Exhibit 10.7
EXECUTION COPY
SECURITY AGREEMENT
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SECURITY AGREEMENT, dated as of November 10, 2003 (as amended,
modified or supplemented from time to time, this "Security Agreement"), among
GENTEK INC., a Delaware corporation ("GenTek"), the Domestic Subsidiaries
identified on the signature pages hereto as "Grantors" (together with GenTek,
each a "Grantor" and collectively, the "Grantors"), and BNY ASSET SOLUTIONS LLC,
a Delaware limited liability company, in its capacity as administrative agent
(in such capacity, together with any successor administrative agent, the
"Administrative Agent") for the financial institutions (the "Lenders") from time
to time party to the Loan Agreement referred to below.
WITNESSETH:
WHEREAS, the Guarantors are party to that certain Senior Term
Loan and Guarantee Agreement dated as of the date hereof (as from time to time
amended, restated, supplemented or otherwise modified, the "Loan Agreement") by
and among the Grantors, the Lenders and the Administrative Agent;
WHEREAS, in order to induce the Administrative Agent and the
Lenders to enter into the Loan Agreement and the other Loan Documents, the
Grantors have agreed to grant a continuing Lien on the Collateral in favor of
the Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, to secure the Obligations;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINED TERMS. The following terms shall have the
following respective meanings:
"Accounts" means, with respect to a Grantor, all of such
Grantor's now owned or hereafter acquired or arising accounts, as defined in the
UCC, including any rights to payment for the sale or lease of goods or rendition
of services, whether or not they have been earned by performance.
"Chattel Paper" means, with respect to a Grantor, all of such
Grantor's now owned or hereafter acquired chattel paper, as defined in the UCC,
including electronic chattel paper.
"Collateral" has the meaning set forth in Section 2 hereof.
"Contract" and "Contracts" have the respective meanings set
forth in Section 18(b) hereof.
"Copyright Licenses" means any written agreement naming any
Grantor as licensor or licensee granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture, distribute,
exploit and sell materials derived from any Copyright.
"Copyrights" means all works capable of copyright, including,
without limitation, in (i) all original works of authorship fixed in any
tangible medium of expression, all mask works fixed in a chip product, and all
registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the United States or any other
country, or any political subdivision thereof,
all whether now or hereafter owned by such Grantor, including, but not limited
to, those registrations or applications for registrations described on Schedule
C annexed hereto and made a part hereof, and (ii) all extensions or renewals
thereof, subject to any exclusive licenses (a) granted prior to the date hereof,
(b) granted in the future, to the extent permitted by the Loan Agreement, or (c)
otherwise approved of by Administrative Agent.
"Documents" means, with respect to a Grantor, all documents as
such term is defined in the UCC, including bills of lading, warehouse receipts
or other documents of title, now owned or hereafter acquired by such Grantor.
"Equipment" means, with respect to a Grantor, all of such
Grantor's now owned and hereafter acquired machinery, equipment, furniture,
furnishings, fixtures and other tangible personal property (except Inventory),
including embedded software, motor vehicles with respect to which a certificate
of title has been issued, aircraft, dies, tools, jigs, molds and office
equipment, as well as all of such types of property leased by such Grantor and
all of such Grantor's rights and interests with respect thereto under such
leases (including, without limitation, options to purchase); together with all
present and future additions and accessions thereto, replacements therefor,
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; wherever any
of the foregoing is located.
"General Intangibles" means, with respect to a Grantor, all of
such Grantor's now owned or hereafter acquired general intangibles, choses in
action and causes of action and all other intangible personal property of such
Grantor of every kind and nature (other than Accounts), including, without
limitation, all contract rights, payment intangibles, Proprietary Rights,
corporate or other business records, inventions, designs, blueprints, plans,
specifications, patents, patent applications, trademarks, service marks, trade
names, trade secrets, goodwill, copyrights, computer software, customer lists,
registrations, licenses, franchises, tax refund claims, any funds which may
become due to such Grantor in connection with the termination of any Plan or
other employee benefit plan or any rights thereto and any other amounts payable
to such Grantor from any Plan or other 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
insurance and any proceeds thereof, proceeds of insurance covering the lives of
key employees on which such Grantor is beneficiary, rights to receive dividends,
distributions, cash, Instruments and other property in respect of or in exchange
for pledged equity interests or Investment Property and any letter of credit,
guarantee, claim, security interest or other security held by or granted to such
Grantor.
"Instruments" means, with respect to a Grantor, all
instruments as such term is defined in the UCC, now owned or hereafter acquired
by such Grantor.
"Intellectual Property" means the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all
rights to xxx at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Inventory" means, with respect to a Grantor, all of such
Grantor's now owned and hereafter acquired inventory, goods and merchandise,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, work-in-process, finished goods
(including embedded software), other materials and supplies of any kind, nature
or description
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which are used or consumed in such Grantor'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.
"Investment Property" means, with respect to a Grantor, all of
such Grantor's right, title and interest in and to any and all: (a) securities
whether certificated or uncertificated; (b) securities entitlements; (c)
securities accounts; (d) commodity contracts; or (e) commodity accounts.
"Patent Licenses" means, with respect to any Grantor, all
agreements, whether written or oral, providing for the grant by or to any
Grantor of any right to manufacture, use or sell any invention covered in whole
or in part by a Patent.
"Patents" means all patentable works, including, without
limitation, all (i) letters patents and patent applications in the United States
of America or any other country or any political subdivision, including, but not
limited to, those described on Schedule B annexed hereto and made a part hereof
and (ii) all reissues, continuations, continuations-in-part, extensions or
divisions thereof.
"Proprietary Rights" means, with respect to a Grantor, all of
such Grantor's now owned and hereafter arising or acquired: licenses,
franchises, patents, patent rights, copyrights, works which are the subject
matter of copyrights, trademarks, service marks, trade names, trade styles,
patent, trademark and service xxxx applications, and all licenses and rights
related to any of the foregoing, and all other rights under any of the
foregoing, all extensions, renewals, reissues, divisions, continuations and
continuations-in-part of any of the foregoing, and all rights to xxx for past,
present and future infringement of any of the foregoing.
"Supporting Obligations" means all supporting obligations as
such term is defined in the UCC, including letters of credit and guaranties
issued in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments or Investment Property.
"Trademark Licenses" means, with respect to a Grantor, any
agreement, whether written or oral, providing for the grant by or to any Grantor
of any right to use any Trademark.
"Trademarks" means all (i) trademarks, trade names, trade
dress, service marks, domain names, logos and other source indicators, designs
and general intangibles of like nature (whether registered or unregistered) and
all goodwill of the business represented thereby and all registrations and
recordings thereof, including, without limitation, applications, registrations
and recordings in the United States Patent and Trademark Office or in any
similar office or agency of the United States of America, any State thereof, or
any other country or any political subdivision thereof, including, but not
limited to, those described on Schedule A annexed hereto and made a part hereof
and (ii) all renewals thereof.
"UCC" means the Uniform Commercial Code, as in effect from
time to time, of the State of New York or of any other state the laws of which
are required as a result thereof to be applied in connection with the issue of
perfection of security interests.
All other capitalized terms used but not otherwise defined
herein have the meanings given to them in the Loan Agreement. All other
undefined terms contained in this Security Agreement, unless the context
indicates otherwise, have the meanings provided for by the UCC to the extent the
same are used or defined therein.
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2. GRANT OF LIEN.
(a) As security for all Obligations, each Grantor hereby
grants to the Administrative Agent, for the benefit of the Administrative Agent
and the Lenders, a continuing security interest in, lien on, and right of setoff
against, all of the following property and assets of such Grantor, whether now
owned or existing or hereafter acquired or arising, regardless of where located:
(i) all Accounts;
(ii) all Inventory;
(iii) all contract rights;
(iv) all Chattel Paper;
(v) all Documents;
(vi) all Instruments;
(vii) all Intellectual Property;
(viii) all Supporting Obligations;
(ix) all General Intangibles;
(x) all Equipment;
(xi) all Investment Property;
(xii) all money, cash, cash equivalents,
securities and other property of any kind of such Grantor held directly
or indirectly by the Administrative Agent or any Lender;
(xiii) all of such Grantor's deposit
accounts, credits and balances with and other claims against the
Administrative Agent or any Lender or any of their Affiliates or any
other financial institution with which such Grantor maintains deposits,
including any Payment Accounts;
(xiv) all other assets and property of
such Grantor;
(xv) all books, records and other
property related to or referring to any of the foregoing, including
books, records, account ledgers, data processing records, computer
software and other property and General Intangibles at any time
evidencing or relating to any of the foregoing; and
(xvi) all accessions to, substitutions
for and replacements, products and proceeds of any of the foregoing,
including, but not limited to, proceeds of any insurance policies,
claims against third parties, and condemnation or requisition payments
with respect to all or any of the foregoing;
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provided, however, that notwithstanding any of the other provisions set forth in
this Section 2, this Security Agreement shall not constitute a grant of a
security interest in any property to the extent that such grant of a security
interest is prohibited by any Requirements of Law of a Governmental Authority,
requires a consent not obtained of any Governmental Authority pursuant to such
Requirement of Law or is prohibited by, or constitutes a breach or default under
or results in the termination of or requires any consent not obtained under, any
contract, license, agreement, instrument or other document evidencing or giving
rise to such property or, in the case of any Investment Property, any applicable
shareholder or similar agreement, except to the extent that such Requirement of
Law or the term in such contract, license, agreement, instrument or other
document or shareholder or similar agreement providing for such prohibition,
breach, default or termination or requiring such consent is ineffective under
applicable law. The Grantors and the Administrative Agent agree that nothing in
the Loan Agreement, the Pledge Agreement or this Security Agreement is intended
to result in the direct or indirect pledge of (x) the assets of a "controlled
foreign corporation" (as defined in the Code) or (y) more than 65% of the total
combined voting power of all classes of stock entitled to vote of a "controlled
foreign corporation."
All of the foregoing, together with the real property covered
by the Mortgage(s), all equity interests in Subsidiaries pledged or required to
be pledged to the Administrative Agent under the Pledge Agreement and all other
property of each of the Grantors in which the Administrative Agent or any Lender
may at any time be granted a Lien as collateral for any of the Obligations, is
herein collectively referred to as the "Collateral"; provided, however,
"Collateral" shall not include, and no Grantor shall be deemed to have granted a
security interest in any of such Grantor's rights or interests in (a) any lease,
license, contract, property rights or agreement to which any Grantor is a party
or any of its rights or interests thereunder if and for so long as the grant of
such security interest shall constitute or result in (i) the abandonment,
invalidation or unenforceability of any right, title or interest of any Grantor
therein or (ii) in a breach or termination pursuant to the terms of, or a
default under, any such lease, license, contract, property rights or agreement
(other than to the extent that any provision prohibiting such Grantor from
granting a security interest in its rights and interests thereunder in favor of
the Administrative Agent would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including
the Bankruptcy Code) or principles of equity); provided, further, that such
security interest shall attach immediately at such time as the condition causing
such abandonment, invalidation or unenforceability shall be remedied and to the
extent severable, shall attach immediately to any portion of such lease,
license, contract, property rights or agreement that does not result in any of
the consequences specified in (i) or (ii) above; provided, further, that any
Account or any money or other amounts due or to become due to such Grantor under
any such license, contract or agreement shall at no time be excluded from the
Collateral or the security interest granted by such Grantor hereunder in favor
of the Administrative Agent, (b) Equipment financed by a Grantor with purchase
money Indebtedness or Capital Leases expressly permitted under the Loan
Agreement, so long as such Grantor is prohibited from granting a security
interest under the terms of such Indebtedness or Capital Lease and only so long
as such Indebtedness or Capital Lease remains outstanding, (c) Equipment subject
to Liens permitted by Section 6.3(m), so long as such Grantor is prohibited from
granting a security interest under the terms of the Indebtedness secured by such
Lien and only so long as such Indebtedness remains outstanding, (d) in any of
the outstanding Capital Stock or other equity interests of an Excluded Foreign
Subsidiary, in excess of 65% of the issued and outstanding shares of the voting
Capital Stock or other voting equity interests of such Excluded Foreign
Subsidiary; provided that immediately upon the amendment of the Code to allow
the pledge of a greater percentage of the voting Capital Stock or other voting
equity interest in an Excluded Foreign Subsidiary without adverse tax
consequences, the Collateral shall include, and the security interest granted by
each Grantor shall attach to, such greater percentage of Capital Stock of each
Excluded Foreign Subsidiary.
(b) All of the Obligations shall be secured by all of the
Collateral.
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3. PERFECTION AND PROTECTION OF SECURITY INTEREST.
(a) Each Grantor shall, at its expense, perform all steps
reasonably requested by the Administrative Agent in writing at any time to
perfect, maintain, protect and enforce the Administrative Agent's Liens,
including: (i) executing, delivering and/or filing and recording of the
Intellectual Property Security Agreement and filing or authorizing the
Administrative Agent to file financing or continuation statements, and
amendments thereof, in form and substance reasonably satisfactory to the
Administrative Agent; (ii) delivering to the Administrative Agent or its bailee
the originals of all Instruments having a value in excess of $1,000,000 and,
upon the request of the Administrative Agent, Documents and Chattel Paper of
such Grantor having a value in excess of $1,000,000 and all other Collateral of
which the Administrative Agent reasonably determines it or its bailee should
have physical possession in order to perfect and protect the Administrative
Agent's security interest therein, duly pledged, endorsed or assigned to the
Administrative Agent without restriction; (iii) delivering to the Administrative
Agent or its bailee, upon the Administrative Agent's request, warehouse receipts
covering any portion of the Collateral located in warehouses and for which
warehouse receipts are issued and certificates of title covering any portion of
the Collateral for which certificates of title have been issued; (iv) when an
Event of Default has occurred and is continuing, transferring its Inventory to
warehouses or other locations designated by the Administrative Agent; (v)
placing notations on such Grantor's books of account to disclose the
Administrative Agent's security interest; (vi) in the case of Investment
Property, Deposit Accounts, Letter-of-Credit Rights and any other relevant
collateral, taking any actions necessary to enable the Administrative Agent to
obtain "control" (within the meaning of the applicable UCC) with respect thereto
(other than, so long as no Event of Default shall have occurred and be
continuing, with respect to securities accounts having assets of less than
$500,000 on an individual basis maintained therein); (vii) assigning and
delivering to the Administrative Agent, upon the request of the Administrative
Agent, all Supporting Obligations, including letters of credit, deposit accounts
and other relevant collateral on which such Grantor is named beneficiary with
the written consent of the issuer thereof; (viii) furnishing to the
Administrative Agent and the Lenders from time to time statements and schedules
further identifying and describing the assets and property of such Grantor and
such other reports in connection therewith as the Administrative Agent may
reasonably request, all in reasonable detail and (ix) taking such other steps as
are reasonably deemed necessary or desirable by the Administrative Agent to
maintain and protect the Administrative Agent's Liens. To the extent permitted
by applicable law, the Administrative Agent may (and each Grantor hereby
authorizes the Administrative Agent to) file, without the applicable Grantor's
signature, one or more financing statements continuation statements or other
documents and amendments thereto for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Administrative Agent's Liens. Each
Grantor authorizes the Administrative Agent to use the collateral description
"all personal property [except for ________]" in any such financing statements.
Each Grantor hereby ratifies and authorizes the filing by the Administrative
Agent of any financing statement with respect to the Collateral made prior to
the date hereof. Each Grantor agrees that a carbon, photographic, photostatic or
other reproduction of this Security Agreement or of a financing statement is
sufficient as a financing statement.
(b) From time to time, each Grantor shall, upon the
request of the Administrative Agent, execute and deliver confirmatory written
instruments pledging to the Administrative Agent, for the ratable benefit of the
Administrative Agent and the Lenders, the Collateral in which such Grantor has
an interest, but a Grantor's failure to do so shall not affect or limit any
security interest or any other rights of the Administrative Agent or any Lender
in and to the Collateral with respect to such Grantor. So long as the Loan
Agreement is in effect and until all Obligations have been fully satisfied, the
Administrative Agent's Liens shall continue in full force and effect in all
Collateral.
4. LOCATION OF COLLATERAL. (a) Each Grantor represents
and warrants to the Administrative Agent and the Lenders that: (A) Schedule I
hereto is a correct and complete list of
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such Grantor's chief executive office, the location of its books and records,
the locations of the Collateral in which such Grantor has an interest and the
locations of all of its other places of business; and (b) Schedule I hereto
correctly identifies any of such facilities and locations that are not owned by
such Grantor and sets forth the names of the owners and lessors or sublessors of
such facilities and locations. Each Grantor covenants and agrees that it will
not (i) change its jurisdiction of organization or the location of its chief
executive office from the location identified in Schedule I hereto, or (ii)
change its name unless it gives the Administrative Agent at least thirty (30)
days' (or such lesser number of days agreed to by the Administrative Agent)
prior written notice thereof and executes any and all financing statements and
other documents that the Administrative Agent reasonably requests in connection
therewith.
5. JURISDICTION OF ORGANIZATION. Schedule II hereto
identifies each Grantor's corporate name, its jurisdiction of incorporation or
organization, the type of entity it was organized as and the state organization
identification number of such Grantor (if the state of its incorporation or
organization provides such organization number).
6. TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL.
Each Grantor represents and warrants to the Administrative Agent and the Lenders
and agrees with the Administrative Agent and the Lenders that when financing
statements and other filings specified on Schedule 3.12(a) of the Loan Agreement
in appropriate form are filed in the offices specified on Schedule 3.12(a) of
the Loan Agreement and the filing of the Intellectual Property Security
Agreement is made in the U.S. Patent and Trademark Office within three months of
the date hereof and in the U.S. Copyright Office within one month of the date
hereof against the United States issued registrations and applications for the
United States Intellectual Property included in the Collateral (provided that
the registration of unregistered copyrights in the U.S. Copyright Office may be
required in order to perfect the Lien therein): (a) the security interest
granted pursuant to this Security Agreement constitute valid perfected second
priority, at any time when an Exit Facility remains outstanding and in effect
(or first priority at any time when no Exit Facility remains outstanding or in
effect), security interests in all of the Collateral (provided, however, that
subsequent recordations in the U.S. Parent and Trademark Office and the U.S.
Copyright Office, as applicable, may be necessary to perfect the security
interest in issued registrations and applications for other United States
Intellectual Property acquired by a Grantor after the date hereof) in favor of
the Administrative Agent, for the ratable benefit of the Lenders, as collateral
security for such Grantor's Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting to
purchase any Collateral from such Grantor; (b) are prior to all other Liens on
the Collateral in existence on the date hereof except for Liens securing the
Exit Facility and unrecorded Liens permitted by the Loan Agreement which have
priority over the Liens on the Collateral by operation of law (with respect to
rights in Intellectual Property to the extent such perfection and priority may
be achieved by filings made in the U.S. Patent and Trademark Office and the U.S.
Copyright Office); and (c) such Grantor will use, store and maintain the
Collateral in which it granted a security interest hereunder in favor of the
Administrative Agent with all reasonable care and will use such Collateral for
lawful purposes only. Notwithstanding the foregoing, the taking of actions
outside the United States may be required in order to perfect the Lien in
Intellectual Property included in the Collateral which is protected under
non-U.S. law.
7. [INTENTIONALLY OMITTED.]
8. [INTENTIONALLY OMITTED.]
9. [INTENTIONALLY OMITTED.]
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10. ACCOUNTS.
(a) No amount payable to such Grantor under or in
connection with any Accounts is evidenced by an Instrument or Chattel Paper
which has not been delivered to the Administrative Agent or its bailee.
(b) The amounts represented by such Grantor to the
Lenders from time to time as owing to such Grantor in respect of the Accounts
will at such times be accurate.
11. [INTENTIONALLY OMITTED.]
12. INVENTORY. Each Grantor represents and warrants
to the Administrative Agent and the Lenders and agrees with the Administrative
Agent and the Lenders that all of the Inventory owned by such Grantor is and
will be held for sale or lease, or to be furnished in connection with the
rendition of services, in the ordinary course of such Grantor's business, and is
and will be fit for such purposes. Each Grantor will keep its Inventory in good
and marketable condition, except for damaged or defective goods arising in the
ordinary course of such Grantor's business.
13. EQUIPMENT. Each Grantor represents and warrants to
the Administrative Agent and the Lenders and agrees with the Administrative
Agent and the Lenders that all of the Equipment owned by such Grantor is and
will be used or held for use in such Grantor's business, and is and will be fit
for such purposes. Each Grantor shall keep and maintain its Equipment in good
operating condition and repair (ordinary wear and tear excepted) and shall make
all necessary replacements thereof.
14. [INTENTIONALLY OMITTED.]
15. DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER. Each
Grantor represents and warrants to the Administrative Agent and the Lenders that
(a) all Documents, Instruments and Chattel Paper of such Grantor describing,
evidencing, or constituting Collateral, are complete, valid, and genuine, to the
best of such Grantor's knowledge, and (b) all goods evidenced by such Documents,
Instruments and Chattel Paper are and will be owned by such Grantor, free and
clear of all Liens other than Liens permitted under the Loan Agreement.
16. RIGHT TO CURE. The Administrative Agent may, in the
discretion of the Administrative Agent, and shall, at the direction of the
Required Lenders, pay any amount or do any act required of a Grantor hereunder
or under any other Loan Document in order to preserve, protect, maintain or
enforce the Obligations, the Collateral or the Administrative Agent's Liens
therein, and which a Grantor fails to pay or do. All payments that the
Administrative Agent makes under this Section 16 and all reasonable
out-of-pocket costs and expenses that the Administrative Agent pays or incurs in
connection with any action taken by it hereunder shall be reimbursed by the
applicable Grantor. Any payment made or other action taken by the Administrative
Agent under this Section 16 shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed thereafter as herein provided.
17. POWER OF ATTORNEY. Each Grantor hereby appoints the
Administrative Agent and the Administrative Agent's designee as such Grantor's
attorney, with full irrevocable power and authority in the place and stead of
such Grantor and in the name of such Grantor or in its own name, for the purpose
of carrying out the terms of this Security Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Security
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Administrative Agent the power and right, on behalf of such
Grantor,
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without notice to or assent by such Grantor, to do any or all of the following:
(a) to endorse such Grantor's name on any checks, notes, acceptances, money
orders or other forms of payment or security that come into the Administrative
Agent's or any Lender's possession; (b) to sign such Grantor's name on any
invoice, xxxx of lading, warehouse receipt or other negotiable or non-negotiable
Document constituting Collateral in which such Grantor granted a security
interest hereunder to the Administrative Agent, on drafts against customers, on
assignments of Accounts of such Grantor, on notices of assignment, financing
statements and other public records and to file any such financing statements by
electronic means with or without a signature as authorized or required by
applicable law or filing procedure; (c) so long as any Event of Default has
occurred and is continuing, to ask, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys, due or to become due under
or with respect to any of the Collateral; (d) so long as any Event of Default
has occurred and is continuing, to send requests for verification of Accounts of
such Grantor to customers or Account Debtors; (e) to complete in such Grantor's
name or the Administrative Agent's name, any order, sale or transaction, obtain
the necessary Documents in connection therewith, and collect the proceeds
thereof; (f) so long as any Event of Default has occurred and is continuing, to
clear Inventory of such Grantor through customs in such Grantor's name, the
Administrative Agent's name or the name of the Administrative Agent's designee,
and to sign and deliver to customs officials powers of attorney in such
Grantor's name for such purpose; and (g) so long as any Event of Default has
occurred and is continuing, to do all things necessary to carry out the Loan
Agreement and this Security Agreement. In addition, concurrently with the
execution and delivery hereof, each Grantor is executing and delivering to the
Administrative Agent, in the form of Exhibit B hereto, five originals of a Power
of Attorney for the implementation of the assignment, sale or other disposal of
the Intellectual Property of such Grantor pursuant to this Security Agreement.
Each Grantor ratifies and approves all acts of such attorney. None of the
Lenders, the Administrative Agent nor their attorneys will be liable for any
acts or omissions or for any error of judgment or mistake of fact or law except
for their willful misconduct or gross negligence. This power, being coupled with
an interest, is irrevocable until the Loan Agreement has been terminated and the
Obligations have been fully satisfied.
18. THE ADMINISTRATIVE AGENT'S AND LENDERS' RIGHTS,
DUTIES AND LIABILITIES.
(a) Each Grantor assumes all responsibility and liability
arising from or relating to the use, sale or other disposition of the
Collateral. The Obligations shall not be affected by any failure of the
Administrative Agent or any Lender to take any steps to perfect the
Administrative Agent's Liens or to collect or realize upon any of the
Collateral, nor shall loss of or damage to any of the Collateral release any
Grantor from any of the Obligations. Following the occurrence and during the
continuation of an Event of Default, the Administrative Agent may (but shall not
be required to), and at the direction of the Required Lenders shall, without
notice to or consent from any of the Grantors, xxx upon or otherwise collect,
extend the time for payment of, modify or amend the terms of, compromise or
settle for cash, credit, or otherwise upon any terms, grant other indulgences,
extensions, renewals, compositions or releases, and take or omit to take any
other action with respect to the Collateral, any security therefor, any
agreement relating thereto, any insurance applicable thereto, or any Person
liable directly or indirectly in connection with any of the foregoing, without
discharging or otherwise affecting the liability of the Grantors for the
Obligations or under the Loan Agreement or any other agreement now or hereafter
existing between the Administrative Agent and/or any Lender and any Grantor.
(b) It is expressly agreed by each Grantor that, anything
herein to the contrary notwithstanding, such Grantor shall remain liable under
each of its leases, agreements, contracts and licenses (each a "Contract" and
collectively, the "Contracts") to observe and perform all the conditions and
obligations to be observed and performed by it thereunder. At the request of the
Administrative Agent, a Grantor will deliver copies of each material Contract to
which it is a party and each material
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amendment or modification thereof to the Administrative Agent promptly upon the
execution and delivery thereof. None of the Administrative Agent nor any Lender
shall have any obligation or liability under any Contract by reason of or
arising out of this Security Agreement or the granting herein of a Lien thereon
or the receipt by Administrative Agent or any Lender of any payment relating to
any Contract pursuant hereto. None of the Administrative Agent nor any Lender
shall be required or obligated in any manner to perform or fulfill any of the
obligations of a Grantor under or pursuant to any Contract, or to make any
payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any Contract, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
(c) It is expressly agreed by each Grantor that such
Grantor will pay and discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all taxes, assessments and
governmental charges or levies imposed upon the Collateral or in respect of
income or profits therefrom, as well as all claims of any kind (including,
without limitation, claims for labor, materials and supplies) against or with
respect to the Collateral, except that no such charge need be paid if the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion of
the Collateral or any interest therein.
(d) The Administrative Agent may at any time after an
Event of Default shall have occurred and be continuing, subject to the
Intercreditor Agreement, without prior notice to the applicable Grantor, notify
Account Debtors, parties to the Contracts of such Grantor and obligors in
respect of Instruments and Chattel Paper of such Grantor, that the Accounts of
such Grantor and the right, title and interest of such Grantor in and under such
Contracts, Instruments and Chattel Paper have been assigned to the
Administrative Agent, and that payments shall be made directly to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders. Upon the written request of the Administrative Agent, a Grantor shall
so notify Account Debtors, parties to Contracts of such Grantor and obligors in
respect of Instruments and Chattel Paper of such Grantor.
19. PATENT, TRADEMARK AND COPYRIGHT COLLATERAL.
(a) Schedule A lists all registered Trademarks owned by
such Grantor in the operation of such Grantor's businesses currently conducted.
Except as set forth on Schedule A, such Grantor is the sole owner of, and has
full title, free and clear of all liens, in all Trademarks listed on Schedule A
and any registrations therefor are valid, subsisting and, to such Grantor's
knowledge, in full force and effect. No holding, decision or judgment has been
rendered by any Governmental Authority against a Grantor which would limit,
cancel or question the validity of, or such Grantor's rights in, any Trademark
in any respect that could reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule A, no action or proceeding is pending,
or, to the knowledge of such Grantor, threatened, on the date hereof (i) seeking
to limit, cancel or question the validity of any Trademark owned by a Grantor or
such Grantor's ownership interest therein, or (ii) which, if adversely
determined, would have a material adverse effect on the value of any Trademark
owned by a Grantor.
(b) Except to the extent a Grantor shall determine in its
reasonable business judgment that such Trademark is not material to the conduct
of its business, such Grantor (either itself or through licensees) will continue
to use all Trademarks currently used in its business, as conducted in order to
maintain its Trademarks free from any claim of abandonment for nonuse and such
Grantor will not (and will not permit any licensee thereof to) do any act or
knowingly omit to do any act whereby any Trademark of such Grantor may become
invalidated.
10
(c) Schedule B lists all Patents owned by such Grantor in
the operation of such Grantor's businesses currently conducted. Except as set
forth on Schedule B, such Grantor is the sole owner of, and has full title, free
and clear of all liens, in each of the Patents of such Grantor shown on Schedule
B annexed hereto and made a part hereof. As of the date hereof, none of the
Patents of such Grantor has been abandoned or assigned, and, except to the
extent that the Administrative Agent, upon prior written notice by such Grantor,
shall consent, such Grantor will not (and not permit any licensee to) do any
act, or knowingly omit to do any act, whereby any of the Patents of such Grantor
may become abandoned and such Grantor shall notify the Administrative Agent
promptly if it knows or has any reason to know that any Patent may become
abandoned. No holding, decision or judgment has been rendered by any
Governmental Authority against a Grantor which would limit, cancel or question
the validity of, or such Grantor's rights in, any Patent in any respect that
could reasonably be expected to have a Material Adverse Effect. No action or
proceeding is pending, or, to the knowledge of such Grantor, threatened, on the
date hereof (i) seeking to limit, cancel or question the validity of any Patent
owned by such Grantor or such Grantor's ownership interest therein, or (ii)
which, if adversely determined, would have a material adverse effect on the
value of any Patent owned by a Grantor.
(d) Schedule C lists all registered Copyrights owned by
such Grantor in the operation of such Grantor's businesses currently conducted.
Except as set forth on Schedule C, such Grantor is the sole owner of, and has
full title, free and clear of all liens, in the Copyrights and each of said
Copyrights is subsisting and, to such Grantor's knowledge, in full force and
effect. None of the registered Copyrights has been abandoned, assigned or
dedicated, and, except to the extent that the Administrative Agent, upon prior
written notice by the applicable Grantor, shall consent in writing, such Grantor
will not (and not permit any licensee to) do any act, or knowingly omit to do
any act, whereby any of the registered Copyrights may become abandoned or
dedicated, and each Grantor shall notify the Administrative Agent promptly if it
knows of any reason or has reason to know that any such Copyright may become
abandoned or dedicated. No holding, decision or judgment has been rendered by
any Governmental Authority against a Grantor which would limit, cancel or
question the validity of, or such Grantor's rights in, any Copyright in any
respect that could reasonably be expected to have a Material Adverse Effect. No
action or proceeding is pending, or, to the knowledge of such Grantor,
threatened, on the date hereof (i) seeking to limit, cancel or question the
validity of any Copyright owned by a Grantor or such Grantor's ownership
interest therein, or (ii) which, if adversely determined, would have a material
adverse effect on the value of any Copyright owned by a Grantor.
(e) Each Grantor shall notify the Administrative Agent
promptly (and in no event later than three (3) Business Days) if it knows or has
reason to know that any application or registration relating to any of its
material patents, trademarks or copyrights (now or hereafter existing) may
become abandoned or dedicated, or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court) regarding such Grantor's ownership of any such
Intellectual Property, its right to register the same, or to keep and maintain
the same.
(f) In no event shall a Grantor, either directly or
through any agent, employee, licensee or designee, file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency without giving the Administrative Agent written notice thereof. Each
Grantor shall promptly from time to time (but no less frequently than quarterly)
provide the Administrative Agent with a listing of all applications, if any, for
new Intellectual Property (together with a listing of the issuance of
registrations on presently pending applications for Intellectual Property),
which new applications and registrations shall be subject to the terms and
conditions hereunder, and come within the terms "trademarks," "patents" and
"copyrights" as used herein. Upon reasonable request of the Administrative
Agent, a Grantor shall execute and deliver any and all security agreements,
documents and assignments as the Administrative
11
Agent may reasonably request to evidence the Administrative Agent's Lien on the
Intellectual Properety of such Grantor, and the General Intangibles of such
Grantor relating thereto or represented thereby.
(g) Each Grantor shall take all actions necessary or
reasonably requested by the Administrative Agent to maintain and pursue each
application, to obtain the relevant registration and to maintain the
registration of each of its Intellectual Property (now or hereafter existing),
including the filing of applications for renewal, affidavits of use, affidavits
of noncontestability and opposition and interference and cancellation
proceedings, unless such Grantor shall determine in its reasonable business
judgment that such Intellectual Property is not material to the conduct of its
business.
(h) Such Grantor will perform all acts and execute all
documents, including, without limitation, the Grants of Security Interest
documents attached as Exhibit A hereto, and any other documents reasonably
requested by the Administrative Agent at any time to evidence, perfect,
maintain, record and enforce the Administrative Agent's interest in the
Collateral in favor of the Administrative Agent or otherwise in furtherance of
the provisions of this Security Agreement, and each Grantor hereby authorizes
the Administrative Agent to execute and file one or more financing statements
(and similar documents) or copies thereof or of this Security Agreement in favor
of the Administrative Agent.
(i) In the event that any of the material Intellectual
Property is infringed upon, or misappropriated or diluted by a third party, the
applicable Grantor shall notify the Administrative Agent promptly after such
Grantor learns thereof. Such Grantor shall, unless it shall reasonably determine
that such Intellectual Property is not material to the conduct of its business,
promptly xxx for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and shall
take such other actions as the Administrative Agent shall deem appropriate under
the circumstances to protect such patent, trademark or copyright Collateral.
(j) Such Grantor will take all necessary and reasonable
steps to maintain and protect the Intellectual Property, including, without
limitation, filing of renewals, affidavits of use, and opposition, interference
and cancellation proceedings (subject inter alia, to dedication, abandonment or
invalidation as permitted under paragraphs 19(b), 19(c) and 19(d) hereof).
20. INDEMNIFICATION.
In any suit, proceeding or action brought by the
Administrative Agent or any Lender relating to any Account, Chattel Paper,
Contract, Document, General Intangible or Instrument of a Grantor for any sum
owing thereunder or to enforce any provision of any Account, Chattel Paper,
Contract, Document, General Intangible or Instrument of a Grantor, the
applicable Grantor will save, indemnify and keep the Administrative Agent and
the Lenders harmless from and against all expense (including reasonable
attorneys' fees and expenses), loss or damage suffered by reason of any defense,
setoff, counterclaim, recoupment or reduction of liability whatsoever of the
obligor thereunder, arising out of a breach by such Grantor of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at
any time owing to, or in favor of, such obligor or its successors from such
Grantor, except in the case of the Administrative Agent or any Lender, to the
extent such expense, loss or damage is attributable to the gross negligence or
willful misconduct of the Administrative Agent or such Lender as finally
determined by a court of competent jurisdiction. All such obligations of the
Grantors shall be and remain enforceable against and only against the Grantors
and shall not be enforceable against the Administrative Agent or any Lender.
21. LIMITATION ON LIENS ON COLLATERAL. No Grantor will
create, permit or suffer to exist, and will defend the Collateral in which it
has an interest against, and take such other action as is necessary to remove,
any Lien on such Collateral except Liens permitted under the Loan
12
Agreement, and will defend the right, title and interest of the Administrative
Agent and the Lenders in and to any of such Grantor's rights under such
Collateral against the claims and demands of all Persons whomsoever.
22. NOTICE REGARDING COLLATERAL. Each Grantor will advise
the Administrative Agent promptly, in reasonable detail, of any Lien (other than
Permitted Liens) or claim made or asserted against any of the Collateral.
23. REMEDIES; RIGHTS UPON DEFAULT.
(a) In addition to all other rights and remedies granted
to it under this Security Agreement, the Loan Agreement, the other Loan
Documents and under any other instrument or agreement securing, evidencing or
relating to any of the Obligations, if any Event of Default shall have occurred
and be continuing, the Administrative Agent may exercise all rights and remedies
of a secured party under the UCC or any other applicable law. Without limiting
the generality of the foregoing, each Grantor expressly agrees that in any such
event the Administrative Agent, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon the applicable Grantor or any
other Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the UCC and other
applicable law), may forthwith enter upon the premises of such Grantor where any
Collateral is located through self help, without judicial process, without first
obtaining a final judgment or giving such Grantor or any other Person notice and
opportunity for a hearing on the Administrative Agent's claim or action and may
collect, receive, assemble, process, appropriate and realize upon the
Collateral, or any part thereof, and may forthwith sell, lease, assign, give an
option or options to purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at a public or private sale or sales, at any exchange at such prices as it may
deem acceptable, for cash or on credit or for future delivery without assumption
of any credit risk. The Administrative Agent or any Lender shall have the right
upon any such public sale or sales and, to the extent permitted by law, upon any
such private sale or sales, to purchase for the benefit of the Administrative
Agent and the Lenders, the whole or any part of said Collateral so sold, free of
any right or equity of redemption, which equity of redemption each Grantor
hereby releases. Such sales may be adjourned and continued from time to time
with or without notice. The Administrative Agent shall have the right to conduct
such sales on any Grantor's premises or elsewhere and shall have the right to
use any Grantor's premises without charge for such time or times as the
Administrative Agent deems necessary or advisable.
(b) Each Grantor further agrees, at the Administrative
Agent's request during an Event of Default, to assemble the Collateral in which
it granted a security interest hereunder to the Administrative Agent and make it
available to the Administrative Agent at places which the Administrative Agent
shall select, whether at such Grantor's premises or elsewhere. Until the
Administrative Agent is able to effect a sale, lease or other disposition of the
Collateral, the Administrative Agent shall have the right to hold or use the
Collateral, or any part thereof, to the extent that it deems appropriate for the
purpose of preserving the Collateral or its value or for any other purpose
deemed appropriate by the Administrative Agent. The Administrative Agent shall
have no obligation to any Grantor to maintain or preserve the rights of such
Grantor as against third parties with respect to the Collateral in which it
granted a security interest hereunder to the Administrative Agent while such
Collateral is in the possession of the Administrative Agent. The Administrative
Agent may, if the Administrative Agent so elects, seek the appointment of a
receiver or keeper to take possession of any of the Collateral and to enforce
any of the Administrative Agent's remedies (for the benefit of the
Administrative Agent and the Lenders), with respect to such appointment without
prior notice or hearing as to such appointment. The Administrative Agent shall
apply the net proceeds of any such collection,
13
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the Obligations as provided in the Loan Agreement, and only
after so paying over such net proceeds, and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the UCC, need the
Administrative Agent account for the surplus, if any, to the applicable
Grantors. To the maximum extent permitted by applicable law, each Grantor waives
all claims, damages and demands against the Administrative Agent or any Lender
arising out of the repossession, retention or sale of any of the Collateral
except such as arise solely out of the gross negligence or willful misconduct of
the Administrative Agent or such Lender as finally determined by a court of
competent jurisdiction. Each Grantor agrees that ten (10) days prior notice by
the Administrative Agent of the time and place of any public sale or of the time
after which a private sale may take place is reasonable notification of such
matters. The Grantors shall, jointly and severally, remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral are
insufficient to pay all Obligations, including any attorneys' fees or other
expenses incurred by the Administrative Agent or any Lender to collect such
deficiency.
(c) If an Event of Default shall have occurred and be
continuing, the Administrative Agent may (without assuming any obligations or
liability thereunder), at any time, enforce (and shall have the exclusive right
to enforce) against any licensee or sublicensee all rights and remedies of the
applicable Grantor in, to and under any one or more license agreements with
respect to the Intellectual Property, and take or refrain from taking any action
under any thereof, and each Grantor hereby releases the Administrative Agent and
each Lender from, and agrees to hold the Administrative Agent and each Lender
free and harmless from and against any claims arising out of, any action taken
or omitted to be taken with respect to any such license agreement.
(d) In the event of any license, assignment, sale or
other disposition of the Intellectual Property, or any of it, after the
occurrence or continuation as hereinabove provided of an Event of Default, each
Grantor shall use commercially reasonable efforts to supply its know how and
expertise relating to the manufacture and sale of the products bearing or in
connection with the Intellectual Property of such Grantor, and its customer
lists and other records relating to the Intellectual Property of such Grantor
and to the distribution of said products, to the Administrative Agent or its
designee.
(e) Except as otherwise specifically provided herein,
each Grantor hereby waives presentment, demand, protest or any notice (to the
maximum extent permitted by applicable law) of any kind in connection with this
Security Agreement or any Collateral. Without limiting any of the foregoing,
each Grantor, to the maximum extent not prohibited by applicable law, hereby (i)
agrees that it will not invoke, claim or assert the benefit of any rule of law
or statute now or hereafter in effect (including, without limitation, any right
to prior notice or judicial hearing in connection with the Administrative
Agent's possession, custody or disposition of any Collateral or any appraisal,
valuation, stay, extension, moratorium or redemption law), or take or omit to
take any other action, that would or could reasonably be expected to have the
effect of delaying, impeding or preventing the exercise of any rights and
remedies in respect of the Collateral, the absolute sale of any of the
Collateral or the possession thereof by any purchaser at any sale thereof, and
waives the benefit of all such laws and further agrees that it will not hinder,
delay or impede the execution of any power granted hereunder to the
Administrative Agent, but that it will permit the execution of every such power
as though no such laws were in effect, (ii) waives all rights that it has or may
have under any rule of law or statute now existing or hereafter adopted to
require the Administrative Agent to marshal any Collateral or other assets in
favor of such Grantor or any other party or against or in payment of any or all
of the Obligations, and (iii) waives all rights that it has or may
14
have under any rule of law or statute now existing or hereafter adopted to
require the Administrative Agent to pursue any third party for any of the
Obligations.
24. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For
the purpose of enabling the Administrative Agent to exercise rights and remedies
under Section 23 hereof (including, without limiting the terms of Section 23
hereof, in order to take possession of, hold, preserve, process, assemble,
prepare for sale, market for sale, sell or otherwise dispose of Collateral) at
such time as the Administrative Agent shall be lawfully entitled to exercise
such rights and remedies, each Grantor hereby grants to the Administrative
Agent, for the benefit of the Administrative Agent and the Lenders, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to such Grantor) to use, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof,
subject to (x) any exclusive licenses (i) granted prior to the date hereof, (ii)
granted in the future, to the extent permitted by the Loan Agreement, or (iii)
otherwise approved of by Administrative Agent and (y) subject, in the case of
Trademarks and any property of similar nature, to sufficient rights to qualify
control and inspection in favor of the Grantor to avoid the risk of invalidation
of such Trademarks and property of similar nature.
25. LIMITATION ON ADMINISTRATIVE AGENT'S AND LENDERS'
DUTY IN RESPECT OF COLLATERAL. The Administrative Agent and Lenders shall use
reasonable care with respect to the Collateral in its possession or under its
control. Neither the Administrative Agent nor any Lender shall have any other
duty as to any Collateral in its possession or control or in the possession or
control of any Administrative Agent or nominee of the Administrative Agent or
such Lender, or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto. The Administrative Agent
and the Lenders shall be accountable only for amounts that they actually receive
as a result of the exercise of the powers conferred upon them hereunder, and
neither they nor any of their officers, directors, employees or Administrative
Agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
26. MAINTENANCE OF INSURANCE. (a) Each Grantor will
maintain, with financially sound and reputable companies, insurance policies (i)
insuring the Inventory and Equipment against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Administrative
Agent and (ii) to the extent requested by the Administrative Agent, insuring
such Grantor, the Administrative Agent and the Lenders against liability for
personal injury and property damage relating to such Inventory and Equipment,
such policies to be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Administrative Agent and the Lenders.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (ii) name the Administrative
Agent as insured party or loss payee, (iii) if reasonably requested by the
Administrative Agent, include a breach of warranty clause and (iv) be reasonably
satisfactory in all other respects to the Administrative Agent.
27. INTERCREDITOR AGREEMENT. Notwithstanding anything in
this Security Agreement to the contrary, (a) the Lien granted to the
Administrative Agent pursuant to this Security Agreement and the exercise of any
right or remedy by the Administrative Agent hereunder are subject to the
provisions of the Intercreditor Agreement and (b) with respect to the delivery
of any Collateral which may be perfected by possession by the secured party with
respect thereto, or which is required pursuant to the terms of this Security
Agreement, such delivery shall be deemed to have been complied with so long
15
as such delivery is made to the Exit Facility Agent and held subject to Section
5.5 of the Intercreditor Agreement. In the event of any conflict between the
terms of the Intercreditor Agreement and this Security Agreement, the terms of
the Intercreditor Agreement shall govern.
28. MISCELLANEOUS.
(a) Amendments in Writing. None of the terms or
provisions of this Security Agreement may be waived, amended, supplemented or
otherwise modified except in accordance with Section 9.1 of the Loan Agreement.
(b) Reinstatement. This Security Agreement shall remain
in full force and effect and continue to be effective should any petition be
filed by or against any Grantor for liquidation or reorganization, should any
Grantor become insolvent or make an assignment for the benefit of any creditor
or creditors or should a receiver or trustee be appointed for all or any
significant part of any Grantor's assets, and shall continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of the
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
(c) Notices. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other party, or whenever any of the parties
desires to give and serve upon any other party any communication with respect to
this Security Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be given in the
manner, and deemed received, as provided for in the Loan Agreement.
(d) Severability. Whenever possible, each provision of
this Security Agreement shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Security
Agreement. This Security Agreement is to be read, construed and applied together
with the Loan Agreement and the other Loan Documents which, taken together, set
forth the complete understanding and agreement of the Administrative Agent, the
Lenders and the Grantors with respect to the matters referred to herein and
therein.
(e) No Waiver; Cumulative Remedies. None of the
Administrative Agent nor any Lender shall by any act, delay, omission or
otherwise be deemed to have waived any of its rights or remedies hereunder, and
no waiver shall be valid unless in writing, signed by the Administrative Agent
and then only to the extent therein set forth. A waiver by the Administrative
Agent of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Administrative Agent would
otherwise have had on any future occasion. No failure to exercise nor any delay
in exercising on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or future exercise thereof or the exercise of any other right, power
or privilege. No notice to or demand upon a Grantor in any case shall entitle
such Grantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Administrative Agent to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand. The rights and remedies hereunder
provided are cumulative and
16
may be exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law. None of the terms or provisions of this Security
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by the Administrative Agent and the Grantors.
(f) Limitation by Law. All rights, remedies and powers
provided in this Security Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of law, and all the
provisions of this Security Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be limited
to the extent necessary so that they shall not render this Security Agreement
invalid, unenforceable, in whole or in part, or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
(g) Security Interest Absolute. All rights of the
Administrative Agent hereunder, the security interests granted to the
Administrative Agent hereunder and all obligations of the Grantors hereunder,
shall be absolute and unconditional irrespective of
(i) any lack of validity or enforceability of the Loan
Agreement, any other Loan Document, any other agreement with respect to
any of the Obligations or any other agreement or instrument relating to
any of the foregoing;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or consent to any departure from the Loan
Agreement, any other Loan Document or any other agreement or
instrument;
(iii) any exchange, release or nonperfection of any other
collateral, or any release or amendment or waiver of or consent to or
departure from any guaranty, for all or any of the Obligations; or
(iv) any other circumstance which might otherwise
constitute a defense available to, or discharge of, a Grantor or any
other obligor in respect of the Obligations or in respect of this
Security Agreement.
(h) Termination of this Security Agreement. Subject to
Section 26(a) hereof, this Security Agreement shall terminate upon the
indefeasible payment and performance in full in cash of all Obligations.
(i) Successors and Assigns. This Security Agreement and
all obligations of the Grantors hereunder shall be binding upon the successors
and assigns of each Grantor (including any debtor-in-possession on behalf of a
Grantor) and shall, together with the rights and remedies of the Administrative
Agent, for the benefit of the Administrative Agent and the Lenders, hereunder,
inure to the benefit of the Administrative Agent and the Lenders, all future
holders of any instrument evidencing any of the Obligations and their respective
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Security Agreement without
the prior written consent of the Administrative Agent. No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Obligations or any portion
thereof or interest therein shall in any manner affect the Lien granted to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, hereunder. No Grantor may assign, sell, hypothecate or otherwise
transfer any interest in or obligation under this Security Agreement.
(j) Counterparts. This Security Agreement may be executed
in any number of separate counterparts, each of which shall collectively and
separately constitute one and the same agreement.
17
(k) GOVERNING LAW. THIS SECURITY AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
(l) Submission To Jurisdiction; Waivers. Each Grantor
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Security Agreement and the other
Loan Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the courts of the State of New York, the courts
of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in the Loan
Agreement or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive
or consequential damages.
(m) WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
(n) Section Titles. The Section titles contained in this
Security Agreement are and shall be without substantive meaning or content of
any kind whatsoever and are not a part of the agreement between the parties
hereto.
(o) No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Security Agreement.
In the event an ambiguity or question of intent or interpretation arises, this
Security Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Security
Agreement.
(p) Acknowledgements. Each Grantor hereby acknowledges
that:
(i) it has been advised by counsel in the negotiation,
execution and delivery of this Security Agreement and the other Loan
Documents to which it is a party;
18
(ii) neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Security Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand,
and the Administrative Agent and Lenders, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and
(iii) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the
Lenders.
(q) Additional Grantors. Each Subsidiary of the Borrower
that is required to become a party to this Security Agreement pursuant to
Section 5.9 of the Loan Agreement shall become a Grantor for all purposes of
this Security Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex 1 hereto.
(r) Releases.
(i) At such time as the Loans and the other Obligations
shall have been paid in full, the Collateral shall be released from the
Liens created hereby, and this Security Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Administrative Agent and each Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any
party, and all rights to the Collateral shall revert to the Grantors.
At the request and sole expense of any Grantor following any such
termination, the Administrative Agent shall deliver to such Grantor any
Collateral held by the Administrative Agent hereunder, and execute and
deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.
(ii) If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by
the Loan Agreement, then the security interest hereunder on such
Collateral shall automatically terminate simultaneously with such sale,
transfer or disposition and the Administrative Agent, at the request
and sole expense of such Grantor, shall execute and deliver to such
Grantor all releases or other documents reasonably necessary or
desirable for the release of the Liens created hereby on such
Collateral. At the request and sole expense of the Borrower, a
Guarantor shall be released from its obligations hereunder in the event
that all the Capital Stock of such Guarantor (or its parent company)
shall be sold, transferred or otherwise disposed of in a transaction
permitted by the Loan Agreement.
(s) Benefit of Lenders. All Liens granted or contemplated
hereby shall be for the benefit of the Administrative Agent and the Lenders, and
all proceeds or payments realized from Collateral in accordance herewith shall
be applied to the Obligations in accordance with the terms of the Loan
Agreement.
19
IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.
GRANTORS:
GENTEK INC.
By:
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
GENTEK HOLDING CORPORATION (formerly known
as General Chemical Corporation)
GENERAL CHEMICAL PERFORMANCE PRODUCTS LLC
NOMA HOLDING INC.
GENTEK TECHNOLOGIES MARKETING INC.
VIGILANT NETWORKS LLC
BIG T-2 COMPANY LLC
KRONE DIGITAL COMMUNICATIONS INC.
PRINTING DEVELOPMENTS, INC.
KRONE INTERNATIONAL HOLDING INC.
GENERAL CHEMICAL WEST LLC
GENERAL CHEMICAL LLC
FINI ENTERPRISES, INC.
XXXXXX, INC.
NOMA CORPORATION
NOMA DELAWARE INC.
BALCRANK PRODUCTS INC.
TOLEDO TECHNOLOGIES INC.
DEFIANCE, INC.
XXXXXX HOLDINGS INC.
NOMA O.P., INC.
NOMA TECHNOLOGIES LIMITED PARTNERSHIP
TOLEDO TECHNOLOGIES MANAGEMENT LLC
DEFIANCE PRECISION PRODUCTS, INC.
HY-FORM PRODUCTS, INC.
DEFIANCE TESTING AND ENGINEERING SERVICES,
INC.
DEFIANCE PRECISION PRODUCTS MANAGEMENT LLC
DEFIANCE PRECISION PRODUCTS MANUFACTURING
LLC
DEFIANCE KINEMATICS INC.
BINDERLINE DRAFTLINE, INC.
KRONE USA INCORPORATED
KRONE INCORPORATED
KRONE HOLDING INC.
By:
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
CON-X CORPORATION
KRONE OPTICAL SYSTEMS INC.
By:
-----------------------------------------
Name: Xxxxx X'Xxxxxx
Title: Vice President
TOLEDO TECHNOLOGIES MANUFACTURING LLC
By:
-----------------------------------------
Name:
Title:
KRONE HOLDING LLC
By its Sole Member and Manager, Krone
Holding Inc.
By:
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
ADMINISTRATIVE AGENT:
BNY ASSET SOLUTIONS LLC, as the
Administrative Agent
By:
-----------------------------------------
Title:
--------------------------------------
Schedule I to
Security Agreement
------------------
LOCATION OF COLLATERAL
----------------------
A. Location of Chief Executive Office
B. Location of Books and Records
C. Location of Collateral
D. Location of all other places of business
E. Location of leased facilities and name of lessor/sublessor
Schedule II to
Security Agreement
------------------
JURISDICTION OF ORGANIZATION
----------------------------
Schedule A to
Security Agreement
------------------
TRADEMARKS
----------
Trademark Reg. Date Reg. No.
--------------------------- ------------------------- ----------------------
Schedule B to
Security Agreement
------------------
PATENTS
-------
File Number Serial/Patent No. Status Title
------------------ ------------------------ ---------------- ---------------
Schedule C to
Security Agreement
------------------
COPYRIGHTS
----------
Titles Issue or Filing Date Copyright No.
--------------------------- --------------------------- ---------------------
Exhibit A to
Security Agreement
------------------
GRANT OF
SECURITY INTEREST IN [TRADEMARK or PATENT or COPYRIGHT] RIGHTS
--------------------------------------------------------------
THIS GRANT OF SECURITY INTEREST IN [TRADEMARK/ PATENT/
COPYRIGHT] RIGHTS ("Agreement"), dated as of November __, 2003 among GenTek
Inc., a Delaware corporation ("GenTek"), having an office at____________, the
Domestic Subsidiaries identified on signature pages hereto as "Grantors", each
having an office at ______________ (together with GenTek, each a "Grantor" and,
collectively, the "Grantors") and BNY Asset Solutions LLC, a Delaware limited
liability company, having an office at 000 Xxxx Xxx Xxxxxxx Xxxxxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, as administrative agent (in its capacity as
administrative agent, together with any successor in such capacity, referred to
herein as the "Administrative Agent") for the financial institutions (the
"Lenders") now or hereafter being parties to the Senior Term Loan Agreement,
dated as of the date hereof (as amended, restated, modified or supplemented from
time to time in accordance with its terms, the "Loan Agreement"), among the
Grantors, the Lenders and the Administrative Agent. Capitalized terms not
defined herein shall have the meanings ascribed to them in the Loan Agreement.
WITNESSETH:
----------
WHEREAS, the Lenders have agreed to enter into the Loan
Agreement; and
WHEREAS, in order to induce the Administrative Agent and the
Lenders to enter into the Loan Agreement and the other Loan Documents, the
Lenders and the Administrative Agent have required the execution and delivery of
this Agreement by the Grantors;
WHEREAS, in connection with the Loan Agreement, the Grantors
have executed and delivered a Security Agreement, dated as of November 7, 2003,
in favor of the Administrative Agent (together with all amendments and
modifications, if any, from time to time thereafter made thereto, the "Security
Agreement");
WHEREAS, pursuant to the Security Agreement, each Grantor
granted to the Administrative Agent for the benefit of the Administrative Agent
and the Lenders a continuing security interest in, lien on, and right of setoff
against all Collateral, including the [Trademarks/Patents/Copyrights]; and
WHEREAS, each Grantor has duly authorized the execution,
delivery and performance of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided or provided by reference in the Security
Agreement.
3. Grant of Security Interest. Each Grantor hereby grants a
continuing security interest in, lien on, and a right of setoff against,
[Trademarks/Patents/Copyrights] (including, without limitation, those items
listed on Schedule A hereto), to the Administrative Agent for the benefit of the
Administrative Agent and the Lenders as security for all Obligations.
4. Purpose. This Agreement has been executed and delivered by
each Grantor for the purpose of recording the grant of security interest herein
with the United States [Patent and Trademark][Copyright] Office. The security
interest granted hereby has been granted to the Lenders in connection with the
Security Agreement and is expressly subject to the terms and conditions thereof.
The Security Agreement (and all rights and remedies of the Lenders thereunder)
shall remain in full force and effect in accordance with its terms.
5. Acknowledgment. Each Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Lenders with respect to the
security interest in the [Trademarks/Patents/Copyrights] granted hereby are more
fully set forth in the Loan Agreement and the Security Agreement, the terms and
provisions of which (including the remedies provided for therein) are
incorporated by reference herein as if fully set forth herein.
6. Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original, but all of which together constitute
one and the same original.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Grantors and the Administrative Agent
have caused this Security Agreement to be executed by their respective officers
thereunto duly authorized as of the day and year first above written.
GRANTORS:
GENTEK INC.
By:
-----------------------------------------
Title:
GENTEK HOLDING CORPORATION
(formerly known as General Chemical
Corporation)
CON-X CORPORATION
GENERAL CHEMICAL PERFORMANCE PRODUCTS LLC
NOMA HOLDING INC.
GENTEK TECHNOLOGIES MARKETING INC.
HN INVESTMENT HOLDINGS INC.
VIGILANT NETWORKS LLC
BIG T-2 COMPANY LLC
KRONE DIGITAL COMMUNICATIONS INC.
PRINTING DEVELOPMENTS, INC.
KRONE INTERNATIONAL HOLDING INC.
GENERAL CHEMICAL WEST LLC
GENERAL CHEMICAL LLC
FINI ENTERPRISES, INC.
XXXXXX, INC.
WATERSIDE URBAN RENEWAL CORPORATION
NOMA CORPORATION
NOMA DELAWARE INC.
BALCRANK PRODUCTS INC.
TOLEDO TECHNOLOGIES INC.
DEFIANCE, INC.
KRONE OPTICAL SYSTEMS INC.
XXXXXX INTERNATIONAL INC.
XXXXXX HOLDINGS INC.
NOMA O.P., INC.
NOMA TECHNOLOGIES LIMITED PARTNERSHIP
PCT MEXICO CORPORATION
ELECTRONIC INTERCONNECT SYSTEMS, INC.
TOLEDO TECHNOLOGIES MANAGEMENT LLC
TOLEDO TECHNOLOGIES MANUFACTURING LLC
DEFIANCE PRECISION PRODUCTS, INC.
HY-FORM PRODUCTS, INC.
DEFIANCE TESTING AND ENGINEERING SERVICES,
INC.
DEFIANCE PRECISION PRODUCTS MANAGEMENT LLC
DEFIANCE PRECISION PRODUCTS MANUFACTURING
LLC
DEFIANCE KINEMATICS INC.
BINDERLINE DRAFTLINE, INC.
KRONE INTERNATIONAL HOLDING INC.
KRONE HOLDING INC.
KRONE HOLDING LLC
KRONE USA INCORPORATED
KRONE INCORPORATED
By:
-----------------------------------------
Title:
Accepted and Agreed:
BNY ASSET SOLUTIONS LLC, as Administrative Agent
By:
-------------------------
Name:
Title:
STATE OF )
) ss
COUNTY OF )
On the ____ day of __________, 20__, before me personally came
___________________, who is personally known to me to be the ___________________
of [name of Obligor/name of Borrower], a [state] [form of entity]; who, being
duly sworn, did depose and say that she/he is the _______________________in such
[form of entity], the [form of entity] described in and which executed the
foregoing instrument; that she/he executed and delivered said instrument
pursuant to authority given by the [governing body of entity -- ie, Board of
Directors] of such [form of entity]; and that she/he acknowledged said
instrument to be the free act and deed of said [form of entity].
------------------------------
Notary Public
(PLACE STAMP ABOVE)
STATE OF )
) ss
COUNTY OF )
On the ____ day of __________, 20__, before me personally came
___________________, who is personally known to me to be the ___________________
of BNY Asset Solutions LLC, a Delaware limited liability company; who, being
duly sworn, did depose and say that she/he is the _______________________in such
company, the company described in and which executed the foregoing instrument;
that she/he executed and delivered said instrument pursuant to authority given
by the Board of Directors of such company; and that she/he acknowledged said
instrument to be the free act and deed of said company.
------------------------------
Notary Public
(PLACE STAMP ABOVE)
Schedule A to
Security Agreement
------------------
SCHEDULE A
U.S. [PATENTS OR TRADEMARKS OR COPYRIGHTS] REGISTRATIONS AND APPLICATIONS
[For Trademarks:]
Trademark Reg. Date Reg. No.
--------------------------- ------------------------ -----------------------
[For Patents:]
File Number Serial/Patent No. Status Title
---------------------- -------------------- --------------- --------------
[For Copyrights:]
File Number Serial/Patent No. Status Title
---------------------- -------------------- --------------- --------------
SPECIAL POWER OF ATTORNEY
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, THAT [NAME OF GRANTOR], a
______________ corporation, with its principal office at __________________,
(hereinafter called the "Assignor"), hereby appoints and constitutes BNY Asset
Solutions LLC, a Delaware limited liability company, as administrative agent (in
its capacity as administrative agent, together with any successor in such
capacity, referred to herein as the "Assignee") for the financial institutions
(the "Lenders") now or hereafter being parties to the Senior Term Loan and
Guarantee Agreement, dated as of the date hereof (as amended, modified or
supplemented from time to time in accordance with its terms, the "Loan
Agreement"), among the Assignor, certain affiliates of the Assignor and the
Assignee, its true and lawful attorney, with full power of substitution, and
with full power and authority to perform the following acts on behalf of the
Assignor upon and during the continuance of an Event of Default:
1. For the purpose of assigning, selling, licensing or
otherwise disposing of all right, title and interest of the Assignor in
and to any letters patent of the United States or any other country or
political subdivision thereof, and all registrations, recordings,
reissues, continuations, continuations-in-part and extensions thereof,
and all pending applications therefor, and for the purpose of the
recording, registering and filing of, or accomplishing any other
formality with respect to, the foregoing, to execute and deliver any
and all agreements, documents, instruments of assignment or other
papers necessary or advisable to effect such purpose;
2. For the purpose of assigning, selling, licensing or
otherwise disposing of all right, title and interest of the Assignor in
and to any trademarks, trade names, trade styles and service marks, and
all registrations, recordings, reissues, extensions and renewals
thereof, and all pending applications therefor, and for the purpose of
the recording, registering and filing of, or accomplishing any other
formality with respect to, the foregoing, to execute and deliver any
and all agreements, documents, instruments of assignment or other
papers necessary or advisable to effect such purpose;
3. To execute any and all documents, statements, certificates
or other papers necessary or advisable in order to obtain the purposes
described above as the Assignee may in its sole discretion determine.
This power of attorney is made pursuant to a Security
Agreement, dated the date hereof, between the Assignor and the Assignee and
takes effect solely for the purposes of Section 17 thereof and is subject to the
conditions thereof and may not be revoked until the indefeasible payment and
performance in full in cash of all "Obligations" as defined in such Security
Agreement.
Dated: ________ __, 2003
[NAME OF GRANTOR]
By:
--------------------------------
Name:
Title:
Annex 1 to
Security Agreement
------------------
ASSUMPTION AGREEMENT, dated as of ________________, 200_, made
by ______________________________ (the "Additional Grantor"), in favor of BNY
Asset Solutions LLC, a Delaware limited liability company, as administrative
agent (in such capacity, the "Administrative Agent") for the banks and other
financial institutions or entities (the "Lenders") parties to the Loan Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Loan Agreement.
WITNESSETH:
----------
WHEREAS, GenTek Inc. (the "Borrower"), the Lenders and the
Administrative Agent have entered into a Senior Term Loan and Guarantee
Agreement, dated as of November 7, 2003 (as amended, supplemented or otherwise
modified from time to time, the "Loan Agreement");
WHEREAS, in connection with the Loan Agreement, the Borrower
and certain of its Affiliates (other than the Additional Grantor) have entered
into the Security Agreement, dated as of November 7, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Security Agreement")
in favor of the Administrative Agent for the benefit of the Lenders;
WHEREAS, the Loan Agreement requires the Additional Grantor to
become a party to the Security Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Security
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Security Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 27(q) of
the Security Agreement, hereby becomes a party to the Security Agreement as a
Grantor thereunder with the same force and effect as if originally named therein
as a Grantor and, without limiting the generality of the foregoing, hereby
expressly assumes all obligations and liabilities of a Grantor thereunder. The
information set forth in Annex 1-A hereto is hereby added to the information set
forth in the Schedules to the Security Agreement. The Additional Grantor hereby
represents and warrants that each of the applicable representations and
warranties contained in the Security Agreement is true and correct on and as the
date hereof (after giving effect to this Assumption Agreement) as if made on and
as of such date.
2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
2
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
--------------------------------
Name:
Title:
Annex 1-A to
Assumption Agreement
--------------------
Supplement to Schedule I
------------------------
Supplement to Schedule II
-------------------------
Supplement to Schedule A
------------------------
Supplement to Schedule B
------------------------
Supplement to Schedule C
------------------------
Supplement to Schedule D
------------------------
Supplement to Schedule E
------------------------
Supplement to Schedule F
------------------------
