Exhibit 10.17
COLLATERAL SHARING AGREEMENT, dated as of February
14, 2003, among XXXXXX SCIENTIFIC INTERNATIONAL INC.
(the "Company"), XXXXXX SCIENTIFIC COMPANY L.L.C. (the
"Initial Borrower"), certain other Subsidiaries of the
Company party hereto (collectively with the Company and
the Initial Borrower, the "Grantors") and JPMORGAN CHASE
BANK ("JPMCB"), as Collateral Agent.
W I T N E S S E T H :
WHEREAS, in order to induce the Lenders parties thereto to enter
into the Credit Agreement dated as of February 14, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Company, the Initial Borrower, the lenders from time to time party
thereto and JPMCB, as Administrative Agent, the Company and certain of its
Subsidiaries have entered into the Collateral Agreement referred to in the
Credit Agreement and certain other Security Documents; and
WHEREAS, the Obligations are secured by Liens on the Collateral
described in the Security Documents and the Senior Note Obligations are secured
by the portion of the Collateral constituting Restricted Collateral;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and to induce the Administrative Agent, the Issuing
Banks and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make Loans to, and the Issuing Banks to issue Letters of Credit for
the account of, the Borrowers thereunder, and in order to provide for the
allocation of proceeds of Collateral among the Secured Obligations secured
thereby, each Grantor hereby agrees with the Collateral Agent as follows:
ARTICLE I
Definitions
SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this
Agreement and not otherwise defined herein have the meanings specified in the
Credit
2
Agreement or, if not defined therein, the Collateral Agreement.
(b) The rules of construction specified in Section 1.03 of the
Credit Agreement also apply to this Agreement.
SECTION 1.02. Other Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"Collateral" means all assets or property of the Loan Parties, now
owned or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Collateral Account" has the meaning set forth in Section 3.01.
"Collateral Agent" means JPMCB, in its capacity as collateral agent
under the Security Documents and this Agreement, and any successor collateral
agent appointed hereunder.
"Collateral Agent Fees" means all fees, costs and expenses of, and
other amounts owing to, the Collateral Agent of the types referred to in Section
4.03.
"Collateral Estate" has the meaning set forth in Section 2.01(c).
"Debt" has the meaning set forth in Section 1010 of the Senior Note
Indenture.
"Distribution Date" means each date fixed by the Collateral Agent in
its sole discretion for a distribution pursuant to the applicable provisions of
this Agreement of any funds held in the Collateral Account.
"Event of Default" means any "Event of Default" under the Credit
Agreement or any "Event of Default" under the Senior Note Indenture (in each
case, as such term is defined in the Credit Agreement or the Senior Note
Indenture).
"Exchange Rate" means, at any date of determination thereof with
respect to any currency, the spot rate of exchange for the conversion of such
currency into Dollars determined by reference to such rate publishing service as
is customarily utilized by the Collateral Agent for such purpose; provided that,
to the extent that "Exchange Rate" is used herein to refer to an actual
3
exchange by the Collateral Agent of one currency for another, "Exchange Rate"
shall be deemed to refer to the rate at which such exchange actually occurs so
long as such exchange is effected under customary market conditions. Any
determination by the Collateral Agent of the Exchange Rate for any purpose of
this Agreement shall be conclusive absent manifest error.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel reasonably satisfactory to the Collateral Agent, who may be counsel
regularly retained by the
Collateral Agent.
"Principal Properties" has the meaning set forth in the Senior Note
Indenture.
"Proceeds" means all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York on
the date hereof.
"Representatives" means (a) in respect of any of the Obligations,
the Administrative Agent and (b) in respect of any of the Senior Note
Obligations, the Senior Note Trustee.
"Requisite Secured Parties" means, at any time, the Secured Party or
Secured Parties holding more than 50% of the aggregate amount of the outstanding
Revolving Exposures, the Term Loans, the Incremental Term Loans and the Senior
Notes.
"Restricted Collateral Obligations" means, at any time, the
collective reference to (a) all of the Obligations that do not constitute Debt
and (b) the maximum aggregate amount of the Obligations constituting Debt that
may be secured at such time by the Restricted Collateral without causing the
Senior Notes to be required to be equally and ratably secured.
"Restricted Subsidiary" has the meaning set forth in the Senior Note
Indenture.
"Secured Obligations" means, without duplication, (a) the
Obligations and (b) the Senior Note Obligations.
"Triggering Event" means (a) the occurrence of an Event of Default,
(b) the declaration of the Loans then outstanding to be due and payable
immediately or the termination of the Commitments under the Credit Agreement or
the acceleration of the Senior Note Obligations and (c) receipt by the
Collateral Agent of a written notice from
4
the Administrative Agent or the Senior Note Trustee, as applicable, to such
effect.
"Unrestricted Collateral" means all Collateral other than Restricted
Collateral.
ARTICLE II
Authority of Collateral Agent
SECTION 2.01. General Authority of the Collateral Agent over the
Collateral. (a) Each Grantor hereby appoints the Collateral Agent as its true
and lawful attorney-in-fact for the purpose of taking any action and executing
any and all documents and instruments that the Collateral Agent may deem
necessary or desirable to carry out the terms of this Agreement and the other
Security Documents and accomplish the purposes hereof and thereof and, without
limiting the generality of the foregoing, each Grantor hereby acknowledges that
the Collateral Agent shall have all powers and remedies set forth in the
Security Documents.
(b) By acceptance of the benefits of this Agreement and the Security
Documents, each Secured Party shall be deemed irrevocably (i) to consent to the
appointment of the Collateral Agent as its agent hereunder and under the
Security Documents, (ii) to confirm that the Collateral Agent shall have the
authority to act as the exclusive agent of such Secured Party for enforcement of
any provisions of this Agreement and the Security Documents against any Grantor
or the exercise of remedies hereunder or thereunder, (iii) to agree that such
Secured Party shall not take any action (other than through the Collateral
Agent) to enforce any provisions of this Agreement or any other Security
Document against any Grantor or to exercise any remedy hereunder or thereunder
and (iv) to agree to be bound by the terms of this Agreement and the Security
Documents.
(c) The Collateral Agent hereby agrees that it holds and will hold
all of its right, title and interest in, to and under the Security Documents and
the Collateral granted to the Collateral Agent thereunder whether now existing
or hereafter arising (all such right, title and interest being hereinafter
referred to as the "Collateral Estate") under and subject to the conditions set
forth in this Agreement and the other Security Documents; and the Collateral
Agent further agrees that it will hold such Collateral Estate in trust for the
benefit of the relevant Secured Parties, for the enforcement of the payment of
all
5
Secured Obligations secured by the relevant Collateral (subject to the
limitations and priorities set forth herein and in the respective Security
Documents, including with respect to Restricted Collateral) and as security for
the performance of and compliance with the covenants and conditions of this
Agreement and each of the Security Documents.
SECTION 2.02. Determinations Relating to Collateral. Prior to the
occurrence of a Triggering Event, in the event (a) the Collateral Agent shall
receive any written request from any Loan Party under any Security Document for
consent or approval with respect to any matter or thing relating to any
Collateral or any Loan Party's obligations with respect thereto or (b) there
shall be due to or from the Collateral Agent under the provisions of any
Security Document any material performance or the delivery of any material
instrument or (c) the Collateral Agent shall become aware of any nonperformance
by any Loan Party of any covenant or any breach of any representation or
warranty set forth in any Security Document, then, in each such event, the
Collateral Agent shall advise the Administrative Agent of the matter or thing as
to which consent has been requested or the performance or instrument required to
be delivered or the nonperformance or breach of which the Collateral Agent has
become aware. Prior to the occurrence of a Triggering Event, the Administrative
Agent and the Required Lenders shall have the exclusive authority to direct the
Collateral Agent's response to any of the events or circumstances contemplated
in clauses (a), (b) and (c) above.
SECTION 2.03. Remedies. (a) Upon the occurrence of a Triggering
Event, or upon receipt of any written directions as contemplated by paragraph
(b) of this Section 2.03, the Collateral Agent shall, within five days
thereafter, notify each of the Administrative Agent, the Senior Note Trustee and
the Company in writing that a Triggering Event exists or that the Collateral
Agent has received such written directions, as the case may be, enclosing with
such notice a copy of the applicable notice or written directions, as the case
may be.
(b) Following the occurrence of a Triggering Event, (i) the
Requisite Secured Parties shall have the exclusive right to direct the time,
method and place of conducting any proceeding for the exercise of any right or
remedy available to the Collateral Agent with respect to the Restricted
Collateral, or of exercising any trust or power conferred on the Collateral
Agent with respect to the Restricted Collateral, or for the taking of any other
action
6
authorized by the instruments comprising the Collateral Estate in connection
with the Restricted Collateral; and (ii) the Required Lenders shall have the
exclusive right to direct the time, method and place of conducting any
proceeding for the exercise of any right or remedy available to the Collateral
Agent with respect to the Unrestricted Collateral, or of exercising any trust or
power conferred on the Collateral Agent with respect to the Unrestricted
Collateral, or for the taking of any other action authorized by the instruments
comprising the Collateral Estate in connection with the Unrestricted Collateral.
Nothing in this paragraph (b) shall impair the right of the Collateral Agent in
its discretion to take any action deemed proper by the Collateral Agent and
which is not inconsistent with any direction received by it pursuant to clause
(i) or (ii).
SECTION 2.04. Nature of Secured Parties' Rights. All of the Secured
Parties shall be bound by any instruction or direction given by the Required
Lenders or Requisite Secured Parties, as applicable, pursuant to this Article
II.
SECTION 2.05. Right to Appoint a Receiver. Upon the filing of a xxxx
in equity or other commencement of judicial proceedings to enforce the rights of
the Collateral Agent under this Agreement or any other Security Document, the
Collateral Agent shall, to the extent permitted by law, with notice to the
Company but without notice to any other Grantor or any party claiming through
the Grantors, without regard to the solvency or insolvency at the time of any
Person then liable for the payment of any of the Obligations or any of the
Senior Note Obligations, without regard to the then value of the Collateral
Estate, and without requiring any bond from any complainant in such proceedings,
be entitled as a matter of right to the appointment of a receiver or receivers
of the Collateral Estate, or any part thereof, and of the rents, issues, tolls,
profits, royalties, revenues and other income thereof, pending such proceedings,
with such powers as the court making such appointment shall confer, and to the
entry of an order directing that the rents, issues, tolls, profits, royalties,
revenues and other income of the property constituting the whole or any part of
the Collateral Estate be segregated, sequestered and impounded for the benefit
of the Collateral Agent and the Secured Parties, and each Grantor irrevocably
consents to the appointments of such receiver or receivers and to the entry of
such order; provided that, notwithstanding the appointment of any receiver, the
Collateral Agent shall be entitled to retain possession and control of all cash
and Permitted Investments held by or deposited with it pursuant to this
Agreement or any other Security Document.
7
SECTION 2.06. Exercise of Powers. All of the powers, remedies and
rights of the Collateral Agent as set forth in this Agreement may be exercised
by the Collateral Agent in respect of any other Security Document as though set
forth in full therein and all of the powers, remedies and rights of the
Collateral Agent as set forth in any other Security Document may be exercised
from time to time as herein and therein provided.
SECTION 2.07. Remedies Not Exclusive. (a) No remedy conferred upon
or reserved to the Collateral Agent herein or in the other Security Documents is
intended to be exclusive of any other remedy or remedies, but every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein or in any other Security Document or now or hereafter existing at law or
in equity or by statute.
(b) No delay or omission by the Collateral Agent to exercise any
right, remedy or power hereunder or under any other Security Document shall
impair any such right, remedy or power or shall be construed to be a waiver
thereof, and every right, power and remedy given by this Agreement or any other
Security Document to the Collateral Agent may be exercised from time to time and
as often as may be deemed expedient by the Collateral Agent.
(c) If the Collateral Agent shall have proceeded to enforce any
right, remedy or power under this Agreement or any other Security Document and
the proceeding for the enforcement thereof shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Collateral Agent, then the Grantors, the Collateral Agent and the other Secured
Parties shall, subject to any determination in such proceeding, severally and
respectively be restored to their former positions and rights hereunder or
thereunder with respect to the Collateral Estate and in all other respects, and
thereafter all rights, remedies and powers of the Collateral Agent shall
continue as though no such proceeding had been taken.
(d) All rights of action and of asserting claims upon or under this
Agreement and the other Security Documents may be enforced by the Collateral
Agent without the possession of any instrument evidencing any Obligation or the
production thereof at any trial or other proceeding relative thereto, and any
suit or proceeding instituted by the Collateral Agent shall be, subject to the
applicable provisions of Article V, brought in its name as Collateral Agent and
any recovery of judgment shall be held as part of the Collateral Estate.
8
SECTION 2.08. Waiver and Estoppel. (a) Each Grantor agrees, to the
extent it may lawfully do so, that it will not at any time in any manner
whatsoever claim, or take the benefit or advantage of, any appraisement,
valuation, stay, extension, moratorium, turnover or redemption law, or any law
permitting it to direct the order in which the Collateral shall be sold, now or
at any time hereafter in force, which may delay, prevent or otherwise affect the
performance or enforcement of this Agreement or any other Security Document and
hereby waives, to the extent permitted by law, all benefit or advantage of all
such laws and covenants that it will not hinder, delay or impede the execution
of any power granted to the Collateral Agent in this Agreement or any other
Security Document but will suffer and permit the execution of every such power
as though no such law were in force; provided that nothing contained in this
Section 2.08(a) shall be construed as a waiver of any rights of the Grantors
under any applicable federal bankruptcy law or state insolvency law.
(b) Each Grantor, to the extent it may lawfully do so, on behalf of
itself and all who may claim through or under it, including any and all
subsequent creditors, vendees, assignees and licensors, waives and releases all
rights to demand or to have any marshaling of the Collateral upon any sale,
whether made under any power of sale granted herein or in any other Security
Document or pursuant to judicial proceedings or upon any foreclosure or any
enforcement of this Agreement or any other Security Document (in each case in
accordance with the applicable Security Documents) and consents and agrees that
all the Collateral may at any such sale be offered and sold as an entirety.
(c) Each Grantor waives, to the extent permitted by applicable law,
presentment, demand, protest and any notice of any kind (except notices
explicitly required hereunder or under any other Security Document) in
connection with this Agreement and the other Security Documents and any action
taken by the Collateral Agent with respect to the Collateral.
SECTION 2.09. Limitation on Collateral Agent's Duty in Respect of
Collateral. Beyond its duties as to the custody thereof expressly provided
herein or in any other Security Document and to account to the Secured Parties
and the Grantors for moneys and other property received by it hereunder or under
any other Security Document, the Collateral Agent shall not have any duty to the
Grantors or to the Secured Parties as to any Collateral in its possession or
control or in the possession or control of any of its agents or nominees, or any
income thereon or as to
9
the preservation of rights against prior parties or any other rights pertaining
thereto.
SECTION 2.10. Limitation by Law. All rights, remedies and powers
provided in this Agreement or any other Security Document may be exercised only
to the extent that the exercise thereof does not violate any applicable
provision of law, and all the provisions hereof are intended to be subject to
all applicable mandatory provisions of law which may be controlling and to be
limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable in whole or in part or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
SECTION 2.11. Rights of Secured Parties in Respect of Obligations.
Notwithstanding any other provision of this Agreement or any other Security
Document, the right of each Secured Party to receive payment of the Obligations
or Senior Note Obligations held by such Secured Party when due (whether at the
stated maturity thereof, by acceleration or otherwise), as expressed in the
instruments evidencing or agreements governing such Obligations or Senior Note
Obligations or to institute suit for the enforcement of such payment on or after
such due date (to the extent suit can be brought without impairing the validity
of the Collateral Agent's Lien on any Collateral), shall not be impaired or
affected without the consent of such Secured Party given in the manner
prescribed by the instruments evidencing or agreements governing such
Obligations or Senior Note Obligations, as applicable.
SECTION 2.12. Equal and Ratable Security. This Agreement and the
other Security Documents (a) are intended to secure the Senior Note Obligations
equally and ratably with the Obligations to the extent (but only to the extent)
required by the Senior Note Indenture and (b) shall be construed and enforced to
give effect to such intention.
ARTICLE III
Collateral Account; Distributions
SECTION 3.01. The Collateral Account. At such time as the Collateral
Agent deems appropriate, the Collateral Agent shall establish and, at all times
thereafter until this Agreement shall have terminated, there shall be maintained
with the Collateral Agent an account which shall be entitled the "Xxxxxx
Scientific Collateral Account" (the "Collateral Account"). All moneys which are
10
received by the Collateral Agent or any agent or nominee of the Collateral Agent
in respect of the Collateral, whether in connection with the exercise of the
remedies provided in this Agreement or any other Security Document, shall be
deposited in the Collateral Account and held by the Collateral Agent as part of
the Collateral Estate and applied and disbursed in accordance with the terms of
this Agreement. The Collateral Agent shall maintain such sub-accounts and
records with respect to the Collateral Account as will permit the segregation
and allocation of proceeds of Collateral in accordance with Section 3.04.
SECTION 3.02. Control of Collateral Account. All right, title and
interest in and to the Collateral Account, and funds on deposit in the
Collateral Account, shall constitute part of the Collateral Estate. The
Collateral Account shall be subject to the exclusive dominion and control of the
Collateral Agent.
SECTION 3.03. Investment of Funds Deposited in Collateral Account.
The Collateral Agent may, at the request of the Company, invest and reinvest
moneys on deposit in the Collateral Account at any time in Permitted
Investments; provided that the Collateral Agent, in its sole discretion, may (a)
restrict such investments and reinvestments to Permitted Investments that have a
shorter duration and higher credit quality than other Permitted Investments and
(b) not invest or reinvest any amount that it expects to distribute from the
Collateral Account within one Business Day. All such investments and the
interest and income received thereon and the net proceeds realized on the sale
or redemption thereof shall be held in the Collateral Account as part of the
Collateral Estate. The Collateral Agent shall not be responsible for any
diminution in funds resulting from such investments or any liquidation prior to
maturity.
SECTION 3.04. Application of Moneys. (a) The Collateral Agent shall
have the right at any time after the occurrence and during the continuance of an
Event of Default or a Triggering Event to apply moneys held by it in the
Collateral Account to the payment of due and unpaid Collateral Agent Fees.
(b) All remaining moneys held by the Collateral Agent in the
Collateral Account received by the Collateral Agent with respect to the
Restricted Collateral shall, to the extent available for distribution (it being
understood that the Collateral Agent may liquidate investments prior to maturity
in order to make a distribution pursuant to this Section 3.04), be distributed
(subject to the provisions of
11
Sections 3.04(e), 3.05 and 3.06), after the occurrence and during the
continuance of an Event of Default or a Triggering Event, by the Collateral
Agent on each Distribution Date in the following order of priority (with such
distributions being made by the Collateral Agent to the respective
Representatives for the Secured Parties entitled thereto as provided in Section
3.04(f), and each such Representative shall be responsible for insuring that
amounts distributed to it are distributed to the relevant Secured Parties in the
order of priority set forth herein):
First: to the Collateral Agent for any unpaid Collateral Agent Fees
and then to any Secured Party which has theretofore advanced or paid any
Collateral Agent Fees constituting administrative expenses allowable under
Section 503(b) of the Bankruptcy Code, an amount equal to the amount
thereof so advanced or paid by such Secured Party and for which such
Secured Party has not been reimbursed prior to such Distribution Date,
and, if such moneys shall be insufficient to pay such amounts in full,
then ratably (without priority of any one over any other) to such Secured
Parties in proportion to the amounts of such Collateral Agent Fees
advanced by the respective Secured Parties and remaining unpaid on such
Distribution Date;
Second: to any Secured Party which has theretofore advanced or paid
any Collateral Agent Fees other than such administrative expenses, an
amount equal to the amount thereof so advanced or paid by such Secured
Party and for which such Secured Party has not been reimbursed prior to
such Distribution Date, and, if such moneys shall be insufficient to pay
such amounts in full, then ratably (without priority of any one over any
other) to such Secured Parties in proportion to the amounts of such
Collateral Agent Fees advanced by the respective Secured Parties and
remaining unpaid on such Distribution Date;
Third: to the Secured Parties holding Restricted Collateral
Obligations, amounts equal to all Restricted Collateral Obligations then
owing to them, whether or not then due and payable, and, if such moneys
shall be insufficient to pay such amounts in full, then ratably (without
priority of any one over any other) to such Secured Parties in proportion
to the unpaid amounts thereof on such Distribution Date;
Fourth: to the Secured Parties that hold Secured Obligations, in an
amount equal to all Secured
12
Obligations then owing to them, whether or not then due and payable, and,
if such moneys shall be insufficient to pay such amounts in full, then
ratably (without priority of any one over any other) to such Secured
Parties in proportion to the unpaid amounts thereof on such Distribution
Date; and
Fifth: any surplus then remaining shall be paid to the Grantors or
their successors or assigns or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
(c) All remaining moneys held by the Collateral Agent in the
Collateral Account received by the Collateral Agent with respect to the
Unrestricted Collateral shall, to the extent available for distribution (it
being understood that the Collateral Agent may liquidate investments prior to
maturity in order to make a distribution pursuant to this Section 3.04), be
distributed (subject to the provisions of Section 3.04(e) and Section 3.05),
after the occurrence and during the continuance of an Event of Default or a
Triggering Event, by the Collateral Agent on each Distribution Date in the
following order of priority:
First: to the Collateral Agent for any unpaid Collateral Agent Fees
and then to any Secured Party which has theretofore advanced or paid any
Collateral Agent Fees constituting administrative expenses allowable under
Section 503(b) of the Bankruptcy Code, an amount equal to the amount
thereof so advanced or paid by such Secured Party and for which such
Secured Party has not been reimbursed prior to such Distribution Date,
and, if such moneys shall be insufficient to pay such amounts in full,
then ratably (without priority of any one over any other) to such Secured
Parties in proportion to the amounts of such Collateral Agent Fees
advanced by the respective Secured Parties and remaining unpaid on such
Distribution Date;
Second: to any Secured Party which has theretofore advanced or paid
any Collateral Agent Fees other than such administrative expenses, an
amount equal to the amount thereof so advanced or paid by such Secured
Party and for which such Secured Party has not been reimbursed prior to
such Distribution Date, and, if such moneys shall be insufficient to pay
such amounts in full, then ratably (without priority of any one over any
other) to such Secured Parties in proportion to the amounts of such
Collateral Agent Fees advanced by the
13
respective Secured Parties and remaining unpaid on such Distribution Date;
Third: to the Secured Parties that hold Obligations, in an amount
equal to all Obligations then owing to them, whether or not then due and
payable, and, if such moneys shall be insufficient to pay such amounts in
full, then ratably (without priority of any one over any other) to such
Secured Parties in proportion to the unpaid amounts thereof on such
Distribution Date; and
Fourth: any surplus then remaining shall be paid to the Grantors or
their successors or assigns or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
(d) The term "unpaid" as used in Sections 3.04(b) and 3.04(c)
refers:
(i) in the absence of a bankruptcy proceeding with respect to the
relevant Loan Party or Loan Parties, to all amounts of the relevant
Obligations and Senior Note Obligations (other than contingent
indemnification and other contingent obligations as to which the
applicable Grantor has not received a notice of claim) outstanding as of a
Distribution Date (and for the purpose of this provision, the amount of
the Obligations then outstanding shall include the undrawn face amount of,
and any unreimbursed drawings under, any Letter of Credit), and
(ii) during the pendency of a bankruptcy proceeding with respect to
the relevant Grantor(s), to all amounts allowed by the bankruptcy court in
respect of the relevant Obligations and Senior Note Obligations as a basis
for distribution (including estimated amounts, if any, allowed in respect
of contingent claims),
to the extent that prior distributions have not been made in respect thereof.
(e) Notwithstanding any provision in this Agreement or any other
Security Document to the contrary, the provisions of Sections 3.04(b) and
3.04(c) shall not be construed to require or allow proceeds of any item of
Collateral to be distributed to pay any Obligation or any Senior Note Obligation
that is not secured by a Lien on such Collateral pursuant to the applicable
Security Documents.
14
(f) The Collateral Agent shall make all payments and distributions
under this Section 3.04: (i) on account of Obligations to the Administrative
Agent, pursuant to directions of the Administrative Agent, for redistribution to
the holders of the Obligations; and (ii) on account of Senior Note Obligations
(subject to Section 3.05) to the Senior Note Trustee, pursuant to directions of
the Senior Note Trustee, for redistribution to the holders of the applicable
Senior Note Obligations.
SECTION 3.05. Application of Moneys Distributable to Senior Note
Trustee. If at any time any moneys collected or received by the Collateral Agent
pursuant to this Agreement are distributable pursuant to Section 3.04 to the
Senior Note Trustee, and if the Senior Note Trustee shall notify the Collateral
Agent in writing that no provision is made under the Senior Note Indenture for
the application by the Senior Note Trustee of such moneys (whether because the
Senior Note Obligations have not become due and payable or otherwise) and that
the Senior Note Indenture does not effectively provide for the receipt and the
holding by the Senior Note Trustee of such moneys pending the application
thereof, then the Collateral Agent, after receipt of such notification, may, at
the request of the Company, invest such amounts in Permitted Investments, and
shall hold all such amounts so distributable and all such investments and the
net proceeds thereof solely as security for the Senior Note Obligations and for
no other purpose until such time as the Senior Note Trustee shall request in
writing the delivery thereof by the Collateral Agent for application pursuant to
the Senior Note Indenture ; provided that the Collateral Agent, in its sole
discretion, may (a) restrict such investments to Permitted Investments that have
a shorter duration and higher credit quality than other Permitted Investments
and (b) not invest any amount that it expects to distribute within one Business
Day. Notwithstanding the foregoing, if, at any time, all the Senior Note
Obligations in respect of which any moneys and investments (and proceeds
thereof) are held by the Collateral Agent pursuant to this Section 3.05 cease to
be outstanding for any reason, then such moneys and any moneys that constitute
Proceeds of such investments will be applied by the Collateral Agent in
accordance with Section 3.04(b). The Collateral Agent shall not be responsible
for any diminution in funds resulting from investments made at the direction of
the Company or from holding such moneys uninvested.
SECTION 3.06. Collateral Agent's Calculations. In making the
determinations and allocations required by Section 3.04, the Collateral Agent
may conclusively rely
15
upon, and shall have no liability to any of the Secured Parties for actions
taken in reliance upon, (a) information supplied by the Administrative Agent or
any Secured Party as to the amounts of unpaid principal and interest and other
amounts outstanding with respect to any Obligations and (b) information supplied
by the Senior Note Trustee as to the amounts of unpaid principal and interest
and other amounts outstanding with respect to the Senior Note Obligations;
provided that nothing in this sentence shall prevent any Grantor from contesting
any amounts claimed by any Secured Party in any information so supplied. In
addition, for purposes of making the allocations required by Section 3.04 with
respect to any amount that is denominated in a Local Currency, the Collateral
Agent shall, on or prior to the applicable Distribution Date, convert such
amount into an amount of Dollars based upon the relevant Exchange Rate as of a
recent date specified by the Collateral Agent in its reasonable discretion. All
distributions made by the Collateral Agent pursuant to Section 3.04 shall be
(subject to any decree of any court of competent jurisdiction) final (absent
manifest error), and the Collateral Agent shall have no duty to inquire as to
the application by the Administrative Agent or the Senior Note Trustee of any
amounts distributed to it for distribution to any Secured Parties.
ARTICLE IV
Agreements with Collateral Agent
SECTION 4.01. Delivery of Secured Instruments. The Company
represents and warrants that it has delivered to the Collateral Agent true and
complete copies of the Senior Note Indenture as in effect on the Effective Date.
The Company shall deliver to the Collateral Agent, promptly upon the execution
thereof, a true and complete copy of any amendment, modification or supplement
to the Senior Note Indenture entered into after the Effective Date.
SECTION 4.02. Information as to Secured Parties, Administrative
Agent and Senior Note Trustee. The Company shall deliver to the Collateral Agent
from time to time after the date hereof upon request of the Collateral Agent a
list setting forth as of a date not more than 30 days prior to the date of such
delivery, (a) the aggregate unpaid principal amount of Obligations outstanding,
(b) the aggregate unpaid principal amount of Senior Note Obligations
outstanding, and (c) to the extent known to the Company, the respective names
and addresses of the Administrative Agent, the Senior Note Trustee and each
Secured Party that is a
16
counterparty to a Swap Agreement the obligations under which constitute
Obligations. In addition, the Company will promptly notify the Collateral Agent
to the extent known to the Company of each change in the identity of the Senior
Note Trustee or, if the Administrative Agent is not the same Person as and not
an Affiliate of the Collateral Agent, the Administrative Agent. Promptly
following the Effective Date, the Company will request the Senior Note Trustee
to deliver to the Collateral Agent the names of the officers of the Senior Note
Trustee authorized to give directions hereunder on behalf of the Senior Note
Trustee. The Company will request that the Senior Note Trustee notify the
Collateral Agent of any change of the officers of the Senior Note Trustee
authorized to give directions hereunder on behalf of the Senior Note Trustee
prior to the date of any such change. If the Collateral Agent does not receive
the names of the officers of the Senior Note Trustee authorized to give
directions hereunder on behalf of the Senior Note Trustee, the Collateral Agent
may rely on any person purporting to be authorized to give directions hereunder
on behalf of the Senior Note Trustee. If the Collateral Agent is not informed of
changes of the officers of the Senior Note Trustee authorized to give directions
hereunder on behalf of the Senior Note Trustee, the Collateral Agent may rely on
the information previously provided to the Collateral Agent.
SECTION 4.03. Collateral Agent's Fees and Expenses; Indemnification.
Each Grantor jointly and severally acknowledges and agrees that the Collateral
Agent shall be entitled to the benefits of Section 10.03 of the Credit
Agreement. Any such amounts shall be additional Obligations secured by the
Security Documents. The provisions of this Section 4.03 shall remain operative
and in full force and effect regardless of the termination of this Agreement or
any other Security Documents, the consummation of the transactions contemplated
hereby or the repayment of any of the Secured Obligations.
SECTION 4.04. Collateral Agent's Lien. Notwithstanding anything to
the contrary in this Agreement, as security for the payment of Collateral Agent
Fees (a) the Collateral Agent is hereby granted a lien upon all Collateral and
(b) the Collateral Agent shall have the right to use and apply any of the funds
held by the Collateral Agent in the Collateral Account to cover such Collateral
Agent Fees.
SECTION 4.05. Further Assurances. Each Grantor agrees, at its own
expense, to execute any and all further documents, financing statements,
agreements and instruments,
17
and take all such further actions (including the filing and recording of
financing statements, fixture filings, mortgages, deeds of trust and other
documents) to the extent required by Section 5.13 of the Credit Agreement.
ARTICLE V
The Collateral Agent
Each of the Secured Parties, by its acceptance of the benefits
hereof, hereby irrevocably appoints the Collateral Agent as its agent and
authorizes the Collateral Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Collateral Agent by the terms of
the Security Documents, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Collateral Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Collateral Agent, and such bank and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Company or any Subsidiary or other Affiliate
thereof as if it were not the Collateral Agent hereunder.
The Collateral Agent shall not have any duties or obligations except
those expressly set forth in the Security Documents. Without limiting the
generality of the foregoing, (a) the Collateral Agent shall not be subject to
any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Collateral Agent shall not have any duty to
take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Security Documents
that the Collateral Agent is required to exercise in writing by the Required
Lenders or the Requisite Secured Parties, as applicable, pursuant to Article II
hereof, and (c) except as expressly set forth in the Security Documents, the
Collateral Agent shall not have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Company or any of
its Subsidiaries that is communicated to or obtained by the bank serving as
Collateral Agent or any of its Affiliates in any capacity. The Collateral Agent
shall not be liable for any action taken or not taken by it with the consent or
at the request of the Required Lenders or the Requisite Secured Parties, as
applicable, pursuant to Article II hereof, or in the absence of its own gross
negligence or wilful misconduct. The Collateral Agent shall
18
be deemed not to have knowledge of any Default, Event of Default or Triggering
Event, as applicable, unless and until written notice thereof is given to the
Collateral Agent by any Borrower, the Administrative Agent or the Senior Note
Trustee, as applicable, and the Collateral Agent shall not be responsible for or
have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document or the Senior
Note Indenture, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document or the Senior Note Indenture, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document, the Senior
Note Indenture or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV of the Credit Agreement or
elsewhere in any Loan Document or the Senior Note Indenture, other than to
confirm receipt of items expressly required to be delivered to the Collateral
Agent under the Loan Documents.
The Collateral Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Collateral Agent also
may rely upon any statement made to it orally or by telephone and believed by it
to be made by the proper Person, and shall not incur any liability for relying
thereon. The Collateral Agent may consult with legal counsel (who may be counsel
for the Company), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
The Collateral Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Collateral Agent. The Collateral Agent and any such sub-agent may perform any
and all its duties and exercise its rights and powers through their respective
Related Parties. The exculpatory provisions of the preceding paragraphs shall
apply to any such sub-agent and to the Related Parties of the Collateral Agent
and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for in the
Credit Agreement as well as activities as Collateral Agent.
19
Subject to the appointment and acceptance of a successor Collateral
Agent as provided in this paragraph, the Collateral Agent may resign at any time
by notifying the Lenders, the Issuing Banks, the Senior Note Trustee and the
Company. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Company, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Collateral Agent gives notice of
its resignation, then the retiring Collateral Agent may, on behalf of the
Secured Parties, the Lenders and the Issuing Banks, appoint a successor
Collateral Agent which shall be a bank with an office in New York, New York, or
an Affiliate of any such bank (unless otherwise agreed by the Company and the
Required Lenders). Upon the acceptance of its appointment as Collateral Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Collateral Agent,
and the retiring Collateral Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Company to a successor Collateral
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Company and such successor. After the Collateral Agent's
resignation hereunder, the provisions of this Article and Section 4.03 shall
continue in effect for the benefit of such retiring Collateral Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Collateral Agent.
ARTICLE VI
Miscellaneous
SECTION 6.01. Notices. All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 10.01 of the Credit Agreement. All communications and
notices hereunder to any Subsidiary Party shall be given to it in care of the
Company as provided in Section 10.01 of the Credit Agreement. All communications
and notices hereunder to the Senior Note Trustee shall be given to it at the
address specified therefor in writing by the Company to the Collateral Agent.
SECTION 6.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in
20
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Secured Parties and shall survive
the execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
Secured Party or on its behalf and notwithstanding that the Collateral Agent,
any Issuing Bank or any Secured Party may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended under the Credit Agreement, and shall continue in full force and effect
as long as the principal of or any accrued interest on any Loan or any fee or
any other amount payable under any Loan Document is outstanding and unpaid or
any Letter of Credit is outstanding and so long as the Commitments have not
expired or terminated.
SECTION 6.03. Binding Effect; Several Agreement. This Agreement
shall become effective as to any Grantor when a counterpart hereof executed on
behalf of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective permitted successors and assigns, and shall inure to the
benefit of such Grantor, the Collateral Agent and the other Secured Parties and
their respective successors and permitted assigns, except that no Grantor shall
have the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly contemplated by this Agreement, the Collateral
Agreement, any other Security Documents or the Credit Agreement. This Agreement
shall be construed as a separate agreement with respect to each Grantor and may
be amended, modified, supplemented, waived or released with respect to any
Grantor without the approval of any other Grantor and without affecting the
obligations of any other Grantor hereunder.
SECTION 6.04. Successors and Assigns. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of any Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 6.05. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
21
SECTION 6.06. Waivers; Amendment. (a) No failure or delay by the
Collateral Agent in exercising any right or power hereunder or under any other
Security Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent under the Security Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or any other Security Document or
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Collateral Agent
or any other Secured Party may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Loan Party or Loan Parties with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 10.02 of the Credit Agreement;
provided that after the occurrence of and during the continuance of a Triggering
Event, no such amendment, supplement or waiver shall, without the consent of the
Senior Note Trustee, adversely affect the rights of the holders of the Senior
Note Obligations to equal and ratable security to the extent and for the periods
contemplated by this Agreement. Subject to the foregoing, none of the provisions
of this Agreement or any other Security Document shall be construed to require
any consent of the Senior Note Trustee or any holders of Senior Note Obligations
to any such waiver, amendment or modification.
SECTION 6.07. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
22
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 6.08. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 6.09. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute a single contract. Delivery of an executed signature
page to this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 6.10. Headings. Article and Section headings used herein are
for the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 6.11. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District Court of
the Southern District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to any Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Collateral
Agent, any Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to
23
this Agreement or any other Loan Document against any Grantor or its properties
in the courts of any jurisdiction.
(b) Each Grantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (a) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 6.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 6.12. Termination or Release. (a) This Agreement, the Liens
created by Section 4.04 and all other security interests granted hereby shall
terminate when all the Loan Document Obligations (other than unliquidated
contingent liabilities in respect of indemnification obligations) have been
indefeasibly paid in full and the Lenders have no further commitment to lend
under the Credit Agreement, the LC Exposure has been reduced to zero and the
Issuing Banks have no further obligations to issue Letters of Credit under the
Credit Agreement.
(b) A Subsidiary Party shall automatically be released from its
obligations hereunder and the Lien created by Section 4.04 in, and all other
security interests granted hereby on, the Collateral owned by such Subsidiary
Party shall be automatically released upon the consummation of any transaction
permitted by the Credit Agreement as a result of which such Subsidiary Party
ceases to be a Subsidiary; provided that the Required Lenders shall have
consented to such transaction (to the extent required by the Credit Agreement)
and the terms of such consent did not provide otherwise.
(c) Upon any sale or other transfer by any Grantor of any Collateral
that is permitted under the Credit Agreement to any Person that is not a
Grantor, or at any time during which no Triggering Event has occurred and is
continuing, upon the effectiveness of any written consent to the release of the
security interest granted hereby in any Collateral pursuant to Section 10.02 of
the Credit
24
Agreement, the security interest in such Collateral shall be automatically
released. No such release shall require any consent or approval by any other
Secured Party.
(d) In connection with any termination or release pursuant to
paragraph (a), (b) or (c), the Collateral Agent shall execute and deliver to any
Grantor, at such Grantor's expense, all documents that such Grantor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 6.12(d) shall be without recourse
to or warranty by the Collateral Agent.
SECTION 6.13. Agreement to be Bound. Pursuant to Section 7.18 of the
Collateral Agreement, each Subsidiary of the Company party to the Collateral
Agreement has agreed to be bound by the terms of this Agreement and, without
limiting the generality of the foregoing, has expressly agreed that all
obligations and liabilities of a Grantor hereunder apply to such party with the
same force and effect as if such party were a signatory hereto.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first written above.
XXXXXX SCIENTIFIC INTERNATIONAL INC.,
by
/s/
-----------------------------------
Name:
Title:
XXXXXX SCIENTIFIC COMPANY L.L.C.,
by Xxxxxx Scientific
International Inc.,
manager and sole member
by
/s/
-----------------------------------
Name:
Title:
XXXX-XXXXXX INSTRUMENT COMPANY,
by
-----------------------------------
Name:
Title:
XXXXXX CLINICAL SERVICES INC.,
by
-----------------------------------
Name:
Title:
26
XXXXXX XXXXXXXX L.L.C.,
by Xxxxxx Scientific
International Inc.,
manager and sole member
by
-----------------------------------
Name:
Title:
XXXXXX SCIENTIFIC WORLDWIDE INC.,
by
-----------------------------------
Name:
Title:
FSWH COMPANY LLC,
by
-----------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
as Collateral Agent,
by
-----------------------------------
Name:
Title:
