EXHIBIT 10.11
SECURITY AGREEMENT
------------------
(SUBSIDIARIES)
--------------
SECURITY AGREEMENT, dated as of April 22, 1998, among FLEX-O-LITE, INC., a
Delaware corporation ("Flex"), OSD ENVIZION, INC., a Delaware corporation
("OSD"), CRYSTALOID TECHNOLOGIES, INC., a Delaware corporation ("Crystaloid"),
▇▇▇▇▇▇▇ ACQUISITION, INC., a Delaware corporation ("JAI"), AMERICAN ALLSAFE
COMPANY, a Texas corporation ("Allsafe"), SILENCIO/SAFETY DIRECT, INC., a Nevada
corporation ("Silencio"), and together with Flex, OSD, Crystaloid, JAI and
Allsafe, the "Subsidiaries") and BANKBOSTON, N.A., a national banking
association, as agent (hereinafter, in such capacity, the "Agent") for itself
and the other lending institutions (hereinafter, collectively, the "Banks")
which are or may become parties to the Credit Agreement (as hereinafter
defined).
WHEREAS, ▇▇▇▇▇▇▇ Products, Inc., a Delaware corporation (the "Borrower"),
has entered into a Revolving Credit and Acquisition Loan Agreement, dated as of
April 22, 1998 (as amended and in effect from time to time, the "Credit
Agreement"), with the Banks, the Agent and Mercantile Bank National Association,
as Co-Agent, pursuant to which the Banks, subject to the terms and conditions
contained therein, provide certain financial accommodations to the Borrower; and
WHEREAS, the Subsidiaries are expected to receive substantial direct and
indirect benefits from the making of Loans and other extensions of credit to the
Borrower by the Banks pursuant to the Credit Agreement (which benefits are
hereby acknowledged); and
WHEREAS, the Subsidiaries have executed and delivered to the Agent, for the
benefit of the Banks and the Agent, a Guaranty dated as of the date hereof (as
amended and in effect from time to time, the "Guaranty"), pursuant to which the
Subsidiaries guaranteed to the Agent and the Banks the payment and performance
of the Borrower's obligations to the Banks and the Agent under or in respect of
the Credit Agreement; and
WHEREAS, it is a condition to the further effectiveness of the Credit
Agreement that the Subsidiaries execute and deliver to the Agent, for the
benefit of the Banks and the Agent, a security agreement in substantially the
form hereof;
-2-
NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. All capitalized terms used herein without definitions
-----------
shall have the respective meanings provided therefor in the Credit Agreement.
All terms defined in the Uniform Commercial Code of The Commonwealth of
Massachusetts and used herein shall have the same definitions herein as
specified therein.
2. GRANT OF SECURITY INTEREST.
--------------------------
2.1. COLLATERAL GRANTED. Each of the Subsidiaries hereby grants to
------------------
the Agent, for the benefit of the Banks and the Agent, to secure the
payment and performance in full of all of the Obligations (as defined in
the Credit Agreement), including all of the Subsidiaries' Obligations under
the Guaranty (collectively, the "Obligations"), a security interest in and
so pledges and assigns to the Agent, for the benefit of the Banks and the
Agent, the following properties, assets and rights of the Subsidiaries,
wherever located, whether now owned or hereafter acquired or arising, and
all proceeds and products thereof (all of the same being hereinafter called
the "Collateral"):
All personal and fixture property of every kind and nature
including without limitation all furniture, fixtures, all equipment
and accessions, raw materials, inventory and all other capital
assets, other goods, accounts, contract rights, rights to the
payment of money, insurance refund claims and all other insurance
claims and proceeds, tort claims, chattel paper, documents,
instruments, securities and other investment property (as such term
is defined in the Uniform Commercial Code), deposit accounts and all
general intangibles including, without limitation, all tax refund
claims, license fees, patents, patent applications, trademarks,
trademark applications, trade names, copyrights, copyright
applications, rights to ▇▇▇ and recover for past infringement of
patents, trademarks and copyrights, computer programs, computer
software, engineering drawings, service marks, customer lists,
goodwill, and all licenses, permits, agreements of any kind or
nature pursuant to which such Subsidiary possesses, uses or has
authority to possess or use property (whether tangible or
intangible) of others or others possess, use or have authority to
possess or use property (whether tangible or intangible) of such
Subsidiary, and all recorded data of any kind or nature, regardless
of the medium of recording including, without limitation, all
software, writings, plans, specifications and schematics.
-3-
2.2. DELIVERY OF INSTRUMENTS, ETC.
----------------------------
(a) Pursuant to the terms hereof, each of the Subsidiaries has
endorsed, assigned and delivered to the Agent all negotiable or non-
negotiable instruments, certificated securities and chattel paper
pledged by it hereunder, together with instruments of transfer or
assignment duly executed in blank as the Agent may have specified.
In the event that any Subsidiary shall, after the date of this
Agreement, acquire any other negotiable or non-negotiable
instruments, certificated securities or chattel paper to be pledged
by it hereunder, such Subsidiary shall forthwith endorse, assign and
deliver the same to the Agent, accompanied by such instruments of
transfer or assignment duly executed in blank as the Agent may from
time to time specify.
(b) To the extent that any securities now or hereafter
acquired by any Subsidiary are uncertificated and are issued to such
Subsidiary or its nominee directly by the issuer thereof, such
Subsidiary shall cause the issuer to note on its books the security
interest of the Agent in such securities and shall cause the issuer,
pursuant to an agreement in form and substance satisfactory to the
Agent, to agree to comply with instructions from the Agent as to
such securities, without further consent of such Subsidiary or such
nominee. To the extent that any securities, whether certificated or
uncertificated, or other financial assets now or hereafter acquired
by any Subsidiary are held by such Subsidiary or its nominee through
a securities intermediary, such Subsidiary shall use reasonable
efforts to (i) cause such securities intermediary to note on its
books the security interest of the Agent in such securities or other
financial assets and to confirm such notation promptly to the Agent
and (ii), at the request of the Agent, cause such securities
intermediary, pursuant to an agreement in form and substance
satisfactory to the Agent, to agree to comply with entitlement
orders or other instructions from the Agent as to such securities or
other financial assets, without further consent of such Subsidiary
or such nominee. The Agent agrees with each of the Subsidiaries that
the Agent shall not give any such entitlement orders or instructions
to any such issuer or securities intermediary unless an Event of
Default has occurred and is continuing and the Agent has elected to
exercise its rights and remedies as contemplated by (S)14.
(c) To the extent that any Subsidiary is a beneficiary under
any written letter of credit now or hereafter issued in favor of
such Subsidiary, such Subsidiary shall deliver such letter of credit
to the Agent. The Agent shall from time to time, at the request and
expense of such Subsidiary, make such arrangements with such
Subsidiary as are in the Agent's reasonable judgment necessary
-4-
and appropriate so that such Subsidiary may make any drawing to
which such Subsidiary is entitled under such letter of credit,
without impairment of the Agent's perfected security interest in
such Subsidiary's rights to proceeds of such letter of credit or in
the actual proceeds of such drawing. At the Agent's request, such
Subsidiary shall, for any letter of credit, whether or not written,
now or hereafter issued in favor of such Subsidiary as beneficiary,
execute and deliver to the issuer and any confirmer of such letter
of credit an assignment of proceeds form, in favor of the Agent and
satisfactory to the Agent and such issuer or (as the case may be)
such confirmer, requiring the proceeds of any drawing under such
letter of credit to be paid directly to the Agent for application as
provided in the Credit Agreement.
2.3. EXCLUDED COLLATERAL. Notwithstanding the foregoing provisions
-------------------
of this (S)2, such grant of security interest shall not extend to, and the
term "Collateral" shall not include, any chattel paper and general
intangibles which are now or hereafter held by any of the Subsidiaries as
licensee, lessee or otherwise, to the extent that (a) such chattel paper
and general intangibles are not assignable or capable of being encumbered
as a matter of law or under the terms of the license, lease or other
agreement applicable thereto (but solely to the extent that any such
restriction shall be enforceable under applicable law), without the consent
of the licensor or lessor thereof or other applicable party thereto and (b)
such consent has not been obtained provided, however, that the foregoing
-------- -------
grant of security interest shalextend to, and the term "Collateral" shall
include, (i) any and all proceeds of such chattel paper and general
intangibles to the extent that the assignment or encumbering of such
proceeds is not so restricted and (ii) upon any such licensor, lessor or
other applicable party consent with respect to any such otherwise excluded
chattel paper or general intangibles being obtained, thereafter such
chattel paper or general intangibles as well as any and all proceeds
thereof that might have theretofore have been excluded from such grant of a
security interest and the term "Collateral".
2.4. STOCK PLEDGE AGREEMENT. Concurrently herewith each of the
----------------------
Subsidiaries is executing and delivering to the Agent, for the benefit of
the Banks and the Agent, a Stock Pledge Agreement pursuant to which such
Subsidiary is pledging to the Agent, for the benefit of the Banks and the
Agent, (a) 100% of shares of the capital stock of each of its Domestic
Subsidiaries and (b) not less than 66% of the shares of capital stock of
each of its Foreign Subsidiaries. Such pledge shall be governed by the
terms of such stock pledge agreement and not by the terms of this
Agreement.
2.5. PATENT AND TRADEMARK ASSIGNMENTS. Concurrently herewith each of
--------------------------------
the Subsidiaries is also executing and delivering to the Agent, for the
benefit of the Banks and the Agent, the Patent Assignment
-5-
and the Trademark Assignment pursuant to which the Borrower is assigning to
the Agent, for the benefit of the Banks and the Agent, certain Collateral
consisting of patents and patent rights and trademarks, service marks and
trademark and service ▇▇▇▇ rights, together with the goodwill appurtenant
thereto. The provisions of the Patent Assignment and the Trademark
Assignment are supplemental to the provisions of this Agreement, and
nothing contained in the Patent Assignment or the Trademark Assignment
shall derogate from any of the rights or remedies of the Agent or any of
the Banks hereunder. Nor shall anything contained in the Patent Assignment
or the Trademark Assignment be deemed to prevent or extend the time of
attachment or perfection of any security interest in such Collateral
created hereby.
3. TITLE TO COLLATERAL, ETC. Each of the Subsidiaries is the owner of the
-------------------------
Collateral free from any adverse lien, security interest or other encumbrance,
except for the security interest created by this Agreement and other liens
permitted by the Credit Agreement. None of the Collateral constitutes, or is the
proceeds of, "farm products" as defined in (S)9-109(3) of the Uniform Commercial
Code of The Commonwealth of Massachusetts. None of the account debtors in
respect of any accounts, chattel paper or general intangibles and none of the
obligors in respect of any instruments included in the Collateral is a
governmental authority subject to the Federal Assignment of Claims Act.
4. CONTINUOUS PERFECTION. Each Subsidiary's place of business or, if more
---------------------
than one, chief executive office is indicated on the Perfection Certificate
delivered to the Agent by each Subsidiary herewith (collectively, the
"Perfection Certificates"). None of the Subsidiaries will change the same, or
the name, identity or corporate structure of such Subsidiary in any manner,
without providing at least thirty (30) days prior written notice to the Agent.
The Collateral, to the extent not delivered to the Agent pursuant to (S)2.2,
will be kept at those locations listed on the Perfection Certificate and none of
the Subsidiaries will remove the Collateral from such locations, without
providing at least thirty (30) days prior written notice to the Agent.
5. NO LIENS. Except for the security interest herein granted and liens
--------
permitted by the Credit Agreement, each of the Subsidiaries shall be the owner
of its respective Collateral free from any lien, security interest or other
encumbrance, and such Subsidiary shall defend the same against all claims and
demands of all persons at any time claiming the same or any interests therein
adverse to the Agent or any of the Banks. No Subsidiary shall pledge, mortgage
or create, or suffer to exist a security interest in the Collateral in favor of
any person other than the Agent, for the benefit of the Banks and the Agent,
except for liens permitted by the Credit Agreement.
6. NO TRANSFERS. No Subsidiary will sell or offer to sell or otherwise
------------
transfer the Collateral or any interest therein except as permitted by (S)10.5.2
of the Credit Agreement.
-6-
7. INSURANCE.
---------
7.1. MAINTENANCE OF INSURANCE. Each of the Subsidiaries will
------------------------
maintain with financially sound and reputable insurers insurance with
respect to its properties and business against such casualties and
contingencies as shall be in accordance with general practices of
businesses engaged in similar activities in similar geographic areas. Such
insurance shall be in such minimum amounts that such Subsidiary will not be
deemed a co-insurer under applicable insurance laws, regulations and
policies and otherwise shall be in such amounts, contain such terms, be in
such forms and be for such periods as may be reasonably satisfactory to the
Agent. In addition, all such insurance shall be payable to the Agent as
loss payee under a "standard" or "New York" loss payee clause for the
benefit of the Banks and the Agent. Without limiting the foregoing, such
Subsidiary will (a) keep all of its physical property insured with casualty
or physical hazard insurance on an "all risks" basis, with broad form flood
and earthquake coverages and electronic data processing coverage, with a
full replacement cost endorsement and an "agreed amount" clause in an
amount equal to 100% of the full replacement cost of such property, (b)
maintain all such workers' compensation or similar insurance as may be
required by law and (c) maintain, in amounts and with deductibles equal to
those generally maintained by businesses engaged in similar activities in
similar geographic areas, general public liability insurance against claims
of bodily injury, death or property damage occurring, on, in or about the
properties of such Subsidiary; business interruption insurance; and product
liability insurance.
7.2. INSURANCE PROCEEDS. The proceeds of any casualty insurance in
------------------
respect of any casualty loss of any of the Collateral shall, subject to the
rights, if any, of other parties with a prior interest in the property
covered thereby, (a) so long as no Event of Default has occurred and is
continuing, be disbursed to the appropriate Subsidiary for direct
application by such Subsidiary in accordance with (S)10.5.2 of the Credit
Agreement and (b) in all other circumstances, be held by the Agent as cash
collateral for the Obligations. The Agent may, at its sole option, disburse
from time to time all or any part of such proceeds so held as cash
collateral, upon such terms and conditions as the Agent may reasonably
prescribe, for direct application by such Subsidiary solely to the repair
or replacement of such Subsidiary's property so damaged or destroyed, or
the Agent may apply all or any part of such proceeds to the Obligations
with the Total Commitment (if not then terminated) being reduced by the
amount so applied to the Obligations.
7.3. NOTICE OF CANCELLATION, ETC. All policies of insurance shall
----------------------------
provide for at least thirty (30) days prior written cancellation notice to
the Agent. In the event of failure by any of the Subsidiaries to provide
and maintain insurance as herein provided, the Agent may, at its option,
-7-
provide such insurance and charge the amount thereof to such Subsidiary.
Each of the Subsidiaries shall furnish the Agent with certificates of
insurance and policies evidencing compliance with the foregoing insurance
provision.
8. MAINTENANCE OF COLLATERAL; COMPLIANCE WITH LAW. Each of the
----------------------------------------------
Subsidiaries will keep the Collateral in good order and repair and will not use
the same in violation of law or any policy of insurance thereon. The Agent, or
its designee, may inspect the Collateral at any reasonable time, wherever
located. Each of the Subsidiaries will pay promptly when due all taxes,
assessments, governmental charges and levies upon the Collateral or incurred in
connection with the use or operation of such Collateral or incurred in
connection with this Agreement, (other than such items contessted in good faith
in accordance with (S)9.8 of the Credit Agreement). Each of the Subsidiaries has
at all times operated, and such Subsidiary will continue to operate, its
business in compliance with all applicable provisions of the federal Fair Labor
Standards Act, as amended, and with all applicable provisions of federal, state
and local statutes and ordinances dealing with the control, shipment, storage or
disposal of hazardous materials or substances.
9. COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
----------------------------------------------------------
9.1. EXPENSES INCURRED BY AGENT. In its discretion, the Agent may
--------------------------
discharge taxes and other encumbrances at any time levied or placed on any
of the Collateral (other than any taxes or encumbrances contested in good
faith and in accordance with (S)9.8 of the Credit Agreement), make repairs
thereto (after any Event of Default has occurred and is continuing or if
the Borrower's failure to make such repairs will result in an Event of
Default) and pay any necessary filing fees. Each of the Subsidiaries agrees
to reimburse the Agent on demand for any and all expenditures so made. The
Agent shall have no obligation to any Subsidiary to make any such
expenditures, nor shall the making thereof relieve any Subsidiary of any
default.
9.2. AGENT'S OBLIGATIONS AND DUTIES. Anything herein to the
------------------------------
contrary notwithstanding, each of the Subsidiaries shall remain liable
under each contract or agreement comprised in the Collateral to be observed
or performed by such Subsidiary thereunder. Neither the Agent nor any Bank
shall have any obligation or liability under any such contract or agreement
by reason of or arising out of this Agreement or the receipt by the Agent
or any Bank of any payment relating to any of the Collateral, nor shall the
Agent or any Bank be obligated in any manner to perform any of the
obligations of any Subsidiary under or pursuant to any such contract or
agreement, to make inquiry as to the nature or sufficiency of any payment
received by the Agent or any Bank in respect of the Collateral or as to the
sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of
-8-
any amounts which may have been assigned to the Agent or to which the Agent
or any Bank may be entitled at any time or times. The Agent's sole duty
with respect to the custody, safe keeping and physical preservation of the
Collateral in its possession, under (S)9-207 of the Uniform Commercial Code
of The Commonwealth of Massachusetts or otherwise, shall be to deal with
such Collateral in the same manner as the Agent deals with similar property
for its own account.
10. SECURITIES AND DEPOSITS. The Agent may at any time, at its option,
-----------------------
transfer to itself or any nominee any securities constituting Collateral,
receive any income thereon and hold such income as additional Collateral or
apply it to the Obligations. Whether or not any Obligations are due, the Agent
may demand, ▇▇▇ for, collect, or make any settlement or compromise which it
deems desirable with respect to the Collateral. Regardless of the adequacy of
Collateral or any other security for the Obligations, any deposits or other sums
at any time credited by or due from the Agent or any Bank to any of the
Subsidiaries may at any time be applied to or set off against any of the
Obligations.
11. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER OBLIGORS. If a Default or an
--------------------------------------------------
Event of Default shall have occurred and be continuing, each of the Subsidiaries
shall, at the request of the Agent, notify account debtors on accounts, chattel
paper and general intangibles of such Subsidiary and obligors on instruments for
which such Subsidiary is an obligee of the security interest of the Agent in any
account, chattel paper, general intangible or instrument and that payment
thereof is to be made directly to the Agent or to any financial institution
designated by the Agent as the Agent's agent therefor, and the Agent may itself,
if a Default or an Event of Default shall have occurred and be continuing,
without notice to or demand upon any of the Subsidiaries, so notify account
debtors and obligors. After the making of such a request or the giving of any
such notification, each of the Subsidiaries shall hold any proceeds of
collection of accounts, chattel paper, general intangibles and instruments
received by such Subsidiary as trustee for the Agent, for the benefit of the
Banks and the Agent, without commingling the same with other funds of such
Subsidiary and shall turn the same over to the Agent in the identical form
received, together with any necessary endorsements or assignments. The Agent
shall apply the proceeds of collection of accounts, chattel paper, general
intangibles and instruments received by the Agent to the Obligations, such
proceeds to be immediately entered after final payment in cash or solvent
credits of the items giving rise to them.
12. FURTHER ASSURANCES. Each of the Subsidiaries, at its own expense,
------------------
shall do, make, execute and deliver all such additional and further acts,
things, deeds, assurances and instruments as the Agent may reasonably require
more completely to vest in and assure to the Agent and the Banks their
respective rights hereunder or in any of the Collateral, including, without
limitation, (a) executing, delivering and, where appropriate, filing financing
statements and continuation statements under the Uniform Commercial Code, (b)
obtaining
-9-
governmental and other third party consents and approvals, including without
limitation any consent of any licensor, lessor or other applicable party
referred to in (S)2.3, (c) obtaining waivers from mortgagees and landlords and
(d) taking all actions required by Sections 8-313 and 8-321 of the Uniform
Commercial Code, as applicable in each relevant jurisdiction, with respect to
certificated and uncertificated securities.
13. POWER OF ATTORNEY.
-----------------
13.1. APPOINTMENT AND POWERS OF AGENT. Each of the Subsidiaries
-------------------------------
hereby irrevocably constitutes and appoints the Agent and any
officer or agent thereof, with full power of substitution, as its
true and lawful attorneys-in-fact with full irrevocable power and
authority in the place and stead of such Subsidiary or in the
Agent's own name, 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 that may be necessary or desirable
to accomplish the purposes of this Agreement and, without limiting
the generality of the foregoing, hereby gives said attorneys the
power and right, on behalf of such Subsidiary, without notice to or
assent by such Subsidiary, to do the following:
(a) upon the occurrence and during the continuance of an
Event of Default, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the
Collateral in such manner as is consistent with the Uniform
Commercial Code of The Commonwealth of Massachusetts and as fully
and completely as though the Agent were the absolute owner thereof
for all purposes, and to do at such Subsidiary'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 security interest therein, in order to effect the
intent of this Agreement, all as fully and effectively as such
Subsidiary might do, including, without limitation, (i) the filing
and prosecuting of registration and transfer applications with the
appropriate federal or local agencies or authorities with respect to
trademarks, copyrights and patentable inventions and processes, (ii)
upon written notice to such Subsidiary, the exercise of voting
rights with respect to voting securities, which rights may be
exercised, if the Agent so elects, with a view to causing the
liquidation in a commercially reasonable manner of assets of the
issuer of any such securities and (iii) the execution, delivery and
recording, in connection with any sale or other disposition of any
Collateral, of the endorsements, assignments or other instruments of
conveyance or transfer with respect to such Collateral; and
(b) to file such financing statements with respect hereto,
with or without such Subsidiary's signature, or a photocopy of this
-10-
Agreement in substitution for a financing statement, as the Agent
may deem appropriate and to execute in such Subsidiary's name such
financing statements and amendments thereto and continuation
statements which may require such Subsidiary's signature.
13.2. RATIFICATION BY SUBSIDIARIES. To the extent permitted by law,
----------------------------
each of the Subsidiaries 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.
13.3. NO DUTY ON AGENT. The powers conferred on the Agent hereunder
----------------
are solely to protect the interests of the Agent and the Banks in the
Collateral and shall not impose any duty upon the Agent to exercise any
such powers. The Agent shall be accountable only for the amounts that it
actually receives as a result of the exercise of such powers and neither it
nor any of its officers, directors, employees or agents shall be
responsible to any of the Subsidiaries for any act or failure to act,
except for the Agent's own gross negligence or willful misconduct.
14. REMEDIES. If an Event of Default shall have occurred and be
--------
continuing, the Agent may, without notice to or demand upon any of the
Subsidiaries, declare this Agreement to be in default, and the Agent shall
thereafter have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the Uniform Commercial Code, including, without limitation, the
right to take possession of the Collateral, and for that purpose the Agent may,
so far as each of the Subsidiaries can give authority therefor, enter upon any
premises on which the Collateral may be situated and remove the same therefrom.
The Agent may in its discretion require any of the Subsidiaries to assemble all
or any part of the Collateral at such location or locations within the state(s)
of such Subsidiary's principal office(s) or at such other locations as the Agent
may designate. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market, the
Agent shall give to such Subsidiary at least five (5) Business Days prior
written notice of the time and place of any public sale of Collateral or of the
time after which any private sale or any other intended disposition is to be
made. Each of the Subsidiaries hereby acknowledges that five (5) Business Days
prior written notice of such sale or sales shall be reasonable notice. In
addition, each of the Subsidiaries waives any and all rights that it may have to
a judicial hearing in advance of the enforcement of any of the Agent's rights
hereunder, including, without limitation, its right following an Event of
Default to take immediate possession of the Collateral and to exercise its
rights with respect thereto. To the extent that any of the Obligations are to be
paid or performed by a person other than a Subsidiary, each of the Subsidiaries
waives and agrees not to assert any rights or privileges which it may have under
(S)9-112 of the Uniform Commercial Code of The Commonwealth of Massachusetts.
-11-
15. NO WAIVER, ETC. Each of the Subsidiaries waives demand, notice,
---------------
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description. With respect to
both the Obligations and the Collateral, each of the Subsidiaries assents to any
extension or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Agent may deem advisable. The Agent shall have no duty
as to the collection or protection of the Collateral or any income thereon, nor
as to the preservation of rights against prior parties, nor as to the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in (S)9.2. The Agent shall not be deemed to have waived any of its
rights upon or under the Obligations or the Collateral unless such waiver shall
be in writing and signed by the Agent with the consent of the Majority Banks. No
delay or omission on the part of the Agent in exercising any right shall operate
as a waiver of such right or any other right. A waiver on any one occasion shall
not be construed as a bar to or waiver of any right on any future occasion. All
rights and remedies of the Agent with respect to the Obligations or the
Collateral, whether evidenced hereby or by any other instrument or papers, shall
be cumulative and may be exercised singularly, alternatively, successively or
concurrently at such time or at such times as the Agent deems expedient.
16. MARSHALLING. Neither the Agent nor any Bank shall be required to
-----------
marshal any present or future collateral security (including but not limited to
this Agreement and the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of the rights of the
Agent hereunder and of the Agent or any Bank in respect of such collateral
security and other assurances of payment shall be cumulative and in addition to
all other rights, however existing or arising. To the extent that it lawfully
may, each of the Subsidiaries hereby agrees that it will not invoke any law
relating to the marshalling of collateral which might cause delay in or impede
the enforcement of the Agent's rights under this Agreement or under any other
instrument creating or evidencing any of the Obligations or under which any of
the Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may,
each of the Subsidiaries hereby irrevocably waives the benefits of all such
laws.
17. PROCEEDS OF DISPOSITIONS; EXPENSES. Each of the Subsidiaries shall pay
----------------------------------
to the Agent on demand any and all reasonable expenses, including reasonable
attorneys' fees and disbursements, incurred or paid by the Agent in protecting,
preserving or enforcing the Agent's rights under or in respect of any of the
Obligations or any of the Collateral. After deducting all of said expenses, the
residue of any proceeds of collection or sale of the Obligations or Collateral
shall, to the extent actually received in cash, be applied to the payment of
the
-12-
Obligations in such order or preference as is provided in the Credit Agreement,
proper allowance and provision being made for any Obligations not then due. Upon
the final payment and satisfaction in full of all of the Obligations and after
making any payments required by Section 9-504(1)(c) of the Uniform Commercial
Code of The Commonwealth of Massachusetts, any excess shall be returned to the
appropriate Subsidiary. Such Subsidiary shall remain liable for any deficiency
in the payment of the Obligations after all proceeds of Collateral have been
applied.
18. OVERDUE AMOUNTS. Until paid, all amounts due and payable by each of
---------------
the Subsidiaries hereunder shall be a debt secured by the Collateral and shall
bear, whether before or after judgment, interest at the rate of interest for
overdue principal set forth in the Credit Agreement.
19. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT IS INTENDED TO
--------------------------------------
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. Each of the
Subsidiaries agrees that any suit for the enforcement of this Agreement may be
brought in the courts of The Commonwealth of Massachusetts or any federal court
sitting therein and consents to the non-exclusive jurisdiction of such court and
to service of process in any such suit being made upon such Subsidiary by mail
at the address set forth below its signature hereto or at such other address as
such Subsidiary may designate in writing to the Agent. Each of the Subsidiaries
hereby waives any objection that it may now or hereafter have to the venue of
any such suit or any such court or that such suit is brought in an inconvenient
court.
20. WAIVER OF JURY TRIAL. EACH OF THE SUBSIDIARIES WAIVES ITS RIGHT TO A
--------------------
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, each
of the Subsidiaries waives any right which it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each of the Subsidiaries (a) certifies that neither the Agent or
any Bank nor any representative, agent or attorney of the Agent or any Bank has
represented, expressly or otherwise, that the Agent or any Bank would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that, in entering into the Credit Agreement and the other Loan
Documents to which the Agent or any Bank is a party, the Agent and the Banks are
relying upon, among other things, the waivers and certifications contained in
this (S)20.
21. MISCELLANEOUS. The headings of each section of this Agreement are for
-------------
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon each
-13-
of the Subsidiaries and its respective successors and assigns, and shall inure
to the benefit of the Agent, the Banks and their respective successors and
assigns. If any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein. Each
of the Subsidiaries acknowledges receipt of a copy of this Agreement.
IN WITNESS WHEREOF, intending to be legally bound, each of the Subsidiaries
has caused this Agreement to be duly executed as of the date first above
written.
FLEX-O-LITE, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
_____________________________
_____________________________
OSD ENVIZION, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
_____________________________
_____________________________
CRYSTALOID TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
____________________________
____________________________
▇▇▇▇▇▇▇ ACQUISITION, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
______________________________
______________________________
AMERICAN ALLSAFE COMPANY
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
______________________________
______________________________
SILENCIO/SAFETY DIRECT, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
_______________________________
_______________________________
ACCEPTED:
BANKBOSTON, N.A.,
AS AGENT
By: /s/ ▇▇▇▇▇ van der ▇▇▇▇▇
---------------------------
▇▇▇▇▇ van der ▇▇▇▇▇, Vice
President
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OR STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 22 day of April, 1998, personally appeared ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ to me known personally, and who, being by me duly sworn, deposes and says
that he is the VP & CFO of Flex-O-Lite, Inc., and that said instrument was
signed and sealed on behalf of said corporation by authority of its Board of
Directors, and said Vice President & CFO acknowledged said instrument to be the
free act and deed of said corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Notary Public
My commission expires: August 8/3/99
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OR STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 22 day of April, 1998, personally appeared ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ to me known personally, and who, being by me duly sworn, deposes and says
that he is the VP & CFO of OSD Envizion, Inc., and that said instrument was
signed and sealed on behalf of said corporation by authority of its Board of
Directors, and said VP & CFO acknowledged said instrument to be the free act and
deed of said corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Notary Public
My commission expires: August 8/3/99
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OR STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 22 day of April, 1998, personally appeared ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ to me known personally, and who, being by me duly sworn, deposes and says
that he is the VP & CFO of Crystaloid Technologies, Inc., and that said
instrument was signed and sealed on behalf of said corporation by authority of
its Board of Directors, and said VP & CFO acknowledged said instrument to be the
free act and deed of said corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Notary Public
My commission expires: August 8/3/99
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OR STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 22 day of April, 1998, personally appeared ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ to me known personally, and who, being by me duly sworn, deposes and says
that he is the VP & CFO of ▇▇▇▇▇▇▇ Acquisition, Inc., and that said instrument
was signed and sealed on behalf of said corporation by authority of its Board of
Directors, and said VP & CFO acknowledged said instrument to be the free act and
deed of said corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Notary Public
My commission expires: August 8/3/99
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OR STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 22 day of April, 1998, personally appeared ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ to me known personally, and who, being by me duly sworn, deposes and says
that he is the VP & CFO of American Allsafe Company, and that said instrument
was signed and sealed on behalf of said corporation by authority of its Board of
Directors, and said VP & CFO acknowledged said instrument to be the free act and
deed of said corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Notary Public
My commission expires: August 8/3/99
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OR STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 22 day of April, 1998, personally appeared ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ to me known personally, and who, being by me duly sworn, deposes and says
that he is the VP & CFO of Silencio/Safety Direct, Inc., and that
said instrument was signed and sealed on behalf of said corporation by authority
of its Board of Directors, and said VP & CFO acknowledged said
instrument to be the free act and deed of said corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Notary Public
My commission expires: August 8/3/99
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OR STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 22 day of April, 1998, personally appeared ▇▇▇▇▇ van der
▇▇▇▇▇, to me known personally, and who, being by me duly sworn, deposes and says
that he is a Vice President of BankBoston, N.A. (the "Agent"), and that said
instrument was signed and sealed on behalf of said Agent by authority of its
Board of Directors, and said ▇▇▇▇▇ van der ▇▇▇▇▇ acknowledged said instrument to
be the free act and deed of the Agent.
_________________________
Notary Public
My commission expires: