EXHIBIT 10.21
________________________________________________________________________________
________________________________________________________________________________
SECURITY AGREEMENT-COMPANY
DATED AS OF MARCH 12, 1998
BETWEEN
IMPAC GROUP, INC.
AND
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
AS AGENT
________________________________________________________________________________
________________________________________________________________________________
TABLE OF CONTENTS
Page
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1. Definitions and Interpretation of Agreement............................ 2
"Account Debtor"....................................................... 2
"Account Receivable"................................................... 2
"Agent" shall have the meaning given to such term in the Preamble...... 2
"Assignee Deposit Account"............................................. 2
"Collateral"........................................................... 2
"Contract Right"....................................................... 2
"Equipment"............................................................ 2
"General Intangibles".................................................. 2
"Inventory"............................................................ 3
"Non-Goods Collateral"................................................. 3
"Obligor".............................................................. 3
"Permissible Collateral Locations"..................................... 3
2. Grant of Security Interest............................................. 4
3. Representations and Warranties......................................... 5
4. Use of Equipment....................................................... 5
5. Processing, Sale and Collections....................................... 5
6. Certificates, ▇▇▇▇▇▇▇▇▇ and Reports.................................... 7
7. Covenants.............................................................. 7
8. Remedies............................................................... 9
(a) Remedies; Obtaining the Collateral Upon an Event of Default..... 9
(b) Disposition of the Collateral................................... 10
9. Application of Proceeds................................................ 11
10. Remedies Cumulative.................................................... 12
11. Discontinuance of Proceedings.......................................... 12
12. Custody and Preservation of Collateral................................. 12
13. Authorization for the Agent to Take Certain Action..................... 12
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14. Notices............................................................. 13
15. Waiver and Amendments............................................... 13
16. Termination......................................................... 13
18. Severability........................................................ 14
19. Successors and Assigns.............................................. 14
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SCHEDULES
SCHEDULE A - Schedule of Equipment Locations
SCHEDULE B - Schedule of Chief Executive Office Location, Records Locations
and Inventory Locations
SCHEDULE C - Schedule of Trade Names, Styles and Doing Business Forms
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SECURITY AGREEMENT-COMPANY
THIS SECURITY AGREEMENT- COMPANY, dated as of March 12, 1998 (as the same
may be restated, amended or modified from time to time, this "Agreement"), by
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and between IMPAC GROUP, INC. a Delaware corporation (the "Company"), and BANK
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AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION, as agent (the "Agent") for the
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Secured Creditors (as defined below). Unless otherwise defined in Section 1,
terms defined in the Credit Agreement (as defined below) are used herein as
therein defined.
R E C I T A L S:
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▇. ▇▇▇▇▇▇▇▇ to the Credit Agreement, dated as of even date herewith, among
the Company, AGI Incorporated ("AGI"), Klearfold, Inc. ("Klearfold"; and
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together with AGI, each a "L/C Borrower" and collectively, the "L/C Borrowers")
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the financial institutions from time to time party thereto (the "Lenders") and
the Agent (as from time to time restated, amended or modified, the "Credit
Agreement"), the Lenders have agreed to extend certain credit and issue letters
of credit to the Company and the L/C Borrowers;
B. Pursuant to the Guaranty-Company, dated as of even date herewith (as
from time to time amended or modified, the "Guaranty"), the Company has
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guaranteed to the Secured Creditors the payment when due of all obligations and
liabilities of the L/C Borrowers under or with respect to the Secured Debt
Agreements (as defined below) to which such L/C Borrower is a party;
C. The Company may from time to time be an account party to one or more
Swap Contracts relating to the Revolving Loans (each such Swap Contract with a
Swap Creditor (as defined below), a "Secured Swap Contract") with Bank of
America National Trust & Savings Association ("B of A"), in its individual
capacity, any Lender or syndicate of financial institutions organized by B of A,
or an affiliate of B of A, or any Lender (even if B of A or any such Lender
ceases to be a Lender under the Credit Agreement for any reason) and any
institution that participates in, and in each case their subsequent assigns,
such Secured Swap Contract (collectively, the "Swap Creditors"); and
D. The Company may from time to time incur Indebtedness pursuant to
Section 8.05(i) of the Credit Agreement as an account party to one or more
letters of credit (a "Section 8.05 L/C Obligation") (each such Section 8.05 L/C
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Obligation with a L/C Creditor (as defined below), a "Secured Letter of Credit")
issued by B of A or a Lender, in each case in its individual capacity (even if B
of A or such Lender ceases to be a Lender under the Credit Agreement for any
reason) and any institution that participates in, and in each case their
subsequent assigns, such Secured Letter of Credit (collectively, the "L/C
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Creditors"); and
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E. As a condition to entering into a Secured Debt Agreement and extending
credit under such Secured Debt Agreement, the Secured Creditors have required
that the Company grant to the
Agent, for the ratable benefit of itself and the Secured Creditors, a security
interest in the Collateral (as defined below) on the terms and conditions set
forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions and Interpretation of Agreement. The following shall have
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(unless otherwise provided elsewhere in this Agreement) the following respective
meanings (such meanings being equally applicable to both the singular and plural
form of the terms defined):
"Account Debtor" shall mean the party who is obligated on or under any
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Account Receivable or Contract Right.
"Account Receivable" shall mean any right of the Company to payment for
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goods sold or leased or for services rendered.
"Agent" shall have the meaning given to such term in the Preamble.
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"Assignee Deposit Account" has the meaning ascribed to it in Section 5.
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"BofA" has the meaning ascribed to it in the Recitals.
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"Collateral" has the meaning ascribed to it in Section 2.
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"Contract Right" shall mean any right of the Company to payment under
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a contract for the sale or lease of goods or the rendering of services, which
right is at the time not yet earned by performance.
"Credit Agreement" has the meaning ascribed to it in the Recitals.
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"Event of Default" means any Event of Default under, and as defined
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in, the Credit Agreement, or any payment default, after any applicable grace
period, under any other Secured Debt Agreement.
"Equipment" shall mean all equipment owned by the Company of every
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description; all accessories, parts, accessions and other property owned by the
Company at any time installed thereon or affixed thereto or used in connection
therewith; and all substitutions for or replacements of any of the foregoing.
"General Intangibles" means all intangible personal property of the
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Company including, without limitation, all general intangibles, contract rights,
rights to receive payments of money, choses in action, judgments, tax refunds
and tax refund claims, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, trade names, trade secrets, drawings or plans
with respect to trade secrets, copyrights, licenses, franchises, leasehold
interests
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in real or personal property, rights to receive rentals of real or personal
property and guarantee claims.
"Inventory" shall mean all goods held by the Company for sale or
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lease, or leased by the Company as lessor, or furnished or to be furnished by
the Company under any contract of service, or held by the Company as raw
materials, work in process or materials used or consumed in a business; and all
goods, the sale or lease of which has given rise to an Account Receivable,
Contract Right, instrument or chattel paper, which are returned to the Company,
repossessed by the Company, stopped in transit by the Company or which otherwise
come into the possession of the Company.
"L/C Creditor" has the meaning ascribed to it in the Recitals.
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"Lenders" has the meaning ascribed to it in the Recitals.
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"Non-Goods Collateral" shall mean all Collateral other than Inventory,
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Equipment and other goods.
"Obligor" shall mean the Company and each other party primarily or
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secondarily liable on any of the Secured Obligations.
"Permissible Collateral Locations" shall mean the Company's address
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shown above, any locations listed on Schedule B hereto as to which (in the case
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of locations not owned by the Company) the Agent has received an executed
landlord waiver in form satisfactory to the Agent (with respect to leased
premises) and any other location to which the Agent, after all actions necessary
in the Agent's absolute discretion to protect the Agent's security interest in
all Collateral to be kept at such location.
"Secured Creditors" means, collectively, the Agent, each Lender, each
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L/C Creditor and each Swap Creditor.
"Secured Debt Agreements" means, collectively, the Credit Agreement
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and the other Loan Documents, each Secured Letter of Credit and each Secured
Swap Contract.
"Secured Letter of Credit" has the meaning ascribed to it in the
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Recitals.
"Secured Obligations" means, collectively, (i) all "Obligations" as
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defined in the Credit Agreement, (ii) all "Obligations" as defined in the
Guaranty, (iii) the payment when due of all obligations of the Company to Swap
Creditors pursuant to any Secured Swap Contract and the due performance and
compliance with all the terms of the Secured Swap Contracts by the Company and
(iv) the payment when due of all obligations of the Company to L/C Creditors
pursuant to any Secured Letter of Credit and the due performance and compliance
with all the terms of the Secured Letter of Credit by the Company.
"Secured Swap Contract" has the meaning ascribed to it in the
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Recitals.
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"Swap Creditor" has the meaning ascribed to it in the Recitals.
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A Section or a Schedule is, unless otherwise stated, a reference to a
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section hereof or a schedule hereto, as the case may be. Section captions used
in this Agreement are for convenience only, and shall not affect the
construction of this Agreement. The words "hereof," "herein," "hereto" and
"hereunder" and words of similar purport when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise defined therein, all terms defined in this Agreement
shall have the defined meanings when used in any certificate or other documents
made or delivered pursuant hereto.
2. Grant of Security Interest. As security for the payment of all
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Secured Obligations, the Company hereby assigns to the Agent for the benefit of
the Secured Creditors, and grants to the Agent for the benefit of the Secured
Creditors, a continuing security interest in, all personal property, wherever
located, in which the Company now has or hereafter acquires any right or
interest and all proceeds thereof, including without limitation the following
(collectively, the "Collateral"):
(a) all Inventory, Accounts Receivable, Contract Rights and documents
of title of the Company;
(b) all chattel paper and instruments evidencing any obligation to
the Company for payment for goods sold or leased or for services rendered;
(c) all interest of the Company in any goods, the sale or lease of
which shall have given or shall give rise to, and in all guaranties and other
property securing the payment of or performance under, any Accounts Receivable,
Contract Rights or any such chattel paper or instruments;
(d) all Equipment of the Company.
(e) all General Intangibles of the Company;
(f) to the extent related to the property described in clauses (a)
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through (e) above, all books, correspondence, credit files, records, invoices
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and other papers and documents, including, without limitation, to the extent so
related, all tapes, cards, computer runs, computer programs (to the extent the
Company may grant a security interest in the same without a breach of the terms
thereof) and other papers and documents in the possession or control of the
Company or any computer bureau from time to time acting for the Company; and, to
the extent so related, all rights in, to and under all policies of insurance,
including claims of rights to payments thereunder and proceeds therefrom,
including any credit insurance; and
(g) all proceeds and products of any of the foregoing.
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3. Representations and Warranties. The Company represents and warrants
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to the Agent and the Secured Creditors that:
(a) none of the Collateral is of a type where a security interest or
lien may be filed under, or notice thereof given under, any federal statute
relating exclusively to Collateral of that type rather than property generally;
provided, however, some of the collateral may be intellectual property falling
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under the purview of the United States Patent and Trademark Office;
(b) all Equipment, except any thereof which the Company shall have
identified on Schedule A as equipment normally used in more than one State, is
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located at one of the addresses shown on Schedule A unless another location is
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shown with respect to any Equipment in the description thereof on Schedule A, in
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which case such Equipment is located at such other location, and all Inventory
is located at the addresses shown on Schedule B;
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(c) since January 1, 1993, the Company has not conducted business
under any name except the name or trade name in which it has executed this
Agreement; provided, however, the Company previously conducted business under
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the name KFI Holding Corporation;
(d) except with respect to vehicles, none of the Equipment owned by
the Company is covered by any certificate of title; and
(e) the Company has no trade names, styles or doing business forms
except for the divisional names listed on Schedule C and, when using such names,
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the Company identifies the applicable division as a division of the Company;
4. Use of Equipment. Until an Event of Default has occurred and is
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continuing, the Company may have possession of all Equipment and use the same in
any lawful manner not inconsistent with this Agreement or with any policy of
insurance on any of the Equipment.
5. Processing, Sale and Collections. Until such time as an Event of
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Default has occurred and is continuing and the Agent shall notify the Company of
the revocation of such power and authority, the Company:
(a) may, in the ordinary course of its business, at its own expense,
sell, lease or furnish under contracts of service any of the Inventory normally
held by the Company for such purpose, and use and consume, in the ordinary
course of its business, any raw materials, work in process or materials normally
held by the Company for such purpose;
(b) will, at its own expense, endeavor to collect, as and when due,
all amounts due with respect to any of the Non-Goods Collateral, including the
taking of such action with respect to such collection as the Agent may
reasonably request or, in the absence of such request, as the Company may deem
advisable;
(c) may grant, in the ordinary course of business, to any party
obligated on or with respect to any of the Non-Goods Collateral, any rebate,
refund or allowance to which such party may
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be lawfully entitled, and may accept, in connection therewith, the return of
goods, the sale or lease of which shall have given rise to such Non-Goods
Collateral; and
(d) the Company may sell used and obsolete furniture, equipment and
fixtures in the ordinary course of business to the extent not prohibited by the
Credit Agreement. So long as no Event of Default has occurred and is continuing,
the Agent shall, upon the request of the Company, accompanied by a certificate
to the effect such sale is in compliance with this section, without the
requirement of obtaining the consent of any Secured Creditor, release the Lien
of this Agreement upon any property sold pursuant to this section.
The Agent, however, may at any time (but shall not be obligated to), during
the continuation of an Event of Default and after giving written notice of such
action to the Company notify any party obligated on or with respect to any of
the Non-Goods Collateral to make payment directly to the Agent of any amounts
due or to become due thereunder and enforce collection of any of the Non-Goods
Collateral by suit or otherwise and surrender, release or exchange all or any
part thereof, or compromise or extend or renew for any period (whether or not
longer than the original period) any indebtedness thereunder or evidenced
thereby. Upon request of the Agent during the continuation of an Event of
Default, the Company will, at its own expense, notify any parties obligated on
or with respect to any of the Non-Goods Collateral to make payment to the Agent
of any amounts due or to become due thereunder.
The Company will, upon written demand of the Agent made after and during
the continuance of an Event of Default, forthwith, upon receipt, transmit and
deliver to the Agent, in the form received, all cash, checks, drafts, chattel
paper and other instruments or writings for the payment of money (properly
endorsed, where required, so that such items may be collected by the Agent)
which may be received by the Company at any time in full or partial payment or
otherwise as proceeds of any of the Collateral. Except as the Agent may
otherwise consent in writing, any such items which may be received by the
Company following such demand of the Agent will not be commingled with any other
of its funds or property, but will be held separate and apart from its own funds
or property and upon express trust for the Agent, for the benefit of itself and
the Secured Creditors, until delivery is made to the Agent. All items or amounts
which are delivered by the Company to the Agent on account of partial or full
payment by an Account Debtor or otherwise as proceeds of any of the Collateral
shall be deposited to the credit of a special deposit account over which the
Company shall have no control (herein called the "Assignee Deposit Account") of
the Company with the Agent, as security for payment of the Secured Obligations.
The Agent shall invest any and all available funds deposited in such special
deposit account, within 10 business days after the date the relevant funds
become available, in securities issued as fully guaranteed or insured by the
United States Government or any agency thereof backed by the full faith and
credit of the United States having maturities of no greater than 3 months from
the date of acquisition thereof (collectively, "Government Obligations"). The
Company hereby acknowledges and agrees that the Agent shall not have any
liability with respect to, and the Company hereby indemnifies the Agent against,
any loss resulting from the acquisition of the Government Obligation and the
Agent shall not have any obligation to monitor the trading activity of any such
Governmental Obligations on and after the acquisition thereof for the purpose of
obtaining the highest possible return with respect thereto, the Agent's
responsibility being limited to acquiring such Governmental Obligations. The
Agent may,
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from time to time, in its absolute discretion, apply all or any of the then
balance, representing collected funds, in the Assignee Deposit Account, toward
payment of the Secured Obligations, whether or not then due.
The Agent is authorized to endorse, in the name of the Company, any item,
howsoever received by the Agent, representing any payment on or other proceeds
of any of the Collateral.
6. Certificates, Schedules and Reports. The Company will furnish to the
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Agent from time to time, as the Agent may reasonably request, such additional
schedules and such certificates and reports respecting all or any of the
Collateral at the time subject to the security interest hereunder and the items
or amounts received by the Company in full or partial payment or otherwise as
proceeds of any of the Collateral, all to such extent as the Agent may
reasonably request. Each of the foregoing schedules, certificates, reports and
notices shall be executed by a duly authorized officer of the Company and shall
be in such form and detail as the Agent may reasonably specify.
7. Covenants. From the date of this Agreement, and thereafter until this
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Agreement is terminated, the Company:
(a) will keep all Inventory at the addresses shown on Schedule B, or
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at such other address as to which the Company has given the Agent one (1) month
prior written notice and the Agent has taken such steps as it deems necessary to
ensure that its security interest in collateral at such new location shall
remain perfected;
(b) will keep its records concerning its Accounts Receivables at its
address shown on Schedule B, unless the Agent shall otherwise be notified one
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(1) month in advance of a new address in writing, which records will be of such
character as will enable the Agent or its designees to determine at any time the
status thereof, and the Company will not, unless the Agent shall otherwise
consent in writing, duplicate any such records at any other address;
(c) will keep all Equipment, except any thereof which the Company
shall have identified on Schedule A as equipment normally used in more than one
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State (referred to in this clause (c) as "mobile goods"), at the addresses on
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Schedule A, unless the Agent shall otherwise consent in writing; will give
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written notice to the Agent within thirty (30) days before any use of any mobile
goods in any jurisdiction other than a State in which the Company shall have
previously advised the Agent such mobile goods will be used; and will not use
any mobile goods outside the territorial limits of the United States, unless the
Agent shall otherwise consent in writing;
(d) will not, without giving the Agent one (1) month prior written
notice, change the location of its chief executive office or its chief place of
business from the address shown on Schedule B;
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(e) will furnish the Agent not less than 30 days written notice prior
to changing its name or adopting or changing any trade name, style or doing
business form;
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(f) will furnish the Agent such information concerning the Company,
the Collateral and the Account Debtors as the Agent may from time to time
reasonably request;
(g) upon the occurrence and continuance of an Event of Default, will,
upon request of the Agent, stamp on its records concerning the Collateral a
notation, in form satisfactory to the Agent, of the security interest of the
Agent hereunder;
(h) will reimburse the Agent upon demand for all reasonable costs and
expenses, including reasonable fees of attorneys (who may be employees of the
Agent) and reasonable legal expenses, incurred by the Agent in seeking to
collect or enforce any rights under the Collateral and, in case of an Event of
Default, in seeking to collect any Secured Obligations and to enforce rights
hereunder, including reasonable expenses of any repairs to any realty or other
property to which any of the Equipment may be affixed or be a part;
(i) will pay, when due, all taxes, assessments, governmental charges
and other similar charges levied against any of the Collateral, except and so
long as the Company is contesting such taxes, assessments or charges in good
faith and by appropriate proceedings and the Company has set aside on its books
such reserves or other appropriate provisions therefor as may be required by
generally accepted accounting principles;
(j) will do nothing to impair in any material respect the rights of
the Agent or the Secured Creditors in the Collateral. The Company will at all
times keep the Collateral insured in compliance with the requirements of the
Credit Agreement. The Company assumes all liability and responsibility in
connection with the Collateral acquired by it, and the liability of the Company
to pay its obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, stolen, damaged or for any reason
whatsoever unavailable to the Company;
(k) will notify the Agent of any Collateral which, to its knowledge,
constitutes a claim against the United States government or any instrumentality
or agency thereof (except for claims against any state government, unless
requested by the Agent), the assignment of which claim is restricted by federal
law. Promptly upon the reasonable request of the Agent, the Company will take
such steps as may be necessary to comply with any applicable federal assignment
of claims laws; and
(l) at any time after and during the continuance of an Event of
Default, upon reasonable request, will give the Agent information as to
ownership of any vehicle or other Equipment covered by a certificate of title.
Promptly upon reasonable request of the Agent at any time after and during the
continuance of an Event of Default, the Company will deliver any such
certificate of title to the Agent and/or will cause the lien of the Agent, on
behalf of itself and the Secured Creditors, to be noted thereupon.
The Agent may from time to time, at its option, perform any agreement of
the Company hereunder which the Company shall fail to perform and take any other
action which the Agent deems necessary for the maintenance or preservation of
any of the Collateral or its interest therein, and the Company agrees to
forthwith reimburse the Agent for all reasonable expenses of the Agent in
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connection with the foregoing, together with interest thereon from the date
incurred until reimbursed by the Company at a rate per annum equal to the Base
Rate plus the Applicable Margin in effect from time to time. The Company's
obligation to reimburse the Agent pursuant to the preceding sentence shall be a
Secured Obligation payable on demand.
8. Remedies.
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(a) Remedies; Obtaining the Collateral Upon an Event of Default. The
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Company agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Agent may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from the Company or any
other Person who then has possession of any part thereof with or without
notice or process of law (unless the same shall be required by applicable
law), and for that purpose may enter in an orderly and lawful manner upon
the Company's premises where any of the Collateral is located and remove
the same and use in connection with such removal any and all services,
supplies, aids and other facilities of the Company;
(ii) instruct the obligor or obligors on any contract,
agreement, instrument or other obligation (including, without limitation,
the Receivables) constituting the Collateral to make any payment required
by the terms of such instrument or agreement directly to the Agent, on
behalf of itself and the Secured Creditors;
(iii) sell or otherwise liquidate, or direct the Company to sell
or otherwise liquidate, any or all investments made in whole or in part
with the Collateral or any part thereof, and take possession of the
proceeds of any such sale or liquidation;
(iv) with respect to Secured Obligations not already covered
under the Credit Agreement which are contingent and cannot be accelerated
by their nature, require the Company to deposit cash or other acceptable
collateral in an amount sufficient to cover principal, interest and fees
which will have accrued by the maturity date on said Secured Obligations to
be held as security for said Secured Obligations in the special non-
interest bearing collateral account referred to in Section 7.2 hereof; and
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(v) take possession of the Collateral or any part thereof, by
directing the Company in writing to deliver the same to the Agent, on
behalf of itself and the Secured Creditors, at any reasonable place or
places designated by the Agent, in which event the Company shall at its own
expense:
(A) forthwith cause the same to be moved to the place or
places so designated by the Agent and there delivered to the Agent, on
behalf of itself and the Secured Creditors;
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(B) store and keep any Collateral so delivered to the
Agent, on behalf of itself and the Secured Creditors, at such place or
places pending further action by the Agent; and
(C) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good condition;
it being understood that the Company's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly, upon
application to a court of equity having jurisdiction, the Agent, on behalf
of itself and the Secured Creditors, shall be entitled to a decree
requiring specific performance by the Company of said obligation.
(b) Disposition of the Collateral.
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(i) Any Collateral repossessed by the Agent, on behalf of itself
and the Secured Creditors, under or pursuant to Section 8(a) hereof and any
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other Collateral whether or not so repossessed by the Agent, on behalf of
itself and the Secured Creditors, upon the occurrence and continuance of an
Event of Default may be sold, leased or otherwise disposed of under one or
more contracts or as an entirety and without the necessity of gathering at
the place of sale the property to be sold, and in general in such manner,
at such time or times, at such place or places and on such terms and for
such prices as the Agent may, in compliance with any mandatory requirements
of applicable law, determine to be commercially reasonable. Upon the
occurrence and during the continuance of any Event of Default, the Agent,
on behalf of itself and the Secured Creditors, shall have the power to
foreclose the Company's right of redemption in the Collateral by sale,
lease or other disposition of the Collateral in accordance with the Uniform
Commercial Code as enacted in each state where the Collateral is located.
Any of the Collateral may be sold, leased or otherwise disposed of in the
condition in which the same existed when taken by the Agent, on behalf of
itself and the Secured Creditors, or after any overhaul or repair which the
Agent shall determine to be commercially reasonable and the Agent shall be
entitled to reimbursement for the payment of any costs or expenses of such
overhaul or repair. Any such disposition which shall be a private sale or
other private proceeding permitted by the requirements of applicable law
shall be made after 10 days' prior written notice to the Company specifying
the time at which such disposition is to be made and the intended sale
price or other consideration therefor. Any such disposition which shall be
a public sale permitted by such requirements of applicable law shall be
made after written notice to the Company specifying the time and place of
such sale and, in the absence of applicable requirements of law, shall be
by public auction. To the extent permitted by any such requirement of law,
the Agent, on behalf of itself and the Secured Creditors, or any Secured
Creditor may itself bid for and become the purchaser of the Collateral or
any item thereof, offered for sale in accordance with this Section 8(b)
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without accountability to the Company. In the payment of the purchase price
of the Collateral the purchaser shall be entitled to have credit on account
of the purchase price thereof of amounts owing to such purchaser on account
of any of the Secured Obligations held by such purchaser and any such
purchaser
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may deliver notes, claims for interest, or claims for other payment with
respect to such Secured Obligations in lieu of cash up to the amount which
would, upon distribution of the net proceeds of such sale, be payable
thereon. Such notes, if the amount payable hereunder shall be less than the
amount due thereon, shall be returned to the holder thereof after being
appropriately stamped to show partial payment. If, under mandatory
requirements of applicable law, the Agent, on behalf of itself and the
Secured Creditors, shall be required to make disposition of the Collateral
within a period of time which does not permit the giving of notice to the
Company as hereinabove specified, the Agent need give the Company only such
notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law.
(ii) No notification need be given to the Company if it has
signed, after a Default or an Event of Default, a statement renouncing or
modifying any right to notification of sale or other intended disposition.
In addition to the rights and remedies granted to it in this Agreement and
in the Secured Debt Agreements, the Agent, on behalf of itself and the
Secured Creditors, shall have all the rights and remedies of a secured
party under the Uniform Commercial Code of the state in which the
Collateral is located.
9. Application of Proceeds. The proceeds of the Collateral shall be
-----------------------
applied by the Agent to payment of the Secured Obligations in the following
order unless a court of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all reasonable costs and expenses of the
Agent incurred in connection with the collection and enforcement of the Secured
Obligations or of the security interest granted to the Agent pursuant to this
Agreement, including all reasonable costs and expenses of any sale pursuant to
this Agreement, and of any judicial or private proceedings in which such sale
may be made, and of all other reasonable expenses, Secured Obligations and
advances made or incurred by the Agent;
(b) SECOND, to payment, pro rata, of that portion of the Secured
--- ----
Obligations constituting accrued and unpaid interest and fees, together with (to
the extent permitted by law) interest owing thereon at the applicable default
rate from the date due, owing or unpaid until paid in full;
(c) THIRD, to payment, pro rata, of the principal of the Secured
--- ----
Obligations, then due, owing or unpaid in respect of any Secured Obligations;
(d) FOURTH, to payment, pro rata, of any other Secured Obligations
--- ----
due, owing or unpaid until paid in full including, without limitation, any
Secured Obligations incurred pursuant to this Agreement; and
(e) FIFTH, the balance, if any, after all of the Secured Obligations
have been satisfied, shall be remitted as required by law.
-11-
10. Remedies Cumulative. Each and every right, power and remedy hereby
-------------------
specifically given to the Agent, for the benefit of itself and the Secured
Creditors, shall be in addition to every other right, power and remedy
specifically given to the Agent or the Secured Creditors under this Agreement or
any Secured Debt Agreement now or hereafter existing at law or in equity, or by
statute and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time or simultaneously
and as often and in such order as may be deemed expedient by the Agent. All such
rights, powers and remedies shall be cumulative and the exercise or the
beginning of exercise of one shall not be deemed a waiver of the right to
exercise any of the others. No delay or omission of the Agent in the exercise of
any such right, power or remedy and no renewal or extension of any of the
Secured Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an acquiescence
therein. In the event that the Agent or any Secured Creditor shall bring any
suit to enforce any of its rights hereunder and shall be entitled to judgment,
then in such suit the Agent or such Secured Creditor may recover reasonable
expenses, including attorneys' fees, which attorneys may be employees of the
Agent, and the amounts thereof shall be included in such judgment.
11. Discontinuance of Proceedings. In case the Agent or any Secured
-----------------------------
Creditor shall have instituted any proceeding to enforce any right, power or
remedy under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Agent or such Secured Creditor, then and
in every such case the Company and the Agent or such Secured Creditor shall be
restored to their respective former positions and rights hereunder with respect
to the Collateral, and all rights, remedies and powers of the Agent or such
Secured Creditor shall continue as if no such proceeding had been instituted.
12. Custody and Preservation of Collateral. The Agent shall be deemed to
--------------------------------------
have exercised reasonable care in the custody and preservation of any of the
Collateral in its possession if it takes such action for that purpose as the
Company requests in writing, but failure of the Agent to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care, and
no failure of the Agent to preserve or protect any rights with respect to such
Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by the Company, shall be deemed
a failure to exercise reasonable care in the custody or preservation of such
Collateral.
13. Authorization for the Agent to Take Certain Action. The Company
--------------------------------------------------
irrevocably authorizes the Agent, at any time and from time to time, in the sole
discretion of the Agent, and appoints the Agent as its attorney-in-fact to act
on behalf of the Company, (a) to execute on behalf of the Company as debtor and
to file financing statements necessary or desirable in the Agent's sole
discretion to perfect and to maintain the perfection and priority of the Agent's
security interest in the Collateral, on behalf of itself and the Secured
Creditors, (b) to endorse and collect any cash proceeds of the Collateral, (c)
to file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Collateral as a financing statement in
such offices as the Agent in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the Agent's and the
Secured Creditors' security interest in the Collateral, (d) to enforce payment
of the Receivables in the name of the Agent, any Secured Creditor or the
Company, and
-12-
(e) to apply the proceeds of any Collateral received by the Agent to the Secured
Obligations as provided in Section 9 hereof. This appointment as attorney-in-
---------
fact is coupled with an interest and shall be irrevocable for so long as any
Secured Obligations are outstanding.
14. Notices. (a) Any notice required or permitted to be given under this
-------
Agreement shall be given (i) in the case of the Company, the Agent, the Agent
and each Lender, in accordance the Credit Agreement, (ii) in the case of a L/C
Creditor, in accordance with the relevant Secured Letter of Credit and (iii) in
the case of a Swap Creditor, in accordance with the relevant Secured Swap
Contract.
(b) The Company, the Agent or any Secured Creditor may
change the address for service of notice upon it by a notice in writing to the
other.
15. Waiver and Amendments. No failure or delay on the part of the Agent
---------------------
or any Secured Creditor in the exercise of any power, right or remedy, and no
course of dealing between the Company and the Agent or any Secured Creditor,
shall operate as a waiver of such power, right or remedy, nor shall any single
or partial exercise of any power, right or remedy preclude other or further
exercise thereof or the exercise of any other power, right or remedy. The
remedies provided for herein are cumulative and not exclusive of any remedies
which may be available to the Agent or any Secured Creditor at law or in equity.
No notice to or demand on the Company not required hereunder shall in any event
entitle the Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Agent or any Secured
Creditor to any other or further action in any circumstances without notice or
demand. No amendment, modification or waiver of, or consent with respect to, any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed and delivered by the Agent and the Secured
Creditors affected thereby. Any waiver of any provision of this Agreement, and
any consent to any departure by the Company from the terms of any provision of
this Agreement, shall be effective only in the specific instance and for the
specific purpose for which given.
16. Termination. This Agreement shall continue in effect (notwithstanding
-----------
the fact that from time to time there may be no Secured Obligations or
commitments therefor outstanding) until the payment in full of the Secured
Obligations and the termination of the Secured Debt Agreements in accordance
with its terms thereunder, at which time the security interests granted hereby
shall terminate and any and all rights to the Collateral shall revert to the
Company. Upon such termination, the Agent shall promptly return to the Company,
at the Company's expense, such of the Collateral held by the Agent as shall not
have been sold or otherwise applied pursuant to the terms hereof. The Agent will
promptly execute and deliver to the Company such other documents as the Company
shall reasonably request to evidence such termination.
17. CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
-------------
THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
-13-
18. Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
19. Successors and Assigns. The rights and privileges of the Company, the
----------------------
Agent and the Secured Creditors hereunder shall inure to the benefit of their
successors and permitted assigns.
20. Agent. BofA has been appointed as Agent for the Secured Creditors
-----
hereunder, and the Agent has agreed to act (and any successor Agent shall act)
as such hereunder only on the express conditions contained in Article X of the
Credit Agreement. Any successor Agent appointed pursuant to Article X of the
Credit Agreement shall be entitled to all the rights, interests and benefits of
the Agent hereunder.
21. Marshalling. Neither the Agent nor any Secured Creditor shall be
-----------
under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of the Company or any other
party or against or in payment of any or all of the Secured Obligations.
22. WAIVER OF JURY TRIAL. ALL PARTIES HERETO HEREBY WAIVE TRIAL BY JURY
--------------------
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER.
[Signature Page Follows]
-14-
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
IMPAC GROUP, INC.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION,
as Agent
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
S-1
[TO SECURITY AGREEMENT-COMPANY]
SCHEDULE A
----------
EQUIPMENT LOCATIONS
-------------------
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
SCHEDULE B
----------
A. Chief Executive Office Location
-------------------------------
1950 N. Ruby Street
Melrose Park, Cook County, Illinois
B. Records Locations
-----------------
1) 1950 N. Ruby Street 2) ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
C. Inventory Locations
-------------------
1950 N. Ruby Street
Melrose Park, Cook County, Illinois
SCHEDULE C
----------
[List trade names, styles
and doing business forms]
None