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EXHIBIT 4.4
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "AGREEMENT"), dated as of November 2,
2000 by and among THE XXXXX GROUP, INC., a Tennessee corporation (the
"BORROWER"), certain of the Borrower's Subsidiaries listed on the signature
pages hereto (the "SUBSIDIARIES", together with the Borrower, the "GRANTORS")
and SUNTRUST BANK, a Georgia banking corporation, in its capacity as Collateral
Agent (the "COLLATERAL AGENT") for itself and other lending institutions (the
"LENDERS") that are signatories to the Credit Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, SunTrust Bank, as Administrative
Agent, and Bank of America, N.A., as the Documentation Agent are parties to that
Credit Agreement, dated as of March 31, 1998, as amended by that certain First
Amendment to Credit Agreement, effective December 26, 1998, as amended by that
certain Second Amendment to Credit Agreement, effective October 5, 2000 and by
that certain Third Amendment to Credit Agreement, effective November 2, 2000 (as
amended or modified, the "CREDIT AGREEMENT"; capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement);
WHEREAS, the Borrower has executed that certain Promissory Note in the
amount of $5,000,000 in favor or SunTrust Bank, formerly known as SunTrust Bank,
Chattanooga, ("SUNTRUST") (as amended or modified, the "SUNTRUST NOTE");
WHEREAS, pursuant to that certain Amended and Restated Subsidiary
Guaranty Agreement, dated as of the date hereof, certain of the Borrower's
Subsidiaries have guaranteed, among other things, the Obligations of the
Borrower under the Credit Agreement and under the SunTrust Note (the "SUBSIDIARY
GUARANTY AGREEMENT");
WHEREAS, it is a condition precedent to the obligations of the Lenders
under the Credit Agreement and SunTrust under the SunTrust Note that the
Grantors enter into this Agreement to secure all obligations of the Grantors
under the Credit Agreement, the SunTrust Note, the Subsidiary Guaranty Agreement
and all Credit Documents, and the Grantors desire to satisfy such condition
precedent;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms defined in the Credit
Agreement and not otherwise defined herein, when used in this Agreement,
including its preamble and Recitals, shall have the respective meanings provided
for in the Credit Agreement. The following additional terms, when used in this
Agreement, shall have the following meanings:
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"ACCOUNTS" shall mean, for any Person, all "accounts" (as
defined in the UCC), now or hereafter owned or acquired by such Person or in
which such Person now or hereafter has or acquires any rights and, in any event,
shall mean and include, without limitation, (a) all accounts receivable,
contract rights, book debts, notes, drafts and other obligations or indebtedness
owing to such Person arising from the sale or lease of goods or other property
by it or the performance of services by it (including, without limitation, any
such obligation which might be characterized as an account, contract right or
general intangible under the Uniform Commercial Code in effect in any
jurisdiction), (b) all of such Person's rights in, to and under all purchase and
sales orders for goods, services or other property, and all of such Person's
rights to any goods, services or other property represented by any of the
foregoing (including returned or repossessed goods and unpaid sellers' rights of
rescission, replevin, reclamation and rights to stoppage in transit), (c) all
monies due to or to become due to such Person under all contracts for the sale,
lease or exchange of goods or other property or the performance of services by
it (whether or not yet earned by performance on the part of such Person), and
(d) all collateral security and guarantees of any kind given to such Person with
respect to any of the foregoing.
"CHATTEL PAPER" shall mean any "chattel paper" (as defined in
the UCC).
"COLLATERAL" shall mean, collectively, all of the following
property in which any Grantor has any right, title and interest:
(i) Accounts;
(ii) Chattel Paper and Electronic Chattel Paper;
(iii) Commercial Tort Claims;
(iv) Documents;
(v) Equipment;
(vi) General Intangibles, Payment Intangibles,
Letter of Credit Rights and Software
(vii) Instruments;
(viii) Inventory;
(ix) Investment Property;
(x) All other goods and personal property,
whether tangible or intangible;
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(xi) All books and records pertaining to any of
the Collateral (including, without
limitation, customer lists, credit files,
computer programs, printouts and other
computer materials and records); and
(xii) All products and Proceeds of all or any of
the Collateral described in clauses (ii)
through (x) hereof.
Notwithstanding anything to the contrary contained herein, this
Agreement shall not cover and the term "Collateral" shall not include
any of the following: (A) the Purchased Assets sold or purported to be
sold directly or indirectly to Xxxxx Funding II, (B) any equipment or
related collateral owned by SAFECO Credit Company, Inc. and leased to
The Xxxxx Group, Inc. or pledged to SAFECO Credit Company, Inc. by the
Xxxxx Group Inc. pursuant to that certain Master Equipment Lease
Agreement dated as of August 15, 2000, (C) all assets and property of
Xxxxx Funding II, and all capital stock of Xxxxx Funding II, (D) all
capital stock of Chroma Technologies, Inc. and Fabrica International,
(E) all accounts receivable and related assets owed by account debtors
located outside the United States to the extent factored by GE Factors
or any third party and (F) all accounts receivable of Fabrica
International and related assets factored by SunTrust Bank so long as
the proceeds thereof are deposited into bank accounts at SunTrust Bank
subject to the Master Account Agreement;
"COLLECTIONS" means (i) all payments received in respect of
the Receivables, in the form of cash, checks, wire transfers, ACH transfers or
any other form of payment in accordance with the terms of a Receivable or
otherwise, (ii) all proceeds from the sale or other disposition of any
collateral securing a Receivable, (iii) any repurchase amounts, (iv) any
insurance proceeds or sales tax refund payments received in respect of a
Receivable and (v) any indemnification, recourse payments or other amounts
payable to Xxxxx Funding II, Inc. or any Originator in respect of a Receivable
pursuant to Loan Agreement, the Receivables Purchase Agreement, the First Tier
Purchase Agreement or otherwise.
"COMMERCIAL TORT CLAIM" shall mean, for any Person, any
"commercial tort claim," (to the extent such term is defined in the UCC), and,
in any event, including any claim arising in tort with respect to which (A) the
claimant is an organization; or (B) the claimant is an individual and the claim;
(i) arose in the course of the claimant's business or profession; and (ii) does
not include damages arising out of personal injury to or the death of an
individual.
"CONTRACT" means either a written agreement between an
Originator and a Person, or an invoice, pursuant to which such Person is
obligated to pay for goods, merchandise and/or services.
"COPYRIGHT LICENSE" shall mean any and all rights under any
written agreement granting any right to use any Copyright or Copyright
registration.
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"COPYRIGHTS" shall mean all of the following: (a) all
copyrights and general intangibles of like nature (whether registered or
unregistered), now owned or existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof, and (b) all reissues, extensions or renewals thereof.
"DEFAULT" shall mean any event that, with notice or lapse of
time or both, would constitute an Event of Default.
"XXXXX GROUP MASTER ACCOUNTS" shall mean Account No.
8801796544 and Account No. 8800600382 maintained at SunTrust Bank in the name of
the Borrower, any other deposit or disbursement accounts in the name of any
Grantor, but excluding all deposit or disbursement accounts in the name of Xxxxx
Funding II.
"DOCUMENTS" shall mean all "documents" (as defined in the UCC)
or other receipts covering, evidencing or representing goods.
"ELECTRONIC CHATTEL PAPER" shall mean any "electric chattel
paper" (to the extent defined in the UCC), including any Chattel Paper evidenced
by a record or records consisting of information stored in an electronic medium.
"EQUIPMENT" shall mean all "equipment" (as defined in the UCC)
and, in any event, including all machinery and equipment, including, without
limitation, processing equipment, conveyors, machine tools, data processing and
computer equipment with software and peripheral equipment, all engineering,
processing and manufacturing equipment, trailers, trucks, forklifts, molds,
dies, stamps, motor vehicles, rolling stock, furnishings, and other equipment of
every kind and nature, fixtures, together with all additions and accessions
thereto, replacements therefor, and all parts therefor, all substitutes for any
of the foregoing, fuel therefor, and all manuals, drawings, instructions,
warranties and rights with respect thereto.
"EVENT OF DEFAULT" shall mean, collectively, (i) an "Event of
Default", as such term is defined in the Credit Agreement, shall occur and be
continuing, or (ii) an "Event of Default, as such term is defined in the
SunTrust Note, shall occur and be continuing, or (iii) the Borrower shall fail
to duly and promptly perform, comply with or observe the terms, covenants,
conditions and agreements set forth in this Agreement.
"FACTORING CONTRACT" means the Factoring Contract and Security
Agreement, dated as of February 26, 1999, between The Xxxxx Group, Inc. and GE
Factors.
"FIRST TIER PURCHASE AGREEMENT" means the First Tier Purchase
Agreement, dated as of June 23, 2000, by and among The Xxxxx Group, Inc. and the
other Originators, as such First Tier Purchase Agreement may be amended,
supplemented or otherwise modified from time to time.
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"GE FACTORS" means GE Capital First Factors Corporation, a
North Carolina corporation.
"GENERAL INTANGIBLES" shall mean all "general intangibles" (as
defined in the UCC) and, in any event, including all right, title and interest
which such Person may now or hereafter have in or under any contract, all
customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications
therefor and reissues, extensions or renewals thereof, rights in Intellectual
Property, interests in partnerships, joint ventures and other business
associations (including without limitation those listed on Schedule 2 attached
hereto), licenses, permits, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), choses in action, deposit, checking and other bank accounts, rights
to receive tax refunds and other payments, rights of indemnification, and other
papers and documents.
"INSTRUMENTS" shall mean all "instruments" or "letters of
credit" (each as defined in the UCC) and, in any event including letters of
credit evidencing, representing, arising from or existing in respect of,
relating to, securing or otherwise supporting the payment of, any of the
Accounts, including (but not limited to) promissory notes, drafts, bills of
exchange and trade acceptances.
"INTELLECTUAL PROPERTY" shall mean collectively, (a) all
Patents, patent rights and patent applications, Copyrights and copyright
applications, Trademarks, trademark rights, trade names, trade name rights,
service marks, service xxxx rights, applications for registration of trademarks,
trade names and service marks, fictitious names registrations and trademark,
trade name and service xxxx registrations, and all derivations thereof, and (b)
Patent Licenses, Trademark Licenses, Copyright Licenses and other licenses to
use any of the items described in clause (a), and any other items necessary to
conduct or operate the business of such Person, now or hereafter owned or
acquired by such Person.
"INVENTORY" shall mean, for any Person, any "inventory," (as
such term is defined in the UCC), now owned or hereafter acquired by any Grantor
or in which any Grantor now has or hereafter acquires any rights and wherever
located, and, in any event, shall include, without limitation, all inventory,
merchandise, goods and other personal property, now owned or hereafter acquired
by any Grantor or in which any Grantor now has or hereafter acquires any rights
and wherever located, which are held for sale or lease or are furnished or are
to be furnished under a contract of service or which constitute raw materials,
work in process or materials used or consumed or to be used or consumed in the
Grantor's business, or the processing, packaging, delivery or shipping of the
same, and all finished goods.
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"INVESTMENT PROPERTY" shall mean, for any Person, all
"investment property" (as defined in the UCC) now or hereafter owned or acquired
by such Person and, in any event, including all certificated securities,
uncertificated securities, security entitlements, securities accounts, commodity
contracts and commodity accounts.
"LETTER OF CREDIT RIGHT" shall mean any "letter of credit
right" (to the extent defined in the UCC), including any right to payment or
performance under a letter of credit, whether or not the beneficiary has
demanded or is at the time entitled to demand payment or performance; but not
including the right of a beneficiary to demand payment or performance under a
letter of credit.
"LICENSE" shall mean, for any Person, any Copyright License,
Patent License, Trademark License or other license of rights or interests.
"LIEN" means any mortgage, pledge, assignment, lien, security
interest or other charge or encumbrance of any kind, including the retained
security title of a conditional vendor or a lessor.
"LOAN AGREEMENT" shall mean the Loan Agreement, dated as of
June 23, 2000, among Xxxxx Funding, II, Inc., as borrower, The Xxxxx Group,
Inc., as servicer, Three Pillars Funding Corporation, as lender, and SunTrust
Equitable Securities Corporation, as administrator, as amended, supplemented or
otherwise modified from time to time.
"MERCHANDISE" means (i) carpeting, other floor covering and
goods related to the foregoing, in each case of the type sold by the
Originators, and (ii) service contracts and services in respect of any goods or
merchandise referred to in clause (i) above.
"OBLIGOR" means, with respect to any Receivable, the Person or
Persons obligated to make payments with respect to such Receivable, including
any guarantor thereof.
"OBLIGATIONS" shall mean, collectively, the Obligations, as
such term is defined in the Credit Agreement, and all obligations owing to
SunTrust pursuant to the SunTrust Note.
"ORIGINATOR" means any of The Xxxxx Group, Inc., in its
capacity as originator under the Receivables Purchase Agreement, and those
Subsidiaries of The Xxxxx Group, Inc. that generate Receivables and that are
parties to the First Tier Purchase Agreement.
"PATENT LICENSE" shall mean any written agreement now or
hereafter in existence granting any right with respect to any invention on which
a Patent is in existence.
"PATENTS" shall mean all of the following: (a) all letters
patent of the United States or any other country, all registrations and
recordings thereof, and all applications for letters patent of the United States
or any other country, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
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of the United States, any State or Territory thereof, or any other country, and
(b) all reissues, continuations, continuations-in-part or extensions thereof.
"PAYMENT INTANGIBLE" shall mean any "payment intangible" (to
the extent defined in the UCC), including any General Intangible under which the
account debtors' principal obligation is a monetary obligation.
"PERSON" shall mean an individual, partnership, limited
liability company, corporation (including a business trust), joint stock
company, trust unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"PROCEEDS" shall mean all proceeds of, and all other profits,
rentals or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or realization upon,
the Collateral, and, in any event, including all claims against third parties
for loss of, damage to or destruction of, or for proceeds payable under, or
unearned premiums with respect to, policies of insurance in respect of, any
Collateral, and any condemnation or requisition payments with respect to any
Collateral and any property acquired with cash proceeds.
"PURCHASED ASSETS" shall mean (i) all Receivables, now
existing or arising hereafter and all payment and enforcement rights (but not
any obligations) to, in and under the related Contracts, (ii) all Collections
and other monies due or to become due with respect to the foregoing, (iii) all
Related Security for the Receivables, (iv) all of the Originator's rights and
claims under the First Tier Purchase Agreement, (v) all lockboxes and accounts
to which Collections are sent, and all funds and investments from time to time
therein, and (vi) all proceeds of the foregoing, including, without limitation,
insurance proceeds relating thereto, in each case with respect to clauses (i)
through (vi), to the extent actually sold directly or indirectly to Xxxxx
Funding II, Inc.; provided, however, that "Purchased Assets" shall not include
the Xxxxx Group Master Accounts or the funds and investments contained from time
to time therein.
"RECEIVABLE" means, (i) with respect to any Obligor (other
than GE Factors), the indebtedness of such obligor under a Contract arising from
a sale of Merchandise by an Originator, and includes the right to payment of any
interest, finance, returned check or late charges and other obligations of such
Obligor with respect thereto and (ii) with respect to GE Factors, the obligation
of GE Factors to pay the purchase price for accounts receivable pursuant to the
Factoring Contract.
"RECEIVABLE FILE" means with respect to a Receivable, (i) the
Contract giving rise to the Receivable and other evidences of the Receivable
including, without limitation, tapes, discs, punch cards and related property
and rights and (ii) each UCC financing statement related thereto, if any.
"RECEIVABLES PURCHASE AGREEMENT" means the Receivables
Purchase Agreement, dated as of June 23, 2000, by and between The Xxxxx Group,
Inc. and Xxxxx Funding II, Inc., as such Receivables Purchase Agreement may be
amended, supplemented or otherwise modified
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from time to time.
"RELATED SECURITY" means, with respect to any Receivable, (a)
all right, title and interest, but none of the obligations, of the related
Originator, in the merchandise (including returned merchandise), if any,
relating to the sale which gave rise to such Receivable, (b) all right, title
and interest, but none of the obligations, of the related Originator, in, to and
under other Liens and property subject to Liens from time to time purporting to
secure payment of such Receivable, whether pursuant to the Contract related to
such Receivable or otherwise, (c) all UCC Financing Statements or similar
instruments covering any collateral securing payment of such Receivable, (d) all
guaranties, indemnities, insurance and other agreements (including the related
Receivable File) or arrangement and other collateral of whatever character from
time to time supporting or securing payment of such Receivable, whether pursuant
to the Contract relating to such Receivable or otherwise relating to such
Receivable and (e) all other instruments and all rights under the documents in
the Receivables File relating to such Receivables and all rights (but not
obligations) relating to such Receivables.
"SECURITY INTERESTS" shall mean the security interests granted
pursuant to Section 3, as well as all other security interests created or
assigned as additional security for the Obligations pursuant to the provisions
of this Agreement.
"SECURED PARTY" shall mean the Collateral Agent, the
Administrative Agent, the Lenders, the Documentation Agent and SunTrust.
"SOFTWARE" shall mean any "software" (to the extent defined in
the UCC), including any computer program and any supporting information provided
in connection with a transaction relating to the program but excluding any
computer program that is included in the definition of "goods".
"SUBSIDIARY" means, with respect to any Person, a corporation
of which such Person and/or its other Subsidiaries own, directly or indirectly,
such number of outstanding shares as have more than 50% of the ordinary voting
power for the election of directors.
"TRADEMARK LICENSE" shall mean any written agreement granting
to such Person any right to use any Trademark.
"TRADEMARKS" shall mean all of the following: (i) all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), now owned or existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, (ii) all reissues, extensions or
renewals thereof and (iii) all goodwill associated with or symbolized by any of
the foregoing.
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"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of Georgia; provided, that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than Georgia, "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or non-perfection.
SECTION 2. Representations and Warranties. Each Grantor represents and
warrants as follows:
(a) Such Grantor has good and marketable title to all of
its Collateral, free and clear of any Liens other than the Liens permitted by
Section 8.01 of the Credit Agreement. Grantor has all rights to and is entitled
to grant a security interest hereunder in all of its Collateral.
(b) Such Grantor has not performed any act or acts that
could prevent the Collateral Agent from enforcing any of the terms of this
Agreement. Other than financing statements or other similar or equivalent
documents or instruments with respect to Liens permitted by Section 8.01 of the
Credit Agreement, no financing statement, mortgage, security agreement or
similar or equivalent document or instrument covering all or any part of its
Collateral is on file or of record in any jurisdiction, and none of its
Collateral is subject to any Lien, other than, in each case, Liens permitted by
Section 8.01 of the Credit Agreement. None of its Collateral is in the
possession of a Person (other than such Grantor) asserting any claim thereto or
security interest therein, except that the Collateral Agent or its designee may
have possession of Collateral as contemplated hereby.
(c) All of the information set forth in the Perfection
Certificate, in the form of Schedule 1 attached hereto, is true and correct as
of the date hereof.
(d) When the UCC-1 financing statements in appropriate
form are properly filed in the offices specified in the Perfection Certificate,
the Security Interests shall constitute valid and perfected security interests
in such Grantor's Collateral, prior to all other Liens and rights of others
therein except for the Liens permitted by Section 8.01 of the Credit Agreement,
to the extent that a security interest therein may be perfected by filing
pursuant to the UCC.
(e) The Inventory and Equipment are insured in accordance
with the requirements of the Credit Agreement.
(f) All Equipment and Inventory is located at the places
specified in the Perfection Certificate and such location is an owned, leased or
bailment location as specified in the Perfection Certificate. The correct
corporate name, the principal place of business and the chief executive office
of each of the Grantors and the places where the Grantors' books and records
concerning the Collateral are currently kept are set forth in the Perfection
Certificate.
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SECTION 3. The Security Interests. In order to secure the full and
punctual payment and performance of all debts, liabilities and obligations of
the Grantors, jointly and severally, to the Collateral Agent and the Secured
Parties, including, without limitation, the Obligations, all obligations of any
Grantor arising under the terms and conditions of the Subsidiary Guaranty
Agreement and those arising under the terms and conditions of any guaranty
agreement in accordance with the terms thereof, (collectively, the "SECURED
OBLIGATIONS") each Grantor hereby pledges, assigns, hypothecates, sets over and
conveys to the Collateral Agent, for its benefit and for the benefit of the
Secured Parties, and grants to the Collateral Agent for its benefit and for the
benefit of the Secured Parties, a continuing security interest in and to, all of
its rights to all Collateral now or hereafter owned or acquired by such Grantor
or in which such Grantor now has or hereafter has or acquires any rights, and
wherever located. The Security Interests are granted as security only and shall
not subject the Collateral Agent or any Secured Party to, or transfer to the
Collateral Agent or any Secured Party, or in any way affect or modify, any
obligation or liability of any Grantor with respect to any Collateral or any
transaction in connection therewith.
SECTION 4. Further Assurances; Covenants.
(a) General.
(i) No Grantor will change the location of its
chief executive office or principal place of business in any state
unless it shall have given the Collateral Agent thirty (30) days prior
notice thereof, executed and delivered to the Collateral Agent all
financing statements and financing statement amendments which the
Collateral Agent may request in connection therewith and delivered an
opinion of counsel with respect thereto in accordance with Section
4(a)(viii). No Grantor shall change the locations, or establish new
locations, where it keeps or holds any of its Collateral or any records
relating thereto from the applicable locations described in the
Perfection Certificate unless such Grantor shall have given the
Collateral Agent thirty (30) days prior notice of such change of
location, executed and delivered to the Collateral Agent all financing
statements and financing statement amendments which the Collateral
Agent may request in connection therewith and delivered an opinion of
counsel with respect thereto in accordance with Section 4(a)(viii), and
such Grantor shall have complied with any other requirement in this
Agreement or any other Credit Document relating to the location of any
of its Collateral, provided, however, that each Grantor may keep its
Collateral at any of its locations described in the Perfection
Certificate and in any other location in which the Collateral Agent has
previously filed a financing statement naming such Grantor as debtor
and the Collateral Agent as secured party. No Grantor shall in any
event change the location, or establish new locations, of any of its
Collateral if such change would cause the Security Interests in such
Collateral to lapse or cease to be a perfected first priority Security
Interest, subject to Liens permitted by Section 8.01 of the Credit
Agreement.
(ii) No Grantor will change its name, taxpayer
identification number, identity or corporate structure in any manner
unless it shall have given the Collateral
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Agent thirty (30) days prior notice thereof, executed and delivered to
the Collateral Agent all financing statements and financing statement
amendments which the Collateral Agent may request in connection
therewith and delivered an opinion of counsel with respect thereto in
accordance with Section 4(a)(viii).
(iii) The Grantors will, from time to time, at
their expense, execute, deliver, file and record any statement,
financing statements, assignment, instrument, document, agreement or
other paper and take any other action (including, without limitation,
any filings with the United States Patent and Trademark Office,
Copyright or Patent filings, any filings of financing or continuation
statements under the UCC) that from time to time may be necessary, or
that the Collateral Agent may request, in order to create, preserve,
upgrade in rank (to the extent required hereby), perfect, confirm or
validate the Security Interests or to enable the Collateral Agent and
the Secured Parties to obtain the full benefits of this Agreement, or
to enable the Collateral Agent to exercise and enforce any of its
rights, powers and remedies hereunder with respect to any of its
Collateral. To the extent permitted by law, each Grantor hereby
authorizes the Collateral Agent to execute and file financing
statements, financing statement amendments or continuation statements
without the Grantor's signature appearing thereon. Each Grantor agrees
that a carbon, photographic, photostatic or other reproduction of this
Agreement or of a financing statement is sufficient as a financing
statement. The Grantors shall, jointly and severally, pay the costs of,
or incidental to, any recording or filing of any financing statements,
financing statement amendments or continuation statements concerning
their Collateral.
(iv) If any Grantor's Collateral exceeding in
value $250,000 in aggregate is at any time in the possession or control
of any warehouseman, bailee (other than a carrier transporting
inventory to a purchaser in the ordinary course of business) or any of
such Grantor's agents or processors, such Grantor shall notify in
writing such warehouseman, bailee, agent or processor of the Security
Interests created hereby, shall within 60 days obtain such
warehouseman's, bailee's, agent's or processor's agreement in writing
to hold all such Collateral for the Collateral Agent's account subject
to the Collateral Agent's instructions, and at any time after the
occurrence and during the continuance of an Event of Default, shall
cause such warehousemen, bailee, agent or processor to issue and
deliver to the Collateral Agent warehouse receipts, bills of lading or
any similar documents relating to such Collateral in the Collateral
Agent's name and in form and substance acceptable to the Collateral
Agent.
(v) Each Grantor will immediately deliver and
pledge each Instrument, Investment Property and Document to the
Collateral Agent, appropriately endorsed to the Collateral Agent,
provided that so long as no Event of Default shall have occurred and be
continuing, such Grantor may retain for collection in the ordinary
course any Instruments, Investment Property and Documents (other than
checks and drafts constituting payments in respect of Accounts)
received by it in the ordinary course of business and the Collateral
Agent shall, promptly upon request of such Grantor, make appropriate
arrangements for making any other Instruments, Investment Property and
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Documents pledged by such Grantor available to it for purposes of
presentation, collection or renewal (any such arrangement to be
effected, to the extent deemed appropriate to the Collateral Agent,
against trust receipt or like document).
(vi) Except for Inventory sold in the ordinary
course of business, no Grantor will (A) sell, transfer, lease,
exchange, assign or otherwise dispose of, or grant any option, warrant
or other right with respect to, any of its Collateral except that so
long as no Default or Event of Default has occurred and is continuing,
the Grantors may dispose of assets if such disposition is permitted by
Section 8.04 of the Credit Agreement, whereupon, in the case of such a
disposition, sale or exchange, the Security Interests created hereby in
such item (but not in any Proceeds arising from such disposition, sale
or exchange) shall cease immediately without any further action on the
part of the Collateral Agent; or (B) create, incur or suffer to exist
any Lien with respect to any Collateral, except for the Liens permitted
by Section 8.01 of the Credit Agreement.
(vii) The Grantors will, promptly upon request,
provide to the Collateral Agent all information and evidence it may
request concerning the Collateral, to enable the Collateral Agent to
enforce the provisions of this Agreement.
(viii) Prior to each date on which any Grantor
proposes to take any action contemplated by Section 4(a)(i) or Section
4(a)(ii), upon request of the Required Lenders, such Grantor shall, at
its cost and expense, cause to be delivered to the Collateral Agent and
the Secured Parties an opinion of counsel, satisfactory to the
Collateral Agent, to the effect that all financing statements and
amendments or supplements thereto, continuation statements and other
documents required to be recorded or filed in order to perfect and
protect the Security Interests and priority thereof against all
creditors of and purchasers from such Grantor have been filed in each
filing office necessary for such purposes and that all filing fees and
taxes, if any, payable in connection with such filings have been paid
in full.
(b) Accounts, Etc. Each Grantor will perform and comply
in all material respects with all of its obligations in respect of Accounts,
Instruments and General Intangibles.
(c) Inventory, Etc. The Grantors shall notify the
Collateral Agent immediately of any additional location where Inventory
exceeding in value $250,000 in the aggregate is stored that is not listed in the
Perfection Certificate and in no event later than ten (10) days after the
occurrence thereof.
(d) Equipment, Etc. The Grantors shall, (i) within ten
(10) days after a written request by the Required Lenders after the occurrence
and during the continuance of an Event of Default, in the case of Equipment now
owned, and (ii) following a request by the Required Lenders pursuant to
subclause (i) above, within ten (10) days after acquiring any other Equipment,
deliver to the Collateral Agent, for the benefit of itself and the Secured
Parties, any and all certificates of title, and applications therefor, if any,
of such Equipment and shall cause the Collateral Agent, for the benefit of
itself and the Secured Parties, to be named as lienholder
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on any such certificate of title and applications. The Grantors shall promptly
inform the Collateral Agent of any material additions to or deletions from the
Equipment and shall not permit any such items to become a fixture to real estate
or an accession to other personal property unless such real estate or personal
property.
(e) Patents, Trademarks, Etc. Each Grantor shall notify
the Collateral Agent immediately (i) of its acquisition after the date hereof of
any Intellectual Property and (ii) if it knows, or has reason to know, that any
application or registration relating to any Intellectual Property owned by or
licensed to such Grantor is reasonably likely to become abandoned or dedicated,
or of any adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding
in the United States Copyright Office, the United States Patent and Trademark
Office or any court) regarding any Grantor's ownership of any Intellectual
Property, its right to register the same, or to keep and maintain the same. In
the event that any Intellectual Property is infringed, misappropriated or
diluted by a third party, the Grantors shall notify the Collateral Agent
promptly after they learn thereof and shall, unless the Grantors shall
reasonably determine that any such action would be of immaterial economic value,
promptly xxx for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as the Grantors shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property. In no event shall the
Grantors, either themselves or through any agent, employee or licensee, file an
application for the registration of any Intellectual Property with the United
States Patent and Trademark Office, the United States Copyright Office, or any
similar office or agency in any other country or any political subdivision
thereof, unless not less than thirty (30) days prior thereto it informs the
Collateral Agent, and, upon issuance of such Intellectual Property, executes and
delivers any and all agreements, instruments, documents and papers the
Collateral Agent may reasonably request to evidence the Security Interests in
such Intellectual Property and the goodwill and general intangibles of the
Grantors relating thereto or represented thereby. Each Grantor hereby
constitutes the Collateral Agent its attorney-in-fact to execute and file all
such writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed, and such power, being coupled with an interest, shall be
irrevocable until the Commitments have terminated and the Secured Obligations
are paid in full.
(f) Insurance Proceeds. Upon the occurrence of an
insurable loss to any of the Collateral and absent and Event of Default,
applicable proceeds of any insurance policies shall be made available for
application by Borrower, at its discretion to: (i) the repair of the damaged
Collateral; (ii) the replacement of the damaged Collateral (provided, Collateral
Agent receives a perfected, first priority security interest in such
replacement); (iii) application to capital expenditures (provided, Collateral
Agent receives a perfected, first priority security interest in any purchased
assets); (iv) or repayment of the Obligations.
SECTION 5. Reporting and Recordkeeping. Each Grantor covenants and
agrees with the Collateral Agent and the Secured Parties that from and after the
date of this Agreement and until the Commitments have terminated, and all
Secured Obligations are paid in full:
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(a) Maintenance of Records Generally. Such Grantor will
keep and maintain at its own cost and expense records of its Collateral,
complete in all material respects, including, without limitation, a record of
all payments received and all credits granted with respect to the Collateral and
all other dealings with its Collateral. Such Grantor will xxxx its books and
records pertaining to its Collateral to evidence this Agreement and the Security
Interests. For the Collateral Agent's and the Secured Parties' further security,
such Grantor agrees that the Collateral Agent and the Secured Parties shall have
a security interest in all of each Grantor's books and records pertaining to its
Collateral and, upon the occurrence and during the continuation of any Event of
Default, the Grantor shall deliver and turn over full and complete copies of any
such books and records to the Collateral Agent or to its representatives at any
time on demand of the Collateral Agent. Upon reasonable notice from the
Collateral Agent such Grantor shall permit any representative of the Collateral
Agent or the Secured Parties, to inspect such books and records and will provide
photocopies thereof to the Collateral Agent and the Secured Parties.
(b) Special Provisions Regarding Maintenance of Records
and Reporting Re: Accounts, Inventory and Equipment;
(i) Such Grantor shall keep complete and
accurate records of its Accounts. Upon the request of the Collateral
Agent, such Grantor shall deliver to the Collateral Agent all
documents, including, without limitation, repayment histories, present
status reports, relating to its Accounts so scheduled and such other
matters and information relating to the status of its then existing
Accounts as the Collateral Agent shall reasonably request.
(ii) Such Grantor shall maintain itemized
records, accurate in all material respects, itemizing and describing
the kind, type, quality, quantity, location and book value of its
Inventory and Equipment and shall, upon request by the Collateral
Agent, furnish the Collateral Agent with a current schedule containing
the foregoing information.
(c) Further Identification of Collateral. Such Grantor
will if so requested by the Collateral Agent furnish to the Collateral Agent, as
often as the Collateral Agent reasonably requests, statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Collateral Agent may reasonably request,
all in reasonable detail.
(d) Notices. The Grantors will advise the Collateral
Agent promptly, in reasonable detail, (i) of any Lien or claim made or asserted
against any of the Collateral, (ii) of any material adverse change in the
composition of the Collateral, and (iii) of the occurrence of any other event
which would have a material adverse effect on the aggregate value of the
Collateral or on the validity, perfection or priority of the Security Interests.
SECTION 6. General Authority. Each Grantor hereby irrevocably appoints
the Collateral Agent its true and lawful attorney, with full power of
substitution, in the name of such Grantor,
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the Collateral Agent, the Secured Parties or otherwise, for the sole use and
benefit of the Collateral Agent and the Secured Parties, but at such Grantor's
expense, to exercise, (a) at any time from time to time with respect to (i)
below, and (b) at any time after an Event of Default has occurred and is
continuing; with respect to (ii), (iii), (iv) and (v) below, from all or any of
the following powers:
(i) to file the financing statements, financing statement
amendments and continuation statements referred to in Section
4(a)(iii),
(ii) to demand, xxx for, collect, receive and give
acquittance for any and all monies due or to become due with
respect to any Collateral or by virtue thereof,
(iii) to settle, compromise, compound, prosecute or defend
any action or proceeding with respect to any Collateral,
(iv) to sell, transfer, assign or otherwise deal in or
with the Collateral or the proceeds or avails thereof, as
fully and effectually as if the Collateral Agent were the
absolute owner thereof, and
(v) to extend the time of payment of any or all thereof
and to make any allowance and other adjustments with reference
to the Collateral.
SECTION 7. Remedies upon Event of Default.
(a) If any Event of Default has occurred and is
continuing, the Collateral Agent may exercise on behalf of the Secured Parties
without further notice, all rights and remedies under this Agreement, the
SunTrust Note or any other Credit Document or that are available to a secured
creditor under the UCC or that are otherwise available at law or in equity, at
any time, in any order and in any combination, including to collect any and all
Secured Obligations from any Grantor, and, in addition, the Collateral Agent may
sell the Collateral or any part thereof at public or private sale, for cash,
upon credit or for future delivery, and at such price or prices as the
Collateral Agent may deem satisfactory. The Collateral Agent shall give each
Grantor not less than ten (10) days' prior written notice of the time and place
of any sale or other intended disposition of such Grantor's Collateral, except
any Collateral which is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market. The Grantors agree that
any such notice constitutes "reasonable notification" within the meaning of
Section 9-504(3) of the UCC (to the extent such Section is applicable).
(b) The Collateral Agent or any Secured Party may be the
purchaser of any or all of the Grantors' Collateral so sold at any public sale
(or, if such Collateral is of a type customarily sold in a recognized market or
is of a type which is the subject of widely distributed standard price
quotations or if otherwise permitted under applicable law, at any private sale)
and thereafter hold the same, absolutely, free from any right or claim of
whatsoever kind. The Grantors will execute and deliver such documents and take
such other action as the Collateral Agent deems necessary or advisable in order
that any such sale may be made in compliance with
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law. Upon any such sale the Collateral Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so sold. Each
purchaser at any such sale shall hold the Collateral so sold to it absolutely,
free from any claim or right of any kind, including any equity or right of
redemption of the Grantors. To the extent permitted by law, each Grantor hereby
specifically waives all rights of redemption, stay or appraisal which it has or
may have under any law now existing or hereafter adopted. The notice (if any) of
such sale shall (1) in case of a public sale, state the time and place fixed for
such sale, and (2) in the case of a private sale, state the day after which such
sale may be consummated. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Collateral Agent may fix in the notice of such sale. At any such sale the
Grantors' Collateral may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may determine. The Collateral Agent shall not
be obligated to make any such sale pursuant to any such notice. The Collateral
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned. In case of any sale of all or any part of
the Grantors' Collateral on credit or for future delivery, such Collateral so
sold may be retained by the Collateral Agent until the selling price is paid by
the purchaser thereof, but the Collateral Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for such Collateral so
sold and, in case of any such failure, such Collateral may again be sold upon
like notice. The Collateral Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Grantors' Collateral, or any
portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction. The Grantors shall remain liable, jointly and severally, for any
deficiency.
(c) For the purpose of enforcing any and all rights and
remedies under this Agreement, the Collateral Agent may (i) require the Grantors
to, and the Grantors agree that they will, at their expense and upon the request
of the Collateral Agent, forthwith assemble all or any part of its Collateral as
directed by the Collateral Agent and make it available at a place designated by
the Collateral Agent which is, in the Collateral Agent's opinion, reasonably
convenient to the Collateral Agent and the Grantors, whether at the premises of
a Grantor or otherwise, (ii) to the extent permitted by applicable law, enter,
with or without process of law and without breach of the peace, any premise
where any such Collateral is or may be located and, without charge or liability
to the Collateral Agent, seize and remove such Collateral from such premises,
(iii) have access to and use the Grantors' books and records, computers and
software relating to the Grantors' Collateral, and (iv) prior to the disposition
of any of the Grantors' Collateral, store or transfer such Collateral without
charge in or by means of any storage or transportation facility owned or leased
by the Grantors, process, repair or recondition such Collateral or otherwise
prepare it for disposition in any manner and to the extent the Collateral Agent
deems appropriate and, in connection with such preparation and disposition, use
without charge any trademark, trade name, copyright, patent or technical process
used by the Grantors.
(d) Without limiting the generality of the foregoing, if
any Event of Default has occurred and is continuing:
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(i) the Collateral Agent may license, or
sublicense, whether general, special or otherwise, and whether
on an exclusive or non-exclusive basis, any Intellectual
Property included in the Collateral throughout the world for
such term or terms, on such conditions and in such manner as
the Collateral Agent shall in its sole discretion determine;
(ii) the Collateral Agent may (without assuming
any obligations or liability thereunder), at any time and from
time to time, enforce (and shall have the exclusive right to
enforce) against any licensee or sublicensee all rights and
remedies of the Grantors in, to and under any Licenses and
take or refrain from taking any action under any thereof, and
each Grantor hereby releases the Collateral Agent and each of
the Secured Parties from, and agrees to hold the Collateral
Agent and each of the Secured Parties free and harmless from
and against any claims arising out of, any lawful action so
taken or omitted to be taken with respect thereto except for
the Collateral Agent's and such Secured Party's bad faith,
gross negligence or willful misconduct as determined by a
final and nonappealable decision of a court of competent
jurisdiction; and
(iii) upon request by the Collateral Agent, the
Grantors will execute and deliver to the Collateral Agent
powers of attorney, in form and substance satisfactory to the
Collateral Agent, for the implementation of any lease,
assignment, license, sublicense, grant of option, sale or
other disposition of any Intellectual Property. In the event
of any such disposition pursuant to this Section, the Grantors
shall supply their know-how and expertise relating to the
manufacture and sale of the products bearing Trademarks or the
products or services made or rendered in connection with
Patents or Copyrights, and its customer lists and other
records relating to such Intellectual Property and to the
distribution of said products, to the Collateral Agent.
SECTION 8. Limitation on Duty of Collateral Agent in Respect of
Collateral. Beyond reasonable care in the custody thereof, the Collateral Agent
shall have no duty as to any Collateral of the Grantors in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral of the Grantors in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property, and the Collateral Agent shall not be
liable or responsible for any loss or damage to any of the Grantors' Collateral,
or for any diminution in the value thereof, by reason of the act or omission of
any warehouseman, carrier, forwarding agency, consignee or other agent or bailee
selected by the Collateral Agent in good faith.
SECTION 9. Application of Proceeds. The Collateral Agent shall apply
all proceeds received from the Collateral first to the fees and expenses of the
Collateral Agent then due and payable, second to the accrued and unpaid interest
and other fees that have accrued under the
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Credit Documents and under the SunTrust Note, pro rata to the Lenders and
SunTrust, and third to the outstanding principal amount of the Obligations and
indebtedness outstanding under the Credit Documents and under the SunTrust Note,
pro rata to the Lenders and SunTrust.
SECTION 10. Appointment of Co-Agents. At any time or times, in order to
comply with any legal requirement in any jurisdiction, the Collateral Agent may
appoint another bank or trust company or one or more other Persons reasonably
acceptable to the Required Lenders, either to act as co-agent or co-agents,
jointly with the Collateral Agent, or to act as separate agent or agents on
behalf of the Collateral Agent with such power and authority as may be necessary
for the effectual operation of the provisions hereof and specified in the
instrument of appointment.
SECTION 11. Concerning the Collateral Agent. The provisions of Article
X of the Credit Agreement shall inure to the benefit of the Collateral Agent in
respect of this Agreement and shall be binding upon the parties to the Credit
Agreement in such respect. In furtherance and not in derogation of the rights,
privileges and immunities of the Collateral Agent therein set forth:
(a) The Collateral Agent is authorized to take all such
action as is provided to be taken by it as Collateral Agent hereunder or
otherwise permitted under the Credit Agreement and all other action reasonably
incidental thereto. As to any matters not expressly provided for herein or
therein, the Collateral Agent may request instructions from the Required Lenders
and shall act or refrain from acting in accordance with written instructions
from the Required Lenders or, in the absence of such instructions, in accordance
with its discretion.
(b) The Collateral Agent shall not be responsible for the
existence, genuineness or value of any of the Grantor's Collateral or for the
validity, perfection, priority or enforceability of the Security Interests,
whether impaired by operation of law or by reason of any action or omission to
act on its part. The Collateral Agent shall have no duty to ascertain or inquire
as to the performance or observance of any of the terms of this Agreement by the
Grantors.
SECTION 12. Expenses. In the event that any Grantor fails to comply
with the provisions of the Credit Agreement, the SunTrust Note, this Agreement
or any other Credit Document, such that the value of any of its Collateral or
the validity, perfection, rank or value of the Security Interests are thereby
diminished or potentially diminished or put at risk, the Collateral Agent if
requested by the Required Lenders may, but shall not be required to, effect such
compliance on behalf of such Grantor, and the Grantors shall reimburse the
Collateral Agent, jointly and severally, for the reasonable costs thereof on
demand. All insurance expenses and all expenses of protecting, storing,
warehousing, appraising, insuring, handling, maintaining and shipping such
Collateral, any and all excise, stamp, intangibles, transfer, property, sales,
and use taxes imposed by any state, federal, or local authority or any other
governmental authority on any of such Collateral, or in respect of periodic
appraisals and inspections of such Collateral to the extent the same may be
requested by the Required Lenders from time to time or in respect of the sale or
other disposition thereof, shall be borne and paid by the Grantors; and if the
Grantors fail promptly to pay any portion thereof when due, the Collateral Agent
or any Secured Party
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may, at its option, but shall not be required to, pay the same and charge the
Grantors' accounts therefor, and the Grantors agree to reimburse the Collateral
Agent or such Secured Party therefor on demand. All sums so paid or incurred by
the Collateral Agent or any Secured Party for any of the foregoing and any and
all other sums for which the Grantors may become liable hereunder and all costs
and expenses (including reasonable attorneys' fees, legal expenses and court
costs) incurred by the Collateral Agent or any Secured Party in enforcing or
protecting the Security Interests or any of their rights or remedies thereon
shall be payable by the Grantors on demand and shall bear interest (after as
well as before judgment) until paid at the rate set forth in Section 4.03(c) of
the Credit Agreement and shall be additional Secured Obligations hereunder.
SECTION 13. Termination of Security Interests; Release of Collateral.
Upon the repayment in full of all Secured Obligations, the Security Interests
shall terminate and all rights to the Collateral of the Grantors shall revert to
the Grantors. At any time and from time to time prior to such termination of the
Security Interests, the Collateral Agent may release any of the Grantors'
Collateral with the prior written consent of the Required Lenders or all
Lenders, as required under the Credit Agreement. Upon any such termination of
the Security Interests or release of such Collateral, the Collateral Agent will,
at the expense of the Grantors, execute and deliver to the Grantors such
documents as the Grantors shall reasonably request, but without recourse or
warranty to the Collateral Agent or any Secured Party, including but not limited
to UCC-3 termination statements, to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be.
SECTION 14. Notices. All notices, requests and other communications to
the Grantors, the Collateral Agent or the Secured Parties hereunder shall be in
writing or by telecopy, shall be in the English language, and shall be
sufficiently given to the Collateral Agent, the Secured Parties or the Grantors
if addressed or delivered to them at, in the case of the Borrower, the
Collateral Agent, the Lenders, their respective addresses and telecopier numbers
specified in Section 11.02 of the Credit Agreement and in the case of SunTrust,
its respective address and telecopier specified in the SunTrust Note, or at such
other address as any party may designate to the Borrower and the Collateral
Agent by written notice. All such notices and communications shall be deemed to
have been duly given at the times set forth in Section 11.02 of the Credit
Agreement.
SECTION 15. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Collateral Agent, any Secured Party or any holder of any Note in
exercising any right or remedy hereunder, and no course of dealing between any
Grantor on the one hand and the Collateral Agent, any Secured Party or any
holder of any Note on the other hand shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy hereunder or any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right or remedy hereunder or thereunder. The rights and
remedies herein and in the other Credit Documents are cumulative and not
exclusive of any rights or remedies which the Collateral Agent, any Secured
Party or the holder of any Note would otherwise have. No notice to or demand on
any Grantor not required hereunder in any case shall entitle any Grantor to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights
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of the Collateral Agent, the Secured Parties or the holder of any Note to any
other or further action in any circumstances without notice or demand.
SECTION 16. Successors and Assigns. This Agreement is for the benefit
of the Collateral Agent and the Secured Parties and their permitted successors
and assigns, and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness. This Agreement shall be
binding on the Grantors and their successors and assigns; provided, however,
that the Grantors may not assign any of their rights or obligations hereunder
without the prior written consent of the Collateral Agent and the Secured
Parties.
SECTION 17. Amendments. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by the Grantors herefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Collateral Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 18. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
SECTION 19. Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable, in whole or in part,
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 20. Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instruments.
SECTION 21. Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
SECTION 22. Additional Grantors. In the event that any Subsidiary of
the Borrower is required, under the terms of the Credit Agreement or otherwise,
to grant a security interest in its Collateral, such Subsidiary shall become a
Grantor hereunder and shall be bound by all of the terms and conditions hereof,
upon the delivery to the Collateral Agent of an executed counterpart of a
Supplement to this Security Agreement in the form of Exhibit A attached hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
THE XXXXX GROUP, INC.
By:
---------------------------------------
Name:
Title:
CARRIAGE INDUSTRIES, INC.
By:
---------------------------------------
Name:
Title:
FABRICA INTERNATIONAL
By:
---------------------------------------
Name:
Title:
CHROMA TECHNOLOGIES, INC.
By:
---------------------------------------
Name:
Title:
BRETLIN, INC.
By:
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
[SIGNATURE PAGE TO THE XXXXX GROUP SECURITY AGREEMENT]
22
CANDLEWICK YARNS, INC.
By:
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXX GROUP LOGISTICS, INC.
By:
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
AMTEX, INC.
By:
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXX FUNDING, INC.
By:
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President &
Assistant Secretary
[SIGNATURE PAGE TO THE XXXXX GROUP SECURITY AGREEMENT]
23
EXHIBIT A
to
Security Agreement
SUPPLEMENT TO SECURITY AGREEMENT
THIS SUPPLEMENT TO SECURITY AGREEMENT (this "Supplement"), dated as of
_____________ __, ____, is executed by [_________________], [__________] (the
"ADDITIONAL GRANTOR"), in favor of SUNTRUST BANK, as collateral agent (the
"COLLATERAL AGENT") for itself and other lending institutions (the "LENDERS")
that are signatories to the Credit Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Xxxxx Group, Inc. (the "BORROWER"), the Lenders, SunTrust
Bank, as Administrative Agent, and Bank of America, N.A., as the Documentation
Agent are parties to that Credit Agreement, dated as of March 31, 1998, as
amended by that certain First Amendment to Credit Agreement, effective December
26, 1998, as amended by that certain Second Amendment to Credit Agreement,
effective October 5, 2000 and by that certain Third Amendment to Credit
Agreement, effective November 2, 2000 (as amended or modified, the "CREDIT
AGREEMENT"; capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Credit Agreement);
WHEREAS, the Borrower has executed that certain Promissory Note in the
amount of $5,000,000 in favor or SunTrust Bank, formerly known as SunTrust Bank,
Chattanooga, ("SUNTRUST") (as amended or modified, the "SUNTRUST Note");
WHEREAS, the Borrower and certain of the Borrower's Subsidiaries have
entered into that certain Security Agreement, dated as of November 2, 2000, in
favor of the Collateral Agent (as amended, restated, supplemented or otherwise
modified from time to time, the "Security Agreement"), pursuant to which the
Borrower and such Subsidiaries granted Liens to the Collateral Agent for the
benefit of the Secured Parties in all of their Collateral; and
WHEREAS, the Additional Grantor is a Subsidiary of the Borrower, and
pursuant to the Credit Agreement and Section 22 of the Security Agreement, the
Borrower is required to cause the Additional Grantor to become a party to the
Security Agreement, and the Additional Grantor desires to execute and deliver
this Supplement to satisfy such requirement;
24
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Additional Grantor agrees as follows:
SECTION 1. Granting of Security Interests. In order to secure
the full and punctual payment and performance of the Secured Obligations in
accordance with the terms thereof, the Additional Grantor hereby grants,
pledges, assigns, hypothecates, sets over and conveys to the Collateral Agent
for its benefit and the benefit of the Secured Parties, a continuing security
interest in and to all of its Collateral now or hereafter owned or acquired by
such Additional Grantor or in which such Additional Grantor now has or hereafter
has or acquires any rights, and wherever located. The Security Interests are
granted as security only and shall not subject the Collateral Agent or any
Secured Party to, or transfer to Collateral Agent or any Secured Party, or in
any way affect or modify, any obligation or liability of Additional Grantor with
respect to any of its Collateral or any transaction in connection therewith.
SECTION 2. Representations and Warranties. The Additional
Grantor, with respect to itself, hereby restates each representation and
warranty set forth in Section 2 of the Security Agreement as of the date hereof.
SECTION 3. Updated Perfection Certificate. Attached hereto as
Schedule 1 is a Perfection Certificate with respect to the Additional Grantor,
which shall be deemed to modify and update the Perfection Certificate delivered
by the Grantors on November 2, 2000.
SECTION 4. Binding Effect. This Supplement shall become
effective when it shall have been executed by the Additional Grantor and
thereafter shall be binding upon the Additional Grantor and shall inure to the
benefit of the Collateral Agent and the Secured Parties. Upon the effectiveness
of this Supplement, the Additional Grantor shall be deemed to be a Grantor for
all purposes under the Security Agreement, and this Supplement shall be deemed
to be a part of and shall be subject to all the terms and conditions of the
Security Agreement. The Additional Grantor shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent of
the Collateral Agent.
SECTION 5. Governing Law. THIS SUPPLEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
SECTION 6. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instruments.
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IN WITNESS WHEREOF, the Additional Grantor has caused this
Supplement to be duly executed and delivered by its duly authorized officer as
of the date first above written.
"Additional Grantor"
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By:
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Name:
Title:
