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EXHIBIT 10.8
SECOND AMENDED AND RESTATED
SECURITY AGREEMENT
This Second Amended and Restated Security Agreement (this "Security
Agreement") is entered into as of March 30, 2000, by and among Marketing
Specialists Corporation (the "Borrower"), and the subsidiaries of Borrower
signatory hereto (the "Guarantors", and together with the Borrower, individually
and collectively, the "Companies"), in favor of First Union National Bank, a
national banking association, as agent ("Agent") for the lenders (together with
such additional financial institutions as may become Lenders from time to time
as provided in the Credit Agreement described below "Lenders").
BACKGROUND
1. Borrower has entered into that certain Second Amended and Restated
Credit Agreement dated as of the date hereof (as may be amended from time to
time, the "Credit Agreement") among the Borrower, the Lenders and the Agent.
2. Pursuant to the Credit Agreement, Marketing Specialists Sales
Company ("MSSC," a Guarantor hereunder), The Chase Manhattan Bank (the "Revolver
Agent") and Bank of America, N.A. ("Account Agent") are entering into that
certain Three Party Agreement Relating to Lockbox Services (with Activation)
dated the date hereof (the "Agency Account Agreement"), providing that, upon
notice from Revolver Agent (or Agent, to the extent the Revolver Agent is no
longer a party thereto) to Account Agent, Account Agent will shut down the
Companies' lock box accounts and forward checks or other items or payment
instruments received thereafter to Agent.
3. As a condition to Agent's and Lenders' willingness to enter into the
Credit Agreement, the Companies are willing to execute and deliver to Agent, as
agent for the Lenders, this Security Agreement.
4. The Borrower, Guarantors and the Agent are parties to that certain
Amended and Restated Security Agreement dated August 18, 1999 (the "Existing
Security Agreement").
5. The parties desire to amend the Existing Security Agreement and the
Guarantors signatory hereto desire to become party to the Security Agreement as
set forth herein.
6. This Security Agreement amends and restates in its entirety the
Existing Security Agreement; provided, however, that this Security Agreement
shall not constitute a novation and nothing herein shall be deemed to have
terminated or discharged any indebtedness or obligation under the Existing
Security Agreement, all of which shall remain outstanding under and be governed
by this Security Agreement.
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
each Company and the Agent hereby agree as follows:
A. DEFINITIONS. All capitalized terms used and not defined herein shall have the
respective meaning ascribed thereto in the Credit Agreement. In addition, as
used herein, the following terms shall have the following meanings:
1. BOOKS AND RECORDS. The term "Books and Records" means all of
the Companies' books and records, including without
limitation, all books and records indicating, summarizing, or
evidencing the Collateral, including without limitation,
computer runs, invoices, tapes, processing software,
processing contracts (such as contracts for computer time and
services) and any computer prepared information, tapes, or
data of every kind and description relating to the Collateral,
whether in the possession of any Companies or in the
possession of third parties.
2. COLLATERAL. The term "Collateral" means all tangible and
intangible property of the Companies, whether now owned or
hereafter acquired, including, but not limited to, each
Company's interest now and in the future in the following
types or items of property:
a. ACCOUNTS - All presently owned and hereafter acquired
accounts, accounts receivable, contract rights,
bills, acceptances, and other forms of obligations
arising out of the sale, lease or consignment of
goods or the rendition of services by any of the
Companies; together with any property evidencing or
relating to the Accounts (including, without
limitation, guaranties, credit insurance and Letters
of Credit), any security for the Accounts, all Books
and Records relating thereto, and all Proceeds of any
of the foregoing, including returned or reclaimed
inventory.
b. INVENTORY - All presently owned and hereafter
acquired inventory of every nature, kind, and
description, wherever located, including, without
limitation, raw materials, goods, work in process,
finished goods, parts or supplies; all goods and
property held for sale or lease or to be furnished
under contracts of service; and all goods and
inventory returned, reclaimed or repossessed,
together with all Proceeds of any of the foregoing.
c. EQUIPMENT - All presently owned and hereafter
acquired equipment, whether or not affixed to realty,
including, without limitation, machines,
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computers, kiosks, trucks, trailers, motors, tools,
dies, parts, jigs, goods, accessories, handling and
delivery equipment, fixtures, improvements, office
machines and furniture, together with all Proceeds of
any of the foregoing, and all accessions,
accessories, replacements and the rights of the
Companies under any manufacturer's warranties
relating to the foregoing.
d. CHATTEL PAPER - All presently owned and hereafter
acquired chattel paper, including, but not limited
to, any writing or writings which evidence both a
monetary obligation and a security interest in or a
lease of specific goods, together with all Proceeds
of any of the foregoing.
e. GENERAL INTANGIBLES - All presently owned and
hereafter acquired general intangibles, including,
without limitation, any personal property, choses in
action, causes of action, designs, plans, goodwill,
tax refunds, licenses, franchises, trademarks,
tradenames, service marks, copyrights, trade
agreements, customer lists and patents and all rights
under license agreements for use of the same,
together with all Proceeds of any of the foregoing.
f. INSTRUMENTS - All presently owned and hereafter
acquired instruments, including, without limitation,
bills of exchange, notes, and all negotiable
instruments, all checks or other items or payment
instruments, all certificated securities, all
certificates of deposit and any other writing that
evidences a right to the payment of money and is not
itself a security agreement or lease and is of a type
that is in the ordinary course of business
transferred by delivery with any necessary
endorsement or assignment, together with all Proceeds
of any of the foregoing.
g. DOCUMENTS - All presently owned and hereafter
acquired documents, including, but not limited to,
documents of title (as that term is defined in the
Uniform Commercial Code) and any and all receipts,
including, but not limited to, receipts of the kind
described in Article 7 of the Uniform Commercial
Code, together with all Proceeds of any of the
foregoing.
h. LETTERS OF CREDIT - All presently owned and hereafter
acquired letters of credit, including, but not
limited to, any written undertaking to pay money
conditioned upon presentation of specified documents,
and advices of letters of credit, together with all
Proceeds of any of the foregoing.
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i. INVESTMENT PROPERTY - All presently owned and
hereafter acquired investment property, including all
securities, securities accounts, and security
entitlements, together with all Proceeds of any of
the foregoing.
j. PROCEEDS - All presently owned and hereafter acquired
proceeds, as that term is defined in the Uniform
Commercial Code, including, without limitation,
whatever is received upon the use, lease, sale,
exchange, collection, any other utilization or any
disposition of any of the Collateral described in
this Section A(2), whether cash or non-cash, all
rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general
intangibles, equipment, inventory, substitutions,
additions, accessions, replacements, products, and
renewals of, for, or to such property and all
insurance therefor.
3. LIABILITIES. The term "Liabilities" means any and all
obligations and indebtedness of every kind and description of
the Companies to the Lenders pursuant to, under, or in
connection with the Loan Documents, whether such debts or
obligations are primary or secondary, direct or indirect,
absolute or contingent, sole, joint or several, secured or
unsecured, due or to become due, contractual or tortious,
arising by operation of law or otherwise, or now or hereafter
existing, whether incurred by any Companies as principal,
surety, endorser, guarantor, accommodation party or otherwise,
including, without limitation, principal, interest and fees,
late fees and expenses (including attorneys' fees and costs
and/or the allocated fees and costs of Agent's in-house legal
counsel, to the extent required to be paid under the Loan
Documents), or that have been or may hereafter be contracted
or incurred, and any obligations of the Companies or any of
them under interest rate protection agreements, swaps, hedging
contracts or similar arrangements with any Lender (including
without limitation, any swap agreements as defined in 11
U.S.C. Section 101). If a party ceases to be a Lender, any
obligations under interest rate protection agreements, swaps,
hedging contracts or similar arrangements (including without
limitation, any swap agreements as defined in 11 U.S.C.
Section 101) with that party prior to the date it ceased to be
a Lender shall continue to be Liabilities secured hereunder.
4. LOAN DOCUMENTS. The term "Loan Documents" means the Credit
Agreement, the Notes, the Collateral Security Documents, and
any other documents and agreements executed and delivered in
connection with the Credit Agreement.
5. SECURITY AGREEMENT. The term "Security Agreement" means this
Security Agreement, together with all Schedules and Exhibits
hereto as may be amended, restated or otherwise modified from
time to time.
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6. UNIFORM COMMERCIAL CODE. The term "Uniform Commercial Code"
means the Uniform Commercial Code, in effect from time to time
in the Commonwealth of Pennsylvania.
Unless the context otherwise requires, all capitalized terms not
specifically defined herein which are defined in the Uniform Commercial
Code shall have the meanings stated therein.
B. SECURITY INTEREST. In order to secure the due and punctual payment and
performance of the Liabilities, the Companies hereby grant to Agent,
for the benefit of the Lenders, a continuing security interest in and
general lien upon their right, title and interest in the Collateral.
The security interests granted herein are granted as security only and
shall not subject Agent to, or in any way affect or modify, any
obligation or liability of the Companies with respect to any of the
Collateral or any transaction which gave rise thereto.
C. FURTHER ASSURANCES; FILING.
1. DELIVERY OF DOCUMENTS, ETC. At any time and from time to time,
upon the demand of Agent, the Companies will, at the
Companies' expense: (i) give, execute, deliver, file, and/or
record any notice, statement, instrument, document, agreement,
or other papers that may be necessary or desirable, or that
Agent may request, in order to create, preserve, perfect, or
validate any security interest granted pursuant hereto or
intended to be granted hereunder or to enable Agent to
exercise or enforce its rights hereunder or with respect to
such security interest; (ii) keep, stamp, or otherwise xxxx
any and all documents, instruments, chattel paper, and their
respective Books and Records in such manner as Agent may
reasonably require to evidence the security interest granted
hereunder.
2. FILING OF FINANCING STATEMENT. At Agent's sole option, and
without the consent of the Companies, Agent may file a carbon,
photographic, or other reproduction of this Security Agreement
or any financing statement executed pursuant hereto as a
financing statement in any jurisdiction so permitting. Without
the prior written consent of Agent, no Companies shall file or
authorize or permit to be filed in any jurisdiction any such
financing or like statement in which First Union National Bank
or its successor as Agent is not named as the sole secured
party as Agent for the Lender, except as permitted under the
Credit Agreement.
D. REPRESENTATIONS AND WARRANTIES. Each Company represents and warrants to
Agent, which representations and warranties shall be continuing
representations and warranties until all of the Liabilities are
satisfied in full, as follows:
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1. SECURITY AGREEMENT QUESTIONNAIRES. Set forth on Schedule A are
complete, true and correct responses as to each Company to the
information requested by the Security Agreement Questionnaire
attached as Schedule A (subject to subsequent disclosure
pursuant to Paragraph E(2) hereof). If, for any reason, any
Company's Security Agreement Questionnaire is not attached to
this Security Agreement at the time of execution, such failure
shall in no way alter Agent's right to rely upon the
representations and warranties contained in such Security
Agreement Questionnaire and the other representations and
warranties contained in this Section D. The Companies agrees
that Agent may attach any Company's Security Agreement
Questionnaire to this Security Agreement at any time
subsequent to the execution of this Security Agreement.
2. DEPOSIT ACCOUNTS. Set forth on Schedule B is a complete, true
and correct listing of all lock boxes and deposit accounts
maintained by each of the Companies including the name of the
depository institution, how the account is titled, and the
account number (subject to subsequent disclosure pursuant to
Paragraph E(2) hereof) other than (i) xxxxx cash accounts,
provided the aggregate balance of all such xxxxx cash accounts
shall not at any time exceed $200,000, and (ii) "MDS accounts"
which do not contain any funds appearing on the balance sheet
of the Companies or to which the Companies are legally
entitled (all such lock boxes and accounts not excluded by
clauses (i) and (ii), the "Covered Accounts"). Each Covered
Account listed on Schedule B other than the "Deposit Accounts"
(as defined in the Agency Account Agreement) shall be promptly
closed, or shall remain open solely for the purpose or
purposes identified on Schedule B. No Company shall establish
or maintain any Covered Account not listed on Schedule B
without prior written consent of Agent.
3. NO CONSENTS NECESSARY. No consent or approval of any person or
entity, including, without limitation, any debt or equity
holder of any Companies, or of any public authority, is
necessary for the valid execution, delivery and performance of
this Security Agreement, or any document or instrument
executed in connection herewith, or the exercise by Agent or
Lenders of their rights and remedies hereunder that have not
been obtained.
4. TITLE. The Companies are, or to the extent that any Collateral
will be acquired after the date hereof, will be, the owners of
the Collateral, holding good and marketable title thereto,
free from any lien, security interest, encumbrance, or claim
other than the liens and encumbrances of Agent and have the
right to grant the security interests created by this Security
Agreement subject to Permitted Liens under the Credit
Agreement.
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5. NO FICTITIOUS NAMES. The Companies do not operate or issue
invoices under any name other than the name(s) set forth on
the signature page hereof and as otherwise disclosed on
Schedule A.
6. COLLATERAL NOT SUBJECT TO AGREEMENTS OR LICENSES. The
Collateral is not subject to or restricted by any agreement or
license relating to patents, trademarks, trade secrets, or
copyrights, except that the Companies' computer and word
processing equipment is subject to various software licenses
or otherwise disclosed on Schedule A.
E. COVENANTS. Each Company hereby covenants and agrees that for as long as
any Liabilities are outstanding:
1. DEFENSE OF COLLATERAL. The Companies shall defend the
Collateral against all claims and demands of all persons or
entities at any time claiming any interest therein other than
Agent.
2. NOTICE OF CHANGES IN LOCATION OF CHIEF EXECUTIVE OFFICE,
RESIDENCE, BOOKS AND RECORDS, COLLATERAL. The Companies shall
provide Agent with prompt written notice of: (i) any intended
change in the chief executive office or residence of any of
the Companies, and/or any office where any of the Companies
maintain their Books and Records; (ii) the location or
movement of any Collateral to or at an address other than the
addresses set forth on Schedule A hereto; and (iii) the
establishment of any new lock box or deposit account, all such
notices to be received by Agent at least 30 days prior to the
effective date of any such change; provided, that no notice
shall be required pursuant to (i) or (ii) above with respect
to any sales office location at which no Books and Records are
maintained other than Books and Records that are duplicates of
Books and Records maintained at other locations of which Agent
has notice hereunder and at which the aggregate value of all
other Collateral located at such premises does not exceed
$20,000. If any such new location as set forth in (i) and (ii)
above is on leased or mortgaged premises, the Companies will
furnish Agent, prior to the effective date of any such change,
with landlord's or mortgagee's waivers pertaining to such
premises in form and substance reasonably satisfactory to
Agent. With respect to any new deposit account, the Companies
shall, if required by Agent, prior to the first use of such
deposit account, furnish to Agent with blocked account letters
or such other agreements with the applicable depository
institution as Agent shall reasonably require, in each case in
form and substance reasonably satisfactory to Agent.
3. CONTROLLED ACCOUNT. The Companies hereby acknowledge and agree
that (i) except as agreed to by the Agent in writing, all
account debtors of the Companies will be instructed to send
payment to the Post Office Boxes (as defined in the Agency
Account Agreement) maintained by Account Agent, and all
payments
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from account debtors will be deposited initially into the
Lockbox Accounts (as defined in the Agency Account Agreement)
maintained by Account Agent, and (ii) MSSC will maintain at
all times instructions to Account Agent to sweep daily all
available funds in the Deposit Accounts to a deposit account
maintained with the Revolver Agent (or Agent, to the extent
the Revolver Agent is no longer a party thereto) for this
purpose.
4. SECURITY INTERESTS IN COLLATERAL. The Companies shall keep the
Collateral free from any lien, security interest, or
encumbrance except those in favor of Agent and except as
permitted pursuant to the Credit Agreement, in good order and
repair, reasonable wear and tear excepted, and will not waste
or destroy the Collateral or any part thereof. If reasonably
requested by Agent, the Companies shall give notice of Agent's
security interests in the Collateral to any third person with
whom the Companies has any actual or prospective contractual
relationship or other business dealings.
5. MAINTENANCE, INSPECTION OF BOOKS AND RECORDS. The Companies
shall maintain complete and accurate Books and Records and
shall make all necessary entries therein to reflect the costs,
values and locations of the Collateral and all payments,
credits and adjustments thereto. The Companies shall keep
Agent fully informed as to the location of all such Books and
Records, shall permit Agent and its authorized agents to have
full, complete and unrestricted access thereto at all
reasonable times to inspect, audit and make copies of any and
all such Books and Records (collectively, a "Records
Inspection") and upon submission to the Companies of an
invoice therefor, the Companies will reimburse Agent for any
and all fees and costs related to any Records Inspection by
Agent and its authorized agents, provided that, unless an
Event of Default has occurred and is continuing: (i) Agent
shall give Companies reasonable notice of such Records
Inspection; and (ii) Agent shall not perform more than three
Records Inspections (not including ordinary course visits and
meetings) at the premises of the Companies during any twelve
month period. Agent's rights hereunder shall be enforceable at
law or in equity, and the Companies consents to the entry of
judicial orders or injunctions enforcing specific performance
of such obligations hereunder.
6. MAINTENANCE AND INSPECTION OF EQUIPMENT. With respect to
equipment constituting Collateral, the Companies shall: (i)
keep accurate books and records with respect thereto,
including, without limitation, maintenance records; (ii) upon
request, deliver to Agent all evidence of ownership in such
Collateral, including certificates of title with Agent's
interest appropriately noted on the certificate; (iii) permit
Agent and its authorized agents to inspect any or all such
equipment at all reasonable times, provided that, unless an
Event of Default has occurred: (A) Agent shall give Companies
reasonable notice of such inspection of equipment;
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and (B) Agent shall not perform more than three such
inspections (not including ordinary course visits and
meetings) at the premises of the Companies during any twelve
month period; (iv) preserve such equipment, excluding obsolete
equipment, in good condition and repair, and pay the cost of
all replacement parts, repairs to and maintenance of such
equipment, and (v) if after the date hereof, any of the
Collateral is moved to or located upon land (other than at
locations identified on the Security Agreement Questionnaires)
which land is the subject of a lease or mortgage, at the
request of Agent, use reasonable best efforts to deliver an
agreement of subordination from the lessor or mortgagee
providing that any lien of such party shall be subordinate to
the security interest of Agent granted herein.
7. CONTINUING OF PERFECTED STATUS OF COLLATERAL. The Companies
agrees to cooperate and join, at their expense, with Agent in
taking such steps as are necessary, in Agent's judgment, to
perfect or continue the perfected status of the security
interests granted herein, including, without limitation, the
execution and delivery of any financing statements, amendments
thereto and continuation statements, the notation of
encumbrances in favor of Agent on certificates of title, and
the execution and filing of any collateral assignments and any
other instruments requested by Agent to perfect its security
interest in the Collateral and any and all general intangibles
relating to the Collateral. Agent is expressly authorized to
file financing statements without the Companies's signature.
F. GENERAL AUTHORITY.
1. BANK AS ATTORNEY-IN-FACT. Each Company hereby irrevocably
appoints Agent (and any of its attorneys, officers, employees,
or agents), upon the occurrence and during the continuation of
an Event of Default, as its true and lawful attorney-in-fact,
said appointment being coupled with an interest, with full
power of substitution, in the name of the Companies, Agent, or
otherwise, for the sole use and benefit of Agent in its sole
discretion, but at the Companies' expense, to exercise, to the
extent permitted by law, in its name or in the name of the
Companies or otherwise, the powers set forth herein, whether
or not any of the Liabilities are due, such powers, including,
but not limited to, the power at any time: (i) to endorse the
name of the Companies upon any instruments of payment,
invoice, freight, or express xxxx, xxxx of lading, storage, or
warehouse receipt relating to the Collateral; (ii) to demand,
collect, receive payment of, settle, compromise, or adjust all
or any of the Collateral; (iii) to sign and file one or more
financing statements naming the Companies as debtor and Agent
as secured party and indicating therein the types or
describing the items of Collateral herein specified; (iv) to
correspond and negotiate directly with insurance carriers; and
(v) to execute any notice, statement, instrument, agreement,
or other paper that Agent may require to create, preserve,
perfect, or validate any security interest granted
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pursuant hereto or to enable Agent to exercise or enforce its
rights hereunder or with respect to such security interest.
2. LIABILITY OF BANK AS ATTORNEY-IN-FACT. Neither Agent nor its
attorneys, officers, employees, or agents shall be liable for
acts, omissions, any error in judgment, or mistake in fact in
its/their capacity as attorney-in-fact. Each Company hereby
ratifies all acts of Agent as its attorney-in-fact. This
power, being coupled with an interest, is irrevocable until
the Liabilities have been fully satisfied. Agent shall not be
required to take any steps necessary to preserve any rights
against prior parties with respect to any of the Collateral.
3. EFFECT OF EXTENSIONS AND MODIFICATIONS. Agent may extend the
time of payment, arrange for payment in installments, or
otherwise modify the terms of, or release, any of the
Collateral, without thereby incurring responsibility to, or
discharging or otherwise affecting any liability of, any
Companies or any other obligor.
G. EVENTS OF DEFAULT. The occurrence of an Event of Default under the
Credit Agreement shall constitute an Event of Default under this
Security Agreement.
H. REMEDIES.
1. ACCELERATION OF LIABILITIES; GENERAL RIGHTS OF BANK. Upon the
occurrence and during the continuance of an Event of Default,
Agent may, in accordance with Paragraph 7.2 of the Credit
Agreement, exercise any and all rights and remedies it has
under this Security Agreement, any other Loan Document and/or
applicable law.
2. RIGHT OF SETOFF. If any Liabilities shall be due and payable
or any one or more Events of Default shall have occurred and
be continuing, whether or not the Agent shall have made demand
under any Loan Document and regardless of the adequacy of any
collateral for the Liabilities or other means of obtaining
repayment of the Liabilities, each Lender shall have the
right, without notice to any Company and is specifically
authorized hereby to set-off against and apply to the then
unpaid balance of the Liabilities any items or funds of any
Company held by such Lender or any affiliate of such Lender,
any and all deposits (whether general or special, time or
demand, matured or unmatured) or any other property of any
Company including, without limitation, securities and/or
certificates of deposit, now or hereafter maintained by any
Company for its or their own account with such Lender or any
affiliate of such Lender, and any other indebtedness at any
time held or owing by such Lender or any affiliate of such
Lender, to or for the credit or the account of Borrower, even
if effecting such set-off results in a loss or reduction of
interest or the imposition of a penalty applicable to the
early
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withdrawal of time deposits. For such purpose, the Lenders
shall have, and each Company hereby grants to each Lender, a
first lien on and security interest in such deposits,
property, funds and accounts and the proceeds thereof, subject
to Permitted Liens under the Credit Agreement.
3. TURNOVER OF PROPERTY HELD BY AFFILIATES. Each Company
authorizes each affiliate of each Lender, upon the occurrence
and during the continuance of an Event of Default, at the
request of any such Lender, and without notice to any Company,
to turn over to the Agent any property of such Company,
including, without limitation, funds and securities, held by
such affiliate for any such Company's account and to debit any
deposit account maintained by such Company with such affiliate
(even if such deposit account is not then due or there results
a loss or reduction of interest or the imposition of a penalty
in accordance with law applicable to the early withdrawal of
time deposits), in the amount requested by such Lender up to
the amount of the Liabilities, and to pay or transfer such
amount or property to the Agent for application to the
Liabilities.
4. ADDITIONAL RIGHTS AND REMEDIES. In addition to the rights and
remedies available to Agent as set forth above, upon the
occurrence of an Event of Default hereunder, or at any time
thereafter, Agent may at its option in accordance with the
Credit Agreement, immediately and without notice, do any or
all of the following, which rights and remedies are
cumulative, may be exercised from time to time, and are in
addition to any rights and remedies available to Agent under
any other agreement or instrument by and between any Company
or Companies and the Agent:
a. Exercise any and all of the rights and remedies of a
secured party under the Uniform Commercial Code,
including, without limitation, the right to require
the Companies to assemble the Collateral and make it
available to Agent at a place reasonably convenient
to the parties;
b. Notify account debtors of any Company that their
obligations to such Company are payable directly to
Agent, for benefit of the Lenders, and collect such
sums.
c. Operate, utilize, recondition and/or refurbish any of
the Collateral for the purpose of enhancing or
preserving the value thereof by any means deemed
appropriate by Agent, in its sole discretion,
including, without limitation, converting raw
materials and/or work-in-process into finished goods;
d. Demand, xxx for, collect, or retrieve any money or
property at any time payable, receivable on account
of, or in exchange for, or make any
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compromise, or settlement deemed desirable with
respect to any of the Collateral;
e. Upon five (5) business days' prior written notice to
the Borrower (or one (1) day notice by telephone with
respect to Collateral that is perishable or threatens
to decline rapidly in value), which each Company
hereby acknowledges to be sufficient, commercially
reasonable and proper, Agent may sell, lease or
otherwise dispose of any or all of the Collateral at
any time and from time to time at public or private
sale, with or without advertisement thereof. Each
Company waives the benefit of any marshaling doctrine
with respect to Agent's exercise of its rights
hereunder. Each Company grants a royalty-free license
to Agent for all patents, service marks, trademarks,
tradenames, copyrights, computer programs and other
intellectual property and proprietary rights
sufficient to permit Agent to exercise all rights
granted to Agent under this Section. Agent or anyone
else may be the purchaser of any or all of the
Collateral so sold and thereafter hold such
Collateral absolutely, free from any claim or right
of whatsoever kind, including any equity of
redemption of any Company or any other obligor, any
such notice, right and/or equity of redemption being
hereby expressly waived and released.
5. APPLICATION OF PROCEEDS. Upon a sale of any Collateral by
Agent, Agent shall apply the sale proceeds in accordance with
Section 8.17 of the Credit Agreement, except the fees payable
under Paragraph 2.13 thereof, which shall be paid solely to
Agent.
I. MISCELLANEOUS.
1. REMEDIES CUMULATIVE; NO WAIVER. The rights, powers and
remedies of Agent provided in this Security Agreement and any
of the other Loan Documents are cumulative and not exclusive
of any right, power or remedy provided by law or equity. No
failure or delay on the part of Agent in the exercise of any
right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or
remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy.
2. NOTICES. Each Company agrees that any notice, request or
consent required to be given to such Companies hereunder or in
connection herewith may be given to Borrower on behalf of such
Companies. Any notice, request or consent required hereunder
or in connection herewith shall be deemed satisfactorily given
if in writing and delivered by hand, mailed (registered or
certified mail) or sent by facsimile transmission to Agent or
Borrower at their respective addresses or
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telecopier number set forth below, or to any party at such
other addresses or telecopier numbers as may be given by any
party to the others in writing:
if to Borrower:
Marketing Specialists Corporation
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
Telecopier: (000) 000-0000
if to Agent:
First Union National Bank
0000 Xxxxxxxx Xxxxxx
XX 4843
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopier: (000) 000-0000
3 COSTS AND EXPENSES; INDEMNIFICATION. Whether or not the
transactions contemplated by this Security Agreement and the
other Loan Documents are fully consummated, the Borrower shall
promptly pay (or reimburse, as Agent may elect) all reasonable
costs and expenses which Agent has incurred or may hereafter
incur in connection with the negotiation, preparation,
reproduction, interpretation, perfection, monitoring and
enforcement of the Loan Documents, the collection of all
amounts due under the Loan Documents, and all amendments,
modifications, consents or waivers, if any, to the Loan
Documents. Such costs and expenses shall include, without
limitation, the fees and disbursements of counsel to Agent,
the costs of appraisals, searches of public records, costs of
filing and recording documents with public offices, internal
and/or external audit and/or examination fees and costs,
stamp, excise and other taxes, the fees of Agent's
accountants, consultants or other professionals, costs and
expenses from any actual or attempted sale of all or any part
of the Collateral, or any exchange, enforcement, collection,
compromise, or settlement of any of the Collateral or receipt
of the proceeds thereof, and for the care and preparation for
sale of the Collateral (including insurance costs) and
defending and asserting the rights and claims of Agent in
respect thereof, by litigation or otherwise. Each Company
shall indemnify, defend and hold harmless Agent with respect
to any and all claims, expenses, demands, losses, costs, fines
or liabilities of any kind (including, without limitation,
those involving death, personal injury or property damage and
including reasonable attorneys fees and costs) arising from
the use or
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ownership of the Collateral other than those resulting from
Agent's own willful misconduct or gross negligence. The
reimbursement and indemnification obligations of each Company
under this Section shall constitute Liabilities secured by the
Collateral and shall survive any termination of the Loan
Documents.
4 GOVERNING LAW. This Security Agreement shall be construed in accordance
with and governed by the substantive laws of the Commonwealth of
Pennsylvania without reference to conflict of laws principles.
5 INTEGRATION. This Security Agreement and the other Loan Documents
constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all oral negotiations
and prior writings with respect to the subject matter hereof and
thereof.
6 AMENDMENT; WAIVER. No amendment of this Security Agreement, and no
waiver of any one or more of the provisions hereof shall be effective
unless set forth in writing and signed by the parties hereto.
7 SUCCESSORS AND ASSIGNS. This Security Agreement (i) shall be binding
upon each Company and the Agent and their respective successors and
permitted assigns, and (ii) shall inure to the benefit of each Company
and the Agent and their respective successors and permitted assigns;
provided, however, that no Company may assign its rights hereunder or
any interest herein without the prior written consent of Agent, and any
such assignment or attempted assignment by any Company shall be void
and of no effect with respect to Agent.
8 SEVERABILITY. The illegality or unenforceability of any provision of
this Security Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Security Agreement
or any instrument or agreement required hereunder. In lieu of any
illegal or unenforceable provision in this Security Agreement, there
shall be added automatically as a part of this Security Agreement a
legal and enforceable provision as similar in terms to such illegal or
unenforceable provision as may be possible.
9 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. Each Company
irrevocably appoints each officer of Borrower as its attorney upon whom
may be served any notice, process or pleading in any action or
proceeding against it arising out of or in connection with this
Security Agreement, the Credit Agreement, the Notes, the Loan Documents
or any of the Collateral; each Company hereby consents that any action
or proceeding against it be commenced and maintained in any court
within the Commonwealth of Pennsylvania or in the United States
District Court for the
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Xxxxxxx Xxxxxxxx of Pennsylvania by service of process on any officer
of Borrower; and each Company agrees that the courts of the
Commonwealth of Pennsylvania and the United States District Court for
the Eastern District of Pennsylvania shall have jurisdiction with
respect to the subject matter hereof and the person of each Company and
the Collateral. Notwithstanding the foregoing, Agent, in its absolute
discretion may also initiate proceedings in the courts of any other
jurisdiction in which any Company may be found or in which any of its
properties or Collateral may be located.
10 INCONSISTENCIES. The Loan Documents are intended to be consistent.
However, in the event of any inconsistencies among any of the Loan
Documents, such inconsistency shall not affect the validity or
enforceability of any Loan Document. In the event of any inconsistency
or ambiguity in any of the Loan Documents, the Loan Documents shall not
be construed against any one party but shall be interpreted consistent
with Agent's policies and procedures.
11 HEADINGS. The headings of sections and paragraphs have been included
herein for convenience only and shall not be considered in interpreting
this Security Agreement.
12 SCHEDULES. If a Schedule and/or an Exhibit is attached hereto, the
provisions thereof are incorporated herein.
13 WAIVER OF JURY TRIAL; ACKNOWLEDGMENTS.
a0 EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE NOTES OR
OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
AGENT OR LENDERS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
AGENT'S ENTERING INTO THIS AGREEMENT ON BEHALF OF THE LENDERS.
b0 BORROWER ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF
COUNSEL IN THE REVIEW AND EXECUTION OF THIS AGREEMENT AND,
SPECIFICALLY, SECTION 13(a) HEREOF, AND
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FURTHER ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE
FOREGOING WAIVER OF JURY TRIAL HAVE BEEN FULLY EXPLAINED TO
BORROWER BY SUCH COUNSEL.
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IN WITNESS WHEREOF the parties hereto have executed this Second Amended and
Restated Security Agreement as of the date above first written.
Attest: MARKETING SPECIALISTS
CORPORATION
By: By:
----------------------------- ------------------------------
Name: Name:
Title: Title:
Attest: MARKETING SPECIALISTS SALES
COMPANY
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
Attest: BROMAR, INC.
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
Attest: XXXX XXXXX ASSOCIATES, INC.
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
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SCHEDULE A
Security Agreement Questionnaires Attached
A-1
19
SCHEDULE B
Deposit Accounts
B-1
