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EXHIBIT 4.3
AFFILIATE SECURITY AGREEMENT
This AFFILIATE SECURITY AGREEMENT (as amended, supplemented, amended
and restated or otherwise modified from time to time, this "Security
Agreement"), dated as of October 30, 1997, is made by each Affiliate (as
defined in the Term Loan Agreement referred to below) of the Borrower (as
defined below) a signatory hereto (each, individually, a "Grantor", and
collectively, the "Grantors"), in favor of UNITED STATES TRUST COMPANY OF NEW
YORK, as collateral agent (together with any successor(s) thereto in such
capacity, the "Collateral Agent") under the Intercreditor Agreement (as defined
below) for each of the Secured Parties (as defined below).
W I T N E S S E T H :
WHEREAS, pursuant to a Term Loan Agreement, dated as of the date
hereof (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Term Loan Agreement"), among Pioneer Americas, Inc., a
corporation organized under the laws of Delaware (the "Borrower"), the Parent
Guarantor named therein, the various financial institutions as are, or may from
time to time become, parties thereto (each, individually, a "Term Loan Lender",
and collectively, the "Term Loan Lenders"), DLJ Capital Funding, Inc., as
Syndication Agent for the Term Loan Lenders, Salomon Brothers Holding Company
Inc, as Documentation Agent for the Term Loan Lenders, Bank of America National
Trust and Savings Association, as Administrative Agent for the Term Loan
Lenders (the Syndication Agent, the Documentation Agent and the Administrative
Agent are hereinafter collectively referred to as the "Term Loan Agents"), and
the Collateral Agent, the Term Loan Lenders have extended Term Loan Commitments
to make Term Loans to the Borrower, which Term Loans will be evidenced by notes
(as amended, supplemented, amended and restated, or otherwise modified from
time to time, including all notes issued in exchange or substitution therefor,
the "Term Loan Notes") in an aggregate principal amount of $100,000,000;
WHEREAS, pursuant to that certain Indenture, dated as of the date
hereof (as amended, supplemented, amended and restated, or otherwise modified
from time to time, the "Senior Secured Note Indenture"), among PCI Chemicals
Canada Inc., a corporation organized under the laws of the Province of New
Brunswick ("PCICC"), the Affiliate Guarantors (as defined therein) and United
States Trust Company of New York, as trustee (in such capacity, the "Trustee")
for the holders of the Notes (as defined therein) (the "Holders"), PCICC will
issue its 9 1/4% Senior Secured Notes due 2007 (as amended, supplemented,
amended and restated, or otherwise modified from time to time, including all
notes issued in exchange or substitution therefor upon the registration of such
notes pursuant to the Securities Act of 1933 or otherwise, the "Senior Secured
Notes") in an aggregate principal amount of $175,000,000;
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WHEREAS, as a condition precedent to the purchase of Senior Secured
Notes by the Initial Purchasers (as defined in the Senior Secured Note
Indenture) and the making of the Term Loans under the Term Loan Agreement, each
Grantor is required to execute and deliver this Security Agreement;
WHEREAS, each Grantor is an Affiliate of the Borrower;
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Security Agreement inasmuch as such Grantor will derive substantial direct and
indirect benefits from the Term Loans made to the Borrower by the Term Loan
Lenders pursuant to the Term Loan Agreement and the purchase of the Senior
Secured Notes by the Initial Purchasers pursuant to the Senior Secured Note
Indenture;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Initial Purchasers to purchase the Senior Secured Notes pursuant to the Senior
Secured Note Indenture and (ii) the Term Loan Lenders to make Term Loans to the
Borrower pursuant to the Term Loan Agreement, each Grantor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in Section 4.1.2(b).
"Collateral Agent" is defined in the preamble.
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units,
memory units, display terminals, printers,
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features, computer elements, card readers, tape drives, hard and soft
disk drives, cables, electrical supply hardware, generators, power
equalizers, accessories and all peripheral devices and other related
computer hardware;
(b) all software programs (including both source code, object
code and all related applications and data files), whether now owned,
licensed or leased or hereafter acquired by any Grantor, designed for
use on the computers and electronic data processing hardware described
in clause (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a) through
(c); and
(e) all rights with respect to all of the foregoing,
including any and all copyrights, licenses, options, warranties,
service contracts, program services, test rights, maintenance rights,
support rights, improvement rights, renewal rights and
indemnifications and any substitutions, replacements, additions or
model conversions of any of the foregoing.
"Contracts" is defined in clause (b) of Section 2.1.
"Copyright Collateral" means all copyrights (including all copyrights
for semi-conductor chip product mask works) of each Grantor, whether statutory
or common law, registered or unregistered, now or hereafter in force throughout
the world including all of such Grantor's right, title and interest in and to
all copyrights registered in the United States Copyright Office or anywhere
else in the world and also including the copyrights referred to in Item A of
Schedule IV attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses, including each
copyright license referred to in Item B of Schedule IV attached hereto, the
right to sue for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions and renewals
of any thereof and all proceeds of the foregoing, including licenses,
royalties, income, payments, claims, damages and proceeds of suit.
"Equipment" is defined in clause (a) of Section 2.1.
"Grantor" and "Grantors" are defined in the preamble.
"Holders" is defined in the second recital.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and
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the Trade Secrets Collateral (except to the extent any of the foregoing arises
out of or relates to any inventory or accounts receivable).
"Intercreditor Agreement" means the Intercreditor and Collateral
Agency Agreement, dated as of October 30, 1997, among the Borrower, PCI
Chemicals Canada Inc., PCI Carolina, Inc., Pioneer Licensing, Inc., the
Trustee, the Administrative Agent and the Collateral Agent, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in Item A of Schedule II attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, including each patent license
referred to in Item B of Schedule II attached hereto; and
(d) all proceeds of, and rights associated with, the
foregoing (including license royalties and proceeds of infringement
suits), the right to sue third parties for past, present or future
infringements of any patent or patent application, including any
patent or patent application referred to in Item A of Schedule
II attached hereto, and for breach or enforcement of any patent
license, including any patent license referred to in Item B of
Schedule II attached hereto, and all rights corresponding thereto
throughout the world.
"PCICC" is defined in the second recital.
"Related Contracts" is defined in clause (b) of Section 2.1.
"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means the Collateral Agent, the Trustee, the
Holders, the Term Loan Agents, the Term Loan Lenders and any holder of a Term
Loan Note.
"Security Agreement" is defined in the preamble.
"Senior Secured Note Indenture" is defined in the second recital.
"Senior Secured Notes" is defined in the second recital.
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"Term Loan Agreement" is defined in the first recital.
"Term Loan Lender" and "Term Loan Lenders" are defined in the first
recital.
"Term Loan Notes" is defined in the first recital.
"Trademark Collateral" means:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, service marks,
certification marks, collective marks, logos, and general intangibles
of a like nature (all of the foregoing items in this clause (a) being
collectively called a "Trademark"), now existing anywhere in the world
or hereafter adopted or acquired, all registrations and recordings
thereof and all applications in connection therewith, whether pending
or in preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in
any office or agency of the United States of America or any State
thereof or any foreign country, including those referred to in Item A
of Schedule III attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in Item B of Schedule III attached hereto;
(c) all extensions or renewals of any of the items described
in clauses (a) and (b);
(d) all of the goodwill of the business connected with the
use of, and symbolized by the items described in, clauses (a) and (b);
and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by any Grantor against third parties
for past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in Item A and
Item B of Schedule III attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach
or enforcement of any Trademark license.
"Trade Secrets Collateral" means all confidential or proprietary
information and all know-how obtained by or used in or contemplated at any time
for use in the business of any Grantor (all of the foregoing being collectively
called a "Trade Secret"), whether or not such Trade Secret has been reduced to
a writing or other tangible form, including all documents and things embodying,
incorporating or referring in any way to such Trade Secret, all Trade Secret
licenses, including each Trade Secret license referred to in Schedule V
attached hereto, and including the right to sue for and to enjoin and to
collect damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any such Trade Secret license.
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"Trustee" is defined in the second recital.
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of New York.
SECTION 1.2. Intercreditor Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Security
Agreement, including its preamble and recitals, have the meanings provided in
the Intercreditor Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or
in the Intercreditor Agreement or the context otherwise requires, terms for
which meanings are provided in the U.C.C. are used in this Security Agreement,
including its preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. Each Grantor hereby assigns and
pledges to the Collateral Agent, for the ratable benefit of each of the Secured
Parties, and hereby grants to the Collateral Agent, for the ratable benefit of
each of the Secured Parties, a security interest in all of the following,
whether now or hereafter existing or acquired by such Grantor (the
"Collateral"):
(a) all pipelines, valves, pipes, pumps and equipment in all
of its forms of such Grantor, wherever located, including all parts
thereof and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor and all
accessories related thereto (any and all of the foregoing being the
"Equipment");
(b) all contracts, contract rights, chattel paper, documents,
instruments, and general intangibles (excluding any of the foregoing
arising out of or relating to inventory or accounts receivable but
including tax refunds) of such Grantor, whether or not arising out of
or in connection with the sale or lease of goods or the rendering of
services, and all rights of such Grantor now or hereafter existing in
and to all security agreements, guaranties, leases and other contracts
securing or otherwise relating to any such contracts, contract rights,
chattel paper, documents, instruments, and general intangibles (any
and all such contracts, contract rights, chattel paper, documents,
instruments, and general intangibles being the "Contracts", and any
and all such security agreements, guaranties, leases and other
contracts being the "Related Contracts");
(c) all Intellectual Property Collateral of such Grantor;
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(d) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section 2.1;
(e) all of such Grantor's other property and rights of every
kind and description and interests therein (other than inventory,
accounts receivable or any other property or rights arising out of or
relating to any inventory or accounts receivable); and
(f) all products, offspring, rents, issues, profits, returns,
income and proceeds of and from any and all of the foregoing
Collateral (including proceeds which constitute property of the types
described in clauses (a), (b), (c), (d) and (e), proceeds deposited
from time to time in the Collateral Account and in any lock boxes of
such Grantor, and, to the extent not otherwise included, all payments
under insurance (whether or not the Collateral 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).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would
constitute a violation of a valid and enforceable restriction in favor of a
third party on such grant, unless and until any required consents shall have
been obtained. Each Grantor shall, upon the request of the Collateral Agent,
use its best commercial efforts to obtain any such required consent.
SECTION 2.2. Security for Obligations. This Security Agreement
secures the payment of (i) all Term Loan Obligations, whether for principal,
interest, costs, fees, expenses or otherwise, (ii) all Indenture Obligations,
whether for principal, interest, costs, fees, expenses or otherwise and (iii)
all obligations of each Grantor and each other Obligor now or hereafter
existing under this Security Agreement, each Collateral Document and each other
Loan Document (as such term is defined in the Term Loan Agreement) to which
such Grantor or such other Obligor is or may become a party (all such
obligations of the Borrower and such Grantor or such other Obligor listed in
items (i) through (iii) above being the "Secured Obligations").
SECTION 2.3. Continuing Security Interest; Transfer of Term Loan
Notes. This Security Agreement shall create a continuing security interest in
the Collateral and shall
(a) remain in full force and effect until payment in full in
cash of all Secured Obligations, the termination of all Term Loan
Commitments, and the termination of all obligations under the
Intercreditor Agreement,
(b) be binding upon each Grantor, its successors, transferees
and assigns, and
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(c) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral Agent and
each other Secured Party.
Without limiting the generality of the foregoing clause (c), any Term Loan
Lender may assign or otherwise transfer (in whole or in part) any Term Loan
Note or Term Loan held by it to any other Person or entity, and such other
Person or entity shall thereupon become vested with all the rights and benefits
in respect thereof granted to such Term Loan Lender under any Collateral
Document or any Loan Document (including this Security Agreement) or otherwise,
subject, however, to any contrary provisions in such assignment or transfer,
and to the provisions of Section 11.11 and Article X of the Term Loan
Agreement. Upon the payment in full in cash of all Secured Obligations, the
termination of all Term Loan Commitments, and the termination of all
obligations under the Intercreditor Agreement, the security interest granted
herein shall terminate and all rights to the Collateral shall revert to such
Grantor. Upon any such termination, the Collateral Agent will, at such
Grantor's sole expense, execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence such termination. Upon any
sale or other transfer of Collateral permitted by the terms of the
Intercreditor Agreement, the security interest created hereunder in such
Collateral (but not in the proceeds thereof) shall be deemed to be
automatically released and the Collateral Agent will, at such Grantor's sole
expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such release.
SECTION 2.4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and shall perform all of its duties and obligations under such
contracts and agreements,
(b) the exercise by the Collateral Agent of any of its rights
hereunder shall not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral, and
(c) neither the Collateral Agent nor any other Secured Party
shall have any obligation or liability under any such contracts or
agreements included in the Collateral by reason of this Security
Agreement, nor shall the Collateral Agent or any other 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 2.5. Security Interest Absolute. All rights of the
Collateral Agent and the security interests granted to the Collateral Agent
hereunder, and all obligations of each Grantor hereunder, shall be absolute and
unconditional, irrespective of
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(a) any lack of validity or enforceability of the
Intercreditor Agreement, the Senior Secured Note Indenture, the Term
Loan Agreement, any Term Loan Note, any Senior Secured Note, any
Collateral Document or any other Loan Document;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower, any other Obligor or any
other Person under the provisions of the Intercreditor
Agreement, the Senior Secured Note Indenture, the Term Loan
Agreement, any Term Loan Note, any Senior Secured Note, any
Collateral Document or any other Loan Document or otherwise,
or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Secured
Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any
other extension, compromise or renewal of any Secured Obligations;
(d) any reduction, limitation, impairment or termination of
any Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and each Grantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the Intercreditor Agreement, the Senior Secured Note Indenture, the
Term Loan Agreement, any Term Loan Note, any Senior Secured Note, any
Collateral Document, or any other Loan Document;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute
a defense available to, or a legal or equitable discharge of, the
Borrower, any other Obligor, any surety or any guarantor.
SECTION 2.6. Postponement of Subrogation, etc. Each Grantor hereby
agrees that it will not exercise any rights which it may acquire by reason of
any payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until the prior payment in full in
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cash of all Secured Obligations, the termination of all Term Loan Commitments
and the termination of all obligations under the Intercreditor Agreement. Any
amount paid to any Grantor on account of any payment made hereunder prior to
the payment in full in cash of all Secured Obligations shall be held in trust
for the benefit of the Secured Parties and shall immediately be paid to the
Collateral Agent for the account of the Secured Parties and credited and
applied against the Secured Obligations, whether matured or unmatured, in
accordance with the terms of the Intercreditor Agreement; provided, however,
that if
(a) such Grantor has made payment to the Secured Parties of
all or any part of the Secured Obligations, and
(b) all Secured Obligations have been paid in full in cash,
all Term Loan Commitments have been terminated and all obligations
under the Intercreditor Agreement,
each Secured Party agrees that, at the requesting Grantor's request, the
Secured Parties will execute and deliver to such Grantor appropriate documents
(without recourse and without representation or warranty) necessary to evidence
the transfer by subrogation to such Grantor of an interest in the Secured
Obligations resulting from such payment by such Grantor. In furtherance of the
foregoing, for so long as any Secured Obligations, Term Loan Commitments or any
obligations under either the Senior Secured Note Indenture or the Intercreditor
Agreement remain outstanding, each Grantor shall refrain from taking any action
or commencing any proceeding against the Borrower or any other Person (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in respect of payments made under this
Security Agreement to any Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Each Grantor represents
and warrants to each Secured Party (a) as to all matters contained in Article
VI of the Term Loan Agreement insofar as the representations and warranties
contained therein are applicable to such Grantor and its properties, each such
representation and warranty set forth in such Article (insofar as applicable as
aforesaid) and all other terms of the Term Loan Agreement to which reference is
made therein, together with all related definitions and ancillary provisions,
being hereby incorporated into this Security Agreement by reference as though
specifically set forth in this Section and (b) insofar as the representations
and warranties contained herein are applicable to such Grantor and its
properties, as set forth in this Section.
SECTION 3.1.1. Location of Collateral, etc. All of the Equipment of
such Grantor is located at the places specified in Item A of Schedule I hereto.
None of the Equipment has, within
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the four months preceding the date of this Security Agreement, been located at
any place other than the places specified in Item A of Schedule I hereto except
as set forth in a footnote thereto. All of the lock boxes of the Grantor are
located at the places specified in Item B of Schedule I hereto. The place(s)
of business and chief executive office of such Grantor and the office(s) where
such Grantor keeps its records concerning the Contracts, and all originals of
all chattel paper which evidence Contracts, are located at the address set
forth in Item C of Schedule I hereto. Such Grantor has no trade names other
than those set forth in Item D of Schedule I hereto. During the four months
preceding the date hereof, such Grantor has not been known by any legal name
different from the one set forth on the signature page hereto, nor has such
Grantor been the subject of any amalgamation, merger or other corporate
reorganization, except as set forth in Item E of Schedule I hereto. All
Contracts evidenced by a promissory note or other instrument, negotiable
document or chattel paper have been duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Collateral Agent and delivered and pledged to the
Collateral Agent pursuant to Section 4.1.7. Such Grantor is not a party to any
Federal, state or local government contract except as set forth in Item F of
Schedule I hereto.
SECTION 3.1.2. Ownership, No Liens, etc. Such Grantor owns its
Collateral free and clear of any Lien, security interest, charge or encumbrance
except for the security interest created by this Security Agreement and except
(a) as permitted under Section 7.2.2 of the Term Loan Agreement or (b) for any
Permitted Liens (as defined in the Senior Secured Note Indenture). No
effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any recording office, except
such as may have been filed in favor of the Collateral Agent relating to this
Security Agreement or as have been filed in connection with Liens permitted
pursuant to the Intercreditor Agreement.
SECTION 3.1.3. Possession and Control. Such Grantor has exclusive
possession and control (subject only to (a) Liens permitted under Section 7.2.2
of the Term Loan Agreement or (b) Permitted Liens (as defined in the Senior
Secured Note Indenture) of its Equipment.
SECTION 3.1.4. Negotiable Documents, Instruments and Chattel Paper.
Subject to the proviso to clause (b) of Section 4.1.7, such Grantor has,
contemporaneously herewith, delivered to the Collateral Agent possession of all
originals of all negotiable documents, instruments and chattel paper currently
owned or held by such Grantor (duly endorsed in blank, if requested by the
Collateral Agent).
SECTION 3.1.5. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
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(b) such Intellectual Property Collateral is valid and
enforceable;
(c) such Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property
Collateral, including recordations of all of its interests in the
Patent Collateral and Trademark Collateral in the United States Patent
and Trademark Office and in corresponding offices throughout the world
and its claims to the Copyright Collateral in the United States
Copyright Office and in corresponding offices throughout the world;
(d) such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted
rights of any third party; and
(e) such Grantor has performed and will continue to perform
all acts and has paid and will continue to pay all required fees and
taxes to maintain each and every item of Intellectual Property
Collateral in full force and effect throughout the world, as
applicable.
Such Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of such Grantor's
business.
SECTION 3.1.6. Validity, etc. This Security Agreement creates a
valid first priority security interest in the Collateral, securing the payment
of the Secured Obligations, and all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken.
SECTION 3.1.7. Authorization, Approval, etc. Except as have been
obtained or made and are in full force and effect, no authorization, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required either
(a) for the grant by such Grantor of the security interest
granted hereby or for the execution, delivery and performance of this
Security Agreement by such Grantor, or
(b) for the perfection of or the exercise by the Collateral
Agent of its rights and remedies hereunder.
SECTION 3.1.8. Compliance with Laws. Such Grantor is in compliance
with the requirements of all applicable laws (including the provisions of the
Fair Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which
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would be reasonably likely to have a Material Adverse Effect or materially
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1. Certain Covenants. Each Grantor covenants and agrees
that, so long as any portion of the Secured Obligations shall remain unpaid,
any Term Loan Lender shall have any outstanding Term Loan Commitment, or any
obligations under the Intercreditor Agreement shall remain outstanding, such
Grantor will, unless the Collateral Agent (with the consent of the Term Loan
Lenders and the Holders as specified in the Intercreditor Agreement) shall
otherwise consent in writing, perform, comply with and be bound by (a) all of
the agreements, covenants and obligations contained in Article VII of the Term
Loan Agreement and in Article Ten of the Senior Secured Note Indenture which
are applicable to such Grantor or its properties, each such agreement, covenant
and obligation contained in each such Article and all other terms of each of
the Term Loan Agreement and the Senior Secured Note Indenture to which
reference is made herein, together with all related definitions and ancillary
provisions, being hereby incorporated into this Security Agreement by reference
as though specifically set forth in this Section and (b) the obligations set
forth in this Section.
SECTION 4.1.1. As to Equipment. Such Grantor hereby agrees that it
shall
(a) keep all the Equipment at the places therefor specified
in Section 3.1.1 or, upon 30 days' prior written notice to the
Collateral Agent, at such other places in a jurisdiction where all
representations and warranties set forth in Article III (including
Section 3.1.6) shall be true and correct, and all action required
pursuant to the first sentence of Section 4.1.7 shall have been taken
with respect to the Equipment;
(b) cause the Equipment to be maintained and preserved in the
same condition, repair and working order as when new, ordinary wear
and tear excepted, and in accordance with any manufacturer's manual;
and forthwith, or in the case of any loss or damage to any of the
Equipment, as quickly as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements, and other
improvements in connection therewith which are necessary or desirable
to such end; and promptly furnish to the Collateral Agent a statement
respecting any loss or damage to any of the Equipment; and
(c) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Equipment, except to the extent the validity thereof is
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being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been set aside.
SECTION 4.1.2. As to Contracts. (a) Such Grantor shall keep its
place(s) of business and chief executive office and the office(s) where it
keeps its records concerning the Contracts, and all originals of all chattel
paper which evidences Contracts, located at the address(es) set forth in Item D
of Schedule I hereto, or, upon 30 days' prior written notice to the Collateral
Agent, at such other locations in a jurisdiction where all actions required by
the first sentence of Section 4.1.7 shall have been taken with respect to the
Contracts; not change its name except upon 30 days' prior written notice to the
Collateral Agent; hold and preserve such records and chattel paper; and permit
representatives of the Collateral Agent at any time during normal business
hours to inspect and make abstracts from such records and chattel paper.
(b) Upon written notice by the Collateral Agent to such Grantor
pursuant to this Section 4.1.2(b), all proceeds of Collateral received by such
Grantor shall be delivered in kind to the Collateral Agent for deposit to a
deposit account (the "Collateral Account") of such Grantor maintained with the
Collateral Agent, and such Grantor shall not commingle any such proceeds, and
shall hold separate and apart from all other property, all such proceeds in
express trust for the benefit of the Collateral Agent until delivery thereof
is made to the Collateral Agent. The Collateral Agent will not give the notice
referred to in the preceding sentence unless there shall have occurred and be
continuing a Default of the nature set forth in Section 8.1.9 of the Term Loan
Agreement, a Default of the nature set forth in Clause 10 or 11 of Section 501
of the Senior Secured Note Indenture or an Event of Default.
(c) The Collateral Agent shall have the right to apply any amount in
the Collateral Account to the payment of any Secured Obligations which are due
and payable or payable upon demand, or to the payment of any Secured
Obligations at any time that an Event of Default shall exist.
SECTION 4.1.3. As to Collateral.
(a) Until the occurrence and continuance of a Default of the
nature set forth in Section 8.1.9 of the Term Loan Agreement, a
Default of the nature set forth in Clause 10 or 11 of Section 501 of
the Senior Secured Note Indenture or an Event of Default, and such
time as the Collateral Agent shall notify such Grantor of the
revocation of such power and authority, such Grantor (i) may use and
consume, in the ordinary course of its business (except as otherwise
permitted under the Intercreditor Agreement), any raw materials, work
in process or materials normally held by such Grantor for such
purpose, (ii) will, at its own expense, endeavor to collect, as and
when due, all amounts due with respect to any of the Collateral,
including the taking of such action with respect to such collection as
the Collateral Agent may reasonably request following the occurrence
of a Default of the nature set forth in Section 8.1.9 of the Term Loan
Agreement, a Default of the nature set forth in Clause 10 or 11 of
Section 501 of the Senior Secured Note
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Indenture or an Event of Default or, in the absence of such request,
as such Grantor may deem advisable, and (iii) may grant, in the
ordinary course of business (except as otherwise permitted under the
Intercreditor Agreement), to any party obligated on any of the
Collateral, any rebate, refund or allowance to which such party may be
lawfully entitled, and may accept, in connection therewith, the return
of goods, the sale or lease of which shall have given rise to such
Collateral. The Collateral Agent, however, may, at any time following
a Default of the nature set forth in Section 8.1.9 of the Term Loan
Agreement, a Default of the nature set forth in Clause 10 or 11 of
Section 501 of the Senior Secured Note Indenture or an Event of
Default, whether before or after any revocation of such power and
authority or the maturity of any of the Secured Obligations, notify
any parties obligated on any of the Collateral to make payment to the
Collateral Agent of any amounts due or to become due thereunder and
enforce collection of any of the Collateral by suit or otherwise and
surrender, release, or exchange all or any part thereof, or compromise
or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder or evidenced thereby.
Upon request of the Collateral Agent following a Default of the nature
set forth in Section 8.1.9 of the Term Loan Agreement, a Default of
the nature set forth in Clause 10 or 11 of Section 501 of the Senior
Secured Note Indenture or an Event of Default, such Grantor will, at
its own expense, notify any parties obligated on any of the Collateral
to make payment to the Collateral Agent of any amounts due or to
become due thereunder.
(b) The Collateral Agent is authorized to endorse, in the
name of such Grantor, any item, howsoever received by the Collateral
Agent, representing any payment on or other proceeds of any of the
Collateral.
SECTION 4.1.4. As to Intellectual Property Collateral. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of such Grantor that:
(a) such Grantor shall not, unless such Grantor shall either
(i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that
any of the Patent Collateral is of negligible economic value to such
Grantor, or (ii) have a valid business purpose to do otherwise, do any
act, or omit to do any act, whereby any of the Patent Collateral may
lapse or become abandoned or dedicated to the public or unenforceable
except upon expiration at the end of the unrenewable term of
registration thereof.
(b) such Grantor shall not, and such Grantor shall not permit
any of its licensees to, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that
any of the Trademark Collateral is of negligible economic value to
such Grantor, or (ii) have a valid business purpose to do otherwise,
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(i) fail to continue to use any of the Trademark
Collateral in order to maintain all of the Trademark
Collateral in full force free from any claim of abandonment
for non-use,
(ii) fail to maintain as in the past the quality of
products and services offered under all of the Trademark
Collateral,
(iii) fail to employ all of the Trademark Collateral
registered with any Federal or state or foreign authority with
an appropriate notice of such registration,
(iv) adopt or use any other Trademark for a period
of sixty days which is confusingly similar or a colorable
imitation of any of the Trademark Collateral unless such
Trademark becomes a part of the Trademark Collateral,
(v) use any of the Trademark Collateral registered
with any Federal or state or foreign authority for a period of
sixty days except for the uses for which registration or
application for registration of all of the Trademark
Collateral has been made unless a registration or application
for registration for such use is made with such Federal or
state or foreign authority, and
(vi) do or permit any act or knowingly omit to do
any act whereby any of the Trademark Collateral may lapse or
become invalid or unenforceable.
(c) such Grantor shall not, unless such Grantor shall either
(i) reasonably and in good faith determine (and
notice of such determination shall have been delivered to the
Collateral Agent) that any of the Copyright Collateral or any
of the Trade Secrets Collateral is of negligible economic
value to such Grantor, or
(ii) have a valid business purpose to do otherwise,
do or permit any act or knowingly omit to do any act whereby
any of the Copyright Collateral or any of the Trade Secrets
Collateral may lapse or become invalid or unenforceable or
placed in the public domain except upon expiration of the end
of an unrenewable term of a registration thereof.
(d) such Grantor shall notify the Collateral Agent
immediately if it knows, or has reason to know, that any application
or registration relating to any material item of the Intellectual
Property Collateral may become abandoned or dedicated to the public or
placed in the public domain or invalid or unenforceable, 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, the United States
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Copyright Office or any foreign counterpart thereof or any court)
regarding such Grantor's ownership of any of the Intellectual Property
Collateral, its right to register the same or to keep and maintain and
enforce the same.
(e) in no event shall such Grantor or any of its agents,
employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United
States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency in any other country or any political
subdivision thereof, unless it promptly informs the Collateral Agent,
and upon request of the Collateral Agent, executes and delivers any
and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral
Agent's security interest in such Intellectual Property Collateral and
the goodwill and general intangibles of such Grantor relating thereto
or represented thereby.
(f) such Grantor shall take all necessary steps, including in
any proceeding before the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain
and pursue any application (and to obtain the relevant registration)
filed with respect to, and to maintain any registration of, the
Intellectual Property Collateral, including the filing of applications
for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and the payment
of fees and taxes (except to the extent that dedication, abandonment
or invalidation is permitted under the foregoing clauses (a), (b) and
(c)).
(g) such Grantor shall, contemporaneously herewith, execute
and deliver to the Collateral Agent a Patent Security Agreement, a
Trademark Security Agreement and a Copyright Security Agreement in the
forms of Exhibit A, Exhibit B and Exhibit C hereto, respectively, and
shall execute and deliver to the Collateral Agent any other document
required to acknowledge or register or perfect the Collateral Agent's
interest in any part of the Intellectual Property Collateral.
SECTION 4.1.5. Insurance. Such Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment) against such casualties and
contingencies and of such types and in such amounts as is required pursuant to
each of the Term Loan Agreement and the Senior Secured Note Indenture, and
will, upon the request of the Collateral Agent, furnish a certificate of a
reputable insurance broker setting forth the nature and extent of all insurance
maintained by such Grantor in accordance with this Section. Without limiting
the foregoing, such Grantor further agrees as follows:
(a) Each policy for property insurance shall show the
Collateral Agent as loss payee.
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(b) Each policy for liability insurance shall show the
Collateral Agent as an additional insured.
(c) Each insurance policy shall provide that at least 30
days' prior written notice of cancellation or of lapse shall be given
to the Collateral Agent by the insured.
(d) Such Grantor shall, if so requested by the Collateral
Agent, deliver to the Collateral Agent a copy of each insurance
policy.
(e) All payments in respect of property insurance shall be
deposited to the Collateral Account and if there shall be no
Collateral Account shall be paid to such Grantor.
SECTION 4.1.6. Transfers and Other Liens. Such Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the
Intercreditor Agreement; or
(b) create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral to secure
Indebtedness of any Person or entity, except for the security interest
created by this Security Agreement and except as permitted by the
Intercreditor Agreement.
SECTION 4.1.7. Further Assurances, etc. Such Grantor agrees that,
from time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Collateral Agent may request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, such Grantor will
(a) mark conspicuously each chattel paper included in the
Contracts and each Related Contract and, at the request of the
Collateral Agent, each of its records pertaining to the Collateral
with a legend, in form and substance satisfactory to the Collateral
Agent, indicating that such document, chattel paper, Related Contract
or Collateral is subject to the security interest granted hereby;
(b) if any Contract shall be evidenced by a promissory note
or other instrument, negotiable document or chattel paper, deliver and
pledge to the Collateral Agent hereunder such promissory note,
instrument, negotiable document or chattel paper duly endorsed and
accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Collateral Agent;
provided, however, that unless there shall have occurred and be
continuing a Default of the nature set forth in
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Section 8.1.9 of the Term Loan Agreement, a Default of the nature set
forth in Clause 10 or 11 of Section 501 of the Senior Secured Note
Indenture or an Event of Default,
(i) no such promissory note, instrument, negotiable
document or chattel paper that has a fair market value less
than $500,000, individually, or
(ii) such promissory notes, instruments, negotiable
documents or chattel paper that collectively have a fair
market value in the aggregate less than $1,000,000,
shall be required to be delivered unless otherwise required pursuant
to the Term Loan Agreement, any other Loan Document (as such term is
defined in the Term Loan Agreement), the Senior Secured Indenture or
any other Collateral Document;
(c) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices (including any assignment of claim form under or pursuant to
the federal assignment of claims statute, 31 U.S.C. Section 3726, any
successor or amended version thereof or any regulation promulgated
under or pursuant to any version thereof), as may be necessary or
desirable, or as the Collateral Agent may request, in order to perfect
and preserve the security interests and other rights granted or
purported to be granted to the Collateral Agent hereby; and
(d) furnish to the Collateral Agent, from time to time at the
Collateral Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Collateral Agent may reasonably
request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all
or any part of the Collateral without the signature of such Grantor where
permitted by law. A carbon, photographic or other reproduction of this
Security Agreement or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.
ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints the Collateral 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
Collateral Agent's discretion, following the occurrence and continuation of a
Default of the nature set forth in Section 8.1.9 of the Term Loan Agreement, a
Default
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of the nature set forth in Clause 10 or 11 of Section 501 of the Senior Secured
Note Indenture or an Event of Default, to take any action and to execute any
instrument which the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Security Agreement, including:
(a) to ask, demand, collect, sue 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;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) above;
(c) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
the rights of the Collateral Agent with respect to any of the
Collateral; and
(d) to perform the affirmative obligations of such Grantor
hereunder (including all obligations of such Grantor pursuant to
Section 4.1.7).
Such Grantor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and coupled with an
interest.
SECTION 5.2. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Collateral Agent incurred in connection therewith shall be payable by such
Grantor pursuant to Section 6.2.
SECTION 5.3. Collateral Agent Has No Duty. In addition to, and not
in limitation of, Section 2.4, the powers conferred on the Collateral Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining
to any Collateral.
SECTION 5.4. Reasonable Care. The Collateral Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the Collateral
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.
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ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may
(i) require each Grantor to, and such Grantor hereby
agrees that it will, at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place to be designated
by the Collateral Agent which is reasonably convenient to both
parties, and
(ii) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent
may deem commercially reasonable. Each Grantor agrees that,
to the extent notice of sale shall be required by law, at
least ten days' prior 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 Collateral Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made
at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Collateral 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 Collateral
Agent, be held by the Collateral Agent as collateral for, and/or then
or at any time thereafter applied (after payment of any amounts
payable to the Collateral Agent pursuant to Section 6.2) in whole or
in part by the Collateral Agent for the ratable benefit of the Secured
Parties against, all or any part of the Secured Obligations in such
order as the Collateral Agent shall elect. Any surplus of such cash
or cash proceeds held by the Collateral Agent and remaining after
payment in full in cash of all the Secured Obligations shall be paid
over to the applicable Grantor or to whomsoever may be lawfully
entitled to receive such surplus.
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SECTION 6.2. Indemnity and Expenses.
(a) Each Grantor jointly and severally agrees to indemnify
the Collateral Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Security Agreement
(including enforcement of this Security Agreement), except claims,
losses or liabilities resulting from the Collateral Agent's gross
negligence or wilful misconduct.
(b) Each Grantor will upon demand pay to the Collateral Agent
the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any experts
and agents, which the Collateral Agent may incur in connection with
(i) the administration of this Security Agreement,
(ii) the custody, preservation, use or operation of,
or, after the occurrence and during the continuance of an
Event of Default, the sale of, collection from, or other
realization upon, any of the Collateral, and
(iii) the exercise or enforcement of any of the
rights of the Collateral Agent or the Secured Parties
hereunder, or (iv) the failure by any Grantor to perform or
observe any of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Collateral Document. This Security Agreement is a
Collateral Document executed pursuant to the Intercreditor Agreement and shall
(unless otherwise expressly indicated herein) be construed, administered and
applied in accordance with the terms and provisions of the Intercreditor
Agreement.
SECTION 7.2. Amendments; etc. No amendment to or waiver of any
provision of this Security Agreement nor 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 Collateral Agent (on behalf of the Secured Parties),
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 7.3. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing or by facsimile and,
if to any Grantor, addressed, delivered or transmitted to such Grantor in care
of the Borrower at the address or facsimile number of the Borrower specified in
the Intercreditor Agreement, if to the Collateral Agent, addressed,
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delivered or transmitted to it at the address or facsimile number of the
Collateral Agent specified in the Intercreditor Agreement. Any notice, if
mailed and properly addressed with postage prepaid or if properly addressed and
sent by pre-paid courier service, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given which transmitted
(and electronic confirmation of receipt thereof has been received).
SECTION 7.4. Section Captions. Section captions used in this
Security Agreement are for convenience of reference only, and shall not affect
the construction of this Security Agreement.
SECTION 7.5. Severability. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Security Agreement.
SECTION 7.6. Counterparts. This Security Agreement may be executed
by the parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.7. Governing Law, Entire Agreement, etc. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION
OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS
CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO
THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.
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IN WITNESS WHEREOF, each Grantor has caused this Security Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
PCI CAROLINA, INC., a Delaware
corporation
By /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
PIONEER LICENSING, INC., a Delaware
corporation
By /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
UNITED STATES TRUST COMPANY OF
NEW YORK, as Collateral Agent
By /s/ PATRICIA STERMER
----------------------------------
Name: Patricia Stermer
Title: Assistant Vice President