EXHIBIT 10.4
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") dated as of June 25, 2003,
by and among each of the parties listed on the signature pages hereof and those
additional entities that hereafter become parties hereto by executing the form
of Supplement attached hereto as Annex 1, as grantors (collectively, the
"Grantors", and individually, a "Grantor") and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association in its capacity as administrative
agent for the Lender Group (as defined below) (the "Administrative Agent").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement") by and among Xxxxxx & Xxxxx
Corporation, a Tennessee corporation, as borrower (the "Borrower"), the
Guarantors (as defined therein), the financial institutions party thereto as
lenders (together with any other financial institution which subsequently
becomes a lender thereunder, the "Lenders"), Wachovia Bank, National
Association, as issuing bank (together with any other financial institution
which subsequently becomes an issuing bank thereunder, the "Issuing Banks"),
Wachovia Securities, Inc. as arranger (the "Arranger") and the Administrative
Agent, the Lenders have agreed to make the Current Asset Loans (as defined in
the Credit Agreement) to the Borrower, and to incur Letter of Credit Obligations
(as defined in the Credit Agreement) on behalf of the Borrower;
WHEREAS, the Administrative Agent has agreed to act as
administrative agent for the benefit of the Lender Group in connection with the
transactions contemplated by the Credit Agreement; and
WHEREAS, each Guarantor (as defined in the Credit Agreement) is a
direct or indirect Subsidiary (as defined in the Credit Agreement) of the
Borrower, and each Grantor will realize direct and indirect benefits as a result
of the extensions of credit to the Borrower pursuant to the Credit Agreement;
and
WHEREAS, it is a condition precedent to the closing of the Credit
Agreement that (i) the Borrower has agreed to grant a continuing Lien (as
defined in the Credit Agreement) on the Collateral (as hereinafter defined) to
secure the Obligations (as defined in the Credit Agreement), (ii) each Grantor
that is a Guarantor has agreed to grant a continuing Lien on the Collateral to
secure its obligations under the Credit Agreement and the other Loan Documents
to which such Guarantor is a party and all of the Obligations of the Borrower
under the Credit Agreement ((i) and (ii) hereinafter, collectively, the "Secured
Obligations"), and (iii) all of the Grantors have agreed to grant the security
interest contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Defined Terms.
(a) All capitalized terms used herein without definition
shall have the meanings ascribed thereto in the Credit Agreement. All other
terms contained in this Agreement, unless the context indicates otherwise, have
the meanings provided for by the Code (as defined herein) to the extent the same
are used or defined therein.
(b) "Code" as used in this Agreement, means the Uniform
Commercial Code as the same may, from time to time, be enacted and in effect in
the State of New York; provided, that to the extent that the Code is used to
define any term herein or in any Loan Document and such term is defined
differently in different Articles or Divisions of the Code, the definition of
such term contained in Article or Division 9 shall govern; provided further,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection or priority of, or remedies with respect to, the
Administrative Agent's or any Lender's Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term "Code" shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or remedies
and for purposes of definitions related to such provisions.
SECTION 2. Grant of Security. Each Grantor hereby grants, collaterally
assigns and pledges to the Administrative Agent, for the benefit of the Lender
Group, a security interest in (together with a right of setoff) all of the
following property of such Grantor, whether now owned or hereafter acquired, and
all substitutions therefor and accessions thereto (collectively, the
"Collateral"):
(a) All of such Grantor's right, title and interest with
respect to Accounts (as such term is defined in the Credit Agreement), and any
other "accounts" as defined in the Code (the "Accounts");
(b) All of such Grantor's books and records related to
the Collateral ("Books");
(c) All of such Grantor's right, title, and interest with
respect to any Blocked Accounts ("Deposit Accounts");
(d) All of such Grantor's right, title and interest with
respect to general intangibles including contract rights, rights to payment,
rights arising under common law, statutes, or regulations, choses or things in
action, including, without limitation, purchase orders, customer lists, route
lists, infringement claims, computer programs, information contained on computer
disks or tapes, software, literature, reports, catalogs, insurance premium
rebates, tax refunds, and tax refund claims), and any other personal property
other than commercial tort claims, money, Accounts, Deposit Accounts, and
Negotiable Proceeds (as defined below) (the "General Intangibles");
(e) All of such Grantor's right, title and interest with
respect to "inventory," as such term is defined in the Code, wherever located,
and in any event including inventory, merchandise, goods and other personal
property that are held by or on behalf of such Grantor for sale or lease or are
furnished or are to be furnished under a contract of service, goods that are
leased by such Grantor as lessor, or that constitute raw materials, work in
process, finished goods, returned goods, promotional materials or materials or
supplies of any kind, nature or
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description used or consumed or to be used or consumed in the Grantor's business
or in the processing, production, packaging, promotion, delivery or shipping of
the same, including all supplies and embedded software (the "Inventory");
(f) All of such Grantor's right, title, and interest with
respect to any "supporting obligations" as such term is defined in the Code,
including letters of credit and guaranties issued in support of Accounts,
documents, General Intangibles, or instruments (the "Supporting Obligations");
(g) all of the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance or
commercial tort claims covering any or all of the foregoing, and any and all
Accounts, Books, Deposit Accounts, General Intangibles, Inventory, Supporting
Obligations, Negotiable Proceeds (as defined below), money, deposit accounts, or
other tangible or intangible property resulting from the sale, lease, license,
exchange, collection, or other disposition of any of the foregoing, the proceeds
of any award in condemnation with respect to any of the foregoing property of
the Grantor, any rebates or refunds, whether for taxes or otherwise, and all
proceeds of any such proceeds, or any portion thereof or interest therein, and
the proceeds thereof, and all proceeds of any loss of, damage to or destruction
of the above, whether insured or not insured, and, to the extent not otherwise
included, any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral (the
"Proceeds"); provided, however, notwithstanding anything to the contrary
contained herein, the Collateral shall not include the Excluded Assets.
SECTION 3. Security for Obligations. This Agreement secures the payment
of the Secured Obligations. Without limiting the generality of the foregoing,
this Agreement secures the payment of all amounts which constitute part of the
Obligations and would be owed by the Borrower to the Lender Group, or any of
them, but for the fact that they are unenforceable or not allowable due to the
existence of an insolvency proceeding involving the Borrower.
SECTION 4. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each of the Grantors shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of the duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent of any of the rights hereunder shall not release any of the
Grantors from any of their respective duties or obligations under the contracts
and agreements included in the Collateral, and (c) none of the members of the
Lender Group shall have any obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement, nor shall any
member of the Lender Group be obligated to perform any of the obligations or
duties of any of the Grantors thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 5. Negotiable Proceeds. Each Grantor covenants and agrees with
the Administrative Agent, for the benefit of the Lender Group, that from and
after the date of this Agreement and until the date of termination of this
Agreement in accordance with Section 22 hereof:
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(a) in the event that any Proceeds is evidenced by or
consists of letters of credit, letter of credit rights, instruments, promissory
notes, drafts, and documents (collectively, "Negotiable Proceeds") and if and to
the extent that perfection or priority of the Administrative Agent's security
interest is dependent on or enhanced by possession, the applicable Grantor,
promptly upon the request of the Administrative Agent, shall endorse and deliver
physical possession of such Negotiable Proceeds and all other documents held by
such Grantor in connection therewith to the Administrative Agent; and
(b) such Grantor shall take, upon the reasonable request
of the Administrative Agent, all steps reasonably necessary to grant the
Administrative Agent control of all "transferable records" as defined in each of
the Uniform Electronic Transactions Act and the Electronic Signatures in Global
and National Commerce Act.
(c) if any Grantor retains possession of any instruments
promptly upon the request of the Administrative Agent, such instruments shall be
marked with the following legend: "This writing and the obligations evidenced or
secured hereby are subject to the security interest of Wachovia Bank, National
Association, as the Administrative Agent, for the benefit of the Lender Group".
SECTION 6. Government Contracts. If any Account arises out of a
contract or contracts with the United States of America or any department,
agency, or instrumentality thereof, the Grantors shall promptly notify the
Administrative Agent thereof in writing and execute any instruments or take any
steps reasonably required by the Administrative Agent in order that all moneys
due or to become due under such contract or contracts shall be assigned to the
Administrative Agent and notice thereof given under the Federal Assignment of
Claims Act or other Applicable Law.
SECTION 7. Representations, Warranties and Covenants. Each Grantor
hereby represents, warrants and covenants as follows:
(a) The exact legal name of each of the Grantors is set
forth on the signature pages of this Agreement or a supplement hereto. The
Internal Revenue Service taxpayer identification number and the organizational
identification number issued by the state of formation of each Grantor are
listed next to such Grantor's name on Schedule 1 attached hereto.
(b) All of the Inventory of the Grantors, other than
Inventory in transit and Inventory sold in the ordinary course of business, is
located in the continental United States, Puerto Rico or Mexico at the places
specified in Schedules 6.11(a) and (b) to the Credit Agreement. The chief place
of business and chief executive office of each Grantor and the office where each
Grantor keeps records concerning the Accounts is located at the addresses
specified in Schedule 2 attached hereto. None of the Accounts of the Grantors is
evidenced by a promissory note or other instrument, other than a note or other
instrument which has been delivered to the Administrative Agent. Each Grantor
covenants and agrees that it will not change the location of its principal place
of business or chief executive office, or the office where such Grantor keeps
records concerning its Accounts, from the locations identified as such on
Schedule 2, unless, in either case, it complies with the requirements of Section
6.11 of the Credit Agreement and executes any and all documents and authorizes
the filing of any and all Uniform Commercial Code ("UCC") financing statements
that the Administrative Agent reasonably
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requests in connection therewith. Each Grantor further represents and warrants
and agrees that (a) none of the Collateral is subject to any licensing, patent,
royalty, trademark, trade name or copyright agreements with any third parties
which would require any consent of any third party upon sale or disposition
thereof or the payment of any monies to any third party as a precondition of
such sale or other disposition, and (b) the completion of manufacture, sale or
other disposition of any Inventory by the Administrative Agent following an
Event of Default shall not require the consent of any Person and shall not
constitute a breach or default under any contract or agreement to which any
Grantor is a party or to which such property is subject.
(c) Schedule 3 attached hereto sets forth a true,
complete and correct list of the name and address of each location at which any
of the Collateral is stored with a reprocessor, warehouseman or other bailee
(together with the name and address of each reprocessor, warehouseman or bailee
with respect thereto).
(d) This Agreement creates a valid security interest in
the Collateral of each of the Grantors, to the extent a security interest
therein can be created under the Code, securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest have been duly taken or will have been taken
upon the filing of UCC financing statements listing each Grantor, as a debtor,
and the Administrative Agent, as secured party, in the jurisdictions listed next
to each Grantor's name on Schedule 4 attached hereto, except for any action
necessary to perfect the Administrative Agent's security interest in any
Collateral to the extent a security interest therein is not perfected by the
filing of a financing statement under the Code. Upon the making of such filings,
the Administrative Agent shall have a first priority perfected security interest
in the Collateral of each of the Grantors to the extent such security interest
can be perfected by the filing of a financing statement under the Code.
(e) The parties intend that all of the Collateral shall
remain personal property regardless of the manner of its attachment or
affixation to real property.
(f) Within the twelve (12) month period immediately
preceding the Agreement date, none of the Grantors has purchased any of the
Collateral in a bulk transfer or in a transaction outside the ordinary course of
the business of the applicable seller.
SECTION 8. Further Assurances.
(a) Each Grantor agrees that from time to time, at its
own expense, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
that the Administrative Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any of the Collateral. Without limiting the generality
of the foregoing, each Grantor shall: (i) if any Account of any of the Grantors
shall be evidenced by a promissory note or other instrument, deliver and pledge
to the Administrative Agent hereunder such note or instrument or duly indorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to the Administrative Agent and (ii) authorize
the filing of such UCC financing or continuation statements, or amendments
thereto, and execute and deliver to the Administrative Agent such other
instruments or notices, as may be necessary or as the
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Administrative Agent may reasonably request, in order to perfect and preserve
the security interest granted or purported to be granted hereby.
(b) Each Grantor authorizes the Administrative Agent to
file, transmit, or communicate, as applicable, UCC financing statements, in-lieu
financing statements and amendments describing the Collateral, in order to
perfect the Administrative Agent's security interest in the Collateral without
such Grantor's signature to the extent permitted by Applicable Law. A photocopy
or other reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a UCC financing statement
where permitted by Applicable Law. Each Grantor also hereby ratifies its
authorization for the Administrative Agent to have filed in any jurisdiction any
UCC financing statements, in-lieu of financing statements or amendments thereto
if filed prior to the date hereof. Each Grantor acknowledges that it is not
authorized to file any financing statement or amendment or termination statement
with respect to any financing statement filed in connection with this Agreement
without the prior written consent of the Administrative Agent, subject to such
Grantor's rights under Section 9-509(d)(2) of the Code.
SECTION 9. Change Name. Each Grantor covenants and agrees that such
Grantor will not, without at least thirty (30) days prior written notice to the
Administrative Agent and subject to any reasonable requirements of the
Administrative Agent in connection therewith, change such Grantor's federal tax
identification number or name or reincorporate or reorganize itself under the
laws of any jurisdiction.
SECTION 10. Intentionally Omitted.
SECTION 11. Insurance. The Grantors shall, at their own expense,
maintain insurance with respect to the Collateral in such amounts, against such
risks, in such form and with such insurers, as set forth in the Credit
Agreement.
SECTION 12. Transfers and Other Liens. The Grantors shall not (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral, except Inventory in the ordinary
course of business and other Collateral as expressly otherwise permitted by the
Credit Agreement, or (ii) create or permit to exist any Lien, security interest,
option or other charge or encumbrance upon or with respect to any of the
Collateral of any of the Grantors, except for Permitted Liens or as otherwise
permitted by the Credit Agreement. The inclusion of proceeds in the Collateral
shall not be deemed to constitute the Administrative Agent's consent to any sale
or other disposition of any of the Collateral except as expressly permitted in
this Agreement or the other Loan Documents.
SECTION 13. Administrative Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints the Administrative Agent its
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, at such time as an Event of Default
has occurred and is continuing under the Credit Agreement, to take any action
and to execute any instrument which the Administrative Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:
(a) to ask, demand, collect, xxx for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in connection with the Accounts or any other Collateral of
such Grantor;
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(b) to receive and open all mail addressed to such
Grantor and to notify postal authorities to change the address for the delivery
of mail to such Grantor to that of the Administrative Agent as provided in any
Blocked Account Agreement;
(c) to receive, indorse, and collect any drafts or other
instruments, documents, Negotiable Proceeds in connection therewith;
(d) to file any claims or take any action or institute
any proceedings which the Administrative Agent may deem necessary or desirable
for the collection of any of the Collateral of such Grantor or otherwise to
enforce the rights of the Administrative Agent with respect to any of the
Collateral;
(e) to repair, alter, or supply goods, if any, necessary
to fulfill in whole or in part the purchase order of any Person obligated to
such Grantor in respect of any Account of such Grantor; and
(f) to use any labels, patents, trademarks, tradenames,
URLs, domain names, industrial designs, copyrights, advertising matter or other
industrial and intellectual property rights, in advertising for sale and selling
Inventory and other Collateral and to collect any amounts due under Accounts or
Negotiable Proceeds of such Grantor.
SECTION 14. Administrative Agent May Perform. Upon the occurrence of an
Event of Default, the Administrative Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the
Administrative Agent incurred in connection therewith shall be payable, jointly
and severally, by the Grantors.
SECTION 15. Administrative Agent's Duties. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon the Administrative Agent to
exercise any such powers. Except for the safe custody of any Collateral in its
actual possession and the accounting for moneys actually received by it
hereunder, the Administrative Agent shall have no duty as to any Collateral or
as to the taking of any necessary steps to preserve rights against prior parties
or any other rights pertaining to any Collateral. The Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any Collateral in its actual possession if such Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property. Each reference herein to any right granted to, benefit conferred upon
or power exercisable by the "Administrative Agent" shall be a reference to the
Administrative Agent for the ratable benefit of the Lender Group, and each
action taken or right exercised hereunder shall be deemed to have been so taken
or exercised by the Administrative Agent for the ratable benefit of the Lender
Group.
SECTION 16. Remedies. Upon the occurrence and during the continuance of
an Event of Default:
(a) The Administrative Agent may exercise in respect of
the Collateral, in addition to other rights and remedies provided for herein, in
the other Loan Documents, or otherwise available to it, all the rights and
remedies of a secured party on default under the Code in effect in the State of
New York at that time or any other applicable jurisdiction. Without limiting the
generality of the foregoing, each Grantor expressly agrees that in any such
event the
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Administrative Agent without demand of performance or other demand,
advertisement or notice of any kind (except a notice specified below of time and
place of public or private sale or as expressly required by the Credit
Agreement) to or upon any of the Grantors or any other Person (all and each of
which demands, advertisements and notices are hereby expressly waived to the
maximum extent permitted by the Code and other Applicable Law), may take
immediate possession of the Collateral and (i) require the Grantors to, and each
Grantor hereby agrees that it will at its own expense and upon request of the
Administrative Agent forthwith, assemble all or part of the Collateral as
directed by the Administrative Agent and make it available to the Administrative
Agent at one or more locations where such Grantor regularly maintains Inventory
and (ii) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of the
Administrative Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Administrative Agent may deem
commercially reasonable. Each Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten (10) days' notice to any of the Grantors
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Administrative
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
(b) The Administrative Agent is hereby granted a license
or other right to use, without charge, each Grantor's labels, patents,
copyrights, rights of use of any name, trade secrets, trade names, trademarks,
service marks and advertising matter, URLs, domain names, industrial designs,
other industrial or intellectual property or any property of a similar nature,
whether owned by any of the Grantors or with respect to which any of the
Grantors have rights under license, sublicense or other agreements, as it
pertains to the Collateral, in preparing for sale, advertising for sale and
selling any Collateral, and each Grantor's rights under all licenses and all
franchise agreements shall inure to the benefit of the Administrative Agent.
(c) Any cash held by the Administrative Agent or any
member of the Lender Group as Collateral and all cash proceeds received by the
Administrative Agent or any member of the Lender Group in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Administrative Agent, be held by the
Administrative Agent as collateral for, and/or then or at any time thereafter be
applied in whole or in part by the Administrative Agent against, all or any part
of the Secured Obligations in such order as may be set forth in the Credit
Agreement. Any surplus of such cash or cash proceeds held by the Administrative
Agent and remaining after payment in full of all the Secured Obligations shall
be delivered to the Grantors.
(d) Each Grantor hereby acknowledges that the Secured
Obligations arose out of a commercial transaction, and agrees that if an Event
of Default shall occur the Administrative Agent shall have the right to an
immediate writ of possession without notice of a hearing. The Administrative
Agent shall have the right to the appointment of a receiver for the properties
and assets of each of the Grantors, and each Grantor hereby consents to such
rights and such appointment and hereby waives any objection such Grantors may
have thereto or the right to have a bond or other security posted by the
Administrative Agent.
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(e) Neither the Administrative Agent nor any member of
the Lender Group shall be liable or responsible in any way for the safekeeping
of any of the Collateral or for any loss or damage thereto (except the
Administrative Agent for reasonable care in the custody thereof while any
Collateral is in the Administrative Agent's actual possession and except the
Administrative Agent or a member of the Lender Group for its willful misconduct
or gross negligence) or for any diminution in the value thereof, or for any act
or default of any warehouseman, carrier, forwarding agency, or other person
whomsoever, but the same shall be at each Grantor's sole risk.
(f) Neither the Administrative Agent nor any member of
the Lender Group shall be under any obligation to marshal any assets in favor of
any Grantor or any other Person or against or in payment of any or all of the
Obligations.
SECTION 17. Remedies Cumulative. Each right, power, and remedy of the
Administrative Agent as provided for in this Agreement or in the other Loan
Documents or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every
other right, power, or remedy provided for in this Agreement or in the other
Loan Documents or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or beginning of the exercise by the Administrative
Agent, of any one or more of such rights, powers or remedies shall not preclude
the simultaneous or later exercise by the Administrative Agent of any or all
such other rights, powers or remedies.
SECTION 18. Expenses. The Grantors shall, upon demand, pay to the
Administrative Agent, jointly and severally, the amount of any and all
reasonable out-of-pocket expenses, including, without limitation, the fees and
expenses of its counsel incurred and of any experts and agents, which the
Administrative Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or, upon an
Event of Default, the sale of, collection from, or other realization upon, any
of the Collateral in accordance with this Agreement and the other Loan
Documents, (iii) the exercise or enforcement of any of the rights of the
Administrative Agent hereunder or (iv) the failure by any of the Grantors to
perform or observe any of the provisions hereof.
SECTION 19. Possession Until Default. Until an Event of Default shall
occur and be continuing, except as otherwise provided in this Agreement, the
Credit Agreement or other Loan Documents, the Grantors shall have the right to
possession and enjoyment of the Collateral for the purpose of conducting the
ordinary course of their respective businesses, subject to and upon the terms
hereof and of the Credit Agreement and other Loan Documents.
SECTION 20. Amendments; Etc. No waiver of any provision of this
Agreement, and no consent to any departure by any of the Grantors herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
amendment of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by the Administrative Agent and each of the
Grantors to which such amendment applies.
SECTION 21. Addresses for Notices. All notices and other communications
provided for hereunder shall be given in the form and manner and delivered to
the Administrative Agent at
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its address specified in the Credit Agreement, and to any of the Grantors at
their respective addresses set forth in the Credit Agreement, or, as to any
party, at such other address as shall be designated by such party in a written
notice to the other party.
SECTION 22. Continuing Security Interest: Assignments under Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the Secured
Obligations (other than any Obligations then outstanding in respect of Bank
Products and any contingent indemnity obligations) have been paid in full in
cash or otherwise satisfied to the satisfaction of the Lender Group and the
expiration or termination of the obligation of the Lender Group to extend credit
pursuant to the Credit Agreement, (ii) be binding upon each of the Grantors, and
their respective successors and assigns, and (iii) inure to the benefit of, and
be enforceable by, the Administrative Agent, and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may, in accordance with the provisions of the Credit Agreement, assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of the
Current Asset Commitments and the Current Asset Loans owing to it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise. Upon
payment in full in cash, or other satisfaction to the satisfaction of the Lender
Group, of the Secured Obligations (other than any Obligations then outstanding
in respect of Bank Products and any contingent indemnity obligations) and all
other amounts payable under this Agreement and the expiration or termination of
the obligation of the Lenders to extend credit pursuant to the Credit Agreement,
the security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Grantors or any other Person entitled thereto. No
transfer or renewal, extension, assignment or termination of this Agreement or
of the Credit Agreement, any other Loan Document, or any other instrument or
document executed and delivered by the Borrower or any of the Grantors to the
Administrative Agent nor any additional Advances made by any Lender to the
Borrower, nor the taking of further security, nor the retaking or re-delivery of
the Collateral to the Grantors, or any of them, by the Administrative Agent, nor
any other act of the Lender Group, or any of them, shall release any of the
Grantors from any obligation, except a release or discharge executed in writing
by the Administrative Agent with respect to such obligation or payment of such
obligation or upon payment in full in cash, or other satisfaction to the
satisfaction of the Lender Group, of the Secured Obligations (other than any
Obligations then outstanding in respect of Bank Products and any contingent
indemnity obligations) and all other amounts payable under this Agreement and
the expiration or termination of the obligation of the Lenders to extend credit
pursuant to the Credit Agreement. The Administrative Agent shall not by any act,
delay, omission or otherwise, be deemed to have waived any of its rights or
remedies hereunder, unless such waiver is in writing and signed by the
Administrative Agent and then only to the extent therein set forth. A waiver by
the Administrative Agent of any right or remedy on any occasion shall not be
construed as a bar to the exercise of any such right or remedy which the
Administrative Agent would otherwise have had on any other occasion.
SECTION 23. Governing Law; Terms. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, including,
without limitation, Sections 5-1401 and 5-1402 of the New York General
Obligations Law and Section 327(b) of the New York Civil Practice Laws and Rules
and without reference to the conflict or choice of law principles thereof except
to the extent that the validity or perfection of the security interest
-10-
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the State of New York.
SECTION 24. New Subsidiaries. Pursuant to Section 6.20 of the Credit
Agreement, any new Domestic Subsidiary (whether by acquisition, creation or
designation) is required to enter into this Agreement by executing and
delivering in favor of the Administrative Agent an instrument in the form of
Annex 1 attached hereto. Upon the execution and delivery of Annex 1 by such new
Domestic Subsidiary, such Domestic Subsidiary shall become a Grantor hereunder
with the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any instrument adding an additional Grantor as a party
to this Agreement shall not require the consent of any Grantor hereunder. The
rights and obligations of each Grantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Grantor hereunder.
SECTION 25. Miscellaneous.
(a) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Delivery of an executed counterpart of this Agreement by facsimile shall be
equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
facsimile also shall deliver an original executed counterpart of this Agreement
but the failure to deliver an original executed counterpart shall not affect the
validity, enforceability and binding effect of this Agreement.
(b) Any provision of this Agreement which is prohibited
or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of such provision in
any other jurisdiction.
(c) To the extent that the terms and conditions of this
Agreement shall be inconsistent or conflict with the terms and conditions of the
Pledge Agreements with respect to any of the Collateral covered thereby, the
terms and conditions of the Pledge Agreements shall control.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the Grantors and the Administrative Agent
has caused this Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
GRANTORS: XXXXXX & XXXXX CORPORATION,
a Tennessee corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President - Treasurer
XXXXXX & XXXXX
INTERNATIONAL, INC., a Delaware
corporation
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Treasurer
XXXXX EUROPE, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Treasurer
XXXXXX & XXXXX EUROPE, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Treasurer
XXXXXX & XXXXX CARIBE INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Treasurer
ADMINISTRATIVE WACHOVIA BANK, NATIONAL
AGENT: ASSOCIATION, as Administrative Agent
By: /s/ W. Xxxxxx Xxxxxx
-----------------------------------------
Name: W. Xxxxxx Xxxxxx
Title: Director
SECURITY AGREEMENT
SCHEDULE 1
TO
SECURITY AGREEMENT
FEDERAL TAXPAYER IDENTIFICATION NUMBER, ORGANIZATIONAL IDENTIFICATION NUMBER
XXXXXX & XXXXX CORPORATION
FEIN: 00-0000000
State of Incorp: Tennessee
Org. Id. Number: 0307723
XXXXXX & XXXXX INTERNATIONAL, INC.
FEIN: 00-0000000
State of Incorp: Delaware
Org. Id. Number: 0658122
XXXXX EUROPE, INC.
FEIN: 00-0000000
State of Incorp: Delaware
Org. Id. Number: 2724936
XXXXXX & XXXXX EUROPE, INC.
FEIN: 00-0000000
State of Incorp: Delaware
Org. Id. Number: 2724942
XXXXXX & XXXXX CARIBE INC.
FEIN: 00-0000000
State of Incorp: Delaware
Org. Id. Number: 0701921
SCHEDULE 2
TO
SECURITY AGREEMENT
PRINCIPAL PLACE OF BUSINESS/CHIEF EXECUTIVE OFFICE
XXXXXX & XXXXX CORPORATION
0000 X& X Xxxxxxxxx
Xxxxxxx, XX 00000
XXXXXX & XXXXX INTERNATIONAL, INC.
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
XXXXX EUROPE, INC.
0000 X& X Xxxxxxxxx
Xxxxxxx, XX 00000
XXXXXX & XXXXX EUROPE, INC.
0000 X& X Xxxxxxxxx
Xxxxxxx, XX 00000
XXXXXX & XXXXX CARIBE INC.
X.X. Xxx 0000 - Xxxxx X
Xxxx-Xxxxxx Xxxxxxxxxx Xxxx
Xxx 00-00
Xxxx, Xxxx, Xxxxxx Xxxx 00000
SCHEDULE 3
TO
SECURITY AGREEMENT
BAILEE LOCATIONS
None.
SCHEDULE 4
TO
SECURITY AGREEMENT
UCC FILING JURISDICTIONS
XXXXXX & XXXXX CORPORATION Tennessee Secretary of State
XXXXXX & XXXXX INTERNATIONAL, INC. Delaware Secretary of State
XXXXX EUROPE, INC. Delaware Secretary of State
XXXXXX & XXXXX EUROPE, INC. Delaware Secretary of State
XXXXXX & XXXXX CARIBE INC. Delaware Secretary of State
Puerto Rico Secretary of State
Annex 1 to Security Agreement
Form of Supplement
Supplement No. __ (this "Supplement") dated as of _______ to
the Security Agreement dated as of June 25, 2003 (as amended,
restated, supplemented or otherwise modified from time to
time, the "Security Agreement") by each of the parties listed
on the signature pages thereto and those additional entities
that thereafter become parties thereto (each a "Grantor") and
Wachovia Bank, National Association, in its capacity as
administrative agent for the Lender Group (as defined in the
Credit Agreement described below) (the "Administrative
Agent").
WITNESSETH:
WHEREAS, Xxxxxx & Xxxxx Corporation, a Tennessee corporation, as
borrower (the "Borrower"), the Guarantors (as defined therein), the financial
institutions party thereto as lenders (together with any other financial
institution which subsequently becomes a lender thereunder, the "Lenders"),
Wachovia Bank, National Association, as issuing bank (together with any other
financial institution which subsequently becomes an issuing bank thereunder, the
"Issuing Banks"), Wachovia Securities, Inc. as arranger (the "Arranger") and the
Administrative Agent are parties to that certain Credit Agreement dated as of
June 25, 2003 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"); and
WHEREAS, capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement, and if
not defined therein, in the Credit Agreement; and
WHEREAS, the Grantors have entered into the Security Agreement in order
to induce the Lender Group to extend credit to the Borrower under the Credit
Agreement; and
WHEREAS, pursuant to provisions of Section 6.20 of the Credit
Agreement, new Domestic Subsidiaries of the Borrower (whether by acquisition,
creation, or designation) must execute and deliver to the Administrative Agent
certain Loan Documents and Security Documents, including, without limitation,
the Security Agreement, and the execution of the Security Agreement by the
undersigned new Grantor or Grantors (collectively, the "New Grantor") may be
accomplished by the execution of this Supplement in favor of the Administrative
Agent for the ratable benefit of the Lender Group;
NOW, THEREFORE, for and in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the New Grantor hereby agrees as follows:
SECTION 1. In accordance with Section 24 of the Security Agreement, the
New Grantor, by its signature below, becomes a `Grantor' under the Security
Agreement with the same force and effect as if originally named therein as a
`Grantor' and the New Grantor hereby (a) agrees to all of the terms and
provisions of the Security Agreement applicable to it as a `Grantor' thereunder
and (b) represents and warrants that the representations and warranties
made by it as a `Grantor' thereunder are true and correct on and as of the date
hereof. In furtherance of the foregoing, the New Grantor, as security for the
payment and performance in full of the Secured Obligations, does hereby grant,
assign, and pledge to the Administrative Agent, for the ratable benefit of the
Lender Group, a security interest in and security title to all Collateral (as
defined in the Security Agreement) of the New Grantor, and all additions thereto
and replacements thereof and all other property of the New Grantor whether now
or hereafter created, acquired or reacquired, to secure the full and prompt
payment of the Secured Obligations, including, without limitation, any interest
thereon, plus attorneys' fees and expenses if the Obligations represented by the
Security Agreement are collected by law, through an attorney-at-law, or under
advice therefrom. Schedule 1, "Federal Taxpayer Identification Number,
Organizational Identification Number" Schedule 2, "Principal Place of
Business/Chief Executive Office," Schedule 3, "Bailee Locations," and Schedule
4, "UCC Filing Jurisdictions" attached hereto supplement Schedule 1, Schedule 2,
Schedule 3, and Schedule 4 to the Security Agreement and shall be deemed a part
thereof for all purposes of the Security Agreement. Each reference to a
`Grantor' in the Security Agreement shall be deemed to include the New Grantor.
The Security Agreement is incorporated herein by reference.
SECTION 2. The New Grantor represents and warrants to the
Administrative Agent and the other members of the Lender Group that this
Supplement has been duly executed and delivered by the New Grantor and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other
similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity).
SECTION 3. This Supplement may be executed in multiple counterparts,
each of which shall be deemed to be an original, but all such separate
counterparts shall together constitute but one and the same instrument. Delivery
of a counterpart hereof by facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof.
SECTION 4. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 5. This Supplement shall be construed and interpreted in
accordance with the internal laws of the State of New York including, without
limitation, Section 5-1401 and 5-1402 of the New York General Obligations Law
and Section 327(b) of the New York Civil Practice Laws and Rules.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the New Grantor has duly executed this Supplement
to the Security Agreement as of the day and year first above written.
NEW GRANTOR: [Name of New Grantor]
By:_________________________________
Name:_______________________________
Title:______________________________
