SECURITY AGREEMENT
SECURITY AGREEMENT ("AGREEMENT") dated as of January 21, 1997 among
IMCO RECYCLING INC., a Delaware corporation ("BORROWER"); EACH OF THE
SUBSIDIARIES party hereto (the "SUBSIDIARY GUARANTORS"); and TEXAS COMMERCE
BANK NATIONAL ASSOCIATION, as administrative agent for the lenders or other
financial institutions or entities party, as lenders, to the Credit Agreement
referred to below (in such capacity, together with its successors in such
capacity, the "ADMINISTRATIVE AGENT").
Borrower, the Subsidiary Guarantors, certain lenders, Xxxxxxx Xxxxx &
Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as Arranger and
Syndication Agent, and the Administrative Agent are parties to a Credit
Agreement dated as of the date hereof (as modified and supplemented and in
effect from time to time, the "CREDIT AGREEMENT"), providing, subject to the
terms and conditions thereof, for extensions of credit (by the making of loans
and the issuance of letters of credit) to be made by said lenders to Borrower.
To induce said lenders to enter into the Credit Agreement and to
extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Debtor (as
hereinafter defined) has agreed to pledge, mortgage and grant a security
interest in the Pledged Collateral (as hereinafter defined) as security for the
Secured Obligations (as hereinafter defined). Accordingly, the parties hereto
agree as follows:
Section 1. DEFINITIONS. Terms defined in the Credit Agreement are
used herein as defined therein. In addition, as used herein:
"ACCOUNTS" see Section 3(a)(vi) hereof.
"AGREEMENT" see the introduction hereto.
"COLLATERAL ACCOUNT" see Section 4.01(a) hereof.
"CONTRACTS" shall mean all contracts, undertakings, or other
agreements, including, without limitation, the IMSAMET Acquisition Documents, as
the same may be amended from time to time, and (a) all rights of any Debtor to
receive moneys due and to become due thereunder or in connection therewith, (b)
all rights of any Debtor to damages arising out of or for breach or default in
respect thereof and (c) all rights of any Debtor to exercise remedies
thereunder.
"COPYRIGHT COLLATERAL" shall mean all Copyrights, whether now owned or
hereafter acquired by any Debtor, including each Copyright identified in ANNEX 2
hereto.
"COPYRIGHTS" shall mean all copyrights, copyright registrations and
applications for copyright registrations, including, without limitation, all
renewals and extensions thereof, the right to recover for all past, present and
future infringements
thereof, and all other rights of any kind whatsoever accruing thereunder or
pertaining thereto.
"DEBTOR" shall mean each of Borrower and each Subsidiary Guarantor
(other than IMCO Recycling of Ohio Inc., a Subsidiary).
"DOCUMENTS" see Section 3(a)(xii) hereof.
"EQUIPMENT" see Section 3(a)(x) hereof.
"INSTRUMENTS" see Section 3(a)(vii) hereof.
"INTELLECTUAL PROPERTY" shall mean, collectively, all Copyright
Collateral, all Patent Collateral and all Trademark Collateral, together with
(a) all inventions, processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or other agreements granted
to any Debtor with respect to any of the foregoing, in each case whether now or
hereafter owned or used including, without limitation, the licenses or other
agreements with respect to the Copyright Collateral, the Patent Collateral or
the Trademark Collateral, listed in ANNEX 5 hereto; (c) all information,
customer lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys, engineering
reports, test reports, manuals, materials standards, processing standards,
performance standards, catalogs, computer and automatic machinery software and
programs; (d) all field repair data, sales data and other information relating
to sales or service of products now or hereafter manufactured; (e) all
accounting information and all media in which or on which any information or
knowledge or data or records may be recorded or stored and all computer
programs used for the compilation or printout of such information, knowledge,
records or data; and (f) all licenses, consents, permits, variances,
certifications and approvals of governmental agencies now or hereafter held by
any Debtor; and (g) all causes of action, claims and warranties now or hereafter
owned or acquired by the Debtors in respect of any of the items listed above.
"INTERESTS" shall mean, as to any Debtor (i) all right, title and
interest, now existing or hereafter acquired, of such Debtor in any LLC but not
any of its obligations from time to time as a member (unless the Administrative
Agent shall become a member as a result of its exercise of remedies herein) of
any LLC; (ii) any and all moneys due and to become due to such Debtor now or in
the future by way of a distribution made to such Debtor in its capacity as a
member of or an owner of any LLC; (iii) any other Property of any LLC to which
such Debtor now or in the future may be entitled in its capacity as a member of
or an owner of any LLC by way of distribution, return of capital or otherwise;
(iv) any other claim in respect of any LLC to which such Debtor now or in the
future may be entitled in its capacity as a member of or an owner of any LLC and
its Property, including any rights under any operating agreement or other
agreement governing or pertaining to such interests; (v) the certificates, if
any, representing all such rights and interests; (vi) all right of such Debtor
under each limited liability company or operating agreement of each LLC; and
(vii) to the extent not otherwise included, all proceeds of any of the
foregoing.
-2-
"INVENTORY" see Section 3(a)(viii) hereof.
"ISSUERS" shall mean, collectively, the respective corporations
identified beneath the names of the Debtors on ANNEX 1A hereto under the caption
"ISSUER," together with any corporation created or acquired after the date
hereof, the capital stock of which is required to be pledged hereunder pursuant
to this Agreement or the Credit Agreement.
"LLC" shall mean, collectively, the respective limited liability
companies identified beneath the name of the Debtors on ANNEX 1A hereto under
the caption "LLC", together with any limited liability company created or
acquired after the date hereof, the Interests in which is required to be pledged
hereunder pursuant to this Agreement or the Credit Agreement.
"MOTOR VEHICLES" shall mean motor vehicles, tractors, trailers and
other like property, whether or not the title thereto is governed by a
certificate of title or ownership.
"PARTNERSHIP" shall mean, collectively, the respective partnerships
identified beneath the name of the Debtors on ANNEX 1A hereto under the caption
"PARTNERSHIP", together with any partnerships created or acquired after the date
hereof, the Partnership Interests in which is required to be pledged hereunder
pursuant to this Agreement or the Credit Agreement.
"PARTNERSHIP INTERESTS" shall mean, as to any Debtor (i) all right,
title and interest, now existing or hereafter acquired, of such Debtor in any
Partnership but not any of its obligations from time to time as a partner
(unless the Administrative Agent shall become a partner as a result of its
exercise of remedies herein) of any Partnership; (ii) any and all moneys due and
to become due to such Debtor now or in the future by way of a distribution made
to such Debtor in its capacity as a member of or an owner of any Partnership;
(iii) any other Property of any Partnership to which such Debtor now or in the
future may be entitled in its capacity as a member of or an owner of any
Partnership by way of distribution, return of capital or otherwise; (iv) any
other claim in respect of any Partnership to which such Debtor now or in the
future may be entitled in its capacity as a member of or an owner of any
Partnership and its Property, including any rights under any partnership
agreement or other document governing or pertaining to such interests; (v) the
certificates, if any, representing all such rights and interests; (vi) all
rights of such Debtor under each partnership agreement or limited partnership
agreement of each Partnership; and (vii) to the extent not otherwise included,
all proceeds of any of the foregoing.
"PATENT COLLATERAL" shall mean all Patents, whether now owned or
hereafter acquired by any Debtor, including each Patent identified in ANNEX 3
hereto, excluding, however, the Patents identified as "Excluded Patents" on said
ANNEX 3.
"PATENTS" shall mean all patents and patent applications, including,
without limitation, the inventions and improvements described and claimed
therein together with the reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, all income, royalties, damages and
payments now or hereafter due and/or payable
-3-
under and with respect thereto, including, without limitation, damages and
payments for past or future infringements thereof, the right to xxx for past,
present and future infringements thereof, and all rights corresponding
thereto throughout the world.
"PLEDGED COLLATERAL" see Section 3 hereof.
"PLEDGED INTERESTS" see Section 3(a)(iv) hereof.
"PLEDGED OBLIGATIONS" shall mean all of each Debtor's right, title and
interest, if any, in and to any and all obligations owed to such Debtor by any
Person, whether now existing or hereafter incurred, and in and to all collateral
granted to such Debtor or for the benefit of such Debtor as collateral security
for such obligations.
"PLEDGED SECURITIES" shall mean thereunder Pledged Interests and the
Pledged Stock, collectively.
"PLEDGED STOCK" see Section 3(a)(i) hereof.
"SECURED OBLIGATIONS" shall mean, collectively, (a) the principal of
and interest (including any interest that would accrue but for the provisions of
the Bankruptcy Code) on the Loans made by the Lenders to, and the Notes held by
each Lender of, Borrower and all other amounts from time to time owing to the
Creditors by Borrower under the Basic Documents including, without limitation,
all Reimbursement Obligations and interest thereon, (b) all obligations of
Borrower arising under any Swap Contract between Borrower and any Lender, (c)
all obligations of the Subsidiary Guarantors under the Credit Agreement and the
other Basic Documents (including, without limitation, in respect of their
Guarantees under Section 6 of the Credit Agreement) and (d) all obligations of
the Debtors to the Creditors hereunder.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"STOCK AND INTERESTS COLLATERAL" shall mean, collectively, the Pledged
Collateral described in clauses (i) through (iv) of Section 3(a) hereof and the
proceeds of and to any such property and, to the extent related to any such
property or such proceeds, all books, correspondence, credit files, records,
invoices and other papers.
"TRADEMARK COLLATERAL" shall mean all Trademarks, whether now owned or
hereafter acquired by any Debtor, including each Trademark identified in ANNEX 4
hereto. Notwithstanding the foregoing, the Trademark Collateral does not and
shall not include any Trademark that would be rendered invalid, abandoned, void
or unenforceable by reason of its being included as part of the Trademark
Collateral.
"TRADEMARKS" shall mean all trade names, trademarks and service marks,
logos, trademark and service xxxx registrations, and applications for trademark
and service xxxx registrations, including, without limitation, all renewals of
trademark and service xxxx registrations, all rights corresponding thereto
throughout the world, the right to recover for all past, present and future
infringements thereof, all other rights of any kind whatsoever accruing
thereunder or pertaining thereto, together, in each case,
-4-
with the product lines and goodwill of the business connected with the use
of, and symbolized by, each such trade name, trademark and service xxxx.
"UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York.
"VOTING POWERS" see Section 5.04(a)(2).
Section 2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Each Debtor
represents and warrants to and covenants and agrees with the Creditors that:
(a) Such Debtor is the sole beneficial owner of the Pledged
Collateral (and, with respect to the Pledged Securities, sole record owner
thereof) in which it purports to grant a security interest pursuant to
Section 3 hereof and no Lien exists or will exist upon such Pledged
Collateral at any time (and no right or option to acquire the same exists
in favor of any other Person), except for the pledge and security interest
in favor of the Administrative Agent for the benefit of the Lenders created
or provided for herein, which pledge and security interest shall constitute
a first priority perfected pledge and security interest in and to all of
such Pledged Collateral and each Debtor will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Pledged Collateral, other than pursuant
hereto; and, subject to Section 5.04 hereof, will cause any and all Pledged
Securities, to the extent certificated, whether for value paid by any
Debtor or otherwise, to be forthwith deposited with the Administrative
Agent and pledged or assigned hereunder.
(b) The Pledged Stock represented by the certificates identified
under the name of such Debtor in ANNEX 1A hereto is, and all other Pledged
Stock in which such Debtor shall hereafter grant a security interest
pursuant to Section 3 hereof will be, duly authorized, validly existing,
fully paid and non-assessable and none of such Pledged Stock is or will be
subject to any contractual restriction, or any restriction under the
charter or by-laws of the respective Issuer of such Pledged Stock, upon the
transfer of such Pledged Stock (except for any such restriction contained
herein or in the Credit Agreement or as permitted by the Credit Agreement).
(c) The Pledged Stock represented by the certificates identified
under the name of such Debtor in ANNEX 1A hereto constitutes (x) with
respect to each Subsidiary other than a Foreign Subsidiary all of the
issued and outstanding shares of capital stock of any class of such Issuers
beneficially owned by such Debtor and (y) with respect to each Foreign
Subsidiary, all of the issued and outstanding shares of capital stock of
any class of such Issuers beneficially owned by such Debtor which in the
aggregate do not represent more than 65% of the total combined voting power
of all classes of capital stock of any such Issuer (in each case, whether
or not registered in the name of such Debtor) and said ANNEX 1A correctly
identifies, as at the date hereof, or, with respect to any Issuer created
or acquired after the date hereof, as of the date of pledge hereunder, the
respective Issuers of such Pledged Stock, the respective class and par
value of the shares
-5-
comprising such Pledged Stock and the respective number of shares
(and registered owners thereof) represented by each such certificate.
(d) The Pledged Obligations identified on ANNEX 1B hereto constitute
all of the Pledged Obligations of such corporations as identified on
ANNEX 1B hereto, and, other than the Pledged Obligations, no Debtor owns,
directly or indirectly, any other Pledged Obligations of any Subsidiary
(other than a Foreign Subsidiary).
(e) ANNEXES 2, 3 AND 4 hereto, respectively, set forth under the name
of such Debtor a complete and correct list of all Copyrights, Patents and
Trademarks owned by such Debtor on the date hereof, which have been
registered or for which an application for registration has been made;
except pursuant to licenses and other user agreements entered into by such
Debtor in the ordinary course of business, that are listed in ANNEX 5
hereto, on and as of the date hereof (i) such Debtor owns and possesses the
right to use, and has done nothing to authorize or enable any other Person
to use, any Copyright, Patent or Trademark listed in said ANNEXES 2, 3 AND
4, and (ii) all registrations listed in said ANNEXES 2, 3 AND 4 are valid
and in full force and effect; and except as may be set forth in said
ANNEX 5, such Debtor owns and possesses the right to use all Copyrights,
Patents end Trademarks on and as of the date hereof.
(f) ANNEX 5 hereto sets forth a complete and correct list of all
material licenses and other user agreements included in the Intellectual
Property on the date hereof.
(g) To such Debtor's knowledge, on and as of the date hereof: (i)
except as set forth in ANNEX 5 hereto, there is no violation by others of
any right of such Debtor with respect to any Copyright, Patent or Trademark
listed in ANNEXES 2, 3 AND 4 hereto, respectively, under the name of such
Debtor and (ii) such Debtor is not infringing in any respect upon any
Copyright, Patent or Trademark of any other Person; and no proceedings have
been instituted or are pending against such Debtor or, to such Debtor's
knowledge, threatened, and no claim against such Debtor has been received
by such Debtor, alleging any such violation, except as may be set forth in
said ANNEX 5.
(h) Any goods now or hereafter produced by such Debtor or any of its
Subsidiaries included in the Pledged Collateral have been and will be
produced in compliance with the requirements of the Fair Labor Standards
Act of 1938, as amended, except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.
(i) The Interests of each Debtor identified under the name of such
Debtor on ANNEX 1A hereto pledged hereunder, and in respect of which a
security interest has been granted hereunder, constitute all of the issued
and outstanding Interests, limited liability company interests or other
ownership or equity interests in any LLC owned by the Debtors; the
Partnership Interests of each Debtor identified under the name of such
Debtor on ANNEX 1A hereto pledged hereunder, and in respect of which a
security interest has been granted hereunder, constitute
-6-
all of the issued and outstanding Partnership Interests or other ownership
or equity interests in any Partnership owned by the Debtors; and none of
the Pledged Interests is or will be subject to any contractual restriction,
or any restriction under the organizational or other organic documents of
the respective issuer of such Pledged Interests upon the transfer of such
Pledged Interests (except for any such restriction contained herein or in
the Credit Agreement or as permitted by the Credit Agreement). The Pledged
Interests have been duly authorized and validly issued, and all payments
required to be made by any holder of such Pledged Interests in respect of
such interests have been made.
(j) Each Debtor has the corporate power and authority to grant the
security interest in the Pledged Collateral pursuant to this Agreement and
has taken all necessary corporate action to grant the security interest in
the Pledged Collateral pursuant to this Agreement.
(k) None of the Pledged Stock constitutes margin stock, as defined in
Regulation U of the Board of Governors of the Federal Reserve System.
(l) No security agreement, financing statement, equivalent security
or lien instrument or continuation statement covering all or part of the
Pledged Collateral is on file or of record in any public office, except
such as may have been or will be filed in favor of the Administrative Agent
pursuant to this Agreement.
(m) Upon filing of the financing statements in the offices referred
to on SCHEDULE 1 hereto, the security interest created by this Agreement in
all Pledged Collateral other than the Pledged Securities will constitute a
valid, perfected first priority security interest in such Pledged
Collateral to the extent provided in the Uniform Commercial Code,
enforceable in accordance with its terms against all creditors of such
Debtor and any Persons purporting to purchase any such Pledged Collateral
from such Debtor, except as enforcement of such security interest may be
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law).
(n) The Interests in each LLC and the Partnership Interests in each
Partnership are not represented by certificates.
(o) Each Debtor's principal place of business, chief executive office
and the place where its records concerning the Pledged Collateral are kept
is at the address listed on SCHEDULE 2 hereto, and such Pledgor will not
change such principal place of business or chief executive office or remove
such records without giving the Administrative Agent at least 30 days prior
written notice thereof and taking such action to maintain the perfection or
priority of the Administrative Agent's security interest in the Pledged
Collateral as is necessary or reasonably requested by the Administrative
Agent; and such Debtor will not change its name, identity or structure in
any manner which might make any financing statement filed in
-7-
respect of the Pledged Collateral seriously misleading unless it shall have
given the Administrative Agent at least 30 days prior written notice
thereof.
(p) No consent or approval of any Governmental Authority or any
securities exchange or any other Person was or is necessary for the
validity of the security interest granted herein and the pledge effected
hereby.
(q) By virtue of the execution and delivery by the Debtors of this
Agreement, when the Pledged Securities, certificates, instruments or other
documents representing or evidencing such Pledged Securities are delivered
to the Administrative Agent in accordance with this Agreement, or, in the
case such Pledged Securities constituting uncertificated securities, when
the steps required by Articles 8 and 9 of the Uniform Commercial Code have
been taken to perfect the Administrative Agent's security interest therein,
the security interest created by this Agreement in the Pledged Securities
to the extent provided in the Uniform Commercial Code, enforceable in
accordance with its terms against all creditors of such Debtor and any
Person purporting to purchase any such Pledged Collateral from such Debtor,
except as enforcement of such security interest may be affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law).
(r) There are no restrictions upon the voting rights associated with,
or upon the transfer of, any of the Pledged Securities. The Pledged
Securities are not subject to any put, call, option or other right in favor
of any other Person whatsoever.
(s) Neither the execution and delivery of this Agreement by each
Debtor nor the consummation of the transactions herein contemplated nor the
fulfillment of the terms hereof (i) violates any Debtor's, or any of its
Subsidiaries', charter or by-laws or any organizational or other organic
document of any Issuer, LLC or Partnership, (ii) violates the terms of any
agreement, indenture, mortgage, deed of trust, equipment lease, instrument
or other document to which any Debtor, or any of its Subsidiaries, is a
party, or by which any of them may be bound or to which any of their
properties or assets may be subject, which violation or conflict would have
a Material Adverse Effect, or a material adverse effect on the value of the
Pledged Collateral or a material adverse effect on the security interests
hereunder, or (iii) conflicts with any law, order, rule or regulation
applicable to any Debtor, or any of its Subsidiaries, of any Governmental
Authority having jurisdiction over any Debtor, or any of its Subsidiaries,
or their Properties, or (iv) results in or requires the creation or
imposition of any Lien (other than the Lien contemplated hereby) upon or
with respect to any of the Property now owned or hereafter acquired by any
Debtor, or any of its Subsidiaries.
(t) Upon reasonable request to a Debtor, the Administrative Agent
shall have full and free access during normal business hours to all of the
books, correspondence and records of such Debtor relating to the Pledged
Collateral, and the Administrative Agent and its representatives may
examine the same, take
-8-
extracts therefrom and make photocopies thereof, and such Debtor agrees to
render to the Administrative Agent, at such Debtor's cost and expense, such
clerical and other assistance as may be reasonably requested by the
Administrative Agent with regard thereto.
(u) In the event that the Administrative Agent desires to exercise
any remedies, voting or consensual rights or attorney-in-fact powers set
forth in this Agreement and determines it necessary to obtain any approvals
or consents of any Governmental Authority or any other Person therefor,
then, upon the reasonable request of the Administrative Agent, each Debtor
agrees to use its best efforts to assist and aid the Administrative Agent
to obtain as soon as practicable any necessary Approvals for the exercise
of any such remedies, rights and powers.
(v) There are no voting trusts or other agreements or understandings
to which any Debtor is a party or by which it may be bound with respect to
voting, managerial consent, election or other rights of any Debtor relating
to the Pledged Securities.
(w) Such Debtor is not in default in the payment of any portion of
any mandatory capital contribution, if any, required to be made under any
agreement to which such Debtor is a party relating to its Interests or
Partnership Interests, and such Debtor is not in violation of any other
material provisions of any such agreement to which such Debtor is a party,
or otherwise in default or violation thereunder; to the best knowledge of
the Debtors no Interest or Partnership Interest is subject to any defense,
offset or counterclaim, nor have any of the foregoing been asserted or
alleged against such Debtor by any Person with respect thereto and as of
the date hereof, there are no certificates, instruments, documents or other
writings (other than the operating agreements, partnership agreements and
certificates, if any, delivered to the Administrative Agent) which evidence
any Interest or Partnership Interest of such Debtor.
Section 3. PLEDGED COLLATERAL; REGISTRATION OF PLEDGE OF PLEDGED
INTERESTS; ACKNOWLEDGEMENTS; DELIVERY OF PLEDGED SECURITIES AND PLEDGED
OBLIGATIONS. (a) As collateral security for the prompt payment in full when
due (whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations owing by such Debtor, each Debtor hereby pledges and mortgages to
the Administrative Agent, for the benefit of the Creditors as hereinafter
provided, and grants to the Administrative Agent, for the benefit of the
Creditors as hereinafter provided, a security interest in, all of such Debtor's
right, title and interest in the following property, whether now owned by such
Debtor or hereafter acquired and whether now existing or hereafter coming into
existence (all being collectively referred to herein as "PLEDGED COLLATERAL"):
(i) the shares of common stock of the Issuers represented by the
certificates identified in ANNEX 1A hereto under the name of such Debtor
and each other corporation hereafter acquired or formed by any Debtor and
all other shares of capital stock of whatever class of the Issuers now or
hereafter owned by such Debtor and all Equity Rights of any such Issuer
owned by any Debtor (except for 49% of IMCO Recycling of Ohio Inc.), in
each case together with the certificates
-9-
evidencing the same, subject, in the case of any Foreign Subsidiary, to the
limitation that shares of capital stock of any such Issuer which represent
in excess of 65% of the combined voting power of all classes of capital
stock of such Issuer shall not be pledged; PROVIDED, HOWEVER, that if
following a change in the relevant sections of the Code or the regulations,
rules, rulings, notices or other official pronouncements issued or
promulgated thereunder which would permit a pledge of 66-2/3% or more of the
total combined voting power of all classes of capital stock of any Foreign
Subsidiary entitled to vote without causing the undistributed earnings of
such Foreign Subsidiary as determined for Federal income taxes to be treated
as a deemed dividend to the Debtors for Federal income tax purposes, then
the 65% limitation set forth above shall no longer be applicable and the
Debtors shall duly pledge and deliver to the Administrative Agent such of
the capital stock not theretofore required to be pledged hereunder
(collectively, the "PLEDGED STOCK");
(ii) all shares, securities, moneys or Property representing a
dividend on any of the Pledged Stock, or representing a distribution or
return of capital upon or in respect of the Pledged Stock, or resulting
from a split-up, revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or
otherwise in respect of, the Pledged Stock;
(iii) all Pledged Obligations identified on ANNEX 1B hereto under the
name of any Debtor; PROVIDED, HOWEVER, if following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices
or other official pronouncements issued or promulgated thereunder which
would permit a pledge of any promissory note issued by any Foreign
Subsidiary without causing the undistributed earnings of such Foreign
Subsidiary as determined for Federal income taxes to be treated as a deemed
dividend to the Pledgor for Federal income tax purposes, then each Debtor
shall duly pledge and deliver to the Administrative Agent such of the
Pledged Obligations of each Foreign Subsidiary not theretofore required to
be pledged hereunder;
(iv) all Interests or Partnership Interests now or hereinafter owned
by any Debtor and any limited liability company interest, partnership
interest or other ownership or equity securities or certificate (including,
without limitation, any certificate representing a distribution in
connection with any reclassification, increase or reduction of capital or
any certificate issued in connection with any reorganization), option or
rights, whether in addition to, in substitution of, as a conversion of, or
in exchange for Interests or Partnership Interests, or otherwise in respect
thereof (collectively, the "PLEDGED INTERESTS");
(v) without affecting the obligations of such Debtor under any
provision prohibiting such action hereunder or under the Credit Agreement,
in the event of any consolidation or merger in which an Issuer, LLC or
Partnership is not the surviving corporation, all shares of each class of
the capital stock of the successor corporation or interests or certificates
of the successor limited liability company or partnership owned by the
Debtors (unless such successor is such Debtor itself) formed by or
resulting from such consolidation or merger;
-10-
(vi) all accounts and general intangibles (each as defined in the
Uniform Commercial Code) of such Debtor constituting any right to the
payment of money, including (but not limited to) all moneys due and to
become due to such Debtor in respect of any loans or advances or for
Inventory or Equipment or other goods sold or leased or for services
rendered, all moneys due and to become due to such Debtor under any
guarantee (including a letter of credit) of the purchase price of
Inventory or Equipment sold by such Debtor and all tax refunds (such
accounts, general intangibles and moneys due and to become due being herein
called collectively "ACCOUNTS");
(vii) all instruments, chattel paper or letters of credit (each as
defined in the Uniform Commercial Code) of such Debtor evidencing,
representing, arising from or existing in respect of, relating to, or
securing or otherwise supporting the payment of, any of the Accounts,
including (but not limited to) promissory notes, drafts, bills of exchange
and trade acceptances (herein collectively called "INSTRUMENTS");
(viii) all inventory (as defined in the Uniform Commercial Code) of such
Debtor, all goods obtained by such Debtor in exchange for such inventory,
any products made or processed from such inventory including all
substances, if any, commingled therewith or added thereto, and any such
inventory as is temporarily out of such Debtor's custody or possession,
including inventory held by others on consignment, inventory on the
premises of others and items in transit (herein collectively called
"INVENTORY");
(ix) all Intellectual Property and all other accounts or general
intangibles (each as defined in the Uniform Commercial Code) not
constituting Intellectual Property or Accounts;
(x) all equipment (as defined in the Uniform Commercial Code) of such
Debtor, including all Motor Vehicles (herein collectively called
"EQUIPMENT");
(xi) all Contracts;
(xii) all documents of title (as defined in the Uniform Commercial
Code) or other receipts of such Debtor covering, evidencing or representing
Inventory or Equipment (herein collectively called "DOCUMENTS");
(xiii) all rights, claims and benefits of such Debtor against any Person
arising out of, relating to or in connection with Inventory or Equipment
purchased by such Debtor, including, without limitation, any such rights,
claims or benefits against any Person storing or transporting such
Inventory or Equipment;
(xiv) the balance from time to time in the Collateral Account; and
(xv) all other tangible and intangible personal property and fixtures
of such Debtor, including, without limitation, all proceeds, products,
offspring, accessions, rents, profits, income, benefits, substitutions and
replacements of and
-11-
to any of the property of such Debtor described in the preceding clauses of
this Section 3 (including, without limitation, any proceeds of insurance
thereon and all causes of action, claims and warranties now or hereafter
held by any Debtor in respect of any of the items listed above) and, to the
extent related to any property described in said clauses or such proceeds,
products and accessions, all books, correspondence, credit files, records,
invoices and other papers, including without limitation all tapes, cards,
computer runs and other papers and documents in the possession or under the
control of such Debtor or any computer bureau or service company from time
to time acting for such Debtor.
Notwithstanding the foregoing, the Pledged Collateral does not and shall not
include any contract to which any Debtor is a party which would be rendered void
or unenforceable by reason of its being included as part of the Pledged
Collateral or which is not assignable by its terms, unless a consent to the
assignment has been received by such Debtor and/or the Administrative Agent.
(b) Concurrently with the execution of this Agreement and with the
creation or acquisition of any securities or interests in any Issuer, LLC or
Partnership the securities or interests in which are required to be pledged
hereunder, each Debtor shall deliver to the Administrative Agent (i) an Initial
Transaction Statement in the form of EXHIBIT A hereto confirming that such
Debtor has registered the pledge of its Interests and Partnership Interests
effected by this Agreement on the books of each applicable LLC or Partnership in
which it has an Interest or a Partnership Interest and (ii) an Acknowledgement
in form of EXHIBIT B hereto of each Issuer, LLC or Partnership whose securities
or interests are Pledged Securities hereunder.
(c) Each Debtor hereby delivers to the Administrative Agent all of the
certificates evidencing the Pledged Stock owned by such Debtor which is
represented by certificates, endorsed in blank or accompanied with appropriate
undated stock powers executed in blank. Each Debtor has caused the Lien of the
Administrative Agent in and to the Pledged Stock to be registered upon the books
of the Issuers of the Pledged Stock. If at any time any Pledged Stock which is
not represented by a certificate as of the date of this Agreement shall be
represented by one or more certificates, then each Debtor shall promptly deliver
the same to the Administrative Agent accompanied by stock powers duly executed
in blank, with signature properly guaranteed. All other shares of Pledged Stock
subsequently acquired by each Debtor shall be pledged to the Administrative
Agent and if represented by a certificate, certificates representing the same
shall be delivered to the Administrative Agent contemporaneously with the
acquisition thereof, accompanied by stock powers duly executed in blank.
(d) Each Debtor has executed and delivered to the Administrative
Agent such financing statements as the Administrative Agent has requested, with
respect to that portion of the Pledged Collateral in which a Lien may be
perfected by the filing of a financing statement against such Debtor. Each
Debtor has caused the Lien of the Administrative Agent in and to the Interests
and the Partnership Interests to be registered upon the books of the issuers of
such Interests and Partnership Interests. If at any time any Interests or
Partnership Interests shall be represented by one or more certificates or by any
documents that are instruments (as defined in the Uniform Com-
-12-
mercial Code), then the appropriate Obligor shall promptly deliver the same
to the Administrative Agent accompanied by duly executed transfer powers
endorsed in blank respecting such certificates or documents.
(e) Each Debtor hereby delivers to the Administrative Agent all of
the promissory notes, instruments and agreements evidencing the Pledged
Obligations held by such Debtor in suitable form for transfer by endorsement and
delivery or accompanied by duly executed instruments of transfer or assignment
in blank. If any Debtor shall become entitled to receive or shall receive any
promissory notes, instruments or agreements constituting Pledged Collateral
after the date hereof (including, without limitation, any certificate
representing any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in connection
with any reorganization of the obligor on any Pledged Obligations) in respect of
the Pledged Obligations, such Debtor agrees: (i) to accept the same as the
agent of the Administrative Agent, (ii) to hold the same in trust on behalf of
and for the benefit of the Administrative Agent, and (iii) to deliver any and
all promissory notes, instruments or agreements evidencing the same to the
Administrative Agent within ten (10) days following the receipt thereof by such
Debtor, in the exact form received, with the endorsement in blank of such Debtor
when necessary and with an appropriate undated instrument of transfer or
assignment duly executed in blank (with signature properly guaranteed), to be
held by the Administrative Agent subject to the terms of this Agreement, as
additional Pledged Collateral.
(f) Each delivery of such Pledged Securities or Pledged Obligations
after the date hereof shall be accompanied by a schedule describing the
securities and/or indebtedness theretofore and then being pledged hereunder,
which schedule shall be attached hereto and made a part hereof. Each schedule
so delivered shall supersede any prior schedules so delivered.
Section 4. CASH PROCEEDS OF COLLATERAL.
4.01 COLLATERAL ACCOUNT.
(a) There is hereby established with the Administrative Agent a cash
collateral account (the "COLLATERAL ACCOUNT") in the name and under the control
of the Administrative Agent (1) into which there shall be deposited from time to
time (i) the cash proceeds (including pursuant to any Disposition thereof) of
any of the Pledged Collateral, (ii) the cash proceeds of any Taking or
Destruction or loss of title with respect to any Real Property (including
proceeds of Casualty Events and proceeds of insurance covering the Pledged
Collateral or any Real Property) and (iii) any cash in respect of any Pledged
Collateral which the Administrative Agent is entitled to pursuant to Section
5.04 hereof and (2) into which the Debtors may from time to time deposit any
additional amounts that any of them wishes to pledge to the Administrative Agent
for the benefit of the Lenders as additional collateral security hereunder and
which, as provided in Section 10 of the Credit Agreement, it is required to
pledge as additional collateral security hereunder.
-13-
(b) The balance from time to time in the Collateral Account shall
constitute part of the Pledged Collateral hereunder and shall not constitute
payment of the Secured Obligations until applied as hereinafter provided. So
long as no Event of Default has occurred and is continuing, the Administrative
Agent shall remit the collected balance outstanding to the credit of the
Collateral Account to or upon the order of the respective Debtor as such Debtor
shall from time to time instruct; PROVIDED, HOWEVER, that any amounts deposited
in the Collateral Account in respect of any Disposition effected pursuant to
Section 9.06(j) or (k) of the Credit Agreement or Casualty Events or Takings,
Destructions or loss of title with respect to Real Property shall be disbursed
to the relevant Debtor in periodic installments upon submission of reasonable
evidence that such amount is to be applied as permitted by Section 2.10(a) of
the Credit Agreement and (ii) any amounts deposited in the Collateral Account in
respect of prepayments or reductions of Loans or Commitments under Section 2.10
of the Credit Agreement which are to be applied to LIBOR Loans as provided in
the penultimate sentence of Section 2.10(b) of the Credit Agreement shall be
held by the Administrative Agent until the end of the respective Interest
Periods of such LIBOR Loans at which time, whether or not an Event of Default
has occurred, the Administrative Agent shall cause such monies to be applied to
such LIBOR Loans. However, at any time following the occurrence and during the
continuance of an Event of Default, the Administrative Agent may (and, if
instructed by the Lenders as specified in Section 11.03 of the Credit Agreement,
shall) in its (or their) discretion apply or cause to be applied (subject to
collection) the balance from time to time outstanding to the credit of the
Collateral Account to the payment of the Secured Obligations in the manner
specified in Section 5.09 hereof. The balance from time to time in the
Collateral Account shall be subject to withdrawal only as provided herein.
(c) If requested by the Company and agreed to by any Lender that is
an Original Lender, and subject to documentation reasonably satisfactory to the
Administrative Agent and such Lender, the Administrative Agent shall designate
such Lender as a collateral sub-agent for the Administrative Agent in respect of
all or any portion of the Collateral Account and provide written notice to the
Company of such designation.
4.02 PROCEEDS OF ACCOUNTS. At any time after the occurrence and
during the continuance of an Event of Default, each Debtor shall, upon the
request of the Administrative Agent, instruct all account debtors and other
Persons obligated in respect of all Accounts to make all payments in respect of
the Accounts either (a) directly to the Administrative Agent (by instructing
that such payments be remitted to a post office box which shall be in the name
and under the control of the Administrative Agent) or (b) to one or more other
banks in the United States of America (by instructing that such payments be
remitted to a post office box which shall be in the name and under the control
of the Administrative Agent) under arrangements, in form and substance
satisfactory to the Administrative Agent, pursuant to which such Debtor shall
have irrevocably instructed such other bank (and such other bank shall have
agreed) to remit all proceeds of such payments directly to the Administrative
Agent for deposit into the Collateral Account. All payments made to the
Administrative Agent, as provided in the preceding sentence, shall be
immediately deposited in the Collateral Account. In addition to the foregoing,
each Debtor agrees that, at any time after the occurrence and during the
continuance of an Event of Default if the proceeds of any Pledged Collateral
hereunder
-14-
(including the payments made in respect of Accounts) shall be received by it,
such Debtor shall as promptly as possible deposit such proceeds into the
Collateral Account. Until so deposited, all such proceeds shall be held in
trust by such Debtor for and as the property of the Administrative Agent and
the Lenders and shall not be commingled with any other funds or property of
such Debtor.
4.03 INVESTMENT OF BALANCE IN COLLATERAL ACCOUNT. Amounts on deposit
in the Collateral Account shall be invested from time to time in such Permitted
Investments as the respective Debtor (or, after the occurrence and during the
continuance of a Default, the Administrative Agent) shall determine, which
Permitted Investments shall be held in the name and be under the control of the
Administrative Agent; PROVIDED, HOWEVER, that (i) at any time after the
occurrence and during the continuance of an Event of Default, the Administrative
Agent may (and, if instructed by the Lenders as specified in Section 11.03 of
the Credit Agreement, shall) in its (or their) discretion at any time and from
time to time elect to liquidate any such Permitted Investments and to apply or
cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 5.09 hereof and (ii) if requested
by the respective Debtor, such Permitted Investments may be held in the name and
under the control of one or more of the Lenders (and in that connection each
Lender, pursuant to Section 11.10 of the Credit Agreement,) has agreed that such
Permitted Investments shall be held by such Lender as a collateral sub-agent for
the Administrative Agent hereunder).
4.04 COVER FOR LETTER OF CREDIT LIABILITIES. Amounts deposited into
the Collateral Account as cover for Letter of Credit Liabilities under the
Credit Agreement pursuant to Section 10 thereof shall be held by the
Administrative Agent in a separate sub-account (designated "Letter of Credit
Liabilities Sub-Account") and all amounts held in such sub-account shall
constitute collateral security FIRST for the Letter of Credit Liabilities
outstanding from time to time and SECOND as collateral security for the other
Secured Obligations hereunder, which funds shall be retained by the
Administrative Agent in the Collateral Account (as provided in this Agreement as
collateral security in the first instance for the Letter of Credit Liabilities)
until such time as all Letters of Credit shall have been terminated and all of
the Letter of Credit Liabilities paid in full.
Section 5. COVENANTS; FURTHER ASSURANCES; REMEDIES. In furtherance
of the grant of the pledge and security interest pursuant to Section 3 hereof,
the Debtors hereby jointly and severally agree with each Lender and the
Administrative Agent as follows:
5.01 DELIVERY AND OTHER PERFECTION. Each Debtor shall:
(a) if there shall be received by such Debtor any of the above-
described shares, securities or Property (other than cash unless required
by the terms hereof to be delivered hereunder) required to be pledged by
such Debtor under clauses (i), (ii), (iii), (iv) and (v) of Section 3(a)
hereof or any distribution of capital shall be made on or in respect of the
Pledged Interests or any Property shall be distributed upon or with respect
to the Pledged Interests pursuant to the recapitalization or
reclassification of the capital of any LLC or Partnership, or pursuant to
the reorganization thereof, forthwith either (x) transfer and deliver to
the Administrative Agent such shares, capital, Property or securities so
received by
-15-
such Debtor (together with the certificates for any such shares and
securities duly endorsed in blank or accompanied by undated stock powers
duly executed in blank), all of which thereafter shall be held by the
Administrative Agent, pursuant to the terms of this Agreement, as part of
the Pledged Collateral or (y) take such other action as the Administrative
Agent shall deem necessary or appropriate to duly record the Lien created
hereunder in such shares, securities, capital or Property in said clauses
(i), (ii), (iii), (iv) and (v) and until such time of transfer hold such
shares, securities, money, property or capital shall be held in trust for
the sole benefit of the Lenders, segregated from of the other property of
each Debtor;
(b) deliver and pledge to the Administrative Agent any and all
Instruments, endorsed and/or accompanied by such instruments of assignment
and transfer in such form and substance as the Administrative Agent may
request; PROVIDED, HOWEVER, that so long as no Default shall have occurred
and be continuing, such Debtor may retain for collection in the ordinary
course any Instruments received by such Debtor in the ordinary course of
business and the Administrative Agent shall, promptly upon request of such
Debtor, make appropriate arrangements for making any other Instrument
pledged by such Debtor available to such Debtor for purposes of
presentation, collection or renewal (any such arrangement to be effected,
to the extent deemed appropriate by the Administrative Agent, against trust
receipt or like document);
(c) maintain the security interest created by this Agreement as a
first priority perfected security interest and shall defend such security
interest against claims and demands of all Persons whomsoever and give,
execute, deliver, file and/or record any financing statement, continuation
statement, notice, instrument, document, agreement or other papers that may
be necessary or desirable (in the judgment of the Administrative Agent) to
create, preserve, perfect or validate the security interest granted
pursuant hereto or to enable the Administrative Agent to exercise and
enforce its rights hereunder with respect to such pledge and security
interest (and each Debtor authorizes the Administrative Agent to file any
such financing or continuation statement without the signature of each
Debtor to the extent permitted by applicable law), including, without
limitation, after the occurrence and during the continuance of an Event of
Default, causing any or all of the Stock and Interests Collateral to be
transferred of record into the name of the Administrative Agent or its
nominee (and the Administrative Agent agrees that if any Stock and
Interests Collateral is transferred into its name or the name of its
nominee, the Administrative Agent will thereafter promptly give to the
respective Debtor copies of any notices and communications received by it
with respect to the Stock and Interests Collateral) and if any amount
payable under or in connection with any of the Interests or Partnership
Interests shall be or become evidenced by any instrument (including any
promissory note) or chattel paper (in each case as defined in the Uniform
Commercial Code), such instrument or chattel paper shall be immediately
delivered to the Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as Pledged Collateral
pursuant to this Agreement;
-16-
(d) keep full and accurate books and records relating to the Pledged
Collateral;
(e) furnish to the Administrative Agent upon its request statements
and schedules further identifying and describing the Copyright Collateral,
the Patent Collateral and the Trademark Collateral, respectively, and such
other reports in connection with the Copyright Collateral, the Patent
Collateral and the Trademark Collateral, as the Administrative Agent may
reasonably request, all in reasonable detail;
(f) promptly upon request of the Administrative Agent, following
receipt by the Administrative Agent of any statements, schedules or reports
pursuant to clause (e) above, modify this Agreement by amending ANNEXES 2,
3 AND/OR 4 hereto, as the case may be, to include any Copyright, Patent or
Trademark that becomes part of the Pledged Collateral under this Agreement;
(g) permit representatives of the Administrative Agent, upon
reasonable notice, at any time during normal business hours to inspect and
make abstracts from its books and records pertaining to the Pledged
Collateral;
(h) upon the occurrence and during the continuance of any Event of
Default, permit representatives of the Administrative Agent to be present
at such Debtor's place of business to receive copies of all communications
and remittances relating to the Pledged Collateral, and forward copies of
any notices or communications received by such Debtor with respect to the
Pledged Collateral, all in such manner as the Administrative Agent may
require;
(i) upon the occurrence and during the continuance of any Event of
Default, upon request of the Administrative Agent, promptly notify (and
such Debtor hereby authorizes the Administrative Agent so to notify) each
account debtor in respect of any Accounts or Instruments that such Pledged
Collateral has been assigned to the Administrative Agent for the benefit of
the Lenders hereunder, and that any payments due or to become due in
respect of such Pledged Collateral are to be made directly to the
Administrative Agent; and
(j) pay, and save the Administrative Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay
in paying, any and all stamp, excise, sales or other similar taxes which
may be payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated by
this Agreement.
5.02 OTHER FINANCING STATEMENTS AND LIENS. Without the prior written
consent of the Administrative Agent (granted with the authorization of the
Lenders as specified in Section 11.09 of the Credit Agreement), no Debtor shall
file or suffer to be on file, or authorize or permit to be filed or to be on
file, in any jurisdiction, any financing statement or like instrument with
respect to the Pledged Collateral in which the Administrative Agent is not named
as the sole secured party for the benefit of the Lenders.
-17-
5.03 PRESERVATION OF RIGHTS. Regardless of whether or not there
shall have occurred any Event of Default, the Administrative Agent may institute
and maintain or cause in its name or in the name of the Debtors to be instituted
and maintained, such suits and proceedings as the Administrative Agent may be
advised by counsel shall be necessary or expedient to prevent any impairment of
the security interest in or perfection of the Pledged Collateral in
contravention of the terms of the Basic Documents. The Debtors agree not to
knowingly take or permit to be taken any action which would impair the Pledged
Collateral or the Administrative Agent's rights in the Pledged Collateral. The
Administrative Agent shall not be required to take steps necessary to preserve
any rights against prior parties to any of the Pledged Collateral.
5.04 SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.
(a) PLEDGED SECURITIES AND PLEDGED OBLIGATIONS.
(1) The Debtors will cause the Pledged Stock to constitute at all
times, with respect to (x) any Issuer other than a Foreign Subsidiary all of
shares of each class of capital stock of each such Issuer then owned by any
Debtor and (y) any Foreign Subsidiary, such amount of the shares of capital
stock of each such Issuer as will not (subject to Section 3(a)(i) hereof) result
in greater than 65% of the total combined voting power of all classes of capital
stock of any such Issuer.
(2) So long as no Event of Default shall have occurred and be
continuing, the Debtors shall have the right to exercise all voting, consensual,
partnership, managerial and membership rights and powers and other powers of
ownership pertaining to the Pledged Securities (collectively, the "VOTING
POWERS") for all purposes not inconsistent with the terms of this Agreement, the
other Basic Documents or any other instrument or agreement referred to herein or
therein; PROVIDED, HOWEVER, that each Debtor agrees that no vote shall be cast
or membership or partnership right exercised or other action taken which, in the
Administrative Agent's reasonable judgment, would materially impair the Pledged
Securities (other than pursuant to a transaction expressly permitted under the
Credit Agreement) or which would be inconsistent with or result in any violation
of any provision of any of this Agreement or any other Basic Document. The
Administrative Agent shall execute and deliver to the Debtors or cause to be
executed and delivered to the Debtors all such proxies, powers of attorney,
dividend and other orders, and all such instruments, without recourse, as the
Debtors may reasonably request for the purpose of enabling the Debtors to
exercise the Voting Powers that they are entitled to exercise pursuant to this
Section 5.04(a)(2). Upon the occurrence and during the continuance of an Event
of Default, at the Administrative Agent's option and following written notice
from the Administrative Agent to the Debtors (such written notice to be
effective immediately upon the giving thereof as provided below) all rights of
the Debtors to exercise the Voting Powers they are entitled to exercise pursuant
to this Section 5.04(a)(2), and the obligations of the Administrative Agent
under this Section 5.04(a)(2), shall cease, and all such Voting Powers shall
thereupon become vested in the Administrative Agent, which shall have the sole
and exclusive right and authority to exercise such Voting Powers, including,
without limitation, the right to act by shareholder, partner, member or other
interestholder consent. Such authorization shall
-18-
constitute an irrevocable voting proxy from each Debtor to the Administrative
Agent or, at the Administrative Agent's option, to the Administrative Agent's
nominee.
(3) The Debtors shall be entitled to receive and retain any dividends
or distributions on the Pledged Securities to the extent that the payment of
such dividends is permitted by the Credit Agreement.
(4) If any Event of Default shall have occurred, then so long as such
Event of Default shall continue, and whether or not the Administrative Agent or
any Lender exercises any available right to declare any Secured Obligation due
and payable or seeks or pursues any other relief or remedy available to it under
applicable law or under this Agreement, the Credit Agreement, the Notes or any
other agreement relating to such Secured Obligation, all dividends and other
distributions on the Pledged Securities shall be paid directly to the
Administrative Agent and retained by it as part of the Pledged Collateral,
subject to the terms of this Agreement, and, if the Administrative Agent shall
so request in writing, the Debtors jointly and severally agree to execute and
deliver to the Administrative Agent appropriate additional dividend,
distribution and other orders and documents to that end; PROVIDED, HOWEVER, that
if such Event of Default is cured, any such dividend or distribution theretofore
paid to the Administrative Agent shall, upon request of the Debtors (except to
the extent theretofore applied to the Secured Obligations), be returned by the
Administrative Agent to the Debtors.
(5) So long as no Event of Default has occurred, and to the extent
not prohibited by the Credit Agreement, each Debtor shall be entitled to receive
and retain principal and interest payments, if any, paid on the Pledged
Obligations.
(6) Upon the occurrence and during the continuance of an Event of
Default, (i) all rights of each Debtor to receive or demand, as the case may be,
principal and interest payments which such Debtor is authorized to receive or
demand pursuant to Section 5.04(a)(5) shall cease, and all such rights shall
thereupon become vested in the Administrative Agent, which shall have the sole
and exclusive right and authority to receive or demand, as the case may be, and
retain such principal and interest payments (and all other payments in respect
of the Pledged Obligations); in addition, all principal and interest payments
(and all other payments in respect of the Pledged Obligations) which are
received by any Obligor contrary to the provisions of this Section 5.07(a)(6)
shall be received in trust for the benefit of the Administrative Agent, shall be
segregated from other property or funds of such Debtor and shall be forthwith
delivered to the Administrative Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement) and (ii) all rights of each Debtor
to exercise any rights and powers (including the right to receive and retain
payments on the Pledged Obligations) which it would otherwise be entitled to
exercise pursuant to Section 5.04(a)(5) shall cease, and all such rights shall
thereupon become vested in the Administrative Agent, which shall have the sole
and exclusive right and authority to exercise all such rights and powers until
such Event of Default shall have been cured or waived in accordance with the
Credit Agreement, at which time all such rights shall thereupon become revested
in such Debtor. Any and all money and other Property paid over to or received
by the Administrative Agent as Pledged Collateral and retained by the
Administrative Agent pursuant to the provisions of this Section 5.04(a)(6) shall
be retained by the
-19-
Administrative Agent in the Collateral Account upon receipt of money or other
property and shall be applied in accordance with the provisions of the Credit
Agreement. Upon the occurrence and during the continuance of an Event of
Default, each Debtor further agrees that so long as the Pledged Obligations
continue to be Collateral under this Agreement, such Debtor will not permit
any of the notes, instruments or other agreements evidencing the Pledged
Obligations to be amended, modified or changed in any way, nor will such
Obligor accept any waiver, indulgence, modification or other departure by any
obligor under such Pledged Obligations from any provision of the Pledged
Obligations, without first obtaining written consent of the Administrative
Agent.
(7) Each Debtor hereby represents and warrants that it has made its
own arrangements for keeping informed of changes or potential change affecting
the Pledged Securities and the Pledged Obligations (including, without
limitation, rights to convert, rights to subscribe, payment of dividends,
reorganization or other exchanges, tender offers and voting rights of the
Pledged Securities), and each Obligor agrees that the Administrative Agent shall
have no responsibility or liability for informing such Obligor of any such
changes or potential changes or for taking any action or omitting to take any
action with respect thereto.
(8) The Administrative Agent may, upon the occurrence and during the
continuation of an Event of Default, without notice and at its option, transfer
or register the Pledged Securities and the Pledged Obligations or any part
thereof, into its or its nominee's name, or endorse any of the Pledged
Obligations for negotiation, without any indication that such Pledged Collateral
is subject to the security interest hereunder.
(b) INTELLECTUAL PROPERTY.
(1) For the purpose of enabling the Administrative Agent, during the
continuance of an Event of Default, to exercise rights and remedies under
Section 5.05 hereof at such time as the Administrative Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Debtor hereby grants to the Administrative Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to such Debtor) to use, assign, license or sublicense any of
the Intellectual Property now owned or hereafter acquired by such Debtor,
wherever the same may be located, including in such license reasonable access to
all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout thereof.
(2) Notwithstanding anything contained herein to the contrary, but
subject to the provisions of Section 9.06 of the Credit Agreement that limit the
right of the Debtors to dispose of their respective property, so long as no
Event of Default shall have occurred and be continuing, the Debtors will be
permitted to exploit, use, enjoy, protect, license, sublicense, assign, sell,
dispose of or take other actions with respect to the Intellectual Property in
the ordinary course of the business of the Debtors. In furtherance of the
foregoing, unless an Event of Default shall have occurred and be continuing the
Administrative Agent shall from time to time, upon the request of the respective
Debtor, execute and deliver any instruments, certificates or other documents, in
the form so requested, that such Debtor shall have certified are appropriate (in
its judgment) to allow
-20-
it to take any action permitted above (including relinquishment of the
license provided pursuant to clause (1) immediately above as to any specific
Intellectual Property). Further, upon the payment in full of all of the
Secured Obligations and cancellation or termination of the Commitments and
Letter of Credit Liabilities or earlier expiration of this Agreement or
release of the Pledged Collateral, the Administrative Agent shall grant back
to the Debtors the license granted pursuant to clause (1) immediately above.
The exercise of rights and remedies under Section 5.05 hereof by the
Administrative Agent shall not terminate the rights of the holders of any
licenses or sublicenses theretofore granted by the Debtors in accordance with
the first sentence of this clause (2).
(c) MOTOR VEHICLES. At any time after the occurrence and during the
continuance of an Event of Default, each Debtor shall, upon the request of the
Administrative Agent, deliver to the Administrative Agent originals of the
certificates of title or ownership for the Motor Vehicles, and any other
Equipment covered by certificates of title or ownership, owned by it with the
Administrative Agent listed as lienholder.
5.05 EVENTS OF DEFAULT; REMEDIES; ETC. During the period during which
an Event of Default shall have occurred and be continuing:
(a) each Debtor shall, at the request of the Administrative Agent,
assemble the Pledged Collateral owned by it at such place or places,
reasonably convenient to both the Administrative Agent and such Debtor,
designated in its request;
(b) the Administrative Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the Pledged Collateral
and may extend the time of payment, arrange for payment in installments, or
otherwise modify the terms, of any of the Pledged Collateral;
(c) the Administrative Agent shall have all of the rights and
remedies with respect to the Pledged Collateral of a secured party under
the Uniform Commercial Code (whether or not the Uniform Commercial Code is
in effect in the jurisdiction where the rights and remedies are asserted)
and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Pledged
Collateral as if the Administrative Agent were the sole and absolute owner
thereof (and each Debtor agrees to take all such action as may be
appropriate to give effect to such right);
(d) the Administrative Agent in its discretion may, in its name or in
the name of the Debtors or otherwise, demand, xxx for, collect or receive
any money or property at any time payable or receivable on account of or in
exchange for any of the Pledged Collateral, but shall be under no
obligation to do so; and
-21-
(e) the Administrative Agent may, upon ten business days' prior
written notice to the Debtors of the time and place, with respect to the
Pledged Collateral or any part thereof that shall then be or shall
thereafter come into the possession, custody or control of the
Administrative Agent, the Lenders or any of their respective agents, sell,
lease, assign or otherwise dispose of all or any part of such Pledged
Collateral, at such place or places as the Administrative Agent deems best,
and for cash or for credit or for future delivery (without thereby assuming
any credit risk), at public or private sale, without demand of performance
or notice of intention to effect any such disposition or of the time or
place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and the Administrative Agent or any Lender
or anyone else may be the purchaser, lessee, assignee or recipient of any
or all of the Pledged Collateral so disposed of at any public sale (or, to
the extent permitted by law, at any private sale) and thereafter hold the
same absolutely, free from any claim or right of whatsoever kind, including
any right or equity of redemption (statutory or otherwise), of the Debtors,
any such demand, notice and right or equity being hereby expressly waived
and released. In the event of any sale, assignment, or other disposition
of any of the Trademark Collateral, the goodwill connected with and
symbolized by the Trademark Collateral subject to such disposition shall be
included, and the Debtors shall supply to the Administrative Agent or its
designee, for inclusion in such sale, assignment or other disposition, all
Intellectual Property relating to such Trademark Collateral. The
Administrative Agent may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may
be made at any time or place to which the sale may be so adjourned. In
case any sale of all or any part of the Pledged Collateral is made on
credit or for future delivery, the Pledged Collateral so sold may be
retained by the Administrative Agent until the sale price is paid in full
by the purchaser or purchasers thereof, but the Administrative Agent shall
not incur any liability in case any such purchaser or purchasers shall fail
to take up and pay for the Pledged Collateral so sold and, in case of any
such failure, such Pledged Collateral may be sold again upon like notice.
For purposes hereof, (i) a written agreement to purchase the Pledged
Collateral or any portion thereof shall be treated as a sale thereof, (ii)
the Administrative Agent shall be free to carry out such sale pursuant to
such agreement and (iii) no Debtor shall be entitled to the return of the
Pledged Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Administrative Agent shall have entered into such
an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of
sale herein conferred upon it, the Administrative Agent may proceed by a
suit or suits at law or in equity to foreclose upon the Pledged Collateral
and to sell the Pledged Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court appointed receiver. Any sale pursuant
to the provisions of this Section 5.05 shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-504(3) of the
Uniform Commercial Code or its equivalent in other jurisdictions. If under
mandatory requirements of applicable law, the Administrative Agent shall be
required to make disposition of the Pledged Collateral within a period of
time that does not
-22-
permit the giving of notice to the Debtors as herein before provided, the
Administrative Agent need give the Debtors only such notice of disposition
as shall be reasonably practicable in view of such mandatory requirements
of law.
The proceeds of each collection, sale or other disposition under this
Section 5.05, including by virtue of the exercise of the license granted to the
Administrative Agent in Section 5.04(b) hereof, shall be applied in accordance
with Section 5.09 hereof.
The Debtors recognize that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Administrative Agent may be compelled, with respect to any
sale of all or any part of the Pledged Securities or Pledged Obligations, to
limit purchasers to those who will agree, among other things, to acquire such
Pledged Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. The Debtors acknowledge that any such
private sales may be at prices and on terms less favorable to the Administrative
Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agree that any such private sale shall
be deemed to have been made in a commercially reasonable manner and that the
Administrative Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Securities or Pledged Obligations
for the period of time necessary to permit the respective Issuer or issuer
thereof to register it for public sale.
Each of the Debtors further agrees to use its reasonable best efforts
to do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Pledged Securities or Pledged
Obligations pursuant to this Section 5.05 valid and binding and in compliance
with any and all other applicable Requirements of Law. Each of the Debtors
further agrees that a breach of any of the covenants contained in this Section
5.05 will cause irreparable injury to the Administrative Agent and the Lenders,
that the Administrative Agent and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 5.05 shall be specifically enforceable against such
Debtor, and, to the extent permitted by law, such Debtor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred and is
continuing.
5.06 DEFICIENCY. If the proceeds of sale, collection or other
realization of or upon the Pledged Collateral pursuant to Section 5.05 hereof
are insufficient to cover the costs and expenses of such realization and the
payment in full of the Secured Obligations, the Debtors shall remain liable for
any deficiency.
5.07 REMOVALS, NAME CHANGE, ETC. Without at least 30 days' prior
written notice to the Administrative Agent, no Debtor shall (i) maintain any of
its books and records with respect to the Pledged Collateral at any office or
maintain its principal place of business at any place other than at the address
set forth in SCHEDULE 2 hereto, or permit any Inventory or Equipment to be
located anywhere, other than at one of the locations identified in ANNEX 6
hereto or at the premises of a Person processing or storing such Inventory, if
such Person has executed Uniform Commercial Code Financing Statements naming
such Debtor as secured party (which financing statements are hereby
-23-
assigned to the Administrative Agent) or such Person has executed a supplier
subordination agreement satisfactory to the Majority Lenders in form and
substance or in transit from one of such locations to another or (ii) change
its corporate name, or the name under which it does business, from the name
shown on the signature pages hereto.
5.08 PRIVATE SALE. No Creditor shall incur liability as a result of
the sale of the Pledged Collateral, or any part thereof, at any private sale
pursuant to Section 5.05 hereof conducted in a commercially reasonable manner.
Each Debtor hereby waives any claims against any Creditor arising by reason of
the fact that the price at which the Pledged Collateral may have been sold at
any such private sale held in a commercially reasonable manner was less than the
price that might have been obtained at a public sale or was less than the
aggregate amount of the Secured Obligations, even if the Administrative Agent
accepts the first offer received and does not offer the Pledged Collateral to
more than one offeree.
5.09 APPLICATION OF PROCEEDS. Except as otherwise herein expressly
provided and except as provided below in this Section 5.09, the proceeds of any
collection, sale or other realization of all or any part of the Pledged
Collateral pursuant hereto, and any other cash at the time held by the
Administrative Agent under Section 4 hereof or this Section 5, shall be applied
by the Administrative Agent:
FIRST, to the payment of the reasonable costs and expenses of such
collection, sale or other realization, including reasonable out-of-pocket
costs and expenses of the Administrative Agent and the fees and expenses of
its agents and counsel, and all expenses incurred and advances made by the
Administrative Agent in connection therewith;
NEXT, to the payment in full of the Secured Obligations, in each case
equally and ratably in accordance with the respective amounts thereof then
due and owing or as the Lenders holding the same may otherwise agree; and
FINALLY, to the payment to the respective Debtor, or its successors or
assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining.
As used in this Section 5, "PROCEEDS" of Pledged Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Pledged Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Debtors or any issuer of or obligor on
any of the Pledged Collateral. Notwithstanding the foregoing, the proceeds of
any cash or other amounts held in the "Letter of Credit Liabilities Sub-Account"
of the Collateral Account pursuant to Section 4.04 hereof shall be applied FIRST
to the Letter of Credit Liabilities outstanding from time to time and SECOND to
the other Secured Obligations in the manner provided above in this Section 5.09.
5.10 ATTORNEY-IN-FACT. Without limiting any rights or powers granted
by this Agreement to the Administrative Agent while no Event of Default has
occurred and is continuing, upon the occurrence and during the continuance of
any Event of Default the
-24-
Administrative Agent is hereby appointed the attorney-in-fact of each Debtor
for the purpose of carrying out the provisions of this Section 5 and taking
any action and executing any instruments that the Administrative Agent may
deem necessary or advisable to accomplish the purposes hereof, which
appointment as attorney-in-fact is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, upon and during the
continuance of any Event of Default, so long as the Administrative Agent
shall be entitled under this Section 5 to make collections in respect of the
Pledged Collateral, the Administrative Agent shall have the right and power
to receive, endorse and collect all checks made payable to the order of any
Debtor representing any dividend, payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same. Each Debtor agrees, in the absence of willful wrongdoing or gross
negligence, that neither the Administrative Agent nor any of its agents,
designees or attorneys-in-fact will be liable for any acts of commission or
omission, or for any error of judgment or mistake of fact or law with respect
to the exercise of the power of attorney granted under this Section 5.10.
5.11 PERFECTION. Prior to or concurrently with the execution and
delivery of this Agreement and upon the acquisition or creation of any
securities of or interests in any Issuer, LLC or Partnership the securities or
interests in which are required to be pledged hereunder, each Debtor shall (i)
file such financing statements and other documents in such offices as the
Administrative Agent may request to perfect the security interests granted by
Section 3 of this Agreement, (ii) deliver to the Administrative Agent all
certificates identified in ANNEX 1A hereto, accompanied by undated stock powers
duly executed in blank and (iii) deliver to the Administrative Agent all Pledged
Obligations identified on SCHEDULE 1B hereto.
5.12 TERMINATION. When all Secured Obligations shall have been paid
in full and the Commitments of the Lenders under the Credit Agreement and all
Letter of Credit Liabilities shall have expired or been terminated, this
Agreement shall terminate, and the Administrative Agent shall forthwith cause to
be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Pledged
Collateral and money received in respect thereof, to or on the order of the
respective Debtor and to be released and canceled all licenses and rights
referred to in Section 5.04(b) hereof. The Administrative Agent shall also
execute and deliver to the respective Debtor upon such termination or upon the
sale or other disposition of Property permitted by Section 9.06 of the Credit
Agreement such Uniform Commercial Code termination statements, certificates for
terminating the Liens on the Motor Vehicles and such other documentation as
shall be reasonably requested by the respective Debtor to effect the termination
and release of the Liens on the Pledged Collateral.
5.13 EXPENSES. The Debtors jointly and severally agree to pay to the
Administrative Agent all reasonable out-of-pocket expenses (including reasonable
expenses for legal services of every kind) of, or incident to, the enforcement
of any of the provisions of this Section 5, or performance by the Administrative
Agent of any obligations of the Debtors in respect of the Pledged Collateral
which the Debtors have failed or refused to perform, or any actual or attempted
sale, or any exchange, enforcement, collection, compromise or settlement in
respect of any of the Pledged
-25-
Collateral, and for the care of the Pledged Collateral and defending or
asserting rights and claims of the Administrative Agent in respect thereof,
by litigation or otherwise, including expenses of insurance, and all such
expenses shall be Secured Obligations to the Administrative Agent secured
under Section 3 hereof.
5.14 FURTHER ASSURANCES. Each Debtor agrees that, from time to time
upon the written request of the Administrative Agent, such Debtor will execute
and deliver such further documents and do such other acts and things as the
Administrative Agent may reasonably request in order fully to effect the
purposes of this Agreement.
5.15 IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUERS, LLCS AND
PARTNERSHIPS. Each of the Debtors hereby authorizes and instructs each Issuer,
LLC and Partnership to comply with any instruction received by it from the
Administrative Agent in writing that (a) states that an Event of Default has
occurred and is continuing and (b) is otherwise in accordance with the terms of
this Agreement and any other Basic Document to which it is a party, without any
other or further instructions from such Debtor, and such Debtor agrees that each
Issuer, LLC and Partnership shall be fully protected in so complying.
5.16 EFFECT OF SALE, ETC. (a) Any sale or resales pursuant to the
provisions of this Agreement, whether under any right or power granted hereby or
thereby or pursuant to any legal proceedings, shall operate to divest each
Debtor of all right, title, interest, claim and demand whatsoever either at law
or in equity, of, in and to the Pledged Collateral, or any part thereof, so
sold, and any Property so sold shall be free and clear of any and all rights of
redemption by, through or under such Debtor. At any such sale any Lender may
bid for and purchase the Pledged Collateral sold and may make payment therefor
as set forth in clause (b) of this Section 5.16, and any such Lender so
purchasing any such Pledged Collateral, upon compliance with the terms of sale,
may hold, retain and dispose of such Pledged Collateral without further
accountability.
(b) The receipt by the Administrative Agent, or by any Person
authorized under any judicial proceedings to make such sale, of the proceeds of
any such sale shall be a sufficient discharge to any purchaser of the Pledged
Collateral, or of any part thereof, sold as aforesaid; and no such purchaser
shall be bound to see to the application of such proceeds, or be bound to
inquire as to the authorization, necessity or propriety of any such sale. In
the event that, at any such sale, any Lender is the successful purchaser, it
shall be entitled, for the purpose of making settlement or payment, to use and
apply such Pledged Collateral to the Secured Obligations by crediting thereon
the amount apportionable and applicable thereto out of the net proceeds of such
sale.
Section 6. MISCELLANEOUS.
6.01 NO WAIVER. No failure on the part of the Administrative Agent
or any of its agents to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Administrative
Agent or any of its agents of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.
-26-
6.02 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York without regard to
principles of conflicts of law thereof.
6.03 NOTICES. All notices, requests, consents and demands hereunder
shall be in writing and telecopied or delivered to the intended recipient at its
"Address for Notices" specified pursuant to Section 12.02 of the Credit
Agreement and shall be deemed to have been given at the times specified in said
Section 12.02.
6.04 WAIVERS, ETC. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by each Debtor
and the Administrative Agent (with the consent of the Lenders as specified in
Section 11.09 of the Credit Agreement). Any such amendment or waiver shall be
binding upon each Creditor, each holder of any of the Secured Obligations and
each Debtor.
6.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of each
Debtor, the Creditors and each holder of any of the Secured Obligations
(PROVIDED, HOWEVER, that no Debtor shall assign or transfer its rights or
obligations hereunder without the prior written consent of the Creditors).
6.06 CAPTIONS. The captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.
6.07 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
6.08 AGENTS. The Administrative Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith.
6.09 SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Creditors in order
to carry out the intentions of the parties hereto as nearly as may be possible
and (ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
6.10 ADMINISTRATIVE AGENT NOT A MEMBER. Nothing contained in this
Agreement shall be construed or interpreted (a) to transfer to the
Administrative Agent or any Lender any of the obligations of a partner of a
Partnership or a member or manager of any LLC or (b) to constitute the
Administrative Agent or any Lender a partner of a Partnership or a member or
manager of any LLC.
-27-
6.11 RESTORATION OF RIGHTS AND REMEDIES. If the Administrative Agent
shall have instituted any proceeding to enforce any right or remedy under this
Agreement and such proceeding shall have been discontinued or abandoned for any
reason, or shall have been determined adversely to the Administrative Agent,
then and in every such case the Administrative Agent and the Debtors and the
Lenders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions under this Agreement and
under the other Basic Documents, and thereafter all rights and remedies of the
Administrative Agent shall continue as though no such proceeding had been
instituted.
6.12 CUMULATIVE REMEDIES. No remedy under this Agreement is intended
to be exclusive of any other remedy, but each and every remedy shall be
cumulative and in addition to any and every other remedy given under this
Agreement or otherwise existing; nor shall the giving, taking or enforcement of
any other or additional security, collateral or guaranty for the payment or
performance of the Secured Obligations operate to prejudice, waive or affect the
security of this Agreement or any rights, powers or remedies under this
Agreement, nor shall the Administrative Agent or any Lender be required to look
first to, enforce or exhaust any such other or additional security, collateral
or guaranties.
6.13 CONSENT. Each Debtor hereby consents that from time to time,
before or after the occurrence or existence of any Event of Default, with or
without notice to or assent from such Obligor, any security at any time held by
or available to the Administrative Agent for any of the Secured Obligations, or
any other security at any time held by or available to the Administrative Agent
for any obligation of any other Person secondarily or otherwise liable for any
of the Secured Obligations, may be exchanged, surrendered, or released and any
of the Secured Obligations may be changed, altered, renewed, extended,
continued, surrendered, compromised, waived or released, in whole or in part, as
the Administrative Agent or any holder thereof may see fit, and each Debtor
shall remain bound under this Agreement notwithstanding any such exchange,
surrender, release, change, alteration, renewal, extension, continuance,
compromise, waiver or release.
6.14 WAIVERS BY DEBTORS. (a) Except as otherwise provided in this
Agreement, THE DEBTORS HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE ADMINISTRATIVE AGENT'S TAKING
POSSESSION OR THE ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF THE PLEDGED
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND
HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE
DEBTORS WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED
STATES OR OF ANY STATE, and, to the full extent permitted by applicable law,
each Debtor hereby further waives:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Administrative Agent's gross
negligence, bad faith or willful misconduct;
-28-
(ii) all other requirements as to the time, place and terms of sale or
other requirements, with respect to the enforcement of the Administrative
Agent's rights and powers hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
marshaling of assets, extension or moratorium, existing at law or in
equity, by statute or otherwise, now or hereafter in force, in order to
prevent or delay the enforcement of this Agreement or the sale or other
disposition of the Pledged Collateral or any portion thereof, and each
Debtor, for itself and all who may claim under it, insofar as it now or
hereafter lawfully may, hereby waives all such rights.
(b) Each Debtor hereby waives notice of acceptance of this Agreement
and of extensions of credit under the Basic Documents or under any other
agreement, note, document or instrument now or at any time or times hereafter
executed by such Debtor and delivered to the Administrative Agent or any Lender.
Each Debtor further waives presentment and demand for payment of any of the
Secured Obligations, protest and notice of dishonor or default with respect to
any of the Secured Obligations, and all other notices to which such Obligor
might otherwise be entitled, except as otherwise expressly provided in this
Agreement or in the other Basic Documents.
(c) Each Debtor (to the extent that it may lawfully do so) covenants
that it will not at any time insist upon or plead, or in any manner claim or
take the benefit or advance of, any stay (except in connection with a pending
appeal), valuation, appraisal, redemption or extension law now or at any time
hereafter in force that, but for this waiver, might be applicable to any sale
made under any judgment, order or decree based on this Agreement or any other
Basic Document; and each Debtor (to the extent that it may lawfully do so)
hereby expressly waives and relinquishes all benefit and advance of any and all
such laws and hereby covenants that it will not hinder, delay or impede the
execution of any power in this Agreement or therein granted and delegated to the
Administrative Agent, but that it will suffer and permit the execution of every
such power as though no such law or laws had been made or enacted.
6.15 ADDITIONAL COLLATERAL. Without notice or consent of any Debtor
and without impairment of the security interests and rights created by this
Agreement, the Administrative Agent may accept from any person or persons
additional collateral or other security for the Secured Obligations. Neither
the creation of the security interests created hereunder nor the acceptance of
any such additional collateral or security shall prevent the Administrative
Agent from resorting to such additional collateral or security or to the Pledged
Collateral, in any order without affecting the Administrative Agent's rights
hereunder.
6.16 OBLIGATIONS ABSOLUTE. The liability of the Debtors under this
Agreement shall remain in full force and effect without regard to, and shall not
be released, suspended, discharged, terminated or otherwise affected by (a) any
change in the time, place or manner of payment of all or any of the Secured
Obligations, or in any other term of the Basic Documents, the Notes, any waiver,
indulgence, renewal, extension, amendment or modification of or addition,
consent or supplement to or deletion from or any other action or inaction under
or in respect of the Notes or any other Basic Document
-29-
or any assignment or transfer thereof; (b) any lack of validity or
enforceability, in whole or in part, of the Notes or any other Basic
Document; (c) any furnishing of any additional security for the Secured
Obligations or any acceptance thereof or any release or non-perfection of any
security interest in the Pledged Collateral; (d) any limitation on any
party's liability or obligations under the Notes or any other Basic Document;
(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to a Debtor, or
any action taken with respect to this Agreement by any trustee or receiver,
or by any court, in any such proceeding, whether or not any Debtor shall have
notice or knowledge of any of the foregoing; (f) any exchange, release or
amendment or waiver of or consent to departure from any agreement pursuant to
which a Lien is created in favor of the Administrative Agent for the benefit
of the Holders, pursuant to which a person other than any Debtor has granted
a security interest; or (g) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Debtor.
6.17 WAIVER OF JURY TRIAL. Each Debtor and the Administrative Agent
each hereby irrevocably waives all right to a trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Agreement or the
transactions contemplated hereby.
[Signature Pages Follow]
-30-
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the day and year first above
written.
IMCO RECYCLING INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
PHOENIX SMELTING CORPORATION
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMCO INVESTMENT COMPANY
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
INTERAMERICAN ZINC, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMCO ENERGY CORP.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
-31-
IMCO INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMCO RECYCLING OF CALIFORNIA, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMCO RECYCLING OF INDIANA INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMCO RECYCLING OF ILLINOIS INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
METAL XXXX, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
-32-
IMCO MANAGEMENT PARTNERSHIP L.P.
By: IMCO Recycling Inc., its
General Partner
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMCO INDIANA PARTNERSHIP L.P.
By: IMCO Energy Corp., its
General Partner
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMCO RECYCLING OF LOUDON INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMSAMET, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMSAMET OF IDAHO, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
-33-
IMSAMET OF UTAH, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
IMCO ACQUISITION INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
PITTSBURG ALUMINUM, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Administrative Agent
By: /s/ XXXXXXXXX XXXXX
----------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Vice President
-34-
