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EXHIBIT 10.10
EXECUTION COPY
SECURITY AGREEMENT dated as of August
12, 1999, among WORLDWIDE FLIGHT SERVICES,
INC., a Delaware corporation (the
"Borrower"), each subsidiary of WFS Holdings,
Inc. ("Holdings") listed on Schedule I hereto
(each such subsidiary individually a
"Subsidiary" or a "Guarantor" and,
collectively, the "Subsidiaries" or, with
Holdings, the "Guarantors"; the Subsidiaries
and the Borrower are referred to collectively
herein as the "Grantors") and THE CHASE
MANHATTAN BANK, a New York banking
corporation ("Chase"), as administrative
agent (in such capacity, the "Administrative
Agent") for the Secured Parties (as defined
herein).
Reference is made to (a) the Credit Agreement dated as of August 12, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, Holdings, the lenders from time to time party
thereto (the "Lenders") and Chase, as administrative agent for the Lenders and
(b) the Guarantee Agreement dated as of August 12, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Guarantee
Agreement"), among the Guarantors and the Administrative Agent.
The Lenders have agreed to make Loans to the Borrower, and the Issuing Bank
has agreed to issue Letters of Credit for the account of the Borrower, pursuant
to, and upon the terms and subject to the conditions specified in, the Credit
Agreement. Each of the Guarantors has agreed to guarantee, among other things,
all the obligations of the Borrower under the Credit Agreement. The obligations
of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
are conditioned upon, among other things, the execution and delivery by the
Grantors of an agreement in the form hereof to secure (a) the due and punctual
payment by the Borrower of (i) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including reasonable fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Loan Parties to the Secured Parties under
the Credit Agreement and the other Loan Documents, (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Loan Parties under or pursuant to the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all obligations
of the Borrower or any other Loan Party, monetary or otherwise, under each
Hedging Agreement entered into with a counterparty that was a Lender (or an
Affiliate of a Lender) at the time such Hedging Agreement was entered into and
(d) the due and punctual payment and performance of all obligations in respect
of overdrafts and related liabilities owed to the Administrative Agent or any of
its Affiliates and arising from treasury, depositary and cash management
services in connection with any
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automated clearing house transfers of funds (all the monetary and other
obligations described in the preceding clauses (a) through (d) being
collectively called the "Obligations").
Accordingly, the Grantors and the Administrative Agent, on behalf of itself
and each Secured Party (and each of their respective successors or assigns),
hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the context otherwise
requires, all capitalized terms used but not defined herein shall have the
meanings set forth in the Credit Agreement.
SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Account Debtor" shall mean any Person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.
"Accounts" shall mean any and all right, title and interest of any Grantor
to payment for goods and services sold or leased, including any such right
evidenced by chattel paper, whether due or to become due, whether or not it has
been earned by performance, and whether now or hereafter acquired or arising in
the future, including accounts receivable from Affiliates of the Grantors.
"Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Cash Concentration Bank" shall mean a financial institution which shall
have delivered to the Administrative Agent an executed Cash Concentration Letter
Agreement.
"Cash Concentration Letter Agreement" shall mean a Cash Concentration
Letter Agreement substantially in the form of Annex 2 hereto among one or more
Grantors, the Administrative Agent and a Cash Concentration Bank.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents, (c)
Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash accounts
(including the Concentration Accounts, the Collection Deposit Accounts and the
Collateral Proceeds Account), (g) Investment Property and (h) Proceeds.
"Collateral Proceeds Account" shall mean the collateral proceeds account
maintained by the Administrative Agent for the benefit of the Secured Parties.
"Collection Deposit Account" shall mean a lockbox account of a Grantor
maintained for the benefit of the Secured Parties with the Administrative Agent
or with a Sub-Agent pursuant to a Lockbox and Depository Agreement.
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"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an option on
a commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"Commodity Customer" shall mean a Person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a Person who is registered as a
futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Concentration Account" shall mean a cash concentration account maintained
by a Grantor with a Cash Concentration Bank.
"Copyright License" shall mean any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following: (a) all copyright rights in
any work subject to the copyright laws of the United States or any other
country, whether as author, assignee, transferee or otherwise, and (b) all
registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, including those listed on Schedule II.
"Credit Agreement" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Documents" shall mean all instruments, files, records, ledger sheets and
documents covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the Uniform Commercial Code, such Person is the
Entitlement Holder.
"Equipment" shall mean all equipment, furniture and furnishings, and all
tangible personal property similar to any of the foregoing, including tools,
parts and supplies of every kind and description, and all improvements,
accessions or appurtenances thereto, that are now or hereafter owned by any
Grantor. The term Equipment shall include Fixtures.
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"Financial Asset" shall mean (a) a Security, (b) an obligation of a Person
or a share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a Person's claim to it is
evidenced, including a certificated or uncertificated Security, a certificate
representing a Security or a Security Entitlement.
"Fixtures" shall mean all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
"General Intangibles" shall mean all choses in action and causes of action
and all other assignable intangible personal property of any Grantor of every
kind and nature (other than Accounts Receivable) now owned or hereafter acquired
by any Grantor, including corporate or other business records, indemnification
claims, contract rights (including rights under leases, whether entered into as
lessor or lessee, Hedging Agreements and other agreements), Intellectual
Property, goodwill, registrations, franchises, tax refund claims and any letter
of credit, guarantee, claim, security interest or other security held by or
granted to any Grantor to secure payment by an Account Debtor of any of the
Accounts Receivable (other than those general intangibles which by their terms
prohibit assignment or a grant of a security interest by such Grantor).
"Intellectual Property" shall mean all intellectual and similar property of
any Grantor of every kind and nature now owned or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"Inventory" shall mean all goods of any Grantor, whether now owned or
hereafter acquired, held for sale or lease, or furnished or to be furnished by
any Grantor under contracts of service, or consumed in any Grantor's business,
including raw materials, intermediates, work in process, packaging materials,
finished goods, semi-finished inventory, scrap inventory, manufacturing supplies
and spare parts, and all such goods that have been returned to or repossessed by
or on behalf of any Grantor.
"Investment Property" shall mean all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of any Grantor, whether now owned or hereafter acquired
by any Grantor.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule III (other than those license agreements in
existence on the date hereof or entered into after the date hereof, which by
their terms prohibit assignment or a grant of a security interest by such
Grantor as licensee thereunder); provided, however, that, so long as no Event of
Default has occurred and
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is continuing, Schedule III shall not set forth licenses with respect to
telephone, computer, computer software, HVAC, cleaning, security, maintenance,
laundry or substantially similar systems entered into by any Grantor in the
ordinary course of business.
"Lockbox and Depository Agreement" shall mean a Lockbox and Depository
Agreement substantially in the form of Annex 1 hereto among one or more
Grantors, the Administrative Agent and a Sub-Agent.
"Obligations" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean all of the following: (a) all letters patent of the
United States or any other country, all registrations and recordings thereof,
and all applications for letters patent of the United States or any other
country, including registrations, recordings and pending applications in the
United States Patent and Trademark Office or any similar offices in any other
country, including those listed on Schedule IV, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof,
and the inventions disclosed or claimed therein, including the right to make,
use and/or sell the inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate substantially in the form
of Annex 3 hereto, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Financial Officer and the chief
legal officer of the Borrower.
"Proceeds" shall mean any consideration received from the sale, exchange,
license, lease or other disposition of any asset or property that constitutes
Collateral, any value received as a consequence of the possession of any
Collateral and any payment received from any insurer or other Person or entity
as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which constitutes
Collateral, and shall include, (a) all cash and negotiable instruments received
by a Sub-Agent, a Cash Concentration Bank or the Administrative Agent pursuant
to Article V, (b) any claim of any Grantor against any third party for (and the
right to ▇▇▇ and recover for and the rights to damages or profits due or accrued
arising out of or in connection with) (i) past, present or future infringement
of any Patent now or hereafter owned by any Grantor, or licensed under a Patent
License, (ii) past, present or future infringement or dilution of any Trademark
now or hereafter owned by any Grantor or licensed under a Trademark License or
injury to the goodwill associated with or symbolized by any Trademark now or
hereafter owned by any Grantor, (iii) past, present or future breach of any
License and (iv) past, present or future infringement of any Copyright now or
hereafter owned by any Grantor or licensed under a Copyright License and (c) any
and all other amounts from time to time paid or payable under or in connection
with any of the Collateral.
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"Secured Parties" shall mean (a) the Lenders, (b) the Issuing Bank, (c) the
Administrative Agent, (d) the Administrative Agent, (e) each counterparty to a
Hedging Agreement entered into with the Borrower or any Loan Party if such
counterparty was a Lender (or an Affiliate of a Lender) at the time the Hedging
Agreement was entered into, (f) the beneficiaries of each indemnification
obligation undertaken by any Grantor under any Loan Document and (g) the
successors and assigns of each of the foregoing.
"Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c)(i) are, or are of a type, dealt
with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
"Securities Account" shall mean an account to which a Financial Asset is or
may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Entitlements" shall mean the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning assigned to such term in Section
2.01.
"Security Intermediary" shall mean (a) a clearing corporation or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Sub-Agent" shall mean a financial institution which shall have delivered
to the Administrative Agent an executed Lockbox and Depository Agreement.
"Trademark License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following: (a) all trademarks, service
marks, trade names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule V, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.
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SECTION 1.03. Rules of Interpretation. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Administrative Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Administrative
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, all of such Grantor's right, title and interest
in, to and under the Collateral (the "Security Interest"). Without limiting the
foregoing, the Administrative Agent is hereby authorized to file one or more
financing statements (including fixture filings), continuation statements,
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantors, and naming any Grantor or the
Grantors as debtors and the Administrative Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security Interest is granted
as security only and shall not subject the Administrative Agent or any other
Secured Party to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to the
Administrative Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid rights
in and title to the Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the
Administrative Agent the Security Interest in such Collateral pursuant hereto
and to execute, deliver and perform its obligations in accordance with the terms
of this Agreement, without the consent or approval of any other Person other
than any consent or approval which has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the Collateral
have been delivered to the Administrative Agent for filing in each governmental,
municipal or other office specified in Schedule 6 to the Perfection Certificate,
which are all the filings, recordings and registrations (other than filings
required to be made in the United States Patent and Trademark Office and the
United States Copyright Office in order to perfect the Security Interest in
Collateral consisting of United States Patents, Trademarks and Copyrights)
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that are necessary to publish notice of and protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Administrative Agent (for the ratable benefit of the Secured Parties) in respect
of all Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements.
(b) Each Grantor represents and warrants that fully executed security
agreements in the form hereof and containing a description of all Collateral
consisting of Intellectual Property with respect to United States Patents and
United States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered Copyrights
have been delivered to the Administrative Agent for recording by the United
States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and the
regulations thereunder, as applicable, and otherwise as may be required pursuant
to the laws of any other necessary jurisdiction, to protect the validity of and
to establish a legal, valid and perfected security interest in favor of the
Administrative Agent (for the ratable benefit of the Secured Parties) in respect
of all Collateral consisting of Patents, Trademarks and Copyrights in which a
security interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, or in any other necessary jurisdiction, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction (other than such actions as
are necessary to perfect the Security Interest with respect to any Collateral
consisting of Patents, Trademarks and Copyrights (or registration or application
for registration thereof) acquired or developed after the date hereof).
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to the
filings described in Section 3.02 above, a perfected security interest in all
Collateral (other than, if no filings with respect to Fixtures are made,
Fixtures) in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the Uniform Commercial Code or other applicable law in such jurisdictions and
(c) a security interest that shall be perfected in all Collateral in which a
security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable. The Security Interest is and shall be
prior to any other Lien on any of the Collateral, other than Permitted
Encumbrances that have priority over the Security Interest by operation of law.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.02 of the Credit Agreement. The Grantor has not filed or
consented to the filing of (a) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Collateral, (b) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Collateral with the
United States Patent and Trademark Office or the United States Copyright Office
or (c) any assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing statement
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or analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement.
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records; Place of
Business. (a) Each Grantor agrees promptly to notify the Administrative Agent in
writing of any change (i) in its corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of its chief executive office, its principal
place of business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in its identity or corporate structure or (iv) in its Federal Taxpayer
Identification Number. Each Grantor agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
valid, legal and perfected first priority security interest in all the
Collateral. Each Grantor agrees promptly to notify the Administrative Agent if
any material portion of the Collateral owned or held by such Grantor is damaged
or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Collateral owned by it as is
consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received with respect to
any part of the Collateral, and, at such time or times as the Administrative
Agent may reasonably request, promptly to prepare and deliver to the
Administrative Agent a duly certified schedule or schedules in form and detail
satisfactory to the Administrative Agent showing the identity, amount and
location of any and all Collateral, provided that so long as no Event of Default
has occurred and is continuing, the Administrative Agent shall be limited to one
such request per fiscal year.
SECTION 4.02. Protection of Security. Each Grantor shall, at its own cost
and expense, take any and all actions necessary to defend title to the
Collateral against all Persons and to defend the Security Interest of the
Administrative Agent in the Collateral and the priority thereof against any Lien
not expressly permitted pursuant to Section 6.02 of the Credit Agreement.
SECTION 4.03. Further Assurances. Each Grantor agrees, at its own expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Administrative Agent
may from time to time request to better assure, preserve, protect and perfect
the Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the Security Interest and the filing
of any financing statements (including fixture filings) or other documents in
connection herewith or therewith. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note
or other instrument, such note or instrument shall be
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immediately pledged and delivered to the Administrative Agent, duly endorsed in
a manner satisfactory to the Administrative Agent.
Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Administrative Agent, with prompt notice thereof to the Grantors,
to supplement this Agreement by supplementing Schedule II, III, IV or V hereto
or adding additional schedules hereto to specifically identify any asset or item
that may constitute Copyrights, Licenses, Patents or Trademarks; provided,
however, that any Grantor shall have the right, exercisable within 10 days after
it has been notified by the Administrative Agent of the specific identification
of such Collateral, to advise the Administrative Agent in writing of any
inaccuracy of the representations and warranties made by such Grantor hereunder
with respect to such Collateral. Each Grantor agrees that it will use its best
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such Collateral within 30 days after the date it has been notified by the
Administrative Agent of the specific identification of such Collateral.
SECTION 4.04. Inspection and Verification. The Administrative Agent and
such Persons as the Administrative Agent may reasonably designate shall have the
right, at the Grantors' own cost and expense, to inspect the Collateral, all
records related thereto (and to make extracts and copies from such records) and
the premises upon which any of the Collateral is located, to discuss the
Grantors' affairs with the officers of the Grantors and to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of, or any other matter relating to, the Collateral, including, in
the case of Accounts or Collateral in the possession of any third person, by
contacting Account Debtors or the third person possessing such Collateral for
the purpose of making such a verification, all in accordance with the terms and
provisions of the Credit Agreement. The Administrative Agent shall have the
absolute right to share any information it gains from such inspection or
verification with any Secured Party.
SECTION 4.05. Taxes; Encumbrances. At its option, the Administrative Agent
may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and not permitted pursuant to Section 6.02 of the Credit Agreement, and may pay
for the maintenance and preservation of the Collateral, in each case to the
extent any Grantor fails to do so as required by the Credit Agreement or this
Agreement, and each Grantor jointly and severally agrees to reimburse the
Administrative Agent on demand for any payment made or any expense incurred by
the Administrative Agent pursuant to the foregoing authorization; provided,
however, that nothing in this Section 4.05 shall be interpreted as excusing any
Grantor from the performance of, or imposing any obligation on the
Administrative Agent or any Secured Party to cure or perform, any covenants or
other promises of any Grantor with respect to taxes, assessments, charges, fees,
Liens, security interests or other encumbrances and maintenance as set forth
herein or in the other Loan Documents.
SECTION 4.06. Assignment of Security Interest. If at any time any Grantor
shall take a security interest in any property of an Account Debtor or any other
Person to secure payment and performance of an Account, such Grantor shall
promptly assign such security interest to the Administrative Agent. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other Person granting the security interest.
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SECTION 4.07. Continuing Obligations of the Grantors. Each Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Administrative Agent and the Secured Parties from and against any
and all liability for such performance.
SECTION 4.08. Use and Disposition of Collateral. None of the Grantors shall
make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except as
expressly permitted by Section 6.02 of the Credit Agreement. None of the
Grantors shall make or permit to be made any transfer of the Collateral and each
Grantor shall remain at all times in possession of the Collateral owned by it,
except that (a) Inventory may be sold in the ordinary course of business and (b)
unless and until the Administrative Agent shall notify the Grantors that an
Event of Default shall have occurred and be continuing and that during the
continuance thereof the Grantors shall not sell, convey, lease, assign, transfer
or otherwise dispose of any Collateral (which notice may be given by telephone
if promptly confirmed in writing), the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document. Without limiting the
generality of the foregoing, each Grantor agrees that it shall not permit any
Inventory to be in the possession or control of any warehouseman, bailee, agent
or processor at any time unless such warehouseman, bailee, agent or processor
shall have been notified of the Security Interest and shall have agreed in
writing to hold the Inventory subject to the Security Interest and the
instructions of the Administrative Agent and to waive and release any Lien held
by it with respect to such Inventory, whether arising by operation of law or
otherwise.
SECTION 4.09. Limitation on Modification of Accounts. None of the Grantors
will, without the Administrative Agent's prior written consent, grant any
extension of the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any Person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices and in accordance with such prudent
and standard practices used in industries that are the same as or similar to
those in which such Grantor is engaged.
SECTION 4.10. Insurance. The Grantors, at their own expense, shall maintain
or cause to be maintained insurance covering physical loss or damage to the
Inventory and Equipment in accordance with Section 5.07 of the Credit Agreement.
The Grantors shall (a) cause all such policies to be endorsed or otherwise
amended to include a "standard" or "New York" lender's loss payable endorsement,
in form and substance reasonably satisfactory to the Administrative Agent, which
endorsement shall provide that, from and after the Effective Date, if the
insurance carrier shall have received written notice from the Administrative
Agent that an Event of Default has occurred and is continuing, the insurance
carrier shall pay all proceeds otherwise payable to any Loan Party under such
policies directly to the Administrative Agent; (b) cause all such policies to
provide that neither the Loan Parties, the Administrative Agent nor any other
party shall be a coinsurer thereunder, and with respect to real property and
equipment, to contain a "Replacement Cost Endorsement", without any deduction
for depreciation, and such other provisions as the Administrative Agent may
reasonably require from time to time to protect their interests; (c) deliver,
when available, original or certified copies of or certificates evidencing all
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such policies to the Administrative Agent; (d) cause each such policy to provide
that it shall not be canceled, modified or not renewed (i) by reason of
nonpayment of premium upon not less than 30 days' prior written notice thereof
by the insurer to the Administrative Agent (giving the Administrative Agent the
right to cure defaults in the payment of premiums) or (ii) for any other reason
upon not less than 30 days' prior written notice thereof by the insurer to the
Administrative Agent (except in the case of war risk and allied perils coverage,
which shall provide the notice generally provided in the marketplace); and (e)
deliver to the Administrative Agent, prior to the cancellation, modification or
nonrenewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the
Administrative Agent) together with evidence reasonably satisfactory to the
Administrative Agent of payment of the required premium therefor. Each Grantor
irrevocably makes, constitutes and appoints the Administrative Agent (and all
officers, employees or agents designated by the Administrative Agent) as such
Grantor's true and lawful agent (and attorney-in-fact) for the purpose, during
the continuance of an Event of Default, of making, settling and adjusting claims
in respect of Collateral under policies of insurance, endorsing the name of such
Grantor on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or part relating thereto, the
Administrative Agent may, without waiving or releasing any obligation or
liability of the Grantors hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Administrative Agent
deems advisable. All sums disbursed by the Administrative Agent in connection
with this Section 4.10, including reasonable attorneys' fees, court costs,
expenses and other charges relating thereto, shall be payable, upon demand, by
the Grantors to the Administrative Agent and shall be additional Obligations
secured hereby.
SECTION 4.11. Legend. Each Grantor shall legend, in form and manner
satisfactory to the Administrative Agent, its books, records and documents
evidencing or pertaining to its Accounts Receivable with an appropriate
reference in such books, records and documents that such Accounts Receivable
have been assigned to the Administrative Agent for the benefit of the Secured
Parties and that the Administrative Agent has a security interest therein.
SECTION 4.12. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not, nor will it permit any of
its licensees to, do any act, or omit to do any act, whereby any Patent which is
necessary to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that it shall continue to ▇▇▇▇ any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
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(c) Each Grantor (either itself or through licensees) will, for each work
covered by a material Copyright, continue to publish, reproduce, display, adopt
and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws.
(d) Each Grantor shall notify the Administrative Agent immediately if it
knows or has reason to know that any Patent, Trademark or Copyright necessary to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly informs
the Administrative Agent, and, upon request of the Administrative Agent,
executes and delivers any and all agreements, instruments, documents and papers
as the Administrative Agent may request to evidence and perfect the
Administrative Agent's security interest in such Patent, Trademark or Copyright,
and each Grantor hereby appoints the Administrative Agent as its
attorney-in-fact to execute and file such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed; such power, being
coupled with an interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, to maintain and pursue each material application relating
to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant
or registration) and to maintain each issued Patent and each registration of the
Trademarks and Copyrights that is necessary to the conduct of any Grantor's
business, including timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with good business judgment, to initiate opposition, interference and
cancelation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any Collateral
consisting of a Patent, Trademark or Copyright material to the conduct of any
Grantor's business has been or is about to be infringed, misappropriated or
diluted by a third party, such Grantor promptly shall notify the Administrative
Agent and shall, if consistent with good business judgment, promptly ▇▇▇ for
infringement, misappropriation or dilution and to recover any and all damages
for such infringement, misappropriation or dilution, and take such other actions
as are appropriate under the circumstances to protect such Collateral.
(h) Upon and during the continuance of an Event of Default, each Grantor
shall use its commercially reasonable efforts to obtain all requisite consents
or approvals from the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all of such Grantor's right, title
and interest thereunder to the Administrative Agent or its designee.
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ARTICLE V
Collections
SECTION 5.01. Cash Management Accounts. (a) Within 30 Business Days after
the Effective Date, the Grantors shall establish and maintain (i) Collection
Deposit Accounts with one or more financial institutions that (A) are reasonably
satisfactory to the Administrative Agent and (B) have entered into a Lockbox and
Depository Agreement and (ii) Concentration Accounts with one or more financial
institutions that (A) are reasonably satisfactory to the Administrative Agent
and (B) have entered into a Collection Deposit Letter Agreement. The Proceeds of
all Accounts Receivable and Inventory shall be deposited into the applicable
Collection Deposit Accounts and forwarded to the applicable Concentration
Account in accordance with the applicable Lockbox and Depository Agreement. Each
Grantor shall use all reasonable efforts to prevent any funds which are not
payments with respect to Accounts Receivable or Inventory from being deposited
into, or otherwise commingled with, the funds held in the Collection Deposit
Accounts.
(b) All Proceeds of Inventory and Accounts Receivable that have been
received by any Sub-Agent on any Business Day will be transferred into the
applicable Concentration Account within one Business Day after such funds become
immediately available to the extent required by the applicable Lockbox and
Depository Agreement. All Proceeds stemming from the sale of a substantial
portion of the Collateral (other than Proceeds of Accounts) that have been
received by a Grantor on any Business Day will be transferred into the
applicable Collection Deposit Account within one Business Day from receipt of
such Proceeds. All Proceeds received on any Business Day by the Administrative
Agent pursuant to Section 5.02 will be transferred into the applicable
Concentration Account on such Business Day.
(c) The Collection Deposit Accounts are, and shall remain, under the sole
dominion and control of the Administrative Agent. Each Grantor acknowledges and
agrees that (i) such Grantor has no right of withdrawal from any Collection
Deposit Account, (ii) the funds on deposit in the Collection Deposit Accounts
and Concentration Accounts shall continue to be collateral security for all the
Obligations and (iii) upon the occurrence and during the continuance of an Event
of Default contained in clause (a) or (b) of Article VII of the Credit Agreement
(a "Payment Default"), at the Administrative Agent's election, the funds on
deposit in the Collection Deposit Accounts and the Concentration Accounts shall
be applied as provided in Section 6.02. So long as no Payment Default has
occurred and is continuing, the Grantors shall have the right, at any time and
from time to time, to withdraw funds from the Concentration Accounts.
(d) Effective upon notice to the Grantors from the Administrative Agent
after the occurrence and during the continuance of a Payment Default (which
notice may be given by telephone if promptly confirmed in writing), each
Concentration Account will, without any further action on the part of any
Grantor, the Administrative Agent or any Cash Concentration Bank, convert into a
closed lockbox account under the exclusive dominion and control of the
Administrative Agent in which funds are held subject to the rights of the
Administrative Agent hereunder. Each Grantor irrevocably authorizes the
Administrative Agent, upon the occurrence and during the continuance of a
Payment Default to notify each Sub-Agent and each Cash Concentration Bank (i) of
the occurrence of a Payment Default and (ii) of the matters referred to in this
paragraph (d). Following the occurrence and during the continuation of a Payment
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Default, the Administrative Agent may instruct each Sub-Agent and each Cash
Concentration Bank to transfer immediately all funds held in each Collection
Deposit Account or Concentration Account, as the case may be, to the Collateral
Proceeds Account.
SECTION 5.02. Collections. (a) Each Grantor agrees (i) to promptly notify
and direct each Account Debtor and every other person obligated to make payments
on Accounts Receivable or in respect of any Inventory to make all such payments
directly to a Collection Deposit Account established in accordance with Section
5.01, (ii) to use all reasonable efforts to cause each Account Debtor and every
other person identified in clause (i) above to make all payments with respect to
Accounts Receivable and Inventory directly to a Collection Deposit Account and
(iii) promptly to deposit all payments received by it on account of Accounts
Receivable and Inventory, whether in the form of cash, checks, notes, drafts,
bills of exchange, money orders or otherwise, in a Collection Deposit Account in
precisely the form in which received (but with any endorsements of such Grantor
necessary for deposit or collection), and until they are so deposited such
payments shall be held in trust by such Grantor for the benefit of the
Administrative Agent.
(b) Without the prior written consent of the Administrative Agent, no
Grantor shall, in a manner adverse to the Lenders, change the general
instructions given to Account Debtors in respect of payment on Accounts to be
deposited in the Collection Deposit Accounts. Each Grantor shall, and the
Administrative Agent hereby authorizes each Grantor to, enforce and collect all
amounts owing on the Inventory and Accounts Receivable, for the benefit and on
behalf of the Administrative Agent and the other Secured Parties; provided,
however, that such privilege may at the option of the Administrative Agent be
terminated upon the occurrence and during the continuance of an Event of
Default.
SECTION 5.03. Power of Attorney. Each Grantor irrevocably makes,
constitutes and appoints the Administrative Agent (and all officers, employees
or agents designated by the Administrative Agent) as such Grantor's true and
lawful agent and attorney-in-fact, and in such capacity the Administrative Agent
shall have the right, with power of substitution for each Grantor and in each
Grantor's name or otherwise, for the use and benefit of the Administrative Agent
and the Secured Parties, upon the occurrence and during the continuance of an
Event of Default (a) to receive, endorse, assign and/or deliver any and all
notes, acceptances, checks, drafts, money orders or other evidences of payment
relating to the Collateral or any part thereof; (b) to demand, collect, receive
payment of, give receipt for and give discharges and releases of all or any of
the Collateral; (c) to sign the name of any Grantor on any invoice or ▇▇▇▇ of
lading relating to any of the Collateral; (d) to send verifications of Accounts
Receivable to any Account Debtor; (e) to commence and prosecute any and all
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the Collateral or
to enforce any rights in respect of any Collateral; (f) to settle, compromise,
compound, adjust or defend any actions, suits or proceedings relating to all or
any of the Collateral; (g) to notify, or to require any Grantor to notify,
Account Debtors to make payment directly to the Administrative Agent; and (h) to
use, sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and to do all other acts and
things necessary to carry out the purposes of this Agreement, as fully and
completely as though the Administrative Agent were the absolute owner of the
Collateral for all purposes (in each case, in accordance with Section 5.01 and
Section 5.02); provided, however, that nothing herein contained shall be
construed as requiring or obligating the Administrative Agent or any Secured
Party to make any commitment or to make any inquiry as to the nature or
sufficiency of
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any payment received by the Administrative Agent or any Secured Party, or to
present or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken or omitted to be
taken by the Administrative Agent or any Secured Party with respect to the
Collateral or any part thereof shall give rise to any defense, counterclaim or
offset in favor of any Grantor or to any claim or action against the
Administrative Agent or any Secured Party. It is understood and agreed that the
appointment of the Administrative Agent as the agent and attorney-in-fact of the
Grantors for the purposes set forth above is coupled with an interest and is
irrevocable. The provisions of this Section shall in no event relieve any
Grantor of any of its obligations hereunder or under any other Loan Document
with respect to the Collateral or any part thereof or impose any obligation on
the Administrative Agent or any Secured Party to proceed in any particular
manner with respect to the Collateral or any part thereof, or in any way limit
the exercise by the Administrative Agent or any Secured Party of any other or
further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Loan Document, by law or otherwise.
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Administrative Agent on demand, and it is agreed that the
Administrative Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest,
by making all necessary filings with any applicable Governmental Authority and
executing any other necessary documentation, to become an assignment, transfer
and conveyance of any of or all such Collateral by the applicable Grantors to
the Administrative Agent, or to license or sublicense, whether general, special
or otherwise, and whether on an exclusive or non-exclusive basis, any such
Collateral throughout the world on such terms and conditions and in such manner
as the Administrative Agent shall determine (other than in violation of any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law. Without limiting the generality
of the foregoing, each Grantor agrees that the Administrative Agent shall have
the right, subject to the mandatory requirements of applicable law, to sell or
otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery as the Administrative Agent shall deem
appropriate. The Administrative Agent shall be authorized at any such sale (if
it deems it advisable to do so) to restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and upon consummation of any such sale the
Administrative Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely, free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by law) all rights of
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redemption, stay and appraisal which such Grantor now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted.
The Administrative Agent shall give the Grantors 10 Business Days' written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of New
York or its equivalent in other jurisdictions) of the Administrative Agent's
intention to make any sale of Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Administrative Agent may fix and state in the
notice (if any) of such sale. At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Administrative Agent may (in its sole and absolute discretion)
determine. The Administrative Agent shall not be obligated to make any sale of
any Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Administrative
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. In case any sale of all or
any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Administrative Agent until the sale
price is paid by the purchaser or purchasers thereof, but the Administrative
Agent shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may be sold again upon like notice. At any public
(or, to the extent permitted by law, private) sale made pursuant to this
Section, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any Obligation then due
and payable to such Secured Party from any Grantor as a credit against the
purchase price, and such Secured Party may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
to any Grantor therefor. For purposes hereof a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Administrative Agent shall be free to carry out such sale pursuant to such
agreement and no Grantor shall be entitled to the return of the Collateral or
any portion thereof subject thereto, notwithstanding the fact that after the
Administrative Agent shall have entered into such an agreement all Events of
Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Administrative Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a final judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
SECTION 6.02. Application of Proceeds. The Administrative Agent shall apply
the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all reasonable costs and expenses
incurred by the Administrative Agent or the Administrative Agent (in
its capacity as such
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hereunder or under any other Loan Document) in connection with such
collection or sale or otherwise in connection with this Agreement or
any of the Obligations, including all court costs and the reasonable
fees and expenses of its agents and legal counsel, the repayment of
all advances made by the Administrative Agent hereunder or under any
other Loan Document on behalf of any Grantor and any other costs or
expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the
date of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Administrative Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Administrative Agent
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the Administrative Agent or of the officer making
the sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the
Administrative Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 6.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Administrative Agent to exercise rights and remedies
under this Article at such time as the Administrative Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Administrative Agent an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sub-license any of the Collateral consisting of Intellectual Property now owned
or hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof. The use of such license
by the Administrative Agent shall be exercised, at the option of the
Administrative Agent, upon the occurrence and during the continuation of an
Event of Default; provided that any license, sub-license or other transaction
entered into by the Administrative Agent in accordance herewith shall be binding
upon the Grantors notwithstanding any subsequent cure of an Event of Default.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder to any Guarantor shall be given to it at its address or telecopy
number set forth on Schedule I, with a copy to the Borrower.
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SECTION 7.02. Security Interest Absolute. All rights of the Administrative
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement, any other Loan Document, any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the
Credit Agreement, any other Loan Document or any other agreement or instrument,
(c) any exchange, release or non-perfection of any Lien on other collateral, or
any release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the making by the Lenders of the Loans and the
issuance of Letters of Credit by the Issuing Bank, and the execution and
delivery to the Lenders of any notes evidencing such Loans, regardless of any
investigation made by the Lenders or on their behalf, and shall continue in full
force and effect until this Agreement shall terminate.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Administrative Agent and a
counterpart hereof shall have been executed on behalf of the Administrative
Agent, and thereafter shall be binding upon such Grantor and the Administrative
Agent and their respective successors and assigns, and shall inure to the
benefit of such Grantor, the Administrative Agent and the other Secured Parties
and their respective successors and assigns, except that no Grantor shall have
the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly contemplated by this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or
released with respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Administrative Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 7.06. Administrative Agent's Fees and Expenses; Indemnification.
(a) Each Grantor jointly and severally agrees to pay upon demand to the
Administrative Agent the amount of any and all reasonable expenses, including
the reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which the Administrative Agent may incur in connection with
(i) the administration of this Agreement, (ii) the custody or preservation of,
or the sale of, collection from or other realization upon any of the Collateral,
(iii) the exercise,
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enforcement or protection of any of the rights of the Administrative Agent
hereunder or (iv) the failure of any Grantor to perform or observe any of the
provisions hereof.
(b) Without limitation of its indemnification obligations under the other
Loan Documents, each Grantor jointly and severally agrees to indemnify the
Administrative Agent and the other Indemnitees against, and hold each of them
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable fees, disbursements and other charges of counsel,
incurred by or asserted against any of them arising out of, in any way connected
with, or as a result of, the execution, delivery or performance of this
Agreement or any claim, litigation, investigation or proceeding relating hereto
or to the Collateral, whether or not any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or any Related Parties of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent or any Lender. All amounts due under this Section
7.06 shall be payable on written demand therefor.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent
hereunder and of the Administrative Agent, the Administrative Agent and the
Lenders under the other Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement or any other Loan Document or consent to any
departure by any Grantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Grantor in any case shall entitle such
Grantor or any other Grantor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Grantor or Grantors with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Credit Agreement.
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SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.09.
SECTION 7.10. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract (subject to Section 7.04), and
shall become effective as provided in Section 7.04. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used herein are for
the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Grantor or its properties in the courts of any jurisdiction.
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(b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 7.01. Nothing in this Agreement
will affected the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 7.14. Termination. This Agreement and the Security Interest shall
terminate when all the Obligations have been paid in full and the Lenders have
no further commitment to lend under the Credit Agreement, the LC Exposure has
been reduced to zero and the Issuing Bank has no further obligation to issue
Letters of Credit under the Credit Agreement, at which time the Administrative
Agent shall execute and deliver to the Grantors, at the Grantors' expense, all
Uniform Commercial Code termination statements and similar documents which the
Grantors shall reasonably request to evidence such termination. Any execution
and delivery of termination statements or documents pursuant to this Section
7.14 shall be without recourse to or warranty by the Administrative Agent. A
Grantor shall automatically be released from its obligations hereunder and the
Security Interest in the Collateral of such Grantor shall be automatically
released in the event that such Grantor ceases to be a Subsidiary pursuant to a
transaction permitted under the Loan Documents.
SECTION 7.15. Additional Grantors. Pursuant to Section 5.12 of the Credit
Agreement, each Subsidiary Loan Party that was not in existence or not a
Subsidiary Loan Party on the date of the Credit Agreement is required to enter
into this Agreement as a Grantor upon becoming a Subsidiary Loan Party. Upon
execution and delivery by the Administrative Agent and a Subsidiary of an
instrument in the form of Annex 4 hereto, such Subsidiary shall become a Grantor
hereunder with the same force and effect as if originally named as a Grantor
herein. The execution and delivery of any such instrument shall not require the
consent of any Grantor hereunder. The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor as a party to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
WORLDWIDE FLIGHT SERVICES, INC.,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name:
Title:
EACH OF THE OTHER GUARANTORS
LISTED ON SCHEDULE I HERETO,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent,
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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