EXHIBIT 10.4
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AMENDED AND RESTATED SECURITY AGREEMENT
among
CII TECHNOLOGIES, INC.,
COMMUNICATIONS INSTRUMENTS, INC.,
CERTAIN SUBSIDIARIES
OF COMMUNICATIONS INSTRUMENTS, INC.
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Collateral Agent
Dated as of June 19, 1998
and
Amended and Restated as of March 19, 1999
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TABLE OF CONTENTS
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ARTICLE I SECURITY INTERESTS.................................................................... 2
1.1. Grant of Security Interests........................................................... 2
1.2. Power of Attorney..................................................................... 2
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS..................................... 3
2.1. Necessary Filings..................................................................... 3
2.2. No Liens.............................................................................. 3
2.3. Other Financing Statements............................................................ 3
2.4. Chief Executive Office; Records....................................................... 4
2.5. Location of Inventory and Equipment................................................... 4
2.6. Recourse.............................................................................. 4
2.7. Trade Names; Change of Name........................................................... 5
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS............... 5
3.1. Additional Representations and Warranties............................................. 5
3.2. Maintenance of Records................................................................ 5
3.3. Direction to Account Debtors; Contracting Parties; etc................................ 6
3.4. Modification of Terms; etc............................................................ 6
3.5. Collection............................................................................ 6
3.6. Instruments........................................................................... 7
3.7. Further Actions....................................................................... 7
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS.............................................. 7
4.1. Additional Representations and Warranties............................................. 7
4.2. Licenses and Assignments.............................................................. 8
4.3. Infringements......................................................................... 8
4.4. Preservation of Marks................................................................. 8
4.5. Maintenance of Registration........................................................... 8
4.6. Future Registered Marks............................................................... 8
4.7. Remedies.............................................................................. 9
(i)
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ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS................. 9
5.1. Additional Representations and Warranties........................................... 9
5.2. Licenses and Assignments............................................................ 10
5.3. Infringements....................................................................... 10
5.4. Maintenance of Patents.............................................................. 10
5.5. Prosecution of Patent Application................................................... 10
5.6. Other Patents and Copyrights........................................................ 11
5.7. Remedies............................................................................ 11
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL................................................ 11
6.1. Protection of Collateral Agent's Security........................................... 11
6.2. Warehouse Receipts Non-Negotiable................................................... 12
6.3. Further Actions..................................................................... 12
6.4. Financing Statements................................................................ 12
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT........................................ 13
7.1. Remedies; Obtaining the Collateral Upon Default..................................... 13
7.2. Remedies; Disposition of the Collateral............................................. 14
7.3. Waiver of Claims.................................................................... 15
7.4. Application of Proceeds............................................................. 15
7.5. Remedies Cumulative................................................................. 16
7.6. Discontinuance of Proceedings....................................................... 17
ARTICLE VIII.. INDEMNITY........................................................................... 17
8.1. Indemnity........................................................................... 17
8.2. Indemnity Obligations Secured by Collateral; Survival............................... 18
ARTICLE IX DEFINITIONS......................................................................... 19
ARTICLE X..... MISCELLANEOUS....................................................................... 23
10.1. Notices............................................................................. 23
10.2. Waiver; Amendment................................................................... 24
10.3. Obligations Absolute................................................................ 24
10.4. Successors and Assigns.............................................................. 24
10.5. Headings Descriptive................................................................ 24
(ii)
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10.6. Governing Law.......................................... 24
10.7. Assignor's Duties...................................... 25
10.8. Termination; Release................................... 25
10.9. Counterparts........................................... 25
10.10. The Collateral Agent................................... 26
10.11. Additional Assignors................................... 26
ANNEX A Schedule of Chief Executive Offices and other Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Trade and Fictitious Names
ANNEX D List of Marks
ANNEX E List of Patents and Applications
ANNEX F List of Copyrights and Applications
ANNEX G Grant of Security Interest in United States Trademarks and Patents
ANNEX H Grant of Security Interest in United States Copyrights
(iii)
AMENDED AND RESTATED SECURITY AGREEMENT
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AMENDED AND RESTATED SECURITY AGREEMENT, dated as of June 19, 1998,
and amended and restated as of March 19, 1999, among each of the undersigned
assignors (each, an "Assignor" and, together with any other entity that becomes
a party hereto pursuant to Section 10.11 hereof, the "Assignors") and Bank of
America National Trust and Savings Association, as Collateral Agent (together
with its successors and assigns, the "Collateral Agent"), for the benefit of the
Secured Creditors (as defined below). Except as otherwise defined herein, terms
used herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
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WHEREAS, CII Technologies, Inc. ("Holdings"), Communications
Instruments, Inc. (the "Borrower"), the several financial institutions from time
to time party thereto (the "Lenders"), NationsBank, N.A., as an Issuing Lender
and the Swingline Lender, and NationsBank, N.A., as Administrative Agent
(together with any successor administrative agent, the "Administrative Agent,"
and together with the Collateral Agent, the Issuing Lenders, the Swingline
Lender and the Lenders, the "Lender Creditors"), have entered into a Credit
Agreement, dated as of June 19, 1998, and amended and restated as of March 19,
1999 (as amended, restated, modified or supplemented from time to time, the
"Credit Agreement"), providing for the making of Loans to the Borrower and the
issuance of, and participation in, Letters of Credit for the account of the
Borrower, all as contemplated therein;
WHEREAS, the Borrower may from time to time be party to one or more
Interest Rate Protection Agreements or Other Hedging Agreements with one or more
Lenders or with an affiliate of a Lender (each such Lender or affiliate, even if
the respective Lender subsequently ceases to be a Lender under the Credit
Agreement for any reason, together with such Lender's or affiliate's successors
and assigns, collectively, the "Other Creditors", and together with the Lender
Creditors, the "Secured Creditors");
WHEREAS, pursuant to Article X of the Credit Agreement, Holdings has
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guaranteed to the Secured Creditors the payment when due of all obligations and
liabilities of the Borrower under or with respect to the Loan Documents and the
Interest Rate Protection Agreements and Other Hedging Agreements;
WHEREAS, pursuant to the Subsidiary Guaranty, each Assignor (other
than Holdings and the Borrower) has jointly and severally guaranteed to the
Secured Creditors the payment when due of all obligations and liabilities of the
Borrower under or with respect to the Loan Documents and the Interest Rate
Protection Agreements and Other Hedging Agreements;
WHEREAS, the Collateral Agent and the Assignors (other than Products
Unlimited and its Domestic Subsidiaries) entered into a Security Agreement,
dated as of June 19, 1998 (the "Original Security Agreement"), in connection
with the Original Credit Agreement;
WHEREAS, the parties hereto wish to amend and restate the Original
Security Agreement in its entirety in the form of this Agreement;
WHEREAS, it is a condition precedent to the Restatement Effective Date
and to the making of Loans to the Borrower and the issuance of Letters of Credit
for the account of the Borrower under the Credit Agreement that the Assignors
shall have executed and delivered to the Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute this Agreement to satisfy
the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, (i) the
parties hereto hereby acknowledge and agree that the Original Security Agreement
shall be, and hereby is, amended and restated in its entirety in the form of
this Agreement and (ii) each Assignor hereby makes the following representations
and warranties to the Collateral Agent and hereby covenants and agrees with the
Collateral Agent as follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the prompt
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and complete payment and performance when due of all of its Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent (and hereby
reconfirms its assignment under the Original Security Agreement), and does
hereby pledge and grant to the Collateral Agent for the benefit of the Secured
Creditors (and hereby reconfirms its pledge and grant under the Original
Security Agreement), a continuing security interest of first priority in, all of
the right, title and interest of such Assignor in, to and under all of the
following, whether now existing or hereafter from time to time acquired: (i)
each and every Receivable, (ii) all Contracts, together with all Contract Rights
arising thereunder (other than Contracts which by their terms cannot be pledged
(although the right to receive payments of money due or to become due thereunder
shall not be excluded from the security interest created hereunder)), (iii) all
Inventory, (iv) all Equipment, (v) all Marks, together with the registrations
and right to all renewals thereof, and the goodwill of the business of such
Assignor symbolized by the Marks, (vi) all Patents and Copyrights, (vii) all
computer programs of such Assignor and all intellectual property rights therein
(other than such programs and rights which by their terms cannot be pledged) and
all other proprietary information of such Assignor, including, but not limited
to, trade secrets, (viii) all other Goods, General Intangibles, Chattel Paper,
Documents and Instruments, (ix) the Cash Collateral Account and all monies,
securities and instruments deposited or required to be deposited in such Cash
Collateral Account, and (x) all Proceeds and products of any and all of the
foregoing (all of the above, collectively, the "Collateral"). Notwithstanding
anything to the contrary contained in the immediately preceding sentence, the
term Collateral shall not include motor vehicles.
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(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
(c) The parties hereto hereby confirm that the security interests
created under the Original Security Agreement shall continue uninterrupted
pursuant to this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
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appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquittance for any and all monies and claims for
monies due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem to be reasonably necessary or advisable to
protect the interests of the Secured Creditors, which appointment as attorney is
coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and recordings
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necessary or appropriate to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral have been accomplished (or, in the case of Collateral acquired
pursuant to the Acquisition, will have been accomplished on the Business Day
immediately following the Restatement Effective Date) and the security interest
granted to the Collateral Agent pursuant to this Agreement in and to the
Collateral creates a perfected security interest therein prior to the rights of
all other Persons therein and subject to no other Liens (other than Permitted
Liens) and is entitled to all the rights, priorities and benefits afforded by
the Uniform Commercial Code or other relevant law as enacted in any relevant
jurisdiction to perfected security interests, in each case to the extent that
the Collateral consists of the type of property in which a security interest may
be perfected by filing a financing statement under the Uniform Commercial Code
as enacted in any relevant jurisdiction or by filing a security agreement in the
United States Patent and Trademark Office or United States Copyright Office or,
to the extent provided in Section 6.3(b) hereof, in any foreign equivalent
office of the United States Patent and Trademark or United States Copyright
Office.
2.2. No Liens. Such Assignor is, and as to Collateral acquired by it
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from time to time after the date hereof such Assignor will be, the owner of, or
has rights in, all Collateral free from any Lien, security interest, encumbrance
or other right, title or interest of any Person (other than Permitted Liens),
and such Assignor shall defend the Collateral to the extent of its
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rights therein against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.
2.3. Other Financing Statements. As of the date hereof, there is no
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financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than financing statements filed in respect of
Permitted Liens), and so long as the Aggregate Commitment has not been
terminated or any promissory note issued under the Credit Agreement remains
unpaid or any of the Obligations remain unpaid or any Interest Rate Protection
Agreement or Other Hedging Agreement or Letter of Credit remains in effect
(other than Letters of Credit, together with all fees that have accrued and will
accrue thereon through the stated termination date of such Letters of Credit,
which have been secured in a manner satisfactory to the applicable Issuing
Lenders in their sole and absolute discretion) or any Obligations are owed with
respect thereto, such Assignor will not execute or authorize to be filed in any
public office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except (a) financing statements and other perfection instruments
filed or to be filed in respect of and covering the security interests granted
hereby by such Assignor or as permitted by the Credit Agreement and (b)
financing statements with respect to Permitted Liens.
2.4. Chief Executive Office; Records. The chief executive office of
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such Assignor is located at the address or addresses indicated on Annex A hereto
for such Assignor. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents
evidencing all Receivables and Contract Rights of such Assignor and the only
original books of account and records of such Assignor relating thereto are, and
will continue to be, kept at such chief executive office, at one or more of the
locations set forth on Annex A hereto or at such new locations as such Assignor
may establish in accordance with the last sentence of this Section 2.4. All
Receivables and Contract Rights of such Assignor are, and will continue to be,
maintained at, and controlled and directed (including, without limitation, for
general accounting purposes) from, the office locations described above or such
new location established in accordance with the last sentence of this Section
2.4. No Assignor shall establish new locations for such offices until it shall
have given to the Collateral Agent notice of its intention to do so unless (i)
such Assignor shall give to the Collateral Agent written notice of any such
relocation of its chief executive office within 10 days following such
relocation, clearly describing such new location and providing such other
information in connection therewith as the Collateral Agent may reasonably
request and (ii) with respect to such new location, it shall take all action,
reasonably satisfactory to the Collateral Agent, to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted hereby
at all times fully perfected and in full force and effect.
2.5. Location of Inventory and Equipment. All Inventory and
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Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor (other than (i) immaterial
portions of Inventory (x) sold on consignment or held on display for
demonstration purposes or (y) transferred to another location in connection
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with a sale of such Inventory in the ordinary course of business, so long as
such sale occurs within 60 days from the date of such transfer and (ii) various
spare parts held for maintenance or repair of Equipment). Each Assignor agrees
that all Inventory and Equipment now held or subsequently acquired by it shall
be kept at (or shall be in transport to) any one of the locations shown on Annex
B hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.5 (other than (i) immaterial portions of
Inventory (x) sold on consignment or held on display for demonstration purposes
or (y) may be transferred to another location in connection with a sale of such
Inventory in the ordinary course of business, so long as such sale occurs within
60 days from the date of such transfer and (ii) various spare parts held for
maintenance or repair of Equipment). Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent written notice within 10 days following any such relocation clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may request and (ii) with respect to such new
location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
2.6. Recourse. This Agreement is made with full recourse to each
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Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the other Loan
Documents, in the Interest Rate Protection Agreements or Other Hedging
Agreements and otherwise in writing in connection herewith or therewith.
2.7. Trade Names; Change of Name. No Assignor has or operates in any
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jurisdiction under, or in the preceding 12 months has had or has operated in any
jurisdiction under, any trade names, fictitious names or other names except its
legal name and such other trade or fictitious names as are listed on Annex C
hereto. No Assignor shall change its legal name or assume or operate in any
jurisdiction under any trade, fictitious or other name except those names listed
on Annex C hereto and new names established in accordance with the last sentence
of this Section 2.7. No Assignor shall assume or operate in any jurisdiction
under any new trade, fictitious or other name unless (i) it shall have given to
the Collateral Agent written notice within 10 days following any assumption of,
or operation under, such new name clearly describing such new name and the
jurisdictions in which such new name shall be used and providing such other
information in connection therewith as the Collateral Agent may reasonably
request and (ii) with respect to such new name, it shall have taken all action
requested by the Collateral Agent, to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time when
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each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that
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such Receivable, and all records, papers and documents relating thereto (if any)
are what they purport to be, and that all papers and documents (if any) relating
thereto will be the only original writings evidencing and embodying such
obligation of the account debtor named therein (other than copies created for
general accounting purposes).
3.2. Maintenance of Records. Each Assignor will keep and maintain at
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its own cost and expense accurate records of its Receivables and Contracts,
records of all payments received, all credits granted thereon, all merchandise
returned and all other dealings therewith, and such Assignor will make the same
available on such Assignor's premises to the Collateral Agent for inspection, at
such Assignor's own cost and expense, at any and all reasonable times upon prior
notice to a Responsible Officer of such Assignor. Upon the occurrence and
during the continuance of an Event of Default and at the request of the
Collateral Agent, such Assignor shall, at its own cost and expense, deliver all
tangible evidence of its Receivables and Contract Rights (including, without
limitation, all documents evidencing the Receivables and all Contracts) and such
books and records to the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by such Assignor). Upon
the occurrence and during the continuance of an Event of Default and if the
Collateral Agent so directs, such Assignor shall legend, in form and manner
reasonably satisfactory to the Collateral Agent, the Receivables and the
Contracts, as well as books, records and documents (if any) of such Assignor
evidencing or pertaining to such Receivables and Contracts with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.
3.3. Direction to Account Debtors; Contracting Parties; etc. Upon
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the occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all
payments on account of the Receivables and Contracts to be made directly to the
Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in the preceding
clause (x) and (z) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Assignor.
Without notice to or assent by any Assignor, the Collateral Agent may apply any
or all amounts then in, or thereafter deposited in, the Cash Collateral Account
which application shall be effected in the manner provided in Section 7.4 of
this Agreement. The costs and expenses (including reasonable attorneys' fees)
of collection, whether incurred by the relevant Assignor or the Collateral
Agent, shall be borne by the relevant Assignor. The Collateral Agent shall
deliver a copy of each notice referred to in the preceding clause (y) to the
relevant Assignor; provided, that the failure by the Collateral Agent to so
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notify such Assignor shall not affect the effectiveness of such notice or the
other rights of the Collateral Agent created by this Section 3.3. The
Collateral Agent's rights and the Assignor's Obligations under this Section 3.3
shall be in addition to, and not in lieu of, their respective rights and
obligations under Section 7.11 of the Credit Agreement.
3.4. Modification of Terms; etc. No Assignor shall rescind or cancel
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any indebtedness evidenced by any Receivable or under any Contract, or modify in
any material
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respect any term thereof or make any material adjustment with respect thereto,
or extend or renew the same, or compromise or settle any material dispute,
claim, suit or legal proceeding relating thereto, or sell any Receivable or
Contract, or interest therein, without the prior written consent of the
Collateral Agent, except as permitted by Section 3.5 hereof or in the Credit
Agreement. Each Assignor will duly fulfill all obligations on its part to be
fulfilled under or in connection with the Receivables and Contracts and will do
nothing to impair the rights of the Collateral Agent in the Receivables or
Contracts.
3.5. Collection. Each Assignor shall endeavor in accordance with
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reasonable business practices to cause to be collected from the account debtor
named in each of its Receivables or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Receivable or Contract,
and apply forthwith upon receipt thereof all such amounts as are so collected to
the outstanding balance of such Receivable or under such Contract, except that,
prior to the occurrence of an Event of Default, any Assignor may allow in the
ordinary course of business as adjustments to amounts owing under its
Receivables and Contracts (i) an extension or renewal of the time or times of
payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, attorneys' fees) of
collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any Instrument
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constituting Collateral, such Assignor will within 10 Business Days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
3.7. Further Actions. Each Assignor will, at its own expense, make,
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execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
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represents and warrants that it is the true and lawful owner of or otherwise has
the right to use the registered Marks listed in Annex D hereto for such Assignor
and that said listed Marks constitute all the marks and applications for marks
registered in the United States Patent and Trademark Office or
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the equivalent thereof in any foreign country that such Assignor owns or uses in
connection with its business as of the Restatement Effective Date. Each Assignor
represents and warrants that it owns, is licensed to use or otherwise has the
right to use all Marks that it uses. Each Assignor further warrants that it has
no knowledge of any third party claim that any aspect of such Assignor's present
or contemplated business operations infringes or will infringe any trademark,
service mark or trade name. Each Assignor represents and warrants that it is the
true and lawful owner of or otherwise has the right to use all trademark
registrations and applications listed in Annex D hereto and that said
registrations are valid, subsisting, have not been canceled and that such
Assignor is not aware of any third-party claim that any of said registrations is
invalid or unenforceable, or is not aware that there is any reason that any of
said registrations is invalid or unenforceable, or is not aware that there is
any reason that any of said applications will not pass to registration. Each
Assignor represents and warrants that upon the recordation of a Grant of
Security Interest in United States Trademarks and Patents in the form of Annex G
hereto in the United States Patent and Trademark Office, together with filings
on Form UCC-1 pursuant to this Agreement, all filings, registrations and
recordings necessary or appropriate to perfect the security interest granted to
the Collateral Agent in the United States Marks covered by this Agreement under
federal law will have been accomplished. Each Assignor agrees to execute such a
Grant of Security Interest in United States Trademark and Patents covering all
right, title and interest in each United States Mark, and the associated
goodwill, of such Assignor, and to record the same. Each Assignor hereby grants
to the Collateral Agent an absolute power of attorney to sign, upon the
occurrence and during the continuance of an Event of Default, any document which
may be required by the United States Patent and Trademark Office or the
equivalent thereof in any foreign country in order to effect an absolute
assignment of the Assignor's right, title and interest in each Mark, and record
the same.
4.2. Licenses and Assignments. Except as otherwise permitted by the
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Credit Agreement or this Agreement, each Assignor hereby agrees not to divest
itself of any right under any Mark absent prior written approval of the
Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon learning
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thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is infringing or diluting or otherwise
violating in any material respect any of such Assignor's rights in and to any
Mark, or with respect to any party claiming that such Assignor's use of any Mark
violates in any material respect any property right of that party. Each Assignor
further agrees, unless otherwise agreed by the Collateral Agent, to prosecute
any Person infringing any Mark in accordance with commercially reasonable
business practices.
4.4. Preservation of Marks. Each Assignor agrees to use its Marks in
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interstate commerce (or the equivalent thereof in any foreign jurisdiction)
during the time in which this Agreement is in effect, sufficiently to preserve
such Marks as trademarks or service marks under the laws of the United States or
under the laws of the applicable foreign country, as the case may be; provided,
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that, to the extent permitted by the Credit Agreement, no Assignor shall be
obligated to preserve any Mark in the event such Assignor determines, in its
reasonable business judgment, that the preservation of such Mark is no longer
desirable in the conduct of its business.
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4.5. Maintenance of Registration. Each Assignor shall, at its own
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expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. (S)(S) 1051 et seq. (or the equivalent thereof in any foreign
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jurisdiction) to maintain trademark registrations, including but not limited to
affidavits of use and applications for renewals of registration in the United
States Patent and Trademark Office (or the equivalent thereof in any foreign
jurisdiction) for all of its registered Marks pursuant to 15 U.S.C. (S)(S)
1058(a), 1059 and 1065 (or the equivalent thereof in any foreign jurisdiction),
and shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the Collateral Agent; provided, that no Assignor shall
--------
be obligated to maintain registration of any Mark in the event that such
Assignor determines, in its reasonable business judgment, that such maintenance
of such Mark is no longer necessary or desirable in the conduct of its business.
Each Assignor agrees to notify the Collateral Agent three (3) months prior to
the dates on which the affidavits of use or the applications for renewal
registration are due with respect to any registered Mark that the affidavits of
use or the renewal is being processed or being abandoned, as the case may be.
4.6. Future Registered Marks. If any registration for a Mark issues
-----------------------
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office (or the equivalent
thereof in any foreign jurisdiction), within 30 days of receipt of such
certificate, such Assignor shall deliver to the Collateral Agent a copy of such
certificate, and a grant of security in such Mark, to the Collateral Agent and
at the expense of such Assignor, confirming the grant of security in such Mark
to the Collateral Agent hereunder, the form of such security to be substantially
the same as the form hereof or in such other form as may be reasonably
satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be continuing,
--------
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks, together with all
trademark rights and rights of protection to the same, vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such rights,
title and interest shall immediately vest, in the Collateral Agent for the
benefit of the Secured Creditors, and the Collateral Agent shall be entitled to
exercise the power of attorney referred to in Section 4.1 hereof to execute,
cause to be acknowledged and notarized and record said absolute assignment with
the applicable agency; (ii) take and use or sell the Marks and the goodwill of
such Assignor's business symbolized by the Marks and the right to carry on the
business and use the assets of such Assignor in connection with which the Marks
have been used; and (iii) direct such Assignor to refrain, in which event such
Assignor shall refrain, from using the Marks in any manner whatsoever, directly
or indirectly, and, if requested by the Collateral Agent, change such Assignor's
corporate name to eliminate therefrom any use of any Mark and execute such other
and further documents that the Collateral Agent may request to further confirm
this and to transfer ownership of the Marks and registrations and any pending
trademark application in the United States Patent and Trademark Office (or the
equivalent thereof in any foreign jurisdiction) to the Collateral Agent.
-9-
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
-----------------------------------------
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use (i) all material United States and foreign trade secrets and
proprietary information necessary to operate the business of the Assignor (the
"Trade Secret Rights"), (ii) the Patents listed in Annex E hereto for such
Assignor and that said Patents constitute all the patents and applications for
patents that such Assignor owns or uses as of the Restatement Effective Date and
(iii) the Copyrights listed in Annex F hereto for such Assignor and that said
Copyrights constitutes all registrations of copyrights and applications for
copyright registrations that such Assignor owns or uses as of the Restatement
Effective Date. Each Assignor further warrants that it has no knowledge of any
third party claim that any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any patent or any copyright or
such Assignor has misappropriated any trade secret or proprietary information,
except those claims which in the aggregate could not be reasonably expected to
have a Material Adverse Effect. Each Assignor represents and warrants that upon
the recordation of a Grant of Security Interest in United States Trademarks and
Patents in the form of Annex G hereto in the United States Patent and Trademark
Office and the recordation of a Grant of Security Interest in United States
Copyrights in the form of Annex H hereto in the United States Copyright Office,
together with filings on Form UCC-1 pursuant to this Agreement, all filings,
registrations and recordings necessary or appropriate to perfect the security
interest granted to the Collateral Agent in the United States Patents and United
States Copyrights covered by this Agreement under federal law will have been
accomplished. Each Assignor agrees to execute such a Grant of Security Interest
in United States Trademarks and Patents covering all right, title and interest
in each United States Patent of such Assignor and to record the same, and to
execute such a Grant of Security Interest in United States Copyrights covering
all right, title and interest in each United States Copyright of such Assignor
and to record the same. Each Assignor hereby grants to the Collateral Agent an
absolute power of attorney to sign, upon the occurrence and during the
continuance of any Event of Default, any document which may be required by the
United States Patent and Trademark Office (or the equivalent thereof in any
foreign jurisdiction) or the United States Copyright Office (or the equivalent
thereof in any foreign jurisdiction) in order to effect an absolute assignment
of all right, title and interest in each Patent and Copyright, and to record the
same.
5.2. Licenses and Assignments. Except as otherwise permitted by the
------------------------
Credit Agreement or this Agreement, each Assignor hereby agrees not to divest
itself of any right under any Patent or Copyright absent prior written approval
of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon learning
-------------
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe any of such
Assignor's rights in and to in any Patent or Copyright or to any claim that such
Assignor's practice of any Patent or use of any Copyright violates any property
right of a third
-10-
party, or with respect to any misappropriation of any Trade Secret Right or any
claim that such Assignor's practice of any Trade Secret Right violates any
property right of a third party. Each Assignor further agrees, absent direction
of the Collateral Agent to the contrary, diligently to prosecute any Person
infringing any Patent or Copyright or any Person misappropriating any Trade
Secret Right in accordance with commercially reasonable business practices.
5.4. Maintenance of Patents. At its own expense, each Assignor shall
----------------------
make timely payment of all post-issuance fees required pursuant to 35 U.S.C. (S)
41 (or the equivalent thereof in any foreign jurisdiction) to maintain in force
rights under each Patent, absent prior written consent of the Collateral Agent;
provided, that, to the extent permitted by the Credit Agreement, no Assignor
- --------
shall be obligated to maintain any Patent in the event such Assignor determines,
in its reasonable business judgment, that the maintenance of such Patent is no
longer necessary or desirable in the conduct of its business.
5.5. Prosecution of Patent Application. At its own expense, each
---------------------------------
Assignor shall diligently prosecute all applications for Patents listed in Annex
E hereto for such Assignor and shall not abandon any such application prior to
exhaustion of all administrative and judicial remedies, absent written consent
of the Collateral Agent; provided, that, to the extent permitted by the Credit
--------
Agreement, no Assignor shall be obligated to prosecute any application in the
event such Assignor determines, in its reasonable business judgment, that the
prosecuting of such application is no longer necessary or desirable in the
conduct of its business.
5.6. Other Patents and Copyrights. Within 30 days of the acquisition
----------------------------
or issuance of a Patent, registration of a Copyright, or acquisition of a
registered Copyright, or of filing of an application for a Patent or
registration of Copyright, the relevant Assignor shall deliver to the Collateral
Agent a copy of said Copyright or certificate or registration of, or application
therefor, said Patents, as the case may be, with an assignment for security as
to such Patent or Copyright, as the case may be, to the Collateral Agent and at
the expense of such Assignor, confirming the assignment for security, the form
of such assignment for security to be substantially the same as the form hereof
or in such other form as may be reasonably satisfactory to the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be continuing,
--------
the Collateral Agent may by written notice to the relevant Assignor, take any or
all of the following actions: (i) declare the entire right, title, and interest
of such Assignor in each of the Patents and Copyrights vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such right,
title, and interest shall immediately vest in the Collateral Agent for the
benefit of the Secured Creditors, in which case the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 hereof to
execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such other
and further documents as the Collateral Agent may request further to confirm
this and to transfer ownership of the Patents and Copyrights to the Collateral
Agent for the benefit of the Secured Creditors.
-11-
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each Assignor will
-----------------------------------------
do nothing to impair the rights of the Collateral Agent in the Collateral except
to the extent such impairment shall be waived in accordance with the terms of
Section 10.2 hereof. Each Assignor will at all times keep its Inventory and
Equipment insured in favor of the Collateral Agent, at such Assignor's own
expense to the extent and in the manner provided in the Credit Agreement; all
policies or certificates with respect to such insurance (and any other insurance
maintained by such Assignor) (i) shall be endorsed to the Collateral Agent's
reasonable satisfaction for the benefit of the Collateral Agent (including,
without limitation, by naming the Collateral Agent as additional insured and
loss payee) and (ii) shall state that such insurance policies shall not be
canceled or revised without 30 days' prior written notice thereof (or 10 days
prior written notice in the case of nonpayment of premium) by the insurer to the
Collateral Agent; and certified copies of such policies or certificates shall be
deposited with the Collateral Agent. If any Assignor shall fail to insure its
Inventory and Equipment in accordance with the preceding sentence, or if any
Assignor shall fail to so endorse and deposit all policies or certificates with
respect thereto, the Collateral Agent shall have the right (but shall be under
no obligation) to procure such insurance and such Assignor agrees to promptly
reimburse the Collateral Agent for all costs and expenses of procuring such
insurance. Except as otherwise permitted to be retained by the relevant
Assignor pursuant to the Credit Agreement, the Collateral Agent shall, at the
time such proceeds of such insurance are distributed to the Secured Creditors,
apply such proceeds in accordance with Section 7.4 hereof. Each Assignor
assumes all liability and responsibility in connection with the Collateral
acquired by it and the liability of such Assignor to pay the Obligations shall
in no way be affected or diminished by reason of the fact that such Collateral
may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable
to such Assignor.
6.2. Warehouse Receipts Non-Negotiable. Each Assignor agrees that if
---------------------------------
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in Section 7-104
of the Uniform Commercial Code as in effect in any relevant jurisdiction or
under other relevant law) or, if any warehouse receipt or any receipt in the
nature of a warehouse receipt is "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law) then the respective Assignor shall promptly take
all action as may be required under the relevant jurisdiction to grant a
perfected security interest in such Collateral to the Collateral Agent for the
benefit of the Secured Creditors.
6.3. Further Actions. (a) Each Assignor will, at its own expense,
---------------
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attor-
-12-
ney, certificates, reports and other assurances or instruments and take such
further steps relating to the Collateral and other property or rights covered by
the security interest hereby granted, which the Collateral Agent deems
reasonably appropriate or advisable to perfect, preserve or protect its security
interest in the Collateral.
(b) Each Assignor hereby agrees that it will from time to time, at
its own expense and at the request of the Collateral Agent or the Majority
Lenders, take all actions (including making all appropriate filings) as may be
necessary or in the reasonable opinion of the Collateral Agent desirable to
perfect (and maintain the perfection of) any security interest in any material
foreign Mark, Patent and/or Copyright, and in connection therewith shall deliver
one or more opinions of foreign counsel confirming the validity and perfection
of such foreign Marks, Patents and/or Copyrights.
6.4. Financing Statements. Each Assignor agrees to execute and
--------------------
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first priority
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby all in accordance with the Uniform
Commercial Code as enacted in any and all relevant jurisdictions or any other
relevant law. Each Assignor will pay any applicable filing fees, recordation
taxes and related expenses relating to its Collateral. Each Assignor hereby
authorizes the Collateral Agent to file any such financing statements without
the signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor
-----------------------------------------------
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions and
may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or any
other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent;
-13-
(iii) withdraw all monies, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct the relevant Assignor to sell, assign or otherwise liquidate any or
all of the Collateral or any part thereof, and, in each case, take
possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral Agent,
in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or places
so designated by the Collateral Agent and there delivered to the
Collateral Agent;
(y) store and keep any Collateral so delivered to the Collateral
Agent at such place or places pending further action by the
Collateral Agent as provided in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to protect
the same and to preserve and maintain them in good condition; and
(vi) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for such
term and on such conditions and in such manner as the Collateral Agent
shall in its sole judgment determine (taking into account such provisions
as may be necessary to protect and preserve such Marks, Patents or
Copyrights);
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Administrative Agent or the Collateral Agent, in each case acting upon
the instructions of the Majority Lenders (or, after the date on which all Loan
Document Obligations have been paid in full and the Aggregate Commitment has
been terminated, the holders of at least the majority of the outstanding Other
Obligations) and that no other Secured Creditor shall have any right
individually to seek to enforce or to enforce this Agreement or to realize upon
the security to be granted hereby, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent or the
Collateral Agent or the holders of at least a majority of the outstanding
Interest Rate Obligations, as the case may be, for the benefit of the Secured
Creditors upon the terms of this Agreement.
7.2. Remedies; Disposition of the Collateral. Any Collateral
---------------------------------------
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or
-14-
not so repossessed by the Collateral Agent, may be sold, assigned, leased or
otherwise disposed of under one or more contracts or as an entirety, and without
the necessity of gathering at the place of sale the property to be sold, and in
general in such manner, at such time or times, at such place or places and on
such terms as the Collateral Agent may, in compliance with any mandatory
requirements of applicable law, determine to be commercially reasonable. Any of
the Collateral may be sold, leased or otherwise disposed of, in the condition in
which the same existed when taken by the Collateral Agent or after any overhaul
or repair at the expense of the relevant Assignor which the Collateral Agent
shall determine to be commercially reasonable. Any such disposition which shall
be a private sale or other private proceedings permitted by such requirements
shall be made upon not less than 10 days' written notice to the relevant
Assignor specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of the relevant
Assignor or any nominee of such Assignor to acquire the Collateral involved at a
price or for such other consideration at least equal to the intended sale price
or other consideration so specified. Any such disposition which shall be a
public sale permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time and place of
such sale and, in the absence of applicable requirements of law, shall be by
public auction (which may, at the Collateral Agent's option, be subject to
reserve), after publication of notice of such auction not less than 10 days
prior thereto in two newspapers in general circulation in the City of New York.
To the extent permitted by any such requirement of law, the Collateral Agent may
bid for and become the purchaser of the Collateral or any item thereof, offered
for sale in accordance with this Section without accountability to the relevant
Assignor. If, under mandatory requirements of applicable law, the Collateral
Agent shall be required to make disposition of the Collateral within a period of
time which does not permit the giving of notice to the relevant Assignor as
hereinabove specified, the Collateral Agent need give such Assignor only such
notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law.
7.3. Waiver of Claims. Except as otherwise provided in this
----------------
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Assignor hereby further waives, to the extent
permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
-15-
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the relevant Assignor
therein and thereto, and shall be a perpetual bar both at law and in equity
against such Assignor and against any and all Persons claiming or attempting to
claim the Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
-----------------------
Collateral Agent (or, to the extent the Pledge Agreement, any Mortgage or any
other Collateral Documents require proceeds of collateral under such Collateral
Documents to be applied in accordance with the provisions of this Agreement, the
Collateral Agent under such other Collateral Document) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing the Collateral
Agent of the type provided in clauses (iii) and (iv) of the definition of
Obligations herein;
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Obligations shall be paid to the Secured Creditors as provided in Section
7.4(c) hereof with each Secured Creditor receiving an amount equal to its
outstanding Obligations or, if the proceeds are insufficient to pay in full
all such Obligations, its Pro Rata Share of the amount remaining to be
distributed; and
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii) and following the
termination of this Agreement pursuant to Section 10.8 hereof, to the
relevant Assignor or, to the extent directed by such Assignor or a court of
competent jurisdiction, to whomever may be lawfully entitled to receive
such surplus.
(b) For purposes of this Agreement, "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Obligations and the
denominator of which is the then outstanding amount of all Obligations.
(c) All payments required to be made to the Lender Creditors
hereunder shall be made to the Administrative Agent under the Credit Agreement
for the account of the Lender Creditors and all payments required to be made to
the Other Creditors hereunder shall be made directly to the respective Other
Creditor.
-16-
(d) For purposes of applying payments received in accordance with
this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Other Creditors for
a determination (which the Administrative Agent, each Other Creditor and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Obligations owed to the Lender Creditors or
the Other Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Lender Creditor or an Other Creditor)
to the contrary, the Administrative Agent under the Credit Agreement, in
furnishing information pursuant to the preceding sentence, and the Collateral
Agent, in acting hereunder, shall be entitled to assume that (x) no Loan
Document Obligations other than principal, interest and regularly accruing fees
are owing to any Lender Creditor and (y) no Interest Rate Protection Agreement
or Other Hedging Agreement, or Other Obligations in respect thereof, are in
existence.
(e) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the sums referred to in
clause (a) of this Section 7.4 with respect to the relevant Assignor.
7.5. Remedies Cumulative. Each and every right, power and remedy
-------------------
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, the
Interest Rate Protection Agreements or Other Hedging Agreements, the other Loan
Documents or now or hereafter existing at law, in equity or by statute and each
and every right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time or simultaneously and as often and
in such order as may be deemed expedient by the Collateral Agent. All such
rights, powers and remedies shall be cumulative and the exercise or the
beginning of the exercise of one shall not be deemed a waiver of the right to
exercise any other or others. No delay or omission of the Collateral Agent in
the exercise of any such right, power or remedy and no renewal or extension of
any of the Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an acquiescence
therein. No notice to or demand on any Assignor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Collateral Agent to any other or
further action in any circumstances without notice or demand. In the event that
the Collateral Agent shall bring any suit to enforce any of its rights hereunder
and shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent
-----------------------------
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
-17-
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees to
---------
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, permitted assigns, employees, agents and
servants (hereinafter in this Section 8.1 referred to individually as
"Indemnitee," and collectively as "Indemnitees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements
(including attorneys' fees and expenses) (for the purposes of this Section 8.1
the foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any Interest Rate Protection
Agreement or Other Hedging Agreement, any other Loan Document or any other
document executed in connection herewith or therewith or in any other way
connected with the administration of the transactions contemplated hereby or
thereby or the enforcement of any of the terms of, or the preservation of any
rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the laws of any
country, state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property damage), or contract claim; provided that no Indemnitee
shall be indemnified pursuant to this Section 8.1(a) for losses, damages or
liabilities to the extent caused by the gross negligence or willful misconduct
of such Indemnitee. Each Assignor agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, damage, injury,
penalty, claim, demand, action, suit or judgment, the relevant Assignor shall
assume full responsibility for the defense thereof. Each Indemnitee agrees to
use its best efforts to promptly notify the relevant Assignor of any such
assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof, each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b) hereof,
each Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and
-18-
against any loss, costs, damages and expenses which such Indemnitee may suffer,
expend or incur in consequence of or growing out of any misrepresentation by any
Assignor in this Agreement, any Interest Rate Protection Agreement or Other
Hedging Agreement, any other Loan Document or in any writing contemplated by or
made or delivered pursuant to or in connection with this Agreement, any Interest
Rate Protection Agreement or Other Hedging Agreement or any other Loan Document.
(d) If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
-----------------------------------------------------
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
promissory notes issued under the Credit Agreement, the termination of all
Interest Rate Protection Agreements or Other Hedging Agreements and the payment
of all other Obligations and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Administrative Agent" shall have the meaning provided in the recitals
to this Agreement.
"Agreement" shall mean this Amended and Restated Security Agreement as
the same may be modified, supplemented or amended from time to time in
accordance with its terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower" shall have the meaning provided in the recitals to this
Agreement.
"Cash Collateral Account" shall mean, collectively, each cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
-19-
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreements or Other Hedging Agreements).
"Copyrights" shall mean any United States or foreign copyright owned
by any Assignor, including any registrations of any Copyrights, in the United
States Copyright Office or the equivalent thereof in any foreign country, as
well as any application for a United States or foreign copyright registration
now or hereafter made with the United States Copyright Office or the equivalent
thereof in any foreign country by any Assignor, other than those countries
outside the United States where the grant of a security interest would
invalidate such Copyrights.
"Credit Agreement" shall have the meaning provided in the recitals to
this Agreement.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor and any and
all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Goods" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.
-20-
"Holdings" shall have the meaning provided in the recitals to this
Agreement.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through work-
in-process to finished goods -- and all products and proceeds of whatever sort
and wherever located and any portion thereof which may be returned, rejected,
reclaimed or repossessed by the Collateral Agent from any Assignor's customers,
and shall specifically include all "inventory" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor.
"Lender Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Lenders" shall have the meaning provided in the recitals to this
Agreement.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"Loan Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Marks" shall mean all right, title and interest in and to any United
States or foreign trademarks, service marks and trade names now held or
hereafter acquired by any Assignor, including any registration of any trademarks
and service marks in the United States Patent and Trademark Office, or the
equivalent thereof in any foreign country, other than those countries outside
the United States, where the grant of a security interest would invalidate such
trademarks, service marks and trade names, and any trade dress including logos
and/or designs used by any Assignor in the United States or any foreign country.
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor, now existing or hereafter incurred under, arising out of or in
connection with any Loan Document to which such Assignor is a party and the due
performance and compliance by each Assignor with the terms of each such Loan
Document, including, without limitation, in the case of the Borrower, all
"Obligations" under and as defined in the Credit Agreement, and in the case of
each other Assignor, all "Guaranteed Obligations" under and as defined in the
Credit Agreement or the Subsidiary Guaranty, as applicable (all such obligations
-21-
and liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate Protection Agreements
or Other Hedging Agreements, being herein collectively called the "Loan Document
Obligations"); (ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of each Assignor now existing
or hereafter incurred under, arising out of or in connection with any Interest
Rate Protection Agreement or Other Hedging Agreement, including, without
limitation, in the case of the Assignors other than the Borrower, all
obligations of such Assignor under Article X of the Credit Agreement or under
the Subsidiary Guaranty, as the case may be, in respect of Interest Rate
Protection Agreements or Other Hedging Agreements (all such obligations and
liabilities under this clause (ii) being herein collectively called the "Other
Obligations"); (iii) any and all sums advanced by the Collateral Agent in order
to preserve the Collateral or preserve its security interest in the Collateral;
(iv) in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of each Assignor referred to in
clauses (i) and (ii), after an Event of Default shall have occurred and be
continuing, the reasonable expenses of re-taking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, or of
any exercise by the Collateral Agent of its rights hereunder, together with
reasonable attorneys' fees and court costs; and (v) all amounts paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement under
Section 8.1 of this Agreement.
"Original Security Agreement" shall have the meaning provided in the
recitals to this Agreement.
"Other Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
"Patents" shall mean any United States or foreign patent to which any
Assignor now or hereafter has title and any divisions or continuations thereof,
as well as any application for a United States or foreign patent now or
hereafter made by any Assignor, except those patents or patent applications in
those countries outside the United States where the granting of a security
interest in such patents is not permissible under the laws of that country.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
-22-
"Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to secure
the foregoing, (b) all of any Assignor's right, title and interest in and to any
goods, the sale of which gave rise thereto, (c) all guarantees, endorsements
and indemnifications on, or of, any of the foregoing, (d) all powers of attorney
for the execution of any evidence of indebtedness or security or other writing
in connection therewith, (e) all books, records, ledger cards, and invoices
relating thereto, (f) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto and (h) all other writings
related in any way to the foregoing.
"Requisite Creditors" shall have the meaning provided in Section 10.2
of this Agreement.
"Secured Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Termination Date" shall have the meaning provided in Section 10.8 of
this Agreement.
"Trade Secret Rights" shall have the meaning provided in Section 5.1
of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all notices,
-------
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed:
(a) if to any Assignor, at:
-23-
c/o CII Technologies, Inc.
1396 Charlotte Highway
Fairview, N.C. 28730
Attention: Richard Heggelund
Telephone No.: (704) 628-1711
Telecopier No.: (704) 628-1439
(b) if to the Collateral Agent, at:
Bank of America National Trust
and Savings Association
NationsBank Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
Attention: John O'Neill
Telephone No.: (704) 388-5045
Telecopier No.: (704) 386-9607
(c) if to any Lender Creditor (other than the Collateral Agent), at
such address as such Lender Creditor shall have specified in the Credit
Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to each Assignor and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2. Waiver; Amendment. None of the terms and conditions of this
-----------------
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor directly affected thereby and the
Collateral Agent (with the consent of (x) either the Majority Lenders (or, to
the extent required by Section 12.01 of the Credit Agreement, all of the
Lenders) at all times prior to the time on which all Loan Document Obligations
have been paid in full and the Aggregate Commitment has been terminated or (y)
the holders of at least a majority of the outstanding Other Obligations at all
times after the time on which all Loan Document Obligations have been paid in
full and the Aggregate Commitment has been terminated); provided, that any
--------
change, waiver, modification or variance affecting the rights and benefits of a
single Class of Secured Creditors (and not all Secured Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors of
such Class of Secured Creditors. For the purpose of this Agreement the term
"Class" shall mean each class of Secured Creditors, i.e., whether (x) the Lender
----
Creditors as holders of the Loan Document Obligations or (y) the Other Creditors
as the holders of the Other Obligations. For the purpose of this Agreement, the
term "Requisite Creditors" of any Class shall mean each of (x) with respect to
the Loan Document Obligations, the Majority Lenders and (y) with respect to the
Other Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the Interest Rate Protection Agreements or
Other Hedging Agreements.
-24-
10.3. Obligations Absolute. The obligations of each Assignor
--------------------
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Loan Document or any
Interest Rate Protection Agreement or Other Hedging Agreement; or (c) any
amendment to or modification of any Loan Document or any Interest Rate
Protection Agreement or Other Hedging Agreement or any security for any of the
Obligations; whether or not any Assignor shall have notice or knowledge of any
of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding upon
----------------------
each Assignor and its successors and assigns and shall inure to the benefit of
the Collateral Agent and its successors and assigns; provided, that no Assignor
--------
may transfer or assign any or all of its rights or obligations hereunder without
the prior written consent of the Collateral Agent. All agreements, statements,
representations and warranties made by each Assignor herein or in any
certificate or other instrument delivered by such Assignor or on its behalf
under this Agreement shall be considered to have been relied upon by the Secured
Creditors and shall survive the execution and delivery of this Agreement, the
other Loan Documents and the Interest Rate Protection Agreements or Other
Hedging Agreements regardless of any investigation made by the Secured Creditors
or on their behalf.
10.5. Headings Descriptive. The headings of the several sections of
--------------------
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
-------------
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
10.7. Assignor's Duties. It is expressly agreed, anything herein
-----------------
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of each Assignor under or with
respect to any Collateral.
10.8. Termination; Release. (a) After the Termination Date, this
--------------------
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
-25-
this Agreement, "Termination Date" shall mean the date upon which the Aggregate
Commitment and all Interest Rate Protection Agreements and Other Hedging
Agreements have been terminated, no promissory note or Letter of Credit under
the Credit Agreement is outstanding (other than Letters of Credit, together with
all fees that have accrued and will accrue thereon through the stated
termination date of such Letters of Credit, which have been secured in a manner
satisfactory to the applicable Issuing Lenders in their sole and absolute
discretion) and all other Obligations (other than any indemnities described in
Section 8.1 hereof and in Section 12.05 of the Credit Agreement which are not
then due and payable) have been paid in full.
(b) In the event that any part of the Collateral is sold or otherwise
disposed of in connection with a sale or other disposition permitted by Section
8.02 of the Credit Agreement or is otherwise released at the direction of the
Majority Lenders (or all the Lenders if required by Section 12.01 of the Credit
Agreement), the Collateral Agent, at the request and expense of such Assignor,
will duly release from the security interest created hereby and assign, transfer
and deliver to such Assignor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold or
released and as may be in the possession of the Collateral Agent and has not
theretofore been released pursuant to this Agreement.
(c) At any time that the respective Assignor desires that Collateral
be released as provided in the foregoing Section 10.8(a) or (b), it shall
deliver to the Collateral Agent a certificate signed by a Responsible Officer of
such Assignor stating that the release of the respective Collateral is permitted
pursuant to Section 10.8(a) or (b) hereof.
10.9. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Collateral Agent.
10.10. The Collateral Agent. The Collateral Agent will hold in
--------------------
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the
obligations of the Collateral Agent as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement and as provided
in the Uniform Commercial Code in the State of New York. The Collateral Agent
shall act hereunder on the terms and conditions set forth in Article XI of the
Credit Agreement.
10.11. Additional Assignors. It is understood and agreed that any
--------------------
Subsidiary of Holdings that is required to execute a counterpart of this
Agreement after the date hereof pursuant to Sections 7.12 and/or 8.15 of the
Credit Agreement shall automatically become an Assignor hereunder by executing a
counterpart hereof (or a Guarantor Supplement) and delivering the same to the
Collateral Agent.
* * *
-26-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
CII TECHNOLOGIES, INC., as an Assignor
By: _________________________________
Name:
Title:
COMMUNICATIONS INSTRUMENTS, INC.,
as an Assignor
By: _________________________________
Name:
Title:
KILOVAC CORPORATION, as an Assignor
By: _________________________________
Name:
Title:
KILOVAC INTERNATIONAL, INC.,
as an Assignor
By: _________________________________
Name:
Title:
CORCOM, INC.,
as an Assignor
By: _________________________________
Name:
Title:
PRODUCTS UNLIMITED CORPORATION,
as an Assignor
By: _________________________________
Name:
Title:
MARC INDUSTRIES, INC.,
as an Assignor
By: _________________________________
Name:
Title:
SOL INDUSTRIES, INC.,
as an Assignor
By: _________________________________
Name:
Title:
GW INDUSTRIES, INC.,
as an Assignor
By: _________________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Collateral Agent
By: _________________________________
Name:
Title:
ANNEX A
-------
to
--
SECURITY AGREEMENT
------------------
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
--------------------------
CII Technologies, Inc.
- ----------------------
1396 Charlotte Highway
Fairview, North Carolina 28730
Communications Instruments, Inc.
- --------------------------------
1396 Charlotte Highway
Fairview, North Carolina 28730
2 Craftsman Road
East Windsor, Connecticut
3165 Sweeten Creek Road
Asheville, North Carolina 28803
9B2 Butterfield Street
El Paso, Texas
175 N. Diamond Street
Mansfield, Ohio
245 E. 4th Street
Mansfield, Ohio
Two Solutions Way,
Waynesboro, Virginia 22980-1999
Kilovac Corporation
- --------------------
550 Linden Avenue
Carpinteria, California 93013
5095 6th Street
Carpinteria, California 93013
5041 6th Street
Carpinteria, California 93013
Kilovac International, Inc.
- ---------------------------
550 Linden Avenue
ANNEX A
Page 2
Carpinteria, California 93013
Corcom, Inc.
- ------------
1201 Francisco Street
Torrence, California 90502
6700 Fallbrook Avenue
Suite 160
West Hills, California 91307
17 Sarah's Way
Fairhaven, Massachusetts 02719
43 Butterfield Circle
El Paso, Texas 07990
844 East Rockland Road
Libertyville, Illinois 60648
2430 Amster Street
Torrence, California 90505
ANNEX B
to
SECURITY AGREEMENT
------------------
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
---------------------------------------------
CII Technologies, Inc.
- ----------------------
1396 Charlotte Highway
Fairview, North Carolina 28730
Communications Instruments, Inc.
- --------------------------------
1396 Charlotte Highway
Fairview, North Carolina 28730
2 Craftsman Road
East Windsor, Connecticut
3165 Sweeten Creek Road
Asheville, North Carolina 28803
9-B2 Butterfield Street
El Paso, Texas
175 N. Diamond Street
Mansfield, Ohio
245 E. 4th Street
Mansfield, Ohio
Two Solutions Way,
Waynesboro, Virginia 22980-1999
Kilovac Corporation
- --------------------
550 Linden Avenue
Carpinteria, California 93013
5095 6th Street
Carpinteria, California 93013
5041 6th Street
Carpinteria, California 93013
Kilovac International, Inc.
- ---------------------------
ANNEX A
Page 2
550 Linden Avenue
Carpinteria, California 93013
Corcom, Inc.
- ------------
1201 Francisco Street
Torrence, California 90502
6700 Fallbrook Avenue
Suite 160
West Hills, California 91307
17 Sarah's Way
Fairhaven, Massachusetts 02719
43 Butterfield Circle
El Paso, Texas 07990
844 East Rockland Road
Libertyville, Illinois 60648
2430 Amster Street
Torrence, California 90505
ANNEX C
to
SECURITY AGREEMENT
------------------
TRADE AND FICTITIOUS NAMES
--------------------------
Midtex Relays
Midtex Division of CII Technologies, Inc.
Hartman Division of CII Technologies, Inc.
Hartman Electrical Manufacturing
Kilovac Division of CII Technologies, Inc.
Communications Instruments, Inc. Division of CII Technologies, Inc.
Corcom, Inc.
ibex Aerospace Technologies, Inc.
GENICOM Corporation
GENICOM Corporation Relays Division
ANNEX D
to
SECURITY AGREEMENT
LIST OF MARKS
- --------------------------------------------------------------------------------
MARK REGISTRATION STATUS
NO.
- --------------------------------------------------------------------------------
COMMUNICATIONS INSTRUMENTS, INC.
- --------------------------------------------------------------------------------
CII logo
- --------------------------------------------------------------------------------
CII TECHNOLOGIES
- --------------------------------------------------------------------------------
FLAGSHIP 1,098,654 Inactive*
US
- --------------------------------------------------------------------------------
HARTMAN logo
- --------------------------------------------------------------------------------
HiG logo 792,859 & 854,539 Inactive*
US
- --------------------------------------------------------------------------------
MIDTEX logo
- --------------------------------------------------------------------------------
MISS TESTER 762,701 Inactive*
US
- --------------------------------------------------------------------------------
MM5 1,156,189 Inactive*
US
- --------------------------------------------------------------------------------
KILOVAC CORPORATION
- --------------------------------------------------------------------------------
KILOVAC 824,815 & 1,687,712 Active
US
- --------------------------------------------------------------------------------
WEST COAST ELECTRICAL MANUFACTURING CO.
- --------------------------------------------------------------------------------
WESCO and design 51,573 Active
California
- --------------------------------------------------------------------------------
* This registration was either canceled or expired and no representations and
warranties are made with respect to this mark.
- --------------------------------------------------------------------------------
MARK REGISTRATION STATUS
NO.
- --------------------------------------------------------------------------------
COMMUNICATIONS INSTRUMENTS, INC. (GENICOM)
- --------------------------------------------------------------------------------
Decigrid 1,380,197
US
- --------------------------------------------------------------------------------
Decigrid 229622 Not renewed
Portugal
- --------------------------------------------------------------------------------
Decigrid 439224 Renewal due
Italy 04/30/05
- --------------------------------------------------------------------------------
Decigrid 339,189 Renewal due
ANNEX D
Page 2
- --------------------------------------------------------------------------------
MARK REGISTRATION STATUS
NO.
- --------------------------------------------------------------------------------
Switzerland 4/16/05
- --------------------------------------------------------------------------------
Decigrid 199,012 Renewal due
Sweden 12/06/05
- --------------------------------------------------------------------------------
Decigrid 1,102,293 Renewal due
Spain 11/05/05
- --------------------------------------------------------------------------------
Decigrid 124,083 Abandoned
Norway
- --------------------------------------------------------------------------------
Decigrid B1239799 Renewal due
UK 04/15/06
- --------------------------------------------------------------------------------
Decigrid 1,090,568 Renewal due
Germany 04/06/05
- --------------------------------------------------------------------------------
Decigrid 1,306,848 Renewal due
France 04/22/05
- --------------------------------------------------------------------------------
Decigrid 01551/1986 Not renewed
Denmark
- --------------------------------------------------------------------------------
Decigrid TMA317259 Renewal due
Canada 8/15/05
- --------------------------------------------------------------------------------
Decigrid 408,575 Renewal due
Benelux 04/15/05
- --------------------------------------------------------------------------------
MARK REGISTRATION STATUS
NO.
- --------------------------------------------------------------------------------
CORCOM, INC.
- --------------------------------------------------------------------------------
"Four C's" Mark
- --------------------------------------------------------------------------------
968,038
US
- --------------------------------------------------------------------------------
968,039
US
- --------------------------------------------------------------------------------
1,202,581
US
- --------------------------------------------------------------------------------
1,492,063
US
- --------------------------------------------------------------------------------
1,591,857
US
- --------------------------------------------------------------------------------
105765
Turkey
- --------------------------------------------------------------------------------
443915
Republic of China (Taiwan)
- --------------------------------------------------------------------------------
ANNEX D
Page 3
- --------------------------------------------------------------------------------
MARK REGISTRATION STATUS
NO.
- --------------------------------------------------------------------------------
429833
Republic of China (Taiwan)
- --------------------------------------------------------------------------------
6759
Switzerland
- --------------------------------------------------------------------------------
181,835
Sweden
- --------------------------------------------------------------------------------
994,208
Spain
- --------------------------------------------------------------------------------
2461/88
Singapore
- --------------------------------------------------------------------------------
MARK REGISTRATION STATUS
NO.
- --------------------------------------------------------------------------------
140,173
New Zealand
- --------------------------------------------------------------------------------
336660
Mexico
- --------------------------------------------------------------------------------
226493
South Korea
- --------------------------------------------------------------------------------
1,786,919
Japan
- --------------------------------------------------------------------------------
23359-81
Italy
- --------------------------------------------------------------------------------
53487
Israel
- --------------------------------------------------------------------------------
196340
India
- --------------------------------------------------------------------------------
5513/81
Germany
- --------------------------------------------------------------------------------
1 701 525
France
- --------------------------------------------------------------------------------
517322
Peoples Republic of China
- --------------------------------------------------------------------------------
349576
Peoples Republic of China
- --------------------------------------------------------------------------------
271,422
Canada
- --------------------------------------------------------------------------------
A369657
Australia
- --------------------------------------------------------------------------------
ANNEX D
Page 4
- --------------------------------------------------------------------------------
MARK REGISTRATION STATUS
NO.
- --------------------------------------------------------------------------------
01 378884
Netherlands
- --------------------------------------------------------------------------------
1721 of 1982
Hong Kong
- --------------------------------------------------------------------------------
1,167,240
United Kingdom
- --------------------------------------------------------------------------------
99-200
Austria
- --------------------------------------------------------------------------------
COMMUNICATIONS INSTRUMENTS, INC. (IBEX)
- --------------------------------------------------------------------------------
The stylized format for "Ibex"
as shown on the page of the
Ibex letterhead
- --------------------------------------------------------------------------------
ANNEX E
to
SECURITY AGREEMENT
------------------
LIST OF PATENTS AND APPLICATIONS
--------------------------------
- --------------------------------------------------------------------------------------------------------------------
TITLE COUNTRY PATENT NO./ ISSUE DATE/
SERIAL NO. FILING DATE
- --------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS INSTRUMENTS, INC.
- --------------------------------------------------------------------------------------------------------------------
Patents Issued
- --------------------------------------------------------------------------------------------------------------------
Magnetic Circuit for Miniature Relays US 4,322,701 03/30/82
(SN143454)
- --------------------------------------------------------------------------------------------------------------------
Electromagnetic Actuator US 4,581,597 04/08/86
(SN570513)
- --------------------------------------------------------------------------------------------------------------------
Utility Meter Interface Circuit US 5,283,572 02/01/94
(SN569178)
- --------------------------------------------------------------------------------------------------------------------
Patents Pending
- --------------------------------------------------------------------------------------------------------------------
None
- --------------------------------------------------------------------------------------------------------------------
KILOVAC CORPORATION
- --------------------------------------------------------------------------------------------------------------------
Patents Issued
- --------------------------------------------------------------------------------------------------------------------
DC Vacuum Relay Device US 5,394,128 02/28/95
(SN140275)
- --------------------------------------------------------------------------------------------------------------------
DC Vacuum Relay Device EPO 587611 05/21/97
(SN2910682)
- --------------------------------------------------------------------------------------------------------------------
DC Vacuum Relay Device Germany 69219890 06/26/97
(SN69219890)
- --------------------------------------------------------------------------------------------------------------------
Armature Position Sensor for a Relay US 5,483,214 01/09/96
(SN233627)
- --------------------------------------------------------------------------------------------------------------------
DC Vacuum Relay Japan 2646292 05/09/97
- --------------------------------------------------------------------------------------------------------------------
TITLE COUNTRY PATENT NO./ ISSUE DATE/
SERIAL NO. FILING DATE
- --------------------------------------------------------------------------------------------------------------------
Sealed Relay Device US 5,519,370 05/21/96
(SN205526)
- --------------------------------------------------------------------------------------------------------------------
DC Vacuum Relay Device US 5,554,962 09/10/96
with Angular Impact Break (SN542687)
Mechanism
(Continuation of Patent Application
Serial No. 676968, abandoned)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Patents Pending
---------------
- --------------------------------------------------------------------------------------------------------------------
US 08/233629 04/26/94
- --------------------------------------------------------------------------------------------------------------------
PCT 924502545 03/26/93
- --------------------------------------------------------------------------------------------------------------------
PCT 95US2630 03/03/95
- --------------------------------------------------------------------------------------------------------------------
PCT 95US5152 04/26/95
- --------------------------------------------------------------------------------------------------------------------
PCT 97US/03119 02/27/97
- --------------------------------------------------------------------------------------------------------------------
CANADA 2184829 02/27/95
- --------------------------------------------------------------------------------------------------------------------
EPO 95913530 02/03/95
- --------------------------------------------------------------------------------------------------------------------
JAPAN 523041/95 02/03/95
- --------------------------------------------------------------------------------------------------------------------
PCT 97/07736 05/06/97
- --------------------------------------------------------------------------------------------------------------------
US 08/643469 05/06/97
- --------------------------------------------------------------------------------------------------------------------
US 08/913150 09/05/97
- --------------------------------------------------------------------------------------------------------------------
US 08/062328 10/17/97
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
CORCOM, INC
- --------------------------------------------------------------------------------------------------------------------
Patents Issued
--------------
- --------------------------------------------------------------------------------------------------------------------
TITLE COUNTRY PATENT NO./ ISSUE DATE/
SERIAL NO. FILING DATE
- --------------------------------------------------------------------------------------------------------------------
Adjustable Inductor US 3480896 11/25/69
- --------------------------------------------------------------------------------------------------------------------
Noise Suppression Filter US 3996537 12/07/76
- --------------------------------------------------------------------------------------------------------------------
Apparatus for Determining Differential
Mode and Common Mode Noise US 4263549 04/21/81
- --------------------------------------------------------------------------------------------------------------------
Leadless Filter US 4384263 05/17/83
- --------------------------------------------------------------------------------------------------------------------
A.C. Power Entry Module US 4488201 12/11/86
- --------------------------------------------------------------------------------------------------------------------
Power Line Interference Filter Mounted
on a PC Board US 4622526 11/11/86
- --------------------------------------------------------------------------------------------------------------------
Telephone Connector with a Bypass
Capacitor US 4695115 09/22/87
- --------------------------------------------------------------------------------------------------------------------
Broadband RFI Power Line
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Filter US 4761623 08/02/88
- --------------------------------------------------------------------------------------------------------------------
Modular Electrical Connector US 4772224 09/20/88
- --------------------------------------------------------------------------------------------------------------------
Electrical Contact Plug with a Metal
Housing US 4863401 09/05/89
- --------------------------------------------------------------------------------------------------------------------
Power Entry Module US 5434740 07/18/95
- --------------------------------------------------------------------------------------------------------------------
Canada 1286014
- --------------------------------------------------------------------------------------------------------------------
Canada 1202055
- --------------------------------------------------------------------------------------------------------------------
TITLE COUNTRY PATENT NO./ ISSUE DATE/
SERIAL NO. FILING DATE
- --------------------------------------------------------------------------------------------------------------------
European Patent 0 262 339 B1
Office (Publication No.)
- --------------------------------------------------------------------------------------------------------------------
Japan 1846482
- --------------------------------------------------------------------------------------------------------------------
South Korea 91-1318
- --------------------------------------------------------------------------------------------------------------------
Republic of China NI-29960
(Taiwan)
- --------------------------------------------------------------------------------------------------------------------
United Kingdom 0 262 339
- --------------------------------------------------------------------------------------------------------------------
ANNEX F
to
SECURITY AGREEMENT
------------------
LIST OF COPYRIGHTS AND APPLICATIONS
-----------------------------------
ANNEX G
to
SECURITY AGREEMENT
------------------
GRANT OF SECURITY INTEREST
--------------------------
IN UNITED STATES TRADEMARKS AND PATENTS
---------------------------------------
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Name of Grantor], a corporation ("the Grantor") with
principal offices at_______________________________, hereby grants to Bank of
America National Trust and Savings Association, as Collateral Agent, with
principal offices at 100 North Tryon Street Street, Charlotte, North Carolina
28255 (the "Grantee"), a security interest in (i) all of the Grantor's right,
title and interest in and to the United States trademarks, trademark
registrations and trademark applications (the "Marks") set forth on Schedule A
attached hereto, (ii) all of the Grantor's rights, title and interest in and to
the United States patents (the "Patents") set forth on Schedule B attached
hereto, in each case together with (iii) all Proceeds (as such term is defined
in the Security Agreement referred to below) and products of the Marks and
Patents, (iv) the goodwill of the businesses with which the Marks are associated
and (v) all causes of action arising prior to or after the date hereof for
infringement of any of the Marks and Patents or unfair competition regarding the
same.
THIS AGREEMENT is made to secure the satisfactory performance and
payment of all the Obligations of the Grantor, as such term is defined in the
Amended and Restated Security Agreement among Grantor, the other assignors from
time to time party thereto and the Grantee, dated as of June 19, 1998, and
amended and restated as of March 19, 1999 (as amended, restated and otherwise
modified from time to time, the "Security Agreement"). Upon the occurrence of
the Termination Date (as defined in the Security Agreement), the Grantee shall,
upon such satisfaction, execute, acknowledge, and deliver to the Grantor an
instrument in writing releasing the security interest in the Marks and Patents
acquired under this Agreement.
This Agreement has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Agreement are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the ___ day of ____________.
ANNEX G
Page 2
[NAME OF GRANTOR],
as Grantor
By: _________________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Collateral Agent and Grantee
By: _________________________________
Name:
Title:
STATE OF __________ )
) ss.:
COUNTY OF ________ )
On this __ day of _______, _____, before me personally came
_________________ who, being by me duly sworn, did state as follows: that [s]he
is _______________ of [Name of Grantor], that [s]he is authorized to execute the
foregoing Agreement on behalf of said corporation and that [s]he did so by
authority of the Board of Directors of said corporation.
_________________________
Notary Public
STATE OF __________ )
) ss.:
COUNTY OF ________ )
On this ___ day of ______, _____, before me personally came
_______________ who, being by me duly sworn, did state as follows: that [s]he is
__________________ of Bank of America National Trust and Savings Association,
that [s]he is authorized to execute the foregoing Agreement on behalf of said
corporation and that [s]he did so by authority of the Board of Directors of said
corporation.
_________________________
Notary Public
SCHEDULE A
----------
MARK REG. NO. REG. DATE
- ---- -------- ---------
SCHEDULE B
----------
PATENT PATENT NO. ISSUE DATE
- ------ ---------- ----------
ANNEX H
-------
GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
---------------------------
WHEREAS, [Name of Grantor], a _______________ corporation (the
"Grantor"), having its chief executive office at ____________________, is the
owner of all right, title and interest in and to the United States copyrights
and associated United States copyright registrations and applications for
registration set forth in Schedule A attached hereto;
WHEREAS, Bank of America National Trust and Savings Association, as
Collateral Agent, having its principal offices at 100 North Tryon Street,
Charlotte, North Carolina 28255 (the "Grantee"), desires to acquire a security
interest in said copyrights and copyright registrations and applications
therefor; and
WHEREAS, the Grantor is willing to grant to the Grantee a security
interest in the copyrights and copyright registrations and applications therefor
described above;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and subject to the terms and conditions of the
Amended and Restated Security Agreement, dated as of June 19, 1998, and amended
and restated as of March 19, 1999, made by the Grantor, the other assignors from
time to time party thereto and the Grantee (as amended, restated and otherwise
modified from time to time, the "Security Agreement"), the Grantor hereby grants
to the Grantee a security interest in the copyrights and copyright registrations
and applications therefor set forth in Schedule A attached hereto.
This Agreement has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Agreement are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
Executed at ________, ________, the ___ day of _____ _____.
ANNEX H
PAGE 2
[NAME OF GRANTOR],
as Grantor
By: _________________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Collateral Agent and Grantee
By: _________________________________
Name:
Title:
STATE OF __________ )
) ss.:
COUNTY OF ________ )
On this ___ day of _____ ______, before me personally came
_______________, who being duly sworn, did depose and say that [s]he is
___________________ of [Name of Grantor], that [s]he is authorized to execute
the foregoing Agreement on behalf of said corporation and that [s]he did so by
authority of the Board of Directors of said corporation.
_________________________
Notary Public
STATE OF __________ )
) ss.:
COUNTY OF _________ )
On this ___ day of ______, _______, before me personally came
______________ who, being by me duly sworn, did state as follows: that [s]he is
__________________ of Bank of America National Trust and Savings Association,
that [s]he is authorized to execute the foregoing Agreement on behalf of said
corporation and that [s]he did so by authority of the Board of Directors of said
corporation.
____________________________
Notary Public
SCHEDULE A
----------
U.S. COPYRIGHTS
---------------
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
- ------------ ----------- ---------------