EXHIBIT 10.10
SECURITY AGREEMENT
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SECURITY AGREEMENT, dated as of April 22, 1998, between XXXXXXX PRODUCTS,
INC., a Delaware corporation (the "Borrower"), and BANKBOSTON, N.A., a national
banking association, as agent (hereinafter, in such capacity, the "Agent") for
itself and the other lending institutions (hereinafter, collectively, the
"Banks") which are or may become parties to a Revolving Credit and Acquisition
Loan Agreement, dated as of April 22, 1998 (as amended and in effect from time
to time, the "Credit Agreement"), among the Borrower, the Banks, the Agent and
Mercantile Bank National Association, as Co-Agent.
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending credit to the Borrower under the Credit Agreement that the
Borrower execute and deliver to the Agent, for the benefit of the Banks and the
Agent, a security agreement in substantially the form hereof; and
WHEREAS, the Borrower wishes to grant security interests in favor of the
Agent, for the benefit of the Banks and the Agent, 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
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shall have the respective meanings provided therefor in the Credit Agreement.
All terms defined in the Uniform Commercial Code of The Commonwealth of
Massachusetts and used herein shall have the same definitions herein as
specified therein.
2. GRANT OF SECURITY INTEREST.
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2.1. COLLATERAL GRANTED. The Borrower hereby grants to the Agent, for
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the benefit of the Banks and the Agent, to secure the payment and
performance in full of all of the Obligations, a security interest in and
so pledges and assigns to the Agent, for the benefit of the Banks and the
Agent, the following properties, assets and rights of the Borrower,
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 furniture, fixtures, equipment, raw
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materials, inventory, other goods, accounts, contract rights, rights
to the payment of money, insurance refund claims and all other
insurance claims and proceeds, tort claims, chattel paper, documents,
instruments, securities and other investment property, deposit
accounts, rights to proceeds of letters of credit and all general
intangibles including, without limitation, all tax refund claims,
license fees, patents, patent applications, trademarks, trademark
applications, trade names, copyrights, copyright applications, rights
to xxx and recover for past infringement of patents, trademarks and
copyrights, computer programs, computer software, engineering
drawings, service marks, customer lists, goodwill, and all licenses,
permits, agreements of any kind or nature pursuant to which the
Borrower possesses, uses or has authority to possess or use property
(whether tangible or intangible) of others or others possess, use or
have authority to possess or use property (whether tangible or
intangible) of the Borrower, and all recorded data of any kind or
nature, regardless of the medium of recording including, without
limitation, all software, writings, plans, specifications and
schematics.
2.2. DELIVERY OF INSTRUMENTS, ETC.
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(a) Pursuant to the terms hereof, the Borrower has endorsed,
assigned and delivered to the Agent all negotiable or non-negotiable
instruments, certificated securities and chattel paper pledged by it
hereunder, together with instruments of transfer or assignment duly
executed in blank as the Agent may have specified. In the event that
the Borrower shall, after the date of this Agreement, acquire any
other negotiable or non-negotiable instruments, certificated
securities or chattel paper to be pledged by it hereunder, the
Borrower shall forthwith endorse, assign and deliver the same to the
Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as the Agent may from time to time specify.
(b) To the extent that any securities now or hereafter acquired
by the Borrower are uncertificated and are issued to the Borrower or
its nominee directly by the issuer thereof, the Borrower shall cause
the issuer to note on its books the security interest of the Agent in
such securities and shall cause the issuer, pursuant to an agreement
in form and substance satisfactory to the Agent, to agree to comply
with instructions from the Agent as to such securities, without
further consent of the Borrower or such nominee. To the extent that
any securities, whether certificated or uncertificated, or other
financial assets now or hereafter acquired by the Borrower are held by
the Borrower or its nominee through a securities intermediary, the
Borrower shall (i) cause such securities intermediary to note on its
books the security interest of
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the Agent in such securities or other financial assets and to confirm
such notation promptly to the Agent and (ii), at the request of the
Agent, cause such securities intermediary, pursuant to an agreement in
form and substance satisfactory to the Agent, to agree to comply with
entitlement orders or other instructions from the Agent as to such
securities or other financial assets, without further consent of the
Borrower or such nominee. The Agent agrees with the Borrower that the
Agent shall not give any such entitlement orders or instructions to
any such issuer or securities intermediary unless an Even of Default
has occurred and is continuing and the Agent has elected to exercise
its rights and remedies as contemplated by (S)14.
(c) To the extent that the Borrower is a beneficiary under any
written letter of credit now or hereafter issued in favor of the
Borrower, the Borrower shall deliver such letter of credit to the
Agent. The Agent shall from time to time, at the request and expense
of the Borrower, make such arrangements with the Borrower as are in
the Agent's reasonable judgment necessary and appropriate so that the
Borrower may make any drawing to which the Borrower is entitled under
such letter of credit, without impairment of the Agent's perfected
security interest in the Borrower's rights to proceeds of such letter
of credit or in the actual proceeds of such drawing. At the Agent's
request, the Borrower shall, for any letter of credit, whether or not
written, now or hereafter issued in favor of the Borrower as
beneficiary, execute and deliver to the issuer and any confirmer of
such letter of credit an assignment of proceeds from, in favor of the
Agent and satisfactory to the Agent and such issuer or (as the case
may be) such confirmer, requiring the proceeds of any drawing under
such letter of credit to be paid directly to the Agent for application
as provided in the Credit Agreement.
2.3. EXCLUDED COLLATERAL. Notwithstanding the foregoing provisions of
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this (S)2, such grant of security interest shall not extend to, and the
term "Collateral" shall not include, any chattel paper and general
intangibles which are now or hereafter held by the Borrower as licensee,
lessee or otherwise, to the extent that (a) such chattel paper and general
intangibles are not assignable or capable of being encumbered as a matter
of law or under the terms of the license, lease or other agreement
applicable thereto (but solely to the extent that any such restriction
shall be enforceable under applicable law), without the consent of the
licensor or lessor thereof or other applicable party thereto and (b) such
consent has not been obtained; provided, however, that the foregoing grant
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of security interest shall extend to, and the term "Collateral" shall
include, (i) any and all proceeds of such chattel paper and general
intangibles to the extent that the assignment or encumbering of such
proceeds is not so restricted and (ii) upon any such licensor, lessor or
other applicable party
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consent with respect to any such otherwise excluded chattel paper or
general intangibles being obtained, thereafter such chattel paper or
general intangibles as well as any and all proceeds thereof might have
theretofore have been excluded from such grant of a security interest and
the term "Collateral".
2.4. STOCK PLEDGE AGREEMENT. Concurrently herewith the Borrower is
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executing and delivering to the Agent, for the benefit of the Banks and the
Agent, the Stock Pledge Agreement pursuant to which the Borrower is
pledging to the Agent, for the benefit of the Banks and the Agent, (a) 100%
of the shares of capital stock of each of the Borrower's Domestic
Subsidiaries and (b) not less than 66% of the Shares of capital stock of
each of the Borrower's Foreign Subsidiaries. Such pledge shall be governed
by the terms of such stock pledge agreement and not by the terms of this
Agreement.
2.5. PATENT AND TRADEMARK ASSIGNMENTS. Concurrently herewith the
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Borrower is also executing and delivering to the Agent, for the benefit of
the Banks and the Agent, the Patent Assignment and the Trademark Assignment
pursuant to which the Borrower is assigning to the Agent, for the benefit
of the Banks and the Agent, certain Collateral consisting of patents and
patent rights and trademarks, service marks and trademark and service
xxxx rights, together with the goodwill appurtenant thereto. The provisions
of the Patent Assignment and the Trademark Assignment are supplemental to
the provisions of this Agreement, and nothing contained in the Patent
Assignment or the Trademark Assignment shall derogate from any of the
rights or remedies of the Agent or any of the Banks hereunder. Nor shall
anything contained in the Patent Assignment or the Trademark Assignment be
deemed to prevent or extend the time of attachment or perfection of any
security interest in such Collateral created hereby.
3. TITLE TO COLLATERAL, ETC. The Borrower is the owner of the Collateral
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free from any adverse lien, security interest or other encumbrance, except for
the security interest created by this Agreement and other liens permitted by the
Credit Agreement. None of the Collateral constitutes, or is the proceeds of,
"farm products" as defined in (S)9-109(3) of the Uniform Commercial Code of The
Commonwealth of Massachusetts. None of the account debtors in respect of any
accounts, chattel paper or general intangibles and none of the obligors in
respect of any instruments included in the Collateral is a governmental
authority subject to the Federal Assignment of Claims Act.
4. CONTINUOUS PERFECTION. The Borrower's place of business or, if more
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than one, chief executive office is indicated on the Perfection Certificate
delivered to the Agent herewith (the "Perfection Certificate"). The Borrower
will not change the same, or the name, identity or corporate structure of the
Borrower in any manner, without providing at least thirty (30) days prior
written notice to the Agent. The Collateral, to the extent not delivered to the
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Agent pursuant to (S)2.2, will be kept at those locations listed on the
Perfection Certificate and the Borrower will not remove the Collateral from such
locations, without providing at least thirty (30) days prior written notice to
the Agent.
5. NO LIENS. Except for the security interest herein granted and liens
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permitted by the Credit Agreement, the Borrower shall be the owner of the
Collateral free from any lien, security interest or other encumbrance, and the
Borrower 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 Agent or any
of the Banks. The Borrower shall not pledge, mortgage or create, or suffer to
exist a security interest in the Collateral in favor of any person other than
the Agent, for the benefit of the Banks and the Agent, except for liens
permitted by the Credit Agreement.
6. NO TRANSFERS. The Borrower will not sell or offer to sell or otherwise
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transfer the Collateral or any interest therein except as permitted by (S)10.5.2
of the Credit Agreement.
7. INSURANCE.
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7.1. MAINTENANCE OF INSURANCE. The Borrower will maintain with
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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 the Borrower will not 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 Agent. In addition, all
such insurance shall be payable to the Agent as loss payee under a
"standard" or "New York" loss payee clause for the benefit of the Banks and
the Agent. Without limiting the foregoing, the Borrower will (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, with a full replacement cost
endorsement and an "agreed amount" clause in an amount equal to 100% of the
full replacement cost of such property, (b) maintain all such workers'
compensation or similar insurance as may be required by law and (c)
maintain, in amounts and with deductibles equal to those generally
maintained by businesses engaged in similar activities in similar
geographic areas, general public liability insurance against claims of
bodily injury, death or property damage occurring, on, in or about the
properties of the Borrower; business interruption insurance; and product
liability insurance.
7.2. INSURANCE PROCEEDS. The proceeds of any casualty insurance
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in respect of any casualty loss of any of the Collateral shall, subject to
the rights, if any, of other parties with a prior interest in the
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property covered thereby, (a) so long as no Default or Event of Default has
occurred and is continuing, be disbursed to the Borrower for direct
application by the Borrower in accordance with (S)10.5.2 of the Credit
Agreement and (b) in all other circumstances, be held by the Agent as cash
collateral for the Obligations. The Agent may, at its sole option, disburse
from time to time all or any part of such proceeds so held as cash
collateral, upon such terms and conditions as the Agent may reasonably
prescribe, for direct application by the Borrower solely to the repair or
replacement of the Borrower's property so damaged or destroyed, or the
Agent may apply all or any part of such proceeds to the Obligations with
the Total Commitment (if not then terminated) being reduced by the amount
so applied to the Obligations.
7.3. NOTICE OF CANCELLATION, ETC. All policies of insurance shall
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provide for at least thirty (30) days prior written cancellation notice to
the Agent. In the event of failure by the Borrower to provide and maintain
insurance as herein provided, the Agent may, at its option, provide such
insurance and charge the amount thereof to the Borrower. The Borrower shall
furnish the Agent with certificates of insurance and policies evidencing
compliance with the foregoing insurance provision.
8. MAINTENANCE OF COLLATERAL; COMPLIANCE WITH LAW. The Borrower will keep
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the Collateral in good order and repair and will not use the same in violation
of law or any policy of insurance thereon. The Agent, or its designee, may
inspect the Collateral at any reasonable time, wherever located. The Borrower
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 such Collateral or incurred in connection with this Agreement, (other than
such items contested in good faith and in accordance with (S)9.8 of the Credit
Agreement). The Borrower has at all times operated, and the Borrower 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.
9. COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
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9.1. EXPENSES INCURRED BY AGENT. In its discretion, the Agent may
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discharge taxes (other than taxes contested in good faith and in accordance
with (S)9.8 of the Credit Agreement) and other encumbrances at any time
levied or placed on any of the Collateral, make repairs thereto (after any
Event of Default has occurred and is continuing or if the Borrower's
failure to make such repairs will result in an Event of Default) and pay
any necessary filing fees. The Borrower agrees to reimburse the Agent on
demand for any and all expenditures so made. The Agent shall have no
obligation to the Borrower to make any such
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expenditures, nor shall the making thereof relieve the Borrower of any
default.
9.2. AGENT'S OBLIGATIONS AND DUTIES. Anything herein to the contrary
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notwithstanding, the Borrower shall remain liable under each contract or
agreement comprised in the Collateral to be observed or performed by the
Borrower thereunder. Neither the Agent nor any Bank 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 Agent or any Bank of
any payment relating to any of the Collateral, nor shall the Agent or any
Bank be obligated in any manner to perform any of the obligations of the
Borrower under or pursuant to any such contract or agreement, to make
inquiry as to the nature or sufficiency of any payment received by the
Agent or any Bank 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
Agent or to which the Agent or any Bank may be entitled at any time or
times. The Agent's sole duty with respect to the custody, safe keeping and
physical preservation of the Collateral in its possession, under (S)9-207
of the Uniform Commercial Code of The Commonwealth of Massachusetts or
otherwise, shall be to deal with such Collateral in the same manner as the
Agent deals with similar property for its own account.
10. SECURITIES AND DEPOSITS. The Agent may at any time, at its option,
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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. Whether or not any Obligations are due, the Agent
may demand, xxx for, collect, or make any settlement or compromise which it
deems desirable with respect to the Collateral. Regardless of the adequacy of
Collateral or any other security for the Obligations, any deposits or other sums
at any time credited by or due from the Agent or any Bank to the Borrower may at
any time be applied to or set off against any of the Obligations.
11. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER OBLIGORS. If a Default or an
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Event of Default shall have occurred and be continuing, the Borrower shall, at
the request of the Agent, notify account debtors on accounts, chattel paper and
general intangibles of the Borrower and obligors on instruments for which the
Borrower is an obligee of the security interest of the Agent in any account,
chattel paper, general intangible or instrument and that payment thereof is to
be made directly to the Agent or to any financial institution designated by the
Agent as the Agent's agent therefor, and the Agent may itself, if a Default or
an Event of Default shall have occurred and be continuing, without notice to or
demand upon the Borrower, so notify account debtors and obligors. After the
making of such a request or the giving of any such notification, the Borrower
shall hold any proceeds of collection of accounts, chattel paper, general
intangibles and instruments received by the Borrower as trustee for the Agent,
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for the benefit of the Banks and the Agent, without commingling the same with
other funds of the Borrower and shall turn the same over to the Agent in the
identical form received, together with any necessary endorsements or
assignments. The Agent shall apply the proceeds of collection of accounts,
chattel paper, general intangibles and instruments received by the Agent to the
Obligations, such proceeds to be immediately entered after final payment in cash
or solvent credits of the items giving rise to them.
12. FURTHER ASSURANCES. The Borrower, as its own expense, shall do, make,
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execute and deliver all such additional and further acts, things, deeds,
assurances and instruments as the Agent may reasonably require more completely
to vest in and assure to the Agent and the Banks their respective rights
hereunder or in any of the Collateral, including, without limitation, (a)
executing, delivering and, where appropriate, filing financing statements and
continuation statements under the Uniform Commercial Code, (b) obtaining
governmental and other third party consents and approvals, including without
limitation any consent of any licensor, lessor or other applicable party
referred to in (S)2.3, (c) obtaining waivers from mortgagees and landlords and
(d) taking all actions required by Sections 8-313 and 8-321 of the Uniform
Commercial Code (1990) or Sections 8-106 and 9-115 of the Uniform Commercial
Code (1994), as applicable in each relevant jurisdiction, with respect to
certificated and uncertificated securities.
13. POWER OF ATTORNEY.
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13.1. APPOINTMENT AND POWERS OF AGENT. The Borrower hereby
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irrevocable constitutes and appoints the 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
the Borrower or in the 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
desirable to accomplish the purposes of this Agreement and, without
limiting the generality of the foregoing, hereby gives said attorneys the
power and right, on behalf of the Borrower, without notice to or assent by
the Borrower 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 deal with any of the
Collateral in such manner as is consistent with the Uniform
Commercial Code of The Commonwealth of Massachusetts and as fully
and completely as though the Agent were the absolute owner
thereof for all purposes, and to do at the Borrower' expense, at
any time, or from time to time, all acts and things which the
Agent deems necessary to protect, preserve or realize upon the
Collateral and the Agent's security interest therein, in order to
effect the intent of this Agreement, all as fully and effectively
as the
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Borrower might do, including, without limitation, (i) the filing
and prosecuting of registration and transfer applications with
the appropriate federal or local agencies or authorities with
respect to trademarks, copyrights and patentable inventions and
processes, (ii) upon written notice to the Borrower, the exercise
of voting rights with respect to voting securities, which rights
may be exercised, if the Agent so elects, with a view to causing
the liquidation in a commercially reasonable manner 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 file such financing statements with respect
hereto, with or without the Borrower's signature, or a photocopy
of this Agreement in substitution for a financing statement, as
the Agent may deem appropriate and to execute in the Borrower's
name such financing statements and amendments thereto and
continuation statements which may require the Borrower's
signature.
13.2. RATIFICATION BY BORROWER. To the extent permitted by law,
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the Borrower 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 shall be irrevocable.
13.3. NO DUTY ON AGENT. The powers conferred on the Agent
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hereunder are solely to protect the interests of the Agent and the Banks in
the Collateral and shall not impose any duty upon the Agent to exercise any
such powers. The 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 the Borrower for any act or failure to act, except for the
Agent's own gross negligence or willful misconduct.
14. REMEDIES. If an Event of Default shall have occurred and be
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continuing, the Agent may, without notice to or demand upon the Borrower,
declare this Agreement to be in default, and the Agent shall thereafter 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, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Agent may, so far as the
Borrower can give authority therefor, enter upon any premises on which the
Collateral may be situated and remove the same therefrom. The Agent may in its
discretion require the Borrower to assemble all or any part of the Collateral at
such location or locations within the state(s) of the Borrower's principal
office(s) or at such other locations as the Agent may 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 Agent shall give to the
Borrower at
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least five (5) Business Days prior written notice 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. The Borrower hereby acknowledges that
five Business Days prior written notice of such sale or sales shall be
reasonable notice. In addition, the Borrower waives any and all rights that it
may have to a judicial hearing in advance of the enforcement of any of the
Agent's rights hereunder, including, without limitation, its right following an
Event of Default to take immediate possession of the Collateral and to exercise
its rights with respect thereto. To the extent that any of the Obligations are
to be paid or performed by a person other than the Borrower, the Borrower waives
and agrees not to assert any rights or privileges which it may have under
(S)9-112 of the Uniform Commercial Code of The Commonwealth of Massachusetts.
15. NO WAIVER, ETC. The Borrower waives demand, notice, protest, notice
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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
Obligations and the Collateral, the Borrower 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 Agent may deem advisable. The Agent shall have no duty
as to the collection or protection of the Collateral or any income thereon, nor
as to the preservation of rights against prior parties, nor as to the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in (S)9.2. The Agent shall not be deemed to have waived any of its
rights upon or under the Obligations or the Collateral unless such waiver shall
be in writing and signed by the Agent with the consent of the Majority Banks. No
delay or omission on the part of the Agent in exercising any right shall operate
as a waiver of such right or any other right. A waiver on any one occasion shall
not be construed as a bar to or waiver of any right on any future occasion. All
rights and remedies of the 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 time as the Agent deems expedient.
16. MARSHALLING. Neither the Agent nor any Bank shall be required to
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marshal any present or future collateral security (including but not limited to
this Agreement and 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 of the
Agent hereunder and of the Agent or any Bank in respect of such collateral
security and other assurances of payment shall be cumulative and in addition to
all other rights, however existing or arising. To the extent that it lawfully
may, the Borrower hereby agrees that it will not invoke any law relating to the
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marshalling of collateral which might cause delay in or impede the enforcement
of the Agent's rights 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 Borrower hereby irrevocably waives the benefits of all such laws.
17. PROCEEDS OF DISPOSITIONS; EXPENSES. The Borrower shall pay to the
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Agent on demand any and all reasonable expenses, including reasonable attorneys'
fees and disbursements, incurred or paid by the Agent in protecting, preserving
or enforcing the Agent's rights 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 of the Obligations or 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 Credit Agreement, proper
allowance and provision being made for any Obligations not then due. Upon the
final payment and satisfaction in full of all of the Obligations and after
making any payments required by Section 9-504(1)(c) of the Uniform Commercial
Code of The Commonwealth of Massachusetts, any excess shall be returned to the
Borrower, and the Borrower shall remain liable for any deficiency in the payment
of the Obligations.
18. OVERDUE AMOUNTS. Until paid, all amounts due and payable by the
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Borrower hereunder shall be a debt secured by the Collateral and shall bear,
whether before or after judgment, interest at the rate of interest for overdue
principal set forth in the Credit Agreement.
19. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT IS INTENDED TO
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TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. The Borrower
agrees that any suit for the enforcement of this Agreement may be brought in the
courts of The Commonwealth of Massachusetts 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 the Borrower by mail at the address
specified in (S)20 of the Credit Agreement. The Borrower 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.
20. WAIVER OF JURY TRIAL. THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL
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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 OF
ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the Borrower 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. The Borrower (a)
certifies that neither the Agent or any Bank nor any
-12-
representative, agent or attorney of the Agent or any Bank has represented,
expressly or otherwise, that the Agent or any Bank would not, in the event of
litigation, seek to enforce the foregoing waivers and (b) acknowledges that, in
entering into the Credit Agreement and the other Loan Documents to which the
Agent or any Bank is a party, the Agent and the Banks are relying upon, among
other things, the waivers and certifications contained in this (S)20.
21. 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 the
Borrower and its respective successors and assigns, and shall inure to the
benefit of the Agent, the Banks 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. The
Borrower acknowledges receipt of a copy of this Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the Borrower has caused
this Security Agreement to be duly executed as of the date first above written.
XXXXXXX PRODUCTS, INC.
By: /s/ Xxxxxxxxxxx X. Xxxx
-----------------------
Title: Vice President
Accepted:
BANKBOSTON, N.A.,
as Agent
By: /s/ Xxxxx van der Xxxxx
------------------------------------
Xxxxx van der Xxxxx, Vice President
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OR STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 22 day of April, 1998, personally appeared Xxxxxxxxxxx X.
Xxxx to me known personally, and who, being by me duly sworn, deposes and says
that he is the VP and CFO of XXXXXXX PRODUCTS, INC., and that said instrument
was signed and sealed on behalf of said corporation by authority of its Board of
Directors, and said VP and CFO acknowledged said instrument to be the free act
and deed of said corporation.
/s/ Xxxx X. Xxxxxxxx
----------------------
Notary Public
My commission expires: [August 3, 1999]
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 21st day of April, 1998, personally appeared Xxxxx van der
Xxxxx to me known personally, and who, being by me duly sworn, deposes and says
that he is the Vice President of BANKBOSTON, N.A., and that said instrument was
signed and sealed on behalf of said corporation by authority of its Board of
Directors, and said Xxxxx van der Xxxxx acknowledged said instrument to be the
free act and deed of said corporation.
/s/ X. X. Xxxxxxxx-Xxxxxx
-----------------------------
Notary Public
My commission expires: [February 21, 1999]
