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GUARANTEE AND PLEDGE AGREEMENT
made by
GENTEK INC.
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of April 30, 1999
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GUARANTEE AND PLEDGE AGREEMENT
GUARANTEE AND PLEDGE AGREEMENT, dated as of April 30, 1999, made by
each of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, the "Grantors"), in favor of THE CHASE
MANHATTAN BANK, as Administrative Agent (in such capacity, the "Administrative
Agent") for the banks and other financial institutions (the "Lenders") from time
to time parties to the Credit Agreement, dated as of April 30, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among GenTek Inc. (the "Company"), the Canadian Borrower thereunder (the
"Canadian Borrower"; together with the Company, the "Borrowers", and either of
them, a "Borrower"), the Lenders and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make extensions of credit to the Borrowers upon the terms and subject
to the conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, the Borrowers and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrowers under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
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(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Pledge Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Canadian Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Tranche B Term Loans and all other obligations
and liabilities of the Canadian Borrower (including, without limitation,
interest accruing at the then applicable rate provided in the Credit Agreement
after the maturity of the Tranche B Term Loans and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Canadian Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to the
Administrative Agent or any Lender (or, in the case of any Lender Hedge
Agreement, any Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Lender Hedge Agreement or any other
document made, delivered or given in connection with any of the foregoing, in
each case whether on account of principal, interest, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or to the Lenders that are required to be
paid by the Canadian Borrower pursuant to the terms of any of the foregoing
agreements).
"Company Obligations": the collective reference to the unpaid principal
of and interest on the Loans made to the Company and reimbursement obligations
in respect of Letters of Credit and all other obligations and liabilities of the
Company (including, without limitation, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of the Loans and
reimbursement obligations in respect of Letters of Credit and interest accruing
at the then applicable rate provided in the Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
to the Administrative Agent or any Lender (or, in the case of any Lender Hedge
Agreement, any Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Letter of Credit, any Lender Hedge
Agreement or any other document made, delivered or given in connection with any
of the foregoing, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by the
Company pursuant to the terms of any of the foregoing agreements).
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"Certificated Security": the collective reference to (i) any
"certificated security" as defined in Section 8-102 of the New York UCC and (ii)
all limited liability company certificates, partnership interest certificates
and certificated options therefor that may be issued or granted by any Issuer.
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the
Administrative Agent as provided in Section 6.2 or 6.3.
"Excluded Equity Interests": Equity Interests, together with any
shares, stock certificates, options or rights of any nature whatsoever in
respect of any Equity Interests, that represent (i) more than 65% of the total
outstanding Voting Stock of any Foreign Subsidiary or Foreign Subsidiary Holding
Company that is not an Excluded Issuer or (ii) any Voting Stock of an Excluded
Issuer.
"Excluded Issuer": any Subsidiary of the Company that is a direct or
indirect Subsidiary of a Foreign Subsidiary or a Foreign Subsidiary Holding
Company.
"Foreign Subsidiary": any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
"Foreign Subsidiary Holding Company": any Domestic Subsidiary that has
no material assets other than the Capital Stock or other securities of one or
more Foreign Subsidiaries or other Foreign Subsidiary Holding Companies, and
other assets relating solely to an ownership interest in such Capital Stock or
other securities.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of any
Foreign Subsidiary or any Foreign Subsidiary Holding Company.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the New York UCC (other than any Excluded Equity
Interests).
"Guarantor Obligations": with respect to any Guarantor, all obligations
and liabilities of such Guarantor which may arise under or in connection with
this Agreement (including, without limitation, Section 2) or any other Loan
Document to which such Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or to the Lenders that are required to be
paid by such Guarantor pursuant to the terms of this Agreement or any other Loan
Document).
"Guarantors": the collective reference to (i) each Grantor other than
the Borrowers and (ii) with respect to the Canadian Borrower Obligations, the
Company.
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"Investment Property": all "investment property" as such term is
defined in Section 9-115 of the New York UCC (other than any Excluded Equity
Interests).
"Issuers": the collective reference to (i) each Subsidiary of the
Company and (ii) each other Person which issues Capital Stock to the Company or
any of its Subsidiaries in a transaction of the type described in the last
sentence of subsection 7.6 of the Credit Agreement; provided that in no event
shall any Subsidiary of the Company or any other Person described in the
preceding clause (ii) be an Issuer if such Subsidiary or such other Person has
as its parent, directly or indirectly, or the Capital Stock of such other Person
is owned, directly or indirectly by, a Foreign Subsidiary or a Foreign
Subsidiary Holding Company.
"Lender Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements entered into by a Borrower with any Lender
(or any Affiliate of any Lender) providing for protection against fluctuations
in interest rates or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": (i) in the case of the Company, the Company Obligations,
(ii) in the case of the Canadian Borrower, the Canadian Borrower Obligations,
and (iii) in the case of each Guarantor, its Guarantor Obligations (including
its guarantee of the Canadian Borrower Obligations pursuant to this Agreement).
"Pledged Interests": the collective reference to:
(i) all right, title and interest, now existing or hereafter acquired,
of each Grantor in any limited liability company or partnership but not any of
its obligations from time to time as a member or partner therein, including
rights under any agreement creating or organizing any limited liability company
or partnership;
(ii) any and all moneys due and to become due to each Grantor now or in
the future or by way of a distribution made to such Grantor in its capacity as a
member or partner of or the owner of any limited liability company or
partnership interest in any limited liability company or partnership or
otherwise in respect of such Grantor's interest as member of any limited
liability company or partner in any partnership or the owner of any limited
liability company or partnership interest;
(iii) any other property of any limited liability company or
partnership to which any Grantor now or in the future may be entitled in its
capacity as a member or partner of or the owner of any limited liability company
or partnership interest in any such limited
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liability company or partnership by way of distribution, return of
capital or otherwise; and
(iv) any other claim which each Grantor now has or may have in the
future in its capacity as a member or partner of or the owner of any limited
liability company or partnership interest against any such limited liability
company or partnership interest or its property;
provided that in no event shall "Pledged Interests" include any Excluded Equity
Interests.
"Pledged Investment Property": as defined in Section 3(c).
"Pledged Stock": the shares of Capital Stock listed on Schedule 2 and
all other shares of Capital Stock issued by any Issuer, together with any other
shares, stock certificates, options or rights of any nature whatsoever in
respect of the Capital Stock of any Issuer that may be issued or granted to, or
held by, any Grantor while this Agreement is in effect; provided that in no
event shall "Pledged Stock" include any Excluded Equity Interests.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1)
of the New York UCC and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Stock, the Pledged Interests and
Collateral consisting of Investment Property, collections thereon or
distributions or payments with respect thereto.
"Securities Act": the Securities Act of 1933, as amended.
"Uncertificated Security": as defined in Section 8-102 of the New York
UCC.
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
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2.1 Guarantee. (a) (i) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Company when due (whether at the stated maturity, by
acceleration or otherwise) of the Company Obligations.
(ii) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Canadian Borrower when due (whether at the stated maturity, by acceleration or
otherwise) of the Canadian Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Company Obligations and the Canadian
Borrower Obligations may at any time and from time to time exceed the amount of
the liability of such Guarantor hereunder without impairing the guarantee
contained in this Section 2 or affecting the rights and remedies of the
Administrative Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Company Obligations, all the Canadian Borrower
Obligations and the obligations of each Guarantor under the guarantee contained
in this Section 2 shall have been satisfied by payment in full, no Letter of
Credit shall be outstanding and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Company may be free from any Company Obligations and/or the Canadian
Borrower may be free from any Canadian Borrower Obligations.
(e) No payment made by the Company, the Canadian Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Lender from the Company, the Canadian Borrower,
any of the Guarantors, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Company Obligations or
the Canadian Borrower Obligations, shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Company Obligations or the Canadian Borrower Obligations, as
the case may be, or any payment received or collected from such Guarantor in
respect of the Company Obligations or the Canadian Borrower Obligations, as the
case may be), remain liable for the Company Obligations and the Canadian
Borrower Obligations up to the maximum liability of such Guarantor
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hereunder until the Company Obligations and the Canadian Borrower Obligations
are paid in full, no Letter of Credit shall be outstanding and the Commitments
are terminated.
(f) Without limitation of the foregoing, the Company, as a Guarantor
hereunder, unconditionally and irrevocably guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Canadian Borrower when due (whether at the stated maturity,
by acceleration or otherwise) of the Canadian Borrower Obligations.
2.2 Right of Contribution. Each Subsidiary Guarantor hereby agrees that
to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and conditions of Section 2.3. The provisions of this Section shall
in no respect limit the obligations and liabilities of any Subsidiary Guarantor
to the Administrative Agent and the Lenders, and each Subsidiary Guarantor shall
remain liable to the Administrative Agent and the Lenders for the full amount
guaranteed by such Subsidiary Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Company, the Canadian Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent or any Lender for the payment of the Company Obligations or the Canadian
Borrower Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Company, the Canadian Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Company on
account of the Company Obligations or the Canadian Borrower on account of the
Canadian Borrower Obligations are paid in full, no Letter of Credit shall be
outstanding and the Commitments are terminated. If any amount shall be paid to
any Guarantor on account of such subrogation rights at any time when all of the
Company Obligations or all of the Canadian Borrower Obligations, as the case may
be, shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent,
if required), to be applied against the Company Obligations or the Canadian
Borrower Obligations, as the case may be, whether matured or unmatured, in such
order as the Administrative Agent may determine.
2.4 Amendments, etc. with respect to Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the
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Company Obligations or the Canadian Borrower Obligations made by the
Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender and any of such Obligations continued, and such Obligations, or
the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, and the Credit Agreement and the other
Loan Documents and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent (or the Required Lenders or all Lenders, as
the case may be) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Administrative
Agent or any Lender for the payment of such Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any Lender
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Company Obligations, for the Canadian
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the Company
Obligations and the Canadian Borrower Obligations and notice of or proof of
reliance by the Administrative Agent or any Lender upon the guarantee contained
in this Section 2 or acceptance of the guarantee contained in this Section 2;
the Company Obligations, the Canadian Borrower Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee contained
in this Section 2; and all dealings between each of the Company and the Canadian
Borrower and any of the Guarantors, on the one hand, and the Administrative
Agent and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Section 2. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Company, the Canadian Borrower or any of the Guarantors with respect to the
Company Obligations and the Canadian Borrower Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Company Obligations, any of the Canadian
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Company, the Canadian Borrower or any other
Person against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Company,
the Canadian Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Company for the
Company Obligations, of the Canadian Borrower for the Canadian Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights
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and remedies hereunder against any Guarantor, the Administrative Agent or any
Lender may, but shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as it may have against the Company,
the Canadian Borrower, any other Guarantor or any other Person or against any
collateral security or guarantee for the Company Obligations or, for the
Canadian Borrower Obligations, or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to make any such demand,
to pursue such other rights or remedies or to collect any payments from the
Company, the Canadian Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Company, the Canadian Borrower, any other
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or
any Lender against any Guarantor. For the purposes hereof "demand" shall include
the commencement and continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Company Obligations or Canadian
Borrower Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company, the Canadian Borrower
or any Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Company,
the Canadian Borrower or any Guarantor or any substantial part of its property,
or otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in
Dollars at the office of the Administrative Agent located at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Administrative Agent,
and hereby grants to the Administrative Agent, for the ratable benefit of the
Lenders, a security interest in, all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations:
(a) all Pledged Stock;
(b) all Pledged Interests;
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(c) all Investment Property (together with all Pledged Stock and all
Pledged Interests, the "Pledged Investment Property") and General Intangibles
described in clauses (a), (b) and (d) of this Section 3; and
(d) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrowers thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 Title; No Other Liens. Except for the security interest granted to
the Administrative Agent for the ratable benefit of the Lenders pursuant to this
Agreement and the other Liens permitted to exist on the Collateral by the Credit
Agreement, such Grantor owns each item of the Collateral free and clear of any
and all Liens or claims of others. No financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in any
public office, except such as have been filed in favor of the Administrative
Agent, for the ratable benefit of the Lenders, pursuant to this Agreement or
with respect to Liens permitted by the Credit Agreement.
4.2 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for the
ratable benefit of the Lenders, as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for unrecorded Liens permitted by the Credit
Agreement which have priority over the Liens on the Collateral by operation of
law.
4.3 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
4.4 Investment Property. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
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(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or options in favor of, or claims of, any other Person,
except the security interest created by this Agreement and Liens permitted under
the Credit Agreement.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and the
Lenders that, from and after the date of this Agreement until the Obligations
shall have been paid in full, no Letter of Credit shall be outstanding and the
Commitments shall have terminated:
5.1 Delivery of Certificated Securities. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced by any
Certificated Security, such Certificated Security shall be immediately delivered
to the Administrative Agent, duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement,
provided that in no event shall any Excluded Equity Interests be required to be
pledged hereunder.
5.2 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind against or with respect to the Collateral, except that no
such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.3 Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.2 and shall defend such security interest against the claims and
demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection therewith as the Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take
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such further actions as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, (i) filing
any financing or continuation statements under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction with respect to the security
interests created hereby and (ii) in the case of Investment Property and any
other relevant Collateral, taking any actions necessary to enable the
Administrative Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
5.4 Changes in Locations, Name, etc. Such Grantor will not, except upon
15 days' prior written notice to the Administrative Agent and delivery to the
Administrative Agent of all additional executed financing statements and other
documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein:
(i) change its jurisdiction of organization or the location of its
chief executive office or sole place of business from that referred to in
Section 4.3; or
(ii) change its name, identity or corporate structure to such an extent
that any financing statement filed by the Administrative Agent in connection
with this Agreement would become misleading.
5.5 Notices. Such Grantor will advise the Administrative Agent and the
Lenders promptly, in reasonable detail, of (a) any Lien (other than security
interests created hereby or Liens permitted under the Credit Agreement) on any
of the Collateral which would adversely affect the ability of the Administrative
Agent to exercise any of its remedies hereunder and (b) the occurrence of any
other event which could reasonably be expected to have a material adverse effect
on the aggregate value of the Collateral or on the security interests created
hereby.
5.6 Investment Property. (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer, whether in addition to, in substitution of, as
a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Administrative Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Pledged
Investment Property upon the liquidation or dissolution of any Issuer shall be
paid over to the Administrative Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any distribution of capital
shall be made on or in respect of the Pledged
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Investment Property or any property shall be distributed upon or with respect to
the Pledged Investment Property pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Administrative Agent, be delivered
to the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Investment Property shall be received by
such Grantor, such Grantor shall, until such money or property is paid or
delivered to the Administrative Agent, hold such money or property in trust for
the Lenders, segregated from other funds of such Grantor, as additional
collateral security for the Obligations. Notwithstanding anything to the
contrary in this Section 5.6(a), in no event shall any Excluded Equity Interests
be required to be pledged hereunder.
(b) Without the prior written consent of the Administrative Agent, such
Grantor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock or other equity securities of any nature or to issue
any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Pledged Investment Property or Proceeds thereof
(except pursuant to a transaction permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Pledged Investment Property or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement or otherwise permitted by the Credit Agreement or (iv) enter into
any agreement or undertaking restricting the right or ability of such Grantor or
the Administrative Agent to sell, assign or transfer any of the Pledged
Investment Property or Proceeds thereof. It is understood that nothing in this
Section 5.6(b) shall prohibit any Grantor from entering into any agreement
providing for a sale or disposition of any Pledged Investment Property that is
permitted under the Credit Agreement and, prior to the consummation of such sale
or disposition, is made subject to the rights of the Administrative Agent
hereunder.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.6(a) with respect to the Investment Property issued by it and (iii) the terms
of Section 6.1(c) shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.1(c) with respect to
the Investment Property issued by it.
SECTION 6. REMEDIAL PROVISIONS
6.1 Pledged Stock. (a) Unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.1(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock to
14
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Investment Property; provided, however,
that no vote shall be cast or corporate right exercised or other action taken
which, in the Administrative Agent's reasonable judgment, would be inconsistent
with or result in any violation of any provision of the Credit Agreement, this
Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Collateral consisting of Investment Property and make application
thereof to the Obligations in such order as the Administrative Agent may
determine, and (ii) any or all of the Collateral consisting of Investment
Property shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise (x)
all voting, corporate and other rights pertaining to such Investment Property at
any meeting of shareholders of the relevant Issuer or Issuers or otherwise and
(y) any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to such Investment Property as if it
were the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Investment Property upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any Issuer, or upon the exercise by any
Grantor or the Administrative Agent of any right, privilege or option pertaining
to such Investment Property, and in connection therewith, the right to deposit
and deliver any and all of the Collateral consisting of Investment Property with
any committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Administrative Agent. In addition, and
without limitation of the foregoing, each Grantor hereby authorizes and
instructs each Issuer of any Investment Property consisting of Uncertificated
Securities (including the Pledged Interests) pledged by such Grantor hereunder
to comply with any instruction (as defined in Section 8-102 of the New York UCC)
issued to such Issuer by the Administrative Agent with respect to all or any
part of such Uncertificated Securities without further consent by any Grantor.
6.2 Proceeds to be Turned Over To Administrative Agent. If an Event of
Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks
15
and other near-cash items shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a Collateral
Account (or by such Grantor in trust for the Administrative Agent and the
Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.3.
6.3 Application of Proceeds. At such intervals as may be agreed upon by
the Company and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent's election,
the Administrative Agent may apply all or any part of Proceeds held in any
Collateral Account in payment of the Obligations in such order as the
Administrative Agent may elect, and any part of such funds which the
Administrative Agent elects not so to apply and deems not required as collateral
security for the Obligations shall be paid over from time to time by the
Administrative Agent to the Company or to whomsoever may be lawfully entitled to
receive the same. Any balance of such Proceeds remaining after the Obligations
shall have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have terminated shall be paid over to the Company or to
whomsoever may be lawfully entitled to receive the same.
6.4 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor's premises
or elsewhere. The Administrative Agent
16
shall apply the net proceeds of any action taken by it pursuant to this Section,
after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as the Administrative Agent may elect, and
only after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the New York UCC, need the Administrative
Agent account for the surplus, if any, to any Grantor. To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.
6.5 Private Sales. (a) Each Grantor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the Pledged Stock and
Pledged Interests, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale of
any of the Pledged Stock or Pledged Interests for the period of time necessary
to permit the Issuer thereof to register such securities for public sale under
the Securities Act, or under applicable state securities laws, even if such
Issuer would agree to do so.
(b) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock and Pledged Interests pursuant to this
Section valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.
6.6 Waiver; Deficiency. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the
17
Collateral are insufficient to pay its Obligations and the reasonable fees and
disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due with
respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due with respect to any other Collateral
whenever payable;
(ii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral;
(iii) execute, in connection with any sale provided for in Section
6.4 or 6.5, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(iv) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the
18
Administrative Agent may deem appropriate; and (7) generally,
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes, and do, at the Administrative Agent's option and such
Grantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent's
and the Lenders' security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The reasonable expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1 shall be
payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent's and the Lenders' interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
19
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of the
New York UCC and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Administrative
Agent determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with subsection 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative,
20
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to
pay or reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay not caused by the Administrative Agent or the Lenders
in paying, any and all stamp, excise, sales or other taxes which may be payable
or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrowers would be required to do so pursuant to subsection 10.5 of the Credit
Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; provided
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement (except in a transaction permitted under
subsection 7.5 of the Credit Agreement) without the prior written consent of the
Administrative Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender, without notice to such Grantor or any
other Grantor, any such notice being expressly waived by each Grantor to the
extent permitted by applicable law, upon any amount becoming due and payable by
such Grantor hereunder (whether at the stated maturity, by acceleration or
otherwise), to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such Lender
to or for the credit or the account of such Grantor. The Administrative Agent
and each Lender agrees promptly to notify such Grantor after any such set-off
and the application made by the Administrative Agent or such Lender, provided
that the failure to give such notice
21
shall not affect the validity of such set-off and application. The rights of the
Administrative Agent and each Lender under this Section 8.6 are in addition to
other rights and remedies provided by law (including, without limitation, other
rights of set-off) which the Administrative Agent or such Lender may have.
8.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents represent
the agreement of the Grantors, the Administrative Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
22
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to
such Grantor at its address referred to in Section 8.2 or at such other
address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages; provided that any such waiver shall not apply
with respect to claims arising from the gross negligence or willful
misconduct of the Administrative Agent, any Issuing Bank or any Lender.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents to which it
is a party;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between the Grantors, on the one hand, and the
Administrative Agent and Lenders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the
Lenders.
8.14 Additional Grantors. Each Subsidiary of the Company that is
required to become a party to this Agreement pursuant to subsection 6.10 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans and the other Obligations
shall have been paid in full, the Commitments have been terminated and no
Letters of Credit shall be outstanding, the Collateral shall be released from
the Liens created hereby, and this Agreement and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Administrative Agent shall deliver
to such Grantor any Collateral held by the Administrative
23
Agent hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral and, if such Collateral is held by the Administrative Agent
hereunder, deliver such Collateral to such Grantor or as such Grantor shall
otherwise direct. At the request and sole expense of the Borrowers, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Company shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Subsidiary Guarantor and the terms
of the sale or other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a certification
by the Company stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.17 Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum due hereunder in Dollars
or Canadian Dollars into another currency, the parties hereto agree, to the
fullest extent that they may legally and effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase Dollars or Canadian Dollars,
as the case may be, with such other currency in New York, New York on the
Business Day immediately preceding the day on which final judgment is given.
(b) The obligation of each Grantor in respect of any sum due to the
Administrative Agent, any Lender or any Issuing Bank hereunder in Dollars shall,
to the extent permitted by applicable law, notwithstanding any judgment in a
currency other than Dollars, be discharged only to the extent that on the
Business Day following receipt of any sum adjudged to be so due in the judgment
currency the Administrative Agent, such Lender or such Issuing Bank may in
accordance with normal banking procedures purchase Dollars in the amount
originally due to the Administrative Agent, such Lender or such Issuing Bank
with the judgment currency. If the amount of Dollars so purchased is less than
the sum originally due to the Administrative Agent, such Lender or such Issuing
Bank, the applicable Grantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent, such
Lender or such Issuing Bank against the resulting loss.
24
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Pledge Agreement to be duly executed and delivered as of the date first
above written.
GENTEK INC.
By: _____________________________________________
Name:
Title:
GENERAL CHEMICAL CORPORATION
By: _____________________________________________
Name:
Title:
TOLEDO TECHNOLOGIES INC.
By: _____________________________________________
Name:
Title:
PRINTING DEVELOPMENTS INC.
By: _____________________________________________
Name:
Title:
BALCRANK PRODUCTS, INC.
By: _____________________________________________
Name:
Title:
25
HMC PATENTS HOLDING COMPANY, INC.
By: _____________________________________________
Name:
Title:
WATERSIDE URBAN RENEWAL
CORPORATION
By: _____________________________________________
Name:
Title:
XXXXXX, INC.
By: _____________________________________________
Name:
Title:
DEFIANCE, INC.
By: _____________________________________________
Name:
Title:
BINDERLINE DRAFTLINE, INC.
By: _____________________________________________
Name:
Title:
26
DEFIANCE PRECISION PRODUCTS, INC.
By: _____________________________________________
Name:
Title:
HY-FORM PRODUCTS, INC.
By: _____________________________________________
Name:
Title:
DEFIANCE TESTING AND ENGINEERING
SERVICES, INC.
By: _____________________________________________
Name:
Title:
HN INVESTMENT HOLDINGS INC.
By: _____________________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By: _____________________________________________
Name:
Title:
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Pledge Agreement dated as of April 30, 1999 (the "Agreement"), made by the
Grantors parties thereto for the benefit of The Chase Manhattan Bank, as
Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.6(a) of
the Agreement.
3. The terms of Sections 6.1(c) of the Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.1(c) of the Agreement.
[NAME OF ISSUER]
By: _____________________________________________
Name:
Title:
Address for Notices:
_________________________________________________
_________________________________________________
_________________________________________________
Fax:
Date:_________________
Annex 1 to
Guarantee and Pledge Agreement
ASSUMPTION AGREEMENT, dated as of ________________, ____, made by
______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of THE CHASE MANHATTAN BANK, as administrative agent (in
such capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") parties to the Credit Agreement referred to below.
All capitalized terms not defined herein shall have the meaning ascribed to them
in such Credit Agreement.
W I T N E S S E T H :
WHEREAS, GenTek Inc. (the "Company") and the Canadian Borrower
thereunder (collectively, the "Borrowers"), the Lenders and the Administrative
Agent have entered into the Credit Agreement, dated as of April 30, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrowers and
certain Subsidiaries of the Company (other than the Additional Grantor) have
entered into the Guarantee and Pledge Agreement, dated as of April 30, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Pledge Agreement") in favor of the Administrative Agent for the benefit of
the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to become
a party to the Guarantee and Pledge Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Pledge Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the
Guarantee and Pledge Agreement, hereby becomes a party to the Guarantee and
Pledge Agreement as a Grantor thereunder with the same force and effect as if
originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in the Schedules to the Guarantee and Pledge
Agreement. The Additional Grantor hereby represents and warrants that each of
the representations and warranties contained in Section 4 of the Guarantee and
Pledge Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.
2
2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: _____________________________________________
Name:
Title:
Annex 1-A to
Assumption Agreement
Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Schedule 4
TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS.......................................................1
1.1 Definitions...........................................................1
1.2 Other Definitional Provisions.........................................5
SECTION 2. GUARANTEE...........................................................5
2.1 Guarantee.............................................................6
2.2 Right of Contribution.................................................7
2.3 No Subrogation........................................................7
2.4 Amendments, etc. with respect to Obligations..........................7
2.5 Guarantee Absolute and Unconditional..................................8
2.6 Reinstatement.........................................................9
2.7 Payments..............................................................9
SECTION 3. GRANT OF SECURITY INTEREST..........................................9
SECTION 4. REPRESENTATIONS AND WARRANTIES.....................................10
4.1 Title; No Other Liens................................................10
4.2 Perfected First Priority Liens.......................................10
4.3 Chief Executive Office...............................................10
4.4 Investment Property..................................................10
SECTION 5. COVENANTS..........................................................11
5.1 Delivery of Certificated Securities..................................11
5.2 Payment of Obligations...............................................11
5.3 Maintenance of Perfected Security Interest; Further Documentation....11
5.4 Changes in Locations, Name, etc. ....................................12
5.5 Notices..............................................................12
5.6 Investment Property..................................................12
SECTION 6. REMEDIAL PROVISIONS................................................13
6.1 Pledged Stock........................................................13
6.2 Proceeds to be Turned Over To Administrative Agent...................14
6.3 Application of Proceeds..............................................15
6.4 Code and Other Remedies..............................................15
6.5 Private Sales........................................................16
6.6 Waiver; Deficiency...................................................16
SECTION 7. THE ADMINISTRATIVE AGENT...........................................17
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. ........17
7.2 Duty of Administrative Agent.........................................18
7.3 Execution of Financing Statements....................................18
7.4 Authority of Administrative Agent....................................19
SECTION 8. MISCELLANEOUS......................................................19
8.1 Amendments in Writing................................................19
8.2 Notices..............................................................19
8.3 No Waiver by Course of Conduct; Cumulative Remedies..................19
8.4 Enforcement Expenses; Indemnification................................19
8.5 Successors and Assigns...............................................20
8.6 Set-Off..............................................................20
8.7 Counterparts.........................................................21
8.8 Severability.........................................................21
8.9 Section Headings.....................................................21
8.10 Integration.........................................................21
8.11 GOVERNING LAW.......................................................21
8.12 Submission To Jurisdiction; Waivers.................................21
8.13 Acknowledgements....................................................22
8.14 Additional Grantors.................................................22
8.15 Releases............................................................22
8.16 WAIVER OF JURY TRIAL................................................23
8.17 Conversion of Currencies............................................23
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Pledged Stock
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization and Chief Executive Offices
