EXHIBIT 10.44
BORROWER GENERAL SECURITY AGREEMENT
BORROWER GENERAL SECURITY AGREEMENT (the "Agreement"), dated as of
November 6, 1997, made by XXXXXX PRODUCTS COMPANY, a Delaware corporation having
an office at 00 Xxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000 ("Pledgor"), in favor of
CREDIT AGRICOLE INDOSUEZ, having an office at 1211 Avenue of the Xxxxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as pledgee, assignee and secured party, in its
capacity as agent and collateral agent (in such capacities and together with any
successors in such capacities, "Collateral Agent") for the lending institutions
(the "Banks") from time to time party to the Credit Agreement (as hereinafter
defined).
R E C I T A L S :
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A. Pursuant to a certain credit agreement, dated as of the date
hereof (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"; capitalized terms used herein and not
defined shall have the meanings assigned to them in the Credit Agreement), among
Xxxxxx, Inc., a Delaware corporation, Pledgor, the Banks and Credit Agricole
Indosuez, as Agent and Collateral Agent for the Banks, the Banks have agreed (i)
to make to or for the account of Pledgor certain Acquisition Term Loans up to an
aggregate principal amount of $50,000,000 and certain Revolving Loans up to an
aggregate principal amount of $25,000,000 and (ii) to issue certain Letters of
Credit for the account of Pledgor.
B. It is contemplated that Pledgor may enter into one or more
agreements with one or more of the Banks ("Interest Rate Agreements") fixing the
interest rates with respect to Loans under the Credit Agreement (all obligations
of Pledgor now existing or hereafter arising under such Interest Rate
Agreements, collectively, the "Interest Rate Obligations").
C. Pledgor is the legal and beneficial owner of the Pledged
Collateral (as hereinafter defined).
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D. It is a condition to the obligations of the Banks to make the
Loans under the Credit Agreement and a condition to any Bank issuing Letters of
Credit under the Credit Agreement or entering into the Interest Rate Agreements
that Pledgor execute and deliver the applicable Credit Documents, including this
Agreement.
E. This Agreement is given by Pledgor in favor of Collateral Agent
for its benefit and the benefit of the Banks and Agent (collectively, the
"Secured Parties") to secure the payment and performance of all of the Secured
Obligations (as defined in Section 2).
A G R E E M E N T :
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NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Collateral Agent hereby agree as follows:
SECTION 1. Pledge. As collateral security for the payment and
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performance when due of all the Secured Obligations, Pledgor hereby pledges,
assigns, transfers and grants to Collateral Agent for its benefit and the
benefit of the Secured Parties, a continuing first priority security interest
(except as set forth on Schedule A hereto) in and to all of the right, title and
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interest of Pledgor in, to and under the following property whether now existing
or hereafter acquired (collectively, the "Pledged Collateral"):
(a) each and every Receivable (as hereinafter defined);
(b) all Inventory (as hereinafter defined);
(c) all books, records, ledgers, print-outs, file materials and other
papers containing information relating to Receivables and any account
debtors in respect thereof, together with all Contracts (as hereinafter
defined) (except where such pledge, assignment, transfer or grant would
violate the provisions of any such Contracts);
(d) all Equipment (as hereinafter defined);
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(e) all Intangibles (as hereinafter defined);
(f) all Insurance Policies (as hereinafter defined);
(g) all Pension Plan Reversions (as hereinafter defined);
(h) any and all property of every name and nature (excluding any
property constituting Pledged Collateral under the Borrower Intellectual
Property Security Agreement) which from time to time after the date hereof,
by delivery or by writing of any kind for the purposes hereof, shall have
been conveyed, mortgaged, pledged, assigned or transferred by Pledgor or by
anyone on Pledgor's behalf or with its consent to Collateral Agent for the
benefit of the Secured Parties, which is hereby authorized to receive at
any and all times any such property, as and for additional security for the
payment of the Secured Obligations and to hold and apply such property
subject to and in accordance with this Agreement; including, without
limitation, all monies due and to become due to Pledgor in connection with
any of the foregoing and all rights, remedies, powers, privileges and
claims of Pledgor under or in connection therewith;
(i) all Documents (as hereinafter defined);
(j) all Instruments (as hereinafter defined); and
(k) all Proceeds (as hereinafter defined) of any and all of the
foregoing.
SECTION 2. Secured Obligations. This Agreement secures, and the
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Pledged Collateral is collateral security for, the payment and performance in
full when due, whether at stated maturity, by acceleration or otherwise
(including, without limitation, the payment of interest and other amounts which
would accrue and become due but for the filing of a petition in bankruptcy or
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C. (S) 362(a)), of (i) all Obligations of Pledgor now existing or
hereafter arising under the Credit Agreement and all Interest Rate Obligations
of Pledgor now existing or hereafter arising under any Interest Rate Agreement
(including, without limitation, the obligations of Pledgor provided for therein
to pay principal, interest and
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all other charges, fees, expenses, commissions, reimbursements, premiums,
indemnities and other payments related to or in respect of the Obligations
contained in the Credit Agreement and the obligations contained in any Interest
Rate Agreement) and (ii) without duplication of the amounts described in clause
(i), all obligations of Pledgor now existing or hereafter arising under this
Agreement or any other Security Document, including, without limitation, all
charges, fees, expenses, commissions, reimbursements, premiums, indemnities and
other payments that Pledgor is obligated to pay under this Agreement or any
other Security Document (the obligations described clauses (i) and (ii),
collectively, the "Secured Obligations").
SECTION 3. No Release. Nothing set forth in this Agreement shall
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relieve Pledgor from the performance of any term, covenant, condition or
agreement on Pledgor's part to be performed or observed under or in respect of
any of the Pledged Collateral or from any liability to any Person under or in
respect of any of the Pledged Collateral or shall impose any obligation on
Collateral Agent or any Secured Party to perform or observe any such term,
covenant, condition or agreement on Pledgor's part to be so performed or
observed or shall impose any liability on Collateral Agent or any Secured Party
for any act or omission on the part of Pledgor relating thereto or for any
breach of any representation or warranty on the part of Pledgor contained in
this Agreement, any Interest Rate Agreement or any other Credit Document, or
under or in respect of the Pledged Collateral or made in connection herewith or
therewith. The obligations of Pledgor contained in this Section 3 shall survive
the termination of this Agreement and the discharge of Pledgor's other
obligations under this Agreement, any Interest Rate Agreement and the other
Credit Documents.
SECTION 4. Supplements by Collateral Agent. Pledgor hereby
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authorizes Collateral Agent, without relieving Pledgor of any obligations
hereunder, to file financing statements, continuation statements, amendments
thereto and other documents relative to all or any part thereof, without the
signature of Pledgor where permitted by law, and Pledgor agrees to do such
further acts and things, and to execute and deliver to Collateral Agent such
additional assignments, agreements, powers and instruments, as Collateral Agent
may reasonably deem necessary or appropriate, wherever required or permitted by
law
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in order to perfect and preserve the rights and interests granted to Collateral
Agent hereunder or to carry into effect the purposes of this Agreement or better
to assure and confirm unto Collateral Agent its respective rights, powers and
remedies hereunder. All of the foregoing shall be at the sole cost and expense
of Pledgor.
SECTION 5. Representations, Warranties and Covenants. Pledgor
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represents, warrants and covenants as follows:
(a) Necessary Filings. Upon the filing of financing statements and
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acceptance thereof in the appropriate offices under the UCC, the security
interest granted to Collateral Agent for the benefit of the Secured Parties
pursuant to this Agreement in and to the Pledged Collateral will constitute a
perfected security interest therein, superior and prior to the rights of all
other Persons therein and subject to no Liens other than the Liens identified on
Schedule A hereto relating to the items of Pledged Collateral identified on such
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schedule (collectively, "Prior Liens").
(b) No Liens. Pledgor is as of the date hereof, and, as to Pledged
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Collateral acquired by it from time to time after the date hereof, Pledgor will
be, the owner of all Pledged Collateral free from any Lien or other right, title
or interest of any Person other than (i) Prior Liens, (ii) the Lien and security
interest created by this Agreement, and (iii) Liens of the type described in
paragraphs (a), (b), (c), (d), (e), (h), (i) and (j) of the definition of
Permitted Encumbrances (collectively, "Permitted Liens"), and Pledgor shall take
all reasonable steps to defend the Pledged Collateral against all claims and
demands of all Persons at any time claiming any interest therein adverse to
Collateral Agent or any Secured Party.
(c) Other Financing Statements. There is no financing statement (or
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similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Pledged Collateral other than financing statements relating to (i) Prior Liens,
(ii) this Agreement and (iii) Permitted Liens, and so long as any of the Secured
Obligations remain unpaid or the Commitments of the Banks to make any Loan or to
issue any Letter of Credit shall not have expired or been sooner terminated,
Pledgor shall
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not execute, authorize or permit to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Pledged Collateral, except, in
each case, financing statements filed or to be filed in respect of and covering
the security interests granted by Pledgor pursuant to this Agreement and
financing statements relating to Prior Liens and Permitted Liens.
(d) Chief Executive Office; Records. The chief executive office of
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Pledgor is located at 00 Xxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000. Pledgor shall not
move its chief executive office except to such new location as Pledgor may
establish in accordance with the last sentence of this Section 5(d). All
tangible evidence of all Receivables, Pension Plan Reversions, Contracts,
Intangibles and Insurance Policies of Pledgor and the only original books of
account and records of Pledgor relating thereto are, and will continue to be,
kept at such chief executive office, or at such new location for such chief
executive office as Pledgor may establish in accordance with the last sentence
of this Section 5(d). All Receivables, Pension Plan Reversions, Contracts,
Intangibles and Insurance Policies of Pledgor are, and will continue to be,
controlled and monitored (including, without limitation, for general accounting
purposes) from such chief executive office location shown above, or such new
location as Pledgor may establish in accordance with the last sentence of this
Section 5(d). Pledgor shall not establish a new location for its chief
executive office nor shall it change its name until (i) it shall have given
Collateral Agent not less than 30 days' prior written notice of its intention so
to do, clearly describing such new location or name and providing such other
information in connection therewith as Collateral Agent or any Secured Party may
request, and (ii) with respect to such new location or name, Pledgor shall have
taken all action reasonably satisfactory to Collateral Agent to maintain the
perfection and priority of the security interest of Collateral Agent for the
benefit of the Secured Parties in the Pledged Collateral intended to be granted
hereby, including, without limitation, obtaining waivers of landlord's or
warehouseman's liens with respect to such new location, if applicable.
(e) Location of Inventory. All Inventory held on the date hereof by
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Pledgor is located at one of the locations
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shown on Schedule B hereto, except for Inventory in transit in the ordinary
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course of business to or from one or more of such locations. All Inventory now
held or subsequently acquired shall be kept at one of the locations shown on
Schedule B hereto, except for Inventory in transit in the ordinary course of
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business to or from one or more of such locations, or at such new location as
Pledgor may establish if (i) it shall have given to Collateral Agent at least 30
days' prior written notice of its intention so to do, clearly describing such
new location and providing such other information in connection therewith as
Collateral Agent or any Secured Party may request, and (ii) with respect to such
new location, Pledgor shall have taken all action reasonably satisfactory to
Collateral Agent to maintain the perfection and priority of the security
interest in the Pledged Collateral intended to be granted hereby, including,
without limitation, obtaining waivers of landlord's or warehouseman's liens with
respect to such new location, if applicable.
(f) Location of Equipment. All Equipment held on the date hereof by
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Pledgor is located at one of the locations shown on Schedule C hereto. All
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Equipment now held or subsequently acquired by Pledgor shall be kept at one of
the locations shown on Schedule C hereto, or such new location as Pledgor may
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establish if (i) it shall have given to Collateral Agent at least 30 days' prior
written notice of its intention so to do, clearly describing such new location
and providing such other information in connection therewith as Collateral Agent
or any Secured Party may request, and (ii) with respect to such new location,
Pledgor shall have taken all action reasonably satisfactory to Collateral Agent
to maintain the perfection and priority of the security interest of Collateral
Agent for the benefit of the Secured Parties in the Pledged Collateral intended
to be granted hereby, including, without limitation, obtaining waivers of
landlord's or warehouseman's liens with respect to such new location, if
applicable.
(g) Authorization, Enforceability. Pledgor has the requisite
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corporate power, authority and legal right to pledge and grant a security
interest in all the Pledged Collateral pursuant to this Agreement, and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium
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or similar laws relating to or affecting creditors' rights generally and except
as such enforceability may be limited by the application of general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(h) No Consents, etc. No consent of any party (including, without
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limitation, stockholders or creditors of Pledgor or any account debtor under a
Receivable) and no consent, authorization, approval, license or other action by,
and no notice to or filing with, any Governmental Authority or regulatory body
or other Person is required for (x) the pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by Pledgor, or (y) the exercise by Collateral
Agent of the rights provided for in this Agreement, or (z) the exercise by
Collateral Agent of the remedies in respect of the Pledged Collateral pursuant
to this Agreement (other than those consents, authorizations, approvals,
licenses, actions, notices or filings which, if not obtained or made, would not
have a material adverse effect upon the interests of Collateral Agent under this
Agreement).
(i) Pledged Collateral. All information set forth herein, including
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the Schedules annexed hereto, and all information contained in any documents,
schedules and lists heretofore delivered to any Secured Party in connection with
this Agreement, in each case, relating to the Pledged Collateral is accurate and
complete in all material respects.
SECTION 6. Special Provisions Concerning Receivables.
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(a) Special Representations and Warranties. As of the time when each
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of its Receivables arises, Pledgor shall be deemed to have represented and
warranted that such Receivable and all records, papers and documents relating
thereto (i) are genuine and correct and in all material respects what they
purport to be, (ii) represent the legal, valid and binding obligation of the
account debtor, evidencing indebtedness unpaid and owed by such account debtor,
arising out of the performance of labor or services or the sale or lease and
delivery of the merchandise listed therein or out of an advance or a loan, (iii)
will, in the case of a Receivable, except for the original or duplicate original
invoice sent to a purchaser evidenc-
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ing such purchaser's account, be the only original writings evidencing and
embodying such obligation of the account debtor named therein, (iv) constitute
and evidence true and valid obligations, enforceable in accordance with their
respective terms, not subject to the fulfillment of any contract or condition
whatsoever or to any defenses, set-offs or counterclaims except with respect to
refunds, returns and allowances in the ordinary course of business, or stamp or
other taxes, and (v) are in compliance and conform in all material respects with
all applicable Federal, state and local laws and applicable laws of any relevant
foreign jurisdiction.
(b) Maintenance of Records. Pledgor shall keep and maintain at its
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own cost and expense complete records of each Receivable, in a manner consistent
with prudent business practice, including, without limitation, records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto, and Pledgor shall make the same available
to Collateral Agent or any Secured Party for inspection upon reasonable prior
notice to any Authorized Officer of Pledgor, at such reasonable times during
regular business hours and intervals and to such reasonable extent as Collateral
Agent or any Secured Party may reasonably request. Pledgor shall, at Pledgor's
sole cost and expense, upon Collateral Agent's demand made at any time after the
occurrence of an Event of Default, deliver all tangible evidence of Receivables,
including, without limitation, all documents evidencing Receivables and any
books and records relating thereto to Collateral Agent or to its representatives
(copies of which evidence and books and records may be retained by Pledgor).
Upon the occurrence and during the continuance of an Event of Default,
Collateral Agent may transfer a full and complete copy of Pledgor's books,
records, credit information, reports, memoranda and all other writings relating
to the Receivables to and for the use by any Person that has acquired or is
contemplating acquisition of an interest in the Receivables or Collateral
Agent's security interest therein without the consent of Pledgor.
(c) Legend. Pledgor shall legend, at the request of Collateral Agent
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made at any time after the occurrence of an Event of Default and in form and
manner reasonably satisfactory to Collateral Agent, the Receivables and other
books, records and documents of Pledgor evidencing or pertaining to the
Re-
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ceivables with an appropriate reference to the fact that the Receivables have
been assigned to Collateral Agent for the benefit of the Secured Parties and
that Collateral Agent has a security interest therein.
(d) Modification of Terms, etc. Pledgor shall not rescind or cancel
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any indebtedness evidenced by any Receivable or modify any material term thereof
or make any material adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or renew
any such indebtedness except in the ordinary course of business consistent with
prudent business practice or compromise or settle any dispute, claim, suit or
legal proceeding relating thereto except in the ordinary course of business
consistent with prudent business practice or sell any Receivable or interest
therein without the prior written consent of Collateral Agent (such consent not
to be unreasonably withheld or delayed). Pledgor shall timely fulfill all
obligations on its part to be fulfilled under or in connection with the
Receivables (except for such obligations the failure to fulfill which would not
have in the aggregate, a material adverse effect upon the interests of
Collateral Agent under this Agreement).
(e) Collection. Pledgor shall use reasonable efforts to cause to be
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collected from the account debtor of each of the Receivables, as and when due
(including, without limitation, Receivables that are delinquent, such
Receivables to be collected in accordance with generally accepted commercial
collection procedures), any and all amounts owing under or on account of such
Receivable, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Receivable, except that Pledgor
may, with respect to a Receivable, allow in the ordinary course of business (i)
a refund or credit due as a result of returned or damaged or defective
merchandise and (ii) such extensions of time to pay amounts due in respect of
Receivables and such other modifications of payment terms or settlements in
respect of Receivables as shall be commercially reasonable in the circumstances,
all in accordance with Pledgor's ordinary course of business consistent with its
collection practices as in effect from time to time. The reasonable costs and
expenses (including, without limitation, attorneys' fees) of collection, in any
case, whether incurred by Pledgor, Collateral Agent or any Secured Party, shall
be paid by Pledgor.
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(f) Instruments. Pledgor shall deliver to Collateral Agent, within
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five days after receipt thereof by Pledgor, any Instrument evidencing
Receivables which is in the principal amount of $500,000 or more. Any
Instrument delivered to Collateral Agent pursuant to this Section 6(f) shall be
appropriately endorsed (if applicable) to the order of Collateral Agent, as
agent for the Secured Parties, and shall be held by Collateral Agent as further
security hereunder; provided, that, so long as no Default or Event of Default
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shall have occurred and be continuing, Pledgor may retain for collection in the
ordinary course any Instruments received by Pledgor in the ordinary course of
business and Collateral Agent shall, promptly upon request of Pledgor, make
appropriate arrangements for making any Instrument pledged by Pledgor available
to Pledgor for purposes of presentation, collection or renewal (any such
arrangement to be effected, to the extent deemed appropriate by Collateral
Agent, against trust receipt or like document).
(g) Cash Collateral. Upon the occurrence and during the continuance
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of an Event of Default, if Collateral Agent so directs, Pledgor shall cause all
payments on account of the Receivables to be held by Collateral Agent as cash
collateral, upon acceleration or otherwise. Without notice to or assent by
Pledgor, Collateral Agent may apply any or all amounts then or thereafter held
as cash collateral in the manner provided in Section 11. The reasonable costs
and expenses (including, without limitation, reasonable attorneys' fees) of
collection, whether incurred by Collateral Agent or any Secured Party, shall be
paid by Pledgor.
SECTION 7. Provisions Concerning All Pledged Collateral.
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(a) Protection of Collateral Agent's Security. Pledgor shall not
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take any action that impairs the rights of Collateral Agent or any Secured Party
in the Pledged Collateral. Pledgor shall at all times keep the Inventory and
Equipment insured, at Pledgor's own expense, to Collateral Agent's reasonable
satisfaction against fire, theft and all other risks of the kind customarily
insured against, in such amounts and with such deductibles as would customarily
be maintained under similar circumstances by operators of businesses similar to
the business of Pledgor to the extent available at commercially reasonable
rates. Each policy or certificate with respect to
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such insurance shall be endorsed to Collateral Agent's reasonable satisfaction
for the benefit of Collateral Agent (including, without limitation, by naming
Collateral Agent as an additional named insured and sole loss payee as
Collateral Agent may request) and such policy or certificate shall be delivered
to Collateral Agent. Each such policy shall state that it cannot be cancelled
without 30 days' prior written notice to Collateral Agent. At least 30 days
prior to the expiration of any such policy of insurance, Pledgor shall deliver
to Collateral Agent an extension or renewal policy or an insurance certificate
evidencing renewal or extension of such policy. If Pledgor shall fail to insure
such Pledged Collateral to Collateral Agent's reasonable satisfaction,
Collateral Agent shall have the right (but shall be under no obligation),
following five (5) Business Days' prior written notice to Pledgor of its
intention to do so, to advance funds to procure or renew or extend such
insurance and Pledgor agrees to reimburse Collateral Agent for all reasonable
costs and expenses thereof, with interest on all such funds from the date
advanced until paid in full at the highest rate then in effect under the Credit
Agreement.
(b) Insurance Proceeds. So long as no Event of Default shall have
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occurred and be continuing, Pledgor shall have the option as provided in Section
3.02(A)(h) of the Credit Agreement (i) to apply any proceeds of property
insurance (less any portion of such proceeds not in excess of $500,000) received
by it as Net Cash Proceeds in accordance with Section 3.02(B)(a) of the Credit
Agreement or (ii) to apply the proceeds of such insurance to the repair or
replacement of the item or items of Pledged Collateral in respect of which such
proceeds were received. In the event that Pledgor elects to apply such proceeds
to the repair or replacement of any item of Pledged Collateral pursuant to
clause (ii) of the preceding sentence, Pledgor shall upon its receipt of such
proceeds from Collateral Agent as promptly as practicable commence and
diligently continue to perform such repair or as promptly as practicable effect
such replacement. Upon the occurrence and during the continuance of an Event of
Default, Collateral Agent shall have the option to apply any proceeds of
insurance received by Pledgor in respect of the Pledged Collateral toward the
payment of the Secured Obligations in accordance with Section 11 hereof or to
continue to hold such proceeds as addi-
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tional collateral to secure the performance by Pledgor of the Secured
Obligations.
(c) Maintenance of Equipment. Pledgor shall exercise commercially
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reasonable efforts to cause the Equipment to be maintained and preserved in good
repair, working order and condition, ordinary wear and tear excepted, and to the
extent consistent with current business practice in accordance with any
manufacturer's manual, and shall, in the case of any loss or damage which
(individually or in the aggregate) exceeds $100,000 to any of the Equipment (of
which prompt notice shall be given to Collateral Agent) as quickly as
commercially practicable after the occurrence thereof, make or cause to be made
all repairs, replacements and other improvements in connection therewith which
are necessary or desirable in the conduct of Pledgor's business in Pledgor's
commercially reasonable judgment.
(d) Payment of Taxes; Claims. Pledgor shall pay, prior to the date
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on which material penalties attach thereto, all property and other material
taxes, assessments and governmental charges or levies imposed upon, and all
lawful claims (including claims for labor, materials and supplies) against, the
Pledged Collateral which, if unpaid might become a Lien upon the Pledged
Collateral. Notwithstanding the foregoing, Pledgor may at its own expense
contest the amount or applicability of any of the obligations described in the
preceding sentence as permitted under the Credit Agreement.
(e) Further Actions. Pledgor shall, at its sole cost and expense,
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make, execute, endorse, acknowledge, file or refile and/or deliver to Collateral
Agent from time to time such lists, descriptions and designations of the Pledged
Collateral, copies of warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, supplements, additional security agreements,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to the Pledged Collateral and other property or rights covered by
the security interest hereby granted, which Collateral Agent reasonably deems
appropriate or advisable to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral and to perfect,
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preserve or protect the security interest in the Pledged Collateral created and
granted by this Agreement.
(f) Financing Statements. Pledgor shall sign and deliver to
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Collateral Agent such financing and continuation statements, in form reasonably
acceptable to Collateral Agent, as may from time to time be required to
continue and maintain a valid, enforceable, first priority security interest in
the Pledged Collateral as provided herein and the other rights, as against third
parties, provided hereby, all in accordance with the UCC or any other relevant
law. Pledgor shall pay any applicable filing fees and other expenses related to
the filing of such financing and continuation statements. Pledgor authorizes
Collateral Agent to file any such financing or continuation statements without
the signature of Pledgor where permitted by law.
(g) Warehouse Receipts Non-Negotiable. If any warehouse receipt or
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receipt in the nature of a warehouse receipt is issued with respect to any of
the Inventory, Pledgor shall not permit such warehouse receipt or receipt in the
nature thereof to be "negotiable" (as such term is used in Section 7-104 of the
UCC or under other relevant law).
SECTION 8. Transfers and Other Liens. Pledgor shall not (a) sell,
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convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral except as permitted by the Credit Agreement or (b)
create or permit to exist any Lien upon or with respect to any of the Pledged
Collateral other than (i) Prior Liens, (ii) the Lien and security interest
granted to Collateral Agent pursuant to this Agreement, and (iii) Permitted
Liens.
Upon any sale or other disposition of any assets of Pledgor which is
in compliance with the Credit Agreement and the proceeds of which sale or other
disposition are used to make a mandatory prepayment of the Loans pursuant to
Section 3.02(A) of the Credit Agreement, such assets constituting Pledged
Collateral shall be released from the Lien of this Agreement in accordance with
Section 17 of this Agreement.
SECTION 9. Reasonable Care. Collateral Agent shall be deemed to have
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exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially
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equivalent to that which Collateral Agent, in its individual capacity, accords
its own property, it being understood that Collateral Agent shall not have
responsibility for taking any necessary steps to preserve rights against any
Person with respect to any Pledged Collateral.
SECTION 10. Remedies Upon Default; Obtaining the Pledged Collateral
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Upon Event of Default. (a) If an Event of Default shall have occurred and be
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continuing, and the Secured Obligations have been declared due and payable in
accordance with the Credit Agreement, then and in every such case, Collateral
Agent may:
(i) Personally, or by agents or attorneys, immediately take
possession of the Pledged Collateral or any part thereof, from Pledgor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
Pledgor's premises where any of the Pledged Collateral is located and
remove such Pledged Collateral and use in connection with such removal any
and all services, supplies, aids and other facilities of Pledgor.
(ii) Instruct the obligor or obligors on any agreement, instrument
or other obligation (including, without limitation, the Receivables and
Contracts) constituting the Pledged Collateral to make any payment required
by the terms of such instrument or agreement directly to Collateral Agent;
provided, however, that in the event that any such payments are made
-------- -------
directly to Pledgor, prior to receipt by any such obligor of such
instruction, Pledgor shall segregate all amounts received pursuant thereto
in a separate account and pay the same as promptly as practicable to
Collateral Agent.
(iii) Sell, assign or otherwise liquidate, or direct Pledgor to
sell, assign or otherwise liquidate, any or all investments made in whole
or in part with the Pledged Collateral or any part thereof, and take
possession of the proceeds of any such sale, assignment or liquidation.
(iv) Take possession of the Pledged Collateral or any part thereof,
by directing Pledgor in writing to deliver the same to Collateral Agent at
any place or places so designated by Collateral Agent, in which event
Pledgor
-16-
shall at its own expense: (A) forthwith cause the same to be moved to the
place or places designated by Collateral Agent and there delivered to
Collateral Agent; (B) store and keep any Pledged Collateral so delivered to
Collateral Agent at such place or places pending further action by
Collateral Agent; and (C) while the Pledged Collateral shall be so stored
and kept, provide such security and maintenance services as shall be
reasonably necessary to protect the same and to preserve and maintain them
in good condition. Pledgor's obligation to deliver the Pledged Collateral
is of the essence of this Agreement. Upon application to a court of equity
having jurisdiction, Collateral Agent shall be entitled to a decree
requiring specific performance by Pledgor of such obligation.
(b) Remedies; Disposition of the Pledged Collateral.
-----------------------------------------------
(i) Upon the occurrence and during the continuance of an Event of
Default, Collateral Agent may from time to time exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC, and Collateral Agent may also in
its sole discretion, without notice except as specified below, sell the
Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any of Collateral
Agent's offices or elsewhere, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as Collateral Agent
may deem commercially reasonable. Collateral Agent or any other Secured
Party or any of their respective Affiliates may be the purchaser of any or
all of the Pledged Collateral at any such sale and shall be entitled, for
the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Pledged Collateral sold at such sale,
to use and apply any of the Secured Obligations owed to such Person as a
credit on account of the purchase price of any Pledged Collateral payable
by such Person at such sale. Each purchaser at any such sale shall acquire
the property sold absolutely free from any claim or right on the part of
Pledgor. Collateral Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given.
Col-
-17-
lateral Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Pledgor hereby waives, to the fullest extent permitted by law,
any claims against Collateral Agent arising by reason of the fact that the
price at which any Pledged 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 Collateral Agent accepts the first offer received and does
not offer such Pledged Collateral to more than one offeree.
(ii) Pledgor acknowledges and agrees that, to the extent notice of
sale shall be required by law, ten days' notice to Pledgor of the time and
place of any public sale or of the time after which any private sale or
other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to
Pledgor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or
other intended disposition.
(c) Waiver of Notice and Claims. Pledgor hereby waives, to the
---------------------------
fullest extent permitted by applicable law, notice or judicial hearing in
connection with Collateral Agent's taking possession or Collateral Agent's
disposition of any of the Pledged Collateral, including, without limitation, any
and all prior notice and hearing for any prejudgment remedy or remedies and any
such right which Pledgor would otherwise have under law, and Pledgor hereby
further waives, to the fullest extent permitted by applicable law: (i) all
damages occasioned by such taking of possession; (ii) all other requirements as
to the time, place and terms of sale or other requirements with respect to the
enforcement of Collateral Agent's rights hereunder; and (iii) all rights of
redemption, appraisal, valuation, stay, extension or moratorium now or hereafter
in force under any applicable law. Collateral Agent shall not be liable for any
incorrect or improper payment made pursuant to this Section 10 in the absence of
gross negligence or willful misconduct. Any sale of, or the grant of options to
purchase, or any other realization upon, any Pledged Collateral shall operate to
divest all right, title, interest, claim and demand, either at
-18-
law or in equity, of Pledgor therein and thereto, and shall be a perpetual bar
both at law and in equity against Pledgor and against any and all Persons
claiming or attempting to claim the Pledged Collateral so sold, optioned or
realized upon, or any part thereof, from, through or under Pledgor.
(d) Certain Sales of Pledged Collateral. Pledgor recognizes that, by
-----------------------------------
reason of certain prohibitions contained in law, rules, regulations or orders of
any foreign Governmental Authority, Collateral Agent may be compelled, with
respect to any sale of all or any part of the Pledged Collateral, to limit
purchasers to those who meet the requirements of such foreign Governmental
Authority. Pledgor acknowledges that any such sales may be at prices and on
terms less favorable to Collateral Agent than those obtainable through a public
sale without such restrictions, and, notwithstanding such circumstances, agrees
that any such restricted sale shall be deemed to have been made in a
commercially reasonable manner.
SECTION 11. Application of Proceeds. The proceeds received by
-----------------------
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Pledged Collateral pursuant to the exercise by
Collateral Agent of its remedies as a secured creditor as provided in Section 10
hereof shall be applied, together with any other sums then held by Collateral
Agent pursuant to this Agreement, promptly by Collateral Agent as follows:
First, to the payment of all costs and expenses, fees, commissions and
-----
taxes of such sale, collection or other realization, including, without
limitation, reasonable out of pocket costs and expenses of Collateral Agent
and its agents and counsel, and all expenses, liabilities and advances made
or incurred by Collateral Agent in connection therewith;
Second, to the payment of all other costs and expenses of such sale,
------
collection or other realization, including, without limitation,
compensation to the Banks and their agents and counsel and all costs,
liabilities and advances made or incurred by the Banks in connection
therewith;
Third, to the payment in full in cash of Secured Obligations
-----
consisting of interest and all amounts other
-19-
than principal under the Credit Agreement at any time and from time to time
owing by Pledgor under or in connection with the Credit Agreement, ratably
according to the unpaid amounts thereof, in the manner and priority set
forth in the Credit Agreement, together with interest on each such amount
in the manner and to the extent set forth in the Credit Agreement from and
after the date such amount is due, owing or unpaid until paid in full;
Fourth, to the pro rata payment in full in cash of Secured Obligations
------ --- ----
consisting of (i) principal at any time and from time to time owing by
Pledgor under or in connection with the Credit Agreement, ratably according
to the unpaid amounts thereof, in the manner and priority set forth in the
Credit Agreement and (ii) the amount of Pledgor's obligations then due and
payable under any Interest Rate Agreement, including any early termination
payments then due (exclusive of expenses or similar liabilities to any Bank
under the applicable Interest Rate Agreement(s)), together with interest on
each such amount in the manner and to the extent set forth in the Credit
Agreement from and after the date such amount is due, owing or unpaid until
paid in full; and
Fifth, the balance, if any, to the Person lawfully entitled thereto
-----
(including Pledgor or its successors or assigns).
SECTION 12. Expenses. Pledgor will upon demand pay to Collateral
--------
Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and the reasonable fees and expenses of any
experts and agents which Collateral Agent may incur in connection with (i) the
collection of the Secured Obligations, (ii) the enforcement and administration
of this Agreement, (iii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Pledged Collateral, (iv)
the exercise or enforcement of any of the rights of Collateral Agent or any
Secured Party hereunder or (v) the failure by Pledgor to perform or observe any
of the provisions hereof. All amounts payable by Pledgor under this Section 12
shall be due within ten Business Days after demand and shall be part of the
Secured Obligations. Pledgor's obligations under this
-20-
Section 12 shall survive the termination of this Agreement and the discharge of
Pledgor's other obligations hereunder.
SECTION 13. No Waiver; Cumulative Remedies. (a) No failure on the
------------------------------
part of Collateral Agent to exercise, no course of dealing with respect to, and
no delay on the part of Collateral Agent in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law.
(b) In the event Collateral Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to Collateral Agent, then and in every such case, Pledgor, Collateral
Agent and each Secured Party shall be restored to their respective former
positions and rights hereunder with respect to the Pledged Collateral, and all
rights, remedies and powers of Collateral Agent and the Secured Parties shall
continue as if no such proceeding had been instituted.
SECTION 14. Collateral Agent. Collateral Agent has been appointed as
----------------
collateral agent pursuant to the Credit Agreement. The actions of Collateral
Agent hereunder are subject to the provisions of the Credit Agreement.
Collateral Agent 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 action (including, without limitation, the release or
substitution of Pledged Collateral), in accordance with this Agreement and the
Credit Agreement. Collateral Agent may resign and a successor Collateral Agent
may be appointed in the manner provided in the Credit Agreement. Upon the
acceptance of any appointment as Collateral Agent 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
Collateral Agent under this Agreement, and the retiring Collateral Agent shall
thereupon be discharged from its duties and obligations under this Agreement.
After
-21-
any retiring Collateral Agent's resignation, 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 Collateral Agent.
SECTION 15. Collateral Agent May Perform; Collateral Agent Appointed
--------------------------------------------------------
Attorney-in-Fact. If Pledgor shall fail to do any act or thing that it has
----------------
covenanted to do hereunder or if any warranty on the part of Pledgor contained
herein shall be breached, Collateral Agent or any Secured Party may (but shall
not be obligated to) do the same or cause it to be done or remedy any such
breach, and may, following five Business Days' prior written notice to Pledgor
of its intention to do so, expend funds for such purpose. Any and all amounts
so expended by Collateral Agent or such Secured Party shall be paid by Pledgor
within ten Business Days after demand therefor, with interest at the highest
rate then in effect under the Credit Agreement during the period from and
including the date on which such funds were so expended to the date of
repayment. Pledgor's obligations under this Section 15 shall survive the
termination of this Agreement and the discharge of Pledgor's other obligations
under this Agreement, the Credit Agreement, any Interest Rate Agreement and the
other Credit Documents. Pledgor hereby appoints Collateral Agent its attorney-
in-fact, with full authority in the place and stead of Pledgor and in the name
of Pledgor, or otherwise, from time to time in Collateral Agent's reasonable
discretion to take any action and to execute any instrument consistent with the
terms of this Agreement and the other Credit Documents which Collateral Agent
may deem reasonably necessary or advisable to accomplish the purposes of this
Agreement. The foregoing grant of authority is a power of attorney coupled with
an interest and such appointment shall be irrevocable for the term of this
Agreement. Pledgor hereby ratifies all that such attorney shall lawfully do or
cause to be done by virtue hereof.
SECTION 16. Modification in Writing. No amendment, modification,
-----------------------
supplement, termination or waiver of or to any provision of this Agreement, nor
consent to any departure by Pledgor therefrom, shall be effective unless the
same shall be made in accordance with the terms of the Credit Agreement and
unless in writing and signed by Collateral Agent. Any amendment, modification
or supplement of or to any provision of this Agreement, any waiver of any
provision of this Agreement
-22-
and any consent to any departure by Pledgor from the terms of any provision of
this Agreement shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement or any other Credit Document, no notice to or demand
on Pledgor in any case shall entitle Pledgor to any other or further notice or
demand in similar or other circumstances.
SECTION 17. Termination; Release. When all the Secured Obligations
--------------------
have been paid in full and the Commitments of the Banks to make any Loan or to
issue any Letter of Credit under the Credit Agreement shall have expired or been
sooner terminated, this Agreement shall terminate. Upon termination of this
Agreement or any release of Pledged Collateral in accordance with the provisions
of the Credit Agreement, Collateral Agent shall, upon the request and at the
sole cost and expense of Pledgor, forthwith assign, transfer and deliver to
Pledgor, against receipt and without recourse to or warranty by Collateral
Agent, such of the Pledged Collateral to be released (in the case of a release)
as may be in possession of Collateral Agent and as shall not have been sold or
otherwise applied pursuant to the terms hereof, and, with respect to any other
Pledged Collateral, proper instruments (including UCC termination statements on
Form UCC-3) acknowledging the termination of this Agreement or the release of
such Pledged Collateral, as the case may be.
SECTION 18. Definitions. The following terms shall have the
-----------
following meanings. All such definitions shall be equally applicable to the
singular and plural forms of the terms defined.
"Contracts" shall mean all right, title and interest of Pledgor in, to
and under, or derived from, any and all sale, service, performance and equipment
lease contracts, agreements and grants (whether written or oral), and any other
contract (whether written or oral) between Pledgor and third parties.
"Documents" shall have the meaning assigned to that term under the
UCC.
"Equipment" shall mean "equipment", as such term is defined in the
UCC.
-23-
"Instrument" shall have the meaning assigned that term under the UCC.
"Intangibles" shall mean "general intangibles", as such term is
defined in the UCC.
"Insurance Policies" shall mean all insurance policies held by Pledgor
or naming Pledgor as insured, additional insured or loss payee (including,
without limitation, casualty insurance, liability insurance, property insurance
and business interruption insurance) and all such insurance policies entered
into after the date hereof other than insurance policies (or certificates of
insurance evidencing such insurance policies) relating to health and welfare
insurance and life insurance policies in which Pledgor is not named as
beneficiary (i.e., insurance policies that are not "Key Man" insurance
---
policies).
"Inventory" shall mean, all "inventory", as such term is defined in
the UCC.
"Pension Plan Reversions" shall mean Pledgor's right to receive the
surplus funds, if any, which are payable to Pledgor following the termination of
any employee pension plan and the satisfaction of all liabilities of
participants and beneficiaries under such plan in accordance with applicable
law.
"Proceeds" shall mean all "proceeds", as such term is defined in the
UCC or under other relevant law.
"Receivables" shall mean all of Pledgor's rights to payment for goods
sold or leased or services performed by Pledgor or any other party, whether now
in existence or arising from time to time hereafter, including any "account", as
such term is defined in the UCC, and all rights evidenced by an account,
contract, security agreement, chattel paper, or other evidence of indebtedness
or security together with (i) all security pledged, assigned, hypothecated or
granted to or held by Pledgor to secure the foregoing, (ii) general intangibles
arising out of Pledgor's rights in any goods, the sale of which gave rise
thereto, (iii) all guarantees, endorsements and indemnifications on, or of, any
of the foregoing, (iv) all powers of attorney for the execution of any evidence
of indebtedness or security or other writing in connection therewith, and (v)
all evidences of the filing of financing statements and
-24-
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers.
SECTION 19. Notices. Unless otherwise provided herein or in the
-------
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner set forth in the Credit Agreement, as
to either party, addressed to it at the address set forth in the Credit
Agreement or at such other address as shall be designated by such party in a
written notice to the other party complying as to delivery with the terms of
this Section 19; provided that notices to Collateral Agent shall not be
effective until received by Collateral Agent.
SECTION 20. Continuing Security Interest; Assignment. This Agreement
----------------------------------------
shall create a continuing security interest in the Pledged Collateral and shall
(i) be binding upon Pledgor, its successors and assigns and (ii) inure, together
with the rights and remedies of Collateral Agent hereunder, to the benefit of
Collateral Agent and the other Secured Parties and each of their respective
successors, transferees and assigns; no other Persons (including, without
limitation, any other creditor of Pledgor) shall have any interest herein or any
right or benefit with respect hereto. Without limiting the generality of the
foregoing clause (ii), any Bank may assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Bank, herein or otherwise, subject however, to the
provisions of the Credit Agreement and any applicable Interest Rate Agreement.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE RIGHTS AND
--------------------
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
-25-
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. (a) Any
----------------------------------------------
legal action or proceeding with respect to this Agreement may be brought in the
courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, Pledgor
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the non-exclusive jurisdiction of the aforesaid courts.
Pledgor further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to Pledgor at its
address for notices pursuant to the Credit Agreement, such service to become
effective 30 days after such mailing. Pledgor hereby irrevocably appoints CT
Corporation System having an address at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
and such other persons as may hereafter be selected by Borrower irrevocably
agreeing in writing to serve as its agent for service of process in respect of
any such action or proceeding. Nothing herein shall affect the right of
Collateral Agent to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against Pledgor in any other
jurisdiction.
(b) Pledgor hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to in clause (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
SECTION 23. Severability of Provisions. Any provision of this
--------------------------
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 24. Execution in Counterparts. This Agreement and any
-------------------------
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of
-26-
which when so executed and delivered shall be deemed to be an original, but all
such counterparts together shall constitute one and the same agreement.
SECTION 25. Headings. The Section headings used in this Agreement
--------
are for convenience of reference only and shall not affect the construction of
this Agreement.
SECTION 26. Obligations Absolute. All obligations of Pledgor
--------------------
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of either of Pledgor or
any other Credit Party;
(ii) any lack of validity or enforceability of the Credit
Agreement, any Interest Rate Agreement, any Letter of Credit or any other
Credit Document, or any other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any Interest Rate Agreement, any Letter of Credit or any other
Credit Document, or any other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any right,
remedy, power or privilege under or in respect of this Agreement, any
Interest Rate Agreement or any other Credit Document except as specifically
set forth in a waiver granted pursuant to the provisions of Section 16
hereof; or
(vi) any other circumstance or happening whatsoever that is
similar to any of the foregoing.
-27-
SECTION 27. Collateral Agent's Right to Sever Indebtedness. (a)
----------------------------------------------
Pledgor acknowledges that (i) the Pledged Collateral does not constitute the
sole source of security for the payment and performance of the Secured
Obligations and that the Secured Obligations are also secured by other types of
property of Pledgor and its Affiliates in other jurisdictions (all such
property, collectively, the "Collateral"), (ii) the number of such jurisdictions
and the nature of the transaction of which this instrument is a part are such
that it would have been impracticable for the parties to allocate to each item
of Collateral a specific loan amount and to execute in respect of such item a
separate credit agreement, and (iii) Pledgor intends that Collateral Agent have
the same rights with respect to the Pledged Collateral, in any judicial
proceeding relating to the exercise of any right or remedy hereunder or
otherwise, that Collateral Agent would have had if each item of Collateral had
been pledged or encumbered pursuant to a separate credit agreement and security
instrument. In furtherance of such intent, Pledgor agrees to the greatest
extent permitted by law that Collateral Agent may at any time by notice (an
"Allocation Notice") to Pledgor allocate a portion of the Secured Obligations
(the "Allocated Indebtedness") to all or a specified portion of the Pledged
Collateral and sever from the remaining Secured Obligations the Allocated
Indebtedness. From and after the giving of an Allocation Notice with respect to
any of the Pledged Collateral, the Secured Obligations hereunder shall be
limited to the extent set forth in the Allocation Notice and (as so limited)
shall, for all purposes, be construed as a separate credit obligation of Pledgor
unrelated to the other transactions contemplated by the Credit Agreement, any
Interest Rate Agreement, any other Credit Document or any document related to
any thereof. To the extent that the proceeds of any judicial proceeding
relating to the exercise of any right or remedy hereunder of the Pledged
Collateral shall exceed the Allocated Indebtedness, such proceeds shall belong
to Pledgor and shall not be available hereunder to satisfy any Secured
Obligations of Pledgor other than the Allocated Indebtedness. In any action or
proceeding to exercise any right or remedy under this Agreement which is
commenced after the giving by Collateral Agent of an Allocation Notice, the
Allocation Notice shall be conclusive proof of the limits of the Secured
Obligations hereby secured, and Pledgor may introduce, by way of defense or
counterclaim, evidence thereof in any such action or proceeding.
Notwithstanding any
-28-
provision of this Section 27, the proceeds received by Collateral Agent pursuant
to this Agreement shall be applied by Collateral Agent in accordance with the
provisions of Section 11 hereof.
(b) Pledgor hereby waives to the greatest extent permitted under law
the right to a discharge of any of the Secured Obligations under any statute or
rule of law now or hereafter in effect which provides that the exercise of any
particular right or remedy as provided for herein (by judicial proceedings or
otherwise) constitutes the exclusive means for satisfaction of the Secured
Obligations or which makes unavailable any further judgment or any other right
or remedy provided for herein because Collateral Agent elected to proceed with
the exercise of such initial right or remedy or because of any failure by
Collateral Agent to comply with laws that prescribe conditions to the
entitlement to such subsequent judgment or the availability of such subsequent
right or remedy. In the event that, notwithstanding the foregoing waiver, any
court shall for any reason hold that such subsequent judgment or action is not
available to Collateral Agent, Pledgor shall not (i) introduce in any other
jurisdiction any judgment so holding as a defense to enforcement against Pledgor
of any remedy in the Credit Agreement, any Interest Rate Agreement or any other
Credit Document or (ii) seek to have such judgment recognized or entered in any
other jurisdiction, and any such judgment shall in all events be limited in
application only to the state or jurisdiction where rendered and only with
respect to the collateral referred to in such judgment.
(c) In the event any instrument in addition to the Allocation Notice
is necessary to effectuate the provisions of this Section 27, including, without
limitation, any amendment to this Agreement, any substitute promissory note or
affidavit or certificate of any kind, Collateral Agent may execute and deliver
such instrument as the attorney-in-fact of Pledgor. Such power of attorney is
coupled with an interest and is irrevocable.
(d) Notwithstanding anything set forth herein to the contrary, the
provisions of this Section 27 shall be effective only to the maximum extent
permitted by law.
-29-
SECTION 28. Future Advances. This Agreement shall secure the payment
---------------
of any amounts advanced from time to time pursuant to the Credit Agreement.
SECTION 29. Borrower Intellectual Property Security Agreement. To
-------------------------------------------------
the extent that the terms and provisions of this Agreement conflict with the
terms and provisions of the Borrower Intellectual Property Security Agreement
with respect to any Pledged Collateral (as such term is defined in the Borrower
Intellectual Property Security Agreement), the terms and provisions of the
Borrower Intellectual Property Security Agreement shall govern.
IN WITNESS WHEREOF, Pledgor and Collateral Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.
XXXXXX PRODUCTS COMPANY,
as Pledgor
By:
--------------------------------
Name:
Title:
CREDIT AGRICOLE INDOSUEZ,
as Collateral Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Schedule A
----------
PRIOR LIENS
-----------
Secured Party Location Date Number Comment
------------- -------- ---- ------ -------
Schedule B
----------
LOCATION OF INVENTORY
---------------------
Schedule C
----------
LOCATION OF EQUIPMENT
---------------------
