EXHIBIT 99.4
SECURITY AGREEMENT
SECURITY AGREEMENT dated October 1, 1996 made by the Persons listed on
the signature pages hereof and the Additional Grantors (as defined in Section
23(b)) (such Persons so listed and the Additional Grantors being, collectively,
the "Grantors") to BANQUE NATIONALE DE PARIS ("BNP"), as administrative agent
(the "Administrative Agent") for the Secured Parties (as defined in the Credit
Agreement referred to below).
PRELIMINARY STATEMENTS.
(1) MEDIQ/PRN Life Support Services, Inc., a Delaware corporation (the
"Borrower"), has entered into a Credit Agreement dated as of October 1, 1996
(said Agreement, as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement"), with BNP, as
Administrative Agent, NationsBank as Documentation Agent and the Lender Parties
party thereto. Capitalized terms used herein and not otherwise defined are used
herein as defined in the Credit Agreement.
(2) It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
that each Grantor shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Agreement.
(3) Each Grantor is the owner of the shares of stock set forth opposite
such Grantor's name in Part I of Schedule I hereto and issued by the
corporations indicated therein and of the indebtedness set forth opposite such
Grantor's name in Part II of Schedule I hereto and issued by the obligors
indicated therein.
(4) The Borrower has opened a non-interest bearing cash collateral
account (the "Asset Sale Blocked Account") with BNP at its office at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No. 202506-001-48, in the name of the
Borrower but under the sole control and dominion of the Administrative Agent and
subject to the terms of this Agreement.
(5) The Borrower has opened a non-interest bearing cash collateral
account (the "L/C Cash Collateral Account") with BNP at its office at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No. 200875-001-77, in the name of the
Borrower but under the sole control and dominion of the Administrative Agent and
subject to the terms of this Agreement.
(6) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Credit Agreement.
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NOW, THEREFORE, in consideration of the premises and in order to induce
the Lender Parties to make Advances and to issue Letters of Credit under the
Credit Agreement and to induce the Hedge Banks to enter into Bank Hedge
Agreements with the Borrower from time to time, each Grantor hereby agrees with
the Administrative Agent for the ratable benefit of the Secured Parties as
follows:
SECTION 1. Grant of Security. Each Grantor hereby assigns and pledges to
the Administrative Agent for the ratable benefit of the Secured Parties, and
hereby grants to the Administrative Agent for the ratable benefit of the Secured
Parties a security interest in, the following, in each case, as to each type of
property described below, whether now owned or hereafter acquired by such
Grantor, wherever located and whether now or hereafter existing (the
"Collateral"):
(a) All of the following (the "Security Collateral"):
(i) the shares of stock set forth opposite such Grantor's name
in Part I of Schedule I hereto and issued by the corporations
indicated therein (collectively referred to herein as the "Initial
Pledged Shares", and together with the shares referred to in clause
(iii) below, the "Pledged Shares"), together with the certificates
representing such Initial Pledged Shares and all dividends, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such Initial Pledged Shares;
(ii) the indebtedness (whether or not evidenced by instruments)
set forth opposite such Grantor's name in Part II of Schedule I
hereto and issued by the obligors indicated therein (collectively
referred to herein as the "Initial Pledged Debt", and together with
the indebtedness referred to in clause (iv) below, the "Pledged
Debt") and the instruments (if any) evidencing such Initial Pledged
Debt, all security therefor and all interest, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
Initial Pledged Debt;
(iii) all additional shares of stock of any issuer of any
Initial Pledged Shares or of any other Loan Party or any Subsidiary
of any Loan Party or of any other Person from time to time acquired
by such Grantor in any manner, and all additional shares of stock of
each other Subsidiary of such Grantor to the extent required
pursuant to Section 5.01(m) of the Credit Agreement, together with
the certificates representing such additional shares and all
dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares;
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(iv) all additional indebtedness from time to time owed to such
Grantor by any obligor of the Initial Pledged Debt (whether or not
evidenced by instruments) and the instruments evidencing such
indebtedness (if any), and all additional indebtedness owed to such
Grantor by any other obligor to the extent required pursuant to
Section 5.01(m) of the Credit Agreement, all security therefor and
all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness; and
(v) within five days after acquiring or organizing any foreign
Subsidiary or joint venture or any domestic joint venture, (A) in
the case of any foreign Subsidiary or joint venture, 66% of the
total outstanding shares or other ownership interests of such Person
held by such Grantor and (B) in the case of any domestic joint
venture, 100% of the shares or other ownership interests of such
Person held by such Grantor;
(b) All of the following (collectively, the "Account Collateral"):
(i) the L/C Cash Collateral Account, all funds held therein and
all certificates and instruments, if any, from time to time
representing or evidencing the L/C Cash Collateral Account;
(ii) the Asset Sale Blocked Account, all funds held therein and
all certificates and instruments, if any, from time to time
representing or evidencing the Asset Sale Blocked Account;
(iii) all Blocked Accounts (as hereinafter defined), all funds
held therein and all certificates and instruments, if any, from time
to time representing or evidencing the Blocked Accounts;
(iv) all other deposit accounts of such Grantor, all funds held
therein and all certificates and instruments, if any, from time to
time representing or evidencing such deposit accounts;
(v) all Collateral Investments (as hereinafter defined) from
time to time and all certificates and instruments, if any, from time
to time representing or evidencing the Collateral Investments;
(vi) all notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time hereafter delivered
to or otherwise possessed by the Administrative Agent for or on
behalf of such Grantor,
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including, without limitation, those delivered to or possessed in
substitution for or in addition to any or all of the then existing
Account Collateral; and
(vii) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Account Collateral;
(c) All of such Grantor's right, title and interest, in and to all
equipment in all of its forms (including, without limitation, (i) all adult
and infant ventilators, portable volume ventilators, adult, infant, neonatal
and fetal monitors, infant apnea monitors, phototherapy units, pediatric
aerosol tents, compressors, infusion and suction pumps and poles,
incubators, infant warmers, pulse oximeters, sequential compression devices
and all other medical equipment of every kind and nature, and (ii) all
machinery, equipment, office machinery, furniture, computers, computer
hardware, automotive equipment, trucks and motor vehicles), wherever
located, all fixtures and all parts thereof and all accessions and additions
thereto, parts and appurtenances thereof, substitutions therefor and
replacements thereof (any and all such equipment, fixtures, accessions,
additions, parts, appurtenances, substitutions and replacements being the
"Equipment");
(d) All of such Grantor's right, title and interest, in and to all
inventory in all of its forms, wherever located (including, but not limited
to, (i) all medical equipment and raw materials and work in process
therefor, finished goods thereof and materials used or consumed in the
manufacture, production or preparation thereof, (ii) goods in which such
Grantor has an interest in mass or a joint or other interest or right of any
kind (including, without limitation, goods in which such Grantor has an
interest or right as consignee) and (iii) goods that are returned to or
repossessed by such Grantor), and all accessions thereto and products
thereof and documents therefor (any and all such inventory, accessions,
products and documents being the "Inventory");
(e) All of such Grantor's right, title and interest, in and to all
accounts, contract rights, chattel paper, instruments, deposit accounts and
general intangibles and all other obligations of any kind, now or hereafter
existing, whether or not arising out of or in connection with the sale or
lease of goods or the rendering of services and whether or not earned by
performance (including, without limitation, any rights with respect to
workers' compensation or other deposits made by such Grantor and any rights
to receive tax refunds or other refunds, reimbursements and payments from
any federal, state or local government or any political subdivision, agency
or instrumentality thereof), and all rights now or hereafter existing in and
to all security agreements, leases and other contracts securing or otherwise
relating to any such accounts, contract rights, chattel paper, instruments,
deposit accounts, general
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intangibles or obligations (any and all such accounts, contract rights,
chattel paper, instruments, deposit accounts, general intangibles and
obligations, to the extent not referred to in clause (a), (b), (f) or (g) of
this Section 1, being the "Receivables", and any and all such leases,
security agreements and other contracts being the "Related Contracts");
(f) All of such Grantor's right, title and interest in and to each of
the agreements listed on Schedule II hereto, and each Hedge Agreement to
which such Grantor is now or may hereafter become a party, in each case as
such agreements may be amended, supplemented or otherwise modified from time
to time (collectively, the "Assigned Agreements"), including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due under or pursuant to the Assigned Agreements, (ii) all rights of
such Grantor to receive proceeds of any insurance, indemnity, warranty or
guaranty with respect to the Assigned Agreements, (iii) claims of such
Grantor for damages arising out of or for breach of or default under the
Assigned Agreements and (iv) the right of such Grantor to terminate the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder (all such Collateral being the
"Agreement Collateral");
(g) All general intangibles of such Grantor (other than general
intangibles for moneys due or to become due which are covered by Section
1(e) above, including, without limitation, (i) all partnership, corporate
and other interests in and to any Person (other than any Security
Collateral), (ii) all governmental permits, licenses (and any subsequent
renewals thereof), franchises, registrations, authorizations and approvals
and (iii) all trademarks, trade names, trade styles, trade secrets, service
marks, logos, copyrights, patents, patent applications and all licenses,
license applications, registrations and good will relating to or associated
with any of the foregoing (including, without limitation, all such items
listed on Schedule 4.01(ii));
(h) To the extent not otherwise covered above, all of the Borrower's
right, title and interest in and to any funds or other property under or
pursuant to the 12.125% Indenture, including, without limitation, the
Borrower's right to receive monies or U.S. Government Obligations (as
defined in the 12.125% Indenture) from the Trustee or the Paying Agent (each
such term as defined in the 12.125% Indenture) under or pursuant to the
12.125% Indenture;
(i) All proceeds of any and all of the foregoing Collateral (including,
without limitation, proceeds that constitute property of the types described
in clauses (a) through (i) of this Section 1) and, to the extent not
otherwise included, all (i) payments under insurance (whether or not the
Administrative Agent is the loss payee thereof), or any indemnity, warranty
or guaranty, payable by reason of loss or
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damage to or otherwise with respect to any of the foregoing Collateral, and
(ii) cash; and
(j) With respect to any Alternative Lender, the Collateral shall be
limited to all of the foregoing Collateral except for Margin Stock
Collateral.
SECTION 2. Security for Obligations. This Agreement secures, in the case
of each Grantor, the payment of all Obligations of such Grantor now or hereafter
existing under the Loan Documents, whether direct or indirect, absolute or
contingent, including any extensions, modifications, substitutions, amendments
and renewals thereof, whether for principal (including reimbursement for amounts
drawn under Letters of Credit), interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise (all
such Obligations secured hereby being the "Secured Obligations"). Without
limiting the generality of the foregoing, this Agreement secures, as to each
Grantor, the payment of all amounts that constitute part of the Secured
Obligations of such Grantor and that would be owed by such Grantor to the
Secured Parties under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Grantor.
SECTION 3. Grantors Remain Liable. Anything contained herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral, and (c) no Secured Party shall have any obligation
or liability under the contracts and agreements included in the Collateral by
reason of this Agreement or any other Loan Document, nor shall any Secured Party
be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Delivery of Security Collateral, Account Collateral,
Agreement Collateral and Receivables. All certificates or instruments
representing or evidencing any Security Collateral, Account Collateral,
Agreement Collateral or Receivables (and, to the extent requested by the
Administrative Agent, representing or evidencing any other Collateral) shall be
delivered to and held by or on behalf of the Administrative Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Administrative Agent; provided,
however, that this Section 4 shall not apply to any certificate of title
representing automotive equipment, trucks and motor vehicles referred to in
Section 1(c). Upon and after an Event of Default, the Administrative Agent shall
have the right, at any time in its discretion and without notice to any Grantor,
to
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transfer to or to register in the name of the Administrative Agent or any of its
nominees any or all of the Security Collateral and Account Collateral, subject
only to the revocable rights specified in Section 14(a). In addition, upon and
after an Event of Default, the Administrative Agent shall have the right at any
time to exchange certificates or instruments representing or evidencing the
Security Collateral or Account Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 5. Maintaining the L/C Cash Collateral Account and the Asset
Sale Blocked Account. (a) So long as any Advance shall remain unpaid, any Letter
of Credit or Bank Hedge Agreement shall be outstanding or any Lender Party shall
have any Commitment under the Credit Agreement:
(i) The Borrower will maintain the L/C Cash Collateral Account with BNP.
(ii) It shall be a term and condition of the L/C Cash Collateral
Account, notwithstanding any term or condition to the contrary in any other
agreement relating to the L/C Cash Collateral Account, and except as
otherwise provided by the provisions of Section 20, that no amount
(including interest on Collateral Investments) shall be paid or released to
or for the account of, or withdrawn by or for the account of, the Borrower
or any other Person from the L/C Cash Collateral Account.
(b) All Excess Cash from Permitted Asset Sales shall be promptly deposited
in the Asset Sale Blocked Account. It shall be a term and condition of
the Asset Sale Blocked Account, and except as otherwise provided by the
provisions of Section 8 and Section 20, that no amount (including interest on
Collateral Investments) shall be paid or released to or for the account of, or
withdrawn by or for the account of, the Borrower or any other Person from the
Asset Sale Blocked Account, provided, however, that so long as no Default has
occurred and is continuing, upon the request of the Borrower, such interest
shall be released to the Borrower on the last day of each fiscal quarter.
The L/C Cash Collateral Account and the Asset Sale Blocked Account shall be
subject to such applicable laws, and such applicable regulations of the Board of
Governors of the Federal Reserve System and of any other appropriate banking or
governmental authority, as may now or hereafter be in effect.
SECTION 6. Maintaining the Blocked Accounts. So long as any Advance
shall remain unpaid, any Letter of Credit or Bank Hedge Agreement shall be
outstanding or any Lender Party shall have any Commitment under the Credit
Agreement:
(a) Each Grantor shall, to the extent such Grantor shall have at any
time an aggregate amount on deposit in excess of $250,000, maintain blocked
deposit accounts
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("Blocked Accounts") only with banks ("Blocked Account Banks") that have
entered into letter agreements in substantially the form of Exhibit A (or
such other form as the Administrative Agent and such Grantor shall agree)
with such Grantor and the Administrative Agent ("Blocked Account Letters").
(b) At the end of each Business Day, the Grantors required to
maintain Blocked Accounts pursuant to the foregoing paragraph shall
deposit all cash in Blocked Accounts; provided, however, that the
provisions of this Section 6(b) shall not apply to (i) the Citibank
Account and payments required to be made thereto and (ii) any deposit
account held in the name of the Borrower at PNC Bank for miscellaneous
cash receipts and payments thereto so long as the aggregate amount on
deposit in such accounts shall not exceed $25,000.
(c) Upon any termination of any Blocked Account Letter or other
agreement with respect to the maintenance of a Blocked Account by any
Grantor required to maintain any Blocked Account pursuant to Section
6(a) or any Blocked Account Bank, such Grantor shall immediately notify
all Obligors that were making payments to such Blocked Account to make
all future payments to another Blocked Account. Following the occurrence
and during the continuance of an Event of Default, such Grantor agrees
to terminate any or all Blocked Accounts and Blocked Account Letters
upon request by the Administrative Agent.
SECTION 7. Investing of Amounts in the L/C Cash Collateral Account and
the Asset Sale Blocked Account. If requested by the Borrower, the Administrative
Agent will, subject to the provisions of Sections 8 and 20, from time to time
(a) invest amounts on deposit in the L/C Cash Collateral Account and the Asset
Sale Blocked Account in such Cash Equivalents in the name of the Administrative
Agent or as to which all action required by Section 10 shall have been taken as
the Borrower may select and the Administrative Agent may approve and (b) invest
interest paid on the Cash Equivalents referred to in clause (a) above, and
reinvest other proceeds of any such Cash Equivalents that may mature or be sold,
in each case in such Cash Equivalents in the name of the Administrative Agent or
as to which all actions required by Section 10 shall have been taken as the
Borrower may select and the Administrative Agent may approve (the Cash
Equivalents referred to in clauses (a) and (b) above being collectively
"Collateral Investments"). Interest and proceeds that are not invested or
reinvested in Collateral Investments as provided above shall be deposited and
held in the L/C Cash Collateral Account or the Asset Sale Blocked Account, as
the case may be; provided, however, that so long as no Default has occurred and
is continuing, upon the request of the Borrower, such interest deposited and
held in the Asset Sale Blocked Account shall be released to the Borrower on the
last day of each fiscal quarter.
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SECTION 8. Release of Amounts. Any amount on deposit in the Asset Sale
Blocked Account shall be released by the Administrative Agent in accordance with
the terms and conditions set forth in Section 2.16 of the Credit Agreement.
SECTION 9. Representations and Warranties. Each Grantor represents and
warrants as follows:
(a) Such Grantor is the legal and beneficial owner of the Collateral
of such Grantor free and clear of any Lien, claim, option or right of
others, except for the liens and security interests created under this
Agreement or permitted by the Credit Agreement. No effective financing
statement or other instrument similar in effect covering all or any part
of such Collateral (including, without limitation, accounts and general
intangibles relating to the Collateral) or listing such Grantor or any
of its Subsidiaries or any trade name of such Grantor or any of its
Subsidiaries as debtor with respect to Collateral is on file in any
recording office, except such as may have been filed in favor of the
Administrative Agent relating to the Loan Documents or as permitted by
Section 5.02(a) of the Credit Agreement.
(b) The Pledged Shares owned by such Grantor have been duly
authorized and validly issued and are fully paid and non-assessable.
The Pledged Debt held by such Grantor has been duly authorized,
authenticated or issued and delivered, is the legal, valid and binding
obligation of the issuers thereof and is not in default.
(c) The Initial Pledged Shares owned by such Grantor constitute the
percentage of the issued and outstanding shares of stock of the issuers
thereof indicated on Schedule I hereto. The Initial Pledged Debt
constitutes all of the outstanding indebtedness owed to such Grantor for
money borrowed or for the deferred purchase price of property of the
issuers thereof.
(d) On the date hereof and thereafter on the most recent date on
which a revised Schedule III is required to be furnished to the
Administrative Agent pursuant to Section 11(d), all of the Equipment
and Inventory of such Grantor, other than such Equipment and Inventory
as has been rented or leased to such Grantor's customers, is located at
the places specified in Schedule III hereto. The chief place of
business and chief executive office of such Grantor and the office
where such Grantor keeps its records concerning the Receivables, and
the original copies of each Assigned Agreement and all originals of all
Related Contracts and all chattel paper, if any, that evidence
Receivables (other than (i) those delivered to the Administrative Agent
and (ii) rental contracts located in the ordinary course of business at
the Borrower's branch offices), are located at the address set forth on
the signature pages hereto beneath such Grantor's name. Such Grantor
has delivered to the Administrative Agent the originals of all
agreements, certificates or instruments representing or
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evidencing any Collateral and all security therefor and guaranties
thereof, in each case to the extent that the delivery thereof to the
Administrative Agent is required under Section 4 above. None of the
Receivables or Agreement Collateral is evidenced by a promissory note
or other instrument that is required to be delivered to the
Administrative Agent hereunder and has not been so delivered (other
than promissory notes issued to the Borrower with respect to amounts
due to the Borrower, in the ordinary course of business on a basis
consistent with current practice).
(e) The Assigned Agreements to which such Grantor is a party, true
and complete copies of which have been furnished to each Lender Party,
have been duly authorized, executed and delivered by all parties
thereto, have not been amended or otherwise modified, are in full force
and effect and are binding upon and enforceable against all parties
thereto in accordance with their terms. There exists no default under
any Assigned Agreement to which such Grantor is a party by any party
thereto. Each party to any Assigned Agreement to which such Grantor is a
party (other than such Grantor) has executed and delivered to such
Grantor a consent, in substantially the form of Exhibit B hereto or
otherwise in form and substance satisfactory to the Administrative
Agent, to the assignment of the Agreement Collateral to the
Administrative Agent for the benefit of the Secured Parties pursuant to
this Agreement.
(f) Such Grantor has no Blocked Accounts or other deposit accounts
other than the Blocked Accounts listed on Part I of Schedule V hereto
and the other deposit accounts listed on Part II of Schedule V hereto.
Each Grantor has instructed all existing Obligors to make all payments
to a Blocked Account to the extent required by the terms hereof.
(g) This Agreement, the pledge of the Security Collateral pursuant
hereto and the pledge and assignment of the Account Collateral pursuant
hereto create in favor of the Administrative Agent for the benefit of
the Secured Parties a valid and perfected security interest in the
Collateral of such Grantor, securing the payment of the Secured
Obligations of such Grantor, and all filings and other actions necessary
or desirable to perfect and protect such security interest have been
duly taken. Such security interest is subject in priority only to
(i) the lien imposed on the Collateral pursuant to the 12.125% Indenture
as in effect on the date of the Initial Extension of Credit, (ii) the
existing lien of Meridian Bank on the promissory note issued by Medifac,
Inc. to MEDIQ, (iii) the existing lien of Meridian Bank on the
promissory note issued by Granary Partners, L.P. to MEDIQ, and (iv) the
prior liens permitted under Section 5.02(a) of the Credit Agreement.
Upon the release of the liens referred to in the foregoing clauses
(i), (ii), (iii) and (iv), such security interest shall be a first
priority security interest.
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(h) Such Grantor has no trade names except as set forth on Schedule
IV hereto; such trade names were adopted in good faith; and, to the best
of such Grantor's knowledge, there exist no adverse claims against such
trade names as of the Closing Date.
(i) No consent of any other Person and no authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required (i) for the
grant by such Grantor of the assignment and security interest granted
hereby, for the pledge by such Grantor of any Security Collateral
hereunder or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) for the perfection or maintenance of the
pledge, assignment and security interest created hereunder (including
the first priority nature of such pledge, assignment and security
interest, except as otherwise permitted), except for the filing of
financing and continuation statements under the Uniform Commercial Code,
which financing statements have been duly filed, or (iii) for the
exercise by the Administrative Agent of its voting or other rights
provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in
connection with the disposition of any portion of the Security
Collateral by laws affecting the offering and sale of securities
generally.
(j) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(k) Such Grantor has, independently and without reliance upon any
Secured Party and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter
into this Agreement, and such Grantor has established adequate means of
obtaining from any other Loan Parties on a continuing basis information
pertaining to, and is now and on a continuing basis will be completely
familiar with, the financial condition, operations, properties and
prospects of such other Loan Parties.
SECTION 10. Further Assurances. (a) Each Grantor agrees that from time
to time, at the expense of such Grantor, such Grantor will promptly execute and
deliver all further instruments and documents, and take all further action, that
such Grantor believes may be necessary or desirable, or that the Administrative
Agent may reasonably request, in order to perfect and protect any pledge,
assignment or security interest granted or purported to be granted hereby or to
enable the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, each Grantor will: (i) xxxx conspicuously (A) each invoice issued in
connection with the rental or lease of any Equipment or Inventory, from 60 days
after the Initial Extension of Credit, with the following legend: "THIS
EQUIPMENT MAY BE SUBJECT TO A SECURITY INTEREST GRANTED TO BANQUE NATIONALE DE
PARIS AS
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ADMINISTRATIVE AGENT" and (B) each Assigned Agreement of such Grantor included
in the Collateral, and each of its records pertaining to the Collateral, with a
legend, in form and substance satisfactory to the Administrative Agent,
indicating that such Collateral is subject to the security interest granted
hereby, (ii) if any Collateral shall be evidenced by a promissory note or other
instrument (other than promissory notes permitted pursuant to Section
5.02(f)(ix) of the Credit Agreement), deliver and pledge to the Administrative
Agent for the benefit of the Secured Parties hereunder such note or instrument
duly indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Administrative Agent,
(iii) deliver and pledge to the Administrative Agent for the benefit of the
Secured Parties hereunder certificates representing the Pledged Shares
accompanied by undated stock powers executed in blank and evidence that all
other action that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the liens and security interests created under this
Agreement has been taken and (iv) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Administrative Agent may
request, in order to perfect and preserve the pledge, assignment and security
interests granted or purported to be granted hereunder.
(b) Each Grantor hereby authorizes the Administrative Agent to file one
or more financing or continuation statements, and amendments thereto, relating
to all or any part of the Collateral without the signature of such Grantor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) Each Grantor will furnish to the Administrative Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Administrative
Agent may reasonably request, all in reasonable detail.
(d) The Borrower will furnish to the Administrative Agent, at any time
within six months prior to the fifth anniversary of the date hereof, an opinion
of counsel acceptable to the Required Lenders to the effect that all financing
or continuation statements have been filed, and all other action has been taken,
to perfect and validate continuously from the date hereof the pledge, assignment
and security interests granted hereunder (excluding, in the case of perfection,
any Collateral in which a security interest may not be perfected by the filing
of a financing statement under the Uniform Commercial Code of any jurisdiction).
13
SECTION 11. As to Equipment and Inventory. Each Grantor shall:
(a) On the date hereof and thereafter on the most recent date on
which a revised Schedule III is required to be furnished to the
Administrative Agent pursuant to Section 11(d), all of the Equipment and
Inventory of such Grantor, other than such Equipment and Inventory as
has been rented or leased to such Grantor's customers, shall be located
at the places specified in Schedule III hereto or at such other places
in jurisdictions where all action required by Section 10 shall have been
taken with respect to such Equipment and Inventory.
(b) Cause all of its Equipment and Inventory to be maintained and
preserved, as is reasonably required in the conduct of its business, in
good working order and condition, excluding (i) ordinary wear and tear
and (ii) properties that have become obsolete or no longer fit for their
intended purposes, and shall forthwith, or in the case of any loss or
damage to any of such Equipment or Inventory as soon as practicable
after the occurrence thereof, make or cause to be made all repairs,
replacements and other improvements in connection therewith which are
necessary or desirable to such end.
(c) Pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the
Equipment and Inventory; provided, however, that such Grantor shall not
be required to pay or discharge any such tax, assessment, charge, levy
or claim (x) that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained,
or (y) in respect of which the Lien resulting therefrom, if any,
attaches to its property and becomes enforceable against its other
creditors, to the extent that the aggregate amount of all such taxes,
assessments, charges or claims does not exceed $250,000.
(d) Furnish to the Administrative Agent, at the same time as the
quarterly financial statements are required to be furnished to the
Administrative Agent pursuant to Section 5.03(c) of the Credit
Agreement, unless no revisions are required, a revised Schedule III
specifying each place where the Equipment and Inventory of such Grantor
is located excluding such Equipment or Inventory rented or leased to
such Grantor's customers. Such revised Schedule III shall be deemed to
replace the then existing Schedule III and shall be of full force and
effect as of the date of delivery of such Schedule to the Administrative
Agent.
(e) In the event that Equipment and/or Inventory of the Grantors
with a book value equal to or greater than 10% of the aggregate book
value of all Equipment and Inventory of the Grantors' is relocated, in
one move or in a series of moves, from one county to another, furnish
within five Business Days after such relocation
14
notice of such relocation to the Administrative Agent (such notice to
include the percentage book value of the relocated Equipment and
Inventory and the old and new locations of such Equipment and
Inventory).
(f) For each leased location at which at any time Equipment and
Inventory of the Grantors with a book value equal to or greater than 10%
of the aggregate book value of the Equipment and Inventory is located,
use its good faith efforts to furnish at such time to the Administrative
Agent a landlord access letter or consent on terms and conditions
reasonably acceptable to the Administrative Agent.
SECTION 12. Insurance. (a) Each Grantor shall, at its own expense,
maintain insurance with respect to the Equipment and Inventory in such amounts,
against such risks, in such form and with such insurers, as shall be reasonably
satisfactory to the Administrative Agent from time to time. Each policy for
liability insurance shall provide for all losses to be paid on behalf of the
Administrative Agent and such Grantor as their interests may appear, and each
policy for property damage insurance shall provide for all losses (except for
losses of less than $1,000,000 per occurrence) to be paid directly to the
Administrative Agent, except to the extent permitted to be paid to a Grantor
pursuant to Section 12(b). Each such policy shall in addition (i) name such
Grantor and the Administrative Agent as insured parties thereunder (without any
representation or warranty by or obligation upon the Administrative Agent) as
their interests may appear, (ii) contain the agreement by the insurer that any
loss thereunder shall be payable to the Administrative Agent notwithstanding any
action, inaction or breach of representation or warranty by such Grantor,
(iii) provide that there shall be no recourse against the Administrative
Agent for payment of premiums or other amounts with respect thereto and (iv)
provide that at least 10 days' prior written notice of cancellation or of lapse
shall be given to the Administrative Agent by the insurer. Each Grantor shall,
if so requested by the Administrative Agent, deliver to the Administrative Agent
certificates evidencing such insurance, make the original policies of such
insurance reasonably available for inspection by the Administrative Agent and,
as often as the Administrative Agent may reasonably request, a report of a
reputable insurance broker with respect to such insurance. Further, each Grantor
shall, at the request of the Administrative Agent, duly exercise and deliver
instruments of assignment of such insurance policies to comply with the
requirements of Section 10 and cause the insurers to acknowledge notice of such
assignment.
(b) Reimbursement under any insurance maintained by any Grantor pursuant
to this Section 12 may be paid directly to the Person who shall have incurred
liability covered by such insurance. In case of any loss involving damage to
Equipment or Inventory when subsection (c) of this Section 12 is not applicable,
such Grantor shall make or cause to be made the necessary repairs to or
replacements of such Equipment or Inventory, and any proceeds of insurance
properly received by or released to such Grantor
15
shall be used by such Grantor, except as otherwise required or permitted
hereunder or by the Credit Agreement to pay or as reimbursement for the cost of
such repairs or replacements.
(c) Upon the occurrence and during the continuance of any Event of
Default, all insurance payments in respect of such Equipment or Inventory shall
be paid to and applied by the Administrative Agent as specified in Section
20(b).
SECTION 13. Place of Perfection; Records; Collection of Receivables.
(a) Each Grantor shall keep its chief place of business and chief executive
office and the office where it keeps its records concerning the Collateral; and
the original copies of the Assigned Agreements of such Grantor, and all
originals of all chattel paper which evidences or constitutes Receivables
(other than rental contracts located in the ordinary course of business at the
Borrower's branch offices), at the location therefor specified in Section 9(d)
or, upon 30 days' prior written notice to the Administrative Agent, at such
other locations in a jurisdiction where all actions required by Section 10 shall
have been taken with respect to the Collateral. Each Grantor will hold and
preserve such records, Assigned Agreements and chattel paper and will permit
representatives of the Administrative Agent at any time during normal business
hours to inspect and make abstracts from such records and chattel paper.
(b) Except as otherwise provided in this subsection (b), such Grantor
shall continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Receivables and Related Contracts. In connection with
such collections, upon and after an Event of Default, such Grantor may take
(and, at the Administrative Agent's direction, shall take) such action as such
Grantor or the Administrative Agent may deem necessary or advisable to enforce
collection of the Receivables and Related Contracts; provided, however, that the
Administrative Agent shall have the right upon the occurrence and during the
continuance of an Event of Default and upon written notice to the Borrower of
its intention to do so, to notify the Obligors under any Receivables or Related
Contracts of the assignment of such Receivables or Related Contracts to the
Administrative Agent and to direct such Obligors to make payment of all amounts
due or to become due to such Grantor thereunder directly to the Administrative
Agent and, upon such notification and at the expense of such Grantor, to enforce
collection of any such Receivables or Related Contracts, and to adjust, settle
or compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by such Grantor of the
notice from the Administrative Agent referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including instruments) received by such
Grantor in respect of the Receivables or the Related Contracts shall be received
in trust for the benefit of the Administrative Agent hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Administrative Agent in the same form as so received (with any necessary
indorsement) to be applied as provided by the terms of the Credit Agreement and
(ii) such Grantor shall not adjust, settle or compromise the amount or payment
of any Receivable, release wholly or partly any obligor thereof, or allow any
credit or discount thereon.
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SECTION 14. Voting Rights; Dividends; Etc. (a) So long as no Default
under Section 6.01(a) or (f) of the Credit Agreement or Event of Default shall
have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Security Collateral of
such Grantor or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the other Loan Documents; provided,
however, that no Grantor shall exercise or refrain from exercising any
such right if, in the Administrative Agent's judgment, such action would
have a material adverse effect on the value of the Security Collateral
or any part thereof.
(ii) Each Grantor shall be entitled to receive and retain any and
all dividends and interest paid in respect of the Security Collateral of
such Grantor if and to the extent that the payment thereof is not
otherwise prohibited by the terms of the Loan Documents; provided,
however, that any and all
(A) dividends and interest paid or payable other than in cash in
respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any
Security Collateral,
(B) dividends and other distributions paid or payable in cash in
respect of any Security Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Security
Collateral,
shall be, and shall be forthwith delivered to the Administrative Agent
to hold as, Security Collateral except as otherwise required under the
Credit Agreement and shall, if received by any Grantor, be received in
trust for the benefit of the Administrative Agent, be segregated from
the other property or funds of such Grantor and be forthwith delivered
to the Administrative Agent as Security Collateral in the same form as
so received (with any necessary endorsement).
(iii) The Administrative Agent shall execute and deliver (or cause
to be executed and delivered) to each Grantor all such proxies and other
instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and
retain pursuant to paragraph (ii) above.
17
(b) Upon the occurrence and during the continuance of any Default under
Section 6.01(a) or (f) of the Credit Agreement or Event of Default:
(i) All rights of each Grantor (A) to exercise or refrain from
exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 14(a)(i) shall,
upon notice to such Grantor by the Administrative Agent, cease, and
(B) to receive the dividends and interest payments that it would
otherwise be authorized to receive and retain pursuant to Section
14(a)(ii) shall automatically cease, and all such rights shall thereupon
become vested in the Administrative Agent, which shall thereupon have
the sole right to exercise or refrain from exercising such voting and
other consensual rights and to receive and hold as Security Collateral
such dividends and interest payments.
(ii) All dividends and interest payments that are received by any
Grantor contrary to the provisions of paragraph (i) of this Section
14(b) shall be received in trust for the benefit of the Administrative
Agent, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Administrative Agent as Security Collateral
in the same form as so received (with any necessary endorsement).
SECTION 15. As to the Assigned Agreements. (a) Each Grantor shall at its
expense:
(i) perform and observe all the terms and provisions of the Assigned
Agreements to be performed or observed by it, maintain the Assigned
Agreements to which it is a party in full force and effect, enforce the
Assigned Agreements in accordance with the terms thereof and take all
such action to such end as may be requested from time to time by the
Administrative Agent; and
(ii) furnish to the Administrative Agent promptly upon receipt
thereof copies of all notices, requests and other documents received by
such Grantor under or pursuant to the Assigned Agreements to which it is
a party, and from time to time (A) furnish to the Administrative Agent
such information and reports regarding the Assigned Agreements and such
other Collateral of such Grantor as the Administrative Agent may
reasonably request, and (B) upon request of the Administrative Agent
make to each other party to any Assigned Agreement to which it is a
party such demands and requests for information and reports or for
action as such Grantor is entitled to make thereunder.
(b) Each Grantor agrees that it shall perform and observe all of the
terms and provisions of each Assigned Agreement to be performed or observed by
it, maintain each such Assigned Agreement in full force and effect, enforce such
Assigned Agreement in
18
accordance with its terms, take all such action to such end as may be from time
to time requested by the Administrative Agent.
(c) Each Grantor hereby consents on its behalf and on behalf of its
Subsidiaries to the assignment and pledge to the Administrative Agent for the
ratable benefit of the Secured Parties of each Assigned Agreement to which it is
a party by any other Grantor hereunder.
SECTION 16. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it shall not (i) sell, assign (by operation of law or
otherwise), lease or otherwise dispose of, or grant any option with respect to,
any of the Collateral of such Grantor (other than sales, assignments, options,
leases and other dispositions permitted under the terms of the Credit Agreement
including, without limitation, Section 5.02(e) of the Credit Agreement) or
(ii) create or suffer to exist any Lien upon or with respect to any of the
Collateral of such Grantor, except for the Liens created under the Collateral
Documents or permitted under the Credit Agreement.
(b) Each Grantor agrees that it shall (i) cause each issuer of the
Pledged Shares owned by such Grantor not to issue any stock or other securities
in addition to or in substitution for the Pledged Shares issued by such issuer,
except to such Grantor, and (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional shares of
stock or other securities of each issuer of any Pledged Shares.
SECTION 17. Administrative Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints for the term that this Agreement is in
effect the Administrative Agent such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Administrative Agent's discretion, to
take any action and to execute any instrument that the Administrative Agent may
deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Administrative Agent pursuant to Section 12,
(b) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral,
(c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) or (b) above,
and
19
(d) to file any claims or take any action or institute any
proceedings that the Administrative Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce compliance with the terms and conditions of any Assigned
Agreement or the rights of the Administrative Agent with respect to any
of the Collateral.
SECTION 18. Administrative Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may, but
without any obligation to do so and without further notice, itself perform, or
cause performance of, such agreement, and the expenses of the Administrative
Agent incurred in connection therewith shall be payable by such Grantor under
Section 21.
SECTION 19. The Administrative Agent's Duties. The powers conferred on
the Administrative Agent hereunder are solely to protect its and the other
Secured Parties' interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Administrative Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Security Collateral,
whether or not the Administrative Agent or any other Secured Party has or is
deemed to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to
any Collateral. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which it accords its own property.
SECTION 20. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Administrative Agent may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon default
under the New York Uniform Commercial Code as in effect at such time (the
"Code"), whether or not the Code applies to the affected Collateral, and
also may (i) require any Grantor to, and each Grantor hereby agrees that it
will at its expense and upon request of the Administrative Agent forthwith,
assemble all or part of the Collateral as directed by the Administrative
Agent and make it available to the Administrative Agent at a place and time
to be designated by the Administrative Agent which is reasonably convenient
to both parties; (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of the Administrative Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem
20
commercially reasonable; (iii) occupy any premises owned or leased by any
Grantor where the Collateral or any part thereof is assembled or located for
a reasonable period in order to effectuate its rights and remedies hereunder
or under law, without obligation to such Grantor in respect of such
occupation; and (iv) exercise any and all rights and remedies of any Grantor
under or in connection with the Assigned Agreements, the Receivables and the
Related Contracts or otherwise in respect of the Collateral, including,
without limitation, any and all rights of such Grantor to demand or
otherwise require payment of any amount under, or performance of any
provision of, the Assigned Agreements, the Receivables and the Related
Contracts. Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to such Grantor of the time and
place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Administrative Agent
shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Administrative Agent may adjourn any public
or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(b) Any cash held by the Administrative Agent as Collateral and all cash
proceeds received by the Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Administrative Agent, be held by the
Administrative Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the
Administrative Agent pursuant to Section 21) in whole or in part by the
Administrative Agent for the ratable benefit of the Secured Parties against
all or any part of the Secured Obligations as permitted or required by the
Credit Agreement. Any surplus of such cash or cash proceeds held by the
Administrative Agent and remaining after payment in full of all the Secured
Obligations shall be paid over to the Grantor or to whomsoever may be
lawfully entitled to receive such surplus.
(c) All payments received by any Grantor under or in connection with any
Assigned Agreement or otherwise in respect of the Collateral shall be
received in trust for the benefit of the Administrative Agent and the other
Secured Parties, shall be segregated from other funds of such Grantor and
shall be forthwith paid over to the Administrative Agent in the same form as
so received (with any necessary endorsement).
(d) The Administrative Agent may, without notice to the Borrower except
as required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against the L/C
Cash Collateral Account and the Asset Sale Blocked Account or any part
thereof.
21
SECTION 21. Indemnity and Expenses. (a) Each Grantor agrees to defend,
protect, indemnify and hold harmless each Secured Party from and against any and
all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting from such Secured Party's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) Each Grantor will upon demand pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Administrative
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from or other realization upon, any of the Collateral of such Grantor, (iii) the
exercise or enforcement of any of the rights of the Administrative Agent or any
other Secured Party against such Grantor, or (iv) the failure by such Grantor to
perform or observe any of the provisions hereof.
(c) Without prejudice to the survival of any other agreement of any Loan
Party hereunder or under any other Loan Document, the agreements and obligations
of the Grantors contained in this Section 21 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under any of
the other Loan Documents.
SECTION 22. Security Interest Absolute. The obligations of each Grantor
under this Agreement are independent of the Secured Obligations, and a separate
action or actions may be brought and prosecuted against such Grantor to enforce
this Agreement, irrespective of whether any action is brought against the other
Grantors or whether the other Grantors are joined in any such action or actions.
All rights of the Administrative Agent and the pledge, assignment and security
interest hereunder, and all obligations of each Grantor hereunder, shall be
absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of any Loan Document, any
Hedge Agreement or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment
or waiver of or any consent to any departure from any Loan Document or any
Hedge Agreement, including, without limitation, any increase in the Secured
Obligations resulting from the extension of additional credit to any Grantor
or any of its Subsidiaries or otherwise;
(iii) any taking, exchange, release or nonperfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
22
(iv) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Borrower or any of its Subsidiaries;
(v) any change, restructuring or termination of the corporate structure
or existence of any Grantor or any of its Subsidiaries; or
(vi) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, such Grantor or a third-party grantor of a
security interest.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Loan Party or otherwise, all as
though such payment had not been made.
SECTION 23. Amendments; Waivers; Etc. (a) No amendment or waiver of any
provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Administrative Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
(b) Upon the execution and delivery by any Person of a security
agreement supplement in substantially the form of Exhibit C hereto (each a
"Security Agreement Supplement"), (i) such Person shall be referred to as an
"Additional Grantor" and shall be and become a Grantor and each reference in
this Agreement to "Grantor" shall also mean and be a reference to such
Additional Grantor, and (ii) the annexes attached to each Security Agreement
Supplement shall be incorporated into and become a part of and supplement
Schedules I, II, III, IV and V hereto, and the Administrative Agent may attach
such annexes as supplements to such Schedules; and each reference to such
Schedules shall mean and be a reference to such Schedules as supplemented
pursuant hereto.
SECTION 24. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and, mailed, telecopied, telegraphed, telexed or delivered
to the Borrower or to the Agent, as the case may be, in each case addressed to
it at its address specified in the Credit Agreement or, as to either party at
such other address as shall be designated by such
23
party in a written notice to each other party complying as to delivery with the
terms of this Section 24. All such notices and other communications shall, when
mailed, telecopied, telegraphed, telexed or cabled, respectively, be effective
when deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
SECTION 25. Continuing Security Interest; Assignments. This Agreement
shall create a continuing security interest in the Collateral and shall
(a) remain in full force and effect until the latest of the cash payment in full
of the Secured Obligations, the Termination Date and the termination or
expiration of all Bank Hedge Agreements, (b) be binding upon each Grantor, its
successors and assigns and (c) inure, together with the rights and remedies of
the Administrative Agent hereunder, to the benefit of the Secured Parties and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitments,
the Advances owing to it and the Note or Notes held by it) to any other Person
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender Party herein or otherwise, in each case
as provided in Section 8.07 of the Credit Agreement. No Grantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Secured Parties.
SECTION 26. Release and Termination. (a) Upon any sale, lease, transfer
or other disposition of any item of Collateral (including, without limitation,
as a result of the sale, in accordance with the terms of the Loan Documents, of
the Person that owns such Collateral) in accordance with the terms of the Loan
Documents (other than sales or rentals of Equipment and Inventory in the
ordinary course of business), the Administrative Agent will, at any Grantor's
expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence the release of such item of Collateral from
the assignment and security interest granted hereby; provided, however, that
(i) at the time of such request and such release no Event of Default shall have
occurred and be continuing, (ii) the Borrower shall have delivered to the
Administrative Agent, at least five Business Days prior to the date of the
proposed release, a written request for release describing the item of
Collateral and the terms of the sale, lease, transfer or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a form of release for execution by the Administrative
Agent and a certification by the Borrower to the effect that the transaction is
in compliance with the Loan Documents and as to such other matters as the
Administrative Agent may request and (iii) the proceeds of any such sale, lease,
transfer or other disposition required to be applied in accordance with Section
2.06(b)(ii) of the Credit Agreement shall be paid to, or in accordance with the
instructions of, the Administrative Agent at the closing.
24
(b) With respect to the sale or other disposition of Equipment or
Inventory in the ordinary course of business permitted by the Loan Documents, so
long as at the time of such sale no Event of Default shall have occurred and be
continuing, such sale or other disposition may be made free from the lien of
this Agreement and the other Loan Documents without the necessity of any release
from or consent by the Administrative Agent and no purchaser of any such
property shall be bound to inquire into any question affecting the right of any
Grantor to sell or otherwise dispose of such Equipment or Inventory free from
the lien of this Agreement and the Loan Documents.
(c) In connection with any sale, lease, transfer or other disposition of
all or part of the stock of any Discontinued Subsidiary by any Grantor in
accordance with the terms of the Loan Documents, so long as no Event of Default
shall have occurred and be continuing and the Borrower shall have delivered to
the Administrative Agent, at least five Business Days prior to the date of the
such sale, lease, transfer or other disposition, written notice requesting that
the certificates held by the Administrative Agent evidencing such stock be
delivered to such Grantor, the pledge and assignment of, and security interest
in, such stock granted hereby shall be released and such certificates shall be
released to such Grantor.
(d) Upon the latest of the cash payment in full of the Secured
Obligations, the Termination Date and the termination or expiration of all Bank
Hedge Agreements, the pledge, assignment and security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the Grantors.
Upon any such termination, the Administrative Agent will, at the Borrower's
expense, execute and deliver to the Borrower such documents as the Borrower
shall reasonably request to evidence such termination.
SECTION 27. The Mortgages. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of any
Mortgage and the terms of such Mortgage are inconsistent with the terms of this
Agreement, then with respect to such Collateral, the terms of such Mortgage
shall be controlling in the case of fixtures and leases, letting and licenses
of, and contracts and agreements relating to the lease of real property, and the
terms of this Agreement shall be controlling in the case of all other
Collateral.
SECTION 28. Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 29. Governing Law; Terms. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, except to
the extent that the validity or perfection of the security interest hereunder,
or remedies hereunder, in
25
respect of any particular Collateral are governed by the laws of a jurisdiction
other than the State of New York. Unless otherwise defined herein or in the
Credit Agreement, terms used in Article 8 or Article 9 of the Code are used
herein as therein defined.
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
MEDIQ/PRN LIFE SUPPORT SERVICES, INC.
By /s/ Xxx X. Xxxxxx
---------------------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice-President
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
MEDIQ INCORPORATED
By /s/ Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Senior Vice-President
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
26
PRN HOLDINGS, INC.
By /s/ Xxx X. Xxxxxx
---------------------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice-President
Address of Chief Executive Office and for Notices:
0000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
MEDIQ INVESTMENT SERVICES, INC.
By /s/ Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
Address of Chief Executive Office and for Notices:
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
MEDIQ MANAGEMENT SERVICES, INC.
By /s/ Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Financial Officer
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
27
MEDIQ SURGICAL EQUIPMENT SERVICES, INC.
By /s/ Xxx X. Xxxxxx
---------------------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice-President
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
VALUE-MED PRODUCTS, INC.
By /s/ Xxx X. Xxxxxx
---------------------------------
Name: Xxx X. Xxxxxx
Title: Treasurer
Address of Chief Executive Office and for Notices:
Xxx XXXXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
SCHEDULE 1
Part I: Initial Pledged Shares
Grantor: MEDIQ Incorporated
MEDIQ Investment Services, Inc.: 100 shares
of common stock, $10 par
PRN Holdings, Inc.: 1000 shares of common stock
$.01 par
MEDIQ Management Services, Inc.: 100 shares of
common stock, $10 par
MEDIQ Mobile X-Ray Services, Inc.: 1000 shares
of common stock, $1 par
Health Examinetics, Inc.: 100 shares of common
stock, $10 par
MEDIQ Services, Inc.: 100 shares of common stock
$10 par
Thera-Kinetics Acquisition Corporation: 1000
shares of common stock, $10 par
MEDIQ Imaging Services, Inc.: 100 shares of
common stock, $10 par
MEDIQ Diagnostic Centers Inc.: 100 shares of
common stock, $10 par
MEDIQ Home Therapy Services of Arizona, Inc.:
100 shares of common stock, $10 par
Grantor: PRN Holdings, Inc.
MEDIQ/PRN Life Support Services, Inc.: 10,000
shares of common stock, $.01 par
Value-Med Products, Inc.: 100 shares of common
stock, $10 par
29
Grantor: MEDIQ Investment Services, Inc.
PCI Services, Inc.: 2,875,000 shares of common
stock, $.001 par
NutraMax Products, Inc.: 1,782,356 shares of
common stock, $.001 par
P. I. Corporation: 100 shares of common stock
$10 par
Grantor: MEDIQ/PRN Life Support Services, Inc.
MEDIQ Surgical Equipment Services, Inc.: 100
shares of common stock, $10 par
Grantor: MEDIQ Management Services, Inc.
Alpha Health Consultants, Inc.: 100 shares of
common stock, $10 par
Part II: Initial Pledged Debt
Grantor: MEDIQ Incorporated
(1) Non-negotiable Subordinated Note, in the original principal amount
of $1,500,000, from Medifac, Inc., dated June 27, 1995;
(2) Note A, in the original principal amount of $2,500,000 from Granary
Partners, L.P., dated June 27, 1995;
(3) Promissory Note, in the original principal amount of $11,500,000
from Mental Health Management, Inc., dated August 31, 1993.
SCHEDULE II
Assigned Agreements
None
SCHEDULE III
LOCATIONS OF EQUIPMENT AND INVENTORY
000 Xxxxxx Xxxx, Xxx X, Xxxxxxxx, XX AL
000 Xxxx Xxxxxx Xx., Xxxxxxxx, XX AL
000 X Xxxxx Xxxxx, Xxxxxxxxxx, XX AL
000 Xxxxx 00xx Xxxxxx, Xxx 000, Xxxxx, XX 00000 AZ
000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX AZ
00000 Xxxxxx Xx, Xxx X,X,X, Xxxxxxx Xxxx, XX XX
0000 Xxxx Xxxxx, Xxxxxx 000-000, Xxxxxx, XX CA
00000 Xxxxx Xx, Xxx 0000, Xxx Xxxx, XX XX
0000 X. Xxxxxxx Xxx, Xxxx. 104-106, 2056, 206, Orange, CA CA
0000 Xxxxxxxx Xxx, Xxxx 0&0, Xxxxxxxxx, XX XX
000 Xxxxxx Xxx., Xxxxx 0, Xxxxxxxxxx, XX CA
0000 Xxxxxxxxx Xx., X. Xxxxxxxxx, XX (Unit #K011 & K012) CA
0000 Xxxxxxx Xx, Xxx 000, Xxx Xxxxx, XX XX
0000 Xxxxxxx Xxxxxx, Xxxxxxxx, XX CA
0000 Xxxxx Xxxx Xx, Xxxxxxxx, XX CA
00000 Xxxxxxxxx Xx, Xxxxx Xx Xxxxxxx, XX XX
00000 Xxxxxxxxx Xx, Xxxxx Xx Xxxxxxx, XX XX
00000 E. Xxxxxxxx Xxx, Xxxxx 00, 00 & 0000, XXX, XX XX
0000 Xxxxxxx Xxx., Xxxxx Xxxx, XX CA
0000 Xxxxxxx Xx. Xxxxx X, Xxxxxxxx Xxx, XX XX
0000 Xxxxx Xx, Xxx 000, Xxxxxx, XX XX
00X Xxxxxx Xx, Xxxx Xxxxxx, XX XX
0000 Xxxxx Xxxxxx, Xxxxxxxx, XX XX
0000 Xxxxxxxx Xxx, Xxx 000, Xxxxxxxxxxxx, XX FL
000 Xxxxxxxxx Xx, #X-000-X, Xxxxxxxxx, XX FL
00000 Xxxxx Xxxx, Xxx 0, Xx Xxxxx, XX FL
0000 XX 00xx Xxx, Xxxxx, XX FL
0000 XX 00xx Xxxxxxx #000X & 800B, Pompano Beach, FL FL
0000 Xxxxxxxx Xx #000, Xxxxx, XX FL
000 Xxxxxxx Xx., Xxxx. G, Space 35 & 40, Casselberry, FL FL
000 X Xxxxx Xxxx, Xxx 0000, Xxxxxxxxx Xxxxxxx, XX FL
0000 XX 000xx Xx., Xxxxxx 000 & 000, Xxxxxx, XX XX
0000 XX 00xx Xx., Xxxxx, XX (Unit #A-7 & A-9) FL
32
0000 X. Xxxx Xx., Xxxxxx, XX (3 units) GA
000 Xxxxxxxxxx Xx., Xxxxx 0000, Xxxxxx, XX XX
000 Xxxxxxxxxxx Xx #000, Xxxxx, XX GA
0000 Xxxx Xx., Xxxxx, XX GA
0000 X. Xxxx Xx., Xxxxxxxx, XX (Unit #C058) GA
000 X Xxxxxxx Xx, Xxxx Xxxx, XX IA
0000 X. Xxxx Xx., Xxxxx, XX ID
000 XX Xxxxx Xxx., Xxxxxx, XX IL
000 X Xxxxx Xxx, #000, Xxxxxxxx, XX IL
0 South 000, Xxxxx 00, Xxxxxxxx Xxxxxxx, XX IL
000 Xxxxxxx Xx., Xxxxxxxxxxx, XX IL
0000 Xxxxxxxxxx Xx, Xxxxxxxxxxxx, XX IN
0000 X. Xxxxxxxx, Xxxxxxxxxxxx, XX (Unit #M05) IN
000 Xxxxxx Xxx, Xxxxxxx, XX KS
0000 Xxxxx, Xxxxxx Xxxx, XX XX
00000 Plantside Dr.-C, Louisville, KY KY
0000 Xxxxxx Xx, Xxxxxxx, XX XX
0000 Xxxxxxxxxx Xxxxxx Xx., Xxxxx 0, Xxxxxxxxxx, XX XX
00 Xxxx Xx, Xxxxx X, Xxxxxxxxxx, XX MA
000 Xxxx Xxxx Xx., Xxxxxxx, XX (Unit #B-16) MA
0000 Xxxxxxx Xx, Xxx X-X, Xxxxxxx, XX MD
00000 Xxxxxxxx Xxxx Xxxx., Xxxxxxxx, XX MI
48200 West Road, Wixom, MI MI
00000 Xxxx Xx., Xxxxx, XX (Unit #515) MI
0000 Xxxxxxxxx Xxxxxx Xx., Xxxxx 000, Xxxxx, XX MN
0000 Xxxxxxxxxx Xxxx., #0000, Xxxxxxx, XX (three units) MN
0000 Xxxxxx Xxxxxxxxxx Xxxxx, Xxxxxxxxx, XX MO
0000 Xxxxxxx Xx., #000, Xxxxxxx, XX MS
0000 Xxxxxxx Xxxxxx Xxxx, Xxx 000, Xxxxxxxxxxx, XX NC
Xxxx 00, Xxxxxxxxxxx, XX XX
Xxxxxxxxxxx, XX (Unit #7) NC
33
000 Xxxxx 00xx Xx., Xxxxx, XX NE
Xxx XXXXX Xxxxx, Xxxxxxxxxx, XX NJ
000 Xxx Xxxxxx, Xxxxxxx, XX XX
0000 Xxxxxxxx Xxx, Xxxxx X, Xx. Xxxxxx, XX XX
000 Xxxxx Xxxxxx, Xxxxxxxx, XX XX
0000 Xxx Xxxxxxxx Xxx, Xxxxxxxxxxx, XX NM
0000 X. Xxxxxxx Xxx, #00X, Xxx Xxxxx, XX NV
10435 Palms Airport Dr, Las Vegas, NV NV
0000 Xxxxxxxx Xx, Xxx Xxxxx, XX NV
000 Xxxxxxxxxx Xx, Xxxxxxxxx, XX NY
000 00xx Xx., Xxxxxxxx, XX (Unit #1145 and 1151) NY
000 Xx. Xxxx Xx., Xxxx Xxxxxxx, XX NY
0000 Xxxxxxxx Xxxxx, Xxxxx X, Xxxxxx, XX XX
0000 Xxx Xxxxx Xx., Xxxx 000, Xxxxx, XX XX
0000 Xxxxxxxx Xx., Xxxxx Xxxxxxxx, XX (Unit #0812, 0814) OH
000 Xxx-Xxxx Xxx. Xxxx, Xxxxxxxxx Xxx, XX XX
0000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, XX XX
4422 S. W. 34th St., Oklahoma City, OK OK
5415 S. 000xx Xxxx Xxx., Xxx 000, Xxxxx, XX OK
0000 XX 00xx Xxxxx #0, Xxxxxxxx, XX OR
0000 XX 00xx Xxx., Xxxxxxxx, XX OR
000 Xxxxxxx Xxxx Xx., Xxxxxxxxxx, XX PA
0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxxxxxx, XX PA
0000 Xxxxxxxx Xx, Xxxxx 000, Xxxxxxxxxxx, XX TN
0000 Xxxxx Xxxxxxx, Xxxxxxx, XX TX
0000 Xxxxxxx Xx, #000, Xxx Xxxxxxx, XX TX
0000 Xxxxxxxxx Xxx, Xxxx X, Xxxxxxx, XX TX
9419 Buffalo Speedway, Houston, TX (Unit #F39/56) TX
0000 Xxxxxxx Xx., Xxxxx 000, Xxxxxx, XX TX
Xxxxxxx Xxxxx, 0 & 00, 0000 Xxxxxx, Harlingen, TX TX
7365 Remcon, B204 & X000, Xx Xxxx, XX TX
2100 No Xxx 000, Xxx. 000, Xxxxx Xxxxxx, XX XX
2100 No Xxx 000, Xxx. 000, Xxxxx Xxxxxx, XX XX
000 Xxxxxxxx Xxxxxxx, Xxxxxxxxx, XX TX
34
0000 Xxxxx 0000 Xxxx, Xxxxx X, XXX, XX XX
2265 Xxxxx 0000 Xxxx, Xxxxx X, XXX, XX XX
0000 Xxxxx Xxxxxxx Xxx, Xxxxxxxx, XX VA
0000 Xxxxxxxxxxxx Xx., Xxxxxxxx, XX (Unit #C-15) VA
000 Xxxxxxxxxxxx Xxxx, Xxx X, Xxxxxxx Xxxx, XX VA
0000 X. 000xx Xx., Xxxxx 000, Xxxxxxx, XX XX
2648 00xx Xxx X, Xxxxx X00 & X00, Xxxxxxx, XX XX
000 X. Xxxxx, Xxxxx X-0 & 0, Xxxxxxx, XX XX
0000 Xxxxxxxxxx Xx, Xxxxxx, XX WI
0000 Xxxxx Xxxxxxxxx Xx., Xxxxxxx, XX WI
N8 X00000 Xxxxxxx Xx, Xxx X0, Xxxxxxxx, XX WI
X000X000 Xxxxxxxxxx Xx., Xxxxxxxx, XX WI
SCHEDULE IV
Trade Names
CAMP
Telstar
Trackstar
MEDIQ/PRN
MEDIQ
MEDIQ Care Units
Value-Med
Criticare Hospital Services
MEDIQ Consulting Group
MEDIQ Healthcare Resources
SCHEDULE V
Blocked Accounts and Other Bank Accounts
1. MEDIQ Incorporated
o Summit Bank
Operating Account (Account No. 345004469)**
2. MEDIQ Management Services, Inc.
o Mellon Bank, N.A.
Operating Account (Account No. 2-820-933)**
Payroll Account (Account No. 2-949-493)**
Payroll ACH Prefunding (Account No. 2-834-166)**
3. MEDIQ/PRN Life Support Services, Inc.
o Mellon Bank, N.A.
Master Account (Account No. 2-229-870)**
Operating Account (Account No. 2-951-135)**
Payroll Account (Account No. 2-951-143)**
Lockbox Account (Lockbox No. 7777-W0815)**
o CoreStates Bank, N.A.
Concentration Account (Account No. 00017-03189)**
Operating Account (Account No. 00003-23387)**
Payroll Account (Account No. 00003-16080)**
Lockbox Account - Blocked Account (Account No. 00017-03170)**
o Citibank, N.A.
Health Account (Account No. 00000000)
o PNC Bank (Midlantic Bank)
Xxxxx Cash Account (Account No. 1-00000000-6)
o Congress Financial Corp.
Congress Account
**Accounts covered by Blocked Account Agreements.
EXHIBIT A TO THE SECURITY AGREEMENT
FORM OF BLOCKED ACCOUNT LETTER
October 1, 1996
[Blocked Account Bank Address]
Attn: [ ]
[Grantor]
Ladies and Gentlemen:
Reference is made to the deposit accounts listed on the attached
Schedule I into which certain monies, instruments and other properties are
deposited from time to time (the "Accounts") maintained with you by [Grantor], a
________ corporation (the "Company"). Pursuant to a Security Agreement dated as
of October 1, 1996 (the "Security Agreement"), the Company has granted to Banque
Nationale de Paris, as administrative agent (the "Administrative Agent") for the
Secured Parties referred to in the Credit Agreement dated as of October 1, 1996
(the "Credit Agreement") with the Company, a security interest in certain
property of the Company, including, among other things, the following (the
"Account Collateral"): the Accounts, all funds held therein and all certificates
and instruments, if any, from time to time representing or evidencing the
Accounts, all interest, dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account Collateral and all proceeds
of any and all of the foregoing Account Collateral and, to the extent not
otherwise included, all (i) payments under insurance (whether or not the
Administrative Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Account Collateral and (ii) cash. It is a condition to the
continued maintenance of the Accounts with you that you agree to this letter
agreement.
By signing this letter agreement, you acknowledge notice of the Security
Agreement and confirm to the Administrative Agent that you have received no
notice of any other pledge or assignment of the Accounts. Further, you hereby
agree with the Administrative Agent that:
(a) Notwithstanding anything to the contrary in any other agreement
relating to the Accounts, the Accounts are and will be subject to the terms
and conditions of the Security Agreement, will be maintained solely for the
benefit of the Administrative Agent, will be entitled "Banque Nationale de
Paris, as Administrative
2
Agent, Re: [Grantor]" and will be subject to written instructions only from
an officer of the Administrative Agent.
(b) Upon the written request of the Administrative Agent to you, which
request shall specify that an "Event of Default" under the Credit Agreement
has occurred and is continuing (which writing may be by telex or telecopy
and upon which you may conclusively rely, absent manifest error), you shall
immediately transfer (at the cost and expense of the Company) subject to
your usual deposit terms, all funds then or thereafter deposited in the
Accounts by wire transfer into the Administrative Agent's Account at the
Federal Reserve Bank of New York, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, XX, 00000,
ABA No. 000000000, for further credit to Account No. 750420-701-03.
(c) From and after the date that the Administrative Agent shall have
sent to you a written notice (which writing may be by telex or telecopy and
upon which you may conclusively rely, absent manifest error) that an "Event
of Default" under the Credit Agreement has occurred and until the date, if
any, that the Administrative Agent shall have advised you in writing (which
writing may be by telex or telecopy and upon which you may conclusively
rely, absent manifest error) that no Event of Default is continuing, you
shall not honor any withdrawal or transfer from, or any check, draft or
other item of payment on, the Accounts, other than any withdrawal, transfer,
check, draft or other item made in writing by the Administrative Agent or
bearing the written consent of the Administrative Agent, and, to the extent
of collected funds in the Accounts, you shall honor each such withdrawal,
transfer, check, draft or other item made in writing by the Administrative
Agent or bearing the written consent of the Administrative Agent.
(d) You will follow your usual operating procedures for the handling of
the Accounts, including any remittance received in the Accounts that
contains restrictive endorsements, irregularities (such as a variance
between the written and numerical amounts), undated or postdated items,
missing signatures, incorrect payees, etc.
(e) You shall furnish to the Administrative Agent, promptly upon the
reasonable written request of the Administrative Agent in each instance, all
information regarding the Accounts, to the extent the same is provided to
the Company, for the period of time specified in such written notice, and
the Company hereby authorizes you to furnish same.
(f) You agree that you will not make, and you hereby waive all of your
rights to make, any charge, debit or offset to the Accounts for any reason
whatsoever, and waive any and all liens, whether contractual or provided
under law, which you may have or hereafter acquire on the Accounts or funds
therein, in each case, other than any charge, offset, debit or lien in
respect of your customary service charges relating to the Accounts.
3
(g) All service charges and fees with respect to the Accounts shall be
payable by the Company.
(h) After the giving of notice referred to in paragraphs (b) and (c)
above, the Administrative Agent shall be entitled to exercise any and all
rights of the Company in respect of the Accounts, and the undersigned shall
comply in all respects with such exercise.
This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of the Administrative Agent, the other
Secured Parties and their successors, transferees and assigns. You may terminate
this letter agreement only upon thirty days' prior written notice to the Company
and the Administrative Agent. Upon such termination you shall close the Accounts
and transfer all funds in the Accounts to the Administrative Agent's Account
specified in paragraph (b) above.
4
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Very truly yours,
[GRANTOR]
By
-----------------------------
Name:
Title:
BANQUE NATIONALE DE
PARIS, as Administrative Agent
By
-----------------------------
Title:
By
-----------------------------
Title:
Acknowledged and agreed to as of
the date first above written:
[BLOCKED ACCOUNT BANK NAME]
By
---------------------------
Title:
SCHEDULE I TO EXHIBIT A TO THE
SECURITY AGREEMENT
Accounts
EXHIBIT B TO THE SECURITY AGREEMENT
FORM OF CONSENT AND AGREEMENT
The undersigned hereby acknowledges notice of, and consents to the terms
and provisions of, the Security Agreement dated October 1, 1996 (the "Security
Agreement", the terms defined therein being used herein as therein defined) from
MEDIQ/PRN Life Support Services, Inc. (the "Borrower") and certain other parties
thereto (together with the Borrower, the "Grantors") to Banque Nationale de
Paris as agent (the "Administrative Agent") for the Secured Parties referred to
therein, and hereby agrees with the Administrative Agent that:
(a) Upon written notice from the Administrative Agent, the undersigned
will make all payments to be made by it under or in connection with the
__________ Agreement dated _______________, 19__ (the "Assigned Agreement")
between the undersigned and the Borrower in accordance with the instructions
of the Administrative Agent.
(b) All payments referred to in paragraph (a) above shall be made by the
undersigned irrespective of, and without deduction for, any counterclaim,
defense, recoupment or set-off and shall be final, and the undersigned will
not seek to recover from the Administrative Agent or any Lender for any
reason any such payment once made.
(c) The Administrative Agent shall be entitled to exercise any and all
rights and remedies of the Borrower under the Assigned Agreement in
accordance with the terms of the Security Agreement, and the undersigned
shall comply in all respects with such exercise.
(d) The undersigned will not, without the prior written consent of the
Administrative Agent, (i) cancel or terminate the Assigned Agreement or
consent to or accept any cancellation or termination thereof, [or]
(ii) amend or otherwise modify the Assigned Agreement [, or (iii) make any
prepayment of amounts to become due under or in connection with the Assigned
Agreement, except as expressly provided therein].
This Consent and Agreement shall be binding upon the undersigned and its
successors and assigns, and shall inure, together with the rights and remedies
of the Administrative Agent hereunder, to the benefit of the Administrative
Agent, the other Secured Parties and their successors, transferees and assigns.
This Consent and Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has duly executed this Consent and
Agreement as of the date set opposite its name below.
2
Dated: _______________, ____ [NAME OF OBLIGOR]
By
-----------------------------
Name:
Title:
EXHIBIT C TO THE SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
Banque Nationale de Paris, as Administrative Agent
under the Credit Agreement
referred to below
[Address]
[Date]
Attention:
Security Agreement dated as of October 1, 1996
made by MEDIQ/PRN Life Support Services, Inc. and
the other Grantors to Banque Nationale de Paris, as Administrative Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Security Agreement (such
Security Agreement, as in effect on the date hereof and as it may hereafter be
amended, modified or otherwise supplemented from time to time, being the
"Security Agreement"). The terms defined in the Security Agreement (or in the
Credit Agreement referred to therein) and not otherwise defined herein are used
herein as therein defined.
The undersigned hereby agrees, as of the date first above written, to
become a Grantor under the Security Agreement as if it were an original party
thereto and agrees that each reference in the Security Agreement to "Grantor"
shall also mean and be a reference to the undersigned.
The undersigned hereby assigns and pledges to the Administrative Agent
for the ratable benefit of the Secured Parties, and hereby grants to the
Administrative Agent for the ratable benefit of the Secured Parties as security
for the Secured Obligations a lien on and security interest in, all of the
right, title and interest of the undersigned, whether now owned or hereafter
acquired, in and to the Collateral owned by the undersigned, including, but not
limited to, the property listed on Annex I hereto. Schedules I, II, III, IV and
V to the Security Agreement are hereby supplemented by Annexes I, II, III, IV
and V hereto, respectively. The undersigned hereby certifies that such Annexes
have been prepared by the undersigned in substantially the form of Schedules I,
II, III, IV and V to the Security Agreement and are accurate and complete as of
the date hereof.
The undersigned hereby makes each representation and warranty set forth
in Section 9 of the Security Agreement (as supplemented by the attached Annexes)
to the same extent as
2
each other Grantor and hereby agrees to be bound as a Grantor by all of the
terms and provisions of the Security Agreement to the same extent as each other
Grantor.
This Security Agreement Supplement shall be governed by, and construed
in accordance with, the laws of the State of New York.
Very truly yours,
[NAME OF ADDITIONAL
GRANTOR]
By
-----------------------------
Name:
Title:
Address of Chief Executive
Office and for Notices:
[Address]
Attention: Chief Financial Officer
