SECURITY AGREEMENT dated as of September 30, 1997, among
HUNTSMAN PACKAGING CORPORATION, a Utah corporation (the "Borrower"),
each subsidiary of the Borrower listed on Schedule I hereto (each such
subsidiary individually a "Guarantor" and collectively, the
"Guarantors"; the Guarantors and the Borrower are referred to
collectively herein as the "Grantors") and THE CHASE MANHATTAN BANK, a
New York banking corporation ("Chase"), as collateral agent (in such
capacity, the "Collateral Agent") for the Secured Parties (as defined
herein).
Reference is made to (a) the Credit Agreement dated as of September
30, 1997 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders") and Chase, as administrative agent (in such capacity,
the "Administrative Agent") for the Lenders, and (b) the Guarantee Agreement
dated as of September 30, 1997 (as amended, supplemented or otherwise modified
from time to time, the "Guarantee Agreement"), between the Guarantors and the
Administrative Agent.
The Lenders have agreed to make Loans to the Borrower, and the Issuing
Bank has agreed to issue Letters of Credit for the account of the Borrower in
an amount up to $250,000,000, pursuant to, and upon the terms and subject to
the conditions specified in, the Credit Agreement. The Guarantors have agreed
to guarantee, among other things, all the obligations of the Borrower under the
Credit Agreement. The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit under the Credit Agreement are
conditioned upon, among other things, the execution and delivery by the
Grantors of an agreement in the form hereof to secure (a) the due and punctual
payment by the Borrower of (i) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at matu-
rity, by acceleration, upon one or more dates set for prepayment or otherwise,
(ii) each payment required to be made by the Borrower under the Credit
Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Loan Parties to the Secured Parties under
the Credit Agreement and the other Loan Documents, (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Loan Parties under or pursuant to the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all obligations
of the Borrower monetary or otherwise, under each Hedging Agreement entered
into with any counterparty that was a Lender (or an Affiliate thereof) at the
time such Hedging Agreement was entered into and (d) the due and punctual
payment of all monetary obligations of the Borrower (but not in excess of
$5,000,000 in the aggregate) under any domestic overdraft facilities entered
into by the Borrower including, but not limited to, the Line of Credit
Agreement and Automatic Borrowing Service Agreement entered into with Mellon
Bank, N.A. (all the monetary and other obligations described in the preceding
clauses (a) through (d) being collectively called the "Obligations").
2
Accordingly, the Grantors and the Collateral Agent, on behalf of
itself and each Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definition of Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall
have the meanings set forth in the Credit Agreement.
Section 1.2. Definition of Certain Terms Used Herein. As used herein,
the following terms shall have the following meanings.
"Account Debtor" shall mean any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.
"Accounts" shall mean any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including any such
right evidenced by chattel paper, whether due or to become due, whether or not
it has been earned by performance, and whether now or hereafter acquired or
arising in the future, including accounts receivable from Affiliates of the
Grantors.
"Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities
and guarantees with respect thereto, including any rights to stoppage in
transit, replevin, reclamation and resales, and all related security interests,
liens and pledges, whether voluntary or involuntary, in each case whether now
existing or owned or hereafter arising or acquired.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents,
(c) Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash
accounts and (g) Proceeds; provided, however, that Collateral shall not include
property or assets which are subject to a purchase money security interest or
other similar interest, including but no limited to a Capital Lease
3
Obligation, the terms of which prohibit the granting of a security interest to
any other creditor.
"Copyright License" shall mean any written agreement, now or hereafter
in effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States, whether as author, assignee, transferee or
otherwise, and (b) all registrations and applications for registration of any
such copyright in the United States, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, including those listed on Schedule II.
"Credit Agreement" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Documents" shall mean all instruments, files, records, ledger sheets
and documents covering or relating to any of the Collateral.
"Equipment" shall mean all equipment, furniture and furnishings,
including tools, parts and supplies of every kind and description, and all
improvements. accessions or appurtenances thereto, that are now or hereafter
owned by any Grantor.
"General Intangibles" shall mean all choses in action and causes of
action and all other assignable intangible personal property of any Grantor of
every kind and nature (other than Accounts Receivable) now owned or hereafter
acquired by any Grantor, including corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, Hedging Agreements and other agreements but
excluding contract rights in contracts which prohibit assignment or the
granting of
4
a security interest), Intellectual Property, goodwill, registrations,
franchises, tax refund claims and any letter of credit, guarantee, claim,
security interest or other security held by or granted to any Grantor to secure
payment by an Account Debtor of any of the Accounts Receivable.
"Intellectual Property" shall mean all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights,
Licenses, Trademarks, trade secrets, confidential or proprietary technical and
business information, know-how, show-how or other data or information, software
and databases and all embodiments or fixations thereof and related
documentation and registrations, and all additions, improvements and accessions
to, and books and records describing or used in connection with, nay of the
foregoing.
"Inventory" shall mean all goods of any Grantor, whether now owned or
hereafter required, held for sale or lease, or furnished or to be furnished by
any Grantor under contracts of service, or consumed in any Grantor's business,
including raw materials, intermediates, work in process, packaging materials,
finished goods, semi-finished inventory, scrap inventory, manufacturing
supplies and spare parts, and all such goods that have been returned to or
repossessed by or on behalf of any Grantor.
"License" shall mean any Patent License, Trademark License, Copyright
License or other franchise agreement, license or sublicense to which any
Grantor is a party, including those listed on Schedule III (other than those
agreements in existence on the date hereof and listed on Schedule III and those
agreements entered into after the date hereof, which by their terms prohibit
assignment or a grant of a security interest by such Grantor as licensee
thereunder).
"Obligations" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Patent License" shall mean any written agreement, now or hereafter
in effect, granting to any third
5
party any right to make, use or sell any invention on which a Patent, now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, is in existence, or granting to any Grantor any right to make, use or
sell any invention on which a Patent, now or hereafter owned by any third
party, is in existence, and all rights of any Grantor under any such agreement.
"Patents" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States, all
registrations and recordings thereof, and all applications for letters patent
of the United States, including registrations, recordings and pending
applications in the United States Patent and Trademark Office, including those
listed on Schedule IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate substantially in the
form of Annex 1 hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by a Financial Officer and
the chief legal officer of the Borrower.
"Proceeds" shall mean any consideration received from the sale,
exchange, license, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the possession
of any Collateral and any payment received from any insurer or other person or
entity as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which constitutes
Collateral, and shall include, (a) any claim of any Grantor against any third
party for (and the right to xxx and recover for and the rights to damages or
profits due or accrued arising out of or in connection with) (i) past, present
or future infringement of any Patent now or hereafter owned by any Grantor, or
licensed under a Patent License, (ii) past, present or future infringement or
dilution of any Trademark how or hereafter owned by any Grantor or licensed
under a Trademark License or injury to the goodwill associated with or
symbolized by any Trademark now or hereafter owned by any Grantor, (iii) past,
present or future breach of any
6
License and (iv) past, present or future infringement of any Copyright now or
hereafter owned by any Grantor or licensed under a Copyright License and(b) any
and all other amounts from time to time paid or payable under or in connection
with any of the Collateral.
"Secured Parties" shall mean (a) the Lenders, (b) the Administrative
Agents, (c) the Collateral Agent, (d) the Issuing Bank, (e) each counterparty
to an Hedging Agreement entered into with the Borrower if such counterparty was
a Lender (or an Affiliate of a Lender) at the time the Hedging Agreement was
entered into, (f) the beneficiaries of each indemnification obligation
undertaken by any Grantor under any Loan Document, (g) any lender under any
domestic overdraft facility entered into by the Borrower (but only tot he
extent the aggregate amount outstanding under all such facilities does not
exceed $5,000,000) including, but not limited to, Mellon Bank, N.A., pursuant
tot he Line of Credit Agreement and Automatic Borrowing Service Agreement
entered into with the Borrower, and (h) the permitted successors and assigns of
each of the foregoing.
"Security Interest" shall have the meaning assigned to such term in
Section 2.1.
"Trademark License" shall mean nay written agreement, now or hereafter
in effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under such
agreement.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, trade dress, logos, other source or business identifiers, designs
and general intangibles or like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office,
any State of the United States, and all exten-
7
sions or renewals thereof, including those listed on Schedule V, (b) all
goodwill associated therewith or symbolized thereby and (c) all other assets,
rights, and interests that uniquely reflect or embody such goodwill.
SECTION 1.3. Rules of Interpretation. The rules of interpretation
specified in Section 1.3 of the Credit Agreement shall be applicable to this
Agreement.
ARTICLE II
Security Interest
Section 2.1. Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor
hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges,
hypothecates and transfers to the Collateral Agent, it successors and assigns,
for the ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in, all of such Grantor's right, title and
interest in, to and under the Collateral (the "Security Interest"). without
limited the foregoing,t he Collateral Agent is hereby authorized to file one or
more financing statements, continuation is hereby authorized to file one or
more financing statement, continuation statements, filings with the United
States Patent and Trademark Office or United States Copyright Office (or any
successor office or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantor (but, prior to the occurrence of
any Event of Default or Default, the Collateral Agent shall provide notice of
such filing to such Grantor), and naming any Grantor or the Grantors as debtors
and the Collateral Agent as secured party.
SECTION 2.2. No Assumption of Liability. The Security Interest is
granted as security only and shall not subject the Collateral Agent or any
other Secured Party to, or in any way alter or modify, and obligation or
liability of any Grantor with respect to or arising out of the Collateral.
8
ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:
SECTION 3.1. Title and Authority. Each Grantor has good and valid
rights in and title to the Collateral with respect to which it has purported to
grant a Security Interest hereunder and has full power and authority to grant
to the Collateral Agent the Security Interest in such Collateral pursuant
hereto and to execute, deliver and perform its obligations in accordance with
the terms of this Agreement, without the consent or approval of any other
Person other than any consent or approval which has been obtained.
SECTION 3.2. Filings. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code therein is correct
and complete. Fully executed Uniform Commercial Code financing statements, as
applicable, or other appropriate filings, recordings or registrations
containing a description of the Collateral have been delivered to the
Collateral Agent for filing in each governmental, municipal or other office
specified in Schedule 6 to the Perfection Certificate, which are all the
filings, recordings and registrations (other than filings, recordings and
registrations required to be made in the United States Patent and Trademark
Office and the United States Copyright Office in order to perfect the Security
Interest in Collateral consisting of United States Patents, United States
Trademarks and United States Copyrights) that are necessary to publish notice
of and protect the validity of and to establish a legal, valid and perfected
security interest in favor of the Collateral Agent (for the ratable benefit of
the Secured Parties) in respect of all Collateral in which the Security
Interest may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof), and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under appli-
9
cable law with respect to the filing of continuation statements and such
filings, recordings and registrations as may be necessary to perfect the
Security Interest as a result of any event described in Section 5.3 of the
Credit Agreement.
(b) Each Grantor ensures that fully executed security agreements in
the form hereof and containing a description of all Collateral consisting of
Intellectual Property shall have been received and recorded within three months
after the execution of this Agreement with respect to United States Patents and
United States registered Trademarks (and Trademarks for which United States
registration applications are pending) and within one month after the execution
of this Agreement with respect to United States registered Copyrights by the
United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section 1060 or 17 U.S.C.
Section 205 and the regulations thereunder, as applicable, to protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Collateral Agent (for the ratable benefit of the Secured Parties)
in respect of all Collateral consisting of Patents, Trademarks and Copyrights
in which a security interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and no
further or subsequent filing,refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to
perfect the Security Interest with respect to any Collateral consisting of
Patents, Trademarks, and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).
SECTION 3.3. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to the
filings described in Section 3.2 above, a perfected security interest in all
Collateral in which a security interest may be perfected by filing, recording
or registering a financing statement or analogous document in the United States
(or any political subdivision thereof) pursuant tot he Uniform Commercial Code
or other applicable law in such jurisdictions and (c) a security
10
interest that shall be perfected in all Collateral in which a security interest
may be perfected in the United States Patent and Trademark Office and the
United States Copyright Office upon the receipt and recording of this Agreement
with the United States Patent and Trademark Office and the United States
Copyright Office, as applicable, within the three month period (commencing as
of the date hereof) pursuant to 35 U.S.C. Section 261 or 15 U.S.C. Section 1060
or the one-month period (commencing as of the date hereof) pursuant to 17 U.S.C
Section 205 and otherwise as may be required pursuant to the laws of any other
necessary jurisdiction. The Security Interest is and shall be prior to any
other Lien on any of the Collateral, other than Liens expressly permitted to be
prior to the Security Interest pursuant to Section 6.3 of the Credit Agreement.
SECTION 3.4. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.3 of the Credit Agreement. No Grantor has filed or
consented to the filing of (a) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Collateral, (b) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Collateral in the
United States Patent and Trademark Office or the United States Copyright Office
or (c) any assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document is still in effect, except, in each case, for Liens
expressly permitted pursuant to Section 6.3 of the Credit Agreement.
ARTICLE IV
Covenants
SECTION 4.1. Records. Each Grantor agrees to maintain, at its own
costs and expense, such complete and accurate records with respect to the
Collateral owned by it as is consistent with its current practices and in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged, but in any
event to in-
11
clude complete accounting records indicating all payments and proceeds received
with respect to an y part of the Collateral, and, at such time or times as the
Collateral Agent may reasonably request, promptly to prepare and deliver to the
Collateral Agent a duly certified schedule or schedules in form and detail
reasonably satisfactory to the Collateral Agent showing the identity, amount
and location of any and all Collateral.
SECTION 4.2. Protection of Security. Each Grantor shall, at its own
costs and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien
not expressly permitted pursuant to Section 6.3 of the Credit Agreement.
SECTION 4.3. Further Assurances. Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the Collateral
Agent may from time to time reasonably request to better assured, preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements or other documents in
connection herewith or therewith. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note
or other instrument, such note or instrument shall be immediately pledged and
delivered to the Collateral Agent, duly endorsed in a manner satisfactory to
the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agents, with prompt notice thereof tot he Grantors,
to supplement this Agreement by supplementing Schedules II, III, IV or V hereto
or adding additional schedules hereto to specifically identify any asset or
item that may constitute Copyrights, Patents or Trademarks; provided, however,
that any Grantor shall have the right, exercisable within thirty (30) days
after it has been notified by the Collateral Agent of the specific
identification of such Collateral, to advise the Collateral Agent in writ-
12
ing of any inaccuracy of the representations and warranties made by such
Grantor hereunder with respect to such Collateral. Each Grantor agrees that it
will use its best efforts to take such action as shall be necessary in order
that all representations and warranties hereunder shall be true and correct
with respect to such Collateral within thirty (30) days after the date it has
been notified by the collateral Agent of the specific identification of such
Collateral.
SECTION 4.4. Inspection and Verification. Subject to the limitations
set forth in Section 5.09 of the Credit Agreement, the Collateral Agent and
such Persons as the collateral Agent may reasonably designate shall have the
right, at the Grantors' own costs and expense, to inspect the Collateral, all
records related thereto (and to make extracts and copies form such records) and
the premises upon which any of the Collateral is located, to discuss the
Grantor's affairs with the officers of the Grantors and their independent
accountants and to verify under reasonable procedures the validity, amount,
quality, quantity, value, condition and status of, or any other matter relating
to, the Collateral, including, in the case of Accounts or Collateral in the
possession of any third part, by contacting Account Debtors or the third person
possessing such Collateral for the purposes of making such a verification. The
Collateral Agent shall have the absolute right to share any information it
gains from such inspection or verification with any Secured Party (it being
understood that any such information shall be deemed to be "Information"
subject to the provisions of Section 9.12 of the Credit Agreement).
SECTION 4.5. Taxes; Encumbrances. At it option, the Collateral Agent
may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed ont he Collateral
and not permitted pursuant to Section 6.3 of the Credit Agreement, and may pay
for the maintenance and preservation of the Collateral to the extent any
Grantor fails to do so as required by the Credit Agreement or this Agreement,
and each Grantor jointly and severally agrees to reimburse the Collateral Agent
on demand for any payment made or any expense incurred by the Collateral Agent
pursuant to the foregoing authorization; provided, however, that nothing in
this Section 4.5 shall
13
be interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.
SECTION 4.6. Assignment of Security Interest. If at any time any
Grantor shall take a security interest in any property of an Account Debtor or
any other Person to secure payment and performance of an Account, such Grantor
shall promptly assign such security interest tot he Collateral Agent. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other Person granting the security interest.
SECTION 4.7. Continuing Obligations of the Grantors. Each Grantor
shall remain liable to observe and perform all the conditions and obligations
to be observed and performed by it under each contract, agreement or instrument
relating to the Collateral , all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.
SECTION 4.8. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except
as expressly permitted by Section 6.3 of the Credit Agreement. Unless and until
the Collateral Agent shall notify the Grantors that (i) an Event of Default
shall have occurred and be continuing and (ii) during the continuance thereof
the Grantors shall not sell, convey, lease, assign, transfer or otherwise
dispose of any Collateral in any lawful manner not inconsistent with the
provisions of this Agreement, the Credit Agreement or any other Loan Document.
Without limiting the generality of the foregoing, each Grantor agrees that it
shall not permit any Inventory to be in the possession or control of any
warehouseman, bailee, agent or processor at any time, other than Inventory that
is in transit by any
14
means, unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and each Grantor shall use its best efforts
to obtain a written agreement in form and substance reasonably satisfactory to
the Collateral Agent to hold the Inventory subject to the Security Interest and
the instructions of the Collateral Agent, and to waive and release any Lien
held by it with respect to such Inventory, whether arising by operation of law
or otherwise.
SECTION 4.9. Limitation on Modification of Accounts. None of the
Grantors will, without the Collateral Agent's prior written consent, grant any
extension of the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any Person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions,credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices and in accordance with such prudent
and standard practices used in industries that are the same as or similar to
those in which such Grantor is engaged.
SECTION 4.10. Insurance. The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage
to the Inventory and Equipment in accordance with Section 5.7 of the Credit
Agreement. Each Grantor irrevocable makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of any Event of
Default, of making, settling and adjusting claims in respect of Collateral
under policies of insurance, endorsing the name of such Grantor on any check,
draft, instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
In the event that any Grantor at any time or times shall fail to obtain or
maintain any of the policies of insurance required hereby or to pay any premium
in whole or part relating thereto, the Collateral Agent may, without waiving or
releasing any obligation or liability of the Grantors hereunder or any Event of
Default, in its sole discretion, obtain and maintain such policies of insur-
15
ance and pay such premium and take any other actions with respect thereto as
the Collateral Agent deems reasonably advisable. All sums disbursed by the
Collateral Agent in connection with this Section 4.10, including reasonable
attorneys' fees, court costs, expenses and other charges relating thereto,
shall be payable, upon demand, by the Grantors to the Collateral Agent and
shall be additional Obligations secured hereby.
SECTION 4.11. Legend. Each Grantor shall legend, in form and manner
reasonably satisfactory to the Collateral Agent, its Accounts Receivable and
its books, records and documents evidencing or pertaining thereto with an
appropriate reference tot he fact that such Accounts Receivable have been
assigned to the Collateral Agent for the benefit of the Secured Parties and
that the Collateral Agent has a security interest therein.
SECTION 4.12. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not, nor will it permit any of
its licensees to, do any act, or omit to do any act, whereby any Patent which
is material tot he conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees, to the extent practical le, that it shall
continue to xxxx any products covered by a Patent with the relevant patent
number as necessary and sufficient to establish and preserve its maximum rights
under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark, (iii) display such
Trademark with notice of Federal or foreign registration tot he extent
necessary and sufficient to establish and preserve its maximum rights under
applicable law and (iv) not knowingly use or knowingly permit the use of such
Trademark in violation of any third party rights.
(c) Each Grantor (either itself or through licensees) will, for each
work covered by a material Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice
16
as necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent promptly if it
knows that any Patent, Trademark or Copyright material to the conduct of its
business may become abandoned, lost or dedicated to the public, or of any
adverse determination or development (including the institution of, or any such
determination and development in, any proceeding in the United States Patent
and Trademark Office or United States Copyright Office) regarding such
Grantor's ownership of any Patent, Trademark or Copyright, its right to
register the same, or to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark
or Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or
any office or agency in any political subdivision of the United States, unless
it promptly informs the Collateral Agent, and, upon request of the Collateral
Agent, executes and delivers any and all agreements, instruments, documents and
papers as the Collateral Agent may request to evidence the Collateral Agent's
security interest in such Patent, Trademark or Copyright, and each Grantor
hereby appoints the Collateral Agent as its attorney-in-fact to execute and
file such writings for the foregoing purposes (and, prior to the occurrence of
any Event of Default or Default, such Grantor shall be notified of such
filing), all acts of such attorney being hereby ratified and confirmed; such
power, being coupled with an interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States, to maintain and pursue each
material application relating to the Patents, Trademarks and/or Copyrights (and
to obtain the relevant grant or registration) and to maintain each issued
Patent and each registration of the Trademarks and Copyrights that is material
to the conduct of any Grantor's business, including timely filings of applica-
17
tions for renewal, affidavits of use, affidavits of incontestability and
payment of maintenance fees, and, if consistent with good business judgment, to
initiate opposition, interference and cancellation proceedings against third
parties.
(g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly xxx for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use its best efforts to obtain all requisite consents or
approvals by the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all of such Grantor's right,
title and interest thereunder to the Collateral Agent or its designee.
ARTICLE V
Power of Attorney
Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent and attorney-in-fact,
and in such capacity the Collateral Agent shall have the right, with power of
substitution for each Grantor and in Grantor's name or otherwise, for the use
and benefit of the Collateral Agent and the Secured Parties, upon the
occurrence and during the continuance of an Event of Default (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part hereof; (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral; (c) to sign the
name of any Grantor on an invoice or xxxx of lading
18
relating to any of the Collateral; (d) to send verifications of Accounts
Receivable to any Account Debtor; (e) to commence and prosecute any and all
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the Collateral or
to enforce any rights in respect of any Collateral; (f) to settle, compromise,
compound, adjust or defend any actions, suits or proceedings relating to all or
any of the Collateral; (g) to notify, or to require any Grantor to notify,
Accounts Debtors to make payment directly to the Collateral Agent; and (h) to
use, sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and to do all other acts and
things necessary to carry out the purposes of this Agreement, as fully and
completely as though the Collateral Agent were the absolute owner of the
Collateral for all purposes; provided, however, that nothing herein contained
shall be construed as requiring or obligating the Collateral Agent or any
Secured Party to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Collateral Agent or any Secured
Party, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby, and no action taken or omitted to be taken by the Collateral Agent or
any Secured Party with respect to the Collateral or any part thereof shall give
rise to any defense, counterclaim or offset in favor or any Grantor or (unless
such action is the result of gross negligence or willful misconduct) to any
claim or action against the Collateral Agent or any Secured Party. It is
understood and agreed that the appointment of the Collateral Agent as the agent
and attorney-in-fact of the Grantors for the purposes set forth above is
coupled with an interest and is irrevocable. The provisions of this Section
shall in no event relieve any Grantor of any of its obligations hereunder or
under any other Loan Document with respect to the Collateral or any part
thereof or impose any obligation on the Collateral Agent or any Secured Party
to proceed in any particular manner with respect to the Collateral or any part
thereof, or in any way limit the exercise by the Collateral Agent or any
Secured Party of any other or further right which it may have on the date of
this Agreement or hereafter, whether hereunder, under any other Loan Document,
by law or otherwise.
19
ARTICLE VI
Remedies
SECTION 6.1. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property , on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any such Collateral throughout the world on such terms
and conditions and in such manner as the Collateral Agent shall determine
(other than in violation of any then-existing licensing or contractual
arrangements to the extent that waivers cannot be obtained), and (b) with or
without legal process and with or without prior notice or demand for
performance, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purposes of taking possession of or removing the Collateral and, generally, to
exercise any and all rights afforded to a secured party under the Uniform
Commercial Code or other applicable law. Without limiting the generality of the
foregoing, each Grantor agrees that the Collateral Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral, at public or private sale or at
any broker's board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate. The Collateral
Agent shall be authorized at any such sale (if it deems it advisable to do so)
to restrict the prospective bidders or purchasers to persons who will represent
and agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the
20
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give the Grantors ten (10) days' prior
written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-504(3) of the Uniform Commercial Code as in effect in the
State of New York or its equivalent in other jurisdictions) of the Collateral
Agent's intention to make any sale of Collateral. Such notice, in the case of a
public sale,s hall state the time and place for such sale and, in the case of a
sale at a broker's board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or portion thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix and
state in the notice (if any) of such sale. At any such sale, the Collateral, or
portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may (in its sole and absolute
discretion ) determine. The Collateral Agent sh all not be obligated to make
any sale of any Collateral if it shall determine not to do so, regardless of
the fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice,be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the collateral
so sold and, in case of any such failure, such Collateral may be sold again
upon like notice. At any public (or, to the extent permitted by law, private)
sale made pursuant to this Section, any Secured Party may bid for or purchase,
free (to the
21
extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to such Secured Party from any Grantor as a credit
against the purchase price and such Secured Party may, upon compliance with the
terms of sale, hold, retain and dispose of such property without further
accountability to any Grantor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of
the Collateral or any portion thereof subject thereto, notwithstanding the fact
that after the Collateral Agent shall have entered into such an agreement all
Events of Default shall have been remedied and the Obligations paid in full. As
the Collateral Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed received.
SECTION 6.2. Application of Proceeds. The Collateral Agent shall apply
the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent or the Collateral Agent (in its capacity as such
hereunder or under any other Loan Document) in connection with such
collection or sale or otherwise in connection with this Agreement or any of
the Obligations, including all court costs and the fees and expenses of its
agents and legal counsel, the repayment of all advances made by the
Collateral Agent hereunder or under any other Loan Document on behalf of
any Grantor and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Loan Document.
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed
22
among the Secured Parties pro rata in accordance with the amounts of the
Obligations owed to them on the date of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be
a sufficient discharge tot he purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer to be answerable in any way for the misapplication thereof.
SECTION 6.3. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to the extent that such license
does not violate any then existing licensing arrangements (to the extent that
waivers cannot be obtained) to use, license or sub-license any of the
Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may
be recorded or stored and to all computer software and programs used for the
compilation or printout thereof and sufficient rights of quality control in
favor of Grantor to avoid the invalidation of the Trademarks subject to the
license. The use of such license by the Collateral Agent shall be exercised, at
the option of that Collateral Agent, upon the occurrence and during the
continuation of an Event of Default; provided that any license, sub-license or
other transaction entered into by the Collateral Agent in accordance
23
herewith shall be binding upon the Grantors notwithstanding any subsequent cure
of an Event of Default.
ARTICLE VII
Miscellaneous
SECTION 7.1. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.1 of the Credit Agreement. All communications and notices
hereunder to any Guarantor shall be given to it at its address or telecopy
number set forth on Schedule I, with a copy to the Borrower.
SECTION 7.2. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement, any other Loan Document,
any agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) 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 any consent to any departure from the
Credit Agreement, any other Loan Document or any other agreement or instrument,
(c) any exchange, release or non-perfection of any Lien on other collateral,
or any release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.
SECTION 7.3. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be consider to have been relied upon by the
Secured Parties and shall survive the making by the Lenders of the Loans, and
the execution and delivery to the Lenders of any notes evidencing such Loans,
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in
24
full force and effect until this Agreement shall terminate.
SECTION 7.4. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their
respective successors and assigns, except that no Grantor shall have the right
to assign or transfer Collateral (and any such assignment or transfer shall be
void) except as expressly contemplated in this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or
released with respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor hereunder.
SECTION 7.5. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 7.6. Collateral Agent's Expenses; Indemnification. (a) Each
Grantor jointly and severally agrees to pay upon demand to the Collateral Agent
the amount of any and all reasonable expenses, including the reasonable fees,
disbursements and other charges of its counsel and of any experts or agents,
which the Collateral Agent may incur in connection with (i) the administration
of this Agreement, (ii) the custody or preservation of, or the sale of,
collection from or other realization upon any of the Collateral (iii) the
exercise, enforcement or protection of any of the rights of the Collateral
Agent hereunder or (iv)the failure of any Grantor to perform or observe any of
the provisions hereof.
25
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Grantor jointly and severally agrees to indemnify
the Collateral Agent and the other Indemnitees against, and hold each of them
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable fees, disbursements and other charges of
counsel, incurred by or asserted against any of them arising out of, in any way
connected with, or as a result of, the execution, delivery or performance of
this Agreement or any claims, litigation, investigation or proceeding relating
hereto or to the Collateral, whether or not any Indemnitee is a part thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
have resulted from the gross negligence or willful misconduct of such
Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.6 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Collateral Agent or any Lender. All amounts due under this Section 7.6
shall be payable on written demand therefor.
SECTION 7.7. GOVERNING LAW, THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.8. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent, the Issuing Bank, the Administrative Agent and the
Lenders under the other Loan Documents are cumulative and are
26
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provisions of this Agreement or any other Loan Document or
consent to any departure by any Grantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on any Grantor in any case
shall entitle such Grantor or any other Grantor to any other or further notice
or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Grantor or Grantors with respect
to which such waiver, amendment or modification is to apply, subject to any
consent required in accordance with Section 9.2 of the Credit Agreement.
SECTION 7.9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (CERTIFIED THAT NO OTHER REPRESENTATIVE, AGENT OR
ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED , EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 7.9.
SECTION 7.10. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable
27
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7.11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section 7.4),
and shall become effective as provided in Section 7.4. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof.
SECTION 7.12.Headings. Article and Section headings used herein are
for the purpose of reference only, are not part of hiis Agreement and are not
to affect the construction of, or to be take into consideration in
interpreting, this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction 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, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York Sate or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
the Collateral Agent, the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or the other Loan Documents against any Grantor or its properties in the courts
of any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
28
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State court or Federal court of the United States of America sitting
in New York City, Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.1. Nothing in this
Agreement will affect the right of any party to this Agreement to service
process in any other manner permitted by law.
SECTION 7.14. Termination. This Agreement and the Security Interest
shall terminate when all the Obligations have been indefeasibly paid in full,
the Lenders have no further commitment to lend, the LC Exposure has been
reduced to zero and the Issuing Bank has no further commitment to issue Letters
of Credit under the Credit Agreement, at which time the Collateral Agent shall
execute and deliver to the Grantors, at the Grantors' expense, all Uniform
Commercial Code termination statements and similar documents which the Grantors
shall reasonably request to evidence such termination. Any execution and
delivery of termination statements or documents pursuant to this Section 7.14
shall be without recourse to or warranty by the Collateral Agent. A Guarantor
shall automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Guarantor shall be automatically released in
the event that all the capital stock of such Guarantor shall be sold,
transferred or otherwise disposed of to a Person that is not an affiliate of
the borrower in accordance with the terms of the Credit Agreement; provided
that the Required Lenders shall have consented to such sale, transfer or other
disposition (to the extent required by the Credit Agreement) and the terms of
such consent did not provide otherwise.
SECTION 7.15. Additional Guarantors. Upon execution and delivery by
the Collateral Agent and a Subsidiary of an instrument in the form of Annex 2
hereto, such Subsidiary shall become a Grantor hereunder with the same force
and effect as if originally named as a
29
Grantor herein. The execution and delivery of any such instrument sh all not
require the consent of any Grantor hereunder. The rights and obligations of
each Grantor hereunder shall remain in full force and effect notwithstanding
the addition of any new Grantor as a part to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
HUNTSMAN PACKAGING CORPORATION,
By: _________________________
Name:
Title:
EACH OF THE GUARANTORS LISTED ON
SCHEDULE I HERETO:
By: __________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Collateral Agent,
By: ___________________________
Name:
Title: Authorized Officer
30
(Security Agreement)
SCHEDULE I
Guarantors
1. Huntsman Deerfield Films Corporation
2. Huntsman United Films Corporation
3. Huntsman Preparatory Inc.
4. Huntsman Container Corporation International
5. Huntsman Packaging Georgia, Inc.
6. Huntsman Film Products of Mexico, Inc.
7. Huntsman Bulk Packaging Corporation
31
(Security Agreement)
SCHEDULE II
Copyrights
None
32
(Security Agreement)
SCHEDULE III
Licenses
Huntsman Film Products Corporation/FMC Corporation, March 1, 1997
Huntsman Film Products Corporation/Saltech Inc., August 25, 1993
Huntsman Film Products Corporation/Saltech Inc., Amendment, July 15, 1994
Huntsman Film Products of Canada Ltd./984427 Ontario Limited, August 25, 1993
Huntsman Film Products of Canada Ltd./984427 Ontario Limited, Amendment, July
15, 1994
Huntsman Film Products Pty. Ltd./First Green Park Pty., Ltd. and Eighth Milieu
Nominees Pty. Ltd. (Integrated Packaging), Sub-License, October 7, 1994
Huntsman Film Products GMBH/G.+X. Xxxxxxx Kunststoffverarbeitung und
Verpackungen GMBH, Sub-License, January 31, 1995
Huntsman Film Products Corporation-USA/G.+X. Xxxxxxx Kunststoffverarbeitung und
Verpackungen GMBH, Sub-License, June 1, 1995
Huntsman Design Products Corporation/A. Xxxx Xxxxxxx, January 1, 1995
Huntsman Film Products Corporation/Tycon Proprietary Limited, June 29, 1992
Huntsman Film Products Corporation/Tycon Proprietary Limited, Technical and
Trademark Agreement, June 29, 1992
33
Huntsman Film Products Corporation/Tycon Proprietary Limited, Supplement to
Technical and Trademark Agreement, June 29, 1992
Huntsman Film Products Corporation/Tycon Proprietary Limited, Amendment of
Technical and Trademark Agreement, June 29, 1992
Huntsman Container Company Limited/Xxxxx International Corporation, March 28,
1995
Huntsman Ipex/Ipex Bulk System International Pty. Ltd., 1994
Huntsman Group Intellectual Property Holdings Corporation/Huntsman Packaging
Corporation, December 30, 1996
34
(Security Agreement)
SCHEDULE IV
Patents
35
HUNTSMAN PACKAGING CORPORATION
(F/K/A HUNTSMAN FILM PRODUCTS CORPORATION)
U.S. PATENTS AND PATENT APPLICATIONS
-------------------------------------------------------------------------------------
PATENT ISSUE DATE EXPIRES SERIAL FILING DOCKET RELEASE COMMENTS
NUMBER NUMBER DATE NUMBER
-------------------------------------------------------------------------------------
4230607 28OC1980 16JA1998 869878 16JA1978 00000 Xxxxx Xxxxxx
Bank
-------------------------------------------------------------------------------------
4230774 28OC1980 21FE1998 879824 21FE1978 00000 Xxxxx Xxxxxx
Bank
-------------------------------------------------------------------------------------
4362835 07DE1982 08DE2000 213806 08DE1980 00000 Xxxxx Xxxxxx
Bank
-------------------------------------------------------------------------------------
4746689 24MY1988 21JL2006 887481 21JL1986 00000 Xxxxx Xxxxxx
Bank
-------------------------------------------------------------------------------------
4923750 08MY1990 30DE2007 139776 30DE1987 00000X Xxxxx Xxxxxx
Bank
-------------------------------------------------------------------------------------
5116677 26MY1992 05DE2009 446219 05DE1989 00000X Xxxxx Xxxxxx
Xxxx
-------------------------------------------------------------------------------------
0000000 18SE1979 07N01997 849371 07N01977 81356 Will expire
1997
-------------------------------------------------------------------------------------
4095730 20JE1978 22AU1997 826501 22AU1977 81355 Expired
-------------------------------------------------------------------------------------
0
XXXXXXXX XXXXXXXXX FILMS CORPORATION
U.S. PATENTS AND PATENT APPLICATIONS
------------------------------------------------------------------------------------------------
PATENT ISSUE DATE EXPIRES SERIAL FILING DOCKET RELEASE COMMENTS
NUMBER NUMBER DATE NUMBER
------------------------------------------------------------------------------------------------
- - Not yet as- 7/15/97 81431
signed
------------------------------------------------------------------------------------------------
- - Not yet as- 8/12/97 81432 Regular
signed utility
patent
application
filed on
8/12/97
upon expi-
ry of pro-
visional
application
------------------------------------------------------------------------------------------------
2
HUNTSMAN PACKAGING CORPORATION
U.S. PATENTS AND PATENT APPLICATIONS
----------------------------------------------------------------------------------------------
PATENT ISSUE DATE EXPIRES SERIAL FILING DOCKET RELEASE COMMENTS
NUMBER NUMBER DATE NUMBER
----------------------------------------------------------------------------------------------
- - - 510286 8/2/95 81335-1
----------------------------------------------------------------------------------------------
5526934 6/18/96 4/29/2014 235499 4/29/94 81344
----------------------------------------------------------------------------------------------
5495946 3/5/96 3/29/2014 358736 12/19/94 81344-C1
----------------------------------------------------------------------------------------------
- - - 504894 7/20/95 81346
----------------------------------------------------------------------------------------------
5537923 7/23/96 5/24/2015 449704 5/24/95 81347
----------------------------------------------------------------------------------------------
3
HUNTSMAN UNITED FILMS CORPORATION
U.S. PATENTS AND PATENT APPLICATIONS
------------------------------------------------------------------------------------------
PATENT ISSUE DATE EXPIRES SERIAL FILING DOCKET RELEASE COMMENTS
NUMBER NUMBER DATE NUMBER
------------------------------------------------------------------------------------------
- - - 478196 6/7/95 81427
------------------------------------------------------------------------------------------
4
HUNTSMAN PACKAGING CORPORATION
(F/K/A HUNTSMAN FILM PRODUCTS CORPORATION)
U.S. PATENTS AND PATENT APPLICATIONS
----------------------------------------------------------------------------------------------
PATENT ISSUE DATE EXPIRES SERIAL FILING DOCKET RELEASE COMMENTS
NUMBER NUMBER DATE NUMBER
----------------------------------------------------------------------------------------------
5522690 04JE1996 11MY2015 438782 11MY1995 81348
----------------------------------------------------------------------------------------------
- - - 641899 02MY1996 81348-C1
----------------------------------------------------------------------------------------------
- - - 60/037907 11FE1997 81430 Provisional
application
----------------------------------------------------------------------------------------------
5
HUNTSMAN PACKAGING CORPORATION
(F/K/A HUNTSMAN POLYPROPYLENE CORPORATION)
UNITED STATES PATENTS AND PATENT APPLICATIONS
-------------------------------------------------------------------------------
DOCKET PATENT GRANT DATE APPLICATION APPLICATION EXPIRATION
NUMBER NUMBER NUMBER DATE DATE
-------------------------------------------------------------------------------
21682 4,310,639 1/12/82 505,227 10/26/65 1/12/1999
-------------------------------------------------------------------------------
45123 4,297,465 10/27/81 201,955 10/29/80 10/29/2000
-------------------------------------------------------------------------------
46814 4,378,451 3/29/83 301,921 9/14/81 9/14/2001
-------------------------------------------------------------------------------
49177 4,526,919 7/2/85 625,332 6/27/84 6/27/2004
-------------------------------------------------------------------------------
49178 4,528,312 7/9/85 625,331 6/27/84 6/27/2004
-------------------------------------------------------------------------------
57262 5,037,888 8/6/91 433,818 11/9/89 11/9/2009
-------------------------------------------------------------------------------
60390 5,198,497 3/30/93 814,166 12/30/91 12/30/2011
-------------------------------------------------------------------------------
63415-C1 611,480 3/5/96
-------------------------------------------------------------------------------
66087 040,050 3/30/93
-------------------------------------------------------------------------------
67460 5,414,063 5/9/95 040,049 3/30/93 3/30/2013
-------------------------------------------------------------------------------
81406-C1 4,276,400 6/30/81 048,209 6/13/79 6/30/1998
===============================================================================
6
HUNTSMAN PACKAGING CORPORATION
(f/k/a Huntsman Polypropylene)
Huntsman Polypropylene Corporation
ADPRO USA
Reg. No.: 1,753,498 1993/02/23
App. No.: 74/291,441 1992/07/06
Renewal Due: 2003/02/23
Action Due: Affidavit of Use 1999/02/23
-------------------------------------------------------------------------------
Huntsman Polypropylene Corporation
HUNTSMAN POLYPROPYLENE CORPORATION USA
Reg. No.: 1919111 1995/09/19
App. No.: 473597 1993/12/28
Renewal Due: 2005/09/19
Action Due: Affidavit of Use 2001/19/19
-------------------------------------------------------------------------------
7
(Security Agreement)
SCHEDULE V
Trademarks
8
HUNTSMAN PACKAGING CORPORATION
(F/K/A HUNTSMAN FILM PRODUCTS CORPORATION)
U.S. TRADEMARKS AND TRADEMARK APPLICATIONS
-------------------------------------------------------------------------
XXXX REG. NO. REG. DATE SERIAL NO. FILING DATE
-------------------------------------------------------------------------
CHEEZFILM 1857675 10/11/1994 74/450529 10/21/1993
-------------------------------------------------------------------------
CASTFLEX - - 75/154199 08/22/1996
-------------------------------------------------------------------------
ARCTICWRAP 1564492 11/07/1989 73/785713 03/10/1989
-------------------------------------------------------------------------
CHOICE-WRAP 857929 10/01/1968 72/266325 03/09/1967
-------------------------------------------------------------------------
ELASTIFILM 1100744 08/29/1978 73/158208 02/08/1978
-------------------------------------------------------------------------
XXX-XXX 1959770 03/05/1996 74/563535 08/19/1994
-------------------------------------------------------------------------
OMNIFILM 1208308 09/14/1982 73/339450 11/30/1981
-------------------------------------------------------------------------
PERMA-BLOCK 1947873 01/16/1996 74/435949 09/15/1993
-------------------------------------------------------------------------
PHASE PLUS 1916417 09/05/1995 74/579970 09/29/1994
-------------------------------------------------------------------------
PRIME-WRAP 819118 11/22/1966 72/239517 02/24/1966
-------------------------------------------------------------------------
9
-------------------------------------------------------------------------
XXXX REG. NO. REG. DATE SERIAL NO. FILING DATE
-------------------------------------------------------------------------
TOUGH-GUARD 987894 07/09/1974 72/460278 06/14/1973
-------------------------------------------------------------------------
VITAFILM 422922 08/20/1946 71/479120 01/29/1945
-------------------------------------------------------------------------
VITAFRESH 1185722 01/12/1982 73/257088 04/07/1980
-------------------------------------------------------------------------
VITASPENSER 2049615 04/01/1997 74/619153 01/09/1995
-------------------------------------------------------------------------
VITAWRAP 839152 11/21/1967 72/620546 12/12/1966
-------------------------------------------------------------------------
WINWRAP 1882217 03/07/1995 74/487444 02/07/1994
-------------------------------------------------------------------------
10
-------------------------------------------------------------------------
XXXX REG. NO. REG. DATE SERIAL NO. FILING DATE
-------------------------------------------------------------------------
SECURALL 1381419 2/4/86 73/547573 7/12/85
-------------------------------------------------------------------------
CO-EX PLASTICS 1539303 5/16/89 73/730779 5/26/88
-------------------------------------------------------------------------
11
HUNTSMAN UNITED FILMS CORPORATION
U.S. TRADEMARKS AND TRADEMARK APPLICATIONS
---------------------------------------------------------------------
XXXX REG. NO. REG. DATE SERIAL NO. FILING DATE
---------------------------------------------------------------------
UNIVOH 2077576 7/8/97 75/149426 8/13/96
---------------------------------------------------------------------
00
XXXXXXXX XXXXXXXXX FILMS CORPORATION
U.S. TRADEMARKS AND TRADEMARK APPLICATIONS
----------------------------------------------------------------------------
XXXX REG. NO. REG. DATE SERIAL NO. FILING DATE
----------------------------------------------------------------------------
DEERFIELD PLASTICS
Design 977946 2/5/74 72/424331 5/15/72
----------------------------------------------------------------------------
STRATA 1485267 4/19/88 73/681751 8/31/87
----------------------------------------------------------------------------
13
HUNTSMAN PACKAGING CORPORATION
(F/K/A HUNTSMAN FILM PRODUCTS CORPORATION)
U.S. TRADEMARKS AND TRADEMARK APPLICATIONS
-------------------------------------------------------------------------
XXXX REG. NO. REG. DATE SERIAL NO. FILING DATE
-------------------------------------------------------------------------
BFO 1600830 6/12/90 73/778909 2/6/89
-------------------------------------------------------------------------
XXXX-XXX 000000 7/9/68 72/215251 3/29/65
-------------------------------------------------------------------------
XX 0000000 6/12/90 73/779067 2/6/89
-------------------------------------------------------------------------
XXXXX STAR 1602283 6/19/90 73/778903 2/6/89
-------------------------------------------------------------------------
SHO CASE 1678544 3/10/92 73/779093 2/6/89
-------------------------------------------------------------------------
14
Annex 1 to the
Security Agreement
[Form Of]
PERFECTION CERTIFICATE
Reference is made to (a) the Credit Agreement dated as of September 30,
1997 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the HUNTSMAN PACKAGING CORPORATION, a Utah
corporation (the "Borrower"), the lenders from time to time party thereto (the
"Lenders"), and THE CHASE MANHATTAN BANK, a New York bank corporation
("Chase"), as administrative agent (in such capacity, the "Administrative
Agent") for the Lenders, and (b) the Guarantee Agreement dated as of September
30, 1997 (as supplemented or otherwise modified from time to time, the
"Guarantee Agreement") between the Guarantors and the Administrative Agent.
Capitalized terms used herein and not defined herein shall have meanings
assigned to such terms in the Credit Agreement.
The undersigned, a Financial Officer and a Legal Officer, respectively, of
the Borrower, hereby certify to the Collateral Agent and each other Secured
Party as follows:
1. Names. (a) The exact corporate name of each Grantor, as such name
appears in its respective certificate of incorporation, is as follows:
(b) Set forth below is each other corporate name each Grantor has had
in the past five years, together with the date of the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor has changed
its identity or corporate structure in any way within the past five years.
Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred,
include in Schedule 1 the information required by Sections 1 and 2 of this
certificate as to each acquiree or constituent party to a merger or
consolidation.
(d) The following is a list of all other names (including trade names
or similar appellations) used by each Grantor or any of its divisions or other
business units in connection with the conduct of its business or the ownership
of its properties at any time during the past five years:
15
(e) Set forth below is the Federal Taxpayer Identification Number of
each Grantor:
2. Current Locations. (a) The chief executive office of each Grantor is
located at the address set forth opposite its name below:
Grantor Mailing Address County State
------- --------------- ------ -----
(b) Set forth below opposite the name of each Grantor are all
locations where such Grantor maintains any books or records relating to any
Accounts Receivable (with each location at which chattel paper, if any, is kept
being indicated by an "*"):
Grantor Mailing Address County State
------- --------------- ------ -----
(c) Set forth below opposite the name of each Grantor are all the
material places of business of such Grantor not identified in paragraph (a) or
(b) above:
Grantor Mailing Address County State
------- --------------- ------ -----
(d) Set forth below opposite the name of each Grantor are all the
locations where such Grantor maintains any Collateral not identified above:
Grantor Mailing Address County State
------- --------------- ------ -----
(e) Set forth below opposite the name of each Grantor are the names
and addresses of all Persons other than such Grantor that have possession of
any of the Collateral of such Grantor:
Grantor Mailing Address County State
------- --------------- ------ -----
3. Unusual Transactions. All Accounts Receivable have been originated by
the Grantors and all Inventory has been acquired by the Grantors in the
ordinary course of business.
16
4. File Search Reports. Attached hereto as Schedule 4(A) are true copies of
file search reports from the Uniform Commercial Code filing offices where
filings described in Section 3.16 of the Credit Agreement are to be made.
Attached hereto as Schedule 4(B) is a true copy of each financing statement or
other filing identified in such filing search reports.
5. UCC Filings. Duly signed financing statements on Form UCC-1 in
substantially the form of Schedule 5 hereto have been prepared for filing in
the Uniform Commercial Code filing office in each jurisdiction where a Grantor
has Collateral as identified in Section 2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
forth, with respect to the filings described in Section 5 above, each filing
and the filing office in which such filing is to be made.
7. Filing Fees. All filing fees and taxes payable in connection with the
filings described in Section 5 above have been paid.
8. Stock Ownership. Attached hereto as Schedule 8 is a true and correct
list of all the duly authorized, issued and outstanding stock of each
Subsidiary and the record and beneficial owners of such stock. Also set forth
on Schedule 8 is each Subsidiary that represents 50% or less of the equity of
the entity in which such investment was made.
9. Notes. Attached hereto as Schedule 9 is a true and correct list of all
notes held by each Subsidiary and all intercompany notes between the Borrower
and each Subsidiary of the Borrower and between each Subsidiary of the Borrower
and each other such Subsidiary.
10. Advances. Attached hereto as Schedule 10 is (a) a true and correct list
of all advances made by the Borrower to any Subsidiary of the Borrower or made
by any Subsidiary of the Borrower to the Borrower or any other Subsidiary of
the Borrower, which advances will be on and after the date hereof evidenced by
one or more inter-company notes pledged to the Collateral Agent under the
Pledge Agreement, and (b) a true and correct list of all unpaid intercompany
transfers of goods sold and delivered by or to the Borrower or any Subsidiary
of the Borrower.
11. Mortgage Filings. Attached hereto as Schedule 11 is a schedule setting
forth, with respect to each Mortgaged Property, (i) the exact corporate name of
the corporation that owns such property as such name appears in its certificate
of incorporation, (ii) if different from the name identified pursuant to clause
(i), the exact name of the current record owner of such property reflected in
the records of the filing office for such property identified pursuant to the
following clause and (iii) the filing office in
17
which a Mortgage with respect to such property must be filed or recorded in
order for the Collateral Agent to obtain a perfected security interest therein.
IN WITNESS WHEREOF, the undersigned have duly executed this certificate on
this 30th day of September, 1997.
HUNTSMAN PACKAGING CORPORATION,
by
--------------------------------
Name:
Title: (Financial Officer)
by
--------------------------------
Name:
Title: (Legal Officer)
18
Annex 2 to the
Security Agreement
SUPPLEMENT NO. ___ dated as of , to the Security Agreement
dated as of September 30, 1997, among HUNTSMAN PACKAGING CORPORATION,
a Utah corporation (the "Borrower"), each subsidiary of the Borrower
listed on Schedule I thereto (each such subsidiary individually a
"Guarantor" and collectively, the "Guarantors"; the Guarantors and the
Borrower are referred to collectively herein as the "Grantors") and
The Chase Manhattan Bank, a New York banking corporation ("Chase") as
collateral agent (in such capacity, the "Collateral Agent") for the
Secured Parties (as defined herein).
A. Reference is made to (a) the Credit Agreement dated as of September
30, 1997 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders"), Chase, as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders, and (b) the Guarantee Agreement dated
as of September 30, 1997 (as amended, supplemented or otherwise modified from
time to time, the "Guarantee Agreement"); between the Guarantors and the
Administrative Agent.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement and
the Credit Agreement.
C. The Grantors have entered into the Security Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Section 7.15 of Security Agreement provides that additional
Subsidiaries of the Borrower may become Grantors under the Security Agreement
by execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Grantor") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Grantor
under the Security Agreement in order to induce the Lenders to make additional
Loans and the Issuing Bank to issue additional Letters of Credit and as
consideration for Loans previously made and Letters of Credit previously
issued.
Accordingly, the Collateral Agent and the New Grantor agree as
follows:
SECTION 1. In accordance with Section 7.15 of Security Agreement, the
New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions
of the Security Agreement
19
applicable to it as a Grantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Grantor thereunder are true
and correct on and as of the date hereof. In furtherance of the foregoing, the
New Grantor, as security for the payment and performance in full of the
Obligations (as defined in the Security Agreement), does hereby create and
grant to the Collateral Agent, its successors and assigns, for the benefit of
the Secured Parties, their successors and assigns, a security interest in and
lien on all of the New Grantor's right, title and interest in and to the
Collateral (as defined in the Security Agreement) of the New Grantor. Each
reference to a "Grantor" in the Security Agreement shall be deemed to include
the New Grantor. The Security Agreement is hereby incorporated herein by
reference.
SECTION 2. The New Grantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth under
its signature hereto, is the true and correct location of the chief executive
office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
20
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below.
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
[Name of New Grantor],
by
-------------------------------
Name:
Title:
Address:
THE CHASE MANHATTAN BANK,
as Collateral Agent,
by
-------------------------------
Name:
Title:
21
SCHEDULE I
to Supplement No. ___ to the
Security Agreement
LOCATION OF COLLATERAL
----------------------
Description Location
----------- --------
22
