|
Exhibit
10.83
SECURITY
AGREEMENT
This SECURITY
AGREEMENT (the “ Security Agreement ”) is
dated as of the 13 th day
of June, 2008, by and between EXACTECH, INC. , a Florida
corporation (the “ Borrower ”), EXACTECH
INTERNATIONAL, INC. , a Florida corporation and ALTIVA
CORPORATION , a Delaware corporation (collectively, “
Guarantors ”, and together with Borrower, the “
Debtor ”), as debtors, and SUNTRUST BANK , a
Georgia banking corporation, in its capacity as administrative
agent for the Lenders [as defined in the Revolving Credit Agreement
dated of even date herewith among the Borrower, the lenders from
time to time party thereto, and SunTrust Bank, as Administrative
Agent (as amended, supplemented or otherwise modified from time to
time, the “ Credit Agreement ”)] as secured
party (the “ Secured Party ”).
NOW, THEREFORE, in
consideration of the Obligations (as defined in the Credit
Agreement) of the Borrower to the Secured Party, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound, the
Debtor and the Secured Party hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions
. Any capitalized term not defined herein shall have the meaning
given to it in the Credit Agreement. Any capitalized term not
defined herein or in the Credit Agreement shall have the meaning
given to it in the UCC. As used herein, the following terms shall
have the following meanings:
(a) Books and Records
. The term “ Books and Records ” means all of
the Debtor’s books and records, including, but not limited
to, records indicating, summarizing, or evidencing the Collateral,
the Obligations, and the Debtor’s property, business
operations, or financial condition; computer runs, invoices, tapes,
processing software, processing contracts (such as contracts for
computer time and services), and any computer prepared information,
tapes, or data of every kind and description, whether in the
possession of the Debtor or in the possession of third
parties.
(b) Collateral . The
term “ Collateral ” means all personal property
of the Debtor, whether now owned or hereafter acquired, whether now
existing or hereafter acquired or arising, and wherever located,
including, without limitation, the following described
property:
(i) ACCOUNTS: All accounts,
accounts receivable, contract rights, bills, acceptances, chattel
paper, general intangibles, instruments, and other forms of
obligations arising out of the sale, lease, or ownership of the
Property (“ Accounts ”), together with any
property evidencing or relating to the Accounts (such as guaranties
and credit insurance), and any security for the Accounts and all
Books and Records relating thereto.
(ii) INVENTORY: All inventory
of every nature, kind, and description, wherever located,
including, without limitation, raw materials, goods and
merchandise, work in process, finished goods (including embedded
software), parts and supplies; all goods and property held for sale
or lease or to be furnished under contracts of service; all goods
and inventory returned, reclaimed or repossessed; other materials
and supplies of any kind, nature, or description that are used or
consumed in the Debtor’s business or used in connection with
the packing, shipping, advertising, selling, or finishing of such
goods, merchandise, and all documents of title or other Documents
representing them; all general intangibles and any documents
relating to, arising from or evidencing any of the foregoing
(“ Inventory ”).
(iii) EQUIPMENT: All
machinery and equipment, furniture and furnishings, and all
fixtures, whether or not affixed to realty, tools, motor vehicles
with respect to which a certificate of title has been issued, and
other tangible personal property ( except Inventory),
including embedded software and office equipment, as well as
all of such types of property leased by the Debtor and all of the
Debtor’s rights and interests with respect thereto under such
leases (including, without limitations, options to purchase);
together with all present and future additions and
accessions thereto, accessories, replacements, substitutions,
component and auxiliary parts and supplies used or to be used in
connection therewith and all substitutes for any of the foregoing;
and all manuals, drawings, instructions, warranties, and rights
with respect thereto, and the rights of the Debtor under any
manufacturer’s warranties relating to the foregoing property;
and all records and data relating to any or all of the foregoing
property described in Subsections (a)-(c) herein, whether in
the form of a writing, photograph, microfilm, microfiche, or
electronic media, together with all of the Debtor’s right,
title and interest in and to all computer software required to
utilize, create, maintain, and process any such records or data on
electronic media (“ Equipment ”).
(iv) GENERAL INTANGIBLES: All
“general intangibles”, including, without limitation,
any personal property, choses in action, causes of action, and all
other intangible personal property of the Debtor of every kind and
nature ( other than Accounts), including, without
limitation, all contract rights, payment intangibles, intellectual
property collateral, corporate or other business records,
inventions, designs, blueprints, plans, specifications, patents,
patent applications, trade secrets, computer software,
registrations, goodwill, tax refund claims, licenses, franchises,
trademarks, trade names, service marks, copyrights, customer lists,
and patents, all rights under license agreements for use of the
same, any funds that may become due to the Debtor in connection
with the termination of any employee benefit plan or any rights
thereto and any other amounts payable to the Debtor from any
employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption
insurance and proceeds thereof, property, casualty, or any similar
type of
2
insurance and any proceeds
thereof, proceeds of insurance covering the lives of key employees
on which the Debtor is the beneficiary, rights to receive
dividends, distributions, cash, Instruments, and other property in
respect of or in exchange for pledged equity interests or
Investment Property (including all rights and interest in
securities whether certificated or uncertificated, securities
entitlements, securities accounts, commodity contracts, or
commodity accounts) and any supporting obligation (as such term is
defined in the UCC), letter of credit rights (including rights to
payment or performance under a letter of credit whether or not the
Debtor, as beneficiary, has demanded or is entitled to demand
payment or performance), guarantee, claim, security interest, or
other security held by or granted to the Debtor (“ General
Intangibles ”).
(v) CHATTEL PAPER: All
chattel paper, including, but not limited to, any electronic
chattel paper as well as any writing or writings that evidence both
a monetary obligation and security interest in or a lease of
specific goods (“ Chattel Paper ”).
(vi) INSTRUMENTS: All
instruments, including, without limitation, bills of exchange,
notes, and all negotiable and non-negotiable instruments, all
securities, all certificates of deposit and any other writing that
evidences a right to the payment of money and is not itself a
security agreement or lease and is of a type that is in the
ordinary course of business transferred by delivery with any
necessary endorsement or assignment (“ Instruments
”).
(vii) DOCUMENTS: All
documents, including, but not limited to, bills of lading,
warehouse receipts, and other documents of title (as that term is
defined in the Uniform Commercial Code) and any and all receipts,
including, but not limited to, receipts of the kind described in
Article 7 of the Uniform Commercial Code (“ Documents
”).
(viii) DEPOSIT ACCOUNTS: All
the Debtor’s deposit accounts and any renewals or rollovers
of the deposit accounts, any successor accounts, and any general
intangibles and choses in action arising therefrom or relating
thereto.
(ix) GOODS: All
“goods” as defined in the UCC, including embedded
software to the extent included in “goods” as defined
in the UCC, manufactured homes, standing timber that is cut and
removed for sale, and unborn young of animals.
(x) SOFTWARE: All
“software” as such term is defined in the UCC, other
than software embedded in any category of Goods, including all
computer programs and all supporting information provided in
connection with a transaction related to any program.
3
(xi) CASH AND SECURITIES: All
money, cash, cash equivalents, securities, and other property of
any kind of the Debtor held directly or indirectly by the Secured
Party.
(xii) PROCEEDS: Any and all
proceeds (including insurance proceeds) of any or all of the
foregoing and all property that is within the definition of
proceeds as it is defined in the Uniform Commercial Code, including
without limitation, whatever is received upon the use, lease, sale,
exchange, collection, loss, destruction, any other utilization, or
any disposition of any of the foregoing property described in this
Section 1, whether cash or non-cash, all rental or lease
payments, and any other type or item of property, and all
substitutions, additions, accessions, replacements, products, and
renewals of, to, or for such property and all insurance therefor;
and all records and data relating to any or all of the foregoing
property, whether in the form of a writing, photograph, microfilm,
microfiche, or electronic media, together with all of the
Debtor’s right, title and interest in and to all computer
software required to utilize, create, maintain, and process any
such records or data on electronic media (collectively, “
Proceeds ”).
Unless the context otherwise
requires, all terms used in this definition of Collateral (whether
capitalized or not) that are specifically defined in the Uniform
Commercial Code shall have the meanings stated therein. The term
Collateral expressly excludes any real property owned by the
Debtor.
(c) Loan Documents .
The term “ Loan Documents ” means the Credit
Agreement, the Notes, all credit accommodations, notes, loan
agreements, subordination agreements, security agreements,
financing statements, and any other agreements and documents,
including any Hedging Agreement, now or hereafter existing,
creating, evidencing, guarantying, securing, or relating to any or
all of the Obligations, together with all amendments,
modifications, restatements, renewals, or extensions
thereof.
(d) Obligor . The term
“ Obligor ” means the Debtor and each and every
maker, endorser, guarantor, or surety of or party obligated for any
of the Obligations.
(e) Uniform Commercial
Code . The term “ Uniform Commercial Code ”
of “ UCC ” means with respect to the Collateral
owned by any Debtor which is organized in the State of Florida, the
Uniform Commercial Code in effect from time to time in the State of
Florida, and with respect to the Collateral owned by any Debtor
which is organized under the laws of another State in the United
States, the Uniform Commercial Code in effect from time to time in
the State of such jurisdiction.
ARTICLE II
SECURITY
INTEREST
2.1 Security
Interest . In order to secure the due and punctual payment
and performance of the Obligations, the Debtor hereby grants to the
Secured Party a continuing perfected first priority security
interest in and lien on its right, title, and interest in
(a) the
4
Collateral, and (b) all property of
the Debtor now or hereafter in the actual or constructive
possession of the Secured Party, any of the Lenders and/or any
Affiliate of any of the Lenders in any capacity whatsoever
including, but not limited to, any balance or share of any deposit,
trust or agency account in which a security interest is not
prohibited by applicable law. If the Debtor has granted any
security interest to the Secured Party in any or all of the
Collateral prior to the date of this Security Agreement, this
Security Agreement shall be deemed to be a reaffirmation of the
previously granted security interest and an amendment and
restatement of any previously executed Security Agreement. It is
the intention of the Debtor, all Obligors, and the Secured Party
that all existing security interests will remain continuously
perfected. The security interests granted are granted as security
only and shall not subject the Secured Party to, or in any way
affect or modify, any obligation or liability of the Debtor or any
other Obligor with respect to any of the Collateral or any
transaction that gave rise thereto. This Security Agreement is and
shall be considered and deemed to be a security agreement as
referred to in the Uniform Commercial Code.
2.2 Release of
Collateral . Upon any sale, lease, transfer or other
disposition of any item of Collateral of any Debtor in accordance
with the terms of this Security Agreement and the Credit
Agreement (other than any disposition among Loan Parties or to
any Subsidiary of any Loan Party), the Secured
Party will, at such Debtor’s request and expense,
execute and deliver to such Debtor such documents as such Debtor
shall reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted
hereby; provided , however , that (i) at the
time of such request and such release no Default shall have
occurred and be continuing, (ii) such Debtor shall have
delivered to the Secured Party, at least three
(3) Business Days prior to the date of the proposed release, a
written request for release describing the item of Collateral and
the terms of the sale, lease, transfer or other disposition in
reasonable detail, including, without limitation, the price thereof
and any expenses in connection therewith, together with a form of
release for execution by the Secured Party.
2.3 Additional
Debtors . Pursuant to Section 5.11 of the Credit
Agreement, each Subsidiary Loan Party that was not in existence on
the date of the Credit Agreement is required to enter into this
Security Agreement as a Debtor upon becoming Subsidiary Loan Party.
Upon execution and delivery after the date hereof by the Secured
Party and such Subsidiary of an instrument in the form of
Exhibit A , such Subsidiary shall become a Debtor hereunder
with the same force and effect as if originally named as a Debtor
herein. The execution and delivery of any instrument adding an
additional Debtor as a party to this Security Agreement shall not
require the consent of any other Debtor hereunder. The rights and
obligations of each Debtor hereunder shall remain in full force and
effect notwithstanding the addition of any new Debtor as a party to
this Security Agreement. The foregoing shall not apply to Foreign
Subsidiaries of the Borrower which shall become parties hereto only
pursuant to Section 5.9 of the Credit Agreement.
5
ARTICLE III
RIGHTS IN CONNECTION
WITH COLLATERAL
3.1 Delivery of
Documents . At any time and from time to time, upon the
demand of the Secured Party, the Debtor will, at the Debtor’s
expense:
(a) immediately give,
execute, deliver, pledge, endorse, file, and/or record any notice,
statement, financing statement, instrument, document, chattel
paper, agreement, or other papers that may be necessary or
desirable, or that the Secured Party may reasonably request, in
order to create, preserve, perfect, or validate any security
interest granted pursuant hereto or intended to be granted
hereunder or to enable the Secured Party to exercise or enforce its
rights hereunder or with respect to such security interest;
and
(b) keep, stamp, or otherwise
mark any and all documents, instruments, chattel paper, and
its/their Books and Records relating to the Collateral in such
manner as the Secured Party may require.
3.2 Power of
Attorney . The Debtor hereby irrevocably appoints the
Secured Party (and any of its attorneys, officers, employees, or
agents) as its true and lawful attorney-in-fact, said appointment
being coupled with an interest, with full power of substitution, in
the name of the Debtor, the Secured Party, or otherwise, for the
sole use and benefit of the Secured Party in its reasonable
discretion, but at the Debtor’s expense, to exercise, to the
extent permitted by law, in its name or in the name of the Debtor
or otherwise, the powers set forth herein, whether or not any of
the Obligations is due (a) to endorse the name of the Debtor
upon any instruments of payment, freight, or express bill, bill of
lading, storage, or warehouse receipt relating to the Collateral
and upon the occurrence of an Event of Default (as defined in
Section 5.1 below) to demand, collect, receive payment of,
settle, or adjust all or any of the Collateral; (b) to
correspond and negotiate directly with insurance carriers; and
(c) to sign and file one or more financing statements and
continuation statements naming the Debtor as debtor and the Secured
Party as secured party and to execute any notice, statement,
instruments, agreement, or other paper that the Secured Party may
require to create, preserve, perfect, or validate any security
interest granted pursuant hereto or to enable the Secured Party to
exercise or enforce its rights hereunder or with respect to such
security interest. Neither the Secured Party nor its attorneys,
officers, employees, or agents shall be liable for any act,
omissions, any error in judgment, or mistake in fact in its/their
capacity as attorney-in-fact that is done in good faith. This
power, being coupled with an interest, is irrevocable until the
Obligations has been fully satisfied, except for acts, errors, and
mistakes amounting to gross negligence or willful
misconduct.
3.3 Security Agreement
as Financing Statement . At the Secured Party’s sole
option, and without the Debtor’s consent, the Secured Party
may file a copy or other reproduction of this Security Agreement or
any financing statement executed pursuant hereto as a financing
statement in any jurisdiction so permitting. The Secured Party is
expressly authorized to file financing statements without the
Debtor’s signature.
6
3.4 Secured
Party’s Rights in Collateral . With respect to the
Collateral, or any part thereof, the right is expressly granted to
the Secured Party, at its sole discretion after an Event of Default
has occurred:
(a) to transfer or register
in the name of itself or its nominee any of the Collateral, and
whether or not so transferred or registered, to receive the income
and dividends thereon, including stock dividends and rights to
subscribe, and to hold the same as a part of the Collateral and/or
apply the same to the Obligations;
(b) to exchange any of the
Collateral for other property upon the reorganization,
recapitalization, or other readjustment and in connection
therewith, to deposit the Collateral or any part thereof with any
nominee or depository upon such terms as the Secured Party may
determine in its reasonable discretion; and
(c) extend the time of
payment, arrange for payment in installments, or otherwise release
its security interest in any of the Collateral, or refrain from
exercising any right against any Collateral.
3.5 Custody of
Collateral . With respect to the Collateral, or any part
thereof, which at any time may come into the possession, custody,
or under the control of the Secured Party or any of its Affiliates,
agents or correspondents, the Debtor hereby acknowledges and agrees
that the Secured Party’s sole duty with respect to the
custody, safekeeping and physical preservation of such Collateral,
whether pursuant to Section 9-207 of the Uniform Commercial
Code or otherwise, shall be to deal with it in the same manner as
it deals with its own similar property.
3.6 Delay in Realizing
Upon Collateral . Neither the Secured Party, nor any of its
directors, officers, employees, Affiliates, agents or
correspondents shall be liable for failure to demand, collect, or
realize upon any of the Collateral or for any delay in doing
so.
3.7 Collateral
Examinations . The Debtor shall submit to collateral
examinations (upon not less than two (2) Business Days notice)
at any time as may be reasonably requested by the Secured Party, to
be performed by Secured Party or
|
