EXHIBIT 4.10
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COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
DATED AS OF THE 20TH DAY OF MARCH, 2003
BY AND AMONG
U.S. BANK NATIONAL ASSOCIATION, INDIVIDUALLY AND
AS COLLATERAL AGENT
BANK OF AMERICA, N.A.,
VARIOUS NOTEHOLDERS,
THE NORTHERN TRUST COMPANY,
A. M. CASTLE & CO.
AND
VARIOUS GUARANTORS
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TABLE OF CONTENTS
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Section 1. DEFINITIONS....................................................................... 4
Section 1.1. Definitions........................................................ 4
Section 1.2. Terms Generally................................................... 17
Section 2. RECOURSE OF SECURED PARTIES; OTHER COLLATERAL; ACTION BY SECURED PARTIES.......... 17
Section 2.1. Recourse of Secured Parties; Other Collateral...................... 17
Section 2.2. Action by Secured Parties.......................................... 18
Section 3. DUTIES OF COLLATERAL AGENT........................................................ 18
Section 3.1. Notices to the Secured Parties..................................... 18
Section 3.2. Actions Under Security Documents................................... 19
Section 3.3. Status of Moneys Received.......................................... 20
Section 4. CERTAIN INTERCREDITOR ARRANGEMENTS................................................ 20
Section 4.1. General Rule: Pari Passu Rights Against Collateral................ 20
Section 4.2. Non-Cash Distributions or Proceeds................................. 22
Section 4.3. Additional Collateral.............................................. 22
Section 4.4. Certain Notices.................................................... 22
Section 4.5. Enforcement........................................................ 23
Section 4.6. Turnover of Collateral............................................. 23
Section 4.7. Payments From Enforcement Rights................................... 24
Section 4.8. Waivers and Amendments of Credit Documents......................... 24
Section 4.9. Independent Investigation; Sharing of Financial Information........ 25
Section 4.10. Agents............................................................. 25
Section 5. CONCERNING THE COLLATERAL AGENT................................................... 25
Section 5.1. Appointment of Collateral Agent.................................... 25
Section 5.2. Limitations on Responsibility of Collateral Agent.................. 26
Section 5.3. Reliance by Collateral Agent; Etc.................................. 27
Section 5.4. Resignation or Removal of the Collateral Agent..................... 28
Section 5.5. Expenses and Indemnification....................................... 29
Section 5.6. Expenses and Indemnification by Secured Parties.................... 31
Section 5.7. Collateral Agent's Fee............................................. 31
Section 6. REPRESENTATIONS AND WARRANTIES.................................................... 31
Section 7. AMENDMENT OF THIS AGREEMENT....................................................... 32
Section 7.1. Amendments......................................................... 32
Section 7.2. Waivers............................................................ 32
Section 8. APPROVAL BY THE COMPANY AND GUARANTORS; COMPANY'S OBLIGATIONS ABSOLUTE............ 32
Section 8.1. General............................................................ 32
Section 8.2. Obligations Absolute............................................... 33
Section 8.3. No Additional Rights for Company Hereunder......................... 33
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Section 9. COLLATERAL AGENT AS AGENT AND LENDER.............................................. 33
Section 10. COVENANTS CONCERNING COLLATERAL................................................... 34
Section 10.1. Additional Assignments, and Mortgages.............................. 34
Section 10.2. Perfection Certificate............................................. 34
Section 11. CONDEMNATION...................................................................... 35
Section 11.1. Takings............................................................ 35
Section 11.2. Application of Awards.............................................. 35
Section 11.3. Settlement of Condemnation Claims.................................. 36
Section 11.4. Offered Repayment.................................................. 37
Section 11.5. Applicable Prepayment Provisions................................... 38
Section 11.6. Waiver of Offered Repayment........................................ 38
Section 11.7. Collateral Agent Expenses.......................................... 38
Section 12. APPLICATION OF INSURANCE PROCEEDS................................................. 39
Section 12.1. General............................................................ 39
Section 12.2. Offered Repayment.................................................. 40
Section 12.3. Remnant Insurance Proceeds......................................... 41
Section 12.4. Notice of Casualty; Adjusting Loss ................................ 42
Section 12.5. Reimbursement of Collateral Agent's Expenses....................... 42
Section 13. PROCEEDS FROM SALE OF ASSETS...................................................... 43
Section 13.1. General............................................................ 43
Section 13.2. Net Proceeds from an Asset Disposition............................. 43
Section 13.3. Offered Repayment.................................................. 43
Section 13.4. Collateral Agent Expenses.......................................... 44
Section 14. MISCELLANEOUS..................................................................... 45
Section 14.1. Further Assurances, Etc............................................ 45
Section 14.2. No Individual Action; Marshaling; Etc.............................. 45
Section 14.3. Successors and Assigns............................................. 45
Section 14.4. Notices............................................................ 46
Section 14.5. Termination; Full Release of Collateral............................ 46
Section 14.6. Partial Release of Collateral...................................... 48
Section 14.7. Applicable Law..................................................... 49
Section 14.8. Severability....................................................... 50
Section 14.9. Counterparts....................................................... 50
Section 14.10. Section Headings.................................................. 50
Section 14.11. Complete Agreement................................................. 50
Section 14.12. Additional Future Debt............................................. 50
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
This COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (as may be amended from
time to time, this "AGREEMENT"), dated as of the 20th day of March, 2003, by and
among: (i) U.S. Bank National Association (in its individual capacity herein
referred to as the "COLLATERAL AGENT BANK" and in its capacity as collateral
agent herein referred to as the "COLLATERAL AGENT"), (ii) Bank of America, N.A.,
a national banking association, as an issuer of BofA Letters of Credit (as
defined below) and a party to certain Reimbursement Agreements (as defined
below) and the holder of the LaPorte Bonds and the Mecklenburg Bonds (each as
defined below) (together with its successors and assigns, "BOFA"), (iii) each of
the holders of Notes (together with their respective successors and assigns as
holders of Notes) issued pursuant to the Note Agreements (as defined below) (the
"NOTE HOLDERS"), (iv) The Northern Trust Company, an Illinois banking
corporation, as party to a Trade Agreement (as defined below) (together with its
successors and assigns, "NORTHERN"), (v) A. M. Castle & Co., a Maryland
corporation (together with its successors and assigns, the "COMPANY"), (vi) each
Guarantor (as defined below) which executes this Agreement or which from time to
time hereafter executes an instrument accepting and agreeing to the provisions
of this Agreement, and (vii) any holders of Additional Future Debt (as defined
below).
PREAMBLE
WHEREAS, pursuant to a Note Agreement dated as of April 1, 1996 (as
amended from time to time, the "1996 NOTE AGREEMENT"), among the Company and the
purchasers set forth on Schedule 1 thereto, the Company issued, and such
purchasers purchased, $20,000,000 aggregate principal amount of the Company's
6.49% Senior Notes due April 15, 2008 (as may be amended from time to time,
collectively, the "1996 Notes"); and
WHEREAS, pursuant to a Note Agreement, dated as of May 15, 1997 (as
amended from time to time, the "1997 NOTE AGREEMENT"), among the Company and the
purchasers set forth on Schedule 1 thereto, the Company issued, and such
purchasers purchased, $25,000,000 aggregate principal amount of the Company's
7.54% Senior Notes due May 30, 2009 (as may be amended from time to time,
collectively, the "1997 NOTES"), and
WHEREAS, pursuant to a Note Agreement, dated as of March 1, 1998 (as
amended from time to time, the "1998 NOTE AGREEMENT", and together with the 1996
Note Agreement and the 1997 Note Agreement, collectively, the "NOTE
AGREEMENTS"), among the Company and the purchasers set forth on Schedule 1
thereto, the Company issued, and such purchasers purchased, (i) $15,000,000
aggregate principal amount of the Company's 6.40% Series A Senior Notes due
Xxxxx 0, 0000, (xx) $25,000,000 aggregate principal amount of the Company's
6.53% Series B Senior Notes due March 1, 2010, and (iii) $15,000,000 aggregate
principal amount of the Company's 6.69% Series C Senior Notes due March 1, 2012
(the Notes described in clauses (i), (ii) and (iii), as such Notes may be
amended from time to time, collectively, the "1998 NOTES", and together with the
1996 Notes and the 1997 Notes, collectively, the "NOTES"), and
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WHEREAS, each of the Note Agreements has been amended by a separate First
Amendment and Waiver to Note Agreement, each dated as of December 1, 1998; and
WHEREAS, each of the Note Agreements has been further amended pursuant to
separate Second Amendment to Note Agreement, each dated as of November 22, 2002,
a Third Amendment to Note Agreements dated as of December 26, 2002 and a Fourth
Amendment to Note Agreements dated as of the date hereof (collectively, the "NEW
NOTE AGREEMENT AMENDMENTS"; references herein to the Note Agreements refer to
the Note Agreements as amended by each First Amendment and Waiver to Note
Agreement, the New Note Agreement Amendments and as may be further amended from
time to time); and
WHEREAS, BofA has issued letters of credit (i) pursuant to which up to a
maximum amount of $611,337 may be drawn at any one time to secure payments due
in connection with certain State of Ohio, Industrial Development Refunding
Revenue Bonds (A.M. Castle & Co. Project) Series 1994 issued to provide
financing to the Company, (ii) pursuant to which up to a maximum amount of
$1,008,188 may be drawn at any one time to secure payments due in connection
with certain The Industrial Development Authority of the City of Kansas City,
Missouri, Industrial Development Refunding Revenue Bonds (A.M. Castle & Co.
Project) Series 1994 issued to provide financing to the Company, (iii) pursuant
to which up to a maximum of $672,544 may be drawn at any one time in connection
with certain Village of Franklin Park Illinois Industrial Development Refunding
Revenue Bonds (A.M. Castle & Co. Project) Series 1994 issued to provide
financing to the Company, (iv) pursuant to which up to a maximum of $194,281 may
be drawn at any one time to secure payments due in connection with certain
Village of Rosemont, Illinois Industrial Development Refunding Revenue Bonds
(A.M. Castle & Co. Project) Series 1994 issued to provide financing to the
Company (v) pursuant to which up to a maximum of $3,762,740 may be drawn at any
one time to secure payments due in connection with certain City of Hammond,
Indiana Adjustable Rate Economic Development Revenue Bonds (A.M. Castle & Co.
Project), Series 1994 issued to provide financing to the Company and (vi)
pursuant to which up to $5,000,000 may be drawn to secure payments due from
Xxxxxx Steel Company LLC ("XXXXXX") in connection with a certain Amended and
Restated Credit Agreement, dated as of March 8, 2002 (as may be amended or
modified from time to time) between Xxxxxx and BofA, as Agent (the items
described in clauses (i) - (vi) are herein collectively referred to as the "BOFA
LETTERS OF CREDIT"); and
WHEREAS, the Company has entered into (i) that certain Reimbursement
Agreement dated as of June 1, 1994 (the "JUNE 1994 AGREEMENT") between the
Company and BofA, (ii) that certain Reimbursement Agreement dated as of November
1, 1994 (the "NOVEMBER 1994 AGREEMENT") between the Company and BofA, and (iii)
that certain Application and Agreement for Standby Letter of Credit dated March
5, 2002 between the Company and BofA (the "MARCH 2002 AGREEMENT", and together
with the June 1994 Agreement and the November 1994 Agreement, collectively, as
may be amended from time to time, the "REIMBURSEMENT AGREEMENTS") pursuant to
which BofA issued the BofA Letters of Credit; and
WHEREAS, the June 1994 Agreement was amended by an Assignment and
Amendment to Reimbursement Agreement dated as of June 12, 2001, and the November
1994 Agreement
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was amended by an Assignment and Amendment to Reimbursement Agreement dated as
of November 1, 2001, and further amended by a Second Amendment to Reimbursement
Agreement dated November 1, 2001; and
WHEREAS, the Company and BofA have amended the Reimbursement Agreements by
separate amendments each dated as of November 22, 2002 and the Reimbursement
Agreements have been further amended by separate amendments each dated December
26, 2002 and separate amendments each dated as of the date hereof (collectively
the "NEW REIMBURSEMENT AGREEMENT AMENDMENTS"; references herein to the
Reimbursement Agreements refer to the Reimbursement Agreements as so amended and
as further amended by the New Reimbursement Agreement Amendments, as applicable,
and as may be further amended from time to time); and
WHEREAS, the Company has also entered into (a) that certain Guarantee
Agreement, dated as of November 22, 2002, of the Company in favor of BofA
pursuant to which the Company guarantees to BofA (i) the payment by the City of
XxXxxxx, Indiana (the "KEYSTONE ISSUER") of all principal, interest and any
other amounts payable by the Keystone Issuer in respect of the Keystone Issuer's
Economic Development Revenue Bonds, Series 1998 (Keystone Services, Inc.
Project) (the "LAPORTE BONDS"), and (ii) the payment and performance by Keystone
Service, Inc. of all of its covenants, agreements, obligations and liabilities
under that certain Loan Agreement, dated as of April 1, 1998, between the
Keystone Issuer and Keystone Service, Inc. and (b) that certain Guarantee
Agreement, dated of November 22, 2002, of the Company in favor of BofA pursuant
to which the Company guarantees the payment to BofA by The Mecklenburg County
Industrial Facilities and Pollution Control Financing Authority (the
"MECKLENBURG ISSUER") of all principal, interest and any other amounts payable
by the Mecklenburg Issuer in respect to the Mecklenburg Issuer's Tax-Exempt
Industrial Revenue Bonds (A.M. Castle & Co. Project) Series 1996 (the
"MECKLENBURG BONDS;" the obligations of the Company under each of said Guarantee
Agreements are herein collectively referred to as the "IRB BOND GUARANTY
OBLIGATIONS" and each such Guarantee Agreement is herein referred to as an "IRB
BOND GUARANTY" and collectively as the "IRB BOND GUARANTEES"); and
WHEREAS, pursuant to a Trade Acceptance Purchase Agreement, dated as of
August 13, 2001, between the Company and Northern (the "TRADE AGREEMENT"), the
Company agreed to sell certain trade acceptances to Northern and Northern agreed
to purchase certain trade acceptances to generate working capital for the
Company's operations; and
WHEREAS, the Trade Agreement has been amended by a First Amendment dated
as of April 29, 2002, and a Second Amendment to Trade Acceptance Purchase
Agreement dated as of June 30, 2002; and
WHEREAS, the Company and Northern have further amended the Trade Agreement
pursuant to a Third Amendment to Trade Acceptance Purchase Agreement dated as of
November 22, 2002, a Fourth Amendment to Trade Acceptance Purchase Agreement
dated as of December 26, 2002 and a Fifth Amendment to Trade Acceptance Purchase
Agreement dated as of the date hereof (collectively, the "NEW TRADE AGREEMENT
AMENDMENTS"; references herein to the Trade
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Agreement refer to the Trade Agreement as so amended and as further amended by
the New Trade Agreement Amendments and as may be further amended from time to
time); and
WHEREAS, in connection with (i) the Note Holders entering into the New
Note Agreement Amendments, (ii) BofA entering into the New Reimbursement
Agreement Amendments, (iii) the issuance of the IRB Bond Guarantees and (iv)
Northern entering into the New Trade Agreement Amendments it was provided that,
among other things, (a) the Company and each of the Guarantors grant a perfected
lien on and security interest in the Collateral (as hereinafter defined) to the
Collateral Agent, for the pro rata benefit of (1) the Note Holders, as security
for the Company's obligations under the Note Agreements and the Notes and the
Guarantors' guarantee thereof, (2) BofA, as security for the Company's
obligations under the Reimbursement Agreements and the Guarantors' guarantee
thereof and under the IRB Bond Guaranties and the Guarantors' guarantee thereof,
(3) Northern, as security for the Company's obligations under the Trade
Agreement and the Guarantors' guarantee thereof, and (4) any holders of
Additional Future Debt; and
WHEREAS, the Guarantors have executed and delivered guaranties of the
Secured Obligations (as hereinafter defined); and each of the Company and the
Guarantors has entered into certain security agreements and related documents
pursuant to which the Company or such Guarantor (as the case may be) has granted
to the Collateral Agent, for the benefit of Northern, the Note Holders, BofA and
any holders of Additional Future Debt, a security interest in and Lien upon the
Collateral (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
SECTION 1.1. DEFINITIONS. The following terms shall have the
meanings set forth in this Section 1 or elsewhere in the provisions of this
Agreement referred to below:
Acceptable Revolving Credit Facility. Shall mean a loan agreement or
similar facility pursuant to which a lender or lenders provides revolving loans
to the Company or any Subsidiary for the primary purpose of financing such
Person's ongoing business operations so long as such agreement or facility (a)
is not secured by Liens on the property of the Company or any Subsidiary and (b)
provides for interest rates, fees and other pricing terms similar to those
generally available to borrowers whose unsecured long term debt is rated
Investment Grade.
Account Collateral. Shall have the meaning ascribed to it in Annex X
to each of the documents referred to in clauses (i) and (ii) of the definition
of GECC Securitization Documents (in effect on the date hereof).
Action. See Section 2.2(a).
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Actionable Default. Shall mean any Actionable Payment Default and
any other Event of Default which permits any one or more holders of Secured
Obligations to accelerate the maturity of the Secured Obligations held by it.
Actionable Payment Default. Shall mean any failure of the Company or
any Guarantor to pay any of the Secured Obligations as and when due and payable
in accordance with the terms of any Note Document, any Reimbursement Agreement,
any IRB Bond Guaranty, the Trade Agreement, any Additional Future Debt Document
or Security Document, whether by acceleration (including automatic acceleration
upon the commencement of a bankruptcy case) or otherwise and the expiration of
ninety (90) days after such failure (collectively, a "PAYMENT DEFAULT"), or the
commencement of any bankruptcy, insolvency, reorganization or other similar case
or proceeding by or against the Company or any Guarantor, or the making by the
Company or any Guarantor of an assignment for the benefit of its creditors.
Additional Future Debt. Shall mean (a) any increase in the principal
amount of the Principal Obligations incurred after the date hereof in compliance
with the terms of the Credit Documents and this Agreement and/or (b) any
additional indebtedness of the Company, in each case, incurred after the date
hereof in compliance with the terms of the Credit Documents and this Agreement
so long as, in each such case, the holder of such additional indebtedness shall
have executed and delivered to the Collateral Agent and each of the holders of
the Secured Obligations a Joinder Agreement in the form of Exhibit A attached
hereto.
Additional Future Debt Documents. Shall mean documents, instruments
and agreements relating to Additional Future Debt as the same may be amended,
renewed, extended, restated, supplemented or otherwise modified from time to
time.
Affiliate. Shall mean as to any Person, a Person controlling,
controlled by, or under common control with such Person.
Agreement. As defined in the introductory paragraph hereto.
Approved Asset Disposition. Shall mean an Asset Disposition the
terms of which have been approved in writing by the Requisite Parties so long as
the Collateral Agent shall have received written direction from the Requisite
Holders of such approval.
A/R Intercreditor Agreement. Shall mean that certain Intercreditor
Agreement, of even date herewith, among the Collateral Agent, GECC, as purchaser
and administrative agent, the Company, Total Plastics, Inc., Xxxxxx Steel Plate
Co., Keystone Tube Company LLC, Castle SPED, LLC, Castle IND MGR, Inc., the Note
Holders, BofA and Northern in the form attached hereto as Exhibit B.
Asset Disposition. Shall mean any Transfer so long as immediately
before and immediately after the consummation of any such Transfer and after
giving effect thereto, no Default or Event of Default exists.
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Asset Disposition Certificate. Shall mean with respect to any
proposed Asset Disposition a certificate executed by a Senior Officer which (a)
states that no Default or Event of Default then exists or will exist upon the
consummation of such Asset Disposition and such Asset Disposition is permitted
by the terms of each of the Loan Documents, (b) describes such Asset
Disposition, (c) sets forth (i) estimated Net Proceeds to be received by the
Obligors upon consummation of such Asset Disposition and (ii) net book value of
the Asset Disposition Collateral in respect of such Asset Disposition together
with the aggregate net book value of all Asset Disposition Collateral in respect
of all Asset Dispositions completed in the then current calendar year.
Asset Disposition Collateral. Shall mean any Collateral to be
Transferred in connection with an Asset Disposition.
BofA. As defined in the introductory paragraph hereto.
BofA Debt. Shall mean the Reimbursement Agreement Debt and the IRB
Bond Guaranty Obligations.
BofA Letters of Credit. As defined in the Preamble hereto.
Bankruptcy Code. Shall mean the Bankruptcy Code of 1978, as amended,
or any successor statute.
Bankruptcy Event. Shall mean and include:
(a) the pendency of any case against the Company or any Guarantor
arising under the Bankruptcy Code;
(b) the pendency of any case against the Company or any Guarantor
arising under any other bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
other similar law of any jurisdiction;
(c) the appointment of, or taking possession by, a trustee,
receiver, custodian, liquidator or similar official of the Company or any
Guarantor or any substantial assets of any of them;
(d) any assignment for the benefit of creditors of the Company or
any Guarantor; and
(e) the failure of the Company or any Guarantor generally to pay its
debts as they become due.
Business Day. Shall mean any day, other than Saturday, Sunday or a
legal holiday or any other day on which banking institutions in Chicago,
Illinois and St. Xxxx, Minnesota generally are authorized by law to close.
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Collateral. Shall mean any of the properties and assets of whatever
nature, tangible or intangible, now owned or existing or hereafter acquired or
arising, of the Company or any of the Guarantors in which at the time of
reference a Lien has been granted or has purportedly been granted to the
Collateral Agent to secure the Secured Obligations and which has not been
released pursuant to the terms hereof or of the A/R Intercreditor Agreement, and
all other cash provided to be the subject of a Lien to secure any of the Secured
Obligations as contemplated by any Security Document, and any property and
assets paid or payable to the Collateral Agent under any of the Guaranties or
any subordination agreement, in each case other than Excluded Collateral.
Collateral Agent. As defined in the introductory paragraph hereto
unless and until a successor Collateral Agent shall have been appointed pursuant
to Section 5.4 hereof, and thereafter "Collateral Agent" shall mean such
successor Collateral Agent.
Collateral Agent Bank. As defined in the introductory paragraph
hereto and any successor bank, in its individual capacity, serving as a
successor Collateral Agent pursuant to Section 5.4.
Company. As defined in the introductory paragraph hereto.
Credit Documents. Shall mean, collectively, the Note Documents, the
Reimbursement Agreements, the IRB Bond Guaranties, the Trade Agreement, any
Additional Future Debt Documents and the Security Documents.
Default. Shall mean any event or condition which, with the giving of
notice or the lapse of time, or both, would become an Event of Default.
Demand Notice. See Section 4.4(a).
Disposition. See Section 4.1(b).
Distribution Amount. See Section 4.1(c)(i).
Enforcement Notice. Shall mean written notice given by the Requisite
Parties or Special Requisite Parties, as the case may be, to the Collateral
Agent (a) stating that a Notice of Actionable Default has theretofore been given
by such Requisite Parties or Special Requisite Parties, as the case may be, to
the Collateral Agent and that the Actionable Default specified in such Notice of
Actionable Default continued to exist uncured for the applicable period
described in Section 4.5, and (b) setting forth instructions from such Requisite
Parties or Special Requisite Parties, as the case may be, to the Collateral
Agent to exercise all or any such rights, powers and remedies as are available
under the Security Documents and making such additional statements as may be
called for under Section 4.5.
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Event of Default. Shall mean any "Event of Default" under and as
defined in the Trade Agreement, any "Event of Default" under and as defined in
any of the Note Agreements, any "Event of Default" under and as defined in any
of the Reimbursement Agreements or the IRB Bond Guaranties, or any similar event
or condition giving rise to the right of a holder or holders of Additional
Future Debt to accelerate or which results in the acceleration of the maturity
of such Additional Future Debt. Notwithstanding anything to the contrary set
forth in any Credit Document, each Secured Party hereby agrees that any default
by the Company or any Guarantor in the performance or observance of any covenant
or provisions of this Agreement or any Security Document shall not constitute an
"Event of Default" under such Credit Document unless such default shall continue
for more than thirty (30) days after the first date on which a Senior Officer of
the Company becomes aware of such default.
Excluded Collateral. Shall mean (a) any property (whether currently
existing or subsequently acquired) subject to a Permitted First Priority Lien,
to the extent the agreement creating such Lien prohibits additional Liens on
such property; (b) cash sufficient to secure the Company's (or any of its
Subsidiaries') obligations to pay its workmen's compensation benefits, including
obligations to any Person providing surety, insurance, letters of credit or
other credit support so long as such cash does not secure any other obligation
for any other purpose; (c) all property purchased with proceeds of the note
issued pursuant to the Loan Agreement dated as of November 1, 1994 between the
Company and the City of Hammond, Indiana; (d) all properties and assets of A. M.
Castle & Co. (Canada), Inc., and any successor holder of such assets; (e) other
property with a deminumus fair market value that, individually or in the
aggregate with all other such property, is not material to the continued
business operations of the Company or any Subsidiary which owns such property;
(f) any leasehold interest in any real property leased by the Company or any
Subsidiary the termination of which would not result in a Material Adverse
Effect; (g) the Excluded Receivables; (h) Excluded GECC Collateral; (i) all
shares of capital stock (or other similar equity or ownership interests) in a
Person (other than the Company or any wholly-owned Subsidiary of the Company)
where the assignment, transfer or hypothecation thereof, for collateral
purposes, is prohibited or restricted by the terms and conditions of its
constitutive (or similar formation related) documents, any agreements or
arrangements with the holders of its capital stock, (or other similar equity or
ownership interests) or any other similar agreements, and, as a result of any
such assignment, transfer or hypothecation by any Obligor, such Obligor would be
deprived of any material right or otherwise suffer any material adverse affect
in respect of such capital stock, other interests or otherwise under such
documents, agreements or arrangements; (j) the capital stock or other ownership
or equity interests in Castle IND MGR, Inc. (so long as its only asset is its
interest in Castle SPFD, LLC); (k) any interest of Castle IND MGR, Inc. in
Castle SPFD, LLC, and (l) all Property of a Person existing at the time such
Person becomes a Subsidiary of the Company to the extent that any agreement or
arrangement (the amount of all obligations which are created or evidenced by, or
the subject of, such agreements or arrangements are herein referred to as
"Future Negative Pledge Obligations") to which such Person is a party or by
which such Person is bound prohibits or restricts Liens on such Property so long
as such agreement or arrangement was not entered into in contemplation of such
Person becoming a Subsidiary and the existence of the Lien of the Collateral
Agent would result in such Subsidiary being deprived of any material right or
otherwise suffering any material adverse effect with respect to such Property or
otherwise under any such agreement or
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arrangement so long as the aggregate amount of all Future Negative Pledge
Obligations and the aggregate amount of obligations secured by Future Acquired
Liens does not exceed 10% of Adjusted Consolidated Net Worth (as such term is
defined in the Note Documents as in effect on the date hereof).
Excluded GECC Collateral. Shall mean the Receivables Assets (as such
term is defined in the A/R Intercreditor Agreement).
Excluded Insurance Proceeds. Shall mean any proceeds of insurance
directly relating to a claim for, or a loss arising from, (a) business
interruption insurance so long as all such proceeds are used by the Obligors to
maintain the business operations whose interruption was the subject of the claim
giving rise to such proceeds and (b) the damage, destruction or loss of
inventory so long as such proceeds are used by the Obligors for working capital
or to replace the inventory whose damage, destruction or loss was the subject of
the claim giving use to such proceeds.
Excluded Receivables. Shall mean, at any time, outstanding
Receivables and Related Security arising out of the ordinary course of business
of the Company or its Subsidiaries which shall have been sold to generate funds
for working capital purposes pursuant to the provisions of one or more
Receivables Purchase Agreements which makes funds available to the Company or
any Subsidiary in an aggregate amount, for all Receivables Purchase Agreements,
not exceeding $65,000,000 at any time and covering Receivables not exceeding, in
the aggregate, $90,000,000 at any time.
Existing First Priority Liens. Shall mean Liens securing obligations
existing on the date of this Agreement as such liens and obligations are
disclosed in one or more lender's title insurance policies delivered to each of
the Secured Parties on the date hereof or in Schedule 1.1 to this Agreement.
Future Acquired Liens. Shall mean Liens on Property of a Person
which shall have become a Subsidiary after the date of this Agreement so long as
(a) each such Lien existed on the date such Person became a Subsidiary and such
Lien was not created in contemplation of such Person becoming a Subsidiary and
(b) the aggregate amount of obligations secured by all such Liens, together with
the aggregate amount of all Future Negative Pledge Obligations, does not exceed
10% of Adjusted Consolidated Net Worth (as such term is defined in the Note
Agreements as in effect on the date hereof).
Future Negative Pledge Obligations. See definition of "Excluded
Collateral" in this Section 1.1.
GECC. Shall mean General Electric Capital Corporation, and its
successors and assigns.
GECC Securitization Documents. Shall mean, collectively, (a) the
Receivables Sale and Contribution Agreement dated as of December 26, 2002 by and
among the Company,
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Total Plastics, Inc., Xxxxxx Steel Plate Co. and Keystone Tube Company, LLC,
each as an originator, and Castle SPFD, LLC as buyer, (b) the Receivables
Purchase and Servicing Agreement dated as of December 26, 2002 by and among
Castle SPFD, LLC, as seller, the Company, as master servicer, Total Plastics,
Inc. and Xxxxxx Steel Plate Co., each as a servicer, Castle IND MGR, Inc., as
independent member, and GECC as purchaser and as administrative agent and (iii)
all other Related Documents (as defined in Annex X to each of the documents
referred to in clause (i) and clause (ii) above).
Guaranties. See definition of "Guarantors" in this Section 1.1.
Guarantors. Shall mean each of Datamet, Inc., an Illinois
corporation, Keystone Tube Company, LLC, a Delaware limited liability company,
Total Plastics, Inc., a Michigan corporation, Paramont Machine Company, LLC, a
Delaware limited liability company, Advanced Fabricating Technology, LLC, a
Delaware limited liability company, Xxxxxx Steel Plate Co., a Delaware
corporation, and Metal Mart, LLC, a Delaware limited liability company, and any
other party that may from time to time hereafter execute and deliver a guaranty
for the benefit of any one or more of the Secured Parties guarantying the
Secured Obligations (collectively, the "GUARANTIES").
Indemnified Liabilities. See Section 5.5(b)
Indemnified Parties. See Section 5.5(b)
Insured. See Section 12.1(a)(i).
Investment Grade. Shall mean in respect of any obligation that such
obligation (i) has a rating of Baa3 or better by Xxxxx'x Investor Service or a
rating BBB-or better by Standard & Poor's; or (ii) has a rating of NAIC 1 or
NAIC 2 from the National Association of Insurance Commissioners; or (iii) in the
judgment of the Majority Secured Parties has a credit quality equal to or better
than one which would be afforded either of the ratings described in clause (i)
or clause (ii) of this definition.
IRB Bond Guaranty. As defined in the Preamble hereto.
IRB Bond Guaranty Obligations. As defined in the Preamble hereto.
Notwithstanding the foregoing, IRB Bond Guaranty Obligations shall not include
any obligations in respect of the principal amount of the XxXxxxx Bonds in
excess of $4,300,000 or in respect of the principal amount of the Mecklenburg
Bonds in excess of $1,500,000.
Joinder Agreement. Attached as Exhibit A hereto.
June 1994 Agreement. As defined in the Preamble hereto.
Xxxxxx. As defined in the Preamble hereto.
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XxXxxxx Xxxxx. As defined in the Preamble hereto.
LC Amendments. As defined in the Preamble hereto.
Lien. Shall mean any mortgage, security deed, deed of trust, pledge,
lien, security interest or other encumbrance, whether now existing or hereafter
created, acquired or arising, and whether voluntary or involuntary, to secure
payment of a debt or performance of an obligation.
Loan Documents. Shall mean the Credit Documents (other than the
Security Documents).
Majority Secured Parties. Shall mean a group of holders of Secured
Obligations which includes each of (a) holders of at least 51% of the Note
Principal Obligations, (b) the holders of at least 51% in principal amount
(including contingent reimbursement obligations) of BofA Debt, (c) the holders
of at least 51% in principal amount of the Trade Agreement Debt and (d) the
holders of at least 51% in principal amount of Additional Future Debt, if any.
Make-Whole Amount. Shall mean with respect to any of the Note
Agreements and the Note
Debt owed thereunder, the "Make-Whole Amount" as defined in such
Note Agreement on the date hereof.
March 2002 Agreement. As defined in the Preamble hereto.
Material Adverse Effect. Shall mean a material adverse effect on (a)
the business, assets, properties, profits, prospects, operations or condition,
financial or otherwise, of the Company and its Subsidiaries, on a consolidated
basis or (b) the ability of the Company to perform its obligations under any of
the Credit Documents, or (c) the ability of any of the holders of the Secured
Obligations to enforce the Company's obligations under any of the Credit
Documents.
Material Provisions. Shall mean, in respect of any Security
Documents, any provision which describes the nature of the Secured Obligations
secured thereby or establishes that all Secured Obligations are pari passu with
respect to the Lien created by such Security Document.
Mecklenburg Bonds. As defined in the Preamble hereto.
Mortgage. Shall mean any mortgage or deed of trust, whether now
existing or hereafter created, encumbering any of the Mortgaged Property.
Mortgaged Property. Shall mean any Significant Real Estate Interest,
now owned or hereafter acquired, of the Company or any of the Guarantors with
respect to which at the time of reference a mortgage or deed of trust has been
granted or has purportedly been granted to the Collateral Agent to secure the
Secured Obligations and which has not been released pursuant to the terms
hereof.
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Mortgagor. Shall mean the Company or any of the Guarantors who has
granted to the Collateral Agent for the benefit of the Secured Parties a
Mortgage on any Mortgaged Property.
Net Proceeds. Shall mean, with respect to any Taking, damage,
destruction or loss of Collateral or any Asset Disposition (each, a "Payment
Event"), the cash payments (including any cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received by one or more Obligors or the Collateral
Agent as a result of such Payment Event, in each case, net of (a) any bona fide
direct out of pocket costs and expenses incurred in connection with such Payment
Event, (b) payments made by any such Obligor to retire or repay indebtedness
(other than the Secured Obligations) where payment of such indebtedness is
secured by Permitted First Priority Liens on the Property which is the subject
of such Payment Event and such indebtedness shall have become due or payable as
a result of such Payment Event and (c) so long as no Default or Event of Default
shall have occurred and be continuing, amounts required to be paid to any Person
(other than the Company of any wholly-owned Subsidiary of the Company) owning a
beneficial interest in any Property which is the subject of such Payment Event.
New Note Agreement Amendments. As defined in the Preamble hereto.
1996 Note Agreement. As defined in the Preamble hereto.
1997 Note Agreement. As defined in the Preamble hereto.
1998 Note Agreement. As defined in the Preamble hereto.
1996 Notes. As defined in the Preamble hereto.
1997 Notes. As defined in the Preamble hereto.
1998 Notes. As defined in the Preamble hereto.
Northern. As defined in the introductory paragraph hereto.
Note Agreements. As defined in the Preamble hereto.
Note Debt. Shall mean all indebtedness, obligations and liabilities
of any of the Company and the Guarantors to or for the benefit of any Note
Holder arising or incurred under the Note Agreements (including, without
limitation, Make-Whole Amounts), the Notes or the Guaranties related thereto,
existing on the date of this Agreement or arising hereafter, direct or indirect,
joint or several, absolute or contingent, matured or unmatured, arising by
contract, operation of law or otherwise. Notwithstanding the foregoing, Note
Debt shall not include Note Principal Obligations to the extent that such Note
Principal Obligations exceed $96,250,000 plus the principal amount of any
Additional Future Debt incurred under the Note Documents.
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Note Documents. Shall mean the Notes and the Note Agreements.
Note Holders. As defined in the introductory paragraph hereto,
together with their respective successors and assigns.
Note Principal Obligations. Shall mean at the time of reference
thereto, the principal amount then outstanding under the Notes or any
instruments or agreements issued or entered into in compliance with the terms of
this Agreement and the Credit Documents.
Notes. Shall mean the Notes, as such term is defined in the Preamble
hereto, together with any promissory notes or other evidences of indebtedness
issued in exchange for, replacement of or substitution for any Notes under any
of the Note Agreements.
Notice of Actionable Default. A notice by (i) the Requisite Parties
delivered to the Collateral Agent, stating that an Actionable Default has
occurred and is continuing or (ii) the Special Requisite Parties delivered to
the Collateral Agent stating that an Actionable Payment Default has occurred and
is continuing.
November 1994 Agreement. As defined in the Preamble hereto.
Obligors. Shall mean collectively, the Company and each of the
Guarantors.
Offered Repayment. Shall mean a written offer made by any of the
Obligors to each of the holders of Secured Obligations to use the Net Proceeds
in respect of any Taking under Section 11, or damage, destruction or loss under
Section 12, or Asset Disposition under Section 13 to ratably prepay (based on
the aggregate unpaid principal amount (including contingent reimbursement
obligations)) the Secured Obligations outstanding at the time of any such
Offered Repayment, any accrued and unpaid interest thereon and, in the case of
any Asset Disposition as contemplated by Section 13, Make Whole Amount and other
prepayment or breakage fees) in an aggregate amount equal to such Net Proceeds
as the case may be;
in each case, such Offered Repayment shall be net of all reasonable costs
incurred by the Collateral Agent in connection with the obtaining or collecting
of such proceeds, including, without limitation, reasonable attorney's fees.
Payment Default. See Section 1.1 (in the definition of Actionable
Payment Default).
Permitted First Priority Lien. Shall mean (a) Existing First
Priority Liens (b) Future Acquired Liens and (c) the Liens described in (and
permitted by) each of (i) clause (a) and clause (h) of Section 7.4 of each of
the Note Agreements (as in effect immediately after giving effect to the New
Note Agreement Amendments), (ii) clause (i) and clause (viii) of Section 6.12 of
the Trade Agreement (immediately after giving effect to the New Trade Agreement
Amendments), (iii) clause (i) and clause (viii) of Section 5.02(d) of each of
the Reimbursement Agreements (immediately after giving effect to the New
Reimbursement Agreement Amendments) and (iv) similar clauses in any Additional
Future Debt Documents.
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Permitted Investments. Shall mean
(a) investments in certificates of deposit (and equivalent
investments, including, without limitation, overnight federal reserve fund
deposits) issued by any bank, trust company or national association that
is acting as Collateral Agent hereunder and having a maturity of 365 days
or less;
(b) investments in commercial paper rated on the date of acquisition
thereof "A-1"(or higher) by Standard & Poor's or "P-1" (or higher) by
Moody's (or any future comparable ratings issued by Standard & Poor's or
Moody's), provided that such obligations mature within 270 days of the
date of acquisition thereof;
(c) investments in obligations of the United States of America,
provided that such obligations mature within 365 days of the date of
acquisition thereof;
(d) investments in "money market" funds limited to obligations of
the type defined in clauses (a), (b) and (c) above.
Person. Shall mean any individual, corporation, partnership, limited
liability company, trust, unincorporated association, business or other legal
entity, and any government or any governmental agency or political subdivision
thereof.
Principal Obligations. Shall mean Note Principal Obligations in an
amount not to exceed $96,250,000 Reimbursement Agreement Debt in an amount not
to exceed $17,049,090 and Trade Agreement Debt in an amount not to exceed
$8,000,000, and the outstanding principal amount of all Additional Future Debt.
Proceeds Deposit. Shall mean amounts distributed to the Collateral
Agent pursuant to Sections 11.5, 12.2 and 13.2 to be held as cash
collateral for the benefit of BofA pursuant to the provisions of
Section 4.1(c)(ii).
Property. Shall mean, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, xxxxxx or inchoate.
Real Estate Facility. Shall mean any real property owned by any
Obligor, including any land, buildings and other improvements thereon.
Receivable. Shall mean a payment owing to a Person (whether
constituting an account, chattel paper, document, instrument, letter-of-credit
right, letter of credit, investment property or general intangible) arising from
the provision of merchandise, goods or services by such Person, including the
right to payment of any interest or finance charges and other obligations owing
to such Person with respect thereto.
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Receivables Purchase Agreements. Shall mean an agreement or
agreements pursuant to which any one or more of the Company or any Subsidiary
sells its accounts receivable as a means of providing it working capital for its
business operations, including, without limitation, any one or more of the GECC
Securitization Documents.
Reimbursement Agreements. As defined in the Preamble hereto.
Reimbursement Agreement Debt. Shall mean all indebtedness,
obligations and liabilities of any of the Company and the Guarantors to or for
the benefit of BofA arising or incurred under the Reimbursement Agreements or
the Guaranties, existing on the date of this Agreement or arising hereafter,
direct or indirect, joint or several, absolute or contingent, matured or
unmatured, arising by contract, operation of law or otherwise. Notwithstanding
the foregoing, Reimbursement Agreement Debt shall not include any reimbursement
obligations in respect of drawings under the BofA Letters of Credit in excess of
$17,049,090 (plus the amount of any applicable fees and costs payable to BofA
under the Reimbursement Agreements) in the aggregate, at any time outstanding
plus the principal amount of any Additional Future Debt which is the subject of
such reimbursement obligations.
Related Security. Shall mean with respect to any Receivable: (a) all
supporting obligations, security interests or Liens and property subject thereto
from time to time securing or purporting to secure the payment of such
Receivable by the Person obligated thereon, (b) all guaranties, indemnities and
warranties, insurance policies, financing statements and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Receivable, (c) all right, title and interest of the Company or
any Subsidiary in and to any goods (including returned, repossessed, foreclosed
goods or Scrapped Goods) the sale of which gave rise to such Receivable;
provided, that Related Security will exclude returned goods to the extent that
all amounts required to be paid pursuant to the transactions involving the
transfer of such Receivable in respect of such goods have been paid, (d) all
collections with respect to any of the foregoing or the Account Collateral, (e)
all records with respect to any of the foregoing, and (f) all proceeds of such
Receivable or with respect to any of the foregoing.
Requisite Parties. Shall mean as of any date the holders of at least
51% in aggregate outstanding principal amount of all BofA Debt (including
Undrawn LC/Guaranty Exposure), Note Debt, Trade Agreement Debt and Additional
Future Debt on such date.
Responsible Officer. Shall mean with respect to the Collateral
Agent, an officer in its Corporate Trust Services Department (or similar
department) of the Collateral Agent Bank.
Scrapped Goods. Goods, the sale of which gave rise to a Receivable,
which are rejected by the applicable obligor on such Receivable for any reason
but which are scrapped rather than being returned to the seller of such goods or
any of its Affiliates.
Secured Obligations. Shall mean collectively, (a) the Note Debt, (b)
the Reimbursement Agreement Debt, (c) the Trade Agreement Debt, (d) the IRB Bond
Guaranty
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Obligations, (e) any Additional Future Debt and (e) all indebtedness,
obligations and liability of the Company or any Guarantor to the Collateral
Agent under any Security Document.
Secured Parties. Shall mean each of the holders of Note Debt,
Reimbursement Agreement Debt, Trade Debt and Additional Future Debt.
Security Documents. Shall mean any and all instruments or agreements
pursuant to which a Lien is created or arises in favor of the Collateral Agent
or any other Secured Party to secure any of the Secured Obligations.
Senior Officer. Means the chief executive officer, chief financial
officer, principal accounting officer, treasurer or controller of the Company.
Significant Real Estate Interest. Shall mean each Real Estate
Facility (other than any Excluded Collateral).
Significant Subsidiary. As defined in the Note Agreements (as in
effect immediately after giving effect to the New Note Agreement Amendments).
Special Cash Collateral Account. See Section 4.1(c).
Special Requisite Parties. Shall mean as of any date the holders of
at least 25% in aggregate outstanding principal amount of all BofA Debt
(including Undrawn LC/Guaranty Exposure), Note Debt, Trade Agreement Debt and
Additional Future Debt on such date.
Stock Pledge Agreement. Shall mean one or more instruments or
agreements executed and delivered to the Collateral Agent in connection with the
execution and delivery of this Agreement which purports to pledge and grant a
security interest to the Collateral Agent in shares of capital stock or other
equity interest of any Subsidiary or other Person that are certificated or
otherwise physically evidenced.
Subsidiary. As defined in the Note Agreements (as in effect on the
date hereof).
Taking. See Section 11.1.
Trade Agreement. As defined in the Preamble hereto.
Trade Agreement Debt. Shall mean all indebtedness, obligations and
liabilities of any of the Company and Guarantors to or for the benefit of
Northern arising or incurred under the Trade Agreement (including any prepayment
premium) or the Guaranties related thereto, existing on the date of this
Agreement or arising hereafter, direct or indirect, joint or several, absolute
or contingent, matured or unmatured, arising by contract, operation of law or
otherwise. Notwithstanding the foregoing, Trade Agreement Debt shall not include
any obligations in excess of $8,000,000 (plus the amount of any applicable fees
and costs payable to Northern
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under the Trade Agreement) plus the amount of any Additional Future Debt
incurred under the Trade Agreement.
Transfer. Shall mean any sale or other disposition of assets
(including, without limitation, stock of Subsidiaries) constituting Collateral
in accordance with the terms of the Note Documents, the Trade Agreement, the
Reimbursement Agreements or any Additional Future Debt Documents.
Undrawn LC/Guaranty Exposure. Shall mean the aggregate undrawn face
amount of the outstanding BofA Letters of Credit and outstanding contingent
liability under the IRB Bond Guaranties.
SECTION 1.2. TERMS GENERALLY. The definitions in Section 1.1 shall
apply (except as otherwise specified) equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". All references herein to Sections shall be deemed
references to Sections of this Agreement unless the context shall otherwise
require.
SECTION 2. RECOURSE OF SECURED PARTIES; OTHER COLLATERAL; ACTION BY
SECURED PARTIES.
SECTION 2.1. RECOURSE OF SECURED PARTIES; OTHER COLLATERAL.
(a) Each of the Secured Parties acknowledges and agrees that (i) it
shall only have recourse to the Collateral through the Collateral Agent and that
it shall have no independent recourse to the Collateral and (ii) the Collateral
Agent shall have no obligation to, and shall not (except as otherwise
specifically provided herein) take, any action hereunder or under any Security
Document to which it is a party, except upon instructions from the Requisite
Parties or the Special Requisite Parties, as the case may be, in accordance with
Section 2.2 hereof.
(b) Nothing contained herein shall restrict (i) the rights of any
Secured Party (other than the Collateral Agent) to pursue remedies, by
proceedings in law and equity, to collect any of the Secured Obligations or to
enforce the performance of and provisions of any of the Secured Obligations, to
the extent in either case that such remedies do not relate to the Collateral or
interfere with the Collateral Agent's ability to take action hereunder or under
any Security Document or (ii) the rights of any Secured Party (other than the
Collateral Agent) to initiate an action or actions in any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar proceeding in its individual capacity and
to appear or be heard on any matter before the bankruptcy or other applicable
court in any such proceeding, including, without limitation, with respect to any
question concerning the post-petition usage of Collateral and post-petition
financing arrangements.
(c) Neither the Collateral Agent nor any other Secured Party shall
contest the validity, perfection, priority or enforceability of or seek to avoid
any Lien securing any Secured Obligation, and each party hereby agrees to
cooperate in the defense of any action contesting the
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validity, perfection, priority or enforceability of such Liens. Except as
expressly provided in this Agreement with respect to distributions of
Collateral or proceeds by the Collateral Agent to the Secured Parties, no
Secured Party shall have the right to obtain any of the Collateral for its sole
account or the benefit for its sole account of any Lien securing any of the
Secured Obligations. No Secured Party may seek, and each Secured Party hereby
waives, any right ot require any of the Collateral to be partitioned.
SECTION 2.2. ACTION BY SECURED PARTIES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action permitted or required by this Agreement to be given or
taken by the Requisite Parties, the Special Requisite Parties or the Majority
Secured Parties, as the case may be, shall be embodied in and evidenced by one
or more instruments and signed by or on behalf of such Requisite Parties, such
Special Requisite Parties or such Majority Secured Parties, as the case may be,
and, except as otherwise expressly provided in any such instrument to be
effective at a later date, any such action shall become effective when such
instrument or instruments shall have been received by the Collateral Agent. The
instrument or instruments evidencing any action (and the action embodied therein
and evidenced thereby) are sometimes referred to herein as an "ACTION" of the
Persons signing such instrument or instruments.
(b) The Collateral Agent shall be entitled to rely absolutely upon
an Action of the Requisite Parties, the Special Requisite Parties or the
Majority Secured Parties, as the case may be, if such Action purports to be
taken by or on behalf of such Requisite Parties, such Special Requisite Parties
or such Majority Secured Parties, as the case may be, and nothing in this
Section 2.2 or elsewhere in this Agreement shall be construed to require the
Collateral Agent to demonstrate that such Requisite Parties, such Special
Requisite Parties or such Majority Secured Parties, as the case may be, have
been authorized by the Note Holders, Northern, BofA and/or the holders of
Additional Future Debt, as applicable, to take any action which they purport to
be taking, the Collateral Agent being entitled to rely conclusively, and being
fully protected in so relying, on any Action of the Note Holders, Northern, BofA
and/or the holders of Additional Future Debt, as the case may be.
SECTION 3. DUTIES OF COLLATERAL AGENT.
SECTION 3.1. NOTICES TO THE SECURED PARTIES. The Collateral
Agent shall use commercially reasonable efforts to, within five (5) Business
Days following receipt thereof, furnish to each of the Note Holders, Northern,
BofA and the holders of Additional Future Debt:
(a) a copy of each Notice of Actionable Default, Demand Notice or
Enforcement Notice received by the Collateral Agent;
(b) a copy of each certificate received by the Collateral Agent
rescinding or withdrawing a Notice of Actionable Default, Demand Notice or
Enforcement Notice;
(c) written notice of any release or subordination of rights by the
Collateral Agent of any Collateral; and
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(d) a copy of any notice or other communication given or received by
the Collateral Agent under any Security Document.
The Collateral Agent shall not be required to furnish any of the foregoing
of the items to any Person to the extent the specific terms of this Agreement
require another party to this Agreement to furnish such item to such Person.
Any Notice of Actionable Default, Demand Notice or Enforcement Notice
shall be deemed to have been given when actually received by a Responsible
Officer of the Collateral Agent and, subject to Section 4.5(c), to have been
rescinded or withdrawn when a Responsible Officer of the Collateral Agent has
actually received from the notifying party a notice rescinding or withdrawing
such Notice of Actionable Default, Demand Notice or Enforcement Notice. Any
Notice of Actionable Default, Demand Notice or Enforcement Notice shall be
deemed to be outstanding at all times after such notice has been given until
such time, if any, as such notice has been rescinded or withdrawn.
SECTION 3.2. ACTIONS UNDER SECURITY DOCUMENTS.
(a) The Collateral Agent shall not be obligated to take any action
under this Agreement or any of the Security Documents except for the performance
of such duties as are specifically set forth herein or therein. The Collateral
Agent shall take any action under or with respect to the Security Documents or
the Collateral which is requested by the Requisite Parties or the Special
Requisite Parties, as the case may be, pursuant to Section 4.5; provided that
the Collateral Agent shall not amend or waive any provision of the Security
Documents except in accordance with Section 7.
(b) The Collateral Agent shall exercise or refrain from exercising
all such rights, powers and remedies as shall be available to it under the
Security Documents to which it is a party or any of them or with respect to the
Collateral solely in accordance with an Enforcement Notice received from the
Requisite Parties or the Special Requisite Parties, as the case may be, in
accordance with Section 4.5. The Collateral Agent shall have the right to
decline to follow any such direction if (i) the Collateral Agent, being advised
by counsel and acting in good faith, determines that the directed action is not
permitted by the terms of this Agreement or the Security Documents or is
unlawful or (ii) the Collateral Agent, being advised by counsel and acting in
good faith, is in reasonable doubt as to whether such directed action is
permitted by this Agreement or the Security Documents or would involve it in
personal liability unless the Collateral Agent shall be provided written
confirmation from the Requisite Parties or the Special Requisite Parties, as the
case may be, providing the Enforcement Notice that the Collateral Agent's
indemnity by the other Secured Parties contained in this Agreement would apply
without exception for such directed action (absent gross negligence and willful
misconduct of the Collateral Agent). All directions from the Requisite Parties
or the Special Requisite Parties, as the case may be, shall be as contemplated
and permitted by this Agreement and the applicable Security Document. The
Collateral Agent may rely on any such direction given to it by the Requisite
Parties or the Special Requisite Parties, as the case may be, and shall be fully
protected, and shall under no circumstances (absent the gross negligence and
willful misconduct of the Collateral Agent) be liable to the Company, any
Guarantor, any holder of any Secured
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Obligations, or any other Person for taking or refraining from taking action in
accordance with such direction and the otherwise applicable terms of this
Agreement.
(c) In the absence of an Enforcement Notice (which may relate to the
exercise of specific remedies or to the exercise of remedies in general) from
the Requisite Parties or the Special Requisite Parties, as the case may be, the
Collateral Agent shall not, without the consent of the Requisite Parties or the
Special Requisite Parties, as the case may be, exercise remedies available to it
under any Security Documents or with respect to the Collateral or any part
thereof.
SECTION 3.3. STATUS OF MONEYS RECEIVED. All moneys received by
the Collateral Agent pursuant to this Agreement shall be held in trust for the
purposes for which they were paid, and shall be segregated from any other moneys
held by the Collateral Agent, and may be deposited by the Collateral Agent under
such general conditions as may be prescribed by law in the general banking
department of the Collateral Agent, and the Collateral Agent shall not be liable
for any interest thereon.
SECTION 4. CERTAIN INTERCREDITOR ARRANGEMENTS.
SECTION 4.1. GENERAL RULE: PARI PASSU RIGHTS AGAINST
COLLATERAL.
(a) General Rule. All amounts owing with respect to the Secured
Obligations shall be secured by the Collateral, without distinction as to
whether some Secured Obligations are then due and payable and other Secured
Obligations are not then due and payable, all in accordance with the priorities
established in this Section 4.
(b) Application of Collateral Proceeds Generally. Except as
specifically provided in Section 11, Section 12 and Section 13, if the
Collateral Agent receives any cash amounts as payments under any Security
Documents or as proceeds of or otherwise constituting the Collateral (which
amounts, under the terms of any of the Security Documents, are to be applied to
any of the Secured Obligations), including, without limitation, any amounts
received pursuant to Section 4.6 and Section 4.7, any net proceeds received by
the Collateral Agent in connection with any sale, exchange or other disposition
(a "DISPOSITION") of Collateral and, if applicable, any sum received by the
Collateral Agent pursuant to Section 507(b) of the Bankruptcy Code in any
bankruptcy case in which the Company or a Guarantor is a debtor, such cash
amounts shall be applied (subject to Section 4.2 and Section 5.3(e) hereof):
(i) first, to the payment of any unpaid fees or other amounts
expressly owing under this Agreement to the Collateral Agent pursuant to
Section 5.5, Section 5.6 or Section 5.7;
(ii) second, equally and ratably to reimburse the Secured
Parties for any amounts paid by the Secured Parties pursuant to Section
5.6;
(iii) third, pro rata to all accrued and unpaid interest on
BofA Debt (other than Undrawn LC/Guaranty Exposure), Note Debt, Trade
Agreement Debt, Additional Future Debt and Undrawn LC/Guaranty Exposure in
proportion to the respective amounts thereof owing to each Secured Party
on the date of such distribution;
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(iv) fourth, pro rata to all outstanding principal amounts of
BofA Debt (other than Undrawn LC/Guaranty Exposure), Note Debt (other than
Make-Whole Amounts), Trade Agreement Debt, Additional Future Debt and
Undrawn LC/Guaranty Exposure in proportion to the respective amounts
thereof owing to each Secured Party on the date of distribution;
(v) fifth, pro rata, to all other Secured Obligations
(including, without limitation, Make-Whole Amounts and fees payable under
the Credit Documents), if any, then remaining unpaid, in proportion to the
respective amounts owed to each Secured Party; and
(vi) sixth, after indefeasible payment in full of and
provision for all Secured Obligations, to the Company or to whomever else
the Collateral Agent may be required to pay by applicable law.
(c) Special Deposit Provisions. Any payment pursuant to clause (iii)
or clause (iv) of Section 4.1(b) with respect to Undrawn LC/Guaranty Exposure
and any payment constituting a Proceeds Deposit shall be paid to (or retained
by) the Collateral Agent for deposit in an account (the "SPECIAL CASH COLLATERAL
ACCOUNT") to be held as Collateral for the Secured Obligations and to be applied
as provided in this Section 4.1(c).
(i) Distributions of Cash Collateral. On each date after the
creation of the Special Cash Collateral Account on which a reduction in
Undrawn LC/Guaranty Exposure occurs by reason of either a drawing under
any BofA Letter of Credit or a claim made by BofA against the Company on
an IRB Bond Guaranty as certified to the Collateral Agent by BofA the
Collateral Agent shall distribute from the Special Cash Collateral Account
an amount (a "DISTRIBUTION AMOUNT") equal to the lesser of (1) the balance
held by the Collateral Agent in the Special Cash Collateral Account and
(2) all or a portion of the amount of such draw or claim, as certified to
the Collateral Agent by BofA, which would have been received by BofA prior
to such time had such draw or claim been made immediately prior to the
first distribution made under Section 4.1(b) and the Secured Obligation
resulting from such draw or claim represented a separate non-contingent
Secured Obligation. The Distribution Amount shall be distributed to pay
any outstanding non-contingent amount of non-contingent BofA Debt
representing an increase in the amount of BofA Debt on account of such
draw or claim. At such times as the Undrawn LC/Guaranty Exposure is
reduced to zero, any amount remaining in the Special Cash Collateral
Account, after the payment of all prior Distribution Amounts, shall be
distributed as provided in clauses (iii), (iv), (v) and (vi) of Section
4.1(b). BofA shall provide copies of each certificate delivered to the
Collateral Agent under this Section 4.1(c) to the Company and each of the
other Secured Parties when such certificate is delivered to the Collateral
Agent.
(ii) Distributions of Proceeds Collateral. On any date after a
Proceeds Deposit occurs, the Collateral Agent shall distribute from the
Special Cash Collateral Account an amount (a "PROCEEDS DISTRIBUTION
AMOUNT") equal to all or a portion of the amount of such Proceeds Deposit,
in each case as requested in writing by BofA. The
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Proceeds Distribution Amount shall be distributed to BofA for application
to the Reimbursement Agreement Debt. At such times as the Secured
Obligations owing to BofA are reduced to zero, any amount remaining in the
Special Cash Collateral Account attributable to Proceeds Deposits, shall
be distributed as provided in clauses (iii), (iv), (v) and (vi) of Section
4.1(b).
(iii) Investment of Special Cash Collateral Account. All
amounts in the Special Cash Collateral Account shall be invested by the
Collateral Agent in Permitted Investments, as directed in writing by the
Company and all income on such Permitted Investments shall be retained in
the Special Cash Collateral Account until all BofA Debt is paid in full
and thereafter shall be distributed as provided in Section 4.1(b).
SECTION 4.2. NON-CASH DISTRIBUTIONS OR PROCEEDS. If the
Collateral Agent receives any non-cash distributions or proceeds in respect of
the Collateral, then, unless the Requisite Parties instruct the Collateral Agent
to the contrary, the Collateral Agent shall hold such non-cash distributions and
proceeds as Collateral upon the terms of this Agreement and the Security
Documents until converted to cash and thereupon applied or disbursed in
accordance with this Section 4; provided, however, that, if any non-cash
distribution is received by the Collateral Agent and is to be applied in
satisfaction of any Secured Obligation by operation of a plan of reorganization
under Chapter 11 of the federal Bankruptcy Code or otherwise as required by
applicable law, the Requisite Parties may, instead of awaiting the conversion of
such non-cash distribution to cash, direct the Collateral Agent to distribute
such non-cash distribution as provided in Section 4.1(b), except in respect of a
distribution under Section 4.1(b)(i).
SECTION 4.3. ADDITIONAL COLLATERAL. Each of BofA, each Note
Holder, Northern and each holder of Additional Future Debt hereby covenants and
agrees that it will not take, hold or suffer to exist any security interest in
or Lien on any assets as security for any of the Secured Obligations unless such
security interest or Lien is granted in favor of, or otherwise made available
to, the Collateral Agent for the benefit of BofA, the Note Holders, Northern and
the holders of Additional Future Debt as contemplated by this Agreement.
SECTION 4.4. CERTAIN NOTICES.
(a) Each of BofA, each Note Holder, Northern and each holder of
Additional Future Debt hereby agrees to give written notice to the Collateral
Agent of any demand for payment in full of the Secured Obligations owing to the
demanding party, whether by acceleration of such obligations or otherwise (a
"DEMAND NOTICE"). Any Requisite Parties or Special Requisite Parties, as the
case may be, giving a Notice of Actionable Default or Enforcement Notice to the
Collateral Agent shall contemporaneously give a copy thereof to each of the
other Secured Parties.
(b) Neither BofA, any Note Holder, Northern nor any holder of
Additional Future Debt shall incur liability of any kind should it, upon the
occurrence of any Event of Default, refrain from accelerating maturity or
otherwise demanding payment in full of any Secured Obligations owing to it, or
should it refrain from exercising any of its rights and
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remedies against the Company, any Guarantor or any other obligor in respect of
the Secured Obligations.
SECTION 4.5. ENFORCEMENT.
(a) The Collateral Agent shall (subject to the provisions of Section
3.2 and Section 5) take any such actions in the exercise of rights and remedies
under the Security Documents as are directed in an Enforcement Notice given by
the Requisite Parties or Special Requisite Parties, as the case may be, at any
time more than five (5) Business Days after a Notice of Actionable Default shall
have been given to a Responsible Officer of the Collateral Agent with respect to
the Event of Default that is the basis (or one of the bases) of the Enforcement
Notice. In the event the Collateral Agent shall have received conflicting
directions from the Special Requisite Parties and the Requisite Parties, it
shall follow the directions of the Requisite Parties, except to the extent that
such direction of the Requisite Parties would have the effect of rescinding or
nullifying any Enforcement Notice given by Special Requisite Parties, in which
case the Collateral Agent shall follow the directions of the Special Requisite
Parties set forth in such Enforcement Notice. In the event the Collateral Agent
shall receive conflicting directions as set forth in two or more Enforcement
Notices delivered by any one or more holders of Secured Obligations, each of
which constitutes Special Requisite Parties, it shall either (i) follow the
directions of the Requisite Parties or (ii) if no such directions shall have
been given by the Requisite Parties within thirty (30) Business Days from the
most recent directions so received from a group of holders constituting Special
Requisite Parties submit such matter to a court of competent jurisdiction to
establish the proper course of action it shall be required to take. It is
acknowledged that the Collateral Agent shall have no obligation to take any
action (including, without limitation, submitting such matter to court) unless
it has received security or indemnity as contemplated by Section 5.5(a).
(b) BofA, each Note Holder, Northern and each holder of Additional
Future Debt agrees that it will promptly, and in any event within five (5)
Business Days after the request by one of the others (which request may be made
telephonically), advise the requesting party (telephonically, confirmed in
writing) as to the outstanding amount of Undrawn LC/Guaranty Exposure, other
BofA Debt, Note Debt, Trade Agreement Debt or Additional Future Debt owed to it.
Any party may rely on such information (or other means available to it) to
determine whether the Requisite Parties or the Special Requisite Parties, as the
case may be, have acted with respect to any action or proposed action.
(c) Any Enforcement Notice, when issued, may be rescinded or
withdrawn with the consent of the Requisite Parties or Special Requisite
Parties, whichever shall have given such Enforcement Notice .
SECTION 4.6. TURNOVER OF COLLATERAL. If any Secured Party
acquires custody, control or possession of any payment constituting any
Collateral (including proceeds therefrom), other than pursuant to the terms of
Section 4.1(b), Section 4.1(c) or Section 4.2 hereof, such Secured Party shall
promptly cause such payment or Collateral to be delivered to or put in the
custody, possession or control of the Collateral Agent or, if the Collateral
Agent shall so designate, an agent of the Collateral Agent (which agent may be a
branch or affiliate of the Collateral Agent) in the same form of
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payment received, with appropriate endorsements, for distribution in accordance
with the provisions of Section 4.1 or Section 4.2, as applicable. Until such
time as the provisions of the immediately preceding sentence have been complied
with, such Secured Party shall be deemed to hold such Collateral in trust for
the Collateral Agent. Notwithstanding the foregoing, neither BofA, any Note
Holder, Northern nor any holder of Additional Future Debt shall be required to
deliver to the Collateral Agent or such agent of the Collateral Agent, any
amounts received by BofA, such Note Holder, Northern or such holder of
Additional Future Debt prior to receipt by the Collateral Agent of a Notice of
Actionable Default to the extent that such amounts constitute (a) payments of
principal on BofA Debt, the Note Debt, the Trade Agreement Debt or Additional
Future Debt required to be made pursuant to the Loan Documents and due and paid
prior to such date, or (b) regular payments of interest, Make-Whole Amounts,
fees and other charges on or in respect of BofA Debt, the Note Debt, the Trade
Agreement Debt or Additional Future Debt due and paid prior to such date.
SECTION 4.7. PAYMENTS FROM ENFORCEMENT RIGHTS. Each of the
Secured Parties agrees with each other Secured Party that (a) if any Secured
Party exercises any right of setoff, banker's lien or similar right with respect
to any Collateral or any assets of the Company or any Guarantor, the amount set
off shall be applied pro rata to the Secured Obligations in accordance with
Section 4.1(b) or Section 4.2, as the case may be, and (b) if such Secured Party
shall receive from the Company or any Guarantor, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross-action, enforcement of the
claim in respect of the Secured Obligations owing to such Secured Party by
proceedings against the Company at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, for application to the payment of the Secured Obligations owing to
such Secured Party any amount in excess of its ratable portion of the payments
received by the other Secured Parties with respect to BofA Debt, Note Debt,
Trade Agreement Debt and Additional Future Debt (as the case may be) held by all
of the Secured Parties as contemplated by Section 4.1(b) or Section 4.2, as the
case may be, such Secured Party will make such disposition and arrangements with
the other Secured Parties with respect to such excess, either by way of
distribution, pro tanto assignment of claims, subrogation or otherwise as shall
result in each Secured Party receiving in respect of the Secured Obligations
owing to it its proportionate payment as contemplated by Section 4.1(b) or
Section 4.2, as the case may be; provided that if all or any part of such excess
payment is thereafter recovered from such Secured Party, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
SECTION 4.8. WAIVERS AND AMENDMENTS OF CREDIT DOCUMENTS. Each
of the Note Holders, Northern, BofA and each holder of Additional Future Debt
agrees that, without the written consent of the Majority Secured Parties, it
shall not modify or amend any provisions of or give any waiver with respect to
the Credit Documents to which such party hereto is a signatory, if the effect of
such modification or amendment or waiver is (i) to increase the principal amount
of the Note Debt, Trade Agreement Debt, BofA Debt or Additional Future Debt then
outstanding (unless such increase in Note Debt, Trade Agreement Debt, BofA Debt
or Additional Future Debt constitutes Additional Future Debt, in which case no
such consent shall be required), or (ii) to amend or modify any term defined
therein which is incorporated by reference into this Agreement, or is
specifically referred to in this Agreement in such a way as to alter its meaning
in this Agreement, or (iii) to provide for loans to be made or letters of credit
to be issued (other
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than by extension or renewal) after the issuance of an Enforcement Notice, or
(iv) to amend or modify any provision of any of the Security Documents or this
Agreement except as provided therein or herein. Except as otherwise specified in
the preceding sentence, the Note Holders, Northern, BofA and the holders of
Additional Future Debt, without the consent of the other parties, shall be free
to deal with the Company and the Guarantors in their respective sole discretion
under and in respect of the provisions of the Loan Documents to which they are
party, with the right and power without limitation to modify, amend or waive any
terms or provisions of such Loan Documents, to grant extensions of the time of
payment or performance, and to make compromises and settlements with the Company
or any Guarantor.
SECTION 4.9. INDEPENDENT INVESTIGATION; SHARING OF FINANCIAL
INFORMATION. Each of BofA, each Note Holder, Northern and each holder of
Additional Future Debt acknowledges and agrees that it has entered into the
Credit Documents to which it is party and (as applicable) extended funds and/or
credit or provided services to the Company on the basis of its own independent
investigation of the Company, its Subsidiaries and affiliated companies, and
their business, operations and financial condition, that it shall continue to
make such investigations in connection with the credit and/or loans extended to
the Company as it deems appropriate and that it has not conducted any such
investigations in reliance upon information, analysis and recommendations which
it may have obtained from any other Secured Party. Without derogation in any way
of the preceding sentence, the Company acknowledges and consents to any exchange
of information by and among BofA, each Note Holder, Northern and each holder of
Additional Future Debt, without regard to whether the impact of any such
exchange is favorable or unfavorable to the Company and without regard to the
accuracy or completeness of any information so exchanged.
SECTION 4.10. AGENTS. Except as specifically provided in this
Agreement, and except for the role of the Collateral Agent as specified in this
Agreement, BofA is not acting as agent for any other Secured Party, no Note
Holder is acting as agent for any other Secured Party and Northern is not acting
as agent for any other Secured Party; and nothing stated or implied in this
Agreement shall be deemed to create such an agency relationship.
SECTION 5. CONCERNING THE COLLATERAL AGENT.
SECTION 5.1. APPOINTMENT OF COLLATERAL AGENT. The Note
Holders, BofA and Northern hereby appoint the Collateral Agent Bank to act as
collateral agent pursuant to the terms of this Agreement and the Security
Documents and hereby irrevocably authorize the Collateral Agent to execute and
enter into the A/R Intercreditor Agreement and an intercreditor agreement in
connection with any other Receivables Purchase Agreement on their behalf and to
take such action and perform such duties as provided therein, and the Collateral
Agent Bank hereby accepts such appointment. The relationship between the
Collateral Agent and the holders of the Secured Obligations is and shall be that
of agent and principal only, and nothing contained in this Agreement or any of
the Credit Documents shall be construed to appoint the Collateral Agent as a
trustee for any such holder.
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SECTION 5.2. LIMITATIONS ON RESPONSIBILITY OF COLLATERAL
AGENT.
(a) The Collateral Agent shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties contained herein or in any Security Document, except for those made
by it herein. The Collateral Agent makes no representation as to the value or
condition of the Collateral or any part thereof, as to the title of the Company
or any Guarantor to the Collateral, as to the security afforded by this
Agreement or any Security Document or, except as set forth in Section 6, as to
the validity, execution, enforceability, legality or sufficiency of this
Agreement or any Security Document, and the Collateral Agent shall incur no
liability or responsibility in respect of any such matters. The Collateral Agent
shall not be responsible for insuring the Collateral, for the payment of taxes,
charges, assessments or liens upon the Collateral or otherwise as to the
maintenance of the Collateral, except as provided in the immediately following
sentence when the Collateral Agent has possession of the Collateral. The
Collateral Agent shall have no duty to the Company or any Guarantor or to the
holders of any of the Secured Obligations as to the care of any Collateral in
its possession or control or in the possession or control of any agent or
nominee of the Collateral Agent or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto, except
the duty to accord such of the Collateral as may be in its possession
substantially the same care as it accords its own assets and the duty to account
for monies received by it. The Collateral Agent's duties and responsibilities
shall be determined solely by the provisions of this Agreement and the Security
Documents to which it is a party, and the Collateral Agent shall not be liable
or responsible for any duties or obligations set forth in any other document to
which it is not a party.
(b) The Collateral Agent shall not be responsible for any loss
suffered with respect to any investment permitted to be made under this
Agreement and shall not be responsible for the consequences of any oversight or
error of judgment whatsoever, except that the Collateral Agent may be liable for
losses due to its willful misconduct, gross negligence or breach of its
agreement set forth herein. The Collateral Agent shall not be required to
ascertain or inquire as to the performance by the Company of any of the
covenants or agreements contained herein or in any of the Credit Documents.
Neither the Collateral Agent nor any officer, agent or representative thereof
shall be personally liable for any action taken or omitted to be taken by any
such Person in connection with this Agreement or any Security Document except
for such Person's own gross negligence or willful misconduct. Neither the
Collateral Agent nor any officer shall be personally liable for any action taken
by any such Person in accordance with any notice given by the Requisite Parties
or Special Requisite Parties, as the case may be, in accordance with and
pursuant to the terms of this Agreement even if, at the time such action is
taken by any such Person, the Requisite Parties or Special Requisite Parties, as
the case may be, or Persons purporting to be the Requisite Parties or Special
Requisite Parties, as the case may be, are not so authorized by the Requisite
Parties or the Special Requisite Parties, as the case may be, to give such
notice, except where a Responsible Officer of the Collateral Agent has actual
knowledge that such Requisite Parties or Special Requisite Parties, as the case
may be, or Persons purporting to be the Requisite Parties or Special Requisite
Parties, as the case may be, are not so authorized by the Requisite Parties or
Special Requisite Parties, as the case may be, to give such notice. The
Collateral Agent may execute any of the powers granted under this Agreement or
any of the Security Documents or the A/R Intercreditor Agreement (or any other
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intercreditor agreement executed by the Collateral Agent in accordance with the
terms of this Agreement) and perform any duty hereunder or thereunder either
directly or by or through agents, receivers, or attorneys-in-fact and shall not
be responsible for anything done by such agents, receivers or attorneys-in-fact
selected by it with due care.
(c) Whenever pursuant to the provisions hereof or of any Security
Document it is required that any party hereto obtain the consent or approval of
the Collateral Agent, or that any matter prove satisfactory to the Collateral
Agent, or if the Collateral Agent, in its best judgment, needs clarification or
instruction concerning its duties or obligations hereunder, the Collateral
Agent, prior to giving any such consent or approval or indicating its
satisfaction with any such matter, or performing such duty or obligation, shall
(except where the failure to do so, in its good faith judgment, could imperil
the Collateral or the Liens thereon) be required to consult with the Secured
Parties in a manner deemed reasonable by the Collateral Agent, and the
Collateral Agent shall be protected in following any direction of the Requisite
Parties or Special Requisite Parties, as the case may be.
(d) The foregoing provisions of this Section 5.2 shall not relieve
the Collateral Agent of any liability for any failure to perform any contractual
duty expressly undertaken by it to be performed under this Agreement if such
liability is caused by the gross negligence or willful misconduct of the
Collateral Agent.
SECTION 5.3. RELIANCE BY COLLATERAL AGENT; ETC.
(a) Whenever in the performance of its duties under this Agreement
the Collateral Agent shall deem it necessary or desirable that a matter be
proved or established with respect to any Person in connection with the taking,
suffering or omitting of any action hereunder by the Collateral Agent, such
matter may be conclusively deemed to be proved or established by a certificate
executed by an officer of such Person, and the Collateral Agent shall have no
liability with respect to any action taken, suffered or omitted in reliance in
good faith thereon.
(b) The Collateral Agent may consult with counsel and shall be fully
protected in taking any action hereunder in good faith in accordance with any
advice of such counsel. The Collateral Agent shall have the right but not the
obligation at any time to seek instructions concerning the administration of
this Agreement, the duties created hereunder, or any of the Collateral from any
court of competent jurisdiction.
(c) The Collateral Agent shall be fully protected in relying in good
faith upon any resolution, statement, certificate, instrument, opinion, report,
notice, request, consent, order or other paper or document which it believes to
be genuine and to have been signed or presented by the proper party or parties.
In the absence of its gross negligence or willful misconduct, the Collateral
Agent may conclusively rely in good faith, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificate or
opinions furnished to the Collateral Agent in connection with this Agreement.
(d) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or knowledge of the occurrence of any
Event of Default or Actionable
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Default unless and until a Responsible Officer of the Collateral Agent shall
have received a Notice of Actionable Default or notice of such Event of Default.
The Collateral Agent shall have no obligation whatsoever either prior to or
after receiving such a Notice of Actionable Default to inquire whether an
Actionable Default has, in fact, occurred and shall be entitled to rely in good
faith conclusively, and shall be fully protected in so relying, on any
certificate so furnished to it and shall have no obligation, absent written
instructions from the Requisite Parties or Special Requisite Parties, as the
case may be, to take or omit to take any action with respect to such Notice of
Actionable Default.
(e) To the extent the Collateral Agent is required (pursuant to
Section 4, Section 11, Section 12, Section 13, or otherwise) to determine any
amount, or take any action to distribute any amount, of any Secured Obligation
or other payments hereunder, it shall have no obligation to do so unless such
amount shall have been certified in writing by the Requisite Parties or the
Special Requisite Parties, as the case may be, as being the amount in question.
Each of the other parties hereto agrees to certify such amounts upon request of
the Collateral Agent. If any dispute or disagreement shall arise as to the
allocation of any sum of money received by the Collateral Agent hereunder or
under any Security Document, the Collateral Agent shall have the right to
deliver such sum to a court of competent jurisdiction and therein commence an
action for interpleader.
SECTION 5.4. RESIGNATION OR REMOVAL OF THE COLLATERAL AGENT.
The Collateral Agent may at any time resign by giving sixty (60) days prior
written notice thereof to each Secured Party and the Company, and the Collateral
Agent may at any time be removed for cause (consisting of fraud, gross
misconduct, willful or reckless breach of this Agreement or other just cause, as
determined in their discretion by the Majority Secured Parties) by sixty (60)
days prior written notice thereof to the Collateral Agent, each other Secured
Party and the Company given by the Majority Secured Parties, provided that in
the case of fraud, gross misconduct or willful or reckless breach of this
Agreement such removal may be effective immediately upon five (5) days after
giving of such notice to the Collateral Agent and provided further that no
resignation or removal shall be effective until a successor for the Collateral
Agent is appointed. Upon such resignation or removal, the Majority Secured
Parties shall have the right to appoint a successor Collateral Agent. If no
successor Collateral Agent shall have been so appointed by the Majority Secured
Parties and shall have accepted such appointment within forty-five (45) days
after the retiring Collateral Agent's giving of notice of resignation or the
giving of notice of removal, as the case may be, then the retiring Collateral
Agent may, on behalf of the Secured Parties, appoint a successor Collateral
Agent, which shall be a financial institution having a long-term bank deposit
rating of not less than "A" from Standard & Poor's Ratings Group, a Division of
XxXxxx-Xxxx, Inc., or "A-2" from Xxxxx'x Investors Services, Inc. Upon the
acceptance of any appointment as Collateral Agent hereunder by a successor
Collateral Agent, such successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations hereunder. After any retiring Collateral Agent's
resignation or removal, the provisions of this Agreement and the Security
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Collateral Agent. Any
corporation into which the Collateral Agent Bank may be merged or with which it
may be consolidated, or any corporation which acquires all or
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substantially all of the corporate trust business of the Collateral Agent Bank,
including the collateral agency established pursuant to this Agreement, or any
corporation resulting from any merger or consolidation to which the Collateral
Agent Bank shall be a party, shall be the successor to the Collateral Agent Bank
without the execution of any paper.
SECTION 5.5. EXPENSES AND INDEMNIFICATION.
(a) By countersigning this Agreement, the Company agrees (i) to
reimburse the Collateral Agent, promptly, for any reasonable expenses incurred
by the Collateral Agent, including reasonable counsel fees and disbursements and
compensation of agents, arising out of, in any way connected with, or as a
result of, the execution or delivery of this Agreement or any Security Document
or any agreement or instrument contemplated hereby or thereby or the performance
by the parties hereto or thereto of their respective obligations hereunder or
thereunder or in connection with the enforcement or protection of the rights of
the Collateral Agent and the Secured Parties hereunder or under the Security
Documents, and (ii) to indemnify and hold harmless the Collateral Agent and its
directors, officers, employees and agents, promptly, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, and reasonable costs, expenses or disbursements of any kind or nature
whatsoever ("LOSSES") which may be imposed on, incurred by or asserted against
the Collateral Agent Bank in its capacity as the Collateral Agent or any of them
in any way relating to or arising out of this Agreement or any Security Document
or any action taken or omitted by them under this Agreement or any Security
Document; provided that the Company shall not be liable to the Collateral Agent
for any portion of such Losses resulting from the gross negligence or willful
misconduct of the Collateral Agent or any of its directors, officers, employees
or agents as determined by a final non-appealable order of a court of competent
jurisdiction. A statement by the Collateral Agent that is submitted to the
Company with respect to the amount of such expenses and containing a basic
description thereof and/or the amount of its indemnification obligation shall be
prima facie evidence of the amount thereof owing to the Collateral Agent or the
Collateral Agent Bank, as the case may be; provided, however, that the Company
shall nonetheless have the right to dispute any such amount and, to the extent
provided in this Section 5.5, the reasonableness thereof. Except as otherwise
expressly provided herein, the Collateral Agent shall be under no obligation to
take any action to protect, preserve or enforce any rights or interests in the
Collateral or to take any action in connection with the execution or enforcement
of its duties hereunder, whether on its own motion or on request of any other
Person, which in the opinion of the Collateral Agent may involve loss, liability
or expense to it, unless one or more of the Secured Parties shall offer and
furnish security or indemnity, reasonably satisfactory to the Collateral Agent
in accordance herewith, against loss, liability and expense to the Collateral
Agent. Notwithstanding anything to the contrary contained in this Agreement, or
any Security Document or any other documents noted in Section 10 of this
Agreement, in the event that the Collateral Agent is entitled or required to
commence an action to foreclose on such Security Document or other document, or
otherwise exercise its remedies to acquire control or possession of any property
constituting all or part of the Collateral, the Collateral Agent shall not be
required to commence any such action or exercise any such remedy if the
Collateral Agent has determined in good faith that it may incur liability under
any federal or state environmental or hazardous waste law, rule or regulation as
the result of the presence at, or release on or from, any property of any
hazardous materials or waste, as defined under such federal or state laws,
unless it has
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received security or indemnity from a Person, in an amount and in form, all
satisfactory to the Collateral Agent in its sole discretion, protecting the
Collateral Agent from all such liability.
(b) The indemnification provisions in this Section 5.5(b) and
Section 5.5(c) are in addition to the indemnification provisions in Section
5.5(a). Without limiting any indemnification the Company or any Obligor has
granted in any other provision of this Agreement or in any other Credit
Document, the Company and each Obligor hereby indemnifies and holds harmless the
Collateral Agent and each of the Secured Parties and their respective directors,
officers, employees and agents (collectively, the "INDEMNIFIED PARTIES") from
and against any and all Losses which may be imposed on, incurred by or asserted
against the Indemnified Parties or any of them as a result of, arising out of,
or relating to any claim, action or proceeding by any third party (other than
any Indemnified Party) with respect to (i) any accident, injury to or death of
persons or loss of or damage to or loss of the use of property occurring on or
about any Mortgaged Property or any part thereof or the adjoining sidewalks,
curbs, vaults and vault spaces, if any, streets, alleys or ways, (ii) any use,
non-use or condition of any Mortgaged Property or any part thereof or the
adjoining sidewalks, curbs, vaults and vault spaces, if any, streets, alleys or
ways, (iii) any failure on the part of the Company or any applicable Obligor to
perform or comply with any of the terms of any Mortgage, (iv) performance of any
labor or services or the furnishing of any materials or other property in
respect of any Mortgaged Property or any part thereof made or suffered to be
made by or on behalf of the Company or any applicable Obligor, (v) any
negligence or tortious act on the part of the Company or any applicable
Mortgagor or any of its agents, contractors, lessees, licensees or invitees, or
(vi) any work in connection with any alterations, changes, new construction or
demolition of or additions to any Mortgaged Property (collectively, the
"INDEMNIFIED LIABILITIES"); provided, however, that the Company or any Obligor
shall not indemnify or hold harmless any Indemnified Party against any
Indemnified Liabilities arising (x) by reason of any Indemnified Party's gross
negligence or willful misconduct, or (y) in the case of clauses (i), (ii), (iv)
and (vi) above, after termination of the Company's or such Obligor's ownership
or operation of any Mortgaged Property.
(c) In the event that (i) any Indemnified Party is made a party to
any action or proceeding by reason of the execution of this Agreement or any
Security Document or (ii) any action or proceeding shall be commenced in which
it becomes necessary to defend or uphold the lien of any Mortgage, all
reasonable sums paid by the Indemnified Parties for the expense of any
litigation to prosecute or defend the rights and lien created by any Mortgage or
otherwise shall be paid by the Company or any applicable Mortgagor to such
Indemnified Parties, as hereinafter provided. The Company or any applicable
Mortgagor will pay and save the Indemnified Parties harmless against any and all
liability with respect to any intangible personal property tax or similar
imposition of any jurisdiction or any subdivision or authority thereof now or
hereafter in effect, to the extent that the same may be payable by the
Indemnified Parties in respect of any Mortgage or any obligation secured
thereby. In case any action, suit or proceeding is brought against any
Indemnified Party by reason of any such occurrence, the Company or any
applicable Mortgagor, upon written request of such Indemnified Party, will, at
the Company's or such Mortgagor's expense, resist and defend such action, suit
or proceeding or cause the same to be resisted or defended by counsel designated
by the Company or such Mortgagor and approved by such Indemnified Party, which
approval shall not be unreasonably withheld or delayed. The obligations of the
Company and each Mortgagor under this Section 5.5 shall survive any discharge or
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reconveyance of any Mortgage and the payment in full of the obligations secured
thereby. If and to the extent that the foregoing undertaking is unenforceable
for any reason, the Company and each Mortgagor hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. (d) All amounts payable
to the Indemnified Parties under this Section 5.5 shall be deemed indebtedness
secured by the Security Documents and shall bear interest at the highest
interest rate for overdue payments provided for in any of the Credit Documents
commencing 30 days after any Obligor's receipt of written notice that such
amounts are due and owing.
SECTION 5.6. EXPENSES AND INDEMNIFICATION BY SECURED PARTIES.
Each of BofA, each Note Holder, Northern and each holder of Additional Future
Debt severally agrees (i) to reimburse the Collateral Agent, promptly, in the
amount of its pro rata share for any expenses referred to in Section 5.5 and
reasonable fees due pursuant to Section 5.7 which shall not have been reimbursed
or paid by the Company or paid from the proceeds of Collateral as provided
herein and (ii) to indemnify and hold harmless the Collateral Agent, the
Collateral Agent Bank and its directors, officers, employees and agents,
promptly, in the amount of its pro rata share, from and against any and all
Losses referred to in Section 5.5, to the extent the same shall not have been
reimbursed by the Company or paid from the proceeds of Collateral as provided
herein; provided that none of BofA, any Note Holder, Northern or any holder of
Additional Future Debt shall be liable to the Collateral Agent or the Collateral
Agent Bank for any portion of such Losses resulting from the gross negligence or
willful misconduct of, or the gross negligence or willful misconduct in the
failure to perform any express duty undertaken under this Agreement to be
performed by, the Collateral Agent or the Collateral Agent Bank or any of its
directors, officers, employees or agents. For purposes of this Section 5.6, the
pro rata share of any Secured Party's claim for which a reimbursement or
indemnity obligation arises under this Section 5.6 shall be its percentage share
of the sum of the Secured Obligations, as of the last day of the calendar month
preceding the date on which such claim was incurred and on which any Principal
Obligations were outstanding.
SECTION 5.7. COLLATERAL AGENT'S FEE. By countersigning this
Agreement, the Company agrees to pay to the Collateral Agent for the Collateral
Agent's own account, a non-refundable Collateral Agent's fee, on the date hereof
and an additional yearly fee. Such yearly fees shall be payable as specified in
a separate letter agreement between the Company and the Collateral Agent Bank
until the Secured Obligations have been paid in full in cash, the commitments
represented by the Credit Documents shall have expired or been reduced to zero
or terminated, there is no Undrawn LC/Guaranty Exposure, and the Collateral
Agent no longer has any duties hereunder.
SECTION 6. REPRESENTATIONS AND WARRANTIES. Each of the Collateral
Agent, BofA, each Note Holder, Northern, each holder of Additional Debt and, by
countersigning this Agreement, the Company and each Guarantor, represents and
warrants to the other parties hereto that (a) the execution, delivery and
performance of this Agreement or the Joinder Agreement to which it is a party
(in the case of a holder of Additional Future Debt) (i) have been duly
authorized by all requisite corporate or other action on its part and (ii) do
not conflict with or result in any breach or contravention of any provision of
law, statute, rule or
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regulation to which it is subject or any judgment, order, writ, injunction,
license or permit applicable to it and will not conflict with any provision of
its charter documents or bylaws or any agreement or other instrument binding
upon it; and (b) this Agreement or such Joinder Agreement, as the case may be,
has been duly executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms.
SECTION 7. AMENDMENT OF THIS AGREEMENT.
SECTION 7.1. Amendments. No modification or amendment of this
Agreement shall be effective unless the same shall be in writing and signed by
the Majority Secured Parties and no modification or amendment of any Security
Document shall be effective, nor shall any waiver of any provision of any
Security Document be executed by the Collateral Agent, without the written
consent of the Majority Secured Parties; provided, however, (i) no amendment or
waiver shall adversely affect any of the Collateral Agent's rights, immunities
or rights to indemnification hereunder or under any of the Security Documents or
expand its duties or reduce any amount payable to the Collateral Agent hereunder
or under any Security Documents without the written consent of the Collateral
Agent; (ii) Sections 3 and 5 of this Agreement and any other provision of this
Agreement or of any of the Security Documents affecting the rights and
obligations of the Collateral Agent hereunder may not be amended without the
written consent of the Collateral Agent; (iii) no modification or amendment of
Section 2.2 or the defined terms used therein, Section 4.9, Section 5.4, Section
5.5, Section 5.7, Section 6, this Section 7.1(iii), Section 8, Section 10,
Section 11, Section 12 or Section 13 of this Agreement shall be effective unless
the same shall have been consented to by the Company; (iv) no modification,
amendment or waiver that changes the amount that a Secured Party receives from a
distribution hereunder or that delays the time of a distribution hereunder shall
be effective without the consent of such Secured Party and (v) none of the
Material Provisions of any of the Security Documents may be created, amended or
waived without the consent of all holders of Secured Obligations. Any Security
Document executed after the date hereof shall be approved by the Majority
Secured Parties as to form.
SECTION 7.2. WAIVERS. Except as provided in Section 7.1, no
waiver of any provision of this Agreement and no consent to any departure by any
party hereto from the provisions hereof shall be effective unless such waiver or
consent shall be set forth in a written instrument executed by the party against
which it is sought to be enforced, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any party hereto in any case shall entitle such party to
any other or further notice or demand in the same, similar or other
circumstances.
SECTION 8. APPROVAL BY THE COMPANY AND GUARANTORS; COMPANY'S OBLIGATIONS
ABSOLUTE.
SECTION 8.1. GENERAL. By countersigning this Agreement, each of the
Company and the Guarantors acknowledges and consents to and agrees to perform
and be bound by each provision of this Agreement which expressly recites that
the Company or such Guarantor is agreeing to such provision by countersigning
this Agreement.
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SECTION 8.2. OBLIGATIONS ABSOLUTE. Nothing contained in this
Agreement shall impair, as between the Company, or any Guarantor and each of
BofA, each Note Holder, Northern and each holder of Additional Future Debt, (a)
the obligation of the Company or such Guarantor to pay to the Note Holders all
amounts payable in respect of the Note Debt as and when the same shall become
due and payable in accordance with the terms thereof, or prevent any of the Note
Holders (except as expressly otherwise provided in this Agreement) from
exercising all rights, powers and remedies otherwise permitted by the Note
Documents and by applicable law upon a default in the payment or performance of
the Note Debt, all, however, subject to the rights of BofA, Northern and the
holders of Additional Future Debt as set forth in this Agreement, or (b) the
obligation of the Company or such Guarantor to pay to BofA all amounts payable
in respect of BofA Debt as and when the same shall become due and payable in
accordance with the terms thereof, or prevent BofA (except as expressly
otherwise provided in this Agreement) from exercising all rights, powers and
remedies otherwise permitted by the Reimbursement Agreements, the IRB Bond
Guaranties and by applicable law upon a default in the payment or performance of
BofA Debt, all, however, subject to the rights of the Note Holders, Northern and
the holders of Additional Future Debt as set forth in this Agreement, (c) the
obligation of the Company or such Guarantor to pay to Northern all amounts
payable in respect of the Trade Agreement Debt as and when the same shall become
due and payable in accordance with the terms thereof, or prevent Northern
(except as expressly otherwise provided in this Agreement) from exercising all
rights, powers and remedies otherwise permitted by the Trade Agreement and by
applicable law upon a default in the payment or performance of the Trade
Agreement Debt, all, however, subject to the rights of the Note Holders, BofA
Issuer and the holders of Additional Future Debt as set forth in this Agreement
and (d) the obligation of the Company or such Guarantor to pay to any holder of
Additional Future Debt all amounts payable in respect of such Additional Future
Debt as and when the same shall become due and payable in accordance with the
terms thereof, or prevent any holder of Additional Future Debt (except as
expressly otherwise provided in this Agreement) from exercising all rights,
powers and remedies otherwise permitted by such Additional Future Debt Documents
and by applicable law upon a default in the payment or performance of such
Additional Future Debt, all, however, subject to the rights of the Note Holders,
Northern and BofA as set forth in this Agreement.
SECTION 8.3. NO ADDITIONAL RIGHTS FOR COMPANY HEREUNDER. If the
Collateral Agent or any Secured Party shall enforce its rights or remedies in
violation of the terms of this Agreement, the Company and each Guarantor agrees,
by its consent hereto, that it shall not use such violation as a defense to such
enforcement by any such party nor assert such violation as a counterclaim or
basis for setoff or recoupment against any such party (except to the extent such
violation affects the rights of the Company or any Guarantor set forth in this
Agreement). Nothing contained in this Agreement shall constitute a commitment by
BofA, any Note Holder, Northern or any holder of Additional Future Debt to make
available to the Company or any Guarantor any advances, loans or letters of
credit beyond such advances, loans or letters of credit as specifically provided
for in the Loan Documents.
SECTION 9. COLLATERAL AGENT AS AGENT AND LENDER. If a Secured
Party is at any time the Collateral Agent, such Secured Party shall, in its
individual capacity and as Collateral Agent, have the same obligations and the
same rights, powers and privileges as it would have had were it not also the
Collateral Agent.
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SECTION 10. COVENANTS CONCERNING COLLATERAL
SECTION 10.1. ADDITIONAL ASSIGNMENTS, AND MORTGAGES.
(a) Without limiting the obligations of the Company or any of its
Subsidiaries in the Credit Documents (and subject to the provisions of the
Credit Documents and this Agreement), the Company shall, and shall cause each of
its Significant Subsidiaries which has not theretofore executed and delivered
one or more Security Documents in favor of the Collateral Agent with respect to
all of its assets (other than Excluded Collateral) as security for the Secured
Obligations, to execute and deliver to the Collateral Agent such Security
Documents, and take such other action, as may be requested to grant Liens to the
Collateral Agent on all its assets (other than Excluded Collateral).
(b) Without limiting the obligations of the Company or any of its
Subsidiaries in the Credit Documents (and subject to the provisions of the
Credit Documents and this Agreement) if the Company or any of its Significant
Subsidiaries acquires after the date hereof ownership of a Significant Real
Estate Interest, the Company shall, and shall cause such Significant Subsidiary,
to deliver within a reasonable time period to the Collateral Agent a fully
executed mortgage or deed of trust over such interest in real estate, together
with any environmental site assessments in the possession of the Company or such
Significant Subsidiary and evidence of insurance with the Collateral Agent named
as loss payee and additional insured with respect to such real estate as the
Collateral Agent (upon instruction from the Requisite Parties) may reasonably
request in accordance with good banking and lending practices, all in form and
content acceptable to the Requisite Parties. If such Significant Subsidiary is
not a Guarantor, the Company shall cause such Significant Subsidiary to become a
Guarantor and a party to this Agreement. If the Company or the Significant
Subsidiary acquiring such Significant Real Estate Interest obtains a current
owner's title insurance policy in respect of all or a portion of such
Significant Real Estate Interest in connection with the acquisition of such
Significant Real Estate Interest, the Company shall also deliver to the
Collateral Agent a customary lender's title insurance policy in respect of such
Significant Real Estate Interest for the benefit of the Collateral Agent from
the insurance company issuing such owner's title insurance policy in an insured
amount equal to the insured amount of such owner's title insurance policy. The
Company further agrees that, following the taking of such actions, the
Collateral Agent shall have for the pari passu benefit of the Secured Parties a
valid and enforceable Lien over such interest in real estate, free and clear of
all Liens, defects and encumbrances other than such Liens, defects or
encumbrances existing on such Significant Real Estate Interest at the time such
Significant Real Estate Interest shall have been so acquired.
SECTION 10.2. PERFECTION CERTIFICATE. The Company shall furnish
to the Collateral Agent and to each of the holders of Secured Obligations not
later than October 15 of each year beginning with the year 2004, a fully
completed Perfection Certificate substantially in the form attached hereto as
Exhibit C setting forth the information required thereby as of October 1st in
such year. Upon receipt of such Perfection Certificate the Collateral Agent
shall forward a copy of such Perfection Certificate to special counsel to the
Requisite Parties if such special counsel is known to the Collateral Agent. If
such special counsel is not known to the Collateral Agent, it shall request that
the holders of the Secured Obligations notify the Collateral Agent of the name
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and address of such special counsel. Upon the effective date of this Agreement
such special counsel is Xxxxxxx XxXxxxxxx, LLP of Hartford, Connecticut. Upon
request of the Requisite Parties or such special counsel the Company will take
any and all actions, and execute and deliver such documents and instruments,
with respect to the recording, filing, registering, re-recording, refiling and
re-registering of any of the Security Documents in respect of any Collateral as
are necessary under the law of the jurisdiction in which the Collateral is
located or under other applicable law to maintain the continued perfection,
existence and priority of the Lien of the Security Documents (including, without
limitation, to the extent provided for therein and herein on any property
acquired by the Company or any Guarantor after the date hereof), and to fully
preserve and protect the rights, and under the Security Documents of or for the
benefit of the Collateral Agent in respect of such Liens and the Collateral.
SECTION 11. CONDEMNATION
SECTION 11.1. TAKINGS. Each Obligor, in each Mortgage to which
such entity is a party, shall irrevocably assign, or cause to be assigned, to
the Collateral Agent a security interest in and Lien on any award or payment
which may become payable to such entity by reason of any taking of a Significant
Real Estate Interest encumbered by such Mortgage or any part thereof, whether
directly or indirectly, temporarily or permanently, in or by condemnation or
other eminent domain proceedings (a "Taking"). All rights of the Collateral
Agent under this Section 11 as to any Significant Real Estate Interest are
subject to any rights in favor of holders of Permitted First Priority Liens in
such Significant Real Estate Interest and shall be enforceable to the fullest
extent not prohibited or restricted by the terms of any agreements or
instruments creating such Permitted First Priority Liens.
SECTION 11.2. APPLICATION OF AWARDS.
(a) Any awards or payments made with respect to any Taking relating
to a Significant Real Estate Interest shall be paid or distributed as provided
in this Section. If any Obligor shall receive directly any such award or
payment, promptly following the receipt thereof such Obligor shall transfer in
immediately available funds the Net Proceeds in respect of such Taking from such
award or payment to the Collateral Agent and the Collateral Agent shall
distribute such Net Proceeds in accordance with the provisions of this clause
(a). If the Collateral Agent shall receive directly any such award or payment
and no Default or Event of Default then exists, the Collateral Agent shall,
prior to making any other payment or distribution hereunder, transfer to the
Obligor whose Property was the subject of such Taking an amount in immediately
available funds equal to the difference between (A) the amount of such award or
payment so received and (B) the Net Proceeds relating thereto (as set forth in a
certificate executed by a Senior Officer and delivered to the Collateral Agent),
and thereafter the remainder of such award or payment shall be distributed as
provided below. Any and all amounts to be distributed as provided in this clause
(a) shall be distributed as follows:
(i) if the gross amount of any awards or payments with respect
to such Taking are in an amount less than $5,000,000, the Net Proceeds
thereof held by the Collateral Agent shall be immediately payable in
immediately available funds directly to such Obligor which is the subject
of such Taking upon receipt of a certificate executed by
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a Senior Officer which states that no Default or Event of Default exists
and such Obligor will use such Net Proceeds to repair or replace the
Significant Real Estate Interest which was the subject of such Taking; and
(ii) if the gross amount of any awards or payments with
respect to such Taking equals or exceeds $5,000,000, the Secured Parties
shall review with the Company, the Company's business proposal with
respect to the application of the Net Proceeds thereof held by the
Collateral Agent, which proposal the Company shall submit to the Secured
Parties at any time but no later than thirty (30) Business Days after the
date such award has been paid, and give due consideration to the merits
and rationale of such proposal recognizing the integrated nature of the
Company's manufacturing facilities and operations. Within twenty (20)
Business Days of receipt of the Company's proposal, the Requisite Parties
shall, following review thereof, determine (which determination shall be
reasonably made and not unduly delayed) whether such Net Proceeds shall be
applied as provided in such proposal. If the Company shall not have
received a reply from the Requisite Parties by the end of such twenty (20)
Business Day period, the Company shall deliver a written notice to each of
the Secured Parties requesting a determination as to such proposal and
shall give the Requisite Parties an additional five (5) Business Days
after the delivery of such second notice to deliver a written acceptance
or rejection of such proposal. If the Requisite Parties fail to advise the
Company in writing of their determination with respect to such proposal as
provided herein prior to the end of such five (5) Business Day period,
they shall be deemed to have accepted such proposal. Upon actual or deemed
acceptance of such proposal, the Collateral Agent shall promptly transfer
in immediately available funds such Net Proceeds to the relevant Obligor
and the relevant Obligor shall act diligently and good faith to apply such
Net Proceeds substantially as provided in such proposal. If such proposal
is not accepted, then the Net Proceeds shall be applied as an Offered
Repayment as set forth in Section 11.4 below.
(b) Notwithstanding anything contained herein, if any Default or
Event of Default shall have occurred and be continuing, any Net Proceeds of a
Taking, together with any other amounts held by the Collateral Agent in respect
of such Taking, shall be applied as an Offered Repayment as set forth in Section
11.4 below unless the Majority Secured Parties and the Company agree otherwise.
The Collateral Agent shall promptly and, in any case, not more than five (5)
Business Days after the receipt of any funds hereunder satisfactorily identified
to the Collateral Agent as Net Proceeds of a Taking, inform the Obligors and the
Secured Parties in writing of such receipt and the amount thereof.
SECTION 11.3. SETTLEMENT OF CONDEMNATION CLAIMS. Immediately upon
receipt by any of the Obligors of notice of the institution of any proceeding or
negotiations for a Taking, the Obligors shall give notice thereof to the
Collateral Agent. The Collateral Agent may, but shall be under no obligation to,
appear in any such proceedings and participate in any such negotiations and may
be represented by counsel. The Obligors, notwithstanding that the Collateral
Agent may not be a party to any such proceeding, will promptly give, or cause to
be given, to the Collateral Agent copies of all notices, pleadings, judgments,
determinations and other papers received by any Obligor. The Obligors will not
enter into, or permit to be entered into, any agreement permitting or consenting
to the Taking of the applicable Significant Real Estate Interest, or any
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part thereof, or providing for the conveyance thereof in lieu of condemnation,
with anyone authorized to acquire the same in condemnation or by eminent domain
which, for any award or payment, is estimated by the Collateral Agent in good
faith to exceed $5,000,000, unless the Collateral Agent, acting at the direction
of the Requisite Parties, shall first have consented thereto in writing. The
Requisite Parties agree to consider granting such consent without undue delay.
If a Default or Event of Default has occurred and is continuing, the Collateral
Agent, acting at the direction of the Requisite Parties, shall be authorized,
but shall not be obligated, to negotiate, adjust, compromise or settle any
Taking award and appear in any proceeding arising in connection with such
Taking. In connection therewith, the Obligors do hereby irrevocably authorize,
empower and appoint the Collateral Agent as attorney-in-fact for the Obligors
(which appointment is coupled with an interest) to do any and all of the
foregoing in the name and on behalf of the Obligors. The Requisite Parties agree
to act in good faith without undue delay in issuing any such written instruction
and approving any such adjustment.
SECTION 11.4. OFFERED REPAYMENT. Any Net Proceeds to be applied
as an Offered Repayment as provided in Section 11.2(a)(ii) or Section 11.2(b)
shall be offered pro rata to all Secured Parties as a prepayment as provided in
Section 11.5 below. Each such Offered Repayment shall be made in writing as soon
as practicable after the Obligors being informed, in writing, by the Collateral
Agent of their obligation to make such Offered Repayment but, in any case, not
later than ten (10) days thereafter. Each Offered Repayment shall specify the
date on which the prepayment provided therein is to be made (which shall be a
Business Day and shall not be a date more than twenty-five (25) days after the
date of the delivery of such Offered Repayment), the principal amount of the
Secured Obligations of each recipient of such Offered Repayment then being
offered to be prepaid and the amount of accrued interest to be paid thereon. To
accept or reject any Offered Repayment under this Section 11.4, in whole or in
part, any Secured Party shall cause a written notice of such acceptance or
rejection to be delivered to the Obligors not later than fifteen (15) days after
the date of receipt by such holder of such Offered Repayment (it being
understood that the failure by a holder to accept in full or in part such
Offered Repayment as provided herein prior to the end of such fifteen (15) day
period shall be deemed to constitute a rejection of said Offered Repayment, or,
if so indicated as to any Secured Party on the Schedule 14.4 or in a written
notice delivered to the Company by any Secured Party within 60 days of the date
hereof, an acceptance of such Offered Repayment). The Obligors shall inform the
Collateral Agent, in writing not less than five (5) Business Days prior to any
date fixed for effecting of the payments contemplated by any accepted Offered
Repayment under this Section 11.4, of all amounts due in respect of each of such
accepted Offered Repayments, the payment date therefor, the recipients thereof,
and the payment address and payment method required in respect of each such
recipient. Upon the receipt by the Collateral Agent of written instructions from
the Obligors (or the Requisite Parties, in the event that the Obligors fail to
give such notice within a reasonable time) directing the Collateral Agent to
effect the payment in immediately available funds of accepted Offered Repayments
from the Net Proceeds then held by the Collateral Agent, as expressly provided
in the immediately preceding sentence, the Collateral Agent shall effect the
payment of such accepted Offered Repayments as so instructed. To the extent that
any such Net Proceeds shall not have been utilized to pay or prepay Secured
Obligations as a result of one or more holders of Secured Obligations rejecting
(in whole or in part) or being deemed to have rejected their respective Offered
Repayments, upon receipt of a written demand from the Obligors (or the
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Requisite Parties, in the event that the Obligors fail to give such notice
within a reasonable time), the Collateral Agent shall pay such remaining Net
Proceeds, together with any interest accrued thereon, promptly to the Obligors.
Only upon the Collateral Agent effecting the payment in full of all of the
amounts owing in respect of the applicable accepted Offered Repayments under
this Section 11.4 will the Obligors be deemed to have discharged the payment
obligations they have under this Section 11.4 with respect to such accepted
Offered Repayments. The Obligors agree that they will instruct the Collateral
Agent to effect the payment of all related Offered Repayments to all applicable
Secured Parties simultaneously. Notwithstanding the foregoing, if, to the extent
required by the operation of any provision of any of the Credit Documents (it
being understood that the Loan Documents outstanding on the date hereof contain
no such provision), the Obligors are prohibited from making any Offered
Repayment such Offered Repayment shall be deemed to have been rejected by each
Secured Party who is a party to the Credit Document containing such prohibition.
SECTION 11.5. APPLICABLE PREPAYMENT PROVISIONS. Each accepted
Offered Repayment pursuant to Section 11.4 shall be made in accordance with, and
subject to, (a) Section 2.2(a) of each of the Note Documents (with respect to
any prepayment of the Note Principal Obligations) but without payment of any
Make-Whole Amount, (b) Section 3.6 and Section 3.4(iii)(d) of the Trade
Agreement (with respect to any prepayment of the Trade Agreement Debt) but
without payment of any prepayment or breakage fees, and (c) any one or more
similar provisions in a similar section in the Additional Future Debt Documents
(with respect to any prepayment of the Additional Future Debt), in each case, as
certified to the Collateral Agent by the Secured Party entitled to receive such
Offered Repayment. Each accepted Offered Repayment in respect of any BofA Debt
shall be deposited in the Special Cash Collateral Account as a Proceeds Deposit.
To the extent any such sections of the Loan Documents referred to in this
Section 11.5 contain notice and procedural provisions, such provisions are
hereby deemed waived to permit prepayments under this Section 11.5.
SECTION 11.6. WAIVER OF OFFERED REPAYMENT. The Majority Secured
Parties may at any time within twenty (20) days after receipt of written
notification from the Collateral Agent of its receipt of any funds arising from
a Taking, as provided for in Section 11.2(b) above, waive the obligation of the
Obligors to make Offered Repayments in respect of such award, as provided in
Section 11.2 above, by delivering a written notice of waiver in respect thereof
to the Obligors and the Collateral Agent. In such event, the Collateral Agent
shall promptly thereafter transfer in immediately available funds all such funds
held by it to the Obligor whose Property was the subject of such Taking.
SECTION 11.7. COLLATERAL AGENT EXPENSES. The Obligors shall
promptly reimburse the Collateral Agent upon demand for all of the Collateral
Agent's reasonable out-of-pocket expenses (including reasonable attorney's fees)
incurred in performing its duties under this Section 11. To the extent the
Collateral Agent has not been so reimbursed by the Obligors (or arrangements
therefor made to the satisfaction of the Collateral Agent), any disbursement to
be made by the Collateral Agent pursuant to this Section 11 shall be net of all
of the Collateral Agent's reasonable out-of-pocket expenses (including
reasonable attorney's fees) incurred in performing its duties under this
Section 11.
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SECTION 12. APPLICATION OF INSURANCE PROCEEDS
SECTION 12.1. GENERAL.
(a) Any insurance proceeds (other than Excluded Insurance Proceeds)
which are paid in respect of the damage, destruction, loss or other casualty
(each, a "CASUALTY") of the Collateral under any insurance policy required to be
maintained by any one or more of the Obligors under the provisions of any Credit
Document shall be paid or distributed as provided in this Section. If any
Obligor shall receive directly any such insurance proceeds, promptly following
the receipt thereof such Obligor shall transfer in immediately available funds
the Net Proceeds in respect of such Casualty from such insurance proceeds to the
Collateral Agent and the Collateral Agent shall distribute such Net Proceeds in
accordance with the provisions of this clause (a). If the Collateral Agent shall
receive directly any such insurance proceeds and no Default or Event of Default
then exists, the Collateral Agent shall, prior to making any other payment or
distribution hereunder, transfer to the Obligor whose Property was the subject
of such Casualty an amount in immediately available funds equal to the
difference between (A) the amount of such insurance proceeds so received and (B)
the Net Proceeds relating thereto (as set forth in a certificate executed by a
Senior Officer and delivered to the Collateral Agent), and thereafter the
remainder of such insurance proceeds shall be distributed as provided below. Any
and all amounts to be distributed as provided in this clause (a) shall be
distributed as follows:
(i) if the insurance proceeds with respect to such Casualty
are in an aggregate amount less than $5,000,000 in respect of any single
occurrence, the Net Proceeds thereof held by the Collateral Agent shall be
immediately payable in immediately available funds directly to the
applicable Obligor which is the primary insured on such policy (the
"INSURED") upon receipt of a certificate executed by a Senior Officer
which states that no Default or Event of Default then exists and such
Obligor will use such Net Proceeds to repair or replace the Collateral
which was the subject of such Casualty which gave rise to such Net
Proceeds; and
(ii) if the insurance proceeds with respect to such Casualty
equal or exceed $5,000,000 in respect of any single occurrence, the
Secured Parties shall review with the Company, the Company's business
proposal with respect to the application of the Net Proceeds thereof held
by the Collateral Agent, which proposal the Company shall submit to the
Secured Parties within thirty (30) Business Days of the date of the
occurrence of the Casualty, and give due consideration to the merits and
rationale of such proposal recognizing the integrated nature of the
Company's facilities and operations. Within twenty (20) Business Days of
receipt of the Company's proposal, the Requisite Parties shall, following
review thereof, determine (which determination shall be reasonably made
and not unduly delayed) whether such Net Proceeds shall be applied as
provided in such proposal. If the Company shall not have received a reply
from the Requisite Parties by the end of such twenty (20) Business Day
period, the Company shall deliver a written notice to each of the Secured
Parties requesting a determination as to such proposal and shall give the
Requisite Parties an additional five (5) Business Days after the delivery
of such second notice to deliver a written acceptance or rejection of such
proposal. If the Requisite Parties fail to advise the Company in writing
of their
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determination with respect to such proposal as provided herein prior to
the end of such five (5) Business Day period, they shall be deemed to have
accepted such proposal. Upon actual or deemed acceptance of such proposal,
the Collateral Agent shall hold such Net Proceeds for disbursement in
accordance with Section 12.3 and the Insured shall act diligently and in
good faith to apply such Net Proceeds substantially as provided in such
proposal. If such proposal is not accepted, then the Net Proceeds shall be
applied as a Offered Repayment as set forth in Section 12.2 below.
(b) Notwithstanding anything contained herein, if any Default or
Event of Default shall have occurred and be continuing, any Net Proceeds of any
such Casualty with respect to the Collateral, together with any other amounts
held by the Collateral Agent in respect of such Casualty, shall be applied as an
Offered Repayment as set forth in Section 12.2 below unless the Majority Secured
Parties and the Company agree otherwise. The Collateral Agent shall promptly
and, in any case, not more than five (5) Business Days after the receipt of any
funds hereunder satisfactorily identified to the Collateral Agent as amounts to
be applied as an Offered Repayment, inform the Obligors and the Secured Parties
in writing of such receipt and the amount thereof.
SECTION 12.2. OFFERED REPAYMENT. Any Net Proceeds to be applied
as an Offered Repayment as provided in Section 12.1(a)(ii) or Section 12.1(b)
shall be offered pro rata to all Secured Parties as a prepayment as provided
below. Each such Offered Repayment shall be made in writing as soon as
practicable after each of the Obligors being informed, in writing, by the
Collateral Agent of their obligation to make such Offered Repayment but, in any
case, not later than ten (10) days thereafter. Each Offered Repayment shall
specify the date on which the prepayment provided therein is to be made (which
shall be a Business Day and shall not be a date more than thirty-five (35) days
after the date of the delivery of such Offered Repayment), the principal amount
of the Secured Obligations of the recipient of such Offered Repayment then being
offered to be prepaid and the amount of accrued interest to be paid thereon. To
accept or reject any Offered Repayment under this Section 12.2, in whole or in
part, any Secured Party shall cause a written notice of such acceptance or
rejection to be delivered to the Obligors not later than fifteen (15) days after
the date of receipt by such holder of such Offered Repayment, provided that, if
(a) the Obligors shall have not received a reply from a holder of such
applicable Secured Obligations by the end of such fifteen (15) day period or (b)
any such holder shall have rejected such Offered Repayment, the Obligors shall
deliver a second written notice (which shall include a description of whether
other holders of such Secured Obligations have accepted or rejected such Offered
Repayment) in respect of the relevant Offered Repayment to each such holder
described in clause (a) or (b) above and shall give each such holder an
additional ten (10) days after the delivery of such second notice to deliver a
written acceptance or rejection of such Offered Repayment (it being understood
that the failure by a holder to accept (in full or in part) such Offered
Repayment as provided herein prior to the end of the aforesaid ten (10) day
period shall be deemed to constitute a rejection of said Offered Repayment, or,
if so indicated as to any Secured Party on Schedule 14.4 or in a written notice
delivered to the Company by any Secured Party within 60 days of the date hereof,
an acceptance of such Offered Repayment). The Obligors shall inform the
Collateral Agent, in writing not less than five (5) Business Days prior to any
date fixed for the effecting of the payments contemplated by any accepted
Offered Repayment under this Section 12.2, of all amounts due in respect of each
of such accepted Offered Repayments, the payment date
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therefor, the recipients thereof, and the payment address and payment method
required in respect of each such recipient. Upon the receipt by the Collateral
Agent of written instructions from the Obligors (or the Requisite Secured
Parties, in the event that the Obligors fail to give such notice within a
reasonable time) directing the Collateral Agent to effect the payment in
immediately available funds of accepted Offered Repayments from the Net Proceeds
then held by the Collateral Agent, as expressly provided in the immediately
preceding sentence, the Collateral Agent shall effect the payment of such
accepted Offered Repayments as so instructed. To the extent that any such Net
Proceeds shall not have been utilized to pay or prepay Secured Obligations as a
result of one or more holders of Secured Obligations rejecting (in whole or in
part) or being deemed to have rejected their respective Offered Repayments, upon
receipt of a written demand from the Obligors (or the Requisite Parties, in the
event that the Obligors fail to give such notice within a reasonable time), the
Collateral Agent shall pay such remaining Net Proceeds, together with any
interest accrued thereon, promptly to the Obligors. Each accepted Offered
Repayment in respect of any BofA Debt shall be deposited in the Special Cash
Collateral Account as a Proceeds Deposit and each other accepted Offered
Repayment pursuant to this Section 12.2 shall be made in accordance with (a)
Section 2.2(a) of each of the Note Agreements (with respect to any prepayment of
the Note Principal Obligations) but without payment of Make-Whole Amount, (b)
Section 3.6 and Section 3.4(iii)(d) of the Trade Agreement (with respect to any
prepayment of the Trade Agreement Debt) but without payment of any prepayment or
breakage fees, and (c) any one or more similar provisions in the Additional
Future Debt Documents (with respect to any prepayments of Additional Future
Debt), in each case, as certified to the Collateral Agent by the Secured Party
to whom such Offered Repayment is due. To the extent any such sections of the
Loan Documents referred to in this Section 12.2 contain notice or other
procedural provisions, such provisions are hereby seemed waived to permit
prepayments under this Section 12.2. Only upon the Collateral Agent effecting
the payment in full of all of the amounts owing in respect of the applicable
accepted Offered Repayments under this Section 12.2 will the Obligors be deemed
to have discharged the payment obligations they have under this Section 12.2
with respect to such accepted Offered Repayments. The Obligors agree that they
will instruct such Collateral Agent to effect the payment of all related Offered
Repayments to all applicable Secured Parties simultaneously. Notwithstanding the
foregoing, if, to the extent required by the operation of any provision of any
Credit Documents (it being understood that the Loan Documents outstanding on the
date hereof contain no such provision), the Obligors are prohibited from making
any Offered Repayment under such Credit Document, such Offered Repayment shall
be deemed to have been rejected by the each Secured Party who is a party to the
Credit Document containing such prohibition.
SECTION 12.3. REMNANT INSURANCE PROCEEDS. With respect to any
proposal accepted or deemed accepted in accordance with Section 12.1(a)(ii)
whereby the Insured is entitled to be paid and use such Net Proceeds, such Net
Proceeds shall be held by the Collateral Agent for distribution in accordance
with this Section 12.3. Upon receipt of a written demand from the Insured and a
certificate certifying that no Default or Event of Default has occurred and is
continuing, the Collateral Agent shall promptly pay any Net Proceeds in
immediately available funds to the Insured to pay the costs of implementing the
Company's proposal in accordance with Section 12.1(a)(ii). Should the Net
Proceeds, if any, be insufficient to pay the entire cost of the work outlined in
such proposal, the Insured shall pay the deficiency or the entire cost as the
case may be. On the completion of all work and payment in full therefor and upon
receipt by the Collateral Agent of evidence to its
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satisfaction that such work has been completed and paid for in full and that any
property purchased, repaired, reconstructed and restored in the course of such
work is subject to the applicable Liens under the Security Documents (subject to
any Permitted First Priority Liens), any Net Proceeds not yet disbursed to the
Insured as above provided and in the possession or under the control of the
Collateral Agent or the Secured Parties shall be remitted to the Insured.
Notwithstanding anything in this Section 12.3 to the contrary, if no Default or
Event of Default shall have occurred and be continuing, to the extent that such
Net Proceeds shall not have been utilized to pay or prepay the applicable
Secured Obligations as provided herein, the Insured may, in its discretion,
elect not to implement its proposal in connection with such Net Proceeds and, in
such event, upon notice thereof to the Secured Parties and the Collateral Agent,
shall pay any amounts they are entitled to receive under this Section 12.3 to
the Secured Parties as an Offered Repayment of the Secured Obligations as
provided in Section 12.2. The Insured will be deemed to have so elected if it
shall not have commenced implementation of such proposal within sixty (60) days
of such Net Proceeds having become available to it for such purposes.
SECTION 12.4. NOTICE OF CASUALTY; ADJUSTING LOSS. In the event
all or any part of a Significant Real Estate Interest shall suffer a Casualty,
the Obligors will promptly give written notice thereof to the insurance carrier
and the Collateral Agent, and shall promptly provide to the Collateral Agent
such reasonable information concerning such Casualty as the Collateral Agent may
request. So long as no Default or Event of Default shall then exist, the
Obligors shall be authorized to make proof of loss and to negotiate, adjust,
compromise and settle all insurance claims and demands with respect to any such
Casualty; provided, however, that the Obligors may not adjust any claim for any
Casualty which is estimated by the Collateral Agent in good faith to exceed
$5,000,000 unless the Collateral Agent at the Collateral Agent's request, acting
at the direction of the Requisite Parties, shall have joined in such adjustment
without undue delay. If (a) there has been no adjustment of any such Casualty
within six (6) months from the date of occurrence thereof as a result of the
failure of any Obligor to diligently prosecute the applicable insurance claim or
(b) if a Default or an Event of Default has occurred and is continuing, the
Collateral Agent, acting at the direction of the Requisite Parties, shall be
authorized, but shall not be obligated, to make such proof of loss with respect
to any such Casualty and to negotiate, adjust, compromise or settle all
insurance claims and demands in respect thereof and prosecute any action arising
in connection therewith. In connection therewith, the Obligors do hereby
irrevocably authorize, empower and appoint the Collateral Agent as
attorneys-in-fact for the Obligors (which appointment is coupled with an
interest) to do any and all of the foregoing in the name and on behalf of the
Obligors. The Requisite Parties agree to act in good faith without undue delay
in issuing any such written instruction and approving any such adjustment.
SECTION 12.5. REIMBURSEMENT OF COLLATERAL AGENT'S EXPENSES. The
Obligors shall promptly reimburse the Collateral Agent upon demand for all of
the Collateral Agent's reasonable out-of-pocket expenses (including reasonable
attorney's fees) incurred in performing its duties under this Section 12. To the
extent the Collateral Agent has not been so reimbursed by the Obligors (or
arrangements therefor made to the satisfaction of the Collateral Agent), any
disbursement to be made by the Collateral Agent pursuant to this Section 12
shall be net of all of the Collateral Agent's reasonable out-of-pocket expenses
(including reasonable attorney's fees) incurred in performing its duties under
this Section 12.
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SECTION 13. PROCEEDS FROM SALE OF ASSETS.
SECTION 13.1. GENERAL. Notwithstanding anything in this Section
13 to the contrary, any Obligor shall be entitled and permitted to undertake any
Asset Disposition in accordance with the terms and conditions of all of the Loan
Documents. If any Obligor intends to undertake an Asset Disposition and if all
of the Loan Documents permit the Obligor to use the proceeds of such Asset
Disposition for any purpose other than the repayment or prepayment of any
Secured Obligation, then such Obligor shall include in its Asset Disposition
Certificate required to be delivered to the Collateral Agent and the Secured
Parties in accordance with Section 14.6: (i) the purpose for which the Obligor
intends to use the proceeds, (ii) the specific provisions of any covenant under
any of the Loan Documents which restrict transfer of assets and which permit
such Asset Disposition and (iii) a statement that the proceeds will be used for
such stated purpose.
SECTION 13.2. NET PROCEEDS FROM AN ASSET DISPOSITION. To the
extent any Obligor is required or is permitted and elects to prepay the Secured
Obligations with Net Proceeds from any Asset Disposition, such Net Proceeds
shall be paid in immediately available funds to the Collateral Agent. The
Collateral Agent shall promptly and, in any case, not more than five (5)
Business Days after the receipt of any such Net Proceeds satisfactorily
identified to the Collateral Agent as Net Proceeds of an Asset Disposition,
inform the Obligors and the Secured Parties in writing of such receipt and the
amount thereof. All Net Proceeds so paid to the Collateral Agent from such Asset
Disposition shall be applied as an Offered Repayment in accordance with the
requirements of Section 13.3.
SECTION 13.3. OFFERED REPAYMENT. With respect to the Net Proceeds
received by the Collateral Agent as a result of any Asset Disposition, the
Obligors shall, subject to Section 13.4 below, extend an Offered Repayment pro
rata to each of the holders of Secured Obligations if such Net Proceeds arise
out of the sale, transfer of other disposition of any Collateral. Each such
Offered Repayment shall be made in writing as soon as practical after the
Obligors being informed, in writing, by the Collateral Agent of its receipt of
any such Net Proceeds but, in any case, not later than ten (10) days thereafter.
Each Offered Repayment shall specify the date on which the prepayment provided
therein is to be made (which shall be a Business Day and shall not be a date
more than twenty-five (25) days after the date of the delivery of such Offered
Repayment), the principal amount of the applicable Secured Obligations of the
recipient of such Offered Repayment then being offered to be prepaid, the amount
of accrued interest to be paid thereon and the estimated Make-Whole Amount due
in respect of such prepayment as provided under the terms of the Note Documents.
To accept or reject any Offered Repayment under this Section 13.3, in whole or
in part, any Secured Party shall cause a written notice of such acceptance or
rejection to be delivered to the Obligors not later than fifteen (15) days after
the date of receipt by such holder of such Offered Repayment (it being
understood that the failure by a holder to accept in full or in part such
Offered Repayment as provided herein prior to the end of such fifteen (15) day
period shall be deemed to constitute a rejection of said Offered Repayment, or,
if so indicated as to any Secured Party on Schedule 14.4 or in a written notice
delivered to the Company by any Secured Party within 60 days of the date hereof,
an acceptance of such Offered Repayment). The Obligors shall inform the
Collateral Agent, in writing not less than five (5) Business Days prior to any
date fixed for the effecting of the payments contemplated by any
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accepted Offered Repayment under this Section 13.3, of all amounts due in
respect of each of such accepted Offered Repayments, the payment date therefor,
the recipients thereof, and the payment address and payment method required in
respect of each such recipient. Upon the receipt by the Collateral Agent of
written instructions from each of the Obligors (or the Requisite Parties in the
event that the Obligors fail to give such notice within a reasonable time)
directing the Collateral Agent to effect the payment in immediately available
funds of accepted Offered Repayments from the Net Proceeds then held by the
Collateral Agent, as expressly provided in the immediately preceding sentence,
the Collateral Agent shall effect the payment of such accepted Offered
Repayments as so instructed. To the extent that any such Net Proceeds shall not
have been utilized to pay or prepay the applicable Secured Obligations as a
result of one or more holders of such Secured Obligations rejecting (in whole or
in part) or being deemed to have rejected their respective Offered Repayments in
respect of such Net Proceeds and upon receipt of a written demand from the
Obligors (or the Requisite Parties in the event that the Obligors fail to give
such notice within a reasonable time), the Collateral Agent shall pay such Net
Proceeds promptly to the Obligors. Each accepted Offered Repayment of the BofA
Debt shall be deposited in the Special Cash Collateral account as a Proceeds
Deposit and each other accepted Offered Repayment pursuant to this Section 13.3
shall be made in accordance with (a) Section 2.2(a) of each of the Note
Agreements (with respect to any prepayment of the Note Debt), (b) Section 3.6
and Section 3.4(iii)(d) of the Trade Agreement (with respect to any prepayment
of the Trade Agreement Debt), and (c) any one or more similar provisions in the
Additional Future Debt Documents (with respect to any prepayments of Additional
Future Debt)), in each case, as certified to the Collateral Agent by the Secured
Party to whom such payment is due. To the extent any such sections referred to
in this Section 13.3 contain notice or other procedural provisions such
provisions are hereby deemed waived to permit prepayments under this Section
13.3. Only upon the Collateral Agent's effecting of the payment in full of all
of the amounts owing in respect of the applicable accepted Offered Repayments
under this Section 13.3 will the Obligors be deemed to have discharged the
payment obligations it has under this Section 13.3 with respect to such accepted
Offered Repayments. The Obligors agree that they will instruct the Collateral
Agent to effect the payment of all related Offered Repayments to all applicable
Secured Parties simultaneously. Notwithstanding the foregoing, if, to the extent
required by the operation of any provision of any Loan Documents (it being
understood that the Loan Documents outstanding on the date hereof have no such
provision), the Obligors are prohibited from making any Offered Repayment under
such Loan Document, such Offered Repayment shall be deemed to have been rejected
by the Secured Party whose Loan Document contained the prohibition. Any amounts
held by the Collateral Agent after giving effect to all such rejected Offered
Repayments shall be released to the Obligors upon receipt of a certificate of a
Senior Officer delivered to the Collateral Agent and each of the Secured Parties
which states that (i) no Default or Event of Default then exists and (ii) such
amounts so paid to the Obligors will be used to acquire productive assets within
180 days of their receipt of such funds or applied to the prepayment of Secured
Obligations within five (5) Business Days of receipt of such funds by the
Obligors.
SECTION 13.4. COLLATERAL AGENT EXPENSES. The Obligors shall
promptly reimburse the Collateral Agent upon demand for all of the Collateral
Agent's reasonable out-of-pocket expenses (including reasonable attorney's fees)
incurred in performing its duties under this Section 13. To the extent the
Collateral Agent has not been so reimbursed by the Obligors (or arrangements
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therefor made to the satisfaction of the Collateral Agent), any disbursement to
be made by the Collateral Agent pursuant to this Section 13 shall be net of all
of the Collateral Agent's reasonable out-of-pocket expenses (including
reasonable attorney's fees) incurred in performing its duties under this
Section 13.
SECTION 14. MISCELLANEOUS.
SECTION 14.1. FURTHER ASSURANCES, ETC. BofA, each Note Holder,
Northern and each holder of Additional Future Debt and, by countersigning this
Agreement, the Company and each Guarantor, agrees to execute and deliver such
other documents and instruments, in form and substance reasonably satisfactory
to the Collateral Agent (upon instructions from the Requisite Parties), and
shall take such other action, in each case as the Collateral Agent (upon
instructions from the Requisite Parties) may reasonably request (at the sole
cost and expense of the Company which, by countersigning this Agreement, agrees
to pay such costs and expenses), to effectuate and carry out the provisions of
this Agreement including, without limitation, by recording or filing in such
places as the requesting party may reasonably deem desirable, this Agreement or
such other documents or instruments.
SECTION 14.2. NO INDIVIDUAL ACTION; MARSHALING; ETC. No holder of
any Secured Obligations may require the Collateral Agent to take or refrain from
taking any action hereunder or under any of the Security Documents or with
respect to any of the Collateral except as and to the extent expressly set forth
in this Agreement. The Collateral Agent shall have no duty to, and the Company
and each Guarantor hereby waives any and all right to require the Collateral
Agent to, marshal any assets or otherwise to take any actions with respect to
marshaling.
SECTION 14.3. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding on and inure to the benefit of
the Collateral Agent, BofA, each of the Note Holders, Northern and each of the
holders of Additional Future Debt who shall have executed and delivered a
Joinder Agreement and their respective successors and assigns and shall be
binding on the Company and each Guarantor and their respective successors and
permitted assigns. Each of the Note Holders, BofA, Northern and each holder of
Additional Future Debt agrees that the provisions of this Agreement apply
regardless of any sale, transfer, pledge, assignment, hypothecation or other
disposition by such Note Holder, BofA, Northern or such holder of Additional
Future Debt of any Note or of any instrument or right evidencing BofA Debt,
Trade Agreement Debt or Additional Future Debt to any Person. Each Secured Party
agrees that it shall not sell, transfer, assign or otherwise dispose of any
interest in any Secured Obligation unless the buyer, transferee or assignee
assumes in writing the obligations of such Secured Party under this Agreement;
provided, however, that the foregoing shall not prohibit BofA, any Note Holder,
Northern or any holder of Additional Future Debt from pledging or otherwise
granting a security interest in any Secured Obligation so long as the pledgee or
other secured party, as a condition to its retaining or further transferring
such Secured Obligation by way of enforcement of such pledge or other security
interest, assumes or causes its transferee to assume in writing the obligations
of such Note Holder, BofA, Northern or such holder of Additional Future Debt
under this Agreement.
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(b) No Secured Party may sell any Secured Obligation or any interest
therein to any Affiliate of the Company (other than a sale which constitutes a
payment under a Guaranty after an Event of Default), or accept any payment of a
Secured Obligation from an Affiliate of the Company (other than payments under a
Guaranty after an Event of Default), without the consent of the Majority Secured
Parties.
SECTION 14.4. NOTICES. All notices and other communications made
or required to be given pursuant to this Agreement or the Security Documents
shall be in writing and shall be delivered in hand, mailed by United States
registered or certified first class mail, postage prepaid, sent by overnight
courier or sent by telecopy, confirmed by delivery via courier or postal
service, addressed as set forth on Schedule 14.4 hereto or to such other address
or addresses as any such party shall specify by notice given to the other
parties. Any such notice and other communications shall be deemed to have been
duly given or made and to have become effective (i) if delivered by hand,
overnight courier or facsimile, at the time of the receipt thereof, and (ii) if
sent by registered or certified first class mail postage prepaid, on the fourth
(4th) Business Day following the mailing thereof; provided, however, that a
Notice of Actionable Default or any other notice to be delivered to the
Collateral Agent pursuant to the terms of this Agreement shall not be deemed to
have been received by a Responsible Officer of the Collateral Agent until the
Collateral Agent actually receives such notice.
SECTION 14.5. TERMINATION; FULL RELEASE OF COLLATERAL.
(a) The Liens created by the Security Documents, including the Liens
of the Collateral Agent, shall terminate and all right, title and interest in
the Collateral shall revert to the Company and its successors and assigns upon
payment in full in cash of all amounts owed to the Collateral Agent pursuant to
Section 5.5 and Section 5.7 and the satisfaction of each of the following four
conditions:
(i) receipt by the Collateral Agent from Northern of notice
stating that either:
(A) the Trade Agreement Debt has been paid in full, in
cash, and all commitments under the Trade Agreement have terminated,
been canceled or been reduced to zero; or
(B) the Trade Agreement Debt no longer constitutes a
Secured Obligation under the Security Documents; or
(C) the Company has entered into an Acceptable Revolving
Credit Facility to replace a Receivables Purchase Agreement and the
Company's unsecured debt obligations are Investment Grade; and
(ii) receipt by the Collateral Agent from each of the Note
Holders of notice that either:
(A) the Note Debt held by such Note Holders has been
paid in full, in cash, in accordance with the Note Agreements; or
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(B) the Note Debt held by such Note Holders no longer
constitutes a Secured Obligation under the Security Documents; or
(C) the Company has entered into an Acceptable Revolving
Credit Facility to replace a Receivables Purchase Agreement and the
Company's unsecured debt obligations are Investment Grade; and
(iii) receipt by the Collateral Agent from BofA of notice
stating that:
(A) BofA Debt due to it has been paid in full, in cash,
and it has no Undrawn LC/Guaranty Exposure; or
(B) BofA Debt due to it no longer constitutes a Secured
Obligation under the Security Documents; or
(C) the Company has entered into an Acceptable Revolving
Credit Facility to replace a Receivables Purchase Agreement and the
Company's unsecured debt obligations are Investment Grade; and
(iv) receipt by the Collateral Agent from each of the holders
of Additional Future Debt that either:
(A) the Additional Future Debt held by such holder or
holders has been paid in full, in cash, in accordance with the
Additional Future Debt Documents; or
(B) the Additional Future Debt held by such holder or
holders no longer constitutes a Secured Obligation under the
Security Documents; or
(C) the Company has entered into an Acceptable Revolving
Credit Facility to replace a Receivables Purchase Agreement and the
Company's unsecured debt obligations are Investment Grade; and
The Secured Parties agree to provide the notices contemplated by Section
14.5(a)(i), Section 14.5(a)(ii), Section 14.5(a)(iii) and Section 14.5(a)(iv),
under the circumstances provided in such Sections for such notices to be capable
of being given, promptly upon the Company's request.
(b) Upon the termination of the Collateral Agent's Liens and the
release of the Collateral in accordance with subsection (a) of this Section
14.5, the Collateral Agent will promptly, at the Company's written request and
expense, (i) execute and deliver to the Company such documents as the Company
shall reasonably request and to provide evidence of the termination of such
security interest, or the release of the Collateral and (ii) deliver or cause to
be delivered to the Company all property of the Company constituting Collateral
then held by Collateral Agent or any agent thereof.
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(c) This Agreement shall terminate automatically when the Liens
granted under the Security Documents have terminated and the Collateral has been
released to the Company by the Collateral Agent as provided in the foregoing
provisions of this Section 14.5.
(d) If, at any time, any payment made or value received with respect
to any Secured Obligation must be returned by the Secured Party receiving the
same upon the insolvency, bankruptcy or reorganization of the Company or any
Guarantor, or otherwise, with the effect as though such payment had not been
made or value received, the Liens in the Collateral created by the Security
Documents in favor of the Collateral Agent and the rights of the Collateral
Agent to act as agent hereunder and to receive amounts pursuant to this
Agreement shall be reinstated to the extent those rights had previously been
terminated. In such event each Secured Party agrees that it will pay to the
other Secured Parties such amounts so that, after giving effect to the payments
hereunder by all Secured Parties, the amounts received by all Secured Parties
are not in excess of the amounts to be paid to them hereunder as though any
payment so returned had not been made.
(e) Notwithstanding the foregoing, Section 5.5, Section 5.6 and
Section 5.7 of this Agreement shall survive, and remain operative and in full
force and effect, regardless of the termination of this Agreement.
SECTION 14.6. PARTIAL RELEASE OF COLLATERAL.
(a) In connection with any Obligor's consummation of an Asset
Disposition in compliance with the provisions of this Agreement, the Liens of
the Collateral Agent in the Asset Disposition Collateral in respect of such
Asset Disposition shall be released and all right, title and interest therein
shall revert to such Obligor and its successors and assigns upon satisfaction of
the following conditions:
(i) if such Asset Disposition is not an Approved Asset
Disposition and if the net book value of such Asset Disposition
Collateral, together with the aggregate net book value of all other Asset
Disposition Collateral which was the subject of an Asset Disposition
(other than an Approved Asset Disposition) in the then current calendar
year, is $5,000,000 or less, the Collateral Agent shall, at such Obligor's
request and expense, release all of its Liens with respect to such Asset
Disposition Collateral as soon as reasonably possible (but no later than
the consummation of such Asset Disposition) provided that the Company
shall have delivered to the Collateral Agent and to each holder of Secured
Obligations an Asset Disposition Certificate in respect of such Asset
Disposition at least twenty (20) days prior to the consummation of such
Asset Disposition; or
(ii) if such Asset Disposition is not an Approved Asset
Disposition and if the net book value of such Asset Disposition
Collateral, together with the aggregate net book value of all other Asset
Disposition Collateral which was the subject of an Asset Disposition
(other than an Approved Asset Disposition) in the then current calendar
year, is more than $5,000,000, the Collateral Agent shall, at the
Company's request and expense, release all of its Liens with respect to
such Asset Disposition Collateral no later
-49-
than the consummation of such Asset Disposition; provided that (a) the
Company shall have delivered to the Collateral Agent and to each holder of
Secured Obligations an Asset Disposition Certificate in respect of such
Asset Disposition at least thirty (30) days prior to the proposed
consummation date of such Asset Disposition, and (b) the Requisite Parties
do not instruct the Collateral Agent to not release the Asset Disposition
Collateral within such thirty (30) day period; or
(iii) if such Asset Disposition is an Approved Asset
Disposition approved by the Requisite Parties as provided in the
definition thereof, then the Collateral Agent shall, at the Company's
request and expense, release all of its Liens with respect to the Asset
Disposition Collateral which is the subject of such Approved Asset
Disposition no later than the consummation of such Asset Disposition.
In each such instance, upon satisfaction of the foregoing conditions, the
Collateral Agent will promptly, at the Company's written request and expense;
(i) execute and deliver to the Company such documents as the Company shall
reasonably request and provide to evidence the release of its Lien in such Asset
Disposition Collateral and (ii) deliver or cause to be delivered to the
Obligors, all Property of the Obligors constituting such Asset Disposition
Collateral then held by the Collateral Agent or any agent thereof so long as, in
each such case, the Collateral Agent obtains a perfected security interest in
Collateral received as proceeds of such Asset Disposition, and it shall have
received an opinion of nationally recognized independent outside counsel to such
effect if such Collateral is real estate or property in which a security
interest is perfected by means other than the filing of a financing statement.
(b) Whether or not instructed by the Secured Parties, the Collateral
Agent may release any Collateral and may provide any release, termination
statement or instrument of subordination required by order of a court of
competent jurisdiction.
(c) To the extent that the Loan Documents of any party permit any
Disposition to which such party's consent is required pursuant to this Section
14.6, such party agrees to provide that consent promptly following a written
request by the Company. But nothing in this Section 14.6 shall (i) be deemed to
imply any waiver of any restriction on Dispositions under the Reimbursement
Agreements, the Note Documents, the Trade Agreement, the Additional Debt
Documents or any other Loan Document, or (ii) without the prior written consent
of the Requisite Parties, authorize the Collateral Agent in any bankruptcy case
to enter into any agreement for, or give any authorization or consent with
respect to, the post-petition usage of Collateral.
Notwithstanding anything to the contrary in this Agreement (including
Section 14.11) or in any Security Document, nothing in this Agreement or in any
Security Document shall or shall be construed as waiving, modifying or otherwise
altering any obligation of any Secured Party to release any Collateral from the
Lien of any Security Document upon the terms and conditions contained in any
Loan Document.
SECTION.14.7. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS (WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS PRINCIPLES).
-50-
SECTION 14.8. SEVERABILITY. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provision.
SECTION 14.9. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument.
SECTION 14.10. SECTION HEADINGS. The section headings used herein
are for convenience of reference only and are not to affect the construction of
or be taken into consideration in interpreting this Agreement.
SECTION 14.11. COMPLETE AGREEMENT. This Agreement constitutes the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes and all other prior representations, negotiations,
writings, memoranda and agreements except as provided below. Except as expressly
provided herein, to the extent any provision of this Agreement supplements,
modifies or conflicts with any provision of the Trade Agreement, any
Reimbursement Agreement, any IRB Bond Guaranty, any Note Agreement or any other
Credit Document, the provisions of this Agreement shall be controlling. Nothing
in this Agreement, expressed or implied, is intended to confer upon any person
other than the parties hereto any rights or remedies under or by reason of this
Agreement.
SECTION 14.12. ADDITIONAL FUTURE DEBT. At the request of the
Company, holders of additional unsecured indebtedness of the Company incurred in
compliance with the terms of the Loan Documents may from time to time after the
date of this Agreement become parties hereto by executing and delivering a
Joinder Agreement to this Agreement in substantially the form attached as
Exhibit A hereto. Each of the undersigned agrees that, effective from and after
the date of the execution and delivery by the Company, each Guarantor and any
holder of such additional indebtedness of a Joinder Agreement, such holder shall
be, and shall be deemed for all purposes to be, a party hereto with the same
force and effect, and subject to the same agreements, representations,
covenants, guarantees, indemnities, liabilities and obligations, as if such
holder were, effective as of such date, an original signatory to this Agreement.
[SIGNATURES FOLLOW ON NEXT PAGE]
IN WITNESS WHEREOF, the Collateral Agent Bank, the Collateral Agent,
the Note Holders, BofA, Northern, the Company and each of the Guarantors have
caused this Collateral Agency and Intercreditor Agreement to be duly executed by
their duly authorized officers, all as of the day and year first above written.
U.S. BANK NATIONAL ASSOCIATION, IN ITS
INDIVIDUAL CAPACITY AND IN ITS CAPACITY
AS COLLATERAL AGENT, AS APPLICABLE
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Assistant Vice President
[Signature Page to Collateral Agency and Intercreditor Agreement]
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
[Signature Page to Collateral Agency and Intercreditor Agreement]
THE NORTHERN TRUST COMPANY
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
[Signature Page to Collateral Agency and Intercreditor Agreement]
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Authorized Signatory
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
[Signature Page to Collateral Agency and Intercreditor Agreement]
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
[Signature Page to Collateral Agency and Intercreditor Agreement]
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Its Authorized
Representative
[Signature Page to Collateral Agency and Intercreditor Agreement]
MUTUAL OF OMAHA LIFE INSURANCE
COMPANY
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Title: First Vice President
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Title: First Vice President
[Signature Page to Collateral Agency and Intercreditor Agreement]
NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Credit Officer
Fixed Income Securities
[Signature Page to Collateral Agency and Intercreditor Agreement]
ACCEPTED AND AGREED TO:
A. M. CASTLE & CO.
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
DATAMET, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
KEYSTONE TUBE COMPANY, LLC
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
TOTAL PLASTICS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
PARAMONT MACHINE COMPANY, LLC
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
[Signature Page to Collateral Agency and Intercreditor Agreement]
ADVANCED FABRICATING TECHNOLOGY, LLC
By: /s/ Xxxxx X. Xxxxx
----------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
XXXXXX STEEL PLATE CO.
By: /s/ Xxxxx X. Xxxxx
----------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
METAL MART, LLC
By: /s/ Xxxxx X. Xxxxx
----------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
[Signature Page to Collateral Agency and Intercreditor Agreement]
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of March 20, 2003, among A. M. Castle & Co.,
a Maryland Corporation (the "COMPANY") and the entities set forth on Schedule A
hereto (collectively, the "OTHER SECURING PARTIES", and together with the
Company, collectively, the "OBLIGORS, each individually, an "OBLIGOR") and U.S.
Bank National Association, as collateral agent (hereinafter, in such capacity,
the "COLLATERAL AGENT") pursuant to, and for the benefit of the Secured Parties
(as defined herein) which are or may become parties to, a Collateral Agency and
Intercreditor Agreement dated as of even date herewith (as amended and in effect
from time to time, the "INTERCREDITOR AGREEMENT"), among the Obligors, the
Collateral Agent and the Secured Parties.
WHEREAS, the Company has previously entered into various financing
arrangements with the Secured Parties; and
WHEREAS, each Obligor wishes to grant a security interest in favor of the
Collateral Agent, for the benefit of the Secured Parties, as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. All capitalized terms used herein without definitions
and that are defined in the Intercreditor Agreement shall have the respective
meanings provided therefor in the Intercreditor Agreement. The term "STATE", as
used herein, means the State of Illinois. Terms used herein and not defined
herein or in the Intercreditor Agreement that are defined in the Uniform
Commercial Code of the State and used herein shall have the same definitions
herein as specified therein from time to time. However, if a term is defined in
Article 9 of the Uniform Commercial Code of the State differently than in
another Article of the Uniform Commercial Code of the State, the term has the
meaning specified in Article 9. As used in this Agreement, the following terms
have the respective meanings set forth below or provided for in the section or
other part of this Agreement referred to immediately following such term:
BAILMENT THRESHOLD PROPERTY - means (a) property with an aggregate cost of
$50,000 or more if such property is in the possession of any individual trade
vendor of any Obligor and, (b) property in the possession of any individual
customer of any Obligor if such property has a cost of $800,000 or more or (c)
property in the possession of one or more customers of any Obligor to the extent
that the aggregate cost of all such property in the possession of all such
customers is in excess of $3,000,000 (but only such excess property).
JOINT VENTURE RIGHTS - means any Obligor's right or obligation to buy or
sell shares of capital stock or other similar equity or ownership interest in a
Person
pursuant to the terms and conditions of such Person's constitutive documents or
other similar agreements related to the formation of such Person, agreements or
arrangements with the other holders of capital stock or other similar equity or
ownership interests in such Person (other than the Company or any wholly-owned
Subsidiary of the Company) or other similar agreements.
REVOLVING LOAN FACILITY - means a loan agreement or similar facility
pursuant to which a lender or lenders provides revolving loans to the Company or
any Subsidiary for the primary purpose of financing such Person's ongoing
business operations, whether such agreement or facility is secured or unsecured.
SECURITIZATION TRANSACTIONS - means one or more transactions involving the
transfer by the Company or any of its Subsidiaries of Receivables and Related
Security including, without limitation, the sale or granting of a Lien in such
Receivables and Related Security, (not including a Revolving Loan Facility) to
an SPV as a contribution to the capital of such SPV or for consideration in the
form of cash or advances under a subordinated note due from such SPV, provided
such transactions are entered into in good faith to provide working capital to
the Company and its Subsidiaries, and provided further that the aggregate
outstanding amount of the obligations incurred under all such transactions by
all such Persons that would be characterized as principal if such transaction or
transactions were structured as a secured lending facility rather than as
purchase transaction or transactions does not exceed $65,000,000 in the
aggregate at any one time outstanding, and provided, further that the aggregate
amount of Receivables and Related Security sold, pledged or otherwise
transferred to the SPV does not exceed $90,000,000 in the aggregate at any one
time outstanding.
SPV - means an entity in which the Company or any of its Subsidiaries owns
an equity interest and a substantial economic interest created and maintained
for the sole purpose of purchasing, or otherwise acquiring, interests in
Receivables and Related Security from any Obligor.
2. GRANT OF SECURITY INTEREST. Each Obligor hereby grants to the
Collateral Agent, for the benefit of the Secured Parties, to secure the payment
and performance in full of all of the Secured Obligations, a security interest
in and pledges and assigns to the Collateral Agent, for the benefit of the
Secured Parties, the following properties, assets and rights of such Obligor,
wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof (all of the same being hereinafter called the
"COLLATERAL"): all personal and fixture property of every kind and nature
including without limitation all goods (including inventory, equipment and any
accessions thereto), instruments (including promissory notes), documents,
accounts (including health-care-insurance receivables), chattel paper (whether
tangible or electronic), deposit accounts, letters of credit, letter-of-credit
rights (whether or not the letter of credit is evidenced by a writing),
commercial tort claims, money, oil, gas or other minerals before extraction,
2
securities and all other investment property, supporting obligations, any other
contract rights or rights to the payment of money, insurance claims and
proceeds, and all general intangibles (including all payment intangibles), in
each case, other than Excluded Collateral. The Collateral Agent acknowledges
that the attachment of its security interest in any commercial tort claim of any
Obligor as original collateral is subject to such Obligor's compliance with
Section 4.8.
3. AUTHORIZATION TO FILE FINANCING STATEMENTS. Each Obligor hereby
irrevocably authorizes the Collateral Agent at any time and from time to time to
file in any filing office in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as all assets of such Obligor or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Uniform Commercial Code of the State or
such jurisdiction, but specifically excluding Excluded Collateral, or (ii) as
being of an equal or lesser scope or with greater detail, and (b) provide any
other information required by part 5 of Article 9 of the Uniform Commercial Code
of the State or such other jurisdiction for the sufficiency or filing office
acceptance of any financing statement or amendment, including (i) whether such
Obligor is an organization, the type of organization and any organizational
identification number issued to such Obligor and, (ii) in the case of a
financing statement filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Each Obligor agrees to furnish any
such information to the Collateral Agent promptly upon request. Each Obligor
also ratifies its authorization for the Collateral Agent to have filed in any
Uniform Commercial Code jurisdiction any like initial financing statements or
amendments thereto if filed prior to the date hereof.
4. OTHER ACTIONS. Further to insure the attachment and perfection of,
and the ability of the Collateral Agent to enforce, the Collateral Agent's
security interest in the Collateral (but in each instance subject to Permitted
First Priority Liens, each Obligor agrees, in each case at such Obligor's
expense, to take the following actions with respect to the following Collateral
and without limitation on such Obligor's other obligations contained in this
Agreement:
4.1. PROMISSORY NOTES AND TANGIBLE CHATTEL PAPER. If any Obligor
shall, now or at any time hereafter, hold or acquire any promissory notes
or tangible chattel paper not constituting Excluded Collateral in excess
of $3,000,000 in the aggregate, such Obligor shall forthwith endorse,
assign and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time specify; provided, however, that
any such promissory note or tangible chattel paper shall be released and
returned to the Obligors (a) pursuant to the conditions set forth in
Sections 14.5 or 14.6 of the Intercreditor Agreement or (b) at such time
that the obligations
3
evidenced by such promissory note or tangible chattel paper have
terminated or have been satisfied and the Obligors shall have certified in
writing to the Collateral Agent that such termination or satisfaction has
occurred.
4.2. DEPOSIT ACCOUNTS. For each deposit account that any Obligor,
now or at any time hereafter, opens or maintains (other than accounts (i)
opened or maintained in connection with Securitization Transactions or
(ii) which do not include proceeds of Collateral or funds generated from
the sale of products or services by any Obligor), such Obligor shall, at
the Collateral Agent's request and option, pursuant to an agreement in
form and substance satisfactory to the Collateral Agent, use its
reasonable best efforts to cause the depositary bank to agree to comply
without further consent of such Obligor, at any time following the
occurrence and during the continuance of an Event of Default with
instructions from the Collateral Agent to such depositary bank directing
the disposition of funds from time to time credited to such deposit
account. The Collateral Agent agrees with the Obligors that the Collateral
Agent shall not give any such instructions or withhold any withdrawal
rights from the Obligors, unless an Event of Default has occurred and is
continuing, or, would occur if effect were given to any withdrawal not
otherwise permitted by each of the Credit Documents. The provisions of
this paragraph shall not apply to (i) a deposit account for which the
Collateral Agent is the depositary bank and is in automatic control, and
(ii) any deposit accounts specially and exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the
benefit of any Obligor's salaried employees.
4.3. INVESTMENT PROPERTY. If any Obligor shall, now or at any time
hereafter, hold or acquire any one or more certificated securities not
evidencing or constituting Excluded Collateral with a fair market value in
excess of $100,000, in the aggregate for all such certificated securities,
such Obligor shall forthwith endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time to
time specify. If any securities (not evidencing or constituting Excluded
Collateral) now or hereafter acquired by such Obligor are uncertificated
and are issued to such Obligor or its nominee directly by the issuer
thereof, the Company shall immediately notify the Collateral Agent thereof
and, at the Collateral Agent's request and option, pursuant to an
agreement in form and substance satisfactory to the Collateral Agent, use
its reasonable efforts to cause the issuer to agree to comply without
further consent of such Obligor or such nominee, at any time following the
occurrence and during the continuance of an Event of Default with
instructions from the Collateral Agent as to such securities. If any
securities, whether certificated or uncertificated, or other investment
property now or hereafter acquired by any Obligor (not evidencing or
constituting Excluded Collateral) are held by any Obligor or its
4
nominee through a securities intermediary or commodity intermediary, such
Obligor shall immediately notify the Collateral Agent thereof and, at the
Collateral Agent's request and option, pursuant to an agreement in form
and substance satisfactory to the Collateral Agent, use its reasonable
efforts to cause such securities intermediary or (as the case may be)
commodity intermediary to agree to comply, in each case without further
consent of such Obligor or such nominee, at any time with entitlement
orders or other instructions from the Collateral Agent, subject to the
provisions of this Section 4.3 noted below, to such securities
intermediary as to such securities or other investment property, or (as
the case may be) to apply any value distributed on account of any
commodity contract as directed by the Collateral Agent to such commodity
intermediary, subject to the provisions of this Section 4.3 noted below.
The Collateral Agent agrees with the Obligors that the Collateral Agent
shall not give any such entitlement orders or instructions or directions
to any such issuer, securities intermediary or commodity intermediary, and
shall not withhold its consent to the exercise of any withdrawal or
dealing rights by the Obligors, unless an Event of Default has occurred
and is continuing or would occur, after giving effect to any such
investment and withdrawal rights not otherwise permitted by each of the
Credit Documents. The provisions of this paragraph shall not apply to any
financial assets credited to a securities account for which the Collateral
Agent is the securities intermediary.
4.4. PLEDGED INTEREST; LIMITATION ON ACTIONS. The parties hereto
acknowledge that Castle SPFD, LLC, a Delaware limited liability company
(the "Receivables Seller"), has entered into a structured receivables
purchase transaction with General Electric Capital Corporation, as
purchaser and agent (the "RECEIVABLES AGENT") pursuant to that certain
Receivables Purchase and Servicing Agreement, dated as of December 26,
2002 among the Receivables Agent, the Receivables Seller, Castle IND MGR,
Inc., a Delaware corporation, as independent Member, the Company, as
master servicer, Total Plastics, Inc., a Michigan corporation, as
servicer, and Xxxxxx Steel Plate Co., a Delaware corporation, as servicer
(as amended, restated or otherwise modified from time to time, the
"PURCHASE AGREEMENT"), pursuant to which the Receivables Agent has agreed
to purchase interests in the Receivables and Related Security (as defined
therein). To induce the Receivables Agent to permit the pledge of the
membership interest of the Receivables Seller (the "PLEDGED COLLATERAL"),
the parties hereto agree to the following limitations. Capitalized terms
used in this Section 4.4 and not otherwise defined herein shall have the
meanings ascribed thereto in the A/R Intercreditor Agreement.
(a) Anything herein or in the Credit Documents to the
contrary notwithstanding, so long as the Receivables Seller has any
assets that are Receivables Assets:
5
(i) Until the date on which the Purchaser Interest and
all other amounts owed under the Related Documents have been
paid in full in cash in accordance with the terms of the
Related Documents, the Collateral Agent, for itself and as
agent for the Secured Parties, agrees that, upon exercising
its rights with respect to the Pledged Collateral, it will not
exercise any rights to vote the Pledged Collateral or
otherwise control the actions and operations of the
Receivables Seller with respect to any matters, except (i) to
vote in favor of a prepayment or termination of the Purchase
Agreement in accordance with its terms and (ii) to vote in
favor of receiving payment of money or other distribution,
and, until the Purchaser Interest and all other amounts owed
under the Related Documents have been paid in full in cash as
described above, the Collateral Agent's rights will be limited
to receiving payments of money and other distributions on the
Pledged Collateral which, pursuant to the terms of the Related
Documents, are allowed to be distributed on account of the
Pledged Collateral. Without limiting the foregoing, the
Collateral Agent shall not vote the Pledged Collateral or
otherwise exercise control over the Receivables Seller so as
to cause the Receivables Seller: (A) to violate or breach any
term or provision in any Related Documents, (B) to make
payments of money or other distributions on such Pledged
Collateral except as described above, (C) to amend or alter
any of the Receivables Seller's organizational documents, or
(D) to incur any debt other than as expressly permitted under
the Related Documents; and
(ii) The provisions of this Section 4.4 shall continue
to be effective or be reinstated, as the case may be, if at
any time any payment of the Purchaser Interest or any other
amounts owed under the Related Documents is rescinded or must
otherwise be returned by the Receivables Agent or the
Purchaser upon the insolvency, bankruptcy or reorganization of
the Receivables Seller or otherwise, all as though such
payment had not been made.
(b) The Receivables Agent shall be a third-party beneficiary
with respect to this Section 4.4.
(c) So long as the Purchaser Interest and all other amounts
owed under the Related Documents have not been paid in full in cash
in accordance with the terms of the Related Documents, this Section
4.4 shall not be amended, modified or supplemented without the prior
written consent of the Receivables Agent, which consent shall be at
the
6
sole discretion of the Receivables Agent, and the provisions of this
Section 4.4 shall be contained in any agreement that amends and
restates this Security Agreement. The Collateral Agent and the
Secured Parties agree that no such party shall enter into any
additional agreement that would adversely affect the rights of the
Receivables Agent as provided hereunder.
4.5. COLLATERAL IN THE POSSESSION OF A BAILEE. If any Collateral
constituting Bailment Threshold Property is, now or at any time hereafter,
in the possession of a bailee, the Obligors shall promptly notify the
Collateral Agent thereof and, at the Collateral Agent's request and
option, shall use its reasonable efforts to promptly obtain an
acknowledgement from the bailee, in form and substance satisfactory to the
Collateral Agent, that the bailee holds such Collateral for the benefit of
the Collateral Agent and such bailee's agreement to comply, without
further consent of the Obligors, at any time with instructions of the
Collateral Agent as to such Collateral. The Collateral Agent agrees with
each Obligor that the Collateral Agent shall not give any such
instructions unless an Event of Default has occurred and is continuing or
would occur after taking into account any action by the Obligors with
respect to the bailee.
7
4.6. ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS. If any
Obligor, now or at any time hereafter, holds or acquires an interest in
any electronic chattel paper or any "transferable record," as that term is
defined in Section 201 of the federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction, in each case,
not constituting Excluded Collateral, such Obligor shall promptly notify
the Collateral Agent thereof and, at the request and option of the
Collateral Agent, shall take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control, under Section
9-105 of the Uniform Commercial Code, of such electronic chattel paper or
control under Section 201 of the federal Electronic Signatures in Global
and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction,
of such transferable record. The Collateral Agent agrees with each of the
Obligors that the Collateral Agent will arrange, pursuant to procedures
satisfactory to the Collateral Agent and so long as such procedures will
not result in the Collateral Agent's loss of control, for the Obligors to
make alterations to the electronic chattel paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201 of
the federal Electronic Signatures in Global and National Commerce Act or
Section 16 of the Uniform Electronic Transactions Act for a party in
control to make without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any
action by any Obligor with respect to such electronic chattel paper or
transferable record.
4.7. LETTER-OF-CREDIT RIGHTS. If any Obligor is, now or at any time
hereafter, a beneficiary under a letter of credit in a face amount in
excess of $500,000, such Obligor shall promptly notify the Collateral
Agent thereof and, at the request and option of the Collateral Agent, such
Obligor shall, pursuant to an agreement in form and substance satisfactory
to the Collateral Agent, use its reasonable efforts to either (a) arrange
for the issuer and any confirmer of such letter of credit to consent to a
collateral assignment to the Collateral Agent of the proceeds of the
letter of credit or (b) arrange for the Collateral Agent to become the
transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of the letter of credit are to
be applied as provided in the Intercreditor Agreement.
4.8. COMMERCIAL TORT CLAIMS. If any Obligor shall, now or at any
time hereafter, hold or acquire a commercial tort claim in an amount in
excess of $500,000, such Obligor shall immediately notify the Collateral
Agent in a writing signed by such Obligor of the particulars thereof and
grant to the Collateral Agent, for the benefit of the Secured Parties and
the Collateral Agent, in such writing a security interest therein and in
the
8
proceeds thereof, all upon the terms of this Agreement, with such writing
to be in form and substance satisfactory to the Collateral Agent.
4.9. OTHER ACTIONS AS TO ANY AND ALL COLLATERAL. Each Obligor
further agrees, upon the request of the Collateral Agent and at the
Collateral Agent's option, to take any and all other actions as the
Collateral Agent may reasonably determine to be necessary or useful for
the attachment, and perfection of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interest in any and all of the
Collateral, including, without limitation, (a) executing, delivering and,
where appropriate, filing financing statements and amendments relating
thereto under the Uniform Commercial Code, to the extent, if any, that any
Obligor's signature thereon is required therefor, (b) causing the
Collateral Agent's name to be noted as secured party on any certificate of
title for a titled good with a book value in excess of $50,000 if such
notation is a condition to attachment, perfection of, or ability of the
Collateral Agent to enforce, the Collateral Agent's security interest in
such Collateral, (c) complying with any provision of any statute,
regulation or treaty of the United States as to any Collateral if
compliance with such provision is a condition to attachment, perfection,
or ability of the Collateral Agent to enforce, the Collateral Agent's
security interest in such Collateral, (d) using commercially reasonable
efforts to obtain governmental and other third party waivers, consents and
approvals, in form and substance reasonably satisfactory to the Collateral
Agent, including, without limitation, any consent of any licensor, lessor
or other person obligated on Collateral, and (e) taking all actions under
any earlier versions of the Uniform Commercial Code or under any other
law, as reasonably determined by the Collateral Agent to be applicable in
any relevant Uniform Commercial Code or other jurisdiction, including any
foreign jurisdiction.
5. RELATION TO OTHER SECURITY DOCUMENTS. The provisions of this
Agreement supplement the provisions of any real estate mortgage or deed of trust
granted by the Company to the Collateral Agent, for the benefit of the Secured
Parties and the Collateral Agent, and which secures the payment or performance
of any of the Obligations. Nothing contained in any such real estate mortgage or
deed of trust shall derogate from any of the rights or remedies of the
Collateral Agent or any of the Secured Parties hereunder. In addition to the
provisions of this Agreement being so read and construed with any such mortgage
or deed of trust, the provisions of this Agreement shall be read and construed
with the other Security Documents referred to below in the manner so indicated.
5.1. STOCK PLEDGE AGREEMENT. Concurrently herewith the Company is
executing and delivering to the Collateral Agent, for the benefit of the
Secured Parties, a stock pledge agreement pursuant to which the Company is
pledging to the Collateral Agent all of the shares of the capital stock of
the Company's subsidiary or subsidiaries which are Guarantors. Such
pledge(s)
9
shall be governed by the terms of such stock pledge agreement(s) and not
by the terms of this Agreement.
5.2. CONTROL AGREEMENT. Within 60 days from the date hereof, some
or all of the Obligors will execute and deliver to the Collateral Agent,
for the benefit of the Secured Parties, a control agreement pursuant to
which each Obligor will pledge to the Collateral Agent all of its
respective interests in its deposit accounts other than such accounts
excluded from the operation of Section 4.2 above. Such pledge shall be
governed by the terms of such control agreement and not by the terms of
this Agreement.
5.3. TRADEMARK COLLATERAL AND SECURITY AGREEMENT. Concurrently
herewith the Company and Total Plastics, Inc. will execute and deliver to
the Collateral Agent, for the benefit of the Secured Parties, a trademark
collateral and security agreement pursuant to which each such Obligor will
pledge to the Collateral Agent all of its rights and interests in any
trademarks in which such Obligor has an interest. Such pledge shall be
governed by the terms of such trademark and collateral and security
agreement and not by the terms of this Agreement, other than Section 2
hereof.
6. REPRESENTATIONS AND WARRANTIES CONCERNING OBLIGORS' LEGAL STATUS.
The Obligors have previously delivered to the Collateral Agent a certificate
signed by each Obligor and entitled "Perfection Certificate" (the "PERFECTION
CERTIFICATE"). Each Obligor represents and warrants to the Secured Parties and
the Collateral Agent as of the date hereof as follows: (a) each Obligor's exact
legal name is that indicated on the Perfection Certificate and on the signature
page hereof, (b) each Obligor is an organization of the type, and is organized
in the jurisdiction, set forth in the Perfection Certificate, (c) the Perfection
Certificate accurately sets forth each Obligor's organizational identification
number or accurately states that each Obligor has none, (d) the Perfection
Certificate accurately sets forth each Obligor's place of business or, if more
than one, its chief executive office, as well as its mailing address, if
different, (e) all other information set forth on the Perfection Certificate
pertaining to each Obligor is accurate and complete in all material respects,
and (f) there has been no change in any of such information since the date on
which the Perfection Certificate was signed by each Obligor.
7. COVENANTS CONCERNING OBLIGOR'S LEGAL STATUS. Each Obligor covenants
with the Secured Parties and the Collateral Agent as follows: (a) without
providing written notice to the Collateral Agent not later than 30 days after
any change referred to below, no Obligor will change its name, its place of
business or, if more than one, chief executive office, or its mailing address or
organizational identification number if it has one, (b) if any Obligor does not
have an organizational identification number and later obtains one, such Obligor
will
10
forthwith notify the Collateral Agent of such organizational identification
number, and (c) such Obligor will not change its type of organization,
jurisdiction of organization or other legal structure unless such change is
otherwise not prohibited by each of the Credit Documents and the Collateral
Agent shall have received written notice of such change not later than 30 days
after any such change.
8. REPRESENTATIONS AND WARRANTIES CONCERNING COLLATERAL, ETC. Each
Obligor further represents and warrants to the Secured Parties and the
Collateral Agent as of the date hereof as follows: (a) each Obligor is the owner
of the Collateral, free from any right or claim of any Person or any Lien,
except for the security interest created by this Agreement and permitted by each
of the Loan Documents, (b) none of the Collateral constitutes, or is the
proceeds of, "farm products" as defined in Section 9-102(a)(34) of the Uniform
Commercial Code of the State, (c) the none of the Obligors holds any commercial
tort claims except as indicated on the Perfection Certificate, (d) each Obligor
has at all times operated its business in compliance with all applicable
provisions of the federal Fair Labor Standards Act, as amended, and with all
applicable provisions of federal, state and local statutes and ordinances
dealing with the control, shipment, storage or disposal of hazardous materials
or substances to the extent that any failure to so operate could result in or
cause to occur a material adverse impairment to the Collateral or the Lien
created hereby, (e) all other information set forth on the Perfection
Certificate pertaining to the Collateral is accurate and complete in all
material respects, and (f) there has been no change in any of such information
since the date on which the Perfection Certificate was signed by the Obligors.
9. COVENANTS CONCERNING COLLATERAL, ETC. Each Obligor further covenants
with the Secured Parties and the Collateral Agent as follows: (a) (except as
permitted by clause (h) and except for Collateral not constituting Bailment
Threshold Property), the Collateral, to the extent not delivered to the
Collateral Agent pursuant to Section 4, will be kept at those locations listed
on the Perfection Certificate and none of the Obligors will remove the
Collateral from such locations, without providing at least 30 days prior written
notice to the Collateral Agent, (b) except for the security interest herein
granted and Liens permitted by each of the Credit Documents or the Intercreditor
Agreement, one or more of the Obligors shall be the owner of the Collateral free
from any right or claim of any other Person (other than Joint Venture Rights) or
any Lien, and each of the Obligors shall defend the same against all claims and
demands of all Persons at any time claiming the same or any interests therein
adverse to the Collateral Agent or any of the Secured Parties, (c) no Obligor
shall pledge, mortgage or create, or suffer to exist any right of any Person in
or claim by any Person to the Collateral, or any Lien in the Collateral in favor
of any Person, other than the Collateral Agent except for Liens permitted by
each of the Credit Documents and the Intercreditor Agreement, (d) each of the
Obligors will keep the Collateral in good order and repair and will not use the
same in violation of law (to the extent that any failure to so operate could
result in or cause to occur a material adverse impairment to the Collateral or
the Lien created
11
hereby) and will comply, in all material respects, with the terms of any policy
of insurance thereon, (e) each of the Obligors will permit the Collateral Agent,
or its designee, to inspect the Collateral in its possession at any reasonable
time and to take all reasonable steps to permit the same with respect to any
Collateral in the possession of Persons other than the Obligors, (f) each of the
Obligors will pay promptly when due all taxes, assessments, governmental charges
and levies upon the Collateral or incurred in connection with the use or
operation of the Collateral or incurred in connection with this Agreement other
than those in dispute by appropriate procedures, (g) each Obligor will continue
to operate, its business in compliance with all applicable provisions of the
federal Fair Labor Standards Act, as amended, and with all applicable provisions
of federal, state and local statutes and ordinances dealing with the control,
shipment, storage or disposal of hazardous materials or substances to the extent
that any failure to so operate could result in or cause to occur a material
adverse impairment to the Collateral or the Lien created hereby, and (h) none of
the Obligors will sell or otherwise dispose, or offer to sell or otherwise
dispose, of the Collateral or any interest therein except for sales of inventory
in the ordinary course of business and, so long as no Default or Event of
Default then exists, sales or other dispositions as otherwise permitted by each
of the Credit Documents. Each of the Secured Parties agrees to instruct the
Collateral Agent to release its security interest in the Collateral in
connection with any such sale or disposition pursuant to the terms of the
Intercreditor Agreement.
10. INSURANCE.
10.1. MAINTENANCE OF INSURANCE. Each Obligor will maintain with
financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall
be in accordance with general practices of businesses engaged in similar
activities in similar geographic areas. Such insurance shall be in such
minimum amounts that no Obligor will be deemed a co-insurer under
applicable insurance laws, regulations and policies and otherwise shall be
in such amounts, contain such terms, be in such forms and be for such
periods as may be reasonably satisfactory to the Collateral Agent. All
proceeds of insurance shall be paid and distributed in accordance with the
terms of the Intercreditor Agreement. Without limiting the foregoing, each
Obligor will, in accordance with prudent and reasonable business
standards, (a) keep all of its physical property insured with casualty or
physical hazard insurance on an "all risks" basis, with broad form flood
and earthquake coverages and electronic data processing coverage, (b)
maintain all such workers' compensation or similar insurance as may be
required by law and (c) maintain, in amounts equal to those generally
maintained by businesses engaged in similar activities in similar
geographic areas: (i) general public liability insurance against claims of
bodily injury, death or property damage occurring, on, in or about the
properties of each Obligor; (ii) business interruption insurance; and
(iii) product liability insurance.
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10.2. INSURANCE PROCEEDS. The proceeds of any casualty insurance in
respect of any casualty loss of any of the Collateral shall be paid and
disbursed in accordance with the terms of the Intercreditor Agreement.
10.3. CONTINUATION OF INSURANCE. All policies of insurance shall
provide for at least 30 days prior written cancellation notice to the
Collateral Agent. In the event of failure by any Obligor to provide and
maintain insurance as herein provided, the Collateral Agent may, at its
option, provide such insurance and charge the amount thereof to any one or
more of the Obligors. Each Obligor shall furnish the Collateral Agent with
certificates of insurance and policies evidencing compliance with the
foregoing insurance provision.
11. COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
11.1. EXPENSES INCURRED BY COLLATERAL AGENT. In the Collateral
Agent's discretion at any time following the occurrence and during the
continuance of an Event of Default, if any Obligor fails to do so, the
Collateral Agent may discharge taxes and other encumbrances at any time
levied or placed on any of the Collateral, maintain any of the Collateral,
make repairs thereto and pay any necessary filing fees or insurance
premiums. Each Obligor agrees to reimburse the Collateral Agent on demand
for all expenditures so made. The Collateral Agent shall have no
obligation to any Obligor to make any such expenditures, nor shall the
making thereof be construed as a waiver or cure of any Default or Event of
Default.
11.2. COLLATERAL AGENT'S OBLIGATIONS AND DUTIES. Anything herein to
the contrary notwithstanding, each Obligor shall remain obligated and
liable under each contract or agreement comprised in the Collateral to be
observed or performed by such Obligor thereunder. Neither the Collateral
Agent nor any Secured Party shall have any obligation or liability under
any such contract or agreement by reason of or arising out of this
Agreement or the receipt by the Collateral Agent or any Secured Party of
any payment relating to any of the Collateral, nor shall the Collateral
Agent or any Secured Party be obligated in any manner to perform any of
the obligations of any Obligor under or pursuant to any such contract or
agreement, to make inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent or any Secured Party in respect of the
Collateral or as to the sufficiency of any performance by any party under
any such contract or agreement, 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 the Collateral Agent or to which the
Collateral Agent or any Secured Party may be entitled at any time or
times. The Collateral Agent's sole duty with respect to the custody, safe
keeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the Uniform Commercial
13
Code of the State or otherwise, shall be to deal with such Collateral in
the same manner as the Collateral Agent deals with similar property for
its own account.
12. SECURITIES AND DEPOSITS. The Collateral Agent may at any time
following and during the continuance of an Event of Default, at its option,
transfer to itself or any nominee any securities constituting Collateral,
receive any income thereon and hold such income as additional Collateral or
apply it to the Obligations pursuant to the terms of the Intercreditor
Agreement. Whether or not any Obligations are due, the Collateral Agent may
following and during the continuance of an Event of Default demand, xxx for,
collect, or make any settlement or compromise which it deems desirable with
respect to the Collateral.
13. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER PERSONS OBLIGATED ON
COLLATERAL. If an Event of Default shall have occurred and be continuing, each
of the Obligors shall, at the request and option of the Collateral Agent, notify
account debtors with respect to the Collateral and other Persons obligated on
any of the Collateral of the security interest of the Collateral Agent in any
account, chattel paper, general intangible, instrument or other Collateral and
that payment thereof is to be made directly to the Collateral Agent or to any
financial institution designated by the Collateral Agent as the Collateral
Agent's agent therefor, and the Collateral Agent may itself, if an Event of
Default shall have occurred and be continuing, without notice to or demand upon
any Obligor, so notify account debtors and other Persons obligated on
Collateral. After the making of such a request or the giving of any such
notification, the Obligors shall hold any proceeds of collection of accounts,
chattel paper, general intangibles, instruments and other Collateral received by
any Obligor as trustee for the Collateral Agent, for the benefit of the Secured
Parties and the Collateral Agent, without commingling the same with other funds
of any one or more of the Obligors and shall turn the same over to the
Collateral Agent in the identical form received, together with any necessary
endorsements or assignments. The Collateral Agent shall apply the proceeds of
collection of accounts, chattel paper, general intangibles, instruments and
other Collateral received by the Collateral Agent to the Secured Obligations as
contemplated by the Intercreditor Agreement.
14. POWER OF ATTORNEY.
14.1. APPOINTMENT AND POWERS OF COLLATERAL AGENT. Each Obligor
hereby irrevocably constitutes and appoints the Collateral Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorneys-in-fact with full irrevocable power and authority in the
place and stead of each such Obligor or in the Collateral Agent's own
name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments that may be necessary or useful to accomplish the purposes of
this Agreement
14
and, without limiting the generality of the foregoing, hereby gives said
attorneys the power and right, on behalf of such Obligor, without notice to or
assent by any such Obligor, to do the following:
(a) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise dispose of or deal with any of the Collateral in
such manner as is consistent with the Uniform Commercial Code of the State
and as fully and completely as though the Collateral Agent were the
absolute owner thereof for all purposes, and to do, at the Obligors'
expense, at any time, or from time to time, all acts and things which the
Collateral Agent deems necessary or useful to protect, preserve or realize
upon the Collateral and the Collateral Agent's security interest therein,
in order to effect the intent of this Agreement, all no less fully and
effectively as such Obligor might do, including, without limitation, (i)
the filing and prosecuting of registration and transfer applications with
the appropriate federal, state or local agencies or authorities with
respect to trademarks, copyrights and patentable inventions and processes,
(ii) upon written notice to such Obligor, the exercise of voting rights
with respect to voting securities, which rights may be exercised, if the
Collateral Agent so elects, with a view to causing the liquidation of
assets of the issuer of any such securities and (iii) the execution,
delivery and recording, in connection with any sale or other disposition
of any Collateral, of the endorsements, assignments or other instruments
of conveyance or transfer with respect to such Collateral; and
(b) to the extent that such Obligor's authorization given in
Section 3 is not sufficient, to file such financing statements with
respect hereto, with or without such Obligor's signature, or a photocopy
of this Agreement in substitution for a financing statement, as the
Collateral Agent may deem appropriate and to execute in such Obligor's
name such financing statements and amendments thereto and continuation
statements which may require the signature of such Obligor.
14.2. RATIFICATION BY THE OBLIGORS. To the extent permitted by law, each
Obligor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.
14.3. NO DUTY ON COLLATERAL AGENT. The powers conferred on the Collateral
Agent hereunder are solely to protect the interests of the Collateral Agent and
the Secured Parties in the Collateral and shall not impose any duty upon the
Collateral Agent to exercise any such powers. The
15
Collateral Agent shall be accountable only for the amounts that it
actually receives as a result of the exercise of such powers, and neither
it nor any of its officers, directors, employees or agents shall be
responsible to any Obligor or to the Secured Parties for any act or
failure to act, except for the Collateral Agent's own gross negligence or
willful misconduct.
15. RIGHTS AND REMEDIES. If an Event of Default shall have occurred and
be continuing, subject to the terms and conditions of the Intercreditor
Agreement, the Collateral Agent, without any other notice to or demand upon any
Obligor, shall have in any jurisdiction in which enforcement hereof is sought,
in addition to all other rights and remedies, the rights and remedies of a
secured party under the Uniform Commercial Code of the State and any additional
rights and remedies as may be provided to a secured party in any jurisdiction in
which Collateral is located, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Collateral Agent may, so
far as any one or more of the Obligors can give authority therefor, enter upon
any premises on which the Collateral may be situated and remove the same
therefrom. The Collateral Agent may in its discretion require each Obligor to
assemble all or any part of the Collateral at such location or locations within
the jurisdiction(s) of such Obligor's principal office(s) or at such other
locations as the Collateral Agent may reasonably designate. Unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Collateral Agent shall give to
the Obligors at least ten (10) days prior written notice to it of the time and
place of any public sale of Collateral or of the time after which any private
sale or any other intended disposition is to be made. Each Obligor hereby
acknowledges that ten (10) days prior written notice of such sale or sales shall
be reasonable notice. In addition, to the fullest extent permitted by applicable
law, each Obligor waives any and all rights that it may have to a judicial
hearing in advance of the enforcement of any of the Collateral Agent's rights
and remedies hereunder, including, without limitation, its right following and
during the continuance of an Event of Default to take immediate possession of
the Collateral and to exercise its rights and remedies with respect thereto.
16. STANDARDS FOR EXERCISING RIGHTS AND REMEDIES. To the extent that
applicable law imposes duties on the Collateral Agent to exercise remedies in a
commercially reasonable manner, each Obligor acknowledges and agrees that it is
not commercially unreasonable for the Collateral Agent (a) to fail to incur
expenses reasonably deemed significant by the Collateral Agent to prepare
Collateral for disposition or otherwise to fail to complete raw material or work
in process into finished goods or other finished products for disposition, (b)
to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
fail to remove Liens on or any adverse claims against Collateral, (d)
16
to exercise collection remedies against account debtors and other Persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (e) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (f) to contact other Persons, whether or
not in the same business as any of the Obligors, for expressions of interest in
acquiring all or any portion of the Collateral, (g) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (h) to dispose of Collateral by
utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (i) to dispose of assets in
wholesale rather than retail markets, (j) to disclaim disposition warranties,
(k) to purchase insurance or credit enhancements to insure the Collateral Agent
against risks of loss, collection or disposition of Collateral or to provide to
the Collateral Agent a guaranteed return from the collection or disposition of
Collateral, or (l) to the extent deemed appropriate by the Collateral Agent, to
obtain the services of brokers, investment bankers, consultants and other
professionals to assist the Collateral Agent in the collection or disposition of
any of the Collateral. Each Obligor acknowledges that the purpose of this
Section 16 is to provide non-exhaustive indications of what actions or omissions
by the Collateral Agent would fulfill the Collateral Agent's duties under the
Uniform Commercial Code of the State or any other relevant jurisdiction in the
Collateral Agent's exercise of remedies against the Collateral and that other
actions or omissions by the Collateral Agent shall not be deemed to fail to
fulfill such duties solely on account of not being indicated in this Section 16.
Without limitation upon the foregoing, nothing contained in this Section 16
shall be construed to grant any rights to any Obligor or to impose any duties on
the Collateral Agent that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this Section 16.
17. NO WAIVER BY COLLATERAL AGENT, ETC. The Collateral Agent shall not
be deemed to have waived any of its rights and remedies in respect of the
Obligations or the Collateral unless such waiver shall be in writing and signed
by the Collateral Agent. No delay or omission on the part of the Collateral
Agent in exercising any right or remedy shall operate as a waiver of such right
or remedy or any other right or remedy. A waiver on any one occasion shall not
be construed as a bar to or waiver of any right or remedy on any future
occasion. All rights and remedies of the Collateral Agent with respect to the
Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times as the
Collateral Agent deems expedient.
18. SURETYSHIP WAIVERS BY THE OBLIGORS. Each Obligor waives demand,
notice, protest, notice of acceptance of this Agreement, notice of loans made,
credit extended, Collateral received or delivered or other action taken in
reliance hereon and all other demands and notices of any description. With
respect to both the
17
Obligations and the Collateral, each Obligor assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or Person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Collateral Agent may deem advisable. The Collateral
Agent shall have no duty as to the collection or protection of the Collateral or
any income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in Section 11.2. Each Obligor further waives any and all other
suretyship defenses.
19. MARSHALLING. Neither the Collateral Agent nor any Secured Party
shall be required to marshal any present or future collateral security
(including but not limited to the Collateral) for, or other assurances of
payment of, the Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order, and all of the
rights and remedies of the Collateral Agent or any Secured Party hereunder and
of the Collateral Agent or any Secured Party in respect of such collateral
security and other assurances of payment shall be cumulative and in addition to
all other rights and remedies, however existing or arising. To the extent that
it lawfully may, each Obligor hereby agrees that it will not invoke any law
relating to the marshalling of collateral which might cause delay in or impede
the enforcement of the Collateral Agent's rights and remedies under this
Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, the Company hereby irrevocably waives the
benefits of all such laws.
20. PROCEEDS OF DISPOSITIONS; EXPENSES. Each Obligor shall pay to the
Collateral Agent on demand any and all expenses, including reasonable attorneys'
fees and disbursements, incurred or paid by the Collateral Agent in protecting,
preserving or enforcing the Collateral Agent's rights and remedies under or in
respect of any of the Obligations or any of the Collateral. After deducting all
of said expenses, the residue of any proceeds of collection or sale or other
disposition of Collateral shall, to the extent actually received in cash, be
applied to the payment of the Obligations in such order or preference as is
provided in the Intercreditor Agreement. Upon the final payment and satisfaction
in full of all of the Obligations and after making any payments required by
Sections 9-608(a)(1)(C) or 9-615(a)(3) of the Uniform Commercial Code of the
State, any excess shall be returned to the Obligors. In the absence of final
payment and satisfaction in full of all of the Obligations, each of the Obligors
shall remain liable for any deficiency.
21. OVERDUE AMOUNTS. Until paid, all amounts due and payable by any one
or more of the Obligors hereunder shall (a) be a debt secured by the Collateral
18
and (b) bear, whether before or after judgment, interest at the highest rate of
interest provided for overdue payments in any of the Credit Documents commencing
30 days after any such Obligor's receipt of a written notice that such amounts
are due and owing. For the avoidance of doubt, all principal, interest and other
amounts due under any Credit Document shall bear interest, and default interest,
as provided in such Credit Agreement.
22. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE. Each
Obligor agrees that any action or claim arising out of any dispute in connection
with this Agreement, any rights or obligations hereunder or the performance or
enforcement of such rights or obligations may be brought in the courts of the
State or any federal court sitting therein and consents to the non-exclusive
jurisdiction of such court and to service of process in any such suit being made
upon any Obligor by mail at the address specified in Section 14.4 of the
Intercreditor Agreement. Each Obligor hereby waives any objection that it may
now or hereafter have to the venue of any such suit or any such court or that
such suit is brought in an inconvenient court.
23. WAIVER OF JURY TRIAL. EACH OBLIGOR, EACH SECURED PARTY AND THE
COLLATERAL AGENT WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS
OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OR ENFORCEMENT OF ANY SUCH RIGHTS OR
OBLIGATIONS. Except as prohibited by law, each Obligor waives any right which it
may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. Each Obligor (a)
certifies that neither the Collateral Agent or any Secured Party nor any
representative, agent or attorney of the Collateral Agent or any Secured Party
has represented, expressly or otherwise, that the Collateral Agent or any
Secured Party would not, in the event of litigation, seek to enforce the
foregoing waivers or other waivers contained in this Agreement and (b)
acknowledges that, in entering into each of the Security Documents, the
Collateral Agent and the Secured Parties are relying upon, among other things,
the waivers and certifications contained in this Section 23.
24. TERMINATION. Upon either final payment and performance in full of
the Secured Obligations and the cancellation or termination of any commitment to
extend credit under the Credit Documents or satisfaction of the conditions set
forth in Section 14.5 of the Intercreditor Agreement, this Agreement shall
terminate and the Collateral Agent shall, at the Obligors' request and expense,
return such Collateral in the possession or control of the Collateral Agent as
has not theretofore been disposed of pursuant to the provisions hereof, together
with any moneys and other property at the time held by the Collateral Agent
hereunder. Upon
19
satisfaction of the conditions set forth in Section 14.6 of the Intercreditor
Agreement, this Agreement shall terminate with respect to the Collateral being
released and the Collateral Agent shall, at the Company's request and expense,
return any Collateral held by the Collateral Agent hereunder and take all
necessary action to release the Lien on such Collateral created hereby.
25. MISCELLANEOUS. The headings of each section of this Agreement are
for convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon each of
the Obligors and its successors and assigns, and shall inure to the benefit of
the Collateral Agent, the Secured Parties and their respective successors and
assigns. If any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein. Each
Obligor acknowledges receipt of a copy of this Agreement.
26. SUBJECT TO INTERCREDITOR AGREEMENT. Any and all rights granted to
the Collateral Agent under this Agreement are to be held and exercised by the
Collateral Agent as security trustee for the benefit of the Secured Parties
pursuant to the provisions of the Intercreditor Agreement. Each of the Secured
Parties shall be a beneficiary of the terms of this Agreement. Any and all
obligations under this Agreement of the parties to this Agreement, and the
rights and indemnities granted to the Collateral Agent under this Agreement, are
created and granted subject to, and in furtherance (and not in limitation) of,
the terms of the Intercreditor Agreement and the rights and indemnities of the
Secured Parties contained therein shall apply equally to this Agreement. Nothing
in this Agreement expressed or implied is intended or shall be construed to give
to any Person other than the Obligors, the Secured Parties and the Collateral
Agent any legal or equitable right, remedy, or claim under or in respect of this
Agreement or any covenant, condition, or provision herein contained; and all
such covenants, conditions and provisions are and shall be held to be for the
sole and exclusive benefit of the Obligors, the Secured Parties and the
Collateral Agent. Notwithstanding anything herein to the contrary, the
Collateral Agent shall exercise its rights and powers subject to the direction
and indemnity of the Secured Parties as provided in the Intercreditor Agreement.
Notwithstanding anything to the contrary in this Agreement, in the event
that any term or provision of the Intercreditor Agreement conflicts with any
term or provision of this Agreement, the relevant terms and provisions of the
Intercreditor Agreement shall control concerning such specific term or
provision.
27. COURSE OF DEALING. No course of dealing among any one or more of the
Obligors, the Secured Parties and the Collateral Agent, nor any failure to
exercise, nor any delay in exercising, on the part of the Collateral Agent or
any of the Secured Parties, any right, power or privilege hereunder or under the
Security
20
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
[INTENTIONALLY LEFT BLANK. NEXT PAGE IS A SIGNATURE PAGE.]
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IN WITNESS WHEREOF, intending to be legally bound, each Obligor has caused
this Agreement to be duly executed as of the date first above written.
A. M. CASTLE & CO.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
DATAMET, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
KEYSTONE TUBE COMPANY, LLC
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
PARAMONT MACHINE COMPANY, LLC
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
[Signature Page to Security Agreement]
ADVANCED FABRICATING
TECHNOLOGY, LLC
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
XXXXXX STEEL PLATE CO.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
METAL MART, LLC
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
TOTAL PLASTICS, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
[Signature Page to Security Agreement]
Accepted:
U.S. BANK NATIONAL
ASSOCIATION, AS COLLATERAL
AGENT
By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Assistant Vice President
[Signature Page to Security Agreement]
SCHEDULE A
1. Datamet, Inc.
2. Keystone Tube Company, LLC
3. Paramont Machine Company, LLC
4. Advanced Fabricating Technology, LLC
5. Xxxxxx Steel Plate Co.
6. Metal Mart, LLC
7. Total Plastics, Inc.
Schedule A
