Document:

ex_104721.htm

Exhibit 10.3

 

EXECUTION VERSION

 

Obligation GUARANTY AGREEMENT

 

BORROWER:

 

Falcon Global USA LLC. 

c/o SEACOR Marine Holdings, Inc.

7910 Main Street Second Floor

Houma, LA 70360

 

GUARANTOR:

 

SEACOR Marine Holdings, Inc.

7910 Main Street Second Floor

Houma, LA 70360

Telecopier No:

 

 

THIS OBLIGATION GUARANTY AGREEMENT (this "Agreement"), dated as of February 8, 2018, is made by the undersigned guarantor (“Guarantor”) pursuant to that certain Credit Agreement dated of even date herewith (as amended, modified, supplemented or restated from time to time, the “Credit Agreement”) among Falcon Global USA LLC. (“Borrower”), the other Loan Parties party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Issuing Bank and Security Trustee (in such Administrative Agent capacity together with its successors and assigns in such Administrative Agent capacity, the “Agent”), and the lenders from time to time party thereto (each a “Lender” and collectively, the “Lenders”). Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement.

 

	
			1.

				
			Guarantee Of Secured Obligations. Guarantor hereby absolutely and unconditionally agrees to, and by these presents does hereby, guarantee the prompt and punctual payment, performance and satisfaction of the following (collectively, the “Secured Obligations”): (i) all interest accruing on the Loans from the Effective Date through the second anniversary of the Effective Date (the “Obligation Termination Date”) pursuant to the terms of the Credit Agreement, including without limitation all interest pursuant to Section 2.11(c) of the Credit Agreement, and (ii) all participation fees accruing pursuant to 2.10(b) of the Credit Agreement from the Effective Date through the end of the Final Testing Period (as defined herein), including any of the foregoing incurred or accrued during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, whether or not allowed or allowable in such proceeding, whether liquidated or unliquidated and whether now existing or hereafter arising from the Effective Date through the Obligation Termination Date.

			

 

Guarantor acknowledges that the Agent shall be entitled, in its sole and absolute discretion, to determine: (i) the order in which the Agent will seek to collect the liabilities of the Borrower and Loan Parties under the Credit Agreement and the other Loan Documents, and (ii) the manner in which Lender will seek to collect such liabilities, including, without limitation, whether by seeking to realize on any collateral security now or hereafter granted to the Agent by the Loan Parties, by the enforcement of the liabilities against the Borrower or such other Loan Parties, by enforcement of any other guaranty by any other Person of the Obligations or the Secured Obligations, or by a combination of such methods.

 

 

 

 

	
			2.

				
			Cash Flow Shortfall. If, for the period from the Effective Date to December 31, 2018 (the “Interim Testing Period”), there is a Cash Flow Shortfall (as defined below), Guarantor shall, on or before forty-five (45) days following the end of the Interim Testing Period, promptly deposit, into a blocked interest bearing account (the “Blocked Account”) in the name of Guarantor subject to an account control agreement with the Agent, cash collateral securing this Obligation Guaranty in the amount of such Cash Flow Shortfall. Agent shall hold such cash collateral securing this Obligation Guaranty until the determination of whether and how much of a capital contribution is due pursuant to the following sentence. If, for the period from the Effective Date to the second anniversary of the Effective Date (the “Final Testing Period”), there is a Cash Flow Shortfall, Guarantor shall, on or before forty-five (45) days following the end of the Final Testing Period, make a cash capital contribution to the Borrower in at least the amount of such Cash Flow Shortfall. Guarantor may use cash collateral deposited pursuant to this Section 2 only toward the satisfaction of its obligation to make a capital contribution pursuant to this Section 2. The Agent shall return and/or release any remaining such cash collateral to Guarantor promptly following receipt of financial reporting reasonably satisfactory to the Agent demonstrating the amount of any such cash capital contribution obligation pursuant to this Section 2 and the satisfaction of any such obligation. 

			

 

For any period, a “Cash Flow Shortfall” is the amount by which (a) interest expense exceeds (b) Adjusted EBITDA minus (i) Capital Expenditures, minus (ii) mandatory tax distributions minus (iii) principal payments on any indebtedness other than under the Loans.

 

	
			3.

				
			Joint, Several and Solidary Liability. Guarantor's obligations and liabilities under this Agreement shall be on a "solidary" or "joint and several" basis along with Borrower to the same degree and extent as if Guarantor had been and/or will be a co-borrower, co-principal obligor and/or co-maker of the Secured Obligations. In the event that there are other guarantors, endorsers or sureties of all or any portion of the Secured Obligations, Guarantor's obligations and liability hereunder shall further be on a "solidary" or "joint and several" basis along with such other guarantors, endorsers and/or sureties.

			

 

	
			4.

				
			Duration Of Guaranty. This Agreement and Guarantor's obligations and liabilities hereunder shall terminate upon the latest to occur of (i) the Obligation Termination Date, (ii) such time as all interest accrued through the Obligation Termination Date under the Credit Agreement shall have been paid in full and (iii) such time as the obligations pursuant to Section 2 hereof shall be Paid in Full.

			

 

	
			5.

				
			Default. Upon the occurrence of an Event of Default, Guarantor unconditionally and absolutely agrees to pay the then unpaid amount of the Secured Obligations. Such payment or payments shall be made at the address for loan payments specified in the Credit Agreement, immediately following demand by the Agent.

			

 

	
			6.

				
			Guaranty Absolute and Unconditional; Guarantor's Waivers. Unless and except as otherwise provided herein or in the Credit Agreement, the obligations and liabilities of Guarantor are irrevocable, continuing, absolute, unconditional and not subject to any reduction, limitation, impairment or termination for any reason other than the Secured Obligations having been Paid in Full. As such, to the fullest extent permitted by applicable law Guarantor hereby waives now and while this Guaranty remains in effect:

			

 

	 	
			(a)

				
			Notice of acceptance of this Agreement.

			

 

- 2 -

 

 

	 	
			(b)

				
			Presentment for payment of the Secured Obligations, notice of dishonor and of nonpayment, notice of intention to accelerate, notice of acceleration, protest and notice of protest, collection or institution of any suit or other action by the Agent in collection thereof, including any notice of default in payment thereof, or other notice to, or demand for payment thereof, on any party.

			

 

	 	
			(c)

				
			Any right to require the Agent to notify Guarantor of any nonpayment relating to any collateral directly or indirectly securing the Secured Obligations, or notice of any action or nonaction on the part of Borrower, the Agent, or any other guarantor, surety or endorser of the Secured Obligations.

			

 

	 	
			(d)

				
			Any rights to demand or require collateral security from Borrower or any other Person as provided under applicable law or otherwise.

			

 

	 	
			(e)

				
			Any right to require the Agent to notify Guarantor of the terms, time and place of any public or private sale of any collateral directly or indirectly securing the Secured Obligations.

			

 

	 	
			(f)

				
			Any "one action" or "anti-deficiency" law or any other law which may prevent the Agent from bringing any action, including a claim for deficiency, against Guarantor, before or after the Agent's commencement or completion of any foreclosure action, or any action in lieu of foreclosure.

			

 

	 	
			(g)

				
			Any election of remedies by the Agent that may destroy or impair Guarantor's subrogation rights or Guarantor's right to proceed for reimbursement against Borrower or any other guarantor, surety or endorser of the Secured Obligations, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Secured Obligations.

			

 

	 	
			(h)

				
			Any disability, lack of authority, or other defense, set-off, recoupment or counterclaim of Borrower, or any other guarantor, surety or endorser, or any other Person, by reason of the invalidity, illegality or unenforceability of any of the Secured Obligations or otherwise, or by reason of the cessation from any cause whatsoever, other than Payment in Full of the Secured Obligations.

			

 

	 	
			(i)

				
			Any statute of limitations or prescriptive period, if at the time an action or suit brought by the Agent against Guarantor is commenced, there is any outstanding Secured Obligations of Borrower which is barred by any applicable statute of limitations or prescriptive period.

			

 

	 	
			(j)

				
			Any disclosure of information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party now or hereafter known or unknown to Agent or Lenders.

			

 

Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences, and that, under the circumstances, such waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law.

 

- 3 -

 

 

	
			7.

				
			Guarantor's Subordination of Rights. In the event that Guarantor should for any reason (a) advance or lend monies to Borrower, whether or not such funds are used by Borrower to make payments under the Secured Obligations, and/or (b) make any payments to Lenders or others for and on behalf of Borrower under the Secured Obligations, and/or (c) make any payment to Lenders in total or partial satisfaction of Guarantor's obligations and liabilities under this Agreement, and/or if any of Guarantor's property is used to pay or satisfy any of the Secured Obligations, Guarantor hereby agrees that any and all rights that Guarantor may have or acquire to collect from or to be reimbursed by Borrower (or from or by any other guarantor, endorser or surety of the Secured Obligations) for any of the foregoing (collectively, the "Collection and/or Reimbursement Rights"), whether Guarantor's Collection and/or Reimbursement Rights arise by way of subrogation to the rights of the Lenders or otherwise, shall in all respects, whether or not the Borrower is presently or subsequently becomes insolvent, be subordinate, inferior and junior to the rights of the Lenders (or any Affiliate of any Lender) to collect and enforce payment, performance and satisfaction of Borrower’s then remaining Secured Obligations, until such time as the Secured Obligations are Paid in Full. In the event of Borrower’s insolvency or consequent liquidation of Borrower’s assets, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of claims of both the Lenders (or any Affiliate of any Lender) and Guarantor shall be paid to the Lenders (and the Lenders’ applicable Affiliates) and shall be first applied by the Lenders to the then remaining Secured Obligations. Guarantor hereby assigns to the Lenders all claims which they may have or acquire as a creditor against Borrower or any assignee or trustee of Borrower in bankruptcy; provided that such assignment shall be effective only for the purpose of assuring to the Lenders (and the Lenders’ applicable Affiliates) Payment in Full of the Secured Obligations.

			

 

	
			8.

				
			Guarantor's Receipt of Payments. Guarantor further agrees to refrain from attempting to collect and/or enforce any of Guarantor's Collection and/or Reimbursement Rights against Borrower (or against any other guarantor, surety or endorser of the Secured Obligations), arising by way of subrogation or otherwise, until such time as all of the then remaining Secured Obligations are Paid in Full. In the event that Guarantor should for any reason whatsoever receive any payments from Borrower (or any other guarantor, surety or endorser of the Secured Obligations) that Borrower (or such a third party) may owe to Guarantor with respect to the Collection and/or Reimbursement Rights, Guarantor agrees to accept such payment(s) in trust for and on behalf of the Lenders (and the Lenders’ applicable Affiliates), advising Borrower (or the third party payee) of such fact. Guarantor further unconditionally agrees to deliver immediately such funds to the Agent, with such funds being held by Guarantor over any interim period in trust for the Lenders.

			

 

	
			9.

				
			Additional Covenants. Guarantor agrees that the Agent or Lenders may, at their sole option, at any time, and from time to time, without consent of or notice to Guarantor, or any of them, and without incurring any responsibility to Guarantor, and without impairing or releasing any of Guarantor's obligations or liabilities under this Agreement:

			

 

	 	
			(a)

				
			Make additional secured and/or unsecured loans to Borrower;

			

 

	 	
			(b)

				
			Discharge, release or agree not to sue any party (including, but not limited to, Borrower or any other guarantor, surety, or endorser of the Obligations or the Secured Obligations), who is or may be liable for any of the Obligations or the Secured Obligations;

			

 

	 	
			(c)

				
			Sell, exchange, release, surrender, realize upon, foreclose on by one or more judicial or non-judicial sale, or otherwise deal with, in any manner and in any order, any collateral directly or indirectly securing repayment of any of the Secured Obligations, or fail to perfect any security interest or other Lien in any such collateral or fail to act in any other manner with respect to any collateral securing any part of the Secured Obligations;

			

 

- 4 -

 

 

	 	
			(d)

				
			Alter, renew, extend, accelerate or otherwise change the manner, place, terms and/or times of payment or other terms of any obligation or liability of any party under any Loan Document or the Secured Obligations, or any part thereof, including any increase or decrease in the rate or rates of interest on any of the Obligations or the Secured Obligations;

			

 

	 	
			(e)

				
			Settle or compromise any of the Secured Obligations;

			

 

	 	
			(f)

				
			Subordinate and/or agree to subordinate the payment of all or any part of the Secured Obligations, or the Lenders’ security rights in any collateral directly or indirectly securing any such Secured Obligations, to the payment and/or security rights of any other present and/or future creditors of Borrower;

			

 

	 	
			(g)

				
			Apply any payments and/or proceeds received from Borrower or others to other loans and/or obligations and liabilities that Borrower may then owe to the Lenders, whether or not the Secured Obligations subject to this Agreement then remains unpaid; or

			

 

	 	
			(h)

				
			Enter into, deliver, modify, amend, rescind, or waive compliance with, any instrument or arrangement evidencing, securing or otherwise affecting, all or any part of the Secured Obligations or any Loan Document.

			

 

	
			10.

				
			No Impairment of Guarantor's Obligations. No course of dealing among the Agent, the Lenders and the Borrower (or any other guarantor, surety or endorser of the Secured Obligations), nor any failure or delay on the part of the Agent or any Lender (or any Affiliate of any Lender) to exercise any of their rights and remedies under this Agreement, the Credit Agreement, or any other Loan Document, shall have the effect of impairing or releasing Guarantor's obligations and liabilities to the Agent and the Lenders (and the Lenders’ applicable Affiliates), or of waiving any of their rights and remedies under this Agreement, the Credit Agreement, any other Loan Document or otherwise. Any partial exercise of any rights and remedies granted to the Agent and the Lenders (and the Lenders’ applicable Affiliates) shall furthermore not constitute a waiver of any of their other rights and remedies; it being Guarantor's intent and agreement that the Agent's and Lenders’ (and the applicable Lenders’ Affiliates’) rights and remedies shall be cumulative in nature.

			

 

	
			11.

				
			No Release of Guarantor. Guarantor's obligations and liabilities under this Agreement shall not be released, impaired, reduced, or otherwise affected by, and shall continue in full force and effect, notwithstanding the occurrence of any event, including without limitation any one or more of the following events:

			

 

	 	
			(a)

				
			The death, insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution, or lack of authority (whether corporate, partnership or trust) of Borrower (or any person acting on Borrower’s behalf), or of any other guarantor, surety or endorser of the Obligations or the Secured Obligations.

			

 

	 	
			(b)

				
			Any payment by Borrower, or any other party, to the Lenders (or any Affiliate of any Lender) that is held to constitute a preferential transfer or a fraudulent conveyance under any applicable law, or any such amounts or payment which, for any reason, the Lenders are required to refund or repay to Borrower or to any other Person.

			

 

- 5 -

 

 

	 	
			(c)

				
			Any dissolution of Borrower, or any sale, lease or transfer of all or any part of Borrower’s assets.

			

 

	
			12.

				
			Automatic Reinstatement. This Agreement and Guarantor's obligations and liabilities hereunder shall continue to be effective, and/or shall automatically and retroactively be reinstated, if a release or discharge has occurred, or if at any time, any payment or part thereof to the Lenders (or any Affiliate of any Lender) with respect to any of the Secured Obligations, is rescinded or must otherwise be restored by the Lenders (or any Affiliate of any Lender) pursuant to any insolvency, bankruptcy, reorganization, receivership, or any other debt relief granted to Borrower or to any other party. In the event that the Agent or Lenders (or any Affiliate of any Lender) must rescind or restore any payment received in total or partial satisfaction of the Secured Obligations, any prior release or discharge from the terms of this Agreement given to Guarantor shall be without effect, and this Agreement and Guarantor's obligations and liabilities hereunder shall automatically and retroactively be renewed and/or reinstated and shall remain in full force and effect to the same degree and extent as if such a release or discharge had never been granted. It is the intention of the Lenders and Guarantor that Guarantor's obligations and liabilities hereunder shall not be discharged except as provided in Section 4.

			

 

	
			13.

				
			Representations and Warranties By Guarantor. Guarantor represents and warrants that there are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived, and Guarantor further represents and warrants that:

			

 

	 	
			(a)

				
			Guarantor is solvent and the execution of this Agreement will not render Guarantor insolvent.

			

 

	 	
			(b)

				
			Guarantor has the power and authority and legal right to execute and deliver this Agreement and Guarantor's other Loan Documents and to perform Guarantor's obligations and liabilities hereunder and thereunder. The execution and delivery by Guarantor of this Agreement and Guarantor's other Loan Documents and the performance of Guarantor's obligations and liabilities hereunder and thereunder have been duly authorized by proper proceedings, and this Agreement and Guarantor's other Loan Documents constitute the legal, valid and binding obligations and liabilities of Guarantor enforceable against Guarantor in accordance with the terms thereof, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

			

 

	 	
			(c)

				
			Neither the execution and delivery by Guarantor of this Agreement and Guarantor's other Loan Documents, nor the consummation of the transactions herein and therein contemplated, nor compliance with the provisions hereof and thereof will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Guarantor, or (ii) the provisions of any indenture, instrument or agreement to which Guarantor is a party or is subject, or by which Guarantor, or Guarantor's property, is bound, or conflict with or constitute a default thereunder, or result in, or require, the creation or imposition of any Lien in, of or on the property of Guarantor pursuant to the terms of any such indenture, instrument or agreement. No order, consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof, which has not been obtained by Guarantor, is required to be obtained by Guarantor in connection with the execution and delivery of this Agreement and Guarantor's other Loan Documents or the performance by Guarantor of Guarantor's obligations and liabilities hereunder and thereunder or the legality, validity, binding effects or enforceability of this Agreement and Guarantor's other Loan Documents, except for filings to perfect Liens granted under Guarantor’s other Loan Documents.

			

 

- 6 -

 

 

	 	
			(d)

				
			Guarantor has agreed and consented to execute this Agreement and Guarantor's other Loan Documents and to guarantee the Secured Obligations in favor of the Lenders (and Lenders’ applicable Affiliates), at Borrower’s request and not at the request of Lenders (or the Affiliates).

			

 

	 	
			(e)

				
			Guarantor will receive and/or has received a direct or indirect material benefit from the transactions contemplated in this Agreement and/or arising out of the Secured Obligations.

			

 

	 	
			(f)

				
			Guarantor has established adequate means of obtaining information from Borrower on a continuing basis regarding Borrower’s financial condition.

			

 

	 	
			(g)

				
			The Agent and the Lenders and Lenders’ Affiliates have made no representations to Guarantor as to the creditworthiness of Borrower. Guarantor acknowledges and agrees that the Agent, Lenders (and Lenders’ Affiliates) shall not have any obligation to investigate the condition or affairs of any other party for the benefit of the Guarantor whether or not such Agent, Lenders (and Lenders’ Affiliates) knows or believes or has reason to know or believe that any such fact or change is unknown to Guarantor, or might (or does) materially increase the risk of the Guarantor as guarantor, or might (or would) affect the willingness of the Guarantor to continue as a guarantor under this Agreement.

			

 

	
			14.

				
			Enforcement of Guarantor’s Obligations and Liabilities. Guarantor agrees that following the occurrence of an Event of Default, should the Agent or the Lenders deem it necessary to file an appropriate collection action to enforce Guarantor’s obligations and liabilities under this Agreement, that this Agreement is a guaranty of payment and not of collection and Agent or the Lenders may commence such a civil action against Guarantor without the necessity of first (i) attempting to collect the Obligations or the Secured Obligations from Borrower or from any other guarantor, surety or endorser of the Obligations or Secured Obligations, whether through filing of suit or otherwise, (ii) attempting to exercise against any collateral directly or indirectly securing repayment of any of the Obligations or the Secured Obligations, whether through the filing of an appropriate foreclosure action or otherwise, or (iii) including Borrower or any other guarantor, surety or endorser of any of the Obligations or the Secured Obligations as an additional party defendant in such a collection action against Guarantor. If there is more than one guarantor under this Agreement, Guarantor additionally agrees that the Agent or the Lenders may file an appropriate collection and/or enforcement action against any one or more of them, without impairing the rights of the Agent or the Lenders against any other guarantor under this Agreement. In the event that the Agent or the Lenders should ever deem it necessary to refer this Agreement to any attorney-at-law for the purpose of enforcing Guarantor’s obligations and liabilities hereunder, or of protecting or preserving their rights hereunder, Guarantor agrees to reimburse the Agent and the Lenders for the reasonable fees of such an attorney. Guarantor additionally agrees that the Agent and the Lenders shall not be liable for failure to use diligence in the collection of any of the the Secured Obligations or any collateral security therefor, or in creating or preserving the liability of any person liable on any such Obligations or Secured Obligations, or in creating, perfecting or preserving any security for any such Secured Obligations.

			

 

- 7 -

 

 

	
			15.

				
			Additional Obligations of Guarantor. Guarantor has reviewed the Credit Agreement and will at all times comply with any affirmative and negative covenants imposed on, or with respect to, Guarantor under the Credit Agreement. Guarantor agrees to keep adequately informed of any facts, events or circumstances which might in any way affect Guarantor's risks under this Agreement. Guarantor further agrees that the Lenders shall have no obligation to disclose to Guarantor any information or material relating to Borrower, the Secured Obligations.

			

 

	
			16.

				
			Additional Documents; Financial Statements. Upon the reasonable request of the Agent, Guarantor will, at any time, and from time to time, execute and deliver to the Agent any and all such financial instruments and documents, and supply such additional information, as may be necessary or advisable in the reasonable opinion of the Agent to obtain the full benefits of this Agreement, provided that no such instruments or documents are inconsistent with this Agreement. Guarantor further agrees to provide the Agent with such financial statements and other related information at such frequencies and in such detail as the Agent may reasonably request.

			

 

	
			17.

				
			Transfer of Obligations. This Agreement is for the benefit of the Agent and the Lenders and for such other Person or Persons as may from time to time become or be the holders of all or any part of the Secured Obligations. This Agreement shall be transferrable and negotiable with the same force and effect and to the same extent as the Secured Obligations may be transferrable; it being understood and agreed to by Guarantor that, upon any transfer or assignment of all or any part of the Secured Obligations, the holder of such Secured Obligations shall have all of the rights and remedies granted to the Lenders under this Agreement. Guarantor further agrees that, upon any transfer of all or any portion of the Secured Obligations, the Lenders may transfer and deliver any and all collateral securing repayment of such Secured Obligations (including, but not limited to, any collateral provided by Guarantor) to the transferee of such Secured Obligations, and such collateral shall secure any and all of the Secured Obligations in favor of such a transferee. Guarantor additionally agrees that after any such transfer or assignment has taken place, the Lenders shall be fully discharged from any and all liability and responsibility to Borrower and Guarantor with respect to such collateral, and the transferee thereafter shall be vested with all the powers and rights with respect to such collateral.

			

 

	
			18.

				
			Consent to Participation. Guarantor recognizes and agrees that the Lenders may, from time to time, one or more times, transfer all or any part of the Secured Obligations through sales of participation interests in such Secured Obligations to one or more third party lenders. Guarantor specifically agrees and consents to all such transfers and assignments, and Guarantor further waives any subsequent notice of such transfers and assignment as may be provided under all applicable laws. Guarantor additionally agrees that the purchaser of a participation interest in the Secured Obligations will be considered as the absolute owner of a percentage interest of such Secured Obligations and that such a purchaser will have all of the rights granted under any participation agreement governing the sale of such a participation interest. Guarantor waives any rights of offset that Guarantor may have against the Lenders and/or any purchaser of such a participation interest, and Guarantor unconditionally agrees that the Lenders or such a purchaser may enforce Guarantor's obligations and liabilities under this Agreement, irrespective of the failure or insolvency of the Lenders or any such purchaser.

			

 

	
			19.

				
			Notices. Any notice and other communications provided pursuant to this Agreement must be in writing and will be considered as given when received by hand or facsimile transmission or one Business Day after delivery to an express courier, or three Business Days after being deposited in the U.S. certified mail, postage prepaid, addressed to the person to whom the notice is to be given at the address shown above, in the case of Guarantor, or at the address set forth in the Credit Agreement, in the case of the Agent and each Lender, or at such other addresses as any party may designate to the others in writing.

			

 

- 8 -

 

 

	
			20.

				
			Additional Guaranties. Guarantor recognizes and agrees that Guarantor may have previously granted, and may in the future grant, one or more additional guaranties of the Obligations or the Secured Obligations in favor of the Agent and the Lenders (and Affiliates of the Lenders). Should this occur, the execution of this Agreement and any additional guaranties on the part of Guarantor will not be construed as a cancellation of this Agreement or any of Guarantor's additional guaranties; it being Guarantor's full intent and agreement that all such guaranties of the Obligations and the Secured Obligations in favor of the Agent and the Lenders (and Affiliates of the Lenders) shall remain in full force and effect and shall be cumulative in nature and effect.

			

 

	
			21.

				
			Taxes.

			

 

	 	
			21.1

				
			Withholding Taxes; Gross-Up; Payments Free of Taxes. Any and all payments by or on account of any obligation of Guarantor under this Agreement or any other Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by Guarantor shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this section), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

			

 

	 	
			21.2

				
			Payment of Other Taxes by Guarantor. Guarantor shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Agent timely reimburse it for, Other Taxes.

			

 

	 	
			21.3

				
			Evidence of Payment. As soon as practicable after any payment of Taxes by Guarantor to a Governmental Authority pursuant to this Agreement or the other Loan Documents, Guarantor shall deliver to the Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to the Agent.

			

 

	 	
			21.4

				
			Indemnification by Guarantor. Guarantor shall indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under the Loan Documents) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Guarantor by a Lender (with a copy to the Agent), or by the Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

			

 

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			22.

				
			Miscellaneous Provisions. The following miscellaneous provisions are a part of this Agreement:

			

 

	 	
			22.1

				
			Amendment. No amendment, modification, consent or waiver of any provision of this Agreement, and no consent to any departure by Guarantor therefrom, shall be effective unless the same shall be in writing signed by a duly authorized officer of the Agent and the Lenders (pursuant to the Credit Agreement), and then shall be effective only as to the specific instance and for the specific purpose for which given.

			

 

	 	
			22.2

				
			Caption Headings. Caption headings of the sections of this Agreement are for convenience purposes only and are not to be used to interpret or to define their provisions. In this Agreement, whenever the context so requires, the singular includes the plural and the plural also includes the singular.

			

 

	 	
			22.3

				
			Construction. The provisions of this Agreement shall be in addition to and cumulative of, and not in substitution, novation or discharge of, any and all prior or contemporaneous guaranty or other agreements by Guarantor (or any one or more of them) in favor of the Agent and the Lenders (and the Lenders’ Affiliates) or assigned to the Agent and the Lenders (and the Lenders’ Affiliates) by others, all of which shall be construed as complementing each other. Nothing herein contained shall prevent the Agent and the Lenders (and the Lenders’ Affiliates) from enforcing any and all such other guaranties or agreements in accordance with their respective terms.

			

 

	 	
			22.4

				
			Governing Law. This Agreement shall be governed and construed in accordance with the substantive laws of the State of New York.

			

 

	 	
			22.5

				
			Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the terms hereof, such provision shall be fully severable. This Agreement shall be construed and enforceable as if the illegal, invalid or unenforceable provision had never comprised a part of it, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement, a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and legal, valid and enforceable. 

			

 

	 	
			22.6

				
			Successors and Assigns Bound. Guarantor's obligations and liabilities under this Agreement shall be binding upon Guarantor's successors, heirs, legatees, devisees, administrators, executors and assigns.

			

 

	 	
			22.7

				
			SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. EACH OF THE GUARANTOR AND, BY ITS ACCEPTANCE HEREOF, THE AGENT (FOR ITSELF AND ON BEHALF OF THE LENDERS AND THEIR AFFILIATES) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

			

 

GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT AND AGREES TO ITS TERMS. IN ADDITION, GUARANTOR UNDERSTANDS THAT THIS AGREEMENT IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS AGREEMENT TO THE AGENT AND THE LENDERS AND THAT THIS AGREEMENT WILL CONTINUE UNTIL TERMINATED. NO FORMAL ACCEPTANCE BY THE AGENT AND THE LENDERS (OR THE LENDERS’ AFFILIATES) IS NECESSARY TO MAKE THIS AGREEMENT EFFECTIVE.

 

[Remainder of page intentionally left blank; Signature page follows]

 

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				GUARANTOR:	
			 

			
	
			 

				
			 

				
			 

			
	
			 

				
			SEACOR MARINE HOLDINGS, INC.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				/s/ Jesús Llorca 	
			 

			
	
			 

				
			Name:

				Jesús Llorca	
			 

			
	
			 

				
			Title:

				Executive Vice President	
			 

			

 

	
			 

				
			AGENT:

				
			 

			
	
			 

				
			 

				
			 

			
	
			 

				
			JPMORGAN CHASE BANK, N.A.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				/s/ S.D. Milliken	
			 

			
	
			 

				
			Name:

				S.D. Milliken	
			 

			
	
			 

				
			Title:

				Authorized Officerex_104722.htm

Exhibit 10.4

 

EXECUTION VERSION

 

PLEDGE AND SECURITY AGREEMENT

 

THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”) is entered into as of February 8, 2018, by and among Falcon Global USA LLC, a Delaware limited liability company (“Falcon”), the additional grantors listed on the signature pages hereto and any additional entities which become parties to this Security Agreement by executing a Security Agreement Supplement hereto in substantially the form of Annex I hereto (such additional entities, together with Falcon, each a “Grantor”, and collectively, the “Grantors”), and JPMorgan Chase Bank, N.A., in its capacity as administrative agent and security trustee (the “Administrative Agent”) for the lenders party to the Credit Agreement referred to below.

 

PRELIMINARY STATEMENT

 

The Grantors, the Administrative Agent and the Lenders are entering into a Credit Agreement dated as of even date herewith (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Falcon is entering into, and has agreed to cause each of its domestic Subsidiaries to enter into, this Security Agreement in order to induce the Lenders to enter into and extend credit to Falcon (the “Borrower”) under the Credit Agreement and to secure the Secured Obligations.

 

ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Secured Parties, hereby agree as follows:

 

Article I

DEFINITIONS

 

1.1     Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

 

1.2     Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Security Agreement are used herein as defined in the UCC provided, however, that if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term has the meaning specified in Article 9 of the UCC.

 

1.3     Definitions of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the first paragraph hereof and in the Preliminary Statement, the following terms shall have the following meanings:

 

“Article” means a numbered article of this Security Agreement, unless another document is specifically referenced.

 

“Closing Date” means the date of the Credit Agreement.

 

“Collateral” shall have the meaning set forth in Article II.

 

 

 

 

“Collateral Report” means any certificate report or other document delivered by any Grantor to the Administrative Agent or any Lender with respect to the Collateral pursuant to any Loan Document.

 

“Control” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

 

“Copyrights” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

 

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

“Deposit Account Control Agreement” means an agreement, in form and substance satisfactory to the Administrative Agent, among any Loan Party, a banking institution holding such Loan Party’s funds, and the Administrative Agent with respect to collection and control of all deposits and balances held in a Deposit Account maintained by such Loan Party with such banking institution.

 

“Event of Default” has the meaning set forth in the Credit Agreement.

 

“Excluded Property” has the meaning set forth in the Credit Agreement.

 

“Exhibit” refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.

 

“Lenders” means the lenders party to the Credit Agreement and their successors and assigns.

 

“Licenses” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

 

“Patents” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

 

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“Plans” means any and all plans, specifications, drawings or any other similar materials relating to the construction, modification and design of the Vessels, as each may from time to time be amended, revised, supplemented, restated, renewed or modified. 

 

“Pledged Collateral” means all Instruments, Securities and other Investment Property of the Grantors, whether or not physically delivered to the Administrative Agent pursuant to this Security Agreement.

 

“Property Excluded From the Security Agreement” means a Vessel to the extent any security interest therein may only be created by a Ship Mortgage.

 

“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.

 

“Section” means a numbered section of this Security Agreement, unless another document is specifically referenced.

 

“Security” shall have the meaning set forth in Article 8 of the UCC.

 

“Security Agreement Supplement” shall mean any Security Agreement Supplement to this Security Agreement in substantially the form of Annex I hereto executed by an entity that becomes a Grantor under this Security Agreement after the date hereof.

 

“Ship Mortgages” has the meaning set forth in the Credit Agreement.

 

“Stock Rights” means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interest.

 

“Trademarks” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

 

“UCC” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Administrative Agent’s or any other Secured Party’s Lien on any Collateral.

 

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The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

 

Article II

GRANT OF SECURITY INTEREST

 

Each Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Secured Parties, to secure the prompt and complete payment and performance of the Secured Obligations, a security interest in all of its right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless of where located (all of which will be collectively referred to as the “Collateral”), including:

 

(i)     all Accounts;

 

(ii)     all Chattel Paper;

 

(iii)     all Copyrights, Patents and Trademarks;

 

(iv)     all Documents;

 

(v)     all Equipment;

 

(vi)     all Fixtures;

 

(vii)     all General Intangibles;

 

(viii)     all Goods;

 

(ix)     all Instruments;

 

(x)     all Inventory;

 

(xi)     all Investment Property;

 

(xii)     all cash or cash equivalents;

 

(xiii)     all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

 

(xiv)     all Deposit Accounts with any bank or other financial institution;

 

(xv)     all Commercial Tort claims; 

 

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(xvi)     all Plans; and

 

(xvii)     all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing

 

but excluding Excluded Property and Property Excluded From the Security Agreement.

 

The term “Collateral” means each and all of the items and property rights described in clauses (i)-(xvi) above.

 

Article III

REPRESENTATIONS AND WARRANTIES

 

Each Grantor represents and warrants, and each Grantor that becomes a party to this Security Agreement pursuant to the execution of a Security Agreement Supplement represents and warrants (after giving effect to supplements, if any, to each of the Exhibits hereto with respect to such Grantor as attached to such Security Agreement Supplement), to the Administrative Agent and the Lenders that:

 

3.1     Title, Authorization, Validity, Enforceability, Perfection and Priority. Such Grantor has good and valid rights in or the power to transfer the Collateral and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e), and has full power and authority to grant to the Administrative Agent the security interest in the Collateral pursuant hereto. The execution and delivery by such Grantor of this Security Agreement has been duly authorized by proper proceedings of such Grantor, and this Security Agreement constitutes a legal valid and binding obligation of such Grantor and creates a security interest which is enforceable against such Grantor in all Collateral it now owns or hereafter acquires, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. When financing statements have been filed in the appropriate offices against such Grantor in the locations listed on Exhibit H, the Administrative Agent will have a fully perfected first priority security interest in that Collateral of such Grantor in which a security interest may be perfected by filing, subject only to Liens permitted under Section 4.1(e).

 

3.2     Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of such Grantor, its state of organization, the organizational number issued to it by its state of organization and its federal employer identification number are set forth on Exhibit A.

 

3.3     Principal Location. Such Grantor’s mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), are disclosed in Exhibit A; such Grantor has no other places of business except those set forth in Exhibit A.

 

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3.4     Collateral Locations. All of such Grantor’s locations where Collateral, which, for the sake of good order excludes ships, including those described in Part III of Exhibit E, is located are listed on Exhibit A. All of said locations are owned by such Grantor except for locations (i) which are leased by the Grantor as lessee and designated in Part VII(b) of Exhibit A and (ii) at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment as designated in Part VII(c) of Exhibit A.

 

3.5     Deposit Accounts. All of such Grantor’s Deposit Accounts are listed on Exhibit B.

 

3.6     Exact Names. Such Grantor’s name in which it has executed this Security Agreement is the exact name as it appears in such Grantor’s organizational documents, as amended, as filed with such Grantor’s jurisdiction of organization. Such Grantor has not, during the past five years, been known by or used any other corporate or fictitious name, or been a party to any merger or consolidation, or been a party to any acquisition.

 

3.7     Letter-of-Credit Rights and Chattel Paper. Exhibit C lists all Letter-of-Credit Rights and Chattel Paper of such Grantor. All action by such Grantor necessary or desirable to protect and perfect the Administrative Agent’s Lien on each item listed on Exhibit C (including the delivery of all originals and the placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The Administrative Agent will have a fully perfected first priority security interest in the Collateral listed on Exhibit C, subject only to Liens permitted under Section 4.1(e).

 

3.8     Accounts and Chattel Paper.

 

(a)     The names of the obligors, amounts owing, due dates and other information with respect to its Accounts and Chattel Paper are and will be correctly stated in all records of such Grantor relating thereto and in all invoices and Collateral Reports with respect thereto furnished to the Administrative Agent by such Grantor from time to time. As of the time when each Account or each item of Chattel Paper arises, such Grantor shall be deemed to have represented and warranted that such Account or Chattel Paper, as the case may be, and all records relating thereto, are genuine and in all respects what they purport to be.

 

(b)     With respect to its Accounts, except as specifically disclosed on the most recent Collateral Report, (i) all Accounts are Eligible Accounts; (ii) all Accounts represent bona fide sales of Inventory or rendering of services to Account Grantors in the ordinary course of such Grantor’s business and are not evidenced by a judgment, Instrument or Chattel Paper; (iii) there are no setoffs, claims or disputes existing or asserted with respect thereto and such Grantor has not made any agreement with any Account Grantor for any extension of time for the payment thereof, any compromise or settlement for less than the full amount thereof, any release of any Account Grantor from liability therefor, or any deduction therefrom except a discount or allowance allowed by such Grantor in the ordinary course of its business for prompt payment and disclosed to the Administrative Agent; (iv) to such Grantor’s knowledge, there are no facts, events or occurrences which in any way impair the validity or enforceability thereof or could reasonably be expected to reduce the amount payable thereunder as shown on such Grantor’s books and records and any invoices, statements and Collateral Reports with respect thereto; (v) such Grantor has not received any notice of proceedings or actions which are threatened or pending against any Account Grantor which might result in any adverse change in such Account Grantor’s financial condition; and (vi) such Grantor has no knowledge that any Account Grantor has become insolvent or is generally unable to pay its debts as they become due.

 

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(c)     In addition, with respect to all of its Accounts, (i) the amounts shown on all invoices, statements and Collateral Reports with respect thereto are actually and absolutely owing to such Grantor as indicated thereon and are not in any way contingent; (ii) from and after the time when a Deposit Account becomes subject to a Deposit Account Control Agreement, no payments shall be made thereon except payments immediately delivered to a Deposit Account subject to a Deposit Account Control Agreement.

 

3.9     Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit) is located at one of such Grantor’s locations set forth on Exhibit A, (b) no Inventory (other than Inventory in transit) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for Liens permitted under Section 4.1(e), (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and merchantable quality, free from any defects, (e) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition, (f) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder and (g) the completion of manufacture, sale or other disposition of such Inventory by the Administrative Agent following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject.

 

3.10     Intellectual Property. Such Grantor does not have any interest in, or title to, any Patent, Trademark or Copyright except as set forth in Exhibit D. This Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the offices listed on Exhibit H and this Security Agreement with the United States Copyright Office and the United States Patent and Trademark Office, fully perfected first priority security interests in favor of the Administrative Agent on such Grantor’s Patents, Trademarks and Copyrights, such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such Grantor; and all action necessary or desirable to protect and perfect the Administrative Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly taken.

 

3.11     Filing Requirements. None of its Equipment is covered by any certificate of title, except for any vehicles described in Part I of Exhibit E, and any ships described in Part III of Exhibit E. None of the Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute except for (a) the vehicles described in Part II of Exhibit E, (b) the ships described in Part III of Exhibit E, which security interests liens or security interests may only be perfected by recordation of Ship Mortgages, and (c) Patents, Trademarks and Copyrights held by such Grantor and described in Exhibit C. The legal description, county and street address of each property on which any Fixtures are located is set forth in Exhibit F together with the name and address of the record owner of each such property.

 

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3.12     No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion of the Collateral which has not lapsed or been terminated (by a filing authorized by the secured party in respect thereof) naming such Grantor as debtor has been filed or is of record in any jurisdiction except for financing statements or security agreements (a) naming the Administrative Agent on behalf of the Secured Parties as the secured party and (b) in respect to other Permitted Encumbrances.

 

3.13     Pledged Collateral.

 

(a)     Exhibit G sets forth a complete and accurate list of all Pledged Collateral owned by such Grantor. Such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit G as being owned by it, free and clear of any Liens, except for any Liens permitted by Section 4.1(e). Such Grantor further represents and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates delivered to the Administrative Agent representing an Equity Interest, either such certificates are Securities as defined in Article 8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Administrative Agent so that the Administrative Agent may take steps to perfect its security interest therein as a General Intangible, (iii) all such Pledged Collateral held by a securities intermediary is covered by a control agreement among such Grantor, the securities intermediary and the Administrative Agent pursuant to which the Administrative Agent has Control and (iv) all Pledged Collateral which represents Indebtedness owed to such Grantor has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

 

(b)     In addition, (i) none of the Pledged Collateral owned by it has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) no options, warrants, calls or commitments of any character whatsoever (A) exist relating to such Pledged Collateral or (B) obligate the issuer of any Equity Interest included in the Pledged Collateral to issue additional Equity Interests, and (iii) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Security Agreement or for the execution, delivery and performance of this Security Agreement by such Grantor, or for the exercise by the Administrative Agent of the voting or other rights provided for in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.

 

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(c)     Except as set forth in Exhibit G, such Grantor owns 100% of the issued and outstanding Equity Interests which constitute Pledged Collateral owned by it and none of the Pledged Collateral which represents Indebtedness owed to such Grantor is subordinated in right of payment to other Indebtedness or subject to the terms of an indenture.

 

3.14     Commercial Tort Claims. As of the date hereof, no Grantor has any Commercial Tort Claims.

 

Article IV

COVENANTS

 

From the date of this Security Agreement and thereafter until this Security Agreement is terminated pursuant to the terms hereof, each Grantor party hereto as of the date hereof agrees, and from and after the effective date of any Security Agreement Supplement applicable to any Grantor (and after giving effect to supplements, if any, to each of the Exhibits hereto with respect to such subsequent Grantor as attached to such Security Agreement Supplement) and thereafter until this Security Agreement is terminated pursuant to the terms hereof, each such additional Grantor agrees that:

 

4.1     General.

 

(a)     Collateral Records. Such Grantor will maintain complete and accurate books and records with respect to the Collateral owned by it, and furnish to the Administrative Agent, with sufficient copies for each of the Lenders, such reports relating to such Collateral as the Administrative Agent shall from time to time request with reasonable notice given.

 

(b)    Authorization to File Financing Statements; Ratification. Such Grantor hereby authorizes the Administrative Agent to file, and if requested will deliver to the Administrative Agent, all financing statements and other documents and take such other actions as may from time to time be requested by the Administrative Agent in order to maintain a first perfected security interest in and, if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Administrative Agent may be filed in any filing office in any UCC jurisdiction and may(i) indicate such Grantor’s Collateral (1) as all assets of the Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organization identification number issued to such Grantor, and (B) in the case of a financing statement filed as a fixture filing or indicating such Grantor’s Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates. Such Grantor also agrees to furnish any such information described in the foregoing sentence to the Administrative Agent promptly upon request. Such Grantor also ratifies its authorization for the Administrative Agent to have filed in any UCC jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.

 

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(c)     Further Assurances. Such Grantor will, if so requested by the Administrative Agent, furnish to the Administrative Agent, as often as the Administrative Agent requests, statements and schedules further identifying and describing the Collateral owned by it and such other reports and information in connection with its Collateral as the Administrative Agent may reasonably request, all in such detail as the Administrative Agent may specify. Such Grantor also agrees to take any and all actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Administrative Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder.

 

(d)     Disposition of Collateral and Liens. Such Grantor will not sell, lease or otherwise dispose of the Collateral owned by it except for dispositions specifically permitted pursuant to Sections 6.05 and 6.06 of the Credit Agreement, nor will such Grantor create, incur, or suffer to exist any Lien on the Collateral owned by it except as permitted by Section 6.02 of the Credit Agreement.

 

(e)     Other Financing Statements. Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except for financing statements (i) naming the Administrative Agent on behalf of the Secured Parties as the secured party, and (ii) in respect to other Permitted Encumbrances. Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the prior written consent of the Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.

 

(f)     Locations. Such Grantor will not (i) maintain any Collateral owned by it at any location other than those locations listed on Exhibit A, (ii) otherwise change, or add to, such locations without the Administrative Agent’s prior written consent as required by the Credit Agreement or (iii) change its principal place of business or chief executive office from the location identified on Exhibit A, other than as permitted by the Credit Agreement.

 

(g)     Compliance with Terms. Such Grantor will perform and comply with all obligations in respect of the Collateral owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral.

 

4.2     [Reserved.]

 

4.3     Inventory and Equipment.

 

(a)     Maintenance of Goods. Such Grantor will do all things necessary to maintain, preserve, protect and keep its Inventory and the Equipment in good repair and working and saleable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business and except for ordinary wear and tear in respect of the Equipment.

 

(b)     Equipment. Such Grantor shall not permit any Equipment to become a fixture with respect to real property or to become an accession with respect to other personal property with respect to which real or personal property the Administrative Agent does not have a Lien. Such Grantor will not, without the Administrative Agent’s prior written consent, alter or remove any identifying symbol or number on any of such Grantor’s Equipment constituting Collateral.

 

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(c)     Titled Vehicles. Such Grantor will give the Administrative Agent notice of its acquisition of any vehicle covered by a certificate of title and deliver to the Administrative Agent, upon request, the original of any vehicle title certificate and provide and/or file all other documents or instruments necessary to have the Lien of the Administrative Agent noted on any such certificate or with the appropriate state office.

 

4.4     Delivery of Instruments, Securities, Chattel Paper and Documents. Such Grantor will (a) deliver to the Administrative Agent immediately upon execution of this Security Agreement the originals of all Chattel Paper, Securities and Instruments constituting Collateral owned by it (if any then exist), (b) hold in trust for the Administrative Agent upon receipt and immediately thereafter deliver to the Administrative Agent any such Chattel Paper, Securities and Instruments constituting Collateral, (c) upon the Administrative Agent’s request, deliver to the Administrative Agent (and thereafter hold in trust for the Administrative Agent upon receipt and immediately deliver to the Administrative Agent) any Document evidencing or constituting Collateral and (d) promptly upon the Administrative Agent’s request, deliver to the Administrative Agent a duly executed amendment to this Security Agreement, in the form of Exhibit I hereto (the “Amendment”), pursuant to which such Grantor will pledge such additional Collateral. Such Grantor hereby authorizes the Administrative Agent to attach each Amendment to this Security Agreement and agrees that all additional Collateral owned by it set forth in such Amendments shall be considered to be part of the Collateral.

 

4.5     Uncertificated Pledged Collateral. Such Grantor will permit the Administrative Agent from time to time to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Collateral owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of Pledged Collateral not represented by certificates and all rollovers and replacements therefor to reflect the Lien of the Administrative Agent granted pursuant to this Security Agreement. With respect to any Pledged Collateral owned by it, such Grantor will take any actions necessary to cause (a) the issuers of uncertificated securities which are Pledged Collateral and (b) any securities intermediary which is the holder of any such Pledged Collateral, to cause the Administrative Agent to have and retain Control over such Pledged Collateral. Without limiting the foregoing, such Grantor will, with respect to any such Pledged Collateral held with a securities intermediary, cause such securities intermediary to enter into a control agreement with the Administrative Agent, in form and substance satisfactory to the Administrative Agent, giving the Administrative Agent Control.

 

4.6     Pledged Collateral.

 

(a)     Changes in Capital Structure of Issuers. Such Grantor will not (i) permit or suffer any issuer of an Equity Interest constituting Pledged Collateral owned by it to dissolve, merge, liquidate, retire any of its Equity Interests or other Instruments or Securities evidencing ownership, reduce its capital, sell or encumber all or substantially all of its assets (except for Permitted Encumbrances and sales of assets permitted pursuant to Section 4.1(d)) or merge or consolidate with any other entity, or (ii) vote any such Pledged Collateral in favor of any of the foregoing.

 

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(b)     Issuance of Additional Securities. Such Grantor will not permit or suffer the issuer of an Equity Interest constituting Pledged Collateral owned by it to issue additional Equity Interests, any right to receive the same or any right to receive earnings, except to such Grantor.

 

(c)     Control of Pledged Collateral. Such Grantor will permit any registerable Pledged Collateral owned by it to be registered in the name of the Administrative Agent or its nominee at any time at the option of the Required Lenders. Each party hereto that is an issuer of Pledged Collateral shall comply with instructions originated by the Administrative Agent regarding such Pledged Collateral without further consent by the registered owner of such Pledged Collateral. 

 

(d)     Exercise of Rights in Pledged Collateral.

 

(i)     Without in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Security Agreement, the Credit Agreement or any other Loan Document; provided however, that no vote or other right shall be exercised or action taken which would have the effect of impairing the rights of the Administrative Agent in respect of such Pledged Collateral.

 

(ii)     Such Grantor will permit the Administrative Agent or its nominee at any time after the occurrence of an Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interest or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof.

 

(iii)     While no Event of Default has occurred, such Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Collateral owned by it to the extent not in violation of the Credit Agreement other than any of the following distributions and payments (collectively referred to as the “Excluded Payments”): (A) dividends and interest paid or payable other than in cash in respect of such Pledged Collateral, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and other distributions paid or payable in cash in respect of such Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of an issuer; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, such Pledged Collateral; provided however, that all such distributions and all rights to such distributions shall remain subject to the Lien created by this Security Agreement; and

 

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(iv)     All Excluded Payments and all other distributions in respect of any Pledged Collateral owned by such Grantor, following the occurrence of an Event of Default, shall be delivered to the Administrative Agent to hold as Pledged Collateral and shall, if received by such 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 Pledged Collateral in the same form as so received (with any necessary endorsement).

 

(e)     Interests in Limited Liability Companies and Limited Partnerships. Each Grantor agrees that no ownership interests in a limited liability company or a limited partnership which are included within the Collateral owned by such Grantor shall at any time constitute a Security under Article 8 of the UCC of the applicable jurisdiction.

 

4.7     Intellectual Property.

 

(a)     Such Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the assignment to or benefit of the Administrative Agent of any License held by such Grantor and to enforce the security interests granted hereunder.

 

(b)     Such Grantor shall notify the Administrative Agent immediately if it knows or has reason to know that any application or registration relating to any Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court) regarding such Grantor’s ownership of any Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same.

 

(c)     In no event shall such Grantor, either directly or through any agent, employee, licensee or designee, file an application for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency without giving the Administrative Agent prior written notice thereof, and, upon request of the Administrative Agent, such Grantor shall execute and deliver any and all security agreements as the Administrative Agent may request to evidence the Administrative Agent’s first priority security interest on such Patent, Trademark or Copyright, and the General Intangibles of such Grantor relating thereto or represented thereby.

 

(d)     Such Grantor shall take all actions necessary or requested by the Administrative Agent to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings , unless the Administrative Agent shall determine that such Patent, Trademark or Copyright is not material to the conduct of such Grantor’s business.

 

(e)     Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the Administrative Agent shall deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 4.8.

 

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4.8     Commercial Tort Claims. Such Grantor shall promptly, and in any event within ten (10) Business Days after the same is acquired by it, notify the Administrative Agent of any commercial tort claim (as defined in the UCC) acquired by it and, unless the Administrative Agent otherwise consents, such Grantor shall enter into an amendment to this Security Agreement, in the form of Exhibit I hereto, granting to Administrative Agent a first priority security interest in such commercial tort claim.

 

4.9     Letter of Credit Rights. If such Grantor is or becomes the beneficiary of a letter of credit, it shall promptly, and in any event within ten (10) Business Days after becoming a beneficiary, notify the Administrative Agent thereof and cause the issuer and/or confirmation bank to (i) consent to the assignment of any Letter of Credit Rights to the Administrative Agent and (ii) agree to direct all payments thereunder to a Deposit Account at the Administrative Agent or subject to a Deposit Account Control Agreement for application to the Secured Obligations, in accordance with Section 2.16(b) of the Credit Agreement, all in form and substance reasonably satisfactory to the Administrative Agent.

 

4.10     Federal, State or Municipal Claims. Such Grantor will promptly notify the Administrative Agent of any Collateral which constitutes a claim against the United States government or any state or local government or any instrumentality or agency thereof, the assignment of which claim is restricted by federal, state or municipal law, and shall promptly take any action requested by the Administrative Agent in connection therewith.

 

4.11     No Interference. Such Grantor agrees that it will not interfere with any right, power and remedy of the Administrative Agent provided for in this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Administrative Agent of any one or more of such rights, powers or remedies.

 

4.12     Insurance.

 

(a)     In the event any Collateral is located in any area that has been designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area”, such Grantor shall purchase and maintain flood insurance on such Collateral (including any personal property which is located on any real property leased by such Loan Party within a “Special Flood Hazard Area”). The amount of flood insurance required by this Section shall at a minimum comply with applicable law, including the Flood Disaster Protection Act of 1973, as amended.

 

(b)     All insurance policies required hereunder and under Section 5.10 of the Credit Agreement shall name the Administrative Agent (for the benefit of the Administrative Agent and the Lenders) as an additional insured or as lender loss payee, as applicable, and shall contain lender loss payable clauses or mortgagee clauses, through endorsements in form and substance satisfactory to the Administrative Agent, which provide that: (i) all proceeds thereunder with respect to any Collateral shall be payable to the Administrative Agent; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the property described in such policy; and (iii) such policy and lender loss payable or mortgagee clauses may be canceled, amended, or terminated only upon at least thirty (30) days prior written notice given to the Administrative Agent.

 

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(c)     All premiums on any such insurance shall be paid when due by such Grantor, and copies of the policies delivered to the Administrative Agent. If such Grantor fails to obtain any insurance as required by this Section, the Administrative Agent may obtain such insurance at the Borrower’s expense.  By purchasing such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from the Grantor’s failure to maintain such insurance or pay any premiums therefor.

 

4.13     [Reserved.]

 

4.14     Deposit Account Control Agreements. Such Grantor will provide to the Administrative Agent, a Deposit Account Control Agreement duly executed on behalf of each financial institution holding a deposit account of such Grantor. No Grantor shall open a deposit account without first entering into a Deposit Account Control Agreement with respect thereto.

 

4.15     Notice of Changes. Without limiting the generality of any covenant with respect thereto set forth in the Credit Agreement, each Grantor will not change its name, identity, federal tax identification number, organization identification number or corporate or limited liability company or partnership structure (as the case may be) in any manner unless it shall have given the Administrative Agent at least 30 days’ prior written notice thereof. Each Grantor will not change the locations where it keeps or holds any Collateral or any records relating thereto, from the applicable location described in Article 3 unless it shall have given the Administrative Agent at least 30 days’ prior written notice thereof.

 

Article V

EVENTS OF DEFAULT AND REMEDIES

 

5.1    Sale. Upon the occurrence of an Event of Default, the Administrative Agent may exercise all rights of a secured party under the UCC and other applicable law (including without limitation such rights under the UCC or other applicable law authorizing the taking of self-help remedies by an Administrative Agent in protecting its rights in, to and under collateral) and, in addition, the Administrative Agent may, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, (i) withdraw or otherwise direct the disposition of all cash in any deposit account and apply such cash and other cash, if any, then held by it as Collateral against the Secured Obligations or (ii) sell the Collateral or any part thereof at public or private sale, for cash, upon credit or for future delivery, and at such price or prices as the Administrative Agent may deem satisfactory. The Administrative Agent or the Lenders or any Lender may be the purchaser of any or all of the Collateral so sold at any public sale (or, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, at any private sale). The Grantor will execute and deliver such documents and take such other action as the Administrative Agent deems reasonably necessary in order that any such sale may be made in compliance with law. Upon any such sale the Administrative Agent shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold to it absolutely and free from any claim or right of whatsoever kind, including any equity or right of redemption of the Grantor which may be waived, and the Grantor, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted. The Grantor agrees that ten (10) days prior written notice of the time and place of any sale or other intended disposition of any of the Collateral constitutes “reasonable notification” within the meaning of Section 9-612 of the UCC (or, if applicable, the comparable section of the UCC under the laws of another jurisdiction), except that shorter or no notice shall be reasonable as to any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market. The notice (if any) of such sale shall (1) in case of a public sale, state the time and place fixed for such sale, and (2) in the case of a private sale, state the day after which such sale may be consummated. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Administrative Agent may fix in the notice of such sale. At any such sale the Collateral may be sold in one lot as an entirety or in separate parcels or portions, as the Administrative Agent may determine. The Administrative Agent shall not be obligated to make any such sale pursuant to any such notice. The Administrative Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so sold may be retained by the Administrative Agent until the selling price is paid by the purchaser thereof, but the Administrative Agent shall not incur any liability in case of the failure of such purchaser to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. The Administrative Agent may specifically modify or disclaim, in its sole discretion, any warranties or the like as to any Collateral and this procedure shall not be considered adversely to affect the commercial reasonableness of any such sale. The Administrative Agent may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. Leasing and licensing of Collateral by the Administrative Agent to third Persons are types of sales permitted hereunder.

 

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The Administrative Agent, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction.

 

The Administrative Agent shall not sell the Plans relative to any Vessel or Vessels to any Person other than such Person(s) who acquires such Vessel(s) pursuant to a transaction permitted pursuant to the Loan Documents.

 

5.2     Remedies.

 

(a)     Upon the occurrence of an Event of Default, the Administrative Agent may exercise any or all of the following rights and remedies:

 

(i)     those rights and remedies provided in this Security Agreement, the Credit Agreement, or any other Loan Document; provided that, this Section 5.2(a) hereof shall not be understood to limit any rights or remedies available to the Administrative Agent and the other Secured Parties prior to an Event of Default;

 

(ii)     those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

 

(iii)     give notice of sole control or any other instruction under any Deposit Account Control Agreement or and other control agreement with any securities intermediary and take any action therein with respect to such Collateral;

 

(iv)     without notice (except as specifically provided in Section 8.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable; and

 

(v)     concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Collateral as though the Administrative Agent was the outright owner thereof.

 

(b)     The Administrative Agent, on behalf of the Secured Parties, may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

 

(c)     The Administrative Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Administrative Agent and the other Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the Grantor hereby expressly releases.

 

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(d)     Until the Administrative Agent is able to effect a sale, lease, or other disposition of Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and the other Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.

 

(e)     Notwithstanding the foregoing, neither the Administrative Agent nor any other Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of its rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any of its rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

 

(f)     Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if the applicable Grantor and the issuer would agree to do so.

 

5.3     Grantor’s Obligations Upon Default. Upon the request of the Administrative Agent after the occurrence of a Default, each Grantor will:

 

(a)     assemble and make available to the Administrative Agent the Collateral and all books and records relating thereto at any place or places specified by the Administrative Agent, whether at such Grantor’s premises or elsewhere;

 

(b)     permit the Administrative Agent, by the Administrative Agent’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy;

 

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(c)     prepare and file, or cause an issuer of Pledged Collateral to prepare and file, with the Securities and Exchange Commission or any other applicable government agency, registration statements, a prospectus and such other documentation in connection with the Pledged Collateral as the Administrative Agent may request, all in form and substance satisfactory to the Administrative Agent, and furnish to the Administrative Agent, or cause an issuer of Pledged Collateral to furnish to the Administrative Agent, any information regarding the Pledged Collateral in such detail as the Administrative Agent may specify;

 

(d)     take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to register or qualify the Pledged Collateral to enable the Administrative Agent to consummate a public sale or other disposition of the Pledged Collateral; and

 

(e)     at its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the Administrative Agent and each Lender, at any time, and from time to time, promptly upon the Administrative Agent’s request, the following reports with respect to the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

 

5.4     Grant of Intellectual Property License. For the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article V at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby (a) grants to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any intellectual property rights now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Administrative Agent may sell any of such Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased the Grantor’s Inventory from such Grantor and in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Administrative Agent may finish any work in process and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein.

 

Article VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

 

6.1     Account Verification. The Administrative Agent may at any time after the occurrence and during the continuance of an Event of Default, in the Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Grantors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.

 

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6.2     Authorization for Administrative Agent to Take Certain Action.

 

(a)     Each Grantor irrevocably authorizes the Administrative Agent to at any time and from time to time in the sole discretion of the Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Administrative Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Administrative Agent to the Secured Obligations as provided in Section 2.16(b) of the Credit Agreement, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens that are Permitted Encumbrances), (vii) to contact Account Grantors for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Administrative Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Grantor of the Grantor, assignments and verifications of Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables, (xii) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Grantor of such Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Receivables, (xv) to change the address for delivery of mail addressed to such Grantor to such address as the Administrative Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do all other acts and things necessary to carry out this Security Agreement; and such Grantor agrees to reimburse the Administrative Agent on demand for any payment made or any expense incurred by the Administrative Agent in connection with any of the foregoing; provided that, this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement or under the Credit Agreement. The Administrative Agent provide notice to the Grantor prior to taking any action pursuant to this Section 6.2(a) provided that failure to deliver such notice shall not limit the Collateral Agent’s right to take such action or the validity of any such action.

  

(b)     All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, under this Section 6.2 are solely to protect the Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any other Secured Party to exercise any such powers. The Administrative Agent agrees that, except for the powers granted in Section 6.1(a)(i)-(vi) and Section 6.1(a)(xvi), it shall not exercise any power or authority granted to it unless an Event of Default has occurred and is continuing.

 

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6.3     Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF ANY OF THE PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY OF THE PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF A DEFAULT. THE ADMINISTRATIVE AGENT AGREES THAT IT SHALL NOT EXERCISE ANY POWER OR AUTHORITY GRANTED TO IT IN THIS SECTION 6.3 UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING.

 

6.4     Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 7.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NONE OF THE ADMINISTRATIVE AGENT, ANY LENDER, ANY OTHER SECURED PARTY, ANY OF THEIR AFFILIATES, OR ANY OF THEIR OR THEIR AFFILIATES’ RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

 

Article VII

GENERAL PROVISIONS

 

7.1     [Reserved.]

 

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7.2   Limitation on Administrative Agent’s and Other Secured Parties’ Duty with Respect to the Collateral. The Administrative Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Administrative Agent and each other Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Administrative Agent nor any other Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent or such other Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Grantors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Grantors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 7.2 is to provide non-exhaustive indications of what actions or omissions by the Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 7.2. Without limitation upon the foregoing, nothing contained in this Section 7.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 7.2.

  

7.3     Compromises and Collection of Collateral. The Grantors and the Administrative Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and any such action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good faith based on information known to it at the time it takes any such action.

 

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7.4     Secured Party Performance of Grantor Obligations. Without having any obligation to do so, the Administrative Agent may, with reasonable notice to the Grantor, perform or pay any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant to this Section 7.4. The Grantors’ obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall be a Secured Obligation payable on demand.

 

7.5     Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.14, 4.15, 5.3, or 7.7 will cause irreparable injury to the Administrative Agent and the other Secured Parties, that the Administrative Agent and the other Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent or the other Secured Parties to seek and obtain specific performance of other obligations of the Grantors contained in this Security Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 7.5 shall be specifically enforceable against the Grantors.

 

7.6     Dispositions Not Authorized. No Grantor is authorized, without the prior written consent of the Administrative Agent, to sell or otherwise dispose of the Collateral except as set forth in Section 4.1(d) and notwithstanding any course of dealing between any Grantor and the Administrative Agent or other conduct of the Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in Section 4.1(d)) shall be binding upon the Administrative Agent or the other Secured Parties unless such authorization is in writing signed by the Administrative Agent with the consent or at the direction of the Required Lenders.

 

7.7     No Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent or any other Secured Party to exercise any right or remedy granted under this Security Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in writing signed by the Administrative Agent with the concurrence or at the direction of the Lenders required under Section 9.02 of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Security Agreement or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the other Secured Parties until the Secured Obligations have been Paid in Full.

 

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7.8     Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Security Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in this Security Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Security Agreement are declared to be severable.

 

7.9     Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof (including a payment effected through exercise of a right of setoff), is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise (including pursuant to any settlement entered into by a Secured Party in its discretion), all as though such payment or performance had not been made. In the event that any payment, or any part thereof (including a payment effected through exercise of a right of setoff), is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

7.10     Benefit of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the other Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Administrative Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Secured Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, hereunder.

 

7.11     Survival of Representations. All representations and warranties of the Grantors contained in this Security Agreement shall survive the execution and delivery of this Security Agreement.

 

7.12     Taxes and Expenses. Any taxes (including income taxes) payable or ruled payable by Federal or State authority in respect of this Security Agreement shall be paid by the Grantors, together with interest and penalties, if any. The Grantors shall reimburse the Administrative Agent for any and all reasonable out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants who may be employees of the Administrative Agent) paid or incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, collection and enforcement of this Security Agreement and in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral). Any and all costs and expenses incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall be borne solely by the Grantors.

 

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7.13     Headings. The title of and section headings in this Security Agreement are for convenience of reference only, and shall not govern the interpretation of any of the terms and provisions of this Security Agreement.

 

7.14     Termination. This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Secured Obligations outstanding) until  the Credit Agreement has terminated pursuant to its express terms and  all of the Secured Obligations have been Paid in Full.

 

7.15     Entire Agreement. This Security Agreement embodies the entire agreement and understanding between the Grantors and the Administrative Agent relating to the Collateral and supersedes all prior agreements and understandings between the Grantors and the Administrative Agent relating to the Collateral.

 

7.16     CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

7.17     CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

 

7.18     WAIVER OF JURY TRIAL. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

 

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7.19     Indemnity. Each Grantor hereby agrees to indemnify the Administrative Agent and the other Secured Parties, and their respective successors, assigns, agents and employees, from and against any and all liabilities, damages, penalties, suits, fees, costs, and expenses of any kind and nature (including, without limitation, all expenses of litigation or preparation therefor whether or not the Administrative Agent or any other Secured Party is a party thereto) imposed on, incurred by or asserted against the Administrative Agent or the other Secured Parties, or their respective successors, assigns, agents and employees, in any way relating to or arising out of this Security Agreement, or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use, operation, condition, sale, return or other disposition of any Collateral (including, without limitation, latent and other defects, whether or not discoverable by the Administrative Agent or the other Secured Parties or any Grantor, and any claim for Patent, Trademark or Copyright infringement).

 

7.20     Counterparts. This Security Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Security Agreement by signing any such counterpart. Delivery of an executed counterpart of a signature page of this Security Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Security Agreement.

 

Article VIII

NOTICES

 

8.1     Sending Notices. Any notice required or permitted to be given under this Security Agreement shall be sent in accordance with Section 9.01 of the Credit Agreement.

 

8.2     Change in Address for Notices. Each of the Grantors, the Administrative Agent and the Lenders may change the address for service of notice upon it by a notice in writing to the other parties.

 

Article IX

THE ADMINISTRATIVE AGENT

 

JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the other Secured Parties hereunder pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed by the parties to this Security Agreement that any authority conferred upon the Administrative Agent hereunder is subject to the terms of the delegation of authority made by the Secured Parties to the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent shall act) as such hereunder only on the express conditions contained in such Article VIII. Any successor Administrative Agent appointed pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Administrative Agent hereunder.

 

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this Security Agreement as of the date first above written.

 

 

	
			 

				GRANTORS:	
			 

			
	
			 

				
			 

				
			 

			
	
			 

				
			FALCON GLOBAL USA LLC

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				/s/ Jesús Llorca	
			 

			
	
			 

				
			Name:

				Jesús Llorca	
			 

			
	
			 

				
			Title:

				Vice President 	
			 

			

 

 

	
			 

				
			Falcon Global Offshore LLC

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				/s/ Jesús Llorca	
			 

			
	
			 

				
			Name:

				Jesús Llorca	
			 

			
	
			 

				
			Title:

				Vice President	
			 

			

 

 

	 	
			Falcon Global Offshore II LLC

				 
	 	 	 	 
	 	 	 	 
	 	
			By: 

				
			/s/ Jesús Llorca

				 
	 	
			Name:

				
			Jesús Llorca

				 
	 	
			Title:

				
			Vice President 

				 

 

 

	 	Falcon Global Jill LLC	 
	 	 	 	 
	 	 	 	 
	 	
			By: 

				
			/s/ Jesús Llorca

				 
	 	
			Name:

				
			Jesús Llorca

				 
	 	
			Title:

				
			Vice President 

				 

 

 

	 	Falcon Global Robert LLC	 
	 	 	 	 
	 	 	 	 
	 	
			By: 

				
			/s/ Jesús Llorca

				 
	 	
			Name:

				
			Jesús Llorca

				 
	 	
			Title:

				
			Vice President 

				 

 

 

 

 

	
			 

				JPMORGAN CHASE BANK, N.A.,

			as Administrative Agent	
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				/s/ S.D. Milliken	
			 

			
	
			 

				
			Name:

				S.D. Milliken	
			 

			
	
			 

				
			Title:

				Authorized Officer

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