EXHIBIT O
MISSISSIPPI CHEMICAL CORPORATION
SECURITY AGREEMENT
This Security Agreement (the "Agreement") is dated as of ____________,
___, by and among Mississippi Chemical Corporation, a Mississippi corporation
(the "Borrower") and ___________________, a ____________ corporation
("_________") and ____________, a ______________ ("_______"; __________
and _________, together with their successors and assigns, being collectively
referred to herein as the "Guarantors"), and the other parties executing this
Agreement under the heading "Debtors" (the Borrower, the Guarantors and such
other parties, along with any parties who execute and deliver to the Agent an
agreement substantially in the form attached hereto as Schedule D, being
hereinafter referred to collectively as the "Debtors" and individually as a
"Debtor"), each with its mailing address as set forth on its signature page
hereto, and Xxxxxx Trust and Savings Bank, an Illinois banking corporation
("HTSB"), with its mailing address at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, acting as administrative agent hereunder for the Secured Creditors
hereinafter identified and defined (HTSB acting as such administrative agent
and any successor or successors to HTSB acting in such capacity being
hereinafter referred to as the "Agent");
PRELIMINARY STATEMENTS
A. The Borrower and HTSB, individually and as administrative agent,
have entered into a Credit Agreement dated as of November 25, 1997 (such Credit
Agreement as the same may be amended, modified or restated from time to time
being hereinafter referred to as the "Credit Agreement"), pursuant to which
HTSB and such other banks and financial institutions from time to time party
to the Credit Agreement (HTSB, in its individual capacity, and such other
banks and financial institutions being hereinafter referred to collectively as
the "Lenders" and individually as a "Lender") have agreed, subject to certain
terms and conditions, to extend credit and make certain other financial
accommodations available to the Borrower (the Agent and the Lenders being
hereinafter referred to collectively as the "Secured Creditors" and
individually as a "Secured Creditor").
B. The Borrower may from time to time enter into one or more interest
rate exchange, swap, cap, collar, floor or other similar agreements and one or
more foreign currency contracts, currency swap contracts or other similar
agreements with one or more of the Lenders party to the Credit Agreement, or
their affiliates, for the purpose of hedging or otherwise protecting the
Borrower against interest rate and foreign currency exposure (the liability of
the Borrower in respect of such agreements with such Lenders and their
affiliates being hereinafter referred to as the "Hedging Liability").
C. As a condition to continuing to extend credit to the Borrower under
the Credit Agreement, the Secured Creditors have required, among other things,
that each Debtor grant to the Agent for the benefit of the Secured Creditors a
lien on and security interest in the personal property of such Debtor described
herein subject to the terms and conditions hereof.
D. The Borrower owns, directly or indirectly, equity interests in each
other Debtor and provides each other Debtor with financial, management,
administrative, technical support and other similar services pursuant to a
management services agreement which enables such Debtor to conduct its business
in an orderly and efficient manner in the ordinary course.
E. Each Debtor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.
F. The Secured Creditors (or the Agent on their behalf) may enter into
an intercreditor agreement with the holders of the Borrower's Senior Notes
(or an agent or trustee on their behalf) to the extent such holders have a
security interest in certain of the Collateral to set forth their respective
rights relating thereto.
NOW, THEREFORE, for and in consideration of the execution and delivery by
the Secured Creditors of the Credit Agreement, and other good and valuable
consideration, receipt whereof is hereby acknowledged, the parties hereto
hereby agree as follows:
Section 1. Terms defined in Credit Agreement. All capitalized terms used
herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Debtor" and "Debtors" as used herein
shall mean and include the Debtors collectively and also each individually,
with all grants, representations, warranties and covenants of and by the
Debtors, or any of them, herein contained to constitute joint and several
grants, representations, warranties and covenants of and by the Debtors;
provided, however, that unless the context in which the same is used shall
otherwise require, any grant, representation, warranty or covenant contained
herein related to the Collateral shall be made by each Debtor only with
respect to the Collateral owned by it or represented by such Debtor as owned
by it.
Section 2. Grant of Security Interest in the Collateral; Obligations
Secured. (a) Each Debtor hereby grants to the Agent for the benefit of the
Secured Creditors a lien on and security interest in, and right of set-off
against, and acknowledges and agrees that the Agent has and shall continue to
have for the benefit of the Secured Creditors a continuing lien on and security
interest in, and right of set-off against, any and all right, title and
interest of each Debtor, whether now owned or existing or hereafter created,
acquired or arising, in and to the following:
(i) Receivables. All Receivables, whether now owned or existing
or hereafter created, acquired or arising, and however evidenced or acquired,
or in which such Debtor now has or hereafter acquires any rights (the term
"Receivables" means and includes all accounts, accounts receivable, contract
rights, instruments, notes, drafts, acceptances, documents, chattel paper, any
right of such Debtor to payment for goods sold or leased or for services
rendered, whether or not earned by performance, and all other forms of
obligations owing to such Debtor, and all of such Debtor's rights to any
merchandise or other goods (including without limitation any returned or
repossessed goods and the right of stoppage in transit) which is represented
by, arises from or is related to any of the foregoing);
(ii) General Intangibles. All General Intangibles, whether now
owned or existing or hereafter created, acquired or arising, or in which such
Debtor now has or hereafter acquires any rights (the term "General Intangibles"
means and includes all general intangibles, all patents, patent applications,
patent licenses, trademarks, trademark registrations, trademark licenses, trade
styles, trade names, copyrights, copyright registrations, copyright licenses
and other licenses and similar intangibles, all customer, client and supplier
lists (in whatever form maintained), all rights in leases and other agreements
relating to real or personal property, all causes of action and tax refunds of
every kind and nature, all privileges, franchises, immunities, licenses,
permits and similar intangibles, and all other personal property (including
things in action) not otherwise covered by this Agreement);
(iii) Inventory. All Inventory, whether now owned or existing or
hereafter created, acquired or arising, or in which such Debtor now has or
hereafter acquires any rights and all documents of title at any time evidencing
or representing any part thereof (the term "Inventory" means and includes all
inventory, farm products, and other goods which are held for sale or lease or
are to be furnished under contracts of service or consumed in such Debtor's
business, all goods which are raw materials, work-in-process, finished goods,
materials or supplies of every kind and nature, in each case used or usable in
connection with the acquisition, manufacture, processing, supply, servicing,
storing, packing, shipping, advertising, selling, leasing or furnishing of such
goods, and any constituents or ingredients thereof, and all goods which are
returned or repossessed goods);
(iv) Equipment. All Equipment, whether now owned or existing or
hereafter created, acquired or arising, or in which such Debtor now has or
hereafter acquires any rights (the term "Equipment" means and includes all
equipment and other machinery, tools, fixtures, trade fixtures, furniture,
furnishings, office equipment, vehicles (including vehicles subject to a
certificate of title law) and all other goods now or hereafter used or usable
in connection with such Debtor's business, together with all parts (other than
parts that are subject to a parts pooling agreement), accessories and
attachments relating to any of the foregoing);
(v) Investment Property. All Investment Property, whether now
owned or existing or hereafter created, acquired or arising, or in which such
Debtor now has or hereafter acquires any rights (the term "Investment Property"
means and includes all investment property and all other securities (whether
certificated or uncertificated), security entitlements, securities accounts,
commodity contracts, and commodity accounts, including all substitutions and
additions thereto, all dividends, distributions and sums distributable or
payable from, upon, or in respect of such property, and all rights and
privileges incident to such property), but excluding investments in (A) the
Bank for Cooperatives, Houston Ammonia Terminal, L.P., Precious Harvest,
Farmland MissChem Limited and FMCL Limited Liability Company, (B) MissChem
Trinidad Limited, MissChem (Barbados) SRL and MissChem Holdings Inc. to the
extent the ability of any Debtor that is an owner thereof to encumber its
equity interest therein is subject to any contractual prohibition, and
(C) and any joint ventures (or other investments) that are not Subsidiaries
to the extent the ability of any Debtor that is a joint venturer therein to
encumber its equity interests in such joint venture is subject to any
contractual prohibition;
(vi) Deposits and Property in Possession. All deposit accounts
(whether general, specific, matured or unmatured and in whatever currency
denominated) of such Debtor maintained with any of the Secured Creditors and
all sums now or hereafter on deposit therein or payable thereon, and any and
all other property and interests in property which now is or may from time
to time hereafter come into the possession, custody or control of any of the
Secured Creditors, or any agent of any of them, in any way and for any purpose
(whether for safekeeping, custody, pledge, transmission, collection or
otherwise);
(vii) Records. All supporting evidence and documents relating to
any of the above-described property, including, without limitation, computer
programs, disks, tapes and related electronic data processing media, and all
rights of such Debtor to retrieve the same from third parties, written
applications, credit information, account cards, payment records,
correspondence, delivery and installation certificates, invoice copies,
delivery receipts, notes and other evidences of indebtedness, insurance
certificates and the like, together with all books of account, ledgers and
cabinets in which the same are reflected or maintained, all whether now
existing or hereafter arising;
(viii) Accessions and Additions. All accessions and additions to
and substitutions and replacements of any and all of the foregoing, whether
now existing or hereafter arising; and
(ix) Proceeds and Products. All proceeds and products of the
foregoing and all insurance of the foregoing and proceeds thereof, whether now
existing or hereafter arising;
all of the foregoing being herein sometimes referred to as the "Collateral."
All terms which are used herein which are defined in the Uniform Commercial
Code of the State of Illinois ("UCC") shall have the same meanings herein as
such terms are defined in the UCC, unless this Agreement shall otherwise
specifically provide.
(b) This Agreement is made and given to secure, and shall secure, the
prompt payment and performance when due of (i) any and all indebtedness,
obligations and liabilities of the Debtors, and of any of them individually, to
the Secured Creditors, and to any of them individually, under or in connection
with or evidenced by the Credit Agreement, the Notes of the Borrower heretofore
or hereafter issued under the Credit Agreement and the obligations of the
Borrower to reimburse the Secured Creditors for the amount of all drawings on
all L/Cs issued pursuant to the Credit Agreement, and all other obligations of
the Borrowers under any and all applications for L/Cs, and any and all
liability of the Debtors, and of any of them individually, arising under or in
connection with or otherwise evidenced by agreements with any one or more of
the Secured Creditors or their affiliates with respect to any Hedging
Liability, and any and all liability of the Debtors, and of any of them
individually, arising under any guaranty issued by it relating to the
foregoing or any part thereof, in each case whether now existing or
hereafter arising (and whether arising before or after the filing of a
petition in bankruptcy and including all interest accrued after the petition
date), due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired and (ii) any and all expenses and
charges, legal or otherwise, suffered or incurred by the Secured Creditors,
and any of them individually, in collecting or enforcing any of such
indebtedness, obligations and liabilities or in realizing on or protecting or
preserving any security therefor, including, without limitation, the lien and
security interest granted hereby (all of the indebtedness, obligations,
liabilities, expenses and charges described above being hereinafter referred to
as the "Obligations"). Notwithstanding anything in this Agreement to the
contrary, the right of recovery against any Debtor under this Agreement shall
not exceed $1.00 less than the lowest amount which would render such Debtor's
obligations under this Agreement void or voidable under applicable law,
including fraudulent conveyance law.
Section 3. Covenants, Agreements, Representations and Warranties. The
Debtors hereby covenant and agree with, and represent and warrant to, the
Secured Creditors that:
(a) Each Debtor is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or organization, is
the sole and lawful owner of the Collateral granted by it hereunder and has the
power and authority to enter into this Agreement and to perform each and all of
the matters and things herein provided for. Each Debtor's Federal tax
identification number is set forth under its name under Column 1 on Schedule A.
(b) Each Debtor's respective chief executive office is at the
location listed under Column 2 on Schedule A attached hereto opposite such
Debtor's name; and such Debtor has no other executive offices or places of
business other than those listed under Column 3 on Schedule A attached hereto
opposite such Debtor's name. The Collateral owned or leased by each Debtor is
and shall remain in such Debtor's possession or control at the locations listed
under Columns 2 and 3 on Schedule A attached hereto opposite such Debtor's name
(collectively for each Debtor, the "Permitted Collateral Locations"), except as
to any Collateral sold or otherwise disposed of in accordance with this
Agreement and Section 7.12 of the Credit Agreement. If for any reason any
Collateral is at any time kept or located at a location other than a Permitted
Collateral Location, the Agent shall nevertheless have and retain a lien on and
security interest therein. No Debtor shall move its chief executive office or
maintain a place of business at a location other than those specified under
Columns 2 or 3 on Schedule A or permit any Collateral to be located at a
location other than a Permitted Collateral Location, in each case without first
providing the Agent at least 30 days prior written notice of the Debtor's
intent to do so; provided that each Debtor shall at all times maintain its
chief executive office, places of business, and Permitted Collateral Locations
in the United States of America and, with respect to any new chief executive
office or place of business or location of Collateral, such Debtor shall have
taken all action reasonably requested by the Agent to maintain the lien and
security interest of the Agent in the Collateral at all times fully perfected
and in full force and effect.
(c) The Collateral and every part thereof is and shall be free
and clear of all security interests, liens (including, without limitation,
mechanics', laborers' and statutory liens), attachments, levies and
encumbrances of every kind, nature and description and whether voluntary or
involuntary, except for the lien and security interest of the Agent therein
and other Liens permitted by Section 7.9 of the Credit Agreement (herein, the
"Permitted Liens"). Each Debtor shall warrant and defend the Collateral
against any claims and demands of all persons at any time claiming the same or
any interest in the Collateral adverse to any of the Secured Creditors.
(d) Each Debtor will promptly pay when due all taxes, assessments
and governmental charges and levies upon or against it or its Collateral, in
each case before the same become delinquent and before penalties accrue
thereon, unless and to the extent that the same are being contested in good
faith by appropriate proceedings which prevent attachment of any Lien resulting
therefrom to, foreclosure on or other realization upon any Collateral and
preclude interference with the operation of its business in the ordinary
course and such Debtor shall have established adequate reserves therefor.
(e) Each Debtor agrees it will not waste or destroy the
Collateral or any part thereof and will not be negligent in the care or use
of any Collateral. Each Debtor agrees it will not use, manufacture, sell or
distribute any Collateral in violation of any statute, ordinance or other
governmental requirement applicable to such Debtor which would have a
material adverse effect on any Secured Creditor's rights under this Agreement
or on the value of the Collateral or on any Debtor's ability to use any of
the Collateral in the ordinary course of its business (a "Material Adverse
Effect"). Each Debtor will perform in all material respects its obligations
under any contract or other agreement constituting part of the Collateral,
it being understood and agreed that the Secured Creditors have no
responsibility to perform such obligations.
(f) Subject to Sections 4(d), 5(a), 6(b), 6(c), and 7(c) hereof
and the terms of the Credit Agreement (including, without limitation,
Section 7.12 thereof), each Debtor agrees it will not, without the Agent's
prior written consent, sell, assign, mortgage, lease or otherwise dispose of
the Collateral or any interest therein.
(g) Each Debtor will insure its Collateral which is insurable
against such risks and hazards as other companies similarly situated insure
against, and including in any event loss or damage by fire, theft, burglary,
pilferage, and loss in transit, in amounts and under policies containing loss
payable clauses to the Agent as its interest may appear (and, if the Agent
requests, naming the Agent as additional insureds therein) by insurers
reasonably acceptable to the Agent. All premiums on such insurance shall be
paid by the Debtors and the policies of such insurance (or certificates
therefor) delivered to the Agent. All insurance required hereby shall provide
that any loss shall be payable notwithstanding any act or negligence of the
relevant Debtor, shall provide that no cancellation thereof shall be effective
until at least 30 days after receipt by the relevant Debtor and the Agent of
written notice thereof, and shall be reasonably satisfactory to the Agent in
all other respects. In case of any material loss, damage to or destruction of
the Collateral or any part thereof in excess of $3,000,000, the relevant
Debtor shall promptly give written notice thereof to the Secured Creditors
generally describing the nature and extent of such damage or destruction.
In case of any loss, damage to or destruction of the Collateral or any part
thereof, the relevant Debtor, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient for
that purpose, at such Debtor's cost and expense, will promptly repair,
substitute or replace the Collateral so lost, damaged or destroyed, except to
the extent such Collateral is not necessary to the conduct of such Debtor's
business in the ordinary course, or apply such proceeds to the prepayment of
the Obligations. In the absence of any Default or Event of Default, losses
shall be payable to and the relevant Debtor shall be entitled to retain such
insurance proceeds for the purpose of repairing, substituting or replacing
the relevant Collateral. During the existence of any Default or Event of
Default, the relevant Debtor will immediately pay over such proceeds of
insurance to the Agent which will thereafter be applied to the reduction of
the Obligations (whether or not then due) or held as collateral security
therefor, as the Agent may then determine and as otherwise provided for in
the Credit Agreement. Each Debtor hereby authorizes the Agent, at the Agent's
option, to adjust, compromise and settle any losses under any insurance
afforded at any time after the occurrence and during the continuation of any
Event of Default, and such Debtor does hereby irrevocably constitute the
Agent, its officers, agents and attorneys, as such Debtor's attorneys-in-fact,
with full power and authority after the occurrence and during the continuation
of any Event of Default to effect such adjustment, compromise and/or
settlement and to endorse any drafts drawn by an insurer of the Collateral or
any part thereof and to do everything necessary to carry out such purposes
and to receive and receipt for any unearned premiums due under policies of
such insurance. Unless the Agent elects to adjust, compromise or settle
losses as aforesaid, any adjustment, compromise and/or settlement of any
losses under any insurance shall be made by the relevant Debtor subject to
final approval of the Agent (regardless of whether or not an Event of Default
shall have occurred) in the case of losses exceeding $3,000,000. All
insurance proceeds shall be subject to the lien and security interest of
the Agent hereunder.
(h) Each Debtor will at all times allow the Secured Creditors and
their respective representatives free access to and right of inspection of the
Collateral at such reasonable times and intervals as the Agent or any other
Secured Creditor may designate and, in the absence of any existing Default or
Event of Default, with reasonable prior written notice to the relevant Debtor.
(i) If any Collateral is in the possession or control of any
agents or processors of a Debtor and the Agent so requests, such Debtor agrees
to notify such agents or processors in writing of the Agent's security interest
therein and during the existence of a Default or an Event of Default, instruct
them to hold all such Collateral for the Agent's account and subject to the
Agent's instructions. Each Debtor will, upon the request of the Agent,
authorize and instruct all bailees and any other parties, if any, at any time
processing, labeling, packaging, holding, storing, shipping or transferring all
or any part of the Collateral to permit the Secured Creditors and their
respective representatives to examine and inspect any of the Collateral then in
such party's possession and to verify from such party's own books and records
any information concerning the Collateral or any part thereof which the Secured
Creditors or their respective representatives may seek to verify. As to any
premises not owned by a Debtor wherein any of the Collateral having an
aggregate value in excess of $1,000,000 at any location or $3,000,000 in the
aggregate for all locations is located, if any, such Debtor shall, upon the
Agent's request, shall take commercially reasonable measures designed to cause
each party having any right, title or interest in, or lien on, any of such
premises to enter into an agreement whereby such party disclaims any right,
title and interest in, and lien on, the Collateral, allowing the removal of
such Collateral by the Agent or its agents or representatives and otherwise in
form and substance reasonably acceptable to the Agent.
(j) Upon the Agent's request, each Debtor agrees from time to
time (but not more frequently than monthly as of such month's end) to deliver
to the Agent such evidence of the existence, identity and location of its
Collateral and of its availability as collateral security pursuant hereto
(including, without limitation, schedules describing all Receivables created
or acquired by such Debtor, copies of customer invoices or the equivalent and
original shipping or delivery receipts for all merchandise and other goods
sold or leased or services rendered by it, together with such Debtor's
warranty of the genuineness thereof, and reports stating the book value of
its Inventory and Equipment by major category and location), in each case as
the Agent may reasonably request. The Agent shall have the right to verify
all or any part of the Collateral in any manner, and through any medium,
which the Agent considers appropriate and reasonable, and each Debtor agrees
to furnish all assistance and information, and perform any acts, which the
Agent may require in connection therewith.
(k) Each Debtor will comply in all material respects with the
terms and conditions of any and all leases, easements, right-of-way agreements
and other agreements binding upon such Debtor or affecting the Collateral, in
each case which cover the premises wherein the Collateral is located, and any
orders, ordinances, laws or statutes of any city, state or other governmental
entity, department or agency having jurisdiction with respect to such premises
or the conduct of business thereon applicable to such Debtor which violation
would have a Material Adverse Effect.
(l) No Debtor has invoiced Receivables or otherwise transacted
business, and does not invoice Receivables or otherwise transact business,
under any trade names other than its name set forth on its signature page to
this Agreement or as otherwise set forth on Schedule B hereto. Each Debtor
agrees it will not change its name or transact business under any other trade
name, in each case without first giving the Agent at least 30 days prior
written notice of its intent to do so.
(m) Each Debtor agrees to execute and deliver to the Agent such
further agreements, assignments, instruments and documents, and to do all such
other things, as the Agent may reasonably deem necessary or appropriate to
assure the Agent its lien and security interest hereunder, including without
limitation, (i) executing such financing statements, effective financing
statements or other instruments and documents as the Agent may from time to
time reasonably require to comply with the UCC, the Food Security Act of 1985
as amended, and any other applicable law, and (ii) executing such patent,
trademark, and copyright agreements as the Agent may from time to time
reasonably require to comply with the filing requirements of the United States
Patent and Trademark Office and the United States Copyright Office. Each
Debtor hereby agrees that a carbon, photographic or other reproduction of
this Agreement or any such financing statement is sufficient for filing as a
financing statement or effective financing statement by the Agent without prior
notice thereof to such Debtor wherever the Agent deems necessary or desirable
to perfect or protect the security interest granted hereby. In the event for
any reason the law of any jurisdiction other than Illinois becomes or is
applicable to the Collateral or any part thereof, or to any of the
Obligations, each Debtor agrees to execute and deliver all such instruments
and documents and to do all such other things as the Agent deems necessary or
appropriate to preserve, protect and enforce the security interest of the
Agent under the law of such other jurisdiction.
(n) On failure of a Debtor to perform any of the covenants and
agreements herein contained, the Agent may, at its option, perform the same
and in so doing may expend such commercially reasonable sums as the Agent deems
advisable in the performance thereof, including, without limitation, the
payment of any insurance premiums, the payment of any taxes, liens and
encumbrances, expenditures made in defending against any adverse claims, and
all other expenditures which the Agent may be compelled to make by operation
of law or which the Agent may make by agreement or otherwise for the
protection of the security hereof. All such sums and amounts so expended
shall be repayable by such Debtor immediately upon demand, shall constitute
additional Obligations secured hereunder, and shall bear interest from the
date said amounts are expended at the rate per annum (computed on the basis
of a year of 365 or 366 days, as the case may be, for the actual number of
days elapsed) determined by adding 2% to the Base Rate from time to time in
effect plus the Applicable Margin, with any change in such rate per annum as
so determined by reason of a change in such Base Rate to be effective on the
date of such change in said Base Rate (such rate per annum as so determined
being hereinafter referred to as the "Default Rate"). No such performance of
any covenant or agreement by the Agent on behalf of a Debtor, and no such
advancement or expenditure therefor, shall relieve any Debtor of any default
under the terms of this Agreement or in any way obligate any Secured Creditor
to take any further or future action with respect thereto. The Agent in
making any payment hereby authorized may do so according to any xxxx,
statement or estimate procured from the appropriate public office or holder
of the claim to be discharged without inquiry into the accuracy of such xxxx,
statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien or title or claim. The Agent in performing any act
hereunder shall be the sole judge of whether the relevant Debtor is required
to perform the same under the terms of this Agreement so long as the Agent
makes such determination in good faith. The Agent is hereby authorized to
charge any depository or other account of any Debtor maintained with any
Secured Creditor for the amount of such sums and amounts so expended.
Section 4. Special Provisions Re: Receivables. (a) As of the time any
Receivable becomes subject to the security interest provided for hereby and at
all times thereafter, each Debtor shall be deemed to have warranted as to each
and all of its Receivables that all warranties of such Debtor set forth in this
Agreement are true and correct with respect to each such Receivable; that each
of its Receivable and all papers and documents relating thereto are genuine and
in all material respects what they purport to be; that each of its Receivable is
valid and existing and, if such Receivable is an account, arises out of a bona
fide sale of goods sold and delivered by such Debtor to, or in the process of
being delivered to, or out of and for services theretofore actually rendered by
such Debtor to, the account debtor named therein; and that no surety bond was
required or given in connection with such Receivable or the contracts or
purchase orders out of which the same arose.
(b) To the extent any Receivables or other item of Collateral is
evidenced by an instrument or chattel paper, each Debtor shall cause such
instrument to be pledged and delivered to the Agent; provided, however, that,
prior to the existence of a Default or Event of Default and thereafter until
otherwise required by the Agent or the Secured Creditors, a Debtor shall not
be required to deliver any such instrument or chattel paper if and only so
long as the aggregate unpaid principal balance of all such instruments and
chattel paper held by the Debtors and not delivered to the Agent under the
Collateral Documents is less than $1,000,000 at any one time outstanding.
(c) If any Receivable arises out of a contract with the United States of
America or any of its departments, agencies or instrumentalities, the relevant
Debtor agrees to, at the request of the Agent or the Secured Creditors, execute
whatever instruments and documents are required by the Agent in order that such
Receivable shall be assigned to the Agent and that proper notice of such
assignment shall be given under the federal Assignment of Claims Act (or any
successor statute) or any similar statute relating to the assignment of such
Receivables.
(d) Unless and until an Event of Default hereunder occurs and is
continuing, any merchandise or other goods which are returned by a customer or
account debtor or otherwise recovered may be resold by the relevant Debtor in
the ordinary course of its business as presently conducted in accordance with
Section 6(b) hereof; upon the occurrence and during the continuation of any
Event of Default hereunder, such merchandise and other goods shall be set aside
at the request of the Agent and held by such Debtor as trustee for the Secured
Creditors and shall remain part of the Collateral. Unless and until an Event
of Default hereunder occurs and is continuing, the relevant Debtor may settle
and adjust disputes and claims with its customers and account debtors, handle
returns and recoveries and grant discounts, credits and allowances in the
ordinary course of its business as presently conducted for amounts and on terms
which such Debtor in good faith considers advisable. Upon the occurrence and
during the continuation of any Event of Default hereunder, at the request of
the Agent, each Debtor shall notify the Agent promptly of all returns and
recoveries and at the Agent's request deliver any such merchandise or other
goods to the Agent. Upon the occurrence and during the continuation of any
Event of Default hereunder, at the Agent's request, each Debtor shall also
notify the Agent promptly of all disputes and claims and settle or adjust
them at no expense to the Secured Creditors hereunder, but no discount, credit
or allowance other than on normal trade terms in the ordinary course of
business as presently conducted shall be granted to any customer or account
debtor and no returns of merchandise or other goods shall be accepted by any
Debtor without the Agent's consent. The Agent may, at all times upon the
occurrence and during the continuation of any Event of Default hereunder,
settle or adjust disputes and claims directly with customers or account
debtors for amounts and upon terms which the Agent considers advisable.
(e) The Agent agrees that its security interest in any Receivables that
are sold by any Debtor pursuant to a Receivables Securitization Program
permitted by the Credit Agreement shall be automatically released upon such
sale; provided that any Receivables returned to any Debtor under a Receivables
Securitization Program shall be subject to the Agent's security interest
hereunder upon such return.
Section 5. Collection of Receivables. (a) Except as otherwise provided
in this Agreement, each Debtor shall make collection of all of its Receivables
and may use the same to carry on its business in accordance with sound business
practice and otherwise subject to the terms hereof.
(b) During the existence of any Default or Event of Default, immediately
upon the Agent's request, each Debtor hereby agrees that:
(i) all instruments and chattel paper at any time constituting
part of the Receivables (including any postdated checks) shall, upon receipt by
such Debtor, be immediately endorsed to and deposited with Agent; and
(ii) such Debtor shall instruct all of its customers and account
debtors to remit all payments in respect of its Receivables to a lockbox or
lockboxes under the sole custody and control of Agent and which are maintained
at post offices selected by the Agent.
(c) Upon the occurrence and during the continuation of any Default or
Event of Default hereunder, whether or not the Agent has exercised any or all
of its rights under other provisions of this Section 5, the Agent or its
designee may notify the relevant Debtor's customers and account debtors at any
time that Receivables have been assigned to the Agent or of the Agent's
security interest therein, and either in its own name, or such Debtor's name,
or both, demand, collect (including, without limitation, through a lockbox
analogous to that described in Section 5(b)(ii) hereof), receive, receipt for,
xxx for, compound and give acquittance for any or all amounts due or to become
due on Receivables, and in the Agent's discretion file any claim or take any
other action or proceeding which the Agent may deem necessary or appropriate
to protect and realize upon the security interest of the Agent in the
Receivables.
(d) Any proceeds of Receivables or other Collateral transmitted to or
otherwise received by the Agent pursuant to any of the provisions of
Sections 5(b) or 5(c) hereof may be handled and administered by the Agent in
and through a remittance account or accounts maintained at the Agent or by the
Agent at a commercial bank or banks selected by the Agent (collectively the
"Depositary Banks" and individually a "Depositary Bank"), and each Debtor
acknowledges that the maintenance of such remittance accounts by the Agent is
solely for the Agent's convenience and that the Debtors do not have any right,
title or interest in such remittance accounts or any amounts at any time
standing to the credit thereof. During the existence of any Default or Event
of Default, the Agent may apply all or any part of any proceeds of Receivables
or other Collateral received by it from any source to the payment of the
Obligations (whether or not then due and payable), such applications to be made
in such amounts, in such manner and order and at such intervals as the Agent
may from time to time in its discretion determine in accordance with the terms
of the Credit Agreement. The Agent need not apply or give credit for any item
included in proceeds of Receivables or other Collateral until the Depositary
Bank has received final payment therefor at its office in cash or final solvent
credits current at the site of deposit acceptable to the Agent and the
Depositary Bank as such. However, if the Agent does permit credit to be given
for any item prior to a Depositary Bank receiving final payment therefor and
such Depositary Bank fails to receive such final payment or an item is charged
back to the Agent or any Depositary Bank for any reason, the Agent may at its
election in either instance charge the amount of such item back against any
such remittance accounts or any depository account of any Debtor maintained
with any Secured Creditor, together with interest thereon at the Default Rate.
Concurrently with each transmission by a Debtor of any proceeds of Receivables
or other Collateral to any such remittance account, upon the Agent's request,
the relevant Debtor shall furnish the Agent with a report in such form as Agent
shall reasonably require identifying the particular Receivable or such other
Collateral from which the same arises or relates. Each Debtor hereby
indemnifies the Secured Creditors from and against all liabilities, damages,
losses, actions, claims, judgments, and all reasonable costs, expenses, charges
and attorneys' fees suffered or incurred by any Secured Creditor because of the
maintenance of the foregoing arrangements described in this Section 5(d);
provided, however, that no Debtor shall be required to indemnify any Secured
Creditor for any of the foregoing to the extent they arise solely from the
gross negligence or willful misconduct of the person seeking to be
indemnified. The Secured Creditors shall have no liability or responsibility
to any Debtor for the Agent or any other Depositary Bank accepting any check,
draft or other order for payment of money bearing the legend "payment in full"
or words of similar import or any other restrictive legend or endorsement
whatsoever or be responsible for determining the correctness of any remittance.
Section 6. Special Provisions Re: Inventory and Equipment. (a) Each
Debtor shall at its own cost and expense take commercially reasonable measures
to maintain, keep and preserve its Inventory located at its facilities in good
and merchantable condition, subject to annual shrinkage not to exceed 5%, and
the Debtors shall take commercially reasonable measures designed to cause third
parties taking Inventory on consignment or storage to maintain, keep and
preserve such Inventory. Each Debtor shall keep and preserve its Equipment in
good repair, working order and condition, ordinary wear and tear excepted, and,
without limiting the foregoing, make all commercially reasonable, necessary and
proper repairs, replacements and additions to its Equipment so that the
efficiency thereof shall be preserved and maintained in all material respects.
(b) Each Debtor may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, use, consume
and sell the Inventory in the ordinary course of its business, but a sale in
the ordinary course of business shall not under any circumstance include any
transfer or sale in satisfaction, partial or complete, of a debt owing by such
Debtor, provided that a transfer or sale of Inventory as part of product swaps
or payment in kind transactions made in the ordinary course of business shall
not constitute a transfer or sale in satisfaction of a debt owing by a Debtor.
(c) Each Debtor may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, sell
(x) obsolete, worn out or unusable Equipment and (y) Equipment to the extent
permitted by Section 7.12 of the Credit Agreement.
(d) As of the time any Inventory or Equipment of a Debtor becomes subject
to the security interest provided for hereby and at all times thereafter, such
Debtor shall be deemed to have warranted as to any and all of such Inventory
and Equipment that all warranties of such Debtor set forth in this Agreement
are true and correct with respect to such Inventory and Equipment; that all of
such Inventory and Equipment is located at a location set forth pursuant to
Section 3(b) hereof.
(e) Upon the Agent's or the Secured Creditors' request and if the
aggregate value of all Collateral subject to a certificate of title law exceeds
$3,000,000, each Debtor shall at its own cost and expense cause the lien of the
Agent in and to any portion of its Collateral subject to a certificate of title
law to be duly noted on such certificate of title or to be otherwise filed in
such manner as is prescribed by law in order to perfect such lien and will
cause all such certificates of title and evidences of lien to be deposited
with the Agent.
(f) Except for Equipment from time to time located on the real estate
described on Schedule C attached hereto or as otherwise hereafter disclosed to
the Secured Creditors in writing, none of the Equipment is or will be attached
to real estate in such a manner that the same may become a fixture.
(g) If any of the Inventory is at any time evidenced by a document of
title, such document shall be promptly delivered by the relevant Debtor to the
Agent; provided, however, that prior to the existence of a Default or Event of
Default and thereafter until otherwise required by the Agent or the Secured
Creditors, a Debtor shall not be required to deliver any such document of title
if and only so long as the aggregate value of Inventory evidenced thereby that
have not been delivered to the Agent under the Collateral Documents is less
than $1,000,000 at any time.
Section 7. Special Provisions Re: Investment Property. (a) Unless and
until an Event of Default has occurred and is continuing and thereafter until
notified to the contrary by the Agent pursuant to Section 9(d) hereof:
(i) each Debtor shall be entitled to exercise all voting and/or
consensual powers pertaining to its Investment Property or any part thereof,
for all purposes not inconsistent with the terms of this Agreement, the Credit
Agreement or any other document evidencing or otherwise relating to any
Obligations; and
(ii) each Debtor shall be entitled to receive and retain all cash
dividends paid upon or in respect of its Investment Property.
(b) Certificates for all securities now or at any time constituting
Investment Property and part of the Collateral hereunder shall be promptly
delivered by the relevant Debtor to the Agent duly endorsed in blank for
transfer or accompanied by an appropriate assignment or assignments or an
appropriate undated stock power or powers, in every case sufficient to transfer
title thereto, including, without limitation, all stock received in respect of
a stock dividend or resulting from a split-up, revision or reclassification of
the Investment Property or any part thereof or received in addition to, in
substitution of or in exchange for the Investment Property or any part thereof
as a result of a merger, consolidation or otherwise. With respect to any
Investment Property held by a securities intermediary, commodity intermediary,
or other financial intermediary of any kind, the relevant Debtor shall execute
and deliver, and shall cause any such intermediary to execute and deliver, an
agreement among such Debtor, the Agent, and such intermediary in form and
substance satisfactory to the Agent which provides, among other things, for the
intermediary's agreement that it will comply with such entitlement orders, and
apply any value distributed on account of any Investment Property maintained in
an account with such intermediary, as directed by the Agent without further
consent by such Debtor. The Agent may, at any time after the occurrence and
during the continuation of an Event of Default at any time when the Obligations
are, or have been declared to be, due and payable in full, cause to be
transferred into its name or the name of its nominee or nominees any and all of
the Investment Property hereunder.
(c) Unless and until an Event of Default has occurred and is continuing,
each Debtor may sell or otherwise dispose of any of its Investment Property to
the extent permitted by the Credit Agreement, provided that no Debtor shall
sell or otherwise dispose of any capital stock or other equity interest in any
direct or indirect Subsidiary without the prior written consent of the Agent.
During the existence of any Event of Default, no Debtor shall sell all or any
part of the Investment Property without the prior written consent of the Agent.
(d) Each Debtor represents that on the date of this Agreement, none of
its Investment Property consists of margin stock (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System) except
to the extent such Debtor has delivered to the Agent a duly executed and
completed Form U-1 with respect to such stock. If at any time the Investment
Property or any part thereof consists of margin stock, the relevant Debtor
shall promptly so notify the Agent and deliver to the Agent a duly executed
and completed Form U-1 and such other instruments and documents reasonably
requested by the Agent in form and substance satisfactory to the Agent.
Section 8. Power of Attorney. In addition to any other powers of
attorney contained herein, each Debtor hereby appoints the Agent, its nominee,
or any other person whom the Agent may designate as such Debtor's attorney-in-
fact, with full power during the existence of any Default or Event of Default
to sign such Debtor's name on verifications of accounts and other Collateral;
to send requests for verification of Collateral to such Debtor's customers,
account debtors and other obligors; to endorse such Debtor's name on any
checks, notes, acceptances, money orders, drafts and any other forms of
payment or security that may come into the Agent's possession; to endorse the
Collateral in blank or to the order of the Agent or its nominee; to sign such
Debtor's name on any invoice or xxxx of lading relating to any Collateral, on
claims to enforce collection of any Collateral, on notices to and drafts
against customers and account debtors and other obligors, on schedules and
assignments of Collateral, on notices of assignment and on public records;
to notify the post office authorities to change the address for delivery of
such Debtor's mail to an address designated by the Agent; to receive, open
and dispose of all mail addressed to such Debtor; and to do all things
necessary to carry out this Agreement. Each Debtor hereby ratifies and
approves all acts of any such attorney and agrees that neither the Agent nor
any such attorney will be liable for any acts or omissions nor for any error
of judgment or mistake of fact or law other that such person's gross
negligence or willful misconduct. The Agent may file one or more financing
statements and/or effective financing statements disclosing its security
interest in any or all of the Collateral without any Debtor's signature
appearing thereon, and each Debtor also hereby grants the Agent a power of
attorney to execute any such financing statements and/or effective financing
statements, or amendments and supplements to financing statements and/or
effective financing statements, on behalf of such Debtor without notice
thereof to any Debtor. The foregoing powers of attorney, being coupled with
an interest, are irrevocable until the Obligations have been fully paid and
satisfied and the commitments of the Lenders to extend credit to or for
the account of the Borrower under the Credit Agreement have expired or
otherwise terminated.
Section 9. Defaults and Remedies. (a) The occurrence of any event or
the existence of any condition which is specified as an "Event of Default"
under the Credit Agreement shall constitute an "Event of Default" hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC (regardless
of whether the UCC is the law of the jurisdiction where the rights or remedies
are asserted and regardless of whether the UCC applies to the affected
Collateral), and further the Agent may, without demand and, to the extent
permitted by applicable law, without advertisement, notice, hearing or process
of law, all of which each Debtor hereby waives to the extent permitted by
applicable law, at any time or times, sell and deliver any or all Collateral
held by or for it at public or private sale, at any securities exchange or
broker's board or at any Secured Creditor's office or elsewhere, for cash, upon
credit or otherwise, at such prices and upon such terms as the Agent deems
advisable, in its sole discretion. Upon the occurrence and during the
continuation of any Event of Default, in addition to any other right or
remedies set forth herein or by applicable law, the Agent may by written
demand direct any securities intermediary, commodities intermediary, or other
financial intermediary at any time holding any Investment Property, or any
issuer thereof, to deliver such Collateral, or any part thereof, to the Agent
and/or liquidate such Collateral, or any part thereof, and deliver the
proceeds thereof to the Agent. In the exercise of any such remedies, the
Agent may sell the Collateral as a unit even though the sales price thereof
may be in excess of the amount remaining unpaid on the Obligations. Also, if
less than all the Collateral is sold, the Agent shall have no duty to marshal
or apportion the part of the Collateral so sold as between the Debtors, or any
of them, but may sell and deliver any or all of the Collateral without regard
to which of the Debtors are the owners thereof. In addition to all other sums
due any Secured Creditor hereunder, each Debtor shall pay the Secured
Creditors all costs and expenses incurred by the Secured Creditors, including
reasonable attorneys' fees and court costs, in obtaining, liquidating or
enforcing payment of Collateral or the Obligations or in the prosecution or
defense of any action or proceeding by or against any Secured Creditor or any
Debtor concerning any matter arising out of or connected with this Agreement
or the Collateral or the Obligations, including, without limitation, any of
the foregoing arising in, arising under or related to a case under the United
States Bankruptcy Code (or any successor statute). Any requirement of
reasonable notice shall be met if such notice is personally served on or
mailed, postage prepaid, to the Debtors in accordance with Section 13(b) hereof
at least 10 days before the time of sale or other event giving rise to the
requirement of such notice; provided, however, no notification need be given
to a Debtor if such Debtor has signed, after an Event of Default hereunder
has occurred, a statement renouncing any right to notification of sale or
other intended disposition. The Agent shall not be obligated to make any
sale or other disposition of the Collateral regardless of notice having been
given. Any Secured Creditor may be the purchaser at any such sale. Each
Debtor hereby waives all of its rights of redemption from any such sale.
The Agent may postpone or cause the postponement of the sale of all or
any portion of the Collateral by announcement at the time and place of such
sale, and such sale may, without further notice, be made at the time and place
to which the sale was postponed or the Agent may further postpone such sale by
announcement made at such time and place. In the event any of the Collateral
shall constitute restricted securities within the meaning of any applicable
securities laws, any disposition thereof in compliance with such laws shall
not render the disposition commercially unreasonable.
(c) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default hereunder, the Agent shall have
the right, in addition to all other rights provided herein or by law, to take
physical possession of any and all of the Collateral and anything found
therein, the right for that purpose to enter without legal process any
premises where the Collateral may be found (provided such entry be done
lawfully), and the right to maintain such possession on the relevant Debtor's
premises (each Debtor hereby agreeing, to the extent it may lawfully do so,
to lease such premises without cost or expense to the Agent or its designee
if the Agent so requests) or to remove the Collateral or any part thereof to
such other places as the Agent may desire. Upon the occurrence and during the
continuation of any Event of Default hereunder, the Agent shall have the right
to exercise any and all rights with respect to deposit accounts of each
Debtor maintained with any Secured Creditor, including, without limitation,
the right to collect, withdraw and receive all amounts due or to become due
or payable under each such deposit account. Upon the occurrence and during
the continuation of any Event of Default hereunder, each Debtor shall, upon
the Agent's demand, assemble the Collateral and make it available to the
Agent at a place reasonably designated by the Agent. If the Agent exercises
its right to take possession of the Collateral, each Debtor shall also at its
expense perform any and all other steps requested by the Agent to preserve
and protect the security interest hereby granted in the Collateral, such as
placing and maintaining signs indicating the security interest of the Agent,
appointing overseers for the Collateral and maintaining Collateral records.
(d) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default at any time when the
Obligations are, or have been declared to be, due and payable in full, all
rights of a Debtor to exercise the voting and/or consensual powers which it is
entitled to exercise pursuant to Section 7(a)(i) hereof and/or to receive and
retain the distributions which it is entitled to receive and retain pursuant to
Section 7(a)(ii) hereof, shall, at the option of the Agent, cease and thereupon
become vested in the Agent, which, in addition to all other rights provided
herein or by law, shall then be entitled solely and exclusively to exercise all
voting and other consensual powers pertaining to the Investment Property and/or
to receive and retain the distributions which such Debtor would otherwise have
been authorized to retain pursuant to Section 7(a)(ii) hereof and shall then be
entitled solely and exclusively to exercise any and all rights of conversion,
exchange or subscription or any other rights, privileges or options pertaining
to any Investment Property as if the Agent were the absolute owner thereof
including, without limitation, the rights to exchange, at its discretion, any
and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the respective issuer
thereof or upon the exercise by or on behalf of any such issuer or the Agent of
any right, privilege or option pertaining to any Investment Property and, in
connection therewith, to deposit and deliver any and all of the Investment
Property with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Agent may determine.
(e) Without in any way limiting the foregoing, each Debtor hereby grants
to the Secured Creditors a royalty-free irrevocable license and right to use
all of such Debtor's patents, patent applications, patent licenses, trademarks,
trademark registrations, trademark licenses, trade names, trade styles, and
similar intangibles in connection with any foreclosure or other realization by
the Agent or the Secured Creditors on all or any part of the Collateral to the
extent permitted by law. The license and right granted the Secured Creditors
hereby shall be without any royalty or fee or charge whatsoever.
(f) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Debtor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not
operate as a waiver; and no waiver shall be effective unless it is in writing,
signed by the party against whom such waiver is sought to be enforced and then
only to the extent specifically stated. Neither any Secured Creditor, nor any
party acting as attorney for any Secured Creditor, shall be liable hereunder
for any acts or omissions or for any error of judgment or mistake of fact or
law other than their gross negligence or willful misconduct. The rights and
remedies of the Secured Creditors under this Agreement shall be cumulative
and not exclusive of any other right or remedy which any Secured Creditor may
have.
Section 10. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Obligations in accordance with the terms of the
Credit Agreement and, if applicable, any intercreditor agreement between the
Secured Parties (or the Agent on their behalf) and any other holders of a
security interest in the Collateral or any part thereof. The Debtors shall
remain liable to the Secured Creditors for any deficiency. Any surplus
remaining after the full payment and satisfaction of the Obligations shall be
returned to the Borrower, as agent for the Debtors, or to whomsoever the Agent
reasonably determines is lawfully entitled thereto.
Section 11. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until the
earlier to occur of (i) the Borrower satisfies the provisions of
Section 7.26(c) of the Credit Agreement, or (ii) all of the Obligations, both
for principal and interest, have been fully paid and satisfied and the
commitments of the Lenders to extend credit to or for the account of the
Borrower under the Credit Agreement have expired or otherwise terminated.
Upon such termination of this Agreement, the Agent shall, upon the request and
at the expense of the Debtors, forthwith release its security interest
hereunder.
Section 12. The Agent. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges and
immunities provided in the Credit Agreement, all of which provisions of said
Credit Agreement (including, without limitation, Section 10 thereof) are
incorporated by reference herein with the same force and effect as if set
forth herein in their entirety. The Agent hereby disclaims any representation
or warranty to the other Secured Creditors or any other holders of the
Obligations concerning the perfection of the liens and security interests
granted hereunder or in the value of any of the Collateral.
Section 13. Miscellaneous. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and
security interest in the Collateral and shall be binding upon each Debtor, its
successors and assigns and shall inure, together with the rights and remedies
of the Secured Creditors hereunder, to the benefit of the Secured Creditors and
their successors and permitted assigns; provided, however, that no Debtor may
assign its rights or delegate its duties hereunder without the Agent's prior
written consent. Without limiting the generality of the foregoing, and subject
to the provisions of the Credit Agreement, any Lender may assign or otherwise
transfer any indebtedness held by it secured by this Agreement 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.
(b) All communications provided for herein shall be in writing, except as
otherwise specifically provided for hereinabove, and shall be deemed to have
been given or made, if to any Debtor when given to the Borrower in accordance
with Section 11.7 of the Credit Agreement, or if to any Secured Creditor, when
given to such party in accordance with Section 11.7 of the Credit Agreement.
(c) No Lender shall have the right to institute any suit, action or
proceeding in equity or at law for the foreclosure or other realization upon
any Collateral subject to this Agreement or for the execution of any trust or
power hereof or for the appointment of a receiver, or for the enforcement of
any other remedy under or upon this Agreement; it being understood and
intended that no one or more of the Lenders shall have any right in any manner
whatsoever to affect, disturb or prejudice the lien and security interest of
this Agreement by its or their action or to enforce any right hereunder, and
that all proceedings at law or in equity shall be instituted, had and
maintained by the Agent in the manner herein provided for the benefit of the
Secured Creditors.
(d) In the event that any provision hereof shall be deemed to be invalid
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed
as not containing such provision, but only as to such jurisdictions where such
law or interpretation is operative, and the invalidity or unenforceability of
such provision shall not affect the validity of any remaining provisions
hereof, and any and all other provisions hereof which are otherwise lawful and
valid shall remain in full force and effect. Without limiting the generality
of the foregoing, in the event that this Agreement shall be deemed to be
invalid or otherwise unenforceable with respect to any Debtor, such invalidity
or unenforceability shall not affect the validity of this Agreement with
respect to the other Debtors.
(e) The lien and security interest herein created and provided for stand
as direct and primary security for the Obligations of the Borrower arising
under or otherwise relating to the Credit Agreement as well as for any of the
other Obligations secured hereby. No application of any sums received by the
Secured Creditors in respect of the Collateral or any disposition thereof to
the reduction of the Obligations or any part thereof shall in any manner
entitle any Debtor to any right, title or interest in or to the Obligations
or any collateral or security therefor, whether by subrogation or otherwise,
unless and until all Obligations have been fully paid and satisfied and all
agreements of the Secured Creditors to extend credit to or for the account of
the Borrower under the Credit Agreement have expired or otherwise terminated.
Each Debtor acknowledges that the lien and security interest hereby created
and provided are absolute and unconditional and shall not in any manner be
affected or impaired by any acts of omissions whatsoever of any Secured
Creditor or any other holder of any Obligations, and without limiting the
generality of the foregoing, the lien and security interest hereof shall not
be impaired by any acceptance by the Secured Creditors or any other holder of
any Obligations of any other security for or guarantors upon any of the
Obligations or by any failure, neglect or omission on the part of any Secured
Creditor or any other holder of any Obligations to realize upon or protect
any of the Obligations or any collateral or security therefor (including,
without limitation, impairment of collateral or failure to perfect security
interest in collateral). The lien and security interest hereof shall not in
any manner be impaired or affected by (and the Secured Creditors, without
notice to anyone, are hereby authorized to make from time to time) any sale,
pledge, surrender, compromise, settlement, release, renewal, extension,
indulgence, alteration, substitution, exchange, change in, modification or
disposition of any of the Obligations or of any collateral or security
therefor, or of any guaranty thereof, or of any instrument or agreement
setting forth the terms and conditions pertaining to any of the foregoing.
The Secured Creditors may at their discretion at any time grant credit to the
Borrower without notice to the other Debtors in such amounts and on such terms
as the Secured Creditors may elect (all of such to constitute additional
Obligations hereby secured) without in any manner impairing the lien and
security interest created and provided for herein. In order to realize hereon
and to exercise the rights granted the Secured Creditors hereunder and under
applicable law, there shall be no obligation on the part of any Secured
Creditor or any other holder of any Obligations at any time to first resort
for payment to the Borrower or to any other Debtor or to any guaranty of the
Obligations or any portion thereof or to resort to any other collateral,
security, property, liens or any other rights or remedies whatsoever, and
the Secured Creditors shall have the right to enforce this Agreement against
any Debtor or any of its Collateral irrespective of whether or not other
proceedings or steps seeking resort to or realization upon or from any of
the foregoing are pending.
(f) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Debtors hereunder or a party shall wish to
become a Debtor hereunder, such substituted or additional Debtor shall, upon
executing an agreement in the form attached hereto as Schedule D, become a
party hereto and be bound by all the terms and conditions hereof to the same
extent as though such Debtor had originally executed this Agreement and, in
the case of a substitution, in lieu of the Debtor being replaced. Any such
agreement shall contain information as to such Debtor necessary to update
Schedules A, B and C hereto with respect to it. No such substitution shall
be effective absent the written consent of Agent nor shall it in any manner
affect the obligations of the other Debtors hereunder.
(g) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws
of the State of Illinois. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
(h) Each Debtor hereby submits to the non-exclusive jurisdiction of the
United States District Court for the Northern District of Illinois and of any
Illinois state court sitting in Xxxx County, Illinois for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Debtor irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient form.
(i) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same agreement.
[SIGNATURE PAGES TO FOLLOW]
IN WITNESS WHEREOF, each Debtor has caused this Agreement to be duly
executed and delivered as of the date first above written.
"DEBTORS"
MISSISSIPPI CHEMICAL CORPORATION
By_____________________________________
Name:________________________________
Title:_______________________________
Address:
_______________________________________
_______________________________________
Attention: _________________
Telephone: _________________
Telecopy: _________________
_______________________________________
By_____________________________________
Name:________________________________
Title:_______________________________
Address:
_______________________________________
_______________________________________
Attention: _________________
Telephone: _________________
Telecopy: _________________
_______________________________________
By_____________________________________
Name:________________________________
Title:_______________________________
Address:
_______________________________________
_______________________________________
Attention: _________________
Telephone: _________________
Telecopy: _________________
Accepted and agreed to in Chicago, Illinois as of the date first above
written.
XXXXXX TRUST AND SAVINGS BANK, as Agent
By______________________________________
Name__________________________________
Title_________________________________
Address:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Agribusiness Division
Telephone: _________________
Telecopy: _________________
SCHEDULE A
LOCATIONS
COLUMN 1 COLUMN 2 COLUMN 3
NAME OF DEBTOR CHIEF
(AND FEDERAL TAX EXECUTIVE ADDITIONAL PLACES
I.D. NUMBER) OFFICE OF BUSINESS
Mississippi Chemical Corporation ______________ ___________
Tax ID #________________ ______________
________________________________ ______________ ___________
Tax ID #________________ ______________
SCHEDULE B
TRADE NAMES
TRADE NAMES OF
NAME OF DEBTOR SUCH DEBTOR
SCHEDULE C
REAL ESTATE LEGAL DESCRIPTIONS
SCHEDULE D
ASSUMPTION AND SUPPLEMENTAL SECURITY AGREEMENT
THIS AGREEMENT dated as of this _____ day of __________________, _____
from [NEW DEBTOR], a _______________ corporation (the "New Debtor"), to Xxxxxx
Trust and Savings Bank ("HTSB"), as agent for the Secured Creditors (defined
in the Security Agreement hereinafter identified and defined) (HTSB acting as
such agent and any successor or successors to HTSB in such capacity being
hereinafter referred to as the "Agent");
WITNESSETH THAT:
WHEREAS, Mississippi Chemical Corporation and ___________________________
(together the "Debtors") and certain other parties have executed and delivered
to the Agent that certain Security Agreement dated as of ___________, ____
(such Security Agreement, as the same may from time to time be amended,
modified, or restated, including supplements thereto which add additional
parties as Debtors thereunder, being hereinafter referred to as the "Security
Agreement") pursuant to which such parties (the "Existing Debtors") have
granted to the Agent for the benefit of the Secured Creditors a lien on and
security interest in each such Existing Debtor's Collateral (as such term is
defined in the Security Agreement) to secure the Obligations (as such term is
defined in the Security Agreement); and
WHEREAS, the Borrower provides the New Debtor with substantial financial,
managerial, administrative, and technical support and the New Debtor will
directly and substantially benefit from credit and other financial
accommodations extended and to be extended by the Secured Creditors to the
Borrower;
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances made
or to be made, or credit accommodations given or to be given, to the Borrower
by the Secured Creditors from time to time, the New Debtor hereby agrees as
follows:
1. The New Debtor acknowledges and agrees that it shall become a
"Debtor" party to the Security Agreement effective upon the date the New
Debtor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the
Security Agreement to the terms "Debtor" or "Debtors" shall be deemed to
include the New Debtor. Without limiting the generality of the foregoing,
the New Debtor hereby repeats and reaffirms all grants (including the grant
of a lien and security interest), covenants, agreements, representations and
warranties contained in the Security Agreement as amended hereby, each and
all of which are and shall remain applicable to the Collateral from time to
time owned by the New Debtor or in which the New Debtor from time to time has
any rights. Without limiting the foregoing, in order to secure payment of
the Obligations, whether now existing or hereafter arising, the New Debtor
does hereby grant to the Agent for the benefit of itself and the other Secured
Creditors, and hereby agrees that the Agent has and shall continue to have
for the benefit of itself and the other Secured Creditors a continuing lien
on and security interest in, among other things, all of the New Debtor's
Collateral (as such term is defined in the Security Agreement), including,
without limitation, all of the New Debtor's Receivables, General
Intangibles, Inventory and Farm Products, Equipment, Investment Property,
and all of the other Collateral described in Section 2 of the Security
Agreement, each and all of such granting clauses being incorporated herein
by reference with the same force and effect as if set forth in their entirety
except that all references in such clauses to the Existing Debtors or any of
them shall be deemed to include references to the New Debtor. Nothing
contained herein shall in any manner impair the priority of the liens and
security interests heretofore granted in favor of the Agent under the Security
Agreement.
2. Schedules A (Locations), B (Trade Names) and C (Real Estate) to the
Security Agreement shall be supplemented by the information stated below with
respect to the New Debtor:
SUPPLEMENT TO SCHEDULE A
NAME OF DEBTOR CHIEF
(AND FEDERAL TAX EXECUTIVE ADDITIONAL PLACES
I.D. NUMBER) OFFICE OF BUSINESS
________________________ ____________________ ______________________
________________________ ____________________ ______________________
SUPPLEMENT TO SCHEDULE B
TRADE MAMES OF
NAME OF DEBTOR SUCH DEBTOR
___________________________________ ______________________________
SUPPLEMENT TO SCHEDULE C
REAL ESTATE LEGAL DESCRIPTIONS
__________________________________
__________________________________
3. The New Debtor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Security Agreement to the same extent and
with the same force and effect as if the New Debtor had originally been one of
the Existing Debtors under the Security Agreement and had originally executed
the same as such an Existing Debtor.
4. All capitalized terms used in this Agreement without definition
shall have the same meaning herein as such terms have in the Security
Agreement, except that any reference to the term "Debtor" or "Debtors" and any
provision of the Security Agreement providing meaning to such term shall be
deemed a reference to the Existing Debtors and the New Debtor. Except as
specifically modified hereby, all of the terms and conditions of the Security
Agreement shall stand and remain unchanged and in full force and effect.
5. The New Debtor agrees to execute and deliver such further
instruments and documents and do such further acts and things as the Agent
may deem necessary or proper to carry out more effectively the purposes of
this Agreement.
6. No reference to this Agreement need be made in the Security Agreement
or in any other document or instrument making reference to the Security
Agreement, any reference to the Security Agreement in any of such to be deemed
a reference to the Security Agreement as modified hereby.
7. This Agreement shall be governed by and construed in accordance with
the State of Illinois (without regard to principles of conflicts of law).
[NEW DEBTOR]
By____________________________________
Name________________________________
Title_______________________________
Accepted and agreed to as of the date first above written.
XXXXXX TRUST AND SAVINGS BANK, as Agent
By_____________________________________
Name_________________________________
Title________________________________
