Exhibit 10.22
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SECURITY AGREEMENT
By
MID-WESTERN AIRCRAFT SYSTEMS, INC.,
MID-WESTERN AIRCRAFT SYSTEMS HOLDINGS, INC.,
ONEX WIND FINANCE LP,
and
THE SUBSIDIARIES PARTY HERETO,
as Grantors,
and
THE BOEING COMPANY,
as Agent
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Dated as of June 16, 2005
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS 2
SECTION 1.01. Uniform Commercial Code Defined Terms 2
SECTION 1.02. Credit Agreement Defined Terms 2
SECTION 1.03. Definition of Certain Terms Used Herein 2
SECTION 1.04. Rules of Construction 8
ARTICLE II AUTHORITY OF AGENT 8
SECTION 2.01. General Authority of the Agent Over the Collateral 8
SECTION 2.02. Exercise of Powers 9
SECTION 2.03. Remedies Not Exclusive 9
SECTION 2.04. Waiver and Estoppel 9
SECTION 2.05. Limitation by Law 10
SECTION 2.06. Rights of Secured Parties in Respect of Obligations 10
ARTICLE III SECURITY INTERESTS 10
SECTION 3.01. Security Interests 10
SECTION 3.02. No Assumption of Liability 11
SECTION 3.03. Intercreditor and Subordination Agreement 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES 11
SECTION 4.01. Title and Authority 11
SECTION 4.02. Validity of Security Interest and Filings 11
SECTION 4.03. Reserved 12
SECTION 4.04. Other Actions 12
SECTION 4.05. No Conflicts, Consents, etc. 15
ARTICLE V COVENANTS 15
SECTION 5.01. Protection of Security 15
SECTION 5.02. Further Assurances 15
SECTION 5.03. Reserved 16
SECTION 5.04. Reserved 16
SECTION 5.05. Reserved 16
SECTION 5.06. Reserved 16
SECTION 5.07. Certain Covenants and Provisions Regarding Patent,
Trademark and Copyright Collateral: 16
ARTICLE VI REMEDIES 16
SECTION 6.01. Remedies upon Default 16
SECTION 6.02. Application of Proceeds 18
SECTION 6.03. Grant of License to Use Intellectual Property 18
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ARTICLE VII INTENTIONALLY OMITTED 19
ARTICLE VIII MISCELLANEOUS 19
SECTION 8.01. Notices 19
SECTION 8.02. Survival of Agreement 19
SECTION 8.03. Binding Effect 19
SECTION 8.04. Successors and Assigns 19
SECTION 8.05. GOVERNING LAW 19
SECTION 8.06. Waivers; Amendment; Several Agreement 19
SECTION 8.07. WAIVER OF JURY TRIAL 20
SECTION 8.08. Severability 20
SECTION 8.09. Counterparts 21
SECTION 8.10. Headings 21
SECTION 8.11. Jurisdiction; Consent to Service of Process 21
SECTION 8.12. Termination 22
SECTION 8.13. Additional Grantors 22
SECTION 8.14. Financing Statements 23
SECTION 8.15. Agent Appointed Attorney-in-Fact 23
SECTION 6. GOVERNING LAW
SECTION 6. GOVERNING LAW
SECTION 6. GOVERNING LAW
ANNEXES
Annex I Form of Supplement
Annex II Form of Perfection Certificate
Annex III Form of Securities Account Control Agreement
Annex IV Form of Deposit Account Control Agreement
Annex V-A Form of Copyright Security Agreement
Annex V-B Form of Patent Security Agreement
Annex V-C Form of Trademark Security Agreement
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SECURITY AGREEMENT
This SECURITY AGREEMENT (as amended, amended and restated, supplemented or
otherwise modified from time to time, this "Agreement") dated as of June 16,
2005 among MID-WESTERN AIRCRAFT SYSTEMS, INC., a Delaware corporation
("Mid-Western"), ONEX WIND FINANCE LP, a Delaware limited partnership (the
"Borrower"), MID-WESTERN AIRCRAFT SYSTEMS HOLDINGS, INC., a Delaware corporation
("Parent"), each Subsidiary of Mid-Western and each Borrower Subsidiary listed
on the signature pages hereto (collectively, together with each Subsidiary that
becomes a party hereto pursuant to Section 8.13 of this Agreement, Mid-Western
and Parent, the "Guarantors" and, together with the Borrower, the "Grantors")
and THE BOEING COMPANY, as agent (in such capacity, the "Agent").
RECITALS
A. The Grantors, the Agent and the lenders party thereto (the "Lenders")
have entered into that certain credit agreement, dated as of June 16, 2005 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Credit Agreement").
B. The Guarantors have, pursuant to the Guarantee Agreement, dated as of
the date hereof, among other things, unconditionally guaranteed the obligations
of the Borrower under the Credit Agreement.
C. The Borrower and each Guarantor will receive substantial benefits from
the execution, delivery and performance of the obligations under the Credit
Agreement and are, therefore, willing to enter into this Agreement.
D. Contemporaneously with the execution and delivery of this Agreement, the
Borrower and the Guarantors have executed and delivered to the Agent a Pledge
Agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Pledge Agreement").
F. This Agreement is given by each Grantor in favor of the Agent for the
benefit of the Secured Parties (as hereinafter defined) to secure the payment
and performance of all of the Obligations.
NOW THEREFORE, in consideration of the foregoing and other benefits
accruing each Grantor, the receipt and sufficiency of which are hereby
acknowledged, each Grantor hereby makes the following representations and
warranties to the Agent for the benefit of the Secured Parties (and each of
their respective successors and assigns), as follows:
ARTICLE I
Definitions
SECTION 1.01. Uniform Commercial Code Defined Terms. Unless otherwise
defined herein, terms used herein that are defined in the UCC shall have the
meanings assigned to them in the UCC, including the following which are
capitalized herein:
"Accounts"; "Bank"; "Certificates of Title"; "Chattel Paper";
"Commercial Tort Claim"; "Commodity Account"; "Commodity Contract";
"Commodity Customer"; "Commodity Intermediary"; "Deposit Accounts";
"Documents"; "Electronic Chattel Paper"; "Entitlement Holder"; "Entitlement
Order"; "Equipment"; "Financial Asset"; "Fixtures"; "Goods"; "Instruments"
(as defined in Article 9 rather than Article 3); "Inventory"; "Investment
Property"; "Letter-of-Credit Rights"; "Letters of Credit"; "Securities";
"Securities Account"; "Securities Intermediary"; "Security Entitlement";
"Supporting Obligations"; and "Tangible Chattel Paper".
SECTION 1.02. Credit Agreement Defined Terms. Capitalized terms used but
not otherwise defined herein that are defined in the Credit Agreement shall have
the meanings given to them in the Credit Agreement.
SECTION 1.03. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Account Debtor" shall mean any Person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.
"Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales.
"Agent" shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.
"Books and Records" shall mean all instruments, files, records, ledger
sheets and documents evidencing, covering or relating to any of the Collateral.
"Borrower" shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.
"Charges" shall mean any and all property and other taxes, assessments and
special assessments, levies, fees and all governmental charges imposed upon or
assessed against, and all claims (including, without limitation, landlords',
carriers', mechanics', maritime,
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workmen's, repairmen's, laborers', materialmen's, suppliers' and warehousemen's
Liens and other claims arising by operation of law) against, all or any portion
of the Collateral.
"Collateral" shall mean with respect to each of the Grantors all of the
following, in each case, whether now owned or hereafter acquired:
(a) Accounts Receivable;
(b) Books and Records;
(c) cash and Deposit Accounts;
(d) Chattel Paper;;
(e) Commercial Tort Claims described on Schedule 13 to the Perfection
Certificate;
(f) Documents;
(g) Equipment;
(h) Fixtures;
(i) General Intangibles;
(j) Goods;
(k) Instruments;
(l) Inventory;
(m) Investment Property;
(n) Letter-of-Credit Rights;
(o) Letters of Credit;
(p) Supporting Obligations;
(q) Intellectual Property;
(r) Motor Vehicles;
(s) to the extent not covered by clauses (a) through (s) of this
definition, all other personal property, whether tangible or intangible;
and
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(t) Proceeds of any and all of the foregoing;
provided that, notwithstanding the foregoing, "Collateral" shall not include any
(i) Securities Collateral (as defined in the Pledge Agreement) or other
collateral for the Obligations pledged under the Pledge Agreement or (ii)
Excluded Property.
"Collateral Estate" shall have the meaning assigned to such term in Section
2.01.
"Commodity Account Control Agreement" shall mean a commodity account
control agreement in the same form provided to the Senior Collateral Agent.
"Control" shall mean (i) in the case of each Deposit Account, "control," as
such term is defined in Section 9-104 of the UCC, (ii) in the case of any
Security Entitlement, "control," as such term is defined in Section 8-106(d) of
the UCC, and (iii) in the case of any Commodity Contract, "control," as such
term is defined in Section 9-106(b) of the UCC.
"Control Agreement" shall mean, collectively, the Deposit Account Control
Agreement, the Securities Account Control Agreement and the Commodity Account
Control Agreement.
"Copyright License" shall mean each written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean, collectively, with respect to each Grantor, all
copyrights (whether statutory or common law, whether registered or unregistered
and whether published or unpublished) and all copyright registrations and
applications made by such Grantor in the United States, in each case, whether
now owned or hereafter created or acquired by or assigned to such Grantor,
including, without limitation, the copyrights, registrations and applications
listed in Schedule 12(b) of the Perfection Certificate, together with any and
all (i) rights and privileges arising under applicable law with respect to such
Grantor's use of such copyrights, (ii) reissues, renewals, continuations and
extensions thereof, (iii) income, fees, royalties, damages, claims and payments
now or hereafter due and/or payable with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof and (iv) rights to sue for past, present or future infringements
thereof.
"Credit Agreement" shall have the meaning assigned to such term in the
Recitals of this Agreement.
"Deposit Account Control Agreement" shall mean an agreement substantially
in the form annexed hereto as Annex IV or such other form that is provided to
the Senior Collateral Agent.
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"Excluded Equity" shall mean any Voting Stock in excess of 65% of the total
outstanding Voting Stock of any Foreign Subsidiary held by any Grantor.
"Excluded Property" shall mean, collectively, (i) any permit, lease,
license, contract, instrument or other agreement held by any Grantor that
prohibits or requires the consent of any Person as a condition to the creation
by such Grantor of a security interest or Lien thereon or that would be breached
or give the other party the right to terminate it as a result thereof, or any
permit, lease, license contract or other agreement held by any Grantor to the
extent that any Requirement of Law, applicable thereto prohibits the creation of
a security interest or Lien thereon or that would be breached or give the other
party the right to terminate it as a result thereof, but only, in each case, to
the extent, and for so long as, such prohibition is not terminated or rendered
unenforceable or otherwise deemed ineffective by the UCC (including Sections
9-406(a), 9-407(a), 9-408(a) and 9-409 of the UCC) or any other applicable
Requirement of Law, (ii) Equipment owned by any Grantor that is subject to a
purchase money Lien or a capital lease which is permitted by the Credit
Agreement if the contract or other agreement in which such Lien is granted (or
in the documentation providing for such capital lease) prohibits or requires the
consent of any Person as a condition to the creation of any other Lien on such
Equipment or that would be breached or give the other party the right to
terminate it as a result thereof and (iii) Excluded Equity; provided, however,
"Excluded Property" shall not include any Proceeds, substitutions or
replacements of Excluded Property (unless such Proceeds, substitutions or
replacements would constitute Excluded Property).
"General Intangibles" shall mean, collectively, all "general intangibles,"
as such term is defined in the UCC, and in any event shall include, without
limitation, all choses in action and causes of action and all other intangible
personal property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including all rights and interests in partnerships,
limited partnerships, limited liability companies and other unincorporated
entities, corporate or other business records, indemnification claims, contract
rights (including rights under leases, whether entered into as lessor or lessee,
hedging agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises and tax refund claims. For avoidance of doubt, General
Intangibles shall include all rights of Grantors (including, without limitation,
any voting rights) under the IRB Agreements (as defined in the Citigroup Credit
Facilities) and the Acquisition Documents (as defined in the Citigroup Credit
Facilities).
"Guarantors" shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.
"Intellectual Property" shall mean all Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
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foregoing, now owned in the United States by a Grantor, or hereafter acquired by
any Grantor.
"Lenders" shall have the meaning assigned to such term in the Recitals of
this Agreement.
"License" shall mean any domestic Patent License, Trademark License or
Copyright License including, without limitation, those listed on Schedules 12(a)
and 12(b) of the Perfection Certificate.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean all of the following now owned or hereafter acquired
in the United States by a Grantor: (a) all letters patent, all registrations and
recordings thereof, and all applications for letters patent, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office, including those listed on Schedule 12(a) of the Perfection
Certificate, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Pledge Agreement" shall have the meaning assigned to such term in the
Recitals of this Agreement.
"Pledged Securities" shall have the meaning assigned to such term in the
Pledge Agreement.
"Proceeds" shall mean, collectively, all "proceeds," as such term is
defined in the UCC, and in any event shall include, without limitation, any
consideration received from the sale, exchange, license, lease or other
disposition of any asset or property that constitutes Collateral, any value
received as a consequence of the possession of any Collateral and any payment
received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property that constitutes Collateral, and shall include
(a) all cash and negotiable instruments received by or held on behalf of the
Agent, (b) any claim of any Grantor against any third party for (and the right
to sue and recover for and the rights to damages or profits due or accrued
arising out of or in connection with) (i) past, present or future infringement
of any Patent now or hereafter owned by any Grantor, or licensed under a Patent
License, (ii) past, present or future infringement or dilution of any Trademark
now or hereafter owned by any Grantor or licensed under a Trademark License or
injury to the goodwill associated with or symbolized by any
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Trademark now or hereafter owned by any Grantor, (iii) past, present or future
breach of any License and (iv) past, present or future infringement of any
Copyright now or hereafter owned by any Grantor or licensed under a Copyright
License and (c) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Secured Parties" shall mean, collectively, the Agent and the Lenders.
"Securities Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Annex III or such other form that is
provided to the Senior Collateral Agent.
"Security Interests" shall have the meaning assigned to such term in
Section 3.01(b).
"Senior Collateral Agent" shall mean (x) prior to the Discharge of Senior
Obligations, Citicorp North America, as collateral agent under the Citigroup
Credit Facilities, and its successors and assigns and (y) thereafter, the Agent.
"Specified Event of Default" means (i) prior to the occurrence of the
Senior Discharge Events, an Event of Default described under Section 8.1(e), (f)
or (h) of the Credit Agreement and (ii) on and after the occurrence of the
Senior Discharge Events, any Event of Default. For the avoidance of doubt,
nothing contained in this definition or its application in this Agreement shall
limit the applicability of any provision of the Intercreditor and Subordination
Agreement, limit the rights of the Senior Secured Parties thereunder or grant to
any Secured Party any right or remedy otherwise prohibited by the Intercreditor
and Subordination Agreement (for purposes hereof, Senior Secured Parties shall
have the meaning assigned to such term in the Intercreditor and Subordination
Agreement).
"Trademark License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following now owned or hereafter
acquired in the United States by a Grantor: (a) all trademarks, service marks,
trade names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office or any State of the United States, and all extensions or
renewals thereof, including those listed on Schedule 12(a) of the Perfection
Certificate, (b) all goodwill associated therewith or
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symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
"UCC" shall mean the Uniform Commercial Code as in effect from time to time
in the State of New York; provided, however, that if by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of the
Agent's and the Secured Parties' security interest in any item or portion of the
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect on the date hereof in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions relating to such
provisions.
SECTION 1.04. Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) where the context requires, provisions relating to any Collateral,
when used in relation to a Grantor, shall refer to such Grantor's
Collateral or any relevant part thereof.
ARTICLE II
Authority of Agent
SECTION 2.01. General Authority of the Agent Over the Collateral. The Agent
hereby agrees that it holds and will hold all of its right, title and interest
in, to and under the Security Documents and the Collateral granted to the Agent
hereunder and thereunder whether now existing or hereafter arising (all such
right, title and interest being hereinafter referred to as the "Collateral
Estate") under and subject to the conditions set forth in this Agreement; and
the Agent further agrees that it will hold such Collateral Estate for the
benefit of the Secured Parties, for the enforcement of the payment of all
Obligations (subject to the limitations and priorities set forth herein and in
the respective Security Documents) and as security for the performance of and
compliance with the covenants and conditions of this Agreement and each of the
Security Documents.
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SECTION 2.02. Exercise of Powers. Subject to the terms of the Intercreditor
and Subordination Agreement, all of the powers, remedies and rights of the Agent
as set forth in this Agreement may be exercised by the Agent in respect of any
Security Document as though set forth in full therein and all of the powers,
remedies and rights of the Agent as set forth in any Security Document may be
exercised by the Agent from time to time as herein and therein provided.
SECTION 2.03. Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Agent herein or in the Security Documents is intended to be
exclusive of any other remedy or remedies, but every such remedy shall be
cumulative and shall be in addition to every other remedy conferred herein or in
any Security Document or now or hereafter existing at law or in equity or by
statute.
No delay or omission by the Agent to exercise any right, remedy or
power hereunder or under any Security Document shall impair any such right,
remedy or power or shall be construed to be a waiver thereof, and every right,
power and remedy given by this Agreement or any Security Document to the Agent
may be exercised from time to time and as often as may be deemed expedient by
the Agent.
If the Agent shall have proceeded to enforce any right, remedy or
power under this Agreement or any Security Document and the proceeding for the
enforcement thereof shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Agent, then the Grantors, the Agent
and the other Secured Parties shall, subject to any determination in such
proceeding, severally and respectively be restored to their former positions and
rights hereunder or thereunder with respect to the Collateral Estate and in all
other respects, and thereafter all rights, remedies and powers of the Agent
shall continue as though no such proceeding had been taken.
SECTION 2.04. Waiver and Estoppel. (a) Subject to the terms of the Security
Documents, each Grantor agrees, to the extent it may lawfully do so, that it
will not at any time in any manner whatsoever claim, or take the benefit or
advantage of, any appraisement, valuation, stay, extension, moratorium, turnover
or redemption law, or any law permitting it to direct the order in which the
Collateral shall be sold, now or at any time hereafter in force, which may
delay, prevent or otherwise affect the performance or enforcement of this
Agreement or any Security Document and hereby waives all benefit or advantage of
all such laws and covenants that it will not hinder, delay or impede the
execution of any power granted to the Agent in this Agreement or any Security
Document but will suffer and permit the execution of every such power as though
no such law were in force; provided that nothing contained in this Section
2.04(a) shall be construed as a waiver of any rights of the Grantors under any
applicable federal bankruptcy law or state insolvency law.
Each Grantor, to the extent it may lawfully do so, on behalf of itself
and all who may claim through or under it, including without limitation any and
all subsequent
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creditors, vendees, assignees and licensors, waives and releases all rights to
demand or to have any marshaling of the Collateral upon any sale, whether made
under any power of sale granted herein or in any Security Document or pursuant
to judicial proceedings or upon any foreclosure or any enforcement of this
Agreement or any Security Document and consents and agrees that all the
Collateral may at any such sale be offered and sold as an entirety.
Each Grantor waives, to the extent permitted by applicable law,
presentment, demand, protest and any notice of any kind (except notices
explicitly required hereunder or under any Security Document) in connection with
this Agreement and the Security Documents and any action taken by the Agent with
respect to the Collateral.
SECTION 2.05. Limitation by Law. All rights, remedies and powers provided
in this Agreement or any Security Document may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of law, and
all the provisions hereof are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement invalid, unenforceable in
whole or in part or not entitled to be recorded, registered or filed under the
provisions of any applicable law.
SECTION 2.06. Rights of Secured Parties in Respect of Obligations.
Notwithstanding any other provision of this Agreement or any Security Document,
but subject to the terms of the Intercreditor and Subordination Agreement the
right of each Secured Party to receive payment of the Obligations held by such
Secured Party when due (whether at the stated maturity thereof, by acceleration
or otherwise), as expressed in the instruments evidencing or agreements
governing such Obligations or to institute suit for the enforcement of such
payment on or after such due date, shall not be impaired or affected without the
consent of such Secured Party given in the manner prescribed by the instruments
evidencing or agreements governing such Obligations.
ARTICLE III
Security Interests
SECTION 3.01. Security Interests. It being expressly understood and agreed
that the security interests granted herein for the benefit of the Agent on
behalf of the Secured Parties shall be subject to the terms of the Intercreditor
and Subordination Agreement and the Credit Agreement, the following liens on the
Collateral are hereby granted:
(a) As security for the payment and performance, as the case may be, in
full of the Obligations, each Grantor hereby collaterally assigns, mortgages,
pledges and hypothecates to the Agent, for the ratable benefit of the Secured
Parties, and hereby grants to the Agent for the ratable benefit of the Secured
Parties, a security interest in, all of such Grantor's right, title
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and interest in, to and under the Collateral of such Grantor. The Liens granted
in this clause (a) to secure the Obligations are referred to herein as the
"Security Interest".
(b) Without limiting the foregoing, the Agent is hereby authorized to file
one or more financing statements (including fixture filings), continuation
statements, filings with the United States Patent and Trademark Office, United
States Copyright Office or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interests granted
by each Grantor, without the signature of any Grantor, and naming any Grantor or
the Grantors as debtors and the Agent as secured party.
SECTION 3.02. No Assumption of Liability. The Security Interests are
granted as security only and shall not subject the Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Collateral.
SECTION 3.03. Intercreditor and Subordination Agreement. The exercise of
any right or remedy by the Agent hereunder is subject to the terms of the
Intercreditor and Subordination Agreement. Notwithstanding anything herein to
the contrary, in the event of any conflict between the terms of the
Intercreditor and Subordination Agreement and this Agreement, the terms of the
Intercreditor and Subordination Agreement shall govern and control.
ARTICLE IV
Representations and Warranties
The Grantors jointly and severally represent and warrant to the Agent and
the Secured Parties that:
SECTION 4.01. Title and Authority. Each Grantor has good and valid rights
in and title to the Collateral with respect to which it has purported to grant
the Security Interests hereunder and has full power and authority to grant to
the Agent the Security Interests in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval which has been obtained.
SECTION 4.02. Validity of Security Interest and Filings.
(a) The Security Interests constitute legal and valid security interests in
all the Collateral securing the payment and performance of the Obligations. As
of the date hereof, all information set forth herein and in the Perfection
Certificate, including the Schedules annexed hereto and thereto is correct and
complete in all material respects. Fully completed UCC financing statements
(including fixture filings as applicable) containing a description of the
Collateral have been delivered to the Agent for filing in each governmental,
municipal or
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other office specified in Schedule 7 to the Perfection Certificate. Upon (i) the
filing of such UCC financing statements with the appropriate filing offices of
each jurisdiction specified in Schedule 7 to the Perfection Certificate and (ii)
the taking of possession or control by the Senior Collateral Agent, as agent and
bailee for the Secured Parties, of the Collateral to the extent possession or
control is required, the Agent for the benefit of the Secured Parties will have
a perfected security interest in respect of all Collateral, to the extent such
security interest can be perfected under the UCC by such filings, taking
possession or control. (b) With respect to all Collateral consisting of United
States registered Patents, United States registered Trademarks and United States
registered Copyrights registered in the name of any Grantor as of the date
hereof, fully executed security agreements in the form of Annex V-A, V-B and V-C
hereto containing a description of all Collateral consisting of Intellectual
Property with respect to United States registered Copyrights, United States
registered Patents, and United States registered Trademarks (and Trademarks for
which United States registration applications are pending), respectively, have
been delivered to the Agent for registration with the United States Patent and
Trademark Office and for recordation with the United States Copyright Office
pursuant to 35 U.S.C. Section 261 or 17 U.S.C. Section 205 and the regulations
thereunder, as applicable. Upon the recordation of such security agreements with
the United States Patent and Trademark Office and United States Copyright
Office, as applicable, and the filing of proper UCC financing statements with
the appropriate filing offices of each jurisdiction specified in Schedule 7 to
the Perfection Certificate, the Agent for the benefit of the Secured Parties
will have perfected security interests in respect of all Collateral consisting
of Patents, Trademarks and Copyrights registered in the name of any Grantor as
of the date hereof.
SECTION 4.03. Reserved
SECTION 4.04. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Agent to enforce, the Agent's
security interests in the Collateral, each Grantor agrees, in each case at such
Grantor's own expense, to take the following actions with respect to the
following Collateral:
(a) Instruments and Tangible Chattel Paper. As of the date hereof,
each Instrument and each item of Tangible Chattel Paper specified in
Schedule 11 to the Perfection Certificate has been properly endorsed,
assigned and delivered to the Senior Collateral Agent, and, if necessary,
accompanied by instruments of transfer or assignment duly executed in
blank. If any amount individually in excess of $250,000 or in the aggregate
in excess of $1,000,000 payable under or in connection with any of the
Collateral shall be evidenced by any Instrument or Tangible Chattel Paper,
the Grantor acquiring such Instrument or Tangible Chattel Paper shall
forthwith endorse, assign and deliver the same to the Senior Collateral
Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as the Senior Collateral Agent may from time to time
reasonably specify; provided, however, that so long as no Specified Event
of Default shall have occurred and be continuing, the Agent (if the Agent
is in possession or control any such Instrument or Tangible Chattel Paper)
shall return such Instrument or Tangible Chattel Paper to such Grantor from
time to time, to
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the extent necessary for collection in the ordinary course of such
Grantor's business; provided, further, that the Agent (if the Agent is in
possession or control any such Instrument or Tangible Chattel Paper) shall
return such Instrument or Tangible Chattel Paper to such Grantor if all
amounts due pursuant such Instrument or Tangible Chattel Paper have been
paid in full.
(b) Deposit Accounts and Investment Property. (i) Each Grantor hereby
represents and warrants that as of the date hereof (1) it does not maintain
any Deposit Accounts other than the collateral account established and
maintained pursuant to the Citigroup Credit Facilities and the accounts
listed in Schedule 14 of the Perfection Certificate, (2) it does not
maintain any Securities Accounts or Commodity Accounts other than those
listed in Schedule 14 of the Perfection Certificate and (3) it does not
hold, own or have any interest in any certificated securities or
uncertificated securities other than those constituting Securities
Collateral or other collateral under the Pledge Agreement, those maintained
in Securities Accounts or Commodity Accounts listed in Schedule 14 of the
Perfection Certificate and Excluded Equity.
(ii) In the event the Grantors have cash, Investment Property or other
funds maintained in any Deposit Accounts (except for (A) Deposit Accounts
used solely to make payroll payments and (B) Deposit Accounts having an
average daily balance of less than $2,500,000 in the aggregate together
with all such other Deposit Accounts under this clause (B) that are not
subject to the Agent's Control) and/or Securities Accounts, Mid-Western
shall promptly notify the Agent and the Grantors shall promptly enter into
Control Agreements in favor of the Agent with the banks, Securities
Intermediaries or Commodity Intermediaries with which such Deposit Accounts
and Securities Accounts are maintained granting to the Agent Control over
such accounts. The Agent agrees with each Grantor that, in the case of a
Deposit Account subject to the Agent's Control, the Agent shall not give
any instructions directing the disposition of funds from time to time
credited to any Deposit Account or withhold any withdrawal rights from such
Grantor with respect to funds from time to time credited to any Deposit
Account or, in the case of a Securities Account or Commodity Account
subject to the Agent's Control, the Agent shall not give any Entitlement
Orders or instructions or directions to any Securities Intermediary or
Commodity Intermediary, and shall not withhold its consent to the exercise
of any withdrawal or dealing rights by such Grantor, unless, in each case,
a Specified Event of Default has occurred and is continuing or, after
giving effect to any withdrawal, would occur.
(iii) If any Grantor shall at any time hold or acquire any
certificated securities constituting Investment Property that are not
Pledged Securities under the Pledge Agreement, such Grantor shall
immediately endorse, assign and deliver the same to the Senior Collateral
Agent, accompanied by such instruments of transfer or assignment duly
executed in blank, all in form and substance reasonably satisfactory
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to the Senior Collateral Agent; provided, that in no event shall Grantor be
required to pledge any Excluded Equity. If any securities now or hereafter
acquired by any Grantor constituting Investment Property that are not
Pledged Securities under the Pledge Agreement are uncertificated and are
not held in accounts required to be subject to a control agreement pursuant
to clause (ii) of this Section 4.04(b), such Grantor shall promptly notify
the Agent thereof and shall use commercially reasonable efforts to cause
the issuer to agree to comply with instructions from the Agent as to such
securities, without further consent of any Grantor pursuant to an issuer's
acknowledgement in form provided to the Senior Collateral Agent.
(iv) As between the Agent and the Grantors, the Grantors shall bear
the investment risk with respect to the Investment Property, and the risk
of loss of, damage to or the destruction of the Investment Property,
whether in the possession of, or maintained as a security entitlement or
deposit by, or subject to the control of, the Agent, a Securities
Intermediary, a Commodity Intermediary, any Grantor or any other Person;
provided, however, that nothing contained in this Section 4.04(b) shall
release or relieve any Securities Intermediary or Commodity Intermediary of
its duties and obligations to the Grantors or any other Person under any
Control Agreement or under applicable law.
(c) Electronic Chattel Paper and Transferable Records. If any amount
individually in excess of $250,000 or in the aggregate in excess of
$1,000,000 payable under or in connection with any of the Collateral shall
be evidenced by any Electronic Chattel Paper or any "transferable record,"
as that term is defined in Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction, the
Grantor acquiring such Electronic Chattel Paper or transferable record
shall promptly notify the Agent thereof and shall take such action as the
Senior Collateral Agent may reasonably request to vest in the Senior
Collateral Agent, for the benefit of the Secured Parties, control under UCC
Section 9-105 of such Electronic Chattel Paper or control under Section 201
of the Federal Electronic Signatures in Global and National Commerce Act
or, as the case may be, Section 16 of the Uniform Electronic Transactions
Act, as so in effect in such jurisdiction, of such transferable record.
(d) Letter-of-Credit Rights. If any Grantor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor of
such Grantor in an amount individually in excess of $250,000 or in the
aggregate in excess of $1,000,000, such Grantor shall promptly notify the
Agent and such Grantor shall use commercially reasonable efforts to (unless
the Senior Collateral Agent requests otherwise) pursuant to an agreement in
form and substance reasonably satisfactory to the Senior Collateral Agent,
either (i) arrange for the issuer and any confirmer of such Letter of
Credit to consent to an assignment to the Senior Collateral Agents of the
proceeds of any
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drawing under the Letter of Credit or (ii) arrange for the Senior
Collateral Agent to become the transferee beneficiary of such Letter of
Credit.
(e) Commercial Tort Claims. As of the date hereof each Grantor hereby
represents and warrants that as of the date hereof it holds no Commercial
Tort Claims other than those listed on Schedule 13 to the Perfection
Certificate. If any Grantor shall at any time hold or acquire a Commercial
Tort Claim having a value individually in excess of $250,000 or in the
aggregate in excess of $1,000,000 such Grantor shall promptly notify the
Agent thereof and grant to the Agent in writing signed by such Grantor a
security interest therein and in the Proceeds thereof, all upon the terms
of this Agreement, with such writing to be in the form provided to the
Senior Collateral Agent.
(f) Motor Vehicles. Upon the request of the Agent during the existence
of a Specified Event of Default, each Grantor shall deliver to the Agent
originals of the certificates of title or ownership for the motor vehicles
(and any other Equipment covered by Certificates of Title or ownership)
owned by it with the Agent listed as a lienholder therein. Such requirement
shall apply to the Grantors if any such motor vehicle (or any such other
Equipment) has a fair market value over $50,000.
SECTION 4.05. No Conflicts, Consents, etc. In the event that a Specified
Event of Default has occurred and is continuing and the Agent desires to
exercise any remedies, voting or consensual rights or attorney-in-fact powers
set forth in this Agreement and determines it necessary to obtain any approvals
or consents of any Governmental Authority or any other Person therefor, then,
upon the reasonable request of the Agent, such Grantor agrees to use
commercially reasonable efforts to assist and aid the Agent to obtain as soon as
practicable any necessary approvals or consents for the exercise of any such
remedies, rights and powers.
ARTICLE V
Covenants
SECTION 5.01. Protection of Security. Each Grantor shall, at its own cost
and expense, take any and all actions reasonably necessary to protect the
Security Interests of the Agent in the Collateral.
SECTION 5.02. Further Assurances. Each Grantor agrees, at its own expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Agent may from time
to time reasonably request to better assure, preserve, protect and perfect the
Security Interests and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the
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execution and delivery of this Agreement, the granting of the Security Interests
and the filing of any financing statements or other documents in connection
herewith or therewith.
SECTION 5.03. Reserved
SECTION 5.04. Reserved
SECTION 5.05. Reserved
SECTION 5.06. Reserved
SECTION 5.07. Certain Covenants and Provisions Regarding Patent, Trademark
and Copyright Collateral:
(a) In the event that any Grantor, either itself or through any agent,
employee, licensee or designee, files an application for or, following the
Closing Date, becomes the registered owner of, any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States, such Grantor
shall with the delivery of its quarterly financial statements notify the Agent
thereof, and shall execute and deliver any and all agreements, instruments,
documents and papers as the Agent may reasonably request to evidence the Agent's
security interest in such Patent, Trademark or Copyright or application
therefor, and each Grantor hereby appoints the Agent as its attorney-in-fact to
execute and file such writings solely for the foregoing purposes, all acts of
such attorney being hereby ratified and confirmed; such power, being coupled
with an interest, is irrevocable until this Agreement is terminated.
(b) Upon and during the continuance of a Specified Event of Default, each
Grantor shall upon the written request of the Agent use its commercially
reasonable efforts to obtain all requisite consents or approvals by the licensor
of each Copyright License, Patent License or Trademark License to effect the
assignment of all of such Grantor's right, title and interest thereunder to the
Senior Collateral Agent or its designee.
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. Subject to the terms of the
Intercreditor and Subordination Agreement, after the occurrence and during the
continuance of a Specified Event of Default, each Grantor agrees to deliver each
item of Collateral to the Agent (or, to the extent delivery of such Collateral
would be commercially impracticable, make such Collateral available), and it is
agreed that the Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an
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assignment, transfer and conveyance of any of or all such Collateral by the
applicable Grantors to the Agent, or to license or sublicense, whether general,
special or otherwise, and whether on an exclusive or nonexclusive basis, any
such Collateral throughout the world on such terms and conditions and in such
manner as the Agent shall determine (other than in violation of applicable law
or any then existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
UCC or other applicable law. Without limiting the generality of the foregoing,
each Grantor agrees that the Agent shall have the right, subject to the
requirements of applicable law, to sell or otherwise dispose of all or any part
of the Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the Agent
shall deem appropriate. The Agent shall be authorized at any such sale (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to Persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the Agent shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by law) all rights of
redemption, stay and appraisal which such Grantor now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted.
The Agent shall give a Grantor ten (10) Business Days' prior written notice
(which each Grantor agrees is reasonable notice within the meaning of Section
9-611 of the UCC) of the Agent's intention to make any sale or other disposition
of such Grantor's Collateral. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker's
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Agent may fix and state in the notice of such sale. At
any such sale, the Collateral, or portion thereof, to be sold may be sold in one
lot as an entirety or in separate parcels, as the Agent may (in its sole and
absolute discretion) determine. The Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The 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 sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Agent until the sale price is paid by the
purchaser or purchasers thereof, but the Agent shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and
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pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice. At any public (or, to the extent permitted
by law, private) sale made pursuant to this Section, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
Obligation then due and payable to such Secured Party from any Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Agent shall be free to carry out such sale pursuant to such
agreement and no Grantor shall be entitled to the return of the Collateral or
any portion thereof subject thereto, notwithstanding the fact that after the
Agent shall have entered into such an agreement all Specified Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Agent may proceed by
a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this Section
shall be deemed to conform to the commercially reasonable standards as provided
in Section 9-611 of the UCC.
SECTION 6.02. Application of Proceeds.. Subject to the terms of the
Intercreditor and Subordination Agreement, the proceeds of any sale of
Securities Collateral pursuant to Section 6 shall be applied by the Agent in
accordance with Section 8.3 of the Credit Agreement.
SECTION 6.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Agent to exercise rights and remedies under this Article
at such time as the Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Agent a nonexclusive license
(exercisable without payment of royalty or other compensation to the Grantors
during the existence of a Specified Event of Default) to use, license or
sublicense any of the Collateral, except to the extent that such license may not
be granted as a result of an exclusive license arrangement, consisting of
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof. The use of such license by the Agent shall be exercised, at the option
of the Agent, after the occurrence and during the continuation of a Specified
Event of Default; provided that any license or sublicense entered into by the
Agent with a Person other than the Agent or a Lender in accordance herewith
shall be binding upon the Grantors notwithstanding any subsequent cure of a
Specified Event of Default.
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ARTICLE VII
Intentionally Omitted
ARTICLE VIII
Miscellaneous
SECTION 8.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 13.6 of the Credit Agreement. All communications and notices
hereunder to any Guarantor shall be given to it at its address or telecopy
number set forth on Schedule I, with a copy to Mid-Western.
SECTION 8.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Agent and the other Secured Parties and shall
survive the making by the Lenders of the Loans, regardless of any investigation
made by the Secured Parties or on their behalf, and shall continue in full force
and effect until this Agreement shall terminate.
SECTION 8.03. Binding Effect. This Agreement shall become effective as to
any Grantor when a counterpart hereof executed on behalf of such Grantor shall
have been delivered to the Agent and a counterpart hereof shall have been
executed on behalf of the Agent, and thereafter shall be binding upon such
Grantor and the Agent and their respective successors and assigns, and shall
inure to the benefit of such Grantor, the Agent and the other Secured Parties
and their respective successors and assigns, except that no Grantor shall have
the right to assign or transfer its rights or obligations hereunder or any
interest herein (and any such assignment or transfer shall be void) except as
expressly permitted by any of the other Loan Documents.
SECTION 8.04. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Agent that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.
SECTION 8.05. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.06. Waivers; Amendment; Several Agreement. (a) No failure or
delay of the Agent in exercising any power or right hereunder shall operate as a
waiver
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thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agent hereunder and of the other
Secured Parties under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provisions of this Agreement or consent to any departure by any Grantor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on any Grantor in any case shall entitle such Grantor or any other
Grantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into among the Agent and the Grantors with respect to which such waiver,
amendment or modification is to apply, subject to any consents required in
accordance with the Intercreditor and Subordination Agreement and Section 10.1
of the Credit Agreement.
(c) This Agreement shall be construed as a separate agreement with respect
to each Grantor and may be amended, modified, supplemented, waived or released
with respect to any Grantor without the approval of any other Grantor and
without affecting the obligations of any other Grantor hereunder.
SECTION 8.07. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.07.
SECTION 8.08. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of
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such provision in any other jurisdiction). The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions. It is
understood and agreed among the parties that this Agreement shall create
separate security interests in the Collateral securing the Obligations as
provided in Section 3.01, and that any determination by any court with
jurisdiction that the security interest securing any Obligation is invalid for
any reason shall not in and of itself invalidate the security interest securing
any other Obligations hereunder.
SECTION 8.09. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute a single contract and shall become effective as
provided in Section 8.04. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof.
SECTION 8.10. Headings. Article and Section headings used herein are for
the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 8.11. Jurisdiction; Consent to Service of Process. (a) Each party
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any Delaware State court or
Federal court of the United States of America sitting in Delaware, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Delaware State court or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Agent or any other Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents
against any Grantor or its properties in the courts of any jurisdiction.
(b) Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
Delaware State or Federal court referred to in paragraph (c) of this Section.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
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(c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for in Section 13.4 of the Credit Agreement. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 8.12. Termination. (a) This Agreement and the Security Interests
(i) shall terminate when all the Obligations (other than contingent
indemnification obligations that are not then due and payable) have been paid in
full and the Lenders have no further commitment to lend under the Credit
Agreement (at which time the Agent shall execute and deliver to the Grantors, at
the Grantors' expense, all UCC termination statements and other documents which
the Grantors shall reasonably request to evidence such termination and shall
return to the Grantors any Collateral held by the Agent) and (ii) shall continue
to be effective or shall be reinstated, as the case may be, if at any time any
payment in respect of any Obligation is rescinded or must otherwise be restored
by any Secured Party upon any bankruptcy or reorganization of any Grantor or
otherwise. Any execution and delivery of termination statements or documents
pursuant to this Section 8.12(a) shall be without recourse to or warranty by the
Agent. Any Subsidiary of Mid-Western that is a Grantor (each a "Mid-Western
Subidiary Grantor") shall automatically be released from its obligations
hereunder and the Security Interests in the Collateral of such Mid-Western
Subsidiary Grantor shall be automatically released in the event that the Equity
Interests of such Mid-Western Subsidiary Grantor shall be sold, transferred or
otherwise disposed of such that such Person is no longer a Subsidiary of
Mid-Western. The Borrower Loan Parties shall automatically be released from
their obligations hereunder and the Security Interests in the Collateral of the
Borrower Loan Parties shall be automatically released in the event the Borrower
assigns its obligations under the Credit Agreement to Mid-Western in accordance
with Section 13.15 of the Credit Agreement.
(b) Upon any sale or other transfer or disposition by any Grantor of any
Collateral (other than to another Grantor) and, prior to the Discharge of Senior
Obligations, upon the effectiveness of any release by the Senior Collateral
Agent of the security interest granted under the Citigroup Credit Facilities in
any Collateral, the Security Interests in such Collateral shall be automatically
released. In connection with such release, the Agent shall execute and deliver
to any Grantor, at such Grantor's expense, all UCC termination statements and
other documents that such Grantor shall reasonably request to evidence such
termination or release and shall return to such Grantor any Collateral owned by
such Grantor that is in the Agent's possession. Any execution and delivery of
UCC termination statements and similar documents pursuant to this Section
8.12(b) shall be without recourse to or warranty by the Agent.
SECTION 8.13. Additional Grantors. To the extent any Subsidiary shall be
required to become a Grantor pursuant to the Credit Agreement, upon execution
and delivery by the Agent and such Subsidiary of an instrument in the form of
Annex I hereto, such Subsidiary shall become a Grantor hereunder with the same
force and effect as if originally
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named as a Grantor herein. Each such Subsidiary shall at such time deliver to
the Agent a completed Perfection Certificate. The execution and delivery of any
such instrument shall not require the consent of any other Grantor hereunder.
The rights and obligations of each Grantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Grantor as a party to this
Agreement.
SECTION 8.14. Financing Statements. Each Grantor hereby irrevocably
authorizes the Agent at any time and from time to time to file in any relevant
jurisdiction any initial financing statements and amendments thereto that
contain the information required by Article 9 of the Uniform Commercial Code of
each applicable jurisdiction for the filing of any financing statement or
amendment relating to the Collateral, including (i) whether such Grantor is an
organization, the type of organization and any organizational identification
number issued to such Grantor, (ii) any financing or continuation statements or
other documents without the signature of such Grantor where permitted by law,
including the filing of a financing statement describing the Collateral as "all
assets now owned or hereafter acquired by the Grantor or in which Grantor
otherwise has rights" and (iii) in the case of a financing statement filed as a
fixture filing or covering Collateral constituting minerals or the like to be
extracted or timber to be cut, a sufficient description of the real property to
which such Collateral relates. Each Grantor agrees to provide all information
described in the immediately preceding sentence to the Agent promptly upon
request. Copies of such financing statements, as filed, should be sent promptly
to Mid-Western at its address for notices pursuant to Section 8.01.
SECTION 8.15. Agent Appointed Attorney-in-Fact. Each Grantor hereby
appoints the Agent the attorney-in-fact of such Grantor for the purpose of
carrying out the provisions of this Agreement and taking any action and
executing any instrument that the Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment is irrevocable until this
Agreement is terminated and coupled with an interest. Subject to the terms of
the Intercreditor and Subordination Agreement, without limiting the generality
of the foregoing, the Agent shall have the right, after the occurrence and
during the continuance of a Specified Event of Default, with full power of
substitution either in the Agent's name or in the name of such Grantor, (a) to
receive, endorse, assign or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof; (b) to demand, collect, receive payment of, give receipt for
and give discharges and releases of all or any of the Collateral; (c) to ask
for, demand, sue for, collect, receive and give acquittance for any and all
moneys due or to become due under and by virtue of any Collateral; (d) to sign
the name of any Grantor on any invoice or bill of lading relating to any of the
Collateral; (e) to send verifications of Accounts to any Account Debtor; (f) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (g) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (h) to notify, or
to require any Grantor to notify,
-23-
Account Debtors to make payment directly to the Agent; and (i) to use, sell,
assign, transfer, pledge, make any agreement with respect to or otherwise deal
with all or any of the Collateral, and to do all other acts and things necessary
to carry out the purposes of this Agreement, as fully and completely as though
the Agent were the absolute owner of the Collateral for all purposes; provided,
that nothing herein contained shall be construed as requiring or obligating the
Agent to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Agent, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Agent and the other Secured Parties shall be
accountable only for amounts actually received as a result of the exercise of
the powers granted to them herein, and neither they nor their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for gross negligence or willful misconduct.
-24-
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
MID-WESTERN AIRCRAFT SYSTEMS, INC.
By: /s/ Nigel Wright
------------------------------------
Name: Nigel Wright
Title: Chief Finacial Officer, Vice
President, Secrectary
and Treauser
MID-WESTERN AIRCRAFT SYSTEMS HOLDINGS,
INC.
By: /s/ Nigel Wright
------------------------------------
Name: Nigel Wright
Title: Chief Finacial Officer, Vice
President, Secrectary
and Treauser
MID-WESTERN AIRCRAFT FINANCE, INC.
By: /s/ Nigel Wright
------------------------------------
Name:
----------------------------------
Title: Representative
ONEX WIND FINANCE LP
By: Its General Partner, 1648701 Ontario
Inc.
By: /s/ Nigel Wright
------------------------------------
Name:
----------------------------------
Title: Representative
ONEX WIND FINANCE LLC
By: /s/ Donald F. West
------------------------------------
Name: Donald F. West
Title: Director
[Boeing Security Agreement]
3101447 NOVA SCOTIA COMPANY
By: /s/ Nigel Wright
------------------------------------
Name: Nigel Wright
Title: President and Chief
Financial Officer
By: /s/ Seth Mersky
------------------------------------
Name: Seth Mersky
Title: Vice President
[Boeing Security Agreement]
THE BOEING COMPANY, as Agent
By: /s/ X
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Boeing Security Agreement]
Annex I to the
Security Agreement
Form of Supplement
SUPPLEMENT NO. ___ dated as of [_________] (this "Supplement"), to the
Security Agreement (the "Security Agreement") dated as of [_________], 2005,
among MID-WESTERN AIRCRAFT SYSTEMS, INC., a Delaware corporation
("Mid-Western"), ONEX WIND FINANCE LP, a Delaware limited partnership (the
"Borrower"), MID-WESTERN AIRCRAFT SYSTEMS HOLDINGS, INC., a Delaware corporation
("Parent"), each Subsidiary of Mid-Western and each Borrower Subsidiary listed
on Schedule I hereto (the "Guarantors" and, together with Parent, Mid-Western
and the Borrower, the "Grantors") and THE BOEING COMPANY, as agent (in such
capacity, the "Agent") for the Secured Parties.
A. Reference is made to (a) the Credit Agreement dated as of June 16, 2005
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Grantors, the lenders party thereto (the "Lenders") and
the Agent (b) the Guarantee Agreement dated as of June 16, 2005 (as amended,
supplemented or otherwise modified from time to time, the "Guarantee
Agreement"), among Parent, Mid-Western, the Guarantors and the Agent, (c) the
Pledge Agreement dated as of June 16, 2005 among Grantors and the Agent (as
amended, supplemented or otherwise modified from time to time, the "Pledge
Agreement", and together with the Security Agreement and the Guarantee
Agreement, the "Collateral Documents").
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement.
C. Pursuant to Section 5.3(b) of the Credit Agreement, certain Subsidiaries
(as defined in the Credit Agreement) of Mid-Western and the Borrower are
required to enter into the Collateral Documents upon the occurrence of certain
events specified therein. Each of the Collateral Documents provides that any
such Subsidiary may become a party to the Collateral Documents by execution and
delivery of an instrument in the form of this Supplement. The undersigned
Subsidiary (the "New Guarantor") is executing this Supplement in accordance with
the requirements of the Credit Agreement to become a party to the Collateral
Documents.
Accordingly, the Agent and the New Guarantor agree as follows:
SECTION 1. In accordance with Section 5.3(b) of the Credit Agreement,
the New Guarantor by its signature below becomes a Guarantor and/or Grantor
and/or Loan Party, as applicable, under the Credit Agreement and each of
the Collateral Documents with the same force and effect as if originally
named therein as a party thereto and hereby (a) agrees to all terms and
provisions of the Credit Agreement and Collateral Documents applicable to
it as a Loan Party and/or Guarantor and/or
Grantor, as applicable, thereunder and (b) represents and warrants that the
representations and warranties made by it as a Loan Party and/or Guarantor
and/or Grantor, as applicable, thereunder are true and correct in all
material respects on and as of the date hereof. In furtherance of the
foregoing, the New Guarantor, as security for the payment and performance
in full of the Obligations (as defined in the Security Agreement), does
hereby create and grant to the Agent for the benefit of the Secured
Parties, their successors and assigns, a security interest in and lien on
all of the New Guarantor's right, title and interest in and to the
Collateral (as defined in the Security Agreement) and the Securities
Collateral (as defined in the Pledge Agreement) of the New Guarantor (the
"First Lien Security Interest"). The Credit Agreement and each of the
Collateral Documents is hereby incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the Agent and
the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforceability of creditors'
rights generally and by general principles of equity.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when
the Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Guarantor and the Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Guarantor hereby represents and warrants that, as
of the date hereof, (a) all information set forth in the Perfection
Certificate, including the schedules annexed thereto is true and correct in
all material respects (as to the property owned by the New Guarantor) and
(b) the information set forth on Schedule II attached hereto is a true and
correct schedule describing the securities of the New Guarantor being
pledged hereunder.
SECTION 5. Except as expressly supplemented thereby, each of the
Collateral Documents shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained herein and
-2-
in the Collateral Documents shall not in any way be affected or impaired
thereby (it being understood that the invalidity a particular provision in
a particular jurisdiction shall not in and of itself affect the validity of
such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 8.01 of the Security Agreement.
All communications and notices hereunder of the New Guarantor shall be
given to it at the address set forth under its signature below.
IN WITNESS WHEREOF, the New Guarantor and the Agent have duly executed this
Supplement to the the Credit Agreement, the Security Agreement, the Pledge
Agreement and the Guarantee Agreement as of the day and year first above
written.
-3-
[Name of New Guarantor],
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
-------------------------------
THE BOEING COMPANY,
as Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-1
SCHEDULE I
to the Supplement
Guarantors
SCHEDULE II
to the Supplement
Pledged Securities of the New Grantor
PLEDGED STOCK
Number of Number and Percentage
Issuer Certificate Registered Owner Class of Shares of Shares
- ------ ----------- ---------------- --------------- ----------
DEBT SECURITIES
Issuer Principal Amount Date of Note Maturity Date
- ------ ---------------- ------------ -------------
Annex II to the
Security Agreement
Form of Perfection Certificate
[PROVIDED UNDER SEPARATE COVER]
Annex III to the
Security Agreement
[Form of]
Control Agreement Concerning Securities Accounts
This Control Agreement Concerning Securities Accounts (this "Control
Agreement"), dated as of [__________], 2005 by and among [_______________] (the
"Grantor"), Citicorp North America, Inc., as Collateral Agent for the benefit of
the Senior Secured Parties (as defined below) (the "Senior Collateral Agent"),
The Boeing Company, as agent for the benefit of the Subordinated Secured Parties
(as defined below) (the "Subordinated Lien Agent") and [______________] (the
"Securities Intermediary"), is delivered pursuant to (a) Section 4.04(b) of that
certain security agreement (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Security Agreement"), dated as of
June 16, 2005 made by Mid-Western Aircraft Systems, Inc., a Delaware corporation
("U.S. Borrower"), ONEX WIND FINANCE LP, a Delaware limited partnership
("Additional Borrower" and, together with the U.S. Borrower, "Borrowers"), and
each of the Guarantors listed on the signature pages thereto in favor of the
Senior Collateral Agent and (b) pursuant to Section 4.04(b) of that certain
security agreement (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Boeing Security Agreement"), dated as of June
16, 2005 made by the Borrowers and each of the Guarantors listed on the
signature pages thereto in favor of the Subordinated Lien Agent. For purposes of
this Control Agreement, Senior Secured Parties shall mean the "Secured Parties"
as such term is defined in the Security Agreement, and Subordinated Secured
Parties shall mean the "Secured Parties" as such term is defined in the Boeing
Security Agreement. This Control Agreement is for the purpose of perfecting the
security interests of the Senior Secured Parties and the Subordinated Secured
Parties granted by the Grantor in the Designated Accounts described below. All
references herein to the "UCC" shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York. References herein to
"Collateral Agents" means the Senior Collateral Agent and the Subordinated Lien
Agent, collectively. Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Security Agreement.
Section 1. Priority of Lien. Pursuant to the Security Agreement and the
Boeing Security Agreement and subject to the Subordination and Intercreditor
Agreement, the Grantor has granted a security interest in all of the Grantor's
rights in the Designated Accounts referred to in Section 2 below to each of the
Senior Collateral Agent and the Subordinated Lien Agent, respectively. The
Collateral Agents, the Grantor and the Securities Intermediary are entering into
this Control Agreement to perfect each of the Senior Collateral Agent's and the
Subordinated Lien Agent's security interest in the Designated Accounts. As
between the Senior Collateral Agent and the Subordinated Lien Agent, the Senior
Collateral Agent shall have a first
-2-
priority security interest in the Designated Accounts and the Subordinated Lien
Agent shall have a second priority security interest in the Designated Accounts.
Section 2. Confirmation of Establishment and Maintenance of Designated
Accounts. The Securities Intermediary hereby confirms and agrees that (i) the
Securities Intermediary has established for the Grantor and maintains the
account(s) listed in Schedule I annexed hereto (such account(s), together with
each such other securities account maintained by the Grantor with the Securities
Intermediary collectively, the "Designated Accounts" and each a "Designated
Account"), (ii) each Designated Account will be maintained in the manner set
forth herein until the earlier of termination of such Designated Account and
termination of this Control Agreement, (iii) this Control Agreement is the valid
and legally binding obligation of the Securities Intermediary, (iv) the
Securities Intermediary is a "securities intermediary" as defined in Article
8-102(a)(14) of the UCC, (v) each of the Designated Accounts is, and will
remain, a "securities account" as such term is defined in Section 8-501(a) of
the UCC, (vi) all securities or other property underlying any financial assets
which are credited to any Designated Account shall be registered in the name of
the Securities Intermediary, endorsed to the Securities Intermediary or in blank
or credited to another securities account maintained in the name of the
Securities Intermediary and in no case will any financial asset credited to any
Designated Account be registered in the name of the Grantor, payable to the
order of the Grantor or specially endorsed to the Grantor, except to the extent
the foregoing have been specially endorsed to the Securities Intermediary or in
blank and (vii) the Securities Intermediary shall not change the name or account
number of any of the Designated Accounts without the prior written consent of
(A) prior to the delivery of a Notice of Termination of Obligations
substantially in the form of Exhibit A annexed hereto (the "Notice of
Termination of Obligations"), the Senior Collateral Agent, (B) subsequent to the
delivery of a Notice of Termination of Obligations, the Subordinated Lien Agent
and (C) prior to delivery pursuant to Section 10(i) hereof of a Notice of Sole
Control substantially in the form of Exhibit B annexed hereto (the "Notice of
Sole Control"), the Grantor.
Section 3. "Financial Assets" Election. The Securities Intermediary hereby
agrees that each item of Investment Property credited to any Designated Account
shall be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the UCC.
Section 4. Entitlement Order. If at any time the Securities Intermediary
shall receive an "entitlement order" (within the meaning of Section 8-102(a)(8)
of the UCC) issued by the Senior Collateral Agent and relating to any financial
asset maintained in one or more of the Designated Accounts, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Grantor or any other person. If at any time the Securities Intermediary
shall receive an entitlement order from the Subordinated Lien Agent relating to
any financial asset maintained in one or more of the Designated Accounts, the
Securities Intermediary shall comply with such entitlement order without further
consent by the Grantor or any other person; provided, that unless the Bank shall
have received a Notice of Termination of
-3-
Obligations from the Senior Collateral Agent or the Subordinated Lien Agent, the
Bank shall not comply with such instructions from the Subordinated Lien Agent
without the prior written consent by the Senior Collateral Agent. The Securities
Intermediary shall also comply with instructions directing the Securities
Intermediary with respect to the sale, exchange or transfer of financial assets
held in each Designated Account originated by the Grantor, or any representative
of, or investment manager appointed by, the Grantor until such time as the
Securities Intermediary has received a Notice of Sole Control delivered pursuant
to Section 10(i).
Section 5. Subordination of Lien; Waiver of Set-Off. The Securities
Intermediary hereby agrees that any security interest in any Designated Account
it now has or subsequently obtains shall be subordinate to the security interest
of each Collateral Agent. The financial assets and other items deposited to any
Designated Account will not be subject to deduction, set-off, banker's lien, or
any other right in favor of any person other than the Senior Secured Parties and
the Subordinated Secured Parties (except that the Securities Intermediary may
set off all amounts due to the Securities Intermediary in respect of its
customary fees and expenses for the routine maintenance and operation of the
Designated Accounts, including overdraft fees and amounts advanced to settle
authorized transactions).
Section 6. Choice of Law. Both this Control Agreement and the Designated
Accounts shall be governed by the laws of the State of New York. Regardless of
any provision in any other agreement, for purposes of the UCC, New York shall be
deemed to be the Securities Intermediary's jurisdiction and the Designated
Accounts (as well as the security entitlements related thereto) shall be
governed by the laws of the State of New York.
Section 7. Conflict with Other Agreements; Amendments. As of the date
hereof, there are no other agreements entered into between the Securities
Intermediary and the Grantor with respect to any Designated Account or any
security entitlements or other financial assets credited thereto (other than
standard and customary documentation with respect to the establishment and
maintenance of such Designated Accounts). The Securities Intermediary and the
Grantor will not enter into any other agreement with respect to any Designated
Account unless the Collateral Agents shall have received prior written notice
thereof. The Securities Intermediary and the Grantor have not and will not enter
into any other agreement with respect to (i) creation or perfection of any
security interest in or (ii) control of security entitlements maintained in any
of the Designated Accounts or purporting to limit or condition the obligation of
the Securities Intermediary to comply with entitlement orders with respect to
financial assets credited to any Designated Account as set forth in Section 4
hereof without the prior written consent of each Collateral Agent acting in its
sole discretion. In the event of any conflict with respect to control over any
Designated Account between this Control Agreement (or any portion hereof) and
any other agreement now existing or hereafter entered into, the terms of this
Control Agreement shall prevail. No amendment or modification of this Control
Agreement or waiver of any rights hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.
-4-
Section 8. Certain Agreements.
(i) The Securities Intermediary has furnished to the Collateral Agents
the most recent account statement issued by the Securities Intermediary with
respect to each of the Designated Accounts and the financial assets and cash
balances held therein, identifying the financial assets held therein in a manner
acceptable to the Collateral Agents. Each such statement accurately reflects the
assets held in such Designated Account as of the date thereof.
(ii) The Securities Intermediary will, upon its receipt of each
supplement to the Security Agreement signed by the Grantor and identifying one
or more financial assets as "Pledged Collateral," enter into its records,
including computer records, with respect to each Designated Account a notation
with respect to any such financial asset so that such records and reports
generated with respect thereto identify such financial asset as "Pledged".
Section 9. Notice of Adverse Claims. Except for the claims and interest of
the Collateral Agents and of the Grantor in the financial assets maintained in
the Designated Account(s), the Securities Intermediary on the date hereof does
not know of any claim to, or security interest in, any Designated Account or in
any financial asset credited thereto and does not know of any claim that any
person other than the Collateral Agents have been given "control" (within the
meaning of Section 8-106 of the UCC) of any Designated Account or any such
financial asset. If the Securities Intermediary becomes aware that any person is
asserting any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process or
any claim of control) against any of the financial assets maintained in any
Designated Account, the Securities Intermediary shall promptly notify the
Collateral Agents and the Grantor thereof.
Section 10. Maintenance of Designated Accounts. In addition to the
obligations of the Securities Intermediary in Section 4 hereof, the Securities
Intermediary agrees to maintain the Designated Accounts as follows:
(i) Notice of Sole Control. If at any time (a) the Senior Collateral
Agent, or (b) after delivery of a Notice of Termination of Obligations, the
Subordinated Lien Agent delivers to the Securities Intermediary a Notice of
Sole Control with respect to any Designated Account, the Securities
Intermediary agrees that, after receipt of such notice, it will take all
instructions with respect to such Designated Account solely from such
Collateral Agent and cease taking instructions from Grantor, including,
without limitation, instructions for investment, distribution or transfer
of any financial asset maintained in any Designated Account. Permitting
settlement of trades pending at the time of receipt of such notice shall
not constitute a violation of the immediately preceding sentence.
(ii) Voting Rights. Until such time as the Securities Intermediary
receives a Notice of Sole Control, the Grantor, or an investment manager on
behalf of the Grantor,
-5-
shall direct the Securities Intermediary with respect to the voting of any
financial assets credited to any Designated Account.
(iii) Statements and Confirmations. The Securities Intermediary will
send copies of all statements and other correspondence (excluding routine
confirmations) concerning any Designated Account or any financial assets
credited thereto simultaneously to each of the Grantor and the Collateral
Agents at the address set forth in Section 12 hereof. The Securities
Intermediary will provide to the applicable Collateral Agent, upon such
Collateral Agent's request therefor from time to time and, in any event, as
of the last business day of each calendar month, a statement of the market
value of each financial asset maintained in each Designated Account.
(iv) Bailee for Perfection. The Securities Intermediary acknowledges
that, in the event that it should come into possession of any certificate
representing any security or other assets (other than those that are
credited to any of the Designated Accounts and the certificate is in the
name of the Securities Intermediary or endorsed to the Securities
Intermediary in blank), the Securities Intermediary shall retain possession
of the same for the benefit of the Senior Collateral Agent, and the
Subordinated Lien Agent, and such act shall cause the Securities
Intermediary to be deemed a bailee for the Collateral Agents, if necessary
to perfect the Collateral Agents' security interests in such securities or
assets. The Securities Intermediary hereby acknowledges its receipt of a
copy of the Security Agreement and the Boeing Security Agreement, which
shall also serve as notice to the Securities Intermediary of a security
interest in collateral held by a bailee.
Section 11. Successors; Assignment. The terms of this Control Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and
their respective corporate successors and permitted assignees.
Section 12. Notices. Any notice, request or other communication required or
permitted to be given under this Control Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two (2) days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.
Grantor:
Attention: ____________________
Telecopy: _____________________
Telephone: ____________________
-6-
with copy to:
[Address] _____________________
_______________________________
_______________________________
Attention: ____________________
Telecopy: _____________________
Telephone: ____________________
Securities
Intermediary: [______________________________]
[Address] _____________________
_______________________________
_______________________________
Attention: ____________________
Telecopy: _____________________
Telephone: ____________________
Senior
Collateral
Agent: Citicorp North America, Inc.
as Senior Collateral Agent
390 Greenwich St.
New York, New York 10013
Attention: ____________________
Telecopy: _____________________
Telephone: ____________________
with a copy to: _______________
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005
Attention: Adam Dworkin, Esq.
Telecopy: (212) 269-5420
Telephone: (212) 701-3000
-7-
Subordinated
Lien
Collateral
Agent: The Boeing Company
as Subordinated Lien Agent
Corporate Headquarters
M/C 5003-1001
100 N. Riverside Drive
Chicago, Illinois 60606-1596
Attention: General Counsel
Telecopy: (312) 544-2829
with a copy to:
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope St., 48th Floor
Los Angeles, California 90071
Attention: Lawrence M. Braun, Esq.
Telecopy: (213) 620-1398
Any party may change its address for notices in the manner set forth above.
Section 13. Termination. The rights and powers granted herein to the
Collateral Agents are powers coupled with an interest and will be affected
neither by the bankruptcy of the Grantor nor by the lapse of time. The
obligations of the Securities Intermediary hereunder shall continue in effect
until (i) the security interests of the Senior Secured Parties and the
Subordinated Secured Parties with respect to the financial assets maintained in
the Designated Account(s) have been terminated and each Collateral Agent has
notified the Securities Intermediary of such termination in writing or (ii)
thirty days following the Securities Intermediary's delivery of written notice
of such termination to the Grantor and the Collateral Agents.
Section 14. Severability. If any term or provision set forth in this
Agreement shall be invalid or unenforceable, the remainder of this Agreement,
other than those provisions held invalid or unenforceable, shall be construed in
all respects as if such invalid or unenforceable term or provision were omitted.
Section 15. Counterparts. This Control Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Control Agreement by signing
and delivering one or more counterparts.
-8-
Section 16. Subordination and Intercreditor Agreement. Notwithstanding
anything herein to the contrary, all liens and security interests granted to the
Subordinated Lien Agent pursuant to or contemplated by this Agreement, the
obligations under this Agreement and the exercise of any right or remedy by the
Subordinated Lien Agent hereunder are subject to the provisions of the
Subordination and Intercreditor Agreement, dated as of June 16, 2005 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Subordination and Intercreditor Agreement"), among Citicorp North America,
Inc., as Senior Collateral Agent, The Boeing Company, as Subordinated Lien Agent
and certain other persons party or that may become party thereto from time to
time and the obligations hereunder and the liens and security interests granted
or contemplated hereby are subordinated to the extent set forth in the
Subordination and Intercreditor Agreement. In the event of any conflict between
the terms of the Subordination and Intercreditor Agreement and this Agreement,
the terms of the Subordination and Intercreditor Agreement shall govern and
control.
S-1
[_________________________________],
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-2
CITICORP NORTH AMERICA, INC.,
as Senior Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE BOEING COMPANY,
as Subordinated Lien Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[_________________________________],
as Securities Intermediary
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SCHEDULE I
Designated Account(s)
EXHIBIT A
[Name of Financial Institution]
[Address]
Re: Notice of Termination of Obligations
Ladies and Gentlemen:
You are hereby notified that the Obligations have been terminated and the
Discharge of Senior Obligations has occurred. Capitalized terms used but not
defined herein shall have the meanings set forth in the Control Agreement
Concerning Securities Accounts, dated as of [______________], 2005, among the
Grantor, the Collateral Agents and the Securities Intermediary.
Sincerely,
CITICORP NORTH AMERICA, INC.,
as Senior Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT B
[Letterhead of applicable Collateral Agent]
[Date]
[Securities Intermediary]
[Address]
Attention: __________________________
Re: Notice of Sole Control
Ladies and Gentlemen:
As referenced in Section 10(i) of the Control Agreement Concerning
Designated Accounts dated as of [______________], by and among [______________],
us and you (the "Control Agreement") (a copy of which is attached) we hereby
give you notice of our sole control over the financial assets maintained in the
Designated Account(s) referred to in the Control Agreement, account numbers:
________________ (the "Specified Designated Accounts"). You are hereby
instructed not to accept any direction, instruction or entitlement order with
respect to financial assets maintained in the Specified Designated Accounts from
any person other than the undersigned.
-2-
You are instructed to deliver a copy of this notice by facsimile
transmission to [Grantor].
Very truly yours,
[APPLICABLE COLLATERAL AGENT],
as [Senior Collateral Agent]
[Subordinated Lien Agent]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
cc: [Grantor]
Annex IV to the
Security Agreement
[Form of]
Control Agreement Concerning Deposit Accounts
This CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS (this "Control
Agreement"), dated as of [______________], by and among [______________] (the
"Grantor"), Citicorp North America, Inc., as collateral agent for the benefit of
the Secured Parties (the "Senior Collateral Agent"), The Boeing Company, as the
agent for the benefit of the Subordinated Secured Parties (as defined below)
(the "Subordinated Lien Agent") and [______________] (the "Bank"), is delivered
pursuant to (a) Section 4.04(b) of that certain security agreement (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Security Agreement"), dated as of [____________], 2005 made by Mid-Western
Aircraft Systems, Inc., a Delaware corporation ("U.S. Borrower"), ONEX WIND
FINANCE LP, a Delaware limited partnership ("Additional Borrower" and, together
with the U.S. Borrower, "Borrowers"), and each of the Guarantors listed on the
signature pages thereto in favor of the Senior Collateral Agent and (b) pursuant
to Section 4.04(b) of that certain security agreement (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Boeing
Security Agreement"), dated as of June 16, 2005 made by the Borrowers and each
of the Guarantors listed on the signature pages thereto in favor of the
Subordinated Lien Agent. For purposes of this Control Agreement, Senior Secured
Parties shall mean the "Secured Parties" as such term is defined in the Security
Agreement, and Subordinated Secured Parties shall mean the "Secured Parties" as
such term is defined in the Boeing Security Agreement. This Control Agreement is
for the purpose of perfecting the security interests of the Senior Secured
Parties and the Subordinated Secured Parties granted by the Grantor in the
Designated Accounts described below. All references herein to the "UCC" shall
mean the Uniform Commercial Code as in effect from time to time in the State of
New York. References herein to "Collateral Agents" means the Senior Collateral
Agent and the Subordinated Lien Agent, collectively. Capitalized terms used but
not defined herein shall have the meanings assigned to such terms in the
Security Agreement.
Section 1. Priority of Lien. Pursuant to the Security Agreement and the
Boeing Security Agreement and subject to the Subordination and Intercreditor
Agreement, the Grantor has granted a security interest in all of the Grantor's
rights in the Designated Accounts referred to in Section 2 below to each of the
Senior Collateral Agent and the Subordinated Lien Agent, respectively. The
Collateral Agents, the Grantor and the Bank are entering into this Control
Agreement to perfect each of the Senior Collateral Agent's and the Subordinated
Lien Agent's security interest in the Designated Accounts. As between the Senior
Collateral Agent and the Subordinated Lien Agent, the Senior Collateral Agent
shall have a first priority security
-2-
interest in the Designated Accounts and the Subordinated Lien Agent shall have a
second priority security interest in the Designated Accounts.
Section 2. Confirmation of Establishment and Maintenance of Designated
Accounts. The Bank hereby confirms and agrees that (i) the Bank has established
for the Grantor and maintains the deposit account(s) listed in Schedule 1
annexed hereto (the "Designated Accounts" and each a "Designated Account"), (ii)
each Designated Account will be maintained in the manner set forth herein until
termination of this Control Agreement, (iii) the Bank is a "bank," as such term
is defined in the UCC, (iv) this Control Agreement is the valid and legally
binding obligation of the Bank and (v) each Designated Account is a "deposit
account" as such term is defined in Article 9 of the UCC.
Section 3. Control. The Bank shall comply with instructions from the
Grantor directing the disposition of funds in one or more of the Designated
Accounts until such time as the Bank has received a Notice of Sole Control
substantially in the form of Exhibit B annexed hereto (the "Notice of Sole
Control") delivered pursuant to Section 9(i) hereof. Until such time as the Bank
has received a Notice of Sole Control, the Bank shall be entitled to distribute
to the Grantor all assets in the Designated Accounts. If at any time the Bank
shall receive any instructions originated by the Senior Collateral Agent
directing the disposition of funds in one or more of the Designated Accounts,
the Bank shall comply with such instructions without further consent by the
Grantor or any other person. If at any time the Bank shall receive any
instructions originated by the Subordinated Lien Collateral Agent directing the
disposition of funds in one or more of the Designated Accounts, the Bank shall
comply with such instructions without further consent by the Grantor; provided,
that unless the Bank shall have received a Notice of Termination of Obligations
substantially in the form of Exhibit A annexed hereto (the "Notice of
Termination of Obligations") from the Senior Collateral Agent, the Bank shall
not comply with such instructions from the Subordinated Lien Agent without the
prior written consent by the Senior Collateral Agent. Notwithstanding anything
to the contrary contained herein, if at any time the Bank shall receive
conflicting instructions from any Collateral Agent and the Grantor, the Bank
shall follow instructions of the Grantor and not the applicable Collateral Agent
prior to receipt by the Bank of a Notice of Sole Control delivered in accordance
with Section 9.1(i), and thereafter, shall follow the instructions of the
applicable Collateral Agent (subject to the consent rights of the other
Collateral Agent as set forth above) and not the Grantor.
Section 4. Subordination of Lien; Waiver of Set-Off. The Bank hereby agrees
that any security interest in any Designated Account it now has or subsequently
obtains shall be subordinate to the security interest of each Collateral Agent.
The funds deposited into any Designated Account will not be subject to
deduction, set-off, banker's lien, or any other right in favor of any person
other than the Senior Secured Parties and the Subordinated Secured Parties
(except that the Bank may set off (i) all amounts due to the Bank in respect of
its customary fees and expenses for the routine maintenance and operation of the
Designated Accounts, including overdraft fees, and (ii) the face amount of any
checks or other items which have been credited to
-3-
any Designated Account but are subsequently returned unpaid because of
uncollected or insufficient funds).
Section 5. Choice of Law. Both this Control Agreement and the Designated
Account(s) shall be governed by the laws of the State of New York. Regardless of
any provision in any other agreement, for purposes of the UCC, New York shall be
deemed to be the Bank's jurisdiction and the Designated Account(s) shall be
governed by the law of the State of New York.
Section 6. Conflict with Other Agreements; Amendments. As of the date
hereof, there are no other agreements entered into between the Bank and the
Grantor with respect to any Designated Account or any funds credited thereto
(other than standard and customary documentation with respect to the
establishment and maintenance of such Designated Accounts). The Bank and the
Grantor will not enter into any other agreement with respect to any Designated
Account unless the Collateral Agents shall have received prior written notice
thereof. The Bank and the Grantor have not and will not enter into any other
agreement with respect to control of the Designated Accounts or purporting to
limit or condition the obligation of the Bank to comply with any orders or
instructions with respect to any Designated Account as set forth in Section 2
hereof without the prior written consent of each Collateral Agent acting in its
sole discretion. In the event of any conflict with respect to control over any
Designated Account between this Control Agreement (or any portion hereof) and
any other agreement now existing or hereafter entered into, the terms of this
Control Agreement shall prevail. No amendment or modification of this Control
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.
Section 7. Certain Agreements. The Bank has furnished to the Collateral
Agents the most recent account statement issued by the Bank with respect to each
of the Designated Accounts and the cash balances held therein. Each such
statement accurately reflects the assets held in such Designated Account as of
the date thereof.
Section 8. Notice of Adverse Claims. Except for the claims and interest of
the Collateral Agents and of the Grantor in the Designated Account(s), the Bank
on the date hereof does not know of any claim to, or security interest in, any
Designated Account or in any funds credited thereto and does not know of any
claim that any person other than the Collateral Agents have been given control
(within the meaning of Section 8-106 of the UCC) of any Designated Account or
any such funds. If the Bank becomes aware that any person is asserting any lien,
encumbrance or adverse claim (including any writ, garnishment, judgment, warrant
of attachment, execution or similar process or any claim of control) against any
funds in any Designated Account, the Bank will promptly notify the Collateral
Agents and the Grantor thereof.
Section 9. Maintenance of Designated Accounts. In addition to the
obligations of the Bank in Section 3 hereof, the Bank agrees to maintain the
Designated Accounts as follows:
-4-
(i) Notice of Sole Control. If at any time any Collateral Agent
delivers to the Bank a Notice of Sole Control with respect to any
Designated Account, the Bank agrees that, after receipt of such notice, it
will take all instruction with respect to such Designated Account solely
from such Collateral Agent in accordance with Section 3 of this Agreement
and cease taking instructions from the Grantor, including, without
limitation, instructions for distribution or transfer of any funds in any
Designated Account; provided, that prior to delivery to the Bank of a
Notice of Termination of Obligations from the Senior Collateral Agent, any
Notice of Sole Control with respect to any Designated Account delivered to
the Bank must include the signature of the Senior Collateral Agent.
(ii) Statements and Confirmations. The Bank will send copies of all
statements and other correspondence (excluding routine confirmations)
concerning any Designated Account simultaneously to the Grantor and the
Collateral Agents at the address set forth in Section 11 hereof. The Bank
will promptly provide to the Collateral Agents, upon request therefor from
time to time and, in any event, as of the last business day of each
calendar month, a statement of the cash balance in each Designated Account.
The Bank shall not change the name or account number of any Designated
Account without the prior written consent of each Collateral Agent.
Section 10. Successors; Assignment. The terms of this Control Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and
their respective corporate successors and permitted assignees.
Section 11. Notices. Any notice, request or other communication required or
permitted to be given under this Control Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two (2) days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.
Grantor:
Attention: ____________________
Telecopy: _____________________
Telephone: ____________________
-5-
with copy to:
[Address] _____________________
_______________________________
_______________________________
Attention: ____________________
Telecopy: _____________________
Telephone: ____________________
Bank: [______________________________]
[______________________________]
[______________________________]
Attention: ____________________
Telecopy: _____________________
Telephone: ____________________
Senior
Collateral
Agent: Citicorp North America, Inc.
as Senior Collateral Agent
390 Greenwich Avenue
New York, New York 10013
Attention: ____________________
Telecopy: _____________________
Telephone: ____________________
with a copy to:
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005
Attention: Adam Dworkin, Esq.
Telecopy: (212) 269-5420
Telephone: (212) 701-3000
Subordinated
Lien
-6-
Agent: The Boeing Company
as Subordinated Lien Agent
Corporate Headquarters
M/C 5003-1001
100 N. Riverside Drive
Chicago, Illinois 60606-1596
Attention: General Counsel
Telecopy: (312) 544-2829
with a copy to:
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope St., 48th Floor
Los Angeles, California 90071
Attention: Lawrence M. Braun, Esq.
Telecopy: (213) 620-1398
Any party may change its address for notices in the manner set forth above.
Section 12. Termination. The rights and powers granted herein to the
Collateral Agents are powers coupled with an interest and will be affected
neither by the bankruptcy of the Grantor nor by the lapse of time. The
obligations of the Bank hereunder shall continue in effect until (i) the
security interests of the Senior Secured Parties and the Subordinated Secured
Parties with respect to the Designated Account(s) have been terminated and the
Collateral Agents have notified the Bank of such termination in writing or (ii)
thirty days following the Bank's delivery of written notice of such termination
to the Collateral Agents and Grantor.
Section 13. Severability. If any term or provision set forth in this
Agreement shall be invalid or unenforceable, the remainder of this Agreement,
other than those provisions held invalid or unenforceable, shall be construed in
all respects as if such invalid or unenforceable term or provision were omitted.
Section 14. Counterparts. This Control Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Control Agreement by signing
and delivering one or more counterparts.
Section 15. Subordination and Intercreditor Agreement. Notwithstanding
anything herein to the contrary, all liens and security interests granted to the
Subordinated Lien Agent pursuant to or contemplated by this Agreement, the
obligations under this Agreement and the exercise of any right or remedy by the
Subordinated Lien Agent hereunder are subject to the provisions of the
Subordination and Intercreditor Agreement, dated as of June 16, 2005 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Subordination
-7-
and Intercreditor Agreement"), among Citicorp North America, Inc., as Senior
Collateral Agent, The Boeing Company, as Subordinated Lien Agent and certain
other persons party or that may become party thereto from time to time and the
obligations hereunder and the liens and security interests granted or
contemplated hereby are subordinated to the extent set forth in the
Subordination and Intercreditor Agreement. In the event of any conflict between
the terms of the Subordination and Intercreditor Agreement and this Agreement,
the terms of the Subordination and Intercreditor Agreement shall govern and
control.
S-1
[_________________________________],
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-2
CITICORP NORTH AMERICA, INC.,
as Senior Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE BOEING COMPANY,
as Subordinated Lien Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[_________________________________],
as Bank
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SCHEDULE 1
Designated Account(s)
EXHIBIT A
[Name of Financial Institution]
[Address]
Re: Notice of Termination of Obligations
Ladies and Gentlemen:
You are hereby notified that the Obligations have been terminated and the
Discharge of Senior Obligations has occurred. Capitalized terms used but not
defined herein shall have the meanings set forth in the Control Agreement
Concerning Deposit Accounts, dated as of [ ], 2004, among the Grantor, the
Collateral Agents and the Bank.
Sincerely,
CITICORP NORTH AMERICA, INC.,
as Senior Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT B
[Letterhead of applicable Collateral Agent]
[Date]
[Bank]
[Address]
Attention: __________________________
Re: Notice of Sole Control
Ladies and Gentlemen:
As referenced in Section 9(i) of the Control Agreement Concerning
Designated Accounts dated as of [______________], by and among [______________],
us and you (the "Control Agreement") (a copy of which is attached) we hereby
give you notice of our sole control over the Designated Account(s) referred to
in the Control Agreement, having account number(s): ____________________________
(the "Specified Designated Accounts"). You are hereby instructed not to accept
any direction or instructions with respect to the Specified Designated Accounts
or any funds credited thereto from any person other than the undersigned, unless
otherwise ordered by a court of competent jurisdiction.
You are instructed to deliver a copy of this notice by facsimile
transmission to [Grantor].
Very truly yours,
[APPLICABLE COLLATERAL AGENT],
as [Senior Collateral]
[Subordinated Lien] Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
cc: [Grantor]
Annex V-A to the
Security Agreement
[Form of]
Copyright Security Agreement
COPYRIGHT SECURITY AGREEMENT, dated as of [______________], by
[___________________] and [___________________] (individually, a "Grantor", and,
collectively, the "Grantors"), in favor of The Boeing Company, as agent for the
benefit of theSecured Parties (the "Agent").
WITNESSETH:
WHEREAS, the Grantors are party to a Security Agreement of even date
herewith (the "Security Agreement") in favor of the Agent pursuant to which the
Grantors are required to execute and deliver this Copyright Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Agent,
for the benefit of the Secured Parties, to enter into the Credit Agreement, the
Grantors hereby agree with the Agent as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in
the Security Agreement and used herein have the meaning given to them in the
Security Agreement.
SECTION 2. Grant of Security Interest in Copyright Collateral. Each Grantor
hereby mortgages, pledges and grants to the Agent for the benefit of the Secured
Parties a lien on and security interest in and to all of its right, title and
interest in, to and under all the following Pledged Collateral of such Grantor:
(a) Copyrights of such Grantor listed on Schedule I attached hereto; and
(b) all Proceeds of any and all of the foregoing (other than Excluded
Property).
SECTION 3. Security Agreement and Intercreditor Agreement. The security
interest granted pursuant to this Copyright Security Agreement is granted in
conjunction with the security interest granted to the Agent pursuant to the
Security Agreement and Grantors hereby acknowledge and affirm that the rights
and remedies of the Agent with respect to the security interest in the
Copyrights made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein. In
-2-
the event that any provision of this Copyright Security Agreement is deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall control. In the event that any provision of this Copyright Security
Agreement is deemed to conflict with the Intercreditor and Subordination
Agreement, the provisions of the Intercreditor and Subordination Agreement shall
control.
SECTION 4. Termination. Upon the payment in full of the Obligations (other
than contingent indemnification obligations for which no claim has been made)
and termination of the Security Agreement, the Agent shall execute, acknowledge,
and deliver to the Grantors an instrument in writing in recordable form
releasing the collateral pledge, grant, assignment, lien and security interests
in the Copyrights under this Copyright Security Agreement.
SECTION 5. Counterparts. This Copyright Security Agreement may be executed
in any number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Copyright Security Agreement
by signing and delivering one or more counterparts.
SECTION 6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[signature page follows]
-3-
IN WITNESS WHEREOF, each Grantor has caused this Copyright Security
Agreement to be executed and delivered by its duly authorized offer as of the
date first set forth above.
Very truly yours,
[_________________________________]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted and Agreed:
THE BOEING COMPANY,
as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-4-
SCHEDULE I
to
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS
COPYRIGHT REGISTRATIONS:
REGISTRATION
OWNER NUMBER TITLE
- ----- ------------ -----
COPYRIGHT APPLICATIONS:
OWNER TITLE
- ----- -----
Annex V-B to the
Security Agreement
[Form of]
Patent Security Agreement
PATENT SECURITY AGREEMENT, dated as of [______________], by
[___________________] and [___________________] (individually, a "Grantor", and,
collectively, the "Grantors"), in favor of The Boeing Company, as agent for the
benefit of the Parties (the "Agent").
WITNESSETH:
WHEREAS, the Grantors are party to a Security Agreement of even date
herewith (the "Security Agreement") in favor of the Agent pursuant to which the
Grantors are required to execute and deliver this Patent Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Agent,
for the benefit of the Secured Parties, to enter into the Credit Agreement, the
Grantors hereby agree with the Agent as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in
the Security Agreement and used herein have the meaning given to them in the
Security Agreement.
SECTION 2. Grant of Security Interest in Patent Collateral. Each Grantor
hereby mortgages, pledges and grants to the Agent for the benefit of the Secured
Parties a lien on and security interest in and to all of its right, title and
interest in, to and under all the following Pledged Collateral of such Grantor:
(a) Patents of such Grantor listed on Schedule I attached hereto; and
(b) all Proceeds of any and all of the foregoing (other than Excluded
Property).
SECTION 3. Security Agreement and Intercreditor Agreement. The security
interest granted pursuant to this Patent Security Agreement is granted in
conjunction with the security interest granted to the Agent pursuant to the
Security Agreement and Grantors hereby acknowledge and affirm that the rights
and remedies of the Agent with respect to the security interest in the Patents
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Patent Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall control. In
-2-
the event that any provision of this Patent Security Agreement is deemed to
conflict with the Intercreditor and Subordinatino Agreement, the provisions of
the Intercreditor and Subordination Agreement shall control.
SECTION 4. Termination. Upon the payment in full of the Obligations (other
than contingent indemnification obligations for which no claim has been made)
and termination of the Security Agreement, the Agent shall execute, acknowledge,
and deliver to the Grantors an instrument in writing in recordable form
releasing the collateral pledge, grant, assignment, lien and security interests
in the Patents under this Patent Security Agreement.
SECTION 5. Counterparts. This Patent Security Agreement may be executed in
any number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Patent Security Agreement by
signing and delivering one or more counterparts.
SECTION 6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[signature page follows]
-3-
IN WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement
to be executed and delivered by its duly authorized offer as of the date first
set forth above.
Very truly yours,
[_________________________________]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted and Agreed:
THE BOEING COMPANY,
as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-4-
SCHEDULE I
to
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS AND PATENT APPLICATIONS
PATENT REGISTRATIONS:
REGISTRATION
OWNER NUMBER NAME
- ----- ------------ ----
PATENT APPLICATIONS:
APPLICATION
OWNER NUMBER NAME
- ----- ----------- ----
Annex V-C to the
Security Agreement
[FORM OF]
TRADEMARK SECURITY AGREEMENT
TRADEMARK SECURITY AGREEMENT, dated as of [______________], by
[___________________] and [___________________] (individually, a "Grantor", and,
collectively, the "Grantors"), in favor of The Boeing Company, as agent for the
benefit of the Secured Parties (the "Agent").
WITNESSETH:
WHEREAS, the Grantors are party to a Security Agreement of even date
herewith (the "Security Agreement") in favor of the Collateral Agents pursuant
to which the Grantors are required to execute and deliver this Trademark
Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Agent,
for the benefit of the Secured Parties, to enter into the Credit Agreement, the
Grantors hereby agree with the Agent as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in
the Security Agreement and used herein have the meaning given to them in the
Security Agreement.
SECTION 2. Grant of Security Interest in Trademark Collateral. Each Grantor
hereby mortgages, pledges and grants to the Agent for the benefit of the Secured
Parties a lien on and security interest in and to all of its right, title and
interest in, to and under all the following Pledged Collateral of such Grantor:
(a) Trademarks of such Grantor listed on Schedule I attached hereto;
(b) all Goodwill associated with such Trademarks; and
(c) all Proceeds of any and all of the foregoing (other than Excluded
Property).
SECTION 3. Security Agreement and Intercreditor Agreement. The security
interest granted pursuant to this Trademark Security Agreement is granted in
conjunction with the security interest granted to the Agent pursuant to the
Security Agreement and Grantors hereby acknowledge and affirm that the rights
and remedies of the Agent with respect to the security interest in the
Trademarks made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein. In the event that any provision of this
Trademark Security Agreement is deemed to conflict with the Security Agreement,
the provisions of the Security Agreement shall control. In the event that any
provision of this Trademark Security Agreement is deemed to conflict with the
Intercreditor and Subordination Agreement, the provisions of the Intercreditor
and Subordination Agreement shall control.
SECTION 4. Termination. Upon the payment in full of the Obligations (other
than contingent indemnification obligations for which no claim has been made)
and termination of the Security Agreement, the Agent shall execute, acknowledge,
and deliver to the Grantors an instrument in writing in recordable form
releasing the collateral pledge, grant, assignment, lien and security interests
in the Trademarks under this Trademark Security Agreement.
SECTION 5. Counterparts. This Trademark Security Agreement may be executed
in any number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Trademark Security Agreement
by signing and delivering one or more counterparts.
SECTION 6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[signature page follows]
IN WITNESS WHEREOF, each Grantor has caused this Trademark Security
Agreement to be executed and delivered by its duly authorized offer as of the
date first set forth above.
Very truly yours,
[_________________________________]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted and Agreed:
THE BOEING COMPANY,
as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS
TRADEMARK REGISTRATIONS:
REGISTRATION
OWNER NUMBER TRADEMARK
- ----- ------------ ---------
TRADEMARK APPLICATIONS:
APPLICATION
OWNER NUMBER TRADEMARK
- ----- ----------- ---------