SECURITY AGREEMENT
among
UNIVERSAL COMPRESSION HOLDINGS, INC.,
TW ACQUISITION CORPORATION,
CERTAIN OF ITS SUBSIDIARIES
and
BANKERS TRUST COMPANY,
as Collateral Agent
Dated as of February 20, 1998
TABLE OF CONTENTS
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ARTICLE I SECURITY INTERESTS ............................................. 2
1.1. Grant of Security Interests .................................... 2
1.2. Power of Attorney .............................................. 2
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS ............. 3
2.1. Necessary Filings .............................................. 3
2.2. No Liens ....................................................... 3
2.3. Other Financing Statements ..................................... 3
2.4. Chief Executive Office; Records ................................ 3
2.5. Location of Inventory and Equipment ............................ 4
2.6. Recourse ....................................................... 4
2.7. Trade Names; Change of Name .................................... 4
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS ......................................... 5
3.1. Additional Representations and Warranties ...................... 5
3.2. Maintenance of Records ......................................... 5
3.3. Direction to Account Debtors; Contracting Parties;
etc ............................................................ 6
3.4. Modification of Terms; etc ..................................... 6
3.5. Collection ..................................................... 6
3.6. Instruments .................................................... 6
3.7. Further Actions ................................................ 7
ARTICLE IV SPECIAL PROVISIONS CONCERNING MARKS ........................... 7
4.1. Additional Representations and Warranties ...................... 7
4.2. Licenses and Assignments ....................................... 7
4.3. Infringements .................................................. 7
4.4. Preservation of Marks .......................................... 7
4.5. Maintenance of Registration .................................... 8
4.6. Future Registered Marks ........................................ 8
4.7. Remedies ....................................................... 8
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS AND
COPYRIGHTS ........................................................... 8
5.1. Additional Representations and Warranties ...................... 9
5.2. Licenses and Assignments ....................................... 9
5.3. Infringements .................................................. 9
5.4. Maintenance of Patent .......................................... 9
5.5. Prosecution of Patent Application .............................. 9
5.6. Other Patents and Copyrights ................................... 10
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5.7. Remedies ....................................................... 10
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL .......................... 10
6.1. Protection of Collateral Agent's Security ...................... 10
6.2. Warehouse Receipts Non-negotiable .............................. 10
6.3. Further Actions ................................................ 10
6.4. Financing Statements ........................................... 11
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT ................. 11
7.1. Remedies; Obtaining the Collateral Upon Default ................ 11
7.2. Remedies; Disposition of the Collateral ........................ 12
7.3. Waiver of Claims ............................................... 13
7.4. Application of Proceeds ........................................ 13
7.5. Remedies Cumulative ............................................ 16
7.6. Discontinuance of Proceedings .................................. 16
ARTICLE VIII INDEMNITY ................................................... 16
8.1. Indemnity ...................................................... 16
8.2. Indemnity Obligations Secured by Collateral;
Survival ....................................................... 17
ARTICLE IX DEFINITIONS ................................................... 18
ARTICLE X THE COLLATERAL AGENT ........................................... 22
10.1. Appointment ................................................... 22
10.2. Nature of Duties .............................................. 22
10.3. Lack of Reliance on the Collateral Agent ...................... 23
10.4. Certain Rights of the Collateral Agent ........................ 24
10.5. Reliance ...................................................... 24
10.6. Indemnification ............................................... 24
10.7. The Collateral Agent in its Individual Capacity ............... 25
10.8. Holders ....................................................... 25
10.9. Resignation by the Collateral Agent ........................... 25
10.10. Fees and Expenses of Collateral Agent ......................... 26
ARTICLE XI MISCELLANEOUS ................................................. 26
11.1. Notices ....................................................... 26
11.2. Waiver; Amendment ............................................. 27
11.3. Obligations Absolute .......................................... 27
11.4. Successors and Assigns ........................................ 27
11.5. Headings Descriptive .......................................... 27
11.6. Severability .................................................. 27
11.7. GOVERNING LAW ................................................. 27
11.8. Assignor's Duties ............................................. 28
11.9. Termination; Release .......................................... 28
(ii)
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11.10. Counterparts .................................................. 29
11.11. Additional Assignors ......................................... 29
ANNEX A Schedule of Chief Executive Offices/Record Locations
ANNEX B Schedule of Inventory and Equiment Locations
ANNEX C Schedule of Trade, Fictitious and Other Names
ANNEX D Schedule of Marks
ANNEX E Schedule of License Agreements and Assignments
ANNEX F Schedule of Patents and Applications
ANNEX G Schedule of Copyrights and Applications
ANNEX H Form of Assignment of Security Interest in United
States Trademarks and Patents
ANNEX I Form of Assignment of Security Interest in United
States Copyrights
(iii)
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of February 20, 1998, between each of the
undersigned assignors (each an "Assignor" and together with any other entity
that becomes an assignor hereunder pursuant to Section 11.11 hereof, the
"Assignors") in favor of BANKERS TRUST COMPANY, as Collateral Agent (the
"Collateral Agent") for the benefit of the Secured Creditors (as defined below).
Except as otherwise defined herein, terms used herein and defined in the Credit
Agreement shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, Universal Compression Holdings, Inc. ("Holdings"), TW
Acquisition Corporation (the "Borrower", which term shall mean Universal
Compression, Inc. from and after the consummation of the Merger), the lenders
from time to time party thereto (the "Banks"), and Bankers Trust Company, as
Agent (together with any successor agent, the "Agent"), have entered into a
Credit Agreement, dated as of February 20, 1998 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrower as contemplated therein (the Banks, the Agent and the Pledgee are
herein called the "Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection Agreements or Other Hedging Agreements with
one or more Banks or any affiliate thereof (each such Bank or affiliate, even if
the respective Bank subsequently ceases to be a Bank under the Credit Agreement
for any reason, together with such Bank's or affiliate's successors and assigns,
if any, collectively, the "Other Creditors," and together with the Bank
Creditors, the "Secured Creditors");
WHEREAS, the Borrower may, with the written consent of the Collateral
Agent, at any time and from time to time enter into, or guarantee obligations of
its Subsidiaries under, one or more Interest Rate Protection Agreements or Other
Hedging Agreements with one or more Other Creditors;
WHEREAS, pursuant to the Holdings Guaranty, Holdings has guaranteed to
the Secured Creditors the payment when due of all of the Guaranteed Obligations
as described therein;
WHEREAS, pursuant to, and after the execution and delivery of, the
Subsidiaries Guaranty, each Subsidiary Guarantor has jointly and severally
guaranteed to the Secured Creditors the payment when due of all Guaranteed
Obligations as described therein;
WHEREAS, it is a condition precedent to the making of Loans to, and
the issuance of Letters of Credit for the account of, the Borrower under the
Credit Agreement that each Assignor shall have created and delivered to the
Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans to, and the issuance of Letters of Credit for the account of, the Borrower
under the Credit
Agreement and the entering into by the Borrower of Interest Rate Protection
Agreements or Other Hedging Agreements and, accordingly, each Assignor desires
to enter into this Agreement in order to satisfy the condition described in the
preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the prompt and
complete payment and performance when due of all of the Obligations, each
Assignor does hereby sell, assign and transfer unto the Collateral Agent, and
does hereby grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest of first priority (subject to
Permitted Liens) in, all of the right, title and interest of the Assignor in, to
and under all of the following, whether now existing or hereafter from time to
time acquired: (i) each and every Receivable, (ii) all Contracts, together with
all Contract Rights arising thereunder, (iii) all Inventory, (iv) the Cash
Collateral Account and all monies, securities and instruments deposited or
required to be deposited in such Cash Collateral Account, (v) all Equipment,
(vi) all Marks, together with the registrations and right to all renewals
thereof, and the goodwill of the business of the Assignor symbolized by the
Marks, (vii) all Patents and Copyrights, and all reissues, renewals or
extensions thereof, (viii) all Intellectual Property Licensee Rights, (ix) all
computer programs of such Assignor and all intellectual property rights therein
and all other proprietary information of such Assignor, including, but not
limited to, Trade Secrets, (x) all other Goods, General Intangibles, Chattel
Paper, Documents and Instruments (other than the Pledged Securities), and (xi)
all Proceeds and products of any and all of the foregoing (all of the above,
collectively, the "Collateral").
(b) The security interests of the Collateral Agent under this
Agreement extend to all Collateral of the kind which is the subject of this
Agreement which the Assignor may acquire at any time during the continuation of
this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of the Assignor or otherwise), in the Collateral Agent's discretion, to
take any action and to execute any instrument which the Collateral Agent may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement, which appointment as attorney is coupled with an interest.
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ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and recordings
necessary to create, preserve, protect and perfect the security interest granted
by such Assignor to the Collateral Agent hereby in respect of the Collateral
located in the states of Texas, New Mexico, Oklahoma, Louisiana and Delaware
(the "Filing States"), other than Equipment leased by the Assignors to third
parties in the ordinary course of business and located in states other than in
the Filing States, have been or shall have been accomplished and the security
interest granted to the Collateral Agent pursuant to this Agreement in and to
such Collateral constitutes or shall constitute a perfected security interest
therein prior to the rights of all other Persons therein and subject to no other
Liens (other than Permitted Liens ) and is or shall be entitled to all the
rights, priorities and benefits afforded by the Uniform Commercial Code or other
relevant law as enacted in any relevant jurisdiction to perfected security
interests.
2.2. No Liens. Each Assignor is, and as to Collateral acquired by it
from time to time after the date hereof the Assignor will be, the owner of all
Collateral free from any Lien, security interest, encumbrance or other right,
title or interest of any Person (other than Liens created hereby or Permitted
Liens), and the Assignor shall defend the Collateral against all claims and
demands (other than immaterial claims and demands) of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.
2.3. Other Financing Statements. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) on file or of record in any relevant jurisdiction
covering or purporting to cover any interest of any kind in the Collateral
(other than financing statements filed in respect of Permitted Liens), and so
long as the Termination Date has not occurred, each Assignor will not execute or
authorize to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction) or
statements relating to the Collateral, except financing statements filed or to
be filed in respect of and covering the security interests granted hereby by
such Assignor or in connection with Permitted Liens.
2.4. Chief Executive Office; Records. The chief executive office of
such Assignor is located at the address set forth on Annex A for such Assignor.
Such Assignor will not move its chief executive office except to such new
location as such Assignor may establish in accordance with the last sentence of
this Section 2.4. The originals of all documents evidencing all Receivables and
Contract Rights and Trade Secrets of the Assignor and the only original books of
account and records of such Assignor relating thereto are, and will continue to
be, kept at such chief executive office, at such other locations shown on Annex
A hereto or at such new locations as the Assignor may establish in accordance
with the last sentence of this Section 2.4. All Receivables and Contract Rights
of such Assignor are, and will continue to be, maintained at, and controlled and
directed (including, without limitation, for general accounting purposes) from,
the
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office locations described above. No Assignor shall establish new locations for
such offices until (i) it shall have given to the Collateral Agent not less than
30 days' prior written notice of its intention so to do, clearly describing such
new location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new location,
it shall have taken all necessary action to maintain the security interest of
the Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect and (iii) at the request of
the Collateral Agent, it shall have furnished an opinion of counsel acceptable
to the Collateral Agent to the effect that all financing or continuation
statements and amendments or supplements thereto have been filed in the
appropriate filing office or offices, and all other necessary actions
(including, without limitation, the payment of all filing fees and taxes, if
any, payable in connection with such filings) have been taken, in order to
perfect (and maintain the perfection and priority of) the security interest
granted hereby.
2.5. Location of Inventory and Equipment. All Inventory and Equipment
held on the date hereof by the Assignor is located at one of the locations shown
on Annex B hereto. The Assignor agrees that all Inventory and all Equipment now
held or subsequently acquired by it shall be kept at (or shall be in transport
to) any one of the locations shown on Annex B hereto, or such new location as
the Assignor may establish in accordance with the last sentence of this Section
2.5. Any Assignor may establish a new location for Inventory and Equipment only
if (i) it shall have given to the Collateral Agent not less than 30 days' prior
written notice of its intention so to do, clearly describing such new location
and providing such other information in connection therewith as the Collateral
Agent may reasonably request, (ii) with respect to such new location, as
promptly as practicable and in no event later than 30 days after the
establishment thereof, it shall have taken all necessary action to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect and
(iii) at the request of the Collateral Agent, it shall have furnished an opinion
of counsel acceptable to the Collateral Agent to the effect that all financing
or continuation statements and amendments or supplements thereto have been filed
in the appropriate filing office or offices, and all other necessary actions
(including, without limitation, the payment of all filing fees and taxes, if
any, payable in connection with such filings) have been taken, in order to
perfect (and maintain the perfection and priority of) the security interest
granted hereby.
2.6. Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the other
Credit Documents, in the Interest Rate Protection Agreements or Other Hedging
Agreements (collectively, the "Financing Documents") and otherwise in writing in
connection herewith or therewith.
2.7. Trade Names; Change of Name. Each Assignor does not have or
operate in any jurisdiction under, or in the preceding 12 months has not had or
has not operated in any jurisdiction under, any trade names, fictitious names or
other names (including, without limitation, any names of divisions or
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operations) except its legal name and such other trade, fictitious or other
names as are listed on Annex C hereto. No Assignor shall change its legal name
or assume or operate in any jurisdiction under any trade, fictitious or other
name except those names listed on Annex C hereto and new names (including,
without limitation, any names of divisions or operations) established in
accordance with the last sentence of this Section 2.7. No Assignor shall assume
or operate in any jurisdiction under any new trade, fictitious or other name
until (i) it shall have given to the Collateral Agent not less than 30 days'
prior written notice of its intention so to do, clearly describing such new name
and the jurisdictions in which such new name shall be used and providing such
other information in connection therewith as the Collateral Agent may reasonably
request, (ii) with respect to such new name, it shall have taken all necessary
action to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect and (iii) at the request of the Collateral Agent, it shall
have furnished an opinion of counsel acceptable to the Collateral Agent to the
effect that all financing or continuation statements and amendments or
supplements thereto have been filed in the appropriate filing office or offices,
and all other necessary actions (including, without limitation, the payment of
all filing fees and taxes, if any, payable in connection with such filings) have
been taken, in order to perfect (and maintain the perfection and priority of)
the security interest granted hereby.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time when
each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are genuine and in all respects what they
purport to be, and that all papers and documents (if any) relating thereto (i)
will represent the genuine, legal and valid obligation of the account debtor
evidencing indebtedness unpaid and owed by the respective account debtor arising
out of the performance of labor or services or the sale or lease and delivery of
the merchandise listed therein, or both, (ii) will be the only original writings
evidencing and embodying such obligation of the account debtor named therein
(other than copies created for general accounting purposes) and (iii) will
evidence true and valid obligations.
3.2. Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense satisfactory and complete records of its Receivables
and Contracts, including, but not limited to, the originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and each Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such Assignor's
own cost and expense, at any and all reasonable times upon two Business Days'
prior notice and otherwise in accordance with Section 8.02 of the Credit
Agreement. Upon the occurrence and during the continuance of an Event of Default
and upon the request of the Collateral Agent, each Assignor shall, at its own
cost and expense, deliver all tangible evidence of its Receivables and Contract
Rights (including, without limitation, all documents evidencing the Receivables
and all Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by the Assignor) . Upon the occurrence and during the continuance of an Event of
Default, and if the Collateral Agent so directs, such Assignor shall legend, in
form
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and manner reasonably satisfactory to the Collateral Agent, the Receivables and
the Contracts, as well as books, records and documents of such Assignor
evidencing or pertaining to such Receivables and Contracts with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.
3.3. Direction to Account Debtors; Contracting Parties; etc. Upon the
occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor, each Assignor agrees (x) to cause all
payments on account of the Receivables and Contracts to be made directly to the
Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in the preceding
clause (x) and (z) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent that such Assignor
might have done. Without notice to or assent by any Assignor, the Collateral
Agent may apply any or all amounts then in, or thereafter deposited in, the Cash
Collateral Account in the manner provided in Section 7.4 of this Agreement. The
costs and expenses (including reasonable attorneys' fees) of collection, whether
incurred by any Assignor or the Collateral Agent, shall be borne by the relevant
Assignor.
3.4. Modification of Terms; etc. No Assignor shall rescind or cancel
any indebtedness evidenced by any Receivable or under any Contract, or modify
any term relating to such indebtedness or make any adjustment with respect
thereto, or extend or renew the same, or compromise or settle any material
dispute, claim, suit or legal proceeding relating thereto, or sell any
Receivable or Contract, or interest therein, without the prior written consent
of the Collateral Agent, except as permitted by Section 3.5. Each Assignor will
duly fulfill all obligations on its part to be fulfilled under or in connection
with the Receivables and Contracts and, except as otherwise expressly permitted
herein, will do nothing to impair the rights of the Collateral Agent in the
Receivables or Contracts.
3.5. Collection. Each Assignor shall endeavor to cause to be collected
from the account debtor named in each of its Receivables or obligor under any
Contract, as and when due (including, without limitation, amounts which are
delinquent, such amounts to be collected in accordance with generally accepted
lawful collection procedures) any and all amounts owing under or on account of
such Receivable or Contract, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Receivable or
under such Contract, except that, prior to the occurrence of an Event of
Default, any Assignor may allow in the ordinary course of business as
adjustments to amounts owing under its Receivables and Contracts (i) an
extension or renewal of the time or times of payment, or settlement for less
than the total unpaid balance, which such Assignor finds appropriate in
accordance with sound business judgment and (ii) a refund or credit due as a
result of returned or damaged merchandise or improperly performed services. The
costs and expenses (including, without limitation, reasonable attorneys' fees)
of collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
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3.6. Instruments. If any Assignor owns or acquires any Instrument
constituting Collateral, such Assignor will within ten days notify the
Collateral Agent thereof, and upon the occurrence and during the continuance of
an Event of Default and if requested by the Collateral Agent will promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
3.7. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of the
Marks listed in Annex D hereto and that said listed Marks include all the United
States federal registrations or applications registered in the United States
Patent and Trademark Office. The Assignor represents and warrants that it owns
or is licensed to use or is not prohibited from using all Marks that it uses.
Each Assignor further warrants that it is aware of no third party claim that any
aspect of such Assignor's present or contemplated business operations infringes
or will infringe any Xxxx. Each Assignor represents and warrants that it is the
owner of record of all United States registrations and applications listed in
Annex D hereto and that said registrations are valid, subsisting, have not been
canceled and that such Assignor is not aware of any third-party claim that any
of said registrations is invalid or unenforceable. Each Assignor hereby grants
to the Collateral Agent an absolute power of attorney to sign, upon the
occurrence and during the continuance of an Event of Default, any document which
may be required by the United States Patent and Trademark Office in order to
effect an absolute assignment of all right, title and interest in each Xxxx and
associated goodwill, and record the same.
4.2. Licenses and Assignments. Other than the license agreements
listed on Annex E hereto and any extensions or renewals thereof, each Assignor
hereby agrees not to divest itself of any right under any Xxxx absent prior
written approval of the Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is infringing or otherwise violating any of
such Assignor's rights in and to any Xxxx, or with respect to any party claiming
that such Assignor's use of any Xxxx violates in any material respect any
property right of that party. Each Assignor further agrees, unless otherwise
agreed by the Collateral Agent, diligently to prosecute any Person infringing
any Xxxx.
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4.4. Preservation of Marks. Each Assignor agrees to use its Marks in
interstate commerce during the time in which this Agreement is in effect,
sufficiently to preserve such Marks as trademarks or service marks registered
under the laws of the United States.
4.5. Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. SS 1051 et seq. to maintain trademark registration, including but not
limited to affidavits of use and applications for renewals of registration in
the United States Patent and Trademark Office for all of its registered Marks
pursuant to 15 U.S.C. 1058(a), 1059 and 1065, and shall pay all fees and
disbursements in connection therewith and shall not abandon any such filing of
affidavit of use or any such application of renewal prior to the exhaustion of
all administrative and judicial remedies without prior written consent of the
Collateral Agent; provided, that to the extent permitted by the Credit
Agreement, such Assignor shall not be obligated to maintain any Xxxx in the
event that such Assignor determines, in its reasonable business judgment, that
the maintenance of such Xxxx is no longer necessary or desirable in the conduct
of its business. Each Assignor agrees to notify the Collateral Agent three (3)
months prior to the date on which the affidavits of use or the applications for
renewal registration are due with respect to any registered Xxxx that the
affidavits of use or the renewal is being processed or being abandoned, as the
case may be.
4.6. Future Registered Marks. If any Xxxx registration is issued
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within thirty (30)
days of receipt of such certificate, such Assignor shall deliver a copy of such
certificate, and a grant of security in such xxxx to the Collateral Agent,
confirming the grant thereof hereunder, the form of such confirmatory grant to
be satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks and the goodwill of the
business associated therewith, together with all trademark rights and rights of
protection to the same, vested, in which event such rights, title and interest
shall immediately vest, in the Collateral Agent for the benefit of the Secured
Creditors, in which case the Collateral Agent shall be entitled to exercise the
power of attorney referred to in Section 4.1 hereof to execute, cause to be
acknowledged and notarized and record said absolute assignment with the
applicable agency; (ii) take and use or sell the Marks and the goodwill of such
Assignor's business symbolized by the Marks and the right to carry on the
business and use the assets of such Assignor in connection with which the Marks
have been used; and (iii) direct such Assignor to refrain, in which event such
Assignor shall refrain, from using the Marks in any manner whatsoever, directly
or indirectly, and, if requested by the Collateral Agent, change such Assignor's
corporate name to eliminate therefrom any use of any Xxxx and execute such other
and further documents that the Collateral Agent may request to further confirm
this and to transfer ownership of the Marks and registrations and any pending
trademark application in the United States Patent and Trademark Office or any
equivalent government agency or office in any foreign jurisdiction to the
Collateral Agent.
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ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of all
rights in the Patents listed in Annex F hereto and in the Copyrights listed in
Annex G hereto, that said Patents include all the United States patents and
applications for United States patents that such Assignor now owns and that said
Copyrights constitute all the United States copyrights registered with the
United States Copyright Office and applications for United States copyrights
that such Assignor now owns. Each Assignor represents and warrants that it owns
or is licensed to practice under all Patents and Copyrights that it now uses or
practices under. Each Assignor further warrants that it is aware of no third
party claim that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any patent or any copyright. Each Assignor
hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of any Event of Default, any
document which may be required by the United States Patent and Trademark Office
or the United States Copyright Office in order to effect an absolute assignment
of all right, title and interest in each Patent and Copyright, and record the
same.
5.2. Licenses and Assignments. Other than the license agreements
listed on Annex E hereto and any extensions or renewals thereof, each Assignor
hereby agrees not to divest itself of any right under any Patent or Copyright
absent prior written approval of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement or other
violation of such Assignor's rights in any Patent or Copyright, or with respect
to any claim that practice of any Patent or use of any Copyright violates any
property right of a third party. Each Assignor further agrees, absent direction
of the Collateral Agent to the contrary, diligently to prosecute any Person
infringing any Patent or Copyright.
5.4. Maintenance of Patents. At its own expense, each Assignor shall
take timely payment of all post-issuance fees required pursuant to 35 U.S.C. 41
to maintain in force rights under each Patent; provided, that to the extent
permitted by the Credit Agreement, such Assignor shall not be obligated to
maintain any Patent in the event that such Assignor determines, in its
reasonable business judgment, that the maintenance of such Patent is no longer
necessary or desirable in the conduct of its business. Each Assignor agrees to
notify the Collateral Agent three (3) months prior to the date on which the
post-issuance fees are due with respect to any Patent that the post-issuance
fees are being paid or that the Patent is being abandoned, as the case may be.
5.5. Prosecution of Patent Application. At its own expense, each
Assignor shall diligently prosecute all applications for Patents listed in Annex
F hereto and shall not abandon any such application prior to exhaustion of all
administrative and judicial remedies, absent written consent of the Collateral
Agent; provided, that to the extent permitted by the Credit Agreement,
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such Assignor shall not be obligated to prosecute any Patent in the event that
such Assignor determines, in its reasonable business judgment, that the
prosecution of such Patent is no longer necessary or desirable in the conduct of
its business.
5.6. Other Patents and Copyrights. Within 30 days of acquisition of a
Patent or Copyright, or of filing of an application for a Patent or Copyright,
the relevant Assignor shall deliver to the Collateral Agent a copy of said
Patent or Copyright or such application, as the case may be, with a grant of
security as to such Patent or Copyright, as the case may be, confirming the
grant thereof hereunder, the form of such confirmatory grant to be satisfactory
to the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the relevant Assignor, take any or
all of the following actions: (i) declare the entire right, title, and interest
of such Assignor in each of the Patents and Copyrights vested, in which event
such right, title, and interest shall immediately vest in the Collateral Agent
for the benefit of the Secured Creditors, in which case the Collateral Agent
shall be entitled to exercise the power of attorney referred to in Section 5.1
hereof to execute, cause to be acknowledged and notarized and record said
absolute assignment with the applicable agency; (ii) take and practice or sell
the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and Copyrights
directly or indirectly, and such Assignor shall execute such other and further
documents as the Collateral Agent may request further to confirm this and to
transfer ownership of the Patents and Copyrights to the Collateral Agent for the
benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Except as otherwise
expressly permitted herein, each Assignor will do nothing to impair the rights
of the Collateral Agent in the Collateral. Each Assignor will at all times keep
its Inventory and Equipment insured in favor of the Collateral Agent, at such
Assignor's own expense to the extent and in the manner provided in Section 8.03
of the Credit Agreement. Prior to the exercise of any of the remedies provided
for herein, all insurance proceeds shall be applied in the manner and to the
extent required by the Credit Agreement, and at any time thereafter, such
insurance proceeds shall be applied in accordance with Section 7.4 hereof. Each
Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-negotiable. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in Section 7-104
of the Uniform Commercial Code as in effect in any relevant jurisdiction or
under other relevant law).
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6.3. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and deliver
to the Collateral Agent such financing statements, in form acceptable to the
Collateral Agent, as the Collateral Agent may from time to time request or as
are necessary or desirable in the opinion of the Collateral Agent to establish
and maintain a valid, enforceable, first priority perfected security interest in
the Collateral as provided herein and the other rights and security contemplated
hereby all in accordance with the Uniform Commercial Code as enacted in any and
all relevant jurisdictions or any other relevant law. Each Assignor will pay any
applicable filing fees, recordation taxes and related expenses. Each Assignor
authorizes the Collateral Agent to file any such financing statements without
the signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, subject to any mandatory requirements of applicable law
then in effect, the Collateral Agent, in addition to any rights now or hereafter
existing under applicable law, shall have all rights as a secured creditor under
the Uniform Commercial Code in all relevant jurisdictions and may also:
(a) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from such Assignor or any
other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor; and
(b) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent and may exercise any and all remedies of such Assignor in
respect of such Collateral; and
(c) withdraw all monies, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4 hereof; and
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(d) sell, assign or otherwise liquidate, or direct the relevant
Assignor to sell, assign or otherwise liquidate, any or all of the
Collateral or any part thereof, and take possession of the proceeds of any
such sale or liquidation; and
(e) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places reasonably designated by the
Collateral Agent, in which event such Assignor shall at its own expense:
(i) forthwith cause the same to be moved to the place or places so
designated by the Collateral Agent and there delivered to the
Collateral Agent, and
(ii) store and keep any Collateral so delivered to the Collateral
Agent at such place or places pending further action by the Collateral
Agent as provided in Section 7.2 hereof, and
(iii) while the Collateral shall be so stored and kept, provide such
guards and maintenance services as shall be necessary to protect the
same and to preserve and maintain them in good condition; and
(f) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for such
term and on such conditions and in such manner as the Collateral Agent
shall in its sole judgment determine; it being understood that each
Assignor's obligation so to deliver the Collateral is of the essence of
this Agreement and that, accordingly, upon application to a court of equity
having jurisdiction, the Collateral Agent shall be entitled to a decree
requiring specific performance by such Assignor of said obligation.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair which the Collateral Agent
shall determine to be commercially reasonable. Any such disposition which shall
be a private sale or other private proceedings permitted by such requirements
shall be made upon not less than 10 days' written notice to the relevant
Assignor specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of such Assignor or
any nominee of such Assignor to acquire the Collateral involved at a price or
for such other consideration at least equal to the intended sale price or other
consideration so specified. Any such disposition which shall be a public sale
permitted by such requirements shall be made upon not less than 10 days' written
notice to the relevant Assignor specifying the time and place of such sale and,
in the absence of
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applicable requirements of law, shall be by public auction (which may, at the
Collateral Agent's option, be subject to reserve), after publication of notice
of such auction not less than 10 days prior thereto in two newspapers in general
circulation in the City of New York. To the extent permitted by any such
requirement of law, the Collateral Agent and the Secured Creditors may bid for
and become the purchaser of the Collateral or any item thereof, offered for sale
in accordance with this Section without accountability to the relevant Assignor.
If, under mandatory requirements of applicable law, the Collateral Agent shall
be required to make disposition of the Collateral within a period of time which
does not permit the giving of notice to the relevant Assignor as herein above
specified, the Collateral Agent need give such Assignor only such notice of
disposition as shall be reasonably practicable in view of such mandatory
requirements of applicable law. Each Assignor agrees to do or cause to be done
all such other acts and things as may be reasonably necessary to make such sale
or sales of all or any portion of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
7.3. Waiver of Claims. Except as otherwise provided in this Agreement,
EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION
OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING,
WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR WOULD OTHERWISE HAVE
UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and
each Assignor hereby further waives, to the extent permitted by law:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay, extension
or moratorium now or hereafter in force under any applicable law in order
to prevent or delay the enforcement of this Agreement or the absolute sale
of the Collateral or any portion thereof, and such Assignor, for itself and
all who may claim under it, insofar as it or they now or hereafter lawfully
may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of such Assignor therein
and thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under the Assignor.
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7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent the Pledge Agreement or any Additional
Security Document to which any Assignor is a party requires proceeds of
Collateral under such agreement to be applied in accordance with the provisions
of this Agreement, the Pledgee or the secured party under such other agreement)
upon any sale or other disposition of the Collateral, together with all other
moneys received by the Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all amounts owing the Collateral Agent of
the type described in clauses (iii) and (iv) of the definition of
"Obligations";
(ii) second, to the extent proceeds remain after the application pursuant
to the preceding clause (i) an amount equal to the outstanding Primary
Obligations shall be paid to the Secured Creditors as provided in Section
7.4(e) hereof, with each Secured Creditor receiving an amount equal to such
outstanding Primary Obligations or, if the proceeds are insufficient to pay
in full all such Primary Obligations, its Pro Rata Share of the amount
remaining to be distributed;
(iii) third, to the extent proceeds remain after the application pursuant
to the preceding clauses (i) and (ii), an amount equal to the outstanding
Secondary Obligations shall be paid to the Secured Creditors as provided in
Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal
to its outstanding Secondary Obligations or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its Pro Rata
Share of the amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the application pursuant
to the preceding clauses (i) through (iii) inclusive, and following the
termination of this Agreement pursuant to Section 11.9(a) hereof, to the
relevant Assignor or to whomever may be lawfully entitled to receive such
surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the
Credit Agreement Obligations, all principal of, and interest on, all Loans, all
Unpaid Drawings theretofore made (together with all interest accrued thereon),
and the aggregate Stated Amounts of all Letters of Credit issued (or deemed
issued) under the Credit Agreement, and all Fees and (ii) in the case of the
Other Obligations, all amounts due under the Interest Rate Protection Agreements
or Other Hedging Agreements (other than indemnities, fees (including, without
limitation, attorneys' fees) and similar obligations and liabilities) and (z)
"Secondary Obligations" shall mean all Obligations other than Primary
Obligations.
(c) When payments to Secured Creditors are based upon their respective
Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall
be applied (for purposes of making determinations under this Section 7.4 only)
(i) first, to their Primary Obligations and (ii)
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second, to their Secondary Obligations. If any payment to any Secured Creditor
of its Pro Rata Share of any distribution would result in overpayment to such
Secured Creditor, such excess amount shall instead be distributed in respect of
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of
the other Secured Creditors, with each Secured Creditor whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid in
full to receive an amount equal to such excess amount multiplied by a fraction
the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the denominator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of all Secured Creditors entitled to such distribution.
(d) Each of the Secured Creditors agrees and acknowledges that if the
Bank Creditors are to receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued (or deemed issued) under the Credit
Agreement (which shall only occur after all outstanding Loans and Unpaid
Drawings with respect to such Letters of Credit have been paid in full), such
amounts shall be paid to the Agent under the Credit Agreement and held by it,
for the equal and ratable benefit of the Bank Creditors, as cash security for
the repayment of Obligations owing to the Bank Creditors as such. If any amounts
are held as cash security pursuant to the immediately preceding sentence, then
upon the termination of all outstanding Letters of Credit, and after the
application of all such cash security to the repayment of all Obligations owing
to the Bank Creditors after giving effect to the termination of all such Letters
of Credit, if there remains any excess cash, such excess cash shall be returned
by the Agent to the Collateral Agent for distribution in accordance with Section
7.4(a) hereof.
(e) Except as set forth in Section 7.4(d) hereof, all payments
required to be made hereunder shall be made (x) if to the Bank Creditors, to the
Agent under the Credit Agreement for the account of the Bank Creditors, and (y)
if to the Other Creditors, to the trustee, paying agent or other similar
representative (each a "Representative") for the Other Creditors or, in the
absence of such a Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in accordance with this
Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the Agent
under the Credit Agreement and (ii) the Representative for the Other Creditors
or, in the absence of such a Representative, upon the Other Creditors for a
determination (which the Agent, each Representative for any Secured Creditors
and the Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Primary Obligations and Secondary
Obligations owed to the Bank Creditors or the Other Creditors, as the case may
be. Unless it has actual knowledge (including by way of written notice from a
Bank Creditor or an Other Creditor) to the contrary, the Agent and each
Representative, in furnishing information pursuant to the preceding sentence,
and the Collateral Agent, in acting hereunder, shall be entitled to assume that
no Secondary Obligations are outstanding. Unless it has actual knowledge
(including by way of written notice from an Other Creditor) to the contrary, the
Collateral Agent, in acting hereunder, shall be entitled to assume that no
Interest Rate Protection Agreements or Other Hedging Agreements are in
existence.
(g) It is understood and agreed that the Assignors shall remain liable
to the extent of any deficiency between the amount of the proceeds of the
Collateral hereunder and the
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aggregate amount of the sums referred to in clauses (i) through (iii),
inclusive, of Section 7.4(a) hereof.
7.5. Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, the other
Financing Documents or now or hereafter existing at law or in equity, or by
statute and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time or simultaneously
and as often and in such order as may be deemed expedient by the Collateral
Agent. All such rights, powers and remedies shall be cumulative and the exercise
or the beginning of exercise of one shall not be deemed a waiver of the right to
exercise of any other or others. No delay or omission of the Collateral Agent in
the exercise of any such right, power or remedy, renewal or extension of any of
the Obligations and no course of dealing between any Assignor and the Collateral
Agent or any holder of any of the Obligations shall impair any such right, power
or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on any Assignor in
any case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Agent may recover reasonable expenses, including
attorneys' fees, and the amounts thereof shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case the relevant
Assignor, the Collateral Agent and each holder of any of the obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Collateral Agent shall continue as if no
such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor agrees to indemnify, reimburse and
hold the Collateral Agent, each Secured Creditor and their respective
successors, assigns, employees, agents and servants (hereinafter in this Section
8.1 referred to individually as "Indemnitee," and collectively as "Indemnity")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable attorneys' fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnity in any way relating to or arising out of this
Agreement, any other Financing Document or any other document executed in
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connection herewith and therewith or in any other way connected with the
administration of the transactions contemplated hereby and thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the
Collateral (including, without limitation, latent or other defects, whether or
not discoverable), any contract claim or, to the maximum extent permitted under
applicable law, the violation of the laws of any country, state or other
governmental body or unit, or any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage); provided that no Indemnitee shall be indemnified pursuant to this
Section 8.l (a) for expenses to the extent caused by the gross negligence or
willful misconduct of any Indemnitee. Each Assignor agrees that upon written
notice by any Indemnitee of the assertion of such an expense, such Assignor
shall assume full responsibility for the defense thereof. Each Indemnitee agrees
to use its best efforts to promptly notify the relevant Assignor of any such
assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof, each
Assignor agrees to pay, or reimburse the Collateral Agent for any and all fees,
costs and expenses of whatever kind or nature incurred in connection with the
creation, preservation or protection of the Collateral Agent's Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral, premiums for insurance with respect to the
Collateral and all other fees, costs and expenses in connection with protecting,
maintaining or preserving the Collateral and the Collateral Agent's interest
therein, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral.
(c) Without limiting the application of Section 8.1(a) or (b) hereof,
each Assignor agrees to pay, indemnify and hold each Indemnitee harmless from
and against any loss, costs, damages and expenses which such Indemnitee may
suffer, expend or incur in consequence of or growing out of any
misrepresentation by such Assignor in this Agreement, any other Financing
Document or in any writing contemplated by or made or delivered pursuant to or
in connection with this Agreement or any other Financing Document.
(d) If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements or Other Hedging Agreements and the payment of all other
Obligations and notwithstanding the discharge thereof.
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ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Agent" shall have the meaning provided in the first WHEREAS clause of
this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Creditor" shall have the meaning provided in the first WHEREAS
clause of this Agreement.
"Banks" shall have the meaning provided in the first WHEREAS clause of
this Agreement.
"Borrower" shall have the meaning provided in the first WHEREAS clause
of this Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with the Collateral Agent for the benefit of the
Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in section 11.2.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, each partnership
agreement to which any Assignor is a party and any Interest Rate Protection
Agreement or Other Hedging Agreement, but excluding licenses and contracts to
the extent that the terms thereof prohibit the assignment of, or granting of a
security interest in, such licenses or contracts.
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"Copyrights" shall mean any copyright owned by any Assignor, including
any registrations of any copy now or hereafter registered with the United States
Copyright office or any foreign equivalent office, as well as any application
for a copyright registration now or hereafter made with the United States
Copyright Office or any foreign equivalent office by any Assignor.
"Credit Agreement" shall have the meaning provided in the first
WHEREAS clause of this Agreement.
"Credit Agreement Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor and any and
all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"Financing Documents" shall have the meaning provided in Section 2.6
of this Agreement.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York and
shall in any event include all of any Assignor's claims, rights, powers,
privileges, authority, options, security interests, liens and remedies under any
partnership agreement to which such Assignor is a party or with respect to any
partnership of which such Assignor is a partner.
"Goods" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in Article 9 of the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
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"Intellectual Property Licensee Rights" shall mean any rights of a
licensee to use any Xxxx, Copyright or Patent.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor.
"Marks" shall mean any trademarks and service marks now held or
hereafter acquired by any Assignor, which are registered in the United States
Patent and Trademark Office or in any similar office or agency of the United
States or any state thereof or any political subdivision thereof and any
application for such trademarks and service marks, as well as any unregistered
marks used by any Assignor in the United States and trade dress including logos,
designs, trade names, company names, business names, fictitious business names
and other business identifiers in connection with which any of these registered
or unregistered marks are used in the United States.
"Obligations" shall mean (i) (x) the principal of and interest on the
Notes issued, and Loans made, under the Credit Agreement, and all reimbursement
obligations and Unpaid Drawings with respect to the Letters of Credit under the
Credit Agreement and (y) all other obligations and indebtedness (including,
without limitation, indemnities, Fees and interest thereon) of each Assignor to
the Bank Creditors now existing or hereafter incurred under, arising out of, or
in connection with the Credit Agreement and the other Credit Documents and the
due performance and compliance by such Assignor with all of the terms,
conditions and agreements contained in the Credit Agreement and the other Credit
Documents (all such principal, interest, obligations and liabilities being
herein collectively called the "Credit Agreement Obligations"); (ii) all
obligations and liabilities owing by such Assignor to the Other Creditors under,
or with respect to, any Interest Rate Protection Agreement or Other Hedging
Agreement, whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereafter arising, and the due performance and
compliance by such Assignor with all of the terms, conditions and agreements
contained therein (all such obligations and liabilities described in this clause
(ii) being herein collectively called the "Other Obligations"); (iii) any and
all sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of such Assignor referred to in clauses (i) and (ii), after an
Event of Default shall have occurred and be continuing, the reasonable expenses
of re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement.
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"Other Creditors" shall have the meaning provided in the second
WHEREAS clause of this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
"Patents" shall mean any patent to which any Assignor now or hereafter
has title and any divisions or continuations thereof, as well as any application
for patent now or hereafter made by any Assignor.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (i) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to secure
the foregoing, (ii) all of any Assignor's right, title and interest in and to
any goods, the sale of which gave rise thereto, (iii) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (iv) all
powers of attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith, (v) all books, records, ledger cards,
and invoices relating thereto, (vi) all evidences of the filing of financing
statements and other statements and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(vii) all credit information, reports and memoranda relating thereto, and (viii)
all other writings related in any way to the foregoing.
"Representative" shall have the meaning provided in Section 7.4 of
this Agreement.
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"Required Secured Creditors" shall mean (i) the Required Banks (or, to
the extent required by Section 13.12 of the Credit Agreement, all of the Banks)
under the Credit Agreement so long as any Credit Agreement Obligations remain
outstanding and (ii) in any situation not covered by preceding clause (i), the
holders of a majority of the outstanding principal amount of the Other
Obligations.
"Requisite Creditors" shall have the meaning provided in Section 11.2
of this Agreement.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the second
WHEREAS clause of this Agreement.
"Termination Date" shall have the meaning provided in Section 11.9 of
this Agreement.
"Trade Secrets" shall mean all trade secrets and proprietary
information necessary to operate the business of any Assignor.
ARTICLE X
THE COLLATERAL AGENT
10.1. Appointment. The Secured Creditors, by their acceptance of the
benefits of this Agreement hereby irrevocably designate Bankers Trust Company,
as Collateral Agent, to act as specified herein. Each Secured Creditor hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note and by the acceptance of the benefits of this Agreement shall be deemed
irrevocably to authorize, the Collateral Agent to take such action on its behalf
under the provisions of this Agreement and any other instruments and agreements
referred to herein and to exercise such powers and to perform such duties
hereunder as are specifically delegated to or required of the Collateral Agent
by the terms hereof and such other powers as are reasonably incidental thereto.
The Collateral Agent may perform any of its duties hereunder or thereunder by or
through its authorized agents or employees.
10.2. Nature of Duties. (a) The Collateral Agent shall have no duties
or responsibilities except those expressly set forth in this Agreement. The
duties of the Collateral Agent shall be mechanical and administrative in nature;
the Collateral Agent shall not have by reason of this Agreement or any other
Financing Document a fiduciary relationship in respect of any Secured Creditor;
and nothing in this Agreement or any other Financing Document, expressed or
implied, is intended to or shall be so construed as to impose upon the
Collateral Agent any obligations in respect of this Agreement except as
expressly set forth herein.
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(b) The Collateral Agent shall not be responsible for insuring the
Collateral or for the payment of taxes, charges or assessments or discharging of
Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
(c) The Collateral Agent shall not be required to ascertain or inquire
as to the performance by any Assignor of any of the covenants or agreements
contained in this Agreement or any other Financing Document.
(d) The Collateral Agent shall be under no obligation or duty to take
any action under this Agreement or any other Credit Document if taking such
action (i) would subject the Collateral Agent to a tax in any jurisdiction where
it is not then subject to a tax or (ii) would require the Collateral Agent to
qualify to do business in any jurisdiction where it is not then so qualified,
unless the Collateral Agent receives security or indemnity satisfactory to it
against such tax (or equivalent liability), or any liability resulting from such
qualification, in each case as results from the taking of such action under this
Agreement or any other Credit Document or (iii) would subject the Collateral
Agent to in personam jurisdiction in any locations where it is not then so
subject.
(e) Notwithstanding any other provision of this Agreement, neither the
Collateral Agent nor any of its officers, directors, employees, affiliates or
agents shall, in its individual capacity, be personally liable for any action
taken or omitted to be taken by it in accordance with this Agreement except for
its own gross negligence or willful misconduct.
10.3. Lack of Reliance on the Collateral Agent. Independently and
without reliance upon the Collateral Agent, each Secured Creditor, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of any Assignor
and its Subsidiaries in connection with the making and the continuance of the
Obligations and the taking or not taking of any action in connection therewith,
and (ii) its own appraisal of the creditworthiness of any Assignor and its
Subsidiaries, and the Collateral Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Secured Creditor with
any credit or other information with respect thereto, whether coming into its
possession before the extension of any Obligations or the purchase of any Notes
or at any time or times thereafter. The Collateral Agent shall not be
responsible in any manner whatsoever to any Secured Creditor for the correctness
of any recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or the security interests granted hereunder or the financial condition
of any Assignor or any Subsidiary of any Assignor or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, or the financial condition of any
Assignor or any Subsidiary of any Assignor, or the existence or possible
existence of any Default or Event of Default. The Collateral Agent makes no
representations as to the value or condition of the Collateral or any part
thereof, or as to the title of any Assignor thereto or as to the security
afforded by this Agreement.
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10.4. Certain Rights of the Collateral Agent. (a) No Secured Creditor
shall have the right to cause the Collateral Agent to take any action with
respect to the Collateral, with only the Required Secured Creditors having the
right to direct the Collateral Agent to take any such action. If the Collateral
Agent shall request instructions from the Required Secured Creditors, with
respect to any act or action (including failure to act) in connection with this
Agreement, the Collateral Agent shall be entitled to refrain from such act or
taking such action unless and until it shall have received instructions from the
Required Secured Creditors and to the extent requested, appropriate
indemnification in respect of actions to be taken, and the Collateral Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Secured Creditor shall have any right of action
whatsoever against the Collateral Agent as a result of the Collateral Agent
acting or refraining from acting hereunder in accordance with the instructions
of the Required Secured Creditors.
(b) The Collateral Agent shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement at the request or
direction of any of the Secured Creditors, unless such Secured Creditors shall
have offered to the Collateral Agent reasonable security or indemnity against
the costs, expenses and liabilities that might be incurred by it in compliance
with such request or direction.
10.5. Reliance. The Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
the proper Person or entity, and, with respect to all legal matters pertaining
to this Agreement and the other Security Documents and its duties thereunder and
hereunder, upon advice of counsel selected by it.
10.6. Indemnification. To the extent the Collateral Agent is not
reimbursed and indemnified by any Assignor under this Agreement, the Secured
Creditors will reimburse and indemnify the Collateral Agent, in proportion to
their respective outstanding principal amounts (including, for this purpose, the
Stated Amount of outstanding Letters of Credit and any unreimbursed drawings in
respect of Letters of Credit, as well as any unpaid Primary Obligations in
respect of Interest Rate Protection Agreements or other Hedging Agreements, as
outstanding principal) of Obligations, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Collateral Agent in performing its
duties hereunder, or in any way relating to or arising out of its actions as
Collateral Agent in respect of this Agreement except for those resulting solely
from the Collateral Agent's own gross negligence or willful misconduct. The
indemnities set forth in this Article X shall survive the repayment of all
Obligations, with the respective indemnification at such time to be based upon
the outstanding principal amounts (determined as described above) of Obligations
at the time of the respective occurrence upon which the claim against the
Collateral Agent is based or, if same is not reasonably determinable, based upon
the outstanding principal amounts (determined as described above) of Obligations
as in effect immediately prior to the termination of this Agreement. The
indemnities set forth in this Article X are in addition to any indemnities
provided by the Banks to the Collateral Agent pursuant to the Credit Agreement,
with the effect being that the Banks shall be responsible for indemnifying the
Collateral Agent to the extent the
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Collateral Agent does not receive payments pursuant to this Section 10.6 from
the Secured Creditors (although in such event, and upon the payment in full of
all such amounts owing to the Collateral Agent, the respective Banks who paid
same shall be subrogated to the rights of the Collateral Agent to receive
payment from the Secured Creditors).
10.7. The Collateral Agent in its Individual Capacity. With respect to
its obligations as a lender under the Credit Agreement and any other Credit
Documents to which the Collateral Agent is a party, and to act as agent under
one or more of such Credit Documents, the Collateral Agent shall have the rights
and powers specified therein and herein for a "Bank", or an "Agent", as the case
may be, and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the terms "Banks," "Required Banks,"
"holders of Notes," or any similar terms shall, unless the context clearly
otherwise indicates, include the Collateral Agent in its individual capacity.
The Collateral Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Assignor or any
Affiliate or Subsidiary of any Assignor as if it were not performing the duties
specified herein or in the other Credit Documents, and may accept fees and other
consideration from any Assignor for services in connection with the Credit
Agreement, the other Credit Documents and otherwise without having to account
for the same to the Secured Creditors.
10.8. Holders. The Collateral Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Collateral Agent. Any request, authority or
consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note, shall be final and
conclusive and binding on any subsequent holder, transferee, assignee or
endorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
10.9. Resignation by the Collateral Agent. (a) The Collateral Agent
may resign from the performance of all of its functions and duties under this
Agreement at any time by giving 15 Business Days' prior or written notice to the
Assignors and the Banks. Such resignation shall take effect upon the appointment
of a successor Collateral Agent pursuant to clause (b) or (c) below.
(b) If a successor Collateral Agent shall not have been appointed
within said 15 Business Day period by the Required Secured Creditors, the
Collateral Agent, with the consent of each Assignor, which consent shall not be
unreasonably withheld, shall then appoint a successor Collateral Agent who shall
serve as Collateral Agent hereunder or thereunder until such time, if any, as
the Required Secured Creditors appoint a successor Collateral Agent as provided
above.
(c) If no successor Collateral Agent has been appointed pursuant to
clause (b) above by the 15th Business Day after the date of such notice of
resignation was given by the Collateral Agent, as a result of a failure by such
Assignor to consent to the appointment of such a successor Collateral Agent, the
Required Secured Creditors shall then appoint a successor Collateral Agent who
shall serve as Collateral Agent hereunder or thereunder until such time, if any,
as the Required Secured Creditors appoint a successor Collateral Agent as
provided above.
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10.10. Fees and Expenses of Collateral Agent. (a) Each Assignor (by
its execution and delivery hereof) hereby agrees that it shall pay to Bankers
Trust Company as the initial Collateral Agent, such fees as have been separately
agreed to in writing with Bankers Trust Company for acting as Agent and as
Collateral Agent hereunder. In the event a successor Collateral Agent is at any
time appointed pursuant to the preceding Section 10.9, each Assignor hereby
agrees to pay such successor Collateral Agent such fees for acting as such as
would customarily be charged by such Collateral Agent for acting in such
capacity in similar situations. Absent manifest error, the determination by a
successor Collateral Agent of the fees owing to it shall be conclusive and
binding upon such Assignor.
(b) In addition, each Assignor agrees to pay all reasonable
out-of-pocket costs and expenses of the Collateral Agent in connection with this
Agreement and any actions taken by the Collateral Agent hereunder, and agrees to
pay all costs and expenses of the Collateral Agent in connection with the
enforcement of this Agreement and the documents and instruments referred to
herein (including, without limitation, reasonable fees and disbursements of
counsel for the Collateral Agent).
ARTICLE XI
MISCELLANEOUS
11.1. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed as follows:
(a) if to any Assignor, at the address set forth opposite such
Assignor's signature:
(b) if to the Collateral Agent:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
(c) if to any Bank Creditor, either (x) to the Agent, at the address
of the Agent specified in the Credit Agreement or (y) at such address as
such Bank Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, either (x) to the Representative for the
Other Creditors, at such address as such Representative may have provided
to the Assignor and the Collateral Agent from time to time, or (y) directly
to the Other Creditors at such address as the Other Creditors shall have
specified in writing to the Assignor and the Collateral Agent; or at such
other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
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11.2. Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor and the Collateral Agent (with
the written consent of the Required Secured Creditors); provided, however, that
any change, waiver, modification or variance affecting the rights and benefits
of a single Class of Secured Creditors (and not all Secured Creditors in a like
or similar manner) shall require the written consent of the Requisite Creditors
of such affected Class. For the purpose of this Agreement, the term "Class"
shall mean each class of Secured Creditors, i.e., whether (y) the Bank Creditors
as holders of the Credit Agreement Obligations or (z) the Other Creditors as the
holders of the Other Obligations; and the term "Requisite Creditors" of any
Class shall mean each of (x) with respect to the Credit Agreement Obligations,
the Required Banks and (y) with respect to the Other Obligations, the holders of
at least a majority of all obligations outstanding from time to time under the
Interest Rate Protection Agreements or Other Hedging Agreements.
11.3. Obligations Absolute. The obligations of each Assignor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Financing Document
except as specifically set forth in a waiver granted pursuant to Section 11.2
hereof; or (c) any amendment to or modification of any Financing Document or any
security for any of the Obligations; whether or not such Assignor shall have
notice or knowledge of any of the foregoing.
11.4. Successors and Assigns. This Agreement shall be binding upon
each Assignor and its successors and assigns and shall inure to the benefit of
the Collateral Agent and each Secured Creditor and their respective successors
and assigns, provided that such Assignor may not transfer or assign any or all
of its rights or obligations hereunder without the written con sent of the
Required Secured Creditors. All agreements, statements, representations and
warranties made by each Assignor herein or in any certificate or other
instrument delivered by such Assignor or on its behalf under this Agreement
shall be considered to have been relied upon by the Secured Creditors and shall
survive the execution and delivery of this Agreement or the other Financing
Documents regardless of any investigation made by the Secured Creditors or on
their behalf.
11.5. Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
11.6. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN
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ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
11.8. Assignor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral except to the extent directly resulting from the
Collateral Agent's gross negligence or willful misconduct.
11.9. Termination; Release. (a) After the Termination Date, this
Agreement shall terminate and the Collateral Agent, at the request and expense
of the respective Assignor, will execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral of
such Assignor as may be in the possession of the Collateral Agent and as has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement. As used in this Agreement, "Termination Date" shall mean the date
upon which the Total Commitments and all Interest Rate Protection Agreements or
Other Hedging Agreements have been terminated, no Note under the Credit
Agreement is outstanding (and all Loans have been repaid in full), all Letters
of Credit have been terminated and all Obligations then owing have been paid in
full.
(b) In the event that any part of the Collateral is sold in connection
with a sale permitted by Section 9.02 of the Credit Agreement or otherwise
released at the direction of the Required Banks (or all Banks if required by
Section 13.12(a)(ii) of the Credit Agreement) and the proceeds of such sale or
sales or from such release are applied in accordance with the provisions of
Section 4.02 of the Credit Agreement, to the extent required to be so applied,
such Collateral will be sold free and clear of the Liens created by this
Agreement and the Collateral Agent, at the request and expense of each Assignor,
will duly assign, transfer and deliver to such Assignor (without recourse and
without any representation or warranty) such of the Collateral as is then being
(or has been) so sold or released and as may be in the possession of the
Collateral Agent and has not theretofore been released pursuant to this
Agreement.
(c) In the event that, prior to the Termination Date, the Borrower
enters into a replacement working capital facility as permitted under Section
9.04(xiv) of the Credit Agreement and such replacement working capital facility
is to be secured by a first priority perfected lien on all Inventory and
Receivables owned by Holdings and its Subsidiaries, the Collateral Agent shall,
at the request and expense of the Assignors, execute and deliver to the
Assignors a proper instrument or instruments releasing all inventory and
receivables owned by Holdings and its Subsidiaries from the security interest
granted pursuant to this Agreement.
(d) At any time that an Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 11.9 (a), (b) or (c), it shall deliver to the
Collateral Agent a certificate signed by its senior officer
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stating that the release of the respective Collateral is permitted pursuant to
Section 11.9(a), (b) or (c). If requested by the Collateral Agent (although the
Collateral Agent shall have no obligation to make any such request), each
Assignor shall furnish appropriate legal opinions (from counsel acceptable to
the Collateral Agent) to the effect set forth in the immediately preceding
sentence. The Collateral Agent shall have no liability whatsoever to any Secured
Creditor as the result of any release of Collateral by it as permitted by this
Section 11.9.
(e) The Collateral Agent shall have no liability whatsoever to any
Secured Creditor as a result of any release of Collateral by it in accordance
with this Section 11.9.
11.10. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with each Assignor and the
Collateral Agent.
11.11. Additional Assignors. It is understood and agreed that any
subsidiary of Holdings that is required to execute a counterpart of this
Agreement after the date hereof pursuant tot he Credit Agreement shall
automatically become an Assignor hereunder by executing a counterpart hereof and
delivering the same to the Collateral Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
ADDRESSES
0000 Xxxxxxxxxx Xxxx UNIVERSAL COMPRESSION HOLDINGS, INC.
Houston, Texas
Attn: President
By
--------------------------------------
Title:
UNIVERSAL COMPRESSION, INC.
By
--------------------------------------
Title:
000 Xxxxxxx Xxxxxx BANKERS TRUST COMPANY,
Xxx Xxxx, Xxx Xxxx 00000 as Collateral Agent
Attention: Xxxxxx Xxxxxxxxxx
By
--------------------------------------
Title:
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