EXHIBIT 10.3
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated as of September 15,
2003, between CHART INDUSTRIES, INC., a Delaware corporation (the "Borrower");
each of the Subsidiaries of the Borrower identified under the caption
"SUBSIDIARY GUARANTORS" on the signature pages hereto and each other such
Subsidiary that may hereafter become a Subsidiary Guarantor party hereto
pursuant to Section 6.09 (individually, a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors" and, together with the Borrower, the
"Obligors"); and JPMORGAN CHASE BANK ("JPMCB"), in its capacity as Collateral
Agent (together with its successors in such capacity, the "Collateral Agent")
for the benefit of the Secured Parties (all capitalized terms used without being
defined in this preamble and in the recitals below shall have the meanings
provided for in Section 1).
RECITALS
WHEREAS, the Borrower, certain of its Subsidiaries as guarantors, the
lenders party thereto, JPMorgan Chase Bank (formerly known as The Chase
Manhattan Bank), as administrative agent for such lenders, are parties to a
Credit Agreement dated as of April 12, 1999 (as heretofore amended, supplemented
or otherwise modified, the "1999 Credit Agreement") pursuant to which such
lenders extended credit (by means of making loans and the issuance of letters of
credit) to or account of the Borrower and certain of its subsidiaries;
WHEREAS, the Borrower and the Subsidiary Guarantors have secured all
of their respective obligations under or in respect of the 1999 Credit
Agreement, including principal, interest, fees, expenses, indemnities and
reimbursement obligations, and certain other obligations owing to the lenders
(and their affiliates), by granting in favor of such administrative agent, for
the benefit of itself and such lenders and affiliates, a security interest in
and lien upon substantially all of their existing and after-acquired personal
and real property pursuant to a Security Agreement dated as of April 12, 1999
(as heretofore amended, supplemented or otherwise modified, the "Existing
Security Agreement") and certain other security agreements, pledge agreements,
mortgages, deeds of trust and other similar instruments and agreements entered
into from time to time pursuant to the 1999 Credit Agreement, each as in effect
on the date hereof;
WHEREAS, on July 8, 2003 the Borrower and the Subsidiary Guarantors
filed a voluntary petition with the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court") initiating cases under chapter 11
of the Bankruptcy Code (the "Cases") and continued in their possession of their
respective assets and in the management of their respective businesses pursuant
to Sections 1107 and 1108 of the Bankruptcy Code.
WHEREAS, the Borrower and the Subsidiary Guarantors party thereto
(each as debtor and debtor in possession under chapter 11 of the Bankruptcy
Code), the lenders party thereto and JPMorgan Chase Bank, as administrative
agent for such lenders, are party to a Revolving Credit Agreement dated as of
July 17, 2003 (as heretofore amended, supplemented or otherwise modified, the
"DIP Credit Agreement"), providing for revolving credit loans and
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letters of credit to the Borrower (including the continuation of the outstanding
letters of credit issued for account of the Borrower under the 1999 Credit
Agreement) in an aggregate principal or face amount not exceeding $40,000,000,
and pursuant to an order of the Bankruptcy Court all obligations of the Borrower
and the Subsidiary Guarantors in respect of the DIP Credit Agreement, including
principal, interest, fees, expenses, indemnities and reimbursement obligations,
are secured by a first-priority security interest in and lien upon their
respective existing and after-acquired personal and real property;
WHEREAS, the Borrower and the Subsidiary Guarantors have filed a plan
of reorganization with the Bankruptcy Court which has been confirmed by a final
order of the Bankruptcy Court entered on September 4, 2003 (as supplemented from
time to time, the "Reorganization Plan"). Pursuant to the Reorganization Plan,
the Borrower and the Subsidiary Guarantors are concurrently herewith entering
into: (a) an Amended and Restated Revolving Credit Agreement dated as of
September 15, 2003 (as from time to time amended, restated, supplemented,
deferred, renewed, extended, increased, refunded, refinanced, replaced or
otherwise modified, the "Revolving Credit Agreement") with the lenders party to
the DIP Credit Agreement as of the date hereof and JPMorgan Chase Bank, as
administrative agent for such lenders (together with its successors in such
capacity, the "Revolving Credit Agent"), which will amend and restate the DIP
Credit Agreement and provide for revolving credit loans and letters of credit to
or for account of the Borrower (and the continuation of the revolving credit
loans and letters of credit made, continued or issued under the DIP Credit
Agreement and the continuation of the letters of credit issued under the 1999
Credit Agreement for account of Chart Heat Exhangers Limited, an English company
and wholly-owned subsidiary of the Borrower ("CHEL"), in each case outstanding
on the date thereof ) in an aggregate principal or face amount not exceeding
$40,000,000; and (b) a Term Loan Agreement dated as of September 15, 2003 (as
from time to time amended, restated, supplemented, deferred, renewed, extended,
increased, refunded, refinanced, replaced or otherwise modified, the "Term Loan
Agreement" and, together with the Revolving Credit Agreement, the "Credit
Agreements") with the lenders party to the 1999 Credit Agreement as of the date
hereof and JPMorgan Chase Bank, as administrative agent for such lenders
(together with its successors in such capacity, the "Term Loan Agent"), pursuant
to which all outstanding obligations (including principal, accrued interest and
fees) of the Borrower and the Subsidiary Guarantors in respect of the 1999
Credit Agreement (other than the obligations in respect of the letters of credit
issued thereunder for account of the Borrower that were continued under the DIP
Credit Agreement and other than the obligations in respect of the letters of
credit originally issued by Bank One, NA under the 1999 Credit Agreement for
account of CHEL) shall be restructured into term loans held by such lenders in
an aggregate principal amount of $120,000,000;
WHEREAS, pursuant to the Reorganization Plan, the existing security
interests in and liens upon the property of the Borrower and Subsidiary
Guarantors granted under the DIP Credit Agreement and the Existing Security
Agreement (and such other existing security agreements, pledge agreements,
mortgages, deeds of trust and other similar instruments and agreements entered
into pursuant to the 1999 Credit Agreement) and pursuant to the order of the
Bankruptcy Court will continue in effect, and the Borrower and/or the Subsidiary
Guarantors may on the date hereof or at any time enter into new security
agreements, pledge agreements, mortgages, deeds of trust and other similar
instruments and agreements in respect of other of their respective property, in
each case as collateral security for the obligations of the Obligors in respect
of the Credit Agreements (and other obligations therein specified);
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WHEREAS, the Borrower, the Revolving Credit Agent (on behalf of the
lenders party to the Revolving Credit Agreement) and the Term Loan Agent (on
behalf of the lenders party to the Term Loan Agreement) are concurrently
herewith entering into a Collateral Agency and Intercreditor Agreement dated as
of September 15, 2003 (as from time to time amended, restated, supplemented,
replaced or otherwise modified, the "Collateral Agency and Intercreditor
Agreement"), pursuant to which, among other things, the Collateral Agent shall
be appointed to act as collateral agent hereunder and under the other Collateral
Documents (as defined therein);
NOW, THEREFORE, to induce the lenders party to the Revolving Credit
Agreement to agree to the terms of the Revolving Credit Agreement and to extend
and continue credit thereunder, and to induce the lenders party to the Term Loan
Agreement to agree to the terms of the Term Loan Agreement and to restructure
the loans under the 1999 Credit Agreement as contemplated thereby, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto wish to amend and restate the Existing Security
Agreement, in its entirety pursuant hereto. Accordingly, the parties hereto
hereby agree that the Existing Security Agreement shall be amended and restated
in its entirety as follows:
Section 1. Definitions.
(a) Unless otherwise indicated, terms defined in the Revolving Credit
Agreement or (following the termination of the Revolving Credit Agreement) the
Term Loan Agreement are used herein as defined therein.
(b) The terms "Accounts", "Chattel Paper", "Deposit Account",
"Document", "Electronic Chattel Paper", "Equipment", "Fixture", "General
Intangible", "Goods", "Instrument", "Inventory", "Investment Property",
"Letter-of-Credit Right", "Payment Intangible", "Proceeds" and "Software" have
the respective meanings ascribed thereto in Article 9 of the Uniform Commercial
Code. The term "Financial Assets" shall have the meaning ascribed thereto in
Article 8 of the Uniform Commercial Code.
(c) In addition, as used herein:
"Cash Management Obligations" means, with respect to any Person, all
obligations of such Person in respect of overdrafts and related liabilities
owed to any other Person that arise from treasury, depositary or cash
management services in connection with any automated clearing house
transfers of funds or any similar transactions.
"Collateral" has the meaning assigned to such term in Section 3.
"Collateral Account" has the meaning assigned to such term in Section
4.01.
"Collateral Agency and Intercreditor Agreement" has the meaning
assigned to such term in the recitals of this Agreement.
"Concentration Account" has the meaning assigned to such term in
Section 4.02.
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"Copyright Collateral" means all Copyrights, whether now owned or
hereafter acquired by any Obligor, including each Copyright identified in
Annex 4.
"Copyrights" means all copyrights, copyright registrations and
applications for copyright registrations, including, without limitation,
all renewals and extensions thereof, the right to recover for all past,
present and future infringements thereof, and all other rights of any kind
whatsoever accruing thereunder or pertaining thereto.
"Depositary" has the meaning assigned to such term in Section 4.02.
"Existing Security Agreement" has the meaning assigned to such term in
the recitals of this Agreement.
"Intellectual Property" means, collectively, all Copyright Collateral,
all Patent Collateral and all Trademark Collateral, together with (a) all
inventions, processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or other agreements
granted to any Obligor with respect to any of the foregoing, in each case
whether now or hereafter owned or used including, without limitation, the
licenses or other agreements with respect to the Copyright Collateral, the
Patent Collateral or the Trademark Collateral, listed in Annex 7; (c) all
information, customer lists, identification of suppliers, data, plans,
blueprints, specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards, processing
standards, performance standards, catalogs, computer and automatic
machinery software and programs; (d) all field repair data, sales data and
other information relating to sales or service of products now or hereafter
manufactured; (e) all accounting information and all media in which or on
which any information or knowledge or data or records may be recorded or
stored and all computer programs used for the compilation or printout of
such information, knowledge, records or data; (f) all licenses, consents,
permits, variances, certifications and approvals of governmental agencies
now or hereafter held by any Obligor; and (g) all causes of action, claims
and warranties now or hereafter owned or acquired by any Obligor in respect
of any of the items listed above.
"Issuers" means, collectively, the respective corporations,
partnerships or other entities identified next to the names of the Obligors
on Annex 3 under the caption "Issuer", and each other Subsidiary of the
Borrower formed or acquired after the date hereof and required by either
Credit Agreement to be added as an "Issuer" under this Agreement (but
excluding any Foreign Subsidiary to the extent covered by a separate
Foreign Subsidiary Pledge Agreement).
"Motor Vehicles" means motor vehicles, tractors, trailers and other
like property, whether or not the title thereto is governed by a
certificate of title or ownership.
"Patent Collateral" means all Patents, whether now owned or hereafter
acquired by any Obligor, including each Patent identified in Annex 5.
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"Patents" means all patents and patent applications, including,
without limitation, the inventions and improvements described and claimed
therein together with the reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, all income, royalties,
damages and payments now or hereafter due and/or payable under and with
respect thereto, including, without limitation, damages and payments for
past or future infringements thereof, the right to sue for past, present
and future infringements thereof, and all rights corresponding thereto
throughout the world.
"Pledged Debt" has the meaning assigned to such term in Section 3(m).
"Pledged Stock" has the meaning assigned to such term in Section 3(l).
"Required Secured Parties" has the meaning assigned to such term in
the Collateral Agency and Intercreditor Agreement.
"Revolving Credit Agent" has the meaning assigned to such term in the
recitals of this Agreement.
"Revolving Credit Agreement" has the meaning assigned to such term in
the recitals of this Agreement.
"Revolving Credit Documents" means the "Credit Documents" (as defined
in the Revolving Credit Agreement).
"Revolving Credit Lenders" means the lenders party from time to time
to the Revolving Credit Agreement.
"Revolving Credit Obligations" means, collectively, (a) in the case of
the Borrower, all obligations in respect of the loans and other extensions
of credit to the Borrower under the Revolving Credit Agreement and all
other amounts whatsoever now or hereafter arising from time to time owing
to the Revolving Credit Lenders or the Revolving Credit Agent by the
Borrower under the Revolving Credit Documents (including, without
limitation, principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Borrower whether or not a claim for
post-filing interest is allowed in such proceedings), fees, charges,
expenses, indemnities, reimbursement obligations, guarantees and all other
amounts payable thereunder or in respect thereof), (b) all Cash Management
Obligations owing by any Obligor to any Revolving Credit Lender (or any
affiliate thereof), (c) in the case of the Subsidiary Guarantors, all
present and future obligations of the Subsidiary Guarantors under the
Revolving Credit Agreement and the other Revolving Credit Documents
(including, without limitation, in respect of their respective guarantee
under the Revolving Credit Agreement) and (d) all present and future
obligations of the Obligors to the Revolving Credit Lenders and the
Revolving Credit Agent hereunder.
"Secured Obligations" means (a) the Revolving Credit Obligations, (b)
the Term Loan Obligations and (c) all present and future obligations of the
Obligors to the
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Collateral Agent hereunder and under the other Collateral Documents (as
defined in the Collateral Agency Agreement).
"Secured Parties" means the Revolving Credit Lenders, the Revolving
Credit Agent, the Term Lenders, the Term Loan Agent, the Collateral Agent
and any other holder of Secured Obligations.
"Stock Collateral" has the meaning assigned to such term in Section
3(l)(ii).
"Term Lenders" means the lenders party from time to time to the Term
Loan Agreement.
"Term Loan Agent" has the meaning assigned to such term in the
recitals of this Agreement.
"Term Loan Agreement" has the meaning assigned to such term in the
recitals of this Agreement.
"Term Loan Documents" means the "Credit Documents" (as defined in the
Term Loan Agreement).
"Term Loan Obligations" means, collectively, (a) in the case of the
Borrower, the principal and interest on the loans made to the Borrower
under the Term Loan Agreement and all other amounts whatsoever now or
hereafter arising from time to time owing to the Term Lenders or the Term
Loan Agent by the Borrower under the Term Loan Documents (including,
without limitation, principal, premium (if any), interest(including
interest accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to the Borrower whether or not a claim for
post-filing interest is allowed in such proceedings), fees, charges,
expenses, indemnities, reimbursement obligations, guarantees and all other
amounts payable thereunder or in respect thereof), (b) in the case of the
Subsidiary Guarantors, all present and future obligations of the Subsidiary
Guarantors under the Term Loan Agreement and the other Term Loan Documents
(including, without limitation, in respect of their respective guarantee
under the Term Loan Agreement) and (c) all present and future obligations
of the Obligors to the Term Lenders and the Term Loan Agent hereunder.
"Trademark Collateral" means all Trademarks, whether now owned or
hereafter acquired by any Obligor, including each Trademark identified in
Annex 6. Notwithstanding the foregoing, the Trademark Collateral does not
and shall not include any Trademark that would be rendered invalid,
abandoned, void or unenforceable by reason of its being included as part of
the Trademark Collateral.
"Trademarks" means all trade names, trademarks and service marks,
logos, trademark and service mark registrations, and applications for
trademark and service mark registrations, including, without limitation,
all renewals of trademark and service mark registrations, all rights
corresponding thereto throughout the world, the right to recover for all
past, present and future infringements thereof, all other rights of any
kind whatsoever accruing thereunder or pertaining thereto, together, in
each case, with the
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product lines and goodwill of the business connected with the use of, and
symbolized by, each such trade name, trademark and service mark.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in the State of New York.
Section 2. Representations and Warranties. Each Obligor represents and
warrants to the Secured Parties and the Collateral Agent that:
(a) Title and Priority. Such Obligor is the sole beneficial owner of
the Collateral in which it purports to grant a security interest pursuant
to Section 3 and no Lien exists or will exist upon such Collateral at any
time, except for Liens permitted under the Credit Agreements and except for
the security interest in favor of the Collateral Agent for the benefit of
the Secured Parties created pursuant hereto. The security interest created
pursuant hereto constitutes a valid and perfected security interest in the
Collateral in which such Obligor purports to grant a security interest
pursuant to Section 3, subject to no equal or prior Lien except as
expressly permitted by Section 7.02 of either Credit Agreement.
(b) Names, Etc. (i) The full and correct legal name, type of
organization, jurisdiction of organization, organizational ID number (if
applicable) and mailing address of each Obligor as of the date hereof are
correctly set forth in Annex 1.
(ii) Annex 1 correctly specifies (i) the place of business of each
Obligor or, if such Obligor has more than one place of business, the
location of the chief executive office of such Obligor, and (ii) each
location where Goods of each Obligor are located (other than Motor Vehicles
constituting Equipment and Goods in transit).
(c) Changes in Circumstances. Except as specified in Annex 1, such
Obligor has not (i) within the period of four months prior to the date
hereof, changed its location (as defined in Section 9-307 of the Uniform
Commercial Code) and (ii) within the period of five years prior to the date
hereof, changed its name. Except as specified in Annex 2, such Obligor has
not, within the period of five years prior to the date hereof, become a
"new debtor" (as defined in Section 9-102(a)(56) of the Uniform Commercial
Code) with respect to a currently effective security agreement previously
entered into by any other Person.
(d) Pledged Stock; Pledged Debt. The Pledged Stock identified under
the name of such Obligor in Annex 3 is, and all other Pledged Stock in
which such Obligor shall hereafter grant a security interest pursuant to
Section 3 will be, duly authorized, validly existing, fully paid and
non-assessable and none of such Pledged Stock is or will be subject to any
contractual restriction, or any restriction under the charter or by-laws of
the respective Issuer of such Pledged Stock, upon the transfer of such
Pledged Stock (except for any such restriction contained herein or in the
Credit Agreements). The Pledged Stock identified under the name of such
Obligor in Annex 3 constitutes all of the issued and outstanding shares of
capital stock of any class of the Issuers beneficially owned by such
Obligor on the date hereof (whether or not registered in the name of such
Obligor)
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and Annex 3 correctly identifies, as at the date hereof, the respective
Issuers of such Pledged Stock, the respective class and par value of the
shares constituting such Pledged Stock and the respective number of shares
(and registered owners thereof) represented by each such certificate. The
Pledged Debt issued by any Obligor and pledged by such Obligor hereunder
has been duly authorized, authenticated or issued and delivered, is the
legal, valid and binding obligation of such Obligor, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law is
evidenced by one or more promissory notes (which notes have been delivered
to the Collateral Agent) and is not in default
(e) Intellectual Property. Annexes 4, 5 and 6, respectively, set forth
under the name of such Obligor a complete and correct list of all
Copyrights, Patents and Trademarks owned by such Obligor on the date
hereof; except pursuant to licenses and other user agreements entered into
by such Obligor in the ordinary course of business that are listed in Annex
7, such Obligor owns and possesses the right to use, and has done nothing
to authorize or enable any other Person to use, any Copyright, Patent or
Trademark listed in Annexes 4, 5 and 6, and all registrations listed in
Annexes 4, 5 and 6 are valid and in full force and effect; and except as
may be set forth in Annex 7, such Obligor owns and possesses the right to
use all Copyrights, Patents and Trademarks.
Annex 7 sets forth a complete and correct list of all licenses and
other user agreements included in the Intellectual Property on the date
hereof.
To such Obligor's knowledge, (i) except as set forth in Annex 7, there
is no violation by others of any right of such Obligor with respect to any
Copyright, Patent or Trademark listed in Annexes 4, 5, and 6, respectively,
under the name of such Obligor and (ii) such Obligor is not infringing in
any respect upon any Copyright, Patent or Trademark of any other Person;
and no proceedings have been instituted or are pending against such Obligor
or, to such Obligor's knowledge, threatened, and no claim against such
Obligor has been received by such Obligor, alleging any such violation,
except as may be set forth in Annex 7.
Such Obligor does not own any Trademarks registered in the United
States of America to which the last sentence of the definition of Trademark
Collateral applies.
(f) Fair Labor Standards Act. Any Goods now or hereafter produced by
such Obligor or any of its Subsidiaries included in the Collateral have
been and will be produced in compliance with the requirements of the Fair
Labor Standards Act, as amended.
Section 3. Collateral. As collateral security for the prompt payment
in full when due (whether at stated maturity, by acceleration or otherwise) of
the Secured Obligations, whether now existing or hereafter from time to time
arising, each Obligor hereby grants (and hereby confirms the grant pursuant to
the Existing Security Agreement) to the Collateral Agent, for the benefit of the
Secured Parties, subject to the terms of the Collateral Agency and Intercreditor
Agreement and as hereinafter provided, a security interest in all of such
Obligor's right, title and interest in, to and under the following property,
whether now owned by such
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Obligor or hereafter acquired and whether now existing or hereafter coming into
existence (all of the property described in this Section 3 being collectively
referred to herein as "Collateral"):
(a) all Accounts;
(b) all General Intangibles;
(c) all Deposit Accounts;
(d) all Instruments;
(e) all Documents;
(f) all Chattel Paper (whether tangible or electronic);
(g) all Inventory;
(h) all Equipment;
(i) all Fixtures;
(j) all Goods not covered by the preceding clauses of this Section 3;
(k) all Letter-of-Credit Rights;
(l) the shares of common stock or other equity interests of the
Issuers identified in Annex 3 under the name of such Obligor and all other
shares of capital stock of whatever class, or other equity interests, of
the Issuers, now or hereafter owned by such Obligor, in each case together
with the certificates (if any) evidencing the same, provided that if any
Issuer hereunder shall be a Foreign Subsidiary the shares of capital stock
of such Foreign Subsidiary that constitute Collateral shall be limited to
(i) 65% of the voting capital stock of such Foreign Subsidiary having
ordinary voting power for the election of the board of directors (or
similar body) of such Foreign Subsidiary and (ii) 100% of all other capital
stock of such Foreign Subsidiary (collectively, the "Pledged Stock"),
together with;
(i) all shares, securities, moneys or property representing a
dividend on any of the Pledged Stock, or representing a distribution
or return of capital upon or in respect of the Pledged Stock, or
resulting from a split-up, revision, reclassification or other like
change of the Pledged Stock or otherwise received in exchange
therefor, and any subscription warrants, rights or options issued to
the holders of, or otherwise in respect of, the Pledged Stock; and
(ii) without affecting the obligations of such Obligor under any
provision prohibiting such action hereunder or under the Credit
Agreements, in the event of any consolidation or merger in which an
Issuer is not the surviving entity, all shares of each class of the
capital stock or other equity interests of the successor corporation
(unless such successor entity is such Obligor itself) formed by or
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resultingfrom such consolidation or merger (the Pledged Stock,
together with all other certificates, shares, securities, properties
or moneys as may from time to time be pledged hereunder pursuant to
this clause (ii) or clause (i) above being herein collectively called
the "Stock Collateral");
(m) all indebtedness from time to time owed to such Obligor (such
indebtedness, together with the Initial Pledged Debt, being the "Pledged
Debt") and the instruments, if any, evidencing such indebtedness, and all
interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of such indebtedness
(n) all Investment Property and Financial Assets not covered by clause
(l) of this Section 3;
(o) all Intellectual Property;
(p) all Payment Intangibles, Software and all other General
Intangibles whatsoever not covered by the preceding clauses of this Section
3;
(q) all other tangible and intangible personal property whatsoever of
such Obligor;
(r) the Collateral Account and the Concentration Account, and all
amounts held from time to time therein (and any investments thereof);
(s) all Proceeds, products, offspring, accessions, rents, profits,
income, benefits, substitutions and replacements of and to any of the
Collateral and, to the extent related to any Collateral, all books,
correspondence, credit files, records, invoices and other papers (including
without limitation all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Obligor or any
computer bureau or service company from time to time acting for such
Obligor).
Notwithstanding the foregoing, and to the extent not overridden by Sections
9-406, 9-407, 9-408 and 9-409 of the Uniform Commercial Code, the Collateral
shall not include (i) contractual rights (other than rights relating to the
proceeds of Accounts and rights to payments of any nature) to the extent that
the grant of a security interest therein would violate the terms of the
agreement under which such contractual rights arise or exist; (ii) rights under
governmental licenses and authorizations to the extent the grant of a security
interest therein is prohibited by law and (iii) any property acquired by any
Obligor under any agreement relating to Liens permitted under clause (c), (d) or
(e) of Section 7.02 of the Credit Agreements that expressly prohibits the
creation by such Obligor of a security interest in such property.
Anything herein to the contrary notwithstanding, (a) each Obligor
shall remain liable under the contracts and agreements included in such
Obligor's Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (b) the exercise by the Collateral Agent of any of the rights
hereunder shall not release any Obligor from any of its duties or obligations
under the contracts and agreements included in the Collateral and (c) no Secured
Party shall have any obligation or
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liability under the contracts and agreements included in the Collateral by
reason of this Agreement or any other agreement, nor shall any Secured Party be
obligated to perform any of the obligations or duties of any Obligor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder
Section 4. Cash Proceeds of Collateral; Collateral Accounts.
4.01 Collateral Account. The Collateral Agent will cause to be
established at a banking institution to be selected by the Collateral Agent a
cash collateral account (the "Collateral Account"), which (i) to the extent of
all Investment Property or Financial Assets (other than cash), shall be a
"securities account" (as defined in Section 8-501 of the Uniform Commercial
Code) in respect of which the Collateral Agent shall be the "entitlement holder"
(as defined in Section 8-102(a)(7) of the Uniform Commercial Code) and (ii) to
the extent of any cash, shall be a Deposit Account, and into which there shall
be deposited from time to time the cash proceeds of any of the Collateral
(including proceeds of insurance thereon) required to be delivered to the
Collateral Agent pursuant hereto and into which the Obligors may from time to
time deposit any additional amounts that any of them wishes to pledge to the
Collateral Agent for the benefit of the Secured Parties as additional collateral
security hereunder or that, as provided in the Credit Agreements, they are
required to pledge as additional collateral security hereunder. The balance from
time to time in the Collateral Account shall constitute part of the Collateral
hereunder and shall not constitute payment of the Secured Obligations until
applied as hereinafter provided. Except as expressly provided in the next
sentence, the Collateral Agent shall remit the collected balance standing to the
credit of the Collateral Account to or upon the order of the respective Obligor
as such Obligor through the Borrower shall from time to time instruct. However,
at any time following the occurrence and during the continuance of an Event of
Default, the Collateral Agent may (and, if instructed by the Required Secured
Parties as provided in the Collateral Agency and Intercreditor Agreement, shall)
in its (or their) discretion apply or cause to be applied (subject to
collection) the balance from time to time standing to the credit of the
Collateral Account to the payment of the Secured Obligations in the manner
specified in Section 5.09. The balance from time to time in the Collateral
Account shall be subject to withdrawal only as provided herein.
4.02 Concentration Account; Proceeds of Accounts.
(a) The Obligors will establish and maintain at all times a single
deposit account (the "Concentration Account") with a depositary bank (the
"Depositary") approved by the Collateral Agent (such approval not to be
unreasonably withheld) into which (subject to paragraph (b) of this Section
4.02) the Obligors will cause all account debtors and other Persons obligated in
respect of the Accounts to make all payments, either directly or indirectly, in
respect of the Accounts. As of the Effective Date, the Concentration Account
will be located at National City Bank ("NCB") in Cleveland. Ohio and such
account is identified on Annex 8 (the "NCB Account"). As soon as practicable
after the Effective Date (but in no event later than 60 days after the Effective
Date), the Obligor shall establish the Concentration Account at JPMorgan Chase
Bank in New York, New York and, upon such establishment, shall transfer, or
cause to be transferred, all funds then held in (or from time to time received
for the account of the Obligors for deposit into) the NCB Account (which shall
cease to function as such) to the new Concentration Account at JPMCB; provided
that, following such establishment, the NCB Account shall be permitted to remain
open for a temporary period of time in order to effect such
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transfer(s). Thereafter, the Obligor shall not change the Depositary in respect
of the Concentration Account without the prior written consent of the Collateral
Account (such approval not to be unreasonably withheld); provided that the
Depositary shall be a Revolving Credit Lender at all times prior to the
termination of the Revolving Credit Agreement and, thereafter, a Term Lender.
The Borrower shall promptly notify the Collateral Agent of any change in the
account number of, or other material matters relating to, the Concentration
Account; provided that, upon the occurrence or during the continuation of an
Event of Default, no such changes may be made without the prior written approval
of the Collateral Agent. At or prior to the time any Person shall become the
Depositary, such Person (in its capacity as the Depositary), the Collateral
Agent and the Borrower (on behalf of itself and the other Obligors) shall enter
into a control agreement with respect to the Concentration Account, in form and
substance satisfactory to the Collateral Agent. At any time following the
occurrence and during the continuance of an Event of Default, the Collateral
Agent may (and, if instructed by the Required Secured Parties as provided in the
Collateral Agency and Intercreditor Agreement, shall) in its (or their)
discretion direct the Depositary to no longer honor instructions from the
Obligors with respect to the Concentration Account and/or to direct the
Depositary to pay (subject to collection) the balance from time to time standing
to the credit of the Concentration Account to the Collateral Agent for
application to the payment of the Secured Obligations in the manner specified in
Section 5.09. To the extent that at any time payments under this Section 4.02(a)
required to be made into the Concentration Account are received by or for the
account of the Obligors (other than by the Depositary for deposit into the
Concentration Account), such Obligor shall remit, or cause to be remitted,
promptly to the Concentration Account any such payments.
(b) Upon the occurrence and during the continuation of an Event of
Default, the Collateral Agent may (i) by written notice to the Borrower require
each Obligor to instruct all account debtors in respect of Accounts, Chattel
Paper and General Intangibles and all obligors on Instruments to make all
payments in respect thereof either (x) directly to the Collateral Agent (by
instructing that such payments be remitted to a post office box which shall be
in the name and under the control of the Collateral Agent) or (y) to one or more
other banks in the United States of America (by instructing that such payments
be remitted to a post office box which shall be in the name and under the
control of the Collateral Agent) under arrangements, in form and substance
satisfactory to the Collateral Agent, pursuant to which such Obligor shall have
irrevocably instructed such other bank (and such other bank shall have agreed)
to remit all proceeds of such payments directly to the Collateral Agent for
deposit into the Collateral Account and/or (ii) instruct the Secured Party which
is the depositary institution in respect of the Concentration Account to remit
the entire balance then held in the Concentration Account directly to the
Collateral Agent for deposit into the Collateral Account (and to this end the
Obligors hereby irrevocably instruct whichever Secured Party shall hold the
Concentration Account at such time upon receipt of such instructions to pay such
balance to the Collateral Agent). All payments made to the Collateral Agent, as
provided in the preceding sentence, shall be immediately deposited in the
Collateral Account. In addition to the foregoing (but subject to paragraph (a)
of this Section 4.02), each Obligor agrees that if the proceeds of any
Collateral hereunder (including the payments made in respect of Accounts) shall
be received by it, such Obligor shall as promptly as possible deposit such
proceeds into the Collateral Account. Until so deposited, all such proceeds
shall be held in trust by such Obligor for and as the property of the Collateral
Agent and shall not be commingled with any other funds or property of such
Obligor.
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4.03 Investment of Account Balances. The cash balance standing to the
credit of the Collateral Account and the Concentration Account shall be invested
from time to time in such Permitted Investments as the respective Obligor
through the Borrower (or, after the occurrence and during the continuance of a
Default, the Collateral Agent) shall determine, which Permitted Investments
shall be held in the name and be under the control of the Collateral Agent (and
credited to the Collateral Account), provided that at any time after the
occurrence and during the continuance of an Event of Default, the Collateral
Agent shall, but only, if instructed by the Required Secured Parties as provided
in the Collateral Agency and Intercreditor Agreement in its (or their)
discretion at any time and from time to time elect (or, in the case of the
Concentration Account, direct the Depositary) to liquidate any such Permitted
Investments and to apply or cause to be applied the proceeds thereof (or, in the
case of the Concentration Account, to direct the Depositary to pay the proceeds
thereof to the Collateral Agent for application) to the payment of the Secured
Obligations in the manner specified in Section 5.09.
4.04 Cover for LC Exposure. Amounts deposited into the Collateral
Account as cover for LC Exposure pursuant to Section 2.04(k) of the Revolving
Credit Agreement shall be held by the Collateral Agent in a separate sub-account
(designated "LC Exposure Sub-Account") and all amounts held in such sub-account
shall constitute collateral security for, first, the LC Exposure outstanding
from time to time, second, the other Revolving Credit Obligations (as defined in
the Collateral Agency and Intercreditor Agreement) and, next, the other Secured
Obligations.
Section 5. Further Assurances; Remedies. In furtherance of the grant
of the pledge and security interest pursuant to Section 3, the Obligors hereby
jointly and severally agree with each Secured Party and the Collateral Agent as
follows:
5.01 Delivery and Other Perfection. Each Obligor shall:
(a) if any of the shares, securities, moneys or property required to
be pledged by such Securing Party under clauses (c)(i) and (c)(ii) of
Section 3 hereof are received by such Securing Party forthwith, either (x)
transfer and deliver to the Administrative Agent such shares or securities
so received by such Securing Party (together with the certificates for any
such shares and securities duly endorsed in blank or accompanied by undated
stock powers duly executed in blank), all of which thereafter shall be held
by the Administrative Agent, pursuant to the terms of this Agreement, as
part of the Collateral or (y) take such other action as the Administrative
Agent shall deem reasonably necessary or appropriate to duly record the
Lien created hereunder in such shares, securities, moneys or property in
said clauses (c)(i) and (c)(ii), including, with respect to the Lien on the
shares of an Issuer which are not represented by certificates, the
registration in the shareholders register of such Issuer of appropriate
entries evidencing said Lien;
(a) deliver to the Collateral Agent any and all Instruments
constituting part of the Collateral in which such Obligor purports to grant
a security interest hereunder, endorsed and/or accompanied by such
instruments of assignment and transfer in such form and substance as the
Collateral Agent may reasonably request; provided that so long as no
Default shall have occurred and be continuing, such Obligor may retain for
collection in
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the ordinary course any Instruments received by such Obligor in the
ordinary course of business and the Collateral Agent shall, promptly upon
request of such Obligor through the Borrower, make appropriate arrangements
for making any Instrument pledged by such Obligor available to such Obligor
for purposes of presentation, collection or renewal (any such arrangement
to be effected, to the extent deemed appropriate by the Collateral Agent,
against trust receipt or like document);
(b) give, execute, deliver, file and/or record any financing
statements, notice, instrument, document, agreement or other papers that
may be reasonably necessary or desirable (in the judgment of the Collateral
Agent) to create, preserve, perfect or validate the security interest
granted pursuant hereto or to enable the Collateral Agent to exercise and
enforce its rights hereunder with respect to such pledge and security
interest, including, without limitation, causing any or all of the Stock
Collateral to be transferred of record into the name of the Collateral
Agent or its nominee (and the Collateral Agent agrees that if any Stock
Collateral is transferred into its name or the name of its nominee, the
Collateral Agent will thereafter promptly give to the respective Obligor
copies of any notices and communications received by it with respect to the
Stock Collateral pledged by such Obligor hereunder), provided that notices
to account debtors in respect of any Accounts, Chattel Paper or General
Intangibles and to Obligors on Instruments shall be subject to the
provisions of clause (c) below;
(c) upon the occurrence and during the continuance of any Event of
Default, upon request of the Collateral Agent, promptly notify (and such
Obligor hereby authorizes the Collateral Agent so to notify) each account
debtor in respect of any Accounts, Chattel Paper, Instruments or General
Intangibles of such Obligor that such Collateral has been assigned to the
Collateral agent hereunder, and that any payments due or to be come due in
respect thereof are to be made directly to the Collateral Agent.
(d) without limiting the obligations of such Obligor under Section
5.04(c), upon the acquisition after the date hereof by such Obligor of any
Equipment covered by a certificate of title or ownership and upon the
request of the Collateral Agent, cause the Collateral Agent to be listed as
the lienholder on such certificate of title and take such other steps as
may be required under the law applicable to perfection of a security
interest in such property to perfect such security interest, and within 120
days of the acquisition thereof deliver evidence of the same to the
Collateral Agent;
(e) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise mark such books and records in such
manner as the Collateral Agent may reasonably require in order to reflect
the security interests granted by this Agreement;
(f) permit representatives of the Collateral Agent, upon reasonable
notice, at any time during normal business hours to inspect and make
abstracts from its books and records pertaining to the Collateral, and
permit representatives of the Collateral Agent to be present at such
Obligor's place of business to receive copies of all communications and
remittances relating to the Collateral, and forward copies of any notices
or communications received by such Obligor with respect to the Collateral,
all in such manner as the Collateral Agent may require.
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5.02 Other Financing Statements and Liens. Except as otherwise
permitted under the Credit Agreements, without the prior written consent of the
Collateral Agent (granted with the authorization of the Required Secured Parties
as provided in the Collateral Agency and Intercreditor Agreement), no Obligor
shall (a) file or suffer to be on file, or authorize or permit to be filed or to
be on file, in any jurisdiction, any financing statement or like instrument with
respect to any of the Collateral in which the Collateral Agent is not named as
the sole secured party for the benefit of the Secured Parties or (b) cause or
permit any Person other than the Collateral Agent to have "control" (as defined
in Section 9-104, 9-105, 9-106 or 9-107 of the Uniform Commercial Code) of any
Deposit Account, Electronic Chattel Paper, Investment Property or
Letter-of-Credit Right constituting part of the Collateral.
5.03 Preservation of Rights. Neither the Collateral Agent nor any
other Secured Party shall be required to take steps necessary to preserve any
rights against prior parties to any of the Collateral.
5.04 Special Provisions Relating to Certain Collateral.
(a) Stock Collateral.
(1) The Obligors will cause the Stock Collateral to constitute at all
times (i) except as provided in clause (ii) below, 100% of the total number of
shares of each class of capital stock (or in the case of any entity other than a
corporation, the total equity interests) of each Issuer then outstanding and
owned by the Obligors and (ii) in the case of any Foreign Subsidiary which is an
Issuer hereunder, 65% of the total number of shares of voting capital stock of
such Foreign Subsidiary having ordinary voting power for the election of the
board of directors (or similar body) and 100% of each class of all other capital
stock of such Foreign Subsidiary.
(2) If any of the shares, securities, moneys or property required to
be pledged by such Obligor under Section 3 are received by such Obligor,
forthwith either (x) transfer and deliver to the Collateral Agent such shares or
securities so received by such Obligor (together with the certificates for any
such shares and securities duly endorsed in blank or accompanied by undated
stock powers duly executed in blank), all of which thereafter shall be held by
the Collateral Agent, pursuant to the terms of this Agreement, as part of the
Collateral or (y) take such other action as the Collateral Agent shall deem
necessary or appropriate to duly record the Lien created hereunder in such
shares, securities, moneys or property in said Section 3.
(3) So long as no Event of Default shall have occurred and be
continuing, the Obligors shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the Stock Collateral for all
purposes not inconsistent with the terms of this Agreement, the Credit
Agreements or any other instrument or agreement referred to herein, provided
that the Obligors jointly and severally agree that they will not vote the Stock
Collateral in any manner that is inconsistent with the terms of this Agreement,
the Credit Agreements or any such other instrument or agreement; and the
Collateral Agent shall execute and deliver to the Obligors or cause to be
executed and delivered to the Obligors all such proxies, powers of attorney,
dividend and other orders, and all such instruments, without recourse, as the
Obligors may reasonably request for the purpose of enabling the Obligors to
exercise the rights and powers that they are entitled to exercise pursuant to
this Section 5.04(a)(2).
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(4) Unless and until an Event of Default has occurred and is
continuing, the Obligors shall be entitled to receive and retain any dividends
and distributions on the Stock Collateral.
(5) If any Event of Default shall have occurred, then so long as such
Event of Default shall continue, and whether or not the Collateral Agent or any
Secured Party exercises any available right to declare any Secured Obligation
due and payable or seeks or pursues any other relief or remedy available to it
under applicable law or under this Agreement, the Credit Agreements or any other
agreement relating to such Secured Obligation, all dividends and other
distributions on the Stock Collateral shall be paid directly to the Collateral
Agent and retained by it in the Collateral Account as part of the Stock
Collateral, subject to the terms of this Agreement, and, if the Collateral Agent
shall so request in writing, the Obligors jointly and severally agree to execute
and deliver to the Collateral Agent appropriate additional dividend,
distribution and other orders and documents to that end, provided that if such
Event of Default is cured or waived, any such dividend or distribution
theretofore paid to the Collateral Agent shall, upon request of the Obligors
(except to the extent theretofore applied to the Secured Obligations), be
returned by the Collateral Agent to the Obligors.
(b) Intellectual Property.
(1) For the purpose of enabling the Collateral Agent to exercise
rights and remedies under Section 5.05 at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, each Obligor hereby grants to the Collateral Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable without payment
of royalty or other compensation to such Obligor) to use, assign, license or
sublicense any of the Intellectual Property now owned or hereafter acquired by
such Obligor, wherever the same may be located, including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer programs used for the compilation or
printout thereof.
(2) Notwithstanding anything contained herein to the contrary, but
subject to the provisions of Section 7.03 of each Credit Agreement that limit
the rights of the Obligors to dispose of their property, so long as no Event of
Default shall have occurred and be continuing, the Obligors will be permitted to
exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or
take other actions with respect to the Intellectual Property in the ordinary
course of the business of the Obligors. In furtherance of the foregoing, unless
an Event of Default shall have occurred and be continuing the Collateral Agent
shall from time to time, upon the request of the respective Obligor, execute and
deliver any instruments, certificates or other documents, in the form so
requested, that such Obligor through the Borrower shall have certified are
appropriate (in its judgment) to allow it to take any action permitted above
(including relinquishment of the license provided pursuant to clause (1)
immediately above as to any specific Intellectual Property). Further, upon the
payment in full of all of the Secured Obligations and cancellation or
termination of the Commitments and LC Exposure or earlier expiration of this
Agreement or release of the Collateral, the Collateral Agent shall grant back to
the Obligors the license granted pursuant to clause (1) immediately above. The
exercise of rights and remedies under Section 5.05 by the Collateral Agent shall
not terminate the rights of the
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holders of any licenses or sublicenses theretofore granted by the Obligors in
accordance with the first sentence of this clause (2).
(3) The Obligors will furnish to the Collateral Agent from time to
time (but, unless a Default shall have occurred and be continuing, no more
frequently than annually) statements and schedules further identifying and
describing the Copyright Collateral, the Patent Collateral and the Trademark
Collateral, respectively, and such other reports in connection with the
Copyright Collateral, the Patent Collateral and the Trademark Collateral as the
Collateral Agent may reasonably request, all in reasonable detail; and promptly
upon request of the Collateral Agent, following receipt by the Collateral Agent
of any statements, schedules or reports pursuant to this clause (3), modify this
Agreement by amending Annexes 2, 3 and/or 4, as the case may be, to include any
Copyright, Patent or Trademark that becomes part of the Collateral under this
Agreement.
(c) Motor Vehicles.
(1) Each Obligor shall, upon the request of the Collateral Agent upon
and during the continuation of any Event of Default, deliver to the Collateral
Agent originals of the certificates of title or ownership for the Motor Vehicles
owned by it with the Collateral Agent listed as lienholder and take such other
action as the Collateral Agent shall deem appropriate to perfect the security
interest created hereunder in all such Motor Vehicles.
(2) Without limiting the generality of the foregoing, upon the
acquisition after the date hereof by any Obligor of any Motor Vehicle, such
Obligor shall, upon the request of the Collateral Agent upon and during the
continuation of any Event of Default, deliver to the Collateral Agent originals
of the certificates of title or ownership for such Motor Vehicles, together with
the manufacturer's statement of origin with the Collateral Agent listed as
lienholder; provided, however, if the Motor Vehicle to be acquired is subject to
a purchase money security interest, the Collateral Agent shall be listed as a
junior lienholder to the Person holding such purchase money security interest.
(3) Without limiting Section 5.10, each Obligor hereby appoints the
Collateral Agent as its attorney-in-fact, effective the date hereof and
terminating upon the termination of this Agreement, for the purpose of (i)
executing on behalf of such Obligor title or ownership applications for filing
with appropriate state agencies to enable Motor Vehicles now owned or hereafter
acquired by such Obligor to be retitled and the Collateral Agent listed as
lienholder thereon, (ii) filing such applications with such state agencies and
(iii) executing such other documents and instruments on behalf of, and taking
such other action in the name of, such Obligor as the Collateral Agent may deem
necessary or advisable to accomplish the purposes hereof (including, without
limitation, the purpose of creating in favor of the Collateral Agent a perfected
lien on the Motor Vehicles and exercising the rights and remedies of the
Collateral Agent under Section 5.05). This appointment as attorney-in-fact is
irrevocable and coupled with an interest.
(4) Any certificates of title or ownership delivered pursuant to the
terms hereof shall be accompanied by odometer statements for each Motor Vehicle
covered thereby.
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5.05 Events of Default, Etc. During the period during which an Event
of Default shall have occurred and be continuing:
(a) each Obligor shall, at the request of the Collateral Agent,
assemble the Collateral owned by it at such place or places, reasonably
convenient to both the Collateral Agent and such Obligor, designated in its
request;
(b) the Collateral Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, any of the Collateral;
(c) the Collateral Agent shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the jurisdiction
where the rights and remedies are asserted) and such additional rights and
remedies to which a secured party is entitled under the laws in effect in
any jurisdiction where any rights and remedies hereunder may be asserted,
including, without limitation, the right, to the maximum extent permitted
by law, to exercise all voting, consensual and other powers of ownership
pertaining to the Collateral as if the Collateral Agent were the sole and
absolute owner thereof (and each Obligor agrees to take all such action as
may be appropriate to give effect to such right);
(d) the Collateral Agent in its discretion may, in its name or in the
name of the Obligors or otherwise, demand, sue for, collect or receive any
money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to do
so; and
(e) the Collateral Agent may, upon ten Business Days' prior written
notice to the Obligors of the time and place, with respect to the
Collateral or any part thereof that shall then be or shall thereafter come
into the possession, custody or control of the Collateral Agent, the other
Secured Parties or any of their respective agents, sell, lease, assign or
otherwise dispose of all or any part of such Collateral, at such place or
places as the Collateral Agent deems best, and for cash or for credit or
for future delivery (without thereby assuming any credit risk), at public
or private sale, without demand of performance or notice of intention to
effect any such disposition or of the time or place thereof (except such
notice as is required above or by applicable statute and cannot be waived),
and the Collateral Agent or any other Secured Party or anyone else may be
the purchaser, lessee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permitted
by law, at any private sale) and thereafter hold the same absolutely, free
from any claim or right of whatsoever kind, including any right or equity
of redemption (statutory or otherwise), of the Obligors, any such demand,
notice and right or equity being hereby expressly waived and released. In
the event of any sale, assignment, or other disposition of any of the
Trademark Collateral, the goodwill connected with and symbolized by the
Trademark Collateral subject to such disposition shall be included, and the
Obligors shall supply to the Collateral Agent or its designee, for
inclusion in such sale, assignment or other disposition, all Intellectual
Property relating to such Trademark Collateral. The Collateral Agent may,
without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from
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time to time by announcement at the time and place fixed for the sale, and
such sale may be made at any time or place to which the sale may be so
adjourned.
The Proceeds of each collection, sale or other disposition under this Section
5.05, including by virtue of the exercise of the license granted to the
Collateral Agent in Section 5.04(b), shall be applied in accordance with Section
5.09.
The Obligors recognize that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Collateral Agent may be compelled, with respect to any sale
of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Obligors acknowledge that any such private sales may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions, and, notwithstanding such circumstances, agree
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Collateral for
the period of time necessary to permit the respective Issuer or issuer thereof
to register it for public sale.
5.06 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 5.05 are insufficient
to cover the costs and expenses of such realization and the payment in full of
the Secured Obligations, the Obligors shall remain liable for any deficiency to
the extent the Obligors are obligated under this Agreement.
5.07 Locations, Etc. Without at least 30 days' prior written notice to
the Collateral Agent, no Obligor shall change its location (as defined in
Section 9-307 of the Uniform Commercial Code) or change its name from the name
shown as its current legal name on Annex 1.
5.08 Private Sale. Neither the Collateral Agent nor any other Secured
Party shall incur any liability as a result of the sale of the Collateral, or
any part thereof, at any private sale pursuant to Section 5.05 conducted in a
commercially reasonable manner. Each Obligor hereby waives any claims against
the Collateral Agent or any other Secured Party arising by reason of the fact
that the price at which the Collateral may have been sold at such a private sale
was less than the price that might have been obtained at a public sale or was
less than the aggregate amount of the Secured Obligations, even if the
Collateral Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.
5.09 Application of Proceeds. The proceeds of any collection, sale or
other realization of all or any part of the Collateral pursuant hereto, and any
other cash at the time held by the Collateral Agent under Section 4 or this
Section 5, shall be applied by the Collateral Agent as expressly provided in the
Collateral Agency and Intercreditor Agreement. Notwithstanding the foregoing,
the proceeds of any cash or other amounts held in the "LC Exposure Sub-Account"
of the Collateral pursuant to Section 4.04 shall be applied in the following
order: first, to the LC Exposure outstanding from time to time, second, to the
other Revolving Credit Obligations (as defined in the Collateral Agency and
Intercreditor Agreement) and next, to the other Secured Obligations.
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5.10 Attorney-in-Fact. Without limiting any rights or powers granted
by this Agreement to the Collateral Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default the Collateral Agent is hereby appointed the attorney-in-fact of each
Obligor for the purpose of carrying out the provisions of this Section 5 and
taking any action and executing any instruments that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, so long as the Collateral Agent shall
be entitled under this Section 5 to make collections in respect of the
Collateral, the Collateral Agent shall have the right and power to receive,
endorse and collect all checks made payable to the order of any Obligor
representing any dividend, payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
5.11 Perfection. Prior to or concurrently with the execution and
delivery of this Agreement, each Obligor shall (i) file such financing
statements and other documents in such offices as the Collateral Agent may
reasonably request to perfect the security interests granted by Section 3 of
this Agreement, (ii) cause the Collateral Agent to be listed as the lienholder
on all certificates of title or ownership relating to Motor Vehicles owned by
such Obligor, (iii) deliver to the Collateral Agent all certificates identified
in Annex 1, accompanied by undated stock powers duly executed in blank and (iv)
execute and deliver such short form assignments or security agreements relating
to Collateral consisting of the Intellectual Property as the Collateral Agent
may reasonably request. Without limiting the foregoing, each Obligor consents
that Uniform Commercial Code financing statements may be filed describing the
Collateral as "all assets" or "all personal property" of such Obligor, provided
that no such description shall be deemed to modify the description of Collateral
set forth in Section 3 hereof.
5.12 Termination. When all Secured Obligations (other than contingent
indemnity obligations) shall have been paid in full and the Commitments and all
LC Exposure under the Revolving Credit Agreement shall have expired or been
terminated, this Agreement shall terminate, and the Collateral Agent shall
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order of the
respective Obligor and to be released and canceled all licenses and rights
referred to in Section 5.04(b). The Collateral Agent shall also execute and
deliver to the respective Obligor upon such termination such Uniform Commercial
Code termination statements, certificates for terminating the Liens on the Motor
Vehicles and such other documentation as shall be reasonably requested by the
respective Obligor to effect the termination and release of the Liens on the
Collateral.
5.13 Further Assurances. Each Obligor agrees that, from time to time
upon the written request of the Collateral Agent, such Obligor will execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order fully to effect the purposes of
this Agreement.
5.14 Release of Motor Vehicles. So long as no Default shall have
occurred and be continuing, upon the request of any Obligor, the Collateral
Agent shall execute and deliver to such Obligor such instruments as such Obligor
shall reasonably request to remove the notation of the Collateral Agent as
lienholder on any certificate of title for any Motor Vehicle; provided that any
such instruments shall be delivered, and the release effective only upon receipt
by the
Security Agreement
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Collateral Agent of a certificate from such Obligor stating that the Motor
Vehicle the lien on which is to be released is to be sold or has suffered a
casualty loss (with title thereto passing to the casualty insurance company
therefor in settlement of the claim for such loss).
Section 6. Miscellaneous.
6.01 Notices. All notices, requests, consents and demands hereunder
shall be in writing and telecopied or delivered to the intended recipient at its
"Address for Notices" specified pursuant to Section 10.01 of the respective
Credit Agreements and shall be deemed to have been given at the times specified
in said Sections 10.01.
6.02 No Waiver. No failure on the part of the Collateral Agent or any
Secured Party to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
or any other Secured Party of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
6.03 Amendments, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by each
Obligor and the Collateral Agent (with the consent of the Secured Parties in
accordance with the Collateral Agency Agreement). Any such amendment or waiver
shall be binding upon the Collateral Agent, each Secured Party and each holder
of any of the Secured Obligations and each Obligor.
6.04 Expenses. The Obligors jointly and severally agree to reimburse
each of the Secured Parties and the Collateral Agent for all reasonable costs
and expenses incurred by them (including, without limitation, the reasonable
fees and expenses of legal counsel) in connection with (i) any Default and any
enforcement or collection proceeding resulting therefrom, including, without
limitation, all manner of participation in or other involvement with (w)
performance by the Collateral Agent of any obligations of the Obligors in
respect of the Collateral that the Obligors have failed or refused to perform,
(x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the Collateral, and
for the care of the Collateral and defending or asserting rights and claims of
the Collateral Agent in respect thereof, by litigation or otherwise, including
expenses of insurance, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 6.04, and all such costs and expenses shall be
Secured Obligations entitled to the benefits of the collateral security provided
pursuant to Section 3.
6.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of each Obligor,
the Collateral Agent, the Secured Parties and each holder of any of the Secured
Obligations (provided, however, that no Obligor shall assign or transfer its
rights or obligations hereunder without the prior written consent of the
Collateral Agent).
Security Agreement
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6.06 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
6.07 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
6.08 Captions. The captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
6.09 Agents and Attorneys-in-Fact. The Collateral Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.
6.10 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Collateral Agent
and the other Secured Parties in order to carry out the intentions of the
parties hereto as nearly as may be possible and (b) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
6.11 Additional Obligors. As contemplated in Section 6.09 of each
Credit Agreement, a new Subsidiary of the Borrower formed or acquired by the
Borrower after the date hereof may become a "Subsidiary Guarantor" under each
Credit Agreement and an "Obligor" under this Agreement, by executing and
delivering to the Collateral Agent a Guarantee Assumption Agreement in the form
of Exhibit D to each Credit Agreement. Accordingly, upon the execution and
delivery of any such Guarantee Assumption Agreement by any such Subsidiary, such
new Subsidiary shall automatically and immediately, and without any further
action on the part of any Person, become an "Obligor" for all purposes of this
Agreement, and each of the Annexes hereto shall be supplemented in the manner
specified in such Guarantee Assumption Agreement.
6.12 Mortgages. In the event that any of the Collateral hereunder is
also subject to a valid and enforceable Lien under the terms of any Mortgage and
the terms of such Mortgage are inconsistent with the terms of this Agreement,
then with respect to such Collateral, the terms of such Mortgage shall be
controlling in the case of fixtures and real estate leases, letting and licenses
of, and contracts and agreements relating to the lease of, real property, and
the terms of this Agreement shall be controlling in the case of all other
Collateral.
Security Agreement
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Security Agreement to be duly executed and delivered as of the day and
year first above written.
BORROWER
CHART INDUSTRIES, INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and
Treasurer
Security Agreement
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SUBSIDIARY GUARANTORS
CHART HEAT EXCHANGERS LIMITED
PARTNERSHIP
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
CHART INTERNATIONAL, INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
CHART MANAGEMENT COMPANY, INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
CHART LEASING, INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
CHART INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
Security Agreement
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CHART INTERNATIONAL HOLDINGS, INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
CHART ASIA, INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
CAIRE INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
COOLTEL, INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
NEXGEN FUELING, INC.
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and Treasurer
GTC OF CLARKSVILLE, LLC
By /s/ Michael F. Biehl
-------------------------
Name: Michael F. Biehl
Title: Chief Financial Officer and
Assistant Treasurer
Security Agreement
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COLLATERAL AGENT
JPMORGAN CHASE BANK,
as Collateral Agent
By /s/ R. A. Odell
-------------------------
Title: Managing Director
Security Agreement
ANNEX 1
FILING DETAILS
Place of
Current Type of Business or
Legal Organization Location of Former
Name (corporation, Jurisdiction Organizational Current Chief Location Legal
(no trade limited liability of ID Number Mailing Executive of Name(s)
names) company, etc.) Organization (if applicable) Address Officer Goods if any)
------ -------------- ------------ --------------- ------- ------- ----- -------
Annex 1 to Security Agreement
ANNEX 2
"NEW DEBTOR" EVENTS
Description of Event Date of Event
-------------------- -------------
Annex 2 to Security Agreement
ANNEX 3
PLEDGED STOCK
[See Section 2(d)]
[Complete for each Obligor:]
[NAME OF OBLIGOR]
Certificate Registered
Issuer Nos. Owner Number of Shares
------ ----------- ---------- ----------------
[Issuer #1] _______ ________ _______ shares of
[common/preferred]
stock, [no] par
value [$________]
[Issuer #2] _______ ________ _______ shares of
[common/preferred]
stock, [no] par
value [$________]
[Issuer #3] _______ ________ _______ shares of
[common/preferred]
stock, [no] par
value [$________]
Annex 3 to Security Agreement
ANNEX 4
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
[See Section 2(e)]
[Complete for each Obligor:]
[NAME OF OBLIGOR]
Title Date Filed Registration No. Effective Date
- ----- ---------- ---------------- --------------
Annex 4 to Security Agreement
ANNEX 5
LIST OF PATENTS AND PATENT APPLICATIONS
[See Section 2(e)]
[Complete for each Obligor:]
[NAME OF OBLIGOR]
File Patent Country Registration No. Date
- ---- ------ ------- ---------------- ----
Annex 5 to Security Agreement
ANNEX 6
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE MARK REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONS
[See Section 2(e)]
U.S. Trademarks
[Complete for each Obligor:]
[NAME OF OBLIGOR]
Application (A)
Registration (R) Registration
Mark or Series No. (S) or Filing Date
---- ----------------- --------------
Annex 6 to Security Agreement
-2-
Foreign Trademarks
[Complete for each Obligor:]
[NAME OF OBLIGOR]
Application (A) Registration or
Mark Registration (R) Country Filing Date (F)
---- ---------------- ------- ---------------
Annex 6 to Security Agreement
ANNEX 7
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
[See Section 2(e)]
[Complete for each Obligor:]
[NAME OF OBLIGOR]
Annex 7 to Security Agreement
ANNEX 8
CONCENTRATION ACCOUNT
[See Section 4.02]
Annex 8 to Security Agreement