EXHIBIT 10.19
BORROWER SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated January 24, 2003, is made by RA
FACTORS, INC., a Delaware corporation ("Factors"), in favor of WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association with an office at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in its capacity as
administrative and collateral agent (together with its successors in such
capacities, the "Agent") for various financial institutions ("Lenders") from
time to time parties to that certain Credit Agreement dated January 24, 2003 (as
the same may be amended, supplemented, waived or otherwise modified from time to
time, the "Credit Agreement"), among Factors, Remington Arms Company, Inc.
("Remington", together with Factors, the "Borrowers"), the Agent, Fleet Capital
Corporation, in its capacity as syndication agent, National City Commercial
Finance, Inc., in its capacity as documentation agent, and the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make Revolver Loans and provide other financial accommodations to the Borrowers
upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligations of the Lenders
to make Revolver Loans and provide other financial accommodations to the
Borrowers under the Credit Agreement that Remington shall have executed and
delivered this Agreement to the Agent for its benefit and the ratable benefit of
the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make Revolver Loans and provide other financial accommodations to the
Borrowers thereunder, Factors hereby agrees with the Agent, for its benefit and
the ratable benefit of the Lenders, as follows:
1. Defined Terms.
(a) Unless otherwise defined herein, capitalized terms defined in
the Credit Agreement are used herein as defined therein. The following terms are
used herein as defined in the UCC from time to time: Accounts, Chattel Paper,
Commercial Tort Claims, Deposit Accounts, Documents, Electronic Chattel Paper,
Equipment, Farm Products, Financial Assets, Fixtures, General Intangibles,
Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights,
Payment Intangibles, Proceeds, Software, and Supporting Obligations. The
following terms shall have the following meanings:
"Agreement": this Security Agreement, as the same may be
amended, supplemented, waived or otherwise modified from time to time.
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"Collateral": as defined in Section 2 of this Agreement.
"Computer Hardware and Software": all rights of Factors
(including rights as licensee and lessee) with respect to (i) computer
and other electronic data processing hardware, including all
integrated computer systems, central processing units, memory units,
display terminals, printers, computer elements, card readers, tape
drives, hard and soft disc drives, cables, electrical supply hardware,
generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (ii) all Software and all software
programs designed for use on the computers and electronic data
processing hardware described in clause (i) above, including all
operating system software, utilities and application programs in any
form (service code and object code in magnetic tape, disc or hard copy
format or any other listings whatsoever); (iii) any firmware
associated with any of the foregoing; (iv) any documentation for
hardware, Software and firmware described in clauses (i), (ii) and
(iii) above, including flow charts, logic diagrams, manuals,
specifications, training materials, charts and pseudo codes; and all
rights with respect thereto, including any and all licenses, options,
warrants, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights, renewal rights
and indemnifications, and any substitutions, replacements, additions
or model conversions of any of the foregoing.
"Contracts": all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which Factors is a
party, or under which Factors has any right, title or interest, or to
which Factors or any property of Factors is subject, as the same may
from time to time be amended, supplemented or otherwise modified,
including (a) all rights of Factors to receive moneys due and to
become due to Factors thereunder or in connection therewith, (b) all
rights of Factors to damages arising out of, or for, breach or default
in respect thereof and (c) all rights of Factors to perform and to
exercise all remedies thereunder.
"Copyright Licenses": all United States written license
agreements to which Factors is a party with any other Person in
connection with any of the Copyrights or such other Person's
copyrights, whether Factors is a licensor or a licensee under any such
license agreement, subject, in each case, to the terms of such license
agreements, and the right to prepare for sale, sell and advertise for
sale, all Inventory now or hereafter covered by such licenses.
"Copyrights": all United States copyrights, whether or not the
underlying works of authorship have been published, and whether or not
the copyrights have been registered, copyright registrations and
applications, and all works of authorship and other intellectual
property rights therein, including (a) all renewals thereof, (b) all
income, royalties, damages and other payments now and hereafter due or
payable with respect thereto (including payments under all licenses
entered into in connection
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therewith, and damages and payments for past or future infringements
thereof), (c) the right to ▇▇▇ for past, present and future
infringements and misappropriations thereof, and (d) all rights
corresponding thereto throughout the world and all other rights of any
kind whatsoever of Factors accruing thereunder or pertaining thereto.
"Patent License": all United States written license agreements
to which Factors is a party with any other Person in connection with
any of the Patents or such other Person's patents, whether Factors is
a licensor or a licensee under any such license agreement, including
the license agreements listed in Schedule II attached hereto and made
a part hereof, subject, in each case, to the terms of such license
agreements, and the right to prepare for sale, sell and advertise for
sale, all Inventory now or hereafter covered by such licenses.
"Patents": all United States patents, patent applications and
patentable inventions, including all patents and patent applications
identified in Schedule II attached hereto and made a part hereof, and
including (a) all inventions and improvements described and claimed
therein, and patentable inventions, (b) the right to ▇▇▇ or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (c) all income, royalties, damages and
other payments now and hereafter due or payable with respect thereto
(including payments under all licenses entered into in connection
therewith, and damages and payments for past or future infringements
thereof), and (d) all rights corresponding thereto in the United
States and all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals, and extensions thereof,
all improvements thereon, and all other rights of any kind whatsoever
of Factors accruing thereunder or pertaining thereto.
"Permitted Liens": Liens permitted pursuant to Section 10.2.5
of the Credit Agreement or as otherwise expressly permitted to exist
under any of the Credit Documents.
"Trademark License": all United States written license
agreements to which Factors is a party with any other Person in
connection with any of the Trademarks or such other Person's names or
trademarks, whether Factors is a licensor or a licensee under any such
license agreement, including the license agreements listed in Schedule
I attached hereto and made a part hereof, subject, in each case, to
the terms of such license agreements, and the right to prepare for
sale, sell and advertise for sale, all Inventory now or hereafter
covered by such licenses.
"Trademarks": all United States trademarks, service marks,
trade names, trade dress or other indicia of trade origin, trademark
and service ▇▇▇▇ registrations, and applications for trademark or
service ▇▇▇▇ registrations (except for "intent to use" applications
for trademark or service ▇▇▇▇ registrations filed pursuant to Section
1(b) of the ▇▇▇▇▇▇ Act, unless and until an Amendment to Allege Use or
a Statement of
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Use under Sections 1(c) and 1(d) of said Act has been filed), and any
renewals thereof, including each registration and application
identified in Schedule I attached hereto and made a part hereof, and
including (a) the right to ▇▇▇ or otherwise recover for any and all
past, present and future infringements and misappropriations thereof,
(b) all income, royalties, damages and other payments now and
hereafter due or payable with respect thereto (including payments
under all licenses entered into in connection therewith, and damages
and payments for past or future infringements thereof), and (c) all
rights corresponding thereto in the United States and all other rights
of any kind whatsoever of Factors accruing thereunder or pertaining
thereto, together in each case with the goodwill of the business
connected with the use of, and symbolized by, each such trademark,
service ▇▇▇▇, trade name, trade dress or other indicia of trade
origin.
"UCC": the Uniform Commercial Code (or any successor statute)
as adopted and in force in the State of New York or, when the laws of
any other state govern the method or manner of the perfection or
enforcement of any security interest in any of the Collateral, the
Uniform Commercial Code (or any successor statute) of such state.
"Work": any work which is subject to copyright protection
pursuant to Title 17 of the United States Code.
(b) Certain Matters of Construction. The terms "herein,"
"hereof" and "hereunder" and other words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. All references to statutes and
related regulations shall include any amendments of same and any
successor statutes and regulations; any of the Credit Documents shall
include any and all amendment or modifications thereto and any and all
restatements, extensions or renewals thereof; to any Person shall mean
and include the successors and permitted assigns of such Person; to
"including" and "include" shall be understood to mean "including,
without limitation." A Default or an Event of Default shall be deemed
to exist at all times during the period commencing on the date that
such Default or Event of Default occurs to the date on which such
Default or Event of Default is waived in writing pursuant to this
Agreement or, in the case of a Default, is cured within any period of
cure expressly provided in this Agreement or the applicable Credit
Document; and an Event of Default shall "continue" or be "continuing"
until such Event of Default has been waived in writing by Agent. Any
Lien referred to in this Agreement or any of the other Credit
Documents as having been created in favor of Agent, any agreement
entered into by Agent pursuant to this Agreement or any of the other
Credit Documents, any payment made by or to or funds received by Agent
pursuant to or as contemplated by any of the Credit Documents, or any
other act taken or omitted to be taken by Agent shall, unless
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otherwise expressly provided, be created, entered into, made or
received, or taken or omitted for its benefit and the benefit or
account of the Lenders.
2. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, Factors hereby
assigns, pledges and grants, subject to existing licenses to use Patents or
Trademarks granted by Factors in the ordinary course of business, to the Agent,
a security interest in and Lien on all of the following property now owned or at
any time hereafter acquired by Factors or in which Factors now has or at any
time in the future may acquire any right, title or interest (collectively, the
"Collateral"):
(i) all Accounts;
(ii) all Chattel Paper, including all Electronic Chattel
Paper;
(iii) all Commercial Tort Claims;
(iv) all Computer Hardware and Software;
(v) all Contracts;
(vi) all Deposit Accounts;
(vii) all Documents;
(viii) all Financial Assets;
(ix) all General Intangibles;
(x) all Goods, including all Equipment and all Inventory;
(xi) all Instruments;
(xii) all Investment Property;
(xiii) all Letter-of-Credit Rights
(xiv) all Patent Licenses;
(xv) all Patents;
(xvi) all Payment Intangibles;
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(xvii) all Supporting Obligations;
(xviii) all Trademark Licenses;
(xix) all Trademarks;
(xx) all monies now or at any time or times hereafter in
the possession or under the control of Agent or any
Lender, or a bailee or affiliate of Agent or any
Lender;
(xxi) all accessions to, substitutions for and all
replacements, products, and cash and non-cash Proceeds
of (i) through (xx) above, including, Proceeds of and
unearned premiums with respect to insurance policies
insuring any of the Collateral and claims against any
Person for loss of, damage to, or destruction of any
of the Collateral; and
(xxii) all books and records (including customer lists,
files, correspondence, tapes, computer programs,
print-outs and other computer materials and records)
of Factors pertaining to any of (i) through (xxi)
above;
provided that in no event shall there be pledged, nor shall Factors be required
to pledge, directly or indirectly, more than 65% of any series of the
outstanding Equity Interests of any Foreign Subsidiary.
Notwithstanding anything to the contrary set forth above, the types or items of
Collateral described shall not include any rights or interests in any
Instrument, Contract, Chattel Paper, General Intangible, Patent License or
Trademark License, as such, if under the terms of such Instrument, Contract,
Chattel Paper, General Intangible, Patent License or Trademark License, or
Applicable Law with respect thereto, the valid grant of a security interest or
Lien therein to Agent is prohibited and such prohibition has not been or is not
waived or the consent of the other party to such Instrument, Contract, Chattel
Paper, General Intangible, Patent License or Trademark License has not been or
is not otherwise obtained or under Applicable Law such prohibition cannot be
waived, provided that the foregoing exclusion shall in no way be construed (a)
to apply if any such prohibition is unenforceable under Sections 9-406 or 9-408
of the UCC or other Applicable Law or (b) so as to limit, impair or otherwise
affect Agent's unconditional continuing security interests in and Liens upon any
rights or interests of Factors in or to monies due or to become due under any
such Instrument, Contract, Chattel Paper, General Intangible, Patent License or
Trademark License (including any Accounts).
3. Rights of Agent and Lenders; Limitations on Agent's and
Lenders' Obligations.
(a) No Liability of Agent or Lenders under Accounts or
Contracts. None of the Agent nor any Lender shall have any obligation
or liability under any Account (or any agreement giving rise thereto)
or Contract by reason of or arising out of this Agreement or
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the receipt by the Agent or any such Lender of any payment relating to
such Account or Contract pursuant hereto, nor shall the Agent or any
Lender be obligated in any manner to perform any of the obligations of
Factors under or pursuant to any Account (or any agreement giving rise
thereto) or Contract, to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to
the sufficiency of any performance by any party under any Account (or
any agreement giving rise thereto) or Contract, to present or file any
claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which
it may be entitled at any time or times.
(b) Accounts and Account Debtors. The Agent shall
have all rights and remedies with respect to the Accounts and all
Account Debtors as are described in the Credit Agreement.
(c) Deposit Accounts. With respect to the grant of a
security interest in Factors's Deposit Accounts, Factors hereby
authorizes and directs each such bank or other depository at which
Factors maintains a Deposit Account to pay or deliver to the Agent
upon its written demand therefor made at any time upon the occurrence
and during the continuation of an Event of Default and without further
notice to Factors (such notice being hereby expressly waived), all
balances in each Deposit Account maintained by Factors with such bank
or other depository for application to the Obligations then
outstanding, and the rights given the Agent in this Section shall be
cumulative with and in addition to the Agent's other rights and
remedies in regard to the foregoing property as proceeds of
Collateral.
4. Representations and Warranties. Factors hereby represents and
warrants that:
(a) Title; No Other Liens. Except for Permitted Liens,
Factors owns each item of the Collateral free and clear of any and all
Liens. No security agreement, financing statement or other public
notice similar in effect with respect to all or any part of the
Collateral that has been authorized or executed by Factors is on file
or of record in any public office, except such as may have been filed
in favor of the Agent, pursuant to this Agreement or any other Credit
Document, or which are permitted pursuant to the Credit Documents.
(b) Perfected First Priority Liens. (i) This Agreement is
effective to create, as collateral security for the Obligations, valid
and enforceable Liens on the Collateral in favor of the Agent, except
with respect to Commercial Tort Claims acquired by Factors after the
date hereof, and except as enforceability may be affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditor's
rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing. (ii) Except with regard to Liens on Specified
Assets, upon the completion of the Filings, and the delivery to and
continuing possession by the Agent of all Instruments, Chattel Paper
and Documents, Investment Property and monies, a security interest in
which is perfected by
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possession, and the obtaining and maintenance of "control" (as
described in the UCC) by the Agent of all Deposit Accounts, Electronic
Chattel Paper, Investment Property, and Letter-of-Credit Rights, a
security interest in which is perfected by "control", the Liens
created pursuant to this Agreement will constitute valid Liens on and
(to the extent provided herein) perfected security interests in the
Collateral in favor of the Agent and will be prior to all other Liens
of all other Persons other than Permitted Liens, and enforceable as
such as against all other Persons other than Ordinary Course Buyers,
and except as enforceability may be limited by the Assignment of
Claims Act and except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by
proceedings in equity or at law) or by an implied covenant of good
faith and fair dealing. As used in this Section 4(b)(ii), the
following terms shall have the following meanings:
"Filings": the filing or recording of the Financing
Statements, any Patent and Trademark Security Agreement with
the U.S. Patent and Trademark Office, any Copyright Security
Agreement with the U.S. Copyright Office, and any filings after
the Closing Date in any jurisdiction as may be necessary under
any Applicable Law.
"Financing Statements": the financing statements
prepared by the Agent naming Factors as debtor and the Agent as
secured party filed on or about the Closing Date in the
jurisdictions as may be necessary under any Applicable Law.
"Ordinary Course Buyers": (i) with respect to Goods
only, buyers in the ordinary course of business to the extent
provided in Section 9-320(a) and 9-321 of the UCC, (ii) with
respect to General Intangibles only, licensees in the ordinary
course of business to the extent provided in Section 9-321 of
the UCC as in effect from time to time in the relevant
jurisdiction and (iii) any other Person who is entitled to take
free of the Lien pursuant to the UCC or other applicable law.
"Specified Assets": the following property and assets
of Factors: (1) Patents, Patent Licenses, Trademarks and
Trademark Licenses to the extent that Liens thereon cannot be
perfected by the filing of financing statements under the UCC
or by the filing and acceptance of a Patent and Trademark
Security Agreement in the United States Patent and Trademark
Office; (2) Collateral for which the perfection of Liens
thereon requires filings in or other actions under the laws of
jurisdictions outside the United States of America, any State,
territory or dependency thereof or the District of Columbia;
(3) Commercial Tort Claims acquired by Factors after the date
hereof, (4) motor vehicles, (5) monies and (6) goods included
in Collateral
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received by any Person for "sale or return" within the meaning
of Section 2-326 of the UCC of the applicable jurisdiction, to
the extent of claims of creditors of such Person.
(c) Accounts. The places where Factors keeps its records
concerning the Accounts are ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other location or locations of which Factors
shall have provided prior written notice to the Agent pursuant to
Section 5(p).
(d) Consents. Except as set forth in Schedules I and II
hereto, no consent of any party (other than Factors) to any Patent
License or Trademark License constituting Collateral or any obligor in
respect of any material Account constituting Collateral or which owes
in the aggregate a material portion of all the Accounts constituting
Collateral is required, or purports to be required, to be obtained by
or on behalf of Factors in connection with the execution, delivery and
performance of this Agreement that has not been obtained. Each Patent
License, Trademark License and Account constituting Collateral is in
full force and effect and constitutes a valid and legally enforceable
obligation of Factors and (to the knowledge of Factors) each other
party thereto except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditor's rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or
at law) and except to the extent the failure of any such Patent
License, Trademark License or Account constituting Collateral to be in
full force and effect or valid or legally enforceable could not be
reasonably expected, in the aggregate, to have a Material Adverse
Effect on the value of the Collateral. Except as set forth in
Schedules I and II hereto, no consent or authorization of, filing with
or other act by or in respect of any Governmental Authority is
required in connection with the execution, delivery, performance,
validity or enforceability of any of the Patent Licenses ,Trademark
Licenses and Accounts constituting Collateral by any party thereto
other than those which have been duly obtained, made or performed and
are in full force and effect and those the failure of which to make or
obtain could not be reasonably expected, in the aggregate, to have a
Material Adverse Effect on the value of the Collateral. Except as set
forth in Schedules I and II hereto, neither Factors nor (to the
knowledge of Factors) any other party to any Patent License or
Trademark License or Account constituting Collateral is in default in
the performance or observance of any of the terms thereof, except for
such defaults as could not reasonably be expected, in the aggregate,
to have a Material Adverse Effect on the value of the Collateral. The
right, title and interest of Factors in, to and under each Patent
License and Trademark License and each Account constituting Collateral
are not subject to any defense, offset, counterclaim or claim which
could be reasonably expected, either individually or in the aggregate,
to have a Material Adverse Effect on the value of the Collateral.
(e) Location of Tangible Property. Factors's Inventory and
Equipment are kept at the locations listed in Schedule III hereto or
such other locations of which Factors shall
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provide written notice to the Agent pursuant to Section 5(p), and
after the date hereof at other locations to the extent permitted
pursuant to Section 8.1.1 of the Credit Agreement.
(f) Chief Executive Office. Factors's chief executive
office and chief place of business is located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other location of which Factors
shall have provided written notice to the Agent pursuant to Section
5(p).
(g) Farm Products. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.
(h) Patents and Trademarks. Schedules I and II hereto
include all Trademarks and Patents owned by Factors in its own name as
of the date hereof and all material Trademark Licenses and all
material Patent Licenses owned by Factors in its own name as of the
date hereof.
(i) Governmental Obligors. As of the date hereof, none of
the obligors on any Accounts, and none of the parties to any
Contracts, is a Governmental Authority, except for any such Accounts
or Contracts that are not material in relation to the business of
Factors and its Subsidiaries, taken as a whole.
(j) Copyrights. As of the date hereof, Factors does not
own any Copyrights and is not a party to any Copyright Licenses (other
than Computer Hardware and Software licenses granted to Factors in the
Ordinary Course of Business) which are material to the business of
Factors and its Subsidiaries, taken as a whole. Factors agrees that
the foregoing representations and warranties shall be deemed to have
been made by Factors on and as of each date on which a Revolver Loan
is made by the Lenders to the Borrowers under the Credit Agreement, in
each case as though made on and as of each such date (or, if any such
representation or warranty is expressly stated to have been made as of
a specific date, as of such specific date).
5. Covenants. Factors covenants and agrees with the Agent and the
Lenders and, with respect to Section 5(a), the Agent covenants and agrees with
Factors, that, from and after the date of this Agreement until the payment in
full of the Obligations (except for contingent obligations of any Obligor under
indemnifications that survive termination of the Revolver Commitments) and the
termination of all the Revolver Commitments:
(a) Further Documentation; Pledge of Instruments and
Chattel Paper. Subject to Section 7.4 of the Credit Agreement, at any
time and from time to time, upon the written request of the Agent or
Factors, as the case may be, and at the sole expense of Factors,
Factors or the Agent, as the case may be, will promptly and duly
execute and deliver such further instruments and documents and take
such further action as the Agent or Factors may reasonably request for
the purpose of obtaining or preserving the full benefits of this
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Agreement and of the rights and powers herein granted, including the
filing of any financing or continuation statements under the UCC in
effect in any jurisdiction with respect to the Liens created hereby.
Factors also hereby authorizes the Agent to prepare and file any such
financing or continuation statement without the signature of Factors
to the extent permitted by Applicable Law. The Agent agrees to notify
Factors and Factors agrees to notify the Agent of any financing or
continuation statement filed by it pursuant to this Section 5(a),
provided that any failure to give any such notice shall not affect the
validity or effectiveness of any such filing. Unless an Event of
Default shall have occurred and be continuing, Factors shall be
entitled to retain possession of all Collateral evidenced by any
Instrument or Chattel Paper, and shall hold all such Collateral in
trust for the Agent, and shall not commingle any of such Collateral
with any other assets of Factors. In the event an Event of Default
shall have occurred and be continuing, upon the request of the Agent,
such Collateral shall be immediately delivered to the Agent, duly
endorsed in a manner satisfactory to the Agent, to be held as
Collateral pursuant to this Agreement. Factors shall not permit any
other Person to possess any such Collateral other than in connection
with any sale or other disposition of such Collateral as permitted by
the Credit Agreement, or as otherwise consented to by Agent in
writing.
(b) Indemnification. Factors agrees to pay, and to save
harmless and defend the Agent and the Lenders from, any and all
liabilities and reasonable costs and expenses (including, reasonable
legal fees and expenses) (i) with respect to, or resulting from, any
delay by Factors in paying, any and all excise, sales or other similar
taxes which may be payable or determined to be payable with respect to
any of the Collateral, (ii) with respect to, or resulting from, any
delay by Factors in complying with any material requirement of
Applicable Law with respect to any of the Collateral or (iii) in
connection with any of the transactions contemplated by this
Agreement, provided that such indemnity shall not, as to the Agent or
any Lender, be available to the extent that such liabilities, costs
and expenses resulted from the gross negligence or willful misconduct
of the Agent or any Lender. In any suit, proceeding or action brought
by the Agent or any Lender under any Account for any sum owing
thereunder, or to enforce any provisions of any Account, Factors will
save, indemnify and keep harmless and defend the Agent and such Lender
from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction or liability
whatsoever of the account debtor thereunder, arising out of a material
breach by Factors of any obligation thereunder.
(c) Maintenance of Records. Factors will keep and maintain
at its own cost and expense reasonably satisfactory and complete
records of the Collateral, including a record of all payments received
and all credits granted with respect to the Accounts constituting
Collateral. For the Agent's and the Lenders' further security, the
Agent, shall have a security interest in all of Factors's books and
records pertaining to the Collateral, and Factors shall permit the
Agent or its representatives to review such books and records upon
reasonable advance notice during normal business hours at the location
where such books and records are kept and at the reasonable request of
the Agent.
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(d) Right of Inspection. Upon reasonable advance notice to
Factors and at reasonable intervals, or at any time and from time to
time after the occurrence and during the continuance of an Event of
Default, the Agent and the Lenders shall have reasonable access during
normal business hours to all the books, correspondence and records of
Factors, and the Agent and the Lenders and their respective
representatives may examine the same, and to the extent reasonable
take extracts therefrom and make photocopies thereof, and Factors
agrees to render to the Agent and the Lenders, at Factors's reasonable
cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. The Agent and the Lenders
and their respective representatives shall also have the right upon
reasonable advance notice to Factors to enter during normal business
hours into and upon any premises where any of Factors's Inventory or
Equipment is located for the purpose of inspecting the same, observing
its use or otherwise protecting its interests therein.
(e) Compliance with Laws, etc. Factors will comply in all
material respects with all Applicable Law with respect to the
Collateral or any part thereof, except to the extent that the failure
to so comply could not be reasonably expected to have a Material
Adverse Effect, in the aggregate, on the Agent's or the Lenders'
rights hereunder, the priority of their Liens on the Collateral or the
value of the Collateral.
(f) Compliance with Contractual Obligations. Factors will
perform and comply in all material respects with all its contractual
obligations relating to the Collateral, unless (i) such performance or
compliance is fully excused by breach by the other party or parties
thereto or (ii) such failure to comply or perform could not be
reasonably expected, in the aggregate, to have a Material Adverse
Effect on the value of the Collateral.
(g) Payment of Obligations. Factors will pay promptly when
due all taxes, assessments and governmental charges or levies imposed
upon the Collateral, as well as all claims of any kind (including
claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such tax, assessment, charge or levy
need be paid if (i) the validity thereof is being contested in good
faith by appropriate proceedings diligently conducted and (ii) such
tax, assessment, charge or levy is adequately reserved against on
Factors's books in accordance with GAAP.
(h) Limitation on Liens on Collateral. Factors will not
create, incur or permit to exist, will defend the Collateral against,
and will take such other action as is reasonably necessary to remove,
any Lien or material adverse claim on or to any of the Collateral,
other than the Liens created hereby and other than Permitted Liens,
and will defend the right, title and interest of the Agent and the
Lenders in and to any of the Collateral against the claims and demands
of all Persons whomsoever.
(i) Limitations on Dispositions of Collateral. Without the
prior written consent of the Agent, Factors will not sell, assign,
transfer, exchange or otherwise dispose of, or grant
12
any option with respect to, the Collateral, or attempt, offer or
contract to do so, except with respect to exclusive licenses in the
Ordinary Course of Business or as permitted by this Agreement or the
Credit Documents.
(j) Limitations on Modifications, Waivers, Extensions of
Contracts, Licenses and Accounts. Factors will not, except in the
Ordinary Course of Business, amend, modify, terminate or waive any
provision of any material Trademark License or any agreement giving
rise to a material Account constituting Collateral in any manner which
could reasonably be expected to materially adversely affect the value
of such Trademark License or Account as Collateral.
(k) Limitations on Discounts, Compromises, Extensions of
Accounts. At all times, Factors will not, except in the Ordinary
Course of Business, grant any extension of the time of payment of any
material Account constituting Collateral, compromise, compound or
settle the same for less than the full amount thereof, release, wholly
or partially, any Person liable for the payment thereof, or allow any
credit or discount whatsoever thereon, unless such extensions,
compromises, compoundings, settlements, releases, credits or discounts
are permitted by the Credit Documents.
(l) Maintenance of Equipment. Factors will maintain each
material item of its Equipment in good operating condition, ordinary
wear and tear and immaterial impairments of value and damage by the
elements excepted, and will provide all maintenance, service and
repairs necessary for such purpose, except to the extent that the
failure to do any of the foregoing could not be reasonably expected to
have a Material Adverse Effect.
(m) Maintenance of Insurance. Factors will maintain, with
financially sound and reputable insurance companies, (i) insurance
(including property insurance) in at least such amounts and against at
least such risks (but including in any event public liability, product
liability and business interruption where reasonably obtainable) as
are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to the Agent,
upon written request, information in reasonable detail as to the
insurance carried and (ii) insurance policies relating to Factors's
Inventory and Equipment (A) insuring Factors's Inventory and Equipment
against loss by fire, explosion, theft and such other casualties as
are usually insured against by companies engaged in the same or a
similar business, (B) insuring Factors against liability for personal
injury and property damage relating to such Inventory and Equipment,
(C) providing that no cancellation, material reduction in amount or
material change in the coverage referred to in clause (A) shall be
effective until at least 10 days after receipt by the Agent of written
notice thereof, (D) naming the Agent and the Lenders as additional
insured parties and (E) being otherwise reasonably satisfactory in all
material respects to the Agent.
(n) Further Identification of Collateral. Factors will
furnish to the Agent and the Lenders from time to time such statements
and schedules further identifying and describing
13
the Collateral, and such other reports in connection with the
Collateral, as the Agent may reasonably request, all in reasonable
detail.
(o) Notices. Factors will advise the Agent and the Lenders
promptly, in reasonable detail, at their respective addresses set
forth in the Credit Agreement, (i) of any Lien (other than Permitted
Liens) on, or material adverse claim asserted against, any of the
Collateral and (ii) of the occurrence of any other event which could
reasonably be expected, in the aggregate, to have a Material Adverse
Effect on the aggregate value of the Collateral or the Liens created
hereunder.
(p) Changes in Locations, Name, etc. Factors will not (i)
change the location of its chief executive office/chief place of
business from that specified in Section 4(f) or remove its books and
records from the locations specified in Section 4(c), (ii) except as
permitted pursuant to Section 8.1.1 of the Credit Agreement, permit
any of the Inventory or the Equipment to be kept at locations other
than those listed in Schedule III hereto, unless such Inventory or
Equipment is conveyed, sold, leased, transferred, assigned or
otherwise disposed of as permitted by Section 10.2.9 of the Credit
Agreement or (iii) change its name, identity or corporate structure to
such an extent that any financing statement filed by the Agent in
connection with this Agreement would become seriously misleading,
unless Factors shall have complied with the following: (A) with
respect to clause (i) and (ii) above, Factors shall have given the
Agent prior written notice thereof, (B) with respect to clause (iii)
above, Factors (x) shall have given the Agent at least 30 days' prior
written notice thereof and (y) prior to effecting any such change,
shall have taken such actions as may be necessary or, upon the
reasonable request of the Agent, advisable to continue the perfection
and priority of the Liens granted pursuant hereto; provided in each
case under clause (B)(y), that the Agent shall have taken all actions
required by Section 5(a) hereof in connection with such actions of
Factors.
(q) Copyrights. Factors will not own nor at any time in
the future acquire any right, title or interest in or to any Copyright
or Copyright License which is material to the business of Factors and
its Subsidiaries, taken as a whole, other than (i) with respect to
Computer Hardware and Software licenses or other Copyright licenses
granted to Factors in the Ordinary Course of Business, (ii) in
connection with any rights of Factors in respect of security interests
in collateral or (iii) with respect to which (A) the Agent shall have
been given prior written notice of the acquisition of any right, title
or interest therein or thereto and (B) if reasonably requested by the
Agent, a security agreement reasonably satisfactory to the Agent shall
have been executed by Factors.
(r) Commercial Tort Claims. If Factors shall at any time
hold or acquire a Commercial Tort Claim, Factors shall promptly notify
Agent in a writing signed by Factors of the brief details thereof and
grant to Agent in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such
writing to be in form and substance satisfactory to Agent.
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6. Agent's Appointment as Attorney-in-Fact.
(a) Powers. Factors hereby irrevocably constitutes and
appoints the Agent and any officer or agent thereof, with full power
of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Factors and
in the name of Factors or in its own name, from time to time in the
Agent's discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable
to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, Factors hereby gives the Agent the
power and right, on behalf of Factors, without notice to or assent by
Factors, to do the following at any time when any Event of Default
shall have occurred and be continuing, and to the extent permitted by
Applicable Law:
(i) in the name of Factors or its own name, or
otherwise, to take possession of and indorse and collect any
checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Account, Contract, Instrument
or General Intangible (to the extent that any of the foregoing
constitute Collateral) or with respect to any other Collateral
and to file any claim or to take any other action or institute
any proceeding in any court of law or equity or otherwise
deemed appropriate by the Agent for the purpose of collecting
any and all such moneys due under any such Account, Contract,
Instrument or General Intangible or with respect to any such
other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or
placed on the Collateral, other than Permitted Liens, to effect
any repairs or any insurance required by the terms of this
Agreement and to pay all or any part of the premiums therefor
and the costs thereof; and
(iii) (A) to direct any party liable for any payment
with respect to any of the Collateral to make payment of any
and all moneys due or to become due thereunder directly to the
Agent or as the Agent shall direct; (B) to ask for, or demand,
collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any
time in respect of or arising out of any Collateral; (C) to
sign and indorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) to
commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect
the Collateral or any thereof and to enforce any other right in
respect of any Collateral; (E) to defend any suit, action or
proceeding brought against Factors with respect to any of the
Collateral; (F)
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to settle, compromise or adjust any suit, action or proceeding
described in clause (E) above and, in connection therewith, to
give such discharges or releases as the Agent may deem
appropriate; (G) subject to any pre-existing rights or
licenses, to assign any Patent or Trademark (along with the
goodwill of the business to which any such Patent or Trademark
pertains), for such term or terms, on such conditions, and in
such manner, as the Agent shall in its sole discretion
determine; and (H) generally, to sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though the Agent
were the absolute owner thereof for all purposes, and to do, at
the Agent's option and Factors's expense, at any time, or from
time to time, all acts and things which the Agent deems
necessary to protect, preserve or realize upon the Collateral
and the Agent's Liens thereon and to effect the intent of this
Agreement, all as fully and effectively as Factors might do.
Factors hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable until payment in
full of the Obligations (except for contingent obligations of any
Obligor under indemnifications that survive termination of the
Revolver Commitments) and the termination of all Revolver Commitments.
(b) Other Powers. Factors also authorizes the Agent, from
time to time if an Event of Default shall have occurred and be
continuing, to execute, in connection with any sale provided for in
Section10 hereof, any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral.
(c) No Duty on the Part of Agent or Lenders. The powers
conferred on the Agent and the Lenders hereunder are solely to protect
the Agent's and the Lenders' interests in the Collateral and shall not
impose any duty upon the Agent or any Lender to exercise any such
powers. The Agent and the Lenders shall be accountable only for
amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to Factors for any act or
failure to act hereunder, except for their own gross negligence or
willful misconduct.
7. Performance by Agent of Factors's Obligations. If Factors fails
to perform or comply with any of its agreements contained herein and the Agent,
as provided for by the terms of this Agreement, shall itself perform or comply,
or otherwise cause performance or compliance, with such agreement, the
reasonable expenses of the Agent incurred in connection with such performance or
compliance, together with interest thereon at the Default Rate shall be payable
by Factors to the Agent on demand and shall constitute Obligations secured
hereby.
8. Proceeds. It is agreed that if an Event of Default shall occur
and be continuing, (a) all Proceeds of any Collateral received by Factors
consisting of cash, checks and other near-cash items
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shall be held by Factors in trust for the Agent and the Lenders, segregated from
other funds of Factors, and at the request of the Agent shall, forthwith upon
receipt by Factors, be turned over to the Agent in the exact form received by
Factors (duly indorsed by Factors to the Agent, if required by the Agent), and
(b) any and all such Proceeds received by the Agent (whether from Factors or
otherwise) may, in the sole discretion of the Agent, be held by the Agent, as
collateral security for the Obligations (whether matured or unmatured), and then
or at any time thereafter may be applied by the Agent against, the Obligations
then due and owing. Any balance of such Proceeds remaining after the payment in
full of the Obligations (except for contingent obligations of any Obligor under
indemnifications that survive termination of the Revolver Commitments) and the
termination of all the Revolver Commitments, shall be paid over to Factors or to
whomsoever may be lawfully entitled to receive the same.
9. Events of Default. It is understood and agreed that an event of
default shall be deemed to have occurred under this Agreement, and Agent shall
be entitled to take such actions as are elsewhere provided herein, in the event
that an Event of Default under and (as defined in) the Credit Agreement or any
of the other Credit Documents shall have occurred.
10. Remedies. If an Event of Default shall occur and be continuing,
the Agent may (and, upon written instructions to do so from the Required
Lenders, shall) exercise all rights and remedies of a secured party under the
UCC, together with every right and remedy available to Agent, under any other
Applicable Law, and, to the extent permitted by Applicable Law, all other rights
and remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations. Without limiting
the generality of the foregoing, the Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon Factors or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may (and upon written instructions to do so from the Required
Lenders, shall) in such circumstances, to the extent permitted by Applicable
Law, forthwith collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), whether on Factors's premises
or elsewhere, but subject to any pre-existing rights or licenses, in one or more
parcels at public or private sale or sales, at any exchange, broker's board or
office of the Agent or any Lender or elsewhere upon such terms and conditions as
it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The Agent
or any Lender shall have the right, to the extent permitted by Applicable Law,
upon any such sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in Factors, which right or
equity is hereby waived or released. Factors further agrees, at the Agent's
request, upon the occurrence and during the continuance of an Event of Default,
to assemble the Collateral and make it available to the Agent at places which
the Agent shall reasonably select, whether at Factors's premises or elsewhere.
Alternatively, Agent may peaceably by its own means or with judicial assistance
enter Factors's premises and take possession of the Collateral or dispose of the
Collateral on Factors's premises without resistance or interference by Factors.
The Agent shall apply the net proceeds of any such
17
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Agent and the Lenders hereunder,
including reasonable attorneys' fees and disbursements, to the payment in whole
or in part of the Obligations then due and owing, and only after such
application and after the payment by the Agent of any other amount required by
any provision of Applicable Law, need the Agent account for the surplus, if any,
to Factors. To the extent permitted by Applicable Law, Factors waives all
claims, damages and demands it may acquire against the Agent or any Lender
arising out of the repossession, retention or sale of the Collateral, other than
any such claims, damages and demands that may arise from the gross negligence or
willful misconduct of any of them. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition. Factors shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay the then
outstanding Obligations, including the reasonable fees and disbursements of any
attorneys employed by the Agent or any Lender to collect such deficiency.
11. Limitation on Duties Regarding Preservation of Collateral. The
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the UCC
or otherwise, shall be to deal with it in the same manner as the Agent deals
with similar property for its own account. Except as provided in the foregoing
sentence or elsewhere herein or in any other Credit Document, neither the Agent
nor any Lender shall be liable or responsible to Factors in any way for the
safeguarding of any of the Collateral, for any loss or damage thereto, for any
diminution in the value thereof, or for any act or default of any carrier,
warehouseman, forwarding agency, or other person whomsoever, but the same shall
be at all times at Factors's risk.
12. Waivers. In addition to the other waivers contained herein and
in any other Credit Document, Factors hereby expressly waives, to the extent
permitted by Applicable Law: demand, protest, notice of protest, notice of
default or dishonor, notice of payments and nonpayments, or of any default,
release, compromise, settlement, extension or renewal of all commercial paper,
instruments or guaranties at any time held by Agent or any of the Lenders on
which Factors may in any way be liable; notice or hearing in connection with,
and the requirement to post a bond as a condition to, the issuance of an
immediate writ of possession with respect to any of the Collateral; any
requirement that the Agent or any of the Lenders protect, secure, perfect or
insure any Lien or any property subject thereto or exhaust any right or take any
action against any Obligor or any other Person or any Collateral, including any
rights any Obligor may otherwise have under the New York General Obligations
Law; and notice of any action taken by Agent, in each case unless expressly
required by this Agreement, any other Credit Document or by Applicable Law.
13. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are powers coupled with
an interest and are irrevocable until payment in full of the Obligations (except
for contingent obligations of any Obligor under indemnifications
18
that survive termination of the Revolver Commitments) and the termination of all
Revolver Commitments.
14. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15. Section Headings. The section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
16. No Waiver; Cumulative Remedies. Neither the Agent nor any
Lender shall by any act (except by a written instrument pursuant to Section 17
hereof), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof. No failure
to exercise, nor any delay in exercising, on the part of the Agent or any
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Agent or such Lender would otherwise have
on any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
17. Amendments in Writing; No Waiver; Cumulative Remedies;
Successors and Assigns. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except by a written
instrument executed by Factors and the Agent. This Agreement shall be binding
upon the successors and assigns of Factors and shall inure to the benefit of the
Agent and the Lenders and their respective successors and assigns, except that
Factors may not assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Agent.
18. Notices. All notices, requests and demands to or upon the
respective parties hereto shall be made in accordance with Section 15.9 of the
Credit Agreement.
19. Authority of Agent. Factors acknowledges that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as among the Agent and the
Lenders be governed by the Credit Documents and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and Factors, the Agent shall be
19
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and Factors shall not be under any
obligation to make any inquiry respecting such authority.
20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW); PROVIDED, HOWEVER, THAT IF ANY COLLATERAL
SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN NEW YORK, THE LAWS OF SUCH
JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF
AGENT'S LIEN UPON COLLATERAL AND THE ENFORCEMENT OF AGENT'S OTHER REMEDIES OF
COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM
OR INCONSISTENT WITH THE LAWS OF THE STATE OF NEW YORK. NOTWITHSTANDING THE
FOREGOING PROVISION FOR THE NOTICE AND SALE OF COLLATERAL UNDER THE LAW OF THE
SITUS, IT IS THE PARTIES' INTENTION THAT NEW YORK LAW CONTROL THE OBLIGATIONS OF
FACTORS UNDER THE CREDIT DOCUMENTS AND THE ENFORCEMENT OF THE SAME SUCH THAT,
FOR EXAMPLE, FACTORS AGREES AND ACKNOWLEDGES THAT PURSUANT TO NEW YORK LAW
FACTORS SHALL BE LIABLE FOR A DEFICIENCY JUDGMENT NOTWITHSTANDING THE SALE OF
REAL PROPERTY COLLATERAL UNDER A POWER OF SALE AND FURTHER THAT LENDERS OR AGENT
MAY, AT THEIR ELECTION, SEEK A MONEY JUDGMENT UNDER THE CREDIT DOCUMENTS WITHOUT
FIRST EXHAUSTING ALL COLLATERAL SECURING THE OBLIGATIONS THEREUNDER.
21. Release of Collateral and Termination.
(a) At such time as the payment in full of the Obligations
(except for contingent obligations of any Obligor under
indemnifications that survive termination of the Revolver Commitments)
and the termination of all Revolver Commitments shall have occurred,
the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated
to survive such termination) of the Agent and Factors hereunder shall
terminate, all without delivery of any instrument or performance of
any act by any party, and all rights to the Collateral shall revert to
Factors. Upon request of Factors following any such termination, the
Agent shall deliver (at the sole cost and expense of Factors) to
Factors any Collateral held by the Agent hereunder, and execute and
deliver (at the sole cost and expense of Factors) to Factors such
documents as Factors shall reasonably request to evidence such
termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by Factors in a transaction permitted by the
Credit Agreement, then the Agent shall execute and deliver to Factors
(at the sole cost and expense of Factors) all releases or other
documents
20
reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral.
21
IN WITNESS WHEREOF, Factors has caused this Agreement to be duly
executed and delivered as of the date first above written.
RA FACTORS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: President
--------------------------------------
ACKNOWLEDGED AND AGREED AS OF THE
DATE HEREOF BY:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇' ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇' ▇▇▇▇▇▇
--------------------------------------
Title: Director
--------------------------------------
22