EXHIBIT 10.4
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SECURITY AGREEMENT
among
MOTORS AND GEARS INDUSTRIES, INC.
VARIOUS SUBSIDIARIES OF MOTORS AND GEARS INDUSTRIES, INC.
and
BANKERS TRUST COMPANY,
as Collateral Agent
Dated as of November 7, 1996
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SECURITY AGREEMENT
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SECURITY AGREEMENT, dated as of November 7, 1996 (as amended,
modified or supplemented from time to time, the "Agreement"), among each of
the undersigned (each, an "Assignor" and, collectively, the "Assignors")
and BANKERS TRUST COMPANY, as Collateral Agent (the "Collateral Agent"),
for the benefit of the Secured Creditors (as defined below). Except as
otherwise defined herein, terms used herein and defined in the Credit
Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Motors and Gears Industries, Inc. (the "Borrower"), various
financial institutions from time to time party thereto (the "Banks') and
Bankers Trust Company, as Agent (the "Agent", and together with the Banks
and the Collateral Agent, the "Bank Creditors"), have entered into a Credit
Agreement, dated as of November 7, 1996, providing for the making of Loans
to the Borrower and the issuance of, and participation in, Letters of
Credit for the account of the Borrower as contemplated therein (as used
herein, the term "Credit Agreement" means the Credit Agreement described
above in this paragraph as so amended, modified, extended, renewed,
replaced, restated, supplemented, restructured or refinanced from time to
time, and including any agreement extending the maturity of, refinancing or
restructuring (including, but not limited to, the inclusion of additional
borrowers thereunder that are Subsidiaries of the Borrower and whose
obligations are guaranteed by the Borrower thereunder or any increase in
the amount borrowed) all, or any portion of, the Indebtedness under such
agreement or any successor agreements; provided, that with respect to any
agreement providing for the refinancing of Indebtedness under the Credit
Agreement, such agreement shall only be treated as, or as part of, the
Credit Agreement hereunder if (i) either (A) all obligations under the
Credit Agreement being refinanced shall be paid in full at the time of such
refinancing, and all commitments under the refinanced Credit Agreement
shall have terminated in accordance with their terms or (B) the Required
Banks shall have consented in writing to the refinancing Indebtedness being
treated, along with their Indebtedness, as Indebtedness pursuant to the
Credit Agreement, (ii) the refinancing Indebtedness shall be permitted to
be incurred under the Credit Agreement being refinanced (if such Credit
Agreement is to remain outstanding) and (iii) a notice to the effect that
the refinancing Indebtedness shall be treated as issued under the Credit
Agreement shall be delivered by the Borrower to the Collateral Agent);
WHEREAS, the Borrower may from time to time enter into one or more
(i) interest rate protection agreements (including, without limitation,
interest rate swaps, caps, floors, collars and similar agreements), (ii)
foreign exchange contracts, currency swap agreements, commodity agreements
or other similar agreements or arrangements designed to protect against the
fluctuations in currency values and/or (iii) other types of hedging
agreements from time to time (each such agreement or arrangement with an
Other Creditor (as hereinafter defined), an "Interest Rate Protection
Agreement or Other Hedging Agreement"), with Bankers Trust Company in its
individual capacity ("BTCo"), any Bank or a syndicate of financial
institutions organized by BTCo or any such Bank, or an affiliate of BTCo or
any such Bank (BTCo, any such Bank or Banks or affiliate or affiliates of
BTCo or such Bank or Banks (even if BTCo or any such Bank ceases to be a
Bank under the Credit Agreement for any reason) and any such institution
that participates in such Interest Rate Protection Agreements or Other
Hedging Agreements and their subsequent successors and assigns
collectively, the "Other Creditors", and together with the Bank Creditors,
the "Secured Creditors");
WHEREAS, pursuant to a Guaranty, each Subsidiary Guarantor will have,
after the execution and delivery thereof, jointly and severally guaranteed
the payment when due of all obligations and liabilities of the Borrower
under or with respect to the Credit Documents and each Interest Rate
Protection Agreement or Other Hedging Agreement with one or more Other
Creditors;
WHEREAS, it is a condition precedent to the making of Loans to the
Borrower and the issuance of, and participation in, Letters of Credit for
the account of the Borrower under the Credit Agreement and to the Other
Creditors entering into Interest Rate Protection Agreements or Other
Hedging Agreements that each Assignor shall have executed and delivered to
the Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute this Agreement to satisfy
the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to
the Collateral Agent and hereby covenants and agrees with the Collateral
Agent as follows:
ARTICLE I
SECURITY INTERESTS
1.1 Grant of Security Interests. (a) As security for the prompt and
complete payment and performance when due of all of the Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and
does hereby pledge and grant to the Collateral Agent for the benefit of the
Secured Creditors, a continuing security interest of first priority in, all
of the right, title and interest of such Assignor in, to and under all of
the following, whether now existing or hereafter from time to time
acquired:
(i) each and every Receivable;
(ii) all Contracts, together with all Contract Rights arising
thereunder;
(iii) all Inventory;
(iv) the Cash Collateral Account and any other cash collateral
account
established for any Assignor for the benefit of the Secured Creditors
and all moneys, securities and instruments deposited or required to
be deposited in such Cash Collateral Account;
(v) all Equipment;
(vi) all Marks, together with the registrations and right to
all renewals
thereof, and the goodwill of the business of such Assignor symbolized
by the Marks;
(vii) all Patents and Copyrights and all reissues, renewals and
extensions thereof;
(viii) all computer programs of such Assignor and all
intellectual property rights therein and all other proprietary
information of such Assignor, including, but not limited to, trade
secrets and Trade Secret Rights;
(ix) all insurance policies;
(x) all other Goods, General Intangibles, Chattel Paper,
Documents and Instruments and other assets of such Assignor (other
than the Pledged Securities); and
(xi) all Proceeds and products of any and all of the foregoing
(all of the above, collectively, the "Collateral").
Notwithstanding anything to the contrary contained above, the term
"Collateral" shall not include any Collateral to the extent that, and for
so long as, such Collateral constitutes Excluded Collateral in accordance
with the definition thereof. To the extent that any Collateral
constituting Excluded Collateral no longer constitutes Excluded Collateral,
each respective Assignor shall, in accordance with the terms of the Credit
Agreement, take all actions required hereby and thereby to grant a security
interest in such Collateral as and when required by the Credit Agreement.
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of
this Agreement which any Assignor may acquire at any time during the
continuation of this Agreement.
1.2 Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably,
with full power after the occurrence of and during the continuance of an
Event of Default (in the name of such Assignor or otherwise) to act,
require, demand, receive, compound and give acquittance for any and all
monies and claims for monies due or to become due to such Assignor under or
arising out of the Collateral, to endorse any checks or other instruments
or orders in connection therewith and to file any claims or take any action
or institute any proceedings which the Collateral Agent may deem to be
necessary or advisable to accomplish the purposes of this Agreement, which
appointment as attorney is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and
delivery of this Agreement, as follows:
2.1 Necessary Filings. All filings, registrations and recordings
necessary or appropriate to create, preserve, protect and perfect the
security interest granted by such Assignor to the Collateral Agent hereby
in respect of the Collateral have been accomplished and the security
interest granted to the Collateral Agent pursuant to this Agreement in and
to the Collateral constitutes a perfected security interest therein prior
to the rights of all other Persons therein and subject to no other Liens
(other than Permitted Liens) and is entitled to all the rights, priorities
and benefits afforded by the Uniform Commercial Code or other relevant law
as enacted in any relevant jurisdiction to perfected security interests.
2.2 No Liens. Such Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of
all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Permitted Liens and
Liens created under this Agreement) and such Assignor shall defend the
Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.
2.3 Other Financing Statements. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration
under the law of any jurisdiction) covering or purporting to cover any
interest of any kind in the Collateral (other than (x) those created under
this Agreement and (y) as may be filed in connection with Liens permitted
pursuant to Section 9.01(iii) of the Credit Agreement), and so long as the
Total Commitment has not been terminated or any Note or Letter of Credit
remains outstanding or any of the Obligations remain unpaid or any Interest
Rate Protection Agreement or Other Hedging Agreement remains in effect or
any Obligations are owed with respect thereto, such Assignor will not
execute or authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law
of any jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or as permitted by the
Credit Agreement.
2.4 Chief Executive Office; Records. The chief executive office of
such Assignor is located at the address or addresses indicated on Annex A
hereto. Such Assignor will not move its chief executive office except to
such new location as such Assignor may establish in accordance with the
last sentence of this Section 2.4. The originals of all documents
evidencing all Receivables and Contract Rights and Trade Secret Rights of
such Assignor and the only original books of account and records of such
Assignor relating thereto are, and will continue to be, kept at such chief
executive office or at such new locations as such Assignor may establish in
accordance with the last sentence of this Section 2.4. All Receivables and
Contract Rights and Trade Secret Rights of such Assignor are, and will
continue to be, maintained at, and controlled and directed (including,
without limitation, for general accounting purposes) from, the office
locations described above or such new location established in accordance
with the last sentence of this Section 2.4. No Assignor shall establish
new locations for such offices until (i) it shall have given to the
Collateral Agent not less than 30 days' prior written notice of its
intention to do so, clearly describing such new location and providing such
other information in connection therewith as the Collateral Agent may
reasonably request, (ii) with respect to such new location, it shall have
taken all action, satisfactory to the Collateral Agent, to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect,
(iii) at the request of the Collateral Agent, it shall have furnished an
opinion of counsel acceptable to the Collateral Agent to the effect that
all financing or continuation statements and amendments or supplements
thereto have been filed in the appropriate filing office or offices, and
(iv) the Collateral Agent shall have received evidence that all other
actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interest granted hereby.
2.5 Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto. Each Assignor agrees that all Inventory
and Equipment now held or subsequently acquired by it shall be kept at (or
shall be in transport to) any one of the locations shown on Annex B hereto,
or such new location as such Assignor may establish in accordance with the
last sentence of this Section 2.5, except as permitted to be sold in
accordance with the terms hereof and in the Credit Agreement. Any Assignor
may establish a new location for Inventory and Equipment only if (i) it
shall have given to the Collateral Agent not less than 30 days' prior
written notice of its intention so to do, clearly describing such new
location and providing such other information in connection therewith as
the Collateral Agent may reasonably request, (ii) with respect to such new
location, it shall have taken all action satisfactory to the Collateral
Agent to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and
in full force and effect, (iii) at the request of the Collateral Agent, it
shall have furnished an opinion of counsel acceptable to the Collateral
Agent to the effect that all financing or continuation statements and
amendments or supplements thereto have been filed in the appropriate filing
office or offices, and (iv) the Collateral Agent shall have received
evidence that all other actions (including, without limitation, the payment
of all filing fees and taxes, if any, payable in connection with such
filings) have been taken, in order to perfect (and maintain the perfection
and priority of) the security interest granted hereby.
2.6 Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in
the other Credit Documents, in the Interest Rate Protection Agreements or
Other Hedging Agreements and otherwise in writing in connection herewith or
therewith.
2.7 Trade Names; Change of Name. No Assignor has or operates in any
jurisdiction under, or previously has had or has operated in any
jurisdiction within the five year period preceding the date of this
Agreement under, any trade names, fictitious names or other names except
its legal name and such other trade or fictitious names as are listed on
Annex C hereto. No Assignor shall change its legal name or assume or
operate in any jurisdiction under any trade, fictitious or other name
except those names listed on Annex C hereto in the jurisdictions listed
with respect to such names and new names (including, without limitation,
any names of divisions or operations) and/or jurisdictions established in
accordance with the last sentence of this Section 2.7. No Assignor shall
assume or operate in any jurisdiction under any new trade, fictitious or
other name or operate under any existing name in any additional
jurisdiction until (i) it shall have given to the Collateral Agent not less
than 30 days' prior written notice of its intention so to do, clearly
describing such new name and/or jurisdiction and, in the case of a new
name, the jurisdictions in which such new name shall be used and providing
such other information in connection therewith as the Collateral Agent may
reasonably request, (ii) with respect to such new name and/or jurisdiction,
it shall have taken all action to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect, (iii) at the request of
the Collateral Agent, it shall have furnished an opinion of counsel
acceptable to the Collateral Agent to the effect that all financing or
continuation statements and amendments or supplements thereto have been
filed in the appropriate filing office or offices, and (iv) the Collateral
Agent shall have received evidence that all other actions (including,
without limitation, the payment of all filing fees and taxes, if any,
payable in connection with such filings) have been taken, in order to
perfect (and maintain the perfection and priority of) the security interest
granted hereby.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1 Additional Representations and Warranties. As of the time when
each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are genuine and in all respects what
they purport to be, and that all papers and documents (if any) relating
thereto (i) will represent the genuine legal, valid and binding obligation
of the account debtor evidencing indebtedness unpaid and owed by the
respective account debtor arising out of the performance of labor or
services or the sale or lease and delivery of the inventory, materials,
equipment or merchandise listed therein, or both, (ii) will be the only
original writings evidencing and embodying such obligation of the account
debtor named therein (other than copies created for general accounting
purposes), (iii) will evidence true and valid obligations, enforceable in
accordance with their respective terms and (iv) will be in compliance and
will conform in all material respects with all applicable federal, state
and local laws and applicable laws of any relevant foreign jurisdiction.
3.2 Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense satisfactory and complete records of its
Receivables and Contracts, including, but not limited to, originals or
copies of all documentation (including each Contract) with respect thereto,
records of all payments received, all credits granted thereon, all
merchandise returned and all other dealings therewith, and such Assignor
will make the same available on such Assignor's premises to the Collateral
Agent for inspection, at such Assignor's own cost and expense, at any and
all reasonable times and intervals as the Collateral Agent may request.
Upon the occurrence and during the continuance of an Event of Default and
at the request of the Collateral Agent, such Assignor shall, at its own
cost and expense, deliver all tangible evidence of its Receivables and
Contract Rights (including, without limitation, all documents evidencing
the Receivables and all Contracts) and such books and records to the
Collateral Agent or to its representatives (copies of which evidence and
books and records may be retained by such Assignor). If the Collateral
Agent so directs, such Assignor shall legend, in form and manner
satisfactory to the Collateral Agent, the Receivables and the Contracts, as
well as books, records and documents of such Assignor evidencing or
pertaining to such Receivables and Contracts with an appropriate reference
to the fact that such Receivables and Contracts have been assigned to the
Collateral Agent and that the Collateral Agent has a security interest
therein.
3.3 Direction to Account Debtors; Contracting Parties; etc. Upon
the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent so directs any Assignor, such Assignor agrees (x) to
cause all payments on account of the Receivables and Contracts to be made
directly to the Cash Collateral Account, (y) that the Collateral Agent may,
at its option, directly notify the obligors with respect to any Receivables
and/or under any Contracts to make payments with respect thereto as
provided in preceding clause (x), and (z) that the Collateral Agent may
enforce collection of any such Receivables and Contracts and may adjust,
settle or compromise the amount of payment thereof, in the same manner and
to the same extent as such Assignor. Without notice to or assent by any
Assignor, the Collateral Agent may apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Account which application
shall be effected in the manner provided in Section 7.4 of this Agreement.
The costs and expenses (including attorneys' fees) of collection, whether
incurred by the Assignor or the Collateral Agent, shall be borne by the
relevant Assignor.
3.4 Modification of Terms; etc. No Assignor shall rescind or cancel
any indebtedness evidenced by any Receivable or under any Contract, or
modify any term thereof or make any adjustment with respect thereto, or
extend or renew the same, or compromise or settle any material dispute,
claim, suit or legal proceeding relating thereto, or sell any Receivable or
Contract, or interest therein, without the prior written consent of the
Collateral Agent, except as permitted by Section 3.5. Each Assignor will
duly fulfill all obligations on its part to be fulfilled under or in
connection with the Receivables and Contracts and will do nothing to impair
the rights of the Collateral Agent in the Receivables or Contracts.
3.5 Collection. Each Assignor shall endeavor to cause to be
collected from the account debtor named in each of its Receivables or
obligor under any Contract, as and when due (including, without limitation,
amounts, services or products which are delinquent, such amounts, services
or products to be collected in accordance with generally accepted lawful
collection procedures) any and all amounts, services or products owing
under or on account of such Receivable or Contract, and apply forthwith
upon receipt thereof all such amounts, services or products as are so
collected to the outstanding balance of such Receivable or under such
Contract, except that, prior to the occurrence of an Event of Default, any
Assignor may allow in the ordinary course of business as adjustments to
amounts, services or products owing under its Receivables and Contracts (i)
an extension or renewal of the time or times of payment or exchange, or
settlement for less than the total unpaid balance, which such Assignor
finds appropriate in accordance with reasonable business judgment and (ii)
a refund or credit due as a result of returned or damaged merchandise or
improperly performed services. The costs and expenses (including, without
limitation, attorneys' fees) of collection, whether incurred by an Assignor
or the Collateral Agent, shall be borne by the relevant Assignor.
3.6 Instruments. If any Assignor owns or acquires any Instrument
constituting Collateral, such Assignor will within 10 days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will
promptly deliver such Instrument to the Collateral Agent appropriately
endorsed to the order of the Collateral Agent as further security
hereunder.
3.7 Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements,
powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to its Receivables,
Contracts, Instruments and other property or rights covered by the security
interest hereby granted, as the Collateral Agent may require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1 Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true, lawful, sole and exclusive
owner of the Marks listed in Annex D hereto and that said listed Marks
constitute all the Marks that such Assignor presently owns or uses in
connection with its business and include all the United States federal
registrations or applications registered in the United States Patent and
Trademark Office. Each Assignor represents and warrants that it owns all
Marks that it uses. Each Assignor further warrants that it has no
knowledge as of the date hereof, of any third party claim that any aspect
of such Assignor's present or contemplated business operations infringes or
will infringe any rights in any trademark, service xxxx or trade name.
Each Assignor represents and warrants that it is the beneficial and record
owner of all trademark registrations and applications listed in Annex D
hereto and that said registrations are valid, subsisting and have not been
cancelled and that such Assignor is not aware of any third-party claim that
any of said registrations is invalid or unenforceable, or that there is any
reason that any of said applications will not pass to registration. Each
Assignor represents and warrants that upon the recordation of an Assignment
of Security Interest in United States Trademarks and Patents in the form of
Annex G hereto in the United States Patent and Trademark Office, together
with filings on Form UCC-1 pursuant to this Agreement, all filings,
registrations and recordings necessary or appropriate to perfect the
security interest granted to the Collateral Agent in the United States
Marks covered by this Agreement under federal law will have been
accomplished. Each Assignor agrees to execute such an Assignment of
Security Interest in United States Trademark and Patents covering all
right, title and interest in each United States Xxxx, and the associated
goodwill, of such Assignor, and to record the same. Each Assignor hereby
grants to the Collateral Agent an absolute power of attorney to sign, upon
the occurrence and during the continuance of an Event of Default, any
document which may be required by the U.S. Patent and Trademark Office or
secretary of state or equivalent governmental agency of any State of the
United States or any foreign jurisdiction in order to effect an absolute
assignment of all right, title and interest in each Xxxx, and record the
same.
4.2 Licenses and Assignments. Each Assignor hereby agrees not to
divest itself of any right under any Xxxx absent prior written approval of
the Collateral Agent, except as otherwise permitted by this Agreement or
the Credit Agreement.
4.3 Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address
of, and to furnish such pertinent information that may be available with
respect to, (i) any party who such Assignor believes is infringing or
diluting or otherwise violating in any respect any of such Assignor's
rights in and to any Xxxx, or (ii) with respect to any party claiming that
such Assignor's use of any Xxxx violates in any material respect any
property right of that party. Each Assignor further agrees, unless
otherwise agreed by the Collateral Agent, diligently to prosecute any
Person infringing any Xxxx.
4.4 Preservation of Marks. Each Assignor agrees to use its Marks in
interstate or foreign commerce, as the case may be, during the time in
which this Agreement is in effect, sufficiently to preserve such Marks as
valid and subsisting trademarks or service marks under the laws of the
United States or the relevant foreign jurisdiction.
4.5 Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required by the Trademark Act of
1946, as amended, 15 U.S.C. 1051 et seq. to maintain trademark
registrations, including but not limited to affidavits of continued use and
applications for renewals of registration in the United States Patent and
Trademark Office for all of its registered Marks pursuant to 15 U.S.C.
1058, 1059 and 1065 and any foreign equivalent thereof, and shall pay all
fees and disbursements in connection therewith and shall not abandon any
such filing of affidavit of use or any such application of renewal prior to
the exhaustion of all administrative and judicial remedies without prior
written consent of the Collateral Agent. Each Assignor agrees to notify
the Collateral Agent at least two (2) months prior to the dates on which
the affidavits of use or the applications for renewal registration are due
with respect to any registered Xxxx that the affidavits of use or the
renewal is being processed.
4.6 Future Registered Marks. If any registration for any Xxxx
issues hereafter to any Assignor as a result of any application now or
hereafter pending before the United States Patent and Trademark Office,
within 30 days of receipt of such certificate, such Assignor shall deliver
to the Collateral Agent a copy of such certificate, and an assignment for
security in such Xxxx, to the Collateral Agent and at the expense of such
Assignor, confirming the assignment for security in such Xxxx to the
Collateral Agent hereunder, the form of such security to be substantially
the same as the form hereof or in such other form as may be satisfactory to
the Collateral Agent.
4.7 Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take
any or all of the following actions: (i) declare the entire right, title
and interest of such Assignor in and to each of the Marks, together with
all trademark rights and rights of protection to the same and the goodwill
of such Assignor's business symbolized by said Marks and the right to
recover for post infringements thereof, vested in the Collateral Agent for
the benefit of the Secured Creditors, in which event such rights, title and
interest shall immediately vest, in the Collateral Agent for the benefit of
the Secured Creditors, and the Collateral Agent shall be entitled to
exercise the power of attorney referred to in Section 4.1 to execute, cause
to be acknowledged and notarized and to record said absolute assignment
with the applicable agency; (ii) take and use or sell the Marks and the
goodwill of such Assignor's business symbolized by the Marks and the right
to carry on the business and use the assets of such Assignor in connection
with which the Marks have been used;. and (iii) direct such Assignor to
refrain, in which event such Assignor shall refrain, from using the Marks
in any manner whatsoever, directly or indirectly, and, if requested by the
Collateral Agent, change such Assignor's corporate name to eliminate
therefrom any use of any Xxxx and execute such other and further documents
that the Collateral Agent may request to further confirm this and to
transfer ownership of the Marks and registrations and any pending trademark
applications therefor in the United States Patent and Trademark Office or
any equivalent government agency or office in any foreign jurisdiction to
the Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1 Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of
all rights in (i) all trade secrets and proprietary information necessary
to operate the business of such Assignor (the "Trade Secret Rights'), (ii)
the Patents listed in Annex E hereto and (iii) the Copyrights listed in
Annex F hereto, that said Patents constitute all the patents and
applications for patents that such Assignor now owns and that are necessary
in the conduct of the business of such Assignor and that such Copyrights
constitute all registrations of copyrights and applications for copyright
registrations that the Assignor now owns and that are necessary in the
conduct of the business of such Assignor. Each Assignor further represents
and warrants that it has the exclusive right to use and practice under all
Patents and Copyrights that it owns, uses or practices under and has the
exclusive right to exclude others from using or practicing under any
Patents its owns, uses or practices under. Each Assignor further warrants
that, as of the date hereof it has no knowledge of any third party claim
that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any rights in any patent or copyright
or such Assignor has misappropriated any trade secret or proprietary
information. Each Assignor represents and warrants that upon the
recordation of an Assignment of Security Interest in United States
Trademarks and Patents in the form of Annex G hereto in the United States
Patent and Trademark Office and the recordation of an Assignment of
Security Interest in United States Copyrights in the form of Annex H hereto
in the United States Copyright Office, together with filings on Form UCC-1
pursuant to this Agreement, all filings, registrations and recordings
necessary or appropriate to perfect the security interest granted to the
Collateral Agent in the United States Patents and United States Copyrights
covered by this Agreement under federal law will have been accomplished.
Each Assignor agrees to execute such an Assignment of Security Interest in
United States Trademarks and Patents covering all right, title and interest
in each United States Patent of such Assignor and to record the same, and
to execute such an Assignment of Security Interest in United States
Copyrights covering all right, title and interest in each United States
Copyright of such Assignor and to record the same. Each Assignor hereby
grants to the Collateral Agent an absolute power of attorney to sign, upon
the occurrence and during the continuance of any Event of Default, any
document which may be required by the U.S. Patent and Trademark Office or
equivalent governmental agency in any foreign jurisdiction or the U.S.
Copyright Office or equivalent governmental agency in any foreign
jurisdiction in order to effect an absolute assignment of all right, title
and interest in each Patent and Copyright, and to record the same.
5.2 Licenses and Assignments. Each Assignor hereby agrees not to
divest itself of any right under any Patent or Copyright absent prior
written approval of the Collateral Agent, except as otherwise permitted by
this Agreement or the Credit Agreement.
5.3 Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to infringement,
contributing infringement or active inducement to infringe in any Patent or
Copyright or to any claim that the practice of any Patent or the use of any
Copyright violates any property right of a third party, or with respect to
any misappropriation of any Trade Secret Right or any claim that practice
of any Trade Secret Right violates any property right of a third party.
Each Assignor further agrees, absent direction of the Collateral Agent to
the contrary, diligently to prosecute any Person infringing any Patent or
Copyright or any Person misappropriating any Trade Secret Right.
5.4 Maintenance of Patents and Copyrights. At its own expense, each
Assignor shall make timely payment of all post-issuance fees required
pursuant to 35 U.S.C. 41 and any foreign equivalent thereof to maintain
in force rights under each Patent, and to apply as permitted pursuant to
applicable law for any renewal of each Copyright absent prior written
consent of the Collateral Agent.
5.5 Prosecution of Patent or Copyright Application. At its own
expense, each Assignor shall diligently prosecute all applications for
Patents listed in Annex E hereto and for Copyrights listed in Annex F
hereto and shall not abandon any such application prior to exhaustion of
all administrative and judicial remedies, absent written consent of the
Collateral Agent.
5.6 Other Patents and Copyrights. Within 30 days of the acquisition
or issuance of a Patent or of a Copyright registration, or of filing of an
application for a Patent or Copyright registration, the relevant Assignor
shall deliver to the Collateral Agent a copy of said Copyright registration
or Patent or certificate or registration of, or application therefor, as
the case may be, with an assignment for security as to such Patent or
Copyright, as the case may be, to the Collateral Agent and at the expense
of such Assignor, confirming the assignment for security, the form of such
assignment for security to be substantially the same as the form hereof or
in such other form as may be satisfactory to the Collateral Agent.
5.7 Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the relevant Assignor, take
any or all of the following actions: (i) declare the entire right, title,
and interest of such Assignor in each of the Patents and Copyrights vested
in the Collateral Agent for the benefit of the Secured Creditors, in which
event such right, title, and interest shall immediately vest in the
Collateral Agent for the benefit of the Secured Creditors, in which case
the Collateral Agent shall be entitled to exercise the power of attorney
referred to in Section 5.1 to execute, cause to be acknowledged and
notarized and to record said absolute assignment with the applicable
agency; (ii) take and practice or sell the Patents, Copyrights and Trade
Secret Rights; and (iii) direct such Assignor to refrain, in which event
such Assignor shall refrain, from practicing the Patents and using the
Copyrights and/or Trade Secret Rights directly or indirectly, and such
Assignor shall execute such other and further documents as the Collateral
Agent may request further to confirm this and to transfer ownership of the
Patents, Copyrights and Trade Secret Rights to the Collateral Agent for the
benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1 Protection of Collateral Agent's Security. Each Assignor will
do nothing to impair the rights of the Collateral Agent in the Collateral.
Each Assignor will at all times keep its Inventory and Equipment insured in
favor of the Collateral Agent, at such Assignor's own expense to the extent
and in the manner provided in the Credit Agreement; all policies or
certificates with respect to such insurance (and any other insurance
maintained by such Assignor); (i) shall be endorsed to the Collateral
Agent's satisfaction for the benefit of the Collateral Agent (including,
without limitation, by naming the Collateral Agent as loss payee and naming
each of the Banks, the Agent and the Collateral Agent as additional
insureds); (ii) shall state that such insurance policies shall not be
cancelled or revised without 30 days' prior written notice thereof by the
insurer to the Collateral Agent; and (iii) certified copies of such
policies or certificates shall be deposited with the Collateral Agent. If
any Assignor shall fail to insure its Inventory and Equipment in accordance
with the preceding sentence, or if any Assignor shall fail to so endorse
and deposit all policies or certificates with respect thereto, the
Collateral Agent shall have the right (but shall be under no obligation) to
procure such insurance and such Assignor agrees to promptly reimburse the
Collateral Agent for all costs and expenses of procuring such insurance.
The Collateral Agent shall, at the time such proceeds of such insurance are
distributed to the Secured Creditors, apply such proceeds in accordance
with Section 7.4. Each Assignor assumes all liability and responsibility in
connection with the Collateral acquired by it -and the liability of such
Assignor to pay the Obligations shall in no way be affected or diminished
by reason of the fact that such Collateral may be lost, destroyed, stolen,
damaged or for any reason whatsoever unavailable to such Assignor.
6.2 Warehouse Receipts Non-Negotiable. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is
issued with respect to any of its Inventory, such warehouse receipt or
receipt in the nature thereof shall not be "negotiable" (as such term is
used in Section 7-104 of the Uniform Commercial Code as in effect in any
relevant jurisdiction or under other relevant law).
6.3 Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such lists, descriptions and designations of its
Collateral, warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security interest
hereby granted, which the Collateral Agent deems reasonably appropriate or
advisable to perfect, preserve or protect its security interest in the
Collateral, including, without limitation, any Collateral which previously
constituted Excluded Collateral.
6.4 Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form
acceptable to the Collateral Agent, as the Collateral Agent may from time
to time request or as are necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first
priority perfected security interest in the Collateral as provided herein
and the other rights and security contemplated hereby all in accordance
with the Uniform Commercial Code as enacted in any and all relevant
jurisdictions or any other relevant law. Each Assignor will pay any
applicable filing fees, recordation taxes and related expenses relating to
its Collateral. Each Assignor hereby authorizes the Collateral Agent to
file any such financing statements without the signature of such Assignor
where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1 Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing,
then and in every such case, the Collateral Agent, in addition to any
rights now or hereafter existing under applicable law, shall have all
rights as a secured creditor under the Uniform Commercial Code in all
relevant jurisdictions and may also:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor
or any other Person who then has possession of any part thereof with
or without notice or process of law, and for that purpose may enter
upon such Assignor's premises where any of the Collateral is located
and remove the same and use in connection with such removal any and
all services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make
any payment required by the terms of such agreement, instrument or
other obligation directly to the Collateral Agent;
(iii) withdraw all monies, securities and instruments in the
Cash Collateral Account for application to the Obligations in
accordance with Section 7.4;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2, or
direct the relevant Assignor to sell, assign or otherwise liquidate
any or all of the Collateral or any part thereof, and, in each case,
take possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered
to the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action
by the Collateral Agent as provided in Section 7.2; and
(z) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain them
in good condition; and
(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents or Copyrights included in the
Collateral for such term and on such conditions and in such manner as
the Collateral Agent shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly, upon
application to a court of equity having jurisdiction, the Collateral Agent
shall be entitled to a decree requiring specific performance by such
Assignor of said obligation.
7.2 Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 and
any other Collateral whether or not so repossessed by the Collateral Agent,
may be sold, assigned, leased or otherwise disposed of under one or more
contracts or as an entirety, and without the necessity of gathering at the
place of sale the property to be sold, and in general in such manner, at
such time or times, at such place or places and on such terms as the
Collateral Agent may, in compliance with any mandatory requirements of
applicable law, determine to be commercially reasonable. Any of the
Collateral may be sold, leased or otherwise disposed of, in the condition
in which the same existed when taken by the Collateral Agent or after any
overhaul or repair at the expense of the relevant Assignor which the
Collateral Agent shall determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceedings
permitted by such requirements shall be made upon not less than 10 days'
written notice to the relevant Assignor specifying the time at which such
disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the 10 days after the
giving of such notice, to the right of the relevant Assignor or any nominee
of such Assignor to acquire the Collateral involved at a price or for such
other consideration at least equal to the intended sale price or other
consideration so specified. Any such disposition which shall be a public
sale permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time and place
of such sale and, in the absence of applicable requirements of law, shall
be by public auction (which may, at the Collateral Agent's option, be
subject to reserve), after publication of notice of such auction not less
than 10 days prior thereto in two newspapers in general circulation to be
selected by the Collateral Agent. To the extent permitted by any such
requirement of law, the Collateral Agent may bid for and become the
purchaser of the Collateral or any item thereof, offered for sale in
accordance with this Section without accountability to the relevant
Assignor. If, under mandatory requirements of applicable law, the
Collateral Agent shall be required to make disposition of the Collateral
within a period of time which does not permit the giving of notice to the
relevant Assignor as hereinabove specified, the Collateral Agent need give
such Assignor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of applicable law. Each
Assignor agrees to do or cause to be done all such other acts and things as
may be reasonably necessary to make such sale or sales of all or any
portion of the Collateral of such Assignor valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrations or
governmental instrumentalities, domestic or foreign, having jurisdiction
over any such sale or sales, all at such Assignor's expense.
Notwithstanding anything to the contrary contained herein, Assignee shall
give to the respective Assignors three Business Days' prior notice of any
foreclosure effected on any Inventory, Equipment or Goods constituting
Collateral under this Agreement.
7.3 Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE
COLLATERAL AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION
OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR
NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH
RIGHT WHICH SUCH ASSIGNOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR
ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and such Assignor hereby
further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Agent's
gross negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any
applicable law in order to prevent or delay the enforcement of this
Agreement or the absolute sale of the Collateral or any portion
thereof, and each Assignor, for itself and all who may claim under
it, insofar as it or they now or hereafter lawfully may, hereby
waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization
upon, any Collateral shall operate to divest all right, title, interest,
claim and demand, either at law or in equity, of the relevant Assignor
therein and thereto, and shall be a perpetual bar both at law and in equity
against such Assignor and against any and all Persons claiming or
attempting to claim the Collateral so sold, optioned or realized upon, or
any part thereof, from, through and under such Assignor.
7.4 Application of Proceeds. (a) All moneys collected by the
Collateral Agent upon any sale or other disposition of the Collateral (or,
to the extent the Pledge Agreement or Mortgages require proceeds of
collateral thereunder to be applied in accordance with the provisions of
this Agreement, the Pledgee or Mortgagee under such other Security
Documents), together with all other moneys received by the Collateral Agent
hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing the
Collateral Agent of the type described in clauses (iii) and (iv) of
the definition of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e), with each Secured Creditor
receiving an amount equal to its outstanding Primary Obligations or,
if the proceeds are insufficient to pay in full all such Primary
Obligations, its Pro Rata Share of the amount remaining to be
distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations shall be paid to the
Secured Creditors as provided in Section 7.4(e), with each Secured
Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all
such Secondary Obligations, its Pro Rata Share of the amount
remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant
to Section 10.8(a) hereof, to the relevant Assignor or to whomever
may be lawfully entitled to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's
Primary Obligations or Secondary Obligations, as the case may be, and the
denominator of which is the then outstanding amount of all Primary
Obligations or Secondary Obligations, as the case may be, (y) "Primary
Obligations" shall mean (i) in the case of the Credit Document Obligations,
all principal of, and interest on, all Loans under the Credit Agreement,
all Unpaid Drawings theretofore made (together with all interest accrued
thereon), the aggregate Stated Amounts of all Letters of Credit issued (or
deemed issued) under the Credit Agreement, and all Fees and (ii) in the
case of the Other Obligations, all amounts due under the Interest Rate
Protection Agreements or Other Hedging Agreements (other than indemnities,
fees (including, without limitation, attorneys' fees) and similar
obligations and liabilities) and (z) "Secondary Obligations" shall mean all
Obligations other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under
this Section 7.4 only) (i) first, to their Primary Obligations and (ii)
second, to their Secondary Obligations. If any payment to any Secured
Creditor of its Pro Rata Share of any distribution would result in
overpayment to such Secured Creditor, such excess amount shall instead be
distributed in respect of the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of the other Secured Creditors, with each
Secured Creditor whose Primary Obligations or Secondary Obligations, as the
case may be, have not been paid in full to receive an amount equal to such
excess amount multiplied by a fraction the numerator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of such
Secured Creditor and the denominator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
(d) Each of the Secured Creditors agrees and acknowledges that if
the Bank Creditors are to receive a distribution on account of undrawn
amounts with respect to Letters of Credit issued (or deemed issued) under
the Credit Agreement (which shall only occur after all outstanding Loans
and Unpaid Drawings with respect to such Letters of Credit have been paid
in full), such amounts shall be paid to the Agent under the Credit
Agreement and held by it, for the equal and ratable benefit of the Bank
Creditors, as cash security for the repayment of Obligations owing to the
Bank Creditors as such. If any amounts are held as cash security pursuant
to the immediately preceding sentence, then upon the termination of all
outstanding Letters of Credit, and after the application of all such cash
security to the repayment of all Obligations owing to the Bank Creditors
after giving effect to the termination of all such Letters of Credit, if
there remains any excess cash, such excess cash shall be returned by the
Agent to the Collateral Agent for distribution in accordance with Section
7.4(a) hereof.
(e) Except as set forth in Section 7.4(d), all payments required to
be made hereunder shall be made (x) if to the Bank Creditors, to the Agent
under the Credit Agreement for the account of the Bank Creditors, and (y)
if to the Other Creditors, to the trustee, paying agent or other similar
representative (each, a "Representative") for the Other Creditors or, in
the absence of such a Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in accordance with
this Section 7.4, the Collateral Agent shall be entitled to rely upon (i)
the Agent under the Credit Agreement and (ii) the Representative for the
Other Creditors or, in the absence of such a Representative, upon the Other
Creditors for a determination (which the Agent, each Representative for any
Secured Creditors and the Secured Creditors agree (or shall agree) to
provide upon request of the Collateral Agent) of the outstanding Primary
Obligations and Secondary Obligations owed to the Bank Creditors or the
Other Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Bank Creditor or an Other
Creditor) to the contrary, the Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent,
in acting hereunder, shall be entitled to assume that no Secondary
Obligations are outstanding. Unless it has actual knowledge (including by
way of written notice from an Other Creditor) to the contrary, the
Collateral Agent, in acting hereunder, shall be entitled to assume that no
Interest Rate Protection Agreements or Other Hedging Agreements are in
existence.
(g) It is understood and agreed that each of the Assignors shall
remain liable to the extent of any deficiency between the amount of the
proceeds of the Collateral hereunder and the aggregate amount of the sums
referred to in clause (a) of this Section with respect to the relevant
Assignor.
7.5 Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this
Agreement, the Interest Rate Protection Agreements or Other Hedging
Agreements or the other Credit Documents now or hereafter existing at law,
in equity or by statute and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time
to time or simultaneously and as often and in such order as may be deemed
expedient by the Collateral Agent. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of the exercise of
one shall not be deemed a waiver of the right to exercise any other or
others. No delay or omission of the Collateral Agent in the exercise of
any such right, power or remedy and no renewal or extension of any of the
Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an
acquiescence therein. No notice to or demand on any Assignor in any case
shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances
without notice or demand. In the event that the Collateral Agent shall
bring any suit to enforce any of its rights hereunder and shall be entitled
to judgment, then in such suit the Collateral Agent may recover expenses,
including attorneys' fees, and the amounts thereof shall be included in
such judgment.
7.6 Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Agent, then and in
every such case the relevant Assignor, the Collateral Agent and each holder
of any of the Obligations shall be restored to their former positions and
rights hereunder with respect to the Collateral subject to the security
interest created under this Agreement, and all rights, remedies and powers
of the Collateral Agent shall continue as if no such proceeding had been
instituted.
ARTICLE VIII
INDEMNITY
8.1 Indemnity. (a) Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured
Creditor and their respective successors, permitted assigns, employees,
agents and servants (hereinafter in this Section 8.1 referred to
individually as an "Indemnitee," and, collectively, as "Indemnities")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all
costs, expenses or disbursements (including attorneys' fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnities in any way relating to or arising out of
this Agreement, any Interest Rate Protection Agreement or Other Hedging
Agreement, any other Credit Document or any other document executed in
connection herewith or therewith or in any other way connected with the
administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of, or the preservation of any rights under
any thereof, or in any way relating to or arising out of the manufacture,
ownership, ordering, purchase, delivery, control, acceptance, lease,
financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation,
latent or other defects, whether or not discoverable), the violation of the
laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the
doctrine of strict liability, or for or on account of injury to or the
death of any Person (including any Indemnitee), or property damage), or
contract claim; provided that no Indemnitee shall be indemnified pursuant
to this Section 8. 1 (a) for losses, damages or liabilities to the extent
caused by the gross negligence or willful misconduct of such Indemnitee.
Each Assignor agrees that upon written notice by any. Indemnitee of the
assertion of such a liability, obligation, damage, injury, penalty, claim,
demand, action,. suit or judgment, the relevant Assignor shall assume full
responsibility for the defense thereof. Each Indemnitee agrees to use its
best efforts to promptly notify the relevant Assignor of any such assertion
of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a), each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment
or discharge of any taxes or Liens upon or in respect of the Collateral,
premiums for insurance with respect to the Collateral and all other fees,
costs and expenses in connection with protecting, maintaining or preserving
the Collateral and the Collateral Agent's interest therein, whether through
judicial proceedings or otherwise, or in defending or prosecuting any
actions, suits or proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b), each
Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or
growing out of any misrepresentation by any Assignor in this Agreement, any
Interest Rate Protection Agreement or Other Hedging Agreement, any other
Credit Document or in any writing contemplated by or made or delivered
pursuant to or in connection with this Agreement, any Interest Rate
Protection Agreement or Other Hedging Agreement or any other Credit
Document.
(d) If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of
such obligations which is permissible under applicable law.
8.2 Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all
the Notes issued under the Credit Agreement, the termination of all
Interest Rate Protection Agreements or Other Hedging Agreements and Letters
of Credit, and the payment of all other Obligations and notwithstanding the
discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Agent" shall have the meaning provided in the recitals to this
Agreement.
"Agreement" shall have the meaning provided in the preamble to this
Agreement.
"Assignor" shall have the meaning provided in the preamble to this
Agreement.
"Bank Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Banks" shall have the meaning provided in the recitals to this
Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control
of, the Collateral Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
"Collateral Agent" shall have the meaning provided in the preamble to
this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreements or Other Hedging Agreements), but excluding those
Contracts to the extent that the terms thereof expressly prohibit the
assignment of, or granting of a security interest in, such Assignor's
rights and obligations thereunder.
"Copyrights" shall mean any U.S. or foreign copyright owned by any
Assignor, including any registrations of any Copyrights, in the U.S.
Copyright Office or the equivalent thereof in any foreign country, as well
as any application for a U.S. or foreign copyright registration now or
hereafter made with the U.S. Copyright Office or the equivalent thereof in
any foreign jurisdiction by any Assignor.
"Credit Agreement" shall have the meaning provided in the recitals to
this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time,
or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or thereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all machinery, equipment,
furnishings, movable trade fixtures and vehicles now or hereafter owned by
any Assignor and any and all additions, substitutions and replacements of
any of the foregoing, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement or any payment default under any Interest
Rate Protection Agreement or Other Hedging Agreement and shall in any
event, without limitation, include any payment default on any of the
Obligations after the expiration of any applicable grace period.
"Excluded Collateral" shall have the meaning provided in the Credit
Agreement.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Goods" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Interest Rate Protection Agreement or Other Hedging Agreement" shall
have the meaning provided in the recitals to this Agreement.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located,
together with all goods, supplies, incidentals, packaging materials,
labels, materials and any other items used or usable in manufacturing,
processing, packaging or shipping same; in all stages of production -- from
raw materials through work-in-process to finished goods -- and all products
and proceeds of whatever sort and wherever located and any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Collateral
Agent from any Assignor's customers, and shall specifically include all
"inventory" as such term is defined in the Uniform Commercial Code as in
effect on the date hereof in the State of New York, now or hereafter owned
by any Assignor.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in
a financing lease or analogous instrument, in, of, or on any Assignor's
property.
"Marks" shall mean all right, title and interest in and to any U.S.
or foreign trademarks, service marks and trade names now held or hereafter
acquired by any Assignor, including any registration or application for
registration of any trademarks and service marks in the United States
Patent and Trademark Office, or the equivalent thereof in any State of the
United States or in an foreign country, and any trade dress including
logos, designs, trade names, company names, business names, fictitious
business names and other business identifiers in connection with which any
of these registered or unregistered marks are used.
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations and liabilities (including, without limitation, indemnities,
fees and interest thereon) of each Assignor owing to the Bank Creditors,
now existing or hereafter incurred under, arising out of or in connection
with any Credit Document to which such Assignor is a party (including all
such obligations and indebtedness under any Guaranty to which such Assignor
is a party) and the due performance and compliance by each Assignor with
the terms, conditions and agreements of each such Credit Document (all such
obligations or liabilities under this clause (i), except to the extent
consisting of obligations or indebtedness with respect to Interest Rate
Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations'); (ii) the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations and liabilities (including, without
limitation, indemnities, fees and interest thereon) of each Assignor owing
to the Other Creditors, now existing or hereafter incurred under, arising
out of or in connection with any Interest Rate Protection Agreement or
Other Hedging Agreement, whether such Interest Rate Protection Agreement or
Other Hedging Agreement is now in existence or hereafter arising,
including, in the case of each Subsidiary Guarantor, all obligations under
its respective Guaranty, in each case, in respect of Interest Rate
Protection Agreements or Other Hedging Agreements, and the due performance
and compliance by such Assignor with all of the terms, conditions and
agreements contained in any such Interest Rate Protection Agreement or
Other Hedging Agreement (all such obligations and indebtedness under this
clause (ii) being herein collectively called the "Other Obligations");
(iii) any and all sums advanced by the Collateral Agent in order to
preserve the Collateral or preserve its security interest in the
Collateral; (iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of each
Assignor referred to in clauses (i), (ii) and (iii) after an Event of
Default shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable
attorneys' fees and court costs; and (v) all amounts paid by any Indemnitee
as to which such Indemnitee has the right to reimbursement under Section
8.1 of this Agreement. It is acknowledged and agreed that the
"Obligations" shall include extensions of credit of the types described
above, whether outstanding on the date of this Agreement or extended from
time to time after the date of this Agreement.
"Other Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
"Patents" shall mean any U.S. or foreign patent to which any Assignor
now or hereafter has title and any divisions or continuations thereof, as
well as any application for a U.S. or foreign patent now or hereafter made
by any Assignor.
"Pledged Securities" shall have the meaning provided in the Pledge
Agreement.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under
other relevant law and, in any event, shall include, but not be limited to,
(i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with
respect to any of the Collateral, (ii) any and all payments (in any form
whatsoever) made or due and payable to any Assignor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental
authority (or any person acting under color of governmental authority) and
(iii) any and all other amounts from time to time paid or payable under or
in connection with any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all of such Assignor's rights to
payment for, or exchange of, goods sold or leased or services performed or
product exchanged by such Assignor, whether now in existence or arising
from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, barter arrangement, security
agreement, chattel paper, or other evidence of indebtedness or security,
together with (a) all security pledged, assigned, hypothecated or granted
to or held by such Assignor to secure the foregoing, (b) all of any
Assignor's right, title and interest in and to any goods or services, the
sale or exchange of which gave rise thereto, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (d) all
powers of attorney for the execution of any evidence of indebtedness or
security or other writing in connection therewith, (e) all books, records,
ledger cards, and invoices relating thereto, (f) all evidences of the
filing of financing statements and other statements and the registration of
other instruments in connection therewith and amendments thereto, notices
to other creditors or secured parties, and certificates from filing or
other registration officers, (g) all credit information, reports and
memoranda relating thereto and (h) all other writings related in any way to
the foregoing; provided that on and after the Receivables Facility
Transaction Date, the term Receivable shall not include any Receivable that
is transferred to the Receivables Entity pursuant to the Receivables
Facility Documents, unless and until the respective such Receivable is
transferred back to one or more Assignors.
"Representative" shall have the meaning provided in Section 7.4(e) of
this Agreement.
"Requisite Creditors" shall have the meaning provided in Section 10.2
of this Agreement.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the recitals
to this Agreement.
"Termination Date" shall have the meaning provided in Section 10.8 of
this Agreement.
"Trade Secret Rights" shall have the meaning provided in Section 5.1
of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to
the party to which such notice, request, demand or other communication is
required or permitted to be given or made under this Agreement, addressed:
(a) if to any Assignor, at it address set forth opposite its
signature below;
(b) if to the Collateral Agent:
Bankers Trust Company
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(c) if to any Bank Creditor (other than the Collateral Agent),
at such address as such Bank Creditor shall have specified in the
Credit Agreement; and
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and the
Collateral Agent;
or at such other address as shall have been furnished in writing by any
Person described above to the party required to give notice hereunder.
10.2 Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly and
adversely affected thereby and the Collateral Agent (with the consent of
(x) the Required Banks (or all the Banks if required by Section 13.12 of
the Credit Agreement) at all times prior to the time at which all Credit
Document Obligations have been paid in full and all Commitments under the
Credit Agreement have been terminated or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the time
on which all Credit Document Obligations have been paid in full and all
Commitments under the Credit Agreement have been terminated; provided, that
any change, waiver, modification or variance affecting the rights and
benefits of a single Class (as defined below) of Secured Creditors (and not
all Secured Creditors in a like or similar manner) shall require the
written consent of the Requisite Creditors (as defined below) of such Class
of Secured Creditors. For the purpose of this Agreement the term "Class'
shall mean each class of Secured Creditors, i.e., whether (x) the Bank
Creditors as holders of the Credit Document Obligations or (y) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors' of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Banks and
(y) with respect to the Other Obligations, the holders of at least a
majority of all obligations outstanding from time to time under the
Interest Rate Protection Agreements or Other Hedging Agreements.
10.3 Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and
shall not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of such
Assignor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Agreement, any other
Credit Document or any Interest Rate Protection Agreement or Other Hedging
Agreement; or (c) any renewal, extension, amendment or modification of or
addition or supplement to or deletion from any Credit Document or any
Interest Rate Protection Agreement or Other Hedging Agreement or any
security for any of the Obligations; (d) any waiver, consent, extension,
indulgence or other action or inaction under or in respect of any such
agreement or instrument including, without limitation, this Agreement; (e)
any furnishing of any additional security to the Collateral Agent or its
assignee or any acceptance thereof or any release of any security by the
Collateral Agent or its assignee; or (f) any limitation on any party's
liability or obligations under any such instrument or agreement or any
invalidity or unenforceability, in whole or in part, of any such instrument
or agreement or any term thereof; whether or not any Assignor shall have
notice or knowledge of any of the foregoing. The rights and remedies of
the Collateral Agent herein provided are cumulative and not exclusive of
any rights or remedies which the Collateral Agent would otherwise have.
10.4 Successors and Assigns. This Agreement shall be binding upon
each Assignor and its successors and assigns and shall inure to the benefit
of the Collateral Agent and. its successors and assigns; provided, that no
Assignor may transfer or assign any or all of its rights or obligations
hereunder without the prior written consent of the Collateral Agent. All
agreements, statements, representations and warranties made by each
Assignor herein or in any certificate or other instrument delivered by such
Assignor or on its behalf under this Agreement shall be considered to have
been relied upon by the Secured Creditors and shall survive the execution
and delivery of this Agreement, the other Credit Documents and the Interest
Rate Protection Agreements or Other Hedging Agreements regardless of any
investigation made by the Secured Creditors or on their behalf.
10.5 Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.
10.6 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.7 Assignor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required
or obligated in any manner to perform or fulfill any of the obligations of
each Assignor under or with respect to any Collateral.
10.8 Termination; Release. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all
indemnities set forth herein including, without limitation, in Section 8.1
hereof shall survive such termination) and the Collateral Agent, at the
request and expense of the respective Assignor, will promptly execute and
deliver to such Assignor a proper instrument or instruments (including
Uniform Commercial Code termination statements on form UCC-3) acknowledging
the satisfaction and termination of this Agreement, and will duly assign,
transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as may be in the
possession of the Collateral Agent and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Interest Rate Protection Agreements or Other Hedging
Agreements have been terminated, no Note is outstanding (and all Loans have
been paid in full), all Letters of Credit have been terminated and all
other Obligations then owing have been paid in full.
(b) In the event that any part of the Collateral is sold (x) at any
time prior to the time at which all Credit Document Obligations have been
paid in full and all Commitments under the Credit Agreement have been
terminated, in connection with a sale permitted by Section 9.02 of the
Credit Agreement or is otherwise released at the direction of the Required
Banks (or all the Banks if required by Section 13.12 of the Credit
Agreement) or (y) at any time thereafter, to the extent permitted by the
Interest Rate Protection Agreements or Other Hedging Agreements, and in the
case of clauses (x) and (y), the proceeds of such sale or sales or from
such release are applied in accordance with the terms of the Credit
Agreement or such Interest Rate Protection Agreements or Other Hedging
Agreements, as the case may be, to the extent required to be so applied,
the Collateral Agent, at the request and expense of such Assignor, will
duly assign, transfer and deliver to such Assignor (without recourse and
without any representation or warranty) such of the Collateral as is then
being (or has been) so sold or released and as may be in the possession of
the Collateral Agent and has not theretofore been released pursuant to this
Agreement.
(c) At any time that the respective Assignor desires that Collateral
be released as provided in the foregoing Section 10.8(a) or (b), it shall
deliver to the Collateral Agent a certificate signed by an Authorized
Officer stating that the release of the respective Collateral is permitted
pursuant to Section 10.8(a) or (b). If requested by the Collateral Agent
(although the Collateral Agent shall have no obligation to make any such
request), the relevant Assignor shall furnish appropriate legal opinions
(from counsel, which may be in-house counsel, reasonably acceptable to the
Collateral Agent) to the effect set forth in the immediately preceding
sentence. The Collateral Agent shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it as
permitted by this Section 10.8.
10.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Collateral Agent.
10.10 The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time
received under this Agreement. It is expressly understood and agreed that
the obligations of the Collateral Agent as holder of the Collateral and
interests therein and with respect to the disposition thereof, and
otherwise under this Agreement, are only those expressly set forth in this
Agreement. The Collateral Agent shall act hereunder on the terms and
conditions set forth in Section 12 of the Credit Agreement.
10.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
10.12 Limited Obligations. It is the desire and intent of each
Assignor and the Secured Creditors that this Agreement shall be enforced
against each Assignor to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is
sought. Notwithstanding anything to the contrary contained herein, in
furtherance of the foregoing, it is noted that the obligations of each
Subsidiary Guarantor constituting an Assignor have been limited as provided
in its respective Guaranty.
10.13 Additional Assignors. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of
this Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become an Assignor hereunder by executing a counterpart
hereof and delivering the same to the Collateral Agent.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
first above written.
Address:
0000 Xxxx Xxxx Xxxx, Xxxxx 000 MOTORS AND GEARS INDUSTRIES, INC.,
Xxxxxxxxx, Xxxxxxxx 00000 as an Assigner
Attention: Xxxxxx X. Xxxxxxxxxxx
Telephone: (000) 000-0000 By /s/ Xxxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000 Title: Vice President
with copies to:
Xxxxxxxx X. Xxxxxxx
The Xxxxxx Company
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxx X. Xxxxxxx
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxxxxxx Xxxxx XXXXXX-XXXXX INDUSTRIES, INC.
Xxx Xxxxxxx, XX 00000
By /s/ Xxxxxxxx X. Xxxxxxx
Title: Vice President
0000 Xxxxxxxx Xxxxx BCM HOLDINGS, INC.
Xxx Xxxxxxx, XX 00000
By /s/ Xxxxxxxx X. Xxxxxxx
Title: Vice President
00 Xxx Xxxxxx THE NEW IMPERIAL ELECTRIC COMPANY
Xxxxx, XX 00000
By /s/ Xxxxxxxx X. Xxxxxxx
Title: Vice President
0000 XxXxxxx Xxxx THE NEW XXXXX MOTORS COMPANY
Xxxxxxxxxx, XX 00000
By /s/ Xxxxxxxx X. Xxxxxxx
Title: Vice President
0000 Xxxxxxx Xxxxxx, X.X. NEW GEAR RESEARCH, INC.,
Xxxxx Xxxxxx, XX 00000
By /s/ Xxxxxxxx X. Xxxxxxx
Title: Vice President
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Agent for the Banks
By /s/ Xxxxxxxx Xxxxx
Title: Vice President
TABLE OF CONTENTS
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Page
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ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests..................................... 2
1.2. Power of Attorney............................................... 4
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1. Necessary Filings............................................... 4
2.2. No Liens........................................................ 4
2.3. Other Financing Statements...................................... 4
2.4. Chief Executive Office; Records................................. 5
2.5. Location of Inventory and Equipment............................. 5
2.6. Recourse........................................................ 6
2.7. Trade Names; Change of Name..................................... 6
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties....................... 7
3.2. Maintenance of Records.......................................... 7
3.3. Direction to Account Debtors; Contracting Parties; etc.......... 7
3.4. Modification of Terms; etc...................................... 8
3.5. Collection...................................................... 8
3.6. Instruments..................................................... 8
3.7. Further Actions................................................. 8
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties....................... 9
4.2. Licenses and Assignments........................................ 9
4.3. Infringements................................................... 10
4.4. Preservation of Marks........................................... 10
4.5. Maintenance of Registration..................................... 10
4.6. Future Registered Marks......................................... 10
4.7. Remedies........................................................ 10
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties....................... 11
5.2. Licenses and Assignments........................................ 12
5.3. Infringements................................................... 12
5.4. Maintenance of Patents and Copyrights........................... 12
5.5. Prosecution of Patent or Copyright Application.................. 12
5.6. Other Patents and Copyrights.................................... 12
5.7. Remedies........................................................ 13
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security....................... 13
6.2. Warehouse Receipts Non-Negotiable............................... 14
6.3. Further Actions................................................. 14
6.4. Financing Statements............................................ 14
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default................. 14
7.2. Remedies; Disposition of the Collateral......................... 16
7.3. Waiver of Claims................................................ 17
7.4. Application of Proceeds......................................... 17
7.5. Remedies Cumulative............................................. 20
7.6. Discontinuance of Proceedings................................... 20
ARTICLE VIII
INDEMNITY
8.1. Indemnity....................................................... 20
8.2. Indemnity Obligations Secured by Collateral; Survival........... 22
ARTICLE IX
DEFINITIONS........................... 22
ARTICLE X
MISCELLANEOUS
10.1.Notices......................................................... 27
10.2.Waiver; Amendment............................................... 27
10.3.Obligations Absolute............................................ 28
10.4.Successors and Assigns.......................................... 28
10.5.Headings Descriptive............................................ 29
10.6.Governing Law................................................... 29
10.7.Assignor's Duties............................................... 29
10.8.Termination; Release............................................ 29
10.9.Counterparts.................................................... 30
10.10.The Collateral Agent........................................... 30
10.11.Severability................................................... 30
00.00.Xxxxxxx Obligations............................................ 30
10.13.Additional Assignors........................................... 31
ANNEX A Schedule of Chief Executive Offices/Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade, Fictitious and Other Names
ANNEX D Schedule of Marks
ANNEX E Schedule of Patents and Applications
ANNEX F Schedule of Copyrights and Applications
ANNEX G Assignment of Security Interest in Patents and Trademarks
ANNEX H Assignment of Security Interest in Copyrights
