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SUBORDINATED GUARANTY AND SECURITY AGREEMENT
THIS SUBORDINATED GUARANTY AND SECURITY AGREEMENT (this "AGREEMENT"),
dated as of September 30, 1996, made by GENICOM CORPORATION, a Delaware
corporation (the "BORROWER"), THE GUARANTORS FROM TIME TO TIME PARTY HERETO
(each a "GUARANTOR", and collectively the "GUARANTORS", and together with the
Borrower, each an "OBLIGOR", and collectively the "OBLIGORS") and TEXAS
INSTRUMENTS INCORPORATED, a Delaware corporation ("LENDER").
RECITALS
WHEREAS, pursuant to the Subordinated Promissory Note dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "NOTE") from the Borrower, Lender has provided to the Borrower a loan in an
original principal amount of $9,000,000; and
WHEREAS, Lender has required, as a condition precedent to making the loan
to the Borrower under the Note, that the Guarantors guarantee the obligations
of the Borrower under the Note and the Obligors secure their respective
obligations to Lender under the Note and the other Loan Documents in accordance
with the terms of this Agreement.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. Capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to such terms in the Note. All terms used in
this Agreement that are defined in the Uniform Commercial Code in effect in the
State of Texas (the "UCC") and which are not otherwise defined herein shall
have the meanings set forth therein.
2. THE GUARANTEE.
(a) The Guarantee. Each of the Guarantors hereby jointly and
severally guarantees to Lender as hereinafter provided the prompt payment of
the Borrower's Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof. The Guarantors
hereby further agree that if any of the Borrower's Obligations are not paid in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as mandatory cash collateralization or otherwise), the Guarantors
will, jointly and severally, promptly pay the same, without any demand or
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whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Borrower's Obligations, the same will be promptly paid in full
when due (whether at extended maturity, as a mandatory prepayment, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Loan Documents, to the extent the obligations of a Guarantor shall
be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
(b) Obligations Unconditional. The obligations of the Guarantors
under subsection (a) hereof are joint and several, absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Loan Documents, or any other agreement or instrument referred to
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Borrower's Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this subsection (b) that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Borrower's Obligations for
amounts paid under this guaranty until such time as Lender has been paid in
full and no Person or Governmental Authority shall have any right to request
any return or reimbursement of funds from Lender in connection with monies
received under the Loan Documents. Without limiting the generality of the
foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which liability shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Borrower's Obligations shall be extended, or such performance or
compliance shall be waived;
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(ii) any of the acts mentioned in any of the provisions of any of the
Loan Documents or any other agreement or instrument referred to therein
shall be done or omitted;
(iii) the maturity of any of the Borrower's Obligations shall be
accelerated, or any of the Borrower's Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the Loan
Documents or any other agreement or instrument referred to therein shall
be waived or any other guarantee of any of the Borrower's Obligations or
any security therefor shall be released or exchanged in whole or in part
or otherwise dealt with;
(iv) any Lien granted to, or in favor of, Lender as security for any
of the Borrower's Obligations shall fail to attach or be perfected; or
(v) any of the Borrower's Obligations shall be determined to be void
or voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of any
Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that Lender exhaust any right, power or remedy
or proceed against any Person under any of the Loan Documents or any other
agreement or instrument referred to therein, or against any other Person under
any other guarantee of, or security for, any of the Borrower's Obligations.
(c) Reinstatement. The obligations of the Guarantors under this
Section 2 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Person in respect of the Borrower's
Obligations is rescinded or must be otherwise restored by any holder of any of
the Borrower's Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and each Guarantor agrees that it
will indemnify Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by
Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
(d) Certain Additional Waivers. Without limiting the generality of
the provisions of this Section 2, each Guarantor
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hereby agrees that such Guarantor shall have no right of recourse to security
for the Borrower's Obligations.
(e) Remedies. The Guarantors agree that, to the fullest extent
permitted by law, as between the Guarantors, on the one hand, and Lender, on
the other hand, the Borrower's Obligations may be declared to be forthwith due
and payable as provided in the Note (and shall be deemed to have become
automatically due and payable in the circumstances provided in the Note) for
purposes of subsection (a) hereof notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Borrower's
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Borrower's
Obligations being deemed to have become automatically due and payable), the
Borrower's Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of said
subsection (a).
(f) Rights of Contribution. The Guarantors hereby agree, as among
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below), each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence hereof and to clause (y) below),
pay to such Excess Funding Guarantor an amount equal to such Guarantor's Pro
Rata Share (as defined below and determined, for this purpose, without
reference to the properties, assets, liabilities and debts of such Excess
Funding Guarantor) of such Excess Payment (as defined below). The payment
obligation of any Guarantor to any Excess Funding Guarantor under this
subsection (f) shall be subordinate and subject in right of payment to the
prior payment in full of the obligations of such Guarantor under the other
provisions of this Section 2, and such Excess Funding Guarantor shall not
exercise any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations. For purposes hereof, (i)
"EXCESS FUNDING GUARANTOR" shall mean, in respect of any obligations arising
under the other provisions of this Section 2 (hereafter, the "GUARANTEED
OBLIGATIONS"), a Guarantor that has paid an amount in excess of its Pro Rata
Share of the Guaranteed Obligations; (ii) "EXCESS PAYMENT" shall mean, in
respect of any Guaranteed Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations; and
(iii) "PRO RATA SHARE", for the purposes of this subsection (f), shall mean,
for any Guarantor, the ratio (expressed as a percentage) of (x) the amount by
which the aggregate present fair saleable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (y) the
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amount by which the aggregate present fair saleable value of all assets and
other properties of the Borrower and all of the Guarantors exceeds the amount
of all of the debts and liabilities (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of the
Borrower and the Guarantors hereunder) of the Borrower and all of the
Guarantors, all as of the date hereof (if any Guarantor becomes a party hereto
subsequent to the Effective Date, then for the purposes of this subsection (f)
such subsequent Guarantor shall be deemed to have been a Guarantor as of the
Effective Date and the information pertaining to, and only pertaining to, such
Guarantor as of the date such Guarantor became a Guarantor shall be deemed true
as of the Effective Date).
(g) Continuing Guarantee. The guarantee in this Section 2 is a
continuing guarantee, and shall apply to all Borrower's Obligations whenever
arising.
(h) Subordination. Each Guarantor agrees, and Lender by its
acceptance hereof agrees, that the guarantee by the Guarantors of the
Borrower's Obligations shall be subordinated to the payment in full of the
Senior Debt upon the same terms and conditions as set forth in the Letter
Agreement.
3. GRANT OF SECURITY INTEREST IN THE COLLATERAL. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration or otherwise, of the Secured Obligations (as defined in Section 4
hereof), each Obligor hereby grants to Lender, a continuing security interest
in, and a right to set off against, any and all right, title and interest of
such Obligor in and to the following, whether now owned or existing or owned,
acquired, or arising hereafter (collectively, the "COLLATERAL"):
(a) All equipment, including, without limitation, all vehicles,
machinery, tools, furniture, furnishings, office equipment and trade
fixtures;
(b) All accounts and receivables and all goods represented by or
securing accounts and receivables, including, without limitation, all
rents and tenant payments, if any;
(c) All inventory, including, without limitation, all raw materials,
all work in process and all goods held by the Borrower for sale or lease;
(d) All contract rights, including, without limitation, all rights
under management agreements, tax
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sharing agreements and lease agreements and all rights to payment of
money, tax refunds and insurance proceeds;
(e) All other general intangibles;
(f) All instruments, documents, chattel paper, securities, policies
and certificates of insurance, deposits, cash or other goods;
(g) All books, records, files, computer software and other writings
or evidence of each Obligor's business;
(h) All licenses, patents, patent applications, trademarks,
trademark applications, tradenames, copyrights, assumed names, service
marks and service xxxx applications (collectively, the "INTELLECTUAL
PROPERTY");
(i) All other personal property of any kind or type whatsoever owned
by an Obligor;
(j) All accessions and additions to, and substitutions and
replacements of, any and all of the foregoing, whether now existing or
hereafter arising; and
(k) All proceeds and products of the foregoing and all insurance
relating to the foregoing collateral and all proceeds thereof (including,
without limitation, insurance proceeds payable on account of business
interruption), whether now existing or hereafter arising.
The Obligors and the Lender hereby agree that, notwithstanding anything to
the contrary contained in this Agreement, the Obligors shall not be deemed to
have assigned, and Lender shall not be deemed to have taken an assignment of,
any "intent to use" federal trademark registration application until such time
as either (i) an amendment alleging use with respect to the related trademark
shall have been accepted for filing by the U.S. Patent & Trademark Office or
(ii) applicable law conclusively allows earlier assignment.
4. SECURITY FOR OBLIGATIONS. The security interest created hereby in
the Collateral constitutes continuing collateral security for all of the
following, whether now existing or hereafter incurred (the "SECURED
OBLIGATIONS"):
(a) (i) In the case of the Borrower, the prompt performance and
observance by the Borrower of all obligations of the Borrower under the Note,
this Agreement and the other Loan Documents to which the Borrower is a party;
or
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(ii) In the case of any Obligor which is a Guarantor, the prompt
performance and observance by such Guarantor of all obligations of such
Guarantor under this Agreement and the other Loan Documents to which such
Guarantor is a party, including, without limitation, its guaranty
obligations arising under Section 2 of this Agreement; and
(b) All other indebtedness, liabilities and obligations of any kind
or nature, now existing or hereafter arising, owing from any Credit Party
to Lender, arising under the Loan Documents, whether primary, secondary,
direct, contingent, or joint and several.
5. REPRESENTATIONS AND WARRANTIES. Each Obligor hereby represents and
warrants to Lender, that so long as any amounts remain payable under the Note
or under any other Loan Document:
(a) Chief Executive Office; Books & Records. Such Obligor's chief
executive office and chief place of business are (and for the prior four
months have been) located at the locations set forth on SCHEDULE 1
attached hereto and such Obligor keeps its books and records at such
locations.
(b) Type and Location of Collateral. The type of Collateral located
in the U.S. owned by such Obligor, each location of Collateral located in
the U.S. owned by such Obligor having an aggregate book value at such
location of $100,000 or more and the owner of each such location for which
a landlord waiver has been requested by Senior Agent is as shown on
SCHEDULE 2 attached hereto.
(c) Ownership. Such Obligor is the legal and beneficial owner of
its Collateral and has the right to pledge, sell, assign or transfer the
same. Such Obligor's legal name is as shown in this Agreement and no
Obligor has in the past four months changed its name, been party to a
merger, consolidation or other change in structure or used any tradename
except as set forth in SCHEDULE 3 hereto.
(d) Security Interest/Priority. This Agreement creates a valid
security interest in favor of Lender, in the Collateral of such Obligor
and, when properly perfected, shall constitute a valid perfected security
interest in such Collateral, free and clear of all Liens except for
Permitted Liens.
(e) Receivables. (i) Each receivable of such Obligor and the papers
and documents relating thereto are genuine and in all respects what they
purport to be, (ii) in the
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case of each receivable of such Obligor which is an account receivable,
each receivable arises out of (A) a bona fide sale of goods sold and
delivered by such Obligor (or is in the process of being delivered) or (B)
services theretofore actually rendered (or, in accordance with the
applicable contract with the account debtor, to be rendered) by such
Obligor to, the account debtor named therein, (iii) no receivable of such
Obligor of $50,000 or more is evidenced by any instrument or chattel paper
unless such instrument or chattel paper has been theretofore endorsed over
and delivered to Lender, and (iv) no surety bond was required or given in
connection with any receivable of such Obligor or the contracts or
purchase orders out of which they arose.
(f) Inventory. No inventory is held by such Obligor pursuant to
consignment, sale or return, sale on approval or similar arrangement.
(g) Intellectual Property. With regard to the Collateral of such
Obligor consisting of Intellectual Property, (i) such Obligor is the
present owner of the entire right, title and interest in and to such
Collateral and has good and indefeasible title thereto with the rights of
use free and clear of the infringement of the rights of others, (ii) the
United States patents listed on SCHEDULE 4 constitute all of the
registrations and applications for the United States patents owned by such
Obligor, (iii) the United States trademarks listed on SCHEDULE 5
constitute all of the registrations and applications for the United States
trademarks owned by such Obligor, (iv) such Obligor has not and will not
make any assignment or agreement in conflict with the security interest in
the Intellectual Property of such Obligor hereunder, and (v) all
applications pertaining to U.S. Intellectual Property of such Obligor
have been duly and properly filed, and all U.S. registrations or letters
pertaining to such Intellectual Property have been duly and properly filed
and issued, and all of such Intellectual Property is valid and
enforceable.
6. COVENANTS. Each Obligor covenants that, so long as any amounts
remain payable under the Note or under any other Loan Document it shall:
(a) OTHER LIENS. Defend the Collateral of such Obligor against the
claims and demands of all other parties claiming an interest therein, keep
such Collateral free from all Liens, except for Permitted Liens, and not
sell, exchange, transfer, assign, lease or otherwise dispose of such
Collateral or any interest therein, except in the
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ordinary course of business and except as permitted under the Note.
(b) Preservation of Collateral. Keep the Collateral of such Obligor
in good order, condition and repair and not use such Collateral in
violation of the provisions of this Agreement or any other agreement
relating to such Collateral or any policy insuring the Collateral or any
applicable statute, law, bylaw, rule, regulation or ordinance.
(c) Change in Location. Keep such Obligor's chief executive office
and chief place of business (as well as its books and records) at the
locations set forth on SCHEDULE 1 and keep Collateral of such Obligor
having a book value of $100,000 or more, individually or in the aggregate,
at the locations set forth for such Obligor on SCHEDULE 2.
(d) Inspection. Upon reasonable notice, and during reasonable
hours, at all times allow Lender or its representatives to visit and
inspect the Collateral of such Obligor and the books and records relating
thereto and otherwise cooperate with and promptly respond to the
reasonable requests of Lender or its representatives with respect thereto.
(e) Perfection of Security Interest. Execute and deliver to Lender
such agreements, assignments or instruments (including affidavits,
notices, reaffirmations and amendments and restatements of existing
documents, as Lender may reasonably request) and do all such other things
as Lender may reasonably deem necessary or appropriate (i) to assure to
Lender its security interests hereunder, including (A) such financing
statements (including renewal statements) or amendments thereof or
supplements thereto or other instruments as Lender may from time to time
reasonably request in order to perfect and maintain the security interests
granted hereunder in accordance with the UCC, (B) with regard to patents
and patent applications, a Notice of Grant of Security Interest in Patents
for filing with the United States Patent and Trademark Office in the form
of SCHEDULE 6 hereto, and (C) with regard to trademarks and trademark
applications, a Notice of Grant of Security Interest in Trademarks for
filing with the United States Patent and Trademark Office in the form of
SCHEDULE 7 hereto, (ii) to consummate the transactions contemplated hereby
and (iii) to otherwise protect and assure Lender of its rights and
interests hereunder. To that end, each Obligor agrees that Lender may
file one or more financing statements disclosing Lender's security
interest in any or all of the Collateral of such Obligor without, to the
extent
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permitted by law, such Obligor's signature thereon, and further each
Obligor also hereby irrevocably makes, constitutes and appoints Lender,
its nominee or any other person whom Lender may designate, as such
Obligor's attorney in fact with full power and for the limited purpose to
sign in the name of such Obligor any such financing statements, or
amendments and supplements to financing statements, renewal financing
statements, notices or any similar documents which in Lender's reasonable
discretion would be necessary, appropriate or convenient in order to
perfect and maintain perfection of the security interests granted
hereunder, such power, being coupled with an interest, being and remaining
irrevocable so long as any amounts remain payable under the Note or under
any other Loan Document. Each Obligor hereby agrees that a carbon,
photographic or other reproduction of this Agreement or any such financing
statement is sufficient for filing as a financing statement by Lender
wherever Lender may in its sole discretion desire to file the same. In
the event for any reason the law of any jurisdiction other than Texas
becomes or is applicable to the Collateral of any Obligor or any part
thereof, or to any of the Secured Obligations, such Obligor agrees to
execute and deliver all such instruments and to do all such other things
as Lender in its sole discretion reasonably deems necessary or appropriate
to preserve, protect and enforce the security interests of Lender under
the law of such other jurisdiction (and, if an Obligor shall fail to do so
promptly upon the request of Lender, then Lender may execute any and all
such requested documents on behalf of such Obligor pursuant to the power
of attorney granted hereinabove). If any Collateral is in the possession
or control of an Obligor's agents and Lender so requests, such Obligor
agrees to notify such agents in writing of Lender's security interest
therein and, upon the Lender's request, instruct them to hold all such
Collateral for Lender's account and subject to Lender's instructions.
Each Obligor agrees to xxxx its books and records to reflect the security
interest of Lender in the Collateral.
(f) Payment of Taxes and Charges. Pay promptly when due all taxes,
assessments, and governmental charges and levies upon or against the
Collateral of such Obligor in each case before the same become delinquent
and before penalties accrue thereon, unless and to the extent that the
same are being contested in good faith by appropriate proceedings.
(g) Treatment of Receivables. Not grant or extend the time for
payment of any receivable, or compromise or settle any receivable for less
than the full amount thereof, or
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release any person or property, in whole or in part, from payment thereof,
or allow any credit or discount thereon, other than as normal and
customary in the ordinary course of such Obligor's business.
(h) Actions Regarding Intellectual Property. Not take or fail to
take any action, nor permit any action to be taken by others that are
subject to such Obligor's control which would affect the validity and
enforcement of the Intellectual Property of such Obligor, or impair the
value of such Intellectual Property.
(i) New Patents and Trademarks. Promptly after each annual delivery
to Lender pursuant to Section 4 of the Note of a listing of new
registration numbers for patents, trademarks, service marks, tradenames
and copyrights awarded to any Obligor, a duly executed amendment or
modification to the Notice of Security Interest in Patents and/or the
Notice of Security Interest in Trademarks, as applicable, or such other
duly executed documents as Lender may request in a form acceptable to
counsel for Lender and suitable for recording to evidence the security
interest in the patent or trademark which is the subject of such new
application to Lender as provided in Section 3 hereof, and subject to all
the terms hereof.
(j) Insurance. Insure the Collateral of such Obligor as set forth
in the Note. In case of any material loss, damage to or destruction of
the Collateral of any Obligor or any part thereof, such Obligor shall
promptly give written notice thereof to Lender generally describing the
nature and extent of such damage or destruction. In case of any loss,
damage to or destruction of the Collateral of any Obligor or any part
thereof, such Obligor, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient for
that purpose, at such Obligor's cost and expense, will promptly repair or
replace the Collateral of such Obligor so lost, damaged or destroyed;
provided, however, that such Obligor need not repair or replace the
Collateral of such Obligor so lost, damaged or destroyed to the extent the
failure to make such repair or replacement (i) is desirable to the proper
conduct of the business of such Obligor in the ordinary course and
otherwise in the best interest of such Obligor and (ii) would not
materially impair the rights and benefits of Lender under this Agreement
or any other Loan Document. In the event an Obligor shall receive any
proceeds of such insurance in a net amount in excess of $1,000,000, such
Obligor will immediately pay over such proceeds to Lender, for payment on
the Secured Obligations; provided, however,
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that Lender agrees to release such insurance proceeds to such Obligor for
replacement or restoration of the portion of the Collateral of such
Obligor lost, damaged or destroyed if, but only if, (A) no Default or
Event of Default shall have occurred and be continuing at the time of
release, (B) written application for such release is received by Lender
from such Obligor within 30 days of receipt of such proceeds and (C)
Lender has received evidence reasonably satisfactory to it that the
Collateral lost, damaged or destroyed has been or will be replaced or
restored to its condition immediately prior to the loss, destruction or
other event giving rise to the payment of such insurance proceeds. All
insurance proceeds shall be subject to the security interest of Lender
hereunder.
7. ADVANCES BY LENDER. On failure of any Obligor to perform any of the
covenants and agreements contained herein, Lender may, at its sole option and
in its sole discretion, perform the same and in so doing may expend such sums
as Lender may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien, expenditures
made in defending against any adverse claim and all other expenditures which
Lender may make for the protection of the security hereof or may be compelled
to make by operation of law. All such sums and amounts so expended shall be
repayable by the Obligors immediately without notice or demand, shall
constitute additional Secured Obligations and shall bear interest from the date
said amounts are expended at the default rate provided in Section 2.3 of the
Note. No such performance of any covenant or agreement by Lender on behalf of
any Obligor, and no such advance or expenditure therefor, shall relieve the
Obligors of any default under the terms of this Agreement or the other Loan
Documents. Lender may make any payment hereby authorized in accordance with
any xxxx, statement or estimate procured from the appropriate public office or
holder of the claim to be discharged without inquiry into the accuracy of such
xxxx, statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim.
8. EVENTS OF DEFAULT. The occurrence of an Event of Default under and
as defined in the Note shall be an Event of Default hereunder (an "EVENT OF
DEFAULT").
9. REMEDIES.
(a) General Remedies. Upon the occurrence of an Event of Default
and during continuation thereof, Lender shall have, in addition to the
rights and remedies provided
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herein, in the Loan Documents or by law (including, but not limited to,
the rights and remedies set forth in the Uniform Commercial Code of the
jurisdiction applicable to the affected Collateral) the rights and
remedies of a secured party under the UCC (regardless of whether the UCC
is the law of the jurisdiction where the rights and remedies are asserted
and regardless of whether the UCC applies to the affected Collateral), and
further Lender may, with or without judicial process or the aid and
assistance of others, (i) enter on any premises on which any of the
Collateral may be located and, without resistance or interference by the
Obligors, take possession of the Collateral, (ii) dispose of any
Collateral on any such premises, (iii) require the Obligors to assemble
and make available to Lender at the expense of the Obligors any Collateral
at any place and time designated by Lender which is reasonably convenient
to both parties, (iv) remove any Collateral from any such premises for the
purpose of effecting sale or other disposition thereof, and/or (v) without
demand and without advertisement, notice, hearing or process of law
(except as provided below), all of which each of the Obligors hereby
waives to the fullest extent permitted by law, at any place and time or
times, sell and deliver any or all Collateral held by or for it at public
or private sale, by one or more contracts, in one or more parcels, for
cash, upon credit or otherwise, at such prices and upon such terms as
Lender deems advisable, in its sole discretion (subject to any and all
mandatory legal requirements). In addition to all other sums due Lender
with respect to the Secured Obligations, the Obligors shall pay Lender all
reasonable costs and expenses incurred by Lender, including, but not
limited to, reasonable attorneys' fees and court costs, in obtaining or
liquidating the Collateral, in enforcing payment of the Secured
Obligations, or in the prosecution or defense of any action or proceeding
by or against Lender or the Obligors concerning any matter arising out of
or connected with this Agreement, any Collateral or the Secured
Obligations, including, without limitation, any of the foregoing arising
in, arising under or related to a case under the Bankruptcy Code. To the
extent the rights of notice cannot be legally waived hereunder, each
Obligor agrees that any requirement of reasonable notice shall be met if
such notice is personally served on or mailed, postage prepaid, to such
Obligor in accordance with the notice provisions of this Agreement at
least 10 days before the time of sale or other event giving rise to the
requirement of such notice. Lender shall not be obligated to make any
sale or other disposition of the Collateral regardless of notice having
been given. To the extent permitted by law, Lender may be a purchaser at
any
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such sale. Subject to the provisions of applicable law, Lender may
postpone or cause the postponement of the sale of all or any portion of
the Collateral by announcement at the time and place of such sale, and
such sale may, without further notice, to the extent permitted by law, be
made at the time and place to which the sale was postponed, or Lender may
further postpone such sale by announcement made at such time and place.
(b) Remedies relating to Receivables. Upon the occurrence of an
Event of Default and during the continuation thereof, whether or not
Lender has exercised any or all of its rights and remedies hereunder, (i)
each Obligor will promptly upon request of Lender instruct all account
debtors to remit all payments in respect of the receivables to a mailing
location selected by Lender and (ii) Lender or its designee may notify any
Obligor's customers and account debtors that the receivables of such
Obligor have been assigned to Lender or of Lender's security interest
therein, and may (either in its own name or in the name of an Obligor or
both) demand, collect (including without limitation by way of a lockbox
arrangement), receive, take receipt for, sell, xxx for, compound, settle,
compromise and give acquittance for any and all amounts due or to become
due on receivables, and, in Lender's discretion, file any claim or take
any other action or proceeding to protect and realize upon the security
interest of Lender in the receivables. Each Obligor acknowledges and
agrees that the proceeds of its receivables remitted to or on behalf of
Lender in accordance with the provisions hereof shall be solely for
Lender's own convenience and that such Obligor shall not have any right,
title or interest in such accounts or in any such other amounts except as
expressly provided herein. Lender shall have no liability or
responsibility to any Obligor for acceptance of a check, draft or other
order for payment of money bearing the legend "payment in full" or words
of similar import or any other restrictive legend or endorsement or be
responsible for determining the correctness of any remittance. Each
Obligor hereby agrees to indemnify Lender from and against all
liabilities, damages, losses, actions, claims, judgments, costs, expenses,
charges and reasonable attorneys' fees suffered or incurred by Lender
because of the maintenance of the foregoing arrangements except as
relating to or arising out of the negligence or willful misconduct of
Lender or its officers, employees or agents.
(c) Access. In addition to the rights and remedies hereunder, upon
the occurrence of an Event of Default and during the continuance thereof,
Lender shall have the right
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to enter and remain upon the various premises of the Obligors without cost
or charge to Lender, and use the same, together with materials, supplies,
books and records of the Obligors for the purpose of collecting and
liquidating the Collateral, or for preparing for sale and conducting the
sale of the Collateral, whether by foreclosure, auction or otherwise. In
addition, Lender may remove Collateral, or any part thereof, from such
premises and/or any records with respect thereto, in order to effectively
collect or liquidate such Collateral.
(d) Nonexclusive Nature of Remedies. The failure of Lender to
exercise any right, remedy or option under this Agreement or any other
Loan Document or as provided by law, or any delay by Lender in exercising
the same, shall not operate as a waiver of any such right, remedy or
option. No waiver hereunder shall be effective unless it is in writing,
signed by the party against whom such waiver is sought to be enforced and
then only to the extent specifically stated, which in the case of Lender
shall only be granted as provided herein. To the extent permitted by law,
neither Lender, nor any party acting as attorney for Lender, shall be
liable hereunder for any acts or omissions or for any error of judgment or
mistake of fact or law other than their negligence or willful misconduct
hereunder. The rights and remedies of Lender under this Agreement shall
be cumulative and not exclusive of any other right or remedy which Lender
may have.
10. POWER OF ATTORNEY. In addition to other powers of attorney contained
herein, each Obligor hereby designates and appoints Lender, and each of its
designees or agents, as attorney-in-fact of such Obligor, irrevocably and with
power of substitution, with authority to take any or all of the following
actions upon the occurrence and during the continuance of an Event of Default,
subject to other provisions hereof:
(i) demand, collect, settle, compromise, adjust, give discharges
and releases, all as Lender may determine;
(ii) commence and prosecute any actions at any court for the
purposes of collecting any Collateral and enforcing any other right in
respect thereof;
(iii) defend, settle or compromise any action brought and, in
connection therewith, give such discharge or release as Lender may deem
appropriate;
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(iv) receive, open and dispose of mail addressed to an Obligor and
endorse checks, notes, drafts, acceptances, money orders, bills of lading,
warehouse receipts or other instruments or documents evidencing payment,
shipment or storage of the goods giving rise to the Collateral of such
Obligor on behalf of and in the name of such Obligor, or securing, or
relating to such Collateral;
(v) sell, assign, transfer, make any agreement in respect of, or
otherwise deal with or exercise rights in respect of, any Collateral or
the goods or services which have given rise thereto, as fully and
completely as though Lender were the absolute owner thereof for all
purposes;
(vi) adjust and settle claims under any insurance policy relating
thereto;
(vii) execute and deliver all assignments, conveyances, statements,
financing statements, renewal financing statements, security agreements,
affidavits, notices and other agreements, instruments and documents that
Lender may determine necessary in order to perfect and maintain the
security interests and liens granted in this Agreement and in order to
fully consummate all of the transactions contemplated therein;
(viii) institute any foreclosure proceedings that Lender may deem
appropriate; and
(ix) do and perform all such other acts and things as Lender may
deem to be necessary, proper or convenient in connection with the
Collateral.
This Power of Attorney is coupled with an interest and is irrevocable until the
Secured Obligations have been fully satisfied.
11. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by Lender in cash
or its equivalent, will be applied in reduction of the Secured Obligations in
such order and manner as set forth hereinbelow, and each Obligor irrevocably
waives the right to direct the application of such payments and proceeds and
acknowledges and agrees that Lender shall have the continuing and exclusive
right to apply and reapply any and all such payments and proceeds in Lender's
sole discretion, notwithstanding any entry to the contrary upon any of
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its books and records. The Obligors shall remain liable to Lender for any
deficiency. The proceeds of the Collateral shall be applied as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
Lender in connection with enforcing its rights under the Loan Documents
and any protective advances made by Lender with respect to the Collateral
under or pursuant to the terms of the Loan Documents;
SECOND, to the payment of all of the Borrower's Obligations
consisting of accrued fees and interest;
THIRD, to the payment of the outstanding principal amount of the
Borrower's Obligations;
FOURTH, to all other Borrower's Obligations and other obligations
which shall have become due and payable under the Loan Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "THIRD"
above; and
FIFTH, to the payment of the surplus, if any, to whomever may be
lawfully entitled to receive such surplus.
12. COSTS OF COUNSEL. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, Lender employs counsel to prepare or
consider amendments, waivers or consents with respect to this Agreement, or to
take action or make a response in or with respect to any legal or arbitral
proceeding relating to this Agreement or relating to the Collateral, or to
protect the Collateral or exercise any rights or remedies under this Agreement
or with respect to the Collateral, then the Obligors agree to promptly pay upon
demand any and all such reasonable costs and expenses of Lender (including the
allocated costs of in-house counsel), all of which costs and expenses shall
constitute Secured Obligations hereunder.
13. CONTINUING AGREEMENT. This Agreement shall be a continuing agreement
in every respect and shall remain in full force and effect so long as any
amounts remain payable under the Note or under any other Loan Document. Upon
such termination of this Agreement, Lender shall, upon the request and at the
expense of the Obligors, forthwith release all of its liens and security
interests hereunder. Notwithstanding the foregoing all releases and
indemnities provided hereunder shall survive termination of this Agreement.
14. AMENDMENTS; WAIVERS; MODIFICATIONS. This Agreement and the
provisions hereof may not be amended, waived, modified,
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changed, discharged or terminated except as set forth in Section 11 of the
Note.
15. SUCCESSORS IN INTEREST. This Agreement shall create a continuing
security interest in the Collateral and shall be binding upon each Obligor, its
successors and assigns and shall inure, together with the rights and remedies
of Lender hereunder, to the benefit of Lender and its successors and assigns;
provided, however, that none of the Obligors may assign its rights or delegate
its duties hereunder without the prior written consent of Lender, which consent
may be withheld in Lender's sole and absolute discretion. To the fullest
extent permitted by law, each Obligor hereby releases Lender, and its
successors and assigns, from any liability for any act or omission relating to
this Agreement or the Collateral, except for any liability arising from the
negligence or willful misconduct of Lender or its officers, employees or
agents.
16. NOTICES. All notices required or permitted to be given under this
Agreement shall be in conformance with Section 15 of the Note.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
18. HEADINGS. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
19. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS. Any legal action or proceeding with
respect of this Agreement may be brought in the courts of the State of
Texas in Dallas County, or of the United States in the District Court for
the Northern District of Texas, and, by execution and delivery of this
Agreement, each of the Obligors hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the Obligors further
irrevocably consents to the service of process out of any of the
aforementioned courts in any
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such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 15 of the Note, such service to become
effective 3 days after such mailing. Nothing herein shall affect the
right of Lender to serve process in any other manner permitted by law or
to commence legal proceedings or to otherwise proceed against any Obligor
in any other jurisdiction.
(b) Each of the Obligors 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 subsection (a) hereof 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.
(c) TO THE EXTENT PERMITTED BY LAW, LENDER AND EACH OF THE OBLIGORS
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
20. SEVERABILITY. If any provision of any of this Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
21. ENTIRETY. This Agreement and the other Loan Documents represent the
entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Loan Documents or the
transactions contemplated herein and therein.
22. SURVIVAL. All representations and warranties of the Obligors
hereunder shall survive the execution and delivery of this Agreement and the
other Loan Documents, the delivery of the Note and the making of the loan under
the Note.
23. OTHER SECURITY. To the extent that any of the Secured Obligations are
now or hereafter secured by Property other than the Collateral (including,
without limitation, real property and securities owned by an Obligor), or by a
guarantee, endorsement or Property of any other Person, then Lender shall have
the right
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to proceed against such other property, guarantee or endorsement upon the
occurrence of any Event of Default, and Lender has the right, in its sole
discretion, to determine which rights, security, liens, security interests or
remedies Lender shall at any time pursue, relinquish, subordinate, modify or
take with respect thereto, without in any way modifying or affecting any of
them or any of Lender's rights or the Secured Obligations under this Agreement
or under any other of the Loan Documents.
24. JOINT AND SEVERAL OBLIGATIONS OF OBLIGORS. All payment obligations
of the Obligors hereunder shall be joint and several.
25. INCORPORATION OF TERMS OF NOTE. Each Guarantor hereby agrees that
the representations and warranties set forth in Section 3 of the Note, the
affirmative covenants set forth in Section 4 of the Note and the negative
covenants set forth in Section 5 of the Note shall be incorporated into this
Agreement and hereby makes each such representation and warranty to be made by
it as a Credit Party and hereby agrees to be bound by each affirmative and
negative covenant applicable to a Credit Party or to it as a Subsidiary of the
Borrower.
26. AGENT OF SENIOR LENDERS AS AGENT. Notwithstanding anything to the
contrary contained in this Agreement, Lender agrees that whenever the Obligors
are required to deliver Collateral to Lender and in which Collateral Lender's
security interests are subordinate to the Senior Lenders, delivery to the
Senior Lenders or the agent for the Senior Lenders under the Senior Debt shall
be deemed delivery to Lender and the Senior Lenders or the agent for the Senior
Lenders shall be the bailee to Lender for purposes of holding such Collateral.
The Obligors hereby instruct the Senior Lenders and the agent for the Senior
Lenders, upon payment in full of the Senior Debt, to deliver all Collateral
held by the Senior Lenders or the agent for the Senior Lenders as security for
the Senior Debt to Lender to be held hereunder.
27. SUBORDINATION OF LIENS. The Liens and security interests granted
under this Agreement are subordinate to the Liens and security interests
granted to the Senior Lenders under the Senior Debt on the terms and subject to
the conditions set forth in the Letter Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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Each of the parties hereto has caused a counterpart of this Agreement to
be duly executed and delivered as of the date first above written.
BORROWER:
--------
GENICOM CORPORATION
By Xxxxx X. Xxxx
---------------------------
Name Xxxxx X. Xxxx
--------------------------
Title Senior VP Finance and CFO
-------------------------
GUARANTORS:
----------
GENICOM INTERNATIONAL HOLDINGS CORPORATION
By Xxxxx X. Xxxx
---------------------------
Name Xxxxx X. Xxxx
--------------------------
Title Senior VP Finance and CFO
-------------------------
GENICOM INTERNATIONAL SALES CORPORATION
By Xxxxx X. Xxxx
---------------------------
Name Xxxxx X. Xxxx
--------------------------
Title Senior VP Finance and CFO
-------------------------
DELMARVA TECHNOLOGIES CORPORATION
By Xxxxx X. Xxxx
---------------------------
Name Xxxxx X. Xxxx
--------------------------
Title Senior VP Finance and CFO
-------------------------
RASTEK CORPORATION
By Xxxxx X. Xxxx
---------------------------
Name Xxxxx X. Xxxx
--------------------------
Title Senior VP Finance and CFO
-------------------------
[Signatures continued]
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22
ENTERPRISING SERVICE SOLUTIONS CORPORATION
By Xxxxx X. Xxxx
---------------------------
Name Xxxxx X. Xxxx
--------------------------
Title Senior VP Finance and CFO
-------------------------
PRINTER SYSTEMS CORPORATION
By Xxxxx X. Xxxx
---------------------------
Name Xxxxx X. Xxxx
--------------------------
Title Senior VP Finance and CFO
-------------------------
THE PRINTER CONNECTION, INC.
By Xxxxx X. Xxxx
---------------------------
Name Xxxxx X. Xxxx
--------------------------
Title Senior VP Finance and CFO
-------------------------
PRINTER SYSTEMS INTERNATIONAL, LTD.
By Xxxxx X. Xxxx
----------------------------
Name Xxxxx X. Xxxx
---------------------------
Title Senior VP Finance and CFO
--------------------------
Accepted and agreed to as of the date first above written.
TEXAS INSTRUMENTS INCORPORATED
By Xxxxxx X. Xxxxxxxxxx
--------------------
Name Xxxxxx X. Xxxxxxxxxx
--------------------
Title Pres., Personal Productivity
-----------------------------
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