Exhibit 10.17.4
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Security
Agreement"), dated as of October 22, 2003, is by and among the parties
identified as "GRANTORS" on the signature pages hereto and such other parties as
may become Grantors hereunder after the date hereof (individually a "Grantor",
and collectively the "Grantors") and BANK OF AMERICA, N.A., as collateral agent
(in such capacity, the "Collateral Agent") for the holders of the Secured
Obligations referenced below.
W I T N E S S E T H
WHEREAS, a revolving credit facility (the "Existing Credit Facility")
was established in favor of AMERIGROUP Corporation, a Delaware corporation (the
"Borrower"), pursuant to the terms of that credit agreement dated as of December
14, 2001 (as amended or modified through the Closing Date, the "Existing Credit
Agreement") among the Borrower, certain of its subsidiaries and affiliates
identified therein, as guarantors, the lenders identified therein and Bank of
America, N.A., as administrative agent thereunder; and
WHEREAS, the Lenders have agreed to replace, refinance and increase the
Existing Credit Facility pursuant to that Amended and Restated Credit Agreement
dated as of the date hereof (as amended, modified, increased, extended, renewed
or replaced, the "Credit Agreement") among the Borrower, the Guarantors
identified therein, the Lenders party thereto and Bank of America, N.A., as
Administrative Agent;
WHEREAS, this Security Agreement is required under the terms of the
Credit Agreement;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings provided in the Credit Agreement. In addition,
the following terms, which are defined in the UCC as in effect in the State of
New York on the date hereof, are used herein as so defined: Accession, Account,
As-Extracted Collateral, Chattel Paper, Commercial Tort Claim, Commingled Goods,
Consumer Goods, Deposit Account, Document, Equipment, Farm Products, Fixtures,
General Intangible, Goods, Instrument, Inventory, Investment Property,
Letter-of-Credit Right, Manufactured Home, Proceeds, Software, Standing Timber,
Supporting Obligation and Tangible Chattel Paper. As used herein:
"Collateral" has the meaning provided in Section 2 hereof.
"Copyright License" means any written agreement, naming any
Grantor as licensor, granting any right under any Copyright including,
without limitation, any thereof referred to in Schedule 1(b) attached
hereto.
"Copyrights" means (a) all registered United States copyrights
in all Works, now existing or hereafter created or acquired, all
registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations,
recordings and applications in the United States Copyright Office
including, without limitation, any thereof referred to in Schedule 1(b)
attached hereto, and (b) all renewals thereof including, without
limitation, any thereof referred to in Schedule 1(b) attached hereto.
"Patent License" means any agreement, whether written or oral,
providing for the grant by or to a Grantor of any right to manufacture,
use or sell any invention covered by a Patent, including, without
limitation, any thereof referred to in Schedule 1(b) attached hereto.
"Patents" means (a) all letters patent of the United States or
any other country and all reissues and extensions thereof, including,
without limitation, any letters patent referred to in Schedule 1(b)
attached hereto, and (b) all applications for letters patent of the
United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any
thereof referred to in Schedule 1(b) attached hereto.
"Secured Obligations" means, without duplication, (i) all
advances to, and debts, liabilities, obligations, covenants and duties
of, any Credit Party arising under any Credit Document or otherwise
with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or
against any Credit Party of any proceeding under any Debtor Relief Laws
naming such Persons as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding,
(ii) all obligations under any Swap Contract of any Credit Party to
which a Lender or any Affiliate of a Lender is a party and (iii) all
costs and expenses incurred in connection with enforcement and
collection of the Secured Obligations, including Attorney Costs.
"Trademark License" means any agreement, written or oral,
providing for the grant by or to a Grantor of any right to use any
Trademark, including, without limitation, any thereof referred to in
Schedule 1(b) attached hereto.
"Trademarks" means (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any state thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 1(b) attached hereto, and (b) all
renewals thereof.
"UCC" means the Uniform Commercial Code of the State of New
York or its equivalent in other applicable jurisdictions, as in effect
from time to time (unless otherwise noted).
"Work" means any work that is subject to copyright protection
pursuant to Title 17 of the United States Code.
2. Grant of Security Interest in the Collateral. To secure the
prompt payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Secured Obligations,
each Grantor hereby grants to the Collateral Agent, for the benefit of the
holders of the Secured Obligations, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Grantor
in and to all personal property of the Grantors of whatever type or description,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Collateral"), including, without limitation, the following:
(a) all Accounts;
(b) all cash and currency;
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(c) all Chattel Paper;
(d) all Commercial Tort Claims identified on Schedule
2(d) attached hereto;
(e) all Copyrights;
(f) all Copyright Licenses;
(g) all Deposit Accounts;
(h) all Documents;
(i) all Equipment;
(j) all Fixtures;
(k) all General Intangibles;
(l) all Instruments;
(m) all Inventory;
(n) all Investment Property (other than such Grantor's
ownership interest in any Foreign Subsidiary to the extent not required
to be pledged to secure the Obligations pursuant to Section 7.13 of the
Credit Agreement);
(o) all Letter-of-Credit Rights;
(p) all Patents;
(q) all Patent Licenses;
(r) all Software;
(s) all Supporting Obligations;
(t) all Trademarks;
(u) all Trademark Licenses; and
(v) to the extent not otherwise included, all Accessions
and all Proceeds of any and all of the foregoing;
provided that notwithstanding anything contained in this Security
Agreement to the contrary, the security interests granted under this
Security Agreement shall not extend to any lease, license or other
contract if the grant of a security interest therein in the manner
contemplated by this Security Agreement is, under the terms thereof and
under applicable law, (x) prohibited and (y) would result in the
termination thereof, unless consent from the relevant party or parties
has been obtained and in any case only to the extent that such
prohibition is not (or could not be) rendered ineffective pursuant to
the UCC or any other applicable law (including Debtor Relief Laws) or
principles of equity.
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The Grantors and the Collateral Agent, on behalf of the
holders of the Secured Obligations, hereby acknowledge and agree that
the security interest created hereby in the Collateral (i) constitutes
continuing collateral security for all of the Secured Obligations,
whether now existing or hereafter arising and (ii) is not to be
construed as an assignment of any Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks or Trademark Licenses.
3. Provisions Relating to Accounts.
(a) Anything herein to the contrary notwithstanding, each
of the Grantors shall remain liable under each of the Accounts to
observe and perform all the conditions and obligations to be observed
and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Account. Neither the Collateral
Agent nor any holder of the Secured Obligations shall have any
obligation or liability under any Account (or any agreement giving rise
thereto) by reason of or arising out of this Security Agreement or the
receipt by the Collateral Agent or any holder of the Secured
Obligations of any payment relating to such Account pursuant hereto,
nor shall the Collateral Agent or any holder of the Secured Obligations
be obligated in any manner to perform any of the obligations of a
Grantor under or pursuant to any Account (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party under any Account (or any agreement
giving rise thereto), to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at
any time or times.
(b) (i) Once during each calendar year and (ii) after the
occurrence and during the continuation of an Event of Default, at any
time and at the expense of the Grantors, the Collateral Agent shall
have the right, but not the obligation, to make test verifications of
the Accounts in any manner and through any medium that it reasonably
considers advisable, and the Grantors shall furnish all such assistance
and information as the Collateral Agent may reasonably require in
connection with such test verifications. At any time and from time to
time, upon the Collateral Agent's reasonable request and at the expense
of the Grantors, the Grantors shall cause independent public
accountants or others satisfactory to the Collateral Agent to furnish
to the Collateral Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts. The Collateral
Agent in its own name or in the name of others may communicate with
account debtors on the Accounts to verify with them to the Collateral
Agent's satisfaction the existence, amount and terms of any Accounts.
4. Representations and Warranties. Each Grantor hereby represents
and warrants to the Collateral Agent, for the benefit of the holders of the
Secured Obligations, that so long as any of the Secured Obligations remains
outstanding and until all of the commitments relating thereto have been
terminated:
(a) Legal Name; Chief Executive Office.
(i) Each Grantor's exact legal name, state of
incorporation or formation, principal place of business and
chief executive office are (and for the four months prior to
the date hereof has been) as set forth on Schedule 4(a)(i)
attached hereto.
(ii) Other than as set forth on Schedule 4(a)(ii)
attached hereto, no Grantor has been party to a merger,
consolidation or other change in structure or used any
tradename in the four months prior to the date hereof.
(b) Ownership. Each Grantor is the legal and beneficial
owner of its Collateral and has the right to pledge, sell, assign or
transfer the same.
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(c) Security Interest/Priority. This Security Agreement
is effective to create in favor of the Collateral Agent, for the
ratable benefit of the holders of the Secured Obligations, a legal,
valid and enforceable security interest in the Collateral identified
herein owned by the Grantors and, when financing statements in
appropriate form are filed in the appropriate offices for the
jurisdiction of organization or formation for such Grantors, the
Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Grantors in
such Collateral that may be perfected by filing, recording or
registering a financing statement under the UCC, in each case prior and
superior in right to any other Lien on any Collateral other than
Permitted Liens.
(d) Types of Collateral. None of the Collateral consists
of, or is the Accessions or the Proceeds of, As-Extracted Collateral,
Consumer Goods, Farm Products, Manufactured Homes, or Standing Timber.
(e) Accounts. (i) Each Account of the Grantors and the
papers and documents relating thereto are genuine and in all material
respects what they purport to be, (ii) each Account arises out of (A) a
bona fide sale of goods sold and delivered by such Grantor (or is in
the process of being delivered) or (B) services theretofore actually
rendered by such Grantor to, the account debtor named therein, (iii) no
Account of a Grantor is evidenced by any Instrument or Chattel Paper
unless such Instrument or Chattel Paper has been theretofore endorsed
over and delivered to, or submitted to the control of, the Collateral
Agent and (iv) no surety bond was required or given in connection with
any Account of a Grantor or the contracts or purchase orders out of
which they arose.
(f) Inventory. No Inventory owned by any Grantor is held
by any other Person pursuant to consignment, sale or return, sale on
approval or similar arrangement.
(g) Copyrights, Patents and Trademarks.
(i) Schedule 1(b) attached hereto includes all
Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks and Trademark Licenses that are the subject of
registrations and applications and are owned by any Grantor in
its own name, or to which any Grantor is a party, as of the
date hereof.
(ii) To the best of each Grantor's knowledge,
each material Copyright, Patent and Trademark of such Grantor
is valid, subsisting, unexpired, enforceable and has not been
abandoned.
(iii) Except as set forth in Schedule 1(b)
attached hereto, none of the Copyrights, Patents and
Trademarks owned by any Grantor is the subject of any
licensing or franchise agreement.
(iv) To the best of each Grantor's knowledge, no
holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question
the validity of any material Copyright, Patent or Trademark
owned by any Grantor.
(v) Other than as set forth on Schedule 1(b)
hereto, no action or proceeding is pending seeking to limit,
cancel or question the validity of any material Copyright,
Patent or Trademark owned by any Grantor. None of such actions
or proceedings, if adversely determined, could reasonably be
expected to have a material adverse effect on the value of any
such Copyright, Patent or Trademark.
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(vi) All applications pertaining to the
Copyrights, Patents and Trademarks of each Grantor have been
duly and properly filed, and all registrations or letters
pertaining to such Copyrights, Patents and Trademarks have
been duly and properly filed and issued, and to the best of
each Grantor's knowledge, all of such Copyrights, Patents and
Trademarks are valid and enforceable.
(vii) To the best of each Grantor's knowledge, no
Grantor has made any assignment or agreement in conflict with
the security interest in the Copyrights, Patents or Trademarks
of each Grantor hereunder.
5. Covenants. Each Grantor covenants that, so long as any of the
Secured Obligations remains outstanding and until all of the commitments
relating thereto have been terminated, such Grantor shall:
(a) Other Liens. Defend the Collateral against the claims
and demands of all other parties claiming an interest therein, keep the
Collateral free from all Liens, except for Permitted Liens, and not
sell, exchange, transfer, assign, lease or otherwise dispose of the
Collateral or any interest therein, except as permitted under the
Credit Agreement.
(b) Preservation of Collateral. Keep the Collateral in
good order, condition and repair and not use the Collateral in
violation of the provisions of this Security Agreement or any other
agreement relating to the Collateral or any policy insuring the
Collateral or any applicable statute, law, bylaw, rule, regulation or
ordinance.
(c) Instruments/Tangible Chattel Paper/Documents. If any
amount payable under or in connection with any of the Collateral shall
be or become evidenced by any Instrument or Tangible Chattel Paper, or
if any property constituting Collateral shall be stored or shipped
subject to a Document, such Grantor shall ensure that such Instrument,
Tangible Chattel Paper or Document is either in the possession of such
Grantor at all times or, if requested by the Collateral Agent, is
immediately delivered to the Collateral Agent, duly endorsed in a
manner satisfactory to the Collateral Agent. Such Grantor shall ensure
that any Collateral consisting of Tangible Chattel Paper is marked with
a legend acceptable to the Collateral Agent indicating the Collateral
Agent's security interest in such Tangible Chattel Paper.
(d) Change in Structure, Location or Type. Not, without
providing ten (10) days prior written notice to the Collateral Agent
and without filing such financing statements and amendments to any
previously filed financing statements as the Collateral Agent may
require, change its name or state of formation or be party to a merger,
consolidation or other change in structure or use any tradename other
than as set forth on Schedule 4(a)(ii) attached hereto.
(e) Inspection. Upon reasonable notice, and during
reasonable hours, at all times allow the Collateral Agent or its
representatives to visit and inspect the Collateral as set forth in
Section 7.11 of the Credit Agreement.
(f) Authorization. Authorize the Collateral Agent to
prepare and file such financing statements (including renewal
statements), amendments and supplements or such other instruments as
the Collateral Agent may from time to time reasonably deem necessary,
appropriate or convenient in order to perfect and maintain the security
interests granted hereunder in accordance with the UCC.
(g) Perfection of Security Interest. Execute and deliver
to the Collateral Agent such agreements, assignments or instruments
(including affidavits, notices, reaffirmations and amendments and
restatements of existing documents, as the Collateral Agent may
reasonably request) and do all such other things as the Collateral
Agent may reasonably deem necessary,
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appropriate or convenient (i) to assure to the Collateral Agent its
security interests hereunder, including (A) such financing statements
(including renewal statements), amendments and supplements or such
other instruments as the Collateral Agent may from time to time
reasonably request in order to perfect and maintain the security
interests granted hereunder in accordance with the UCC, (B) with regard
to Copyrights, a Notice of Grant of Security Interest in Copyrights for
filing with the United States Copyright Office in the form of Schedule
5(f)(i) attached hereto, (C) with regard to Patents, a Notice of Grant
of Security Interest in Patents for filing with the United States
Patent and Trademark Office in the form of Schedule 5(f)(ii) attached
hereto and (D) with regard to Trademarks, a Notice of Grant of Security
Interest in Trademarks for filing with the United States Patent and
Trademark Office in the form of Schedule 5(f)(iii) attached hereto,
(ii) to consummate the transactions contemplated hereby and (iii) to
otherwise protect and assure the Collateral Agent of its rights and
interests hereunder. To that end, each Grantor agrees that the
Collateral Agent may file one or more financing statements (with
collateral descriptions broader and/or less specific than the
description of the Collateral contained herein) disclosing the
Collateral Agent's security interest in any or all of the Collateral of
such Grantor without such Grantor's signature thereon, and further each
Grantor also hereby irrevocably makes, constitutes and appoints the
Collateral Agent, its nominee or any other Person whom the Collateral
Agent may designate, as such Grantor's attorney-in-fact with full power
and for the limited purpose to sign in the name of such Grantor any
such financing statements (including renewal statements), amendments
and supplements, notices or any similar documents which in the
Collateral Agent's reasonable discretion would be necessary,
appropriate or convenient in order to perfect and maintain perfection
of the security interests granted hereunder, such power, being coupled
with an interest, being and remaining irrevocable so long as the
Secured Obligations remain unpaid and until the commitments relating
thereto shall have been terminated. Each Grantor hereby agrees that a
carbon, photographic or other reproduction of this Security Agreement
or any such financing statement is sufficient for filing as a financing
statement by the Collateral Agent without notice thereof to such
Grantor wherever the Collateral Agent may in its sole discretion desire
to file the same. In the event for any reason the law of any
jurisdiction other than New York becomes or is applicable to the
Collateral of any Grantor or any part thereof, or to any of the Secured
Obligations, such Grantor agrees to execute and deliver all such
instruments and to do all such other things as the Collateral Agent in
its sole discretion reasonably deems necessary, appropriate or
convenient to preserve, protect and enforce the security interests of
the Collateral Agent under the law of such other jurisdiction (and, if
a Grantor shall fail to do so promptly upon the request of the
Collateral Agent, then the Collateral Agent may execute any and all
such requested documents on behalf of such Grantor pursuant to the
power of attorney granted hereinabove). If any Collateral is in the
possession or control of a Grantor's agents and the Collateral Agent so
requests, such Grantor agrees to notify such agents in writing of the
Collateral Agent's security interest therein and, upon the Collateral
Agent's request, instruct them to hold all such Collateral for the
account of the holders of the Secured Obligations and subject to the
Collateral Agent's instructions. Each Grantor agrees to mark its books
and records to reflect the security interest of the Collateral Agent in
the Collateral.
(h) Control. Execute and deliver all agreements,
assignments, instruments or other documents as the Collateral Agent
shall reasonably request for the purpose of obtaining and maintaining
control within the meaning of the UCC with respect to any Collateral
consisting of Deposit Accounts, Investment Property, Letter-of-Credit
Rights and Electronic Chattel Paper.
(i) Collateral held by Warehouseman, Bailee, etc. If any
Collateral is at any time in the possession or control of a
warehouseman, bailee, agent or processor of such Grantor, (i) notify
the Collateral Agent of such possession or control, (ii) notify such
Person of the Collateral Agent's security interest in such Collateral,
(iii) instruct such Person to hold all such Collateral for the
Collateral Agent's account and subject to the Collateral Agent's
instructions and (iv) use its best
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efforts to obtain an acknowledgment from such Person that it is holding
such Collateral for the benefit of the Collateral Agent.
(j) Treatment of Accounts. Not grant or extend the time
for payment of any Account, or compromise or settle any Account for
less than the full amount thereof, or release any Person or property,
in whole or in part, from payment thereof, or allow any credit or
discount thereon, other than as normal and customary in the ordinary
course of a Grantor's business, as required by law or as would not
reasonably be expected to have a Material Adverse Effect.
(k) Covenants Relating to Copyrights. Except as could not
reasonably be expected to have a Material Adverse Effect:
(i) Not do any act or knowingly omit to do any
act whereby any material Copyright may become invalidated and
(A) not do any act, or knowingly omit to do any act, whereby
any material Copyright may become injected into the public
domain; (B) notify the Collateral Agent immediately if it
knows that any material Copyright may become injected into the
public domain or of any adverse determination or development
(including, without limitation, the institution of, or any
such determination or development in, any court or tribunal in
the United States or any other country) regarding a Grantor's
ownership of any such Copyright or its validity; (C) take all
necessary steps as it shall deem appropriate under the
circumstances, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each
registration of each material Copyright owned by a Grantor
including, without limitation, filing of applications for
renewal where necessary; and (D) promptly notify the
Collateral Agent of any material infringement of any material
Copyright of a Grantor of which it becomes aware and take such
actions as it shall reasonably deem appropriate under the
circumstances to protect such Copyright, including, where
appropriate, the bringing of suit for infringement, seeking
injunctive relief and seeking to recover any and all damages
for such infringement.
(ii) Not make any assignment or agreement in
conflict with the security interest in the Copyrights of each
Grantor hereunder;
(l) Covenants Relating to Patents and Trademarks. Except
as could not reasonably be expected to have a Material Adverse Effect:
(i) (A) Continue to use each Trademark on each
and every trademark class of goods applicable to its current
line as reflected in its current catalogs, brochures and price
lists in order to maintain such Trademark in full force free
from any claim of abandonment for non-use unless such Grantor,
in the exercise of its reasonable business judgment,
determines not to continue the line or the use of such
Trademark with respect to such line, (B) maintain as in the
past the quality of products and services offered under such
Trademark, (C) employ such Trademark with the appropriate
notice of registration, (D) not adopt or use any mark which is
confusingly similar or a colorable imitation of such Trademark
unless the Collateral Agent, for the ratable benefit of the
holders of the Secured Obligations, shall obtain a perfected
security interest in such mark pursuant to this Security
Agreement, and (E) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any
act whereby any material Trademark may become invalidated.
(ii) Not do any act, or omit to do any act,
whereby any material Patent may become abandoned or dedicated.
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(iii) Notify the Collateral Agent and the holders
of the Secured Obligations promptly if it knows that any
application or registration relating to any material Patent or
Trademark is reasonably likely to become abandoned or
dedicated, or of any material adverse determination or
development (including, without limitation, the institution
of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or
any court or tribunal in any country) regarding a Grantor's
ownership of any material Patent or Trademark or its right to
register and/or maintain the same.
(iv) Whenever a Grantor, either by itself or
through an agent, employee, licensee or designee, shall file
an application for the registration of any Patent or Trademark
with the United States Patent and Trademark Office or any
similar office or agency in any other country or any political
subdivision thereof, a Grantor shall report such filing to the
Collateral Agent and the holders of the Secured Obligations
within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the
Collateral Agent, a Grantor shall execute and deliver any and
all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the
security interest of the Collateral Agent and the holders of
the Secured Obligations in any Patent or Trademark and the
goodwill and general intangibles of a Grantor relating thereto
or represented thereby.
(v) Take all reasonable and necessary steps,
including, without limitation, in any proceeding before the
United States Patent and Trademark Office, or any similar
office or agency in any other country or any political
subdivision thereof, to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each
registration of the Patents and Trademarks, including, without
limitation, filing of applications for renewal, affidavits of
use and affidavits of incontestability unless such Grantor, in
the exercise of its reasonable business judgment, decides to
abandon such Patent or Trademark.
(vi) Promptly notify the Collateral Agent and the
holders of the Secured Obligations after it learns that any
material Patent or Trademark included in the Collateral is
infringed, misappropriated or diluted by a third party in any
material respect and promptly sue for infringement,
misappropriation or dilution, seek injunctive relief where
appropriate and recover any and all damages for such
infringement, misappropriation or dilution, or take such other
actions as it shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark.
(vii) Not make any assignment or agreement in
conflict with the security interest in the Patents or
Trademarks of each Grantor hereunder.
(m) New Patents, Copyrights and Trademarks. Within five
Business Days after the last day of the fiscal quarter in which a new
application for Copyrights, Patents or Trademarks is made by such
Grantor, provide the Collateral Agent with (i) a listing of all such
applications, if any (together with a listing of the issuance of
registrations or letters on present applications), which new
applications and issued registrations or letters shall be subject to
the terms and conditions hereunder, and (ii) (A) with respect to
Copyrights, a duly executed Notice of Security Interest in Copyrights,
(B) with respect to Patents, a duly executed Notice of Security
Interest in Patents, (C) with respect to Trademarks, a duly executed
Notice of Security Interest in Trademarks or (D) such other duly
executed documents as the Collateral Agent may reasonably request in a
form acceptable to counsel for the Collateral Agent and suitable for
recording to evidence the security interest in the Copyright, Patent or
Trademark which is the subject of such new application.
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(n) Insurance. Insure, repair and replace the Collateral
of such Grantor as set forth in the Credit Agreement. All insurance
proceeds shall be subject to the security interest of the Collateral
Agent hereunder.
(o) Commercial Tort Claims.
(i) Promptly notify the Collateral Agent in
writing of the initiation of any Commercial Tort Claim before
any Governmental Authority by or in favor of such Grantor or
any of its Subsidiaries.
(ii) Execute and deliver such statements,
documents and notices and do and cause to be done all such
things as the Collateral Agent may reasonably deem necessary,
appropriate or convenient, or as are required by law, to
create, perfect and maintain the Collateral Agent's security
interest in any Commercial Tort Claim.
6. Advances by Holders of the Secured Obligations. On failure of
any Grantor to perform any of the covenants and agreements contained herein, the
Collateral Agent may, at its sole option and in its sole discretion, perform the
same and in so doing may expend such sums as the Collateral Agent may reasonably
deem advisable in the performance thereof, including, without limitation, the
payment of any insurance premiums, the payment of any taxes, a payment to obtain
a release of a Lien or potential Lien, expenditures made in defending against
any adverse claim and all other expenditures which the Collateral Agent or the
holders of the Secured Obligations may make for the protection of the security
hereof or which may be compelled to make by operation of law. All such sums and
amounts so expended shall be repayable by the Grantors on a joint and several
basis (subject to Section 25 hereof) promptly upon timely notice thereof and
demand therefor, shall constitute additional Secured Obligations and shall bear
interest from the date said amounts are expended at the Default Rate for
Revolving Loans that are Base Rate Loans. No such performance of any covenant or
agreement by the Collateral Agent or the holders of the Secured Obligations on
behalf of any Grantor, and no such advance or expenditure therefor, shall
relieve the Grantors of any default under the terms of this Security Agreement,
the other Credit Documents or any other documents relating to the Secured
Obligations. The holders of the Secured Obligations may make any payment hereby
authorized in accordance with any bill, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by a Grantor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
7. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during the continuation thereof, the Collateral Agent and
the holders of the Secured Obligations shall have, in addition to the
rights and remedies provided herein, in the Credit Documents, in any
other documents relating to the Secured Obligations, or by law
(including, without limitation, levy of attachment and garnishment),
the rights and remedies of a secured party under the UCC of the
jurisdiction applicable to the affected Collateral and, further, the
Collateral Agent may, with or without judicial process or the aid and
assistance of others, (i) enter on any premises on which any of the
Collateral may be located and, without resistance or interference by
the Grantors, take possession of the Collateral, (ii) dispose of any
Collateral on any such premises, (iii) require the Grantors to assemble
and make available to the Collateral Agent at the expense of the
Grantors any Collateral at any place and time designated by the
Collateral Agent which is reasonably convenient to both parties, (iv)
remove any Collateral from any such premises for the purpose of
effecting sale or other disposition thereof, and/or (v) without demand
and without advertisement, notice, hearing or process of law, all of
which each of the Grantors hereby waives to the fullest extent
permitted by law, at any place and time or
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times, sell and deliver any or all Collateral held by or for it at
public or private sale, by one or more contracts, in one or more
parcels, for cash, upon credit or otherwise, at such prices and upon
such terms as the Collateral Agent deems advisable, in its sole
discretion (subject to any and all mandatory legal requirements).
Neither the Collateral Agent's compliance with applicable law nor its
disclaimer of warranties relating to the Collateral shall be considered
to adversely affect the commercial reasonableness of any sale. In
addition to all other sums due the Collateral Agent and the holders of
the Secured Obligations with respect to the Secured Obligations, the
Grantors shall pay the Collateral Agent and each of the holders of the
Secured Obligations all reasonable documented costs and expenses
incurred by the Collateral Agent or any such holder of the Secured
Obligations (including Attorney Costs and court costs) in obtaining or
liquidating the Collateral, in enforcing payment of the Secured
Obligations, or in the prosecution or defense of any action or
proceeding by or against the Collateral Agent or the holders of the
Secured Obligations or the Grantors concerning any matter arising out
of or connected with this Security Agreement, any Collateral or the
Secured Obligations, including, without limitation, any of the
foregoing arising in, arising under or related to a case under Debtor
Relief Laws. To the extent the rights of notice cannot be legally
waived hereunder, each Grantor agrees that any requirement of
reasonable notice shall be met if such notice is personally served on
or mailed, postage prepaid, to the Borrower in accordance with the
notice provisions of Section 11.02 of the Credit Agreement at least ten
Business Days before the time of sale or other event giving rise to the
requirement of such notice. The Collateral Agent and the holders of the
Secured Obligations shall not be obligated to make any sale or other
disposition of the Collateral regardless of notice having been given.
To the extent permitted by law, any holder of the Secured Obligations
may be a purchaser at any such sale. To the extent permitted by
applicable law, each of the Grantors hereby waives all of its rights of
redemption with respect to any such sale. Subject to the provisions of
applicable law, the Collateral Agent and the holders of the Secured
Obligations may postpone or cause the postponement of the sale of all
or any portion of the Collateral by announcement at the time and place
of such sale, and such sale may, without further notice, to the extent
permitted by law, be made at the time and place to which the sale was
postponed, or the Collateral Agent and the holders of the Secured
Obligations may further postpone such sale by announcement made at such
time and place.
(b) Remedies relating to Accounts. Upon the occurrence of
an Event of Default and during the continuation thereof, whether or not
the Collateral Agent has exercised any or all of its rights and
remedies hereunder, each Grantor will promptly upon request of the
Collateral Agent instruct all account debtors to remit all payments in
respect of Accounts to a mailing location selected by the Collateral
Agent. In addition, the Collateral Agent shall have the right to
enforce any Grantor's rights against its customers and account debtors,
and the Collateral Agent or its designee may notify any Grantor's
customers and account debtors that the Accounts of such Grantor have
been assigned to the Collateral Agent or of the Collateral Agent's
security interest therein, and may (either in its own name or in the
name of a Grantor or both) demand, collect (including without
limitation by way of a lockbox arrangement), receive, take receipt for,
sell, sue for, compound, settle, compromise and give acquittance for
any and all amounts due or to become due on any Account, and, in the
Collateral Agent's discretion, file any claim or take any other action
or proceeding to protect and realize upon the security interest of the
holders of the Secured Obligations in the Accounts. Each Grantor
acknowledges and agrees that the Proceeds of its Accounts remitted to
or on behalf of the Collateral Agent in accordance with the provisions
hereof shall be solely for the Collateral Agent's own convenience and
that such Grantor shall not have any right, title or interest in such
Accounts or in any such other amounts except as expressly provided
herein. The Collateral Agent and the holders of the Secured Obligations
shall have no liability or responsibility to any Grantor for acceptance
of a check, draft or other order for payment of money bearing the
legend "payment in full" or words of similar import or any other
restrictive legend or endorsement or be responsible for determining the
correctness of any remittance. Each Grantor hereby agrees to indemnify
the Collateral Agent and the holders of the Secured Obligations from
and against all
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liabilities, damages, losses, actions, claims, judgments, costs,
expenses, charges and Attorney Costs suffered or incurred by the
Collateral Agent or the holders of the Secured Obligations (each, an
"Indemnified Party") because of the maintenance of the foregoing
arrangements except as relating to or arising out of the gross
negligence or willful misconduct of an Indemnified Party or its
officers, employees or agents. In the case of any investigation,
litigation or other proceeding, the foregoing indemnity shall be
effective whether or not such investigation, litigation or proceeding
is brought by a Grantor, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any other Indemnified Party is
otherwise a party thereto.
(c) Access. In addition to the rights and remedies
hereunder, upon the occurrence of an Event of Default and during the
continuation thereof, the Collateral Agent shall have the right to
enter and remain upon the various premises of the Grantors without cost
or charge to the Collateral Agent, and use the same, together with
materials, supplies, books and records of the Grantors for the purpose
of collecting and liquidating the Collateral, or for preparing for sale
and conducting the sale of the Collateral, whether by foreclosure,
auction or otherwise. In addition, the Collateral Agent may remove
Collateral, or any part thereof, from such premises and/or any records
with respect thereto, in order to effectively collect or liquidate such
Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the
Collateral Agent or the holders of the Secured Obligations to exercise
any right, remedy or option under this Security Agreement, any other
Credit Document, any other documents relating to the Secured
Obligations, or as provided by law, or any delay by the Collateral
Agent or the holders of the Secured Obligations in exercising the same,
shall not operate as a waiver of any such right, remedy or option. No
waiver hereunder shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then
only to the extent specifically stated, which in the case of the
Collateral Agent or the holders of the Secured Obligations shall only
be granted as provided herein. To the extent permitted by law, neither
the Collateral Agent, the holders of the Secured Obligations, nor any
party acting as attorney for the Collateral Agent or the holders of the
Secured Obligations, shall be liable hereunder for any acts or
omissions or for any error of judgment or mistake of fact or law other
than their gross negligence or willful misconduct hereunder. The rights
and remedies of the Collateral Agents and the holders of the Secured
Obligations under this Security Agreement shall be cumulative and not
exclusive of any other right or remedy which the Collateral Agent or
the holders of the Secured Obligations may have.
(e) Retention of Collateral. To the extent permitted
under applicable law, in addition to the rights and remedies hereunder,
upon the occurrence of an Event of Default, the Collateral Agent may,
after providing the notices required by Sections 9-620 and 9-621 of the
UCC or otherwise complying with the requirements of applicable law of
the relevant jurisdiction, accept or retain all or any portion of the
Collateral in satisfaction of the Secured Obligations. Unless and until
the Collateral Agent shall have provided such notices, however, the
Collateral Agent shall not be deemed to have accepted or retained any
Collateral in satisfaction of any Secured Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any
sale, collection or realization are insufficient to pay all amounts to
which the Collateral Agent or the holders of the Secured Obligations
are legally entitled, the Grantors shall be jointly and severally
liable for the deficiency (subject to Section 25 hereof), together with
interest thereon at the Default Rate for Revolving Loans that are Base
Rate Loans, together with the costs of collection and Attorney Costs.
Any surplus remaining after the full payment and satisfaction of the
Secured Obligations shall be returned to the Grantors or to whomsoever
a court of competent jurisdiction shall determine to be entitled
thereto.
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8. Release of Collateral. Upon request, the Collateral Agent
shall promptly deliver to the Borrower (at the Borrower's expense) appropriate
release documentation to the extent the release of Collateral is permitted
under, and on the terms and conditions set forth in, the Credit Agreement;
provided that any such release, or the substitution of any of the Collateral for
other Collateral, will not alter, vary or diminish in any way the force, effect,
lien, pledge or security interest of this Security Agreement as to any and all
Collateral not expressly released or substituted, and this Security Agreement
shall continue as a first priority lien (subject to Permitted Liens) on any and
all Collateral not expressly released or substituted.
9. Rights of the Collateral Agent.
(a) Power of Attorney. In addition to other powers of
attorney contained herein, each Grantor hereby designates and appoints
the Collateral Agent, on behalf of the holders of the Secured
Obligations, and each of its designees or agents, as attorney-in-fact
of such Grantor, irrevocably and with power of substitution, with
authority to take any or all of the following actions upon the
occurrence and during the continuation of an Event of Default:
(i) to demand, collect, settle, compromise and
adjust, and give discharges and releases concerning the
Collateral, all as the Collateral Agent may reasonably deem
appropriate;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any of the Collateral and
enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or
release as the Collateral Agent may reasonably deem
appropriate;
(iv) to receive, open and dispose of mail
addressed to a Grantor and endorse checks, notes, drafts,
acceptances, money orders, bills of lading, warehouse receipts
or other instruments or documents evidencing payment, shipment
or storage of the goods giving rise to the Collateral on
behalf of and in the name of such Grantor, or securing, or
relating to such Collateral;
(v) to pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on or
threatened against the Collateral;
(vi) to direct any parties liable for any payment
in connection with any of the Collateral to make payment of
any and all monies due and to become due thereunder directly
to the Collateral Agent or as the Collateral Agent shall
direct;
(vii) to receive payment of and receipt for any
and all monies, claims, and other amounts due and to become
due at any time in respect of or arising out of any
Collateral;
(viii) to sell, assign, transfer, make any
agreement in respect of, or otherwise deal with or exercise
rights in respect of, any Collateral or the goods or services
which have given rise thereto, as fully and completely as
though the Collateral Agent were the absolute owner thereof
for all purposes;
(ix) to adjust and settle claims under any
insurance policy relating thereto;
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(x) to execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, security and pledge agreements,
affidavits, notices and other agreements, instruments and
documents that the Collateral Agent may reasonably deem
appropriate in order to perfect and maintain the security
interests and liens granted in this Security Agreement and in
order to fully consummate all of the transactions contemplated
therein;
(xi) to institute any foreclosure proceedings
that the Collateral Agent may reasonably deem appropriate; and
(xii) to do and perform all such other acts and
things as the Collateral Agent may reasonably deem appropriate
or convenient in connection with the Collateral.
This power of attorney is a power coupled with an interest and
shall be irrevocable for so long as any of the Secured Obligations
shall remain outstanding and until all of the commitments relating
thereto shall have been terminated. The Collateral Agent shall be under
no duty to exercise or withhold the exercise of any of the rights,
powers, privileges and options expressly or implicitly granted to the
Collateral Agent in this Security Agreement, and shall not be liable
for any failure to do so or any delay in doing so. The Collateral Agent
shall not be liable for any act or omission or for any error of
judgment or any mistake of fact or law in its individual capacity or
its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of attorney
is conferred on the Collateral Agent solely to protect, preserve and
realize upon its security interest in the Collateral.
(b) Performance by the Collateral Agent of Obligations.
If any Grantor fails to perform any agreement or obligation contained
herein, the Collateral Agent itself may perform, or cause performance
of, such agreement or obligation, and the expenses of the Collateral
Agent incurred in connection therewith shall be payable by the Grantors
on a joint and several basis pursuant to Section 25 hereof.
(c) The Collateral Agent's Duty of Care. Other than the
exercise of reasonable care to assure the safe custody of the
Collateral while being held by the Collateral Agent hereunder, the
Collateral Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that the Grantors
shall be responsible for preservation of all rights in the Collateral,
and the Collateral Agent shall be relieved of all responsibility for
the Collateral upon surrendering it or tendering the surrender of it to
the Grantors. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in
its possession if such Collateral is accorded treatment substantially
equal to that which the Collateral Agent accords its own property,
which shall be no less than the treatment employed by a reasonable and
prudent agent in the industry, it being understood that the Collateral
Agent shall not have responsibility for taking any necessary steps to
preserve rights against any parties with respect to any of the
Collateral. In the event of a public or private sale of Collateral
pursuant to Section 8 hereof, the Collateral Agent shall have no
obligation to clean, repair or otherwise prepare the Collateral for
sale.
10. Rights of Required Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Required Lenders.
11. Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the Collateral
Agent or any of the holders of the Secured Obligations in cash or its
equivalent,
14
will be applied in reduction of the Secured Obligations in the order set forth
in the Credit Agreement or other document relating to the Secured Obligations,
and each Grantor irrevocably waives the right to direct the application of such
payments and proceeds and acknowledges and agrees that the Collateral Agent
shall have the continuing and exclusive right to apply and reapply any and all
such payments and proceeds in the Collateral Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
12. Costs of Counsel. At all times hereafter, whether or not upon
the occurrence of an Event of Default, the Grantors agree to promptly pay upon
demand any and all reasonable costs and expenses (including Attorney Costs) of
the Collateral Agent and the holders of the Secured Obligations (a) as required
under Section 11.04 of the Credit Agreement and (b) as necessary to protect the
Collateral or to exercise any rights or remedies under this Security Agreement
or with respect to any of the Collateral. All of the foregoing costs and
expenses shall constitute Secured Obligations hereunder.
13. Continuing Agreement.
(a) This Security Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect so
long as any of the Secured Obligations remains outstanding and until
all of the commitments relating thereto have been terminated (other
than any obligations with respect to the indemnities and the
representations and warranties set forth in the Credit Documents). Upon
such payment and termination, this Security Agreement shall be
automatically terminated and the Collateral Agent and the holders of
the Secured Obligations shall, upon the request and at the expense of
the Grantors, forthwith release all of its liens and security interests
hereunder and shall execute and deliver all UCC termination statements
and/or other documents reasonably requested by the Grantors evidencing
such termination. Notwithstanding the foregoing, all releases and
indemnities provided hereunder shall survive termination of this
Security Agreement.
(b) This Security Agreement shall continue to be
effective or be automatically reinstated, as the case may be, if at any
time payment, in whole or in part, of any of the Secured Obligations is
rescinded or must otherwise be restored or returned by the Collateral
Agent or any holder of the Secured Obligations as a preference,
fraudulent conveyance or otherwise under any bankruptcy, insolvency or
similar law, all as though such payment had not been made; provided
that in the event payment of all or any part of the Secured Obligations
is rescinded or must be restored or returned, all reasonable costs and
expenses (including Attorney Costs) incurred by the Collateral Agent or
any holder of the Secured Obligations in defending and enforcing such
reinstatement shall be deemed to be included as a part of the Secured
Obligations.
14. Amendments and Waivers. This Security Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.01 of the Credit Agreement.
15. Successors in Interest. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Grantor, its successors and assigns, and shall inure, together with the rights
and remedies of the Collateral Agent and the holders of the Secured Obligations
hereunder, to the benefit of the Collateral Agent and the holders of the Secured
Obligations and their successors and permitted assigns; provided, however, that
none of the Grantors may assign its rights or delegate its duties hereunder
without the prior written consent of the requisite Lenders under the Credit
Agreement. To the fullest extent permitted by law, each Grantor hereby releases
the Collateral Agent and each holder of the Secured Obligations, and their
respective successors and assigns, from any liability for any act or omission
relating to this Security Agreement or the Collateral, except for any liability
arising from the gross negligence or willful misconduct of the Collateral Agent
or such holder, and their respective officers, employees or agents.
15
16. Notices. All notices required or permitted to be given under
this Security Agreement shall be given as provided in Section 11.02 of the
Credit Agreement.
17. Counterparts. This Security Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart.
18. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Security Agreement.
19. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Any legal action or proceeding with respect to this Security Agreement
may be brought in the state or federal courts located in Charlotte,
North Carolina, and, by execution and delivery of this Security
Agreement, each Grantor hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the
jurisdiction of such courts. Each Grantor further irrevocably consents
to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at the address for
notices pursuant to Section 11.02 of the Credit Agreement, such service
to become effective three days after such mailing. Nothing herein shall
affect the right of the Collateral Agent to serve process in any other
manner permitted by law or to commence legal proceedings or to
otherwise proceed against any Grantor in any other jurisdiction.
(b) Each Grantor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Security Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
20. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
21. Severability. If any provision of this Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
22. Entirety. This Security Agreement, the other Credit Documents
and the other documents relating to the Secured Obligations represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents, any other documents relating to
the Secured Obligations, or the transactions contemplated herein and therein.
16
23. Survival. All representations and warranties of the Grantors
hereunder shall survive the execution and delivery of this Security Agreement,
the other Credit Documents and the other documents relating to the Secured
Obligations, the delivery of the Notes and the extension of credit thereunder or
in connection therewith.
24. Other Security. To the extent that any of the Secured
Obligations are now or hereafter secured by property other than the Collateral
(including, without limitation, real property and securities owned by a
Grantor), or by a guarantee, endorsement or property of any other Person, then
the Collateral Agent shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Collateral Agent shall have the right, in its sole discretion, to
determine which rights, security, liens, security interests or remedies the
Collateral Agent shall at any time pursue, relinquish, subordinate, modify or
take with respect thereto, without in any way modifying or affecting any of them
or the Secured Obligations or any of the rights of the Collateral Agent or the
holders of the Secured Obligations under this Security Agreement, under any of
the other Credit Documents or under any other document relating to the Secured
Obligations.
25. Joint and Several Obligations of Grantors.
(a) Subject to subsection (c) of this Section 25, each of
the Grantors is accepting joint and several liability hereunder in
consideration of the financial accommodation to be provided by the
holders of the Secured Obligations, for the mutual benefit, directly
and indirectly, of each of the Grantors and in consideration of the
undertakings of each of the Grantors to accept joint and several
liability for the obligations of each of them.
(b) Subject to subsection (c) of this Section 25, each of
the Grantors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Grantors with
respect to the payment and performance of all of the Secured
Obligations arising under this Security Agreement, the other Credit
Documents and any other documents relating to the Secured Obligations,
it being the intention of the parties hereto that all the Secured
Obligations shall be the joint and several obligations of each of the
Grantors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary
contained herein, in any other of the Credit Documents or in any other
documents relating to the Secured Obligations, the obligations of each
Guarantor under the Credit Agreement and the other Credit Documents
shall be limited to an aggregate amount equal to the largest amount
that would not render such obligations subject to avoidance under
Section 548 of the Bankruptcy Code of the United States or any other
Debtor Relief Law (including any comparable provisions of any
applicable state law).
[remainder of page intentionally left blank]
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Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.
GRANTORS: AMERIGROUP CORPORATION,
a Delaware corporation
By: /s/ Sherri E. Lee
----------------------------------------
Name: Sherri E. Lee
Title: SVP, Treasurer and Asst. Secretary
PHP HOLDINGS, INC.,
a Florida corporation
By: /s/ Stanley F. Baldwin
----------------------------------------
Name: Stanley F. Baldwin
Title: VP and Secretary
AMERIGROUP CORPORATION
SECURITY AGREEMENT
Accepted and agreed to as of the date first above written.
Bank of America, N.A.,
as Collateral Agent
By: /s/ Annie Cuenco
--------------------------------
Name: Annie Cuenco
Title: Assistant Vice President
AMERIGROUP CORPORATION
SECURITY AGREEMENT