EXHIBIT 4.11
[EXECUTION COPY]
SECURITY AGREEMENT
------------------
This SECURITY AGREEMENT (as amended, supplemented, amended and restated or
otherwise modified from time to time, this "Security Agreement"), dated as of
------------------
March 24, 1998, is made by XXXXX X. XXXXXXXXX COMPANY, a Delaware corporation
(the "Borrower Grantor"), each Restricted Subsidiary (as defined in the Term
----------------
Loan Agreement referred to below) of the Borrower Grantor, a signatory hereto,
and each other Person which may from time to time hereafter become a party
hereto pursuant to Section 7.4 (each, individually, an "Additional Subsidiary
----------- ---------------------
Grantor", and collectively, the "Additional Subsidiary Grantors", and together
------- ------------------------------
with each such Restricted Subsidiary, each individually, a "Subsidiary Grantor",
------------------
and collectively, the "Subsidiary Grantors", and together with the Borrower
-------------------
Grantor, each individually, a "Grantor", and collectively, the "Grantors") in
------- --------
favor of Fleet National Bank, as administrative agent (together with any
successor(s) thereto in such capacity, the "Administrative Agent") for each of
--------------------
the Secured Parties.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Term Loan Agreement, dated as of March 24, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Term Loan Agreement"), among the Borrower Grantor, the various
-------------------
financial institutions as are, or may from time to time become, parties thereto
(each individually a "Lender" and collectively the "Lenders"), the
------ -------
Administrative Agent, Bankers Trust Company, as documentation agent, and DLJ
Capital Funding, Inc., as syndication agent, the Lenders have extended
commitments to make Term Loans to the Borrower Grantor;
WHEREAS, as a condition precedent to the making of the Term Loans under the
Term Loan Agreement, each Grantor is required to execute and deliver this
Security Agreement; and
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
WHEREAS, it is in the best interests of each Grantor to execute this
Security Agreement inasmuch as such Grantor will derive substantial direct and
indirect benefits from the Term Loans made to the Borrower Grantor by the
Lenders pursuant to the Term Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to make the Term
Loans to the Borrower Grantor pursuant to the Term Loan Agreement, each Grantor
agrees, for the benefit of each Secured Party, as follows:
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):
"Additional Subsidiary Grantor" and "Additional Subsidiary Grantors" are
----------------------------- ------------------------------
defined in the preamble.
--------
"Administrative Agent" is defined in the preamble.
-------------------- --------
"Borrower Grantor" is defined in the preamble.
---------------- --------
"Collateral" is defined in Section 2.1.
---------- -----------
"Collateral Account" is defined in Section 4.3.
------------------ -----------
"Equipment" is defined in clause (a) of Section 2.1.
--------- ---------- -----------
"Grantor" and "Grantors" are defined in the preamble.
------- -------- --------
"Lender" and "Lenders" are defined in the first recital.
------ ------- -------------
"Mobile Assets" means trucks, trailers, and other motor vehicles, together
-------------
with in each case all parts, instruments, accessories and other Equipment
installed in or attached thereto.
"Secured Obligations" is defined in Section 2.2.
------------------- -----------
"Secured Party" and "Secured Parties" means the Lenders, the Agents and
------------- ---------------
each of their respective successors, transferees or assigns.
"Security Agreement" is defined in the preamble.
------------------ --------
"Subsidiary Grantor" and "Subsidiary Grantors" are defined in the preamble.
------------------ -------------------
"Term Loan Agreement" is defined in the first recital.
------------------- -------------
-2-
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
------
in the State of New York.
SECTION 1.2. Term Loan 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 Term Loan Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or
------------------
in the Term Loan Agreement or the context otherwise requires, terms for which
meanings are provided in the U.C.C. are used in this Security Agreement,
including its preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. Each Grantor hereby assigns and
-----------------
pledges to the Administrative Agent for its benefit and the ratable benefit of
each of the Secured Parties, and hereby grants to the Administrative Agent for
its benefit and the ratable benefit of each of the Secured Parties, a security
interest in all of its right, title and interest in and to the following,
whether now owned or hereafter acquired by such Grantor (the "Collateral"):
----------
(a) all equipment, machinery, apparatus or tools in all forms of
such Grantor, including:
(i) all plate processing, cutting, tube honing, burning,
sawing, shearing, grinding, polishing, hot-rolling,
and cold-finishing equipment;
(ii) all bar, tubing and pipe, plate, sheet and other
metal product finishing equipment;
(iii) all lighting and power equipment;
(iv) all heating, ventilating, sprinkling, water, power
and communications equipment;
(v) all cleaning equipment;
(vi) all lift, elevator and escalator equipment;
(vii) all electrical equipment; and
-3-
(viii) 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; and all firmware
associated with all of the foregoing in this clause
------
2.1(a),
------
wherever located, together with all parts thereof and all accessions, additions,
attachments, improvements, substitutions and replacements thereto and therefor
and all accessories related thereto, and any of the foregoing which shall
constitute fixtures under applicable law (any and all of the foregoing being the
"Equipment");
---------
(b) all Mobile Assets of such Grantor;
(c) all general intangibles (excluding intellectual property)
relating to the Equipment and the Mobile Assets;
(d) the Collateral Account and all funds held therein and all
certificates and instruments, if any, from time to time
representing or evidencing the Collateral Account;
(e) all investments, if any, from time to time held in the
Collateral Account; all certificates and instruments, if
any, from time to time representing or evidencing such
investments; all securities, instruments, security
entitlements, financial assets and investment property; and
all interest, earnings and proceeds in respect thereof;
(f) 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 2.1; and
-----------
(g) all rents, 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), (b), (c), (d) (e) and (f), proceeds deposited from time
--- --- --- --- --- ---
to time in the Collateral Account of any Grantor, and, to
the extent not otherwise included, all payments under
insurance (whether or not the Administrative Agent is the
loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include (x) 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 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,
which required consents, each Grantor agrees to use its best efforts in
-4-
obtaining and (y) any inventory (including raw materials, work-in-process,
supplies and finished goods), accounts receivable (including sellers' rights
relating thereto, all contracts and contract rights relating thereto and all
books and records relating thereto), all collection accounts, deposit accounts
and other bank accounts relating to collection of the foregoing, together with
the proceeds and products of all of the foregoing, which secures or is purported
to secure obligations under the Revolving Credit Agreement.
SECTION 2.2. Security for Obligations. This Security Agreement
------------------------
secures the payment of all Obligations of the Borrower Grantor now or hereafter
existing under the Term Loan Agreement, the Term Notes and each other Loan
Document to which the Borrower Grantor is or may become a party, whether for
principal, interest, costs, fees, expenses or otherwise, and all obligations of
each other Grantor and each other Obligor now or hereafter existing under this
Security Agreement and each other Loan Document to which such other Grantor or
such other Obligor is or may become a party (all such obligations of the
Borrower Grantor, such other Grantor and such other Obligor collectively
referred to herein as the "Secured Obligations").
-------------------
SECTION 2.3. Continuing Security Interest; Transfer of Notes. This
-----------------------------------------------
Security Agreement shall create a continuing security interest in the
Collateral and shall
(a) remain in full force and effect until payment in full in
cash of all Secured Obligations,
(b) be binding upon each Grantor, its successors, transferees
and assigns, and
(c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the
Administrative Agent and each other Secured Party.
Without limiting the generality of the foregoing clause (c), any Lender may
----------
assign or otherwise transfer (in whole or in part) any Term Note held by it to
any other Person or entity, and such other Person or entity shall thereupon
become vested with all the rights and benefits in respect thereof granted to
such Lender under any Loan Document (including this Security Agreement) or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 10.11 and Article IX of the Term Loan
Agreement. Upon the payment in full in cash of all Secured Obligations, the
security interest granted herein shall terminate and all rights to the
Collateral shall revert to such Grantor. Upon any such termination, the
Administrative Agent will, at such Grantor's sole expense, execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination. Upon any sale or other transfer of Collateral
permitted by the terms of Section 7.2.6 of the Term Loan Agreement, the security
interest created hereunder in such Collateral (but not in the proceeds thereof)
shall be deemed to be automatically released and the Administrative Agent will,
at such Grantor's sole expense, execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such release.
-5-
SECTION 2.4. Grantors Remain Liable. Anything herein to the contrary
----------------------
notwithstanding
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set
forth therein, and shall 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,
(b) the exercise by the Administrative Agent of any of its
rights hereunder shall not release any Grantor from any of
its duties or obligations under any such contracts or
agreements included in the Collateral, and
(c) neither the Administrative Agent nor any other Secured Party
shall have any obligation or liability under any such
contracts or agreements included in the Collateral by reason
of this Security Agreement, nor shall the Administrative
Agent or any other 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 2.5. Security Interest Absolute. All rights of the
--------------------------
Administrative Agent and the security interests granted to the Administrative
Agent hereunder, and all obligations of each Grantor hereunder, shall be
absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the Term Loan
Agreement, any Term Note or any other Loan Document;
(b) the failure of any Secured Party or any holder of any Term
Note
(i) to assert any claim or demand or to enforce any right
or remedy against the Borrower Grantor, any other
Obligor or any other Person under the provisions of
the Term Loan Agreement, any Term Note, any other
Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor of, or collateral securing any Secured
Obligations;
(c) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations or
any other extension, compromise or renewal of any Secured
Obligations;
(d) any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and
shall not be subject to (and each Grantor hereby waives any
right to or claim of) any defense or setoff, counterclaim,
recoupment or termination
-6-
whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, any Secured
Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification
of, or any consent to departure from, any of the terms of
the Term Loan Agreement, any Term Note or any other Loan
Document;
(f) any addition, exchange, release, surrender or non-perfection
of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the
Secured Obligations; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of,
the Borrower Grantor, any other Obligor, or any surety or
any guarantor.
SECTION 2.6. Postponement of Subrogation, etc. Each Grantor hereby
--------------------------------
agrees that it will not exercise any rights which it may acquire by reason of
any payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until the prior payment in full in cash of all Secured Obligations.
Any amount paid to any Grantor on account of any payment made hereunder prior to
the payment in full in cash of all Secured Obligations shall be held in trust
for the benefit of the Secured Parties and each holder of a Term Note and shall
immediately be paid to the Secured Parties and each holder of a Term Note and
credited and applied against the Secured Obligations, whether matured or
unmatured, in accordance with the terms of the Term Loan Agreement; provided,
--------
however, that if
-------
(a) such Grantor has made payment to the Secured Parties and
each holder of a Term Note of all or any part of the Secured
Obligations, and
(b) all Secured Obligations have been paid in full in cash,
each Secured Party and each holder of a Term Note agrees that, at such Grantor's
request, the Secured Parties and the holders of the Notes will 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 by such Grantor. In furtherance of the foregoing, for so long as any
Secured Obligations remain outstanding, such Grantor shall refrain from taking
any action or commencing any proceeding against the Borrower Grantor or any
other Obligor (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 or any holder
of a Term Note.
-7-
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Grantor represents and warrants to each Secured Party as set forth in
this Article.
SECTION 3.1. Location of Collateral, etc. All of such Grantor's
---------------------------
Equipment and Collateral Accounts of such Grantor are located at the places
specified in Item A and Item B of Schedule I hereto. None of the Equipment 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 or C of Schedule
---- - - --------
I hereto except as set forth in a footnote thereto. The place(s) of business
-
and chief executive office of such Grantor and the office(s) where such
Grantor keeps its records concerning the general intangibles relating to the
Equipment, are located at the address set forth in Item C of Schedule I hereto.
------ ----------
Such Grantor has no trade names other than those set forth in Item D of
------
Schedule I hereto. During the four months preceding the date hereof, such
----------
Grantor has not been known by any legal name different from the one set forth on
the signature page hereto, nor has such Grantor been the subject of any merger
or other corporate reorganization, except as set forth in Item E of Schedule I
------ ----------
hereto. All Mobile Assets of such Grantor operate out of the locations
specified in Item F of Schedule I hereto.
------ ----------
SECTION 3.2. Ownership, No Liens, etc. Such Grantor owns its
------------------------
Collateral free and clear of any Lien, security interest, charge or encumbrance
except for the security interest created by this Security Agreement and except
as permitted by the Term Loan Agreement. No effective financing statement or
other instrument similar in effect covering all or any part of the Collateral is
on file in any recording office, except such as may have been filed in favor of
the Administrative Agent relating to this Security Agreement or as have been
filed in connection with Liens permitted pursuant to Section 7.2.2 of the Term
Loan Agreement.
SECTION 3.3. Possession and Control. Such Grantor has exclusive
----------------------
possession and control of its Equipment and Mobile Assets.
SECTION 3.4. Validity, etc. This Security Agreement creates
-------------
(a) a valid first-priority security interest in the Collateral
(other than Mobile Assets), securing the payment of the
Secured Obligations, all filings and other actions necessary
or desirable to perfect and protect such security interest
have been duly taken; and
(b) a valid security interest in each Mobile Asset securing the
payment of the secured Obligations and upon the recordation
or notation of the lien of the Administrative Agent on the
certificate of title in respect of such Mobile Asset, such
security interest will be a valid, first-priority, perfected
security interest.
-8-
SECTION 3.5. 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 such Grantor of the security interest
granted hereby or for the execution, delivery and
performance of this Security Agreement by such Grantor, or
(b) for the perfection of or the exercise by the Administrative
Agent of its rights and remedies hereunder.
SECTION 3.6. Compliance with Laws. Such Grantor is in compliance
--------------------
with the requirements of all applicable laws (including the provisions of the
Fair Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which might have a Material Adverse Effect or
which might materially adversely affect the value of the Collateral or the worth
of the Collateral as collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1. General. Each Grantor covenants and agrees that, so
-------
long as any portion of the Secured Obligations shall remain unpaid, such Grantor
will, unless the Required Lenders shall otherwise consent in writing, perform,
comply with and be bound by the obligations set forth in this Article.
SECTION 4.2. As to Equipment and Mobile Assets. Such Grantor hereby
---------------------------------
agrees that it shall
(a) keep all the Equipment at and operate all Mobile Assets out
of the places therefor specified in Section 3.1 or, upon 30
-----------
days' prior written notice to the Administrative Agent, at
such other places in a jurisdiction where all
representations and warranties set forth in Article III
-----------
(including Section 3.4 shall be true and correct, and all
-----------
action required pursuant to the first sentence of Section
-------------- -------
4.7 shall have been taken with respect to the Equipment;
---
(b) cause the Equipment and Mobile Assets to be maintained and
preserved in the same condition, repair and working order as
of the date of this Security Agreement, ordinary wear and
tear excepted, and in accordance with any manufacturer's
manual; and forthwith, or in the case of any loss or damage
to any of the Equipment or Mobile Assets, as quickly as
practicable after the occurrence thereof, make or cause to
be made all repairs, renewals, replacements, and other
improvements so that its business carried on in connection
therewith may be properly conducted at all
-9-
times unless the Borrower determines in good faith that the
continued maintenance of any of such properties is no longer
economically desirable; and promptly furnish to the
Administrative Agent a statement respecting any loss or
damage in excess of $250,000 to any of the Equipment or
Mobile Assets; 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 the Mobile Assets,
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.
SECTION 4.3. As to the Collateral Account. (a) Promptly upon receipt,
----------------------------
or notice of any pending receipt, of any Collateral Proceeds in respect of an
Asset Disposition (or related Asset Disposition) of at least $5,000,000 to the
extent provided in Section 7.2.6 of the Term Loan Agreement, any Insurance
Proceeds in excess of $500,000 or any Net Awards in excess of $500,000 by any
Grantor, (i) such Grantor will establish (if not already established on or prior
to the date of such Grantor's receipt of any such Collateral Proceeds, Insurance
Proceeds or Net Awards) a deposit account with the Administrative Agent that
will be maintained pursuant to any agreement that the Administrative Agent may
reasonably request, (its "Collateral Account" and, together with the Collateral
------------------
Account of each other Grantor, the "Collateral Account")) and such Grantor shall
------------------
not commingle any Collateral Proceeds, Insurance Proceeds and Net Awards, and
shall hold separate and apart from all other property, all such Collateral
Proceeds, Insurance Proceeds and Net Awards in express trust for the benefit of
the Administrative Agent until delivery thereof is made to the Administrative
Agent; and (ii) such Grantor will ensure that no funds, other than Collateral
Proceeds, Insurance Proceeds and Net Awards, will be paid to its Collateral
Account. The Administrative Agent shall maintain the Collateral Account until
amounts due to all Secured Parties have been paid in full in cash to such
Secured Parties.
(b) The Administrative Agent shall apply such amount of proceeds
as soon as practicable after receipt as follows:
(i) if a Default has occurred or an Event of Default has
occurred and is continuing, and the Secured
Obligations have been accelerated, to the
Administrative Agent in an amount equal to the fees
and expenses incurred by the Administrative Agent
pursuant to Section 6.2(b) which are unpaid as of the
--------------
date of acceleration, and to any Secured Party which
has theretofore advanced or paid any such fees or
expenses owed to the Administrative Agent in the
amount thereof so advanced or paid by such Secured
Party;
(ii) provided that no Default shall have occurred or no
Event of Default shall have occurred or be
continuing, (A) any Trust Moneys constituting
Insurance Proceeds or Net Awards may be withdrawn by
such Grantor pursuant to clause (c) hereof to be
----------
-10-
applied to effect a Restoration; or (B) in accordance
with Section 7.2.6 of the Term Loan Agreement
governing Asset Dispositions, any Trust Moneys
constituting Collateral Proceeds, may be withdrawn by
such Grantor pursuant to clause (d) hereof.
----------
(c) To the extent that any Trust Moneys consist of either
Insurance Proceeds or Net Awards received by the
Administrative Agent and such Insurance Proceeds or Net
Awards may be applied by any Grantor to effect a Restoration
of the affected Collateral, and such Grantor shall provide
the Administrative Agent with prompt written notice
describing the nature and extent of damage or destruction
and such Grantor's best estimate of the cost of Restoration
or the nature and extent of the partial Taking which may
result and the Insurance Proceeds or Net Awards may be
withdrawn by such Grantor and shall be paid by the
Administrative Agent, upon receipt by the Administrative
Agent of the following:
(i) Officers' Certificate. An Officers' Certificate of
---------------------
such Grantor, dated not more than 30 days prior to the
date of the application for the withdrawal and payment
of such Trust Money that (A) expenditures have been
made, or costs incurred, by such Grantor in a
specified amount to make certain repairs, rebuildings
and replacements of the Collateral, which shall be
briefly described, and stating the fair market value
thereof at the date of the expenditure or incurrence
thereof by such Grantor; (B) there is no outstanding
Indebtedness other than costs for which payment is
being requested, for the purchase price or
construction of such repairs, rebuildings or
replacements, or for labor, wages, materials or
supplies in connection with the making thereof, which,
if unpaid, might become the basis of a vendor's,
mechanic's, laborer's, materialman's statutory or
other similar Lien upon any Collateral; (C) no Default
under the Loan Documents shall have occurred or Event
of Default under the Loan Documents shall have
occurred and be continuing; and (D) all conditions
precedent provided for herein and in the Loan
Documents (if any) relating to such withdrawal and
payment have been complied with.
(ii) Opinion of Counsel. An Opinion of Counsel
------------------
substantially stating that (A) all conditions
precedent provided for herein and in the Loan
Documents (if any) relating to such withdrawal and
payment have been complied with; and (B) the
Administrative Agent has a valid and perfected Lien on
such repairs, rebuildings and replacements, that the
same and every part thereof are subject to no Liens
prior to the Lien of the Loan Documents, except
Permitted Liens.
(iii) Architect's or Engineer's Certificate. An architect's
-------------------------------------
or engineer's certificate stating that (A) the
Collateral is capable of being restored, prior to the
maturity of the Term Loan Agreement, to substantially
the same condition as existed prior to the casualty or
Taking (as defined in the Mortgage); (B) the aggregate
estimated direct and indirect costs of such
Restoration; (C) the estimated time for completion of
such Restoration (which time shall not exceed one year
from the date of the damage, destruction or partial
Taking); and (D) as to any Taking, that the property
-11-
taken in such Taking, or sold under threat thereof, is
not necessary to such Grantor's customary use or
occupancy of such Collateral.
(iv) Deposit of Excess Amount. In the event that the
------------------------
estimated cost of Restoration as set forth in the
architect's or engineer's certificate (and such
revisions to such estimate as are from time to time
made) exceeds the aggregate amount of net Insurance
Proceeds or Net Awards actually received from time to
time in respect thereof, such Grantor shall deposit
the amount of such excess with the Administrative
Agent.
(v) Final Request Documentation. If such request is the
---------------------------
final request for any payment, in addition to the
documentation required by subclauses (i), (ii) and
-------------- ----
(iii) above, such request shall be accompanied by (A)
-----
a legal opinion or a title insurance policy, binder or
endorsement satisfactory to the Administrative Agent
confirming that there has not been filed with respect
to all or any part of the applicable Collateral any
Lien which is not either discharged of record or
bonded and which could have priority over the Lien of
the applicable Mortgage and (B) an Officers'
Certificate stating that all occupancy certificates,
operating and other permits, licenses, waivers, other
documents, or any combination of the foregoing
required by law in connection with or as a result of
such Restoration have been obtained;
provided, however, that compliance by such Grantor of the provisions set forth
-------- -------
in clauses (c)(ii) through (c)(v) above shall only be required if the estimated
------- ------- ------
cost of such Restoration exceeds $2,000,000 or such Restoration cannot be
completed within one year from the date of damage, destruction or partial
Taking.
Upon compliance with the foregoing provisions of this Section 4.3(c), the
--------------
Administrative Agent shall pay, to the extent received by it and deposited in
the applicable Collateral Account, not fewer than five nor more than 12 Business
Days, after the receipt of a written request of the applicable Grantor an amount
of Trust Moneys and excess amounts deposited, of the character aforesaid equal
to the amount of the expenditures or costs stated in the Officers' Certificate
required by clause (i) of this Section 4.3(c), or the fair value to such
---------- --------------
Grantor, as the case may be, of such repairs, rebuildings and replacements
covered by such Officers' Certificate, whichever is less. All Insurance
Proceeds or Net Awards not used for Restoration as set forth in this Section 4.3
-----------
(c) or for repayment or prepayment of the Term Loans as set forth in the Term
---
Loan Agreement shall be used in the manner provided in Section 4.3(e).
--------------
(d) To the extent Trust Moneys consist of Collateral Proceeds
and any Grantor intends to use such funds to acquire
additional property, buildings, fixtures, equipment and
other items as provided in the Term Loan Agreement, within
540 days from date of receipt of Collateral Proceeds into
the Collateral Account, such Trust Moneys shall be paid by
the Administrative Agent to such Grantor upon receipt of a
request by the Administrative Agent and upon receipt by the
Administrative Agent of the following:
-12-
(i) Notice. A notice which shall (A) refer to this Section
------ -------
4.3(d), (B) contain all documents referred to below,
------
(C) describe with particularity the Collateral Proceeds
and the Asset Disposition from which such Collateral
Proceeds were received, and (D) describe with
particularity the investment to be made with respect to
the released Collateral Proceeds;
(ii) Officers' Certificate. An Officer's Certificate
---------------------
certifying that (A) the release of the Collateral
Proceeds complies with the terms and conditions of
Section 7.2.6 of the Term Loan Agreement, (B) there is
no Default in effect or Event of Default in effect or
continuing on the date thereof under the Term Loan
Agreement, (C) the release of the Collateral Proceeds
will not result in a Default or Event of Default under
the Term Loan Agreement, (D) the parties executing any
and all documents required under this Section 4.3(d)
--------------
were duly authorized to do so, and (E) all conditions
precedent and covenants provided for in the Term Loan
Agreement (if any) relating to such release and
application of the Collateral Proceeds have been
complied with;
(iii) Real Property Investment. If the Collateral Proceeds
------------------------
are to be invested in real property: (A) a Mortgage or
other instrument or instruments in recordable form
sufficient to grant to the Administrative Agent for the
benefit of the Secured Parties (1) substantially the
same rights and remedies in respect of such real
property as granted thereto under the Mortgages
executed and delivered on the date hereof and (2) a
valid first priority mortgage Lien on such real
property subject to no Liens other than Permitted Liens
permitted under the Mortgages delivered on the date
hereof and, if the real property is a leasehold or
easement interest, such Mortgage or other instrument or
instruments shall include normal and customary
provisions with respect thereto, in each case together
with evidence of the filing of all such financing
statements and other instruments as may be necessary to
perfect such Lien; (B) a policy of title insurance (or
a paid commitment to issue title insurance) insuring
that the Lien of the instruments delivered pursuant to
clause (A) above constitutes a valid and perfected
----------
first priority mortgage Lien on such real property in
an aggregate amount equal to the lesser of the fair
market value of the real property and the then
outstanding principal amount of the Secured
Obligations, together with an Officers' Certificate
stating that any specific exceptions to such title
insurance are Permitted Liens, together with such
endorsements and other opinions of the type included in
the title insurance policy or otherwise delivered to
the Administrative Agent on the date hereof with
respect to such Collateral; (C) in the event such real
property has a fair market value in excess of $500,000,
a survey with respect thereto; (D) an Officers'
Certificate stating that such Grantor has caused there
to be conducted by a reputable expert a review and
analysis of the environmental conditions relating to
such real property and that, in the reasonable and good
faith judgment of the issuer thereof such real property
does not contain any conditions which would cause a
prudent institutional lender to decline to fund loans
secured by such real property, together with a copy of
the written report of such expert; and (E) such further
documents, opinions, certificates
-13-
or instruments as are customarily provided to
institutional mortgage lenders and as the
Administrative Agent may require.
(iv) Personal Property Investment. If the released
----------------------------
Collateral Proceeds are not invested in real property:
(A) an instrument sufficient to grant to the
Administrative Agent, for the benefit of the Secured
Parties (1) substantially the same rights and remedies
in respect of such personal property interest as
granted thereto under the Security Documents executed
and delivered on the date hereof and (2) a valid first
priority Lien on such personal property interest
subject to no Liens other than Permitted Liens,
together with evidence of the filing of such financing
statements and other instruments as may be necessary to
perfect such Liens; (B) evidence of payment or a
closing statement indicating payments to be made by the
applicable Grantor of all filing fees, recording
charges, transfer taxes and other costs and expenses,
including reasonable legal fees and disbursements of
counsel for the Administrative Agent (and any local
counsel), that may be incurred to validly and
effectively subject such personal property to the Lien
of any Security Document; and
(e) At its option, the Administrative Agent may apply Insurance
Proceeds or Net Awards which are not used as set forth in
Section (c) herein (or for prepayment as provided for in the
-----------
Term Loan Agreement), as follows:
(i) Partial Taking or Condemnation. Funds received shall
------------------------------
be applied (A) to the payment of the reasonable costs
and expenses incurred by the Administrative Agent or
its agents in obtaining the Insurance Proceeds and Net
Awards, including the fees and expenses of attorneys
and insurance and other experts and consultants, the
costs of litigation, arbitration, mediation,
investigations and other judicial, administrative or
other proceedings and all other out-of-pocket expenses;
(B) to the payment of, or the application to, any
Secured Obligation (other than prepayment of the Term
Notes); (C) to fulfill any of the other covenants
contained in any of the Loan Documents as the
Administrative Agent may determine in its sole
discretion; or (D) to the relevant Grantor.
(ii) Total Taking or Condemnation. Funds received shall be
----------------------------
applied (A) first, to the payment of the reasonable
costs and expenses incurred by the Administrative Agent
in obtaining any such Insurance Proceeds or Net Awards,
including the fees and expenses of attorneys and
insurance and other experts and consultants, the costs
of litigation, arbitration, mediation, investigations
and other judicial, administrative or other proceedings
and all other out-of-pocket expenses; (B) second, to
the payment of principal of the Term Notes and any
interest accrued and unpaid thereon; (C) third, to the
payment of any Secured Obligations (other than as
provided in clause (B) above); (D) fourth, to fulfill
----------
any of the other covenants in the Loan Documents as the
Administrative Agent may determine, and (E) fifth, the
balance, if any, to the relevant Grantor.
-14-
If, prior to the receipt by the Administrative Agent of Insurance Proceeds
or Net Awards, the Collateral shall have been sold on foreclosure, the
Administrative Agent shall have the right to receive such Insurance Proceeds or
Net Awards to the extent of any deficiency found to be due upon such sale, with
legal interest thereon, whether or not a deficiency judgment shall have been
sought or recovered or denied, and the reasonable attorneys' fees, costs and
disbursements incurred by the Administrative Agent in connection with the
collection of such Net Award or Insurance Proceeds.
(f) Trust Moneys shall be invested in Cash Equivalents as
requested by the applicable Grantor and approved by the
Administrative Agent, and all interest thereon shall be
applied as provided in this Section 4.3.
-----------
SECTION 4.4. As to Collateral.
----------------
(a) Until the occurrence and continuance of a Default of the
nature set forth in Section 8.1.9 of the Term Loan
Agreement or an Event of Default, and such time as the
Administrative Agent shall notify such Grantor of the
revocation of such power and authority each Grantor 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 Administrative Agent may reasonably
request following the occurrence of a Default of the nature
set forth in Section 8.1.9 of the Term Loan Agreement or an
Event of Default or, in the absence of such request, as such
Grantor may deem advisable, and may grant, in the ordinary
course of business (except as otherwise permitted under the
Term Loan Agreement), 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. The
Administrative Agent, however, may, at any time following a
Default of the nature set forth in Section 8.1.9 of the Term
Loan Agreement or an Event of Default, whether before or
after any revocation of such power and authority or the
maturity of any of the Secured Obligations, notify any
parties obligated on any of the Collateral to make payment
to the Administrative Agent of any amounts due or to become
due thereunder and 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. Upon request of the Administrative Agent following
a Default of the nature set forth in Section 8.1.9 of the
Term Loan Agreement or an Event of Default, each Grantor
will, at its own expense, notify any parties obligated on
any of the Collateral to make payment to the Administrative
Agent of any amounts due or to become due thereunder.
(b) The Administrative Agent is authorized to endorse, in the
name of such Grantor, any item, howsoever received by the
Administrative Agent, representing any payment on or other
proceeds of any of the Collateral.
-15-
SECTION 4.5. Insurance. Each Grantor will maintain or cause to be
---------
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Mobile Assets) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Term Loan Agreement and will, upon the request of the
Administrative Agent, furnish a certificate of a reputable insurance broker
setting forth the nature and extent of all insurance maintained by such Grantor
in accordance with this Section. Without limiting the foregoing, such Grantor
further agrees as follows:
(a) Each policy for property insurance shall show the
Administrative Agent as loss payee.
(b) Each policy for liability insurance shall show the
Administrative Agent as an additional insured.
(c) Each insurance policy shall provide that at least 30 days'
prior written notice of cancellation or of lapse shall be
given to the Administrative Agent by the insured.
(d) Such Grantor shall, if so requested by the Administrative
Agent, deliver to the Administrative Agent a copy of each
insurance policy.
(e) All payments in respect of property insurance if required
pursuant to the terms of a Mortgage or any other Loan
Document to be delivered to the Administrative Agent shall
be deposited to the Collateral Account (as provided in
Section 4.3), and if there shall be no Collateral Account
-----------
shall be paid to such Grantor.
SECTION 4.6. Transfers and Other Liens. Each Grantor shall not:
-------------------------
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by
Section 7.2.6 of the Term Loan Agreement; or
(b) create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral to
secure Indebtedness of any Person or entity, except for the
security interest created by this Security Agreement and
except as permitted by the Term Loan Agreement.
SECTION 4.7. Further Assurances, etc. 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 desirable, or that the Administrative Agent may request, in order
to perfect, preserve and protect any security interest granted or purported to
be granted hereby or to enable the Administrative Agent to
-16-
exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, such
Grantor will
(a) at the request of the Administrative Agent, xxxx
conspicuously each of its records pertaining to the
Collateral with a legend, in form and substance satisfactory
to the Administrative Agent, indicating that such document
or Collateral is subject to the security interest granted
hereby;
(b) execute and file such financing 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. (S)
3726, any successor or amended version thereof or any
regulation promulgated under or pursuant to any version
thereof), as may be necessary or desirable, or as the
Administrative Agent may request, in order to perfect and
preserve the security interests and other rights granted or
purported to be granted to the Administrative Agent hereby;
and
(c) furnish to the Administrative Agent, from time to time at
the Administrative Agent's request, statements and schedules
further identifying and describing the Collateral and such
other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in
reasonable detail; and
(d) if a Default of the nature described in Section 8.1.1 of the
Term Loan Agreement or an Event of Default shall occur, then
each Grantor which (i) owns any Mobile Assets or (ii)
acquires any Mobile Assets following such Default or Event
of Default, shall, within 30 days of such Default or Event
of Default or upon such acquisition, as the case may be,
take all steps that are necessary or desirable to ensure
that the security interest granted in favor of the
Administrative Agent in such Mobile Assets will be a valid,
first priority, perfected security interest.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Administrative 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. 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.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. Each
-----------------------------------------------
Grantor hereby irrevocably appoints the Administrative Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or
-17-
otherwise, from time to time in the Administrative Agent's discretion, following
the occurrence and continuation of a Default of the nature set forth in Section
8.1.9 of the Term Loan Agreement or an Event of Default, to take any action and
to execute any instrument which the Administrative 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 Administrative Agent may deem
necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the
Administrative 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 4.7).
-----------
Such 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. Administrative Agent May Perform. If any Grantor fails
--------------------------------
to perform any agreement contained herein, the Administrative Agent may itself
(but shall not be obligated to) perform, or cause performance of, such
agreement, and the expenses of the Administrative Agent incurred in connection
therewith shall be payable by such Grantor pursuant to Section 6.2.
-----------
SECTION 5.3. Administrative Agent Has No Duty. In addition to, and
--------------------------------
not in limitation of, Section 2.4, the powers conferred on the Administrative
-----------
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 Administrative
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent is required
---------------
to exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Administrative 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
-18-
and during the continuance of any Event of Default, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have
----------------
occurred and be continuing:
(a) The Administrative 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
U.C.C. (whether or not the U.C.C. 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 Administrative Agent forthwith, assemble all or
part of the Collateral as directed by the
Administrative Agent and make it available to the
Administrative Agent at a place to be designated by
the Administrative 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
Administrative Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other
terms as the Administrative 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 Administrative Agent
shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The
Administrative 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) All cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in
the discretion of the Administrative Agent, be held by the
Administrative Agent as collateral for, and/or then or at
any time thereafter applied (after payment of any amounts
payable to the Administrative Agent pursuant to Section 6.2)
-----------
in whole or in part by the Administrative Agent for the
ratable benefit of the Secured Parties against,
-19-
all or any part of the Secured Obligations in such order as
the Administrative Agent shall elect. Any surplus of such
cash or cash proceeds held by the Administrative Agent and
remaining after payment in full in cash of all the Secured
Obligations shall be paid over to the applicable Grantor or
to whomsoever may be lawfully entitled to receive such
surplus.
SECTION 6.2. Indemnity and Expenses.
----------------------
(a) Each Grantor jointly and severally agrees to indemnify the
Administrative 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, losses or liabilities resulting
solely from the Administrative Agent's gross negligence or
wilful misconduct.
(b) Each Grantor will upon demand pay to the Administrative
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
Administrative Agent may incur in connection with
(i) the administration of this Security Agreement,
(ii) the custody, preservation, use or operation of, or
the sale of, collection from, or other realization
upon, any of the Collateral, and
(iii) the exercise or enforcement of any of the rights of
the Administrative Agent or the Secured Parties
hereunder, or
(iv) the failure by any Grantor to perform or observe any
of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Security Agreement is a Loan
-------------
Document executed pursuant to the Term Loan Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 7.2. Amendments; etc. No amendment to or waiver of any
---------------
provision of this Security Agreement nor consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent (on behalf of the Lenders or the Required
Lenders, as the case may be), and then such waiver
-20-
or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 7.3. Addresses for Notices. All notices and other
---------------------
communications provided for hereunder shall be in writing or by facsimile
addressed, delivered or transmitted, if to the Borrower Grantor or the
Administrative Agent, to such party at its address or facsimile number set forth
in the Term Loan Agreement and if to a Subsidiary Grantor, addressed to it in
care of the Borrower Grantor at the address or facsimile number of the Borrower
Grantor set forth in the Term Loan Agreement and in each case, to any other
address or facsimile number given to the sender of any notice or communication
pursuant to the terms of this Section 7.3. Any notice, if mailed and properly
-----------
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if transmitted
by facsimile, shall be deemed given when transmitted (and electronic
confirmation of receipt thereof has been received).
SECTION 7.4. Additional Grantors. Upon the execution and delivery by
-------------------
any other Person of an instrument in the form of Annex I hereto, such
-------
Person shall become a "Subsidiary Grantor" and a "Grantor" hereunder with the
same force and effect as if originally named as a Subsidiary Grantor and a
Grantor herein. The execution and delivery of any such instrument shall not
require the consent of any other Grantor hereunder. 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 7.5. Section Captions. Section captions used in this
----------------
Security Agreement are for convenience of reference only, and shall not affect
the construction of this Security Agreement.
SECTION 7.6. 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 7.7. Counterparts. This Security Agreement may be executed
------------
by the parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.8. Governing Law, Entire Agreement, etc. THIS SECURITY
------------------------------------
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
-21-
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS SECURITY AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
-22-
IN WITNESS WHEREOF, each Grantor has caused this Security Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
XXXXX X. XXXXXXXXX COMPANY
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Chief
Financial Officer
FLEET NATIONAL BANK, as the
Administrative Agent
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
SCHEDULE I
to Security Agreement
Xxxxx X. Xxxxxxxxx Company
Item A. Location of Equipment
---------------------
All of the equipment is located at the locations set forth on the
attached Schedule I.C
Item B. Location of Collateral Accounts
-------------------------------
There are no collateral accounts.
Item C. Place(s) of Business and Chief Executive Office
-----------------------------------------------
The places of business and chief executive office are set forth on the
attached Schedule I.C
Item D. Trade Names
-----------
DOMESTIC:
EMJ
Xxxxx X. Xxxxxxxxx Holding Company, Inc.
Xxxxx X. Xxxxxxxxx Company
Xxxxxxxxx Steel and Aluminum
Kilsby Xxxxxxx
FOREIGN:
Xxxxx X. Xxxxxxxxx (U.K.) Limited (Sold January 29, 1998; names now
---------------------------------
used by purchaser)
Xxxxxx-Xxxxxxxxx Steel & Aluminum Limited
KJ Ltd.
Kilsby Xxxxxxx Ltd.
Xxxxx X. Xxxxxxxxx (Canada), Inc.
---------------------------------
Xxxxxx-Xxxxxxxxx Steel & Aluminum, Inc.
KJ Inc.
Bowsteel Ltd.
Xxxxxx-Xxxxxxxxx Steel & Aluminum S.A. de C.V. Inc. (Sold September 8,
---------------------------------------------------
1997; names now used by purchaser)
Xxxxxx-Xxxxxxxxx Steel & Aluminum S.A. de C.V. Inc.
Item E. Merger or Other Corporate Reorganization
----------------------------------------
There are no mergers or other corporate reorganizations.
Item F. Mobile Assets
-------------
All of the Mobile Assets are operated out of the locations listed on
Schedule I.C.
SCHEDULE I.C
to Security Agreement
Xxxxx X. Xxxxxxxxx Company
EQUIPMENT LOCATIONS, PLACES OF BUSINESS AND CHIEF EXECUTIVE OFFICE
------------------------------------------------------------------
Corporate Office Address
(Orange County)
0000 Xxxx Xxxxx Xxxxxx
Xxxx, Xxxxxxxxxx 00000
OWNED PROPERTIES
----------------
City Address
---- -------
1. Boston 00 Xxxxx Xxxxxx
(Xxxxxxxxx Xxxxxx) Xxxxxxxxx, XX 00000
2. Charlotte 0000 Xxxxxxxxxxxx Xxxx.
(Xxxxxxxxxxx Xxxxxx) Xxxxxxxxx, XX 00000
3. Chicago 0000 Xxxxxxxx Xxxx.
(Xxxxxxxxxx) Xxxxxxxxxx, XX 00000
(Xxxx County)
4. Cleveland 0000 Xxxxxxxxxx Xxxxxxx
(Xxxxxx Xxxxxx) Xxxxxxxxx, XX 00000
5. Cleveland Plate 00000 Xxxxxxxx Xxxx
(Xxxxxxxx Xxxxxx) Xxxxxxxxx, XX 00000
6. Dallas Service Center/ 0000 X. Xxxxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxx, XX 00000
(Dallas County)
7. Honolulu 00-000 Xxxxxxxx Xxxx.
(Xxxxxxxx Xxxxxx) Xxxxxxx, XX 00000
8. Xxxxxxxx 00-000 Xxxxxx Xxxxxx
(Culvert Lot, No equipment) Xxxxxxx, XX 00000
(Honolulu County)
9. Houston 0000 Xxxxxxx Xxxxx
(Xxxxxx Xxxxxx) Xxxxxxx, XX 00000
10. Los Angeles Plate 1929 Xxxxxx Xxxxxx Xxxx Blvd.
(Los Angeles County) Xxxxxxx, XX 00000
11. Los Angeles 00000 Xxxxxxx Xx.
(Xxx Xxxxxxx Xxxxxx) Xxxxxxx, XX 00000
12. Minneapolis 0000 000xx Xxxxxx X.X.
(Xxxxx Xxxxxx) Xxxxxx, XX 00000
13. Phoenix 0000 X. Xxxxxxx Xx.
(Xxxxxxxx Xxxxxx) Xxxxxxx, XX 00000
(No Mortgage)
14. Tulsa 0000 X. Xxxx Xx.
(Xxxxx Xxxxxx) Xxxxx, XX 00000
15. Tulsa 0000 X. 00xx Xxxxxx
(Xxxxx Xxxxxx) Xxxxx, XX 00000
16. Plainfield 0000 Xxxxxxx Xxxx.
(Xxxxxxxxx Xxxxxx) Xxxxxxxxxx, XX 00000
17. Kansas City 0000 Xxxx 00xx Xxxxxx
(Xxxxxxx Xxxxxx) Xxxxxx Xxxx, XX 00000
(Held for sale; No Liens)
LEASED PROPERTIES
-----------------
CINCINNATI (Xxxxxxxx County)
----------
000 Xxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
CITY OF INDUSTRY (Los Angeles County)
----------------
0000 X. Xxxxxxx Xxx.
Xxxx xx Xxxxxxxx, XX 00000
2
DAVENPORT (Xxxxx County)
---------
0000 X. 00xx Xx.
Xxxxxxxxx, XX 00000
000 X. 00xx Xxxxxx, Xxxxxxxx 0
Xxxxxxxxx, Xxxx 00000
DENVER (Xxxxx County)
------
0000 Xxxxxxx Xx.
Xxxxxx, XX 00000
HAYWARD (Alameda County)
-------
00000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
KANSAS CITY (Xxxxxxx County)
-----------
0000 X. Xxxxxxxxx Xxx.
Xxxxxx Xxxx, XX 00000
0000 Xxxx 00xx Xx.
Xxxxxx Xxxx, XX
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxx, XX
LITTLE ROCK (Pulaski County)
-----------
0000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxx, XX 00000
MEMPHIS (Shelby County)
-------
0000 Xxxxxxx Xx.
Xxxxxxx, XX 00000
MILWAUKEE (Milwaukee County)
---------
00000 X. Xxxxx Xxx.
Xxxxxxxxxx, XX 00000
(Office space only)
3
PHILADELPHIA (Bucks County)
------------
00 Xxxxx Xxxx.
Xxxxxxxxx, XX 00000
PORTLAND (Multinomah County)
--------
0000 X. Xxxxxx Xx.
Xxxxxxxx, XX 00000
SEATTLE (King County)
-------
00000 00xx Xxxxxx Xx.
Xxxx, XX 00000
ST. LOUIS (St. Louis County)
---------
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
REDFORD (Xxxxx County)
-------
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
(Loading dock; No Liens)
ROCKY HILL (Hartford County)
----------
KALA Building
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 00
Xxxxx Xxxx, XX
(Hartford Sales Office)
ARLINGTON (Tarrant County)
---------
0000 Xxxx X-00, Xxxxx 000
Xxxxxxxxx, XX 00000
(Dallas Credit Office)
4
TULSA (Tulsa County)
-----
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, XX 00000
(Tulsa Services)
(Due to terminate April 30, 1998)
ROSELLE (Xxxx County)
-------
000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
(Merchandising)
HEADQUARTERS (Orange County)
------------
0000 Xxxx Xxxxx Xxxxxx
Xxxx, XX 00000
5
ANNEX I
to Security Agreement
SUPPLEMENT TO SECURITY AGREEMENT
This SUPPLEMENT NO. ___, dated as of ___________ __, ____ (this
"Supplement"), to the Security Agreement, dated as of March 24, 1998 (as
----------
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Security Agreement"), among the initial signatories thereto and each
------------------
other Person which from time to time thereafter became a party thereto pursuant
to Section 7.4 thereof (each, individually, a "Grantor", and, collectively, the
-------
"Grantors"), in favor of FLEET NATIONAL BANK, as administrative agent (together
--------
with any successor(s) thereto in such capacity, the "Administrative Agent") for
--------------------
each of the Secured Parties (such and other capitalized terms being used herein
with the meanings provided, or incorporated by reference, in the Security
Agreement), is made by the undersigned.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to that certain Term Loan Agreement, dated as of March
24, 1998 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Term Loan Agreement"), among Xxxxx X. Xxxxxxxxx Company,
-------------------
a Delaware corporation (the "Borrower Grantor"), the various financial
----------------
institutions as are, or may from time to time become, parties thereto (each,
individually, a "Lender", and collectively, the "Lenders"), DLJ Capital Funding,
------ -------
Inc., as the syndication agent, Bankers Trust Company, as the documentation
agent, and the Administrative Agent, the Lenders have committed to make Term
Loans to the Borrower Grantor;
WHEREAS, as a condition precedent to the making and maintenance of the Term
Loans under the Term Loan Agreement, the undersigned is required to execute and
deliver this Supplement;
WHEREAS, the undersigned has duly authorized the execution, delivery and
performance of this Supplement and the Security Agreement;
WHEREAS, the Security Agreement provides that additional parties may become
Grantors under the Security Agreement by execution and delivery of an instrument
in the form of this Supplement;
WHEREAS, pursuant to the provisions of Section 7.4 of the Security
Agreement, the undersigned is becoming an Additional Subsidiary Grantor under
the Security Agreement;
WHEREAS, the undersigned is a Subsidiary of the Borrower Grantor; and
WHEREAS, the undersigned desires to become a Subsidiary Grantor and a
Grantor under the Security Agreement in order to induce the Secured Parties to
continue to maintain the Term Loans under the Term Loan Agreement as
consideration therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. In accordance with the Security Agreement, the undersigned by
its signature below becomes a Subsidiary Grantor and a Grantor under the
Security Agreement with the same force and effect as if it were an original
signatory thereto as a Subsidiary Grantor and a Grantor and the undersigned
hereby
(a) agrees to all the terms and provisions of the Security Agreement
applicable to it as a Subsidiary Grantor and a Grantor thereunder;
(b) assigns and pledges to the Administrative Agent for its benefit
and the ratable benefit of each of the Secured Parties, and grants to the
Administrative Agent for its benefit and the ratable benefit of each of the
Secured Parties, a security interest in all of the following, whether now
or hereafter existing or acquired by the undersigned (its "Collateral"):
----------
(i) all Equipment of the undersigned;
(ii) all Mobile Assets of the undersigned;
(iii) all general intangibles (excluding intellectual property)
relating to the Equipment and the Mobile Assets of the undersigned;
(iv) 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 clause (b); and
----------
(v) all rents, 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 subclauses (i) through
--------------
(iv) of this clause (b), proceeds deposited from time to time in the
---- ----------
Collateral Account, and, to the extent not otherwise included, all
payments under insurance (whether or not the Administrative Agent is
the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral);
provided, however, that notwithstanding the foregoing, "Collateral" shall
-------- -------
not include (x) 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
-2-
constitute a violation of a valid and enforceable restriction in favor of a
Person (other than an Affiliate of a Grantor) on such grant, unless and
until any required consents shall have been obtained, which required
consents the undersigned agrees to use its best efforts in obtaining and
(y) any inventory (including raw materials, work-in-process, supplies and
finished goods), accounts receivable (including sellers' rights relating
thereto, all contracts and contract rights relating thereto and all books
and records relating thereto), all collection accounts, deposit accounts
and other bank accounts relating to collection of the foregoing, together
with the proceeds and products of all of the foregoing, which secures or is
purported to secure obligations under the Revolving Credit Agreement;
(c) agrees that the Schedule attached hereto shall be deemed to be a
Schedule thereto; and
(d) represents and warrants that the representations and warranties
made by it as a Subsidiary Grantor and a Grantor thereunder are true and
correct on and as of the date hereof.
In furtherance of the foregoing, each reference to a "Grantor", "Subsidiary
Grantor" or "Additional Subsidiary Grantor" in the Security Agreement shall be
deemed to include the undersigned.
SECTION 2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and constitutes a legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired.
SECTION 5. Without limiting the provisions of the Term Loan Agreement (or
any other Loan Document, including the Security Agreement), the undersigned
agrees to reimburse the Administrative Agent for its reasonable out-of-pocket
expenses in connection with this Supplement, including reasonable attorneys'
fees and expenses of the Administrative Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THIS SUPPLEMENT, THE SECURITY
AGREEMENT AND THE
-3-
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7. This Supplement hereby incorporates by reference the provisions
of the Security Agreement, which provisions are deemed to be a part hereof, and
this Supplement shall be deemed to be a part of the Security Agreement.
SECTION 8. This Supplement 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 9. The undersigned hereby acknowledges it has received a copy of
that certain Intercreditor Agreement dated as of March 24, 1998, between the
Administrative Agent and the administrative agent under the Revolving Credit
Agreement and hereby agrees to the terms and provisions thereof.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
-4-
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
[NAME OF ADDITIONAL SUBSIDIARY GRANTOR]
By
-------------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
FLEET NATIONAL BANK, as
Administrative Agent
By
-------------------------------------
Name:
Title:
-5-
SCHEDULE I
to Supplement No. __
Security Agreement
([NAME OF ADDITIONAL SUBSIDIARY GUARANTOR])
Item A. Location of Equipment
---------------------
Description Location
----------- --------
1.
2.
3.
Item B. Location of Collateral Accounts
-------------------------------
Contact
Bank Name and Address Account Number Person
--------------------- -------------- -------
1.
2.
3.
Item C. Place(s) of Business and Chief Executive Office
-----------------------------------------------
Item D. Trade Names
-----------
Item E. Merger or Other Corporate Reorganization
----------------------------------------
Item F. Mobile Assets
-------------
