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EXHIBIT 4.15
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is entered into as
of June 26, 1998 among XXXX INDUSTRIES, INC., a Delaware corporation (the
"Borrower"), each Subsidiary Guarantor (individually a "Subsidiary Guarantor"
and collectively the "Subsidiary Guarantors"), XXXX INDUSTRIES, LLC, a Delaware
limited liability company ("M.I. LLC"), XXXX PLASTICS, LLC, a Delaware limited
liability company("M.P. LLC"; together with the Borrower, the Subsidiary
Guarantors and M.I. LLC, individually an "Obligor", and collectively the
"Obligors") which may hereafter execute a Joinder Agreement (as defined in the
Credit Agreement hereinafter referred to), and NATIONSBANK, N.A., in its
capacity as agent (in such capacity, the "Agent") for the lenders from time to
time party to the Credit Agreement described below (the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Amended and Restated Credit
Agreement, dated as of the date hereof (as amended, modified, extended, renewed
or replaced from time to time, the "Credit Agreement"), among the Obligors,
Anchor Holdings, Inc., the Lenders and the Agent, the Lenders have agreed to
make Loans and issue Letters of Credit upon the terms and subject to the
conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Obligors shall
have executed and delivered this Security Agreement to the Agent for the ratable
benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit
Agreement, and the following terms which are defined in the Uniform
Commercial Code on the date hereof are used herein as so defined:
Accounts, Deposit Accounts, Inventory and Proceeds. For purposes of
this Security Agreement, the term "Lender" shall include any Affiliate
of any Lender to which Hedging Obligations are owed by an Obligor.
(b) In addition, the following terms shall have the following
meanings:
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"Secured Obligations": the collective reference to all of the
Credit Party Obligations, now existing or hereafter arising pursuant to
the Credit Documents, owing from the Borrower or any other Credit Party
to any Lender or the Agent, howsoever evidenced, created, incurred or
acquired, whether primary, secondary, direct, contingent, or joint and
several, including, without limitation, all liabilities arising under
Hedging Agreements and all obligations and liabilities incurred in
connection with collecting and enforcing the foregoing.
"Subsidiary Assets": (i) any and all of each Obligor's equity
ownership interests in any partnership or limited liability company
which is a direct or indirect Domestic Subsidiary of the Borrower on
Schedule 1(a) attached hereto or (ii) each Obligor's equity ownership
interests in Xxxx Plastics SARL, a French limited liability company,
listed on such Schedule 1(a) (collectively, the "LLCs"), including,
without limitation, (A) all related rights, title and interest to
participate in the operation or management of the LLCs and all its
rights to properties, assets, partnership interests and distributions
under the operating, partnership or other applicable organic agreement
in respect thereof (collectively, the "LLC Interests"), (B) all related
rights to receive dividends, distributions or such other payments
arising out of such operating, partnership or other applicable organic
agreement in respect of such Obligor's LLC Interests and (C) all
related General Intangibles arising out of or constituted by such
operating, partnership or other applicable organic agreement in respect
of such Obligor's LLC Interests.
"Trademark License": any agreement, written or oral, providing
for the grant by or to an Obligor of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule 1(b)
hereto.
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 1(b) hereto, and (b) all renewals
thereof.
2. Grant of Security Interest in the Collateral. To secure the prompt
payment and performance in full when due, whether by lapse of time, acceleration
or otherwise, of the Secured Obligations, each Obligor hereby grants to the
Agent, for the benefit of the Lenders, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Obligor
in and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "Collateral"):
(a) all Accounts;
(b) all Inventory;
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(c) all Trademarks;
(d) all Trademark Licenses;
(e) all actions of infringement, including the rights to
xxx for and to recover and retain all damages and
profits arising from past infringements concerning
any Trademarks or Trademark Licenses;
(f) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks, and
related data processing software (owned by such
Obligor or in which (i) it has an interest and (ii) a
security interest may be granted) that at any time
evidence or contain information relating to any
Collateral or are otherwise necessary or helpful in
the collection thereof or realization thereupon;
(g) all Subsidiary Assets;
(h) all cash and Cash Equivalents maintained on deposit
with the Agent; and
(i) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing.
The Obligors and the Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest created hereby in the
Collateral (i) constitutes continuing collateral security for all of the Secured
Obligations, whether now existing or hereafter arising and (ii) is not to be
construed as an assignment of any Trademarks or Trademark Licenses.
3. Provisions Relating to Accounts.
(a) Anything herein to the contrary notwithstanding, each of
the Obligors shall remain liable under each of the Accounts to observe
and perform all the material conditions and obligations to be observed
and performed by it thereunder so long as the applicable account party
is not in default in respect thereof, all in accordance with the terms
of any agreement giving rise to each such Account. Neither the Agent
nor any Lender shall have any obligation or liability under any Account
(or any agreement giving rise thereto) by reason of or arising out of
this Security Agreement or the receipt by the Agent or any Lender of
any payment relating to such Account pursuant hereto, nor shall the
Agent or any Lender be obligated in any manner to perform any of the
obligations of an Obligor under or pursuant to any Account (or any
agreement giving rise thereto), to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party under any
Account (or any agreement giving rise thereto), to present or file any
claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which
it may be entitled at any time or times.
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(b) Once during each calendar year or at any time after the
occurrence and during the continuation of an Event of Default, the
Agent shall have the right, but not the obligation, to (i) subject to
the terms of the immediately succeeding sentence, make test
verifications of the Accounts in any manner and through any medium that
it reasonably considers advisable, and the Obligors shall furnish all
such assistance and information as the Agent may require in connection
with such test verifications and (ii) upon written request, to have the
Obligors, at their own expense, cause independent public accountants or
others satisfactory to the Agent to furnish to the Agent reports
showing reconciliations, aging and test verifications of, and trial
balances for, the Accounts. The Agent in its own name or in the name of
others may communicate with account debtors on the Accounts to verify
with them to the Agent's satisfaction the existence, amount and terms
of any Accounts, provided that if no Event of Default is existing, the
Agent shall first obtain the consent of the Borrower (such consent not
to be unreasonably withheld).
4. Representations and Warranties. Each Obligor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Secured Obligations remain outstanding or any Credit Document is in effect
or any Letter of Credit shall remain outstanding, and until all of the
Commitments shall have been terminated:
(a) Chief Executive Office; Books & Records. Each Obligor's
chief executive office and chief place of business is (and for the
prior four months have been) located at the locations set forth on
Schedule 4(a) hereto, and each Obligor keeps its books and records at
such locations.
(b) Location of Collateral. The location of all Collateral
owned by each Obligor is as shown on Schedule 4(b) hereto.
(c) Ownership. Each Obligor is the legal and beneficial owner
of its Collateral and has the right to pledge, sell, assign or transfer
the same. Each Obligor's legal name is as shown in this Security
Agreement and no Obligor has in the past four months changed its name,
been party to a merger, consolidation or other change in structure or
used any tradename except in connection with the Transaction or as set
forth in Schedule 4(c) attached hereto.
(d) Security Interest/Priority. This Security Agreement
creates a valid security interest in favor of the Agent, for the
benefit of the Lenders, in the Collateral of such Obligor and, when
properly perfected by filing of Uniform Commercial Code financing
statements, shall constitute a valid perfected security interest in
such Collateral, to the extent such security can be perfected by filing
under the UCC, free and clear of all Liens except for Permitted Liens.
(e) Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
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(f) Accounts. (i) Each Account of the Obligors and the papers
and documents relating thereto are genuine and in all material respects
what they purport to be, (ii) each Account arises out of (A) a bona
fide sale of goods sold and delivered by such Obligor (or is in the
process of being delivered) or (B) services theretofore actually
rendered by such Obligor to, the account debtor named therein, (iii) no
Account of an Obligor is evidenced by any Instrument or Chattel Paper
unless such Instrument or Chattel Paper has been theretofore endorsed
over and delivered to the Agent and (iv) no surety bond was required or
given in connection with any Account of an Obligor or the contracts or
purchase orders out of which they arose.
(g) Inventory. No Inventory is held by an Obligor pursuant to
consignment, sale or return, sale on approval or similar arrangement.
(h) Trademarks.
(i) Schedule 1(b) hereto includes all
Trademarks and Trademark Licenses owned by the Obligors in
their own names as of the date hereof.
(ii) To the best of each Obligor's
knowledge, each Trademark of such Obligor is valid,
subsisting, unexpired, enforceable and has not been abandoned.
(iii) Except as set forth in Schedule 1(b)
hereto, none of the Trademarks are the subject of any
licensing or franchise agreement.
(iv) No holding, decision or judgment has
been rendered by any Governmental Authority which would limit,
cancel or question the validity of any Trademark.
(v) No action or proceeding is pending
seeking to limit, cancel or question the validity of any
Trademark, or which, if adversely determined, would have a
Material Adverse Effect.
(vi) All applications pertaining to the
Trademarks of each Obligor have been duly and properly filed,
and all registrations or letters pertaining to such Trademarks
have been duly and properly filed and issued, and all of such
Trademarks are valid and enforceable.
(vii) No Obligor has made any assignment or
agreement in conflict with the security interest in the
Trademarks of each Obligor hereunder.
5. Covenants. Each Obligor covenants that, so long as any of the
Secured Obligations remain outstanding or any Credit Document is in effect or
any Letter of Credit shall remain outstanding, and until all of the Commitments
shall have been terminated, such Obligor shall:
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(a) Other Liens. Defend the Collateral against the claims and
demands of all other parties claiming an interest therein, keep the
Collateral free from all Liens, except for Permitted Liens, and not
sell, exchange, transfer, assign, lease or otherwise dispose of the
Collateral or any interest therein, except as permitted under the
Credit Agreement.
(b) Preservation of Collateral. Keep the Collateral in good
order, condition and repair and not use the Collateral in violation of
the provisions of this Security Agreement or any other agreement
relating to the Collateral or any policy insuring the Collateral or any
applicable statute, law, bylaw, rule, regulation or ordinance.
(c) Instruments/Chattel Paper. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, immediately deliver such Instrument
or Chattel Paper to the Agent, duly indorsed in a manner satisfactory
to the Agent, to be held as Collateral pursuant to this Security
Agreement.
(d) Change in Location, etc. Not, without providing 30 days
prior written notice to the Agent and without filing such amendments to
any previously filed financing statements as the Agent may require, (a)
change the location of its chief executive office and chief place of
business from the locations set forth on Schedule 4(a) hereto, (b)
change the location of its Collateral from the locations set forth for
such Obligor on Schedule 4(b) hereto, or (c) except for transactions
expressly permitted by the Credit Agreement, change its name, be party
to a merger, consolidation or other change in structure or use any
tradename other than as set forth on Schedule 4(c) attached hereto.
(e) Inspection. Allow the Agent or its representatives to
visit and inspect the Collateral as set forth in Section 7.11 of the
Credit Agreement.
(f) Perfection of Security Interest. Execute and deliver to
the Agent such agreements, assignments or instruments (including
affidavits, notices, reaffirmations and amendments and restatements of
existing documents, as the Agent may reasonably request) and do all
such other things as the Agent may reasonably deem necessary or
appropriate (i) to assure to the Agent its security interests
hereunder, including (A) such financing statements (including renewal
statements) or amendments thereof or supplements thereto or other
instruments as the Agent may from time to time reasonably request in
order to perfect and maintain the security interests granted hereunder
in accordance with the UCC, (B) with regard to Trademarks, a Notice of
Grant of Security Interest in Trademarks for filing with the United
States Patent and Trademark Office in the form of Schedule 5(f)(i)
attached hereto, (ii) to consummate the transactions contemplated
hereby and (iii) to otherwise protect and assure the Agent of its
rights and interests hereunder. To that end, each Obligor agrees that
the Agent may file one or more financing statements disclosing the
Agent's security interest in any or all of the Collateral of such
Obligor without, to the extent permitted by law, such Obligor's
signature thereon, and further each Obligor also hereby irrevocably
makes, constitutes and appoints the Agent, its nominee or any other
person whom the Agent may designate, as such Obligor's attorney in fact
with full power and for
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the limited purpose to sign in the name of such Obligor any such
financing statements, or amendments and supplements to financing
statements, renewal financing statements, notices or any similar
documents which in the Agent's reasonable discretion would be
necessary, appropriate or convenient in order to perfect and maintain
perfection of the security interests granted hereunder, such power,
being coupled with an interest, being and remaining irrevocable so long
as the Credit Agreement is in effect or any amounts payable thereunder
or under any other Credit Document, any Letter of Credit shall remain
outstanding, and until all of the Commitments thereunder shall have
terminated. Each Obligor hereby agrees that a carbon, photographic or
other reproduction of this Security Agreement or any such financing
statement is sufficient for filing as a financing statement by the
Agent without notice thereof to such Obligor wherever the Agent may in
its sole discretion desire to file the same. In the event for any
reason the law of any jurisdiction other than North Carolina becomes or
is applicable to the Collateral of any Obligor or any part thereof, or
to any of the Secured Obligations, such Obligor agrees to execute and
deliver all such instruments and to do all such other things as the
Agent in its sole discretion reasonably deems necessary or appropriate
to preserve, protect and enforce the security interests of the Agent
under the law of such other jurisdiction (and, if an Obligor shall fail
to do so promptly upon the request of the Agent, then the Agent may
execute any and all such requested documents on behalf of such Obligor
pursuant to the power of attorney granted hereinabove). If any
Collateral is in the possession or control of an Obligor's agents and
the Agent so requests, such Obligor agrees to notify such agents in
writing of the Agent's security interest therein and, upon the Agent's
request, instruct them to hold all such Collateral for the Lenders'
account and subject to the Agent's instructions.
(g) Treatment of Accounts. Not grant or extend the time for
payment of any Account, or compromise or settle any Account for less
than the full amount thereof, or release any person or property, in
whole or in part, from payment thereof, or allow any credit or discount
thereon, other than as normal and customary in the ordinary course of
an Obligor's business.
(h) New Trademarks. Promptly provide the Agent with (i) a
listing of all applications, if any, for new Trademarks (together with
a listing of the issuance of registrations or letters on present
applications), which new applications and issued registrations or
letters shall be subject to the terms and conditions hereunder, and
(ii) (A) with respect to Trademarks, a duly executed Notice of Security
Interest in Trademarks or (B) such other duly executed documents as the
Agent may request in a form acceptable to counsel for the Agent and
suitable for recording to evidence the security interest in the
Trademark which is the subject of such new application.
(i) Insurance. Insure the Collateral of such Obligor as set
forth in Section 7.6 of the Credit Agreement. All insurance proceeds
shall be subject to the security interest of the Agent hereunder.
6. Advances by Lenders. On failure of any Obligor to perform any of the
covenants and agreements contained herein, the Agent may, at its sole option and
in its sole discretion,
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perform the same and in so doing may expend such sums as the Agent may
reasonably deem advisable in the performance thereof, including, without
limitation, the payment of any insurance premiums, the payment of any taxes, a
payment to obtain a release of a Lien or potential Lien, expenditures made in
defending against any adverse claim and all other expenditures which the Agent
or the Lenders may make for the protection of the security hereof or which may
be compelled to make by operation of law. All such sums and amounts so expended
shall be repayable by the Obligors on a joint and several basis promptly upon
timely notice thereof and demand therefor, shall constitute additional Secured
Obligations and shall bear interest from the date said amounts are expended at
the default rate specified in Section 3.1(b) of the Credit Agreement for
Revolving Loans that are Base Rate Loans. No such performance of any covenant or
agreement by the Agent or the Lenders on behalf of any Obligor, and no such
advance or expenditure therefor, shall relieve the Obligors of any default under
the terms of this Security Agreement or the other Credit Documents. The Lenders
may make any payment hereby authorized in accordance with any xxxx, statement or
estimate procured from the appropriate public office or holder of the claim to
be discharged without inquiry into the accuracy of such xxxx, statement or
estimate or into the validity of any tax assessment, sale, forfeiture, tax lien,
title or claim except to the extent such payment is being contested in good
faith by an Obligor in appropriate proceedings and against which adequate
reserves are being maintained in accordance with GAAP.
7. Events of Default.
The occurrence of an event which under the Credit Agreement would
constitute an Event of Default shall be an Event of Default hereunder (an "Event
of Default").
8. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during continuation thereof, the Lenders shall have, in
addition to the rights and remedies provided herein, in the Credit
Documents or by law (including, but not limited to, the rights and
remedies set forth in the Uniform Commercial Code of the jurisdiction
applicable to the affected Collateral), the rights and remedies of a
secured party under the UCC (regardless of whether the UCC is the law
of the jurisdiction where the rights and remedies are asserted and
regardless of whether the UCC applies to the affected Collateral), and
further, the Agent may, with or without judicial process or the aid and
assistance of others, to the extent not prohibited by applicable law,
(i) enter on any premises on which any of the Collateral may be located
and, without resistance or interference by the Obligors, take
possession of the Collateral, (ii) dispose of any Collateral on any
such premises, (iii) require the Obligors to assemble and make
available to the Agent at the expense of the Obligors any Collateral at
any place and time designated by the Agent which is reasonably
convenient to both parties, (iv) remove any Collateral from any such
premises for the purpose of effecting sale or other disposition
thereof, and/or (v) without demand and without advertisement, notice,
hearing or process of law, all of which each of the Obligors hereby
waives to the fullest extent permitted by law, at any place and time or
times, sell and deliver any or all Collateral held by or for it at
public or private sale, by one or more contracts, in one or more
parcels, for cash, upon credit or otherwise, at such prices and upon
such terms as the Agent deems
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advisable, in its sole discretion (subject to any and all mandatory
legal requirements). In addition to all other sums due the Agent and
the Lenders with respect to the Secured Obligations, the Obligors shall
pay the Agent and each of the Lenders all reasonable documented costs
and expenses incurred by the Agent or any such Lender, including, but
not limited to, reasonable attorneys' fees and court costs, in
obtaining or liquidating the Collateral, in enforcing payment of the
Secured Obligations, or in the prosecution or defense of any action or
proceeding by or against the Agent or the Lenders or the Obligors
concerning any matter arising out of or connected with this Security
Agreement, any Collateral or the Secured Obligations, including,
without limitation, any of the foregoing arising in, arising under or
related to a case under the Bankruptcy Code. To the extent the rights
of notice cannot be legally waived hereunder, each Obligor agrees that
any requirement of reasonable notice shall be met if such notice is
delivered to the Borrower in accordance with the notice provisions of
Section 11.1 of the Credit Agreement at least 10 days before the time
of sale or other event giving rise to the requirement of such notice.
The Agent and the Lenders shall not be obligated to make any sale or
other disposition of the Collateral regardless of notice having been
given. To the extent permitted by law, any Lender may be a purchaser at
any such sale. To the extent permitted by applicable law, each of the
Obligors hereby waives all of its rights of redemption with respect to
any such sale. Subject to the provisions of applicable law, the Agent
and the Lenders may postpone or cause the postponement of the sale of
all or any portion of the Collateral by announcement at the time and
place of such sale, and such sale may, without further notice, to the
extent permitted by law, be made at the time and place to which the
sale was postponed, or the Agent and the Lenders may further postpone
such sale by announcement made at such time and place.
(b) Remedies relating to Accounts. Upon the occurrence of an
Event of Default and during the continuation thereof, whether or not
the Agent has exercised any or all of its rights and remedies
hereunder, (i) each Obligor will promptly upon request of the Agent
instruct all account debtors to remit all payments in respect of
Accounts to a mailing location selected by the Agent and (ii) the Agent
or its designee may notify any Obligor's customers and account debtors
that the Accounts of such Obligor have been assigned to the Agent or of
the Agent's security interest therein, and may (either in its own name
or in the name of an Obligor or both) demand, collect (including
without limitation by way of a lockbox arrangement), receive, take
receipt for, sell, xxx for, compound, settle, compromise and give
acquittance for any and all amounts due or to become due on any
Account, and, in the Agent's discretion, file any claim or take any
other action or proceeding to protect and realize upon the security
interest of the Lenders in the Accounts. Each Obligor acknowledges and
agrees that the Proceeds of its Accounts remitted to or on behalf of
the Agent in accordance with the provisions hereof shall be solely for
the Agent's own convenience and that such Obligor shall not have any
right, title or interest in such Accounts or in any such other amounts
except as expressly provided herein. The Agent and the Lenders shall
have no liability or responsibility to any Obligor for acceptance of a
check, draft or other order for payment of money bearing the legend
"payment in full" or words of similar import or any other restrictive
legend or endorsement or be responsible for determining the correctness
of any remittance. Each Obligor hereby agrees to indemnify
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the Agent and the Lenders from and against all liabilities, damages,
losses, actions, claims, judgments, costs, expenses, charges and
reasonable attorneys' fees suffered or incurred by the Agent or the
Lenders because of the maintenance of the foregoing arrangements except
as relating to or arising out of the gross negligence or willful
misconduct of the Agent or a Lender or its officers, employees or
agents.
(c) Access. In addition to the rights and remedies hereunder,
upon the occurrence of an Event of Default and during the continuance
thereof, the Agent shall have the right to enter and remain upon the
various premises of the Obligors without cost or charge to the Agent,
and use the same, together with materials, supplies, books and records
of the Obligors for the purpose of collecting and liquidating the
Collateral, or for preparing for sale and conducting the sale of the
Collateral, whether by foreclosure, auction or otherwise. In addition,
the Agent may remove Collateral, or any part thereof, from such
premises and/or any records with respect thereto, in order to
effectively collect or liquidate such Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the Agent or
the Lenders to exercise any right, remedy or option under this Security
Agreement, any other Credit Document or as provided by law, or any
delay by the Agent or the Lenders in exercising the same, shall not
operate as a waiver of any such right, remedy or option. No waiver
hereunder shall be effective unless it is in writing, signed by the
party against whom such waiver is sought to be enforced and then only
to the extent specifically stated, which in the case of the Agent or
the Lenders shall only be granted as provided herein. To the extent
permitted by law, neither the Agent, the Lenders, nor any party acting
as attorney for the Agent or the Lenders, shall be liable hereunder for
any acts or omissions or for any error of judgment or mistake of fact
or law other than their gross negligence or willful misconduct
hereunder. The rights and remedies of the Agents and the Lenders under
this Security Agreement shall be cumulative and not exclusive of any
other right or remedy which the Agent or the Lenders may have.
(e) Retention of Collateral. The Agent may, after providing
the notices required by Section 9-505(2) of the UCC or otherwise
complying with the requirements of applicable law of the relevant
jurisdiction, to the extent the Agent is in possession of any of the
Collateral, retain the Collateral in satisfaction of the Secured
Obligations. Unless and until the Agent shall have provided such
notices, however, the Agent shall not be deemed to have retained any
Collateral in satisfaction of any Secured Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which
the Agent or the Lenders are legally entitled, the Obligors shall be
jointly and severally liable for the deficiency, together with interest
thereon at the default rate specified in Section 3.1(b) of the Credit
Agreement for Revolving Loans that are Base Rate Loans, together with
the costs of collection and the reasonable fees of any attorneys
employed by the Agent to collect such deficiency. Any surplus remaining
after the full payment and satisfaction of the Secured Obligations
shall be
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returned to the Obligors or to whomsoever a court of competent
jurisdiction shall determine to be entitled thereto.
9. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Obligor hereby designates and appoints the
Agent, on behalf of the Lenders, and each of its designees or agents,
as attorney-in-fact of such Obligor, irrevocably and with power of
substitution, with authority to take any or all of the following
actions upon the occurrence and during the continuance of an Event of
Default:
(i) to demand, collect, settle, compromise, adjust,
give discharges and releases, all as the Agent may reasonably
determine;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any Collateral and
enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or
release as the Agent may deem reasonably appropriate;
(iv) receive, open and dispose of mail addressed to
an Obligor and endorse checks, notes, drafts, acceptances,
money orders, bills of lading, warehouse receipts or other
instruments or documents evidencing payment, shipment or
storage of the goods giving rise to the Collateral of such
Obligor on behalf of and in the name of such Obligor, or
securing, or relating to such Collateral;
(v) sell, assign, transfer, make any agreement in
respect of, or otherwise deal with or exercise rights in
respect of, any Collateral or the goods or services which have
given rise thereto, as fully and completely as though the Bank
were the absolute owner thereof for all purposes;
(vi) adjust and settle claims under any insurance
policy relating thereto;
(vii) execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, security agreements, affidavits, notices
and other agreements, instruments and documents that the Agent
may determine necessary in order to perfect and maintain the
security interests and liens granted in this Security
Agreement and in order to fully consummate all of the
transactions contemplated therein;
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(viii) institute any foreclosure proceedings that the
Agent may deem appropriate; and
(ix) do and perform all such other acts and things as
the Agent may reasonably deem to be necessary, proper or
convenient in connection with the Collateral.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Secured Obligations remain
outstanding, any Credit Document is in effect or any Letter of Credit
shall remain outstanding and (ii) until all of the Commitments shall
have been terminated. The Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and
options expressly or implicitly granted to the Agent in this Security
Agreement, and shall not be liable for any failure to do so or any
delay in doing so. The Agent shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or law in
its individual capacity or its capacity as attorney-in-fact except acts
or omissions resulting from its gross negligence or willful misconduct.
This power of attorney is conferred on the Agent solely to protect,
preserve and realize upon its security interest in the Collateral.
(b) Performance by the Agent of Obligations. If any Obligor
fails to perform any agreement or obligation contained herein, the
Agent itself may perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by the Obligors on a joint and several basis
pursuant to Section 11 hereof.
(c) The Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while
being held by the Agent hereunder, the Agent shall have no duty or
liability to preserve rights pertaining thereto, it being understood
and agreed that the Obligors shall be responsible for preservation of
all rights in the Collateral, and the Agent shall be relieved of all
responsibility for the Collateral upon surrendering it or tendering the
surrender of it to the Obligors. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Agent accords its own property,
which shall be no less than the treatment employed by a reasonable and
prudent agent in the industry, it being understood that the Agent shall
not have responsibility for taking any necessary steps to preserve
rights against any parties with respect to any of the Collateral.
10. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the Agent or
any of the Lenders in cash or its equivalent, will be applied in reduction of
the Secured Obligations in the order set forth in Section 3.8 of the Credit
Agreement, and each Obligor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Agent shall have the continuing and
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exclusive right to apply and reapply any and all such payments and proceeds in
the Agent's sole discretion, notwithstanding any entry to the contrary upon any
of its books and records.
11. Costs of Counsel. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, the Agent employs counsel to prepare
or consider amendments, waivers or consents with respect to this Security
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Security Agreement or relating to the
Collateral, or to protect the Collateral or exercise any rights or remedies
under this Security Agreement or with respect to the Collateral, then the
Obligors agree to promptly pay upon demand any and all such reasonable
documented costs and expenses of the Agent or the Lenders, all of which costs
and expenses shall constitute Secured Obligations hereunder.
12. Continuing Agreement.
(a) This Security Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long as any
of the Secured Obligations remain outstanding, any Credit Document is
in effect or any Letter of Credit shall remain outstanding, and until
all of the Commitments thereunder shall have terminated (other than any
obligations with respect to the indemnities and the representations and
warranties set forth in the Credit Documents). Upon such payment and
termination, this Security Agreement shall be automatically terminated
and the Agent and the Lenders shall, upon the request and at the
expense of the Obligors, forthwith release all of its liens and
security interests hereunder and shall execute and deliver all UCC
termination statements and/or other documents reasonably requested by
the Obligors evidencing such termination. Notwithstanding the foregoing
all releases and indemnities provided hereunder shall survive
termination of this Security Agreement.
(b) This Security Agreement shall continue to be effective or
be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Secured Obligations is
rescinded or must otherwise be restored or returned by the Agent or any
Lender as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had
not been made; provided that in the event payment of all or any part of
the Secured Obligations is rescinded or must be restored or returned,
all reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Agent or any
Lender in defending and enforcing such reinstatement shall be deemed to
be included as a part of the Secured Obligations.
13. Amendments; Waivers; Modifications. This Security Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 of the Credit Agreement.
14. Successors in Interest. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the
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benefit of the Agent and the Lenders and their successors and permitted assigns;
provided, however, that none of the Obligors may assign its rights or delegate
its duties hereunder without the prior written consent of each Lender or the
Required Lenders, as required by the Credit Agreement. To the fullest extent
permitted by law, each Obligor hereby releases the Agent and each Lender, and
its successors and assigns, from any liability for any act or omission relating
to this Security Agreement or the Collateral, except for any liability arising
from the gross negligence or willful misconduct of the Agent, or such Lender, or
its officers, employees or agents.
15. Notices. All notices required or permitted to be given under this
Security Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
16. Counterparts. This Security Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart.
17. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Security Agreement.
18. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
Any legal action or proceeding with respect to this Security Agreement
may be brought in the courts of the State of North Carolina (including
Mecklenburg County, North Carolina) or of the United States for the
Western District of North Carolina, and, by execution and delivery of
this Security Agreement, each Obligor hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally,
the jurisdiction of such courts. Each Obligor further irrevocably
consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the delivery of copies
thereof in accordance with the notice provisions of Section 11.1 of the
Credit Agreement. Nothing herein shall affect the right of the Agent to
serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Obligor in any other
jurisdiction.
(b) Each Obligor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Security Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
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15
19. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
20. Severability. If any provision of any of the Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
21. Entirety. This Security Agreement and the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
22. Survival. All representations and warranties of the Obligors
hereunder shall survive the execution and delivery of this Security Agreement
and the other Credit Documents, the delivery of the Notes and the making of the
Loans and the issuance of the Letters of Credit under the Credit Agreement.
23. Other Security. To the extent that any of the Secured Obligations
are now or hereafter secured by property other than the Collateral (including,
without limitation, real property and securities owned by an Obligor), or by a
guarantee, endorsement or property of any other Person, then the Agent and the
Lenders shall have the right to proceed against such other property, guarantee
or endorsement upon the occurrence of any Event of Default, and the Agent and
the Lenders have the right, in their sole discretion, to determine which rights,
security, liens, security interests or remedies the Agent and the Lenders shall
at any time pursue, relinquish, subordinate, modify or take with respect
thereto, without in any way modifying or affecting any of them or any of the
Agent's and the Lenders' rights or the Secured Obligations under this Security
Agreement, under any other of the Credit Documents.
24. Joint and Several Obligations of Obligors.
(a) Each of the Obligors is accepting joint and several
liability hereunder in consideration of the financial accommodation to
be provided by the Lenders under the Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Obligors and in
consideration of the undertakings of each of the Obligors to accept
joint and several liability for the obligations of each of them.
(b) Each of the Obligors jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Obligors with respect to the payment and performance of all of the
Secured Obligations arising under this Security Agreement and the other
Credit Documents,
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it being the intention of the parties hereto that all the Obligations
shall be the joint and several obligations of each of the Obligors
without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents, to the extent the
obligations of a Subsidiary Guarantor shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers) then the obligations of each Subsidiary
Guarantor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
25. Xxxx Plastics SARL. Each party hereto acknowledges that the
provisions of this Security Agreement shall govern in respect the pledge of
shares of Xxxx Plastics SARL only to the extent that such provisions do not
contradict the provisions of that certain Contrat De Nontissement De Parts
Sociales dated as of June 26, 1998 among M.I. LLC, M.P. LLC and the Agent.
26. Rights of Required Lenders. All rights of the Agent hereunder, if
not exercised by the Agent, may be exercised by the Required Lenders.
[remainder of page intentionally left blank]
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Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.
XXXX INDUSTRIES, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
----------------------
Name: Xxxxxx X. Xxxxx
----------------------
Title: Chairman & CEO
----------------------
XXXX INDUSTRIES, LLC,
a Delaware limited liability
By: /s/ Xxxxxx X. Xxxxx
----------------------
Name: Xxxxxx X. Xxxxx
----------------------
Title: Chairman & CEO of Xxxx
----------------------
Industries, Inc., Manager
-------------------------
XXXX PLASTICS, LLC,
a Delaware limited liability
By: /s/ Xxxxxx X. Xxxxx
----------------------
Name: Xxxxxx X. Xxxxx
----------------------
Title: Manager
----------------------
Accepted and agreed to in Charlotte, North Carolina as of the date
first above written.
NATIONSBANK, N.A., as Agent
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxxxx
----------------------
Title: Vice President
----------------------
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SCHEDULE 1(a)
DESCRIPTION OF PARTNERSHIP AND LIMITED LIABILITY COMPANY INTERESTS
(a) All equity ownership interests in any partnership or limited liability
company which is a direct or indirect Domestic Subsidiary of the
Borrower, including without limitation the interests in Xxxx Industries
LLC and Xxxx Plastics LLC listed below; and
(b) the equity ownership interests in Xxxx Plastics SARL, a French limited
liability company, listed below (such equity ownership interests
constituting approximately 65% of the total equity ownership interests
in Xxxx Plastics SARL as of the Closing Date).
ISSUER OWNER(S) NUMBER OF SHARES
Xxxx Industries, LLC Xxxx Industries, Inc. 100%
Xxxx Plastics, LLC Xxxx Industries, LLC 100%
7 shares owned by Xxxx
Xxxx Plastics SARL Xxxx Industries, LLC Industries, LLC and 320 shares
and Xxxx Plastics, LLC owned by Xxxx Plastics, LLC
19
SCHEDULE 1(b)
TRADEMARKS
XXXX INDUSTRIES, INC.
(SUCCESSOR TO ANCHOR ADVANCED PRODUCTS, INC.)
U.S. TRADEMARKS
PENDING APPLICATIONS
XXXX APPLICATION SERIAL NO. FILING DATE
SMOOTH-MOVE 75/024,345 11/27/95
REGISTERED XXXXX
XXXX REGISTRATION NO. REGISTRATION DATE
ANCHOR 1,404,994 8/12/86
Design Xxxx 1,114,131 2/27/79
ANCODENT (Stylized) 612,523 9/20/55
20
SCHEDULE 4(a)
CHIEF EXECUTIVE OFFICE
CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS
BORROWER/PARENT
0000 XXXXXXXXXX XXXXX, XXXXX X000
XXXXXXXXX, XX 00000-0000
XXXX PLASTICS, LLC/XXXX INDUSTRIES,LLC
0000 XXXX XXXXXX XXXXXXXXX
XXXXXXXX, XX 00000
21
SCHEDULE 4(b)
LOCATIONS OF COLLATERAL
1. ELK GROVE, XXXX COUNTY, ILLINOIS
2. HARLINGEN, CAMERON COUNTY, TX
3. KNOXVILLE, XXXX COUNTY, TN
4. MORRISTOWN, XXXXXXX COUNTY, TN
5. ROUND ROCK, XXXXXXXXXX COUNTY, TX
6. XXXXXXX, XXX COUNTY, NC
7. SEAGROVE,NC
8. WATERBURY, XXX XXXXX XXXXXX, XX
0. XXXXX, XXXXXXX XXXXXX, XX
10. FAIRPORT, MONROE COUNTY, NY
11. XXXX XXXXX, XX 00000
12. XXXXXXX, XX 00000
13. XXXXXXXXXX, XX 00000
14. XXX XXXXXXX, XX 00000
15. XXXXXX, XX 00000
16. XX XXXXXX, XX 00000
22
SCHEDULE 4(c)
MERGERS, CONSOLIDATIONS, CHANGE IN STRUCTURE OR USE OF TRADENAMES
The Borrower contemplates that Gemini will merge into it, with the
Borrower as the surviving entity.
None
23
SCHEDULE 5(f)(i)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
TRADEMARKS
United States Patent and Trademark Office
Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of
June 26, 1998 (the "Security Agreement") by and among the Obligors party thereto
(each an "Obligor" and collectively, the "Obligors") and NationsBank, N.A., as
Agent (the "Agent") for the lenders referenced therein (the "Lenders"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon, the trademarks and trademark applications shown below to the Agent
for the ratable benefit of the Lenders:
TRADEMARKS
Description of Trademark Date of
Trademark No. Item Trademark
Trademark Applications
Trademark Description of Trademark Date of Trademark
Applications No. Applied For Applications
24
The Obligors and the Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest in the foregoing trademarks and
trademark applications (i) may only be terminated in accordance with the terms
of the Security Agreement and (ii) is not to be construed as an assignment of
any trademark or trademark application.
Very truly yours,
------------------------------------
[Obligor]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Acknowledged and Accepted:
NATIONSBANK, N.A., as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
