EXECUTION COPY
SECURITY AGREEMENT
Dated as of July 27, 2001
From
THE GRANTORS REFERRED TO HEREIN
to
CITICORP USA, INC.
AS ADMINISTRATIVE AGENT
TABLE OF CONTENTS
SECTION PAGE
SECTION 1. GRANT OF SECURITY........................................................2
SECTION 2. SECURITY FOR OBLIGATIONS.................................................6
SECTION 3. GRANTORS REMAIN LIABLE...................................................6
SECTION 4. DELIVERY AND CONTROL OF SECURITY COLLATERAL..............................6
SECTION 5. MAINTAINING THE PLEDGED ACCOUNTS.........................................7
SECTION 6. MAINTAINING THE CASH CONCENTRATION ACCOUNT...............................8
SECTION 7. INVESTING OF AMOUNTS IN THE CASH CONCENTRATION ACCOUNT...................9
SECTION 8. REPRESENTATIONS AND WARRANTIES...........................................10
SECTION 9. FURTHER ASSURANCES.......................................................13
SECTION 10. AS TO EQUIPMENT AND INVENTORY............................................14
SECTION 11. INSURANCE................................................................14
SECTION 12. PLACE OF PERFECTION; RECORDS; COLLECTION OF RECEIVABLES..................15
SECTION 13. AS TO INTELLECTUAL PROPERTY COLLATERAL...................................16
SECTION 14. AS TO THE ASSIGNED AGREEMENTS............................................17
SECTION 15. PAYMENTS UNDER THE ASSIGNED AGREEMENTS...................................18
SECTION 16. TRANSFERS AND OTHER LIENS................................................18
SECTION 17. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT..........................18
SECTION 18. ADMINISTRATIVE AGENT MAY PERFORM.........................................19
SECTION 19. THE ADMINISTRATIVE AGENT'S DUTIES........................................19
SECTION 20. REMEDIES.................................................................19
SECTION 21. INDEMNITY AND EXPENSES...................................................21
SECTION 22. AMENDMENTS; WAIVERS; ADDITIONAL GRANTORS; ETC............................22
SECTION 23. NOTICES; ETC.............................................................22
SECTION 24. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER THE CREDIT AGREEMENT.....22
SECTION 25. RELEASE; TERMINATION.....................................................23
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SECTION 26. SECURITY INTEREST ABSOLUTE..............................................23
SECTION 27. SEVERABILITY............................................................24
SECTION 28. EXECUTION IN COUNTERPARTS...............................................24
SECTION 29. THE MORTGAGES...........................................................24
SECTION 30. GOVERNING LAW...........................................................24
SCHEDULES
Schedule I - Investment Property
Schedule II - Intentionally Omitted
Schedule III - Locations of Equipment and Inventory
Schedule IV - Jurisdiction of Organization, Organizational Identification
Number and Federal Tax Identification Number
Schedule V - Patents, Trademarks and Trade Names, Copyrights and Licenses
Schedule VI - Pledged Accounts and Cash Concentration Account
EXHIBITS
Exhibit A - Form of
Security Agreement Supplement
Exhibit B - Form of Pledged Account Letter
Exhibit C - Form of Consent and Agreement
Exhibit D - Form of Control Agreement
Exhibit E - Form of Intellectual Property
Security Agreement
Exhibit F - Form of Intellectual Property
Security Agreement Supplement
Exhibit G - Form of Cash Concentration Account Letter
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of July 27, 2001 made by
ACCURIDE
CORPORATION, a Delaware corporation (the "U.S. BORROWER"), ACCURIDE CANADA,
INC., a corporation organized under the laws of the Province of Ontario, Canada
(the "CANADIAN BORROWER") (each, individually, a "BORROWER" and, collectively,
the "Borrowers"), and each of the other Persons listed on the signature pages
hereof (together with the Borrowers, and each of the Additional Grantors (as
defined in Section 20(b) below), collectively, the "GRANTORS" and, individually,
a "GRANTOR"), to Citicorp USA, Inc. ("CUSA"), as administrative agent (together
with any successor administrative agent appointed pursuant to Article VIII of
the Credit Agreement (as defined below), the "ADMINISTRATIVE AGENT") for the
Secured Parties (as defined in the Credit Agreement).
PRELIMINARY STATEMENTS.
(1) The U.S. Borrower and the Canadian Borrower have entered into a
Second Amended and Restated Credit Agreement dated as of July 27, 2001 (said
Agreement, as it may hereafter be amended, amended and restated, supplemented or
otherwise modified from time to time, being the "CREDIT AGREEMENT") with the
Lender Parties, Citicorp as Administrative Agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as
Arranger, Bankers Trust as Syndication Agent and ▇▇▇▇▇ Fargo as Documentation
Agent.
(2) Pursuant to the Credit Agreement, the Grantors are entering into
this Agreement so that the U.S. Borrower and its Restricted Subsidiaries party
to this Agreement shall grant a first priority security interest in all of their
assets and property now owned or hereafter acquired to secure the Obligations of
the Borrowers under the Credit Agreement.
(3) The Borrower has security entitlements (the "PLEDGED SECURITY
ENTITLEMENTS") with respect to all the financial assets (the "PLEDGED FINANCIAL
ASSETS") credited from time to time to the Borrower's account, Account No.
878283 (the "SECURITIES ACCOUNT"), with Banc of America Securities LLC at its
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇.
(4) Within 30 days of the Effective Date, (a) the U.S. Borrower
shall have opened a cash collateral account (the "U.S. BORROWER CASH
COLLATERAL ACCOUNT") with Citibank, N.A. ("CITIBANK") at its offices at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (b) the Canadian Borrower shall
have opened a cash collateral account (the "CANADIAN BORROWER CASH COLLATERAL
ACCOUNT" and, together with the U.S. Borrower Cash Collateral Account, the
"CASH COLLATERAL ACCOUNTS") with Citibank at its Affiliate's offices at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇. Each of the Cash Collateral
Accounts shall have been opened in the name of applicable Borrower pursuant
to, and for the purpose set forth in Section 2.06(b)(vii) of the Credit
Agreement, Section 20(d) of this Agreement and Section 15(e) of the Pledge
Agreement, shall be under the sole and exclusive dominion and control of the
Administrative Agent and subject to the terms of this Agreement and of the
Pledge Agreement.
(5) It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry into Bank Hedge Agreements by the Hedge Banks from time to time
that the Grantors shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Agreement.
(6) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Loan Documents.
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(7) Terms defined in the Credit Agreement and not otherwise defined in
this Agreement are used in this Agreement as defined in the Credit Agreement.
Further, unless otherwise defined in this Agreement or in the Credit Agreement,
terms defined in Article 8 or 9 of the Uniform Commercial Code in effect in the
State of
New York ("N.Y. UNIFORM COMMERCIAL CODE") and/or in the Federal Book
Entry Regulations (as defined below) are used in this Agreement as such terms
are defined in such Article 8 or 9 and/or the Federal Book Entry Regulations.
The term "FEDERAL BOOK ENTRY REGULATIONS" means (a) the federal regulations
contained in Subpart B ("TREASURY/RESERVE AUTOMATED DEBT ENTRY SYSTEM (TRADES)")
governing book-entry securities consisting of U.S. Treasury bonds, notes and
bills and Subpart D ("ADDITIONAL PROVISIONS") of 31 C.F.R. Part 357, 31 C.F.R.
Section 357.2, Section 357.10 through Section 357.14 and Section 357.41 through
Section 357.44 and (b) to the extent substantially identical to the federal
regulations referred to in clause (a) above (as in effect from time to time),
the federal regulations governing other book-entry securities.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and issue Letters of Credit under the
Credit Agreement and to induce the Hedge Banks to enter into Bank Hedge
Agreements from time to time, each Grantor hereby agrees with the Administrative
Agent for the ratable benefit of the Secured Parties as follows:
SECTION 1. GRANT OF SECURITY. Each Grantor hereby assigns and pledges
to the Administrative Agent for the ratable benefit of the Secured Parties, and
hereby grants to the Administrative Agent for the ratable benefit of the Secured
Parties a security interest in, such Grantor's right, title and interest in and
to the following, in each case, as to each type of property described below,
whether now owned or hereafter acquired by such Grantor, wherever located, and
whether now or hereafter existing or arising (collectively, the "COLLATERAL"):
(a) all equipment in all of its forms, all fixtures and all parts
thereof and all accessions thereto (any and all such equipment,fixtures,
parts and accessions being the "EQUIPMENT");
(b) all inventory in all of its forms (including, without
limitation, (i) all wheels and raw materials and work in process
therefore,finished goods thereof and materials used or consumed in the
manufacture,production, preparation or shipping thereof, (ii) goods in
which such Grantor has an interest in mass or a joint or other interest or
right of any kind (including, without limitation, goods in which such
Grantor has an interest or right as consignee) and (iii) goods that are
returned to or repossessed or stopped in transit by such Grantor), and all
accessions thereto and products thereof and documents therefor (any and all
such inventory, accessions, products and documents being the "INVENTORY");
(c) all accounts, chattel paper, instruments, deposit accounts,
general intangibles and other obligations of any kind, whether or not
arising out of or in connection with the sale or lease of goods or the
rendering of services and whether or not earned by performance, and all
rights now or hereafter existing in and to all
security agreements, leases
and other contracts securing or otherwise relating to any such accounts,
chattel paper, instruments, deposit accounts, ` general intangibles or
obligations (any and all such accounts, chattel paper, instruments, deposit
accounts, general intangibles and obligations, to the extent not referred
to in clause (d), (e) or (f) below, being the "RECEIVABLES", and any and
all such
security agreements, leases and other contracts being the "RELATED
CONTRACTS");
(d) the following (the "SECURITY COLLATERAL"):
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(i) the Securities Account, all Pledged Security
Entitlements with respect to all Pledged Financial Assets from time to time
credited to the Securities Account, and all Pledged Financial Assets, and
all dividends, interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Pledged Security Entitlements or such
Pledged Financial Assets; and
(ii) all other investment property (including, without
limitation, all (A) security entitlements, (B) securities accounts, (C)
commodity contracts and (D) commodity accounts) in which such Grantor has
now, or acquires from time to time hereafter, any right, title or interest
in any manner, and the certificates or instruments, if any, representing or
evidencing such investment property, and all dividends, interest,
distributions, value, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such investment property;
(e) each of the agreements of each Grantor, and each Hedge
Agreement to which such Grantor is now or may hereafter become a party, in each
case as such agreements may be amended, amended and restated, supplemented or
otherwise modified from time to time (collectively, the "ASSIGNED AGREEMENTS"),
including, without limitation, (i) all rights of such Grantor to receive moneys
due and to become due under or pursuant to the Assigned Agreements, (ii) all
rights of such Grantor to receive proceeds of any insurance, indemnity, warranty
or guaranty with respect to the Assigned Agreements, (iii) claims of such
Grantor for damages arising out of or for breach of or default under the
Assigned Agreements and (iv) the right of such Grantor to terminate the Assigned
Agreements, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder (all such Collateral being the "AGREEMENT
COLLATERAL");
(f) the following (collectively, the "ACCOUNT COLLATERAL"):
(i) an account listed on Schedule VI as the Cash
Concentration Account (the "CASH CONCENTRATION ACCOUNT"), all
financial assets from time to time credited to the Cash Concentration
Account (including, without limitation, all Cash Equivalents from time
to time credited to the Cash Concentration Account), and all
dividends, interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such financial assets, and all funds held
therein and all certificates and instruments, if any, from time to
time representing or evidencing the Cash Concentration Account;
(ii) all Pledged Accounts (as hereinafter defined) from
time to time, all funds held therein and all certificates and
instruments, if any, from time to time representing or evidencing
the Pledged Accounts;
(iii) all other deposit accounts (including, without
limitation, the operating accounts of such Grantor) of such Grantor
from time to time, all funds held therein and all certificates and
instruments, if any, from time to time representing or evidencing such
deposit accounts;
(iv) all notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time delivered to or
otherwise possessed by the Administrative Agent for or on behalf of
such Grantor, including, without limitation,
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those delivered or possessed in substitution for or in addition to any
or all of the then existing Account Collateral; and
(v) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Account Collateral; and
(g) the following (collectively, the "INTELLECTUAL PROPERTY
COLLATERAL"):
(i) all United States, international and foreign patents,
patent applications and statutory invention registrations, including,
without limitation, the patents and patent applications set forth in
Part A of Schedule V hereto (as such Schedule V may be supplemented
from time to time by supplements to this Agreement, each such
supplement being in substantially the form of Exhibit F hereto (an "IP
SECURITY AGREEMENT SUPPLEMENT"), executed and delivered by such
Grantor to the Administrative Agent from time to time), together with
all reissues, divisions, continuations, continuations-in-part,
extensions and reexaminations thereof, all inventions therein, all
rights therein provided by international treaties or conventions and
all improvements thereto, and all other rights of any kind whatsoever
of such Grantor accruing thereunder or pertaining thereto (the
"PATENTS");
(ii) all trademarks (including, without limitation,
service marks), certification marks, collective marks, trade dress,
logos, domain names, product configurations, trade names, business
names, corporate names and other source identifiers, whether or not
registered, whether currently in use or not, including, without
limitation, all common law rights and registrations and applications
for registration thereof, including, without limitation, the trademark
registrations and trademark applications set forth in Part B of
Schedule V hereto (as such Schedule V may be supplemented from time to
time by IP
Security Agreement Supplements executed and delivered by
such Grantor to the Administrative Agent from time to time), and all
other marks registered in the U.S. Patent and Trademark Office or in
any office or agency of any State or Territory of the United States or
any foreign country (but excluding any United States intent-to-use
trademark application prior to the filing and acceptance of a
Statement of Use or an Amendment to allege use in connection therewith
to the extent that a valid security interest may not be taken in such
an intent-to-use trademark application under applicable law), and all
rights therein provided by international treaties or conventions, all
reissues, extensions and renewals of any of the foregoing, together in
each case with the goodwill of the business connected therewith and
symbolized thereby, and all rights corresponding thereto throughout
the world and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto (the "TRADEMARKS");
(iii) all copyrights, copyright applications, copyright
registrations and like protections in each work of authorship, whether
statutory or common law, whether published or unpublished, any
renewals or extensions thereof, all copyrights of works based on,
incorporated in, derived from, or relating to works covered by such
copyrights, including, without limitation, the copyright registrations
and copyright applications set forth in Schedule V hereto including,
without limitation, the trademark registrations and trademark
applications set forth in Part C Schedule V hereto (as such Schedule V
may be supplemented from time to time by IP Security Agreement
Supplements executed and delivered by such Grantor to the
Administrative Agent from time to time), together with
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all rights corresponding thereto throughout the world and all
other rights of any kind whatsoever of such Grantor accruing
thereunder or pertaining thereto (the "COPYRIGHTS");
(iv) all confidential and proprietary information,
including, without limitation, know-how, trade secrets, manufacturing
and production processes and techniques, inventions, research and
development information, technical data, financial, marketing and
business data, pricing and cost information, business and marketing
plans and customer and supplier lists and information (the "TRADE
SECRETS");
(v) all computer software programs and databases
(including, without limitation, source code, object code and all
related applications and data files), firmware, and documentation and
materials relating thereto, and all rights with respect to the
foregoing, together with any and all options, warranties, service
contracts, program services, test rights, maintenance rights,
improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of
the foregoing (the "COMPUTER SOFTWARE");
(vi) all license agreements, permits, authorizations and
franchises, whether with respect to the Patents, Trademarks,
Copyrights, Trade Secrets or Computer Software, or with respect to
the patents, trademarks, copyrights, trade secrets, computer software
or other proprietary right of any other Person, including, without
limitation, the license agreements set forth in Part D of Schedule V
hereto (as such Schedule V may be supplemented from time to time by
IP Security Agreement Supplements executed and delivered by such
Grantor to the Administrative Agent from time to time), and all
income, royalties and other payments now or hereafter due and/or
payable with respect thereto, subject, in each case, to the terms of
such license agreements, permits, authorizations and franchises, (the
"LICENSES"); and
(vii) any and all claims for damages for past, present and
future infringement, misappropriation or breach with respect to the
Patents, Trademarks, Copyrights, Trade Secrets, Computer Software or
Licenses, with the right, but not the obligation, to ▇▇▇ for and
collect, or otherwise recover, such damages; and
(h) all proceeds of any and all of the Collateral (including,
without limitation, proceeds that constitute property of the types
described in clauses (a) through (g) of this Section 1 and this clause
(h)) and, to the extent not otherwise included, all (i) payments under
insurance (whether or not the Administrative Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral and (ii) cash.
Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in, any of such Grantor's rights and interests (i) in any license,
contract or agreement to which such Grantor is a party or any of its rights
thereunder to the extent, but only to the extent that such a grant would, under
the terms of any such license, contract or agreement, result in a breach of the
terms of, or constitute a default under any license, contract or agreement to
which such Grantor is a party (other than to the extent that any such term would
be rendered ineffective pursuant to the UCC of any relevant jurisdiction or any
other applicable law (including the Bankruptcy Code) or principles of equity);
PROVIDED that, immediately upon the ineffectiveness, lapse or termination of any
such provision, the Collateral shall include, and such Grantor shall be deemed
to have granted a security interest in, all such rights and provisions as if
such provision had never been in effect, or (ii) in any Equipment that is
subject to a Capital Lease or purchase money financing (in each case as
6
permitted by the Credit Agreement) so long as, and only so long as, such Capital
Lease or purchase money financing by its terms would not allow the security
interest created hereunder.
SECTION 2. SECURITY FOR OBLIGATIONS. The pledge and assignment of,
and the grant of a lien on and security interest in, the Collateral by the U.S.
Borrower and each of the other Grantors that is a Restricted Subsidiary of the
U.S. Borrower secures the payment of all Obligations of each Loan Party now or
hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such Obligations being the "SECURED
OBLIGATIONS").
SECTION 3. GRANTORS REMAIN LIABLE. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent of any of the rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral and (c) no Secured Party shall have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement or any other Loan Document, nor shall
any Secured Party be obligated to perform any of the obligations or duties of
any Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
SECTION 4. DELIVERY AND CONTROL OF SECURITY COLLATERAL. (a) At any
time upon the occurrence and during the continuance of a Default under Section
7.01(a) or (f) of the Credit Agreement, or upon the occurrence of an Event of
Default, in its sole discretion and without notice to any Grantor, the
Administrative Agent shall have the right at any time to convert Security
Collateral consisting of financial assets credited to the Securities Account to
Security Collateral consisting of financial assets held directly by the
Administrative Agent, and to convert Security Collateral consisting of
financial assets held directly by the Administrative Agent to Security
Collateral consisting of financial assets credited to the Securities Account.
(b) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes a security entitlement, such
Grantor will cause the securities intermediary with respect to such security
entitlement either (i) to identify in its records the Administrative Agent as
the entitlement holder of such security entitlement against such securities
intermediary or (ii) to agree in writing with such Grantor and the
Administrative Agent that such securities intermediary will comply with
entitlement orders (that is, notifications communicated to such securities
intermediary directing transfer or redemption of the financial asset to which
such Grantor has a security entitlement) originated by the Administrative Agent
without further consent of such Grantor, such agreement to be in substantially
the form of Exhibit D hereto or otherwise in form and substance satisfactory to
the Administrative Agent (such agreement being a "SECURITIES ACCOUNT CONTROL
AGREEMENT").
(c) No Grantor will change or add any securities intermediary or
commodity intermediary that maintains any securities account or commodity
account in which any of the Collateral is credited or carried, or change or add
any such securities account or commodity account, in each case without first
complying with the above provisions of this Section 4 in order to perfect the
security interest granted hereunder in such Collateral.
(d) The Administrative Agent hereby agrees with the Grantors that,
unless a Default under Section 7.01(a) or (f) of the Credit Agreement has
occurred and is continuing, or an Event of
7
Default has occurred, the Administrative Agent shall not issue instructions
under the Securities Account Control Agreement.
SECTION 5. MAINTAINING THE PLEDGED ACCOUNTS. So long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding, any Bank Hedge Agreement
shall be in effect or any Lender Party shall have any Commitment under the
Credit Agreement:
(a) Within 30 days of the Effective Date, each Grantor will
establish and maintain lockboxes and deposit accounts (collectively, the
"PLEDGED ACCOUNTS") only with banks (the "PLEDGED ACCOUNT BANKS") that have
entered into letter agreements in substantially the form of Exhibit B
hereto or otherwise in form and substance reasonably satisfactory to the
Administrative Agent with such Grantor and the Administrative Agent (the
"PLEDGED ACCOUNT LETTERS").
(b) Each Grantor will (i) immediately instruct each Person
obligated at any time to make any payment to such Grantor for any reason
(an "OBLIGOR") to make such payment to a Pledged Account of such Grantor or
to the Cash Concentration Account and (ii) deposit in a Pledged Account or
pay to the Administrative Agent for deposit in the Cash Concentration
Account, at the end of each Business Day, all proceeds of Collateral and
all other cash of such Grantor in excess of $250,000 in the aggregate.
(c) Concurrently with or promptly after entering into a Pledged
Account Letter with any Pledged Account Bank, each Grantor will instruct
such Pledged Account Bank to transfer to the Cash Concentration Account, at
the end of each Business Day, in same day funds, an amount equal to the
credit balance of the Pledged Account in such Pledged Account Bank. If any
Grantor shall fail to give any such instructions to any Pledged Account
Bank, the Administrative Agent may do so without further notice to any
Grantor.
(d) Each Grantor agrees that it will not add any bank as a
Pledged Account Bank or add any account as a Pledged Account to those
listed in Schedule VI hereto, unless the Administrative Agent shall have
received at least 10 days' prior written notice of such addition and shall
have received a Pledged Account Letter executed by such new Pledged Account
Bank and such Grantor or a supplement to an existing Pledged Account Letter
covering such new Pledged Account, as the case may be (and, upon the
receipt by the Administrative Agent of such Pledged Account Letter or
supplement, Schedule VI hereto shall be automatically amended to include
such Pledged Account Bank or Pledged Account). Each Grantor agrees that it
will not terminate any bank as a Pledged Account Bank or terminate any
account as a Pledged Account, unless the Administrative Agent shall have
received at least 10 days' prior written notice of such termination (and,
upon such termination, Schedule VI hereto shall be automatically amended to
delete such Pledged Account Bank or Pledged Account).
(e) Upon any termination of any Pledged Account Letter or other
agreement with respect to the maintenance of a Pledged Account by any
Grantor or any Pledged Account Bank, such Grantor will immediately notify
all Obligors that were making payments to such Pledged Account to make all
future payments to another Pledged Account or to the Cash Concentration
Account. Each Grantor agrees to terminate any or all Pledged Accounts and
Pledged Account Letters upon request by the Administrative Agent.
(f) The Grantors will draw checks on, and otherwise withdraw
amounts from, their respective operating accounts in such amounts as may be
required in the ordinary course of
8
business (including, without limitation, to pay or prepay Debt outstanding
under the Loan Documents). So long as no Default under Section 7.01(a) or
(f) of the Credit Agreement or no Event of Default shall have occurred and
be continuing, the Administrative Agent will direct the applicable
Collateral Bank (as hereinafter defined) to transfer amounts on deposit in
the Cash Concentration Account to the respective operating accounts to the
extent necessary to pay all checks drawn on, and all amounts otherwise
withdrawn from, such operating accounts.
(g) Each Grantor agrees that it will not add any account as an
unblocked account and will not terminate any account as an unblocked
account, unless the Administrative Agent shall have received at least 10
days' prior written notice of such addition or termination.
(h) Notwithstanding anything to the contrary in this Agreement,
with respect to the lock-box account of the U.S. Borrower maintained in
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (the "CANADIAN LOCK-BOX"), the transfers required
pursuant to Section 5(c) shall be to the cash concentration account
maintained by the Canadian Borrower under the Canadian Security Agreement
rather than to the Cash Concentration Account.
(i) The Administrative Agent hereby agrees with the Grantors
that, unless a Default under Section 7.01(a) or (f) of the Credit Agreement
has occurred and is continuing, or an Event of Default has occurred, the
Administrative Agent shall not issue instructions under the Pledged Account
Letters.
SECTION 6. MAINTAINING THE CASH CONCENTRATION ACCOUNT. So long as any
of the Advances shall remain unpaid, any Letter of Credit shall be outstanding,
any Bank Hedge Agreement shall be in effect or any of the Lender Parties shall
have any Commitment under the Credit Agreement:
(a) The U.S. Borrower will maintain its Cash Concentration
Account with any commercial bank reasonably acceptable to the
Administrative Agent (the "COLLATERAL BANK") in accordance with the terms
of this Agreement and, within 30 days of the Effective Date, will provide a
letter agreement (the "CASH CONCENTRATION ACCOUNT LETTER") among the U.S.
Borrower, the Collateral Bank and the Administrative Agent, which letter
agreement is to be in substantially the form of Exhibit G hereto or
otherwise in form and substance reasonably satisfactory to the
Administrative Agent. Upon the occurrence and continuance of a Default
under Section 7.01(a) or (f) or the occurrence of an Event of Default, the
Administrative Agent shall have sole and exclusive dominion and control of
the Cash Concentration Account subject to the terms of this Agreement and
of the Cash Concentration Account Letter.
(b) It shall be a term and condition of the Cash Concentration
Account that no amount (including, without limitation, interest on
Collateral Investments related thereto) shall be paid or released to or
for the account of, or withdrawn by or for the account of, the U.S.
Borrower or any other Person from the Cash Concentration Account, except as
otherwise provided in Sections 5 and 20 hereof and in the Cash
Concentration Account Letter.
(c) The U.S. Borrower agrees that it will not add any bank as a
Collateral Bank or add any account as a Cash Concentration Account to that
listed in Schedule VI hereto, unless the Administrative Agent shall have
received at least 10 days' prior written notice of such addition and shall
have received a Cash Concentration Account Letter executed by such new
Collateral Bank and the U.S. Borrower or a supplement to an existing
Cash Concentration Account Letter covering such new Cash Concentration
Account, as the case may be (and, upon the receipt by the Administrative
Agent of such new Cash Concentration Account Letter or supplement, Schedule
VI hereto shall be automatically amended to include such Collateral Bank
9
or Cash Concentration Account). The U.S. Borrower agrees that it will not
terminate any Collateral Bank as a Collateral Bank or terminate any account
as a Cash Concentration Account, unless the Administrative Agent shall have
received at least 10 days' prior written notice of such termination (and,
upon such termination, Schedule VI hereto shall be automatically amended to
delete such Collateral Bank or Cash Concentration Account).
(d) The Administrative Agent hereby agrees with the U.S.
Borrower that, unless a Default under Section 7.01(a) or (f) of the Credit
Agreement has occurred and is continuing, or an Event of Default has
occurred, the Administrative Agent shall not issue instructions under the
Cash Concentration Letter.
SECTION 7. INVESTING OF AMOUNTS IN THE CASH CONCENTRATION ACCOUNT.
(a) So long as no Default under Section 7.01(a) or 7.01(f)
of the Credit Agreement or Event of Default has occurred and is continuing,
the U.S. Borrower may direct the Collateral Bank to (i) invest amounts on
deposit in the Cash Concentration Account in such Cash Equivalents as the
U.S. Borrower may select, in each case which investments shall be made in
the name of, and with the entitlement holder being, the U.S. Borrower, and
(ii) invest interest paid on the Cash Equivalents referred to in clause (i)
above, and reinvest other proceeds of any such Cash Equivalents that may
mature or be sold, in each case in such Cash Equivalents as the U.S.
Borrower may select, in each case which investments shall be made in the
name of, and with the entitlement holder being, the U.S. Borrower (the Cash
Equivalents referred to in clauses (i) and (ii) of this Section 7(a) being,
collectively, the "U.S. BORROWER COLLATERAL INVESTMENTS").
(b) Upon the occurrence and during the continuance of a Default
under Section 7.01(a) or 7.01(f) of the Credit Agreement or an Event of
Default, the Administrative Agent may, subject to the provisions of
Section 20, from time to time (i) invest amounts on deposit in the Cash
Concentration Account in such Cash Equivalents as the Administrative Agent
may select, in each case which investments shall be made in the name of,
and with the entitlement holder being, the Administrative Agent, on behalf
of the U.S. Borrower, and (ii) invest interest paid on the Cash Equivalents
referred to in clause (i) above, and reinvest other proceeds of any such
Cash Equivalents that may mature or be sold, in such Cash Equivalents as
the Administrative Agent may select, in each case which investments shall
be made in the name of, and with the entitlement holder being, the
Administrative Agent, on behalf of the U.S. Borrower (the Cash Equivalents
referred to in clauses (i) and (ii) of this Section 7(b), together with the
U.S. Borrower Collateral Investments, being, collectively, the "COLLATERAL
INVESTMENTS").
(c) Interest and proceeds that are not invested or reinvested in
Collateral Investments as provided in subsection (a) or (b) of this Section
7 shall be deposited and held in the Cash Concentration Account.
(d) The Administrative Agent shall not have any liability to
the U.S. Borrower or any other Grantors or any of the Secured Parties for,
or as a result of, any losses suffered from any Collateral Investment made
by it in accordance with this Section 7 or if the earnings realized on any
such Collateral Investment are less than otherwise could have been achieved
had other Cash Equivalents been selected by the U.S. Borrower or the
Administrative Agent pursuant to the terms of subsection (a) or (b),
respectively, of this Section 7.
(e) All of the Collateral Investments made in respect of the
Cash Concentration Account and all interest and income received thereon and
therefrom, and the net proceeds realized upon the maturity or sale thereof,
shall be held in the Cash Concentration Account as
10
Account Collateral, which amounts may be released solely in accordance with
the provisions of Sections 20 hereof and of the Cash Concentration Account
Letter.
SECTION 8. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and
warrants as follows:
(a) All of the Equipment and Inventory of such Grantor are
located at the places specified therefor in Schedule III hereto, as such
Schedule III may be amended from time to time to reflect a change in the
location of such Equipment or Inventory. The jurisdiction of organization
and the original copies of each Assigned Agreement and Related Contract to
which such Grantor is a party and all originals of all chattel paper that
evidence Receivables of such Grantor, are located at the address specified
therefor in Schedule IV hereto, as such Schedule IV may be amended from
time to time pursuant to Section 12(a). Such Grantor's federal tax
identification and organizational identification number are set forth
opposite such Grantor's name in Schedule IV hereto. Original copies of each
material Assigned Agreement and all originals of all chattel paper that
evidence Receivables have been delivered to the Administrative Agent, in
each case to the extent that delivery thereof to the Administrative Agent
is required under Section 4. None of the Receivables or Agreement
Collateral is evidenced by a promissory note or other instrument in an
aggregate amount in excess of $100,000 that has not been delivered to the
Administrative Agent.
(b) Such Grantor is the legal and beneficial owner of the
Collateral of such Grantor free and clear of any Lien, claim, option or
right of others, except for the security interest created under this
Agreement or permitted under the Credit Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of
such Collateral or listing such Grantor or any trade name of such Grantor
as debtor is on file in any recording office, except such as may have been
filed in favor of the Administrative Agent relating to the Loan Documents
or as otherwise permitted under the Credit Agreement. Such Grantor has the
trade names listed on Schedule V hereto.
(c) Such Grantor has exclusive possession and control of the
Equipment and Inventory other than (i) Inventory with an aggregate value
not to exceed $100,000 that is being processed by third-party processors
pursuant to a contract with a Grantor and (ii) Inventory stored at any
leased premises or warehouse for which a landlord's or warehouseman's
agreement, in form and substance reasonably satisfactory to the
Administrative Agent, is in effect and which leased premises or warehouse
is so indicated by an asterisk on Schedule III hereto, as such Schedule III
may be amended from time to time to reflect a change in the location of
such Equipment or Inventory; provided that the Grantors may store Inventory
at the leased premises or warehouse of any landlord or warehouseman without
a landlord's or warehouseman's agreement (x) for a period of 30 days after
the Effective Date and (y) to the extent that a landlord's or
warehouseman's agreement is not obtained from such landlord or warehouseman
after the exercise by such Grantor of commercially reasonably efforts.
(d) All of the investment property owned by such Grantor as of
the date hereof is listed on Schedule I hereto.
(e) The Assigned Agreements to which such Grantor is a party
have been duly authorized, executed and delivered by such Grantor and, to
the knowledge of such Grantor, all other parties thereto, are in full force
and effect and are binding upon and enforceable against such Grantor and,
to the knowledge of such Grantor, all other parties thereto in accordance
with their terms. True and complete copies of all material Assigned
Agreements have been furnished
11
to the Administrative Agent. There exists no default under any material
Assigned Agreement to which such Grantor is a party by such Grantor and, to
the knowledge of such Grantor, by all other parties thereto. Each party to
the Assigned Agreements for which Administrative Agent has requested a
consent and to which such Grantor is a party, other than the Grantors, has
executed and delivered to such Grantor a consent, in substantially the form
of Exhibit C hereto or otherwise in form and substance reasonably
satisfactory to the Administrative Agent, to the assignment of the
Agreement Collateral to the Administrative Agent pursuant to this
Agreement; provided that such consent shall not be required from any party
if it is not obtained from such party after the exercise by such Grantor of
commercially reasonable efforts.
(f) Such Grantor has no Pledged Accounts, Cash Concentration
Account or other deposit accounts other than the Pledged Accounts and the
Cash Concentration Account listed on Schedule VI hereto, as such Schedule
VI may be amended from time to time pursuant to Section 5(d) and Section
6(c). Such Grantor has instructed all existing Obligors to make all
payments to a Pledged Account.
(g) All filings and other actions necessary or desirable to
perfect and protect the security interest in the Collateral of such Grantor
created under this Agreement have been duly made or taken and are in full
force and effect, and this Agreement creates in favor of the Administrative
Agent for the benefit of the Secured Parties a valid and, together with
such filings and other actions, perfected first priority security interest
in the Collateral of such Grantor, securing the payment of the Secured
Obligations.
(h) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or
any other third party is required for (i) the grant by such Grantor of the
assignment, pledge and security interest granted hereunder or for the
execution, delivery or performance of this Agreement by such Grantor, (ii)
the perfection or maintenance of the assignment, pledge and security
interest created hereunder (including the first priority nature of such
assignment, pledge or security interest), except for (w) the filing of
financing and continuation statements under the Uniform Commercial Code,
which financing statements have been, or will be, duly filed and are in
full force and effect, (x) the recordation of the Intellectual Property
Security Agreements referred to in Section 13(f) with the U.S. Patent and
Trademark Office and the U.S. Copyright Office, which Agreements have been,
or will be, duly recorded and are in full force and effect, (y) the
execution of the Control Agreements pursuant to this Agreement and (z) the
recording of the Lien of the Administrative Agent hereunder on the
certificate of title for any Equipment which is certificate in any state
(which recording shall not be required for any Equipment with a value of
less than $50,000), or (iii) for the exercise by the Administrative Agent
of its rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement.
(i) The Inventory that has been produced or distributed by
such Grantor has been produced in compliance with all requirements of
applicable law, including, without limitation, the Fair Labor Standards
Act.
(j) As to itself and its Intellectual Property Collateral:
(i) To the knowledge of such Grantor, the rights of
such Grantor in or to the Intellectual Property Collateral do not
conflict with, misappropriate or infringe upon the intellectual
property rights of any third party, and no claim has been asserted
that the use of such Intellectual Property Collateral does or may
infringe upon the
12
intellectual property rights of any third party that could reasonably
be expected to have a Material Adverse Effect.
(ii) Such Grantor is the owner of the right, title
and interest in and to the Intellectual Property Collateral and is
entitled to use all such Intellectual Property Collateral without
limitation, subject only to the license terms of the Licenses.
(iii) The Intellectual Property Collateral set
forth on Schedule V hereto includes all of the patents, patent
applications, trademark registrations and applications, copyright
registrations and applications and Licenses owned by such Grantor.
(iv) Except for immaterial portions thereof, the
Intellectual Property Collateral is subsisting and has not been
adjudged invalid or unenforceable in whole or part, and to such
Grantor's knowledge, is valid and enforceable. Such Grantor is not
aware of any uses of any material item of Intellectual Property
Collateral that could be expected to lead to such item becoming
invalid or unenforceable.
(v) Such Grantor has made or performed all filings,
recordings and other acts and has paid all required fees and taxes to
maintain and protect its interest in each and every material item of
Intellectual Property Collateral in full force and effect throughout
the world in all jurisdictions reasonably necessary for such Grantor's
use thereof, and to protect and maintain its interest therein
including, without limitation, recordations of any of its interests in
the Patents and Trademarks with the U.S. Patent and Trademark Office
and in corresponding national and international patent offices, and
recordation of any of its interests in the Copyrights with the U.S.
Copyright Office and in corresponding national and international
copyright offices. Such Grantor has used proper statutory notice in
connection with its use of each material patent, trademark and
copyright of the Intellectual Property Collateral.
(vi) No action, suit, investigation, litigation or
proceeding has been asserted or is pending or, to the knowledge of
such Grantor, threatened against such Grantor (i) based upon or
challenging or seeking to deny or restrict the use of any of the
Intellectual Property Collateral, or (ii) alleging that any services
provided by, processes used by, or products manufactured or sold by,
such Grantor infringe upon or misappropriate any patent, trademark,
copyright or any other proprietary right of any third party except for
such matters as could not reasonably be expected to have a Material
Adverse Effect. To the best of such Grantor's knowledge, no Person is
engaging in any activity that infringes upon or misappropriates the
Intellectual Property Collateral or upon the rights of such Grantor
therein except for such matters as could not reasonably be expected to
have a Material Adverse Effect. Except as set forth on Schedule V
hereto, such Grantor has not granted any license, release, covenant
not to ▇▇▇, non-assertion assurance, or other right to any Person with
respect to any part of the Intellectual Property Collateral except for
those that do not interfere in any material respect with the Grantor's
use thereof.
(vii) With respect to each material License: (A) such
License is valid and binding and in full force and effect and
represents the entire agreement between the respective licensor and
licensee with respect to the subject matter of such License; (B) such
License will not cease to be valid and binding and in full force and
effect on terms identical to those currently in effect as a result of
the rights and interest granted herein,
13
nor will the grant of such rights and interest constitute a breach or
default under such License or otherwise give the licensor or licensee
a right to terminate such License; (C) such Grantor has not received
any notice of termination or cancellation under such License; (D) such
Grantor has not received any notice of a breach or default under such
License, which breach or default has not been cured; (E) such Grantor
has not granted to any other third party any rights, adverse or
otherwise, under such License; and (F) neither such Grantor nor any
other party to such License is in breach or default in any material
respect, and no event has occurred that, with notice or lapse of time
or both, would constitute such a breach or default or permit
termination, modification or acceleration under such License.
(viii) To the best of such Grantor's acknowledge
except for such matters as could not reasonably be expected to have a
Material Adverse Effect, (A) none of the Trade Secrets of such Grantor
has been used, divulged, disclosed or appropriated to the detriment of
such Grantor for the benefit of any other Person other than such
Grantor; (B) no employee, independent contractor or agent of such
Grantor has misappropriated any trade secrets of any other Person in
the course of the performance of his or her duties as an employee,
independent contractor or agent of such Grantor; and (C) no employee,
independent contractor or agent of such Grantor is in default or
breach of any term of any employment agreement, non-disclosure
agreement, assignment of inventions agreement or similar agreement or
contract relating in any way to the protection, ownership,
development, use or transfer of such Grantor's Intellectual Property
Collateral.
SECTION 9. FURTHER ASSURANCES. (a) Each Grantor agrees from time to
time, at its sole expense, to promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Administrative Agent may reasonably request, in order to
perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Administrative Agent to exercise
and enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor will: (i) ▇▇▇▇,
at the request of the Administrative Agent, conspicuously each document included
in Inventory, each chattel paper included in Receivables, each Related Contract,
each Assigned Agreement and, at the request of the Administrative Agent, each of
its records pertaining to the Collateral with a legend, in form and substance
satisfactory to the Administrative Agent, indicating that such document, chattel
paper, Related Contract, Assigned Agreement or Collateral is subject to the
security interest granted hereby; (ii) if any Collateral shall be evidenced by a
promissory note or other instrument or chattel paper, deliver and pledge to the
Administrative Agent hereunder such note or instrument or chattel paper duly
indorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Administrative Agent; (iii)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Administrative Agent may reasonably request, in order to
perfect and preserve the pledge, assignment and security interest granted or
purported to be granted hereby, and (iv) deliver to the Administrative Agent
evidence that all other action that the Administrative Agent may deem reasonably
necessary or desirable in order to perfect and protect the Security interest
created by such Grantor under this Agreement has been taken.
(b) Each Grantor hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the signature of such
Grantor where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
14
(c) Each Grantor will furnish to the Administrative Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Administrative
Agent may reasonably request, all in reasonable detail.
SECTION 10. AS TO EQUIPMENT AND INVENTORY. (a) Each Grantor will
promptly furnish to the Administrative Agent a statement respecting any loss or
damage exceeding $1,000,000 to any of the Equipment or Inventory of such
Grantor.
(b) Each Grantor will pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including, without limitation, claims for labor, materials and supplies)
against, the Equipment and Inventory of such Grantor, except to the extent
payment thereof is not required by Section 5.01(b) of the Credit Agreement. In
producing its Inventory, each Grantor will comply with all requirements of
applicable law, including, without limitation, the Fair Labor Standards Act.
SECTION 11. INSURANCE. (a) Each Grantor will, at its own expense,
establish, within 30 days of the Effective Date, and maintain insurance with
respect to the Equipment and Inventory of such Grantor in such amounts, against
such risks, in such form and with such insurers, as shall be reasonably
satisfactory to the Administrative Agent from time to time. Each policy of each
Grantor for liability insurance shall provide for all losses to be paid on
behalf of the Administrative Agent and such Grantor as their interests may
appear, and each policy for property damage insurance shall provide for all
losses (except for losses of less than $500,000 per occurrence) to be paid
directly to the Administrative Agent. Each such policy shall in addition (i)
name such Grantor and the Administrative Agent as insured parties thereunder
(without any representation or warranty by or obligation upon the Administrative
Agent) as their interests may appear, (ii) contain the agreement by the insurer
that any loss thereunder shall be payable to the Administrative Agent
notwithstanding any action, inaction or breach of representation or warranty by
such Grantor, (iii) provide that there shall be no recourse against the
Administrative Agent for payment of premiums or other amounts with respect
thereto and (iv) provide that at least 10 days' prior written notice of
cancellation or of lapse shall be given to the Administrative Agent by the
insurer. Each Grantor will, if so requested by the Administrative Agent, deliver
to the Administrative Agent original or duplicate policies of such insurance
and, as often as the Administrative Agent may reasonably request, a report of a
reputable insurance broker with respect to such insurance. Further, each Grantor
will, at the request of the Administrative Agent, duly execute and deliver
instruments of assignment of such insurance policies to comply with the
requirements of Section 11 and cause the insurers to acknowledge notice of such
assignment.
(b) Reimbursement under any liability insurance maintained by any
Grantor pursuant to this Section 11 may be paid directly to the Person who shall
have incurred liability covered by such insurance. In case of any loss involving
damage to Equipment or Inventory when subsection (c) of this Section 11 is not
applicable, the applicable Grantor will make or cause to be made the necessary
repairs to or replacements of such Equipment or Inventory, and any proceeds of
insurance properly received by or released to such Grantor shall be used by such
Grantor, except as otherwise required hereunder or by the Credit Agreement, to
pay or as reimbursement for the costs of such repairs or replacements.
(c) So long as no Event of Default shall have occurred and be
continuing, all insurance payments received by the Administrative Agent in
connection with any loss, damage or destruction of any Inventory or Equipment
will be released by the Administrative Agent to the applicable Grantor, and such
payments may be invested by such Grantor in the business or used to prepay or
retire Debt as permitted under the Credit Agreement within one year following
such release; PROVIDED, HOWEVER, that any portion of such payments that has not
been invested in the business or used to prepay or retire Debt as permitted
under the Credit Agreement within such one-year period shall (i) be deemed to be
Net Cash Proceeds
15
occurring on the last day of such one-year period and (ii) be applied to the
prepayment of Advances in accordance with Section 2.06(b)(ii) of the Credit
Agreement; PROVIDED FURTHER that, for purposes of the preceding PROVISO, such
one-year period shall be extended by up to six months from the last day of such
one-year period so long as (A) such payments are to be invested in the business
or used to prepay or retire Debt as permitted under the Credit Agreement within
such additional six-month period under the U.S. Borrower's or any of its
Restricted Subsidiaries' business plan as most recently adopted in good faith by
its board of directors and (B) such Person believes in good faith that such
proceeds will be so reinvested within such additional six-month period. Upon the
occurrence and during the continuance of any Event of Default, all insurance
payments in respect of such Equipment or Inventory shall be paid to the
Administrative Agent and shall, in the Administrative Agent's sole discretion,
(i) be released to the applicable Grantor to be applied as set forth in the
first sentence of this subsection (c) or (ii) be held as additional Collateral
hereunder or applied as specified in Section 20(d).
SECTION 12. PLACE OF PERFECTION; RECORDS; COLLECTION OF RECEIVABLES.
(a) Each Grantor will keep its jurisdiction of organization, and originals of
the Assigned Agreements, and Related Contracts to which such Grantor is a party
and all originals of all chattel paper that evidence Receivables of such
Grantor, at the location therefor specified in Section 8(a) or, upon 30 days'
prior written notice to the Administrative Agent, at such other location in a
jurisdiction where all actions required by Section 9 shall have been taken with
respect to the Collateral of such Grantor (and, upon the taking of such action
in such jurisdiction, Schedule IV hereto shall be automatically amended to
include such other location). Each Grantor will hold and preserve its records
relating to the Collateral, the Assigned Agreements, the Related Contracts and
chattel paper and will permit representatives of the Administrative Agent at any
time during normal business hours and upon reasonable notice to inspect and make
abstracts from such records and other documents.
(b) Except as otherwise provided in this subsection (b), each Grantor
will continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Receivables and the Related Contracts. In connection with
such collections, such Grantor may take (and, at the Administrative Agent's
direction, will take) such action as such Grantor or the Administrative Agent
may deem necessary or advisable to enforce collection of the Receivables and the
Related Contracts; PROVIDED, HOWEVER, that the Administrative Agent shall have
the right at any time, upon the occurrence and during the continuance of a
Default under Section 7.01(a) or (f) of the Credit Agreement, or upon the
occurrence of Event of Default, in its sole discretion and upon written notice
to such Grantor of its intention to do so, to notify the Obligors under any
Receivables or Related Contracts of the assignment of such Receivables or
Related Contracts to the Administrative Agent and to direct such Obligors to
make payment of all amounts due or to become due to such Grantor thereunder
directly to the Administrative Agent and, upon such notification and at the
expense of such Grantor, to enforce collection of any such Receivables or
Related Contracts, and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done. After receipt by any Grantor of the notice from the Administrative Agent
referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including instruments) received by such Grantor in respect of the
Receivables and the Related Contracts of such Grantor shall be received in trust
for the benefit of the Administrative Agent hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over to the
Administrative Agent in the same form as so received (with any necessary
indorsement) to be deposited in the Collateral Account and either (A) released
to such Grantor on the terms set forth in Section 5(f) so long as no Event of
Default shall have occurred and be continuing or (B) if any Event of Default
shall have occurred and be continuing, applied as provided in Section 20(d) and
(ii) such Grantor will not adjust, settle or compromise the amount or payment of
any Receivable, release wholly or partly any Obligor thereof, or allow any
credit or discount thereon without the consent of the Administrative Agent. Upon
the occurrence and during the continuance of a Default under Section 7.01(a) or
(f) of the Credit Agreement, or upon the occurrence of Event of Default, no
Grantor will permit or consent to the
16
subordination of its right to payment under any of the Receivables or the
Related Contracts to any other indebtedness or obligations of the Obligor
thereof.
SECTION 13. AS TO INTELLECTUAL PROPERTY COLLATERAL. (a) With respect
to each material item of its Intellectual Property Collateral, each Grantor
agrees to take, at its expense, all necessary steps, including, without
limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authority, to (i) maintain the validity and
enforceability of each such item of Intellectual Property Collateral and
maintain each such item of Intellectual Property Collateral in full force and
effect, and (ii) pursue the registration and maintenance of each such patent,
trademark, or copyright registration or application, now or hereafter included
in the Intellectual Property Collateral of such Grantor, including, without
limitation, the payment of required fees and taxes, the filing of responses to
office actions issued by the U.S. Patent and Trademark Office, the U.S.
Copyright Office or other governmental authorities, the filing of applications
for renewal or extension, the filing of affidavits under Sections 8 and 15 of
the U.S. Trademark Act, the filing of divisional, continuation,
continuation-in-part, reissue and renewal applications or extensions, the
payment of maintenance fees and the participation in interference,
reexamination, opposition, cancellation, infringement and misappropriation
proceedings. No Grantor shall, without the written consent of the Administrative
Agent, discontinue use of or otherwise abandon any Intellectual Property
Collateral, or abandon any right to file an application for letters patent,
trademark, or copyright, unless such Grantor shall have previously determined
that such use or the pursuit or maintenance of such Intellectual Property
Collateral is no longer desirable in the conduct of such Grantor's business and
that the loss thereof would not be reasonably likely to have a Material Adverse
Effect, in which case such Grantor will give prompt notice of any such
abandonment of any material Intellectual Property Collateral to the
Administrative Agent.
(b) Each Grantor agrees promptly to notify the Administrative Agent if
such Grantor learns (i) that any material item of the Intellectual Property
Collateral may have become abandoned, placed in the public domain, invalid or
unenforceable, or of any adverse determination or development regarding such
Grantor's ownership of any of the Intellectual Property Collateral or its right
to register the same or to keep and maintain and enforce the same, or (ii) of
any adverse determination or the institution of any proceeding (including,
without limitation, the institution of any proceeding in the U.S. Patent and
Trademark Office or any court) regarding any material item of the Intellectual
Property Collateral.
(c) In the event that any Grantor becomes aware that any material item
of the Intellectual Property Collateral is being infringed or misappropriated by
a third party, such Grantor shall promptly notify the Administrative Agent and
shall take such actions, at its expense, as such Grantor or the Administrative
Agent deems reasonable and appropriate under the circumstances to protect such
Intellectual Property Collateral, including, without limitation, suing for
infringement or misappropriation and for an injunction against such infringement
or misappropriation.
(d) Each Grantor shall use proper statutory notice in connection with
its use of each material item of its Intellectual Property Collateral. No
Grantor shall do or permit any act or knowingly omit to do any act whereby any
of its Intellectual Property Collateral may lapse or become invalid or
unenforceable or placed in the public domain.
(e) Each Grantor shall take all steps which it or the Administrative
Agent deems reasonable and appropriate under the circumstances to preserve and
protect each material item of its Intellectual Property Collateral, including,
without limitation, maintaining the quality of any and all products or services
used or provided in connection with any of the Trademarks, consistent with the
quality of the products and services as of the date hereof, and taking all steps
necessary to ensure that all licensed users of any of the Trademarks use such
consistent standards of quality.
17
(f) With respect to its Intellectual Property Collateral, each Grantor
agrees to execute an agreement, in substantially the form set forth in Exhibit E
hereto (an "INTELLECTUAL PROPERTY SECURITY AGREEMENT"), for recording the
security interest granted hereunder to the Administrative Agent in such
Intellectual Property Collateral with the U.S. Patent and Trademark Office, the
U.S. Copyright Office and any other governmental authorities necessary to
perfect the security interest hereunder in such Intellectual Property
Collateral.
(g) Subject to Section 5.02(a)(vi), (vii) or (x) of the Credit
Agreement, each Grantor agrees that, should it obtain an ownership interest in
any material item of the type set forth in Section 1(g) which is not on the date
hereof a part of the Intellectual Property Collateral (the "AFTER-ACQUIRED
INTELLECTUAL PROPERTY"), (i) the provisions of Section 1 shall automatically
apply thereto, (ii) any such After-Acquired Intellectual Property and, in the
case of trademarks, the goodwill of the business connected therewith or
symbolized thereby, shall automatically become part of the Intellectual Property
Collateral subject to the terms and conditions of this Agreement with respect
thereto, (iii) such Grantor shall give prompt written notice thereof to the
Administrative Agent in accordance herewith and (iv) such Grantor shall execute
and deliver to the Administrative Agent an IP Security Agreement Supplement
covering such After-Acquired Intellectual Property as "Additional Collateral"
thereunder and as defined therein, and shall record such IP Security Agreement
Supplement with the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authorities necessary to perfect the security
interest hereunder in such After-Acquired Intellectual Property.
SECTION 14. AS TO THE ASSIGNED AGREEMENTS. (a) Each Grantor will at
its expense:
(i) perform and observe all terms and provisions of the
Assigned Agreements to be performed or observed by it, maintain the
Assigned Agreements to which it is a party in full force and effect,
enforce the Assigned Agreements to which it is a party in accordance with
the terms thereof and take all such action to such end as may be reasonably
requested from time to time by the Administrative Agent; and
(ii) Upon the Administrative Agent's reasonable request,
furnish to the Administrative Agent promptly upon receipt thereof copies of
all notices, requests and other documents received by such Grantor under or
pursuant to the Assigned Agreements to which it is a party, and from time
to time (A) furnish to the Administrative Agent such information and
reports regarding the Assigned Agreements and such other Collateral of such
Grantor as the Administrative Agent may reasonably request and (B) upon
request of the Administrative Agent make to each other party to any
Assigned Agreement to which it is a party such demands and requests for
information and reports or for action as such Grantor is entitled to make
thereunder.
(b) Each Grantor agrees that it will not, unless a Default under
Section 7.01(a) or (f) of the Credit Agreement has occurred and is continuing or
an Event of Default has occurred and except to the extent otherwise permitted
under the Credit Agreement:
(i) cancel or terminate any Assigned Agreement to which
it is a party or consent to or accept any cancellation or termination
thereof;
(ii) amend, amend and restate, supplement or otherwise
modify any such Assigned Agreement or give any consent, waiver or
approval thereunder;
(iii) waive any default under or breach of any such
Assigned Agreement; or
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(iv) take any other action in connection with any such
Assigned Agreement that would impair the value of the interests or rights
of such Grantor thereunder or that would impair the interests or rights
of any Secured Party.
(c) Each Grantor hereby consents on its behalf and on behalf of its
Subsidiaries to the assignment and pledge to the Administrative Agent for
benefit of the Secured Parties of each Assigned Agreement to which it is a
party by any other Grantor hereunder.
SECTION 15. PAYMENTS UNDER THE ASSIGNED AGREEMENTS. (a) Each Grantor
agrees, and has effectively so instructed each other party to each Assigned
Agreement to which it is a party, that all payments due or to become due under
or in connection with such Assigned Agreement will be made directly to a
Pledged Account.
(b) All moneys received or collected pursuant to subsection (a)
above shall be (i) released to the applicable Grantor on the terms set forth
in Section 5(f) so long as no Default under Section 7.01(a) or (f) of the
Credit Agreement or Event of Default shall have occurred and be continuing or
(ii) if any Default under Section 7.01(a) or (f) of the Credit Agreement or
Event of Default shall have occurred and be continuing, applied as provided in
Section 20(d).
SECTION 16. TRANSFERS AND OTHER LIENS. No Grantor shall (i) convey,
transfer, sell, assign (by operation of law or otherwise) or otherwise dispose
of, or grant any option or other right to purchase or otherwise acquire, any
of the Collateral, except for such conveyances, sales, transfers, assignments
and dispositions that are expressly permitted under the Loan Documents, or
(ii) create, incur, assume or suffer to exist any Lien upon or with respect to
any of the Collateral except for the pledge, assignment and security interest
created or otherwise expressly permitted under the terms of the Loan
Documents.
SECTION 17. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. Each
Grantor hereby irrevocably appoints the Administrative Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor
and in the name of such Grantor or otherwise, from time to time in the
Administrative Agent's discretion following the occurrence and continuance of
a Default under Section 7.01(a) or 7.01(f) or an Event of Default, to take any
action and to execute any instrument that the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement and the
other Loan Documents, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Administrative Agent pursuant to Section 11,
(b) to ask for, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(c) to receive, indorse, assign and collect any drafts, acceptances,
instruments, chattel paper and other documents in connection with this
Agreement and give full discharge to same,
(d) to sell, transfer, assign or otherwise deal with the Collateral
or any part thereof in the same manner and to the same extent as if the
Administrative Agent were the absolute owner thereof,
(e) (i) to direct any Person liable to such Grantor for any payment
with respect to its Collateral to make payment of any and all moneys due and
to become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct, (ii) to receive payment of and receipt for
any and all moneys, claims and other amounts due and to become due at any time
in respect of or arising out of any of its Collateral, (iii) to defend any
action, suit or proceeding brought against such
19
Grantor with respect to any of its Collateral and (iv) to settle, compromise or
adjust any action, suit or proceeding described in clause (iii) of this Section
17(e) and, in connection therewith, to give any such discharge or release as the
Administrative Agent may deem appropriate,
(f) to file any application, petition or other request with any
governmental authority for the purpose of obtaining any consent, approval or
authorization therefrom or satisfying any registration, filing, notice or other
requirement thereof necessary in order to fully and properly effect the sale,
transfer or other disposition of any or all of its Collateral, and
(g) to file any claims or take any action or institute any proceedings
at the sole expense of such Grantor that the Administrative Agent may deem
necessary or desirable for the collection of any of the Collateral or otherwise
to enforce compliance with the terms and conditions of any Assigned Agreement or
the rights of the Administrative Agent with respect to any of the Collateral.
SECTION 18. ADMINISTRATIVE AGENT MAY PERFORM. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may as the
Administrative Agent deems necessary but without any obligation to do so and
without notice, itself perform, or cause performance of, such agreement, and the
expenses of the Administrative Agent incurred in connection therewith shall be
payable by such Grantor under Section 21(b).
SECTION 19. THE ADMINISTRATIVE AGENT'S DUTIES. (a) The powers
conferred to the Administrative Agent hereunder are solely to protect its
interest (and the interest of the other Secured Parties) 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 and to dispose of the Collateral in a
commercially reasonable manner, the Administrative Agent shall have no duty as
to any Collateral, as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Collateral, whether or
not any Secured Party has or is deemed to have knowledge of such matters. The
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which the Administrative Agent
accords its own property.
(b) Anything contained herein to the contrary notwithstanding, the
Administrative Agent may from time to time, when the Administrative Agent deems
it to be necessary, appoint one or more subagents (each a "SUBAGENT") for the
Administrative Agent hereunder with respect to all or any part of the
Collateral. In the event that the Administrative Agent so appoints any Subagent
with respect to any Collateral, (i) the assignment and pledge of such Collateral
and the security interest granted in such Collateral by each Grantor hereunder
shall be deemed for purposes of this Security Agreement to have been made to
such Subagent, in addition to the Administrative Agent, for the ratable benefit
of the Secured Parties, as security for the Secured Obligations of such Grantor,
(ii) such Subagent shall automatically be vested, in addition to the
Administrative Agent, with all rights, powers, privileges, interests and
remedies of the Administrative Agent hereunder with respect to such Collateral,
and (iii) the term "Administrative Agent," when used herein in relation to any
rights, powers, privileges, interests and remedies of the Administrative Agent
with respect to such Collateral, shall include such Subagent; PROVIDED, HOWEVER,
that no such Subagent shall be authorized to take any action with respect to any
such Collateral unless and except to the extent expressly authorized in writing
by the Administrative Agent.
SECTION 20. REMEDIES. If any Event of Default shall have occurred and
be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a
20
secured party upon default under the N.Y. Uniform Commercial Code (whether or
not the N.Y. Uniform Commercial Code applies to the affected Collateral) and
also may: (i) require each Grantor to, and each Grantor hereby agrees that it
will at its sole expense and upon request of the Administrative Agent forthwith,
assemble all or part of the Collateral as directed by the Administrative Agent
and make it available to the Administrative Agent at a place and time to be
designated by the Administrative Agent that is reasonably convenient to both
parties; (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
Administrative Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Administrative Agent may deem
commercially reasonable; (iii) occupy any premises owned or leased by any of the
Grantors where the Collateral or any part thereof is assembled or located for a
reasonable period in order to effectuate its rights and remedies hereunder or
under law, without obligation to such Grantor in respect of such occupation; and
(iv) exercise any and all rights and remedies of any of the Grantors under or in
connection with the Assigned Agreements, the Receivables and the Related
Contracts or otherwise in respect of the Collateral, including, without
limitation, any and all rights of such Grantor to demand or otherwise require
payment of any amount under, or performance of any provision of, the Assigned
Agreements, the Receivables and the Related Contracts. Each Grantor agrees that,
to the extent notice of sale shall be required by law, at least ten days' notice
to such 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
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Administrative 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.
(b) Each purchaser of all or any part of the Collateral at any such
sale that has been made in accordance with applicable law shall hold the
property sold absolutely free from any claim, encumbrance or other right on the
part of each of the Grantors, and each of the Grantors hereby waives, to the
fullest extent permitted by applicable law, all rights of stay and/or appraisal
that it now has or may at any time in the future have under any applicable law
now existing or hereafter enacted with respect to any such sale.
(c) All proofs of claim, rights of action and rights to assert claims
under this Agreement or any of the other Collateral Documents to which any
Grantor is or is to be a party may be enforced by the Administrative Agent
without the possession of any of the Notes at any proceeding instituted by the
Administrative Agent, and any such proceeding may be brought in its own name as
agent, and any recovery or judgment shall be for the benefit of the Secured
Parties. In any proceeding brought by the Administrative Agent (and in any
proceeding involving the interpretation of any of the provisions of any of the
Collateral Documents to which such Grantor is a party), the Administrative Agent
shall be held to represent all of the Secured Parties, and it shall not be
necessary to make any of the other Secured Parties party to such proceeding.
(d) All cash held by or on behalf of the Administrative Agent and all
cash proceeds received by or on behalf of the Administrative Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Administrative Agent, be held by the
Administrative Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Administrative Agent
pursuant to Section 21(b)) in whole or in part by the Administrative Agent, for
the ratable benefit of the Secured Parties, against all or any part of the
Secured Obligations, in such order as the Administrative Agent shall elect. In
determining the amounts owing to the Hedge Banks under the Bank Hedge
Agreements, the Administrative Agent shall be entitled to rely, and be fully
protected in relying, upon the Agreement Values (as hereinafter defined) of the
Bank Hedge Agreements. The term "Agreement Value" means, with respect to any of
the Bank Hedge Agreements at any date of determination, the amount, if any, that
would be payable to the Hedge
21
Bank party to such Bank Hedge Agreement in respect of any "AGREEMENT VALUE"
under such Bank Hedge Agreement if such Bank Hedge Agreement were terminated on
such date, calculated as provided in the International Swap Dealers Association,
Inc. Code of Standard Wording, Assumptions and Provisions for Swaps, 1986
Edition. Each determination of the Agreement Value of any of the Bank Hedge
Agreements shall be made by the Administrative Agent in good faith and in
reliance on any information (including information provided by such Hedge Bank)
that it believes to be accurate, but without any obligation to verify such
information. Any surplus of cash or cash proceeds held by or on behalf of the
Administrative Agent in accordance with this Section 20 and remaining after
payment in full in cash of all of the Secured Obligations and all of the other
Obligations of the Loan Parties owing under or in respect of the Loan Documents
shall be paid over to the Grantors or to whomsoever may be lawfully entitled to
receive such surplus.
(e) The Administrative Agent may exercise any and all rights and
remedies of any of the Grantors in respect of the Collateral (including, without
limitation, any and all rights of any such Grantor to demand or otherwise
require payment of any amount under, or performance of any provision of any
Collateral).
(f) Except as otherwise permitted by this Agreement, all payments
received by any of the Grantors under, in connection with any Assigned
Agreement, or otherwise in respect of, any of the Collateral shall be received
and held by such Grantor in trust for the benefit of the Administrative Agent,
shall be segregated from the other property and funds of such Grantor and shall
be delivered forthwith to the Administrative Agent in the same form as so
received (with any necessary endorsement or assignment).
(g) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Grantor, the goodwill of the business
connected with and symbolized by any Trademarks subject to such sale or other
disposition shall be included therein, and such Grantor shall supply to the
Administrative Agent or its designee such Grantor's know-how and expertise, and
documents and things relating to any Intellectual Property Collateral subject to
such sale or other disposition, and such Grantor's customer lists and other
records and documents relating to such Intellectual Property Collateral and to
the manufacture, distribution, advertising and sale of products and services of
such Grantor.
SECTION 21. INDEMNITY AND EXPENSES. (a) Without limiting any of the
provisions of Section 9.04 of the Credit Agreement, each Grantor agrees to
indemnify the Administrative Agent from and against any and all claims, damages,
expenses, losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
damages, expenses, losses or liabilities resulting from the Administrative
Agent's gross negligence or willful misconduct as determined by a final,
non-appealable judgment of a court of competent jurisdiction.
(b) Without limiting any of the provisions of Section 9.04 of the
Credit Agreement, each Grantor will upon demand pay to the Administrative Agent
the amount of any and all reasonable expenses, including without limitation the
reasonable fees and expenses of its counsel and of any experts and agents, that
the Administrative Agent may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of the Administrative Agent or the
Lenders hereunder or (iv) the failure by such Grantor to perform or observe any
of the provisions hereof.
(c) Without prejudice to the survival of any of the other agreements
of any of the Grantors under this Agreement or any of the other Loan Documents,
the agreements and obligations of
22
each of the Grantors contained in this Section 21 and in Section 26 shall
survive the payment in full of all of the Secured Obligations and all of the
other Obligations of any of the Grantors owing under or in respect of the Loan
Documents.
SECTION 22. AMENDMENTS; WAIVERS; ADDITIONAL GRANTORS; ETC. (a) No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Administrative
Agent to exercise, and no delay in exercising any right hereunder, 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.
(b) Upon the execution and delivery by any Person of a supplement to
this Agreement (whether pursuant to Section 5.01(k) of the Credit Agreement or
otherwise), in each case in substantially the form of Exhibit A hereto (each a
"SECURITY AGREEMENT SUPPLEMENT"), (i) such Person if it is not then a Grantor
hereunder, shall be referred to as an "ADDITIONAL GRANTOR" and shall be and
become a Grantor , and each reference in this Agreement to an "Additional
Grantor" or a "Grantor" shall also mean and be a reference to such Additional
Grantor and each reference in any of the other Loan Documents to a "Grantor" or
a "Loan Party" shall also mean and be a reference to such Additional Grantor,
(ii) the supplements attached to each of the Security Agreement Supplements
shall be incorporated into and become a part of and supplement the Schedules to
this Agreement, as appropriate, and the Administrative Agent may attach such
supplements to such Schedules, and each reference to such Schedules shall mean
and be a reference to such Schedules, as supplemented pursuant hereto, and (iii)
the assignment, pledge and grant of security interest contained in such Security
Agreement Supplement shall, as to such Grantor, operate as the assignment,
pledge and grant of security interest, as if such assignment, pledge and grant
were contained in Section 1 hereof and such Grantor was a signatory hereto.
SECTION 23. NOTICES; ETC. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and, mailed, telegraphed, telecopied, telexed,
cabled or delivered to any Grantor or the Administrative Agent as the case may
be and addressed to it at its address set forth opposite its name on the
signature pages hereto, or to any other Grantor addressed to it at its address
set forth beneath the name of such other Grantor on the signature pages of the
Security Agreement Supplement pursuant to which it became a party hereto, or, as
to any party, at such other address as shall be designated, in the case of the
Administrative Agent, by the Administrative Agent in a written notice to the
U.S. Borrower, and in the case of the U.S. Borrower or any other Grantor, by the
U.S. Borrower or such other Grantor in a written notice to the Administrative
Agent, in each case complying as to delivery with the terms of this Section. All
such notices and other communications shall, when mailed, telecopied,
telegraphed, telexed or cabled, respectively, be effective when deposited in the
mails, telecopied, delivered to the telegraph company, confirmed by telex
answerback or delivered to the cable company, respectively, addressed as
aforesaid. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or of any Security Agreement
Supplement or Schedule hereto shall be effective as delivery of an original
executed counterpart thereof.
SECTION 24. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER THE CREDIT
AGREEMENT. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the later of the
payment in full in cash of the Secured Obligations, the expiration or
termination of all Letters of Credit and Bank Hedge Agreements and the
Termination Date, (b) be binding upon each Grantor, its successors and assigns
and (c) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of the Administrative Agent and each of the other
Secured Parties and their respective successors, transferees and assigns.
Without limiting the generality of the
23
foregoing clause (c), any Lender Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitment, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Lender herein or otherwise, subject, in each case, to the provisions of
Section 9.07 of the Credit Agreement.
SECTION 25. RELEASE; TERMINATION. (a) Upon the sale, transfer or other
disposition of any item of Collateral in accordance with Section 5.02(d) of the
Credit Agreement and the other terms of the Loan Documents, the Administrative
Agent will, at the applicable Grantor's expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence the
release of such item of Collateral from the pledge and security interest granted
hereunder; PROVIDED, HOWEVER, that:
(i) at the time of and after giving PRO FORMA effect to
such request and release, no Default shall have occurred and be
continuing;
(ii) such Grantor shall have delivered to the
Administrative Agent, at least five Business Days prior to the date of
the proposed release, a written request for release describing the item
of Collateral and the terms of the sale, transfer or other disposition in
reasonable detail, including the price thereof and any expenses in
connection therewith, together with a form of release for execution by
the Administrative Agent and a certification by such Grantor to the
effect that the subject transaction is in compliance with the Loan
Documents and as to such other matters as the Administrative Agent may
reasonably request; and
(iii) the Net Cash Proceeds of any such sale, transfer or
other disposition shall be applied to prepay the Advances outstanding at
such time in accordance with, and to the extent required under, Section
2.06(b) of the Credit Agreement.
(b) Upon the later of the payment in full in cash of the Secured
Obligations, the termination or expiration of all Letters of Credit and Bank
Hedge Agreements and the Termination Date, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Grantors. Upon any such termination, the Administrative Agent
will, at each Grantor's sole expense, return to such Grantor such Collateral
of such Grantor in the Administrative Agent's possession as shall not have
been sold or otherwise applied pursuant to the terms of the Loan Documents,
and will execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination and revision.
SECTION 26. SECURITY INTEREST ABSOLUTE. (a) The Obligations of each
Grantor under this Agreement are independent of any of the other Obligations
of any of the other Loan Parties under or in respect of the Loan Documents,
and a separate action or actions may be brought or prosecuted against each of
the Grantors to enforce this Agreement and the pledge, assignment and security
interest granted by such Grantor hereunder, irrespective of whether any action
is brought against any of the other Loan Parties or whether any of the other
Loan Parties is joined in any such action or actions. All rights of the
Administrative Agent and the other Secured Parties and the pledges,
assignments and security interests created hereunder, and all obligations of
each of the Grantors hereunder, shall be absolute, unconditional and
irrevocable irrespective of, and each of the Grantors hereby irrevocably
waives any defenses it may now have or may hereafter acquire in any way
relating to, any or all of the circumstances described in Section 6.02 of the
Credit Agreement or Section 2 of the Subsidiaries Guarantee or any other
circumstance that might constitute a defense available to, or a discharge of,
any of the Grantors or the other Loan Parties.
24
(b) This Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Secured
Obligations is rescinded or must otherwise be returned by the Administrative
Agent or any of the other Secured Parties or by any other Person upon the
insolvency, bankruptcy or reorganization of any of the Grantors or otherwise,
all as though such payment had not been made, and each of the Grantors hereby
unconditionally and irrevocably agrees that it will indemnify the
Administrative Agent and each of the other Secured Parties, upon demand, for
all of the costs and expenses (including, without limitation, reasonable fees
and expenses of counsel) incurred by the Administrative Agent or such other
Secured Party in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, a fraudulent transfer or a similar
payment under any bankruptcy, insolvency or similar law.
SECTION 27. SEVERABILITY. The provisions of this Agreement are
severable, and if any term or provision shall be held illegal, invalid or
unenforceable in whole or in part in any jurisdiction, then such illegality,
invalidity or unenforceability shall affect only such term or provision, or
part thereof, in such jurisdiction, and shall not in any manner affect such
term or provision in any other jurisdiction, or any other term or provision of
this Agreement in any jurisdiction.
SECTION 28. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as delivery of an
original executed counterpart of this Agreement.
SECTION 29. THE MORTGAGES. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of
any Mortgage and the terms of such Mortgage are inconsistent with the terms of
this Agreement, then with respect to such Collateral, the terms of such
Mortgage shall be controlling in the case of fixtures and real estate leases,
letting and licenses of, and contracts and agreements relating to the lease
of, real property, and the terms of this Agreement shall be controlling in the
case of all other Collateral.
SECTION 30. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
New York, except to the
extent that the perfection and the effect of perfection of the security
interest hereunder, or remedies hereunder, in respect of any particular
Collateral, pursuant to the laws of the State of
New York, are governed by the
laws of a jurisdiction other than the State of
New York. Unless otherwise
defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of
the N.Y. Uniform Commercial Code are used herein as therein defined.
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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ACCURIDE CORPORATION
By:
--------------------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
ACCURIDE TEXAS, INC.
By:
--------------------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
26
ACCURIDE VENTURES, INC.
By:
--------------------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
ACCURIDE KENTUCKY HOLDING
COMPANY
By:
--------------------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
ACCURIDE CUYAHOGA FALLS, INC.
By:
--------------------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
ACCURIDE TENNESSEE HOLDING
COMPANY
By:
--------------------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
ACCURIDE ▇▇▇▇▇▇▇▇▇ FACILITIES
MANAGEMENT CORPORATION
By:
--------------------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
28
ACCURIDE ▇▇▇▇▇▇▇▇▇ LIMITED
LIABILITY COMPANY
By: ACCURIDE ▇▇▇▇▇▇▇▇▇
FACILITIES MANAGEMENT
CORPORATION
as Member
By:
---------------------------
Name:
Title:
By: ACCURIDE VENTURES, INC.
as Member
By:
---------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
ACCURIDE COLUMBIA FACILITIES
MANAGEMENT CORPORATION
By:
---------------------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
29
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
30
ACCURIDE COLUMBIA GENERAL
PARTNERSHIP
By: ACCURIDE VENTURES, INC.,
its General Partner
By:
--------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
AKW L.P.
By: AKW GENERAL PARTNER L.L.C.
as General Partner
By: ACCURIDE VENTURES, INC.,
as Member
By:
--------------------------------
Name:
Title:
By:
ACCURIDE CORPORATION,
as Member
By:
--------------------------------
Name:
Title:
31
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
32
ACCURIDE GENERAL PARTNERSHIP
L.L.C
By: ACCURIDE VENTURES, INC.,
as Member
By:
--------------------------------
Name:
Title:
By:
ACCURIDE CORPORATION,
as Member
By:
--------------------------------
Name:
Title:
Address: ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Office of General Counsel
WITH A COPY TO:
Address: KKR
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
SCHEDULE I TO THE
SECURITY AGREEMENT
INVESTMENT PROPERTY
-------------------------------------------------------------------------------------------------------------------------------
Name & Address Name & Address Account
Grantor of Investment of Investment Representative Number
-------------------------------------------------------------------------------------------------------------------------------
Accuride Corporation Nations Funds Banc of America Securities LLC 878283
P. O. Box 34602 ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------------------------------
SCHEDULE II TO THE
SECURITY AGREEMENT
INTENTIONALLY OMITTED
SCHEDULE III TO THE
SECURITY AGREEMENT
LOCATIONS OF EQUIPMENT AND INVENTORY
-----------------------------------------------------------------------------------------------------------------
Grantor Location of Equipment Location of Inventory
-----------------------------------------------------------------------------------------------------------------
Accuride Corporation ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ Henderson, KY
7140 Office Circle --
Evansville, IN
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇* ▇▇▇▇▇▇▇▇, ▇▇*
▇▇▇▇▇ Trolley Drive ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Taylor, MI* Taylor, MI*
(Consigned to AOT)
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇.▇. ▇ ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------
Accuride Canada, Inc. ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------
Accuride ▇▇▇▇▇▇▇▇▇ LLC ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇/▇
▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇*
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
-----------------------------------------------------------------------------------------------------------------
AKW LP ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇* ▇▇▇▇, ▇▇ ▇▇▇▇▇*
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ -
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇* ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------
Accuride Columbia GP ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇/▇
▇▇▇▇▇▇▇▇, ▇▇*
-----------------------------------------------------------------------------------------------------------------
SCHEDULE IV TO THE
SECURITY AGREEMENT
JURISDICTION OF ORGANIZATION
AND
FEDERAL TAX IDENTIFICATION NUMBER
Grantor Jurisdiction Organizational
of Federal Tax Identification
Organization Identification No. Number
------------ ------------------ ------
Accuride Corporation Delaware ▇▇-▇▇▇▇▇▇▇ 2107517
Accuride Texas, Inc. Delaware ▇▇-▇▇▇▇▇▇▇ 2227684
Accuride Ventures, Inc. Delaware ▇▇-▇▇▇▇▇▇▇ 2744081
Accuride Kentucky Holding Company Delaware ▇▇-▇▇▇▇▇▇▇ 2845926
Accuride ▇▇▇▇▇▇▇▇▇ Facilities Management Corp. Delaware ▇▇-▇▇▇▇▇▇▇ 2845927
Accuride Tennessee Holding Company Delaware ▇▇-▇▇▇▇▇▇▇ 2845928
Accuride Columbia Facilities Management Corp. Delaware ▇▇-▇▇▇▇▇▇▇ 2845929
Accuride Cuyahoga Falls, Inc. Delaware ▇▇-▇▇▇▇▇▇▇ 3368486
Accuride ▇▇▇▇▇▇▇▇▇ Limited Liability Company Delaware ▇▇-▇▇▇▇▇▇▇ 2845930
Accuride Columbia General Partnership Delaware ▇▇-▇▇▇▇▇▇▇ N/A
AKW, L.P. Delaware ▇▇-▇▇▇▇▇▇▇ 2744430
AKW General Partner, L.L.C. Delaware ▇▇-▇▇▇▇▇▇▇ 2742723
SCHEDULE V TO THE
SECURITY AGREEMENT
PATENTS, TRADEMARKS AND
TRADE NAMES, COPYRIGHTS AND LICENSES
Appl. Or
A. PATENTS/APPLICATIONS US/Canada Country Status Reg. No. Date
------- ------ -------- ----
Full-Faced Steel Vehicle Wheel and US Patented 6,193,321 Feb. 27, 2001
Method of Manufacture
Full-Faced Steel Vehicle Wheel and Method of Canada Pending PCT PCT/US99/
Method of Manufacture Appl. 26522
Method of Manufacturing a Full-Faced US Patented 6,073,347 June 13, 2000
Steel Vehicle Wheel
Apparatus for Centering a Wheel on a US Patented 5,692,811 Dec. 2, 1997
Hub
Apparatus for Centering a Wheel on a Canada Patented 2,114,261 Dec. 22, 1998
Hub
Wheel Balance Weight US Patented 5,228,754 July 20, 1993
Vehicle Wheel US Patented 5,772,228 June 30, 1998
Method of Making a Vehicle Wheel US Patented 6,029,351 Feb. 29, 2000
Vehicle Wheel Canada Pending Appl. 2248548
Wheel Hand Hole Design US Pending Appl. 29/064,259
Wheel Hand Hole Design Canada Patented 74021 Mar. 17, 1994
PATENT/APPLICATIONS - Appl. Or
INTERNATIONAL Country Status Reg. No. Date
------- ------ -------- ----
Full-faced Steel Vehicle Wheel and Europe Pending PCT Appl. PCT/US99/26522
Method of Manufacture Mexico
Apparatus for Centering a Wheel on a Mexico Patented 189,091 June 11, 1998
Hub
Vehicle Wheel Mexico Pending Appl. 987315
Vehicle Wheel Japan Pending Appl. 501907/98
Vehicle Wheel European Patent Pending Appl. 97931561.1
Office (UK,
Germany, Italy,
France, Sweden)
Vehicle Wheel Brazil Pending Appl. 9709665-2
Wheel Hand Hole Design Mexico Patented 5961 Apr. 26, 1993
Appl. Or
B. Trademarks Country Status Reg. No.
------- ------ --------
Accu-Forge US Reg. 981871
Accu-Lite US Reg. 818587
Accu-Ride US Reg. 698057
Accu-Ride US Reg. 912540
Aluminator US Reg. 2417777
Commander US Reg. 702487
Duplex US Reg. 759558
Octo Nest US Reg. 1199529
Radial Commander US Reg. 988254
Wheel-Guard US Reg. 1300461
Accu-Lite Canada Reg. 163800
Accu-Ride Canada Reg. 163813
Commander Canada Reg. 164489
Accuride Mexico Reg. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Reg. 571607
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇
Commander Mexico Reg. 573916
Commander Mexico Reg. 572265
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Reg. 572264
Innovacion en ▇▇▇▇▇▇ Mexico Reg. 19403
Accuride Benelux Reg. 596348
Accu-Ride Benelux Reg. 69432
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Reg. 1564529
ESW Japan Reg. 2575302
Accuride Argentina Reg. 1661676
Accuride Australia Reg. A533675
Accuride Bolivia Appl. Pend. 2732
Accuride Chile Reg. 583715
Accuride China Reg. 1108097
Accuride Colombia Reg. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Reg. ▇▇▇▇-▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Reg. 96/639717
Accuride Germany Reg. 39635876
Accuride Italy Reg. MI96C007568
Accuride Peru Reg. 87691
Accuride Saudi Reg. 7/418
Arabia
Accuride South Reg. 95/13996
Africa
Accuride South Korea Reg. 221081
Korea
Accuride Sweden Reg. 232614
Accuride Thailand Appl. Pend. 429135
Accuride Turkey Reg. 171965
Accuride Uruguay Reg. 289514
Accuride Venezuela Reg. 2910-96
Note: All Patents and Trademarks are owned by
Accuride Corporation.
C. COPYRIGHTS
none
D. LICENSES
(i) Miscellaneous third party (off the shelf) computer
software licenses (assignment (assignment requires consent)
Technology Cross License dated November 16, 2000 by and between
Accuride
Corporation and ▇▇▇▇▇▇▇▇ Ruote SpA. - Nonexclusive, Royalty free cross license
regarding sharing of wheel manufacturing technology. (Assignment requires
consent)
SCHEDULE VI TO THE
SECURITY AGREEMENT
PLEDGED ACCOUNTS
------------------------------------------------------------------------------------------------------------------------------------
Name and Address of Mailing Address of
Grantor Pledged Account Bank Lockbox Account Number
------------------------------------------------------------------------------------------------------------------------------------
Accuride Corporation Bank One 3613900-64 (Concentration Acct)
P. O. Box 206A P. O. Box 905458 5302749 (Lockbox)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (A/P)
23332 (Payroll)
Bank of Nova Scotia ▇. ▇. ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ A 80002 01355 18 (Lockbox)
Toronto, Ontario ▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
Accuride Canada, Inc. Bank of Nova Scotia 372-14 (CND$ Concentration Acct)
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ 29-17 (US$ Concentration Acct)
Toronto, Ontario 535-11 (Payroll)
1143-16 (Payroll)
598-11 (Payroll)
805-19 (Payroll)
1001-10 (Payroll)
756-12 (Payroll)
------------------------------------------------------------------------------------------------------------------------------------
Accuride ▇▇▇▇▇▇▇▇▇ Facilities Bank One 3612762-14 (Checking acct)
Mgmt Corp P. O. Box 206A 3613897-44 (Checking acct)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
Accuride Kentucky Holding Company Bank One 3612761-34 (Checking acct)
P. O. Box 206A 3613896-64 (Checking acct)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
Accuride Tennessee Holding Bank One 3612763-94 (Checking acct)
Company P. O. Box 206A 3613898-24 (Checking acct)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
Accuride Columbia Facilities Bank One 3612764-74 (Checking acct)
Mgmt. Corp P. O. Box 206A 3613899-04 (Checking acct)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
Accuride Columbia General Bank One 3613902-24 (Checking acct)
Partnership P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Name and Address of Mailing Address of
Grantor Pledged Account Bank Lockbox Account Number
------------------------------------------------------------------------------------------------------------------------------------
Accuride Cuyahoga Falls, Inc. Bank One 43962 (Payroll)
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
AKW LP Bank One 696489 (Checking acct)
P. ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT A TO THE
SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
[Date]
Citicorp USA, Inc.,
as the Administrative Agent for the
Secured Parties referred to in the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
-------------------
[NAME OF BORROWER]
Ladies and Gentlemen:
Reference is made to (i) the Second Amended and Restated Credit
Agreement dated as of July 27, 2001 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among Accuride Corporation, a Delaware corporation and Accuride Canada, a
corporation organized under the laws of Ontario, Canada, as Borrowers, the
Lender Parties party thereto, Citicorp USA, Inc., as administrative agent
(together with any successor administrative agent appointed pursuant to Article
VIII of the Credit Agreement, the "ADMINISTRATIVE AGENT") for the Lender
Parties, and (ii) the Security Agreement dated as of July 27, 2001 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"SECURITY AGREEMENT") made by the Grantors from time to time party thereto in
favor of the Administrative Agent for the Secured Parties. Terms defined in the
Credit Agreement or the Security Agreement and not otherwise defined herein are
used herein as defined in the Credit Agreement or the Security Agreement.
Section 1. GRANT OF SECURITY. The undersigned hereby assigns and
pledges to the Administrative Agent for the ratable benefit of the Secured
Parties, and hereby grants to the Administrative Agent for the ratable benefit
of the Secured Parties, a security interest in, all of its right, title and
interest in and to all of the Collateral of the undersigned, whether now owned
or hereafter acquired by the undersigned, wherever located and whether now or
hereafter existing or arising, including, without limitation, the property and
assets of the undersigned set forth on the attached supplemental schedules to
the Schedules to the Security Agreement.
Section 2. SECURITY FOR OBLIGATIONS. The pledge and assignment of, and
the grant of a security interest in, the Collateral by the undersigned under
this Security Agreement Supplement and the Security Agreement secures the
payment of all Obligations of the undersigned now or hereafter existing under or
in respect of the Loan Documents, whether direct
2
or indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract
causes of action, costs, expenses or otherwise.
Section 3. SUPPLEMENTS TO SECURITY AGREEMENT SCHEDULES. The
undersigned has attached hereto supplemental Schedules I, II, III, IV, V[,]
[and] VI [and VII] to Schedules I, II, III, IV, V[,] [and] VI [and VII],
respectively, to the Security Agreement, and the undersigned hereby certifies,
as of the date first above written, that such supplemental schedules have been
prepared by the undersigned in substantially the form of the equivalent
Schedules to the Security Agreement and are complete and correct in all material
respects.
Section 4. REPRESENTATIONS AND WARRANTIES. The undersigned hereby
makes each representation and warranty set forth in Section 9 of the Security
Agreement (as supplemented by the attached supplemental schedules) to the same
extent as each other Grantor.
Section 5. OBLIGATIONS UNDER THE SECURITY AGREEMENT. The undersigned
hereby agrees, as of the date first above written, to be bound as a Grantor by
all of the terms and provisions of the Security Agreement to the same extent as
each of the other Grantors. The undersigned further agrees, as of the date first
above written, that each reference in the Security Agreement to an "Additional
Grantor" or a "Grantor" shall also mean and be a reference to the undersigned.
Section 6. GOVERNING LAW. This Security Agreement Supplement shall be
governed by, and construed in accordance with, the laws of the State of
New
York.
Very truly yours,
[NAME OF ADDITIONAL GRANTOR]
By:
------------------------------
Name:
Title:
Address for notices:
-----------------------
-----------------------
-----------------------
EXHIBIT B TO THE
SECURITY AGREEMENT
FORM OF PLEDGED ACCOUNT LETTER
_______________, ____
[Name and address
of Pledged Account Bank]
[Name of the Grantor]
Gentlemen/women:
Reference is made to [the lockboxes listed on Schedule I hereto into
which certain monies, instruments and other properties are deposited from time
to time and] the deposit accounts listed on Schedule I hereto (such [lockboxes
and] deposit accounts being, collectively, the "PLEDGED ACCOUNTS") maintained
with you by ____________________ (the "GRANTOR"). Pursuant to the Security
Agreement dated July __, 2001 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "SECURITY AGREEMENT"), the Grantor has
granted to Citicorp USA, Inc., as administrative agent (together with any
successor administrative agent appointed pursuant to Article VIII of the Credit
Agreement, the "ADMINISTRATIVE AGENT") for the Secured Parties referred to in
the second amended and restated Credit Agreement dated as of July __, 2001, with
[the Grantor], a security interest in certain property of the Grantor,
including, among other things, the following (the "ACCOUNT COLLATERAL"): each
Pledged Account, all funds held therein and all certificates and instruments, if
any, from time to time representing or evidencing such Pledged Account, all
interest, dividends, distributions, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account Collateral and all proceeds
of any and all of the foregoing Account Collateral. It is a condition to the
continued maintenance of the Pledged Accounts with you that you agree to this
letter agreement.
By executing this letter agreement, you acknowledge notice of, and
consent to the grant of the security interest in, and the pledge and assignment
of, the Account Collateral to the Administrative Agent for the benefit of the
Secured Parties and you confirm to the Administrative Agent that the description
of the Pledged Accounts set forth on Schedule I hereto is correct and that you
have not received any notice of any other security interest in, pledge or
assignment of, or other claim (other than that of the Grantor) on, any of the
Pledged Accounts. Further, you hereby agree with the Administrative Agent that:
(a) Notwithstanding anything to the contrary in any other agreement
relating to any Pledged Account, each Pledged Account is and will be
subject to the security interest, pledge and assignment created under the
Security Agreement, will be maintained solely for the benefit of the
Secured Parties in accordance with the provisions of the Loan
Documents, will have the title set forth opposite the account number
therefor on Schedule I hereto and will be transferred as indicated in
clause (f) below or as otherwise instructed only by an officer of the
Administrative Agent. Only the Administrative Agent is authorized to
withdraw amounts from, to draw upon, or, except as otherwise set forth
herein, to otherwise exercise any powers with respect to the Pledged
Accounts and the funds deposited therein. The Administrative Agent
authorizes and directs that the sole signatories authorized to act on
behalf of the Administrative Agent with respect to the Pledged Accounts are
and shall be such officers of the Administrative Agent as the
Administrative Agent may from time to time designate in a writing
acceptable to you. You may rely without liability on any such written
designation, absent manifest error, unless and until you receive a written
designation to the contrary. Any such written designation shall include the
specimen signature of each authorized officer of the Administrative Agent.
(b) You will collect mail from each Pledged Account on each of your
business days at times that coincide with the delivery of mail thereto.
(c) You will follow your usual operating procedures for the handling
of any remittance that contains restrictive endorsements, irregularities
(such as a variance between the written and numerical amounts), undated or
postdated items, missing signatures, incorrect payees, etc. received in any
Pledged Account.
(d) You will endorse and process all eligible checks and other
remittance items not covered by paragraph (c) and deposit such checks and
remittance items in the Pledged Accounts.
(e) You will maintain a record of all checks and other remittance
items received in each Pledged Account and, in addition to providing the
Grantor with photostats, vouchers, enclosures, etc. of such checks and
remittance items on a daily basis, furnish to the Administrative Agent a
monthly statement of each Pledged Account, to be mailed or telecopied to
the Administrative Agent at: _______________, __________, __________,
Telecopier No. __________, Attention: __________.
(f) You will transfer, in same day funds, on each of your business
days, all amounts collected from each Pledged Account on such day to the
following account (the "CASH CONCENTRATION ACCOUNT"):
[Name of the Borrower]
Account No. __________
______________________
_________________,
________, _____
Attention: ____________________
Each such transfer of funds shall neither comprise only part of a
remittance nor reflect the rounding off of any funds so transferred.
(g) All transfers referred to in paragraph (f) above shall be made
by you irrespective of, and without deduction for, any counterclaim,
defense, recoupment or set-off and shall be final, and you will not seek
to recover from the Administrative Agent for any reason any such payment
once made.
(h) All service charges and fees with respect to any Pledged Account
shall be payable by the Grantor, and deposited checks returned for any
reason shall not be charged to the applicable Pledged Account [, but may
be charged to another account maintained by the Grantor with you].
(i) The Administrative Agent shall be entitled to exercise any and
all rights of the Grantor in respect of the Pledged Accounts and the
other Account Collateral in accordance with the terms of the Security
Agreement, and you shall comply in all respects with such exercise.
You hereby represent and warrant that the person executing this letter
agreement on your behalf is duly authorized to do so.
No amendment or waiver of any provision of this letter agreement, nor
consent to any departures by you or the Grantor herefrom, shall be effective
unless the same shall be in writing as signed by you, the Grantor and the
Administrative Agent.
This letter agreement shall be binding upon you and your successors
and assigns and shall inure to the benefit of the Secured Parties and their
successors, transferees and assigns. You may terminate this letter agreement
upon thirty days' prior written notice to the Grantor and the Administrative
Agent. Upon such termination you shall close the Pledged Accounts and transfer
all funds in the Pledged Accounts to the Cash Concentration Account or another
account as instructed by the Administrative Agent at such time. After any such
termination, you shall nonetheless remain obligated promptly to transfer to the
Cash Concentration Account or to such other account as instructed by the
Administrative Agent at such time all funds and other property received in
respect of the Pledged Accounts.
This letter agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this letter agreement by telecopier shall be effective as
delivery of an original executed counterpart of this letter agreement.
Please indicate your acknowledgment of and agreement to the provisions
of this letter agreement by signing in the appropriate space provided below and
returning this letter agreement to ________________, _______________,
__________, ________ ______, Telecopier No.: (212) ___-____, Attention:
________________. If you elect to deliver this letter agreement by telecopier,
please arrange for the executed original to follow by next-day courier.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of
New York.
Very truly yours,
[NAME OF GRANTOR]
By:
----------------------------------------
Name:
Title:
CITICORP USA, INC., as Administrative
Agent
By:
----------------------------------------
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
[NAME OF PLEDGED ACCOUNT BANK]
By:
----------------------------
Name:
Title:
EXHIBIT C TO THE
SECURITY AGREEMENT
FORM OF CONSENT AND AGREEMENT
The undersigned hereby (a) acknowledges notice of, and consents to the
terms and provisions of, the Security Agreement dated July __, 2001 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"SECURITY AGREEMENT", the terms defined therein being used herein as therein
defined) from the grantors party thereto (the "GRANTORS") and certain other
grantors from time to time party thereto to Citicorp USA, Inc., as
Administrative Agent (the "ADMINISTRATIVE AGENT") for the Secured Parties
referred to therein, (b) consents in all respects to the pledge and assignment
to the Administrative Agent of all of the Grantor's right, title and interest
in, to and under the Assigned Agreement (as defined below) pursuant to the
Security Agreement, (c) acknowledges that the Grantor has provided it with
notice of the right of the Administrative Agent in the exercise of its rights
and remedies under the Security Agreement to make all demands, give all notices,
take all actions and exercise all rights of the Grantor under the Assigned
Agreement, and (d) agrees with the Administrative Agent that:
(i) The undersigned will make all payments to be made by it under or
in connection with the __________ Agreement dated _______________, ____
(the "ASSIGNED AGREEMENT") between the undersigned and the Grantor directly
to the Cash Concentration Account (Account No. [__________] with Citibank
at [___________]) or otherwise in accordance with the instructions of the
Administrative Agent.
(ii) [All payments referred to in paragraph (i) above shall be made by
the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and the
undersigned will not seek to recover from any Secured Party for any reason
any such payment once made.]
(iii) The Administrative Agent or its designee shall be entitled to
exercise any and all rights and remedies of the Grantor under the Assigned
Agreement in accordance with the terms of the Security Agreement, and the
undersigned shall comply in all respects with such exercise.
(iv) The undersigned will not, without the prior written consent of
the Administrative Agent, (A) cancel or terminate the Assigned Agreement or
consent to or accept any cancellation or termination thereof, or (B) amend,
amend and restate, supplement or otherwise modify the Assigned Agreement,
except, in each case, to the extent otherwise permitted under the Credit
Agreement referred to in the Security Agreement.
(v) In the event of a default by the Grantor in the performance of any
of its obligations under the Assigned Agreement, or upon the occurrence or
non-occurrence of any event or condition under the Assigned Agreement which
would immediately or with the passage of any applicable grace period or the
giving of notice, or both, enable the undersigned to terminate or suspend
its obligations under the Assigned Agreement, the
2
undersigned shall not terminate the Assigned Agreement until it first
gives written notice thereof to the Administrative Agent and permits the
Grantor and the Administrative Agent the period of time afforded to the
Grantor under the Assigned Agreement to cure such default.
(vi) The undersigned shall deliver to the Administrative Agent,
concurrently with the delivery thereof to the Grantor, a copy of each
notice, request or demand given by the undersigned pursuant to the Assigned
Agreement.
(vii) Except as specifically provided in this Consent and Agreement,
neither the Administrative Agent nor any other Secured Party shall have any
liability or obligation under the Assigned Agreement as a result of this
Consent and Agreement, the Security Agreement or otherwise.
[In order to induce the Lender Parties to make Advances and issue
Letters of Credit under the Credit Agreement and the Hedge Banks to enter into
Bank Hedge Agreements from time to time, the undersigned repeats and reaffirms
for the benefit of the Secured Parties the representations and warranties made
by it in the Assigned Agreement.]
This Consent and Agreement shall be binding upon the undersigned and
its successors and assigns, and shall inure, together with the rights and
remedies of the Administrative Agent hereunder, to the benefit of the Secured
Parties and their successors, transferees and assigns. This Consent and
Agreement shall be governed by and construed in accordance with the laws of the
State of
New York.
IN WITNESS WHEREOF, the undersigned has duly executed this Consent and
Agreement as of the date set opposite its name below.
Dated: [NAME OF OBLIGOR]
---------------, ----
By:
---------------------------------
Name:
Title:
EXHIBIT D TO THE
SECURITY AGREEMENT
FORM OF CONTROL AGREEMENT
(Securities Account)
CONTROL AGREEMENT dated as of July __, 2001, among ____________, a
___________ (the "GRANTOR"), Citicorp USA, Inc., as Administrative Agent (the
"SECURED PARTY"), and _________, a _________ ("____________"), as securities
intermediary (the "SECURITIES INTERMEDIARY").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security interest (the
"SECURITY Interest") in account no. _______________ maintained by the Securities
Intermediary for the Grantor (the "Account").
(2) Terms defined in Article 8 or 9 of the Uniform Commercial Code in
effect in the State of
New York ("N.Y. UNIFORM COMMERCIAL CODE") are used in
this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby agree as follows:
Section 1. THE ACCOUNT. The Securities Intermediary represents and
warrants to, and agrees with, the ___________ Secured Party that:
(a) The Securities Intermediary maintains the Account for the Grantor,
and all property held by the Securities Intermediary for the account of the
Grantor is, and will continue to be, credited to the Account.
(b) The Account is a securities account. The Securities Intermediary
is the securities intermediary with respect to the property credited from
time to time to the Account. The Grantor is the entitlement holder with
respect to the property credited from time to time to the Account.
(c) The securities intermediary's jurisdiction with respect to the
Account is, and will continue to be for so long as the Security Interest
shall be in effect, the State of [
New York].
(d) Schedule I attached hereto is a statement of the property credited
to the Account on the date hereof.
(e) The Securities Intermediary does not know of any claim to or
interest in the Account or any property credited to the Account, except for
claims and interests of the parties referred to in this Agreement.
2
Section 2. CONTROL BY SECURED PARTY. The Securities Intermediary will
comply with all notifications it receives directing it to transfer or redeem any
property in the Account (each an "ENTITLEMENT ORDER") or other directions
concerning the Account (including, without limitation, directions to distribute
to the Secured Party proceeds of any such transfer or redemption or interest or
dividends on property in the Account) originated by the Secured Party without
further consent by the Grantor or any other person.
Section 3. GRANTOR'S RIGHTS IN ACCOUNT.
(a) Except as otherwise provided in this Section 3, the Securities
Intermediary will comply with Entitlement Orders originated by the Grantor
without further consent by the Secured Party.
(b) Until the Securities Intermediary receives a notice from the
Secured Party that the Secured Party will exercise exclusive control over the
Account (a "NOTICE OF EXCLUSIVE CONTROL"), the Securities Intermediary may
distribute to the Grantor all interest and regular cash dividends on property in
the Account.
(c) The Securities Intermediary will not comply with any Entitlement
Order originated by the Grantor that would require the Securities Intermediary
to make a free delivery to the Grantor or any other person.
(d) If the Securities Intermediary receives from the Secured Party a
Notice of Exclusive Control, the Securities Intermediary will cease:
(i) complying with Entitlement Orders or other directions relating to
the Account originated by the Grantor and
(ii) distributing to the Grantor interest and dividends on property in
the Account.
Section 4. PRIORITY OF SECURED PARTY'S SECURITY INTEREST. (a) The
Securities Intermediary subordinates in favor of the Secured Party any security
interest, lien, or right of setoff it may have, now or in the future, against
the Account or property in the Account, except that the Securities Intermediary
will retain its prior lien on property in the Account to secure payment for
property purchased for the Account and normal commissions and fees for the
Account.
(b) The Securities Intermediary will not agree with any third party
that the Securities Intermediary will comply with Entitlement Orders originated
by the third party.
Section 5. STATEMENTS, CONFIRMATIONS, AND NOTICES OF ADVERSE CLAIMS.
(a) The Securities Intermediary will send copies of all statements and
confirmations for the Account simultaneously to the Grantor and the Secured
Party.
(b) When the Securities Intermediary knows of any claim or interest in
the Account or any property credited to the Account other than the claims and
interests of the parties
3
referred to in this Agreement, the Securities Intermediary will promptly notify
the Secured Party and the Grantor of such claim or interest.
Section 6. THE SECURITIES INTERMEDIARY'S RESPONSIBILITY. (a) Except
for permitting a withdrawal, delivery, or payment in violation of Section 3, the
Securities Intermediary will not be liable to the Secured Party for complying
with Entitlement Orders or other directions concerning the Account from the
Grantor that are received by the Securities Intermediary before the Securities
Intermediary receives and has a reasonable opportunity to act on a Notice of
Exclusive Control.
(b) The Securities Intermediary will not be liable to the Grantor for
complying with a Notice of Exclusive Control or with an Entitlement Order or
other direction concerning the Account originated by the Secured Party, even if
the Grantor notifies the Securities Intermediary that the Secured Party is not
legally entitled to issue the Notice of Exclusive Control or Entitlement Order
or such other direction unless the Securities Intermediary takes the action
after it is served with an injunction, restraining order, or other legal process
enjoining it from doing so, issued by a court of competent jurisdiction, and had
a reasonable opportunity to act on the injunction, restraining order or other
legal process.
(c) This Agreement does not create any obligation of the Securities
Intermediary except for those expressly set forth in this Agreement and in Part
5 of Article 8 of the N.Y. Uniform Commercial Code. In particular, the
Securities Intermediary need not investigate whether the Secured Party is
entitled under the Secured Party's agreements with the Grantor to give an
Entitlement Order or other direction concerning the Account or a Notice of
Exclusive Control. The Securities Intermediary may rely on notices and
communications it believes given by the appropriate party.
Section 7. INDEMNITY. The Grantor will indemnify the Securities
Intermediary, its officers, directors, employees and agents against claims,
liabilities and expenses arising out of this Agreement (including, without
limitation, reasonable attorney's fees and disbursements), except to the extent
the claims, liabilities or expenses are caused by the Securities Intermediary's
gross negligence or willful misconduct as found by a court of competent
jurisdiction in a final, non-appealable judgment.
Section 8. TERMINATION; SURVIVAL. (a) The Secured Party may terminate
this Agreement by notice to the Securities Intermediary and the Grantor. If the
Secured Party notifies the Securities Intermediary that the Security Interest
has terminated, this Agreement will immediately terminate.
(b) The Securities Intermediary may terminate this Agreement on 60
days' prior notice to the Secured Party and the Grantor, PROVIDED that before
such termination the Securities Intermediary and the Grantor shall make
arrangements to transfer the property in the Account to another securities
intermediary that shall have executed, together with the Grantor, a control
agreement in favor of the Secured Party in respect of such property in
substantially the form of this Agreement or otherwise in form and substance
satisfactory to the Secured Party.
(c) Sections 6 and 7 will survive termination of this Agreement.
4
Section 9. GOVERNING LAW. This Agreement and the Account will be
governed by the law of the State of
New York. The Securities
Intermediary and the Grantor may not change the law governing the Account
without the Secured Party's express prior written agreement.
Section 10. ENTIRE AGREEMENT. This Agreement is the entire agreement,
and supersedes any prior agreements, and contemporaneous oral
agreements, of the parties concerning its subject matter.
Section 11. AMENDMENTS. No amendment of, or waiver of a right under,
this Agreement will be binding unless it is in writing and signed by the party
to be charged.
Section 12. FINANCIAL ASSETS. The Securities Intermediary agrees with
the Secured Party and the Grantor that, to the fullest extent permitted by
applicable law, all property credited from time to time to the Account will be
treated as financial assets under Article 8 of the N.Y. Uniform Commercial Code.
Section 13. NOTICES. A notice or other communication to a party under
this Agreement will be in writing (except that Entitlement Orders may be given
orally), will be sent to the party's address set forth under its name below or
to such other address as the party may notify the other parties and will be
effective on receipt.
Section 14. BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by the Grantor, the Secured Party and the Securities
Intermediary, and thereafter shall be binding upon and inure to the benefit of
the Grantor, the Secured Party and the Securities Intermediary and their
respective successors and assigns.
Section 15. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
[NAME OF GRANTOR]
By:
---------------------------------
Name:
Title:
Address:
---------------------------------
---------------------------------
5
CITICORP USA, INC., as
Administrative Agent
By:
---------------------------------
Name:
Title:
Address:
---------------------------------
---------------------------------
[NAME OF SECURITIES
INTERMEDIARY]
By:
---------------------------------
Name:
Title:
Address:
---------------------------------
---------------------------------
EXHIBIT E TO THE
SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "IP SECURITY
AGREEMENT") dated July __, 2001, is made by the grantors listed on the signature
pages hereof (collectively, the "GRANTORS") in favor of Citicorp USA, Inc.
("CUSA"), as administrative agent (the "ADMINISTRATIVE AGENT") for the Secured
Parties (as defined in the Credit Agreement referred to below).
WHEREAS, Accuride Corporation, a Delaware Corporation and Accuride
Canada, Inc., a corporation existing under the laws of Ontario, Canada, have
entered into the Second Amended and Restated Credit Agreement dated as of July
__, 2001 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"), with CUSA, as Administrative Agent
and the Lender Parties party thereto. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as defined in the Credit Agreement.
WHEREAS, as a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry into Bank Hedge Agreements by the Hedge Banks from time to time,
each Grantor has executed and delivered that certain Security Agreement dated
July __, 2001 made by the Grantors to the Administrative Agent (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"SECURITY AGREEMENT").
WHEREAS, under the terms of the Security Agreement, Grantors have
granted a security interest in, among other property, certain intellectual
property of the Grantors to the Administrative Agent for the ratable benefit of
the Secured Parties, and have agreed as a condition thereof to execute this IP
Security Agreement covering such intellectual property for recording with the
U.S. Patent and Trademark Office, the United States Copyright Office and other
governmental authorities.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees as follows:
Section 16. GRANT OF SECURITY. Each Grantor hereby grants to the
Administrative Agent for the ratable benefit of the Secured Parties a security
interest in and to all of such Grantor's right, title and interest in and to the
following (the "COLLATERAL"):
(i) the United States, international, and foreign patents, patent
applications and patent licenses set forth in Schedule A hereto (as
such Schedule A may be supplemented from time to time by supplements
to the Security Agreement and this IP Security Agreement, each such
supplement being in substantially the form of Exhibit G to the
Security Agreement (an "IP SECURITY AGREEMENT SUPPLEMENT"), executed
and delivered by such Grantor to the
2
Administrative Agent from time to time), together with all reissues,
divisions, continuations, continuations-in-part, extensions and
reexaminations thereof, and all rights therein provided by
international treaties or conventions (the "PATENTS");
(ii) the United States and foreign trademark and service ▇▇▇▇
registrations, applications, and licenses set forth in Schedule A
hereto (as such Schedule A may be supplemented from time to time by IP
Security Agreement Supplements executed and delivered by such Grantor
to the Administrative Agent from time to time) (the "TRADEMARKS");
(iii) the copyrights, United States and foreign copyright
registrations and applications and copyright licenses set forth in
Schedule A hereto (as such Schedule A may be supplemented from time to
time by IP Security Agreement Supplements executed and delivered by
such Grantor to the Administrative Agent from time to time) (the
"COPYRIGHTS");
(iv) any and all claims for damages for past, present and future
infringement, misappropriation or breach with respect to the Patents,
Trademarks and Copyrights, with the right, but not the obligation, to
▇▇▇ for and collect, or otherwise recover, such damages; and
(v) any and all proceeds of the foregoing.
SECTION 17. SECURITY FOR OBLIGATIONS. The pledge and assignment of,
and the grant of a security interest in, the Collateral by each Grantor under
this IP Security Agreement secures the payment of all Obligations of each
Grantor now or hereafter existing under or in respect of the Loan Documents,
whether direct or indirect, absolute or contingent, and whether for principal,
reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise.
SECTION 18. RECORDATION. Each Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
applicable government officer record this IP Security Agreement.
SECTION 19. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement.
SECTION 20. GRANTS, RIGHTS AND REMEDIES. This IP Security Agreement
has been entered into in conjunction with the provisions of the Security
Agreement. Each Grantor does hereby acknowledge and confirm that the grant of
the security interest hereunder to, and the rights and remedies of, the
Administrative Agent with respect to the Collateral are more fully set forth in
the Security Agreement, the terms and provisions of which are incorporated
herein by reference as if fully set forth herein.
SECTION 21. GOVERNING LAW. This IP Security Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
3
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
ACCURIDE TEXAS, INC.
By:
-------------------------------
Name:
Title:
ACCURIDE VENTURES, INC.
By:
-------------------------------
Name:
Title:
ACCURIDE KENTUCKY HOLDING
COMPANY
By:
-------------------------------
Name:
Title:
ACCURIDE ▇▇▇▇▇▇▇▇▇ FACILITIES
MANAGEMENT CORPORATION
By:
-------------------------------
Name:
Title:
ACCURIDE ▇▇▇▇▇▇▇▇▇ LIMITED
LIABILITY COMPANY
By:
-------------------------------
Name:
Title:
4
ACCURIDE TENNESSEE HOLDING
COMPANY
By:
-------------------------------
Name:
Title:
ACCURIDE COLUMBIA FACILITIES
MANAGEMENT CORPORATION
By:
-------------------------------
Name:
Title:
ACCURIDE COLUMBIA GENERAL
PARTNERSHIP
By: ACCURIDE VENTURES, INC., its
General Partner
By:
-------------------------------
Name:
Title:
Acknowledged and agreed to
as of the date first above written:
[ ]
--------------------------
By:
----------------------
Name:
EXHIBIT F TO THE
SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this "IP
SECURITY AGREEMENT Supplement") dated ________, ____, is made by the Person
listed on the signature page hereof (the "GRANTOR") in favor of Citicorp USA,
Inc. ("CUSA"), as Administrative Agent (the "ADMINISTRATIVE AGENT") for the
Secured Parties (as defined in the Credit Agreement referred to below).
WHEREAS, Accuride Corporation, a Delaware corporation and Accuride
Canada, a corporation existing under the laws of Ontario, Canada, have entered
into the second amended and restated Credit Agreement dated as of July __, 2001
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"), with Citicorp USA, Inc., as Administrative
Agent and Administrative Agent, and the Lender Parties party thereto. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
as defined in the Credit Agreement.
WHEREAS, pursuant to the Credit Agreement, the Grantor and certain
other Persons have executed and delivered that certain Security Agreement dated
July __, 2001 made by the Grantors and such other Persons to the Administrative
Agent (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "SECURITY AGREEMENT"). To create a short form version of the
Security Agreement covering certain intellectual property of the Grantor and
such other Persons for recording with the U.S. Patent and Trademark Office, the
United States Copyright Office and other governmental authorities, the Grantor
and such other Persons have executed and delivered that certain Intellectual
Property Security Agreement made by the Grantor and such other Persons to the
Administrative Agent dated July __, 2001 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "IP SECURITY
AGREEMENT").
WHEREAS, under the terms of the Security Agreement and the IP Security
Agreement, the Grantor has granted a security interest in the Additional
Collateral (as defined in Section 1 below) of the Grantor to the Administrative
Agent for the ratable benefit of the Secured Parties and has agreed as a
condition thereof to execute this IP Security Agreement Supplement for recording
with the U.S. Patent and Trademark Office, the United States Copyright Office
and other governmental authorities.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees as follows:
SECTION 1. CONFIRMATION OF GRANT OF SECURITY. The Grantor hereby
acknowledges and confirms the grant of a security interest to the Administrative
Agent for the ratable benefit of the Secured Parties under the Security
Agreement and the IP Security Agreement in and to all of the Grantor's right,
title and interest in and to the following (the "ADDITIONAL COLLATERAL"):
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(i) The United States, international, and foreign patents,
patent applications, and patent licenses set forth in Schedule A
hereto, together with all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations thereof, and
all rights therein provided by international treaties or conventions
(the "PATENTS");
(ii) The United States and foreign trademark and service ▇▇▇▇
registrations, applications, and licenses set forth in Schedule A
hereto (the "TRADEMARKS");
(iii) The copyrights, United States and foreign copyright
registrations and applications and copyright licenses set forth in
Schedule A hereto (the "COPYRIGHTS");
(iv) any and all claims for damages for past, present and
future infringement, misappropriation or breach with respect to the
Patents, Trademarks and Copyrights, with the right, but not the
obligation, to ▇▇▇ for and collect, or otherwise recover, such
damages; and
(v) any and all proceeds of the foregoing.
SECTION 2. SUPPLEMENT TO SECURITY AGREEMENT AND IP SECURITY AGREEMENT.
Schedule V to the Security Agreement and Schedule A to the IP Security Agreement
are each, effective as of the date hereof, hereby supplemented to add to such
Schedules the Additional Collateral.
SECTION 3. RECORDATION. The Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
applicable government officer to record this IP Security Agreement Supplement.
SECTION 4. GOVERNING LAW. This IP Security Agreement Supplement shall
be governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
[NAME OF GRANTOR]
By:
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Name:
Title:
Address for Notices:
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Acknowledged and agreed to as of
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the date first above written:
[ ]
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By:
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Name:
Title:
EXHIBIT G TO THE
SECURITY AGREEMENT
FORM OF CASH CONCENTRATION ACCOUNT LETTER
---------------, ----
[Name and address
of Collateral Bank]
[NAME OF THE BORROWER]
Gentlemen/women:
Reference is made to (i) deposit account no. __________ (the "CASH
CONCENTRATION ACCOUNT") and (ii) deposit account no. _________ (the "OPERATING
ACCOUNT"), in each case into which certain monies, instruments and other
properties are deposited from time to time (collectively, the "PLEDGED
ACCOUNTS") maintained with you by ____________________ (the "GRANTOR"). Pursuant
to the Security Agreement dated July __, 2001 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "SECURITY AGREEMENT"),
the Grantor has granted to Citicorp USA, Inc., as Administrative Agent (together
with any successor Administrative Agent appointed pursuant to Article VIII of
the Credit Agreement, the "ADMINISTRATIVE AGENT") for the Secured Parties
referred to in the second amended and restated Credit Agreement dated as of July
__, 2001, with the Grantor, a security interest in, and upon issuance of written
instructions of the Administrative Agent pursuant to paragraph (g) below, sole
dominion and control of, certain property of the Grantor, including, among other
things, the following (the "ACCOUNT COLLATERAL"): each Pledged Account, all
funds held therein and all certificates and instruments, if any, from time to
time representing or evidencing such Pledged Account, all interest, dividends,
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the then existing Account Collateral and all proceeds of any and all of the
foregoing Account Collateral. It is a condition to the continued maintenance of
the Pledged Accounts with you that you agree to this letter agreement.
By executing this letter agreement, you acknowledge notice of, and
consent to the grant of the security interest in, and the pledge and assignment
of, the Account Collateral to the Administrative Agent for the benefit of the
Secured Parties and you confirm to the Administrative Agent that the description
of the Pledged Accounts set forth on Schedule I hereto is correct and that you
have not received any notice of any other security interest in, pledge or
assignment of, or other claim (other than that of the Grantor) on, any of the
Pledged Accounts. Further, you hereby agree with the Administrative Agent that:
(a) Notwithstanding anything to the contrary in any other agreement
relating to any Pledged Account, each Pledged Account is and will be
subject to the security interest, pledge and assignment created under the
Security Agreement, will be maintained solely for the benefit of the
Secured Parties in accordance with the provisions of the Loan
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Documents, will have the title set forth opposite the account number
therefor on Schedule I hereto and, upon the issuance of written
instructions of the Administrative Agent pursuant to paragraph (g) below,
will be subject to written instructions only from an officer of the
Administrative Agent. Upon the issuance of written instructions by the
Administrative Agent pursuant to paragraph (g) below, only the
Administrative Agent will be authorized to withdraw amounts from, to draw
upon, or, except as otherwise set forth herein, to otherwise exercise any
powers with respect to the Pledged Accounts (other than the Operating
Account, as to which authorized signatories of the Borrower shall have such
powers, subject to the terms and conditions of this letter agreement) and
the funds deposited therein. You agree to follow any written instructions
of the Administrative Agent without any further consent from the Grantor.
The Administrative Agent authorizes and directs that the sole signatories
authorized to act on behalf of the Administrative Agent with respect to the
Pledged Accounts are and shall be such officers of the Administrative Agent
as the Administrative Agent may from time to time designate in a writing
acceptable to you. You may rely without liability on any such written
designation, absent manifest error, unless and until you receive a written
designation to the contrary. Any such written designation shall include the
specimen signature of each authorized officer of the Administrative Agent.
(b) You will collect mail from each Pledged Account on each of your
business days at times that coincide with the delivery of mail thereto.
(c) You will follow your usual operating procedures for the handling
of any remittance that contains restrictive endorsements, irregularities
(such as a variance between the written and numerical amounts), undated or
postdated items, missing signatures, incorrect payees, etc. received in any
Pledged Account.
(d) You will endorse and process all eligible checks and other
remittance items not covered by paragraph (c) and deposit such checks and
remittance items in the Cash Concentration Account.
(e) You will maintain a record of all checks and other remittance
items received in each Pledged Account and, in addition to providing the
Grantor with photostats, vouchers, enclosures, etc. of such checks and
remittance items on a daily basis, furnish to the Administrative Agent a
monthly statement of each Pledged Account, to be mailed or telecopied to
the Administrative Agent at: _______________, __________, __________,
Telecopier No. __________, Attention: __________.
(f) Unless the Administrative Agent shall have made the request
referred to in paragraph (g) below:
(i) you will transfer amounts on deposit in the Cash
Concentration Account to the Operating Account to the extent necessary
to pay all checks drawn on, and all amounts otherwise withdrawn from,
the Operating Account; and
(ii) you will from time to time (x) invest amounts on deposit in
the Cash Concentration Account in such Cash Equivalents (as defined in
the Credit
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Agreement, a copy of which definition has been furnished to you) in
the name of the Grantor as the Grantor may select, and (y) invest
interest paid on the Cash Equivalents referred to in clause (x) above,
and reinvest other proceeds of any such Cash Equivalents that may
mature or be sold, in each case in such Cash Equivalents in the name
of the Grantor as the Grantor may select. Interest and proceeds that
are not invested or reinvested in Cash Equivalents as provided above
shall be deposited and held in the Cash Concentration Account. In
addition, the Administrative Agent has the right at any time to direct
you to exchange such Cash Equivalents for similar Cash Equivalents of
smaller or larger denominations, or for other Cash Equivalents, and
you agree to comply with any such direction.
(g) Upon the written request of the Administrative Agent to you, you
will transfer, in same day funds, on each of your business days thereafter
until the Administrative Agent withdraws such request in writing (in which
case the provisions of paragraph (g) shall again become operative), all
amounts collected from or on deposit in the Pledged Accounts (or such
lesser amounts as the Administrative Agent shall direct) on such day to the
following account (the "COLLATERAL ACCOUNT"):
[Name of the Grantor]
Account No. ________
______________
______________
______________
Attention: ______________
Each such transfer of funds shall neither comprise only part of a
remittance nor reflect the rounding off of any funds so transferred.
(h) All transfers referred to in paragraph (g) above shall be made
by you irrespective of, and without deduction for, any counterclaim,
defense, recoupment or set-off and shall be final, and you will not seek
to recover from the Administrative Agent for any reason any such payment
once made.
(i) All service charges and fees with respect to any Pledged Account
shall be payable by the Grantor, and deposited checks returned for any
reason shall not be charged to the applicable Pledged Account [, but may
be charged to another account maintained by the Grantor with you].
(j) The Administrative Agent shall be entitled to exercise any and
all rights of the Grantor in respect of the Pledged Accounts and the
other Account Collateral in accordance with the terms of the Security
Agreement, and you shall comply in all respects with such exercise.
You hereby represent and warrant that the person executing this
letter agreement on your behalf is duly authorized to do so.
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No amendment or waiver of any provision of this letter agreement,
nor consent to any departures by you or the Grantor herefrom, shall be
effective unless the same shall be in writing as signed by you, the Grantor
and the Administrative Agent.
This letter agreement shall be binding upon you and your successors
and assigns and shall inure to the benefit of the Secured Parties and their
successors, transferees and assigns. You may terminate this letter agreement
upon thirty days' prior written notice to the Grantor and the Administrative
Agent. Upon such termination you shall close the Pledged Accounts and transfer
all funds in the Pledged Accounts to the Collateral Account or another account
as instructed by the Administrative Agent at such time. After any such
termination, you shall nonetheless remain obligated promptly to transfer to
the Collateral Account or to such other account as instructed by the
Administrative Agent at such time all funds and other property received in
respect of the Pledged Accounts.
This letter agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this letter agreement by telecopier shall
be effective as delivery of an original executed counterpart of this letter
agreement.
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Please indicate your acknowledgment of and agreement to the provisions
of this letter agreement by signing in the appropriate space provided below and
returning this letter agreement to ________________, _______________,
__________, ________ ______, Telecopier No.: (212) ___-____, Attention:
________________. If you elect to deliver this letter agreement by telecopier,
please arrange for the executed original to follow by next-day courier.
This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
[NAME OF GRANTOR]
By:
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Name:
Title:
CITICORP USA, INC., as Administrative
Agent
By:
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Name:
Title:
Acknowledged and agreed to as of
the date first above written:
[NAME OF COLLATERAL BANK]
By:
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Name:
Title: