Exhibit 10.6
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") dated as of April 21, 2005 is
among the parties identified as "Grantors" on the signature pages hereto and
such other parties as may become Grantors after the date hereof (individually a
"Grantor", and collectively the "Grantors") and BANK OF AMERICA, N.A., in its
capacity as administrative agent (in such capacity, the "Administrative Agent")
for the holders of the Secured Obligations (defined below).
RECITALS
WHEREAS, pursuant to the Credit Agreement (as amended, modified and
supplemented from time to time, the "Credit Agreement") dated as of June 30,
2004 among C&D Technologies, Inc., a Delaware corporation (the "Parent"), C&D
International Investment Holdings Inc., a Delaware corporation ("International"
and together with the Parent, the "Borrowers"), the Guarantors identified
therein, the Lenders identified therein and the Administrative Agent, the
Lenders have agreed to make Loans and issue or participate in Letters of Credit
upon the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Second Amendment to the Credit Agreement (the
"Second Amendment"), the Borrowers, the Guarantors and the Lenders identified
therein have agreed to certain modifications to the Credit Agreement; and
WHEREAS, this Agreement is required by the terms of the Second Amendment.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.
(b) The following terms shall have the meanings assigned thereto in the
Uniform Commercial Code in effect from time to time in the State of New York:
Accession, Account, As-Extracted Collateral, Chattel Paper, Commercial Tort
Claim, Commingled Goods, Consumer Goods, Deposit Account, Document, Electronic
Chattel Paper, Equipment, Farm Products, Financial Asset, Fixtures, General
Intangible, Goods, Instrument, Inventory, Investment Property, Letter-of-Credit
Right, Manufactured Home, Proceeds, Securities Entitlement, Securities Account,
Security, Software, Supporting Obligation and Tangible Chattel Paper.
(c) In addition, the following terms shall have the meanings set forth
below:
"Collateral" has the meaning provided in Section 2 hereof.
"Copyright License" means any written agreement, naming any Grantor as
licensor, granting any right under any Copyright.
"Copyrights" means (a) all registered United States copyrights in all
Works, now existing or hereafter created or acquired, all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, registrations, recordings and applications
in the United States Copyright Office, and (b) all renewals thereof.
"Patent License" means any agreement, whether written or oral,
providing for the grant by or to a Grantor of any right to manufacture, use
or sell any invention covered by a Patent.
"Patents" means (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, and (b) all
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof.
"Secured Obligations" means, without duplication, (a) all Obligations
and (b) all costs and expenses incurred in connection with enforcement and
collection of the Obligations, including the fees, charges and
disbursements of counsel.
"Trademark License" means any agreement, whether written or oral,
providing for the grant by or to a Grantor of any right to use any
Trademark.
"Trademarks" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and the
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any state
thereof or any other country or any political subdivision thereof, or
otherwise and (b) all renewals thereof.
"Work" means any work that is subject to copyright protection pursuant
to Title 17 of the United States Code.
2. Grant of Security Interest in the Collateral. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Secured Obligations,
each Grantor hereby grants to the Administrative Agent, for the benefit of the
holders of the Secured Obligations, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Grantor
in and to all of the following, whether now owned or existing or owned,
acquired, or arising hereafter (collectively, the "Collateral"): (a) all
Accounts; (b) all cash and currency; (c) all Chattel Paper; (d) those certain
Commercial Tort Claims set forth on Schedule 2 hereto; (e) all Copyrights;
(f) all Copyright Licenses; (g) all Deposit Accounts; (h) all Documents; (i) all
Equipment; (j) all Fixtures; (k) all General Intangibles; (l) all Instruments;
(m) all Inventory; (n) all Investment Property; (o) all Letter-of-Credit Rights;
(p) all Patents; (q) all Patent Licenses; (r) all Software; (s) all Supporting
Obligations; (t) all Trademarks; (u) all Trademark Licenses; (v) all other
personal property of such Grantor of whatever type and (w) all Accessions and
all Proceeds of any and all of the foregoing.
Notwithstanding anything to the contrary contained herein, the security
interests granted under this Agreement shall not extend to (collectively, the
"Excluded Collateral") (a) any Property that is the subject of a Lien securing
purchase money Indebtedness permitted under the Credit Agreement pursuant to
documents that prohibit a Grantor from granting any other Liens in such
Property, and (b) any lease, license or other contract of a Grantor if the grant
of a security interest in such lease, license or contract in the manner
contemplated by this Agreement is prohibited by the terms of such lease, license
or contract or by applicable Law and would result in a default under or the
termination of such lease, license or contract or give the other parties thereto
the right to declare a default, terminate, accelerate or otherwise adversely
alter such Grantor's rights, titles and interests thereunder (including upon the
giving of notice or the lapse of time or both); provided that (i) any such
limitation described in the foregoing clause (b) on the security interests
granted hereunder shall only apply to the extent that any such prohibition could
not be rendered ineffective pursuant to the Uniform Commercial Code or any other
applicable Law (including Debtor Relief Laws) or principles of equity and (ii)
with respect to the foregoing clause (b), in the event of the termination or
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elimination of any such prohibition or the requirement for any consent contained
in such lease, license or contract or in any applicable Law, to the extent
sufficient to permit any such item to become Collateral hereunder, or upon the
granting of any such consent, or waiving or terminating any requirement for such
consent, a security interest in such lease, license or contract shall be
automatically and simultaneously granted hereunder and such lease, license or
contract shall cease to be Excluded Collateral and shall be included as
Collateral hereunder. Nothing herein, however, shall be deemed to be a
representation or warranty by any Grantor that it has the right to pledge, sell,
assign or transfer any Excluded Collateral.
The Grantors and the Administrative Agent, on behalf of the holders of the
Secured Obligations, hereby acknowledge and agree that the security interest
created hereby in the Collateral (i) constitutes continuing collateral security
for all of the Secured Obligations, whether now existing or hereafter arising
and (ii) is not to be construed as an assignment of any Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks or Trademark Licenses.
3. Filing of Financing Statements, Notices, etc. Each Grantor hereby
authorizes the Administrative Agent to prepare and file such financing
statements (including continuation statements) or amendments thereof or
supplements thereto or other instruments as the Administrative Agent may from
time to time deem reasonably necessary or appropriate in order to perfect and
maintain the security interests granted hereunder in accordance with the Uniform
Commercial Code (including authorization to describe the Collateral as "all
personal property" or "all assets"). Each Grantor shall also execute and deliver
to the Administrative Agent such agreements, assignments or instruments
(including affidavits, notices, reaffirmations and amendments and restatements
of existing documents, as the Administrative Agent may reasonably request) and
do all such other things as the Administrative Agent may reasonably deem
necessary or appropriate (i) to assure to the Administrative Agent its security
interests hereunder, including (A) such instruments as the Administrative Agent
may from time to time reasonably request in order to perfect and maintain the
security interests granted hereunder in accordance with the Uniform Commercial
Code, (B) with regard to Copyrights, a Notice of Grant of Security Interest in
Copyrights in the form determined by the Administrative Agent, (C) with regard
to Patents, a Notice of Grant of Security Interest in Patents for filing with
the United States Patent and Trademark Office in the form determined by the
Administrative Agent and (D) with regard to Trademarks, a Notice of Grant of
Security Interest in Trademarks for filing with the United States Patent and
Trademark Office in the form determined by the Administrative Agent, (ii) to
consummate the transactions contemplated hereby and (iii) to otherwise protect
and assure the Administrative Agent and the Lenders of their respective rights
and interests hereunder.
4. Representations and Warranties. Each Grantor hereby represents and
warrants to the Administrative Agent, for the benefit of the holders of the
Secured Obligations, that:
(a) Ownership. Each Grantor is the legal and beneficial owner of its
Collateral and has the right to pledge, sell, assign or transfer the same.
(b) Security Interest. This Agreement creates a valid security
interest in favor of the Administrative Agent, for the benefit of the
holders of the Secured Obligations, in the Collateral of such Grantor and,
when properly perfected by filing, shall constitute a valid and perfected
security interest in such Collateral, to the extent such security interest
can be perfected by filing under the Uniform Commercial Code, free and
clear of all Liens except for Permitted Liens.
(c) Types of Collateral. None of the Collateral consists of, or is
the Proceeds of, As-Extracted Collateral, Consumer Goods, Farm Products,
Manufactured Homes or standing timber.
(d) Equipment and Inventory. With respect to any Equipment and/or
Inventory of a Grantor, such Grantor has exclusive possession and control
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of such Equipment and Inventory of such Grantor except for (i) Equipment
leased by such Grantor as a lessee, (ii) Equipment or Inventory in transit
with common carriers and (iii) Equipment or Inventory held by a vendor,
sales representative, bailee or independent contractor pursuant to a
written consignment, bailment, supply or service agreement with a Grantor.
(e) Consents; Etc. Except for (i) the filing or recording of Uniform
Commercial Code financing statements, (ii) the filing of appropriate
notices with the United States Patent and Trademark Office and the United
States Copyright Office, (iii) obtaining control to perfect the Liens
created by this Agreement (including, without limitation, to the extent
required under Section 5(a) hereof), and (iv) consents, authorizations,
filings or other actions which have been obtained or made, no consent or
authorization of, filing with, or other act by or in respect of, any
arbitrator or Governmental Authority and no consent of any other Person
(including, without limitation, any stockholder, member or creditor of such
Obligor), is required for (A) the grant by such Obligor of the security
interest in the Collateral granted hereby or for the execution, delivery or
performance of this Agreement by such Obligor or (B) the perfection of such
security interest (to the extent such security interest can be perfected by
filing under the Uniform Commercial Code, the granting of control
(including, without limitation, to the extent required under Section 5(a)
hereof) or by filing an appropriate notice with the United States Patent
and Trademark Office or the United States Copyright Office).
(f) Commercial Tort Claims. Schedule 2(d) hereto sets forth each
Commercial Tort Claims seeking damages in excess of $250,000 by or in favor
of any Grantor.
5. Covenants. Each Grantor covenants that until such time as the Secured
Obligations arising under the Loan Documents have been paid in full and the
Commitments have expired or been terminated, such Grantor shall:
(a) Instruments/Chattel Paper/Control.
(i) If any amount in excess of $250,000 payable under or in
connection with any of the Collateral shall be or become evidenced by
any Instrument or Tangible Chattel Paper, or if any property
constituting Collateral shall be stored or shipped subject to a
Document, ensure that such Instrument, Tangible Chattel Paper or
Document is either in the possession of such Grantor at all times or,
if requested by the Administrative Agent to perfect its security
interest hereunder in such Collateral, is delivered to the
Administrative Agent duly endorsed in a manner satisfactory to the
Administrative Agent. Such Grantor shall ensure that any Collateral
consisting of Tangible Chattel Paper is marked with a legend
acceptable to the Administrative Agent indicating the Administrative
Agent's security interest hereunder in such Tangible Chattel Paper.
(ii) Execute and deliver all agreements, assignments, instruments
or other documents as reasonably requested by the Administrative Agent
for the purpose of obtaining and maintaining control with respect to
any Collateral consisting of (i) Deposit Accounts, (ii) Investment
Property, (iii) Letter-of-Credit Rights and (iv) Electronic Chattel
Paper.
(b) Further Assurances. Each Grantor shall also execute and deliver
to the Administrative Agent such agreements, assignments or instruments
(including affidavits, notices, reaffirmations and amendments and
restatements of existing documents, as the Administrative Agent may
reasonably request) and do all such other things as the Administrative
Agent may reasonably deem necessary or appropriate (i) to assure to the
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Administrative Agent its security interests hereunder, (ii) to consummate
the transactions contemplated hereby and (iii) to otherwise protect and
assure the Administrative Agent and the Lenders of their respective rights
and interests hereunder.
(c) Collateral Held by Warehouseman, Bailee, etc. If any Collateral
is at any time in the possession or control of a warehouseman, bailee or
any agent or processor of such Grantor and the Administrative Agent so
requests (i) notify such Person in writing of the Administrative Agent's
security interest therein pursuant to this Agreement, (ii) instruct such
Person to hold all such Collateral for the Administrative Agent's account
and subject to the Administrative Agent's instructions and (iii) use
reasonable best efforts to obtain a written acknowledgment from such Person
that it is holding such Collateral for the benefit of the Administrative
Agent, on behalf of the holders of the Secured Obligations.
(d) Commercial Tort Claims. As of the Closing Date, no Grantor has
any Commercial Tort Claims seeking damages in excess of $1,000,000 other
than as set forth on Schedule 2 hereto.
6. Advances. On failure of any Grantor to perform any of the covenants
and agreements contained herein, the Administrative Agent may, at its sole
option and in its sole discretion, perform the same and in so doing may expend
such sums as the Administrative Agent may reasonably deem advisable in the
performance thereof, including, without limitation, the payment of any insurance
premiums, the payment of any taxes, a payment to obtain a release of a Lien or
potential Lien, expenditures made in defending against any adverse claim and all
other expenditures which the Administrative Agent may make for the protection of
the security hereof or which it may be compelled to make by operation of Law.
All such sums and amounts so expended shall be repayable by the Grantors on a
joint and several basis promptly upon timely notice thereof and demand therefor,
shall constitute additional Secured Obligations and shall bear interest from the
date said amounts are expended until such amounts are paid, at a rate equal to
the Base Rate plus the Applicable Rate. No such performance of any covenant or
agreement by the Administrative Agent on behalf of any Grantor, and no such
advance or expenditure therefor, shall be deemed a waiver of any Default. The
Administrative Agent may make any payment hereby authorized in accordance with
any xxxx, statement or estimate procured from the appropriate public office or
holder of the claim to be discharged without inquiry into the accuracy of such
xxxx, statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim except to the extent such payment is being
contested in good faith by a Grantor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.
7. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and
during continuation thereof, the Administrative Agent shall have, in addition to
the rights and remedies provided herein, in the other Loan Documents, in any
other documents relating to the Secured Obligations, or by Law (including, but
not limited to, levy of attachment, garnishment and the rights and remedies set
forth in the Uniform Commercial Code of the jurisdiction applicable to the
affected Collateral), the rights and remedies of a secured party under the
Uniform Commercial Code (regardless of whether the Uniform Commercial Code is
the law of the jurisdiction where the rights and remedies are asserted and
regardless of whether the Uniform Commercial Code applies to the affected
Collateral), and further, the Administrative Agent may, with or without judicial
process or the aid and assistance of others, (i) enter on any premises on which
any of the Collateral may be located and, without resistance or interference by
the Grantors, take possession of the Collateral, only to the extent that such
entry and possession may be accomplished peaceably, (ii) dispose of any
Collateral on any such premises, (iii) require the Grantors to assemble and make
available to the Administrative Agent at the expense of the Grantors any
Collateral at any place and time designated by the Administrative Agent which is
reasonably convenient to both parties, (iv) remove by peaceable means any
Collateral from any such premises for the purpose of effecting sale or other
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disposition thereof, and/or (v) without demand and without advertisement,
notice, hearing or process of law, all of which each of the Grantors hereby
waives to the fullest extent permitted by Law, at any place and time or times,
sell and deliver any or all Collateral held by or for it at public or private
sale, at any exchange or broker's board or elsewhere, by one or more contracts,
in one or more parcels, for cash, upon credit (without assumption by the
Administrative Agent or any holder of the Secured Obligations of any credit
risk) or otherwise, at such prices and upon such terms as the Administrative
Agent deems advisable, in its sole discretion (subject to any and all mandatory
legal requirements). Each Grantor acknowledges that any such private sale may be
at prices and on terms less favorable to the seller than the prices and other
terms which might have been obtained at a public sale. Neither the
Administrative Agent's compliance with applicable Law nor its disclaimer of
warranties relating to the Collateral shall be considered to adversely affect
the commercial reasonableness of any sale. To the extent the rights of notice
cannot be legally waived hereunder, each Grantor agrees that any requirement of
reasonable notice shall be met if such notice, specifying the place of any
public sale or the time after which any private sale is to be made, is
personally served on or mailed, postage prepaid, to the Borrower in accordance
with the notice provisions of Section 11.02 of the Credit Agreement at least 10
days before the time of sale or other event giving rise to the requirement of
such notice. The Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may be made at the time and place to which it was so adjourned. The
Administrative Agent shall not be obligated to make any sale or other
disposition of the Collateral regardless of notice having been given. To the
extent permitted by applicable Law, any holder of Secured Obligations may be a
purchaser at any such sale. Subject to the provisions of applicable Law, the
Administrative Agent may postpone or cause the postponement of the sale of all
or any portion of the Collateral by announcement at the time and place of such
sale, and such sale may be made at the time and place to which the sale was
postponed, or the Administrative Agent may further postpone such sale by
announcement made at such time and place.
(b) Remedies relating to Accounts. During the continuation of an Event of
Default, whether or not the Administrative Agent has exercised any or all of its
rights and remedies hereunder, (i) each Grantor will promptly upon request of
the Administrative Agent instruct all account debtors to remit all payments in
respect of Accounts to a mailing location selected by the Administrative Agent
and (ii) the Administrative Agent shall have the right to enforce any Grantor's
rights against its customers and account debtors, and the Administrative Agent
or its designee may notify any Grantor's customers and account debtors that the
Accounts of such Grantor have been assigned to the Administrative Agent or of
the Administrative Agent's security interest therein, and may (either in its own
name or in the name of a Grantor or both) demand, collect (including without
limitation by way of a lockbox arrangement), receive, take receipt for, sell,
xxx for, compound, settle, compromise and give acquittance for any and all
amounts due or to become due on any Account, and, in the Administrative Agent's
discretion, file any claim or take any other action or proceeding to protect and
realize upon the security interest of the holders of the Secured Obligations in
the Accounts. Each Grantor acknowledges and agrees that the Proceeds of its
Accounts remitted to or on behalf of the Administrative Agent in accordance with
the provisions hereof shall be solely for the Administrative Agent's own
convenience and that such Grantor shall not have any right, title or interest in
such Accounts or in any such other amounts except as expressly provided herein.
Neither the Administrative Agent nor the holders of the Secured Obligations
shall have any liability or responsibility to any Grantor for acceptance of a
check, draft or other order for payment of money bearing the legend "payment in
full" or words of similar import or any other restrictive legend or endorsement
or be responsible for determining the correctness of any remittance.
Furthermore, during the continuation of an Event of Default, (i) the
Administrative Agent shall have the right, but not the obligation, to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and the Grantors shall furnish all such
assistance and information as the Administrative Agent may require in connection
with such test verifications, (ii) upon the Administrative Agent's request and
at the expense of the Grantors, the Grantors shall cause independent public
accountants or others satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts and (iii) the
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Administrative Agent in its own name or in the name of others may communicate
with account debtors on the Accounts to verify with them to the Administrative
Agent's satisfaction the existence, amount and terms of any Accounts.
(c) Access. In addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default and during the continuance thereof, the
Administrative Agent shall have the right to enter and remain upon the various
premises of the Grantors without cost or charge to the Administrative Agent, and
use the same, together with materials, supplies, books and records of the
Grantors for the purpose of collecting and liquidating the Collateral, or for
preparing for sale and conducting the sale of the Collateral, whether by
foreclosure, auction or otherwise. In addition, the Administrative Agent may
peaceably remove Collateral, or any part thereof, from such premises and/or any
records with respect thereto, in order to effectively collect or liquidate such
Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the Administrative Agent
or the holders of the Secured Obligations to exercise any right, remedy or
option under this Agreement, any other Loan Document, any other document
relating to the Secured Obligations, or as provided by Law, or any delay by the
Administrative Agent or the holders of the Secured Obligations in exercising the
same, shall not operate as a waiver of any such right, remedy or option. No
waiver hereunder shall be effective unless it is in writing, signed by the party
against whom such waiver is sought to be enforced and then only to the extent
specifically stated, which in the case of the Administrative Agent or the
holders of the Secured Obligations shall only be granted as provided herein. To
the extent permitted by Law, neither the Administrative Agent, the holders of
the Secured Obligations, nor any party acting as attorney for the Administrative
Agent or the holders of the Secured Obligations, shall be liable hereunder for
any acts or omissions or for any error of judgment or mistake of fact or law
other than their gross negligence or willful misconduct hereunder. The rights
and remedies of the Administrative Agent and the holders of the Secured
Obligations under this Agreement shall be cumulative and not exclusive of any
other right or remedy which the Administrative Agent or the holders of the
Secured Obligations may have.
(e) Retention of Collateral. In addition to the rights and remedies
hereunder, the Administrative Agent may, in compliance with Sections 9-620 and
9-621 of the Uniform Commercial Code or otherwise complying with the
requirements of applicable Law of the relevant jurisdiction, accept or retain
the Collateral in satisfaction of the Secured Obligations. Unless and until the
Administrative Agent shall have provided such notices, however, the
Administrative Agent shall not be deemed to have retained any Collateral in
satisfaction of any Secured Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any sale, collection or
realization are insufficient to pay all amounts to which the Administrative
Agent and the holders of the Secured Obligations are legally entitled, the
Grantors shall be jointly and severally liable for the deficiency, together with
interest thereon at the Default Rate, together with the costs of collection and
the fees, charges and disbursements of counsel, all in accordance with
applicable law. Any surplus remaining after the full payment and satisfaction of
the Secured Obligations shall be returned to the Grantors or to whomsoever a
court of competent jurisdiction shall determine to be entitled thereto.
8. Rights of the Administrative Agent.
(a) Power of Attorney. In addition to other powers of attorney contained
herein, each Grantor hereby designates and appoints the Administrative Agent, on
behalf of the holders of the Secured Obligations, and each of its designees or
agents, as attorney-in-fact of such Grantor, irrevocably and with power of
substitution, with authority to take any or all of the following actions upon
the occurrence and during the continuance of an Event of Default:
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(i) to demand, collect, settle, compromise, adjust, give discharges
and releases, all as the Administrative Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for the
purposes of collecting any Collateral and enforcing any other right in
respect thereof;
(iii) to defend, settle or compromise any action brought and, in
connection therewith, give such discharge or release as the Administrative
Agent may deem reasonably appropriate;
(iv) receive and open mail addressed to a Grantor and endorse
checks, notes, drafts, acceptances, money orders, bills of lading,
warehouse receipts or other instruments or documents evidencing payment,
shipment or storage of the goods giving rise to the Collateral of such
Grantor on behalf of and in the name of such Grantor, or securing, or
relating to such Collateral;
(v) sell, assign, transfer, make any agreement in respect of, or
otherwise deal with or exercise rights in respect of, any Collateral or the
goods or services which have given rise thereto, as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes;
(vi) adjust and settle claims under any insurance policy relating
thereto;
(vii) execute and deliver all assignments, conveyances, statements,
financing statements, renewal financing statements, security agreements,
affidavits, notices and other agreements, instruments and documents that
the Administrative Agent may determine necessary in order to perfect and
maintain the security interests and liens granted in this Agreement and in
order to fully consummate all of the transactions contemplated therein;
(viii) institute any foreclosure proceedings that the Administrative
Agent may deem appropriate;
(ix) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral;
(x) to direct any parties liable for any payment in connection with
any of the Collateral to make payment of any and all monies due and to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct;
(xi) to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in respect of
or arising out of any Collateral; and
(xii) do and perform all such other acts and things as the
Administrative Agent may reasonably deem to be necessary, proper or
convenient in connection with the Collateral.
This power of attorney is a power coupled with an interest and shall be
irrevocable until such time as the Secured Obligations arising under the
Loan Documents have been paid in full and the Commitments have expired or
been terminated. The Administrative Agent shall be under no duty to
exercise or withhold the exercise of any of the rights, powers, privileges
and options expressly or implicitly granted to the Administrative Agent in
this Agreement, and shall not be liable for any failure to do so or any
delay in doing so. This power of attorney is conferred on the
Administrative Agent solely to protect, preserve and realize upon its
security interest hereunder in the Collateral.
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(b) Assignment by the Administrative Agent. The Administrative Agent may
from time to time assign the Secured Obligations to a successor Administrative
Agent appointed in accordance with the Credit Agreement, and such successor
shall be entitled to all of the rights and remedies of the Administrative Agent
under this Agreement in relation thereto.
(c) The Administrative Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while being held by
the Administrative Agent hereunder and the exercise of commercial
reasonableness, the Administrative Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that the
Grantors shall be responsible for preservation of all rights in the Collateral,
and the Administrative Agent shall be relieved of all responsibility for the
Collateral upon surrendering it or tendering the surrender of it to the
Grantors. The Administrative Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Administrative Agent accords its own property, which shall be no less than the
treatment employed by a reasonable and prudent agent in the industry, it being
understood that the Administrative Agent shall not have responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any of the Collateral. In the event of a public or private sale of Collateral
pursuant to Section 6 hereof, the Administrative Agent shall have no
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Collateral, whether or not the Administrative Agent has or is deemed to have
knowledge of such matters, or (ii) taking any steps clean, repair or otherwise
prepare the Collateral for sale.
(d) Liability with Respect to Accounts. Anything herein to the contrary
notwithstanding, each of the Grantors shall remain liable under each of the
Accounts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to such Account. Neither the Administrative Agent nor any
holder of Secured Obligations shall have any obligation or liability under any
Account (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Administrative Agent or any holder of
Secured Obligations of any payment relating to such Account pursuant hereto, nor
shall the Administrative Agent or any holder of Secured Obligations be obligated
in any manner to perform any of the obligations of a Grantor under or pursuant
to any Account (or any agreement giving rise thereto), to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party under any Account
(or any agreement giving rise thereto), to present or file any claim, to take
any action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time or
times.
(e) Releases of Collateral. If any Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall promptly execute and deliver to such Grantor all releases
and other documents, and take such other action, reasonably necessary for the
release of the Liens created hereby or by any other Collateral Document on such
Collateral.
9. Application of Proceeds. Upon the acceleration of the Obligations
pursuant to Section 9.02 of the Credit Agreement, any payments in respect of the
Secured Obligations and any proceeds of the Collateral, when received by the
Administrative Agent or any holder of the Secured Obligations in cash or its
equivalent, will be applied in reduction of the Secured Obligations in the order
set forth in Section 9.03 of the Credit Agreement.
10. Continuing Agreement.
9
(a) This Agreement shall remain in full force and effect until such time
as the Secured Obligations arising under the Loan Documents have been paid in
full and the Commitments have expired or been terminated, at which time this
Agreement shall be automatically terminated and the Administrative Agent shall
forthwith release all of its liens and security interests hereunder and, upon
the request and at the expense of the Grantors, shall execute and deliver all
Uniform Commercial Code termination statements and/or other documents evidencing
such termination.
(b) This Agreement shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in part, of
any of the Secured Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any holder of the Secured Obligations as
a preference, fraudulent conveyance or otherwise under any Debtor Relief Law,
all as though such payment had not been made; provided that in the event payment
of all or any part of the Secured Obligations is rescinded or must be restored
or returned, all reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Administrative Agent or
any holder of the Secured Obligations in defending and enforcing such
reinstatement shall be deemed to be included as a part of the Secured
Obligations.
11. Amendments; Waivers; Modifications, etc. This Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.01 of the Credit Agreement.
12. Successors in Interest. This Agreement shall be binding upon each
Grantor, its successors and assigns and shall inure, together with the rights
and remedies of the Administrative Agent and the holders of the Secured
Obligations hereunder, to the benefit of the Administrative Agent and the
holders of the Secured Obligations and their successors and permitted assigns.
13. Notices. All notices required or permitted to be given under this
Agreement shall be in conformance with Section 11.02 of the Credit Agreement.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
15. Headings. The headings of the sections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
16. Governing Law; Submission to Jurisdiction; Venue; WAIVER OF JURY
TRIAL. The terms of Sections 11.14 and 11.15 of the Credit Agreement with
respect to governing law, submission to jurisdiction, venue and waiver of jury
trial are incorporated herein by reference, mutatis mutandis, and the parties
hereto agree to such terms.
17. Severability. If any provision of any of the Agreement is determined
to be illegal, invalid or unenforceable, such provision shall be fully
severable and the remaining provisions shall remain in full force and effect
and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
18. Entirety. This Agreement, the other Loan Documents and the other
documents relating to the Secured Obligations represent the entire agreement of
the parties hereto and thereto, and supersede all prior agreements and
understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Loan Documents, any other documents relating to
the Secured Obligations, or the transactions contemplated herein and therein.
10
19. Other Security. To the extent that any of the Secured Obligations are
now or hereafter secured by property other than the Collateral (including,
without limitation, real property and securities owned by a Grantor), or by a
guarantee, endorsement or property of any other Person, then the Administrative
Agent and the holders of the Secured Obligations shall have the right to proceed
against such other property, guarantee or endorsement upon the occurrence of any
Event of Default and to the extent otherwise permitted by the Credit Agreement,
and the Administrative Agent shall have the right, in its sole discretion, to
determine which rights, security, liens, security interests or remedies the
Administrative Agent shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or the Secured Obligations or any of the rights of the Administrative Agent
or the holders of the Secured Obligations under this Agreement, under any other
of the Loan Documents or under any other document relating to the Secured
Obligations.
20. Rights of Required Lenders. All rights of the Administrative Agent
hereunder, if not exercised by the Administrative Agent, may be exercised by the
Required Lenders.
[SIGNATURE PAGES FOLLOW]
11
Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.
GRANTORS: C&D TECHNOLOGIES, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Vice President and Chief Financial Officer
C&D INTERNATIONAL INVESTMENT HOLDINGS INC.,
a Delaware corporation
C&D CHARTER HOLDINGS, INC., a Delaware corporation
C&D TECHNOLOGIES (DATEL), INC., a Delaware corporation
DATEL SYSTEMS, INC., a Massachusetts corporation
C&D DYNAMO CORP., a Delaware corporation
DYNAMO ACQUISITION CORP., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer of each foregoing Grantor
C&D TECHNOLOGIES (CPS) LLC, a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
DATEL HOLDING CORPORATION, a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
SCHEDULE 2
COMMERCIAL TORT CLAIMS
C&D Technologies, Inc. v. Avnet, Inc., et al., No. 00 Civ. 1182. This action was
commenced in 2000 and is pending in the United States District Court for the
Southern District of New York.
