EXHIBIT 4.1(c)
SUBSIDIARY PLEDGE AND SECURITY AGREEMENT
This SUBSIDIARY PLEDGE AND SECURITY AGREEMENT (as amended,
supplemented, amended and restated or otherwise modified from time to time, this
"Security Agreement"), dated as of July 17, 2001, is made by ALEXANDER CITY
CASTING COMPANY, INC., a corporation organized and existing under the laws of
the State of Alabama, CAST-MATIC CORPORATION, a corporation organized and
existing under the laws of the State of Michigan, COLUMBUS FOUNDRY, L.P., a
limited partnership organized and existing under the laws of the State of
Delaware, DIVERSIFIED DIEMAKERS, INC, a corporation organized and existing under
the laws of the State of Delaware, GANTON TECHNOLOGIES INC., a corporation
organized and existing under the laws of the State of Illinois, XXXXXX P.M.C.,
INCORPORATED, a corporation organized and existing under the laws of the State
of Illinois, INTERMET HOLDING COMPANY, a corporation organized and existing
under the laws of the State of Delaware, INTERMET INTERNATIONAL, INC., a
corporation organized and existing under the laws of the State of Georgia,
IRONTON IRON INC., a corporation organized and existing under the laws of the
State of Ohio, LYNCHBURG FOUNDRY COMPANY, a corporation organized and existing
under the laws of the Commonwealth of Virginia, NORTHERN CASTINGS CORPORATION, a
corporation organized and existing under the laws of the State of Georgia,
SUDBURY, INC., a corporation organized and existing under the laws of the State
of Delaware, SUDM, INC., a corporation organized and existing under the laws of
the State of Michigan, TOOL PRODUCTS, INC., a corporation organized and existing
under the laws of the State of Delaware, XXXXXX CASTINGS COMPANY, a corporation
organized and existing under the laws of the State of Delaware and XXXXXX
HAVANA, INC., a corporation organized and existing under the laws of the State
of Delaware, and each other Subsidiary of INTERMET CORPORATION, a Georgia
corporation (the "Borrower"), that executes and delivers a supplement to this
Security Agreement from time to time (each individually, a "Grantor" and,
collectively, the "Grantors"), in favor of THE BANK OF NOVA SCOTIA ("Scotia
Capital"), as collateral agent under the Term Loan Agreement and the Revolving
Credit Agreement (together with its successor(s) thereto in such capacities, the
"Collateral Agent") for the benefit of each of the Secured Parties (capitalized
terms used herein have the meanings set forth in or incorporated by reference in
Article I).
W I T N E S S E T H
WHEREAS, pursuant to the First Amended and Restated Term Loan
Agreement, dated as the date hereof (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Term Loan Agreement"),
among the Borrower, the "Lenders" thereunder, SunTrust Bank, as the
Documentation Agent, Bank One, Michigan, as the Syndication Agent and Scotia
Capital, as administrative and collateral agent, such Lenders and the Borrower
have
Subsidiary Security Agreement
agreed to refinance a portion of the outstanding term loans made by such Lenders
to the Borrower;
WHEREAS, the Grantors have guaranteed the obligations of the Borrower
under the Term Loan Agreement pursuant to a First Amended and Restated Guaranty
Agreement dated as of the date hereof (the "Term Loan Guaranty Agreement");
WHEREAS, pursuant to the Fourth Amendment dated as of the date hereof
(the "Revolving Credit Amendment") to the Five-Year Credit Agreement dated as of
November 5, 1999, as amended (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Revolving Credit Agreement"), among
the Borrower, the "Lenders" thereunder, Scotia Capital, as administrative and
collateral agent, and the other agents thereunder, such Lenders and the Borrower
have agreed to refinance the outstanding revolving loans, swingline loans,
letters of credit and available credit thereunder extended by such Lenders to
the Borrower:
WHEREAS, the Grantors have guaranteed the obligations of the Borrower
under the Revolving Credit Agreement pursuant to a First Amended and Restated
Guaranty Agreement dated as of the date hereof (the "Revolving Credit Guaranty
Agreement"); and
WHEREAS, as a condition precedent to the effectiveness of the Term Loan
Agreement and the Revolving Credit Amendment, each Grantor is required to
execute and deliver this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Secured
Parties to engage in such refinancings, each Grantor agrees, for the benefit of
the Secured Parties as follow:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Borrower" is defined in the preamble.
"Capital Securities" means with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the date hereof.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in clause (c) of Section 4.3.
2 Subsidiary Security Agreement
"Collateral Agent" is defined in the preamble.
"Computer, Hardware and Software Collateral" means:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical
supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware;
(b) all software programs (including both source code, object
code and all related applications and data tiles), whether now owned,
licensed or leased or hereafter acquired by any Grantor, designed for
use on the computers and electronic data processing hardware described
in clause (a) above;
(c) all firmware associated therewith,
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a) through
(c); and
(e) all rights with respect to all of the foregoing,
including any and all copyrights, licenses, options, warranties,
service contracts, program services, test rights, maintenance rights,
support rights, improvement rights, renewal rights and indemnifications
and any substitutions, replacements, additions or model conversions of
any of the foregoing.
"Copyright Collateral" means all copyrights of each Grantor, whether
statutory or common law, registered or unregistered and whether published or
unpublished, now or hereafter in force throughout the world including all of
such Grantor's right, title and interest in and to all copyrights registered in
the United States Copyright Office or anywhere else in the world and also
including the copyrights referred to in Item A of Schedule V hereto, and
registrations and recordings thereof and all applications for registration
thereof, whether pending or in preparation, all copyright licenses, including
each copyright license referred to in Item B of Schedule V hereto, the right to
xxx for past, present and future infringements of any of the foregoing, all
rights corresponding thereto, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"Credit Document" means any "Credit Document" as defined in either the
Term Loan Agreement or the Revolving Credit Agreement.
"Credit Part" means any of the Borrower and the Grantors.
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"Default" means any condition or event which, with notice or lapse of
time or both, would constitute an Event of Default.
"Distributions" means all non-cash dividends paid on Capital
Securities, liquidating dividends paid on Capital Securities, shares of Capital
Securities resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Capital Securities constituting
Collateral, but excluding Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Capital Securities constituting Collateral that are not a liquidating
dividend.
"Equipment" is defined in clause (c) of Section 2.1.
"Event of Default" means any Event of Default as defined in either the
Term Loan Agreement or the Revolving Credit Agreement.
"Foreign Pledge Agreement" means any supplemental pledge agreement
governed by the laws of a jurisdiction other than the United States or a state
thereof executed and delivered by any Consolidated Company pursuant to the terms
of this Agreement, in form and substance satisfactory to the Collateral Agent,
as may be necessary or desirable under the laws of organization or incorporation
of a Subsidiary thereof to further protect or perfect the Lien on and security
interest in any Collateral.
"Grantor" and "Grantors" are defined in the preamble.
"Including" means including, without limitation.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Intercompany Note" means a promissory note payable to any
Grantor, substantially in the form of Exhibit A hereto (with such modifications
as agreed to by the Collateral Agent), as amended, modified or supplemented from
time to time in accordance with clause (c) of Section 4.6, together with any
notes delivered in extension or renewal thereof or substitution therefor.
"Inventory" is defined in clause (d) of Section 2.1.
"Lien" means any mortgage, deed of trust, pledge, security interest,
lien, charge, hypothecation, assignment, deposit arrangement, title
retention, preferential property right, trust or other arrangement having
the practical effect of the foregoing and shall include the interest of
4 Subsidiary Security Agreement
a vendor or lessor under any conditional sale agreement, capitalized lease or
other title retention agreement.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing and each patent and patent application referred to in Item A
of Schedule III hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, including each patent license
referred to in Item B of Schedule III hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, and for breach or enforcement of any
patent license.
"Receivables" is defined in clause (e) of Section 2.1.
"Related Contracts" is defined in clause (e) of Section 2.1.
"Required Lenders" means both the "Required Lenders" as defined in the
Term Loan Agreement and the "Required Lenders" as defined in the Revolving
Credit Agreement.
"Revolving Credit Agreement" is defined in the third recital.
"Revolving Credit Amendment" is defined in the third recital.
"Revolving Credit Guaranty Agreement" is defined in the fourth recital.
"Secured Obligations" means:
(a) all "Guaranteed Obligations" (as defined in the Term Loan
Guaranty Agreement);
(b) all "Guaranteed Obligations" (as defined in the Revolving
Credit Guaranty Agreement); and
(c) all Cash Management Obligations.
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"Secured Party" means any of the Collateral Agent and each of the
agents, "Lenders" and their respective Affiliates under the Term Loan Agreement
or the Revolving Credit Agreement
"Securities Act" is defined in clause (a) of Section 6.2.
"Security Agreement" is defined in the preamble.
"Securities Control Agreement" means an agreement in form and substance
satisfactory to the Collateral Agent which provides for the Collateral Agent to
have "control" (as defined in Section 8-106 of the UCC, as such term relates to
investment property (other than certificated securities or commodity contracts),
or as used in Section 9-115(1)(e) of the UCC, as such term relates to commodity
contracts).
"Specified Event" means the occurrence and continuance of a Default
under Section 8.07 of the Term Loan Agreement or the Revolving Credit Agreement
or any other "Event of Default".
"Term Loan Agreement" is defined in the first recital.
"Term Loan Guaranty Agreement" is defined in the second recital.
"Termination Date" means the date on which all Secured Obligations
have been paid in full and all commitments to make loans, issue letters of
credit or otherwise extend credit pursuant to Term Loan Agreement and the
Revolving Credit Agreement have been terminated.
"Trademark Collateral" means:
(a) (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos and other source or
business identifiers, and all goodwill of the business associated
therewith, now existing or hereafter adopted or acquired including
those referred to in Item A of Schedule IV hereto, whether currently in
use or not, all registrations and recordings thereof and all
applications in connection therewith, whether pending or in preparation
for filing, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any office or agency of
the United States of America or any State thereof or any other country
or political subdivision thereof or otherwise, and all common-law
rights relating to the foregoing, and (ii) the right to obtain all
reissues, extensions or renewals of the foregoing (collectively
referred to as the "Trademark");
(b) all Trademark licenses for the grant by or to any Grantor
of any right to use any Trademark, including each Trademark license
referred to in Item B of Schedule IV hereto; and
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(c) all proceeds of, and rights associated with, the
foregoing, including any claim by any Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license.
"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential, proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule VI hereto, and
including the right to xxx for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York, except to the extent that the validity or the perfection of the
security interest hereunder, or remedies hereunder, in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the State of
New York, in which case "UCC" means the Uniform Commercial Code as in effect in
such jurisdiction.
SECTION 1.2. Revolving Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Security
Agreement, including its preamble and recitals, have the meanings provided in
the Revolving Credit Agreement.
SECTION 1.3. UCC Definitions. Unless otherwise defined herein or in the
Revolving Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the UCC, as the same shall be hereafter amended,
including amendments to such terms as may occur upon enactment and effective
date of Revised Article 9, are used in this Security Agreement, including its
preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security Interest. Each Grantor hereby assigns,
pledges, hypothecates, charges, mortgages, delivers, and transfers to the
Collateral Agent, for its benefit and the ratable benefit of each other Secured
Party, and hereby grants to the Collateral Agent, for its benefit and the
ratable benefit of each other Secured Party, a continuing security interest in
all of the following property, whether now or hereafter existing or acquired by
such Grantor (the "Collateral"):
(a) all Intercompany Notes in which such Grantor has an
interest (including each Intercompany Note described in Item A of
Schedule I hereto (including the right to receive payment of the
principal of and accrued interest on such Intercompany Note, and
7 Subsidiary Security Agreement
other rights of such Grantor arising in its capacity as the payee of
such Intercompany Note));
(b) (i) all investment property in which such Grantor has an
interest (including the Capital Securities of each issuer of such
Capital Securities described in Item of Schedule I hereto) and (ii) all
other Capital Securities which are interests in limited liability
companies or partnerships in which such Grantor has an interest
(including the Capital Securities of each issuer of such Capital
Securities described in Item B of Schedule I hereto), in each case
together with Dividends and Distributions payable in respect of the
Collateral described in the foregoing clauses (b)(i) and (b)(ii);
(c) all equipment of such Grantor, including all parts thereof
and all accessions, additions, attachments, improvements, substitutions
and replacements thereto and therefor and all accessories related
thereto (collectively referred to as the "Equipment");
(d) all inventory in all of its forms of such Grantor,
including (i) all raw materials and work in process therefor, finished
goods thereof, and materials used or consumed in the manufacture or
production thereof, (ii) all goods in which such Grantor has an
interest in mass or a joint or other interest or right of any kind
(including goods in which such Grantor has an interest or right as
consignee), and (iii) all goods which are returned to or repossessed by
such Grantor, and all accessions thereto, products thereof and
documents therefor (all of the foregoing collectively referred to as
the "Inventory");
(e) all accounts, contracts, chattel paper, documents,
instruments, and general intangibles (including tax refunds) of such
Grantor, whether or not arising out of or in connection with the sale
or lease of goods or the rendering of services, and all rights of such
Grantor now or hereafter existing in and to all security agreements,
guaranties, leases and other contracts securing or otherwise relating
to any such accounts, contracts, chattel paper, documents, instruments,
and general intangibles (all of the foregoing collectively referred to
as the "Receivables", and any and all such security agreements,
guaranties, leases and other contracts collectively referred to as the
"Related Contracts");
(f) all Intellectual Property Collateral of such Grantor;
(g) the Collateral Account and each lock box (including all
deposits and investments therein and all earnings thereon);
(h) all deposit accounts of such Grantor;
(i) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section;
8 Subsidiary Security Agreement
(j) all of such Grantor's other property and rights of every
kind and description and interests therein; and
(k) all products, offspring, rents, issues, profits, returns,
income and proceeds of and from any and all of the foregoing Collateral
(including proceeds which constitute property of the types described in
clauses (a) through (j) above, and, to the extent not otherwise
included, all payments under insurance (whether or not the Collateral
Agent is the loss payee thereof), or distributions or, rights arising
out of, returns of and from, and any and all claims and/or insurance
payments arising out of the loss, noncomformity, or interference with
the use of, defects or infringements of rights in, or damage to any of
the foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include (i) any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would (A)
constitute a violation of a valid and enforceable restriction in favor of a
third party on such grant, unless and until any required consents shall have
been obtained (provided that each Grantor shall use all commercially reasonable
efforts to obtain such consents) or (B) give any other party to such contract,
instrument, license or other document the right to terminate its obligations
thereunder, unless and until any required consents shall have been obtained and
(ii) investment property consisting of Capital Securities of an issuer that is a
Foreign Subsidiary (other than a Foreign Subsidiary that (i) is treated as a
partnership under the Code or (ii) is not treated as an entity that is separate
from (A) any Grantor, (B) any Person that is treated as a partnership under the
Code or (C) any "United States person" (as defined in Section 7701(a)(30) of the
Code)) of such Grantor, in excess of 65% of the total combined voting power of
all Capital Securities of each such Foreign Subsidiary; provided further,
however, that, in the event of any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase in of, any law or
regulation, directive or guideline of any Governmental Authority that could
reasonably be expected to alter the amount of United States federal income tax
that would otherwise be payable by such Grantor in the absence of such pledge,
the Collateral Agent or the Required Lenders may require such Grantor to pledge
such Capital Securities.
SECTION 2.2. Security for Obligations. This Security Agreement and the
Collateral in which the Secured Parties are granted a security interest in
hereunder secures the payment of all Secured Obligations.
SECTION 2.3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding
(a) each Grantor will remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and will perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Security
Agreement had not been executed;
9 Subsidiary Security Agreement
(b) the exercise by any Secured Party of any of its rights
hereunder will not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral; and
(c) no Secured Party will have any obligation or liability
under any contracts or agreements included in the Collateral by reason
of this Security Agreement, nor will any, Secured Party be obligated to
perform any of the obligations or duties of any Grantor thereunder or
to take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 2.4. Security Interest Absolute, etc. This Security Agreement
shall in all respects be a continuing, absolute, unconditional and irrevocable
grant of security interest, and shall remain in full force and effect until the
Termination Date has occurred. All rights of the Secured Party and the security
interests granted to the Collateral Agent (for its benefit and the ratable
benefit of each other Secured Party) hereunder, and all obligations of each
Grantor hereunder, shall, in each case, be absolute, unconditional and
irrevocable irrespective of:
(a) surrender or non-perfection of any collateral, or any
amendment to or waiver or release or addition to, or consent to or
departure from, any other guaranty held by any Secured Party securing
any of the Secured Obligations;
(b) any change in the time, place or manner of payment of,
or in any other term of, all or any of the Secured Obligations, any
waiver, indulgence, renewal, extension, amendment or modification of,
or addition, consent or supplement to, or deletion from, or any other
action or inaction under or in respect of, the Term Loan Agreement or
the Revolving Credit Agreement, the other Credit Documents, or any
other documents, instruments or agreements relating to the Secured
Obligations or any other instrument or agreement referred to therein
or any assignment or transfer of any thereof;
(c) any lack of validity or enforceability of the Term Loan
Agreement, the Revolving Credit Agreement, the other Credit Documents,
or any other document, instrument or agreement referred to therein or
any assignment or transfer of any thereof;
(d) any furnishing to the Secured Parties of any additional
security for the Secured Obligations, or any sale, exchange, release or
surrender of, or realization on, any security for the Secured
Obligations;
(e) any settlement or compromise of any of the Secured
Obligations, any security therefor, or any liability of any other party
with respect to the Secured Obligations, or any subordination of the
payment of the Secured Obligations to the payment of any other
liability of the Borrower;
(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to any Grantor or the Borrower,
10 Subsidiary Security Agreement
or any action taken with respect to this Security Agreement by any
trustee or receiver, or by any court, in any such proceeding;
(g) any nonperfection of any security interest or lien on any
collateral, or any amendment or waiver of, consent to, or departure
from, any guaranty or security for all or any of the Secured
Obligations;
(h) any application of sums paid by the Borrower or any other
Person with respect to the Secured Obligations of the Borrower to the
Secured Parties, regardless of what Secured Obligations of the Borrower
remain unpaid;
(i) any act or failure to act by any Secured Party which may
adversely affect a Grantor's subrogation rights, if any, against the
Borrower to recover payments made under this Security Agreement; and
(j) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Credit
Party, any surety or any guarantor (other than the Termination Date).
SECTION 2.5. Postponement of Subrogation, etc. Each Grantor agrees that
it will not exercise any rights which it may acquire by way of rights of
subrogation under any Credit Document to which it is a party, nor shall any
Grantor seek or be entitled to seek any contribution or reimbursement from any
Credit Party, in respect of any payment made under any Credit Document or
otherwise, until following the Termination Date. Any amount paid to any Grantor
on account of any such subrogation rights prior to the Termination Date shall be
held in trust for the benefit of the Secured Parties and shall immediately be
paid and turned over to the Collateral Agent for its benefit and the ratable
benefit of each other Secured Party in the exact form received by such Grantor
(duly endorsed in favor of the Collateral Agent, if required), to be credited
and applied against the Secured Obligations, whether matured or unmatured, in
accordance with clause (b) of Section 6.1; provided, however, that if any
Grantor has made payment to the Secured Parties of all or any part of the
Secured Obligations and the Termination Date has occurred, then at such
Grantor's request, the Collateral Agent (on behalf of the Secured Parties) will,
at the expense of such Grantor, execute and deliver to such Grantor appropriate
documents (without recourse and without representation or warranty) necessary to
evidence the transfer by subrogation to such Grantor of an interest in the
Secured Obligations resulting from such payment. In furtherance of the
foregoing, at all times prior to the Termination Date, each Grantor shall
refrain from taking any action or commencing any proceeding against any Credit
Party (or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in respect of payments made
under this Security Agreement to any Secured Party.
SECTION 2.6. Reinstatement. If any payment made in respect of any
Secured Obligations is rescinded or must otherwise be restored by Secured Party
and, pursuant to Section
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2.4, the security interest granted herein shall have terminated, this Agreement
and such security interest shall be reinstated and otherwise restored all as
though such payment had not been made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into the Term Loan
Agreement and the Revolving Credit Amendment and the other Credit Documents as
applicable, each Grantor represents and warrants to each Secured Party as set
forth below.
SECTION 3.1. As to Capital Securities of Subsidiaries. With respect to
any Subsidiary of any Grantor that is
(a) a corporation, business trust, joint stock company or
similar Person, all Capital Securities issued by such Subsidiary are
duly authorized and validly issued, fully paid and non-assessable, and
represented by a certificate; and
(b) a partnership or limited liability company, no Capital
Securities issued by such Subsidiary (i) are dealt in or traded on
securities exchanges or in securities markets, (ii) expressly provide
that such Capital Securities are a security governed by Article 8 of
the UCC, (iii) are held in a securities account, or (iv) are
represented by a certificate.
The percentage of the issued and outstanding Capital Securities of each
Subsidiary pledged by each Grantor hereunder are as set forth on Schedule I
hereto. Except as set forth in Schedule I hereto, no Grantor has any
Subsidiaries, the Capital Securities of which are not pledged pursuant to this
Security Agreement.
SECTION 3.2. Intercompany Notes. All Intercompany Notes have been duly
authorized, executed, endorsed, issued and delivered, and are the legal, valid
and binding obligation of the issuers thereof, and are not in default.
SECTION 3.3. Location of Collateral, etc. All of the Equipment,
Inventory, lock boxes and deposit accounts of each Grantor are located at the
places specified in Item A, Item B and Item C respectively, of Schedule II
hereto, as each such Item may be supplemented or otherwise modified from time to
time pursuant clause (a) of Section 4.2. None of the Equipment and Inventory
has, within the four months preceding the date of this Security Agreement, been
located at any place other than the places specified in Item A and Item B,
respectively, of Schedule II hereto except as set forth in a footnote thereto.
The true legal name as registered in the jurisdiction in which any Grantor is
organized or incorporated, the state of incorporation or organization, the
place(s) of business and the chief executive office of such Grantor and the
office(s) where such Grantor keeps its records concerning the Receivables, and
all originals of all chattel paper which evidence Receivables, are located at
the addresses set forth in Item D of Schedule II hereto, as each such Item may
be supplemented or otherwise modified from time to time pursuant clause (a) of
Section 4.3. No Grantor has any trade names other than those set forth in Item E
of Schedule II
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hereto. During, the four months preceding the date hereof, no Grantor has been
known by any legal name different from the one set forth on the signature page
hereto, nor has any Grantor been the subject of any merger, consolidation,
conversion or other corporate reorganization, except as set forth in Item F of
Schedule II hereto. Each Grantor's federal taxpayer identification number is
(and, during the four months preceding the date hereof, such Grantor has not had
a federal taxpayer identification number different from the one) set forth in
Item of Schedule II hereto. If the Collateral of any Grantor includes any
Inventory located in the State of California, such Grantor is not a "retail
merchant" within the meaning of Section 9102 of the California UCC. All
Receivables evidenced by a promissory note or other instrument, negotiable
document or chattel paper have been duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Collateral Agent and delivered and pledged to the Collateral
Agent pursuant to Section 4.6. No Grantor is a party to any federal, state or
local government contract except as set forth in Item H of Schedule II hereto.
SECTION 3.4. Ownership, No Liens, etc. Each Grantor owns its Collateral
free and clear of any Lien, except for Liens (a) created by this Security
Agreement, and, in the case of Collateral other than any investment property
(including Capital Securities of any Subsidiary of such Grantor) in which such
Grantor has an interest, (b) permitted by Section 7.02 of the Term Loan
Agreement and the Revolving Credit Agreement. No effective financing statement
or other filing similar in effect covering any Collateral is on file in any
recording office, except those filed in favor of the Collateral Agent relating
to this Security Agreement or those tiled in connection with Liens permitted by
Section 7.02 of the Term Loan Agreement and the Revolving Credit Agreement.
SECTION 3.5. Possession of Inventory, etc. Each Grantor agrees that it
will maintain exclusive possession of its goods, instruments and Inventory,
other than Inventory in transit in the ordinary course of business and Inventory
which is in the possession or control of a warehouseman, bailee agent or other
Person (other than a Person controlled by or under common control with such
Grantor) that has been notified of the security interest created in favor of the
Secured Parties pursuant to this Security Agreement, and has agreed to hold such
Inventory subject to the Secured Parties' Lien and waive any Lien held by it
against such Inventory.
SECTION 3.6. Negotiable Documents. Instruments and Chattel Paper. Each
Grantor has delivered to the Collateral Agent possession of all originals of all
negotiable documents, instruments and chattel paper owned or held by such
Grantor on the date hereof and agrees that it will, promptly following receipt,
deliver to the Collateral Agent possession of all originals of negotiable
documents, instruments and chattel paper that it acquires following the date
hereof.
SECTION 3.7. Intellectual Property Collateral. With respect to any
material Intellectual Property Collateral:
(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and
enforceable;
13 Subsidiary Security Agreement
(c) each Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property
Collateral, including recordations of all of its interests in the
Patent Collateral and Trademark Collateral in the United States Patent
and Trademark Office and in corresponding offices throughout the world,
and its claims to the Copyright Collateral in the United States
Copyright Office and in corresponding offices throughout the world;
(d) each Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted
rights of any third party; and
(e) each Grantor has performed and will continue to perform
all acts and has paid and will continue to pay all required fees and
taxes to maintain each and every such item of Intellectual Property
Collateral in full force and effect throughout the world, as
applicable.
Each Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of such Grantor's
business.
SECTION 3.8. Validity, etc. This Security Agreement creates a valid
security interest in the Collateral securing the payment of the Secured
Obligations. Each Grantor has executed and delivered to the Collateral Agent
originals of all financing statements suitable for filing in the appropriate
offices and (a) in the case of Collateral comprised of certificated securities
or instruments, has delivered such Collateral to the Collateral Agent, duly
endorsed in blank and (b) in the case of Collateral comprised of uncertificated
securities and other investment property (other than certificated securities),
has taken such actions causing the Collateral Agent to have "control" (as
defined in Section 8-106 of the UCC, as such term relates to investment property
(other than certificated securities or commodity contracts), or as used in
Section 9-106(b) of the UCC, as such term ,relates to commodity contracts) of
such Collateral.
SECTION 3.9. Authorization. Approval, etc. Except as have been obtained
or made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required either
(a) for the grant by each Grantor of the security interest
granted hereby, the pledge by each Grantor of any Collateral pursuant
hereto or for the execution, delivery and performance of this Security
Agreement by each Grantor;
(b) for the perfection of or the exercise by any Secured Party
of its rights and remedies hereunder (except for whatever action is
necessary for filing in the appropriate offices); or
14 Subsidiary Security Agreement
(c) for the exercise by the Collateral Agent of the voting or
other rights provided for in this Security Agreement, or, except with
respect to any securities issued by a Subsidiary of any Grantor, as may
be required in connection with a disposition of such securities by laws
affecting the offering and sale of securities generally, the remedies
in respect of the Collateral pursuant to this Security Agreement.
SECTION 3.10. Compliance with Laws. Each Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules and regulations, the non-compliance with any of the
Term Loan Agreement and the Revolving Credit Amendment which could reasonably be
expected to materially and adversely affect the value of the Collateral.
SECTION 3.11. Best Interests. It is in the best interests of each
Grantor to execute this Security Agreement inasmuch as such Grantor will, as a
result of being a Subsidiary of the Borrower, derive substantial direct and
indirect benefits from the Term Loan Agreement and the Revolving Credit
Amendment, and each Grantor agrees that the Secured Parties are relying on this
representation in agreeing to the Term Loan Agreement and the Revolving Credit
Amendment.
SECTION 3.12. Representations and Warranties. Each Grantor represents
and warrants as to itself that all representations and warranties relating to it
contained in Sections 5.01 through 5.06 of the Term Loan Agreement and the
Revolving Credit Agreement are true and correct.
ARTICLE IV
COVENANTS
Each Grantor covenants and agrees that, until the Termination Date has
occurred, such Grantor will perform, comply with and be bound by the obligations
set forth below.
SECTION 4.1. As to Investment Property and Intercompany Notes; Etc.
SECTION 4.1.1. Capital Securities of Subsidiaries. Each Grantor will
cause each of its Subsidiaries that is
(a) a corporation, business trust, joint stock company or
similar Person, to provide in its Organic Documents that all
securities issued by such Subsidiary will be represented by a
certificate; and
(b) a partnership or limited liability company, to provide in
its Organic Documents that no Capital Securities issued by such
Subsidiary will (i) be dealt in or traded on securities exchanges or in
securities markets, (ii) expressly provide that such Capital Securities
are securities governed by Article 8 of the UCC, (iii) be held in a
securities account, or (iv) be represented by a certificate.
15 Subsidiary Security Agreement
SECTION 4.1.2 Investment Property (other than Certificated Securities).
With respect to any investment property (other than certificated securities)
owned by any Grantor, such Grantor will cause a Securities Control Agreement
relating to such investment property to be executed and delivered by such
Grantor and the applicable broker or securities or commodity intermediary in
favor of the Collateral Agent.
SECTION 4.1.3 Stock Powers, etc. Each Grantor agrees that all
certificated securities delivered by such Grantor pursuant to this Security
Agreement will be accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer acceptable to the Collateral Agent.
SECTION 4.1.4 Continuous Pledge. Each Grantor will deliver to the
Collateral Agent and at all times keep pledged to the Collateral Agent pursuant
hereto, on a first-priority, perfected basis all investment property
constituting Collateral, all Dividends and Distributions with respect thereto,
all Intercompany Notes (duly endorsed by such Grantor to the order of the
Collateral Agent), and all interest and principal with respect to the
Intercompany Notes, and all proceeds and rights from time to time received by or
distributable to such Grantor in respect of any of the foregoing Collateral.
SECTION 4.1.5 Voting Rights; Dividends, etc. Each Grantor agrees:
(a) promptly upon receipt of notice of the occurrence and
continuance of a Specified Event from the Collateral Agent and without
any request therefor by the Collateral Agent, so long as such Specified
Event shall continue, to deliver (properly endorsed where required
hereby or requested by the Collateral Agent) to the Collateral Agent
all Dividends and Distributions with respect to investment property,
all interest, principal and other cash payments on Intercompany Notes,
and all proceeds of the Collateral, in each case thereafter received by
such Grantor, all of which shall be held by the Collateral Agent as
additional Collateral; and
(b) immediately upon the occurrence and continuance of a
Specified Event and so long as the Collateral Agent has notified such
Grantor of the Collateral Agent's intention to exercise its voting
power under this clause, such Grantor agrees
(i) that the Collateral Agent may exercise (to the
exclusion of such Grantor) the voting power and all other
incidental rights of ownership with respect to any investment
property constituting Collateral and such Grantor hereby
grants the Collateral Agent an irrevocable proxy, exercisable
under such circumstances, to vote such investment property;
and
(ii) to promptly deliver to the Collateral Agent
such additional proxies and other documents as may be
necessary to allow the Collateral Agent to exercise such
voting power.
16 Subsidiary Security Agreement
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by any Grantor but which
such Grantor is then obligated to deliver to the Collateral Agent, shall, until
delivery to the Collateral Agent, be held by such Grantor separate and apart
from its other property in trust for the Secured Parties. The Collateral Agent
agrees that unless a Specified Event shall have occurred and be continuing and
the Collateral Agent shall have given the notice referred to in clause (b), each
Grantor will have the exclusive voting power with respect to any investment
property constituting Collateral and the Collateral Agent will, upon the written
request of such Grantor, promptly deliver such proxies and other documents,
if any, as shall be reasonably requested by such Grantor which are necessary to
allow such Grantor to exercise that voting power; provided, however, that no
vote shall be cast, or consent, waiver, or ratification given, or action taken
by such Grantor that would impair any such Collateral or be inconsistent with or
violate any provision of any Credit Document.
SECTION 4.1.6 Organic Documents. No Grantor will amend, supplement or
otherwise modify or permit, consent to or suffer to occur any amendment,
supplement or modification of, any terms or provisions contained in, or
applicable to, any Organic Document of any Subsidiary that has issued Capital
Securities included in the Collateral if the effect thereof is to impair, or is
in any manner adverse to, the rights or interests of any Secured Party unless
consented to by the Collateral Agent.
SECTION 4.2. As to Equipment and Inventory. Each Grantor hereby agrees
that it will
(a) keep ah the Equipment and Inventory (other than Equipment
and Inventory sold in accordance with Section 7.04 of the Term Loan
Agreement and the Revolving Credit Agreement, motor vehicles and
Inventory in transit) at the places therefor specified in Section 3.3
or, upon 30 days' prior written notice to the Collateral Agent, at such
other places in a jurisdiction where all representations and warranties
set forth in Article III shall be true and correct, and all action
required pursuant to Section 4.6 shall have been taken with respect to
the Equipment and Inventory;
(b) cause the Equipment to be maintained and preserved in good
repair and working order, ordinary wear and tear excepted, and in
accordance with any manufacturer's manual; and forthwith, or in the
case of any material loss or damage to any of the Equipment, as quickly
as practicable after the occurrence thereof, make or cause to be made
all repairs, replacements, and other improvements in connection
therewith which are necessary or desirable to such end; and promptly
furnish to the Collateral Agent a statement respecting any material
loss or damage to any of the Equipment; and
(c) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Equipment and Inventory, except to the extent the validity thereof
is being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP have been set aside.
17 Subsidiary Security Agreement
SECTION. 4.3. As to Receivables. (a) Each Grantor will keep its chief
executive office, its jurisdiction of formation, the office(s) where it keeps
its records concerning the Receivables and all originals of all chattel paper
which evidences Receivables located at the addresses set forth in Item of
Schedule II hereto, or, upon 30 days' prior written notice to the Collateral
Agent, at such other locations in a jurisdiction where all actions required by
Section 4.6 shall have been taken with respect to the Receivables and other
Collateral. No Grantor will change its name or federal taxpayer identification
number or jurisdiction of formation except upon 30 days' prior written notice to
the Collateral Agent. In addition, each Grantor shall supplement the information
contained in Schedule II hereto on the Compliance Certificate on each date a
Compliance Certificate is required to be delivered to the administrative agent
under the Revolving Credit Agreement or the Term Loan Agreement, including any
changes to the information set forth in Section 3.3.
(b) Each Grantor shall have the right to collect all
Receivables so long as no Specified Event shall have occurred and be
continuing.
(c) Upon (i) the occurrence and continuance of a Specified
Event or any other Event of Default and (ii) the delivery of written
notice by the Collateral Agent to each Grantor, all proceeds of
Collateral received by such Grantor shall be delivered in kind to the
Collateral Agent for deposit to a deposit account (the "Collateral
Account") of such Grantor maintained with the Collateral Agent, and
such Grantor shall not commingle any such proceeds, and shall hold
separate and apart from all other property, all such proceeds in
express trust for the benefit of the Secured Parties until delivery
thereof is made to the Collateral Agent.
(d) Following the delivery of notice pursuant to clause
(c)(ii) of this Section, the Collateral Agent shall have the right to
apply any amount in the Collateral Account to the payment of any
Secured Obligations which are due and payable.
(e) With respect to the Collateral Account, it is hereby
confirmed and agreed that (i) deposits in each Collateral Account are
subject to a security interest as contemplated hereby, (ii) each such
Collateral Account shall be under the sole dominion and control of the
Collateral Agent and (iii) the Collateral Agent shall have the sole
right of withdrawal over such Collateral Account.
SECTION 4.4. As to Collateral.
(a) Subject to clause (b) of this Section, each Grantor (i)
may in the ordinary course of its business, at its own expense, sell,
lease or furnish under the contracts of service any of the, Inventory
normally held by such Grantor for such purpose, and use and consume, in
the ordinary course of its business, any raw materials, work in process
or materials normally held by such Grantor for such purpose, (ii) will,
at its own expense, endeavor to collect, as and when due, all amounts
due with respect to any of the Collateral, including the taking of such
action with respect to such collection as the Collateral Agent may
reasonably request following the occurrence of a Specified Event or, in
the absence of such request, as
18 Subsidiary Security Agreement
such Grantor may deem advisable, and (iii) may grant, in the ordinary
course of business, to any party obligated on any of the Collateral,
any rebate, refund or allowance to which such party may be lawfully
entitled, and may accept, in connection therewith, the return of goods,
the sale or lease of which shall have given rise to such Collateral.
(b) At any time following the occurrence and during the
continuance of a Specified Event, whether before or after the maturity
of any of the Secured Obligations, the Collateral Agent may (i) revoke
any or all of the rights of any Grantor set forth in clause (a), (ii)
notify any parties obligated on any of the Collateral to make payment
to the Collateral Agent of any amounts due or to become due thereunder
and (iii) enforce collection of any of the Collateral by suit or
otherwise and surrender, release, or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any indebtedness, thereunder or evidenced
thereby.
(c) Upon request of the Collateral Agent following the
occurrence and during the continuance of a Specified Event, each
Grantor will, at its own expense, notify any parties obligated on any
of the Collateral to make payment to the Collateral Agent of any
amounts due or to become due thereunder.
(d) Each Grantor hereby authorizes the Collateral Agent to
endorse, in the name of such Grantor, any item, howsoever received by
the Collateral Agent, representing any payment on or other proceeds of
any of the Collateral.
SECTION 4.5. As to Intellectual Property Collateral. Except, in the
case of clauses (a)(i), (b) and (d) below, for any items marked with an asterisk
in Schedule III, IV or V hereto, which the Grantors do not currently use and do
not intend to use at any time in the future, each Grantor covenants and agrees
to comply with the following provisions as such provisions relate to any
Intellectual Property Collateral of such Grantor:
(a) such Grantor will not (i) do or fail to perform any act
whereby any of the, Patent Collateral may lapse or become abandoned or
dedicated to the public or unenforceable, (ii) permit any of its
licensees to (A) fail to continue to use any of the Trademark
Collateral in order to maintain all of the Trademark Collateral in full
force free from any claim of abandonment for non-use, (B) fail to
maintain as in the past the quality of products and services offered
under all of the Trademark Collateral, (C) fail to employ all of the
Trademark Collateral registered with any federal or state or foreign
authority with an appropriate notice of such registration, (D) adopt or
use any other Trademark which is confusingly similar or a colorable
imitation of any of the Trademark Collateral, (E) use any of the
Trademark Collateral registered with any federal, state or foreign
authority except for the uses for which registration or application for
registration of all of the Trademark Collateral has been made or (F) do
or permit any act or knowingly omit to do any act whereby any of the
Trademark Collateral may lapse or become invalid or unenforceable, or
(G) do or permit any act or knowingly omit to do any act whereby any of
the Copyright Collateral or any of the Trade Secrets Collateral may
lapse or become invalid or
19 Subsidiary Security Agreement
unenforceable or placed in the public domain except upon expiration of the end
of an unrenewable term of a registration thereof, unless, in the case of any of
the foregoing requirements in clauses (i) or (ii), such Grantor shall either (x)
reasonably and in good faith determine that any of such Intellectual Property
Collateral is of negligible economic value to such Grantor, or (y) have a valid
business purpose to do otherwise;
(b) such Grantor shall promptly notify the Collateral Agent if it
knows, or has reason to know, that any application or registration relating to
any material item of the Intellectual Property Collateral may become abandoned
or dedicated to the public or placed in the public domain or invalid or
unenforceable, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States, Patent and Trademark Office, the United States Copyright
Office or any foreign counterpart thereof or any court) regarding such
Grantor's ownership of any of the Intellectual Property Collateral, its right
to register the same or to keep and maintain and enforce the same;
(c) in no event will such Grantor or any of its agents, employees,
designees or licensees file an application for the registration of any
Intellectual Property Collateral with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, unless it promptly
informs the Collateral Agent, and upon request of the Collateral Agent,
executes and delivers all agreements, instruments and documents as the
Collateral Agent may reasonably request to evidence the Collateral Agent's
security interest in such Intellectual Property Collateral;
(d) such Grantor will take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue any application (and
to obtain the relevant registration) filed with respect to, and to maintain any
registration of, the Intellectual Property Collateral, including the filing of
applications for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and the payment of fees
and taxes (except to the extent that dedication, abandonment or invalidation is
permitted under the foregoing clause (a) or (b); and
(e) such Grantor will promptly (but no less than quarterly) execute and
deliver to the Collateral Agent (as applicable) a Patent Security Agreement,
Trademark Security Agreement and/or Copyright Security Agreement, as the case
may be, in the forms of Exhibit B, Exhibit C and Exhibit D hereto following its
obtaining an interest in any such Intellectual Property, and shall execute and
deliver to the Collateral Agent any other document required to acknowledge or
register or perfect the Secured Parties' interest in any part of such item of
Intellectual Property Collateral.
20 Subsidiary Security Agreement
SECTION 4.6. Further Assurances, etc. Each Grantor will warrant and
defend the security interest herein granted unto the Secured Parties by such
Grantor in and to the Collateral (and all right, title and interest represented
by such Collateral) against the claims and demands of all Persons whomsoever.
Each Grantor agrees that, from time to time at its own expense, it will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or that the Collateral Agent may reasonably
request, in order to perfect, preserve and protect any security interest granted
or purported to be granted hereby or to enable any Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor:
(a) will from time to time upon the request of the Collateral
Agent, promptly deliver to the Collateral Agent such stock powers,
instruments and similar documents, satisfactory in form and substance
to the Collateral Agent, with respect to such Collateral as the
Collateral Agent may reasonably request and will, from time to time
upon the request of the Collateral Agent after the occurrence and
during the continuance of any Specified Event promptly transfer any
Capital Securities constituting Collateral into the name of any nominee
designated by the Collateral Agent for the ratable benefit of the
Secured Parties; if any Receivable shall be evidenced by an instrument,
negotiable document or chattel paper, deliver and pledge to the
Collateral Agent hereunder such instrument, negotiable document or
chattel paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
satisfactory to the Collateral Agent;
(b) will execute and file (or caused to be filed) such
financing statements or continuation statements, or amendments thereto,
and such other instruments or notices (including any assignment of
claim form under or pursuant to the federal assignment of claims
statute, 31 U.S.C. ss. 3726, any successor or amended version thereof
or any regulation promulgated under or pursuant to any version
thereof), as may be necessary or that the Collateral Agent may
reasonably request in order to perfect and preserve the security
interests and other rights granted or purported to be granted to the
Collateral Agent or the other Secured Parties hereby;
(c) hereby authorizes the Collateral Agent to file such
financing statements and other documents without its signature (to the
extent allowed by applicable law);
(d) shall not enter into any agreement amending, supplementing
or waiving any provision of any Intercompany Note (including any
underlying instrument pursuant to which such Intercompany Note is
issued), that compromises, releases or extends the time for payment of
any obligation of the maker thereof;
(e) shall not take or omit to take any action the taking or
the omission of which would result in any impairment or alteration of
any obligation of the maker of any Intercompany Note or other
instrument constituting Collateral;
21 Subsidiary Security Agreement
(f) will furnish to the Collateral Agent, from time to time as
the Collateral Agent may reasonably request, statements and schedules
further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail;
(g) will maintain or cause to be maintained with financially
sound and reputable insurers, insurance with respect to its properties
and business, and the properties and business of its Subsidiaries,
against loss or damage of the kinds customarily insured against by
reputable companies in the same or similar businesses, such insurance
to be of such types and in such amounts as are customary for such
companies under similar circumstances; and
(h) shall not change its state of organization or
incorporation or its name, identity or corporate structure such that
any financing statement filed to perfect the Collateral Agent's
interests under this Security Agreement would be come seriously
misleading, unless such Grantor shall have given the Collateral Agent
not less than 30 days' prior notice of such change (provided that this
Section 4.6(h) shall not be deemed authorize any change or transaction
prohibited under the Term Loan Agreement or the Revolving Credit
Agreement).
With respect to the foregoing and the grant of the security interest hereunder,
each Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. Each Grantor agrees that a carbon, photographic or other reproduction of
this Security Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where permitted by
law.
SECTION 4.7. Deposit Accounts. From and after the date hereof, no
Grantor shall maintain any Deposit Account or deposit any items or amounts in
any Deposit Account, except: (i) Deposit Accounts maintained with the Collateral
Agent or any "Lender" under either the Term Loan Agreement or the Revolving
Credit Agreement, or (ii) Deposit Accounts as to which each respective Grantor,
the Collateral Agent and the depositary bank have entered into a Control
Agreement that the depositary bank will comply with instructions originated by
the Collateral Agent directing disposition of the funds in the account without
further consent by such Grantor.
SECTION 4.8. Transfers and Other Liens. No Grantor shall:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the
Term Loan Agreement and the Revolving Credit Agreement; or
(b) create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure Indebtedness of any Person, except for
the security interest created by this Security Agreement and except as
permitted by the Term Loan Agreement and the Revolving Credit
Agreement.
22 Subsidiary Security Agreement
ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent its attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Collateral Agent's discretion, following
the occurrence and during the continuance of a Specified Event, to take any
action and to execute any instrument which the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Security Agreement,
including:
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Collateral Agent with respect to any of the Collateral;
and
(d) to perform the affirmative obligations of such Grantor
hereunder (including all obligations of such Grantor pursuant to
Section 4.6).
Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may itself perform,
or cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by such
Grantor pursuant to Section 6.4.
SECTION 5.3. Collateral Agent Has No Duty. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest (on behalf of the
Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any investment property, whether or not the Collateral Agent has or
is deemed to have knowledge of such matters, or
23 Subsidiary Security Agreement
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Collateral Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, that the Collateral Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the Collateral
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care, provided, further that the Collateral
Agent shall have no liability to any Grantor or any Secured Party except to the
extent caused by its gross negligence or willful misconduct.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC applies
to the affected Collateral) and also may
(i) require each Grantor to, and such Grantor hereby
agrees that it will, at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place to be designated
by the Collateral Agent which is reasonably convenient to both
parties, and
(ii) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent
may deem commercially reasonable. Each Grantor agrees that,
to the extent notice of sale shall be required by law, at
least ten days prior notice to such Grantor of the time and
place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification.
The Collateral Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made
at the time and place to which it was so adjourned.
(b) The Collateral Agent may
24 Subsidiary Security Agreement
(i) transfer all or any part of the Collateral into
the name of the Collateral Agent or its nominee, with or
without disclosing that such Collateral is subject to the Lien
hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Collateral Agent of any
amount due or to become due thereunder,
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in
any Grantor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral,
and
(vi) execute (in the name, place and stead of any
Grantor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION 6.2. Securities Laws. If the Collateral Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
6.1, each Grantor agrees that, upon request of the Collateral Agent, such
Grantor will, at its own expense:
(a) execute and deliver, and cause (or, with respect to any
issuer which is not a Subsidiary of such Grantor, use its best efforts
to cause) each issuer of the Collateral contemplated to be sold and the
directors, officers, managers and trustees thereof to execute and
deliver, all such instruments and documents, and do or cause to be done
all such other acts and things, as may be necessary or, in the opinion
of the Collateral Agent, advisable to register such Collateral under
the provisions of the Securities Act of 1933, as from time to time
amended (the "Securities Act"), and cause the registration statement
relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related prospectus
which, in the reasonable opinion of the Collateral Agent, are necessary
or advisable, all in conformity with the requirements of the Securities
Act and the rules and regulations of the SEC applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
the Collateral Agent;
25 Subsidiary Security Agreement
(c) cause (or, with respect to any issuer which is not a
Subsidiary of such Grantor, use its best efforts to cause) each such
issuer to make available to its security holders, as soon as
practicable, an earnings statement that will satisfy the provisions of
Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Each Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by any of the Secured Parties by reason of the
failure of such Grantor to perform any of the covenants contained in this
Section and, consequently, agrees that, if such Grantor shall fail to perform
any of such covenants, it shall pay, as liquidated damages and not as a penalty,
an amount equal to the value (as determined by an independent appraiser) of the
Collateral on the date the Collateral Agent shall demand compliance with this
Section.
SECTION 6.3. Compliance with Restrictions. Each Grantor agrees that
(a) in any sale of any of the Collateral whenever an Event of
Default shall have occurred and be continuing, the Collateral Agent is
hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is necessary
in order to
(i) avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and
purchasers to Persons who will represent and agree that they
are purchasing for their own account for investment and not
with a view to the distribution or resale of such Collateral),
or
(ii) obtain any required approval of the sale or of
the purchaser by any Governmental Authority or official, and
(b) such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable
manner, nor shall the Collateral Agent be liable nor accountable to
such Grantor for any discount allowed by the reason of the fact that
such Collateral is sold in compliance with any such limitation or
restriction; provided that the Collateral Agent acted in compliance
with Article 9 of the UCC.
SECTION 6.4. Indemnity and Expenses.
(a) Each Grantor jointly and severally agrees to indemnify the
Collateral Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Security Agreement
(including enforcement of this Security Agreement), except claims,
26 Subsidiary Security Agreement
losses or liabilities resulting from the Collateral Agent's gross
negligence or wilful misconduct.
(b) Each Grantor will, upon demand, pay to the Collateral
Agent the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any experts and
agents, which the Collateral Agent may incur in connection with
(i) the administration of each Credit Document,
(ii) the custody, preservation, use or operation of,
or the sale of, collection from, or other realization upon,
any of the Collateral,
(iii) the exercise or enforcement of any of the
rights of the Collateral Agent or the Secured Parties
hereunder, and
(iv) the failure by any Grantor to perform or
observe any of the provisions hereof.
(c) All of the foregoing fees, costs and expenses shall be
part of the Secured Obligations and shall be secured by the Collateral.
This Section 6.4 shall survive the termination of this Security
Agreement.
SECTION 6.5. Protection of Collateral. The Collateral Agent may from
time to time, at its option, perform any act which any Grantor fails to perform
after being requested in writing so to perform by the Collateral Agent (it being
understood that no such request need be given after the occurrence and during
the continuance of an Event of Default) and the Collateral Agent may from time
to time take any other action which the Collateral Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
SECTION 6.6. Application of Proceeds. All cash proceeds received by the
Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the proceeds of the Collateral shall be
applied by the Collateral Agent to payment of the Secured Obligations in the
following order unless a court of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all reasonable costs and expenses of
the Collateral Agent incurred in connection with the collection and
enforcement of the Secured Obligations or of the security interest
granted to the Collateral Agent pursuant to this Security Agreement;
(b) SECOND, to payment of that portion of the Secured
Obligations constituting accrued and unpaid interest and fees, pro rata
among the Secured Parties in accordance with the amount of such accrued
and unpaid interest and fees owing to each of them;
27 Subsidiary Security Agreement
(c) THIRD, to payment of the principal of the Secured
Obligations, pro rata among the Secured Parties in accordance with the
amount of such principal owing to each of them;
(d) FOURTH, to payment of any other Secured Obligations (other
than those listed above) pro rata among the Secured Parties in
accordance with the amounts owing to each of them; and
(e) FIFTH, the balance, if any, after all of the Secured
Obligations have been satisfied, to the applicable Grantor or to
whosoever may be lawfully entitled to receive them; provided, that
prior to the Termination Date, such balance may, in the discretion of
the Collateral Agent, be used by the Collateral Agent as additional
collateral to be applied at any time thereafter pursuant to this
Section 6.6.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Credit Document. This Security Agreement is a "Credit
Document" executed pursuant to the Term Loan Agreement and the Revolving Credit
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof,
including Articles X thereof.
SECTION 7.2. Binding on Successors, Transferees and Assigns;
Assignment. This Security Agreement shall remain in full force and effect until
the Termination Date has occurred, shall be binding upon each Grantor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided, however, that no Grantor may assign any of its obligations hereunder
without the prior written consent of the Collateral Agent. Without limiting the
foregoing, any Secured Party may assign or otherwise transfer all or any portion
of the Secured Obligations held by it to any other Person, and such other Person
shall thereupon become vested with all the rights and benefits in respect
thereof granted to such Secured Party under this Security Agreement or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the applicable provisions of the Term Loan Agreement or the
Revolving Credit Agreement.
SECTION 7.3. Amendments, etc. No amendment to or waiver of any
provision of this Security Agreement, nor consent to any departure by any
Grantor from its obligations under this Security Agreement, shall in any event
be effective unless the same shall be in writing and signed by the Collateral
Agent (on behalf of the Lenders or the Required Lenders or Super-Majority
Lenders, as the case may be, pursuant to Section 10.2 of the Term Loan Agreement
and the Revolving Credit Agreement) and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
28 Subsidiary Security Agreement
SECTION 7.4. Notices. All notices and other communications provided
for hereunder shall be given in the manner provided in Section 10.01 of the
Revolving Credit Agreement to the appropriate party at the address or facsimile
number of such party (in the case of any Grantor, in care of the Borrower)
pursuant to the Revolving Credit Agreement and shall be deemed given as provided
in the Revolving Credit Agreement.
SECTION 7.5. Foreign Pledge Agreements. Without limiting any of the
rights, remedies, privileges or benefits provided hereunder to the Collateral
Agent for its benefit and the ratable benefit of each other Secured Party, each
Grantor and the Collateral Agent hereby agree that the terms and provisions of
this Security Agreement in respect of any Collateral subject to the pledge or
other lien of a Foreign Pledge Agreement are, and shall be deemed to be,
supplemental and in addition to the rights, remedies, privileges and benefits
provided to the Secured Parties under such Foreign Pledge Agreement and under
applicable law to the extent consistent with applicable law; provided, that, in
the event that the terms of this Security Agreement conflict or are inconsistent
with the applicable Foreign Pledge Agreement or applicable law governing such
Foreign Pledge Agreement, the terms of such Foreign Pledge Agreement or such
applicable law shall be controlling.
SECTION 7.6. Release of Liens. Upon (a) a Permitted Asset Sale of
Collateral, (b) the consummation of a Permitted Receivables Purchase Facility,
but only with respect to such Collateral being sold thereunder (excluding any
interest being retained by a Grantor), or (c) the occurrence of the Termination
Date, the security interests granted herein shall automatically terminate with
respect to (i) such Collateral (in the case of clause (a) or (b)) or (ii) all
Collateral (in the case of clause (c)). Upon such termination, the Collateral
Agent will, at the applicable Grantor's sole expense, deliver to such Grantor,
without any representations, warranties or recourse of any kind whatsoever, all
terminated Collateral held by the Collateral Agent hereunder, and execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such termination.
SECTION 7.7. Additional Grantors. Upon the execution and delivery by
any other Person of a supplement in the form of Annex I hereto, such Person
shall become a "Grantor" hereunder with the same force and effect as if it were
originally a party to this Security Agreement and named as a "Grantor"
hereunder. The execution and delivery of such supplement shall not require the
consent of any other Grantor hereunder, and the rights and obligations of each
Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor as a party to this Security Agreement.
SECTION 7.8. No Waiver; Remedies. No failure on the part of any
Secured Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.9. Section Cautions. Section captions used in this Security
Agreement are for convenience of reference only, and shall not affect the
construction of this Security Agreement.
29 Subsidiary Security Agreement
SECTION 7.10. Severability. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.
SECTION 7.11. Governing Law. Appointment Of Agent For Service Of
Process; Submission To Jurisdiction; Waiver of Jury Trial.
(a) THIS SECURITY AGREEMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTION 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS SECURITY
AGREEMENT OR OTHERWISE RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS SECURITY AGREEMENT, EACH GRANTOR
HEREBY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION
OF THE AFORESAID COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE
RIGHTS OF THE COLLATERAL AGENT AND THE SECURED PARTIES WITH RESPECT TO THIS
SECURITY AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH GRANTOR HEREBY
IRREVOCABLY DESIGNATES UNITED STATES CORPORATION COMPANY AS THE DESIGNEE,
APPOINTEE AND AGENT OF SUCH GRANTOR TO RECEIVE, FOR AND ON BEHALF OF SUCH
GRANTOR, SERVICE OR PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS SECURITY AGREEMENT OR ANY DOCUMENT RELATED
HERETO AND SUCH SERVICE SHALL BE DEEMED COMPLETED THIRTY DAYS AFTER MAILING
THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON
SUCH AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE SERVER OF
PROCESS BY MAIL TO THE RESPECTIVE GRANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT
THE FAILURE OF SUCH GRANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. EACH
GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS SECURITY
AGREEMENT OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE COLLATERAL AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GRANTOR IN ANY
OTHER JURISDICTION. TO THE EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION
30 Subsidiary Security Agreement
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, SUCH GRANTOR HEREBY IRREVOCABLY WAIVES TO
THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS SECURITY AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A
PARTY.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS SECURITY AGREEMENT OR ANY
OTHER CREDIT DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR
THEREUNDER. EACH GRANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER CREDIT DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR SUCH GRANTOR ENTERING INTO THE CREDIT DOCUMENTS.
SECTION 7.12. Counterparts. This Security Agreement may be executed
by the parties hereto in several counterparts, each of which shall be deemed to
be an original and all of which shall constitute together but one and the same
agreement.
SECTION 7.13. Fraudulent Conveyance Limitation. Anything else in this
Security Agreement notwithstanding, the grant by the Borrower hereunder of a
security interest in the Collateral shall secure the Secured Obligations only
for the maximum amount that can be incurred without rendering this Security
Agreement void or voidable under applicable law relating to fraudulent
obligations, fraudulent conveyance or fraudulent transfer, and not any greater
amount.
31 Subsidiary Security Agreement
IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
ALEXANDER CITY CASTING
COMPANY, INC.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
CAST-MATIC CORPORATION
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
COLUMBUS FOUNDRY, L.P.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
DIVERSIFIED DIEMAKERS, INC.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
XXXXXX P.M.C., INCORPORATED
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
Subsidiary Security Agreement
GANTON TECHNOLOGIES INC.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
INTERMET HOLDING COMPANY
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
INTERMET INTERNATIONAL, INC.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
IRONTON IRON INC.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
LYNCHBURG FOUNDRY COMPANY
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
Subsidiary Security Agreement
NORTHERN CASTINGS CORPORATION
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
SUDBURY, INC.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
SUDM, INC.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
TOOL PRODUCTS, INC.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
Subsidiary Security Agreement
XXXXXX CASTINGS COMPANY
By /s/ Xxxx X. Xxxxxx
---------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
XXXXXX HAVANA, INC.
By /s/ Xxxx X. Xxxxxx
----------------------------------------
Name Printed: Xxxx X. Xxxxxx
Title: Secretary
Subsidiary Security Agreement
THE BANK OF NOVA SCOTIA,
as Collateral Agent
By /s/ F.C.H. Xxxxx
-------------------------------------
Name Printed: F.C.H. Xxxxx
Title: Senior Manager Loan Operations
36 Subsidiary Security Agreement
