EXHIBIT 10.18
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "AGREEMENT") is dated as of October
22, 2004 and entered into by and among INTERMET CORPORATION, a Georgia
corporation ("COMPANY"), each of THE OTHER BORROWERS LISTED ON THE SIGNATURE
PAGES HEREOF, each of THE SUBSIDIARY GUARANTORS LISTED ON THE SIGNATURE PAGES
HEREOF and each ADDITIONAL SUBSIDIARY GUARANTOR AND BORROWER that may become a
party hereto after the date hereof in accordance with Section 22 hereof (each an
"ADDITIONAL GRANTOR" and collectively "ADDITIONAL GRANTORS"; Borrowers and
Subsidiary Guarantors, including any Additional Grantors, are sometimes
collectively referred to herein as "GRANTORS" and individually as a "GRANTOR"),
and DEUTSCHE BANK TRUST COMPANY AMERICAS, in its capacity as collateral agent
for and representative of Lenders from time to time party to the Credit
Agreement (in such capacity, "SECURED PARTY"). Terms defined in the Credit
Agreement and not otherwise defined herein are being used herein as therein
defined.
RECITALS
WHEREAS, on September 29, 2004, each Borrower filed a voluntary
petition for relief under the Bankruptcy Code with the United States Bankruptcy
Court for the Eastern District of Michigan (the "BANKRUPTCY COURT"), and each
Borrower continues to operate its businesses and manage its properties as a
debtor-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, Secured Party, as Collateral Agent and Co-Agent, The Bank
of Nova Scotia ("SCOTIA CAPITAL"), as Administrative Agent, and Lenders are
entering into that certain Debtor-in-Possession Credit Agreement dated as of
even date herewith with Borrowers (said Debtor-in-Possession Credit Agreement,
as it may hereafter be amended, restated, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT"), pursuant to which, inter alia,
Lenders have agreed to provide, subject to the terms and conditions contained in
the Credit Agreement, a debtor-in-possession revolving credit facility for the
Borrowers to fund working capital and general corporate purposes and to make
certain other payments during the Chapter 11 Cases;
WHEREAS, Subsidiary Guarantors have entered into that certain
Subsidiary Guaranty dated as of even date herewith (said Subsidiary Guaranty, as
it may hereafter be amended, restated, supplemented or otherwise modified from
time to time, being the "SUBSIDIARY GUARANTY") in favor of Secured Party for the
benefit of Lenders, pursuant to which each Subsidiary Guarantor has guarantied
the prompt payment and performance when due of all obligations of Borrowers
under the Credit Agreement;
WHEREAS, it is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Grantors listed on the
signature pages hereof shall have granted the security interests and undertaken
the obligations contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to enter into the Credit Agreement and make loans and other
extensions of credit
thereunder from time to time and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, each Grantor hereby
agrees with Secured Party as follows:
SECTION 1. GRANT OF SECURITY.
In addition to, and not in lieu of, any security interests for the
benefit of Lenders effected pursuant to the Interim Borrowing Order or the Final
Borrowing Order, as applicable, each Grantor hereby assigns to Secured Party,
and hereby grants to Secured Party a security interest in, all of such Grantor's
right, title and interest in and to all assets (including all real, personal and
mixed property) of each of the Grantors (or, in the case of Borrowers, all
assets of the estates of each of such Grantors), including, without limitation,
the following, in each case whether now or hereafter existing, whether tangible
or intangible, or in which such Grantor now has or hereafter acquires an
interest and wherever the same may be located and whether or not subject to the
Uniform Commercial Code as it exists on the date of this Agreement, or as it may
hereafter be amended in the State of New York (the "UCC"), including all
Assigned Agreements and the following (the "COLLATERAL"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Money and all Deposit Accounts, together with all amounts on
deposit from time to time in such Deposit Accounts;
(d) all Documents;
(e) all General Intangibles, including all intellectual property,
Payment Intangibles and Software;
(f) all Goods, including Inventory, Equipment and Fixtures;
(g) all Instruments;
(h) all Investment Property;
(i) all Letter of Credit Rights and other Supporting Obligations;
(j) all Records;
(k) all Commercial Tort Claims, including those set forth on
Schedule 1 annexed hereto; and
(l) all Proceeds and Accessions with respect to any of the foregoing
Collateral.
Each category of Collateral set forth above shall have the meaning
set forth in the UCC (to the extent such term is defined in the UCC), it being
the intention of Grantors that the
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description of the Collateral set forth above be construed to include the
broadest possible range of assets.
Notwithstanding anything herein to the contrary, in no event shall
the Collateral include, and no Grantor shall be deemed to have granted a
security interest in (i) any of such Grantor's rights or interests in or under
any license, contract, permit, Instrument, Security or franchise to which such
Grantor is a party or any of its rights or interests thereunder, to the extent,
but only to the extent, that such a grant would, under the terms of such
license, contract, permit, Instrument, Security or franchise, result in a breach
of the terms of, or constitute a default under, such license, contract, permit,
Instrument, Security or franchise (other than to the extent that any such term
would be rendered ineffective pursuant to the UCC or any other applicable law
(including the Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
In the event that any asset of a Grantor is excluded from the
Collateral by virtue of the foregoing paragraph, such Grantor agrees to use all
reasonable efforts to obtain all requisite consents to enable such Grantor to
provide a security interest in such asset pursuant hereto as promptly as
practicable.
Notwithstanding the foregoing, the Collateral (i) shall include
Equity Interests issued by a Foreign Subsidiary only to the extent that creation
of a security interest by a Grantor in such Equity Interests could not
reasonably be expected to result in material adverse Tax consequences to
Company, it being acknowledged and agreed that the creation of a security
interest in Equity Interests comprising up to but not exceeding 65% of the
voting power of all classes of the Equity Interests of such Foreign Subsidiary
entitled to vote will not result in such adverse Tax consequences; provided,
that, to the extent a Grantor has previously pledged 65% of the Equity Interests
of such Foreign Subsidiary to The Bank of Nova Scotia, as Collateral Agent,
under that certain First Amended and Restated Borrower Pledge and Security
Agreement dated as of January 8, 2004 or that certain Subsidiary Pledge and
Security Agreement dated as of January 8, 2004 (together, the "Prepetition
Security Agreements"), the Collateral shall only include such Equity Interests
so pledged and (ii) shall not include any rights, recoveries or proceeds related
to Chapter 5 of the Bankruptcy Code with the exception of Section 549 thereof.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral is collateral security
for, the prompt payment or performance in full when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including without limitation the payment of amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code), of all Secured Obligations of each Grantor. "SECURED OBLIGATIONS" means:
(i) with respect to Borrowers, all obligations and liabilities of
every nature of Borrowers now or hereafter existing under or arising out
of or in connection with the Credit Agreement and the other Loan
Documents; and
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(ii) with respect to each Subsidiary Guarantor, and each Additional
Grantor all obligations and liabilities of every nature of such Subsidiary
Guarantors now or hereafter existing under or arising out of or in
connection with the Subsidiary Guaranty;
in each case together with all extensions or renewals thereof,
whether for principal, interest (including without limitation interest that, but
for the filing of a petition in bankruptcy with respect to such Subsidiary
Guarantor, would accrue on such obligations, whether or not a claim is allowed
against such Subsidiary Guarantor for such interest in the related bankruptcy
proceeding), reimbursement of amounts drawn under Revolving Letters of Credit,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from Secured
Party or any Lender as a preference, fraudulent transfer or otherwise, and all
obligations of every nature of Grantors now or hereafter existing under this
Agreement. Nothing in this Agreement is intended to be nor shall it be construed
to be a provision of collateral security for any obligation of the Grantors that
arose prior to the date of the Interim Borrowing Order.
SECTION 3. GRANTORS REMAIN LIABLE.
Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts, licenses 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 Secured Party of any of its rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts, licenses and agreements included in the Collateral, and (c)
Secured Party shall not have any obligation or liability under any contracts,
licenses, and agreements included in the Collateral by reason of this Agreement,
nor shall Secured Party be obligated to perform any of the obligations or duties
of any Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Each Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except as expressly permitted by the
Credit Agreement, such Grantor owns the Collateral free and clear of any Lien
and no effective financing statement or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office, including any IP Filing Office.
(b) PERFECTION. The security interests in the Collateral granted to
Secured Party for the ratable benefit of Lenders hereunder constitute valid
security interests in the Collateral, securing the payment of the Secured
Obligations. If the Grantor is a Subsidiary Guarantor, upon (i) the filing of
UCC financing statements naming each Grantor as "debtor", naming Secured Party
as "secured party" and describing the Collateral in the filing offices with
respect to such Grantor set forth on Schedule 2 annexed hereto, (ii) in the case
of the Securities
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Collateral consisting of certificated Securities or evidenced by Instruments, in
addition to filing of such UCC financing statements, delivery of the
certificates representing such certificated Securities and delivery of such
Instruments to Secured Party (and in the case of Securities Collateral issued by
a foreign issuer, any actions required under foreign law to perfect a security
interest in such Securities Collateral), in each case duly endorsed or
accompanied by duly executed instruments of assignment or transfer in blank,
(iii) in the case of the Intellectual Property Collateral, in addition to the
filing of such UCC financing statements, the recordation of a Grant with the
applicable IP Filing Office, (iv) in the case of Equipment that is covered by a
certificate of title, the filing with the registrar of motor vehicles or other
appropriate authority in the applicable jurisdiction of an application
requesting the notation of the security interest created hereunder on such
certificate of title, and (v) in the case of any Deposit Account and any
Investment Property constituting a Security Entitlement, Securities Account,
Commodity Contract or Commodity Account, the execution and delivery to Secured
Party of an agreement providing for control by Secured Party thereof, the
security interests in the Collateral granted to Secured Party for the ratable
benefit of Lenders will constitute perfected security interests therein (except
to the extent that recordation of the Lien is required under the laws of any
foreign country or any subdivisions thereof with respect to the Copyrights,
Trademarks and Patents) prior to all other Liens, and all filings and other
actions necessary or desirable to perfect and protect such security interests
have been, or promptly after the Closing Date will be, duly made or taken. If
Grantor is a Borrower, upon entry of the Interim Borrowing Order or Final
Borrowing Order, the security interests in the Collateral granted to Secured
Party for the benefit of Lenders hereunder will constitute security interests
therein prior to all other Liens other than Liens permitted under the Credit
Agreement to the extent such Liens are permitted to be senior in priority to the
Liens in favor of the Lenders.
(c) OFFICE LOCATIONS; TYPE AND JURISDICTION OF ORGANIZATION;
LOCATIONS OF EQUIPMENT AND INVENTORY. Such Grantor's name as it appears in
official filings in the jurisdiction of its organization, type of organization
(i.e. corporation, limited partnership, etc.), jurisdiction of organization,
principal place of business, chief executive office, office where such Grantor
keeps its Records regarding the Accounts, Intellectual Property and originals of
Chattel Paper, and organization number provided by the applicable Government
Authority of the jurisdiction of organization are set forth on Schedule 3
annexed hereto. All of the Equipment and Inventory is located at the places set
forth on Schedule 4 annexed hereto, except for Inventory which, in the ordinary
course of business, is in transit either (i) from a supplier to a Grantor, (ii)
between the locations set forth on Schedule 4 annexed hereto, or (iii) to
customers of a Grantor.
(d) NAMES. No Grantor (or predecessor by merger or otherwise of such
Grantor) has, within the six month period preceding the date hereof, or, in the
case of an Additional Grantor, the date of the applicable Counterpart, had a
different name from the name of such Grantor listed on the signature pages
hereof, except the names set forth on Schedule 5 annexed hereto.
(e) DELIVERY OF CERTAIN COLLATERAL. All certificates or Instruments
(excluding checks) evidencing, comprising or representing the Collateral have
been or, when required pursuant to this Agreement, will have been delivered to
Secured Party duly endorsed or accompanied by duly executed instruments of
transfer or assignment in blank.
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(f) SECURITIES COLLATERAL. All of the Pledged Subsidiary Equity set
forth on Schedule 6 annexed hereto has been duly authorized and validly issued
and is fully paid and non-assessable; all of the Pledged Subsidiary Debt set
forth on Schedule 7 annexed hereto has been duly authorized, authenticated or
issued, and delivered and is the legally valid and binding obligation of the
issuers thereof and is not in default; there are no outstanding warrants,
options or other rights to purchase, or other agreements outstanding with
respect to, or property that is now or hereafter convertible into, or that
requires the issuance or sale of, any Pledged Subsidiary Equity; Schedule 6
annexed hereto sets forth all of the Equity Interests and the Pledged Equity
owned by each Grantor, and the percentage ownership in each issuer thereof; and
Schedule 7 annexed hereto sets forth all of the Pledged Debt owned by such
Grantor.
(g) INTELLECTUAL PROPERTY COLLATERAL. A true and complete list of
all Trademark Registrations and applications for any Trademark owned, held
(whether pursuant to a license or otherwise) or used by such Grantor, in whole
or in part, is set forth on Schedule 8 annexed hereto; a true and complete list
of all Patents owned, held (whether pursuant to a license or otherwise) or used
by such Grantor, in whole or in part, is set forth on Schedule 9 annexed hereto;
a true and complete list of all Copyright Registrations and applications for
Copyright Registrations held (whether pursuant to a license or otherwise) by
such Grantor, in whole or in part, is set forth on Schedule 10 annexed hereto;
and after reasonable inquiry, such Grantor is not aware of any pending or
threatened claim by any third party that any of the Intellectual Property
Collateral owned, held or used by such Grantor is invalid or unenforceable.
(h) DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS, COMMODITY ACCOUNTS.
Schedule 11 annexed hereto lists all Deposit Accounts, Securities Accounts and
Commodity Accounts owned by each Grantor, and indicates the institution or
intermediary at which the account is held and the account number.
(i) CHATTEL PAPER. Such Grantor has no interest in any Chattel
Paper, except as described in Schedule 12 annexed hereto.
(j) LETTER-OF-CREDIT RIGHTS. Such Grantor has no interest in any
Letter-of-Credit Rights, except as set forth on Schedule 13 annexed hereto.
(k) DOCUMENTS. No negotiable Documents are outstanding with respect
to any of the Inventory, except as set forth on Schedule 14 annexed hereto.
(l) ASSIGNED AGREEMENTS. Each Assigned Agreement is in full force
and effect and is enforceable against the parties thereto in accordance with its
terms.
(m) MOTOR VEHICLES. Such Grantor owns no motor vehicles, except as
set forth on Schedule 15 annexed hereto, which lists each motor vehicle by
model, model year, jurisdiction of registration and vehicle identification
number.
The representations and warranties as to the information set forth
in Schedules referred to herein are made as to each Grantor (other than
Additional Grantors) as of the date hereof and as to each Additional Grantor as
of the date of the applicable Counterpart, except that, in the case of a Pledge
Supplement, IP Supplement or notice delivered pursuant to Sections 5(b)-
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(c) hereof, such representations and warranties are made as of the date of such
supplement or notice.
SECTION 5. FURTHER ASSURANCES.
(a) GENERALLY. Each Grantor agrees that from time to time, at the
expense of Grantors, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
each Grantor will: (i) notify Secured Party in writing of receipt by such
Grantor of any interest in Chattel Paper and at the request of Secured Party,
xxxx conspicuously each item of Chattel Paper and each of its records pertaining
to the Collateral, with a legend, in form and substance satisfactory to Secured
Party, indicating that such Collateral is subject to the security interest
granted hereby, (ii) deliver to Secured Party all promissory notes and other
Instruments and, at the request of Secured Party, all original counterparts of
Chattel Paper, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Secured Party,
(iii) (A) execute (if necessary) and file such financing or continuation
statements, or amendments thereto, (B) execute and deliver, and cause to be
executed and delivered, agreements establishing that Secured Party has control
over electronic Chattel Paper and Letter-of-Credit Rights of such Grantor, (C)
deliver such documents, instruments, notices, records and consents, in each
case, as may be necessary or desirable and as Secured Party may request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby, (iv) furnish to Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may reasonably
request, all in reasonable detail, (v) promptly after the acquisition by such
Grantor of any item of Equipment that is covered by a certificate of title under
a statute of any jurisdiction under the law of which indication of a security
interest on such certificate is required as a condition of perfection thereof
execute and file with the registrar of motor vehicles or other appropriate
authority in such jurisdiction an application or other document requesting the
notation or other indication of the security interest created hereunder on such
certificate of title, (vi) within 30 days after the end of each calendar
quarter, deliver to Secured Party copies of all such applications or other
documents filed during such calendar quarter and copies of all such certificates
of title issued during such calendar quarter indicating the security interest
created hereunder in the items of Equipment covered thereby, (vii) at any
reasonable time, upon reasonable notice and during normal business hours,
provided the same shall not materially interfere with the operations of the
relevant guarantor, exhibit the Collateral to and allow inspection of the
Collateral by Secured Party, or persons designated by Secured Party, (viii) at
Secured Party's request, appear in and defend any action or proceeding that may
affect such Grantor's title to or Secured Party's security interest in all or
any part of the Collateral, and (ix) use commercially reasonable efforts to
obtain any necessary consents of third parties to the creation and perfection of
a security interest in favor of Secured Party with respect to any Collateral.
Each Grantor hereby authorizes Secured Party to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral (including any financing statement indicating that it covers "all
assets" or "all personal property" of such Grantor) without the signature of any
Grantor.
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(b) SECURITIES COLLATERAL. Without limiting the generality of the
foregoing Section 5(a), each Grantor agrees that (i) all certificates or
Instruments representing or evidencing the Securities Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and shall
be in suitable form for transfer by delivery or, as applicable, shall be
accompanied by such Grantor's endorsement, where necessary, or duly executed
instruments of transfer or assignments in blank, all in form and substance
satisfactory to Secured Party and (ii) it will, upon obtaining any additional
Equity Interests or Indebtedness, promptly (and in any event within five
Business Days) deliver to Secured Party a Pledge Supplement, duly executed by
such Grantor, in respect of such additional Pledged Equity or Pledged Debt;
provided, that the failure of any Grantor to execute a Pledge Supplement with
respect to any additional Pledged Equity or Pledged Debt shall not impair the
security interest of Secured Party therein or otherwise adversely affect the
rights and remedies of Secured Party hereunder with respect thereto. Upon each
such acquisition, the representations and warranties contained in Section 4(f)
hereof shall be deemed to have been made by such Grantor as to such Pledged
Equity or Pledged Debt, whether or not such Pledge Supplement is delivered.
(c) INTELLECTUAL PROPERTY COLLATERAL. At least quarterly, within 15
days after the end of each calendar quarter, each Grantor shall promptly notify
Secured Party of any rights to Intellectual Property Collateral acquired by such
Grantor after the date hereof. Promptly after the filing of an application for
any Trademark Registration, Patent or Copyright Registration, each Grantor shall
execute and deliver to Secured Party an IP Supplement, and submit a Grant for
recordation with respect thereto in the applicable IP Filing Office; provided,
the failure of any Grantor to execute an IP Supplement or submit a Grant for
recordation with respect to any additional Intellectual Property Collateral
shall not impair the security interest of Secured Party therein or otherwise
adversely affect the rights and remedies of Secured Party hereunder with respect
thereto. Upon delivery to Secured Party of an IP Supplement, Schedules 8, 9 and
10 annexed hereto and Schedule A to each Grant, as applicable, shall be deemed
modified to include reference to any right, title or interest in any existing
Intellectual Property Collateral or any Intellectual Property Collateral set
forth on Schedule A to such IP Supplement. Upon each such acquisition, the
representations and warranties contained in Section 4 (g) hereof shall be deemed
to have been made by such Grantor as to such Intellectual Property Collateral,
whether or not such IP Supplement is delivered.
(d) COMMERCIAL TORT CLAIMS. Grantors have no Commercial Tort Claims
as of the date hereof, except as set forth on Schedule 1 annexed hereto. In the
event that a Grantor shall at any time after the date hereof have any Commercial
Tort Claims, such Grantor shall promptly notify Secured Party thereof in
writing, which notice shall (i) set forth in reasonable detail the basis for and
nature of such Commercial Tort Claim and (ii) constitute an amendment to this
Agreement by which such Commercial Tort Claim shall constitute part of the
Collateral.
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SECTION 6. CERTAIN COVENANTS OF GRANTORS.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) give Secured Party at least 30 days' notice of (i) any change in
such Grantor's name, identity or corporate structure, (ii) any change in such
Grantor's chief place of business, chief executive office or residence or the
office where such Grantor keeps its records regarding the Accounts and all
originals of all chattel paper that evidence Accounts or (iii) any
reincorporation, reorganization or other action that results in a change of the
jurisdiction of organization of such Grantor;
(d) if Secured Party gives value to enable such Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes;
(e) except as expressly permitted by the Credit Agreement, pay
promptly when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for labor,
services, materials and supplies) against, the Collateral; provided that such
Grantor shall in any event pay such taxes, assessments, charges, levies or
claims not later than five days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or filed against such Grantor or
any of the Collateral as a result of the failure to make such payment;
(e) keep correct and accurate Records of Collateral at the locations
described in Schedule 3 annexed hereto; and
(f) permit representatives of Secured Party upon reasonable notice
and during normal business hours to inspect and make abstracts from such
Records, and each Grantor agrees to render to Secured Party, at Grantor's cost
and expense, such clerical and other assistance as may be reasonably requested
with regard thereto; and
(g) after the date hereof, give Secured Party prompt notice with
sufficient regularity of any claim or cause of action of any Grantor arising in
tort and not otherwise identified on Schedule 1 hereto.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.
Each Grantor shall:
(a) if any Inventory is in possession or control of any of such
Grantor's agents or processors, if the aggregate book value of all such
Inventory in possession or control of any such agent or processor, exceeds
$500,000, and in any event upon the occurrence of an Event of Default, instruct
such agent or processor to hold all such Inventory for the account of Secured
Party and subject to the instructions of Secured Party;
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(b) if any Inventory is located on premises leased by such Grantor,
deliver to Secured Party a fully executed Collateral Access Agreement;
(c) promptly upon the issuance and delivery to such Grantor of any
Negotiable Document of Title, deliver such document to Secured Party;
(d) promptly furnish to Secured Party a statement respecting any
material loss or damage to any of the Equipment owned by such Grantor;
(e) keep correct and accurate records of Inventory owned by such
Grantor itemizing and describing the kind, type and quantity of such Inventor,
such Grantor's cost therefore and (where applicable) the current list prices for
such Inventory; and
(f) each Grantor shall, at its own expense, maintain insurance with
respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement.
SECTION 8. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS.
(a) Each Grantor shall, for not less than one year from the date on
which each Account of such Grantor arose, maintain (i) complete Records of such
Account, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.
(b) Except as otherwise provided in this subsection (b), each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor under the Accounts. In connection with such
collections, each Grantor may take (and, upon the occurrence and during the
continuance of an Event of Default at Secured Party's direction, shall take)
such action as such Grantor or Secured Party may deem necessary or advisable to
enforce collection of amounts due or to become due under the Accounts; provided,
however, that Secured Party shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default and upon written
notice to such Grantor of its intention to do so, to (i) notify the account
debtors or obligors under any Accounts of the assignment of such Accounts to
Secured Party and to direct such account debtors or obligors to make payment of
all amounts due or to become due to such Grantor thereunder directly to Secured
Party, (ii) notify each Person maintaining a lockbox or similar arrangement to
which account debtors or obligors under any Accounts have been directed to make
payment to remit all amounts representing collections on checks and other
payment items from time to time sent to or deposited in such lockbox or other
arrangement directly to Secured Party, (iii) enforce collection of any such
Accounts at the expense of Grantors, and (iv) adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done. After receipt by such Grantor of the notice from
Secured Party referred to in the proviso to the preceding sentence, (I) all
amounts and proceeds (including checks and other Instruments) received by such
Grantor in respect of the Accounts shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 18 hereof, and (II) such Grantor shall not,
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without the written consent of Secured Party, adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account debtor
or obligor thereof, or allow any credit or discount thereon.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO THE SECURITIES COLLATERAL.
(a) FORM OF SECURITIES COLLATERAL. Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Securities Collateral in its possession or control for certificates
or instruments of smaller or larger denominations. If any Securities Collateral
is not a security pursuant to Section 8-103 of the UCC, no Grantor shall take
any action that, under such Section, converts such Securities Collateral into a
security without causing the issuer thereof to issue to it certificates or
instruments evidencing such Securities Collateral, which it shall promptly
deliver to Secured Party as provided in this Section 9(a).
(b) COVENANTS. Each Grantor shall (i) not, except as expressly
permitted by the Credit Agreement, permit any issuer of Pledged Subsidiary
Equity to merge or consolidate unless all the outstanding Equity Interests of
the surviving or resulting Person are, upon such merger or consolidation,
pledged and become Collateral hereunder and no cash, securities or other
property is distributed in respect of the outstanding Equity Interests of any
other constituent corporation; provided, if the surviving or resulting Person
upon any such merger or consolidation involving an issuer of Pledged Subsidiary
Equity is a Foreign Subsidiary, then such Grantor shall only be required to
pledge outstanding capital stock of such surviving or resulting Person
possessing up to but not exceeding 65% of the voting power of all classes of
capital stock of such issuer entitled to vote; (ii) cause each issuer of Pledged
Subsidiary Equity not to issue Equity Interests in addition to or in
substitution for the Pledged Subsidiary Equity issued by such issuer, except to
such Grantor; (iii) immediately upon its acquisition (directly or indirectly) of
any Equity Interests, including additional Equity Interests in each issuer of
Pledged Equity, comply with Section 5(b); (iv) immediately upon issuance of any
and all Instruments or other evidences of additional Indebtedness from time to
time owed to such Grantor by any obligor on the Pledged Debt, comply with
Section 5; (v) promptly deliver to Secured Party all written notices received by
it with respect to the Securities Collateral; (vi) at its expense (A) perform
and comply in all material respects with all terms and provisions of any
agreement related to the Securities Collateral required to be performed or
complied with by it, (B) maintain all such agreements in full force and effect
and (C) enforce all such agreements in accordance with their terms; and (vii),
at the request of Secured Party, promptly execute and deliver to Secured Party
an agreement providing for control by Secured Party of all Securities
Entitlements, Securities Accounts, Commodity Contracts and Commodity Accounts of
such Grantor.
(c) VOTING AND DISTRIBUTIONS. So long as no Event of Default shall
have occurred and be continuing, (i) each Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not inconsistent with the terms
of this Agreement or the Credit Agreement and (ii) each Grantor shall be
entitled to receive and retain any and all dividends, other distributions,
principal and interest paid in respect of the Securities Collateral to the
extent permitted under the Credit Agreement; provided, any and all (A)
dividends, distributions and interest paid or payable other
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than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Securities Collateral, (B) dividends and other distributions paid or payable in
cash in respect of any Securities Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise
distributed in respect of principal or in redemption of or in exchange for any
Securities Collateral shall be, and shall forthwith be delivered to Secured
Party to hold as, Collateral and shall, if received by such Grantor, be received
for the benefit of Secured Party, be segregated from the other property or funds
of such Grantor and be forthwith delivered to Secured Party as Collateral in the
same form as so received (with all necessary endorsements).
Upon the occurrence and during the continuation of an Event of
Default, (x) all rights of such Grantor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
hereto shall cease, and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to exercise such voting and other
consensual rights; (y) except as otherwise specified in the Credit Agreement,
all rights of such Grantor to receive the dividends, other distributions,
principal and interest payments which it would otherwise be authorized to
receive and retain pursuant hereto shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole right
to receive and hold as Collateral such dividends, other distributions, principal
and interest payments; and (z) all dividends, principal, interest payments and
other distributions which are received by such Grantor contrary to the
provisions of clause (ii) of the immediately preceding paragraph or clause (y)
above shall be received in trust for the benefit of Secured Party, shall be
segregated from other funds of such Grantor and shall forthwith be paid over to
Secured Party as Collateral in the same form as so received (with any necessary
endorsements).
In order to permit Secured Party to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder, (I) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to Secured Party all such proxies, dividend
payment orders and other instruments as Secured Party may from time to time
request, and (II) without limiting the effect of clause (I) above, each Grantor
hereby grants to Secured Party an irrevocable proxy to vote the Pledged Equity
and to exercise all other rights, powers, privileges and remedies to which a
holder of the Pledged Equity would be entitled (including giving or withholding
written consents of shareholders or other holders of Equity Interests, calling
special meetings of shareholders or other holders of Equity Interests and voting
at such meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Equity on the
record books of the issuer thereof) by any other Person (including the issuer of
the Pledged Equity or any officer or agent thereof), upon the occurrence of an
Event of Default and which proxy shall only terminate upon the payment in full
in cash of all of the Secured Obligations and the termination of all Revolving
Commitments of the Lenders under the Credit Agreement and the satisfactory cash
collateralization (as determined by Secured Party) of all Revolving Letters of
Credit and other letters of credit issued or maintained in connection therewith.
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SECTION 10. SPECIAL COVENANTS WITH RESPECT TO THE INTELLECTUAL PROPERTY
COLLATERAL.
(a) Each Grantor shall:
(i) use reasonable efforts so as not to permit the inclusion
in any contract to which it hereafter becomes a party of any provision
that could or might in any way impair or prevent the creation of a
security interest in, or the assignment of, such Grantor's rights and
interests in any property included within the definitions of any
Intellectual Property Collateral acquired under such contracts;
(ii) take any and all reasonable steps to protect the secrecy
of all trade secrets relating to the products and services sold or
delivered under or in connection with the Intellectual Property
Collateral, including, without limitation, where appropriate entering into
confidentiality agreements with employees and labeling and restricting
access to secret information and documents;
(iii) use proper statutory notice in connection with its use
of any of the Intellectual Property Collateral and products and services
covered by the Intellectual Property Collateral; and
(iv) use a commercially appropriate standard of quality (which
may be consistent with such Grantor's past practices) in the manufacture,
sale and delivery of products and services sold or delivered under or in
connection with the Trademarks.
(b) Except as otherwise provided in this Section 10, each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor in respect of the Intellectual Property Collateral or any
portion thereof. In connection with such collections, each Grantor may take
(and, after the occurrence and during the continuation of any Event of Default
at Secured Party's reasonable direction, shall take) such action as such Grantor
or Secured Party may deem reasonably necessary or advisable to enforce
collection of such amounts; provided, Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default, to
notify the obligors with respect to any such amounts of the existence of the
security interest created hereby and to direct such obligors to make payment of
all such amounts directly to Secured Party, and, upon such notification and at
the expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done. Upon the occurrence and
during the continuation of any Event of Default, (i) all amounts and proceeds
(including checks and other Instruments) received by each Grantor in respect of
amounts due to such Grantor in respect of the Intellectual Property Collateral
or any portion thereof shall be received in trust for the benefit of Secured
Party hereunder, shall be segregated from other funds of such Grantor and shall
be forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 18 hereof and (ii) such Grantor shall not adjust,
settle or compromise the amount or payment of any such amount or release wholly
or partly any obligor with respect thereto or allow any credit or discount
thereon.
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make, unless
and until such Grantor, in its
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commercially reasonable judgment, decides otherwise, (i) any application for
registration relating to any of the Intellectual Property Collateral owned, held
or used by such Grantor and set forth on Schedules 8, 9 or 10 annexed hereto, as
applicable, that is pending as of the date of this Agreement, (ii) any Copyright
Registration on any existing or future unregistered but copyrightable works
(except for works of nominal commercial value or with respect to which such
Grantor has determined in the exercise of its commercially reasonable judgment
that it shall not seek registration), (iii) any application on any future
patentable but unpatented innovation or invention comprising Intellectual
Property Collateral, and (iv) any Trademark opposition and cancellation
proceedings, renew Trademark Registrations and Copyright Registrations and do
any and all acts which are necessary or desirable to preserve and maintain all
rights in all Intellectual Property Collateral. Any expenses incurred in
connection therewith shall be borne solely by Grantors. Subject to the
foregoing, each Grantor shall give Secured Party prior written notice of any
abandonment of any Intellectual Property Collateral.
(d) Except as provided herein, each Grantor shall have the right to
commence and prosecute in its own name, as real party in interest, for its own
benefit and at its own expense, such suits, proceedings or other actions for
infringement, unfair competition, dilution, misappropriation or other damage, or
reexamination or reissue proceedings as are necessary to protect the
Intellectual Property Collateral. Each Grantor shall promptly, following its
becoming aware thereof, notify Secured Party of the institution of, or of any
adverse determination in, any proceeding (whether in an IP Filing Office or any
federal, state, local or foreign court) or regarding such Grantor's ownership,
right to use, or interest in any Intellectual Property Collateral. Each Grantor
shall provide to Secured Party any information with respect thereto requested by
Secured Party.
(e) In addition to, and not by way of limitation of, the granting of
a security interest in the Collateral pursuant hereto, each Grantor, effective
upon the occurrence and during the continuation of an Event of Default, hereby
assigns, transfers and conveys to Secured Party the nonexclusive right and
license to use all Trademarks, tradenames, Copyrights, Patents or technical
processes (including, without limitation, the Intellectual Property Collateral)
owned or used by such Grantor that relate to the Collateral and any other
collateral granted by such Grantor as security for the Secured Obligations,
together with any goodwill associated therewith, all to the extent necessary to
enable Secured Party to realize on the Collateral in accordance with this
Agreement and to enable any transferee or assignee of the Collateral to enjoy
the benefits of the Collateral. This right shall inure to the benefit of all
successors, assigns and transferees of Secured Party and its successors, assigns
and transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license shall be granted free of charge, without requirement that any monetary
payment whatsoever be made to such Grantor.
SECTION 11. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED AGREEMENTS.
(a) Each Grantor shall at its expense:
(i) if consistent with sound business practices, perform and
observe all terms and provisions of the Assigned Agreements to be
performed or observed by it, maintain the Assigned Agreements in
full force and effect, enforce the
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Assigned Agreements in accordance with such Grantor's customary
business practice, and
(ii) after the occurrence and continuation of an Event of
Default and upon the request of Secured Party, furnish to Secured
Party, promptly upon receipt thereof, copies of all notices,
requests and other documents received by such Grantor under or
pursuant to the Assigned Agreements, and from time to time (A)
furnish to Secured Party such information and reports regarding the
Assigned Agreements as Secured Party may reasonably request and (B)
upon request of Secured Party make to the parties to such Assigned
Agreements such demands and requests for information and reports or
for action as such Grantor is entitled to make under the Assigned
Agreements.
(b) Upon the occurrence and during the continuance of an Event of
Default, no Grantor shall, without prior Bankruptcy Court approval:
(i) cancel or terminate any of the Assigned Agreements or
consent to or accept any cancellation or termination thereof;
(ii) amend or otherwise modify the Assigned Agreements or give
any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned
Agreements;
(iv) consent to or permit or accept any prepayment of amounts
to become due under or in connection with the Assigned Agreements,
except as expressly provided therein; or
(v) take any other action in connection with the Assigned
Agreements that could reasonably be expected to materially impair
the value of the interest or rights of such Grantor thereunder or
that could reasonably be expected to materially impair the interest
or rights of Secured Party.
SECTION 12. SPECIAL PROVISIONS WITH RESPECT TO THE COLLATERAL ACCOUNTS.
Secured Party is hereby authorized to establish and maintain at its
offices restricted deposit accounts and restricted securities accounts which
shall be in the names of Grantors and under the sole dominion and control of
Secured Party (the "COLLATERAL Accounts"). Each Grantor agrees that from time to
time, at the expense of Grantors, such Grantor will promptly execute and deliver
account control agreements in form and substance satisfactory to Secured Party
and take all further action that may be necessary or desirable, or that Secured
Party may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby in such accounts or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any such accounts.
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SECTION 13. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Each Grantor hereby irrevocably appoints Secured Party as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to Secured Party pursuant to the Credit Agreement;
(b) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other Instruments,
Documents, Chattel Paper and other documents in connection with clauses (a) and
(b) above;
(d) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce or protect the rights of Secured Party with
respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations
of such Grantor to Secured Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party's option and Grantors' expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect, preserve or
realize upon the Collateral and Secured Party's security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
SECTION 14. SECURED PARTY MAY PERFORM.
If any Grantor fails to perform any agreement contained herein,
Secured Party may itself perform, or cause performance of (but shall not be
obligated to perform or cause the performance of), such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
Grantors under Section 19(b) hereof.
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SECTION 15. STANDARD OF CARE.
The powers conferred on Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.
SECTION 16. REMEDIES.
(a) GENERALLY. If any Event of Default (as defined in the Credit
Agreement) shall have occurred and be continuing, Secured Party may exercise in
respect of the Collateral, in addition to all other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC applies to the
affected Collateral), and also may (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of Secured Party
forthwith, assemble all or part of the Collateral as directed by Secured Party
and make it available to Secured Party at a place to be designated by Secured
Party that is reasonably convenient to both parties, (ii) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iv) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (iii) and collecting any
Secured Obligation, (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable, (vi) exercise
dominion and control over and refuse to permit further withdrawals from any
Deposit Account maintained with Secured Party or any Lender and provide
instructions directing the disposition of funds in Deposit Accounts not
maintained with Secured Party or any Lender and (vii) provide entitlement orders
with respect to Security Entitlements and other Investment Property constituting
a part of the Collateral and, without notice to any Grantor, transfer to or
register in the name of Secured Party or any of its nominees any or all of the
Securities Collateral or exercise any and all voting rights in connection
therewith pursuant to Section 9 hereof or otherwise. Secured Party or any Lender
(subject to the terms of the Credit Agreement) may be the purchaser of any or
all of the Collateral at any such sale and Secured Party, as agent for and
representative of Lenders (but not any Lender in its individual capacity unless
Requisite Lenders shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
17
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days' notice to
such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Grantor hereby waives any claims against Secured Party
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations, Grantors shall be jointly and severally liable
for the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to Secured
Party, that Secured Party has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against such Grantor, and each Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities.
(b) Securities Collateral.
(i) Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state
securities laws, Secured Party may be compelled, with respect to any
sale of all or any part of the Securities Collateral conducted
without prior registration or qualification of such Securities
Collateral under the Securities Act and/or such state securities
laws, to limit purchasers to those who will agree, among other
things, to acquire the Securities Collateral for their own account,
for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sales may
be at prices and on terms less favorable than those obtainable
through a public sale without such restrictions (including a public
offering made pursuant to a registration statement under the
Securities Act) and, notwithstanding such circumstances, each
Grantor agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner and that Secured Party
shall have no obligation to engage in public sales and no obligation
to delay the sale of any Securities Collateral for the period of
time necessary to permit the issuer thereof to register it for a
form of public sale requiring registration under the Securities Act
or under applicable state securities laws, even if such issuer
would, or should, agree to so register it. If Secured Party
determines to exercise its right to sell any or all of the
Securities Collateral, upon written request, each Grantor shall and
shall cause each issuer of any Securities Collateral to be sold
18
hereunder from time to time to furnish to Secured Party all such
information as Secured Party may request in order to determine the
number of shares and other instruments included in the Securities
Collateral which may be sold by Secured Party in exempt transactions
under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from
time to time in effect.
(ii) If Secured Party shall determine to exercise its right to
sell all or any of the Securities Collateral pursuant to this
Section, each Grantor agrees that, upon request of Secured Party
(which request may be made by Secured Party in its sole discretion),
such Grantor will, at its own expense (A) execute and deliver, and
cause each issuer of the Securities Collateral contemplated to be
sold and the directors and officers thereof to execute and deliver,
all such instruments and documents, and do or cause to be done all
such other acts and things, as may be necessary or, in the opinion
of Secured Party, advisable to register such Securities Collateral
under the provisions of the Securities Act and to cause the
registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law
to be furnished, and to make all amendments and supplements thereto
and to the related prospectus which, in the opinion of Secured
Party, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of
the Securities and Exchange Commission applicable thereto; (B) use
its best efforts to qualify the Securities Collateral under all
applicable state securities or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Securities
Collateral, as requested by Secured Party; (C) cause each such
issuer to make available to its security holders, as soon as
practicable, an earnings statement which will satisfy the provisions
of Section 11(a) of the Securities Act; (D) do or cause to be done
all such other acts and things as may be necessary to make such sale
of the Securities Collateral or any part thereof valid and binding
and in compliance with applicable law; and (E) bear all costs and
expenses, including reasonable attorneys' fees, of carrying out its
obligations under this Section.
(iii) Without limiting the generality of subsections 10.2 and
10.3 of the Credit Agreement, in the event of any public sale
described herein, each Grantor agrees to indemnify and hold harmless
Secured Party, and each Lender and each of their respective
directors, officers, employees and agents from and against any loss,
fee, cost, expense, damage, liability or claim, joint or several, to
which any such Persons may become subject or for which any of them
may be liable, under the Securities Act or otherwise, insofar as
such losses, fees, costs, expenses, damages, liabilities or claims
(or any litigation commenced or threatened in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus, registration statement, prospectus or other such
document published or filed in connection with such public sale, or
any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse Secured Party
and such other Persons
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for any legal or other expenses reasonably incurred by Secured Party
and such other Persons in connection with any litigation, of any
nature whatsoever, commenced or threatened in respect thereof
(including any and all fees, costs and expenses whatsoever
reasonably incurred by Secured Party and such other Persons and
counsel for Secured Party and such other Persons in investigating,
preparing for, defending against or providing evidence, producing
documents or taking any other action in respect of, any such
commenced or threatened litigation or any claims asserted). This
indemnity shall be in addition to any liability which any Grantor
may otherwise have and shall extend upon the same terms and
conditions to each Person, if any, that controls Secured Party or
such Persons within the meaning of the Securities Act.
(c) COLLATERAL ACCOUNTS. If an Event of Default has occurred and is
continuing, Company shall, as and when required under the Credit Agreement, pay
to Secured Party all amounts provided for in Section 8 thereof (including,
without limitation, any amounts to be held in a collateral account as cash
collateral for undrawn Revolving Letters of Credit).
(d) REMEDIES WITH RESPECT TO BORROWERS. Furthermore, upon the
occurrence and during the continuance of any Event of Default, Secured Party may
revoke Borrowers' rights to use cash collateral in which Secured Party has an
interest; provided that, any other provision of this Agreement or any other Loan
Document to the contrary notwithstanding, with respect to the foregoing, Secured
Party shall give Credit Parties and counsel to any official committees in
respect of the Chapter 11 Cases and the office of the United States Trustee five
Business Days prior written notice (which notice shall be delivered by facsimile
or overnight courier) of the exercise of its rights and remedies with respect to
the Collateral and file a copy of such notice with the clerk of the Bankruptcy
Court. Neither Secured Party nor Lenders shall have any obligation of any kind
to make a motion or application to the Bankruptcy Court to exercise their rights
and remedies set forth or referred to in this Agreement or in the other Loan
Documents. The enumeration of the foregoing rights and remedies is not intended
to be exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative and
not alternative. Borrowers waive (i) presentment, demand and protest and notice
of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties or other
property at any time held by Secured Party or Lenders on which Loan Parties may
in any way be liable and hereby ratify and confirm whatever Secured Party and
Lenders may lawfully do in this regard, (ii) subject to the notice provisions of
the preceding paragraph, all rights to notice and hearing prior to Secured
Party's taking possession or control of, or to Secured Party's or Lenders'
reply, attachment or levy upon, the Collateral, or any bond or security which
might be required by any court prior to allowing Secured Party or Lenders to
exercise any of their remedies, and (iii) the benefit of all valuation,
appraisal and exemption laws. Borrowers acknowledge they have been advised by
counsel of their choice with respect to the effect of the foregoing waivers and
this Agreement, the other Loan Documents and the transactions evidenced by this
Agreement and the other Loan Documents.
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SECTION 17. ADDITIONAL REMEDIES FOR INTELLECTUAL PROPERTY COLLATERAL.
(a) Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default, (i) Secured
Party shall have the right (but not the obligation) to bring suit, in the name
of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents required by Secured
Party in aid of such enforcement and each Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in subsections 10.2 and 10.3
of the Credit Agreement and Section 19 hereof, as applicable, in connection with
the exercise of its rights under this Section, and, to the extent that Secured
Party shall elect not to bring suit to enforce any Intellectual Property
Collateral as provided in this Section, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement of any of the Intellectual Property Collateral by
others and for that purpose agrees to use its commercially reasonable judgment
in maintaining any action, suit or proceeding against any Person so infringing
reasonably necessary to prevent such infringement; (ii) upon written demand from
Secured Party, each Grantor shall execute and deliver to Secured Party an
assignment or assignments of the Intellectual Property Collateral and such other
documents as are necessary or appropriate to carry out the intent and purposes
of this Agreement; (iii) each Grantor agrees that such an assignment and/or
recording shall be applied to reduce the Secured Obligations outstanding only to
the extent that Secured Party (or any Lender) receives cash proceeds in respect
of the sale of, or other realization upon, the Intellectual Property Collateral;
and (iv) within five Business Days after written notice from Secured Party, each
Grantor shall make available to Secured Party, to the extent within such
Grantor's power and authority, such personnel in such Grantor's employ on the
date of such Event of Default as Secured Party may reasonably designate, by
name, title or job responsibility, to permit such Grantor to continue, directly
or indirectly, to produce, advertise and sell the products and services sold or
delivered by such Grantor under or in connection with the Trademarks, Trademark
Registrations and Trademark Rights, such persons to be available to perform
their prior functions on Secured Party's behalf and to be compensated by Secured
Party at such Grantor's expense on a per diem, pro-rata basis consistent with
the salary and benefit structure applicable to each as of the date of such Event
of Default.
(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, Secured Party shall promptly execute and deliver
to such Grantor such assignments as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to Secured Party
as aforesaid, subject to any disposition thereof that may have been made by
Secured Party; provided, after giving effect to such reassignment, Secured
Party's security interest granted pursuant hereto, as well as all other rights
and remedies of Secured Party granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Liens permitted under subsection 7.2A of the Credit Agreement.
21
SECTION 18. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all
proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral shall be applied as
provided in subsections 2.4A and 2.4C of the Credit Agreement.
SECTION 19. INDEMNITY AND EXPENSES.
(a) Grantors jointly and severally agree to indemnify Secured Party
and each Lender from and against any and all claims, losses and liabilities in
any way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including without limitation enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured Party
upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of Secured Party hereunder, or (iv)
the failure by any Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantors in this Section 19 shall (i) survive
the termination of this Agreement and the discharge of Grantors' other
obligations under this Agreement, the Credit Agreement and the other Loan
Documents, and (ii) as to any Grantor that is a party to a Subsidiary Guaranty,
be subject to the provisions of Section 1(b) thereof.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF REVOLVING LOANS;
TERMINATION AND RELEASE.
(a) This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect until the payment
in full in cash of the Secured Obligations, the cancellation or termination of
the Revolving Commitments and the cancellation or expiration of all outstanding
Revolving Letters of Credit, (ii) be binding upon Grantors and their respective
successors and assigns, and (iii) inure, together with the rights and remedies
of Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(iii), but subject to the provisions of subsection 10.1 of the Credit Agreement,
any Lender may assign or otherwise transfer any Revolving Loans held by it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Lenders herein or otherwise.
(b) Upon the payment in full in cash of all Secured Obligations, the
cancellation or termination of the Revolving Commitments and the cancellation or
expiration of all outstanding Revolving Letters of Credit, the security interest
granted hereby shall terminate and all rights to the Collateral shall revert to
the applicable Grantors. Upon any such termination
22
Secured Party will, at Grantors' expense, execute and deliver to Grantors such
documents as Grantors shall reasonably request to evidence such termination. In
addition, upon the proposed sale, transfer or other disposition of any
Collateral by a Grantor in accordance with the Credit Agreement for which such
Grantor desires to obtain a security interest release from Secured Party, such
Grantor shall deliver an Officer's Certificate (x) stating that the Collateral
subject to such disposition is being sold, transferred or otherwise disposed of
in compliance with the terms of the Credit Agreement and (y) specifying the
Collateral being sold, transferred or otherwise disposed of in the proposed
transaction. Upon the receipt of such Officer's Certificate and so long as no
Event of Default has occurred and is continuing or would result from the
proposed disposition of the Collateral and so long as the Proceeds from such
disposition are applied in accordance with the Loan Documents, Secured Party
shall, at Grantor's expense, so long as Secured Party has no reason to believe
that the Officer's Certificate delivered by such Grantor with respect to such
sale is not true, correct and complete, execute and deliver such releases of its
security interest in such Collateral which is to be so sold, transferred or
disposed of, as may be reasonably requested by such Grantor.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 16 hereof in accordance with the instructions of Requisite Lenders.
(b) Secured Party hereunder shall at all times be the same Person
that is Collateral Agent under the Credit Agreement. Written notice of
resignation by Collateral Agent pursuant to subsection 9.6 of the Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Agreement; and appointment of a successor Collateral Agent pursuant to
subsection 9.6 of the Credit Agreement shall also constitute appointment of a
successor Secured Party under this Agreement. Upon the acceptance of any
appointment as Collateral Agent under subsection 9.6 of the Credit Agreement by
a successor Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Secured Party under this Agreement, and the retiring Secured
Party under this Agreement shall promptly (i) transfer to such successor Secured
Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute (if necessary) and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring Secured Party shall be discharged from its
duties and obligations under this Agreement. After any retiring Collateral
Agent's resignation hereunder as Secured Party, the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was Secured Party hereunder.
23
SECTION 22. ADDITIONAL GRANTORS.
In accordance at all times with subsections 6.8A and 6.8D of the
Credit Agreement, any Subsidiary of Company which is not a party hereto may
become a party hereto as a Subsidiary Guarantor or as a Borrower, respectively,
by executing a Counterpart substantially in the form of Exhibit VI annexed
hereto, whereupon such Subsidiary shall become (i) in the case of a Subsidiary
which is not a party hereto and is the subject of subsection 6.8A of the Credit
Agreement, a Grantor with the obligations and liabilities of a Subsidiary
Guarantor hereunder, and (ii) in the case of a Subsidiary which becomes a
Borrower under the Credit Agreement pursuant to subsection 6.8D thereof or
otherwise, a Grantor with the obligations and liabilities of a Borrower
hereunder. Upon delivery of any such Counterpart to Secured Party, notice of
which is hereby waived by Grantors, each such Additional Grantor shall be a
Grantor and shall be as fully a party hereto as if such Additional Grantor were
an original signatory hereto. Each Grantor expressly agrees that its obligations
arising hereunder shall not be affected or diminished by the addition or release
of any other Grantor hereunder, nor by any election of Collateral Agent not to
cause any Subsidiary of Company to become an Additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Grantor hereunder.
SECTION 23. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision
of this Agreement, and no consent to any departure by any Grantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party and, in the case of any such amendment or modification, by
Grantors; provided that this Agreement may be modified by the execution of a
Counterpart by an Additional Grantor in accordance with Section 22 hereof and
Grantors hereby waive any requirement of notice of or consent to any such
amendment. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 24. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served or sent by telefacsimile
or United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile,
or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided that notices to Secured Party
shall not be effective until received. For the purposes hereof, the address of
each party hereto shall be as provided in subsection 10.8 of the Credit
Agreement or as set forth under such party's name on the signature pages hereof
or such other address as shall be designated by such party in a written notice
delivered to the other parties hereto. Electronic mail and Internet and intranet
websites may be used to distribute routine communications; provided, however,
that no signature
24
with respect to any notice, request, agreement, waiver, amendment or other
document or any notice that is intended to have binding effect may be sent by
electronic mail.
SECTION 25. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 26. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 27. HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 28. GOVERNING LAW; RULES OF CONSTRUCTION.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT
THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
NY UCC are used herein as therein defined. The rules of construction set forth
in subsection 1.3 of the Credit Agreement shall be applicable to this Agreement
mutatis mutandis. To the extent (if at all) any provision of this Agreement is
inconsistent and conflicts with any particular provision of the Credit Agreement
in any particular circumstance, the parties hereto agree that such provision of
the Credit Agreement shall prevail in such circumstance.
25
SECTION 29. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF
OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, SHALL BE BROUGHT IN
THE BANKRUPTCY COURT; PROVIDED, THAT UPON DISMISSAL OF THE CHAPTER 11 CASES OR
SHOULD THE BANKRUPTCY COURT DECLINE JURISDICTION OVER THIS AGREEMENT, THE CREDIT
AGREEMENT, CHAPTER 11 CASES OR THE TRANSACTIONS CONTEMPLATED THEREBY, SUCH
PROCEEDINGS MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 24; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GRANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT, SUBJECT TO THE BANKRUPTCY COURT
SEEKING EXCLUSIVE JURISDICTION HEREUNDER, SECURED PARTY RETAINS THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES
THAT, SUBJECT TO THE BANKRUPTCY COURT SEEKING EXCLUSIVE JURISDICTION HEREUNDER,
THE PROVISIONS OF THIS SECTION 29 RELATING TO JURISDICTION AND VENUE SHALL BE
BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 30. WAIVER OF JURY TRIAL.
GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Grantor and Secured Party acknowledge that this waiver is
a material inducement for Grantors and Secured Party to enter into a business
relationship, that Grantors and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Grantor and Secured Party further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 30 AND EXECUTED BY EACH OF THE
PARTIES
26
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
SECTION 31. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
SECTION 32. DEFINITIONS.
(a) Each capitalized term utilized in this Agreement that is defined
in this Agreement shall have the meaning ascribed to such term in this
Agreement. Except as otherwise provided in Section 1 hereof with respect to the
categories of Collateral listed in Section 1 hereof, each capitalized term
utilized in this Agreement that is not defined in this Agreement, but that is
defined in the Credit Agreement, shall have the meaning ascribed to such term in
the Credit Agreement. Each capitalized term utilized in this Agreement that is
not defined in the Credit Agreement or in this Agreement, but that is defined in
the UCC, including the categories of Collateral listed in Section 1 hereof,
shall have the meaning set forth in Articles 1, 8 or 9 of the UCC.
(b) In addition, the following terms used in this Agreement shall
have the following meanings:
"ADDITIONAL GRANTOR" means a Subsidiary of Company that becomes a party
hereto after the date hereof as an additional Grantor by executing a
Counterpart.
"ASSIGNED AGREEMENTS" means, with respect to any Grantor, the agreements
with any account debtor of such Grantor, including, without limitation, (a) all
purchase orders given by any customer to such Grantor, (b) all rights of such
Grantor to receive moneys due or to become due under or pursuant to the Assigned
Agreements, (c) all rights of such Grantor to receive proceeds of any Supporting
Obligations with respect to the Assigned Agreements, (d) all claims of such
Grantor for damages arising out of any breach of or default under the Assigned
Agreements, and (e) all rights of such Grantor to terminate, amend, supplement,
modify or exercise rights or options under the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder.
"BENEFICIARY" means Collateral Agent (including, without limitation, each
Supplemental Collateral Agent) and each Lender (including, without limitation,
each Issuing Lender).
"COLLATERAL" has the meaning set forth in Section 1 hereof.
"COLLATERAL ACCOUNTS" has the meaning set forth in Section 12 hereof.
27
"COPYRIGHT REGISTRATIONS" means all copyright registrations issued to any
Grantor and applications for copyright registration that have been or may
hereafter be issued or applied for thereon in the United States and any state
thereof and in foreign countries (including, without limitation, the
registrations set forth on Schedule 10 annexed hereto, as the same may be
amended pursuant hereto from time to time).
"COPYRIGHT RIGHTS" means all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright licenses,
only to the extent permitted by such licensing arrangements), the rights (but no
the obligation) to renew and extend Copyright Registrations and any such rights
and to register works protectable by copyright and the right (but not the
obligation) to xxx in the name of any Grantor or in the name of Secured Party or
Lenders for past, present and future infringements of the Copyrights and any
such rights.
"COPYRIGHTS" means all items under copyright in various published and
unpublished works of authorship including, without limitation, computer
programs, computer data bases, other computer software layouts, trade dress,
drawings, designs, writings, and formulas (including, without limitation, the
works set forth on Schedule 10 annexed hereto, as the same may be amended
pursuant hereto from time to time).
"COUNTERPART" means a counterpart to this Agreement entered into by a
Subsidiary of Company pursuant to Section 22 hereof.
"CREDIT AGREEMENT" has the meaning set forth in the Preliminary Statements
of this Agreement.
"EQUITY INTERESTS" means all shares of stock, partnership interests,
interests in Joint Ventures, limited liability company interests and all other
Equity Interests in a Person, whether such stock or interests are classified as
Investment Property or General Intangibles under the UCC.
"EVENT OF DEFAULT" means any Event of Default as defined in the Credit
Agreement.
"GRANT" means a Grant of Trademark Security Interest, substantially in the
form of Exhibit I annexed hereto, a Grant of Patent Security Interest,
substantially in the form of Exhibit II annexed hereto, and a Grant of Copyright
Security Interest, substantially in the form of Exhibit III annexed hereto.
"INTELLECTUAL PROPERTY COLLATERAL" means, with respect to any Grantor all
right, title and interest (including rights acquired pursuant to a license or
otherwise but only to the extent permitted by agreements governing such license
or other use) in and to all
(a) Copyrights, Copyright Registrations and Copyright Rights,
including, without limitation, each of the Copyrights, rights, titles and
interests in and to the Copyrights, all derivative works and other works
protectable by copyright, which are presently, or in the future may be, owned,
created (as a work for hire for the benefit of such Grantor), authored (as a
work for hire for the benefit of such Grantor), or acquired by such Grantor, in
whole or in part, and all Copyright Rights with respect thereto and all
Copyright Registrations therefor, heretofore or
28
hereafter granted or applied for, and all renewals and extensions thereof,
throughout the world, including all proceeds thereof (such as, by way of example
and not by limitation, license royalties and proceeds of infringement suits),
the right (but not the obligation) to renew and extend such Copyright
Registrations and Copyright Rights and to register works protectable by
copyright and the right (but not the obligation) to xxx in the name of such
Grantor or in the name of Secured Party or Lenders for past, present and future
infringements of the Copyrights and Copyright Rights;
(b) Patents;
(c) Trademarks, Trademark Registrations, the Trademark Rights and
goodwill of such Grantor's business symbolized by the Trademarks and associated
therewith; and
(d) all trade secrets, trade secret rights, know-how, customer
lists, processes of production, ideas, confidential business information,
techniques, processes, formulas, and all other proprietary information.
"IP SUPPLEMENT" means an IP Supplement, substantially in the form of
Exhibit V annexed hereto.
"PATENT REGISTRATIONS" means all Patents that have been or may hereafter
be issued or applied for thereon in the United States and in foreign countries,
but in the case of such foreign countries only to the extent such registration
in such foreign country relates to a Patent that is not registered in the United
States (including, without limitation, the registrations and applications set
forth on Schedule 9 annexed hereto).
"PATENTS" means all patents and patent applications and rights and
interests in patents and patent applications under any domestic or foreign law
that are presently, or in the future may be, owned or held by such Grantor and
all patents and patent applications and rights, title and interests in patents
and patent applications under any domestic or foreign law that are presently, or
in the future may be, owned by such Grantor in whole or in part (including,
without limitation, the patents and patent applications set forth on Schedule 9
annexed hereto), all rights (but not obligations) corresponding thereto to xxx
for past, present and future infringements and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof.
"PLEDGED DEBT" means the Indebtedness from time to time owed to a Grantor,
including the Indebtedness set forth on Schedule 7 annexed hereto and issued by
the obligors named therein, the Instruments and certificates evidencing such
Indebtedness and all interest, cash or other property received, receivable or
otherwise distributed in respect of or exchanged therefor.
"PLEDGED EQUITY" means all Equity Interests now or hereafter owned by a
Grantor, including all securities convertible into, and rights, warrants,
options and other rights to purchase or otherwise acquire, any of the foregoing,
including those owned on the date hereof and set forth on Schedule 6 annexed
hereto, the certificates or other instruments representing any of the foregoing
and any interest of such Grantor in the entries on the books of any securities
intermediary pertaining thereto and all distributions, dividends and other
property received, receivable or otherwise distributed in respect of or
exchanged therefor, but excluding any Equity
29
Interests of Foreign Subsidiaries to the extent a security interest in such
Equity Interests would result in material adverse Tax consequences to Borrower
or any Subsidiary.
"PLEDGED SUBSIDIARY DEBT" means Pledged Debt owed to a Grantor by any
obligor that is, or becomes, a direct or indirect Subsidiary of such Grantor, of
which such Grantor is a direct or indirect Subsidiary or that controls, is
controlled by or under common control with such Grantor.
"PLEDGED SUBSIDIARY EQUITY" means Pledged Equity in a Person that is, or
becomes a direct Subsidiary of a Grantor.
"PLEDGE SUPPLEMENT" means a Pledge Supplement, in substantially the form
of Exhibit IV annexed hereto, in respect of the additional Pledged Equity or
Pledged Debt pledged pursuant to this Agreement.
"SECURED OBLIGATIONS" has the meaning set forth in Section 2 hereof.
"SECURITIES COLLATERAL" means, with respect to any Grantor, the Pledged
Equity, the Pledged Debt and any other Investment Property in which such Grantor
has an interest.
"TRADEMARKS" means all trademarks, service marks, designs, logos, indicia,
tradenames, trade dress, corporate names, company names, business names,
fictitious business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned by such Grantor, or
hereafter adopted and used, in its business (including, without limitation, the
trademarks specifically set forth on Schedule 8 annexed hereto).
"TRADEMARK REGISTRATIONS" means all trademark registrations that have been
or may hereafter be issued or applied for thereon in the United States and any
state thereof and in foreign countries (including, without limitation, the
registrations and applications set forth on Schedule 8 annexed hereto).
"TRADEMARK RIGHTS" means all common law and other rights (but in no event
any of the obligations) in and to the Trademarks in the United States and any
state thereof and in foreign countries.
"UCC" means the Uniform Commercial Code, as it exists on the date of this
Agreement or as it may hereafter be amended, in the State of New York or when
the context applies, the Uniform Commercial Code as in effect from time to time
in any other applicable jurisdiction.
[Remainder of page intentionally left blank]
30
IN WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWERS:
INTERMET CORPORATION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
OTHER BORROWERS:
ALEXANDER CITY CASTING COMPANY, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
CAST-MATIC CORPORATION,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
COLUMBUS FOUNDRY, L.P.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
S-1
Security Agreement
DIVERSIFIED DIEMAKERS, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
GANTON TECHNOLOGIES INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
INTERMET HOLDING COMPANY,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
INTERMET ILLINOIS, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
INTERMET INTERNATIONAL, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
S-2
Security Agreement
INTERMET U.S. HOLDING, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
IRONTON IRON, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
LYNCHBURG FOUNDRY COMPANY,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
NORTHERN CASTINGS CORPORATION,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
SUDBURY, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
S-3
Security Agreement
SUDM, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
TOOL PRODUCTS, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXXX CASTINGS COMPANY,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXXX HAVANA, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
S-4
Security Agreement
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Secured Party
By: /s/ Xxxxx Xxxxx
--------------------
Name: Xxxxx Xxxxx
Title: Director
S-5
Security Agreement
SCHEDULE A
TO
SECURITY AGREEMENT
Name Notice Address for each Grantor
---- -------------------------------
Schedule A-1 Security Agreement
SCHEDULE B
TO
SECURITY AGREEMENT
Inactive Domestic Subsidiary Existing Encumbrance
---------------------------- --------------------
Schedule A-2 Security Agreement
SCHEDULE 1
TO
SECURITY AGREEMENT
Commercial Tort Claims
Schedule 1-1 Security Agreement
SCHEDULE 2
TO
SECURITY AGREEMENT
Filing Offices
Grantor Filing Offices
------- --------------
Schedule 2-1 Security Agreement
SCHEDULE 3
TO
SECURITY AGREEMENT
Office Locations, Type and Jurisdiction of Organization
NAME OF TYPE OF OFFICE JURISDICTION OF ORGANIZATION
GRANTOR ORGANIZATION LOCATIONS(1) ORGANIZATION NUMBER
------- ------------ ------------ --------------- ------------
----------
(1) List principal place of business, chief executive office and office where
records regarding Accounts, Intellectual Property and Chattel Paper are kept.
Schedule 3-1 Security Agreement
SCHEDULE 4
TO
SECURITY AGREEMENT
Locations of Equipment and Inventory
NAME OF GRANTOR LOCATIONS OF EQUIPMENT AND INVENTORY
--------------- ------------------------------------
Schedule 4-1 Security Agreement
SCHEDULE 5
TO
SECURITY AGREEMENT
Other Names
NAME OF GRANTOR OTHER NAMES
--------------- -----------
Schedule 5-1 Security Agreement
SCHEDULE 6
TO
SECURITY AGREEMENT
CLASS PERCENTAGE OF
OF EQUITY PAR AMOUNT OF OUTSTANDING
EQUITY ISSUER EQUITY CERTIFICATE NOS. VALUE EQUITY INTERESTS EQUITY PLEDGED
------------- ------ ---------------- ----- ---------------- --------------
------------- ------ ---------------- ----- ---------------- --------------
------------- ------ ---------------- ----- ---------------- --------------
------------- ------ ---------------- ----- ---------------- --------------
Schedule 6-1 Security Agreement
SCHEDULE 7
TO
SECURITY AGREEMENT
AMOUNT OF
DEBT ISSUER INDEBTEDNESS
----------- ------------
----------- ------------
----------- ------------
----------- ------------
Schedule 7-1 Security Agreement
SCHEDULE 8
TO
SECURITY AGREEMENT
U.S. Trademarks:
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------------ ------------
Foreign Trademarks:
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------------ ------------
Schedule 8-1 Security Agreement
SCHEDULE 9
TO
SECURITY AGREEMENT
U.S. Patents Issued:
Patent No. Issue Date Title Inventor(s)
---------- ---------- ----- -----------
U.S. Patents Pending:
Date Application
Filed Number Title Inventor(s)
----- ------ ----- -----------
Foreign Patents Issued:
Country Patent No. Issue Date Title Inventor(s)
------- ---------- ---------- ----- -----------
Foreign Patents Pending:
Applicant's Date Application
Country Name Filed Number Title Inventor(s)
------- ---- ----- ------ ----- -----------
Schedule 9-1 Security Agreement
SCHEDULE 10
TO
SECURITY AGREEMENT
U.S. Copyright Registrations:
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
Foreign Copyright Registrations:
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
Pending U.S. Copyright Registration Applications:
Title Appl. No. Date of Application Copyright Claimant
----- --------- ------------------- ------------------
Pending Foreign Copyright Registration Applications:
Country Title Appl. No. Date of Application
------- ----- --------- -------------------
Schedule 10-1 Security Agreement
SCHEDULE 11
TO
SECURITY AGREEMENT
Deposit Accounts, Securities Accounts, Commodity Accounts
Depository Bank or Address of Depository Bank
Type of Account Securities Intermediary or Securities Intermediary Account Number
--------------- ----------------------- -------------------------- --------------
Schedule 11-1 Security Agreement
SCHEDULE 12
TO
SECURITY AGREEMENT
Chattel Paper
Schedule 12-1 Security Agreement
SCHEDULE 13
TO
SECURITY AGREEMENT
Letter-of-Credit Rights
Schedule 13-1 Security Agreement
SCHEDULE 14
TO
SECURITY AGREEMENT
Documents
Schedule 14-1 Security Agreement
SCHEDULE 15
TO
SECURITY AGREEMENT
Motor Vehicles
Jurisdiction
Model Model Year of Registration VIN
----- ---------- --------------- ---
Schedule 15-1 Security Agreement
EXHIBIT I TO
SECURITY AGREEMENT
[FORM OF GRANT OF TRADEMARK SECURITY INTEREST]
GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("GRANTOR"),
owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and
WHEREAS, INTERMET CORPORATION, a Georgia corporation ("COMPANY") and
the Subsidiaries of Company listed on the signature pages thereof (collectively,
Company and such Subsidiaries of Company are "BORROWERS" and each a "BORROWER")
have entered into a Debtor-in-Possession Credit Agreement dated as of October
22, 2004 (said Credit Agreement, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT") with the financial institutions
listed on the signatures pages thereof as Lenders (collectively, together with
their respective successors and assigns party to the Credit Agreement from time
to time, the "LENDERS"), THE BANK OF NOVA SCOTIA, as Administrative Agent for
the Lenders and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent for
the Lenders (in such capacity, "SECURED PARTY") pursuant to which Lenders have
made certain commitments, subject to the terms and conditions set forth in the
Credit Agreement, to extend certain credit facilities to Company; and
[Insert if Grantor is a Subsidiary Guarantor] [WHEREAS, Grantor has
executed and delivered that certain Subsidiary Guaranty dated as of October 22,
2004 (said Subsidiary Guaranty, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the "GUARANTY") in favor of Secured Party for the benefit of
Lenders, pursuant to which Grantor has guarantied the prompt payment and
performance when due of all obligations of Borrowers under the Credit Agreement
and the other Loan Documents; and
WHEREAS, pursuant to the terms of a Security Agreement dated as of
October 22, 2004 (said Security Agreement, as it may heretofore have been and as
it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the "SECURITY AGREEMENT"), among Grantor,
Secured Party and the other grantors named therein, Grantor has created in favor
of Secured Party a security interest in, and Secured Party has become a secured
creditor with respect to, the Trademark Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Security Agreement, to evidence further the security interest granted by
Grantor to Secured Party pursuant to the Security Agreement, Grantor hereby
grants to Secured Party a security interest in all of Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
Grant of Trademark Security Interest
to Security Agreement
I-1
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "TRADEMARK COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all trademarks,
service marks, designs, logos, indicia, tradenames, trade dress, corporate
names, company names, business names, fictitious business names, trade
styles and/or other source and/or business identifiers and applications
pertaining thereto, owned by such Grantor, or hereafter adopted and used,
in its business (including, without limitation, the trademarks
specifically identified on Schedule A annexed hereto) (collectively, the
"TRADEMARKS"), all registrations that have been or may hereafter be issued
or applied for thereon in the United States and any state thereof and in
foreign countries (including, without limitation, the registrations and
applications set forth on Schedule A annexed hereto), all common law and
other rights (but in no event any of the obligations) in and to the
Trademarks in the United States and any state thereof and in foreign
countries, and all goodwill of such Grantor's business symbolized by the
Trademarks and associated therewith; and
(ii) all proceeds, products, rents and profits of or from any
and all of the foregoing Trademark Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not Secured
Party is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of
the foregoing Trademark Collateral. For purposes of this Grant of
Trademark Security Interest, the term "PROCEEDS" includes whatever is
receivable or received when Trademark Collateral or proceeds are sold,
licensed, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.
Grantor does hereby further acknowledge and affirm that the rights
and remedies of Secured Party with respect to the security interest in the
Trademark Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page is intentionally left blank.]
Grant of Trademark Security Interest
to Security Agreement
I-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the __ day of _______, _____.
[NAME OF GRANTOR]
By: __________________
Name: ________________
Title: _______________
Grant of Trademark Security Interest
to Security Agreement
I-3
SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST
Trademark Registration/ Registration/
Owner Description Appl. Number Appl. Date
----- ----------- ------------ ----------
Grant of Trademark Security Interest
to Security Agreement
I-A-1
EXHIBIT II TO
SECURITY AGREEMENT
[FORM OF GRANT OF PATENT SECURITY INTEREST]
GRANT OF PATENT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("GRANTOR"),
owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and
WHEREAS, INTERMET CORPORATION, a Georgia corporation ("COMPANY") and
the Subsidiaries of Company listed on the signature pages thereof (collectively,
Company and such Subsidiaries of Company are "BORROWERS" and each a "BORROWER")
have entered into a Debtor-in-Possession Credit Agreement dated as of October
22, 2004 (said Credit Agreement, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT") with the financial institutions
listed on the signatures pages thereof as Lenders (collectively, together with
their respective successors and assigns party to the Credit Agreement from time
to time, the "LENDERS"), THE BANK OF NOVA SCOTIA, as Administrative Agent for
the Lenders and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent for
the Lenders (in such capacity, "SECURED PARTY") pursuant to which Lenders have
made certain commitments, subject to the terms and conditions set forth in the
Credit Agreement, to extend certain credit facilities to Company; and
[Insert if Grantor is a Subsidiary Guarantor] [WHEREAS, Grantor has
executed and delivered that certain Subsidiary Guaranty dated as of October 22,
2004 (said Subsidiary Guaranty, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the "GUARANTY") in favor of Secured Party for the benefit of
Lenders, pursuant to which Grantor has guarantied the prompt payment and
performance when due of all obligations of Borrowers under the Credit Agreement
and the other Loan Documents; and]
WHEREAS, pursuant to the terms of a Security Agreement dated as of
October 22, 2004 (said Security Agreement, as it may heretofore have been and as
it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the "SECURITY AGREEMENT"), among Grantor,
Secured Party and the other grantors named therein, Grantor has created in favor
of Secured Party a security interest in, and Secured Party has become a secured
creditor with respect to, the Patent Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Security Agreement, to evidence further the security interest granted by
Grantor to Secured Party pursuant to the Security Agreement, Grantor hereby
grants to Secured Party a security interest in all of Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
Grant of Trademark Security Interest
to Security Agreement
II-1
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "PATENT COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all patents and
patent applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or in
the future may be, owned or held by such Grantor and all patents and
patent applications and rights, title and interests in patents and patent
applications under any domestic or foreign law that are presently, or in
the future may be, owned by such Grantor in whole or in part (including,
without limitation, the patents and patent applications set forth on
Schedule A annexed hereto), all rights (but not obligations) corresponding
thereto to xxx for past, present and future infringements and all
re-issues, divisions, continuations, renewals, extensions and
continuations-in-part thereof; and
(ii) all proceeds, products, rents and profits of or from any and
all of the foregoing Patent Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise with respect to any of the
foregoing Patent Collateral. For purposes of this Grant of Patent Security
Interest, the term "PROCEEDS" includes whatever is receivable or received
when Patent Collateral or proceeds are sold, licensed, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary
or involuntary.
Grantor does hereby further acknowledge and affirm that the rights
and remedies of Secured Party with respect to the security interest in the
Patent Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
Grant of Trademark Security Interest
to Security Agreement
II-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ____________, _____.
[NAME OF GRANTOR]
By: __________________
Name: ________________
Title: _______________
Grant of Trademark Security Interest
to Security Agreement
II-3
SCHEDULE A
TO
GRANT OF PATENT SECURITY INTEREST
Patents Issued:
Patent No. Issue Date Invention Inventor(s)
---------- ---------- --------- -----------
Patents Pending:
Applicant's Date Application
Name Filed Number Invention Inventor(s)
---- ----- ------ --------- -----------
Grant of Patent Security Interest
to Security Agreement
II-A-1
EXHIBIT III TO
SECURITY AGREEMENT
[FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]
GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("GRANTOR"),
owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Copyright Collateral (as defined below); and
WHEREAS, INTERMET CORPORATION, a Georgia corporation ("COMPANY") and
the Subsidiaries of Company listed on the signature pages thereof (collectively,
Company and such Subsidiaries of Company are "BORROWERS" and each a "BORROWER")
have entered into a Debtor-in-Possession Credit Agreement dated as of October
22, 2004 (said Credit Agreement, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT") with the financial institutions
listed on the signatures pages thereof as Lenders (collectively, together with
their respective successors and assigns party to the Credit Agreement from time
to time, the "LENDERS"), THE BANK OF NOVA SCOTIA, as Administrative Agent for
the Lenders and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent for
the Lenders (in such capacity, "SECURED PARTY") pursuant to which Lenders have
made certain commitments, subject to the terms and conditions set forth in the
Credit Agreement, to extend certain credit facilities to Company; and
[Insert if Grantor is a Subsidiary Guarantor] [WHEREAS, Grantor has
executed and delivered that certain Subsidiary Guaranty dated as of October 22,
2004 (said Subsidiary Guaranty, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the "GUARANTY") in favor of Secured Party for the benefit of
Lenders, pursuant to which Grantor has guarantied the prompt payment and
performance when due of all obligations of Borrowers under the Credit Agreement
and the other Loan Documents; and
WHEREAS, pursuant to the terms of a Security Agreement dated as of
October 22, 2004 (said Security Agreement, as it may heretofore have been and as
it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the "SECURITY AGREEMENT"), among Grantor,
Secured Party and the other grantors named therein, Grantor has created in favor
of Secured Party a security interest in, and Secured Party has become a secured
creditor with respect to, the Copyright Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Security Agreement, to evidence further the security interest granted by
Grantor to Secured Party pursuant to the Security Agreement, Grantor hereby
grants to Secured Party a security interest in all of Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
Grant of Copyright Security Interest
to Security Agreement
III-1
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "COPYRIGHT COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) under copyright in various
published and unpublished works of authorship including, without
limitation, computer programs, computer data bases, other computer
software layouts, trade dress, drawings, designs, writings, and formulas
(including, without limitation, the works set forth on Schedule A annexed
hereto, as the same may be amended pursuant hereto from time to time)
(collectively, the "COPYRIGHTS"), all copyright registrations issued to
Grantor and applications for copyright registration that have been or may
hereafter be issued or applied for thereon in the United States and any
state thereof and in foreign countries (including, without limitation, the
registrations set forth on Schedule A annexed hereto, as the same may be
amended pursuant hereto from time to time) (collectively, the "COPYRIGHT
REGISTRATIONS"), all common law and other rights in and to the Copyrights
in the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright
licenses, only to the extent permitted by such licensing arrangements)
(the "COPYRIGHT RIGHTS"), including, without limitation, each of the
Copyrights, rights, titles and interests in and to the Copyrights, all
derivative works and other works protectable by copyright, which are
presently, or in the future may be, owned, created (as a work for hire for
the benefit of Grantor), authored (as a work for hire for the benefit of
Grantor), or acquired by Grantor, in whole or in part, and all Copyright
Rights with respect thereto and all Copyright Registrations therefor,
heretofore or hereafter granted or applied for, and all renewals and
extensions thereof, throughout the world, including all proceeds thereof
(such as, by way of example and not by limitation, license royalties and
proceeds of infringement suits), the right (but not the obligation) to
renew and extend such Copyright Registrations and Copyright Rights and to
register works protectable by copyright and the right (but not the
obligation) to xxx in the name of such Grantor or in the name of Secured
Party or Lenders for past, present and future infringements of the
Copyrights and Copyright Rights; and
(ii) all proceeds, products, rents and profits of or from any and
all of the foregoing Copyright Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise with respect to any of the
foregoing Copyright Collateral. For purposes of this Grant of Copyright
Security Interest, the term "PROCEEDS" includes whatever is receivable or
received when Copyright Collateral or proceeds are sold, licensed,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
Grantor does hereby further acknowledge and affirm that the rights
and remedies of Secured Party with respect to the security interest in the
Copyright Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
Grant of Copyright Security Interest
to Security Agreement
III-2
[The remainder of the page is intentionally left blank.]
Grant of Copyright Security Interest
to Security Agreement
III-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the ___ day of ___________, _____.
[NAME OF GRANTOR]
By: _____________________
Name: ___________________
Title: __________________
Grant of Copyright Security Interest
to Security Agreement
III-4
SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST
U.S. Copyright Registrations:
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
Foreign Copyright Registrations:
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
Pending U.S. Copyright Registration Applications:
Title Appl. No. Date of Application Copyright Claimant
----- --------- ------------------- ------------------
Pending Foreign Copyright Registration Applications:
Country Title Appl. No. Date of Application
------- ----- --------- -------------------
III-A-1 Grant of Copyright Security Interest
to Security Agreement
EXHIBIT IV TO
SECURITY AGREEMENT
PLEDGE SUPPLEMENT
This Pledge Supplement, dated as of __________________, is delivered
pursuant to the Security Agreement, dated as of October 22, 2004, between
____________________, a _______________ ("GRANTOR"), the other Grantors named
therein, and Deutsche Bank Trust Company Americas, as Secured Party (said
Security Agreement, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the "SECURITY AGREEMENT"). Capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed thereto in the Security
Agreement.
Grantor hereby agrees that the [Pledged Equity] [Pledged Debt] set
forth on Schedule A annexed hereto shall be deemed to be part of the [Pledged
Equity] [Pledged Debt] and shall become part of the Securities Collateral and
shall secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be
duly executed and delivered by its duly authorized officer as of
_______________.
[GRANTOR]
By: ____________________
Name: __________________
Title: _________________
IV-1 Pledge Supplement
to Security Agreement
SCHEDULE A
TO
PLEDGE SUPPLEMENT
IV-A-1 Pledge Supplement
to Security Agreement
EXHIBIT V TO
SECURITY AGREEMENT
IP SUPPLEMENT
This IP SUPPLEMENT, dated as of _______, is delivered pursuant to
and supplements (i) the Security Agreement, dated as of October 22, 2004 (said
Security Agreement, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the "SECURITY AGREEMENT"), among Intermet Corporation, [Insert Name of
Grantor] ("GRANTOR"), the other grantors named therein, and Deutsche Bank Trust
Company Americas, as Secured Party, and (ii) the [Grant of Trademark Security
Interest] [Grant of Patent Security Interest] [Grant of Copyright Security
Interest] dated as of ___________, _____ (the "GRANT") executed by Grantor.
Capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed thereto in the Grant.
Grantor grants to Secured Party a security interest in all of
Grantor's right, title and interest in and to the [Trademark Collateral] [Patent
Collateral] [Copyright Collateral] set forth on Schedule A annexed hereto. All
such [Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be
deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright
Collateral] and shall be hereafter subject to each of the terms and conditions
of the Security Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this IP Supplement to be duly
executed and delivered by its duly authorized officer as of ______________.
[GRANTOR]
By: __________________________
Name: ________________________
Title: _______________________
V-1 IP Supplement
to Security Agreement
EXHIBIT VI TO
SECURITY AGREEMENT
[FORM OF COUNTERPART]
COUNTERPART (this "COUNTERPART"), dated as of _______, is delivered
pursuant to Section 21 of the Security Agreement referred to below. The
undersigned hereby agrees that this Counterpart may be attached to the Security
Agreement, dated as of October 22, 2004 (said Security Agreement, as it may
heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time being the "SECURITY
AGREEMENT"; capitalized terms used herein not otherwise defined herein shall
have the meanings ascribed therein), among Intermet Corporation, the other
Grantors named therein, and Deutsche Bank Trust Company Americas, as Secured
Party. The undersigned by executing and delivering this Counterpart hereby
becomes a Grantor under the Security Agreement in accordance with Section 21
thereof and agrees to be bound by all of the terms thereof. [Without limiting
the generality of the foregoing, the undersigned hereby [For new Subsidiary
Borrowers only: agrees that it hereby becomes a party to the Security Agreement
as a Grantor, and hereafter has the rights and obligations of a Borrower
thereunder and is bound by all of the provisions thereof as fully as if the
undersigned were one of the original parties thereto.][:
**Paragraphs (i)-(v) for new Subsidiary Guarantors only**
(i) agrees that all Collateral of the undersigned, including the
items of property described on the Schedules attached hereto, shall become
part of the Collateral and shall secure all Secured Obligations, and
hereby grants to the Secured Party for the benefit of the Lenders a
continuing security interest in all such Collateral of the undersigned;
(ii) authorizes the Secured Party to add the information set forth
on the Schedules to this Agreement to the correlative Schedules attached
to the Security Agreement;(1)
(iii) agrees that it hereby becomes a party to the Security
Agreement as a Grantor and hereafter has the rights and obligations of a
Subsidiary Guarantor thereunder and is bound by all of the provisions
thereof as fully as if the undersigned were one of the original parties
thereto;
(iv) makes the representations and warranties set forth in the
Security Agreement, as amended hereby, to the extent relating to the
undersigned; and
(v) agrees that the address and facsimile number of the undersigned
for notice purposes pursuant to Section 24 of the Security Agreement shall
be initially as set forth below.
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(1) The Schedules to the Counterpart should include copies of all Schedules that
identify Collateral to be granted by the Subsidiary Guarantor.
1
Security Agreement
[NAME OF ADDITIONAL GRANTOR]
By: _____________________
Name: ___________________
Title: __________________
Notice Address:
S-1
