EXHIBIT 4.17
SUBSIDIARIES' SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December 11, 1997, made by each
corporation signatory identified on Schedule A hereto (each of such entity, a
"Grantor"), in favor of STATE STREET BANK AND TRUST COMPANY, a Massachusetts
trust company, as trustee (in such capacity, the "Trustee") for holders of the
Notes (as hereinafter defined) (the "Noteholders"), pursuant to the Indenture,
dated as of December 11, 1997 (as amended, supplemented or otherwise modified
from time to time, the "Indenture"), among RBX Corporation, a Delaware
corporation, as issuer (the "Company"), Xxxxxxxx Manufacturing Company, Inc.,
Xxxxxx-Xxxxx Rubber Custom Mixing Corp., Midwest Rubber Custom Mixing Corp.,
OleTex Inc., Rubatex Corporation, Universal Polymer & Rubber Inc., Universal
Rubber Company and Waltex Corporation, as guarantors (the "Subsidiary
Guarantors"), and the Trustee.
WITNESSETH
WHEREAS, the Company will issue 12% Senior Secured Notes due 2003
in the aggregate principal amount of $100,000,000 (the "Notes") pursuant to
the Indenture;
WHEREAS, it is a requirement of the Indenture that each Grantor
guarantees payment and performance of the Company's obligations under the
Indenture, the Notes and the other Collateral Documents (as defined);
WHEREAS, in satisfaction of such condition, each Grantor has entered
into a Guarantee of even date herewith (as amended, supplemented or otherwise
modified from time to time, the "Subsidiary Guarantees") for the benefit of
the Trustee and the Noteholders; and
WHEREAS, it is a further requirement of the Indenture that each
Grantor shall have executed and delivered this Subsidiaries' Security
Agreement to secure payment and performance of each Grantor's obligations
under the Subsidiary Guarantees.
NOW, THEREFORE, in consideration of the premises, each Grantor
hereby agrees with the Trustee, for the benefit of the Trustee and the
Noteholders, as follows:
1. Defined Terms.
1.1 Definitions.
(1) Unless otherwise defined herein, terms defined in
the Indenture and used herein shall have the meanings given to them in
the Indenture, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Accounts, Chattel Paper,
Documents, Equipment, General Intangibles, Instruments, Inventory and
Proceeds.
(2) The following terms shall have the following
meanings:
"Agreement": this Subsidiaries' Security Agreement, as the same may
be amended, modified or otherwise supplemented from time to time.
"Closing Date": the date of the Indenture.
"Code": the Uniform Commercial Code as from time to time in effect
in the State of New York.
"Collateral": as defined in Section 2 of this Agreement.
"Conover Financing Agreements" shall mean that certain Security
Agreement dated September 1, 1985, between Xxxxxxxx Industries, Inc., now
known as Rubatex Corporation, and the Catawba County Industrial Facilities and
Pollution Control Financing Authority to secure a Promissory Note dated
September 1, 1985 of Rubatex Corporation in the original principal amount of
$4,250,000.
"Contracts": all contracts to which each Grantor is or becomes a
party from time to time (other than Chattel Paper, Documents and Instruments),
as the same may from time to time be amended, supplemented or otherwise
modified, including, without limitation, (a) all rights of each Grantor to
receive moneys due and to become due to it thereunder or in connection
therewith, (b) all rights of each Grantor to damages arising out of, or for,
breach or default in respect thereof and (c) all rights of each Grantor to
perform and to exercise all remedies thereunder.
"Contractual Obligation": as to any Person, any provision of any
material security issued by such Person or of any material agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound.
"Copyright Licenses": any agreement, whether written or oral,
naming each Grantor as licensor or licensee, granting any right under any
Copyright, including, without limitation, the agreements listed in Schedule 3
hereto.
"Copyrights": (a) all United States copyrights in all Works,
whether published or unpublished, now existing or hereafter created or
acquired, including, without limitation, the copyrights in the Works listed in
Schedule 3 hereto, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation,
registrations, recordings and applications in the United States Copyright
Office, and (b) all renewals thereof.
"Customer Lists": all customer lists, lists of customers and other
records of each Grantor indicating Persons who are customers of each Grantor
any subsidiary of each Grantor.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Intercreditor Agreement": the Intercreditor Agreement dated as of
December 11, 1997, between the Trustee and The Chase Manhattan Bank, as agent
for the lenders under the New Credit Agreement.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, operations, property or condition (financial or otherwise)
of the Company and the Subsidiary Guarantors, taken as a whole, (b) the
ability of the Company or any of the Subsidiary Guarantors, to perform their
respective obligations under the Indenture, the Notes, the Subsidiary
Guarantees,
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the Registration Rights Agreement and the Collateral Documents, (c) the
validity or the enforceability of the Indenture, the Notes, the Subsidiary
Guarantees, the Registration Rights Agreement and the Collateral Documents or
(d) the rights or remedies of the Trustee, for the benefit of the Trustee and
the Noteholders, hereunder or thereunder.
"Obligations": as defined as "Guarantee Obligations" in the
Indenture.
"Obligors": any purchaser of goods or services or other Person
obligated to make payment to a RBX Party in respect of a purchase of such
goods or services.
"Patents": (a) all letters patent of the United States and all
reissues and extensions thereof, including, without limitation, those listed
in Schedule 4 hereto, and (b) all applications for letters patent of the
United States or of any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, those listed in
Schedule 4 hereto.
"Patent Licenses": all agreements, whether written or oral,
providing for the grant by each Grantor of any right to manufacture, use or
sell any invention covered by a Patent, including, without limitation, those
listed in Schedule 4 hereto.
"RBX Parties": the Company, the Subsidiary Guarantors and any new
Subsidiary complying with Section 4.14 of the Indenture; individually, a "RBX
Party."
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination or an
arbitrator or a court of other Governmental Authority, in each case applicable
to or binding upon such Person or any of its material property (including the
properties subject to the Mortgages and Deeds of Trust) or to which such
Person or any of its material property is subject.
"Tallapoosa Financing Agreements" shall mean that certain Lease
Agreement, dated as of December 1, 1983, by and between Tallapoosa Development
Authority (the "Authority") and Xxxxxx-Xxxxx Rubber Corporation, now known as
Xxxxxx-Xxxxx Custom Rubber Mixing Corp., as assigned by the Authority to
American National Bank and Trust Company of Chicago pursuant to that certain
Assignment dated as of December 29, 1983.
"Trademarks": (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks; logos and other source or business identifiers, and the
goodwill associated therewith, now existing or hereafter adopted or acquired,
all registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office (the
"PTO") or in any similar office or agency of the United States, any state
thereof or any other country or any political subdivision thereof, or
otherwise, including, without limitation, those listed in Schedule 5 hereto,
and (b) all renewals thereof.
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"Trademark License": any agreement, written or oral, providing for
the grant by each Grantor of any right to use any Trademark, including,
without limitation, those listed in Schedule 5 hereto.
"Work": any work which is subject to copyright protection pursuant
to Title 17 of the U.S. Code.
1.2 Other Definitional Provisions.
(1) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement, and section and paragraph references are to this Agreement
unless otherwise specified.
(2) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
2. Security Interest.
2.1 Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, each Grantor
hereby grants to the Trustee for the benefit of the Trustee and the
Noteholders a security interest in all of the following property now owned or
at any time hereafter acquired by each Grantor or in which each Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"):
(1) all Accounts;
(2) all Chattel Paper;
(3) all Contracts;
(4) all Copyrights;
(5) all Copyright Licenses;
(6) all Customer Lists;
(7) all Documents;
(8) all Equipment;
(9) all General Intangibles;
(10) all Instruments;
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(11) all Inventory;
(12) all Instruments, Chattel Paper and General
Intangibles relating to any Indebtedness owed by the Company or any
other Subsidiary of each Grantor to each Grantor;
(13) all Patents;
(14) all Patent Licenses;
(15) all Trademarks;
(16) all Trademark Licenses;
(17) all books and records pertaining to the Collateral;
and
(18) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing, to have and to hold,
together with all rights, titles, interests, powers, privileges and
preferences pertaining or incidental thereto for the benefit of the
Noteholders. Notwithstanding the foregoing, this Agreement shall not be deemed
to grant to the Trustee a security interest in, and the term "Collateral"
shall be deemed not to include, (i) property or assets, whether now existing
or hereafter acquired, of Rubatex Corporation that are located at its Conover,
North Carolina facility to the extent that the Conover Financing Agreements
are in effect and that the grant of such security interest would constitute a
breach of Rubatex Corporation's obligations under the Conover Financing
Agreements, or (ii) property or assets, whether now existing or hereafter
acquired, of Xxxxxx-Xxxxx Rubber Customer Mixing Corp. that are located at its
Tallapoosa, Georgia facility to the extent that the Tallapoosa Financing
Agreements are in effect and that the grant of such security interest would
constitute a breach of Xxxxxx-Xxxxx Rubber Custom Mixing Corp.'s obligations
under the Tallapoosa Financing Agreements. The security interest in the
Collateral granted pursuant to this Agreement shall be subject to the
Intercreditor Agreement.
2.2 No Assumption of Liability. The security interest in the
Collateral is granted as security only and shall not subject the Trustee to,
or in any way alter or modify, any obligation or liability of any Grantor with
respect to or arising out of the Collateral.
3. Representations and Warranties. Each Grantor hereby
represents and warrants that:
3.1 Power and Authority. Each Grantor has the corporate power
and authority and the legal right to execute and deliver, to perform its
obligations under, and to grant the security interest in the Collateral
pursuant to, this Agreement and has taken all necessary corporate action to
authorize its execution, delivery and performance of, and grant of the
security interest in the Collateral pursuant to, this Agreement.
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3.2 Title: No Other Liens. Except for the security interest
granted to the Trustee for the benefit of the Trustee and the Noteholders
pursuant to this Agreement and the other Permitted Liens, each Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of
others. No security agreement, financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in
any public office, except (a) such as have been filed in favor of the Trustee,
for the benefit of the Trustee and the Noteholders, pursuant to this Agreement
or in connection with the Indenture, (b) as are permitted pursuant to the
Indenture or (c) for which termination statements are delivered on or prior to
the Closing Date.
3.3 Enforceable Obligation; Perfected First Priority Security
Interests. This Agreement constitutes a legal, valid and binding obligation
of each Grantor, enforceable in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in law or in equity). The security
interests granted pursuant to this Agreement (a) upon delivery on the Closing
Date of any Instruments and Chattel Paper to the Trustee and upon completion
of the filings specified on Schedule 1 attached hereto, will constitute valid
and perfected security interests in the Collateral in favor of the Trustee,
for the benefit of the Trustee and the Noteholders, other than for Collateral
(excluding Instruments) in which a security interest cannot be perfected by
filing a financing statement, (b) are prior to all other Liens on the
Collateral in existence on the date hereof other than Permitted Liens
(assuming, with respect to any such Instruments and Chattel Paper, that the
Trustee maintains continuous possession thereof) and (c) are (assuming, with
respect to such Instruments and Chattel Paper, that the Trustee maintains
continuous possession thereof) enforceable to the extent provided by law as
such against all creditors of and purchasers from each Grantor and against any
owner or purchaser of the real property where any of the Equipment is located
and any present or future creditor obtaining a Lien on such real property
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.4 Accounts. As of the Closing Date, the place where each
Grantor keeps its records concerning the Accounts is 0000 XxxxxxXxxx Xxxxx,
Xxxxxxx, XX 00000.
3.5 Contracts. No consent of any party (other than each
Grantor) to any Contract is required, or purports to be required, in
connection with the execution, delivery and performance of this Agreement,
except to the extent that the failure to obtain such consent would not be
reasonably likely to have a Material Adverse Effect. Each Contract is in full
force and effect and constitutes a valid, binding and legally enforceable
obligation of each Grantor and (to the best knowledge of each Grantor) each
other party thereto except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law) and except
to the extent the failure of any such Contract to be in full force and effect
or valid or legally enforceable would not be reasonably likely to have a
Material Adverse Effect. Each Grantor is not in default in the performance or
observance of any of the terms of any Contract in any respect which would be
reasonably likely to have a Material Adverse Effect. To the best of each
Grantor's knowledge, no other party to any Contract is in default in the
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performance or observance of any of the terms of any Contract in any respect
which would be reasonably likely to have a Material Adverse Effect. The
right, title and interest of each Grantor in, to and under each Contract are
not subject to any defense, offset, counterclaim or claim, which would be
reasonably likely, either individually or in the aggregate, to have a Material
Adverse Effect. No amount payable to each Grantor under or in connection with
any Contract is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Trustee (other than any and all contracts involving an
aggregate amount less than $100,000).
3.6 Customer Lists. Each Grantor has all rights to its
Customer Lists, and no consent is required in order to grant the security
interest created hereby.
3.7 No Violation. The execution, delivery and performance of
this Agreement will not violate any provision of any Requirement of Law
applicable to, or Contractual Obligation of each Grantor in any respect that,
in the aggregate for all such violations, could reasonably be expected to have
a Material Adverse Effect and will not result in the creation or imposition of
any Lien on any of the Collateral of each Grantor pursuant to any Requirement
of Law applicable to, or Contractual Obligation of each Grantor, except the
security interests created hereby.
3.8 No Consents Required. No consent or authorization of,
filing with, or other act by or in respect of, any arbitrator or Governmental
Authority and no consent of any other Person (including, without limitation,
any stockholder or creditor of each Grantor), is required in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement, other than those which have been duly obtained or made and are in
full force and effect on the Closing Date and except for those the absence of
which, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
3.9 No Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of each Grantor, threatened by or against each Grantor or against
any of its properties or revenues (1) with respect to this Agreement or any of
the transactions contemplated hereby or (2) which could reasonably be expected
to have a Material Adverse Effect.
3.10 Inventory and Equipment. As of the Closing Date, the
Inventory and the Equipment are kept at the locations listed on Schedule 2
hereto.
3.11 Chief Executive Office. The chief executive office and
chief place of business of each Grantor is listed on Schedule 6 hereto.
3.12 Patents, Trademarks and Copyrights. Schedule 4 hereto
includes all registered U.S. Patents owned by each Grantor on the date hereof
and all other Patents and Patent Licenses owned by each Grantor in its own
name as of the date hereof that are material to the business of the Company
and its Subsidiaries, taken as a whole. Schedule 5 hereto includes all
Trademarks owned by each Grantor on the date hereof registered in the U.S.
Patent and Trademark Office ("PTO") and all other Trademarks and Trademark
Licenses owned by each Grantor in its own name as of the date hereof that are
material to the business of the Company and its Subsidiaries, taken as a
whole. Schedule 3 hereto includes all registered U.S. Copyrights owned by
each Grantor
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on the date hereof and all other Copyrights and Copyright Licenses in Works
owned by each Grantor as of the date hereof that are material to the business
of the Company and its Subsidiaries, taken as a whole. To the best of each
Grantor's knowledge, each Patent, Trademark and Copyright is valid,
subsisting, unexpired, enforceable and has not been abandoned, except to the
extent that the failure to be valid, subsisting, unexpired or enforceable or
the abandonment thereof would not be reasonably likely to have a Material
Adverse Effect. Except as set forth in such Schedules , none of such Patents,
Trademarks and Copyrights is the subject of any licensing or franchise
agreement. No holding, decision or judgment has been rendered by any
Governmental Authority that would limit, cancel or question the validity of
any Patent, Copyright or Trademark except for such holdings, decisions or
judgments that would not be reasonably likely to have a Material Adverse
Effect. No action or proceeding is pending seeking to limit, cancel or
question the validity of any Patent, Copyright or Trademark, which, if
adversely determined, would be reasonably likely to have a Material Adverse
Effect.
3.13 Governmental Obligors. As of the date hereof, none of the
Obligors on any Accounts and none of the parties to any Contracts is a
Governmental Authority, except for any such Accounts or Contracts that are not
material in relation to the business of each Grantor or its Subsidiaries,
provided that if after the date hereof any of such Obligors is a Governmental
Authority, each Grantor will give the Trustee prompt written notice thereof.
Each Grantor agrees that the foregoing representations and warranties shall be
deemed to have been made by each Grantor on and as of the Closing Date and on
and as of each date on which an extension of credit is made by the Noteholders
to the Company under the Indenture, in each case as though made on and as of
each such date, except for (i) representations and warranties expressly stated
to relate to a specific date, in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date and (ii) changes in such representations and warranties permitted
by the Indenture.
4. Covenants. Each Grantor covenants and agrees with the
Trustee and the Noteholders that, from and after the date of this Agreement
until payment in full or Legal Defeaseance of all principal of, interest on,
premium, if any, and Liquidated Damages, if any, with respect to the Notes and
any other Obligations for the payment of money then due and owing to any
Noteholder or the Trustee under the Indenture or any Collateral Document:
4.1 Maintenance of Records. Each Grantor will keep and
maintain at its own cost and expense satisfactory and complete records of the
Collateral, including without limitation, a record of all payments received
and all credits granted with respect to the Accounts. Each Grantor will xxxx
its books and records pertaining to the Collateral to evidence this Agreement
and the security interests granted hereby. For the Trustee's and the
Noteholders' further security, the Trustee, for the benefit of the Trustee and
the Noteholders, shall have a security interest in all of each Grantor's books
and records pertaining to the Collateral, and each Grantor shall at the
request of the Trustee grant access to any such books and records to the
Trustee or to its representatives for review upon reasonable advance notice
during normal business hours at the location where such books and records are
kept.
4.2 Books and Records. Each Grantor will keep proper books of
records and account in which full, complete and correct entries in conformity
with GAAP and all material Requirements of Law shall be made of all dealings
and transactions in relation to its business and
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activities; and permit representatives of any Noteholder to visit and inspect
any of its properties and examine and, to the extent reasonable, make
abstracts from any of its books and records, and to discuss the business,
operations, properties and financial and other condition of each Grantor with
officers and employees of each Grantor and (with the prior consent of each
Grantor, which consent shall not be unreasonably withheld) with its
independent certified public accountants, in each case at any reasonable time,
upon reasonable notice to each Grantor, and as often as may reasonably be
desired.
4.3 Maintenance of Insurance. Each Grantor will maintain with
financially sound and reputable insurance companies insurance on all property
material to the business of each Grantor and its Subsidiaries, taken as a
whole, in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and furnish to the Trustee, upon written request,
information in reasonable detail as to the insurance carried provided that
each Grantor may implement programs of self-insurance in the ordinary course
of business and in accordance with industry standards for a company of similar
size so long as reserves are maintained in accordance with GAAP for the
liabilities associated therewith.
4.4 Payment of Obligations. Each 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 (i) the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of each Grantor, or (ii) the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
4.5 Maintenance of Perfected Security Interest; Further
Documentation.
(1) Each Grantor will not create, incur or permit to
exist any Lien or claim on or to the Collateral, other than the
security interests created hereby and other than as permitted pursuant
to the Indenture, will maintain the security interest created by this
Agreement as a perfected security interest (subject only to Permitted
Liens) and will defend such security interest against claims and
demands of all Persons whomsoever.
(2) At any time and from time to time, upon the written
request of the Trustee, and at the sole expense of each Grantor, each
Grantor will promptly and duly execute and deliver such instruments
and documents and take such action as the Trustee may reasonably
request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or
continuation statements under the Code in effect in any jurisdiction
with respect to the security interests created hereby.
4.6 Changes in Locations, Name, etc. Each Grantor will not:
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(1) permit any of the Inventory or Equipment to be kept
at a location other than those listed on Schedule 2 hereto unless it
shall have given the Trustee at least 45 days' prior written notice;
provided that the Company may permit Inventory or Equipment in an
aggregate amount not to exceed $750,000 to be kept at other locations
without such notice; or
(2) change the location of its chief executive office
and chief place of business from that specified in subsection 3.10
unless it shall have given the Trustee at least 45 days' prior written
notice; or
(3) change its name, identity or corporate structure to
such an extent that any financing statement filed by the Trustee in
connection with this Agreement would become seriously misleading,
unless it shall have given the Trustee and the Noteholders at least 45
days' prior written notice of such change.
4.7 Further Identification of Collateral. Each Grantor will
furnish to the Trustee and the Noteholders from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Trustee may reasonably
request, all in reasonable detail.
4.8 Notices. Each Grantor will advise the Trustee promptly, in
reasonable detail, at the Trustee's address set forth in the Indenture, or at
such other address as the Trustee may provide to each Grantor by notice as
provided in Section 11 of:
(1) any Lien (other than security interests created
hereby or Permitted Liens) on, or claim asserted against, any of the
Collateral; and
(2) of the occurrence of any other event that could
reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or on the security interests created
hereby.
4.9 Indemnification.
(1) Each Grantor agrees to pay, and to save the Trustee
and the Noteholders harmless from, any and all liabilities, costs and
expenses (including, without limitation, legal fees and expenses) (1)
with respect to, or resulting from any delay in paying, any and all
excise, sales or other taxes that may be payable or determined to be
payable with respect to any of the Collateral, (2) with respect to, or
resulting from, any delay in complying with any Requirement of Law
applicable to any of the Collateral and (3) in connection with any of
the transactions contemplated by this Agreement. In any suit,
proceeding or action brought by the Trustee or any Noteholder under
any Account or Contract for any sum owing thereunder, or to enforce
any provisions of any Account or Contract, each Grantor will save,
indemnify and keep the Trustee and such Noteholder harmless from and
against all expense, loss or damage suffered by reason of any defense,
setoff, counterclaim, recoupment or reduction or liability whatsoever
of the account debtor or obligor thereunder, arising out of a material
breach by each Grantor of any obligation thereunder or arising out of
any other
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agreement, indebtedneess or liability at any time owing to or in favor
of such account debtor or its successors from such Grantor. The
Trustee may have separate counsel and the Grantors shall pay the
reasonable fees and expenses of such counsel. The Grantors need not
pay for any settlement made without their consent, which consent shall
not be unreasonably withheld.
(2) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel or both.
The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or
Opinion of Counsel. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
4.10 Right of Inspection. Upon reasonable advance notice to
each Grantor and at reasonable intervals, or at any time and from time to time
after the occurrence and during the continuance of an Event of Default, the
Trustee and the Noteholders shall have full and free access upon reasonable
advance notice and during normal business hours to all the books,
correspondence and records of each Grantor, and the Trustee and the
Noteholders and their respective representatives may examine the same, to the
extent necessary, take extracts therefrom and make photocopies thereof, and
each Grantor agrees to render to the Trustee and the Noteholders, at each
Grantor's cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. The Trustee and the Noteholders and
their respective representatives shall also have the right upon reasonable
advance notice to each Grantor to enter during normal business hours into and
upon any premises where any of the Inventory or Equipment of each Grantor is
located for the purpose of inspecting the same, observing its use or otherwise
protecting its interests therein.
4.11 Compliance with Laws, etc. Each Grantor will comply in
all material respects with all Requirements of Law applicable to the
Collateral or any part thereof or to the operation of each Grantor's business,
except to the extent that the failure to so comply would not be reasonably
likely to materially adversely affect the Trustee's or the Noteholders' rights
hereunder, the priority of their Liens on the Collateral or the value of the
Collateral in each case taken as a whole.
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4.12 Limitations on Modifications, Waivers, Extensions of
Contracts and Agreements Giving Rise to Accounts.
(1) Each Grantor will not (i) amend, modify, terminate
or waive any provision of any Contract in any manner that could
reasonably be expected to materially adversely affect such Grantor or
the value of such Contract or (ii) fail to exercise promptly and
diligently each and every material right which it may have under each
such Contract (other than any right of termination), unless, in the
case of clause (i) or (ii), (A) in the business judgment of such
Grantor it is in the best economic interest of such Grantor to amend,
modify, terminate or waive such provision or to fail to exercise such
right and (B) such amendments, modifications, termination and waivers
and such failures to exercise such rights, in the aggregate, would not
be reasonably likely to have a Material Adverse Effect or (C) such
amendments, modifications, termination and waivers and such failures
to exercise such rights are permitted by the Collateral Documents.
(2) Each Grantor will not (i) amend, modify, terminate
or waive any provision of any agreement giving rise to an Account in
any manner that would reasonably be expected to materially adversely
affect such Grantor or the value of such Account or (ii) fail to
exercise promptly and diligently each and every material right that it
may have under each agreement giving rise to an Account (other than
any right of termination), unless, in the case of clause (i) or (ii),
(A) in the business judgment of such Grantor it is in the best
economic interest of such Grantor to amend, modify, terminate or waive
such provision or to fail to exercise such right, (B) such amendments,
modifications, terminations and waivers and such failures, in the
aggregate, to exercise such right would not be reasonably likely to
have a Material Adverse Effect or (C) such amendments, modifications,
termination and waivers and such failures to exercise such rights are
permitted by the Collateral Documents.
4.13 Patents and Trademarks.
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(1) Each Grantor will, except with respect to any
Trademark that is not material to the business of the Company and its
Subsidiaries taken as a whole, (i) continue to use each Trademark on
the same goods and services it is currently used on (except that each
Grantor, in its reasonable business judgment, may also decide not to
reissue or renew Trademark License agreements to which it is a party),
(ii) maintain quality control over all products manufactured,
distributed or sold, and all services offered under each Trademark,
(iii) not knowingly do or omit to do any act that would result in the
invalidation of any Trademark, and (iv) take all steps which in its
business judgment are necessary to prevent a licensee from doing or
omitting to do any act which would result in the invalidation or any
Trademark.
(2) Each Grantor will not (either itself or through
licensees), except with respect to any Patent that such Grantor shall,
in the exercise of its business judgment, reasonably determine is not
material to the business of the Company and its Subsidiaries taken as
a whole, do any act, or omit to do any act, whereby the registration
of any such Patent may become abandoned or dedicated.
(3) Each Grantor will notify the Trustee of any (i)
abandonment of a Trademark; (ii) abandonment of an application to
register a Trademark; (iii) abandonment or dedication of a U.S.
Patent; or (iv) determination by a court or tribunal in the country
where (A) the Trademark or Patent is registered, or (B) the Trademark
or Patent application is pending, or (C) the unregistered Trademark is
used, that such Grantor does not have all right, title and interest to
the Trademark or Trademark application or the U.S. Patent, or of any
other adverse determination of such court or tribunal relating to any
Trademark, Trademark application or Patent; provided that (x) such
Grantor has actual notice of such event and (y) such Trademark,
Trademark application, Patent or Patent application is material to the
business of the Company and its Subsidiaries, taken as a whole.
(4) Whenever any Grantor, either by itself or through
any agent, employee, licensee or designee, shall file an application
for the registration of a Patent or Trademark with the PTO or any
similar office or agency in any other country or any political
subdivision thereof, such Grantor shall report such filing to the
Trustee and the Noteholders within five Business Days after the last
day of the calendar year in which such filing occurs (or, if the
Trustee reasonably so requests in writing, more often). Upon request
of the Trustee, such Grantor shall execute and deliver any and all
agreements, instruments, documents, and papers as the Trustee may
reasonably request to evidence the Trustee's security interest (for
the benefit of the Trustee and the Noteholders) in any Patent or
Trademark and the goodwill and general intangibles, if any, of such
Grantor relating thereto or represented thereby, and each Grantor
hereby constitutes the Trustee its attorney-in-fact to execute and
file all such writings for the purpose of so evidencing the Trustee's
security Interest (and the Trustee agrees to notify each Grantor that
any such filing has been made, provided that any failure to so notify
shall not invalidate any such actions by the Trustee), all lawful acts
of such attorney being hereby ratified and confirmed; such power being
coupled with an interest is irrevocable until the Obligations are paid
in full and are terminated.
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(5) Each Grantor will, except with respect to any Patent
or Trademark application or registration that is not material to the
business of the Company and its Subsidiaries, taken as a whole, take
all reasonable and necessary steps, as it shall deem appropriate under
the circumstances, in accordance with its reasonable business
judgment, including, without limitation, in any proceeding before the
PTO or any similar office or agency in any other country or any
political subdivision thereof, to maintain and pursue each Patent or
Trademark application (and to obtain the relevant registration and to
maintain such registration), including, without limitation, where
appropriate filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(6) In the event that any Patent or Trademark included
in the Collateral is materially infringed or misappropriated or any
Trademark is diluted by a third party, each Grantor shall promptly
notify the Trustee after it learns thereof and shall, unless such
Grantor shall reasonably determine that such Patent or Trademark is
not of material economic value to such Grantor, take such actions as
such Grantor shall reasonably deem appropriate under the circumstances
to protect such Patent or Trademark.
4.14 Copyrights.
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(1) Each Grantor (either itself or through licensees)
will, to the extent consistent with its business judgment, (i) employ
the appropriate notice of copyright for each published Work subject to
copyright protection to the extent necessary to protect the Copyright
relating to such Work and (ii) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act
whereby any Copyright material to the business of the Company and its
Subsidiaries taken as a whole may become invalidated.
(2) Each Grantor will notify the Trustee of any
determination by a court or tribunal in the country where a Copyright
is registered or Copyright application is pending that such Grantor
does not own all right, title and interest to the registered Copyright
or Copyright application, or of any other determination of such court
or tribunal relating to any registered Copyright or Copyright
application that would be reasonably likely to have a Material Adverse
Effect; provided that such Grantor has actual notice of such
determination.
(3) On the last Business Day of each calendar year of
each Grantor following the Closing Date (or, if the Trustee reasonably
so requests in writing, more often), each Grantor shall provide to the
Trustee a document confirming the Trustee's security interest (for the
benefit of the Trustee and the Noteholders) in the Copyright with
respect to each Work for which such Grantor has registered its
Copyright during such calendar year, duly executed and in proper form
for filing in the Copyright Office or other applicable United States
Governmental Authority. Upon the reasonable request of the Trustee,
each Grantor shall execute and deliver any and all additional
agreements, instruments, documents, and papers as the Trustee may
reasonably request to evidence the Trustee's security interest (for
the benefit of the Noteholders) in such Copyright, and each Grantor
hereby constitutes the Trustee its attorney-in-fact to file all such
writings for the purpose of so evidencing the Trustee's security
interest (and the Trustee agrees to notify each Grantor that any such
filing has been made, provided that any failure to so notify any
Grantor shall in no event invalidate any such actions by the Trustee),
all lawful acts of such attorney being hereby ratified and confirmed;
such power being coupled with an interest is irrevocable until the
Obligations are paid in full and are terminated.
(4) Each Grantor will take all reasonable and necessary
steps, as it shall deem appropriate under the circumstances in the
exercise of its reasonable business judgment, (i) to maintain and
pursue each application filed (and to obtain the relevant
registration) and (ii) to maintain to the extent permitted by law each
registration of each Copyright owned by such Grantor, including,
without limitation, in each case where appropriate, filing of
applications for renewal.
(5) Each Grantor will promptly notify the Trustee of any
material infringement of any Copyright material to the business of the
Company and its Subsidiaries, taken as a whole, owned by it of which
it becomes aware and will take such actions as it shall reasonably
deem appropriate under the circumstances to protect such Copyright.
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4.15 Further Assurances. Each Grantor will, promptly upon
request by the Trustee, execute and deliver or cause to be executed and
delivered, or use reasonable best efforts to procure, all instruments and
other documents, all in form and substance satisfactory to the Trustee,
deliver any such documents or instruments to the Trustee and take any other
actions that are reasonably necessary or desirable to perfect, continue the
perfection of, or protect the priority of the Trustee's security interest in
the Collateral, to protect the Collateral against the rights, claims or
interests of third persons or to effect the purposes of this Agreement. Each
Grantor will pay all costs incurred in connection with the foregoing.
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5. Rights of Trustee and Noteholders: Limitations on Trustee's
and Noteholders' Obligations.
5.1 Grantor Remains Liable under Accounts and Contracts.
Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Accounts and Contracts to observe and perform, in all
material respects, all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise to each such Account and in accordance with and pursuant to the
terms and provisions of each such Contract. Neither the Trustee nor any
Noteholder shall have any obligation or liability under any Account (or any
agreement giving rise thereto) by reason of or arising out of this Agreement
or the receipt by the Trustee or any Noteholder of any payment relating to
such Account or Contract pursuant hereto, nor shall the Trustee or any
Noteholder be obligated in any manner to perform any of the obligations of
each Grantor under or pursuant to any Account (or any agreement giving rise
thereto) or under any Contract, to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto) or under or pursuant to any Contract, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
5.2 Analysis of Accounts. At any time and from time to time
but no more than twice annually (unless an Event of Default shall have
occurred and be continuing), the Trustee shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable (including, without limitation, the right to
contact any account debtor with the consent of each Grantor (which consent
shall not be unreasonably withheld)), and each Grantor shall furnish all such
assistance and information as the Trustee may reasonably require in connection
with such test verifications. At any time and from time to time, upon the
request of the Trustee and at the expense of each Grantor at reasonable
intervals each Grantor shall cause independent public accountants or others
satisfactory to the Trustee to furnish to the Trustee reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Accounts.
5.3 Collections on Accounts.
(1) Each Grantor shall collect the Accounts pursuant to,
and to the extent provided in, the Lockbox Assignment Agreement (as
defined in the New Credit Agreement) to the extent consistent with the
business judgment of such Grantor regarding its best economic
interest; provided, that the Trustee may exercise such rights or
remedies as set forth in the Intercreditor Agreement and the Indenture
at any time after the occurrence and during the continuance of an
Event of Default.
(2) Each such deposit of Proceeds of Accounts during the
continuance of an Event of Default shall be accompanied by a report,
identifying in reasonable detail the nature and source of the payments
included in the deposit, to the extent provided under the Lockbox
Assignment Agreement.
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(3) If an Event of Default occurs and is continuing and
subject to the provisions of the Intercreditor Agreement and the
Indenture, each Grantor shall deliver to the Trustee, upon the request
of the Trustee, all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the
Accounts, including, without limitation, all original orders, invoices
and shipping receipts and the Trustee shall exercise reasonable care
with respect to the custody of such documents.
5.4 Books and Records. No Grantor will remove its books and
records with respect to the Collateral from the location of its chief
executive office and chief place of business specified in subsection 3.11
unless it shall have given the Trustee at least 30 days' prior written notice.
6. Remedies.
6.1 Notice to Account Debtors and Contract Parties. At any time
after the occurrence and during the continuance of an Event of Default and
subject to the provisions of the Intercreditor Agreement, upon written request
of the Trustee to so notify such account debtors, each Grantor shall notify
account debtors on the Accounts that the Accounts have been assigned to the
Trustee for the benefit of the Trustee and the Noteholders and that payments
in respect thereof shall be made directly to the Trustee.
6.2 Proceeds to be Turned Over To Trustee. In addition to the
rights of the Trustee and the Noteholders specified in subsection 5.3 with
respect to payments of Accounts, if an Event of Default shall occur and be
continuing and subject to the provisions of the Intercreditor Agreement, upon
the written request of the Trustee to turn over such items, all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items
shall be held by such Grantor in trust for the Trustee and the Noteholders,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Trustee in the exact form received by
such Grantor (duly endorsed by such Grantor to the Trustee, if required) and
held by the Trustee in the Collateral Account pursuant to the provisions of
the Indenture. All Proceeds while held by the Trustee in the Collateral
Account (or by such Grantor in trust for the Trustee and the Noteholders)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in subsection
6.3.
6.3 Application of Proceeds. If an Event of Default shall have
occurred and be continuing, Proceeds held in any collateral account in payment
of the Obligations will, to the extent required by the Indenture, be applied
by the Trustee in such order as provided under Article 6 of the Indenture (the
amounts so applied to be distributed among the Noteholders pro rata in
accordance with the amounts of the Obligations owed to them), and any part of
such funds not so distributed and deemed not required as collateral security
for the Obligations shall be paid over from time to time by the Trustee to a
Grantor or to whomsoever may be lawfully entitled to receive the same. Any
balance of such Proceeds remaining after the Obligations shall have been paid
in full and shall be paid over to a Grantor or to whomsoever may be lawfully
entitled to receive the same.
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6.4 Code Remedies. If an Event of Default shall occur and be
continuing, the Trustee, on behalf of the Noteholders may exercise, in
addition to all other rights and remedies granted to them in the Indenture,
this Agreement and in any other instrument or agreement securing, evidencing
or relating to the Obligations, all rights and remedies of a secured party
under the Code. Without limiting the generality of the foregoing, the
Trustee, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Grantor or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived to the
extent permitted by law), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give an option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Trustee or any Noteholder or elsewhere upon such terms and conditions as
it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk provided
that any such disposition complies with all mandatory legal requirements. The
Trustee or any Noteholder 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 the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or equity is
hereby waived or released to the extent permitted by law. Each Grantor
further agrees, at the Trustee's request, to assemble the Collateral and make
it available to the Trustee at places which the Trustee shall reasonably
select, whether at such Grantor's premises or elsewhere. The Trustee shall
apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein 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 Trustee and the Noteholders hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as is provided in the
Indenture, shall direct, and only after such application and after the payment
by the Trustee of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
Trustee account for the surplus, if any, to such Grantor. To the extent
permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the agent or any Noteholder arising out of the
exercise by them of any rights hereunder other than arising out of their gross
negligence or willful misconduct. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or
other disposition in accordance with Section 13.02 of the Indenture.
6.5 Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Obligations and the fees and disbursements of any
attorneys employed by the Trustee or any Noteholder to collect such
deficiency.
7. Trustee's Appointment as Attorney-in-Fact; Trustee's
Performance of Grantor's Obligations.
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7.1 Powers. At any time when any Event of Default shall have
occurred and be continuing, each Grantor hereby irrevocably constitutes and
appoints the Trustee and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact 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, from time to time in the Trustee's
discretion, for the purpose of carrying out the terms of this 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 Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Trustee the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do the following:
(1) in the name of such Grantor or its own name, or
otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Account, Instrument or General Intangible or with
respect to any other Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Trustee for the purpose of collecting any
and all such moneys due under any Account, Instrument or General
Intangible or with respect to any other Collateral whenever payable;
(2) to pay or discharge taxes and Liens levied or placed
on or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Agreement and to pay all or
any part of the premiums therefor and the costs thereof;
(3) to execute, in connection with the sale provided for
in subsection 6.4 hereof, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;
and
20
(4) (1) to direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Trustee or as the Trustee shall
direct; (2) to ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral;
(3) to sign and endorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection
with any of the Collateral; (4) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any Proceeds thereof and to
enforce any other right in respect of any Collateral; (5) to defend
any suit, action or proceeding brought against any Grantor with
respect to any Collateral; (6) to settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, to give
such discharges or releases as the Trustee may deem appropriate; and
(7) generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Trustee were the absolute owner thereof for
all purposes, and to do, at the Trustee's option and each Grantor's
expense, at any time, or from time to time, all acts and things that
the Trustee deems necessary to protect, preserve or realize upon the
Collateral and the Trustee's and the Noteholders' security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as each Grantor might do.
7.2 Ratification; Power Coupled With An Interest. Each Grantor
hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until the
Obligations are paid and performed in full and terminated.
8. Duty of Trustee. The Trustee's sole duty with respect to
the custody, safekeeping and physical presentation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal
with it in the same manner and with the same care as the Trustee deals with
similar property for its own account. Neither the Trustee, any Noteholder nor
any of their respective directors, officers, employees or agents shall be
liable for failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so, except where such failure or delay
results from their gross negligence or willful misconduct, or shall be under
any obligation to sell or otherwise dispose of any Collateral upon the request
of each Grantor or any other Person or to take any other action whatsoever
with regard to the Collateral or any part thereof. The powers conferred on
the Trustee and the Noteholders hereunder are solely to protect the Trustee's
and the Noteholders' interests in the Collateral and shall not impose any duty
upon the Trustee or any Noteholder to exercise any such powers. The Trustee
and the Noteholders shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any
of their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
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9. Execution of Financing Statements, Etc. Pursuant to the
Code, each Grantor shall file financing statements with respect to the
Collateral in such form and in such filing offices appropriate to perfect the
security interests of the Trustee under this Agreement and shall execute,
deliver and perform such other documents and acts as are necessary to perfect
the security interests of the Trustee under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
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10. Authority of Trustee. Each Grantor acknowledges that the
rights and responsibilities of the Trustee under this Agreement with respect
to any action taken by the Trustee or the exercise or non-exercise by the
Trustee of any option, voting right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Agreement
shall, as between the Trustee and the Noteholders, be governed by the
Indenture, but, as between the Trustee and such Grantor, the Trustee shall be
conclusively presumed to be acting as agent for the Noteholders with full and
valid authority so to act or refrain from acting, and such Grantor shall not
be under any obligation, or entitlement, to make any inquiry respecting such
authority.
11. Notices. All notices, requests and demands to or upon the
Trustee or any Grantor to be effective shall be in writing (or by telex, fax
or similar electronic transfer confirmed in writing) and shall be deemed to
have been duly given or made (1) when delivered by hand or (2) if given by
mail, three days after deposited in the mails by certified mail, return
receipt requested, postage prepaid or (3) if by telex, fax or similar
electronic transfer, when sent and receipt has been confirmed, addressed as
follows:
(1) if to the Trustee, at its address or transmission
number for notices provided in Section 13.02 of the Indenture; and
(2) if to a Grantor, at the address or transmission
number for notices to the Company as provided in Section 13.02 of the
Indenture.
The Trustee and each Grantor may change their addresses and
transmission numbers for notices by notice in the manner provided in this
Section.
12. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
13. Amendments in Writing; No Waiver; Cumulative Remedies.
13.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by each Grantor and the Trustee,
provided that any provision of this Agreement may be waived by the Trustee and
the Noteholders in a letter or agreement executed by the Trustee or by telex
or facsimile transmission from the Trustee.
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13.2 No Waiver by Course of Conduct. Neither the Trustee nor
any Noteholder shall by any act (except by a written instrument pursuant to
subsection 14(a) hereof), delay, indulgence, omission or otherwise be deemed
to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on
the part of the Trustee or any Noteholder, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Trustee or any Noteholder of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Trustee or such Noteholder would otherwise have on any future occasion.
13.3 Remedies Cumulative. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
14. Section Headings. The section and subsection headings used
in this Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
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15. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Trustee and the Noteholders and their successors and assigns.
16. Submission To Jurisdiction; Waivers.
(1) Each Grantor hereby irrevocably and unconditionally:
(1) submits for itself and its property in any
legal action or proceeding relating to this Agreement and the
other Collateral 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;
(2) 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;
(3) 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 each Grantor at its address
set forth in Section 13.02 of the Indenture or at such other
address of which the Trustee shall have been notified pursuant
thereto;
(4) 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
(2) Each of the Grantor, the Trustee and the Noteholders
hereby unconditionally and irrevocably waive, to the maximum extent
not prohibited by law, any right they may have to claim or recover to
any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.
17. Acknowledgments. Each Grantor hereby acknowledges that:
(1) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Collateral
Documents to which it is a party;
(2) neither the Trustee nor any Noteholder has any
fiduciary relationship with or duty to it or any other RBX Party
arising out of or in connection with this Agreement or any of the
other Collateral Documents, and the relationship between the Trustee
and Noteholders, on one hand, and the Company and the Subsidiary
Guarantors, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
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(3) no joint venture is created hereby or by the other
Collateral Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Noteholders or among the Company and the
Subsidiary Guarantors, and the Noteholders.
18. WAIVER OF JURY TRIAL. EACH GRANTOR IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER COLLATERAL DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS THEREOF.
20. Release of Collateral and Termination. (a) Upon the payment
in full or Legal Defeasance of all principal of, interest on, premium, if any,
and Liquidated Damages, if any, with respect to the Notes and any other
Obligations for the payment of money then due and owing to any Noteholder or
the Trustee under the Indenture and the Collateral Documents, the Collateral
shall be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Trustee 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 each Grantor. Upon request of any Grantor
following any such termination, the Trustee shall deliver (at the sole cost
and expense of such Grantor) to such Grantor any Collateral held by the
Trustee hereunder, and execute and deliver (at the sole cost and expense of
such Grantor) to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the
Indenture, then the Trustee shall execute and deliver to such Grantor (at the
sole cost and expense of such Grantor) all releases, termination statements or
other documents reasonably necessary for the release of the Liens created
hereby on such Collateral.
21. Contradictory Provisions. In the event anyone or more of
the provisions of this Agreement shall be found in a final judgment of any New
York State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, to contradict or
otherwise limit any provision in the Indenture, the provision in the Indenture
shall control.
22. Intercreditor Agreement. The Trustee acknowledges that the
security interests granted pursuant to this Agreement to the extent that they
relate to New Credit Agreement Collateral are subject to the provisions of the
Intercreditor Agreement. Notwithstanding anything to the contrary contained
herein, the rights, duties and obligations of the Trustee are subject to the
Intercreditor Agreement.
26
IN WITNESS WHEREOF, the undersigned have caused this Security
Agreement to be duly executed and delivered as of the date first above
written.
XXXXXXXX MANUFACTURING COMPANY, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
XXXXXX-XXXXX RUBBER CUSTOM MIXING CORP.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
MIDWEST RUBBER CUSTOM MIXING CORP.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
OLETEX INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
RUBATEX CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
UNIVERSAL POLYMER & RUBBER INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
UNIVERSAL RUBBER COMPANY
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
WALTEX CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
STATE OF )
:ss.:
COUNTY OF )
On the 9th day of December, 1997, before me personally came
_____________, to me personally known and known to me to be the person
described in and who executed the foregoing instrument as ________________ of
the Grantors who, being by me duly sworn, did depose and say that he resides
at ; that he is of each of
the Grantors, the corporations described in and which executed the foregoing
instrument; that he knows the seals of said corporation; that the seals
affixed to said instrument are such corporate seals; that said instrument was
signed and sealed on behalf of said corporations by order of its Board of
Directors; that he signed his name thereto by like order; and that he
acknowledged said instrument to be the free act and deed of said corporations.
--------------------------------------------
Name:
[NOTARIAL SEAL]
FILINGS REQUIRED TO
PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
-------------------------------
Xxxxxxxx Manufacturing Company Inc.
-----------------------------------
Delaware Secretary of State
Virginia Secretary of State
Boutetourt County
Roanoke County
Bedford County
Georgia Dekalb County
California Secretary of State
Los Angeles County
Washington Secretary of State
King County
Missouri Secretary of State
St. Louis County
St. Louis City
Texas Secretary of State
Xxxxxx County
Xxxxxx-Xxxxx Rubber Custom Mixing Corp.
---------------------------------------
Delaware Secretary of State
Virginia Secretary of State
Roanoke County
Bedford County
Xxxxxxx Xxxxxxxx County
Midwest Rubber Custom Mixing Corp.
----------------------------------
Delaware Secretary of State
Virginia Secretary of State
Roanoke County
Bedford County
Ohio Secretary of State
Summit County
Geauga County
OleTex Inc.
-----------
Delaware Secretary of State
Virginia Secretary of State
Roanoke County
Bedford County
Illinois Secretary of State
Xxxx County
Rubatex Corporation
-------------------
Delaware Secretary of State
Virginia Secretary of State
Roanoke County
Bedford County
California Secretary of State
Los Angeles County
Washington Secretary of State
King County
Missouri Secretary of State
St. Louis County
St. Louis City
Texas Secretary of State
Xxxxxx County
Georgia DeKalb County
Arkansas Secretary of State
St. Xxxxxxx County
North Carolina Secretary of State
Catawba County
Colorado Secretary of State
Denver County
Universal Polymer & Rubber Inc.
-------------------------------
Delaware Secretary of State
Virginia Secretary of State
Roanoke County
Bedford County
Ohio Secretary of State
Geauga County
Summit County
Universal Rubber Company
------------------------
Delaware Secretary of State
Virginia Secretary of State
Roanoke County
Bedford County
Xxxxxxx Xxxxxx County
Waltex Corporation
------------------
Delaware Secretary of State
Virginia Secretary of State
Roanoke County
Bedford County
LOCATION OF INVENTORY AND EQUIPMENT
Xxxxxxxx Manufacturing Company, Inc.
------------------------------------
0000 Xxxx Xxxxxx, X.X. Xxx 000
Xxxxxxxx, XX 00000
Xxxxxx-Xxxxx Rubber Custom Mixing Corp.
---------------------------------------
Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Midwest Rubber Custom Mixing Corp.
----------------------------------
000 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000
OleTex Inc.
-----------
00000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
000 Xxxx 000xx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Rubatex Corporation
-------------------
000X Xxxxxxxxx
Xxxxxxx, XX 00000-0000
0000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
000 XX 00xx Xxxxxx
Xxxxxxx, XX 00000
0000 Xxxxx 000xx
Xxxx, XX 00000-0000
353 and 0000 Xxxxx Xxxxxx
Xx. Xxxxx, XX 00000-0000
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Schedule 1
to Subsidiaries' Security Agreement
Xxxxxxx 0, Xxxxx
X.X. Xxx 000
Colt, AR 72326
00000 Xxxxx Xxx.
Xxxxx Xx Xxxxxxx, XX 00000
0000 XxxxxxXxxx Xxxxx
Xxxxxxx, XX 00000
0000 Xxxxxxx Xx.
Xxxx 00
Xxxxxx, XX 00000-0000
Capri Industrial Park
000 Xxxxx XxXxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Universal Polymer and Rubber Inc.
---------------------------------
00000 X. Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Schedule 1
to Subsidiaries' Security Agreement
COPYRIGHTS AND COPYRIGHT LICENSES
None
Schedule 2
to Subsidiaries' Security Agreement
PATENTS AND PATENT LICENSES
DOMESTIC PATENTS
----------------
U.S.
PATENT NO. PATENT OWNER
---------- ------ -----
4,976,902 Molding Method Rubatex Corporation
4,479,269 Athletic Padding Rubatex Corporation
4,602,792 Dual Function Gasket Universal Polymer & Rubber Inc.
4,602,793 Gasket with Locking Ring Universal Polymer & Rubber Inc.
D,300,404 Telescopically Extendible Rubatex Corporation
Hole Cutter
FOREIGN PATENTS
---------------
None
Schedule 3
to Subsidiaries' Security Agreement
TRADEMARKS AND TRADEMARK LICENSES
TRADEMARKS
TRADEMARK REGISTRATION
NUMBER OR (APPLICATION REGISTRATION OR
TRADEMARKS SERIAL NUMBER) (FILING DATE) COUNTRY
---------- ---------------------- --------------- -------
372 672358 13-Jan-1959 USA
BONDTEX 220506 12-Jul-1974 Canada
BONDTEX 986673 25-Jun-1974 USA
BONDTEX and design 1460057 06-Oct-1987 USA
CLIMATUBE 258927 15-May-1981 Canada
CLIMATUBE 1160006 07-Jul-1981 USA
COMFORTEX 483064 26-Sep-1997 Canada
COMFORTEX 512117 00-Xxx-0000 Xxxxxx
COMFORTEX 2052034 15-Apr-1997 USA
CON-SERV 1414230 21-Oct-1986 USA
DYK BRAND AND DESIGN 187763 12-Jan-1973 Canada
ENSOLEX 674363 24-Feb-1959 USA
ENSOLITE 186026 19-Feb-1964 Australia
ENSOLITE 63837 17-Jun-1981 Greece
ENSOLITE 3209812 No date shown Japan
ENSOLITE 569399 20-Jan-1953 USA
ENSOLITE UCA/45948 17-Feb-1953 Canada
GARDENER'S GRIP 1630035 01-Jan-1991 USA
XXXXXXXX 74/728864 14-Sep-1995 USA
XXXXXXXX LITE 75/318796 02-Jul-1997 USA
XXXXXXXX MANUFACTURING CO.
AND DESIGN 479242 30-Jul-1997 Canada
XXXXXXXX MANUFACTURING CO.
AND DESIGN 534333 00-Xxx-0000 Xxxxxx
XXXXXXXX MANUFACTURING CO. 796049 30-Oct-1995 Canada
XXXXXXXX MANUFACTURING CO. 521960 00-Xxx-0000 Xxxxxx
Schedule 4
to Subsidiaries' Security Agreement
XXXXXXXX MANUFACTURING CO.
AND DESIGN 2033090 21-Jan-1997 USA
XXXXXX-XXXXX 2107412 21-Oct-1997 USA
INSUL-LOCK 1639099 26-Mar-1991 USA
INSUL-SHEET 382016 22-Mar-1991 Canada
INSUL-SHEET 374189 00-Xxx-0000 Xxxxxx
INSUL-SHEET 1549154 25-Jul-1989 USA
INSUL-TAPE 1555760 12-Sep-1989 USA
INSUL-TUBE A269137 15-Sep-1975 Australia
INSUL-TUBE 193680 31-Aug-1973 Canada
INSUL-TUBE 519772 00-Xxx-0000 Xxxxxx
INSUL-TUBE 539679 01-Jan-1997 Mexico
INSUL-TUBE 945587 24-Oct-1972 USA
INSUL-TUBE 141384 00-Xxx-0000 Xxxxxx
M MIDWEST RUBBER CUSTOM
MIXING CORPORATION 75/210387 09-Dec-1996 USA
MIDWEST RUBBER CUSTOM
MIXING CORPORATION 75/211542 None indicated USA
NP77 1440612 26-May-1987 USA
OLETEX 2042253 04-Mar-1997 USA
OLETEX TMA 472199 06-Mar-1997 Canada
OLETEX 506039 00-Xxx-0000 Xxxxxx
OLETEX 506038 00-Xxx-0000 Xxxxxx
OLETEX CROSS LINKED
OLEFIN FOAMS 2051192 08-Apr-1997 USA
OLETEX CROSS LINKED
OLEFIN FOAMS TMA473128 20-Mar-1997 Canada
OLETEX CROSS-LINKED
OLEFIN FOAMS 225734 00-Xxx-0000 Xxxxxx
OLETEX CROSS-LINKED
OLEFIN FOAMS 509238 00-Xxx-0000 Xxxxxx
R AND DESIGN 1457078 15-Sep-1987 USA
R RUBATEX AND DESIGN 2052860 15-Apr-1997 USA
Schedule 4
to Subsidiaries' Security Agreement
RUBATEX 200254 05-Jul-1974 Canada
RUBATEX 1097981 20-Oct-1986 Fed.
Republic
of
Germany
RUBATEX 1282513 23-Aug-1984 France
RUBATEX 89035/1984 09-Aug-1984 Japan
RUBATEX 176370 00-Xxx-0000 Xxxxxx
RUBATEX 176302 00-Xxx-0000 Xxxxxx
RUBATEX 170455 00-Xxx-0000 Xxxxxx
RUBATEX 170370 00-Xxx-0000 Xxxxxx
RUBATEX 84-5631 01-Aug-1984 Sweden
RUBATEX B1223917 01-Aug-1984 United
Kingdom
RUBATEX 972640 13-Nov-1973 USA
RUBATEX (Stylized) 722959 24-Oct-1961 USA
RUBATEX 726980 17-Feb-1954 United
Kingdom
SEATEX 827479 31-Oct-1996 Canada
SEATEX 516003 30-Jan-1996 Mexico
SEATEX 2028635 07-Jan-1997 USA
SOF'N BACKEEZY 1693210 09-Jun-1992 USA
SOF'N BACKEEZY 1692987 09-Jun-1992 USA
SOF'N BACKEEZY 1627155 11-Dec-1990 USA
TEX RUBATEX PIONEER
MANUFACTURER OF CLOSED
CELL RUBBER AND DESIGN 972641 13-Nov-1973 USA
TEX-SKIN 75/198734 15-Nov-1996 USA
THERMA-CEL 838468 05-Mar-1997 Canada
THERMA-CEL 545687 00-Xxx-0000 Xxxxxx
THERMA-CEL 1284312 03-Jul-1984 USA
UP&R 75/197437 13-Nov-1996 USA
Schedule 4
to Subsidiaries' Security Agreement
GRANTORS
--------
Xxxxxxxx Manufacturing Company, Inc.
Xxxxxx-Xxxxx Rubber Custom Mixing Corp.
Midwest Rubber Custom Mixing Corp.
OleTex Inc.
Rubatex Corporation
Universal Polymer & Rubber Inc.
Universal Rubber Company
Waltex Corporation
Schedule 5
to Subsidiaries' Security Agreement
