SECURITY AGREEMENT
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This Security Agreement (this "Agreement"), dated as of November 14, 2001,
by and among Palisade Concentrated Equity Partnership, L.P. ("Palisade"), as
collateral agent for the Investors (as hereinafter defined) (in such capacity,
the "Collateral Agent") and Kroll Inc., an Ohio corporation (the "Company").
BACKGROUND
Pursuant to the terms of a Securities Purchase Agreement dated as of the
date hereof (as amended, modified, restated or supplemented from time to time,
the "Purchase Agreement") by and among the Company, the Collateral Agent and the
investors named in the Purchase Agreement, including, without limitation,
Palisade (collectively, the "Investors"), the Investors have agreed to acquire
from the Company an aggregate of $30,000,000 principal amount of the Company's
6% Senior Secured Subordinated Convertible Notes due 2006 (collectively, the
"Notes"). The Investors are willing to enter into the Purchase Agreement only
upon the condition, among others, that the Company secure its obligations under
the Purchase Documents (as hereinafter defined) by executing and delivering this
Agreement to the Collateral Agent.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
Definitions
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Section 1.1. General Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
"Chattel Paper" means all chattel paper as such term is defined in
the UCC, now owned or hereafter acquired, including, without limitation,
electronic chattel paper, as such term is defined in the UCC.
"Collateral" means and includes all now and hereafter acquired
assets of the Company including, without limitation:
(A) all Inventory;
(B) all Equipment;
(C) all General Intangibles;
(D) all Receivables;
(E) all Chattel Paper;
(F) all Letter-of-Credit Rights;
(G) all Instruments;
(H) the commercial tort claims set forth on Schedule V;
(I) all books, records, ledgercards, files, correspondence,
computer programs, tapes, disks and related data processing software (owned by
the Company or in which it has an interest) which at any time evidence or
contain information relating to any or all of (A), (B), (C), (D), (E), (F), (G)
and (H) above or are otherwise necessary or helpful in the collection thereof or
realization thereupon;
(J) documents of title, policies and certificates of insurance,
securities, Chattel Paper, other documents or instruments evidencing or
pertaining to any or all of (A), (B), (C), (D) (E), (F), (G), (H) and (I) above;
(K) all Supporting Obligations and guaranties, including letters
of credit and guarantees issued in support of Receivables, Chattel Paper,
General Intangibles and Investment Property, Liens on real or personal property,
leases, and other agreements and property which in any way secure or relate to
any or all of (A), (B), (C), (D), (E), (F), (G), (H), (I) and (J) above, or are
acquired for the purpose of securing and enforcing any item thereof;
(L) (i) all cash held as cash collateral to the extent not
otherwise constituting Collateral, all other cash or property at any time on
deposit with or held by the Collateral Agent for the account of the Company
(whether for safekeeping, custody, pledge, transmission or otherwise), (ii) all
present or future deposit accounts (whether time or demand or interest or
non-interest bearing) of the Company with the Collateral Agent or any other
Person including those to which any such cash may at any time and from time to
time be credited, (iii) all Payment Intangibles, (iv) all letter of credit
obligations, (v) all investments and reinvestments (however evidenced) of
amounts from time to time credited to such accounts, (iv) all interest,
dividends, distributions and other proceeds payable on or with respect to (x)
such investments and reinvestments and (y) such accounts, and (v) all Investment
Property; and
(M) all products and proceeds of (A), (B), (C), (D), (E), (F),
(G), (H), (I), (J), (K) and (L) above (including, but not limited to, all claims
to items referred to in (A), (B), (C), (D), (E), (F), (G), (H), (I), (J), (K)
and (L) above) and all claims of the Company against third parties (x) for (i)
loss of, damage to, or destruction of, and (ii) payments due or to become due
under leases, rentals and hires of any or all of (A), (B), (C), (D), (E), (F),
(G), (H), (I), (J), (K) and (L) above and (y) proceeds payable under, or
unearned premiums with respect to policies of insurance in whatever form.
"Copyright License" means any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by the Company or which the Company otherwise has the right to
license, or granting any right to the Company under any Copyright now or
hereafter owned by any third party, and all rights of the Company under any such
agreement.
"Copyrights" means all of the following now owned or hereafter
acquired by the Company: (a) all copyright rights in any work subject to the
copyright laws of the United States
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or any other country, whether as author, assignee, transferee or otherwise, and
(b) all registrations and applications for registration of any such copyright in
the United States or any other country, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, including those used in the Company's business
listed on Schedule II attached hereto.
"Customer" means and includes the account debtor with respect to any
Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or contract right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with the Company,
pursuant to which the Company is to deliver any personal property or perform any
services.
"Default" means any act or event which, with the giving of notice or
passage of time or both, would constitute an Event of Default.
"Equipment" means all equipment as such term is defined in the UCC,
now owned or hereafter acquired, including, without limitation, equipment,
machinery and goods (excluding Inventory), whether or not constituting fixtures,
including, without limitation: plant and office equipment, tools, dies, parts,
data processing equipment, computer equipment with embedded software and
peripheral equipment, furniture and trade fixtures, trucks, trailers, loaders
and other vehicles and all replacements and substitutions therefore and all
accessions thereto.
"Event of Default" means the occurrence of any of the events set
forth in Section 6.1 hereof.
"GAAP" means the United States generally accepted accounting
principles, applied on a basis consistent with the accounting practices applied
in the Company's financial statements included in the SEC Filings.
"General Intangibles" means all general intangibles as such term is
defined in the UCC, now owned or hereafter acquired, including, without
limitation, Payment Intangibles, Trademarks, trade secrets, equipment
formulation, manufacturing procedures, quality control procedures, product
specifications, Patents, Patent applications, Copyrights, registrations,
software, contract rights, choses in action, causes of action, corporate or
other business records, inventions, designs, goodwill, claims under guarantees,
licenses, franchises, tax refunds, tax refund claims, computer programs,
computer data bases, computer program flow diagrams, source codes, object codes
and all other intangible property of every kind and nature.
"Health-Care-Insurance Receivables" means all health-care-insurance
receivables as such term is defined in the UCC, now owned or hereafter acquired,
including, without limitation, an interest in or claim under a policy of
insurance which is a right to payment of a monetary obligation for health-care
goods or services provided.
"Instruments" means all instruments as such term is defined in the
UCC, now owned or hereafter acquired, including, without limitation, a
negotiable instrument or a certificated security or any other writing which
evidences a right to the payment of money.
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"Intellectual Property" means all intellectual and similar property
of the Company of every kind and nature now owned or hereafter acquired by the
Company, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in the connection with, any of the
foregoing.
"Inventory" means all inventory as such term is defined in the UCC,
now owned or hereafter acquired, including, without limitation, goods,
merchandise and other personal property, wherever located, to be furnished under
any contract of service or held for sale or lease, all raw materials, work in
process, finished goods and materials and supplies of any kind, nature or
description which are or might be used or consumed in business or used in
selling or furnishing such goods, merchandise and other personal property, and
all documents of title or other documents representing them.
"Investment Property" means all investment property as such term is
defined in the UCC.
"Letter-of-Credit Rights" means all letter-of-credit rights as such
term is defined in the UCC, now owned or hereafter acquired, including, without
limitation, rights to payment or performance under a letter of credit, whether
or not the beneficiary has demanded or is entitled to demand payment or
performance.
"License" means any Patent License, Trademark License, Copyright
License or other license or sublicense to which the Company is a party.
"Lien" means any mortgage, security deed, deed of trust, pledge,
hypothecation, assignment, security interest, lien (whether statutory or
otherwise), charge, claim or encumbrance, or preference, priority or other
security agreement or preferential arrangement held or asserted in respect of
any asset of any kind or nature whatsoever including, without limitation, any
conditional sale or other title retention agreement, any lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement under the UCC or comparable
law of any jurisdiction.
"Obligations" means and includes all obligations of the Company to
the Collateral Agent and the Investors under this Agreement, the Purchase
Agreement, the Notes and all other agreements, documents and instruments now or
at any time hereafter executed and/or delivered by the Company to, with or in
favor of Collateral Agent and/or the Investors in connection therewith or
related thereto including, without limitation, all reasonable expenses
(including reasonable attorney fees) chargeable to the Company's account or
incurred by the Collateral Agent and/or the Investors in connection with the
Company's account whether provided for herein or in any other agreement,
instrument, or document executed by or on behalf of the Company in connection
with this Agreement or the Collateral.
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"Patent License" means any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by the Company or which the Company
otherwise has the right to license, is in existence, or granting to the Company
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of the Company under
any such agreement.
"Patents" means all of the following now owned or hereafter acquired
by the Company (a) all letters patent of the United States or any other country,
all registrations and recordings thereof, and all applications for letters
patent of the United States or any other country, including registrations,
recordings and pending applications in the United States Patent and Trademark
Office or any similar offices in any other country, including those used in the
Company's business listed on Schedule III attached hereto, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof,
and the inventions disclosed or claimed therein, including the right to make,
use and/or sell the inventions disclosed or claimed therein.
"Payment Intangibles" means all payment intangibles as such term is
defined in the UCC, now owned or hereafter acquired, including, without
limitation, a General Intangible under which the account debtor's principle
obligation is a monetary obligation.
"Permitted Liens" means (a) Liens of carriers, warehousemen,
artisans, bailees, mechanics and materialmen incurred in the ordinary course of
business securing sums not overdue; (b) Liens incurred in the ordinary course of
business in connection with worker's compensation, unemployment insurance or
other forms of governmental insurance or benefits, relating to employees,
securing sums (i) not overdue or (ii) being diligently contested in good faith
provided that adequate reserves with respect thereto are maintained on the books
of the Company in conformity with GAAP, (c) Liens in favor of the Collateral
Agent for its benefit and for the ratable benefit of the Investors, (d) Liens
for taxes (i) not yet due or (ii) being diligently contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Company in conformity with GAAP provided,
that, the Lien shall have no effect on the priority of Liens in favor of the
Collateral Agent other than by operation of law, and (e) zoning restrictions,
easements, licenses, or other restrictions on the use of real property or other
minor irregularities in title thereto, so long as the same do not materially
impair the use, value or marketability of such real estate.
"Premises" means all premises where the Company conducts its
business and has any rights of possession, including, without limitation, the
premises described in Schedule I attached hereto.
"Purchase Documents" means this Agreement, the Registration Rights
Agreement, the Notes, the Pledge Agreement and all other documents, instruments,
agreements and certificates at any time delivered executed and/or delivered by
the Company to, with or in favor of Collateral Agent and/or the Investors in
connection herewith or therewith or related hereto or thereto.
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"Receivables" means all accounts as such term is defined in the UCC,
including, without limitation, each and every right to the payment of money,
whether such right to payment now exists or hereafter arises, whether such right
to payment arises out of a sale, lease or other disposition of goods or other
property, out of a rendering of services, out of a loan, out of the overpayment
of taxes or other liabilities, or otherwise arises under any contract or
agreement, whether such right to payment is created, generated or earned by the
Company or by some other Person who subsequently transfers such Person's
interest to the Company, whether such right to payment is or is not already
earned by performance, and howsoever such right to payment may be evidenced,
together with all other rights and interests (including all Liens) which the
Company may at any time have by law or agreement against any account debtor or
other obligor obligated to make any such payment or against any property of such
account debtor or other obligor; all including but not limited to all present
and future accounts, contract rights, loans and obligations receivable, Health
Care Insurance Receivables, Chattel Paper, bonds, notes and other debt
instruments, tax refunds and rights to payment in the nature of General
Intangibles.
"Security Interest" shall have the meaning assigned to such term in
Section 2.1 hereof.
"Senior Debt" shall have the meaning assigned to such term in the
Notes.
"Senior Liens" means the Liens granted by the Company in favor of
the holders of the Senior Debt to secure the Senior Debt.
"Supporting Obligations" means all supporting obligations as such
term is defined in the UCC.
"Trademark License" means any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark, now or
hereafter owned by the Company or which the Company otherwise has the right to
license, or granting to the Company any right to use any Trademark now or
hereafter owned by any third party and all rights of the Company under any such
agreement.
"Trademarks" means all of the following now owned or hereafter
acquired by the Company: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registrations and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office,
any State of the United States or any similar offices in any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those used in the Company's business listed on Schedule IV attached
hereto and (b) all goodwill associated therewith or symbolized thereby.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the state designated in Section 8.13 as the state whose laws govern this
Agreement or in any other state whose laws are held to govern this Agreement or
any portion hereof.
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Section 1.2. Other Terms.
(a) All capitalized terms not otherwise defined herein shall have
the meanings assigned to them in the Purchase Agreement.
(b) All terms defined in the UCC (as defined herein) and not defined
in this Agreement shall have the meanings specified therein.
(c) All accounting terms not otherwise defined herein shall have the
meanings assigned to them in accordance with GAAP.
Section 1.3. Cross References.
(a) All references in this Agreement to Articles, Sections,
subsections, Exhibits and Schedules, shall be to Articles, Sections,
subsections, Exhibits and Schedules of this Agreement unless otherwise
explicitly specified.
(b) All references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.
ARTICLE II
Security Interest
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Section 2.1. Security Interest.
(a) To secure the prompt and complete payment and performance to the
Collateral Agent and the Investors of the Obligations, the Company hereby
collaterally assigns, pledges and grants to the Collateral Agent for its benefit
and for the ratable benefit of the Investors a continuing security interest in
and to the Collateral, whether now owned or existing or hereafter acquired or
arising and wheresoever located, whether or not the same is subject to Article 9
of the UCC (the "Security Interest"). All of the Company's ledger sheets, files,
records, books of account, business papers and documents relating to the
Collateral shall, until delivered to or removed by the Collateral Agent, be kept
by the Company in trust for the Collateral Agent until all Obligations have been
paid in full.
(b) The Company hereby authorizes the Collateral Agent to file one
or more financing statements (including fixture filings), amendments, filings
with the United States Patent and Trademark Office or United States Copyright
Office (or any successor office or any similar office in any other country) or
other documents for the purpose of perfecting, confirming, continuing, enforcing
or protecting the Security Interest granted by the Company, without the
Company's signature appearing thereon. The Company agrees to furnish to the
Collateral Agent promptly upon request any information reasonably necessary for
the purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by the Company. The parties agree that a carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement. If any Receivable becomes evidenced by a promissory note or
any other instrument for the payment of money, the Company will immediately
deliver such instrument to the Collateral Agent appropriately endorsed.
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ARTICLE III
Representations and Warranties
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The Company represents and warrants to the Collateral Agent as follows:
Section 3.1. Title and Liens. The Collateral (a) is owned solely by the
Company free and clear of all Liens except Permitted Liens and (b) is not
subject to any agreement prohibiting the granting of a security interest or
requiring notice of or consent to the granting of a security interest. The
Company does not hold any commercial tort claims.
Section 3.2. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid Lien in all the Collateral, (b) subject to the
filing of the financing statements described in Section 2.1(b) hereof, a
perfected Lien in all Collateral in which a Lien may be perfected by the filing
of a financing statement and (c) a perfected Lien in all Collateral in which a
Lien may be perfected upon the receipt and recording of this Agreement with the
United States Patent and Trademark Office and the United States Copyright
Office, as applicable.
ARTICLE IV
Covenants
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Section 4.1. Change of Name; Location of Collateral; Records; Place of
Business. The Company shall not make any change (a) in its name, (b) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
or any office facility at which Collateral owned by its is located (including
the establishment of any such new office or facility) from the locations set
forth on Schedule I attached hereto, (c) in its identity or type of organization
or corporate structure, (d) in its Federal Taxpayer Identification Number or
organizational identification number or (e) in its jurisdiction or organization
unless the Company provides the Collateral Agent at least twenty (20) days prior
written notice of such change.
Section 4.2. Records. The Company shall keep and maintain at its own cost
and expense, satisfactory and complete records of the Collateral including,
without limitation, a record of any and all payments received and any and all
credits granted with respect to the Collateral and all other dealings with the
Collateral. Following the occurrence of an Event of Default, the Collateral
Agent may at any time verify the Company's Receivables utilizing an audit
control company or any other agent of the Collateral Agent. The Collateral Agent
or the Collateral Agent's designee may, following the occurrence of an Event of
Default, notify Customers at any time, at the Collateral Agent's sole
discretion, of the Collateral Agent's security interest in Receivables
(contracts, instruments, or chattel paper as the case may be), collect them
directly from the Customers or parties to contracts, instruments and chattel
paper and charge the collection costs and expenses to the Company's account,
but, unless and until the Collateral Agent does so or gives the Company other
instructions, the Company shall collect all Receivables for the Collateral
Agent, receive all payments thereon for the Collateral Agent's benefit in trust
as the Collateral Agent's trustee and promptly deliver them to the Collateral
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Agent in their original form with all necessary endorsements or, as directed by
the Collateral Agent, deposit such payments as directed by the Collateral Agent.
The Company shall place notations upon the Company's books of account and any
financial statement prepared by the Company to disclose the Collateral Agent's
security interest in the Collateral and shall provide the Collateral Agent, as
requested by the Collateral Agent, such schedules, documents and/or information
regarding the Collateral as the Collateral Agent may require.
Section 4.3. Protection of Collateral and Security Interest. The Company
shall, at its own cost and expense, take any and all actions reasonably
necessary to defend the Collateral against the claims and demands of all parties
and to defend the Security Interest of the Collateral Agent in the Collateral
and the priority thereof against any Lien other than a (a) Senior Lien or (b)
Permitted Lien.
Section 4.4. Further Assurances.
(a) Any time and from time to time, upon the written request of the
Collateral Agent and at the sole expense of the Company, the Company shall
promptly and duly execute and deliver any and all such further instruments and
documents and take such further actions as the Collateral Agent may reasonably
request to preserve, protect and perfect the Security Interest and the rights
and remedies created hereby.
(b) Without limiting the generality of the foregoing, the Company
hereby authorizes the Collateral Agent to supplement this Agreement by
supplementing Schedule II, III or IV hereto or adding additional schedules
hereto to specifically identify any asset or item that may constitute
Copyrights, Patents or Trademarks.
Section 4.5. Inspection and Examination. At all times during normal
business hours, the Collateral Agent shall have the right to (a) visit and
inspect the Company's properties and the Collateral and (b) inspect, audit and
make extracts from the Company's relevant books and records relating to the
Collateral. The Company will deliver to the Collateral Agent any instrument
necessary for the Collateral Agent to obtain records from any service bureau
maintaining records for the Company.
Section 4.6. Liens. The Company shall not encumber, mortgage, pledge,
assign or grant any security interest in any Collateral or any of the Company's
other assets to anyone other than the Collateral Agent for its benefit and for
the ratable benefit of the Investors, except for (a) Senior Liens and (b)
Permitted Liens;
Section 4.7. Use and Disposition of Collateral. The Company shall (a) not
dispose of any of the Collateral whether by sale, lease or otherwise except for
(i) the sale of Inventory in the ordinary course of business, and (ii) the
disposition or transfer of obsolete and worn-out Equipment in the ordinary
course of business and (b) keep and maintain the Equipment in good operating
condition, except for ordinary wear and tear, and shall make all reasonably
necessary repairs and replacements thereof.
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Section 4.8. Risk of Loss; Insurance. The Company shall bear the full risk
of loss from any loss of any nature whatsoever with respect to the Collateral.
At it's own cost and expense in amounts and with carriers reasonably acceptable
to the Collateral Agent, it shall (a) keep all its insurable properties and
properties in which it has an interest insured against the hazards of fire,
flood, sprinkler leakage, those hazards covered by extended coverage insurance
and such other hazards, and for such amounts, as is customary in the case of
companies engaged in businesses similar to the Company's including, without
limitation, public and product liability insurance, worker's compensation,
insurance against larceny, embezzlement or other criminal misappropriation of
insured's officers and employees and business interruption insurance; (b)
furnish the Collateral Agent with (i) copies of all policies and evidence of the
maintenance of such policies at least thirty (30) days before any expiration
date, and (ii) appropriate loss payable endorsements in form and substance
satisfactory to the Collateral Agent, naming the Collateral Agent as loss payee
and providing that as to the Collateral Agent the insurance coverage shall not
be impaired or invalidated by any act or neglect of the Company and the insurer
will provide the Collateral Agent with at least thirty (30) days notice prior to
cancellation. The Company shall instruct the insurance carriers that in the
event of any loss thereunder, the carriers shall make payment for such loss to
the Collateral Agent and not to the Company and the Collateral Agent jointly. If
any insurance losses are paid by check, draft or other instrument payable to the
Company and the Collateral Agent jointly, the Collateral Agent may endorse the
Company's name thereon and do such other things as the Collateral Agent may deem
advisable to reduce the same to cash. Following the occurrence of an Event of
Default, the Collateral Agent is hereby authorized to adjust and compromise
claims. All loss recoveries received by the Collateral Agent upon any such
insurance may be applied to the Obligations, in such order as the Investors in
their sole discretion shall determine. Any surplus shall be paid by the
Collateral Agent to the Company or applied as may be otherwise required by law.
Any deficiency thereon shall be paid by the Company to the Collateral Agent, on
demand.
Section 4.9. Covenants Regarding Patent, Trademark and Copyright
Collateral.
(a) The Company agrees that it will not, nor will it permit any of
its licensees to, do any act, or omit to do any act, whereby any Patent material
to the Company's business may become invalidated or dedicated to the public, and
agrees that it shall continue to xxxx any products covered by a Patent with the
relevant patent number as necessary and sufficient to establish and preserve its
maximum rights under applicable patent laws.
(b) The Company (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the Company's business, (i)
maintain such Trademark in full force free from any claim of abandonment or
invalidity for non-use unless the Company decides in its reasonable business
judgment to abandon such Trademark, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
(c) The Company (either itself or through licensees) will, for each
work covered by a Copyright, continue to publish, reproduce, display, adopt and
distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws.
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(d) The Company shall notify the Collateral Agent promptly if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the Company's business may become abandoned, lost or dedicated to the public, or
of any adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the United States
Patent and Trademark Office, United States Copyright Office or any court or
similar office of any country) regarding the Company's ownership of any Patent,
Trademark or Copyright, its right to register the same, or to keep and maintain
the same.
(e) In no event shall the Company, either itself or through any
agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, United States Copyright
Office (or any successor thereof), unless it promptly informs the Collateral
Agent, and, upon request of the Collateral Agent, executes and delivers any and
all agreements, instruments, documents and papers as the Collateral Agent may
request to evidence the Collateral Agent's security interest in such Patent,
Trademark or Copyright, and the Company hereby appoints the Collateral Agent as
its attorney-in-fact to execute and file such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such
power, being coupled with an interest, is irrevocable.
(f) The Company will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office (or any successor thereof) to
maintain and pursue each material application relating to the United States
Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or
registration) and to maintain each issued United States Patent and each United
States registration of the Trademarks and Copyrights material to the Company's
business, including timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with good business judgment, to initiate opposition, interference and
cancellation proceedings against third parties.
(g) In the event that the Company has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
Company's business has been or is about to be infringed, misappropriated, or
diluted by a third party, the Company promptly shall notify the Collateral Agent
and shall promptly xxx for infringement, misappropriation or dilution, and take
such other actions as the Company in its reasonable business judgment deems are
appropriate under the circumstances to protect such Collateral.
(h) Upon and during the continuance of an Event of Default, upon the
request of the Collateral Agent, the Company shall obtain all requisite consents
or approvals by the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all the Company's right, title and
interest thereunder to the Collateral Agent or its designee.
Section 4.10. Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Collateral Agent's security
-11-
interest in the Collateral, the Company agrees, in each case at the Company's
own expense, to take the following actions with respect to the following
Collateral:
(a) Deposit Accounts. For each Deposit Account that the Company at
any time opens or maintains and that is included in the Collateral, the Company
shall, at the Collateral Agent's request and option, pursuant to an agreement in
form and substance reasonably satisfactory to the Collateral Agent, either (i)
cause the depositary bank to agree to comply at any time with instructions from
the Collateral Agent to such depositary bank directing the disposition of funds
from time to time credited to such Deposit Account, without further consent of
the Company, or (ii) arrange for the Collateral Agent to become the customer of
the depositary bank with respect to the Deposit Account, with the Company being
permitted, only with the consent of the Collateral Agent, to exercise rights to
withdraw funds from such Deposit Account. The Collateral Agent agrees with the
Company that the Collateral Agent shall not give any such instructions or
withhold any withdrawal rights from the Company, unless an Event of Default has
occurred and is continuing, or, after giving effect to any withdrawal would
occur. The provisions of this paragraph shall not apply to (A) any Deposit
Account for which the Company, the depositary bank and the Collateral Agent have
entered into a cash collateral agreement specially negotiated among the Company,
the depositary bank and the Collateral Agent for the specific purpose set forth
therein and (B) Deposit Accounts for which the Collateral Agent is the
depositary bank.
(b) Investment Property. If the Company shall at any time hold or
acquire any certificated securities, the Company shall forthwith endorse, assign
and deliver the same to the Collateral Agent for its benefit and for the ratable
benefit of the Investors, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time to time
specify. If any securities now or hereafter acquired by the Company are
uncertificated and are issued to the Company or its nominee directly by the
issuer thereof, the Company shall immediately notify the Collateral Agent
thereof and, at the Collateral Agent's request and option, pursuant to an
agreement in form and substance satisfactory to the Collateral Agent, either (y)
cause the issuer to agree to comply with instructions from the Collateral Agent
as to such securities, without further consent of the Company or such nominee,
or (z) arrange for the Collateral Agent to become the registered owner of the
securities. If any securities, whether certificated or uncertificated, or other
investment property now or hereafter acquired by the Company are held by the
Company or its nominees through a securities intermediary or commodity
intermediary, the Company shall immediately notify the Collateral Agent thereof
and, at the Collateral Agent's request and option, pursuant to an agreement in
form and substance satisfactory to the Collateral Agent, either (i) cause such
securities intermediary or (as the case may be) commodity intermediary to agree
to comply with entitlement orders or other instructions from the Collateral
Agent to such securities intermediary as to such securities or other investment
property, or (as the case may be) to apply any value distributed on account of
any commodity contract as directed by the Collateral Agent to such commodity
intermediary, in each case without further consent of the Company or such
nominee, or (ii) in the case of financial assets or other investment property
held through a securities intermediary, arrange for the Collateral Agent to
become the entitlement holder with respect to such investment property, with the
Company being permitted, only with the consent of the Collateral Agent, to
exercise rights to withdraw or otherwise deal with such investment property. The
Collateral Agent agrees
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with the Company that the Collateral Agent shall not give any such entitlement
orders, instructions or directions to any such issuer, securities intermediary
or commodity intermediary, and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by the Company, unless an Event of Default has
occurred and is continuing, or, after giving effect to any such investment and
withdrawal rights would occur. The provisions of this paragraph shall not apply
to any financial assets credited to a securities account for which the
Collateral Agent is the securities intermediary.
(c) Letter of Credit Rights. If the Company is at any time a
beneficiary under a letter of credit (other than any letter credit constituting
a Supporting Obligation) now or hereafter issued in favor of the Company, the
Company shall promptly notify the Collateral Agent thereof and, at the request
and option of the Collateral Agent, the Company shall, pursuant to an agreement
in form and substance reasonably satisfactory to the Collateral Agent, either
(i) arrange for the issuer and any confirmer to such letter of credit to consent
to an assignment to the Collateral Agent of the proceeds of any drawing under
the letter of credit or (ii) arrange for the Collateral Agent to become the
transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be applied to satisfy the Obligations.
(d) Commercial Tort Claims. If the Company shall at any time hold or
acquire a commercial tort claim, the Company shall immediately notify the
Collateral Agent in a writing signed by the Company of the brief details thereof
and grant to the Collateral Agent in such writing a security interest therein
for its benefit and for the ratable benefit of the Investors and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form
and substance reasonably satisfactory to the Collateral Agent.
Section 4.11. Information. The Company shall promptly inform the
Collateral Agent in writing of: (a) the commencement of all proceedings and
investigations by or before and/or the receipt of any notices from, any
governmental or nongovernmental body and all actions and proceedings in any
court or before any arbitrator against or in any way concerning any of the
Collateral; (b) any Event of Default or Default; (c) any change in the location
of the Company's executive offices; (d) any change in the location of the
Company's Inventory or Equipment from the locations listed on Schedule I
attached hereto; (h) any additional Patents, Copyrights, Trademarks or
commercial tort claims not listed on Schedule II, III, IV or V; and (i) any
additional Licenses, tradenames, corporate names or company names.
ARTICLE V
Power of Attorney
-----------------
The Company hereby irrevocably appoints the Collateral Agent or any other
Person whom the Collateral Agent may designate as the Company's
attorney-in-fact, with full power and authority in place and stead of the
Company and in the name of the Company or in its own name to: (a) following the
occurrence of an Event of Default, endorse the 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; (b) following the
occurrence of an Event of
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Default, sign the Company's name on any invoice or xxxx of lading relating to
any Receivables, drafts against customers, schedules and assignments of
Receivables, notices of assignment, financing statements and other public
records, verifications of account and notices to or from Customers; (c)
following the occurrence of an Event of Default, verify the validity, amount or
any other matter relating to any Receivable by mail, telephone, telegraph or
otherwise with Customers; (d) following the occurrence of an Event of Default,
execute customs declarations and such other documents as may be required to
clear Inventory through United States Customs; (e) do all things reasonably
necessary to carry out this Agreement and all other Purchase Documents; (f)
continue any insurance existing pursuant to the terms of this Agreement and pay
all or any part of the premium therefor and the cost thereof; and (g) on or
after the occurrence and continuation of an Event of Default, notify the post
office authorities to change the address for delivery of the Company's mail to
an address designated by the Collateral Agent, and to receive, open and dispose
of all mail addressed to the Company. The Company hereby ratifies and approves
all acts taken by the attorney in accordance with the provisions of this Article
V. The powers conferred on the Collateral Agent hereunder are solely to protect
its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. In exercising any such powers, the Collateral Agent
shall act in a commercially reasonable manner. Neither the Collateral Agent nor
the attorney will be liable for any acts or omissions or for any error of
judgment or mistake of fact or law unless such liability results from the
Collateral Agent's or the attorney's gross (not mere) negligence or willful
misconduct. This power, being coupled with an interest, is irrevocable so long
as any Receivable which is assigned to the Collateral Agent or in which the
Collateral Agent has a security interest remains unpaid and until the
Obligations have been fully satisfied.
ARTICLE VI
Events of Default, Rights and Remedies
--------------------------------------
Section 6.1. Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) the occurrence of an "Event of Default" as such term is defined
in any of the Notes; or
(b) the Security Interest for any reason ceases to be or is not a
valid and perfected Lien having a first priority interest except as expressly
permitted hereunder.
Section 6.2. Rights and Remedies. Upon the occurrence and continuation of
any Event of Default, the Collateral Agent shall have the right to demand
repayment in full of all Obligations, whether or not otherwise due (in such case
the Collateral Agent may deposit any and all such amounts realized in a cash
collateral deposit account to be maintained as security for the Obligations).
Until all Obligations have been fully satisfied, the Collateral Agent shall
retain its security interest in all Collateral. The Collateral Agent shall have,
in addition to all other rights provided herein, the rights and remedies of a
lender under the UCC, and under other applicable law, all other legal and
equitable rights to which the Collateral Agent may be entitled, including
without limitation, the right to take immediate possession of the Collateral, to
require the Company to assemble the Collateral, at the Company's expense, and to
make it available to
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the Collateral Agent at a place designated by the Collateral Agent which is
reasonably convenient to both parties and to enter any of the Premises of the
Company or wherever the Collateral shall be located, with or without force or
process of law, and to keep and store the same any such premises until sold (and
in the case of any of the Premises or any other property of the Company, the
Company agrees not to charge the Collateral Agent for storage thereof). Further,
the Collateral Agent may, at any time or times after the occurrence of an Event
of Default, sell and deliver all Collateral held by or for the Collateral Agent
in one or more parcels at public or private sale for cash, upon credit or
otherwise, at such prices and upon such terms as the Collateral Agent, in the
Collateral Agent's sole discretion, deems advisable or the Collateral Agent may
otherwise recover upon the Collateral in any commercially reasonable manner as
the Collateral Agent, in its sole discretion, deems advisable. Except as to that
part of the Collateral which is perishable or threatens to decline speedily in
nature or is of a type customarily sold on a recognized market, the requirement
of reasonable notice shall be met if such notice is mailed postage prepaid to
the Company at the Company's address as shown in the Collateral Agent's records,
at least ten (10) days before the time of the event of which notice is being
given. The Collateral Agent may be the purchaser at any sale, if it is public.
Until the Collateral Agent is able to effect a sale, lease, or other disposition
of Collateral, the Collateral Agent shall have the right to use or operate
Collateral, or any part thereof, to the extent that it deems appropriate for the
purpose of preserving Collateral or its value or for any other purpose deemed
appropriate by the Collateral Agent. The Collateral Agent shall have no
obligation to the Company to maintain or preserve the rights of the Company as
against third parties with respect to Collateral while Collateral is in the
possession of the Collateral Agent. The Collateral Agent may, if it so elects,
seek the appointment of a receiver or keeper to take possession of Collateral
and to enforce any of the Collateral Agent's remedies with respect to such
appointment without prior notice or hearing. In connection with the exercise of
the foregoing remedies, the Collateral Agent is granted permission to use (a)
all of the Company's Intellectual Property which are used in connection with
Inventory for the purpose of disposing of such Inventory and (b) any Equipment
for the purpose of completing the manufacture of unfinished goods. The proceeds
of sale shall be applied first to all costs and expenses of sale, including
attorneys' fees, and second to the payment (in whatever order the Investors
elects) of all Obligations. The Collateral Agent will return any excess to the
Company and the Company shall remain liable to the Investors for any deficiency.
Section 6.3. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, the Company hereby grants to the Collateral
Agent for its benefit and for the benefit of the Investors an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Company) to use, license or sublicense any of the Collateral
consisting of Intellectual Property now owned or hereafter acquired by the
Company, and wherever the same may be located, and including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
shall be exercised, at the option of the Collateral Agent, upon the occurrence
and during the continuation of an Event of Default; provided that any license,
sublicense or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Company notwithstanding any
subsequent cure of an Event of Default.
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ARTICLE VII
Subordination
-------------
The Security Interest granted hereunder upon the Collateral shall be
subordinate to the Liens granted in connection with the Senior Debt pursuant to
the terms of an intercreditor agreement among the Company, the Collateral Agent
and the holders of the Senior Debt which shall be requested by the holders of
the Senior Debt and shall be in form and substance reasonably satisfactory to
the Collateral Agent and the other Investors.
ARTICLE VIII
Miscellaneous
-------------
Section 8.1. No Waiver; Cumulative Remedies. No failure or delay by the
Collateral Agent in exercising any right, power or remedy under this Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy under this Agreement. The
remedies provided in this Agreement are cumulative and not exclusive of any
remedies provided by law.
Section 8.2. Waivers. The Company waives presentment and protest of any
instrument and notice thereof, notice of default and all other notices to which
the Company might otherwise be entitled.
Section 8.3. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all the Obligations shall be absolute
and unconditional irrespective of (a) any lack of validity or enforceability of
the Purchase Agreement, any other Purchase Document, any agreement with respect
to any of the Obligations or any other agreement or instrument relating to any
of the foregoing, (b) any change in the time, manner or place of payment of, or
in any other term of, all of any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Purchase Agreement, any other
Purchase Document or any other agreement or instrument, (c) any exchange,
release or non-perfection of any Lien on other collateral, or any release or
amendment or waiver of or consent under or departure from any guarantee securing
or guaranteeing all or any of the Obligations, or (d) any other circumstance
that might otherwise constitute a defense available to, or a discharge of, the
Company in respect of the Obligations or this Agreement.
Section 8.4. Amendments, Etc. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Collateral Agent.
-16-
Section 8.5. Notices. Except as otherwise expressly provided herein, any
notice or request hereunder shall be given in accordance with the terms of the
Purchase Agreement.
Section 8.6. Collateral. This Agreement does not contemplate a sale of
accounts, contract rights or chattel paper, and, as provided by law, the Company
is entitled to any surplus and shall remain liable for any deficiency. The
Collateral Agent's duty of care with respect to Collateral in its possession (as
imposed by law) shall be deemed fulfilled if it exercises reasonable care in
physically keeping such Collateral, or in the case of Collateral in the custody
or possession of a bailee or other third Person, exercises reasonable care in
the selection of the bailee or other third Person, and the Collateral Agent need
not otherwise preserve, protect, insure or care for any Collateral. The
Collateral Agent shall not be obligated to preserve any rights the Company may
have against prior parties, to realize on the Collateral at all or in any
particular manner or order or to apply any cash proceeds of the Collateral in
any particular order of application.
Section 8.7. Costs and Expenses; Indemnification.
(a) The Company shall pay all of the Collateral Agent's reasonable
out-of-pocket costs and expenses, including without limitation reasonable fees
and disbursements of counsel and appraisers, in connection with the preparation,
execution and delivery of this Agreement and in connection with the prosecution
or defense of any action, contest, dispute, suit or proceeding concerning any
matter in any way arising out of, related to or connected with this Agreement.
The Company shall also pay all of the Collateral Agent's reasonable
out-of-pocket costs and expenses, including, without limitation, reasonable fees
and disbursements of counsel, in connection with (a) the preparation, execution
and delivery of any waiver, any amendment thereto or consent proposed or
executed in connection with the transactions contemplated by this Agreement, (b)
the Collateral Agent's obtaining performance of the Company's obligations under
this Agreement, including, but not limited to, the enforcement or defense of the
Security Interest, assignments of rights and Liens hereunder as valid perfected
security interests, (c) any attempt to inspect, verify, protect, collect, sell,
liquidate or otherwise dispose of any Collateral, and (d) any consultations in
connection with any of the foregoing.
(b) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Agreements. The
provisions of this Section 8.7 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any of the other
Agreements, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Purchase Document, or any
investigation made by or on behalf of the Collateral Agent. All amounts due
under this Section 8.7 shall be payable on written demand therefor.
Section 8.8. Regarding Collateral Agent.
(a) Each Investor hereby designates Palisade to act as the
Collateral Agent for such Investor under this Agreement. Each Investor hereby
irrevocably authorizes the Collateral Agent to take such action on its behalf
under the provisions of this Agreement and to exercise such powers and to
perform such duties hereunder as are specifically delegated to or required of
-17-
the Collateral Agent by the terms hereof and such other powers as are reasonably
incidental thereto and the Collateral Agent shall hold all Collateral received
pursuant to this Agreement, for the ratable benefit of the Investors. The
Collateral Agent may perform any of its duties hereunder by or through its
agents or employees. As to matters not expressly provided for in this Agreement,
the Collateral Agent may exercise any discretion or take any action it deems
reasonable and necessary under the circumstances and the Collateral Agent shall
be fully protected in so acting.
(b) Nature of Duties. The Collateral Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement. Neither the
Collateral Agent nor any of its officers, directors, employees or agents shall
be (i) liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their gross (not mere) negligence or
willful misconduct, or (ii) responsible in any manner for any recitals,
statements, representations or warranties made by the Company or any officer
thereof contained in this Agreement or in any certificate, report, statement or
other document referred to or provided for in, or received by the Collateral
Agent under or in connection with, this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
for any failure of the Company to perform its obligations hereunder. Collateral
Agent shall not be under any obligation to any Investor to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Company.
(c) Indemnification. To the extent the Collateral Agent is not
reimbursed and indemnified by the Company, the Investors will reimburse and
indemnify Agent from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Collateral Agent in performing its duties hereunder, or in
any way relating to or arising out of this Agreement; provided that, the
Investors shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Collateral Agent's gross (not mere) negligence
or willful misconduct.
Section 8.9. Counterparts; Faxes. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed via facsimile, which shall be deemed an original.
Section 8.10. Binding Effect; Assignment; Complete Agreement. This
Agreement shall be binding upon and inure to the benefit of the Company and the
Collateral Agent and their respective successors and assigns, except that the
Company shall not have the right to assign or transfer its rights or obligations
hereunder or any interest herein or in the Collateral (and any such assignment
or transfer shall be void). Upon a transfer by the Collateral Agent, the
Collateral Agent shall be released from all responsibility for the Collateral to
the extent same is assigned to any transferee.
-18-
Section 8.11. Severability of Provisions. 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.
Section 8.12. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
Section 8.13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York without
regard to the choice of law principles thereof. Each of the parties hereto
irrevocably submits to the co-exclusive jurisdiction of the courts of the State
of New York located in New York County and the United States District Court for
the Southern District of New York for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Agreement and the
transactions contemplated thereby. Service of process in connection with any
such suit, action or proceeding may be served on each party hereto anywhere in
the world by the same methods as are specified for the giving of notices under
this Agreement. Each of the parties hereto irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Section 8.14. Construction. The parties acknowledge that each party and
its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments, schedules or exhibits hereto.
Section 8.15 Recapture. Anything in this Agreement to the contrary
notwithstanding, if the Collateral Agent receives any payment or payments on
account of the Obligations, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver, or any other party under
the United States Bankruptcy Code, as amended, or any other federal or state
bankruptcy, reorganization, moratorium or insolvency law relating to or
affecting the enforcement of creditors' rights generally, common law or
equitable doctrine, then to the extent of any sum not finally retained by the
Collateral Agent, the Company's obligations to the Collateral Agent shall be
reinstated and this Agreement shall remain in full force and effect (or be
reinstated) until payment shall have been made to the Collateral Agent, which
payment shall be due on demand.
Section 8.16 Termination. This Agreement and the Security Interests
created hereby shall terminate and the Company shall be entitled to the return,
at the Company's expense, of such of the Collateral as has not theretofore been
sold or otherwise applied pursuant to this Agreement which may be in the
possession of the Collateral Agent, upon the earlier of (a) payment in full of
the Obligations and irrevocable termination of the Purchase Agreement, and (b)
such time as all of the following claims has been finally and completely
settled, adjudicated, dismissed or otherwise resolved with prejudice to the
Company and all of its Subsidiaries
-19-
without any material award, cost, penalty, charge or other expense being
incurred by, or assessed against the Company or any Subsidiary: (i) those
certain tax assessments pending in Brazil against X'Xxxx-Xxxx & Xxxxxxxxxx do
Brasil LTDA; (ii) that certain matter pending in the Ontario Superior Court of
Justice, encaptioned HSBC Securities (Canada) Inc. x. Xxxxxx, Xxxx & Xxxx x.
Xxxxxxxxx Xxxx Xxxxxxxxx Xxxxxxxxxxx Inc, et al., and (iii) those matters
identified in Item 1 of the Company's Quarterly Report on Form 10-Q for the
period ending June 30, 2001.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.
XXXXX INC., as the Company
By: /s/
---------------------------------------
Name:
Title:
PALISADE CONCENTRATED EQUITY PARTNERSHIP, L.P.
By: Palisade Concentrate Holdings, LLC, its
General Partner, as the Collateral
Agent and an Investor
By: /s/
---------------------------------------
Name: Xxxx Xxxxxxx
Title: Member
PEGASUS PARTNERS II, L.P.,
By: Pegasus Investors II GP, LLC, its General
Partner, as an Investor
By: /s/
---------------------------------------
Name:
Title:
-21-
