Guarantor Security Agreement
GUARANTOR SECURITY AGREEMENT
THIS GUARANTOR SECURITY AGREEMENT (the "Agreement") dated as of January
31, 2000, is executed by PRIME PRACTICE MANAGEMENT, INC., a New York corporation
(the "Debtor"), for the benefit of BANK OF AMERICA, N.A., a national banking
association ("B of A"), not in its individual capacity but solely as
administrative agent for itself and each of the other Lenders (each, a "Lender"
and collectively, the "Lenders") as defined in the Loan Agreement (as
hereinafter defined) (in such capacity, together with its successors and assigns
in such capacity, the "Administrative Agent").
R E C I T A L S:
- - - - - - - -
A. Prime Refractive Management, L.L.C., a Delaware limited liability
company (the "Borrower"), B of A, as administrative agent, BankBoston, N.A., as
documentation agent, and the Lenders have entered into that certain Loan
Agreement dated January 31, 2000, (as the same may be amended, restated,
extended, supplemented or modified from time to time, the "Loan Agreement"),
pursuant to which the Lenders have agreed to make an advancing term loan to the
Borrower with advances thereunder not to exceed an aggregate principal amount of
Fourteen Million and 00/100 Dollars ($14,000,000.00).
B. The Debtor, together with other guarantors, has executed that
certain Guaranty Agreement of even date herewith (as the same may be amended,
supplemented or modified from time to time, the "Guaranty"), pursuant to which
the Debtor has guaranteed to the Agents (as defined in the Loan Agreement) and
the Lenders the full and complete payment and performance of the Obligations (as
defined in the Loan Agreement).
C. The Agents and the Lenders have conditioned their obligations under the
Loan Agreement upon the execution and delivery of this Agreement by the Debtor.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Terms Defined in Loan Agreement. Capitalized terms used and
not otherwise defined herein shall have the same meanings as set forth in the
Loan Agreement.
Section 1.2 Terms Defined in Uniform Commercial Code. Terms used herein
which are defined in the Uniform Commercial Code as adopted by the State of
Texas, unless otherwise defined herein or in the Loan Agreement, shall have
their meanings as set forth in the Uniform Commercial Code as adopted by the
State of Texas.
Section 1.3 Additional Definitions. As used in this Agreement, the
following terms shall have the following meanings:
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Guarantor Security Agreement
"Accounts" means any "account," as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired by the Debtor, and, in any
event, shall include, without limitation, each of the following, whether now
owned or hereafter acquired by the Debtor: (a) all rights of the Debtor to
payment for goods sold or leased or services rendered, whether or not earned by
performance; (b) all accounts receivable of the Debtor; (c) all rights of the
Debtor to receive any payment of money or other form of consideration; (d) all
security pledged, assigned, or granted to or held by the Debtor to secure any of
the foregoing; (e) all guaranties of, or indemnifications with respect to, any
of the foregoing; and (f) all rights of the Debtor as an unpaid seller of goods
or services, including, but not limited to, all rights of stoppage in transit,
replevin, reclamation, and resale.
"Chattel Paper" means any "chattel paper," as such term is
defined in Article 9 of the UCC, now owned or hereafter acquired by the Debtor.
"Collateral" has the meaning specified in Section 2.1 of this
Agreement.
"Document" means any "document," as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired by the Debtor, including,
without limitation, all documents of title and warehouse receipts of the Debtor.
"Equipment" means any "equipment," as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired by the Debtor and, in any
event, shall include, without limitation, all machinery, equipment, furnishings,
and fixtures now owned or hereafter acquired by the Debtor and any and all
additions, substitutions, and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment, and
accessories installed thereon or affixed thereto.
"General Intangibles" means any "general intangibles," as such
term is defined in Article 9 of the UCC, now owned or hereafter acquired by the
Debtor and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by the Debtor: (a) all of the
Debtor's patents, patent applications, patent rights, service marks, trademarks,
trade names, trade secrets, intellectual property, registrations, goodwill,
copyrights, franchises, licenses, permits, proprietary information, customer
lists, designs, and inventions; (b) all of the Debtor's books, records, data,
plans, manuals, computer software, and computer programs; (c) all of the
Debtor's contract rights, partnership interests, joint venture, limited
liability company, and membership interests (but only to the extent not
otherwise pledged to the Administrative Agent pursuant to a separate pledge or
security agreement), deposit accounts, investment accounts, and certificates of
deposit; (d) all rights of the Debtor to payment under letters of credit and
similar agreements; (e) all tax refunds and tax refund claims of the Debtor; (g)
all choses in action and causes of action of the Debtor (whether arising in
contract, tort, or otherwise and whether or not currently in litigation) and all
judgments in favor of the Debtor; (g) all rights and claims of the Debtor under
warranties and indemnities; and (h) all rights of the Debtor under any
insurance, surety, or similar contract or arrangement.
"Instrument" means any "instrument," as such term is defined
in Article 9 of the UCC and any note payable to Debtor or its order together
with all collateral securing such note and all agreements and documents related
thereto or arising therefrom, now owned or hereafter acquired by the Debtor.
"Inventory" means any "inventory," as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired by the Debtor, and, in any
event, shall include, without limitation, each of the following, whether now
owned or hereafter acquired by the Debtor: (a) all goods and other personal
property of the Debtor that are held for sale or lease or to be furnished under
any contract of service; (b) all raw materials, work-in-process, finished goods,
inventory, supplies, and materials of the Debtor; (c) all wrapping, packaging,
advertising, and shipping materials of the Debtor; (d) all goods that have been
returned to, repossessed by, or stopped in transit by the Debtor; and (e) all
Documents evidencing any of the foregoing.
"Investment Property" means "investment property," as such
term is defined in Section 9.115(a)(6) of the Texas Business and Commerce Code.
"Motor Vehicle" means all cars, trucks, vans and other motor
vehicles now owned or hereafter acquired by the Debtor which are used by the
Debtor for the transfer of lithotripters and lithotripsy related equipment,
including without limitation, those motor vehicles listed on Schedule 1 hereto,
and any and all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
"Proceeds" means any "proceeds," as such term is defined in
Article 9 of the UCC and, in any event, shall include, but not be limited to,
(a) any and all proceeds of any insurance, indemnity, warranty, or guaranty
payable to the Debtor from time to time with respect to any of the Collateral,
(b) any and all payments (in any form whatsoever) made or due and payable to the
Debtor from time to time in connection with any requisition, confiscation,
condemnation, seizure, or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any person acting under color of Governmental
Authority), and (c) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Securities" means all shares of stock of any Person now owned
or hereafter acquired by the Debtor including, without limitation, each of the
shares listed on Schedule 2 hereto, and all dividends, cash, stock dividends,
instruments and other investment property from time to time received, receivable
by, or otherwise distributed to the Debtor for its own account in respect of or
in exchange for any or all of such shares, and the certificates representing
such shares.
"UCC" means the Uniform Commercial Code as in effect in the
State of Texas or, if so required with respect to any particular Collateral by
mandatory provisions of applicable law, as in effect in the jurisdiction in
which such Collateral is located.
ARTICLE II
Security Interest and Pledge
Section 2.1 Security Interest and Pledge. The Debtor hereby pledges and
grants to the Administrative Agent, for the pro rata benefit of the Lenders, a
lien on and security interest in all of the Debtor's right, title, and interest
in and to the following, whether now owned or hereafter arising or acquired and
wherever located (collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments;
(d) all General Intangibles and all Securities;
(e) all Investment Property;
(f) all Documents;
(g) all Equipment, including, without limitation, all Motor Vehicles;
(h) all Inventory;
(i) all other goods and personal property of the Debtor
whether tangible or intangible; and
(j) all Proceeds and products of any or all of the
foregoing.
Section 2.2 Secured Indebtedness. The Collateral shall secure the
following obligations, indebtedness, and liabilities (whether at stated
maturity, by acceleration or otherwise) (all such obligations, indebtedness, and
liabilities being hereinafter sometimes called the "Secured Indebtedness"):
(a) the Obligations and the obligations, liabilities and indebtedness of
the Debtor to the Agents and the Lenders under the Guaranty;
(b) all reasonable costs and expenses, including, without
limitation, all reasonable attorneys' fees and legal expenses, incurred by any
of the Agents or any Lender to preserve and maintain the Collateral, collect the
obligations herein described, and enforce this Agreement; and
(c) all extensions, renewals, and modifications of any of the foregoing.
Section 2.3 Debtor Remains Liable. Notwithstanding anything to the
contrary contained herein, (a) the Debtor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent of any of its rights hereunder shall not release the Debtor
from any of its duties or obligations under the contracts and agreements
included in the Collateral, and (c) neither the Administrative Agent nor any
Lender shall have any obligation or liability under any of the contracts and
agreements included in the Collateral by reason of this Agreement, nor shall the
Administrative Agent or any Lender be obligated to perform any of the
obligations or duties of the Debtor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
ARTICLE III
Representations and Warranties
To induce the Administrative Agent to enter into this Agreement and the
Agents and the Lenders to enter into the Loan Agreement, the Debtor represents
and warrants to the Administrative Agent that:
Section 3.1 Corporate Existence. The Debtor: (a) is a corporation
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation; (b) has all requisite corporate power and authority to own its
assets and carry on its business as now being or as proposed to be conducted;
and (c) is qualified to do business in all jurisdictions in which the nature of
its business makes such qualification necessary and where failure to so qualify
would have a material adverse effect on the business, condition (financial or
otherwise), operations, or properties of the Debtor. The Debtor has the
corporate power and authority to execute, deliver, and perform its obligations
under this Agreement and the other Loan Documents to which it is or may become a
party.
Section 3.2 Corporate Action; No Breach. The execution, delivery, and
performance by the Debtor of this Agreement and the other Loan Documents to
which the Debtor is or may become a party and compliance with the terms and
provisions hereof and thereof have been duly authorized by all requisite
corporate action on the part of the Debtor and do not and will not (a) violate
or conflict with, or result in a breach of, or require any consent under (i) the
articles of incorporation or bylaws of the Debtor, (ii) any material applicable
law, rule, or regulation or any material order, writ, injunction, or decree of
any Governmental Authority or arbitrator, or (iii) any material agreement or
instrument to which the Debtor is a party or by which it or any of its property
is bound or subject, or (b) constitute a material default under any material
agreement or instrument, or result in the creation or imposition of any Lien
(except as provided in Section 2.1 hereof) upon any of the revenues or assets of
the Debtor.
Section 3.3 Approvals. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Debtor of
this Agreement and the other Loan Documents to which the Debtor is or may become
a party or the validity or enforceability thereof.
Section 3.4 Enforceability. This Agreement constitutes, and the other
Loan Documents to which the Debtor is party, when delivered, shall constitute
legal, valid, and binding obligations of the Debtor, enforceable against the
Debtor in accordance with their respective terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
Section 3.5 Title. The Debtor is, and with respect to Collateral
acquired after the date hereof the Debtor will be, the legal and beneficial
owner of the Collateral free and clear of any Lien, security interest, pledge,
claim or other encumbrance (except for Liens permitted by Section 9.2 of the
Loan Agreement and liens in favor of the Prime Administrative Agent (as
hereinafter defined)) or, with respect to the Securities, any right or option on
the part of any Person (other than the Lenders) to purchase or otherwise acquire
the Securities or any part thereof, except for the security interests granted
hereunder, Liens permitted by Section 9.2 of the Loan Agreement, and liens in
favor of the Prime Administrative Agent (as hereinafter defined). The liens and
security interests granted herein are subject and subordinate to the liens
granted in favor of Bank of America, N.A., as Administrative Agent under the
Fourth Amended and Restated Loan Agreement dated as of the date hereof (the
"Prime Loan Agreement") among Prime Medical Services, Inc., Bank of America,
N.A., as Administrative Agent (the "Prime Administrative Agent"), BankBoston,
N.A., as Documentation Agent, and the lenders from time to time party thereto.
Section 3.6 Accounts. Unless the Debtor has given the Administrative
Agent written notice to the contrary, whenever the security interest granted
hereunder attaches to an Account, the Debtor shall be deemed to have represented
and warranted to the Administrative Agent as to each and all of its Accounts
that (a) each Account is genuine and in all respects what it purports to be, (b)
each Account represents the legal, valid, and binding obligation of the account
debtor evidencing indebtedness unpaid and owed by such account debtor arising
out of the performance of labor or services by the Debtor or the sale or lease
of goods by the Debtor, (c) the amount of each Account represented as owing is
the correct amount actually and unconditionally owing except for normal trade
discounts granted in the ordinary course of business, and (d) no Account is
subject to any offset, counterclaim, or other defense.
Section 3.7 Rule 144 Securities. With respect to all Collateral that is
Securities which are subject to Rule 144 under the Securities Act of 1933, as
such rule and act are amended at the time in question and any successor in whole
or in part thereto, (a) the Debtor is the beneficial and record owner thereof,
free and clear of any Liens or transfer restrictions (other than restrictions on
the amount thereof which may be sold, and the manner in which sales may be made,
imposed by such Rule 144), (b) the Debtor acquired such Securities directly from
the issuer thereof more than two (2) years prior to the date hereof in
transactions not involving any public offering, (c) the Debtor paid the purchase
price therefor in cash more than two (2) years prior to the date hereof, (d)
since such date of acquisition, the Debtor has not had a short position in, or
any put or option to dispose of, any capital stock of any issuer thereof or
Securities convertible into capital stock of any issuer thereof, (e) neither the
Debtor, nor any person or entity, the sales of which are required by Rule 144 to
be aggregated with the sales of the Debtor, has sold any capital stock of any
issuer of such Securities during the period of six (6) months prior to the date
hereof, other than sales pursuant to an effective registration statement under
the Securities Act of 1933, as amended, and (f) to the Debtor's best knowledge,
each issuer of such Securities has timely filed all reports required to be filed
by it under the Securities Exchange Act of 1934, as amended.
Section 3.8 Financing Statements. No financing statement, security
agreement, or other Lien instrument covering all or any part of the Collateral
is on file in any public office, except as may have been filed in favor of the
Prime Administrative Agent, any lender under the Prime Agreement, Administrative
Agent, or any Lender pursuant to this Agreement. The Debtor has not within the
past five (5) years had a trade name or done business under any name other than
its legal name set forth at the beginning of this Agreement.
Section 3.9 Principal Place of Business. The principal place of
business and chief executive office of the Debtor, and the office where the
Debtor keeps its books and records, is located at the address of the Debtor
shown on the signature pages of this Agreement.
Section 3.10 Location of Collateral. All Inventory and Equipment of the
Debtor are located at the places specified on Schedule 3 hereto. The Debtor has
exclusive possession and control of its Inventory and Equipment. None of the
Inventory or Equipment of the Debtor is evidenced by a Document (including,
without limitation, a negotiable document of title). All Instruments, Chattel
Paper, Securities and certificates of title of the Debtor have been delivered to
the Prime Administrative Agent, to perfect on its behalf and on behalf of the
Administrative Agent.
Section 3.11 Perfection. Upon the filing of Uniform Commercial Code
financing statements in the jurisdictions listed on Schedule 4 attached hereto,
and upon the Administrative Agent's obtaining possession of all Documents,
Instruments, Chattel Paper, Securities and certificates of title of the Debtor,
and upon the Administrative Agent's obtaining control of all Investment
Property, the security interest in favor of the Administrative Agent created
herein will constitute a valid and perfected Lien upon and security interest in
the Collateral, subject to no equal or prior Lien, except in favor of the Prime
Administrative Agent and as permitted by Section 9.2 of the Loan Agreement.
Section 3.12 Independent Investigation. The Debtor has, independently
and without reliance upon any of the Agents or any Lender and based upon such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. There are no conditions
precedent to the full effectiveness of this Agreement that have not been fully
and permanently satisfied.
Section 3.13 Litigation. Except as disclosed on Schedule 7.5 to the
Prime Agreement, there is no litigation, investigation, or governmental
proceeding threatened against the Debtor or any of its properties which if
adversely determined would have a material adverse effect on the Collateral or
the financial condition, operations, or business of the Borrower, any Material
Subsidiary or the Companies taken as a whole.
Section 3.14 Benefit to Debtor. The value of the consideration received
and to be received by the Debtor as a result of the Borrower, the Agents and the
Lenders entering into the Loan Agreement and the Debtor executing and delivering
this Agreement is reasonably worth at least as much as the liability and
obligation of the Debtor hereunder, and such liability and obligation and the
Borrower's entering into the Loan Agreement have benefited and may reasonably be
expected to benefit the Debtor directly and indirectly.
ARTICLE IV
Covenants
The Debtor covenants and agrees with the Administrative Agent that
until the Secured Indebtedness is paid and performed in full and the Commitments
have terminated:
Section 4.1 Encumbrances. Except as permitted by Section 9.2 of the
Loan Agreement and liens in favor of the Prime Administrative Agent, the Debtor
shall not create, permit, or suffer to exist, and shall defend the Collateral
against, any Lien, security interest, or other encumbrance on the Collateral,
and shall defend the Debtor's rights in the Collateral and the Administrative
Agent's security interest in the Collateral against the claims and demands of
all Persons. The Debtor shall do nothing to impair the rights of the
Administrative Agent in the Collateral.
Section 4.2 Delivery. Prior to or concurrently with the execution and
delivery of this Agreement, Debtor shall deliver to the Prime Administrative
Agent to acknowledge the Administrative Agent's lien and security interest in
all certificates identified on Schedule 2 hereto, with all Chattel Paper,
Instruments and Documents of the Debtor.
Section 4.3 Modification of Accounts. The Debtor shall, in accordance
with prudent business practices, endeavor to collect or cause to be collected
from each account debtor under its Accounts, as and when due, any and all
amounts owing under such Accounts. Without the prior written consent of the
Administrative Agent, the Debtor shall not (a) grant any extension of time on
any Account for any payment or grant extensions of time for payments on its
Accounts which cause the aggregate amount of all payments extended by the Debtor
on its Accounts during any fiscal year of the Debtor to exceed $150,000.00, (b)
compromise, compound, or settle any of the Accounts for less than the full
amount thereof; provided, however, that the Debtor may compromise, compound or
settle any Account which is an amount less than $50,000.00, provided the
aggregate amount compromised, compounded or settled during any fiscal year of
the Debtor shall not exceed $150,000.00, (c) release, in whole or in part, any
Person liable for payment of an Account in excess of $50,000.00, (d) allow any
credit or discount for payment with respect to any Account in excess of
$50,000.00, other than trade discounts granted in the ordinary course of
business; provided, however, that the aggregate amount of all credits or
discounts granted during any fiscal year of the Debtor shall not exceed
$150,000.00, or (e) release any Lien, security interest, or guaranty securing
any Account in excess of $50,000.00.
Section 4.4 Disposition of Collateral. The Debtor shall not sell,
lease, assign (by operation of law or otherwise), or otherwise dispose of, or
grant any option with respect to, the Collateral or any part thereof without the
prior written consent of the Administrative Agent, except the Debtor may sell
Inventory in the ordinary course of business.
Section 4.5 Distributions. If the Debtor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or distribution in connection with
any reclassification, increase, or reduction of capital or issued in connection
with any reorganization), option or rights, whether as an addition to, in
substitution of, or an exchange for any Collateral or otherwise, the Debtor
agrees to accept the same as the Administrative Agent's agent and to hold the
same in trust for the Administrative Agent and to deliver the same forthwith to
the Prime Administrative Agent in the exact form received, with the appropriate
endorsement of the Debtor when necessary and/or appropriate undated stock powers
duly executed in blank, to be held by the Prime Administrative Agent on its own
behalf and on behalf of Administrative Agent as additional Collateral for the
Secured Indebtedness, subject to the terms hereof. Any sums paid upon or in
respect of the Securities upon the liquidation or dissolution of the issuer
thereof shall be paid over to the Prime Administrative Agent to be held by it as
additional Collateral for the Secured Indebtedness subject to the terms hereof;
and in case any distribution of capital shall be made on or in respect of the
Securities or any property shall be distributed upon or with respect to the
Securities pursuant to any recapitalization or reclassification of the capital
of the issuer thereof or pursuant to any reorganization of the issuer thereof,
the property so distributed shall be delivered to the Prime Administrative Agent
to be held by it, as additional Collateral for the Secured Indebtedness, subject
to the terms hereof. All sums of money and property so paid or distributed in
respect of the Securities that are received by the Debtor shall, until paid or
delivered to the Administrative Agent (or the Prime Administrative Agent, so
long as it has a prior lien), be held by the Debtor in trust as additional
security for the Secured Indebtedness.
Section 4.6 Further Assurances. At any time and from time to time, upon
the request of the Administrative Agent, and at the sole expense of the Debtor,
the Debtor shall promptly execute and deliver all such further instruments,
agreements, and documents and take such further action as the Administrative
Agent may reasonably deem necessary or desirable to preserve and perfect its
security interest in the Collateral and carry out the provisions and purposes of
this Agreement. Without limiting the generality of the foregoing, the Debtor
shall: (a) execute and deliver to the Administrative Agent such financing
statements as the Administrative Agent may from time to time require; (b)
deliver and pledge to the Administrative Agent (or the Prime Administrative
Agent, so long as it has a prior lien) all Documents (including, without
limitation, negotiable documents of title) evidencing Inventory or Equipment;
(c) deliver and pledge to the Administrative Agent (or the Prime Administrative
Agent, so long as it has a prior lien) all certificates of title required by the
Loan Agreement, Instruments and Chattel Paper of the Debtor with any necessary
endorsements; and (d) execute and deliver to the Administrative Agent such other
documents, instruments, and agreements as the Administrative Agent may
reasonably require to perfect and maintain the validity, effectiveness, and
priority of the Loan Documents and the Liens intended to be created thereby. The
Debtor authorizes the Administrative Agent to file one or more financing or
continuation statements, and amendments thereto, relating to all or any part of
the Collateral without the signature of the Debtor where permitted by law. A
carbon, photographic, or other reproduction of this Agreement or of any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement and may be filed as a financing statement.
Section 4.7 Risk of Loss; Insurance. The Agents and the Lenders shall
not be responsible for any loss or damage to the Collateral. The Debtor shall,
at its own expense, maintain insurance with financially sound and reputable
insurance companies in such amounts and covering such risks as is usually
carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which the Debtor operates consistent
with past practices and to the extent available on commercially reasonable
terms, provided that in any event the Debtor will maintain workmen's
compensation insurance, property insurance, comprehensive general liability
insurance, professional liability insurance and business interruption insurance
reasonably satisfactory to the Administrative Agent. Each insurance policy
covering Collateral shall name the Administrative Agent as loss payee for the
benefit of the Lenders as its interest may appear and shall provide that such
policy will not be canceled or reduced without thirty (30) days prior written
notice to the Administrative Agent.
Section 4.8 Inspection Rights. The Debtor shall permit the
Administrative Agent and each Lender and their respective representatives to
examine, inspect, and audit the Collateral and to examine, inspect, and copy the
Debtor's books and records at any reasonable time and as often as the
Administrative Agent or any such Lender may desire. The Administrative Agent and
each Lender may at any time and from time to time contact account debtors and
other obligors to verify the existence, amounts, and terms of the Debtor's
Accounts.
Section 4.9 Corporate Changes. The Debtor shall not change its name,
identity, or corporate structure in any manner that might make any financing
statement filed in connection with this Agreement seriously misleading unless
the Debtor shall have given the Administrative Agent thirty (30) days prior
written notice thereof and shall have taken all action reasonably deemed
necessary or desirable by the Administrative Agent to make each financing
statement not seriously misleading. The Debtor shall not change its principal
place of business, chief executive office, or the place where it keeps its books
and records unless it shall have given the Administrative Agent thirty (30) days
prior written notice thereof and shall have taken all action reasonably deemed
necessary or desirable by the Administrative Agent to cause its security
interest in the Collateral to be perfected with the priority required by this
Agreement.
Section 4.10 Books and Records; Information. The Debtor shall keep
accurate and complete books and records of the Collateral and the Debtor's
business and financial condition in accordance with GAAP. The Debtor shall from
time to time at the request of the Administrative Agent deliver to the
Administrative Agent such information regarding the Collateral and the Debtor as
the Administrative Agent may reasonably request, including, without limitation,
lists and descriptions of the Collateral and evidence of the identity and
existence of the Collateral. The Debtor shall xxxx its records to reflect the
security interest of the Administrative Agent hereunder.
Section 4.11 Equipment and Inventory.
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(a) The Debtor shall keep the Equipment and Inventory at the
locations specified on Schedule 3 hereto or, upon thirty (30) days
prior written notice to the Administrative Agent, at such other places
within the United States of America where all action required to
perfect the Administrative Agent's security interest in the Equipment
and Inventory with the priority required by this Agreement shall have
been taken.
(b) The Debtor shall maintain the Equipment and Inventory in accordance
with Section 8.3 of the Loan Agreement.
Section 4.12 Warehouse Receipts Non-Negotiable. The Debtor agrees that
if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued in respect of any of the Collateral, such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7.104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under relevant law).
Section 4.13 Taxes and Claims. The Debtor shall pay and discharge,
before the same become delinquent, (a) all material taxes, assessments, and
governmental charges imposed upon it or upon any of its property, and (b) all
material lawful claims that, if unpaid, might become a Lien upon any of its
property; provided, however, that the Debtor shall not be required to pay or
discharge any such tax, assessment, or governmental charge which is being
contested in good faith by proper proceedings being diligently pursued and for
which adequate reserves have been established in accordance with GAAP.
Section 4.14 Compliance with Laws. The Debtor shall comply in all
material respects with all material applicable laws, rules, regulations, orders,
and decrees of any Governmental Authority or arbitrator.
Section 4.15 Compliance with Agreements. The Debtor shall comply in all
material respects with all agreements, contracts, and instruments binding on it
or affecting its properties or businesses, except where the failure to do so
would not have a material adverse effect on the business, condition (financial
or otherwise), operations or properties of the Borrower, any Material Subsidiary
or the Companies (taken as a whole).
Section 4.16 Notification. Except as permitted by Section 9.2 of the
Loan Agreement and Section 9.2 of the Prime Loan Agreement, the Debtor shall
promptly notify the Administrative Agent of (a) any Lien, security interest,
encumbrance, or claim that has attached to or been made or asserted against any
of the Collateral, (b) any material change in any of the Collateral, including,
without limitation, any material damage to or loss of any material portion of
the Collateral, (c) the occurrence of any other event that could have a material
adverse effect on the Collateral or the security interest created hereunder, and
(d) the occurrence or existence of any Default.
Section 4.17 Collection of Accounts. Except as otherwise provided in
this Section or in any other Loan Document, the Debtor shall have the right to
collect and receive payments on the Accounts. In connection with such
collections, the Debtor may take (and, at the Administrative Agent's direction,
shall take) such actions as the Debtor or the Administrative Agent may
reasonably deem necessary or advisable to enforce collection of the Accounts.
Section 4.18 Additional Securities. The Debtor shall not consent to or
approve the issuance of any additional shares of any class of capital stock of
the issuers of any of the Securities, or any securities convertible into, or
exchangeable for, any such shares or any warrants, options, rights, or other
commitments entitling any Person to purchase or otherwise acquire any such
shares.
Section 4.19 Provide Information. The Debtor shall fully cooperate, to
the extent reasonably requested by the Administrative Agent, in the completion
of any notice, form, schedule, or other document filed by the Administrative
Agent on its own behalf or on behalf of the Debtor, including, without
limitation, any required notice or statement of beneficial ownership or of the
acquisition of beneficial ownership of the Securities and any notice of proposed
sale of such Securities pursuant to Rule 144 as promulgated by the Securities
and Exchange Commission (the "SEC") under the Securities Act of 1933, as
amended. Without limiting the generality of the foregoing, the Debtor shall
furnish to the Administrative Agent any and all information which the
Administrative Agent may reasonably request for purposes of any such filing,
regarding the Debtor, the Securities, and any issuer of any of the Securities,
and the Debtor shall disclose to the Administrative Agent all material adverse
information known by the Debtor with respect to the operations of any issuer of
any of the Securities.
Section 4.20 Notification of Changes in Beneficial Ownership. The
Debtor shall promptly notify the Administrative Agent of any sale of securities
of any Subsidiary of the Debtor or by any Person named on the Debtor's Rule 144
questionnaire and shall furnish promptly to the Administrative Agent a copy of
any Form 144 filed in respect of any such sale. In addition, if the Debtor or
any other Person named in the Debtor's Rule 144 questionnaire shall file with
the SEC a form or other document reporting any change in the beneficial
ownership of the common stock of any Subsidiary of the Debtor, the Debtor shall
promptly furnish to the Administrative Agent a copy of such form or document.
Section 4.21 Restriction on Sales after Default. The Debtor shall not
sell or suffer or permit any Person named in the accompanying Rule 144
questionnaire to sell any shares of the same class of securities as the
Securities at any time after any Event of Default shall have occurred.
Section 4.22 Fixtures. For any Collateral that is a fixture or an
accession which has been attached to real estate or other goods prior to the
perfection of the security interest granted in Section 2.1 hereof, the Debtor
shall furnish to Administrative Agent, upon demand, a disclaimer of interest in
each such fixture or accession and a consent in writing to the security interest
of Administrative Agent therein, signed by all persons and entities having any
interest in such fixture or accession by virtue of any interest in the real
estate or other goods to which such fixture or accession has been attached.
Section 4.23 Notation on Title Certificates. If certificates of title
are issued or outstanding with respect to any of the Collateral, the Debtor
shall cause the security interest granted in Section 2.1 hereof to be properly
noted thereon.
ARTICLE V
Rights of the Administrative Agent
Section 5.1 Power of Attorney. The Debtor hereby irrevocably
constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the name of the
Debtor or in its own name, to take any and all action and to execute any and all
documents and instruments which the Administrative Agent at any time and from
time to time deems reasonably necessary or desirable to accomplish the purposes
of this Agreement if an Event of Default shall have occurred and be continuing,
and, without limiting the generality of the foregoing, the Debtor hereby gives
the Administrative Agent the power and right on behalf of the Debtor and in its
own name to do any of the following (subject to the rights of the Debtor under
Sections 5.2 and 5.3 hereof), without notice to or the consent of the Debtor if
an Event of Default shall have occurred and be continuing:
(a) to demand, xxx for, collect, or receive in the name of the
Debtor or in its own name, any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral and,
in connection therewith, endorse checks, notes, drafts, acceptances,
money orders, documents of title, or any other instruments for the
payment of money under the Collateral or any policy of insurance;
(b) to pay or discharge taxes, Liens, or other encumbrances
levied or placed on or threatened against the Collateral;
(c) to notify post office authorities to change the address for
delivery of mail of the Debtor to an address designated by the
Administrative Agent and to receive, open. and subsequently deliver to
the Debtor mail addressed to the Debtor; and
(d) (i) to direct account debtors and any other parties liable
for any payment under any of the Collateral to make payment of any and
all monies due and to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (ii)
to receive payment of and receipt for any and all monies, claims, and
other amounts due and to become due at any time in respect of or
arising out of any Collateral; (iii) to sign and endorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, proxies, stock powers,
verifications, and notices in connection with accounts and other
documents relating to the Collateral; (vi) to commence and prosecute
any suit, action, or proceeding at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral; (v) to
defend any suit, action, or proceeding brought against the Debtor with
respect to any Collateral; (vi) to settle, compromise, or adjust any
suit, action, or proceeding described above and, in connection
therewith, to give such discharges or releases as the Administrative
Agent may deem appropriate; (vii) to exchange any of the Collateral for
other property upon any merger, consolidation, reorganization,
recapitalization, or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Collateral with any committee,
depositary, transfer agent, registrar, or other designated agency upon
such terms as the Administrative Agent may determine; (viii) to add or
release any guarantor, indorser, surety, or other party to any of the
Collateral; (ix) to renew, extend, or otherwise change the terms and
conditions of any of the Collateral; (x) to make, settle, compromise,
or adjust claims under any insurance policy covering any of the
Collateral; (xi) to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and to do, at the Administrative Agent's
option and the Debtor's expense, at any time, or from time to time, all
acts and things which the Administrative Agent deems necessary to
protect, preserve, or realize upon the Collateral and the
Administrative Agent's security interest therein; and (xii) to
complete, execute and file with the SEC one or more notices of proposed
sale of securities pursuant to Rule 144.
This power of attorney is a power coupled with an interest and shall be
irrevocable. Neither the Administrative Agent nor any Lender shall be under any
duty to exercise or withhold the exercise of any of the rights, powers,
privileges, and options expressly or implicitly granted to the Administrative
Agent in this Agreement, and shall not be liable for any failure to do so or any
delay in doing so. Neither the Administrative Agent nor any Lender shall be
liable for any act or omission or for any error of judgment or any mistake of
fact or law in its individual capacity or in its capacity as attorney-in-fact
except acts or omissions resulting from its gross negligence or willful
misconduct. This power of attorney is conferred on the Administrative Agent
solely to protect, preserve, and realize upon its security interest in the
Collateral. Neither the Administrative Agent nor any Lender shall be responsible
for any decline in the value of the Collateral and shall not be required to take
any steps to preserve rights against prior parties or to protect, preserve, or
maintain any security interest or Lien given to secure the Collateral.
Section 5.2 Voting Rights. Unless and until an Event of Default shall
have occurred and be continuing, the Debtor shall be entitled to exercise any
and all voting rights pertaining to the Securities or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Loan Agreement.
The Administrative Agent shall execute and deliver to the Debtor all such
proxies and other instruments as the Debtor may reasonably request for the
purpose of enabling the Debtor to exercise the voting rights which it is
entitled to exercise pursuant to this Section.
Section 5.3 Dividends. Unless and until an Event of Default shall have
occurred and be continuing, the Debtor shall be entitled to receive and retain
the dividends on the Securities paid in cash out of earned surplus to the extent
and only to the extent that such dividends are permitted by the Loan Agreement.
Section 5.4 Setoff, Property Held by the Lenders. The Administrative
Agent and each Lender shall have the right to set off and apply against the
Secured Indebtedness, at any time and without notice to the Debtor, any and all
deposits (general or special, time or demand, provisional or final) or other
sums at any time credited by or owing from the Administrative Agent or any
Lender to the Debtor whether or not the Secured Indebtedness is then due. As
additional security for the Secured Indebtedness, the Debtor hereby grants the
Administrative Agent and each Lender a security interest in all money,
instruments, and other property of the Debtor now or hereafter held by the
Administrative Agent or any Lender, including without limitation, property held
in safekeeping. In addition to the Administrative Agent's and each Lender's
right of setoff and as further security for the Secured Indebtedness, the Debtor
hereby grants to each of them a security interest in all deposits (general or
special, time or demand, provisional or final) of the Debtor now or hereafter on
deposit with or held by any of them and all other sums at any time credited by
or owing from the any of them to the Debtor. The rights and remedies of the
Administrative Agent and each Lender hereunder are in addition to other rights
and remedies (including, without limitation, other rights of setoff) which any
of them may have.
Section 5.5 Performance by the Secured Party. If the Debtor shall fail
to perform any covenant or agreement contained in this Agreement, the
Administrative Agent, may, at the direction of the Required Lenders, perform or
attempt to perform such covenant or agreement on behalf of the Debtor. In such
event, the Debtor shall, at the request of the Administrative Agent, promptly
pay any amount expended by the Administrative Agent or any Lender in connection
with such performance or attempted performance to the Administrative Agent,
together with interest thereon at the Default Rate from and including the date
of such expenditure to but excluding the date such expenditure is paid in full.
Notwithstanding the foregoing, it is expressly agreed that neither the
Administrative Agent nor any Lender shall have any liability or responsibility
for the performance of any obligations of the Debtor under this Agreement.
ARTICLE VI
Default
Section 6.1 Rights and Remedies. If an Event of Default shall have
occurred and be continuing, the Administrative Agent shall have the following
rights and remedies:
(a) In addition to all other rights and remedies granted to
the Administrative Agent in this Agreement or in any other Loan
Document or by applicable law, the Administrative Agent shall have all
of the rights and remedies of a secured party under the UCC (whether or
not the UCC applies to the affected Collateral). Without limiting the
generality of the foregoing, the Administrative Agent may (i) without
demand or notice to the Debtor, collect, receive, or take possession of
the Collateral or any part thereof and for that purpose the
Administrative Agent may enter upon any premises on which the
Collateral is located and remove the Collateral therefrom or render it
inoperable, and/or (ii) sell, lease, or otherwise dispose of the
Collateral, or any part thereof, in one or more parcels at public or
private sale or sales, at 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. The Administrative Agent shall have the right at any public
sale or sales, and, to the extent permitted by applicable law, at any
private sale or sales, to bid and become a purchaser of the Collateral
or any part thereof free of any right or equity of redemption on the
part of the Debtor, which right or equity of redemption is hereby
expressly waived and released by the Debtor. Upon the request of the
Administrative Agent, the Debtor shall assemble the Collateral and make
it available to the Administrative Agent at any place designated by the
Administrative Agent that is reasonably convenient to the Debtor and
the Administrative Agent. The Debtor agrees that the Administrative
Agent shall not be obligated to give more than five (5) days written
notice of the time and place of any public sale or of the time after
which any private sale may take place and that such notice shall
constitute reasonable notice of such matters. The Administrative Agent
shall not be obligated to make any sale of Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of
Collateral may have been given. The Administrative Agent may, without
notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned. The
Debtor shall be liable for all expenses of retaking, holding, preparing
for sale, or the like, and all attorneys' fees, legal expenses, and all
other costs and expenses incurred by the Administrative Agent or any
Lender in connection with the collection of the Secured Indebtedness
and the enforcement of the Administrative Agent's and the Lender's
rights under this Agreement. The Debtor shall remain liable for any
deficiency if the Proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Secured Indebtedness in full.
The Administrative Agent and the Lenders may apply the Collateral
against the Secured Indebtedness in such order and manner as the
Administrative Agent and the Lenders may elect. The Debtor waives all
rights of marshaling, valuation, and appraisal in respect of the
Collateral.
(b) The Administrative Agent may cause any or all of the
Collateral held by it to be transferred into the name of the
Administrative Agent or the name or names of the Administrative Agent's
nominee or nominees.
(c) The Administrative Agent may exercise or cause to be
exercised all voting, consensual and other powers of ownership in
respect of the Collateral and the Debtor shall deliver to the
Administrative Agent, if requested by the Administrative Agent,
irrevocable proxies with respect to the Securities in form satisfactory
to the Administrative Agent.
(d) The Administrative Agent may collect or receive all money
or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to
do so.
(e) On any sale of the Collateral, the Administrative Agent is
hereby authorized to comply with any limitation or restriction with
which compliance is necessary, in the view of the Administrative
Agent's counsel, in order to avoid any violation of applicable law or
in order to obtain any required approval of the purchaser or purchasers
by any applicable Governmental Authority.
(f) The Debtor agrees that, because of the Securities Act of
1933, as amended, or any other laws or regulations, and for other
reasons, there may be legal and/or practical restrictions or
limitations affecting the Administrative Agent in any attempts to
dispose of certain portions of the Securities and for the enforcement
of their rights. For these reasons, the Administrative Agent is hereby
authorized by the Debtor, but not obligated, upon the occurrence and
during the continuation of an Event of Default, to sell all or any part
of the Securities at private sale, subject to investment letter or in
any other manner which will not require the Securities, or any part
thereof, to be registered in accordance with the Securities Act of
1933, as amended, or the rules and regulations promulgated thereunder,
or any other laws or regulations, at a reasonable price at such private
sale or other distribution in the manner mentioned above. The Debtor
understands that the Administrative Agent may in its discretion
approach a limited number of potential purchasers and that a sale under
such circumstances may yield a lower price for the Securities, or any
part or party thereof, than would otherwise be obtainable if such
collateral were either afforded to a larger number or potential
purchasers, or registered or sold in the open market. The Debtor agrees
that such private sale shall be deemed to have been made in a
commercially reasonable manner, and that the Administrative Agent has
no obligation to delay sale of any Securities to permit the issuer
thereof to register it for public sale under any applicable federal or
state securities laws. The Administrative Agent is authorized, in
connection with any such sale (a) to restrict the prospective bidders
on or purchasers of any of the Securities to a limited number of
sophisticated investors who will represent and agree that they are
purchasing for their own account for investment and not with a view to
the distribution or sale of any of such Securities and (b) to impose
such other limitations or conditions in connection with any such sale
as the Administrative Agent reasonably deems necessary in order to
comply with applicable law. The Debtor covenants and agrees that it
will execute and deliver such documents and take such other action as
the Administrative Agent reasonably deems necessary in order that any
such sale may be made in compliance with applicable law. Upon any such
sale the Administrative Agent shall have the right to deliver, assign
and transfer to the purchaser thereof the Securities so sold. Each
purchaser at any such sale shall hold the Securities so sold
absolutely, free from any claim or right of the Debtor of whatsoever
kind, including any equity or right of redemption of the Debtor. The
Debtor, to the extent permitted by applicable law, hereby specifically
waives all rights of redemption, stay or appraisal which it has or may
have under any law now existing or hereafter enacted.
ARTICLE VII
Miscellaneous
Section 7.1 Indemnification. The Debtor hereby agrees to indemnify each
Agent, each Lender and each Affiliate thereof and their respective officers,
directors, employees, attorneys, and agents (collectively the "Indemnified
Parties") from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages, penalties, judgments, disbursements, costs, and
expenses (including reasonable attorneys' fees) to which any of them may become
subject which directly or indirectly arise from or relate to (a) the
negotiation, execution, delivery, performance, administration, or enforcement of
this Agreement or any other Loan Document, (b) any of the transactions
contemplated by this Agreement or any other Loan Document, (c) any breach by the
Debtor of any representation, warranty, covenant, or other agreement contained
in this Agreement or any other Loan Document, or (d) any investigation,
litigation, or other proceeding, including, without limitation, any threatened
investigation, litigation, or other proceeding relating to any of the foregoing,
INCLUDING, WITHOUT LIMITATION, THOSE ARISING FROM THE SOLE OR CONTRIBUTORY
NEGLIGENCE OF ANY INDEMNIFIED PARTY.
Section 7.2 No Waiver; Cumulative Remedies. No failure on the part of
any Agent or the Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement are cumulative
and not exclusive of any rights and remedies provided by law.
Section 7.3 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Debtor, the Agents, the Lenders and their
respective heirs, successors, and assigns, except that the Debtor may not assign
any of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent.
Section 7.4 Amendment; Entire Agreement. THIS AGREEMENT EMBODIES THE
FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO. The provisions of this Agreement may be amended or
waived only by an instrument in writing signed by the parties hereto.
Section 7.5 Notices. All notices and other communications provided for
in this Agreement shall be given or made in accordance with Section 13.11 of the
Loan Agreement to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof, or, as to any party at such other
address as shall be designated by such party in a notice to the other party
given in accordance with this Section.
Section 7.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
Section 7.7 Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
Section 7.8 Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by any Agent or any Lender shall affect the
representations and warranties or the right of any Agent or any Lender to rely
upon them.
Section 7.9 Waiver of Bond. In the event the Administrative Agent seeks
to take possession of any or all of the Collateral by judicial process, the
Debtor hereby irrevocably waives any bonds and any surety or security relating
thereto that may be required by applicable law as an incident to such
possession, and waives any demand for possession prior to the commencement of
any such suit or action.
Section 7.10 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.11 Construction. The Debtor and the Administrative Agent
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement with its
legal counsel.
Section 7.12 Obligations Absolute. All rights and remedies of the
Administrative Agent hereunder, and all obligations of the Debtor hereunder,
shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Loan Agreement
or any of the other Loan Documents or any other agreement or
instrument relating to any of the foregoing;
(b) any change in the time, manner, or place of payment of,
or in any other term of, all or any of the Secured Indebtedness, any or
all of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Loan Agreement or any of the other
Loan Documents;
(c) any exchange, release, or nonperfection of any Collateral, or
any release or amendment or waiver of or consent to any departure from
any guarantee, for all or any of the Secured Indebtedness; or
(d) any other circumstance (other than payment in full of the
Secured Indebtedness) that might otherwise constitute a defense
available to, or a discharge of, the Debtor.
Section 7.13 Limitations. Notwithstanding any contrary provision, it is
the intention of Debtor, Lenders, and Administrative Agent that the granting of
the liens set forth in this Agreement shall not constitute a fraudulent
conveyance, fraudulent transfer, or similar Laws applicable to Debtor.
Accordingly, notwithstanding anything to the contrary contained in this
Agreement or any other agreement or instrument executed in connection herewith,
granting of liens set forth in this Agreement shall be limited to an aggregate
amount equal to the largest amount that would not render such Debtor's
obligations hereunder subject to avoidance under Section 548 of the United
Stated Bankruptcy Code or any comparable provision of any applicable state law.
Section 7.14 Termination. If all of the Secured Indebtedness shall have
been paid and performed in full and the Commitments shall have expired or
terminated, the Administrative Agent shall, upon the written request of the
Debtor and in accordance with applicable provisions of the Loan Agreement,
promptly execute and deliver to the Debtor a proper instrument or instruments
acknowledging the release and termination of the security interests created by
this Agreement as the Debtor may reasonably deem necessary or desirable, and
shall duly assign and deliver to the Debtor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Administrative Agent and has not previously been sold or otherwise
applied pursuant to this Agreement.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE TO FOLLOW.
Guarantor Security Agreement
IN WITNESS WHEREOF, the Debtor has duly executed this Agreement as of
the day and year first written above.
DEBTOR:
------
PRIME PRACTICE MANAGEMENT, INC.
a New York corporation
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Treasurer
Address for Notices:
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000
Attn: Treasurer
Fax Number: (000) 000-0000
Telephone Number: (000) 000-0000
20
Guarantor Security Agreement
SCHEDULE 1
MOTOR VEHICLES
None.
SCHEDULE 2
SECURITIES
Pledged Stock
None.
SCHEDULE 3
LOCATION OF COLLATERAL
Location of Equipment and Inventory
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000-0000
SCHEDULE 4
JURISDICTIONS FOR FILING
Jurisdictions for Filing UCC-1 Financing Statements
Texas
Guarantor Security Agreement
GUARANTOR SECURITY AGREEMENT
THIS GUARANTOR SECURITY AGREEMENT (the "Agreement") dated as of January
31, 2000, is executed by FASTSTART, INC., a North Carolina corporation (the
"Debtor"), for the benefit of BANK OF AMERICA, N.A., a national banking
association ("B of A"), not in its individual capacity but solely as
administrative agent for itself and each of the other Lenders (each, a "Lender"
and collectively, the "Lenders") as defined in the Loan Agreement (as
hereinafter defined) (in such capacity, together with its successors and assigns
in such capacity, the "Administrative Agent").
R E C I T A L S:
- - - - - - - -
A. Prime Medical Services, Inc., a Delaware corporation (the "Borrower"), B
of A, as administrative agent, BankBoston, N.A., as documentation agent, and the
Lenders have entered into that certain Fourth Amended and Restated Loan
Agreement dated January 31, 2000, (as the same may be amended, restated,
extended, supplemented or modified from time to time, the "Loan Agreement"),
pursuant to which the Lenders have agreed to make a revolving loan to the
Borrower with advances thereunder not to exceed an aggregate principal amount of
Eighty-Six Million and 00/100 Dollars ($86,000,000.00) at any one time
outstanding.
B. The Debtor, together with other guarantors, has executed that
certain Guaranty Agreement of even date herewith (as the same may be amended,
supplemented or modified from time to time, the "Guaranty"), pursuant to which
the Debtor has guaranteed to the Agents (as defined in the Loan Agreement) and
the Lenders the full and complete payment and performance of the Obligations (as
defined in the Loan Agreement).
C. The Agents and the Lenders have conditioned their obligations under the
Loan Agreement upon the execution and delivery of this Agreement by the Debtor.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Terms Defined in Loan Agreement. Capitalized terms used and
not otherwise defined herein shall have the same meanings as set forth in the
Loan Agreement.
Section 1.2 Terms Defined in Uniform Commercial Code. Terms used herein
which are defined in the Uniform Commercial Code as adopted by the State of
Texas, unless otherwise defined herein or in the Loan Agreement, shall have
their meanings as set forth in the Uniform Commercial Code as adopted by the
State of Texas.
Section 1.3 Additional Definitions. As used in this Agreement, the
following terms shall have the following meanings:
16
Guarantor Security Agreement
"Accounts" means any "account," as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired by the Debtor, and, in any
event, shall include, without limitation, each of the following, whether now
owned or hereafter acquired by the Debtor: (a) all rights of the Debtor to
payment for goods sold or leased or services rendered, whether or not earned by
performance; (b) all accounts receivable of the Debtor; (c) all rights of the
Debtor to receive any payment of money or other form of consideration; (d) all
security pledged, assigned, or granted to or held by the Debtor to secure any of
the foregoing; (e) all guaranties of, or indemnifications with respect to, any
of the foregoing; and (f) all rights of the Debtor as an unpaid seller of goods
or services, including, but not limited to, all rights of stoppage in transit,
replevin, reclamation, and resale.
"Chattel Paper" means any "chattel paper," as such term is
defined in Article 9 of the UCC, now owned or hereafter acquired by the Debtor.
"Collateral" has the meaning specified in Section 2.1 of this
Agreement.
"Document" means any "document," as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired by the Debtor, including,
without limitation, all documents of title and warehouse receipts of the Debtor.
"Equipment" means any "equipment," as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired by the Debtor and, in any
event, shall include, without limitation, all machinery, equipment, furnishings,
and fixtures now owned or hereafter acquired by the Debtor and any and all
additions, substitutions, and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment, and
accessories installed thereon or affixed thereto.
"General Intangibles" means any "general intangibles," as such
term is defined in Article 9 of the UCC, now owned or hereafter acquired by the
Debtor and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by the Debtor: (a) all of the
Debtor's patents, patent applications, patent rights, service marks, trademarks,
trade names, trade secrets, intellectual property, registrations, goodwill,
copyrights, franchises, licenses, permits, proprietary information, customer
lists, designs, and inventions; (b) all of the Debtor's books, records, data,
plans, manuals, computer software, and computer programs; (c) all of the
Debtor's contract rights, partnership interests, joint venture, limited
liability company, and membership interests (but only to the extent not
otherwise pledged to the Administrative Agent pursuant to a separate pledge or
security agreement), deposit accounts, investment accounts, and certificates of
deposit; (d) all rights of the Debtor to payment under letters of credit and
similar agreements; (e) all tax refunds and tax refund claims of the Debtor; (g)
all choses in action and causes of action of the Debtor (whether arising in
contract, tort, or otherwise and whether or not currently in litigation) and all
judgments in favor of the Debtor; (g) all rights and claims of the Debtor under
warranties and indemnities; and (h) all rights of the Debtor under any
insurance, surety, or similar contract or arrangement.
"Instrument" means any "instrument," as such term is defined
in Article 9 of the UCC and any note payable to Debtor or its order together
with all collateral securing such note and all agreements and documents related
thereto or arising therefrom, now owned or hereafter acquired by the Debtor.
"Inventory" means any "inventory," as such term is defined in
Article 9 of the UCC, now owned or hereafter acquired by the Debtor, and, in any
event, shall include, without limitation, each of the following, whether now
owned or hereafter acquired by the Debtor: (a) all goods and other personal
property of the Debtor that are held for sale or lease or to be furnished under
any contract of service; (b) all raw materials, work-in-process, finished goods,
inventory, supplies, and materials of the Debtor; (c) all wrapping, packaging,
advertising, and shipping materials of the Debtor; (d) all goods that have been
returned to, repossessed by, or stopped in transit by the Debtor; and (e) all
Documents evidencing any of the foregoing.
"Investment Property" means "investment property," as such
term is defined in Section 9.115(a)(6) of the Texas Business and Commerce Code.
"Motor Vehicle" means all cars, trucks, vans and other motor
vehicles now owned or hereafter acquired by the Debtor which are used by the
Debtor for the transfer of lithotripters and lithotripsy related equipment,
including without limitation, those motor vehicles listed on Schedule 1 hereto,
and any and all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
"Proceeds" means any "proceeds," as such term is defined in
Article 9 of the UCC and, in any event, shall include, but not be limited to,
(a) any and all proceeds of any insurance, indemnity, warranty, or guaranty
payable to the Debtor from time to time with respect to any of the Collateral,
(b) any and all payments (in any form whatsoever) made or due and payable to the
Debtor from time to time in connection with any requisition, confiscation,
condemnation, seizure, or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any person acting under color of Governmental
Authority), and (c) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Securities" means all shares of stock of any Person now owned
or hereafter acquired by the Debtor including, without limitation, each of the
shares listed on Schedule 2 hereto, and all dividends, cash, stock dividends,
instruments and other investment property from time to time received, receivable
by, or otherwise distributed to the Debtor for its own account in respect of or
in exchange for any or all of such shares, and the certificates representing
such shares.
"UCC" means the Uniform Commercial Code as in effect in the
State of Texas or, if so required with respect to any particular Collateral by
mandatory provisions of applicable law, as in effect in the jurisdiction in
which such Collateral is located.
ARTICLE II
Security Interest and Pledge
Section 2.1 Security Interest and Pledge. The Debtor hereby pledges and
grants to the Administrative Agent, for the pro rata benefit of the Lenders, a
lien on and security interest in all of the Debtor's right, title, and interest
in and to the following, whether now owned or hereafter arising or acquired and
wherever located (collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments;
(d) all General Intangibles and all Securities;
(e) all Investment Property;
(f) all Documents;
(g) all Equipment, including, without limitation, all Motor
Vehicles;
(h) all Inventory;
(i) all other goods and personal property of the Debtor whether
tangible or intangible; and
(j) all Proceeds and products of any or all of the foregoing.
Section 2.2 Secured Indebtedness. The Collateral shall secure the
following obligations, indebtedness, and liabilities (whether at stated
maturity, by acceleration or otherwise) (all such obligations, indebtedness, and
liabilities being hereinafter sometimes called the "Secured Indebtedness"):
(a) the Obligations and the obligations, liabilities and
indebtedness of the Debtor to the Agents and the Lenders under the
Guaranty;
(b) all reasonable costs and expenses, including, without
limitation, all reasonable attorneys' fees and legal expenses, incurred by any
of the Agents or any Lender to preserve and maintain the Collateral, collect the
obligations herein described, and enforce this Agreement; and
(c) all extensions, renewals, and modifications of any of the
foregoing.
Section 2.3 Debtor Remains Liable. Notwithstanding anything to the
contrary contained herein, (a) the Debtor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent of any of its rights hereunder shall not release the Debtor
from any of its duties or obligations under the contracts and agreements
included in the Collateral, and (c) neither the Administrative Agent nor any
Lender shall have any obligation or liability under any of the contracts and
agreements included in the Collateral by reason of this Agreement, nor shall the
Administrative Agent or any Lender be obligated to perform any of the
obligations or duties of the Debtor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
ARTICLE III
Representations and Warranties
To induce the Administrative Agent to enter into this Agreement and the
Agents and the Lenders to enter into the Loan Agreement, the Debtor represents
and warrants to the Administrative Agent that:
Section 3.1 Corporate Existence. The Debtor: (a) is a corporation
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation; (b) has all requisite corporate power and authority to own its
assets and carry on its business as now being or as proposed to be conducted;
and (c) is qualified to do business in all jurisdictions in which the nature of
its business makes such qualification necessary and where failure to so qualify
would have a material adverse effect on the business, condition (financial or
otherwise), operations, or properties of the Debtor. The Debtor has the
corporate power and authority to execute, deliver, and perform its obligations
under this Agreement and the other Loan Documents to which it is or may become a
party; provided that Debtor may not be in good standing under the laws of North
Carolina, and Debtor makes no representations concerning the impact of its
status as a North Carolina nonprofit corporation on the representations set
forth herein.
Section 3.2 Corporate Action; No Breach. The execution, delivery, and
performance by the Debtor of this Agreement and the other Loan Documents to
which the Debtor is or may become a party and compliance with the terms and
provisions hereof and thereof have been duly authorized by all requisite
corporate action on the part of the Debtor and do not and will not (a) violate
or conflict with, or result in a breach of, or require any consent under (i) the
articles of incorporation or bylaws of the Debtor, (ii) any material applicable
law, rule, or regulation or any material order, writ, injunction, or decree of
any Governmental Authority or arbitrator, or (iii) any material agreement or
instrument to which the Debtor is a party or by which it or any of its property
is bound or subject, or (b) constitute a material default under any material
agreement or instrument, or result in the creation or imposition of any Lien
(except as provided in Section 2.1 hereof) upon any of the revenues or assets of
the Debtor.
Section 3.3 Approvals. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Debtor of
this Agreement and the other Loan Documents to which the Debtor is or may become
a party or the validity or enforceability thereof.
Section 3.4 Enforceability. This Agreement constitutes, and the other
Loan Documents to which the Debtor is party, when delivered, shall constitute
legal, valid, and binding obligations of the Debtor, enforceable against the
Debtor in accordance with their respective terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
Section 3.5 Title. The Debtor is, and with respect to Collateral
acquired after the date hereof the Debtor will be, the legal and beneficial
owner of the Collateral free and clear of any Lien, security interest, pledge,
claim or other encumbrance (except for Liens permitted by Section 9.2 of the
Loan Agreement and liens in favor of the Refractive Administrative Agent (as
hereinafter defined)) or, with respect to the Securities, any right or option on
the part of any Person (other than the Lenders) to purchase or otherwise acquire
the Securities or any part thereof, except for the security interests granted
hereunder, Liens permitted by Section 9.2 of the Loan Agreement, and liens in
favor of the Refractive Administrative Agent (as hereinafter defined). Debtor
has granted subordinate liens and security interests in the Collateral in favor
of Bank of America, N.A., as Administrative Agent under the Loan Agreement dated
as of the date hereof (the "Refractive Loan Agreement") among Prime Refractive
Management, L.L.C., a Delaware limited liability company, Bank of America, N.A.,
as Administrative Agent (the "Refractive Administrative Agent"), BankBoston,
N.A., as Documentation Agent, and the lenders from time to time party thereto.
Section 3.6 Accounts. Unless the Debtor has given the Administrative
Agent written notice to the contrary, whenever the security interest granted
hereunder attaches to an Account, the Debtor shall be deemed to have represented
and warranted to the Administrative Agent as to each and all of its Accounts
that (a) each Account is genuine and in all respects what it purports to be, (b)
each Account represents the legal, valid, and binding obligation of the account
debtor evidencing indebtedness unpaid and owed by such account debtor arising
out of the performance of labor or services by the Debtor or the sale or lease
of goods by the Debtor, (c) the amount of each Account represented as owing is
the correct amount actually and unconditionally owing except for normal trade
discounts granted in the ordinary course of business, and (d) no Account is
subject to any offset, counterclaim, or other defense.
Section 3.7 Rule 144 Securities. With respect to all Collateral that is
Securities which are subject to Rule 144 under the Securities Act of 1933, as
such rule and act are amended at the time in question and any successor in whole
or in part thereto, (a) the Debtor is the beneficial and record owner thereof,
free and clear of any Liens or transfer restrictions (other than restrictions on
the amount thereof which may be sold, and the manner in which sales may be made,
imposed by such Rule 144), (b) the Debtor acquired such Securities directly from
the issuer thereof more than two (2) years prior to the date hereof in
transactions not involving any public offering, (c) the Debtor paid the purchase
price therefor in cash more than two (2) years prior to the date hereof, (d)
since such date of acquisition, the Debtor has not had a short position in, or
any put or option to dispose of, any capital stock of any issuer thereof or
Securities convertible into capital stock of any issuer thereof, (e) neither the
Debtor, nor any person or entity, the sales of which are required by Rule 144 to
be aggregated with the sales of the Debtor, has sold any capital stock of any
issuer of such Securities during the period of six (6) months prior to the date
hereof, other than sales pursuant to an effective registration statement under
the Securities Act of 1933, as amended, and (f) to the Debtor's best knowledge,
each issuer of such Securities has timely filed all reports required to be filed
by it under the Securities Exchange Act of 1934, as amended.
Section 3.8 Financing Statements. No financing statement, security
agreement, or other Lien instrument covering all or any part of the Collateral
is on file in any public office, except as may have been filed in favor of the
Refractive Administrative Agent, any lender under the Refractive Agreement,
Administrative Agent, or any Lender pursuant to this Agreement. The Debtor has
not within the past five (5) years had a trade name or done business under any
name other than its legal name set forth at the beginning of this Agreement.
Section 3.9 Principal Place of Business. The principal place of
business and chief executive office of the Debtor, and the office where the
Debtor keeps its books and records, is located at the address of the Debtor
shown on the signature pages of this Agreement.
Section 3.10 Location of Collateral. All Inventory and Equipment of the
Debtor are located at the places specified on Schedule 3 hereto. The Debtor has
exclusive possession and control of its Inventory and Equipment. None of the
Inventory or Equipment of the Debtor is evidenced by a Document (including,
without limitation, a negotiable document of title). All Instruments, Chattel
Paper, Securities and certificates of title of the Debtor have been delivered to
the Administrative Agent.
Section 3.11 Perfection. Upon the filing of Uniform Commercial Code
financing statements in the jurisdictions listed on Schedule 4 attached hereto,
and upon the Administrative Agent's obtaining possession of all Documents,
Instruments, Chattel Paper, Securities and certificates of title of the Debtor,
and upon the Administrative Agent's obtaining control of all Investment
Property, the security interest in favor of the Administrative Agent created
herein will constitute a valid and perfected Lien upon and security interest in
the Collateral, subject to no equal or prior Lien, except as permitted by
Section 9.2 of the Loan Agreement.
Section 3.12 Independent Investigation. The Debtor has, independently
and without reliance upon any of the Agents or any Lender and based upon such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. There are no conditions
precedent to the full effectiveness of this Agreement that have not been fully
and permanently satisfied.
Section 3.13 Litigation. Except as disclosed on Schedule 7.5 to the
Loan Agreement, there is no litigation, investigation, or governmental
proceeding threatened against the Debtor or any of its properties which if
adversely determined would have a material adverse effect on the Collateral or
the financial condition, operations, or business of the Borrower, any Material
Subsidiary or the Companies taken as a whole.
Section 3.14 Benefit to Debtor. The value of the consideration received
and to be received by the Debtor as a result of the Borrower, the Agents and the
Lenders entering into the Loan Agreement and the Debtor executing and delivering
this Agreement is reasonably worth at least as much as the liability and
obligation of the Debtor hereunder, and such liability and obligation and the
Borrower's entering into the Loan Agreement have benefited and may reasonably be
expected to benefit the Debtor directly and indirectly.
ARTICLE IV
Covenants
The Debtor covenants and agrees with the Administrative Agent that
until the Secured Indebtedness is paid and performed in full and the Commitments
have terminated:
Section 4.1 Encumbrances. Except as permitted by Section 9.2 of the
Loan Agreement, the Debtor shall not create, permit, or suffer to exist, and
shall defend the Collateral against, any Lien, security interest, or other
encumbrance on the Collateral, and shall defend the Debtor's rights in the
Collateral and the Administrative Agent's security interest in the Collateral
against the claims and demands of all Persons. The Debtor shall do nothing to
impair the rights of the Administrative Agent in the Collateral.
Section 4.2 Delivery. Prior to or concurrently with the execution and
delivery of this Agreement, Debtor shall deliver to the Administrative Agent to
acknowledge all certificates identified on Schedule 2 hereto, with all Chattel
Paper, Instruments and Documents of the Debtor.
Section 4.3 Modification of Accounts. The Debtor shall, in accordance
with prudent business practices, endeavor to collect or cause to be collected
from each account debtor under its Accounts, as and when due, any and all
amounts owing under such Accounts. Without the prior written consent of the
Administrative Agent, the Debtor shall not (a) grant any extension of time on
any Account for any payment or grant extensions of time for payments on its
Accounts which cause the aggregate amount of all payments extended by the Debtor
on its Accounts during any fiscal year of the Debtor to exceed $150,000.00, (b)
compromise, compound, or settle any of the Accounts for less than the full
amount thereof; provided, however, that the Debtor may compromise, compound or
settle any Account which is an amount less than $50,000.00, provided the
aggregate amount compromised, compounded or settled during any fiscal year of
the Debtor shall not exceed $150,000.00, (c) release, in whole or in part, any
Person liable for payment of an Account in excess of $50,000.00, (d) allow any
credit or discount for payment with respect to any Account in excess of
$50,000.00, other than trade discounts granted in the ordinary course of
business; provided, however, that the aggregate amount of all credits or
discounts granted during any fiscal year of the Debtor shall not exceed
$150,000.00, or (e) release any Lien, security interest, or guaranty securing
any Account in excess of $50,000.00.
Section 4.4 Disposition of Collateral. The Debtor shall not sell,
lease, assign (by operation of law or otherwise), or otherwise dispose of, or
grant any option with respect to, the Collateral or any part thereof without the
prior written consent of the Administrative Agent, except the Debtor may sell
Inventory in the ordinary course of business.
Section 4.5 Distributions. If the Debtor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or distribution in connection with
any reclassification, increase, or reduction of capital or issued in connection
with any reorganization), option or rights, whether as an addition to, in
substitution of, or an exchange for any Collateral or otherwise, the Debtor
agrees to accept the same as the Administrative Agent's agent and to hold the
same in trust for the Administrative Agent and to deliver the same forthwith to
the Administrative Agent in the exact form received, with the appropriate
endorsement of the Debtor when necessary and/or appropriate undated stock powers
duly executed in blank, to be held by the Administrative Agent on its own behalf
and on behalf of Refractive Administrative Agent as additional Collateral for
the Secured Indebtedness, subject to the terms hereof. Any sums paid upon or in
respect of the Securities upon the liquidation or dissolution of the issuer
thereof shall be paid over to the Administrative Agent to be held by it as
additional Collateral for the Secured Indebtedness subject to the terms hereof;
and in case any distribution of capital shall be made on or in respect of the
Securities or any property shall be distributed upon or with respect to the
Securities pursuant to any recapitalization or reclassification of the capital
of the issuer thereof or pursuant to any reorganization of the issuer thereof,
the property so distributed shall be delivered to the Administrative Agent to be
held by it, as additional Collateral for the Secured Indebtedness, subject to
the terms hereof. All sums of money and property so paid or distributed in
respect of the Securities that are received by the Debtor shall, until paid or
delivered to the Administrative Agent, be held by the Debtor in trust as
additional security for the Secured Indebtedness.
Section 4.6 Further Assurances. At any time and from time to time, upon
the request of the Administrative Agent, and at the sole expense of the Debtor,
the Debtor shall promptly execute and deliver all such further instruments,
agreements, and documents and take such further action as the Administrative
Agent may reasonably deem necessary or desirable to preserve and perfect its
security interest in the Collateral and carry out the provisions and purposes of
this Agreement. Without limiting the generality of the foregoing, the Debtor
shall: (a) execute and deliver to the Administrative Agent such financing
statements as the Administrative Agent may from time to time require; (b)
deliver and pledge to the Administrative Agent all Documents (including, without
limitation, negotiable documents of title) evidencing Inventory or Equipment;
(c) deliver and pledge to the Administrative Agent all certificates of title
required by the Loan Agreement, Instruments and Chattel Paper of the Debtor with
any necessary endorsements; and (d) execute and deliver to the Administrative
Agent such other documents, instruments, and agreements as the Administrative
Agent may reasonably require to perfect and maintain the validity,
effectiveness, and priority of the Loan Documents and the Liens intended to be
created thereby. The Debtor authorizes the Administrative Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Debtor where
permitted by law. A carbon, photographic, or other reproduction of this
Agreement or of any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement and may be filed as a
financing statement.
Section 4.7 Risk of Loss; Insurance. The Agents and the Lenders shall
not be responsible for any loss or damage to the Collateral. The Debtor shall,
at its own expense, maintain insurance with financially sound and reputable
insurance companies in such amounts and covering such risks as is usually
carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which the Debtor operates consistent
with past practices and to the extent available on commercially reasonable
terms, provided that in any event the Debtor will maintain workmen's
compensation insurance, property insurance, comprehensive general liability
insurance, professional liability insurance and business interruption insurance
reasonably satisfactory to the Administrative Agent. Each insurance policy
covering Collateral shall name the Administrative Agent as loss payee for the
benefit of the Lenders as its interest may appear and shall provide that such
policy will not be canceled or reduced without thirty (30) days prior written
notice to the Administrative Agent.
Section 4.8 Inspection Rights. The Debtor shall permit the
Administrative Agent and each Lender and their respective representatives to
examine, inspect, and audit the Collateral and to examine, inspect, and copy the
Debtor's books and records at any reasonable time and as often as the
Administrative Agent or any such Lender may desire. The Administrative Agent and
each Lender may at any time and from time to time contact account debtors and
other obligors to verify the existence, amounts, and terms of the Debtor's
Accounts.
Section 4.9 Corporate Changes. The Debtor shall not change its name,
identity, or corporate structure in any manner that might make any financing
statement filed in connection with this Agreement seriously misleading unless
the Debtor shall have given the Administrative Agent thirty (30) days prior
written notice thereof and shall have taken all action reasonably deemed
necessary or desirable by the Administrative Agent to make each financing
statement not seriously misleading. The Debtor shall not change its principal
place of business, chief executive office, or the place where it keeps its books
and records unless it shall have given the Administrative Agent thirty (30) days
prior written notice thereof and shall have taken all action reasonably deemed
necessary or desirable by the Administrative Agent to cause its security
interest in the Collateral to be perfected with the priority required by this
Agreement.
Section 4.10 Books and Records; Information. The Debtor shall keep
accurate and complete books and records of the Collateral and the Debtor's
business and financial condition in accordance with GAAP. The Debtor shall from
time to time at the request of the Administrative Agent deliver to the
Administrative Agent such information regarding the Collateral and the Debtor as
the Administrative Agent may reasonably request, including, without limitation,
lists and descriptions of the Collateral and evidence of the identity and
existence of the Collateral. The Debtor shall xxxx its records to reflect the
security interest of the Administrative Agent hereunder.
Section 4.11 Equipment and Inventory.
-----------------------
(a) The Debtor shall keep the Equipment and Inventory at the
locations specified on Schedule 3 hereto or, upon thirty (30) days
prior written notice to the Administrative Agent, at such other places
within the United States of America where all action required to
perfect the Administrative Agent's security interest in the Equipment
and Inventory with the priority required by this Agreement shall have
been taken.
(b) The Debtor shall maintain the Equipment and Inventory in
accordance with Section 8.3 of the Loan Agreement.
Section 4.12 Warehouse Receipts Non-Negotiable. The Debtor agrees that
if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued in respect of any of the Collateral, such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7.104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under relevant law).
Section 4.13 Taxes and Claims. The Debtor shall pay and discharge,
before the same become delinquent, (a) all material taxes, assessments, and
governmental charges imposed upon it or upon any of its property, and (b) all
material lawful claims that, if unpaid, might become a Lien upon any of its
property; provided, however, that the Debtor shall not be required to pay or
discharge any such tax, assessment, or governmental charge which is being
contested in good faith by proper proceedings being diligently pursued and for
which adequate reserves have been established in accordance with GAAP.
Section 4.14 Compliance with Laws. The Debtor shall comply in all
material respects with all material applicable laws, rules, regulations, orders,
and decrees of any Governmental Authority or arbitrator.
Section 4.15 Compliance with Agreements. The Debtor shall comply in all
material respects with all agreements, contracts, and instruments binding on it
or affecting its properties or businesses, except where the failure to do so
would not have a material adverse effect on the business, condition (financial
or otherwise), operations or properties of the Borrower, any Material Subsidiary
or the Companies (taken as a whole).
Section 4.16 Notification. Except as permitted by Section 9.2 of the
Loan Agreement, the Debtor shall promptly notify the Administrative Agent of (a)
any Lien, security interest, encumbrance, or claim that has attached to or been
made or asserted against any of the Collateral, (b) any material change in any
of the Collateral, including, without limitation, any material damage to or loss
of any material portion of the Collateral, (c) the occurrence of any other event
that could have a material adverse effect on the Collateral or the security
interest created hereunder, and (d) the occurrence or existence of any Default.
Section 4.17 Collection of Accounts. Except as otherwise provided in
this Section or in any other Loan Document, the Debtor shall have the right to
collect and receive payments on the Accounts. In connection with such
collections, the Debtor may take (and, at the Administrative Agent's direction,
shall take) such actions as the Debtor or the Administrative Agent may
reasonably deem necessary or advisable to enforce collection of the Accounts.
Section 4.18 Additional Securities. The Debtor shall not consent to or
approve the issuance of any additional shares of any class of capital stock of
the issuers of any of the Securities, or any securities convertible into, or
exchangeable for, any such shares or any warrants, options, rights, or other
commitments entitling any Person to purchase or otherwise acquire any such
shares.
Section 4.19 Provide Information. The Debtor shall fully cooperate, to
the extent reasonably requested by the Administrative Agent, in the completion
of any notice, form, schedule, or other document filed by the Administrative
Agent on its own behalf or on behalf of the Debtor, including, without
limitation, any required notice or statement of beneficial ownership or of the
acquisition of beneficial ownership of the Securities and any notice of proposed
sale of such Securities pursuant to Rule 144 as promulgated by the Securities
and Exchange Commission (the "SEC") under the Securities Act of 1933, as
amended. Without limiting the generality of the foregoing, the Debtor shall
furnish to the Administrative Agent any and all information which the
Administrative Agent may reasonably request for purposes of any such filing,
regarding the Debtor, the Securities, and any issuer of any of the Securities,
and the Debtor shall disclose to the Administrative Agent all material adverse
information known by the Debtor with respect to the operations of any issuer of
any of the Securities.
Section 4.20 Notification of Changes in Beneficial Ownership. The
Debtor shall promptly notify the Administrative Agent of any sale of securities
of any Subsidiary of the Debtor or by any Person named on the Debtor's Rule 144
questionnaire and shall furnish promptly to the Administrative Agent a copy of
any Form 144 filed in respect of any such sale. In addition, if the Debtor or
any other Person named in the Debtor's Rule 144 questionnaire shall file with
the SEC a form or other document reporting any change in the beneficial
ownership of the common stock of any Subsidiary of the Debtor, the Debtor shall
promptly furnish to the Administrative Agent a copy of such form or document.
Section 4.21 Restriction on Sales after Default. The Debtor shall not
sell or suffer or permit any Person named in the accompanying Rule 144
questionnaire to sell any shares of the same class of securities as the
Securities at any time after any Event of Default shall have occurred.
Section 4.22 Fixtures. For any Collateral that is a fixture or an
accession which has been attached to real estate or other goods prior to the
perfection of the security interest granted in Section 2.1 hereof, the Debtor
shall furnish to Administrative Agent, upon demand, a disclaimer of interest in
each such fixture or accession and a consent in writing to the security interest
of Administrative Agent therein, signed by all persons and entities having any
interest in such fixture or accession by virtue of any interest in the real
estate or other goods to which such fixture or accession has been attached.
Section 4.23 Notation on Title Certificates. If certificates of title
are issued or outstanding with respect to any of the Collateral, the Debtor
shall cause the security interest granted in Section 2.1 hereof to be properly
noted thereon.
ARTICLE V
Rights of the Administrative Agent
Section 5.1 Power of Attorney. The Debtor hereby irrevocably
constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the name of the
Debtor or in its own name, to take any and all action and to execute any and all
documents and instruments which the Administrative Agent at any time and from
time to time deems reasonably necessary or desirable to accomplish the purposes
of this Agreement if an Event of Default shall have occurred and be continuing,
and, without limiting the generality of the foregoing, the Debtor hereby gives
the Administrative Agent the power and right on behalf of the Debtor and in its
own name to do any of the following (subject to the rights of the Debtor under
Sections 5.2 and 5.3 hereof), without notice to or the consent of the Debtor if
an Event of Default shall have occurred and be continuing:
(a) to demand, xxx for, collect, or receive in the name of the
Debtor or in its own name, any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral and,
in connection therewith, endorse checks, notes, drafts, acceptances,
money orders, documents of title, or any other instruments for the
payment of money under the Collateral or any policy of insurance;
(b) to pay or discharge taxes, Liens, or other encumbrances
levied or placed on or threatened against the Collateral;
(c) to notify post office authorities to change the address for
delivery of mail of the Debtor to an address designated by the
Administrative Agent and to receive, open. and subsequently deliver to
the Debtor mail addressed to the Debtor; and
(d) (i) to direct account debtors and any other parties liable
for any payment under any of the Collateral to make payment of any and
all monies due and to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (ii)
to receive payment of and receipt for any and all monies, claims, and
other amounts due and to become due at any time in respect of or
arising out of any Collateral; (iii) to sign and endorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, proxies, stock powers,
verifications, and notices in connection with accounts and other
documents relating to the Collateral; (vi) to commence and prosecute
any suit, action, or proceeding at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral; (v) to
defend any suit, action, or proceeding brought against the Debtor with
respect to any Collateral; (vi) to settle, compromise, or adjust any
suit, action, or proceeding described above and, in connection
therewith, to give such discharges or releases as the Administrative
Agent may deem appropriate; (vii) to exchange any of the Collateral for
other property upon any merger, consolidation, reorganization,
recapitalization, or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Collateral with any committee,
depositary, transfer agent, registrar, or other designated agency upon
such terms as the Administrative Agent may determine; (viii) to add or
release any guarantor, indorser, surety, or other party to any of the
Collateral; (ix) to renew, extend, or otherwise change the terms and
conditions of any of the Collateral; (x) to make, settle, compromise,
or adjust claims under any insurance policy covering any of the
Collateral; (xi) to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and to do, at the Administrative Agent's
option and the Debtor's expense, at any time, or from time to time, all
acts and things which the Administrative Agent deems necessary to
protect, preserve, or realize upon the Collateral and the
Administrative Agent's security interest therein; and (xii) to
complete, execute and file with the SEC one or more notices of proposed
sale of securities pursuant to Rule 144.
This power of attorney is a power coupled with an interest and shall be
irrevocable. Neither the Administrative Agent nor any Lender shall be under any
duty to exercise or withhold the exercise of any of the rights, powers,
privileges, and options expressly or implicitly granted to the Administrative
Agent in this Agreement, and shall not be liable for any failure to do so or any
delay in doing so. Neither the Administrative Agent nor any Lender shall be
liable for any act or omission or for any error of judgment or any mistake of
fact or law in its individual capacity or in its capacity as attorney-in-fact
except acts or omissions resulting from its gross negligence or willful
misconduct. This power of attorney is conferred on the Administrative Agent
solely to protect, preserve, and realize upon its security interest in the
Collateral. Neither the Administrative Agent nor any Lender shall be responsible
for any decline in the value of the Collateral and shall not be required to take
any steps to preserve rights against prior parties or to protect, preserve, or
maintain any security interest or Lien given to secure the Collateral.
Section 5.2 Voting Rights. Unless and until an Event of Default shall
have occurred and be continuing, the Debtor shall be entitled to exercise any
and all voting rights pertaining to the Securities or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Loan Agreement.
The Administrative Agent shall execute and deliver to the Debtor all such
proxies and other instruments as the Debtor may reasonably request for the
purpose of enabling the Debtor to exercise the voting rights which it is
entitled to exercise pursuant to this Section.
Section 5.3 Dividends. Unless and until an Event of Default shall have
occurred and be continuing, the Debtor shall be entitled to receive and retain
the dividends on the Securities paid in cash out of earned surplus to the extent
and only to the extent that such dividends are permitted by the Loan Agreement.
Section 5.4 Setoff, Property Held by the Lenders. The Administrative
Agent and each Lender shall have the right to set off and apply against the
Secured Indebtedness, at any time and without notice to the Debtor, any and all
deposits (general or special, time or demand, provisional or final) or other
sums at any time credited by or owing from the Administrative Agent or any
Lender to the Debtor whether or not the Secured Indebtedness is then due. As
additional security for the Secured Indebtedness, the Debtor hereby grants the
Administrative Agent and each Lender a security interest in all money,
instruments, and other property of the Debtor now or hereafter held by the
Administrative Agent or any Lender, including without limitation, property held
in safekeeping. In addition to the Administrative Agent's and each Lender's
right of setoff and as further security for the Secured Indebtedness, the Debtor
hereby grants to each of them a security interest in all deposits (general or
special, time or demand, provisional or final) of the Debtor now or hereafter on
deposit with or held by any of them and all other sums at any time credited by
or owing from the any of them to the Debtor. The rights and remedies of the
Administrative Agent and each Lender hereunder are in addition to other rights
and remedies (including, without limitation, other rights of setoff) which any
of them may have.
Section 5.5 Performance by the Secured Party. If the Debtor shall fail
to perform any covenant or agreement contained in this Agreement, the
Administrative Agent, may, at the direction of the Required Lenders, perform or
attempt to perform such covenant or agreement on behalf of the Debtor. In such
event, the Debtor shall, at the request of the Administrative Agent, promptly
pay any amount expended by the Administrative Agent or any Lender in connection
with such performance or attempted performance to the Administrative Agent,
together with interest thereon at the Default Rate from and including the date
of such expenditure to but excluding the date such expenditure is paid in full.
Notwithstanding the foregoing, it is expressly agreed that neither the
Administrative Agent nor any Lender shall have any liability or responsibility
for the performance of any obligations of the Debtor under this Agreement.
ARTICLE VI
Default
Section 6.1 Rights and Remedies. If an Event of Default shall have
occurred and be continuing, the Administrative Agent shall have the following
rights and remedies:
(a) In addition to all other rights and remedies granted to
the Administrative Agent in this Agreement or in any other Loan
Document or by applicable law, the Administrative Agent shall have all
of the rights and remedies of a secured party under the UCC (whether or
not the UCC applies to the affected Collateral). Without limiting the
generality of the foregoing, the Administrative Agent may (i) without
demand or notice to the Debtor, collect, receive, or take possession of
the Collateral or any part thereof and for that purpose the
Administrative Agent may enter upon any premises on which the
Collateral is located and remove the Collateral therefrom or render it
inoperable, and/or (ii) sell, lease, or otherwise dispose of the
Collateral, or any part thereof, in one or more parcels at public or
private sale or sales, at 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. The Administrative Agent shall have the right at any public
sale or sales, and, to the extent permitted by applicable law, at any
private sale or sales, to bid and become a purchaser of the Collateral
or any part thereof free of any right or equity of redemption on the
part of the Debtor, which right or equity of redemption is hereby
expressly waived and released by the Debtor. Upon the request of the
Administrative Agent, the Debtor shall assemble the Collateral and make
it available to the Administrative Agent at any place designated by the
Administrative Agent that is reasonably convenient to the Debtor and
the Administrative Agent. The Debtor agrees that the Administrative
Agent shall not be obligated to give more than five (5) days written
notice of the time and place of any public sale or of the time after
which any private sale may take place and that such notice shall
constitute reasonable notice of such matters. The Administrative Agent
shall not be obligated to make any sale of Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of
Collateral may have been given. The Administrative Agent may, without
notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned. The
Debtor shall be liable for all expenses of retaking, holding, preparing
for sale, or the like, and all attorneys' fees, legal expenses, and all
other costs and expenses incurred by the Administrative Agent or any
Lender in connection with the collection of the Secured Indebtedness
and the enforcement of the Administrative Agent's and the Lender's
rights under this Agreement. The Debtor shall remain liable for any
deficiency if the Proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Secured Indebtedness in full.
The Administrative Agent and the Lenders may apply the Collateral
against the Secured Indebtedness in such order and manner as the
Administrative Agent and the Lenders may elect. The Debtor waives all
rights of marshaling, valuation, and appraisal in respect of the
Collateral.
(b) The Administrative Agent may cause any or all of the
Collateral held by it to be transferred into the name of the
Administrative Agent or the name or names of the Administrative Agent's
nominee or nominees.
(c) The Administrative Agent may exercise or cause to be
exercised all voting, consensual and other powers of ownership in
respect of the Collateral and the Debtor shall deliver to the
Administrative Agent, if requested by the Administrative Agent,
irrevocable proxies with respect to the Securities in form satisfactory
to the Administrative Agent.
(d) The Administrative Agent may collect or receive all money
or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to
do so.
(e) On any sale of the Collateral, the Administrative Agent is
hereby authorized to comply with any limitation or restriction with
which compliance is necessary, in the view of the Administrative
Agent's counsel, in order to avoid any violation of applicable law or
in order to obtain any required approval of the purchaser or purchasers
by any applicable Governmental Authority.
(f) The Debtor agrees that, because of the Securities Act of
1933, as amended, or any other laws or regulations, and for other
reasons, there may be legal and/or practical restrictions or
limitations affecting the Administrative Agent in any attempts to
dispose of certain portions of the Securities and for the enforcement
of their rights. For these reasons, the Administrative Agent is hereby
authorized by the Debtor, but not obligated, upon the occurrence and
during the continuation of an Event of Default, to sell all or any part
of the Securities at private sale, subject to investment letter or in
any other manner which will not require the Securities, or any part
thereof, to be registered in accordance with the Securities Act of
1933, as amended, or the rules and regulations promulgated thereunder,
or any other laws or regulations, at a reasonable price at such private
sale or other distribution in the manner mentioned above. The Debtor
understands that the Administrative Agent may in its discretion
approach a limited number of potential purchasers and that a sale under
such circumstances may yield a lower price for the Securities, or any
part or party thereof, than would otherwise be obtainable if such
collateral were either afforded to a larger number or potential
purchasers, or registered or sold in the open market. The Debtor agrees
that such private sale shall be deemed to have been made in a
commercially reasonable manner, and that the Administrative Agent has
no obligation to delay sale of any Securities to permit the issuer
thereof to register it for public sale under any applicable federal or
state securities laws. The Administrative Agent is authorized, in
connection with any such sale (a) to restrict the prospective bidders
on or purchasers of any of the Securities to a limited number of
sophisticated investors who will represent and agree that they are
purchasing for their own account for investment and not with a view to
the distribution or sale of any of such Securities and (b) to impose
such other limitations or conditions in connection with any such sale
as the Administrative Agent reasonably deems necessary in order to
comply with applicable law. The Debtor covenants and agrees that it
will execute and deliver such documents and take such other action as
the Administrative Agent reasonably deems necessary in order that any
such sale may be made in compliance with applicable law. Upon any such
sale the Administrative Agent shall have the right to deliver, assign
and transfer to the purchaser thereof the Securities so sold. Each
purchaser at any such sale shall hold the Securities so sold
absolutely, free from any claim or right of the Debtor of whatsoever
kind, including any equity or right of redemption of the Debtor. The
Debtor, to the extent permitted by applicable law, hereby specifically
waives all rights of redemption, stay or appraisal which it has or may
have under any law now existing or hereafter enacted.
ARTICLE VII
Miscellaneous
Section 7.1 Indemnification. The Debtor hereby agrees to indemnify each
Agent, each Lender and each Affiliate thereof and their respective officers,
directors, employees, attorneys, and agents (collectively the "Indemnified
Parties") from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages, penalties, judgments, disbursements, costs, and
expenses (including reasonable attorneys' fees) to which any of them may become
subject which directly or indirectly arise from or relate to (a) the
negotiation, execution, delivery, performance, administration, or enforcement of
this Agreement or any other Loan Document, (b) any of the transactions
contemplated by this Agreement or any other Loan Document, (c) any breach by the
Debtor of any representation, warranty, covenant, or other agreement contained
in this Agreement or any other Loan Document, or (d) any investigation,
litigation, or other proceeding, including, without limitation, any threatened
investigation, litigation, or other proceeding relating to any of the foregoing,
INCLUDING, WITHOUT LIMITATION, THOSE ARISING FROM THE SOLE OR CONTRIBUTORY
NEGLIGENCE OF ANY INDEMNIFIED PARTY.
Section 7.2 No Waiver; Cumulative Remedies. No failure on the part of
any Agent or the Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement are cumulative
and not exclusive of any rights and remedies provided by law.
Section 7.3 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Debtor, the Agents, the Lenders and their
respective heirs, successors, and assigns, except that the Debtor may not assign
any of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent.
Section 7.4 Amendment; Entire Agreement. THIS AGREEMENT EMBODIES THE
FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO. The provisions of this Agreement may be amended or
waived only by an instrument in writing signed by the parties hereto.
Section 7.5 Notices. All notices and other communications provided for
in this Agreement shall be given or made in accordance with Section 13.11 of the
Loan Agreement to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof, or, as to any party at such other
address as shall be designated by such party in a notice to the other party
given in accordance with this Section.
Section 7.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
Section 7.7 Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
Section 7.8 Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by any Agent or any Lender shall affect the
representations and warranties or the right of any Agent or any Lender to rely
upon them.
Section 7.9 Waiver of Bond. In the event the Administrative Agent seeks
to take possession of any or all of the Collateral by judicial process, the
Debtor hereby irrevocably waives any bonds and any surety or security relating
thereto that may be required by applicable law as an incident to such
possession, and waives any demand for possession prior to the commencement of
any such suit or action.
Section 7.10 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.11 Construction. The Debtor and the Administrative Agent
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement with its
legal counsel.
Section 7.12 Obligations Absolute. All rights and remedies of the
Administrative Agent hereunder, and all obligations of the Debtor hereunder,
shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Loan Agreement
or any of the other Loan Documents or any other agreement or
instrument relating to any of the foregoing;
(b) any change in the time, manner, or place of payment of,
or in any other term of, all or any of the Secured Indebtedness, any or
all of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Loan Agreement or any of the other
Loan Documents;
(c) any exchange, release, or nonperfection of any Collateral, or
any release or amendment or waiver of or consent to any departure from
any guarantee, for all or any of the Secured Indebtedness; or
(d) any other circumstance (other than payment in full of the
Secured Indebtedness) that might otherwise constitute a defense
available to, or a discharge of, the Debtor.
Section 7.13 Limitations. Notwithstanding any contrary provision, it is
the intention of Debtor, Lenders, and Administrative Agent that the granting of
the liens set forth in this Agreement shall not constitute a fraudulent
conveyance, fraudulent transfer, or similar Laws applicable to Debtor.
Accordingly, notwithstanding anything to the contrary contained in this
Agreement or any other agreement or instrument executed in connection herewith,
granting of liens set forth in this Agreement shall be limited to an aggregate
amount equal to the largest amount that would not render such Debtor's
obligations hereunder subject to avoidance under Section 548 of the United
Stated Bankruptcy Code or any comparable provision of any applicable state law.
Section 7.14 Renewal. Debtor acknowledges that this Agreement has been
given in amendment, renewal, restatement and confirmation of Debtor's
obligations, covenants, and agreements contained in the Guarantor Security
Agreement previously executed by Debtor in favor of Administrative Agent and the
Lenders, dated April 20, 1998, as amended, confirmed, and renewed from time to
time (the "Previous Agreement"). Debtor further confirms and agrees that neither
the execution of the Loan Agreement or any other Loan Document, nor the
consummation of the transactions described therein, shall in any way affect the
liens under the Previous Agreement, and the obligations, liens, and security
interests evidenced by the Previous Agreement continue in full force and effect
as modified, amended, and restated by the terms contained herein.
Section 7.15 Termination. If all of the Secured Indebtedness shall have
been paid and performed in full and the Commitments shall have expired or
terminated, the Administrative Agent shall, upon the written request of the
Debtor and in accordance with applicable provisions of the Loan Agreement,
promptly execute and deliver to the Debtor a proper instrument or instruments
acknowledging the release and termination of the security interests created by
this Agreement as the Debtor may reasonably deem necessary or desirable, and
shall duly assign and deliver to the Debtor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Administrative Agent and has not previously been sold or otherwise
applied pursuant to this Agreement.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE TO FOLLOW.
Guarantor Security Agreement
IN WITNESS WHEREOF, the Debtor has duly executed this Agreement as of
the day and year first written above.
DEBTOR:
FASTSTART, INC.,
a North Carolina corporation
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Treasurer
Address for Notices:
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000
Attn: Treasurer
Fax Number: (000) 000-0000
Telephone Number: (000) 000-0000
21
Guarantor Security Agreement
SCHEDULE 1
MOTOR VEHICLES
None
SCHEDULE 2
SECURITIES
Pledged Stock
None
SCHEDULE 3
LOCATION OF COLLATERAL
Location of Equipment and Inventory
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000-0000
SCHEDULE 4
JURISDICTIONS FOR FILING
Jurisdictions for Filing XXX-0 Xxxxxxxxx Xxxxxxxxxx
Xxxxx
Xxxxx Xxxxxxxx
