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EXHIBIT 10.80
GUARANTOR SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of May 2, 2000, made by Decora
Industries, Inc., a Delaware corporation (the "Grantor"), in favor of Ableco
Finance LLC, as collateral agent for the Lenders parties to the Financing
Agreement referred to below (in such capacity, the "Collateral Agent").
WITNESSETH:
WHEREAS, the Grantor, Decora, Incorporated (the "Borrower"), the
financial institutions from time to time party thereto (the "Lenders"), The CIT
Group/Business Credit, Inc., as administrative agent for the Lenders (the
"Administrative Agent"), and the Collateral Agent, are parties to a Financing
Agreement, dated as of the date hereof (such Agreement, as amended, restated or
otherwise modified from time to time, being hereinafter referred to as the
"Financing Agreement");
WHEREAS, pursuant to the Financing Agreement, the Lenders have
agreed to extend credit to the Grantor consisting of (i) term loans to the
Grantor in an aggregate principal amount at any one time outstanding not to
exceed $13,000,000 and (ii) revolving credit loans to the Grantor in an
aggregate principal amount at any one time outstanding not to exceed $14,000,000
(each a "Loan" and collectively, the "Loans"), which will include a letter of
credit (the "Support Letter of Credit") issued with the assistance of the
Administrative Agent and the Lenders for the account of the Grantor;
WHEREAS, it is a condition precedent to the Lenders making any Loan
or assisting the Borrower in obtaining the issuance of the Support Letter of
Credit pursuant to the Financing Agreement that the Grantor shall have executed
and delivered to the Collateral Agent a security agreement providing for the
grant to the Collateral Agent for the benefit of the Lenders of a security
interest in all personal property of the Grantor, except as otherwise noted
herein;
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Lenders to make and maintain the Loans and to
assist the Borrower in obtaining the issuance of the Support Letter of Credit
pursuant to the Financing Agreement, the Grantor hereby agrees with the
Collateral Agent as follows:
SECTION 1. Definitions. Reference is hereby made to the Financing
Agreement for a statement of the terms thereof. All terms used in this Agreement
which are defined in the Financing Agreement or in Article 9 of the Uniform
Commercial Code (the "Code") currently in effect in the State of New York and
which are not otherwise defined herein shall have the same meanings herein as
set forth therein. In addition, as used in this Agreement, the following terms
shall have the following meanings:
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"Guaranteed Other Obligations" means any Guaranteed Obligations (as
defined in Section 3 hereof) other than Guaranteed Term Loan Obligations.
"Guaranteed Term Loan Obligations" means any Guaranteed Obligations
with respect to the Term Loans (including, without limitation, the principal
thereof, the interest thereon, and fees and expenses specifically related
thereto).
SECTION 2. Grant of Security Interest. (a) As collateral security
for all of the Guaranteed Other Obligations, the Grantor hereby pledges and
assigns to the Collateral Agent, and grants to the Collateral Agent for the
benefit of the Lenders a continuing security interest in, all personal property
and fixtures of the Grantor, wherever located and whether now or hereafter
existing and whether now owned or hereafter acquired, of every kind and
description, tangible or intangible, including, without limitation, all of the
Grantor's right, title and interest in and to the following (the "Collateral"):
(i) all equipment of any kind including, without limitation, all
furniture, fixtures and machinery, wherever located and whether now or hereafter
existing and whether now owned or hereafter acquired, together with all
substitutes, replacements, accessions and additions thereto, and all tools,
parts, accessories and attachments used in connection therewith (hereinafter
collectively referred to as the "Equipment");
(ii) all inventory of any kind wherever located and whether now or
hereafter existing and whether now owned or hereafter acquired (including,
without limitation, all types of inventory, merchandise, goods, property and
other assets that are held by the Grantor for sale, lease or other disposition
or to be furnished under a contract for services, whether such inventory,
merchandise, goods, property and other assets are raw, in process or finished
goods, and materials used or consumed in the business of the Grantor, and goods
returned to or repossessed by the Grantor and goods in which the Grantor has an
interest in mass or in joint or other interest or right of any kind, including
consigned goods and goods being processed), and all accessions thereto and
products thereof and all packing and shipping materials (any and all such
inventory, accessions and products being hereinafter referred to as the
"Inventory");
(iii) (A) all present and future accounts, contract rights, chattel
paper, documents, instruments, general intangibles and other obligations of any
kind arising out of or in connection with the sale, lease or other disposition
of goods or the rendering of services or otherwise; (B) all of the Grantor's
right, title and interest, and all of the Grantor's rights, remedies, security
and Liens, in, to and in respect of any credit insurance, accounts (including,
without limitation, rights of stoppage in transit, replevin, repossession,
reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party), guaranties or other contracts of suretyship with respect to accounts,
and deposits or other security for the obligation of any Account Debtor; (C) all
rights relating to the sale or other transfer of property to, or the
construction, renovation, processing or other improvement of property by or for
the Grantor; (D) all rights now or hereafter existing in and to all letters of
credit, security agreements, leases and other contracts now or hereafter
existing and securing or otherwise relating to such accounts, contract rights,
chattel paper, instruments, documents, general intangibles or other rights or
obligations (including, without limitation, the contracts described in Schedule
I hereto); and (E) all of the Grantor's right,
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title and interest in, to and in respect of all goods relating to, or which by
sale have resulted in, accounts, including, without limitation, all goods
described in invoices or other documents or instruments with respect to, or
otherwise representing or evidencing, any accounts, and all returned, reclaimed
or repossessed goods (any and all such accounts, contract rights, chattel paper,
instruments, documents, general intangibles and obligations being hereinafter
referred to collectively as the "Receivables", and any and all such credit
insurance, guaranties, letters of credit, security agreements, leases and other
contracts being hereinafter referred to collectively as the "Related
Contracts");
(iv) (A) all trademarks, service marks, trade names, business names,
d/b/a's, Internet domain names, trade styles, designs, logos and other source or
business identifiers and all general intangibles of like nature, now or
hereafter owned, adopted, acquired or used by the Grantor (including, without
limitation, all trademarks and service marks described in Schedule II hereto and
all trade names, business names, trade styles, designs, logos and other source
or business identifiers described in Schedule VI hereto), all applications,
registrations and recordings thereof (including, without limitation,
applications, registrations and recordings in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision thereof), and
all reissues, extensions or renewals thereof, together with all goodwill of the
business symbolized by such marks and all customer lists, formulae and other
records of the Grantor relating to the distribution of products and services in
connection with which any of such marks are used, and all income, royalties,
damages and payments now or hereafter due and/or payable under and with respect
thereto, including, without limitation, payments under all licenses entered into
in connection therewith and damages and payments for past and future
infringements or dilutions thereof and the right to ▇▇▇ for past, present and
future infringements and dilutions thereof (hereinafter referred to collectively
as the "Trademarks"), and (B) all licenses, contracts or other agreements,
whether written or oral, naming the Grantor as licensor or licensee and
providing for the grant of any right to use any Trademark, including, without
limitation, all trademark licenses described in Schedule II hereto, together
with any goodwill connected with and symbolized by any such trademark licenses
or agreements and the right to prepare for sale and sell any and all Inventory
now or hereafter owned by the Grantor and now or hereafter covered by such
licenses (hereinafter referred to collectively as the "Trademark Licenses");
(v) (A) all letters patent, design patents and utility patents, and
all inventions, trade secrets, proprietary information and technology, know-how,
formulae and other general intangibles of like nature, now existing or hereafter
acquired (including, without limitation, all letters patent, design patents and
utility patents and applications therefor described in Schedule III hereto), all
applications, issuances and recordings thereof (including, without limitation,
applications, issuances and recordings in the United States Patent and Trademark
Office or in any similar office or agency of the United States or any other
country or any political subdivision thereof), and all reissues, divisions,
continuations, continuations-in-part and extensions or renewals thereof
(hereinafter referred to collectively as the "Patents"), and (B) all licenses,
contracts or other agreements, whether written or oral, naming the Grantor as
licensee or licensor and providing for the grant of any right to manufacture,
use or sell any invention covered by any patent (hereinafter referred to
collectively as the "Patent Licenses") (including, without limitation, all
Patent Licenses set forth in Schedule III hereto);
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(vi) (A) all copyrights, including, without limitation, all original
works of authorship fixed in any tangible medium of expression, acquired or used
by the Grantor (including, without limitation, all copyrights described in
Schedule IV hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Copyright Office or in any similar office or agency of the
United States or any other country or any political subdivision thereof), and
all reversions, restorations, continuations, continuations in part and
extensions or renewals thereof (hereinafter referred to collectively as the
"Copyrights"), and (B) all licenses, contracts or other agreements, whether
written or oral, naming the Grantor as licensee or licensor and providing for
the grant of any right to use or sell any works covered by any copyright
(hereinafter referred to collectively as the "Copyright Licenses" and together
with the Trademark Licenses and the Patent Licenses, the "Licenses") (including,
without limitation, all Copyright Licenses set forth in Schedule IV hereto);
(vii) (A) all moneys, securities and other property and the proceeds
thereof, now or hereafter held or received by, or in transit to, any Agent or
any Lender from or for the Grantor, whether for safekeeping, pledge, custody,
transmission, collection or otherwise, and all of the Grantor's sums and credits
with, and all of the Grantor's claims against any Agent or any Lender at any
time existing; (B) all rights, interests, choses in action, causes of actions,
claims and all other intangible property of every kind and nature, in each
instance whether now owned or hereafter acquired by the Grantor, including,
without limitation, all corporate and other business records, all loans,
royalties, and all other forms of obligations receivable whatsoever (other than
Receivables); (C) all computer programs, software, printouts and other computer
materials, customer lists, credit files, correspondence, advertising materials
and other source or business identifiers; (D) all customer and supplier
contracts, sale orders, rights under license and franchise agreements, and other
contracts and contract rights; (E) all interests in partnerships, limited
liability companies and joint ventures, including all moneys due from time to
time in respect thereof; (F) all federal, state and local tax refunds and
federal, state and local tax refund claims and all judgments in favor of Grantor
and all of Grantor's rights with respect thereto; (G) all right, title and
interest under leases, subleases, licenses and concessions and other agreements
relating to personal property, including all moneys due from time to time in
respect thereof; (H) all payments due or made to the Grantor in connection with
any requisition, confiscation, condemnation, seizure or forfeiture of any
property by any Person or Governmental Authority; (I) all lock-box and all
deposit accounts (general or special) or other accounts with any bank or other
financial institution, including, without limitation, all depository or other
accounts maintained by the Grantor at any Agent or any Lender and all funds on
deposit therein; (J) all credits with and other claims against third parties
(including carriers and shippers) (other than Receivables); (K) all rights to
indemnification; (L) all reversionary interests in pension and profit sharing
plans and reversionary, beneficial and residual interests in trusts; (M) all
proceeds of insurance of which the Grantor is the beneficiary; (N) all letters
of credit, guaranties, liens, security interests and other security held by or
granted to the Grantor; (O) all instruments, files, records, ledger sheets and
documents covering or relating to any of the Collateral; and (P) all general
intangibles, whether or not similar to the foregoing, in each instance, however
and wherever arising;
(viii) the books and records of the Grantor relating to any of the
foregoing Collateral, including, without limitation, all customer contracts,
sale orders, minute books, ledgers, records, computer programs, software,
printouts and other computer materials, customer
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lists, credit files, correspondence and advertising materials, in each case
indicating, summarizing or evidencing any of the Collateral;
(ix) all investment property, securities, securities accounts,
financial assets and securities entitlements of the Grantor, excluding the
Capital Stock of any Restricted Subsidiary (as defined in the Indenture) of the
Grantor; and
(x) all cash and non-cash proceeds of any and all of the foregoing
Collateral (including, without limitation, (A) damages and payments for past or
future infringements of the Trademarks, the Patents or the Copyrights and (B)
the right to ▇▇▇ for past, present and future infringements of the Trademarks,
the Patents or the Copyrights) and, to the extent not otherwise included, all
payments under insurance (whether or not the Collateral Agent is the loss payee
thereof) and any indemnity, warranty or guaranty payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral;
in each case howsoever the Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise);
(b) As collateral security for all of the Guaranteed Term Loan
Obligations, the Grantor hereby pledges and assigns to the Collateral Agent, and
grants to the Collateral Agent for the benefit of the Lenders a continuing
security interest in, all of the Collateral.
(c) The Collateral Agent's security interest in the Collateral
securing the Guaranteed Other Obligations shall have priority over the
Collateral Agent's security interest in the Collateral securing the Guaranteed
Term Loan Obligations.
SECTION 3. Security for Guaranteed Obligations. The security
interest created hereby in the Collateral constitutes continuing collateral
security for all of the following obligations, whether now existing or hereafter
incurred (the "Guaranteed Obligations"):
(a) the prompt payment by the Grantor, as and when due and payable
(by scheduled maturity, required prepayment, acceleration, demand or otherwise),
of all amounts from time to time owing by it in respect of its guaranty made
pursuant to Article XI of the Financing Agreement dated the date hereof, in
favor of the Agents and the Lenders, whether for principal, interest (including,
without limitation, all interest that accrues after the commencement of any
case, proceeding or other action relating to bankruptcy, insolvency or
reorganization of the Grantor, whether or not a claim for post-filing interest
is allowed in such proceeding), Letter of Credit Obligations, fees,
indemnification payments, expense reimbursements or otherwise; and
(b) the due performance and observance by the Grantor of all of its
other obligations from time to time existing in respect of its guaranty made
pursuant to Article XI of the Financing Agreement and all other Loan Documents
to which it is a party.
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SECTION 4. Representations and Warranties. The Grantor represents
and warrants as follows:
(a) There is no pending or, to the knowledge of the Grantor,
threatened action, suit, proceeding or claim before any court or other
Governmental Authority or any arbitrator, or any order, judgment or award by any
court or other Governmental Authority or arbitrator, that may adversely affect
the grant by the Grantor, or the perfection, of the security interest purported
to be created hereby in the Collateral, or the exercise by the Collateral Agent
of any of its rights or remedies hereunder.
(b) All taxes, assessments and other governmental charges imposed
upon the Grantor or any property of the Grantor (including, without limitation,
all federal income and social security taxes on employees' wages) and which have
become due and payable on or prior to the date hereof have been paid, except to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine and Lien resulting from the non-payment thereof
and with respect to which adequate reserves in accordance with GAAP have been
established for the payment thereof.
(c) All Equipment and Inventory now existing is, and all Equipment
and Inventory hereafter existing will be located at the addresses specified
therefor in Schedule V hereto or at such other locations permitted by the terms
of Section 5(b) hereof. The Grantor's chief place of business and chief
executive office, the place where the Grantor keeps its records concerning
Receivables and all originals of all chattel paper which constitute Receivables
are located at the addresses specified therefor in Schedule V hereto. None of
the Receivables is evidenced by a promissory note or other instrument. Set forth
in Schedule VI hereto is a complete and correct list of each trade name used by
the Grantor.
(d) The Grantor has delivered to the Collateral Agent complete and
correct copies of each Related Contract described on Schedule I hereto, which
represent all of the Related Contracts existing on the date of this Agreement
and each License described in Schedule II, Schedule III and Schedule IV hereto,
including in each such case all schedules and exhibits thereto. Each Related
Contract and License sets forth the entire agreement and understanding of the
parties thereto relating to the subject matter thereof, and there are no other
agreements, arrangements or understandings, written or oral, relating to the
matters covered thereby or the rights of the Grantor in respect thereof. Each
Related Contract now existing is, and each other Related Contract will be, the
legal, valid and binding obligation of the Grantor, and to the best knowledge of
the Grantor, the other parties thereto, enforceable against the Grantor, and to
the best knowledge of the Grantor, the other parties thereto, in accordance with
its terms. No default thereunder by the Grantor and, to the best knowledge of
the Grantor, any other party thereto, has occurred, nor does any defense,
offset, deduction or counterclaim exist thereunder in favor of the Grantor, or
to the best knowledge of the Grantor, the other party thereto.
(e) The Grantor owns, or otherwise possesses adequate rights to use,
all Trademarks, Patents and Copyrights necessary to conduct its business in
substantially the same manner as conducted as of the date hereof. Schedule II
hereto sets forth a true and complete list of all Trademarks owned by the
Grantor and all Trademark Licenses to which the Grantor is a
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party, in each case as of the date hereof. Schedule III hereto sets forth a true
and complete list of all Patents and Patent Licenses owned or used by the
Grantor as of the date hereof. Schedule IV hereto sets forth a true and complete
list of all Copyrights owned by the Grantor and all Copyright Licenses (other
than licenses for commercially available software entered into by the Grantor in
the ordinary course of its business) to which the Grantor is a party, in each
case as of the date hereof. All of such Patents, Trademarks and Copyrights are
subsisting and in full force and effect, have not been abandoned in whole or in
part, have not been adjudged invalid or unenforceable, and to the best knowledge
of the Grantor, are valid and enforceable. Except as set forth in Schedule II,
III or IV hereto, (i) none of such Patents, Trademarks or Copyrights is the
subject of any licensing or franchising agreement and (ii) the Grantor has no
knowledge of any conflict with the rights of others to any Trademark, Patent or
Copyright and, to the best knowledge of the Grantor, the Grantor is not now
infringing or in conflict with any such rights of others in any material
respect, and to the best knowledge of the Grantor, no other Person is now
infringing or in conflict in any material respect with any such properties,
assets and rights owned or used by the Grantor.
(f) The Grantor is and will be at all times the sole and exclusive
owner of the Collateral free and clear of any Lien, except for (i) the security
interest created by this Agreement, and (ii) the security interests and other
encumbrances permitted by the Financing Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any recording or filing office, except (i) such as may
have been filed in favor of the Collateral Agent relating to this Agreement, and
(ii) such as may have been filed to perfect or protect any security interest or
encumbrance permitted by the Financing Agreement.
(g) The exercise by the Collateral Agent of any of its rights and
remedies hereunder will not contravene law or any contractual restriction
binding on or otherwise affecting the Grantor or any of its properties and will
not result in or require the creation of any Lien, security interest or other
charge or encumbrance upon or with respect to any of its properties.
(h) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority or any other Person, is required
for (i) the grant by the Grantor, or the perfection, of the security interest
purported to be created hereby in the Collateral or (ii) the exercise by the
Collateral Agent of any of its rights and remedies hereunder, except (A) for the
filing under the Uniform Commercial Code as in effect in the applicable
jurisdiction of the financing statements described in Schedule VII hereto, (B)
with respect to the perfection of the security interest created hereby in the
United States Trademarks and the United States Patents, for the recording of the
Collateral Assignment for Security (Trademarks), substantially in the form of
Exhibit A hereto and the Collateral Assignment for Security (Patents),
substantially in the form of Exhibit B hereto, in the United States Patent and
Trademark Office, (C) with respect to the perfection of the security interest
created hereby in the United States Copyrights, the registration of such United
States Copyrights and the recordation of the Collateral Assignment for Security
(Copyrights), substantially in the form of Exhibit C hereto, in the United
States Copyright Office or (D) with respect to the perfection of the security
interest created hereby in foreign Trademarks, Patents and Copyrights, for
recordings and filings in jurisdictions located outside of the United States and
covering rights in such jurisdictions relating to Patents, Trademarks,
Copyrights, Patent Licenses, Trademark Licenses and Copyright Licenses.
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(i) This Agreement creates valid security interests in favor of the
Collateral Agent for the benefit of the Lenders in the Collateral, as security
for the Guaranteed Obligations. The Collateral Agent's having possession of all
instruments and cash constituting Collateral from time to time, the recording of
the Collateral Assignment for Security (Trademarks), the Collateral Assignment
for Security (Patents) and the Collateral Assignment for Security (Copyrights),
as applicable, executed pursuant hereto in the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, and the
filing of the financing statements described in Schedule VII hereto and, with
respect to Patents, Trademarks and Copyrights hereafter existing and not covered
by a Collateral Assignment for Security (Trademarks), a Collateral Assignment
for Security (Patents) or a Collateral Assignment for Security (Copyrights), as
applicable, the recording in the United States Patent and Trademark Office or
the United States Copyright Office, as applicable, of appropriate instruments of
assignment with respect to such after-acquired Patents, Trademarks and
Copyrights and, in the case of such after acquired Copyrights, the registration
of such Copyrights in the United States Copyright Office, result in the
perfection of such security interests. Such security interests are, or in the
case of Collateral in which the Grantor obtains rights after the date hereof,
will be, perfected, first priority security interests, subject only to the
security interests and other encumbrances permitted pursuant to the Financing
Agreement. Such filings and all other action necessary or desirable to perfect
and protect such security interests have been duly taken, except for the
Collateral Agent's having possession of Collateral constituting of instruments
or cash after the date hereof, the recording of a Collateral Assignment for
Security (Trademarks), a Collateral Assignment for Security (Patents) or a
Collateral Assignment for Security (Copyrights), as applicable, with respect to
hereafter existing Trademarks, Patents or Copyrights and the taking of
appropriate action with respect to foreign Trademarks.
SECTION 5. Covenants as to the Collateral. So long as any of the
Guaranteed Obligations shall remain outstanding or the Total Commitment shall
not have terminated, unless the Collateral Agent shall otherwise consent in
writing:
(a) Further Assurances. The Grantor will at its expense, at any time
and from time to time, promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or desirable or that
the Collateral Agent may request in order (i) to perfect and protect the
security interest purported to be created hereby; (ii) to enable the Agent to
exercise and enforce its rights and remedies hereunder in respect of the
Collateral; or (iii) otherwise to effect the purposes of this Agreement,
including, without limitation: (A) marking conspicuously each chattel paper
included in the Receivables and each License and Related Contract and, at the
request of the Collateral Agent, each of its records pertaining to the
Collateral with a legend, in form and substance satisfactory to the Collateral
Agent, indicating that such chattel paper, License, Related Contract or
Collateral is subject to the security interest created hereby, (B) if any
Receivable shall be evidenced by a promissory note or other instrument or
chattel paper, delivering and pledging to the Collateral Agent hereunder any
such note, instrument or chattel paper duly endorsed and accompanied by executed
instruments of transfer or assignment, all in form and substance satisfactory to
the Collateral Agent, (C) executing and filing such financing or continuation
statements, or amendments thereto, as may be necessary or desirable or that the
Collateral Agent may request in order to perfect and preserve the security
interest purported to be created hereby, and (D) furnishing to the Collateral
Agent from time to
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time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Collateral Agent
may reasonably request, all in reasonable detail.
(b) Location of Equipment and Inventory. The Grantor will keep the
Equipment and Inventory (other than used Equipment and Inventory sold in the
ordinary course of business in accordance with Section 5(g) hereof) at the
locations specified therefor in Section 4(c) hereof, or, upon not less than
thirty (30) days' prior written notice to the Collateral Agent accompanied by a
new Schedule V hereto indicating each new location of the Equipment and
Inventory, at such other locations in the continental United States as the
Grantor may elect, provided that (i) all action has been taken to grant to the
Collateral Agent a perfected, first priority security interest in such Equipment
and Inventory, and (ii) the Collateral Agent's rights in such Equipment and
Inventory, including, without limitation, the existence, perfection and priority
of the security interest created hereby in such Equipment and Inventory, are not
adversely affected thereby.
(c) Condition of Equipment. The Grantor will maintain or cause to be
maintained in good repair, working order and condition, excepting ordinary wear
and tear and damage due to casualty, all of the Equipment and make or cause to
be made all of the appropriate repairs, renewals and replacements thereof which
are necessary or desirable and consistent with past practice of the Grantor, as
quickly as practicable after the occurrence of any loss or damage thereto. The
Grantor shall promptly furnish to the Collateral Agent a statement describing in
reasonable detail any loss or damage in excess of $100,000 to any Equipment or
Inventory due to casualty.
(d) Taxes, Etc. The Grantor will pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against, the
Equipment and Inventory, except to the extent the validity thereof is being
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves in accordance with GAAP have been set aside for the
payment thereof.
(e) Insurance.
(i) The Grantor will, at its own expense, maintain insurance
(including, without limitation, comprehensive general liability and
property insurance) with respect to the Equipment and Inventory in such
amounts, against such risks, in such form and with such insurers as shall
be reasonably satisfactory to the Collateral Agent from time to time. Each
policy for liability insurance shall provide for all losses to be paid on
behalf of the Collateral Agent and the Grantor as their respective
interests may appear. Each policy for property damage insurance shall
provide for all losses, except for losses of less than $100,000 per
occurrence to be adjusted with, and paid directly to, the Collateral
Agent. Each such policy shall in addition (A) name the Grantor and the
Collateral Agent as insured parties thereunder (without any representation
or warranty by or obligation upon the Collateral Agent) as their interests
may appear, (B) contain the agreement by the
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insurer that any loss thereunder shall be payable to the Collateral Agent
on its own account, notwithstanding any action, inaction or breach of
representation or warranty by the Grantor, (C) provide that there shall be
no recourse against the Collateral Agent for payment of premiums or other
amounts with respect thereto, and (D) provide that at least 30 days' prior
written notice of cancellation or of lapse shall be given to the
Collateral Agent by the insurer. The Grantor will, if so requested by the
Collateral Agent, deliver to the Collateral Agent original or duplicate
policies of such insurance and, as often as the Collateral Agent may
reasonably request, a report of a reputable insurance broker with respect
to such insurance. The Grantor will also, at the request of the Collateral
Agent, execute and deliver instruments of assignment of such insurance
policies and cause the respective insurers to acknowledge notice of such
assignment.
(ii) Payment under any liability insurance maintained by the
Grantor pursuant to this Section 5(e) may be paid directly to the Person
who shall have incurred liability covered by such insurance. In the case
of any loss involving damage to Equipment or Inventory as to which clause
(iii) of this Section 5(e) is not applicable, the Grantor will make or
cause to be made the necessary repairs to or replacements of such
Equipment and Inventory, and any proceeds of insurance maintained by the
Grantor pursuant to this Section 5(e) shall be paid to the Grantor as
reimbursement for the costs of such repairs or replacements.
(iii) Upon the occurrence and during the continuance of an
Event of Default under the Financing Agreement or the actual or
constructive total loss of any Equipment that will not be promptly
replaced with the proceeds of such insurance or Inventory, all insurance
payments in respect of such Equipment and Inventory shall be paid to the
Collateral Agent and applied as specified in Section 7(b) hereof.
(f) Provisions Concerning the Receivables, the Related Contracts and
the Licenses.
(i) The Grantor will (A) give the Collateral Agent at least 30
days' prior written notice of any change in the Grantor's name, identity
or corporate structure, (B) keep its chief place of business and chief
executive office and all originals of all chattel paper which constitute
Receivables at the location(s) specified therefor in Schedule V hereof,
and (C) keep adequate records concerning the Receivables and such chattel
paper and permit representatives of the Collateral Agent to inspect and
make abstracts from such records and chattel paper pursuant to the terms
of the Financing Agreement.
(ii) The Grantor will duly perform and observe all of its
obligations under each Related Contract and, except as otherwise provided
in this subsection (f), continue to collect, at its own expense, all
amounts due or to become due under the Receivables. In connection with
such collections, the Grantor may (and, at the Administrative Agent's
direction, will) take such action as the Grantor or the Administrative
Agent may deem necessary or advisable to enforce collection or performance
of the Receivables; provided, however, that the Collateral Agent shall
have the right at any time, upon the occurrence and during the continuance
of an Event of
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Default, to notify the Account Debtors or obligors under any Receivables
of the assignment of such Receivables to the Collateral Agent and to
direct such Account Debtors or obligors to make payment of all amounts due
or to become due to the Grantor thereunder directly to the Collateral
Agent or its designated agent and, upon such notification and at the
expense of the Grantor and to the extent permitted by law, to enforce
collection of any such Receivables and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as
the Grantor might have done. After receipt by the Grantor of a notice from
the Collateral Agent that the Collateral Agent has notified or intends to
notify the Account Debtors or obligors under any Receivables as referred
to in the proviso to the immediately preceding sentence (A) all amounts
and proceeds (including instruments) received by the Grantor in respect of
the Receivables shall be received in trust for the benefit of the
Collateral Agent hereunder, shall be segregated from other funds of the
Grantor and shall be forthwith paid over to the Collateral Agent in the
same form as so received (with any necessary indorsement) to be held as
cash collateral and either (1) credited to the relevant Loan Account so
long as no Event of Default shall have occurred and be continuing or (2)
if any Event of Default shall have occurred and be continuing, applied as
specified in Section 7(b) hereof, and (B) the Grantor will not adjust,
settle or compromise the amount or payment of any Receivable or release
wholly or partly any Account Debtor or obligor thereof or allow any credit
or discount thereon. In addition, upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall have the
right to notify the United States Postal Service authorities to change the
address for delivery of mail addressed to the Grantor to such address as
the Collateral Agent may designate and to do all other acts and things
necessary to carry out this Agreement.
(iii) Upon the occurrence and during the continuance of any
breach or default under any Related Contract referred to in Schedule I
hereto or otherwise specified in writing by any Agent from time to time or
any License referred to in Schedule II, III or IV hereto by any party
thereto other than the Grantor, the Grantor will (A) promptly after
obtaining knowledge thereof, give each Agent written notice of the nature
and duration thereof, specifying what action, if any, it has taken and
proposes to take with respect thereto, and (B) upon written instructions
from any Agent and at the Grantor's expense, take such action as such
Agent may deem necessary or advisable in respect thereof.
(iv) The Grantor will, at its expense, promptly deliver to
each Agent a copy of each notice or other communication received by it by
which any other party to any Related Contract referred to in Schedule I
hereto or otherwise specified by any Agent from time to time or any
License referred to in Schedule II, III or IV hereto purports to exercise
any of its rights or affect any of its obligations thereunder, together
with a copy of any reply by the Grantor thereto.
(v) The Grantor will exercise promptly and diligently each and
every right which it may have under each License (other than any right of
termination) to the extent warranted in the conduct of the business and
will duly perform and observe in all respects all of its obligations under
each License and will take all action necessary to maintain all Licenses
necessary for the operation of its business in full force and effect.
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The Grantor will not, without the prior written consent of the Collateral
Agent, cancel, terminate, amend or otherwise modify in any material
respect, or waive any material provision of, any Related Contract referred
to in Schedule I hereto or any License referred to in Schedule II, III or
IV hereto.
(g) Transfers and Other Liens.
(i) The Grantor will not sell, assign (by operation of law or
otherwise), lease, exchange or otherwise transfer or dispose of any of the
Collateral except to the extent permitted under Section 7.02(c)(ii) of the
Financing Agreement, subject to the obligation of the Borrower to make
payments pursuant to Section 2.05(c) of the Financing Agreement.
(ii) The Grantor will not create or suffer to exist any Lien,
security interest or other charge or encumbrance upon or with respect to
any Collateral, except for (A) the Liens and security interest created by
this Agreement and the other Loan Documents and (B) the Liens, security
interests and other encumbrances permitted by the Financing Agreement.
(h) Trademarks, Patents and Copyrights.
(i) If applicable, the Grantor has duly executed and delivered
the Collateral Assignment for Security (Trademarks) in the form attached
hereto as Exhibit A, the Collateral Assignment for Security (Patents) in
the form attached hereto as Exhibit B or the Collateral Assignment for
Security (Copyrights) in the form attached hereto as Exhibit C. The
Grantor (either itself or through licensees) will, and will cause each
licensee thereof to, take all action necessary to maintain all of the
Trademarks, Patents and Copyrights in full force and effect, including,
without limitation, using the proper statutory notices and markings and
using the Trademarks on each applicable trademark class of goods in order
to so maintain the Trademarks in full force free from any claim of
abandonment for non-use, and the Grantor will not (and will not permit any
licensee thereof to) do any act or knowingly omit to do any act whereby
any Trademark, Patent or Copyright may become invalidated; provided,
however, that so long as no Event of Default has occurred and is
continuing, the Grantor shall have no obligation to use or to maintain any
Trademark, Patent or Copyright (A) that relates solely to any product or
work that has been, or is in the process of being, discontinued, abandoned
or terminated, (B) that is being replaced with a trademark, patent or
copyright substantially similar to the Trademark, Patent or Copyright, as
the case may be, that may be abandoned or otherwise become invalid, so
long as such replacement Trademark, Patent or Copyright, as the case may
be, is subject to the security interest purported to be created by this
Agreement, (C) that is substantially the same as another Trademark, Patent
or Copyright that is in full force, so long as such other Trademark,
Patent or Copyright, as the case may be, is subject to the Lien and
security interest created by this Agreement, or (D) that is not necessary
for the operation of the Grantor's business and is discontinued or
disposed of in the ordinary course of business. The Grantor will cause to
be taken all necessary steps in any proceeding before the United States
Patent and Trademark Office and the United
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States Copyright Office to maintain each registration of the Trademarks,
the Patents and the Copyrights (other than those Trademarks, Patents and
Copyrights described in the proviso to the immediately preceding
sentence), including, without limitation, filing of renewals, affidavits
of use, affidavits of incontestability and opposition, interference and
cancellation proceedings and payment of taxes. If any Trademark, Patent or
Copyright is infringed, misappropriated or diluted in any material respect
by a third party, the Grantor shall (x) upon learning of such
infringement, misappropriation or dilution, promptly notify the Collateral
Agent and (y) to the extent the Grantor shall deem appropriate under the
circumstances, promptly ▇▇▇ for infringement, misappropriation or
dilution, seek injunctive relief where appropriate and recover any and all
damages for such infringement, misappropriation or dilution, or take such
other actions as the Grantor shall deem appropriate under the
circumstances to protect such Trademark, Patent or Copyright. The Grantor
shall furnish to the Collateral Agent from time to time (but, unless an
Event of Default has occurred and is continuing, no more frequently than
annually) statements and schedules further identifying and describing the
Patents, the Trademarks and the Copyrights and such other reports in
connection with the Patents, the Trademarks and the Copyrights as the
Collateral Agent may reasonably request, all in reasonable detail and
promptly upon request of the Collateral Agent, following receipt by the
Collateral Agent of any such statements, schedules or reports, the Grantor
shall modify this Agreement by amending Schedules II, III or IV hereto, as
the case may be, to include any Patent, Trademark or Copyright which
becomes part of the Collateral under this Agreement. Notwithstanding
anything herein to the contrary, upon the occurrence and during the
continuance of an Event of Default the Grantor may not abandon or
otherwise permit a Trademark, Patent or Copyright to become invalid
without the prior written consent of the Collateral Agent, and if any
Trademark, Patent or Copyright is infringed, misappropriated or diluted in
any material respect by a third party, the Grantor will take such action
as the Collateral Agent shall deem appropriate under the circumstances to
protect such Trademark, Patent or Copyright.
(ii) If either the Grantor or any agent, employee, licensee or
designee thereof, files an application for the registration of any
Trademark or Copyright or for the issuance of any Patent with the United
States Patent and Trademark Office or the United States Copyright Office,
as applicable, within 5 days of such filing the Grantor shall provide the
Collateral Agent written notice thereof. Upon request of the Collateral
Agent, the Grantor shall execute and deliver any and all assignments,
agreements, instruments, documents and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent's security interest
hereunder in such Trademark, Patent or Copyright and the general
intangibles of the Grantor relating thereto or represented thereby, and
the Grantor hereby constitutes the Collateral Agent its attorney-in-fact
to execute and file all such writings for the foregoing purposes, all acts
of such attorney being hereby ratified and confirmed, and such power
(being coupled with an interest) shall be irrevocable until the
termination of the Total Commitment, the repayment of all of the
Guaranteed Obligations in full and the termination of each of the Loan
Documents.
(j) Inspection and Reporting. The Grantor shall permit the
Collateral Agent or any Lender, or any agents or representatives thereof or such
professionals or other Persons as
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the Collateral Agent may designate (i) to examine and inspect the books and
records of the Grantor and take copies and extracts therefrom, (ii) to verify
materials, leases, notes, receivables, inventory and other assets of the Grantor
from time to time, and (iii) to conduct physical counts, appraisals and/or
valuations at the locations of the Grantor, in each case as provided in the
Financing Agreement.
SECTION 6. Additional Provisions Concerning the Collateral.
(a) The Grantor hereby authorizes the Collateral Agent to file,
without the signature of the Grantor where permitted by law, one or more
financing or continuation statements, and amendments thereto, relating to the
Collateral.
(b) The Grantor hereby irrevocably appoints the Collateral Agent the
Grantor's attorney-in-fact and proxy, with full authority in the place and stead
of the Grantor and in the name of the Grantor or otherwise, from time to time in
the Collateral Agent's discretion upon the occurrence and during the continuance
of an Event of Default, to take any action and to execute any instrument which
such Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Agreement (subject to the rights of the Grantor under Section 5(f)
hereof), including, without limitation, (i) to obtain and adjust insurance
required to be paid to the Collateral Agent pursuant to Section 5(e) hereof, and
to receive, indorse and collect any drafts or other instruments, documents and
chattel paper in connection therewith, (ii) to ask, demand, collect, ▇▇▇ for,
recover, compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any Collateral, (iii) to receive, indorse,
and collect any drafts or other instruments, documents and chattel paper in
connection with clause (i) or (ii) above, and (iv) to file any claims or take
any action or institute any proceedings which the Collateral Agent may deem
necessary or desirable for the collection of any Collateral or otherwise to
enforce the rights of the Agents and the Lenders with respect to any Collateral.
(c) For the purpose of enabling the Collateral Agent to exercise
rights and remedies hereunder, at such time as the Collateral Agent shall be
lawfully entitled to exercise such rights and remedies, and for no other
purpose, the Grantor hereby grants to the Collateral Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable without payment
of royalty or other compensation to the Grantor) to use, assign, license or
sublicense any of the Patents, Trademarks or Copyrights now owned or hereafter
acquired by the Grantor, wherever the same may be located, including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer programs used for the compilation or
printout thereof, subject with respect to Trademarks to the reasonable rights of
quality control and inspection in favor of the Grantor as shall be reasonably
necessary to preserve the validity of such Trademarks. Notwithstanding anything
contained herein to the contrary, but subject to the provisions of the Financing
Agreement that limits the right of the Grantor to dispose of its property and
Section 5(h) hereof, so long as no Event of Default shall have occurred and be
continuing, the Grantor may exploit, use, enjoy, protect, license, sublicense,
assign, sell, dispose of or take other actions with respect to the Patents,
Trademarks or Copyrights in the ordinary course of the business of the Grantor.
In furtherance of the foregoing, unless an Event of Default shall have occurred
and be continuing the Collateral Agent shall from time to time, upon the request
of the Grantor, execute and deliver any instruments, certificates or
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other documents, in the form so requested, which the Grantor shall have
certified are appropriate (in its judgment) to allow it to take any action
permitted above (including relinquishment of the license provided pursuant to
this clause (c) as to any Patents, Trademarks or Copyrights). Further, upon the
payment in full of all of the Guaranteed Obligations and cancellation or
termination of the Total Commitments, the Collateral Agent (subject to Section
10(e) hereof) shall release and reassign to the Grantor all of the Collateral
Agent's right, title and interest in and to the Patents, Trademarks, Copyrights
and the Licenses, all without recourse, representation or warranty whatsoever.
The exercise of rights and remedies hereunder by the Collateral Agent shall not
terminate the rights of the holders of any licenses or sublicenses theretofore
granted by the Grantor in accordance with the second sentence of this clause
(c). The Grantor hereby releases the Collateral Agent from any claims, causes of
action and demands at any time arising out of or with respect to any actions
taken or omitted to be taken by the Collateral Agent under the powers of
attorney granted herein other than actions taken or omitted to be taken through
the Collateral Agent's gross negligence or willful misconduct.
(d) If the Grantor fails to perform any agreement contained herein,
the Collateral Agent may itself perform, or cause performance of, such agreement
or obligation, in the name of the Grantor or the Collateral Agent, and the
expenses of the Collateral Agent incurred in connection therewith shall be
payable by the Grantor pursuant to Section 8 hereof and shall be secured by the
Collateral.
(e) The powers conferred on the Collateral Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Collateral Agent shall have no duty as to any Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral.
(f) Anything herein to the contrary notwithstanding (i) the Grantor
shall remain liable under the Related Contracts and Licenses and otherwise with
respect to any of the Collateral to the extent set forth therein to perform all
of its obligations thereunder to the same extent as if this Agreement had not
been executed, (ii) the exercise by the Collateral Agent of any of its rights
hereunder shall not release the Grantor from any its obligations under the
Related Contracts and Licenses or otherwise in respect of the Collateral, and
(iii) the Collateral Agent shall not have any obligation or liability by reason
of this Agreement under the Related Contracts and Licenses or with respect to
any of the other Collateral, nor shall the Collateral Agent be obligated to
perform any of the obligations or duties of the Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
SECTION 7. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all of the rights and remedies of a secured party upon default
under the Code (whether or not the Code applies to the affected Collateral), and
also may (i) require the Grantor to, and the Grantor hereby agrees that it
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will at its expense and upon request of the Collateral Agent forthwith, assemble
all or part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place or places to be designated by the
Collateral Agent which is reasonably convenient to both parties and (ii) without
notice except as specified below, sell the Collateral or any part thereof in one
or more parcels at public or private sale, at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future delivery, and at such
price or prices and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Grantor agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to the Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. The Grantor hereby waives any claims against the Agents and the
Lenders arising by reason of the fact that the price at which the Collateral may
have been sold at a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the
Guaranteed Obligations, even if the Collateral Agent accepts the first offer
received and does not offer the Collateral to more than one offeree and waives
all rights which the Grantor may have to require that all or any part of the
Collateral be marshalled upon any sale (public or private) thereof. In addition
to the foregoing, (i) upon written notice from the Collateral Agent, the Grantor
shall cease any use of the Trademarks, Patents or Copyrights or any ▇▇▇▇ or
patent similar thereto for any purpose described in such notice; (ii) the
Collateral Agent may, at any time and from time to time, upon 10 days' prior
notice to the Grantor, license, whether general, special or otherwise, and
whether on an exclusive or non-exclusive basis, any of the Trademarks, Patents
and Copyrights throughout the world for such term or terms, on such conditions,
and in such manner, as the Collateral Agent shall in its sole discretion
determine; and (iii) the Collateral Agent may, at any time, pursuant to the
authority granted in Section 6 hereof (such authority being effective upon the
occurrence of an Event of Default), execute and deliver on behalf of the
Grantor, one or more instruments of assignment of the Trademarks, Patents and
Copyrights (or any application or registration thereof), in form suitable for
filing, recording or registration in any country.
(b) Any cash held by the Collateral Agent as Collateral and all cash
proceeds received by the Collateral Agent in respect of any sale of or
collection from, or other realization upon, all or any part the Collateral may,
in the discretion of the Collateral Agent, be held by the Collateral Agent as
collateral for, and/or then or at any time thereafter applied in whole or in
part by the Collateral Agent against, all or any part of the Guaranteed
Obligations as provided in Section 4.04 of the Financing Agreement.
(c) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Agents and the
Lenders are legally entitled, the Grantor shall be liable for the deficiency,
together with interest thereon at the highest rate specified in any applicable
Loan Document for interest on overdue principal thereof or such other rate as
shall be fixed by applicable law, together with the costs of collection and the
reasonable fees, costs, expenses of any attorneys employed by the Collateral
Agent to collect such deficiency.
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SECTION 8. Indemnity and Expenses.
(a) The Grantor agrees to indemnify and hold each Agent harmless
from and against any and all claims, damages, losses, liabilities, obligations,
penalties, costs or expenses (including, without limitation, legal fees and
disbursements of such Agent's counsel) to the extent that they arise out of or
otherwise result from this Agreement (including, without limitation, enforcement
of this Agreement), except claims, losses or liabilities resulting solely and
directly from such Agent's gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction.
(b) The Grantor will upon demand pay to the Collateral Agent the
amount of any and all costs and expenses, including the reasonable fees and
disbursements of the Collateral Agent's counsel and of any experts and agents,
which the Collateral Agent may incur in connection with (i) the preparation,
negotiation, execution, delivery, recordation, administration, amendment, waiver
or other modification or termination of this Agreement, or (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any Collateral, (iii) the exercise or enforcement of any of
the rights of the Collateral Agent hereunder, or (iv) the failure by the Grantor
to perform or observe any of the provisions hereof.
SECTION 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied or delivered, if
to the Grantor, to it at the address specified in the [Financing Agreement]
[Guaranty] or if to any Agent, to it at the address specified in the Financing
Agreement; or as to either such Person at such other address as shall be
designated by such Person in a written notice to such other Person complying as
to delivery with the terms of this Section 9. All such notices and other
communications shall be effective (i) if sent by certified mail, return receipt
requested, when received or three Business Days after mailing, whichever first
occurs, (ii) if telecopied, when transmitted and confirmation is received,
provided same is on a Business Day and, if not, on the next Business Day or
(iii) if delivered, upon delivery, provided same is on a Business Day and, if
not, on the next Business Day.
SECTION 10. Miscellaneous.
(a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by the Grantor and the Collateral
Agent, and no waiver of any provision of this Agreement, and no consent to any
departure by the Grantor therefrom, shall be effective unless it is in writing
and signed by the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No failure on the part of any Agent to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The rights and remedies of the Agents provided herein and in the other
Loan Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of any Agent under any Loan
Document against any party
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thereto are not conditional or contingent on any attempt by such Agent to
exercise any of its rights under any other Loan Document against such party or
against any other Person.
(c) 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 portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect until the payment
in full of the Guaranteed Obligations after the Total Commitment has been
terminated and the Support Letter of Credit have been canceled or cash
collateralized, and (ii) be binding on the Grantor and its successors and
assigns and shall inure, together with all rights and remedies of the Collateral
Agent hereunder, to the benefit of the Agents and the Lenders their respective
permitted successors, transferees and assigns. Without limiting the generality
of clause (ii) of the immediately preceding sentence and subject to the terms of
the Financing Agreement, the Agents and Lenders may assign or otherwise transfer
their rights under this Agreement and any other Loan Document, to any other
Person and such other Person shall thereupon become vested with all of the
benefits in respect thereof granted to the Agents and the Lenders herein or
otherwise. None of the rights or obligations of the Grantor hereunder may be
assigned or otherwise transferred without the prior written consent of the
Collateral Agent, and any such assignment or transfer shall be null and void.
(e) Upon the satisfaction in full of the Guaranteed Obligations
after the Total Commitment has been terminated and the Support Letter of Credit
has been canceled or cash collateralized, (i) this Agreement and the security
interests created hereby shall terminate and all rights to the Collateral shall
revert to the Grantor, and (ii) the Collateral Agent will, upon the Grantor's
request and at the Grantor's expense, (A) return to the Grantor such of the
Collateral as shall not have been sold or otherwise disposed of or applied
pursuant to the terms hereof, and (B) execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination,
all without any representation, warranty or recourse whatsoever.
(f) This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York, except as
required by mandatory provisions of law and except to the extent that the
validity and perfection or the perfection and effect of perfection or
non-perfection of the security interest created hereby or remedies hereunder, in
respect of any particular Collateral are governed by the law of a jurisdiction
other than the State of New York.
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IN WITNESS WHEREOF, the Grantor has caused this Agreement to be
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
DECORA INDUSTRIES, INC.
By: ________________________________
Name:
Title:
20
SCHEDULE I TO SECURITY AGREEMENT
RELATED CONTRACTS
None.
21
SCHEDULE II TO SECURITY AGREEMENT
TRADEMARKS
AND
TRADEMARK LICENSES
See attached lists.
22
SCHEDULE III TO SECURITY AGREEMENT
PATENTS AND PATENT LICENSES
See attached lists.
23
SCHEDULE IV TO SECURITY AGREEMENT
COPYRIGHTS AND COPYRIGHT APPLICATIONS
None.
24
SCHEDULE V TO SECURITY AGREEMENT
I. Locations of Equipment and Inventory
None.
II. Grantor's chief place of business, chief executive office and place where
the Grantor keeps its books and records
Grantor's chief place of business, chief executive office and place where
Grantor keeps its books and records is ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇.
25
SCHEDULE VI TO SECURITY AGREEMENT
TRADE NAMES
None.
26
SCHEDULE VII TO SECURITY AGREEMENT
UCC-1 FINANCING STATEMENTS
COUNTY CLERK (OR
SECRETARY OF STATE CORRESPONDING OFFICER) OF
NAME OF DEBTOR OF THE STATE OF THE FOLLOWING COUNTIES
-------------- ------------------ -------------------------
DECORA INDUSTRIES, INC. New York Saratoga County, NY
Washington County, NY
California
Florida
▇▇▇▇▇▇ County, GA
Ohio Lorain County, OH
Portage County, OH
▇▇▇▇▇ County, OH
27
EXHIBIT A
COLLATERAL ASSIGNMENT FOR SECURITY
(TRADEMARKS)
WHEREAS, DECORA INDUSTRIES, INC. (the "Assignor") has adopted, used
and is using the trademarks and service marks listed on the annexed Schedule 1A,
which trademarks and service marks are registered or applied for in the United
States Patent and Trademark Office (the "Trademarks");
WHEREAS, the Assignor, has entered into a Security Agreement dated
May 2, 2000 (the "Security Agreement") in favor of Ableco Finance LLC, as
collateral agent for certain lenders (the "Assignee");
WHEREAS, pursuant to the Security Agreement, the Assignor has
pledged and assigned to the Assignee and granted to the Assignee for the benefit
of the lenders a continuing security interest in all right, title and interest
of the Assignor in, to and under the Trademarks together with, among other
things, the good-will of the business symbolized by the Trademarks and the
applications and registrations thereof, and all proceeds thereof, including,
without limitation, any and all causes of action which may exist by reason of
infringement thereof (the "Collateral"), to secure the payment, performance and
observance of the Guaranteed Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, the Assignor hereby pledges and assigns to the
Assignee and grants to the Assignee for the benefit of the lenders a continuing
security interest in the Collateral to secure the prompt payment, performance
and observance of the Guaranteed Obligations.
The Assignor hereby further acknowledges and affirms that the rights
and remedies of the Assignee with respect to the Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Collateral
Assignment to be duly executed by its officer thereunto duly authorized as of
_____________ __, 200_.
DECORA INDUSTRIES, INC.
By: ________________________________
Name:
Title:
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
ss.:
COUNTY OF NEW YORK
On this ____ day of _______________, 200_, before me personally came
________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that he is the
________________ of _________________________, a __________ corporation, and
that he executed the foregoing instrument in the firm name of
_________________________, and that he had authority to sign the same, and he
acknowledged to me that he executed the same as the act and deed of said firm
for the uses and purposes therein mentioned.
________________________________
29
SCHEDULE 1A TO COLLATERAL ASSIGNMENT FOR SECURITY
(TRADEMARKS AND TRADEMARK APPLICATIONS)
30
EXHIBIT B
COLLATERAL ASSIGNMENT FOR SECURITY
(PATENTS)
WHEREAS, DECORA INDUSTRIES, INC. (the "Assignor") holds all right,
title and interest in the letter patents, design patents and utility patents
listed on the annexed Schedule 1A, which patents are issued or applied for in
the United States Patent and Trademark Office (the "Patents");
WHEREAS, the Assignor, has entered into a Security Agreement dated
May 2, 2000 (the "Security Agreement") in favor of ABLECO FINANCE LLC, as
collateral agent for certain lenders (the "Assignee");
WHEREAS, pursuant to the Security Agreement, the Assignor has
pledged and assigned to the Assignee and granted to the Assignee for the benefit
of the lenders a continuing security interest in all right, title and interest
of the Assignor in, to and under the Patents and the applications and issuances
thereof, and all proceeds thereof, including, without limitation, any and all
causes of action which may exist by reason of infringement thereof (the
"Collateral"), to secure the payment, performance and observance of the
Guaranteed Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, the Assignor hereby pledges and assigns to the
Assignee and grants to the Assignee for the benefit of the lenders a continuing
security interest in the Collateral to secure the prompt payment, performance
and observance of the Guaranteed Obligations.
The Assignor hereby further acknowledges and affirms that the rights
and remedies of the Assignee with respect to the Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Collateral
Assignment to be duly executed by its officer thereunto duly authorized as of
__________ __, 200_.
DECORA INDUSTRIES, INC.
By: ________________________________
Name:
Title:
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
ss.:
COUNTY OF NEW YORK
On this ____ day of _______________, 200_, before me personally came
________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that he is the
________________ of _________________________, a ______________ corporation, and
that he executed the foregoing instrument in the firm name of
_________________________, and that he had authority to sign the same, and he
acknowledged to me that he executed the same as the act and deed of said firm
for the uses and purposes therein mentioned.
____________________________________
32
SCHEDULE 1A TO COLLATERAL ASSIGNMENT FOR SECURITY
(PATENTS AND PATENT APPLICATIONS)
33
EXHIBIT C
COLLATERAL ASSIGNMENT FOR SECURITY
(COPYRIGHTS)
WHEREAS, DECORA INDUSTRIES, INC. (the "Assignor") holds all right,
title and interest in the copyrights listed on the annexed Schedule 1A, which
copyrights are registered in the United States Copyright Office (the
"Copyrights");
WHEREAS, the Assignor, has entered into a Security Agreement dated
May 2, 2000 (the "Security Agreement") in favor of ABLECO FINANCE LLC, as
collateral agent for certain lenders (the "Assignee");
WHEREAS, pursuant to the Security Agreement, the Assignor has
pledged and assigned to the Assignee and granted to the Assignee for the benefit
of the lenders a continuing security interest in all right, title and interest
of the Assignor in, to and under the Copyrights and the registrations thereof,
and all proceeds thereof, including, without limitation, any and all causes of
action which may exist by reason of infringement thereof (the "Collateral"), to
secure the payment, performance and observance of the Guaranteed Obligations (as
defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, the Assignor hereby pledges and assigns to the
Assignee and grants to the Assignee for the benefit of the lenders a continuing
security interest in the Collateral to secure the prompt payment, performance
and observance of the Guaranteed Obligations.
The Assignor hereby further acknowledges and affirms that the rights
and remedies of the Assignee with respect to the Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Collateral
Assignment to be duly executed by its officer thereunto duly authorized as of
_____________ __, 200_.
DECORA INDUSTRIES, INC.
By: ________________________________
Name:
Title:
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
ss.:
COUNTY OF NEW YORK
On this ____ day of _______________, 200_, before me personally came
________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that he is the
________________ of _________________________, a ______________ corporation, and
that he executed the foregoing instrument in the firm name of
_________________________, and that he had authority to sign the same, and he
acknowledged to me that he executed the same as the act and deed of said firm
for the uses and purposes therein mentioned.
____________________________________
35
SCHEDULE 1A TO COLLATERAL ASSIGNMENT FOR SECURITY
(COPYRIGHTS AND COPYRIGHT APPLICATIONS)