SUBORDINATED SECURITY AGREEMENT,
This
instrument and the rights and obligations evidenced hereby are subordinate in
the manner and to the extent set forth in that certain Subordination and
Intercreditor Agreement (the “Intercreditor Agreement”)
dated as of even date herewith, among Xxxxx Fargo Preferred Capital,
Inc., as agent for the Subordinated Creditors referred to therein, Bank of
Montreal, as agent for the Senior Creditors referred to therein, and World
Acceptance Corporation, to the Senior Debt described in the Intercreditor
Agreement, and each holder of this instrument, by its acceptance hereof, shall
be bound by the provisions of the Intercreditor Agreement.
SUBORDINATED
SECURITY AGREEMENT,
PLEDGE
AND INDENTURE OF TRUST
Dated as
of September 17, 2010
among
WORLD
ACCEPTANCE CORPORATION OF ALABAMA
WORLD
ACCEPTANCE CORPORATION OF MISSOURI
WORLD
FINANCE CORPORATION OF GEORGIA
WORLD
FINANCE CORPORATION OF LOUISIANA
WORLD
ACCEPTANCE CORPORATION OF OKLAHOMA, INC.
WORLD
FINANCE CORPORATION OF SOUTH CAROLINA
WORLD
FINANCE CORPORATION OF TENNESSEE
WORLD
FINANCE CORPORATION OF TEXAS
WFC
LIMITED PARTNERSHIP
WFC OF
SOUTH CAROLINA, INC.
WORLD
FINANCE CORPORATION OF ILLINOIS
WORLD
FINANCE CORPORATION OF NEW MEXICO
WORLD
FINANCE CORPORATION OF KENTUCKY
WORLD
FINANCE CORPORATION OF COLORADO
WORLD
FINANCE CORPORATION OF WISCONSIN
and
WFC
SERVICES, INC.
and
XXXXX
FARGO PREFERRED CAPITAL, INC.,
as
Collateral Agent
TABLE
OF CONTENTS
Page
|
||
INTERPRETATION
OF AGREEMENT; DEFINITIONS.
|
2
|
|
Section
1.1.
|
Definitions
|
2
|
Section
1.2.
|
Accounting
Principles
|
6
|
Section
1.3.
|
Directly
or Indirectly
|
6
|
SECTION
2.
|
GRANTING
CLAUSES.
|
6
|
Section
2.1.
|
Equipment
|
7
|
Section
2.2.
|
Receivables
|
7
|
Section
2.3.
|
Pledged
Collateral
|
7
|
Section
2.4.
|
General
Intangibles
|
7
|
Section
2.5.
|
Investment
Property
|
8
|
Section
2.6.
|
Records
and Cabinets
|
8
|
Section
2.7.
|
Partnership
Interests
|
8
|
Section
2.8.
|
Additional
Property
|
8
|
Section
2.9.
|
Deposit
Accounts
|
8
|
Section
2.10.
|
Other
Proceeds and Products
|
8
|
SECTION
3.
|
COVENANTS,
REPRESENTATIONS AND WARRANTIES OF THE COMPANIES.
|
9
|
Section
3.1.
|
Location
of Collateral
|
9
|
Section
3.2.
|
Warranty
of Title
|
9
|
Section
3.3.
|
No
Alienation of Collateral
|
10
|
Section
3.4.
|
Removal
of Collateral
|
10
|
Section
3.5.
|
Compliance
with Leases
|
10
|
Section
3.6.
|
Protection
of Collateral
|
10
|
Section
3.7.
|
Further
Assurances
|
11
|
Section
3.8.
|
Maintenance
of Lien; Recording; Opinions of Counsel
|
11
|
Section
3.9.
|
Consent
to World Security Agreement, Etc
|
12
|
Section
3.10.
|
Names
under which Each Company Conducts its Business.
|
12
|
Section
3.11.
|
Deposit
Accounts
|
13
|
SECTION
4.
|
SPECIAL
PROVISIONS RELATING TO RECEIVABLES.
|
13
|
Section
4.1.
|
Representations
and Warranties
|
13
|
Section
4.2.
|
Receivable
Schedules
|
15
|
Section
4.3.
|
Collection
of Receivables
|
15
|
Section
4.4.
|
Power
of Attorney
|
16
|
SECTION
5.
|
SPECIAL
PROVISIONS RELATING TO PLEDGED COLLATERAL.
|
17
|
Section
5.1.
|
Delivery
of Pledged Collateral; Transfer to Agent
|
17
|
Section
5.2.
|
Voting
Power; Payments.
|
17
|
Section
5.3.
|
Covenants
of Each Company
|
18
|
SECTION
6.
|
APPLICATION
OF CERTAIN MONEYS.
|
19
|
Section
6.1.
|
Application
if no Default or Event of Default Exists
|
19
|
Section
6.2.
|
Application
if a Default or an Event of Default Exists
|
19
|
SECTION
7.
|
DEFAULTS
AND REMEDIES.
|
20
|
Section
7.1.
|
Events
of Default
|
20
|
Section
7.2.
|
Agent’s
Rights
|
20
|
Section
7.3.
|
Waiver
by Each Company
|
21
|
Section
7.4.
|
Effect
of Sale
|
21
|
Section
7.5.
|
Application
of Sale and Other Proceeds
|
21
|
Section
7.6.
|
Discontinuance
of Remedies
|
22
|
Section
7.7.
|
Cumulative
Remedies
|
22
|
SECTION
8.
|
THE
AGENT.
|
22
|
Section
8.1.
|
Duties
of Agent
|
22
|
Section
8.2.
|
Agent’s
Liability
|
23
|
Section
8.3.
|
No
Responsibility of Agent for Recitals
|
24
|
Section
8.4.
|
Certain
Limitations on Agent’s Rights to Compensation and
Indemnification
|
25
|
Section
8.5.
|
Status
of Moneys Received
|
25
|
Section
8.6.
|
Resignation
of Agent
|
25
|
Section
8.7.
|
Removal
of Agent
|
25
|
Section
8.8.
|
Appointment
of Successor Agent
|
25
|
Section
8.9.
|
Succession
of Successor Agent
|
26
|
Section
8.10.
|
Eligibility
of Agent
|
26
|
Section
8.11.
|
Successor
Agent by Merger
|
27
|
Section
8.12.
|
Co-Trustees
|
27
|
Section
8.13.
|
Compensation
and Reimbursement
|
27
|
SECTION
9.
|
SUPPLEMENTS;
WAIVERS.
|
28
|
Section
9.1.
|
Supplemental
Security Agreements Without Lender Consent
|
28
|
Section
9.2.
|
Waivers
and Consents by Lenders; Supplemental Security Agreements with Lenders’
Consent
|
28
|
Section
9.3.
|
Notice
of Supplements
|
28
|
Section
9.4.
|
Opinion
of Counsel Conclusive as to Supplements
|
29
|
SECTION
10.
|
MISCELLANEOUS.
|
29
|
Section
10.1.
|
Successors
and Assigns
|
29
|
Section
10.2.
|
Severability
|
29
|
Section
10.3.
|
Communications
|
29
|
Section
10.4.
|
Release
|
30
|
Section
10.5.
|
Counterparts
|
31
|
Governing
Law
|
31
|
|
Section
10.7.
|
Headings
|
31
|
ii
ATTACHMENTS
TO SECURITY AGREEMENT, PLEDGE AGREEMENT AND INDENTURE OF TRUST:
Schedule
I
|
—
|
Description
of Pledged Collateral
|
Schedule
II
|
—
|
Partnership
Interests
|
Schedule
III
|
—
|
Locations
of Each Company’s Offices and Facilities
|
Schedule
IV
|
—
|
List
of Names Under Which Each Company Does Business
|
Schedule
V
|
Concentration
Accounts
|
|
Exhibit
A
|
—
|
Form
of Subordinated Security Agreement
Supplement
|
iii
SUBORDINATED
SECURITY AGREEMENT,
PLEDGE
AND INDENTURE OF TRUST
THIS
SUBORDINATED SECURITY AGREEMENT, PLEDGE AND INDENTURE OF TRUST (this “Agreement”) dated as of
September 17, 2010, among WORLD ACCEPTANCE CORPORATION OF ALABAMA, an Alabama
corporation, WORLD ACCEPTANCE CORPORATION OF MISSOURI, a Missouri corporation,
WORLD FINANCE CORPORATION OF GEORGIA, a Georgia corporation, WORLD FINANCE
CORPORATION OF LOUISIANA, a Louisiana corporation, WORLD ACCEPTANCE CORPORATION
OF OKLAHOMA, INC., an Oklahoma corporation, WORLD FINANCE CORPORATION OF SOUTH
CAROLINA, a South Carolina corporation, WORLD FINANCE CORPORATION OF TENNESSEE,
a Tennessee corporation, WORLD FINANCE CORPORATION OF TEXAS, a Texas
corporation, WFC LIMITED PARTNERSHIP, a Texas limited partnership, WFC OF SOUTH
CAROLINA, INC., a South Carolina corporation, WORLD FINANCE CORPORATION OF
ILLINOIS, an Illinois corporation, WORLD FINANCE CORPORATION OF NEW MEXICO, a
New Mexico corporation, WORLD FINANCE CORPORATION OF KENTUCKY, a Kentucky
corporation, WORLD FINANCE CORPORATION OF COLORADO, a Colorado corporation,
WORLD FINANCE CORPORATION OF WISCONSIN, a Wisconsin corporation, and WFC
SERVICES, INC., a South Carolina corporation (collectively, the “Companies” and individually
a “Company”), and XXXXX
FARGO PREFERRED CAPITAL, INC., as collateral agent (the “Collateral Agent”), as
amended, modified, supplemented or waived from time to time and as supplemented
from time to time by a security agreement supplement substantially in the form
of Exhibit A hereto between a Restricted Subsidiary and the Collateral Agent
delivered pursuant to Section 3.9 of the World Security
Agreement. The post office addresses of the Companies and the
Collateral Agent are set forth in §10.3.
RECITALS:
A. The
capitalized terms used in this Agreement shall have the respective meanings
specified in §1.1 unless otherwise herein defined or the context hereof shall
otherwise require.
B. World
Acceptance Corporation, a South Carolina corporation (“World”) and parent, directly
or indirectly, of the Companies, has previously entered into that certain
Subordinated Credit Agreement dated as of even date herewith, as heretofore
amended (as amended, restated, supplemented and modified from time to time, the
“Credit Agreement”),
with Administrative Agent and the other banks and financial institutions which
are signatories thereto providing for certain borrowings and other extensions of
credit thereunder.
C. As
a condition to entering into the Credit Agreement, the Companies entered into
that certain Subordinated Security Agreement, Pledge and Indenture of Trust
dated as of even date herewith (as amended, restated, supplemented and modified
from time to time, the “Subsidiary Security
Agreement”).
D. As
a condition to the above described transactions, the Secured
Creditors require, among other things, that each Company enter into this
Agreement for purposes of, inter alia, securing the
obligations of World under the Credit Agreement. The World Security
Agreement (as hereinafter defined) requires that, upon formation or acquisition
of any new Restricted Subsidiary, World cause such subsidiary to enter into a
Subordinated Security Agreement Supplement on the terms set forth
herein.
E. The
Companies desire that World comply with the provisions of the World Security
Agreement and the Credit Agreement. By entering into the Credit
Agreement, the Secured Creditors have conferred financial and other benefits on
the Companies.
F. Each
Company is authorized by law, and deems it necessary to secure the Credit
Agreement, as hereinafter provided, and to that end, in the exercise of said
authority, has duly authorized the execution and delivery of this Agreement
providing for the securing of certain obligations of World and each other
Company, all as hereinafter provided.
G. All
acts and proceedings required by law and by the respective Governing Documents
of each Company necessary to constitute this Agreement a valid and binding
agreement for the uses and purposes herein set forth, in accordance with its
terms, have been done and taken, and the execution and delivery of this
Agreement has been in all respects duly authorized.
SECTION
1.
|
INTERPRETATION
OF AGREEMENT; DEFINITIONS.
|
Section
1.1. Definitions. Except
as otherwise provided in this Section 1, all capitalized terms used herein
without definition shall have the same meanings herein as such terms have in the
Credit Agreement. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined:
“Account Debtor” shall mean
any Person who is or may become obligated to any Company under or on account of
a Receivable.
“Administrative Agent” shall
have the meaning herein as such term is defined in the Credit
Agreement.
“Affiliate” shall have the
same meaning herein as such term is defined in the Credit
Agreement.
“Base Rate” shall have the
same meaning herein as such term is defined in the Credit
Agreement.
“Borrower” shall mean World
Acceptance Corporation, a South Carolina corporation, and any Person which
succeeds to all, or substantially all of the assets and business of World
Acceptance Corporation.
“Closing Date” shall mean
September 17, 2010.
“Collateral” as used herein
shall mean any and all property from time to time subject to the security
interest granted hereby.
2
“Collateral Agent” means the
Person named above as the “Collateral Agent” in the first paragraph of this
Agreement until a successor Collateral Agent shall have become such pursuant to
the applicable provisions of this Agreement, and thereafter “Collateral Agent”
shall mean such successor Collateral Agent.
“Company” shall mean each of
World Acceptance Corporation of Alabama, an Alabama corporation, World
Acceptance Corporation of Missouri, a Missouri corporation, World Finance
Corporation of Georgia, a Georgia corporation, World Finance Corporation of
Louisiana, a Louisiana corporation, World Acceptance Corporation of Oklahoma,
Inc., an Oklahoma corporation, World Finance Corporation of South Carolina, a
South Carolina corporation, World Finance Corporation of Tennessee, a Tennessee
corporation, World Finance Corporation of Texas, a Texas corporation, WFC
Limited Partnership, a Texas limited partnership, WFC of South Carolina, Inc., a
South Carolina corporation, World Finance Corporation of Illinois, an Illinois
corporation, World Finance Corporation of New Mexico, a New Mexico corporation,
World Finance Corporation of Kentucky, a Kentucky corporation, World Finance
Corporation of Colorado, a Colorado corporation, World Finance Corporation of
Wisconsin, a Wisconsin corporation, and WFC Services, Inc., a South Carolina
corporation, any entity that executes and delivers a Subordinated Security
Agreement Supplement in the form attached hereto as Exhibit A (or in such other
form approved by the Collateral Agent and the Administrative Agent), and any
Person which succeeds to all, or substantially all of the assets and business of
any such entity.
“Credit Agreement” shall mean
that certain Subordinated Credit Agreement dated as of September 17, 2010 among
World, the Administrative Agent and the Lenders, as the same may from time to
time be amended, restated, modified, supplemented or waived pursuant to the
terms thereof.
“Default” shall mean any
event or condition, the occurrence of which would, with the lapse of time or the
giving of notice, or both, constitute an Event of Default.
“Event of Default” shall have
the meaning specified in §7.1.
“Environmental Legal
Requirement” shall have the same meaning herein as such term is defined
in the Credit Agreement.
“GAAP” shall have the same
meaning herein as such term is defined in the Credit Agreement.
“Governing Documents” shall
mean collectively the charter instruments, by laws, partnership agreements,
operating agreements and other similar documents prescribing the internal
governance of each Restricted Subsidiary.
“Indebtedness for Borrowed
Money” shall have the same meaning herein as such term is defined in the
Credit Agreement.
“Insurance Subsidiary” shall
have the same meaning herein as such term is defined in the Credit
Agreement.
3
“Investment Property” shall
have the meaning specified in §2.5.
“Lenders” shall have the same
meaning herein as such term is defined in the Credit Agreement.
“Lien” shall mean any
interest in property securing an obligation owed to a Person, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest arising from a mortgage, security agreement,
encumbrance, pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term “Lien” includes
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other similar title exceptions and
encumbrances, including but not limited to mechanics’, materialmen’s,
warehousemen’s, carriers’ and other similar encumbrances, affecting
property. For the purposes of this Agreement, a Person shall be
deemed to be the owner of any property which it has acquired or holds subject to
a conditional sale agreement or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes.
“Moody’s” shall mean Xxxxx’x
Investors Service, Inc.
“Partnership Interests” shall
have the meaning specified in §2.7.
“Person” shall mean an
individual, partnership, corporation, limited liability company, trust or
unincorporated organization, and a government agency or political subdivision
thereof.
“Pledged Collateral” shall
mean and include:
(a) the
Pledged Shares;
(b) all
shares, Securities, moneys, or other property distributed as a dividend on any
shares of capital stock or other Pledged Collateral (including the Pledged
Shares) at any time pledged hereunder or a distribution or return of capital
upon or in respect of any such capital stock or other Pledged Collateral or any
part thereof, or resulting from a split up, revision, reclassification or other
like change of any such capital stock or other Pledged Collateral, and any
subscription warrants, rights or options issued to the holders of, or otherwise
in respect of, any such capital stock or other Pledged Collateral;
and
(c) in
the event of any consolidation or merger in which the issuer of any Pledged
Collateral is not the surviving entity, or in the event of any sale, lease,
transfer or other disposition of all or substantially all of the assets of such
issuer;
(i) all
shares of each class of the capital stock or other Security of the successor
entity formed by or resulting from such consolidation or merger, or of the
corporation to which such sale, lease, transfer or other disposition shall have
been made, and
(ii) all
other Securities, money or property, distributed or distributable in any such
event in respect of any of the Pledged Collateral in connection with such
consideration, merger, sale, lease, transfer or other disposition.
4
“Pledged Shares” shall mean
all of the capital stock, partnership interests, membership interests and other
equity interests owned by any Company or hereafter acquired, including, without
limitation, (a) all rights, authority, powers and privileges of such Company as
a shareholder or holder of any partnership interest, membership interest or
other equity interest of any entity, whether now existing or hereafter arising
under the Governing Documents, or at law or otherwise, and the rights of such
Company under such Governing Documents to acquire additional shares of stock or
to acquire the shares of stock of other shareholders or the partnership
interest, membership interest or other equity interest from any such other
holder, and (b) all other instruments owned or held by, or otherwise established
in favor of, such Company in the nature of capital stock of, partnership
interest, membership interest or any other equity interest in any entity, of any
and every type, class and series.
“Receivables” shall mean all
accounts receivable, receivables, contract rights, controls, instruments, notes,
drafts, bills, acceptances, documents, chattel paper, general intangibles and
all other forms of obligations owing to a Person, including, without limitation,
all Accounts, Instruments (including Promissory Notes), Documents, Chattel Paper
(including tangible and electronic Chattel Paper), Letter-of-Credit Rights,
Supporting Obligations, General Intangibles (including Payments Intangibles), as
defined in the Uniform Commercial Code as in effect in the State of South
Carolina.
“Required Lenders” shall have
the same meaning herein as such term is defined in the Credit
Agreement.
“Restricted Subsidiary” shall
have the same meaning herein as such term is defined in the Credit
Agreement.
“S&P” shall mean Standard
& Poor’s Ratings Services Group, a division of The McGraw Hill Companies,
Inc.
“Secured Creditors” shall
mean, collectively, the Administrative Agent, the Collateral Agent and Lenders,
and each individually shall be referred to as a “Secured Creditor”.
“Secured Indebtedness” shall
mean the “Obligations,”
as such term is defined in the Credit Agreement, in each case whether now
existing or hereafter arising, due or to become due, direct or indirect,
absolute or contingent, and howsoever evidenced, held or acquired.
“Security” shall have the
same meaning as in Section 2(a)(1) of the Securities Act of 1933, as
amended.
“subsidiary” shall mean, as
to any particular parent entity, any corporation, partnership, limited liability
company, or other entity of which more than 50% (by number of votes or other
decision making authority) of the Voting Stock shall be owned by such parent
corporation and/or one or more corporations, partnerships, limited liability
companies or other entities which are themselves subsidiaries of such parent
entity. The term “Subsidiary” shall mean a
subsidiary, directly or indirectly, of World.
5
“Subsidiary Guaranty
Agreement” shall mean the Subordinated Guaranty Agreement dated as of
September 17, 2010, of each Restricted Subsidiary existing on such date and each
other Restricted Subsidiary which has executed a Subordinated Guaranty
Supplement in the form of Exhibit A thereto pursuant to the terms thereof and
Section 3.9 of the World Security Agreement (or in such other form agreed to by
the Collateral Agent and the Administrative Agent), in each case, for the
benefit of the Collateral Agent and the Lenders, as the same may from time to
time be amended, restated, modified, supplemented or waived pursuant to the
terms thereof.
“Underlying Collateral” shall
mean, with respect to any Receivable of any Company, all of its rights with
respect to any collateral granted by the Account Debtor in connection with any
loan.
“Uniform Commercial Code” as
used herein with reference to any collateral shall mean the Uniform Commercial
Code as enacted in the jurisdiction applicable to such Collateral, as amended
from time to time, and any successor statute(s) thereto.
“Unsecured Receivables” shall
mean Receivables which are not secured by Underlying Collateral or
otherwise.
“Voting Stock” shall mean
Securities or other equity interests of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar
functions).
“WFC LP” shall mean WFC
Limited Partnership, a Texas limited partnership.
“World MO” shall mean World
Acceptance Corporation of Missouri, a Missouri corporation.
“World NM” shall mean World
Finance Corporation of New Mexico, a New Mexico corporation.
“World Security Agreement”
shall mean that certain Subordinated Security Agreement, Pledge and Indenture of
Trust dated as of September 17, 2010 between World and the Collateral Agent, as
the same may be amended, restated, supplemented or waived from time to time by
any amendments and supplements thereto entered into in accordance with the terms
thereof.
“World TX” shall mean World
Finance Corporation of Texas, a Texas corporation.
Section
1.2. Accounting
Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP, to
the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
Section
1.3. Directly or
Indirectly. Where any provision in this Agreement refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether the action in question is
taken directly or indirectly by such Person.
6
SECTION
2.
|
GRANTING
CLAUSES.
|
Each
Company in consideration of the premises and other good and valuable
consideration, receipt whereof is hereby acknowledged, and intending to be
legally bound, and in order to secure the payment of all Secured Indebtedness
and the performance and observance of all the covenants and conditions contained
in this Agreement, the World Security Agreement, the Credit Agreement, the
Subsidiary Guaranty Agreements and the other Loan Documents entered into from
time to time in connection therewith, in each case, subject to the terms thereof
and of §7.5, does, on and after the Grant Date, hereby mortgage, grant, convey,
warrant, assign, pledge and hypothecate unto the Collateral Agent, its
successors in trust and assigns, forever, and grants to the Collateral Agent,
its successors in trust and assigns, forever, a continuing security interest in,
automatically and without any further action on and after the Grant Date, all
and singular the following described properties, rights, interests and
privileges, together with the proceeds thereof, now or hereafter owned by such
Company (hereinafter sometimes referred to as the “Collateral”):
Section
2.1. Equipment. All
building materials, building equipment, machinery, apparatus, furniture and
equipment and other personal property (other than motor vehicles and accessions
to motor vehicles) of every kind and nature whatsoever located, including
without limitation: all air conditioning, ventilating, plumbing, heating,
lighting and electrical systems and apparatus; all communications equipment and
intercom systems and apparatus; all typewriters, computers and other office
machines and equipment, furniture, furnishings; all sprinkler equipment and
apparatus, all elevators and escalators; and all machinery, equipment, engines,
boilers, tools, furniture, carpeting, tables and chairs, together with all
accessories, parts and appurtenances appertaining or attached thereto, whether
now owned or hereafter acquired, and all substitutions, renewals, or
replacements of and additions, improvements, accessions and accumulations to any
and all thereof, together with all the rents, income, revenues, issues,
proceeds, profits and avails arising therefrom or in connection therewith and
excluding, in all cases, any of the foregoing items of property which are deemed
fixtures;
Section
2.2. Receivables. All
Receivables, whether now existing or hereafter arising, and however evidenced or
acquired, or in which such Company now has or hereafter acquires any rights and
all rights of such Company to any Underlying Collateral granted by an Account
Debtor in connection with any Receivable owing by it to such
Company;
Section
2.3. Pledged
Collateral. All Pledged Collateral;
Section
2.4. General
Intangibles. All General intangibles of such Company,
including, without limitation, tax refunds, rights with respect to trademarks,
service marks, trade names, patents, copyrights, trade secrets information and
rights to prevent others from doing acts that constitute unfair competition with
or misappropriation of property of such Company including, without limitation,
any sums (net of expenses) that such Company may receive arising out of any
claim for infringement of its rights in any patent, copyright, trademark, trade
name, trade secret or other proprietary right and all rights of such Company
under contracts to enjoy performance by others or to be entitled to enjoy rights
granted by others, including, without limitation, any licenses (to the extent
permitted by law);
7
Section
2.5. Investment
Property. All Investment Property, whether now owned or
existing or hereafter created, acquired or arising, or in which such Company now
has or hereafter acquires any rights (the term “Investment Property” means
and includes all investment property and any other securities (whether
certificated or uncertificated), security entitlements, securities accounts,
commodity contracts and commodity accounts, including all substitutions and
additions thereto, all dividends, distributions and sums distributable or
payable from, upon, or in respect of such property, and all rights and
privileges incident to such property, but excludes the Pledged
Collateral);
Section
2.6. Records and
Cabinets. All supporting evidence and documents relating to
any of the above described property, including without limitation, written
applications, credit information, account cards, payment records,
correspondence, delivery and installation certificates, invoice copies, delivery
receipts, notes and other evidences of indebtedness, insurance certificates and
the like, together with all books of account, data processing records, computer
software and licenses to use the same, ledgers and cabinets in which the same
are reflected or maintained, all whether now existing or hereafter
arising;
Section
2.7. Partnership
Interests. (i) All right, title and interest of such Company,
whether now owned or hereafter acquired, in all partnerships or limited
liability companies, including, but not limited to, those set forth on Schedule
II hereto (collectively, the “Partnerships”), (ii) any and
all payments or distributions of whatever kind or character and whether in cash
or other property, at any time made, owing or payable to such Company in respect
of or on account of its present or hereafter acquired interest in the
Partnerships, whether due or to become due and whether representing profits,
distributions pursuant to complete or partial liquidation or dissolution,
repayment of capital contributions or otherwise, and the right to receive,
receipt for, use and enjoy all such payments and distributions, and all proceeds
thereof, in every case whether now arising or hereafter acquired or arising, and
(iii) all proceeds of any of the foregoing (all of the foregoing rights,
interests, properties and privileges assigned in and in which a security
interest is granted pursuant to this §2.7 being hereafter collectively called
the “Partnership
Interest”);
Section
2.8. Additional
Property. All property and rights, if any, which are by the
express provisions of this Agreement required to be subjected to the lien hereof
and any additional property and rights that may from time to time hereafter, by
writing of any kind, be subjected to the lien hereof by such Company or by
anyone acting at the direction or as an agent of such Company; and
Section
2.9. Deposit
Accounts. All Deposit Accounts, as such term is defined in the
Uniform Commercial Code, of such Company; and
Section
2.10. Other Proceeds and
Products. All proceeds and products of the foregoing and all
insurance of the foregoing and proceeds thereof, whether now existing or
hereafter arising; provided that, in the case of a lien and security interest on
the voting stock or other similar voting equity interests of a corporation,
limited liability company, partnership or other entity which is a “controlled
foreign corporation” as defined under Section 957 of the Internal Revenue Code
(herein, a “Foreign
Company”), if granting a security interest of more than 65% of the total
combined voting stock or other voting equity interests of any such Foreign
Company would cause adverse tax consequences to such Company, then such lien and
security interest on the voting stock or other voting equity interests shall be
limited to 65% of the total combined voting stock or other voting equity
interests of such Foreign Company.
8
ON AND
AFTER THE GRANT DATE, TO HAVE AND TO HOLD the Collateral, WITH POWER OF SALE and
right of entry and possession, unto the Collateral Agent, its successors and
assigns, forever; IN TRUST NEVERTHELESS, upon the terms and trust herein set
forth, for the equal and proportionate benefit, security and protection of all
present and future Secured Creditors; provided always, however, that these
presents are upon the express condition that if the Companies shall irrevocably
pay or cause to be irrevocably paid all the Secured Indebtedness and all
obligations to extend Secured Indebtedness have expired or otherwise terminated,
then these presents and the estate hereby granted and conveyed shall cease and
this Agreement shall become null and void; otherwise this Agreement shall remain
in full force and effect.
SECTION
3.
|
COVENANTS,
REPRESENTATIONS AND WARRANTIES OF THE
COMPANIES.
|
Each
Company hereby covenants with, and represents and warrants to, the Collateral
Agent and for the benefit of the Secured Creditors from time to time
that:
Section
3.1. Location of
Collateral. The Collateral (other than the Underlying
Collateral and the Pledged Collateral) relating to such Company and the books
and records relating thereto are in such Company’s possession at the offices and
facilities owned or leased by such Company or World set forth in Schedule III
hereto. Not less than ten days before the opening of any additional
business location which would require the filing of an additional financing
statement in accordance with the Uniform Commercial Code in order to perfect the
security interest of the Collateral Agent in the Collateral relating to such
Company and the books and records relating thereto or any change in the business
location where the Collateral relating to such Company and the books and records
relating thereto are located and/or maintained which would require the filing of
an additional financing statement in accordance with the Uniform Commercial Code
in order to perfect the security interest of the Collateral Agent in the
Collateral relating to such Company, such Company will deliver to the Collateral
Agent a supplement hereto amending Schedule III to include such business
location, and on and after the Grant Date, evidence of the filing of financing
statements or other notices of the security interest hereof and an opinion of
such Company’s counsel responsive to the requirements of §3.8 hereof. On the
written request of the Collateral Agent or the Administrative Agent, such
Company will deliver to the Collateral Agent a supplement hereto amending
Schedule III to include any additional business locations not previously
reflected in a supplement hereto.
Section
3.2. Warranty of
Title. Such Company is the lawful owner of the Collateral
relating to such Company and has the sole right and lawful authority to deliver
this Agreement. The Collateral relating to such Company and every
part thereof is, on the Closing Date, free and clear of all Liens, except the
Lien of this Agreement and Liens permitted Section 8.11 of the Credit Agreement,
and will be free and clear of all Liens, except the Lien of this Agreement and
the other Liens of the character described in Section 8.11 of the Credit
Agreement, and on and after the Grant Date, the Liens of this Agreement, and
such Company will, on and after the Grant Date, warrant and defend the
Collateral relating to such Company, against any claims and demands of all
Persons at any time claiming the same or any interest therein adverse to the
Collateral Agent.
9
Section
3.3. No Alienation of
Collateral. Except as permitted by the provisions of Section
8.13 of the Credit Agreement, such Company will not, without the Collateral
Agent’s prior written consent, sell, assign, mortgage, lease or otherwise
dispose of the Collateral relating to such Company or any interest
therein.
Section
3.4. Removal of
Collateral. Such Company will not remove the Collateral
relating to such Company and/or the books and records relating thereto from the
locations relating to such Company set forth in Schedule III hereto (i) without
complying with §3.1 hereof or (ii) without the Collateral Agent’s prior written
consent (provided that such Company may move items of Collateral relating to
such Company among such locations). Such Company will at all times
allow the Collateral Agent, the Lenders and their representatives free access
to, and right of inspection of, the Collateral relating to such
Company.
Section
3.5. Compliance with
Leases. Such Company will comply with the terms and conditions
of any leases covering the premises wherein the Collateral relating to such
Company is located and any orders, ordinances, laws or statutes of any city,
state or other governmental entity, department or agency having jurisdiction
with respect to such premises or the conduct of business thereon unless the
failure to so comply will not, individually or in the aggregate, have a material
adverse effect on such Collateral or impair the rights or interests of World,
such Company, any other Restricted Subsidiary or the rights or interest of the
Collateral Agent on and after the Grant Date herein.
Section
3.6. Protection of
Collateral. At any time and from time to time, on and after
the Grant Date, any Secured Creditor may, at its option, or the Collateral Agent
may, at the direction of the Administrative Agent, discharge any taxes, or other
Liens at any time levied or placed on the Collateral relating to such Company
which are due and unpaid and (A) which are not being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or sale of
the Collateral relating to such Company or any material interference with the
use thereof or (B) for which such Company has not set aside on its books,
reserves adequate in accordance with GAAP with respect thereto, and such parties
may pay for the maintenance and preservation of the Collateral relating to such
Company, including the purchasing of insurance therefor to the extent required
to be maintained by World or such Company pursuant to Section 8.2 of the Credit
Agreement and not so maintained, and such Company will immediately reimburse the
Collateral Agent or such Secured Creditor on demand for any payment made or any
expense incurred by the Collateral Agent such Secured Creditor pursuant to the
foregoing authority with interest at a rate per annum equal to the higher of (i)
10.5% and (ii) the Base Rate plus 2%. All such expenses and payments
shall have the benefit of and be secured by the security interest herein granted
on and after the Grant Date, and the Collateral Agent is authorized to charge
any depository account of such Company maintained with the Collateral Agent or
any Secured Creditor for the amount of such expenses and payments.
10
Section
3.7. Further
Assurances. Such Company agrees to execute and deliver to the
Collateral Agent such further agreements and assignments or other instruments
and to do all such other things as the Collateral Agent may deem necessary or
appropriate to assure the Collateral Agent its security interest hereunder
(provided, that the Companies shall be required to deliver to the Collateral
Agent possession of promissory notes evidencing the Unsecured Receivables only
upon the request of the Collateral Agent during the existence of a Default or
Event of Default hereunder), including such financing statement or statements or
amendments thereof or supplements thereto or other instruments as the Collateral
Agent may from time to time reasonably require to perfect, and continue the
perfection of, the security interest in the Collateral contemplated by this
Agreement. Such Company hereby agrees that, to the extent permitted
by applicable law, a carbon, photographic or other reproduction of this
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Collateral Agent on and after the Grant Date without
notice thereof to such Company wherever the Collateral Agent in its sole
discretion desires to file the same. Each Company hereby authorizes
the Collateral Agent to file on and after the Grant Date any and all financing
statements covering the Collateral or any part thereof as the Collateral Agent
may require. On and after the Grant Date, the Collateral Agent shall,
when an Event of Default shall have occurred and be continuing, or at such other
time pursuant to §4 or §5, have the right to take physical possession of any and
all of the Collateral relating to such Company and to maintain such possession
on such Company’s premises or, if possible, to remove the Collateral relating to
such Company or any part thereof to such other places as the Collateral Agent
may desire. If, on and after the Grant Date, the Collateral Agent
exercises its right to take possession of the Collateral relating to such
Company, such Company shall, upon the Collateral Agent’s demand, if possible,
assemble the Collateral relating to such Company and make it available to the
Collateral Agent at a place designated by the Collateral Agent. Such
Company shall at its expense perform any and all other steps reasonably
requested by the Collateral Agent on and after the Grant Date to preserve and
protect the subordinated security interest hereby granted in the
Collateral. If any Collateral relating to such Company is in the
possession or control of any of such Company’s agents or processors while a
Default or an Event of Default shall have occurred and be continuing, such
Company agrees at any time on and after the Grant Date (i) to notify such agents
or processors in writing of the Collateral Agent’s security interest therein,
and (ii) upon the Collateral Agent’s request instruct them to hold all such
Collateral relating to such Company for the Collateral Agent’s account and
subject to the Collateral Agent’s instructions. Such Company agrees
to xxxx its books and records to reflect the security interest of the Collateral
Agent in the Collateral relating to such Company.
Section
3.8. Maintenance of Lien; Recording;
Opinions of Counsel. (a) Such Company will, on and after the
Grant Date, at its expense, take all necessary action to maintain and preserve
the perfected lien of this Agreement (including, without limitation, the filing
of all financing statements or similar notices thereof if and to the extent
permitted or required by applicable law) so long as the Secured Creditors have
any commitment to extend Secured Indebtedness to World and thereafter so long as
any Secured Indebtedness remains outstanding (provided, that the Companies shall
be required to deliver to the Collateral Agent possession of promissory notes
evidencing the Unsecured Receivables only upon the request of the Collateral
Agent during the existence of a Default or Event of Default
hereunder).
11
(b) Such
Company will, forthwith after the execution and delivery of this Agreement and
on and after the Grant Date, and thereafter from time to time, cause this
Agreement (and all financing statements, continuation statements or similar
notices thereof if and to the extent permitted or required by applicable law) to
be filed, registered and recorded in such manner and in such places as may be
required by law in order to publish notice of and fully to protect the
subordinated lien of the Collateral Agent in and to the Collateral relating to
such Company (provided, that the Companies shall be required to deliver to the
Collateral Agent possession of promissory notes evidencing the Unsecured
Receivables only upon the request of the Collateral Agent during the existence
of a Default or Event of Default hereunder); and from time to time will perform
or cause to be performed any other acts as provided by law and will execute or
cause to be executed any and all further instruments that may be required for
such publication and protection or requested by the Administrative
Agent. With respect to any Investment Property held by a securities
intermediary, commodity intermediary, or other financial intermediary of any
kind, at the Collateral Agent’s request, on and after the Grant Date, acting at
the direction of the Administrative Agent, such Company shall execute and
deliver, and shall cause any such intermediary to execute and deliver, an
agreement among such Company, the Collateral Agent and such intermediary in form
and substance reasonably satisfactory to the Administrative Agent which
provides, among other things, for the intermediary’s agreement that, upon notice
by the Collateral Agent that an Event of Default has occurred and is continuing,
it shall comply with entitlement orders, and apply any value distributed on
account of any Investment Property maintained in an account with such
intermediary, as directed by the Collateral Agent without further consent of
such Company.
(c) Such
Company agrees at its own expense to, on and after the Grant Date, furnish to
the Collateral Agent promptly after the execution and delivery of any supplement
or amendment hereto or any continuation statement, an opinion of counsel
satisfactory to the Collateral Agent (who may be independent counsel to such
Company) stating that in the opinion of such counsel, such supplement or
amendment to this Agreement (or a financing statement, continuation statement or
similar notice thereof if and to the extent required by applicable law) or such
continuation statement, as the case may be, has been properly recorded or filed
for record in all public offices in which such recording or filing is necessary
to perfect the Lien provided by this Agreement as a valid Lien and security
interest in the Collateral relating to such Company.
Section
3.9. Consent to World Security Agreement,
Etc. Such Company hereby consents to, and agrees to comply
with, the terms and provisions of the World Security Agreement and the Credit
Agreement.
Section
3.10. Names under which Each Company
Conducts its Business.. No Company conducts its business under
any other name(s) other than as set forth opposite its name on Schedule IV
hereto and such Company will not conduct business under any other name(s) (other
than the names set forth opposite its name on Schedule IV hereto) without (i)
providing the Collateral Agent and the Administrative Agent with thirty (30)
days’ prior written notice of such name and the location of where such business
will be conducted under such name and (ii) complying with any and all requests
made by the Collateral Agent pursuant to §3.7 hereof.
12
Section
3.11. Deposit
Accounts. Each Company maintains one or more local deposit
accounts for the deposit of checks and making of disbursements in the ordinary
course of business (“Local
Accounts”) and World maintains one or more concentration accounts into
which each such Company sweeps collections from the Local Accounts in the
ordinary course of business (“Concentration
Accounts”). All Concentration Accounts used by each Company as
of September 17, 2010, are listed and identified (by account number and
depository institution) on Schedule V attached hereto and made a part
hereof. Such Company shall promptly notify the Collateral Agent of
any Concentration Account opened, maintained or used by such Company after the
date hereof, and shall submit to the Collateral Agent a supplement to Schedule V
to reflect such additional accounts (provided such Company’s failure to do so
shall not impair the Collateral Agent’s security interest
therein). So long as no Event of Default has occurred and is
continuing, the Collateral Agent’s security interest in the Local Accounts need
not be perfected. With respect to any Concentration Account
maintained by a depository institution other than the Collateral Agent, and as a
condition to the establishment and maintenance of any such Concentration
Account, on and after the Grant Date, the relevant Company and such depository
institution shall have executed and delivered to the Collateral Agent an account
control agreement in form and substance satisfactory to the Collateral Agent
which provides, among other things, for the depository institution’s agreement
that it will comply with instructions originated by the Collateral Agent
directing the disposition of the funds in the Concentration Account(s) held at
such depositary institution without further consent by such Company following
payment in full of the Revolving Obligations and subject to the terms of the
Intercreditor Agreement.
SECTION
4.
|
SPECIAL
PROVISIONS RELATING TO RECEIVABLES.
|
Section
4.1. Representations and
Warranties. Each Company shall be deemed to have warranted as
to each of its Receivables that:
(a) Such
Receivable and all papers and documents relating thereto are genuine and in all
respects what they purport to be;
(b) Such
Receivable is legal, valid and subsisting;
(c) The
amount of such Receivable represented as owing is the correct amount actually
and unconditionally owing, is not disputed and is not subject to any set offs,
credits, deductions or countercharges;
(d) Such
Receivable has been created, and is, in all respects in compliance with
applicable state and federal lending laws and will continue to be in compliance
with such laws, any Secured Receivable is secured by Underlying Collateral and,
to the best knowledge of such Company, there is no violation of any
Environmental Legal Requirement with respect to such Underlying
Collateral;
(e) Such
Company has no knowledge or reason to know of any fact which would impair the
collectibility of such Receivable;
(f) All
of such Company’s procedures, requirements and conditions and all federal and
state laws applicable to the making of the loans related to such Receivable and
the creation of such Receivable have been complied with;
(g) To
the best knowledge of such Company, the Account Debtor on such Receivable and
other obligors had legal capacity to enter into the transactions related to such
Receivable;
13
(h) The
form and content of each document related to such Receivable, the security
related thereto, and the transactions from which it arose comply fully with any
and all applicable laws, ordinances, rules and regulations, federal, state
and/or local, with respect to the extension of credit and charging of interest,
including without limitation, as applicable, the Federal Consumer Credit
Protection Act, the Federal Fair Credit Reporting Act, the Federal Trade
Commission Act, the Federal Equal Credit Opportunity Act and all federal, state
and local laws related to licensing, usury, truth in lending, real estate
settlement procedures, consumer protection, equal credit opportunity, fair debt
collection, unfair and deceptive trade practices, rescission rights and
disclosures, and with all rules and regulations thereunder, all as amended, and
any disclosures required with respect to such Receivable were and will continue
to be made properly and in a timely manner;
(i) To
the best knowledge of such Company, such Receivable and all facts, statements or
obligations contained or implicit in any application for credit or financial
statement of the Account Debtor or other obligor submitted to such Company,
including without limitation, the description of any Underlying Collateral
securing such Receivable and the amount owing from the Account Debtor or other
obligor, and the signatures of the parties are genuine, correct, true and
complete;
(j) Such
Company has extended no credit of any kind or in any manner to the Account
Debtor or other obligors in connection with the transactions from which such
Receivable arose other than as indicated on and evidenced by such Company’s
files related to such Receivable;
(k) To
the best knowledge of such Company, each security agreement, UCC filing, title
retention instruments and other document and instrument, if any, which is
security for such Receivable contains a correct and sufficient description of
any Underlying Collateral covered thereby and each lien or security interest
which secures such Receivable is and will continue to be valid;
(l) Before
extending credit to the Account Debtor or other obligor on such Receivable, such
Company has made an adequate credit investigation of the Account Debtor or other
obligor and has determined that the risk of extending such credit is
satisfactory and in accordance with the standards historically observed by such
Company in the conduct of its business;
(m) Any
and all policies of insurance related to the property securing any obligation of
the Account Debtor in connection with such Receivable and any credit life
insurance, credit disability insurance, or credit unemployment insurance are in
full force and effect in accordance with the terms of all agreements between
such Company and the Account Debtor; and
(n) As
to such Receivable, such Company was duly authorized to do business and in good
standing in the jurisdiction in which such Receivable was originated and was
duly licensed to originate such Receivable in such jurisdiction.
14
Section
4.2. Receivable
Schedules. Each Company shall provide the Collateral Agent
with such other relevant information as the Collateral Agent may request from
time to time.
Section
4.3. Collection of
Receivables. (a) Unless and until a Default or an Event of
Default shall have occurred and be continuing and such Company shall have
received written notice from the Collateral Agent, on and after the Grant Date,
not to collect the Receivables, such Company shall make collection of all
Receivables of such Company and may use the same to carry on its business in
accordance with sound business practice and otherwise subject to the terms
hereof.
(b) At
any time while a Default or an Event of Default shall have occurred and be
continuing, and following payment in full of the Revolving Obligations and
subject to the terms of the Intercreditor Agreement, in the event the Collateral
Agent requests such Company to do so at any time on and after the Grant
Date:
(i) All
instruments and chattel paper at any time constituting part of the Receivables
of such Company (including any postdated checks) shall, upon receipt by such
Company and to the extent permitted by law, be immediately endorsed to and
deposited with the Collateral Agent in the same form as received by such
Company; and/or
(ii) Such
Company shall, to the extent permitted by law, instruct all account debtors to
remit all payments in respect of Receivables of such Company to a lockbox to be
maintained at the main post office, Chicago, Illinois, or such other single
location as the Collateral Agent may reasonably designate, under the sole
custody and control of the Collateral Agent.
(c) Except
as otherwise directed by the Collateral Agent, each Company shall, on and after
the Grant Date and following payment in full of the Revolving Obligations and
subject to the terms of the Intercreditor Agreement, place the following legend
conspicuously, on the face of each document, instrument, chattel paper and other
writing evidencing the Receivables created on or after the Closing
Date: “A SECURITY INTEREST IN THIS DOCUMENT HAS BEEN GRANTED TO XXXXX
FARGO PREFERRED CAPITAL, INC., AS COLLATERAL AGENT AND SECURED PARTY, PURSUANT
TO A SUBORDINATED SECURITY AGREEMENT, PLEDGE AND INDENTURE OF
TRUST.” At any time while a Default or an Event of Default shall have
occurred and be continuing, the Collateral Agent or its designee may, on and
after the Grant Date, notify such Company’s customers or account debtors at any
time that Receivables of such Company have been assigned to the Collateral Agent
or of the Collateral Agent’s security interest therein and either in its own
name, that of such Company or both, following payment in full of the Revolving
Obligations and subject to the terms of the Intercreditor Agreement, demand,
collect (including without limitation through a lockbox analogous to that
described in §4.3(b)(ii) hereof), receive, receipt for, xxx for, compound and
give acquittance for any or all amounts due or to become due on such
Receivables, and in the Collateral Agent’s discretion file any claim or take any
other action or proceeding which the Collateral Agent may deem necessary or
appropriate to protect and realize upon the security interest of the Collateral
Agent in such Receivables.
15
(d) In
the event the Collateral Agent has exercised any or all of its rights under
§§4.3(b) or (c) hereof, the Collateral Agent may, at any time while a Default or
an Event of Default shall have occurred and be continuing, cause, on and after
the Grant Date, all instruments, chattel paper, moneys or other proceeds
received by the Collateral Agent to be deposited, handled and administered in
and through a remittance account. If a Default or an Event of Default
has occurred and is continuing to the knowledge of the Collateral Agent, all
amounts received by the Collateral Agent pursuant to the Granting Clauses hereof
and all amounts held in any remittance account referred to above in this
paragraph shall, on and after the Grant Date, be held by the Collateral Agent
for application in the manner provided for in §7 in respect of proceeds and
avails of the Collateral.
Section
4.4. Power of
Attorney. Upon the occurrence and during the continuance of a
Default or an Event of Default, following payment in full of the Revolving
Obligations and subject to the terms of the Intercreditor Agreement, in addition
to any other powers of attorney granted herein, each Company appoints the
Collateral Agent, its nominee, or any other Person whom the Collateral Agent may
designate as such Company’s attorney in fact, with full power at any time and
from time to time to, on and after the Grant Date, endorse such Company’s name
on any checks, notes, acceptances, money orders, drafts or other forms of
payment or security that may come into the Collateral Agent’s possession, upon
the occurrence and during the continuance of a Default or an Event of Default,
following payment in full of the Revolving Obligations and subject to the terms
of the Intercreditor Agreement, to sign such Company’s name on any invoice or
xxxx of lading relating to any Collateral of such Company, on drafts against
customers, on schedules and assignments of Collateral of such Company, on
notices of assignment, and other public records, on verification of accounts and
on notices to customers, to notify the post office authorities to change the
address for delivery of such Company’s mail to an address designated by the
Collateral Agent, to receive, open and dispose of all mail addressed to such
Company, to send requests for verification of Receivables of such Company to
customers or account debtors, and to do all things necessary to carry out this
Agreement. Such Company ratifies and approves all acts of any such
attorney and agrees that neither the Collateral Agent nor any such attorney will
be liable for any acts or omissions nor for any error of judgment or mistake of
fact or law other than their willful misconduct or gross
negligence. The foregoing power of attorney, being coupled with an
interest, is irrevocable until the Secured Indebtedness is fully and irrevocably
paid and satisfied and all obligations to extend credit under the Credit
Agreement have expired or otherwise terminated. The Collateral Agent
may, on and after the Grant Date, file one or more financing statements
disclosing its security interest in any or all of the Collateral without such
Company’s signature appearing thereon. Such Company also hereby
grants the Collateral Agent a power of attorney to execute, on and after the
Grant Date, any such financing statement, or amendments and supplements to
financing statements on behalf of such Company with notice thereof to such
Company, which power of attorney is coupled with an interest and irrevocable
until the Secured Indebtedness is fully paid and satisfied.
16
SECTION
5.
|
SPECIAL
PROVISIONS RELATING TO PLEDGED
COLLATERAL.
|
Section
5.1. Delivery of Pledged Collateral;
Transfer to Collateral Agent. Following payment in full of the
Revolving Obligations and subject to the terms of the Intercreditor Agreement,
all instruments and certificates representing or evidencing the Pledged
Collateral shall , on and after the Grant Date, be delivered to and held by or
on behalf of the Collateral Agent for the ratable benefit of the Secured
Creditors pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank and undated, all in form and substance satisfactory to the
Collateral Agent. The Collateral Agent shall have the right, on and
after the Grant Date, subject to applicable law, at any time in its discretion
after the occurrence of an Event of Default following payment in full of the
Revolving Obligations and subject to the terms of the Intercreditor Agreement,
to transfer to or to register in the name of the Collateral Agent or any of its
nominees any or all of such Pledged Collateral. Promptly after any
such transfer or registration, the Collateral Agent shall give notice thereof to
the Company that owns such Pledged Collateral, but the failure to give such
notice shall not affect any of the rights or remedies of the Collateral Agent
hereunder. The Collateral Agent shall have the right at any time to
exchange instruments or certificates representing or evidencing such Pledged
Collateral for instruments or certificates of smaller or larger denominations,
subject to the terms thereof.
Section
5.2. Voting Power;
Payments.
(a) Voting Power. So
long as an Event of Default shall not have occurred and be continuing, each
Company shall have the right to exercise any and all voting or other consensual
rights pertaining to the Pledged Collateral relating to such Company or any part
thereof for all purposes not inconsistent with the terms of this Agreement and
the Credit Agreement, and such Company agrees that it will not exercise, on and
after the Grant Date, any such rights in any manner which is
inconsistent with the terms of this Agreement and the Credit Agreement;
provided, however, that such Company shall not exercise or shall refrain from
exercising any such right if such action would have a material adverse affect on
the value of the Pledged Collateral relating to such Company or any part
thereof; the Collateral Agent (1) shall have no right to exercise such voting
rights as are reserved in this §5.2(a) to such Company and (2) shall execute and
deliver to such Company or cause to be executed and delivered to such Company
all such proxies, powers of attorney, and other orders, and all such
instruments, without recourse, as such Company may reasonably request in writing
for the purpose of enabling such Company to exercise the voting rights which it
is entitled to exercise under this §5.2(a).
(b) Payments on
Default. So long as no Default or Event of Default shall have
occurred and be continuing, each Company shall have the right to receive and
retain all cash distributions and payments made in respect of the Pledged
Collateral relating to such Company to the extent such payments (1) may be
legally declared and paid under applicable law and (2) are not prohibited by the
applicable provisions hereof and of the Credit Agreement; provided, however, that, on
and after the Grant Date, following payment in full of the Revolving Obligations
and subject to the terms of the Intercreditor Agreement, any and
all
(i) dividends
and distributions paid or payable other than in cash in respect of, and
instruments and other property received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Collateral relating to such
Company,
(ii) dividends
and other distributions paid or payable in cash in respect of any Pledged
Collateral relating to such Company in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid in surplus, and
17
(iii) cash
paid, payable or otherwise distributed in redemption of, or in exchange for, any
Pledged Collateral relating to such Company;
shall be
forthwith delivered to the Collateral Agent to hold as, and such amounts so
delivered shall be, Pledged Collateral and shall, if received by the Collateral
Agent, be received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of such Company and be forthwith
delivered to the Collateral Agent as Pledged Collateral in the same form as so
received (with all appropriate powers, authorizations, orders and
documents).
(c) Voting
Rights after an Event of Default and Receipt of Distributions after a Default or
an Event of Default. Upon the occurrence and during the continuance
of an Event of Default, all rights of each Company to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to clause (a) above and, upon the occurrence and
during the continuance of a Default or an Event of Default, all rights of each
Company to receive the dividends and other distributions which it would
otherwise be entitled to receive and retain pursuant to clause (b) above, in
each such case, shall cease during the period and continuance of such Default or
Event of Default, as the case may be, and all such rights shall thereupon,
following payment in full of the Revolving Obligations and subject to the terms
of the Intercreditor Agreement, become vested in the Collateral Agent, which
shall thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights, as directed in writing by the Administrative
Agent pursuant to §8.1 hereof, and to receive and hold as Pledged Collateral
such distributions and dividends.
Section
5.3. Covenants of Each
Company. Each Company hereby covenants and agrees, on and
after the Grant Date, as follows:
(a) Issuance of Additional
Securities. Such Company will not vote to enable or otherwise
cause any issuer of Pledged Collateral relating to such Company to issue any
shares of stock or other Securities in addition to, or to issue other securities
of any nature in exchange or substitution for, the Pledged Collateral (except to
qualify directors) unless such stock or other securities may be issued under the
relevant provisions hereof, are pledged to the Collateral Agent for the ratable
benefit of the Secured Creditors as part of the Pledged Collateral and such
Company represents to the Collateral Agent and the Secured Creditors that (i)
such Company has good and marketable title to such stock or other Security, free
and clear of any Lien other than the Lien hereof and Liens permitted by clause
(i) of Section 8.11 of the Credit Agreement and (ii) such stock or other
Security has been duly authorized, validly issued and is fully paid and non
assessable.
(b) Regulatory
Consent. Such Company will use its best efforts to obtain
consent of any regulatory authority, Federal, state or local, if any, having
jurisdiction over any license, franchise or other authorization granted by any
governmental unit or authority, which consent may be required in connection with
the transfer of the Pledged Collateral relating to such Company, and will
cooperate fully with the Collateral Agent in effecting any such transfer,
including, without limitation, the execution and delivery of all applications,
certificates and other documents that may be required to obtain the consent and
approval or authorization of or registration or qualification with, any
governmental authority, and specifically, without limitation, any application
for consent to assignment of license or transfer of control necessary or
appropriate under the rules and regulations of any governmental authority for
approval of (1) any sale or sales of property constituting Pledged Collateral
relating to such Company by or on behalf of the Collateral Agent or (2) any
assumption by the Collateral Agent of voting rights or management rights in the
Pledged Collateral relating to such Company, effected in accordance with the
terms of this Agreement.
18
(c) Additional Pledged
Collateral. If any of the Pledged Collateral, including,
without limitation, any shares, notes, obligations, Securities, instruments,
property or (except to the extent otherwise provided in clauses (b) and (c) in
the definition of Pledged Collateral) moneys, distributions or other payments of
every kind and variety referred to in clauses (a) through (c) in the definition
of Pledged Collateral are received by such Company, such Company agrees,
following payment in full of the Revolving Obligations and subject to the terms
of the Intercreditor Agreement, forthwith to transfer and deliver the same (with
the certificates or other instruments or documents evidencing or documenting any
such shares, notes, obligations, interests, instruments, or other Securities
duly endorsed in blank or accompanied by an assignment or assignments sufficient
to transfer title thereto), to the Collateral Agent to be held in pledge
pursuant to the terms of this Agreement, as part of the Pledged
Collateral.
(d) Schedule of Pledged
Collateral. Such Company will furnish to the Collateral Agent
from time to time statements and schedules further identifying and describing
the Pledged Collateral relating to such Company and such other reports in
connection with the Pledged Collateral relating to such Company as the
Collateral Agent may reasonably request, all in reasonable detail.
SECTION
6.
|
APPLICATION
OF CERTAIN MONEYS.
|
Section
6.1. Application if no Default or Event
of Default Exists. So long as no Default or Event of Default
shall have occurred and be continuing, subject to each Company’s contractual
obligations to other parties (including, without limitation, the Credit
Agreement), such Company shall be allowed to receive and apply the Collateral
relating to such Company and to carry on its business in accordance with sound
business practices.
Section
6.2. Application if a Default or an Event
of Default Exists. Following payment in full of the Revolving
Obligations and subject to the terms of the Intercreditor Agreement, if a
Default or an Event of Default has occurred and is continuing, all amounts which
constitute Collateral shall on and after the Grant Date be paid over to the
Collateral Agent for application in the manner provided in §7 in respect of
proceeds and avails of the Collateral.
19
SECTION
7.
|
DEFAULTS
AND REMEDIES.
|
Section
7.1. Events of
Default. An “Event of Default” under the
Credit Agreement shall constitute an Event of Default hereunder.
Section
7.2. Collateral Agent’s
Rights. Each Company agrees that when any Event of Default has
occurred and is continuing, the Collateral Agent may, on and after the Grant
Date and following payment in full of the Revolving Obligations and subject to
the terms of the Intercreditor Agreement, subject to the provisions of §8.1,
without limitation of all other rights and remedies available herein, in the
World Security Agreement, at law or in equity in such event, exercise any one or
more or all, and in any order, of the remedies hereinafter set forth, against
one or more or all of the Companies, it being expressly understood that no
remedy herein conferred is intended to be exclusive of any other remedy or
remedies; but each and every remedy shall be cumulative and shall be in addition
to every other remedy given herein or now or hereafter existing at law or in
equity or by statute:
(a) The
Collateral Agent personally, or by agents or attorneys, shall have the right
(subject to compliance with any applicable mandatory legal requirements) to
enter into and upon the premises of any Company and take possession of all or
any part of the Collateral and to exclude such Company wholly therefrom, and
having and holding the same may use, operate, manage and control the Collateral
and collect and receive all earnings, revenues, issues, proceeds and income of
the Collateral and every part thereof and may maintain, repair and renew the
Collateral and make replacements, alterations, additions and improvements
thereto or remove and dispose of any portion of the Collateral and may otherwise
exercise any and all of the rights and powers of such Company in respect
thereof.
(b) The
Collateral Agent may, if at the time such action may be lawful and always
subject to compliance with any mandatory legal requirements, either with or
without taking possession, and either before or after taking possession, and
without instituting any legal proceedings whatsoever, and having first given
notice of such sale by registered mail to any affected Company, Administrative
Agent and each Lender once at least ten days prior to the date of such sale, and
any other notice which may be required by law, sell and dispose of the
Collateral, or any part thereof, or interest therein, at public auction to the
highest bidder, in one lot as an entirety or in separate lots, and either for
cash or on credit and on such terms as the Collateral Agent may determine, and
at any place (whether or not it be the location of the Collateral or any part
thereof) designated in the notice above referred to. Any such sale or
sales may be adjourned from time to time by announcement at the time and place
appointed for such sale or sales, or for any such adjourned sale or sales,
without further notice, and the Collateral Agent or any Secured Creditor, or of
any interest therein, may bid and become the purchaser at any such
sale.
(c) The
Collateral Agent may proceed to protect and enforce this Agreement and the
Secured Indebtedness or any part thereof by suit or suits or proceedings in
equity, at law or in bankruptcy, and whether for the specific performance of any
covenant or agreement herein contained or in execution or aid of any power
herein granted; or for foreclosure hereunder, or for the appointment of a
receiver or receivers for the Collateral or any part thereof, or for the
recovery of judgment for the Secured Indebtedness or for the enforcement of any
other proper, legal or equitable remedy available under applicable
law.
20
Section
7.3. Waiver by Each
Company. To the extent now or at any time hereafter
enforceable under applicable law, each Company covenants that it will not at any
time on and after the Grant Date insist upon or plead, or in any manner
whatsoever claim or take any benefit or advantage of, any stay or extension law
now or at any time hereafter in force, nor claim, take nor insist upon any
benefit or advantage of or from any law now or hereafter in force providing for
the valuation or appraisement of the Collateral or any part thereof, prior to
any sale or sales thereof to be made pursuant to any provision herein contained,
or to the decree, judgment or order of any court of competent jurisdiction; nor,
after such sale or sales, claim or exercise any right under any statute now or
hereafter made or enacted by any state or otherwise to redeem the property so
sold or any part thereof, and hereby expressly waives for itself and on behalf
of each and every Person, except decree or judgment creditors of such Company
acquiring any interest in or title to the Collateral relating to such Company or
any part thereof subsequent to the date of this Agreement, all benefit and
advantage of any such law or laws, and covenants that it will not invoke or
utilize any such law or laws or otherwise hinder, delay or impede the execution
of any power herein granted and delegated to the Collateral Agent, but will
suffer and permit the execution of every such power as though no such law or
laws had been made or enacted.
Section
7.4. Effect of
Sale. Any sale, whether under any power of sale hereby given
or by virtue of judicial proceedings, shall operate to divest all right, title,
interest, claim and demand whatsoever, either at law or in equity, of any
affected Company in and to the property sold and shall be a perpetual bar, both
at law and in equity, against such Company, its successors and assigns, and
against any and all persons claiming the property sold or any part thereof
under, by or through such Company, its successors or assigns.
Section
7.5. Application of Sale and Other
Proceeds. Subject to the terms of the Intercreditor Agreement,
the proceeds and avails of the Collateral at any time received by the Collateral
Agent on and after the Grant Date during the existence of any Event of Default
shall, when received by the Collateral Agent in cash or its equivalent, to be
paid over to the Administrative Agent to be applied in reduction of, or held as
collateral security for, the Secured Indebtedness in accordance with the terms
of the Credit Agreement. Each Company shall remain liable to the
Secured Creditors for any deficiency. Any surplus remaining after the
full payment and satisfaction of the Secured Indebtedness shall be returned to
the applicable Company or to whomsoever the Collateral Agent reasonably
determines is lawfully entitled thereto.
The
proceeds and/or avails of the Collateral shall be applied as set forth above
notwithstanding the time or order of advance of any funds secured by any such
Collateral or any other priority provided by law or otherwise. By
accepting the benefits of this Agreement, each of the Secured Creditors agrees
that it will not initiate or prosecute, or encourage any other person to
initiate or prosecute, any claim, action or other proceeding challenging the
enforceability of the claims of the Secured Creditors or challenging the
enforceability of any liens or security interests in assets securing the Secured
Indebtedness and the other obligations and liabilities relating thereto, in each
case, created or incurred in accordance with the terms of this Agreement and the
World Security Agreement.
21
Section
7.6. Discontinuance of
Remedies. In case the Collateral Agent shall have proceeded to
enforce any right under this Agreement by foreclosure, sale, entry or otherwise,
and such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely, then and in every such case the Companies,
the Collateral Agent and the Secured Creditors shall be restored to their former
positions and rights hereunder with respect to the property subject to the lien
and security interest created under this Agreement.
Section
7.7. Cumulative
Remedies. No delay or omission of the Collateral Agent or any
Secured Creditor to exercise any right or power arising from any default, shall
exhaust or impair any such right or power or prevent its exercise during the
continuance of such default. No waiver by the Collateral Agent or any
Secured Creditor of any such default, whether such waiver be full or partial,
shall extend to or be taken to affect any subsequent default, or to impair the
rights resulting therefrom except as may be otherwise provided
therein. No remedy hereunder is intended to be exclusive of any other
remedy but each and every remedy shall be cumulative and in addition to any and
every other remedy given hereunder or otherwise existing; nor shall the giving,
taking or enforcement of any other or additional security, collateral or
guaranty for the payment of the Secured Indebtedness operate to prejudice, waive
or affect the security of this Agreement or any rights, powers or remedies
hereunder, nor shall the Collateral Agent or any Secured Creditor be required to
first look to, enforce or exhaust such other or additional security, collateral
or guaranties.
SECTION
8.
|
THE
COLLATERAL AGENT.
|
The
Collateral Agent accepts the trusts hereunder and agrees to perform the same,
but only upon the terms and conditions hereof, including the following, to all
of which each Company and the respective Secured Creditors at any time
outstanding by their acceptance thereof agree:
Section
8.1. Duties of Collateral
Agent. (a) The Collateral Agent undertakes (i)
except while an Event of Default actually known to the Collateral Agent shall
have occurred and be continuing, to perform such duties and only such duties as
are specifically set forth in this Agreement, or in any direction given pursuant
to this Agreement, and (ii) while an Event of Default actually known to the
Collateral Agent shall have occurred and be continuing, subject to §8.1(b), to
exercise such of the rights and powers as are vested in it by this Agreement and
permitted by law.
The
Collateral Agent upon receipt of instruments or notices furnished to the
Collateral Agent pursuant to the provisions of this Agreement shall furnish
copies of the same to the Administrative Agent for distribution to
Lenders.
(b) In
the event that the Collateral Agent shall have actual knowledge of an Event of
Default, the Collateral Agent shall give prompt written notice of such Event of
Default to the Administrative Agent. Subject to the terms of §8.2(h),
in accordance with written instructions received from the Administrative Agent,
the Collateral Agent shall take such action or refrain from taking such action
as the Collateral Agent shall be directed in writing by the Administrative
Agent. If the Collateral Agent shall not have received written
instructions as above provided within twenty (20) days after mailing notice of
such Event of Default to the Administrative Agent, the Collateral Agent may,
subject to instructions received pursuant to the preceding sentence, take such
action, or refrain from taking such action, but shall be under no duty to take
or refrain from taking any action, with respect to such Event of Default, as it
shall determine advisable in the best interests of the Secured
Creditors.
22
(c) The
Collateral Agent shall not have any duty or obligation to manage, control, use,
sell, dispose of or otherwise deal with the Collateral, or, to otherwise take or
refrain from taking any action under, or in connection with, this Agreement,
except as expressly provided by the terms of this Agreement or expressly
provided in written instructions received pursuant to this
Agreement.
(d) Except
if it is herein otherwise expressly provided that no such request is required,
the Collateral Agent shall not be under any obligation to take any action which
is discretionary with the Collateral Agent or otherwise requires judgment to be
made by the Collateral Agent under the provisions hereof, except on written
request by the Administrative Agent.
Section
8.2. Collateral Agent’s
Liability. No provision of this Agreement (except to the
extent provided in §8.13 hereof) shall be construed to relieve the Collateral
Agent from liability for its own gross negligence or willful misconduct, except
that:
(a) unless
an Event of Default actually known to the Collateral Agent shall have occurred
and be continuing, the Collateral Agent shall not be liable except for the
performance of such duties as are specifically set forth in this Agreement and
no implied covenants or obligations shall be read into this Agreement against
the Collateral Agent but the duties and obligations of the Collateral Agent
shall be determined solely by the express provisions of this Agreement;
and
(b) in
the absence of bad faith on the part of the Collateral Agent, the Collateral
Agent may rely upon the authenticity of, and the truth of the statements and the
correctness of the opinions expressed in, and shall be protected in acting upon,
any resolution, officer’s certificate, opinion of counsel (which counsel shall
be independent of the Companies, any Affiliate thereof and the Secured
Creditors), note, request, notice, consent, waiver, order, signature guaranty,
notarial seal, stamp, acknowledgment, verification, appraisal, report, stock
certificate, or other paper or document believed by the Collateral Agent to be
genuine and to have been signed, affixed or presented by the proper party or
parties; and
(c) in
the absence of bad faith on the part of the Collateral Agent, whenever the
Collateral Agent, or any of its agents, representatives, experts or counsel
(which counsel shall be independent of the Companies, any Affiliate thereof and
the Secured Creditors, shall consider it necessary or desirable that any matter
be proved or established, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by an officer’s certificate; provided, however, that the Collateral
Agent, or such agent, representative, expert or counsel, may require such
further and additional evidence and make such further investigation as it or
they may consider reasonable; and
(d) the
Collateral Agent may consult with counsel (which counsel shall be independent of
the Companies, any Affiliate thereof and the Secured Creditors) and the advice
or opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered hereunder in good faith
and in accordance with such advice or opinion of counsel; and
23
(e) the
Collateral Agent shall not be liable with respect to any action taken or omitted
to be taken by it in good faith in accordance with any direction or request of
the Administrative Agent or the requisite portion thereof as expressly provided
herein; and
(f) the
Collateral Agent shall not be liable for any error of judgment made in good
faith by an officer of the Collateral Agent; and
(g) the
Collateral Agent shall not be deemed to have knowledge of any Default or Event
of Default unless and until an officer of the Corporate Trust Department of the
Collateral Agent who customarily handles corporate trusts or such other Person
employed by the Collateral Agent who has primary responsibility for the
transactions contemplated hereby shall have actual knowledge thereof or the
Collateral Agent shall have received written advice thereof from the
Administrative Agent or any Lender; and
(h) whether
or not an Event of Default shall have occurred, the Collateral Agent shall not
be under any obligation to take or refrain from taking any action under this
Agreement which may tend to involve it in any expense or liability, the payment
of which within a reasonable time is not, in its reasonable opinion, assured to
it by the security afforded to it by the terms of this Agreement, unless and
until it is requested in writing so to do by one or more Secured Creditors
outstanding hereunder and furnished, from time to time as it may require, with
reasonable security and indemnity.
Section
8.3. No Responsibility of Collateral
Agent for Recitals. The recitals and statements contained
herein and in the Loan Documents shall be taken as the recitals and statements
of the Companies, and the Collateral Agent assumes no responsibility for the
correctness of the same, nor shall the Collateral Agent have any responsibility
for or any liability with respect to any disclosure, warranty, representation or
concealment or failure to disclose in connection with the offering,
solicitation, sale or distribution of the Secured Indebtedness by the Companies
or by any other Person.
The
Collateral Agent makes no representation as to the validity or sufficiency of
this Agreement, the security hereby or thereby afforded, the title of the
Companies to or the existence of the Collateral or the descriptions thereof, or
the filing or recording or registering of this Agreement or any other
document.
The
Collateral Agent shall not be concerned with or accountable to any Person for
the use or application of any deposited moneys which shall be released or
withdrawn in accordance with the provisions of this Agreement or of any property
or Securities or the proceeds thereof which shall be released from the lien and
security interest hereof in accordance with the provisions of this
Agreement.
24
Section
8.4. Certain Limitations on Collateral
Agent’s Rights to Compensation and Indemnification. Except to
the extent otherwise expressly provided herein and in the Credit Agreement, the
Collateral Agent shall have no right against any Secured Creditor for the
payment of compensation for its services hereunder or any expenses or
disbursements incurred in connection with the exercise and performance of its
powers and duties hereunder or any indemnification against liabilities which it
may incur in the exercise and performance of such powers and duties but on the
contrary, shall look solely to the Companies for such payment and
indemnification which each Company hereby agrees to make, and the Collateral
Agent shall have no lien on or security interest in the Collateral as security
for such compensation, expenses, disbursements and indemnification except to the
extent provided for in §7.5 and in the Credit Agreement.
Section
8.5. Status of Moneys
Received. (a) All moneys received by the Collateral Agent
shall, together with any interest thereon, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
(except as herein otherwise provided with respect to the funds referred to in
paragraph (b) of this Section) need not be segregated in any manner from any
other moneys, except to the extent required by law, and may be deposited by the
Collateral Agent under such general conditions as may be prescribed by law in
the Collateral Agent’s general banking department, and the Collateral Agent
shall be under no liability for interest (other than any interest accrued
pursuant to clause (b) of this §8.5) on any moneys received by it
hereunder.
(b) At
the Companies’ request, so long as no Event of Default has occurred and is
continuing, the Collateral Agent shall invest and reinvest any funds from time
to time held by the Collateral Agent in direct obligations of the United States
of America or obligations for which the full faith and credit of the United
States is pledged to provide for the payment of principal and interest, maturing
not more than 90 days from the date of such investment.
Section
8.6. Resignation of Collateral
Agent. The Collateral Agent may resign without cause and be
discharged from the trusts created hereby by delivering notice thereof, by
registered or certified mail postage prepaid to each Company and the
Administrative Agent. Such resignation shall take effect immediately
upon the appointment of a successor Collateral Agent as provided in §§8.8 and
8.9.
Section
8.7. Removal of Collateral
Agent. The Collateral Agent may be removed at any time, for or
without cause, by an instrument or instruments in writing executed by the
Administrative Agent and delivered to the Collateral Agent with a copy to each
Company, specifying the removal and the date when it shall take effect;
provided, however, that no such removal shall be effective hereunder unless and
until a successor Collateral Agent shall have been appointed and shall have
accepted such appointment as provided in §§8.8 and 8.9.
Section
8.8. Appointment of Successor Collateral
Agent. In case at any time the Collateral Agent shall resign
or be removed or become incapable of acting, a successor Collateral Agent may be
appointed by the Administrative Agent (acting at the request or with the consent
of the Required Lenders), by an instrument or instruments in writing executed by
the Administrative Agent and filed with such successor Collateral Agent and each
Company.
25
Until a
successor Collateral Agent shall be so appointed by the Administrative Agent,
the Companies shall appoint a successor Collateral Agent to fill such vacancy,
by an instrument in writing executed by the Companies and delivered to the
successor Collateral Agent. If all or substantially all of the
Collateral shall be in the possession of one or more receivers, trustees,
liquidators or assignees for the benefit of creditors, then such receivers,
trustees, custodians, liquidators or assignees may, by an instrument in writing
delivered to the successor Collateral Agent, appoint a successor Collateral
Agent. Promptly after any such appointment, the Companies, or any
such receivers, trustees, custodians, liquidators or assignees, as the case may
be, shall give notice thereof by first class mail postage prepaid to the
Administrative Agent.
Any
successor Collateral Agent so appointed by the Companies, or such receivers,
trustees, custodians, liquidators or assignees, shall immediately and without
further act be superseded by a successor Collateral Agent appointed by the R
Administrative Agent.
If a
successor Collateral Agent shall not be appointed pursuant to this Section
within thirty days after notice of the resignation or removal of the retiring
Collateral Agent, the Administrative Agent or such retiring Collateral Agent
(unless the retiring Collateral Agent is being removed) may apply to any court
of competent jurisdiction to appoint a successor Collateral Agent, and such
court may thereupon, after such notice, if any, as it may consider proper,
appoint a successor Collateral Agent.
Section
8.9. Succession of Successor Collateral
Agent. Any successor Collateral Agent appointed hereunder
shall execute, acknowledge and deliver to each Company, the Administrative
Agent, and the predecessor Collateral Agent an instrument accepting such
appointment, and thereupon such successor Collateral Agent, without any further
act, deed, conveyance or transfer, shall become vested with the title to the
Collateral, and with all the rights, powers, trusts, duties and obligations of
the predecessor Collateral Agent in the trust hereunder, with like effect as if
originally named as Collateral Agent herein.
Upon the
request of any such successor Collateral Agent, however, each Company and the
predecessor Collateral Agent shall execute and deliver such instruments of
conveyance and further assurance and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in such successor
Collateral Agent its interest in the Collateral and all such rights, powers,
trusts, duties and obligations of the predecessor Collateral Agent hereunder,
and the predecessor Collateral Agent shall also assign and deliver to the
successor Collateral Agent any property subject to the lien and security
interest of this Agreement which may then be in its possession.
Section
8.10. Eligibility of Collateral
Agent. The Collateral Agent shall be a state or national bank
or trust company in good standing, organized under the laws of the United States
of America or of any state thereof, having a capital, surplus and undivided
profits aggregating at least $500,000,000 and whose certificates of deposit are
accorded a rating of A or better by S&P and Xxxxx’x or, if S&P and
Xxxxx’x are no longer rating such banks, then by any other nationally recognized
credit rating agency of similar standing or a guaranty of its obligations
hereunder from such a bank or trust company or holding company in good standing,
organized under the laws of the United States of America or of any State
thereof, having a capital, surplus and undivided profits aggregating at least
$500,000,000 and whose certificates of deposit are accorded a rating of A or
better by S&P and Xxxxx’x or, if S&P and Xxxxx’x are no longer rating
such banks, then by any other nationally recognized credit rating agency of
similar standing, if there be such a bank or trust company willing and able to
accept such trust upon reasonable and customary terms.
26
In case
the Collateral Agent shall cease to be eligible in accordance with the
provisions of this Section, the Collateral Agent shall resign immediately in the
manner and with the effect specified in §8.6.
Section
8.11. Successor Collateral Agent by
Merger. Any corporation into which the Collateral Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Collateral Agent shall be a party, or
any state or national bank or trust company in any manner succeeding to the
corporate trust business of the Collateral Agent as a whole or substantially as
a whole, if eligible as provided in §8.10, shall be the successor of the
Collateral Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything to the contrary
contained herein notwithstanding.
Section
8.12. Co-Trustees. At
any time, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Collateral may at the time be located, the Companies
and the Collateral Agent jointly shall have power and shall execute and deliver
all instruments, on and after the Grant Date, to appoint one or more persons
approved by the Collateral Agent, to act as co trustee, or co trustees, jointly
with the Collateral Agent, or separate trustee or separate trustees, of all or
any part of the Collateral, and to vest in such person or persons in such
capacity, such interest in the Collateral or any part thereof, and such rights,
powers, duties, trusts or obligations as the Companies and the Collateral Agent
may consider necessary or desirable. If the Companies shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in case an Event of Default shall have occurred and be continuing,
the Collateral Agent alone shall have power to make such appointment if the
Collateral Agent reasonably believes such appointment is necessary or desirable
to carry out the transactions contemplated hereby.
Section
8.13. Compensation and
Reimbursement. Each Company agrees:
(a) to
pay to the Collateral Agent all of its out of pocket expenses in connection with
the preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to the reasonable charges and
disbursements of its special counsel;
(b) to
pay to the Collateral Agent from time to time reasonable compensation for all
services rendered by it hereunder;
(c) except
as otherwise expressly provided herein, to reimburse the Collateral Agent upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Collateral Agent in accordance with any provision of this Agreement
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its gross negligence or willful misconduct; and
27
(d) to
indemnify the Collateral Agent for, and to hold it harmless against, any loss,
liability or expense incurred without gross negligence or willful misconduct on
its part, arising out of or in connection with the acceptance or administration
of the Agreement, including, but not limited to, the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder, and any loss,
liability, expense or claim arising out of its possession, management, control,
use or operation of the Collateral.
SECTION
9.
|
SUPPLEMENTS;
WAIVERS.
|
Section
9.1. Supplemental Security Agreements
Without Secured Creditor Consent. The Companies and the
Collateral Agent from time to time and at any time, subject to the restrictions
in this Agreement contained, may enter into an agreement or agreements
supplemental hereto, which thereafter shall form a part hereof, for any one or
more or all of the following purposes:
(a) to
add to the covenants and agreements to be observed by, and to surrender any
right or power reserved to or conferred upon the Companies;
(b) on
and after the Grant Date, to subject to the lien and security interest of this
Agreement additional property hereafter acquired by any Company and intended to
be subjected to the lien and security interest of this Agreement and to correct
and amplify the description of any property subject to the lien and security
interest of this Agreement;
(c) to
permit the qualification of this Agreement under the Trust Indenture Act of
1939, as amended, or any similar Federal statute hereafter in effect, except
that nothing herein contained shall permit or authorize the inclusion of the
provisions referred to in Section 316(a)(2) of said Trust Indenture Act of 1939
or any corresponding provision in any similar Federal statute hereafter in
effect; and
(d) to
enter into a Subordinated Security Agreement Supplement in the form attached
hereto as Exhibit A;
and each
Company covenants to perform all requirements of any such supplemental
agreement. No restriction or obligation imposed upon any Company may,
except as otherwise provided in this Agreement, be waived or modified by any
such supplemental agreement.
Section
9.2. Waivers and Consents by Secured
Creditors; Supplemental Security Agreements with Secured Creditors’
Consent. Upon the waiver or consent of the Administrative
Agent (acting at the direction or with the consent of the Required Lenders under
the Credit Agreement), the Company and the Collateral Agent may enter into an
agreement or agreements supplemental hereto for the purpose of waiving, adding,
changing or eliminating any provisions of this Agreement or of any agreement
supplemental hereto or modifying in any manner the rights and obligations of the
Secured Creditors and the Company.
Section
9.3. Notice of
Supplements. Promptly after the execution by the Companies and
the Collateral Agent of any supplemental agreement pursuant to the provisions of
§9.1 or §9.2, the Companies shall deliver a conformed copy thereof, mailed first
class postage prepaid, to the Administrative Agent at its address set
forth in the Credit Agreement. Any failure of the Companies to give
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental agreement.
28
Section
9.4. Opinion of Counsel Conclusive as to
Supplements. The Collateral Agent is hereby authorized to join
with the Companies in the execution of any such supplemental indenture or
agreement authorized or permitted by the terms of this Agreement and to make the
further agreements and stipulations which may be therein contained, and the
Collateral Agent may receive an opinion of independent counsel selected by the
Collateral Agent as conclusive evidence that any supplemental agreement executed
pursuant to the provisions of this §9 complies with the requirements of this
§9.
SECTION
10.
|
MISCELLANEOUS.
|
Section
10.1. Successors and
Assigns. Whenever any of the parties hereto is referred to
such reference shall be deemed to include the successors and assigns of such
party; and all the covenants, promises and agreements in this Agreement
contained by or on behalf of each Company or by or on behalf of the Collateral
Agent shall bind and inure to the benefit of the respective successors and
assigns of such parties whether so expressed or not.
Section
10.2. Severability. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section
10.3. Communications. All
communications provided for herein shall be in
writing. Communications to the Companies or the Collateral Agent
shall be deemed to have been given (unless otherwise required by the specific
provisions hereof in respect of any matter) when addressed and delivered in
person, or five days after being deposited in the U.S. mail, postage prepaid, by
registered or certified mail, by courier, or by overnight express mail, as
follows:
If to the
Companies:
c/o World
Acceptance Corporation
000
Xxxxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000 2532
Attention: Chief
Financial Officer
If to the
Collateral Agent:
Xxxxx
Fargo Preferred Capital, Inc.
000 Xxxxx
Xxxxx Street, 7th
Floor
MAC
Y1379-075
Xxxxxxxxxxxx,
XX 00000
Attention: Xxxxxxx
X. Xxxxx, Senior Vice President
29
or to
such Company or the Collateral Agent at such other address as such Company or
the Collateral Agent may designate by notice duly given in accordance with this
Section to the other. Communications to any Secured Creditor shall be
deemed to have been given (unless otherwise provided for by the specific
provisions hereof in respect of any matter) when delivered personally or five
days after being deposited in the U.S. mail, postage prepaid by registered or
certified mail or by courier or by overnight express mail, addressed to such
Secured Creditor at its address set forth in Credit Agreement.
Section
10.4. Release. The
Collateral Agent shall release fully or partially, as the case may be, the Lien
granted by this Agreement under and only under the following
circumstances:
(a) Upon
the written request of the Companies and presentation of satisfactory evidence
that all Secured Indebtedness has been irrevocably fully paid or discharged and
all obligations of the Secured Creditors to extend Secured Indebtedness to World
have terminated or otherwise expired, the Collateral Agent shall release the
Lien and security interest of this Agreement by proper instrument or
instruments;
(b) So
long as no Default or Event of Default then exists, upon the sale or other
disposition of any assets of World and its Restricted Subsidiaries which the
Chief Financial Officer of World certifies to the Collateral Agent, the
Administrative Agent and the Lenders in writing does not constitute a
“substantial part” of the assets of World and its Restricted Subsidiaries (as
defined in Section 8.13 of the Credit Agreement), the Collateral Agent shall,
upon the written direction of World and without the consent of the Secured
Creditors (unless the Collateral Agent has been notified in writing by the
Administrative Agent or any Lender prior to such release that such Lender in
good faith believes that the conditions set forth above have not been satisfied,
in which case no such release shall be issued), release the Lien of this
Agreement on such assets by proper instrument or instruments. If any
such sale or other disposition of assets constituting less than a “substantial
part” of the assets of World and its Restricted Subsidiaries pursuant to this
§10.4(b) results in the sale or other disposition of the capital stock or other
equity interest in a Restricted Subsidiary, the Subsidiary Guaranty Agreement
with respect to, and only with respect to, such Restricted Subsidiary shall
automatically be released and the Collateral Agent, the Administrative Agent and
the Lenders agree to execute and deliver such further instruments and do such
further acts as World may deem necessary or proper to carry out more effectively
the foregoing;
(c) Upon
the sale or other disposition by World of a “substantial part” of the assets of
World and its Restricted Subsidiaries (as defined in Section 8.13 of the Credit
Agreement) after the occurrence and during the continuance of an Event of
Default, the Collateral Agent shall, upon the written direction of the Companies
and the written consent of the Administrative Agent, release the Lien of this
Agreement on such assets by proper instrument or instruments, provided, that,
(i) such sale or other disposition is not to an Affiliate, (ii) the sale price
for such assets is determined by World in good faith to be reasonable, as
evidenced by a resolution of the board of directors of World, (iii) the proceeds
of any such sale or other disposition are applied to the satisfaction of Secured
Indebtedness and, if such application results in the prepayment of any
obligations under the Credit Agreement, such application permanently reduces the
amount of the commitment under the Credit Agreement (unless the Administrative
Agent agrees otherwise), (iv) the Administrative Agent and the Lenders shall
have received written notice of such sale or other disposition at least ten days
prior to the date of such sale or other disposition and (v) the Collateral
Agent, the Administrative Agent and the Lenders receive a certificate of the
Chief Financial Officer of World certifying to each of the
foregoing. If any such sale or other disposition of assets of World
and its Restricted Subsidiaries pursuant to this §10.4(c) results in the sale or
other disposition of the capital stock or other equity interest in a Restricted
Subsidiary, the Subsidiary Guaranty Agreement with respect to, and only with
respect to, such Restricted Subsidiary shall automatically be released and the
Collateral Agent, the Administrative Agent and the Lenders agree to execute and
deliver such further instruments and do such further acts as World may deem
necessary or proper to carry out more effectively the foregoing;
30
(d) Upon
the sale or other disposition of the Collateral or any part thereof pursuant to
and in accordance with §7.2, the Collateral Agent shall release the Lien of this
Agreement on the Collateral or such part, as the case may be, by proper
instrument or instruments; and
(e) With
the prior written consent of the Administrative Agent and each Lender, the
Collateral Agent shall release the Lien of this Agreement or on any assets
covered by this Agreement by proper instrument or instruments.
Section
10.5. Counterparts. This
Agreement may be executed, acknowledged and delivered in any number of
counterparts, each of such counterparts constituting an original but all
together only one Agreement. Execution by facsimile or PDF shall bind
the parties hereto.
Section
10.6. Governing
Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Iowa.
Section
10.7. Headings. Any
headings or captions preceding the text of the several sections hereof are
intended solely for convenience of reference and shall not constitute a part of
this Agreement nor shall they affect its meaning, construction or
effect.
[SIGNATURE
PAGE FOLLOWS]
31
IN
WITNESS WHEREOF, each Company and the Collateral Agent have caused this
Subordinated Security Agreement, Pledge and Indenture of Trust to be duly
executed as of the date and year first above written.
WORLD
ACCEPTANCE CORPORATION OF ALABAMA
|
WORLD
ACCEPTANCE CORPORATION OF MISSOURI
|
WORLD
FINANCE CORPORATION OF GEORGIA
|
WORLD
FINANCE CORPORATION OF LOUISIANA
|
WORLD
ACCEPTANCE CORPORATION OF OKLAHOMA, INC.
|
WORLD
FINANCE CORPORATION OF SOUTH CAROLINA
|
WORLD
FINANCE CORPORATION OF TENNESSEE
|
WFC
OF SOUTH CAROLINA, INC.
|
WORLD
FINANCE CORPORATION OF ILLINOIS
|
WORLD
FINANCE CORPORATION OF NEW MEXICO
|
WORLD
FINANCE CORPORATION OF KENTUCKY
|
WORLD
FINANCE CORPORATION OF COLORADO
|
WORLD
FINANCE CORPORATION OF WISCONSIN
|
WFC
SERVICES, INC.
|
WORLD
FINANCE CORPORATION OF
TEXAS
|
By:
|
||
Name:
|
A.
Xxxxxxxxx XxXxxx III
|
|
Its:
|
Chief
Executive Officer
|
|
WFC
LIMITED PARTNERSHIP
|
||
By:
|
WFC
of South Carolina, Inc., as sole general partner
|
|
By:
|
||
Name:
|
A.
Xxxxxxxxx XxXxxx III
|
|
Its:
|
Chief
Executive
Officer
|
32
XXXXX
FARGO PREFERRED CAPITAL, INC.,
as
Collateral Agent
|
||
By:
|
||
Name:
|
||
Title:
|
Xxxxxxx
X. Xxxxx, Senior Vice
President
|
33
SCHEDULE
I
PLEDGED
SECURITIES
[TO
BE UPDATED BY WORLD]
SCHEDULE
II
PARTNERSHIP
INTERESTS
[TO
BE UPDATED BY WORLD]
SCHEDULE
III
LOCATION
OF OFFICES
[TO
BE UPDATED BY WORLD]
SCHEDULE
IV
LIST
OF NAMES UNDER WHICH EACH COMPANY DOES BUSINESS
[TO
BE UPDATED BY WORLD]
SCHEDULE
V
CONCENTRATION
ACCOUNTS
ACCOUNT
NUMBER
|
DEPOSITORY
INSTITUTION
|
71005681
|
Carolina
First Bank
|
EXHIBIT
A
SECURITY
AGREEMENT SUPPLEMENT
THIS
SUBORDINATED SECURITY AGREEMENT SUPPLEMENT (this “Supplement”), dated
__________, 20__, between _______________________ (the “Company”), and Xxxxx Fargo
Preferred Capital, Inc., as Collateral Agent (the “Collateral Agent”) under the
Subordinated Security Agreement, Pledge and Indenture of Trust dated as of
September 17, 2010 among World Acceptance Corporation of Alabama, an Alabama
corporation, World Acceptance Corporation of Missouri, a Missouri corporation,
World Finance Corporation of Georgia, a Georgia corporation, World Finance
Corporation of Louisiana, a Louisiana corporation, World Acceptance Corporation
of Oklahoma, Inc., an Oklahoma corporation, World Finance Corporation of South
Carolina, a South Carolina corporation, World Finance Corporation of Tennessee,
a Tennessee corporation, World Finance Corporation of Texas, a Texas
corporation, WFC Limited Partnership, a Texas limited partnership, WFC of South
Carolina, Inc., a South Carolina corporation, World Finance Corporation of
Illinois, an Illinois corporation, World Finance Corporation of New Mexico, a
New Mexico corporation, World Finance Corporation of Kentucky, a Kentucky
corporation, World Finance Corporation of Colorado, a Colorado corporation,
World Finance Corporation of Wisconsin, a Wisconsin corporation, WFC Services,
Inc., a South Carolina corporation, each other Restricted Subsidiary which has
previously executed a Subordinated Security Agreement Supplement, and the
Collateral Agent (as amended, restated, modified or supplemented from time to
time, the “Security
Agreement”). All capitalized terms used herein and not
otherwise defined herein shall have the meanings forth in the Security
Agreement.
WITNESSETH:
WHEREAS,
pursuant to Section 3.9 of the World Security Agreement, the Security Agreement
provides for the execution and delivery from time to time of Security Agreement
Supplements substantially in the form hereof each of which shall particularly
describe the Collateral subject to the security interest of the Security
Agreement;
NOW,
THEREFORE, TO SECURE the payment of all Secured Indebtedness and the performance
and observance of all the covenants and conditions contained in this Agreement,
the World Security Agreement, the Credit Agreement, the Subsidiary Guaranty
Agreements and the other Loan Documents entered into from time to time in
connection therewith, in each case, subject to the terms thereof and of §7.5 of
the Security Agreement, the Company does hereby mortgage, grant, convey,
warrant, assign, pledge and hypothecate unto the Collateral Agent, its
successors in trust and assigns, forever, and grants to the Collateral Agent,
its successors in trust and assigns, forever, a continuing security interest in,
all and singular the following described properties, rights, interests and
privileges, together with the proceeds thereof, now or hereafter owned by the
Company:
(a) All
building materials, building equipment, machinery, apparatus, furniture and
equipment and other personal property (other than motor vehicles and accessions
to motor vehicles) of every kind and nature whatsoever located, including
without limitation: all air conditioning, ventilating, plumbing, heating,
lighting and electrical systems and apparatus; all communications equipment and
intercom systems and apparatus; all typewriters, computers and other office
machines and equipment, furniture, furnishings; all sprinkler equipment and
apparatus, all elevators and escalators; and all machinery, equipment, engines,
boilers, tools, furniture, carpeting, tables and chairs, together with all
accessories, parts and appurtenances appertaining or attached thereto, whether
now owned or hereafter acquired, and all substitutions, renewals, or
replacements of and additions, improvements, accessions and accumulations to any
and all thereof, together with all the rents, income, revenues, issues,
proceeds, profits and avails arising therefrom or in connection therewith and
excluding, in all cases, any of the foregoing items of property which are deemed
fixtures;
(b) All
Receivables, whether now existing or hereafter arising, and however evidenced or
acquired, or in which the Company now has or hereafter acquires any rights and
all rights of the Company to any Underlying Collateral granted by an Account
Debtor in connection with any Receivable owing by it to the
Company;
(c) All
Pledged Collateral, if any, including the Pledged Shares, if any, described on
Schedule I hereto;
(d) All
General intangibles of the Company, including, without limitation, tax refunds,
rights with respect to trademarks, service marks, trade names, patents,
copyrights, trade secrets information and rights to prevent others from doing
acts that constitute unfair competition with or misappropriation of property of
the Company including, without limitation, any sums (net of expenses) that the
Company may receive arising out of any claim for infringement of its rights in
any patent, copyright, trademark, trade name, trade secret or other proprietary
right and all rights of the Company under contracts to enjoy performance by
others or to be entitled to enjoy rights granted by others, including, without
limitation, any licenses (to the extent permitted by law);
(e) All
Investment Property, whether now owned or existing or hereafter created,
acquired or arising, or in which the Company now has or hereafter acquires any
rights (the term “Investment
Property” means and includes all investment property and any other
securities (whether certificated or uncertificated), security entitlements,
securities accounts, commodity contracts and commodity accounts, including all
substitutions and additions thereto, all dividends, distributions and sums
distributable or payable from, upon, or in respect of such property, and all
rights privileges incident to such property, but excludes the Pledged
Collateral);
(f) All
supporting evidence and documents relating to any of the above described
property, including without limitation, written applications, credit
information, account cards, payment records, correspondence, delivery and
installation certificates, invoice copies, delivery receipts, notes and other
evidences of indebtedness, insurance certificates and the like, together with
all books of account, data processing records, computer software and licenses to
use the same, ledgers and cabinets in which the same are reflected or
maintained, all whether now existing or hereafter arising;
2
(g) (i)
All right, title and interest of the Company, whether now owned or hereafter
acquired, in all partnerships or limited liability companies, including, without
limitation, those set forth on Schedule II hereto (collectively, the “Partnerships”), (ii) any and
all payments or distributions of whatever kind or character and whether in cash
or other property, at any time made, owing or payable to the Company in respect
of or on account of its present or hereafter acquired interest in the
Partnerships, whether due or to become due and whether representing profits,
distributions pursuant to complete or partial liquidation or dissolution,
repayment of capital contributions or otherwise, and the right to receive,
receipt for, use and enjoy all such payments and distributions, and all proceeds
thereof, in every case whether now arising or hereafter acquired or arising, and
(iii) all proceeds of any of the foregoing;
(h) All
property and rights, if any, which are by the express provisions of this
Agreement required to be subjected to the lien hereof and any additional
property and rights that may from time to time hereafter, by writing of any
kind, be subjected to the lien hereof by the Company or by anyone acting at the
direction or as an agent of the Company;
(i) All
Deposit Accounts, as such term is defined in the Uniform Commercial Code, of
such Company; and
(j) All
proceeds and products of the foregoing and all insurance of the foregoing and
proceeds thereof, whether now existing or hereafter arising; provided that, in
the case of a lien and security interest on the voting stock or other similar
voting equity interests of a corporation, limited liability company, partnership
or other entity which is a “controlled foreign corporation” as defined under
Section 957 of the Internal Revenue Code (herein, a “Foreign Company”), if
granting a security interest of more than 65% of the total combined voting stock
or other voting equity interests of any such Foreign Company would cause adverse
tax consequences to such Company, then such lien and security interest on the
voting stock or other voting equity interests shall be limited to 65% of the
total combined voting stock or other voting equity interests of such Foreign
Company..
TO HAVE
AND TO HOLD the Collateral, WITH POWER OF SALE and right of entry and
possession, unto the Collateral Agent, its successors and assigns, forever; IN
TRUST NEVERTHELESS, upon the terms and trust herein set forth, for the equal and
proportionate benefit, security and protection of all present and future Secured
Creditors; provided always, however, that these presents are upon the express
condition that if the Companies shall irrevocably pay or cause to be irrevocably
paid all the Secured Indebtedness and all obligations to extend Secured
Indebtedness have expired or otherwise terminated, then these presents and the
estate hereby granted and conveyed shall cease and the Secured Agreement shall
become null and void; otherwise the Security Agreement shall remain in full
force and effect.
The
Company hereby binds itself, its successors and assigns, to warrant and forever
defend to the Collateral Agent and its successors and assigns the security
interest hereby created and granted.
3
The
Company hereby agrees that it is a “Company” for all purposes of
the Security Agreement and hereby (A) agrees to be bound by all of the terms of
and perform all of the covenants contained in the Security Agreement and (B)
makes all of the representations and warranties contained in the Security
Agreement.
The
Company hereby represents that the Collateral (other than the Underlying
Collateral and the Pledged Collateral) relating to the Company and the books and
records relating thereto are in the Company’s possession at the offices and
facilities owned or leased by the Company or World set forth on Schedule III
hereto.
This
Supplement shall be construed as supplemental to the Security Agreement and
shall form a part of it and the Security Agreement is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This
Supplement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one and the same
instrument.
This
Supplement shall in all respects be governed by, and construed in accordance
with, the laws of the State of Iowa, including all matters of construction,
validity and performance.
[SIGNATURE
PAGE FOLLOWS]
4
IN
WITNESS WHEREOF, the Company and the Collateral Agent have caused this
Supplement to be executed, as of the day and year first above
written.
[INSERT
NAME OF COMPANY]
|
||
By:
|
||
Name:
|
||
Its:
|
||
XXXXX
FARGO PREFERRED CAPITAL, INC.,
as
Collateral Agent
|
||
By:
|
||
Name:
|
||
Its:
|
5
SCHEDULE
I TO
SECURITY
AGREEMENT SUPPLEMENT
DESCRIPTION
OF PLEDGED COLLATERAL
SCHEDULE
II TO
SECURITY
AGREEMENT SUPPLEMENT
PARTNERSHIP
INTERESTS
SCHEDULE
III TO
SECURITY
AGREEMENT SUPPLEMENT
LOCATIONS
OF OFFICES AND FACILITIES
SCHEDULE
IV TO
SECURITY
AGREEMENT SUPPLEMENT
LIST
OF NAMES UNDER WHICH COMPANY DOES BUSINESS
SCHEDULE
V TO
SECURITY
AGREEMENT SUPPLEMENT
CONCENTRATION
ACCOUNTS