1
Exhibit 10.33
THIRD AMENDMENT TO REVOLVING CREDIT
AND LETTER OF CREDIT ISSUANCE AGREEMENT
AND AMENDMENT TO REVOLVING CREDIT NOTES
This THIRD AMENDMENT TO REVOLVING CREDIT AND LETTER OF CREDIT
ISSUANCE AGREEMENT AND AMENDMENT TO REVOLVING CREDIT NOTES is made as of this
30th day of April, 1999 (this "THIRD AMENDMENT"), and entered into by and among
THE CARBIDE/GRAPHITE GROUP, INC., a corporation organized and existing under the
laws of the State of Delaware (the "BORROWER"), the financial institutions party
thereto as lenders (collectively referred to herein as the "LENDERS"), PNC BANK,
NATIONAL ASSOCIATION, in its capacity as the issuer of letters of credit (in
such capacity, the "L/C ISSUER") and PNC BANK, NATIONAL ASSOCIATION, in its
capacity as agent for the Lenders and the L/C Issuer (in such capacity, the
"AGENT") and further amends that certain Revolving Credit and Letter of Credit
Issuance Agreement dated as of September 25, 1997, as previously amended by that
certain First Amendment to Revolving Credit and Letter of Credit Issuance
Agreement dated as of October 28, 1997 (the "FIRST AMENDMENT") and the Second
Amendment to Revolving Credit and Letter of Credit Agreement and Waiver dated as
of April 30, 1998 (the "SECOND AMENDMENT") (the Revolving Credit and Letter of
Credit Issuance Agreement, as amended by the First Amendment and the Second
Amendment, is hereinafter referred to as the "ORIGINAL CREDIT AGREEMENT").
WITNESSETH
WHEREAS, the Borrower has requested that the commitment be
extended and certain financial covenants be modified; and
WHEREAS, to accommodate such request certain amendments to the
terms of the Original Credit Agreement are required; and
WHEREAS, the Agent, the Lenders and the L/C Issuer have agreed
to make such amendments upon the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing premises, the
mutual covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
with the intent to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS TO ORIGINAL CREDIT AGREEMENT AND NOTES
SECTION 1.01 ADDITIONS TO SECTION 1.01 OF THE ORIGINAL CREDIT
AGREEMENT. The following defined terms and the definitions therefor are hereby
added to Section 1.01 of the Original Credit Agreement and inserted in correct
alphabetical order:
Granting Lender shall have the meaning assigned to it in
Section 10.06.
Mortgage shall mean a Mortgage or Deed of Trust substantially
in the form of Exhibits "M-1" and "M-2" to the Third Amendment.
2
Mortgaged Property shall mean the real property owned in fee
by the Borrower and the Class A Guarantor Subsidiaries, improvements
thereon and fixtures relating thereto, all as now or hereafter more
fully described in a Mortgage.
Third Amendment shall mean the Third Amendment to Revolving
Credit and Letter of Credit Issuance Agreement and Amendment to
Revolving Credit Notes dated as of the Third Amendment Effective Date.
SPC shall have the meaning assigned to it in Section 10.06.
Third Amendment Effective Date shall mean April 30, 1999.
Third Amendment Fee shall mean a fee in the amount of
$150,000.00 which shall be due and payable on the Third Amendment
Effective Date.
Year 2000 Problem shall have the meaning given it in Section
4.27.
SECTION 1.02 MODIFICATION OF EXISTING DEFINED TERMS.
(a) The following defined terms in Section 1.01 of the Original Credit
Agreement are amended and restated in their entirety as follows:
Expiration Date shall mean December 31, 2003, or such later
date as determined by the Lenders in accordance with Section 2.01(b).
Compliance Certificate shall be a certificate executed by the
chief financial officer, treasurer or controller of the Borrower
substantially in the form of Exhibit "F-1" to the Third Amendment.
Security Agreement shall mean an amended and restated security
agreement, substantially in the form of Exhibit "B-1" attached to the
Third Amendment and incorporated herein by reference, together in each
case with all extensions, renewals, amendments, substitutions and
replacements thereto and thereof.
Security Documents shall mean the Security Agreement, any
Subsidiary Guaranty, any Subsidiary Security Agreement, any Mortgage
whether executed by the Borrower or any Subsidiary, the Uniform
Commercial Code filings and any and all security agreements, pledge
agreements, mortgages, deeds of trust, other agreements and other
documents (including without limitation financing statements) related
to the creation, perfection or maintenance of Liens in favor of the
Agent in any assets of the Borrower or a Subsidiary Guarantor as
security for the Lender Obligations.
Subsidiary Security Agreement shall mean the amended and
restated security agreement executed by a Class A Subsidiary Guarantor,
substantially in the form of Exhibit "J-1" attached to this Third
Amendment and incorporated herein by reference, together in each case
with all extensions, renewals, amendments, substitutions and
replacements thereto and thereof.
-2-
3
(b) item (xi) of the definition of Permitted Liens is amended and
restated in its entirety to read as follows:
(xi) "Leases or subleases, including existing operating Leases
with PNC Leasing Corp. as lessor, not otherwise prohibited by this
Agreement or other Loan Documents; provided however that, except for
Liens in favor of the Agent for the benefit of the Agent, the Lenders
and the L/C Issuer, nothing set forth in items (ii) through (xi) of
this definition shall permit or authorize Liens on any of the
Borrower's or any Subsidiary Guarantor's accounts or Inventory or any
chattel paper, documents, instruments or general intangibles relating
to such accounts or Inventory.
SECTION 1.03 REVISION OF EXTENSION OF EXPIRATION DATE. Paragraph (b) of
Section 2.01 of the Original Credit Agreement is hereby amended and restated in
its entirety to read as follows:
(b) Extension of Expiration Date. Commencing in 2000, the
Borrower may request in a writing delivered to the Agent a one year
extension of the Expiration Date. The request shall be given not
earlier than the delivery of the audited financial statements of the
Borrower and its Subsidiaries for the Fiscal Year just ended nor later
than the November 15 immediately following the last day of the Fiscal
Year covered by the most recently delivered audited financial
statements of the Borrower and its Subsidiaries. The Agent shall
promptly send such request to each of the Lenders. The Lenders at their
sole and absolute discretion may extend the Expiration Date then in
effect in one year increments measured from the current Expiration
Date. No such extension of an Expiration Date shall be effective unless
the Borrower shall have received a written notice of all Lenders which
consents to such extension. Such written consent, if given, shall be
given within 45 days of the receipt by the Agent of the Borrower's
request for an extension.
SECTION 1.04 REVISION OF COMMITMENT FEE. Section 2.03 of the Original
Credit Agreement is amended and restated in its entirety to read as follows:
2.03. Commitment Fee. Accruing from the Second Amendment
Effective Date until the Third Amendment Effective Date, the Borrower
agrees to pay to the Agent for the account of each Lender, as
consideration for such Lender's Revolving Credit Commitment hereunder,
a commitment fee (the "Commitment Fee") equal to the Applicable
Commitment Fee per annum, as set forth in the Second Amendment (all
computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed), on the average daily amount equal to such
Lender's Revolving Credit Commitment minus such Lender's Ratable Share
of Total Utilization. Accruing from the Third Amendment Effective Date
until the Expiration Date, the Borrower agrees to pay to the Agent for
the account of each Lender, as consideration for such Lender's
Revolving Credit Commitment hereunder, a Commitment Fee equal to the
Applicable Commitment Fee per annum, as set forth in the Third
Amendment, (all computed on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed) on the average daily amount
equal to such Lender's Revolving Credit Commitment minus such Lender's
Ratable Share of Total Utilization. All
-3-
4
Commitment Fees shall be payable (i) quarterly in arrears beginning
October 31, 1997 and continuing on the last Business Day of each Fiscal
Quarter occurring during the term of the Revolving Credit Commitment
thereafter, (ii) on the Expiration Date and (iii) upon acceleration of
the Notes.
On and after the Third Amendment Effective Date, the term "Applicable
Commitment Fee" shall mean the rate per annum set forth in the chart
below which corresponds to the range of ratios in which the Borrower's
Consolidated Total Indebtedness to EBITDA Ratio, as at the end of the
preceding fiscal quarter, falls:
-------------------------------------------------------------------
CONSOLIDATED TOTAL INDEBTEDNESS APPLICABLE
TO EBITDA RATIO COMMITMENT FEE
-------------------------------------------------------------------
Less than 3.0 to 1.0 .25%
-------------------------------------------------------------------
Equal to or greater than 3.0 to 1.0 .375%
-------------------------------------------------------------------
All such adjustments shall be effective as of the date the Borrower's
quarterly financial statements and Compliance Certificate are required
to be delivered to the Lenders pursuant to items (i) and (iii) of
Section 6.02.
SECTION 1.05 AMENDMENT TO SECTION 2.08(B)(II) OF THE ORIGINAL CREDIT
AGREEMENT. Section 2.08(b)(ii) of the Original Credit Agreement is hereby
amended and restated in its entirety to read as follows:
(ii) Euro-Rate Option. Interest under this Interest Rate
Option shall accrue, for each Euro-Rate Portion of the Revolving Credit
Loans outstanding, for any Euro-Rate Interest Period selected, at a
rate per annum equal to the sum of (A) the Euro-Rate plus (B) the
Applicable Euro-Rate Margin as determined below. The rate of interest
established pursuant to the preceding sentence of this Section
2.08(b)(ii) for each Euro-Rate Portion shall be adjusted from time to
time in accordance with the provisions of Section 2.08(c).
From the Second Amendment Effective Date until the Third Amendment
Effective Date the applicable Euro-Rate Margin shall be that set forth
in the Second Amendment. From the Third Amendment Effective Date, for
purposes of this Agreement, the term "Applicable Euro-Rate Margin"
shall mean the rate per annum set forth in the chart below which
corresponds to the range of ratios in which the Borrower's Consolidated
Total Indebtedness to EBITDA Ratio as at the end of the preceding
Fiscal Quarter falls:
---------------------------------------------------------------------
CONSOLIDATED TOTAL INDEBTEDNESS APPLICABLE EURO-RATE
TO EBITDA RATIO MARGIN
---------------------------------------------------------------------
Less than 2.5 to 1.0 1.00%
---------------------------------------------------------------------
Equal to or greater than 2.5 to
1.0 but less than 3.0 to 1.0 1.125%
---------------------------------------------------------------------
-4-
5
---------------------------------------------------------------------
CONSOLIDATED TOTAL INDEBTEDNESS APPLICABLE EURO-RATE
TO EBITDA RATIO MARGIN
---------------------------------------------------------------------
Equal to or greater than 3.0 to
1.0 but less than 3.25 to 1.0 1.375%
---------------------------------------------------------------------
Equal to or greater than 3.25 to
1.0 but less than 3.5 to 1.0 1.625%
---------------------------------------------------------------------
Equal to or greater than 3.5 to 1.0 2.00%
---------------------------------------------------------------------
All adjustments shall be effective as of the date on which the
Borrower's quarterly financial statements and Compliance Certificate
are required to be delivered pursuant to items (i) and (iii) of Section
6.02.
SECTION 1.06 AMENDMENT TO SECTION 2.17 (B) OF THE ORIGINAL CREDIT
AGREEMENT. Section 2.17 (b) of the Original Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(b) The Borrower shall pay (i) to the L/C Issuer for its own
account a fronting fee equal to 1/8 of 1% per annum (the "L/C Fronting
Fee") on the aggregate daily (computed at the opening of business and
on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed) Stated Amount of the outstanding Letters of Credit
for the period in question, and (ii) to the Agent for the ratable
account of the Lenders a fee (the "Letter of Credit Fee") equal to the
Applicable Letter of Credit Fee per annum, as determined below, on the
aggregate daily (computed at the opening of business and on the basis
of a year of 365 or 366 days, as the case may be, and actual days
elapsed) Stated Amount of the outstanding Letters of Credit for the
period in question. The Letter of Credit Fee and the L/C Fronting Fee
shall be payable (i) quarterly in arrears on the last Business Day of
each Fiscal Quarter occurring during the term of this Agreement
thereafter, (ii) on the Expiration Date or (iii) upon acceleration of
the Notes. Any issuance of an amendment to extend the stated expiration
date of a Letter of Credit or an amendment to increase the Stated
Amount of a Letter of Credit shall be treated as an issuance of a new
Letter of Credit for purposes of calculation of the Letter of Credit
Fee and the L/C Fronting Fee due and payable hereunder. The Borrower
shall also pay to the L/C Issuer the L/C Issuer's customary
documentation fees payable with respect to the Letters of Credit as the
L/C Issuer may generally charge from time to time. After the occurrence
of an Event of Default (which continues after the expiration of any
cure period applicable thereto) and during the continuation thereof,
the rate at which the Letter of Credit Fee is calculated shall be
increased by two hundred (200) basis points (2%) above the pre-default
rate; the increase to be payable monthly during the continuation of the
Event of Default.
From the Second Amendment Effective Date until the Third Amendment
Effective Date the Applicable Letter of Credit Fee shall be that set
forth in the Second Amendment. From the Third Amendment Effective Date,
for purposes of this Agreement, the term "Applicable Letter of Credit
Fee" shall mean the rate per annum set forth in the chart below which
corresponds to the range of ratios
-5-
6
in which the Borrower's Consolidated Total Indebtedness to EBITDA Ratio
as at the end of the preceding Fiscal Quarter falls:
---------------------------------------------------------------------
CONSOLIDATED TOTAL INDEBTEDNESS APPLICABLE LETTER OF
TO EBITDA RATIO CREDIT FEE
--------------------------------------------------------------------
Less than 2.5 to 1.0 1.00%
--------------------------------------------------------------------
Equal to or greater than 2.5 to
1.0 but less than 3.0 to 1.0 1.125%
--------------------------------------------------------------------
Equal to or greater than 3.0 to
1.0 but less than or equal 1.375%
to 3.25 to 1.0
--------------------------------------------------------------------
Equal to or greater than 3.25 to
1.0 but less than or equal 1.625%
to 3.5 to 1.0
--------------------------------------------------------------------
Equal to or greater than 3.5 to 1.0 2.00%
--------------------------------------------------------------------
All adjustments shall be determined as of the date the Borrower's
quarterly financial statements and Compliance Certificate are required
to be delivered pursuant to items (i) and (iii) of Section 6.02.
SECTION 1.07 INCREASE IN COLLATERAL. Section 3.03 of the Original
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
3.03 Assigned Collateral and Mortgaged Property. The Borrower
hereby agrees to grant and convey to the Agent for the benefit of the
Lenders and the L/C Issuer a Lien on any and all Assigned Collateral
and Mortgaged Property now owned or hereafter acquired by the Borrower.
To secure the full and timely payment and performance of each of the
Lender Obligations, and to grant to the Agent for the benefit of the
Agent, the Lenders and the L/C Issuer a Lien on the right, title and
interest of the Borrower in and to any Assigned Collateral and
Mortgaged Property, the Borrower hereby agrees to execute and deliver
to the Agent, on or prior to the Third Amendment Effective Date, the
Security Agreement and Mortgages, together with all financing
statements, supplements, amendments, certificates, documents and
notices as reasonably requested by the Agent to perfect such Liens, all
duly completed and executed to the reasonable satisfaction of the
Agent. The foregoing notwithstanding the Borrower shall not be required
to grant to the Agent for the benefit of the Lenders and the L/C Issuer
a mortgage on real property located in the State of New York until the
occurrence of an Event of Default. Upon the occurrence of an Event of
Default the Borrower will execute and deliver to the Agent a Mortgage
on its real property located in the State of New York.
SECTION 1.08 INCREASE IN SUBSIDIARY COLLATERAL. Section 3.04 of the
Original Credit Agreement is hereby amended and restated in its entirety to read
as follows:
-6-
7
3.04 Designation of Class A Subsidiary Guarantors; Subsidiary
Assigned Collateral and Mortgaged Property.
(a) Each Subsidiary of the Borrower incorporated or
organized in the United States of America, whether now in
existence or hereafter acquired, that owns any property,
tangible or intangible, real, personal or mixed (priced at the
lower of cost or market) with a value at the time of
designation in excess of $5,000,000, shall be designated as a
Class A Subsidiary Guarantor by the Lenders. Any Subsidiary
designated as a Class A Subsidiary Guarantor shall continue as
a Class A Subsidiary Guarantor until released in writing by
all Lenders. For the purposes of this Section 3.04, the
Subordinated Notes shall not be deemed Receivables.
(b) The Borrower hereby agrees to cause each Class A
Subsidiary Guarantor to grant and convey to Agent for the
benefit of the Lenders and the L/C Issuer a Lien on any and
all Subsidiary Assigned Collateral or Mortgaged Property now
owned or hereafter acquired by each such Class A Subsidiary
Guarantor. To secure the full and timely payment and
performance of each of the Lender Obligations, and to grant to
the Agent for the benefit of the Agent, the Lenders and the
L/C Issuer a Lien on the right, title and interest of a Class
A Subsidiary Guarantor in and to any Subsidiary Assigned
Collateral and Mortgaged Property of such Class A Subsidiary
Guarantor, the Borrower hereby agrees to cause each Class A
Subsidiary Guarantor to execute and deliver to the Agent a
Subsidiary Guaranty and a Security Agreement and Mortgage,
together with all financing statements, supplements,
amendments, certificates, documents and notices as reasonably
requested by the Agent to perfect such Liens, all duly
completed and executed to the reasonable satisfaction of the
Agent. Each other Subsidiary Guarantor shall execute and
deliver to the Agent for the benefit of the Lenders, the L/C
Issuer and the Agent a Subsidiary Guaranty to guaranty the
full and timely payment and performance of each of the Lender
Obligations.
SECTION 1.09 INCREASED COOPERATION. Section 3.05 of the Original Credit
Agreement is amended and restated in its entirety to read as follows:
3.05 Further Cooperation. (a) the Borrower shall perform, or
cause a Subsidiary Guarantor to perform, on the reasonable request of
the Agent and at the Borrower's expense, such acts as may be necessary
or advisable to carry out the intent of this Agreement and the other
Loan Documents. Without limiting the generality of the preceding
sentence, the Borrower shall take all steps reasonably necessary or, in
the reasonable opinion of Agent, advisable to grant and convey, or
cause the grant and conveyance by a Subsidiary Guarantor, to Agent for
the benefit of the Lenders, the L/C Issuer and the Agent a Lien on any
and all Assigned Collateral and Mortgaged Property of the Borrower,
whether now owned or hereafter acquired, and any and all Subsidiary
Assigned Collateral and Mortgaged Property of a Class A Subsidiary
Guarantor, whether now owned or hereafter acquired, and to validate or
protect any Lien granted to the Agent for the benefit of the Lenders,
the L/C Issuer and the Agent in any Assigned
-7-
8
Collateral and Mortgaged Property or any Subsidiary Assigned Collateral
and Mortgaged Property, or to defeat the assertion by any third parties
of any adverse claim with respect to any Assigned Collateral or
Mortgaged Property or any Subsidiary Assigned Collateral or Mortgaged
Property. Without limiting the generality of the foregoing, from time
to time, or at the request of Agent, the Borrower will execute and
file, and cause the execution and filing of, as the case may be, such
agreements, amendments, supplements, bailee's waivers, landlord's
waivers, financing statements, continuation statements, amendments
thereto and assignments thereof, and such other instruments and
notices, to grant Liens on any Assigned Collateral or Mortgaged
Property or any Subsidiary Assigned Collateral or Mortgaged Property,
and to perfect, protect or more fully evidence the rights of the Agent,
the Lenders and the L/C Issuer under any Security Documents.
(b) The Borrower hereby authorizes the Agent or any of its
designees, and does hereby constitute the Agent the attorney-in-fact of
the Borrower, to execute in the name of the Borrower, and to file, one
or more financing statements, continuation statements, amendments
thereto and/or assignments thereof, or any Mortgage relative to all or
any of the liens and security interests in favor of the Agent in any of
the Assigned Collateral, or Mortgaged Property whether now existing or
hereafter created. If the Borrower fails to perform any of its
respective agreements or obligations under this Agreement, the Agent or
its designee may (but shall not be required to) itself perform, or
cause the performance of, such agreement or obligation, and the
reasonable expenses of the Agent or its designee or assignee incurred
in connection therewith shall be payable by the Borrower as provided in
Section 10.03 hereof.
SECTION 1.10 PRIORITY. Section 4.25 of the Original Credit Agreement is
hereby amended in its entirety to read as follows:
4.25 Liens. Assuming the filing of all requisite financing
statements and Mortgages, the Liens granted to the Agent for the
benefit of the Agent, the Lenders and the L/C Issuer pursuant to the
Security Documents will at the Closing Date be fully perfected first
priority Liens, subject to Permitted Liens, in and to the collateral
described therein.
SECTION 1.11 YEAR 2000. A new Section 4.27 is hereby added to the
Original Credit Agreement which shall read as follows:
4.27 Year 2000 Problem. The Borrower and its Subsidiaries have
reviewed areas within their business and operations which could be
adversely affected by, and have developed or are developing a program
to address on a timely basis, the risk that certain computer
applications used by the Borrower or its Subsidiaries (or any of their
respective material suppliers, customers or vendors) may be unable to
recognize and perform properly date-sensitive functions involving dates
prior to and after December 31, 1999 (the "YEAR 2000 PROBLEM"). The
Year 2000 Problem is not expected to result in a Material Adverse
Change.
-8-
9
SECTION 1.12 MODIFICATION OF ASSET SALE PROVISIONS. Item (iv) of
Section 7.05 of the Original Credit Agreement is hereby amended and restated in
its entirety to read as follows:
(iv) any sale, transfer or lease of assets, other than those
specifically excepted pursuant to clauses (i) through (iii) above,
which in any one sale, transfer or lease of assets, or in any number of
sales, transfers or leases of assets occurring in any consecutive
twelve month period, involves the sale, transfer or lease of not more
than 2.5% of the Consolidated Net Worth of the Borrower (measured with
respect to a series of sales, transfers or leases of assets on the day
of the first sale); or
SECTION 1.13 MODIFICATION OF TANGIBLE NET WORTH. Section 7.12 of the
Original Credit Agreement is hereby amended and restated in its entirety as
follows:
7.12. Minimum Consolidated Tangible Net Worth. The Borrower
will not at any time on and after February 1, 1999 permit its
Consolidated Tangible Net Worth to be less than an amount equal to the
sum of (i) $78,000,000, plus (ii) 50% of the positive net income for
each Fiscal Quarter ending after January 31, 1999 of the Borrower and
its Subsidiaries determined on a consolidated basis in accordance with
GAAP consistently applied, plus (iii) all increases to equity from the
issuance by the Borrower after January 31, 1999 of further equity
securities or other equity capital investments.
SECTION 1.14 MODIFICATION OF LEVERAGE RATIO. Section 7.14 of the
Original Credit Agreement is hereby amended and restated in its entirety as
follows:
7.14 Leverage Ratio. The Borrower shall not permit its
Consolidated Total Indebtedness to EBITDA Ratio during the applicable
period or periods set forth below to be greater than the ratio set
forth opposite each such period or periods:
------------------------------------------------------------------
CONSOLIDATED TOTAL
INDEBTEDNESS TO EBITDA
PERIOD RATIO
------------------------------------------------------------------
From the Third Amendment
Effective Date through
April 29, 2002 3.75 to 1.00
------------------------------------------------------------------
From April 30, 2002
through April 29, 2003 3.50 to 1.00
------------------------------------------------------------------
On and after April 30, 2003 3.00 to 1.00
------------------------------------------------------------------
In determining compliance with this Section 7.14, the Special Reserve
may be included in calculating the Borrower's EBITDA by treating it as
an extraordinary or unusual loss pursuant to item (a)(v) of the
definition of EBITDA contained in Section 1.01 hereof.
SECTION 1.15 MODIFICATION OF EVENTS OF DEFAULT. Paragraphs (d) and (h)
of Section 8.01 of the Original Credit Agreement are each amended and restated
in their entirety to read as follows:
(d) The Borrower shall default in the observance or
performance of any other covenant, condition or provision hereof, or of
any other Loan Document and, if
-9-
10
remediable, such default shall continue unremedied for a period of
thirty (30) days after any officer of the Borrower becomes aware of the
occurrence thereof; or a Subsidiary Guarantor shall default in the
observance or performance of any other covenant, condition or provision
contained in a Subsidiary Guaranty, Subsidiary Security Agreement,
Mortgage or any other Loan Document executed by such Subsidiary
Guarantor, and such default shall continue unremedied for a period of
thirty (30) days after any officer of such Subsidiary Guarantor becomes
aware of the occurrence thereof;
(h) A notice of lien, levy or assessment in excess of Two
Million Dollars ($2,000,000) in the aggregate is filed of record with
respect to all or any part of the assets of the Borrower or a
Subsidiary Guarantor by the United States, or any department, agency or
instrumentality thereof, or by any state, county, municipal or other
governmental agency, including, without limitation, the PBGC, or if any
taxes or debts in excess of Two Million Dollars ($2,000,000) owing at
any time or times hereafter to any one of these becomes payable and the
same is not paid within thirty (30) days after the same becomes
payable, or if such notice is filed or such payment is not so made,
unless the Borrower or such Subsidiary Guarantor (i) contests such
lien, assessment, tax or debt in good faith by appropriate and lawful
proceedings diligently conducted but only so long as such proceedings
could not subject the Agent, the Lenders or the L/C Issuer to any
criminal penalties, or could not result in or involve any risk of loss,
sale or forfeiture of any Assigned Collateral or Mortgaged Property or
the Subsidiary Assigned Collateral or Mortgaged Property, as the case
may be, or any risk of loss of the first priority interest of the Agent
in the Assigned Collateral or Mortgaged Property or the Subsidiary
Assigned Collateral or Mortgaged Property, as the case may be, (ii)
establishes such reserves or other appropriate provisions, if any, as
shall be required by GAAP and (iii) pays such lien, assessment, tax or
debt in accordance with the terms of any final judgments or orders
relating thereto within thirty (30) days after the entry of such
judgments or orders;
SECTION 1.16 MODIFICATION OF ASSIGNMENT PROVISIONS. Section 10.06 of
the Original Credit Agreement is amended and restated in its entirety to read
as follows:
10.06 Successors and Assigns.
(i) This Agreement shall be binding upon the Borrower
and the Agent, the Lenders, the L/C Issuer and their
respective successors and assigns, and shall inure to the
benefit of the Borrower, the Agent, the Lenders, the L/C
Issuer and respective successors and assigns; provided,
however, that the Borrower shall not assign its rights or
duties hereunder or under any of the other Loan Documents
without the prior written consent of the Lenders.
(ii) Notwithstanding anything to the contrary
contained herein, any Lender (a "GRANTING LENDER") may grant
to a special purpose funding vehicle (an "SPC") the option to
fund all or any part of any Loan that such Granting Lender
would otherwise be obligated to fund pursuant to this
Agreement; provided that (A) nothing herein shall constitute a
commitment by any SPC to fund any Loan, and (B) if an SPC
elects not to exercise such option or otherwise fails to fund
all or any part of
-10-
11
such Loan, the Granting Lender shall be obligated to fund such
Loan pursuant to the terms hereof. Further, (A) all credit
decisions relating to any such funding by the SPC shall be
made by the Granting Lender for and on behalf of the SPC, (B)
the SPC shall have no voting rights under any of the Loan
Documents and (C) except for the payment of principal,
interest and fees, if any, the Agent shall be entitled to
treat the Granting Lender as the Lender for all purposes
hereunder as if the SPC had made no funding of any Loan. The
funding of a Loan by an SPC hereunder shall utilize the
Revolving Credit Commitment of the Granting Lender to the same
extent, and as if, such Loan were funded by such Granting
Lender. Each Party hereto hereby agrees that no SPC shall be
liable for any indemnity or payment under this Agreement for
which a Lender would otherwise be liable for so long as, and
to the extent, the Granting Lender provides such indemnity or
makes such payment. Notwithstanding anything to the contrary
contained in this Agreement, any SPC may disclose on a
confidential basis any non-public information relating to its
funding of Loans to any rating agency, commercial paper dealer
or provider of any surety or guarantee to such SPC. This
Section may not be amended without the prior written consent
of each Granting Lender, all or any part of whose Loan is
being funded by an SPC at the time of such amendment.
SECTION 1.17 MODIFICATION OF REVOLVING CREDIT NOTES. Each Revolving
Credit Note is hereby amended by inserting after the date September 30, 2002, in
the second paragraph of each such Revolving Credit Note, the phrase "or such
later date as determined by the Lenders in accordance with Section 2.01(b) of
the Agreement."
SECTION 1.18 NO OTHER AMENDMENTS. The amendments to the Original Credit
Agreement set forth in Sections 1.01 through 1.17 above do not either implicitly
or explicitly alter, waive or amend, except as expressly provided in this Third
Amendment, the provisions of the Original Credit Agreement. The amendments set
forth in Sections 1.01 through 1.17 hereof do not waive, now or in the future,
compliance with any other covenant, term or condition to be performed or
complied with nor do they impair any rights or remedies of the Lenders and the
Agents under the Original Credit Agreement with respect to any such violation.
ARTICLE II
BORROWER'S SUPPLEMENTAL REPRESENTATIONS
SECTION 2.01 INCORPORATION BY REFERENCE. As an inducement to the Agent,
the Lenders, and the L/C Issuer to enter into this Third Amendment, the Borrower
hereby repeats herein for the benefit of the Agent, the Lenders, and the L/C
Issuer the representations and warranties made by the Borrower in Article IV of
the Original Credit Agreement, as amended hereby, except (i) as adjusted or
updated prior to the Third Amendment Effective Date by information delivered to
the Agent and the Lenders as part of the Borrower's financial reports and
periodic public filings pursuant to items (i), (ii) and (vii) of Section 6.02,
and (ii) that for purposes hereof such representations and warranties, as so
modified, shall be deemed to extend to and cover this Third Amendment.
-11-
12
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01 CONDITIONS PRECEDENT. Each of the following shall be a
condition precedent to the effectiveness of this Third Amendment:
(i) The Agent shall have received, on or before the Third Amendment
Effective Date, the following items, each, unless otherwise indicated, dated on
or before the Third Amendment Effective Date and in form and substance
satisfactory to the Agent and its special counsel, Xxxxxx Xxxxxxxxx, P.C.:
(A) A duly executed counterpart original of this Third
Amendment;
(B) Amended and Restated Security Agreements from the Borrower
and each Class A Subsidiary Guarantor in form and substance
satisfactory to the Agent;
(C) Mortgages from the Borrower and, as appropriate, each
Class A Subsidiary Guarantor in form and substance satisfactory to the
Agent;
(D) The Agent shall have received the Third Amendment Fee for
the pro rata benefit of the Lenders.
(E) A certificate from the Secretary of the Borrower
certifying that the Articles of Incorporation and Bylaws of the
Borrower previously delivered to the Borrower are true, complete and
correct.
(F) Such other instruments, documents and opinions of counsel
as the Agent shall reasonably require, all of which shall be
satisfactory in form and content to the Agent and its special counsel,
Xxxxxx Xxxxxxxxx, P.C.
(ii) The following statements shall be true and correct on the Third
Amendment Effective Date and the Agent shall have received a certificate signed
by an Authorized Officer of the Borrower, dated the Third Amendment Effective
Date, stating that:
(A) the representations and warranties made pursuant to
Section 2.01 of this Third Amendment and in the other Loan Documents,
as amended hereby, are true and correct on and as of the Third
Amendment Effective Date as though made on and as of such date;
(B) no petition by or against the Borrower has at any time
been filed under the United States Bankruptcy Code or under any similar
act;
(C) no Event of Default or event which with the giving of
notice, the passage of time or both would become an Event of Default
has occurred and is continuing, or would result from the execution of
or performance under this Third Amendment;
(D) no Material Adverse Change has occurred which has not been
disclosed to the Agent; and
-12-
13
(E) the Borrower has in all material respects performed all
agreements, covenants and conditions required to be performed on or
prior to the date hereof under the Original Credit Agreement and the
other Loan Documents.
ARTICLE IV
GENERAL PROVISIONS
SECTION 4.01 RATIFICATION OF TERMS. Except as expressly amended by this
Third Amendment, the Original Credit Agreement and each and every
representation, warranty, covenant, term and condition contained therein is
specifically ratified and confirmed. The Borrower hereby confirms that any
collateral for the Lender Obligations, including but not limited to
encumbrances, Liens, security interests, mortgages and pledges granted by the
Borrower or third parties, shall continue unimpaired and in full force and
effect. THE BORROWER EXPRESSLY RATIFIES AND CONFIRMS THE WAIVER OF JURY TRIAL
PROVISION CONTAINED IN THE ORIGINAL CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
SECTION 4.02 REFERENCES. All notices, communications, agreements,
certificates, documents or other instruments executed and delivered after the
execution and delivery of this Third Amendment in connection with the Original
Credit Agreement, any of the other Loan Documents or the transactions
contemplated thereby may refer to the Original Credit Agreement without making
specific reference to this Third Amendment, but nevertheless all such references
shall include this Third Amendment unless the context requires otherwise. From
and after the Amendment Effective Date, all references in the Original Credit
Agreement and each of the other Loan Documents to the "Agreement" shall be
deemed to be references to the Original Credit Agreement as amended hereby.
SECTION 4.03 INCORPORATION INTO ORIGINAL CREDIT AGREEMENT. This Third
Amendment is deemed incorporated into the Original Credit Agreement. To the
extent that any term or provision of this Third Amendment is or may be deemed
expressly inconsistent with any term or provision of the Original Credit
Agreement, the terms and provisions hereof shall control.
SECTION 4.04 COUNTERPARTS. This Third Amendment may be executed in
different counterparts, each of which when executed by the Borrower and the
Agent, the Lenders, and the L/C Issuer shall be regarded as an original, and all
such counterparts shall constitute one Third Amendment.
SECTION 4.05 CAPITALIZED TERMS. Except for proper nouns and as
otherwise defined herein, capitalized terms used herein as defined terms shall
have the same meanings herein as are ascribed to them in the Original Credit
Agreement, as amended hereby.
SECTION 4.06 TAXES. The Borrower shall pay any and all stamp and other
taxes (other than taxes on income payable by the Lenders) and fees payable or
determined to be payable in connection with the execution, delivery, filing and
recording of this Third Amendment and such other documents and instruments as
are delivered in connection herewith and agrees to save the Agent, the Lenders,
and the L/C Issuer harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees.
SECTION 4.07 COSTS AND EXPENSES. The Borrower will pay all costs and
expenses of the Agent (including, without limitation, the reasonable fees and
the disbursements of the Agent's special counsel, Xxxxxx Xxxxxxxxx, P.C.) in
connection with the preparation, execution
-13-
14
and delivery of this Third Amendment and the other documents, instruments and
certificates delivered in connection herewith.
SECTION 4.08 GOVERNING LAW. THIS THIRD AMENDMENT AND THE RIGHTS AND
OBLIGATIONS HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO THE PROVISIONS
THEREOF REGARDING CONFLICTS OF LAW.
SECTION 4.09 HEADINGS. The headings of the sections in this Third
Amendment are for purposes of reference only and shall not be deemed to be a
part hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-14-
15
IN WITNESS WHEREOF, the parties hereto, with the intent to be
legally bound hereby, have caused this Third Amendment to Revolving Credit and
Letter of Credit Issuance Agreement and Amendment to Revolving Credit Notes to
be duly executed by their respective proper and duly authorized officers as a
document under seal, as of the day and year first above written.
ATTEST: BORROWER:
THE CARBIDE/GRAPHITE GROUP, INC.,
a Delaware corporation
_________________________ By__________________________(SEAL)
Name: Name:
Title: Title:
AGENT AND L/C ISSUER:
PNC BANK, NATIONAL ASSOCIATION
By___________________________(SEAL)
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
LENDERS:
REVOLVING CREDIT PNC BANK, NATIONAL ASSOCIATION
COMMITMENT: $26,000,000.00
RATABLE SHARE: 17.33% By___________________________(SEAL)
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-15-
16
REVOLVING CREDIT NATIONAL CITY BANK OF
COMMITMENT: $18,000,000.00 PENNSYLVANIA
RATABLE SHARE: 12% By___________________________(SEAL)
Name:
Title:
REVOLVING CREDIT THE FIRST NATIONAL BANK OF
COMMITMENT: $13,000,000.00 CHICAGO
RATABLE SHARE: 8.66% By___________________________(SEAL)
Name:
Title:
REVOLVING CREDIT FIRST UNION NATIONAL BANK,
COMMITMENT: $18,000,000.00 successor by merger to
CoreStates Bank, N.A.
RATABLE SHARE: 12% By___________________________(SEAL)
Name:
Title:
REVOLVING CREDIT KEYBANK, NATIONAL ASSOCIATION
COMMITMENT: $13,000,000.00
RATABLE SHARE: 8.66% By___________________________(SEAL)
Name:
Title:
REVOLVING CREDIT STANDARD CHARTERED BANK
COMMITMENT: $13,000,000.00
RATABLE SHARE: 8.66% By___________________________(SEAL)
Name:
Title:
By___________________________(SEAL)
Name:
Title:
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-16-
17
REVOLVING CREDIT MELLON BANK, N.A.
COMMITMENT: $13,000,000.00
RATABLE SHARE: 8.66% By___________________________(SEAL)
Name:
Title:
REVOLVING CREDIT NATIONSBANK, N.A.
COMMITMENT: $18,000,000.00
RATABLE SHARE: 12% By___________________________(SEAL)
Name:
Title:
REVOLVING CREDIT THE CHASE MANHATTAN BANK
COMMITMENT: $18,000,000.00
RATABLE SHARE: 12% By___________________________(SEAL)
Name:
Title:
17
18
AMENDED AND RESTATED
SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT AND COLLATERAL
ASSIGNMENT (the Security Agreement and Collateral Assignment and all amendments,
modifications and supplements referred to herein as the "Security Agreement")
dated the 30th day of April, 1999, and made and entered into by and between THE
CARBIDE/GRAPHITE GROUP, INC., a Delaware corporation, having its principal
executive office and place of business at Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (the "Debtor") and PNC BANK, NATIONAL
ASSOCIATION, as agent for the Lenders (as defined in the Credit Agreement
described below) and the L/C Issuer (as defined in the Credit Agreement) (PNC
Bank, National Association in such capacity as agent for the Lenders and the L/C
Issuer herein referred to as the "Agent"), amends and restates in its entirety
the Security Agreement and Collateral Assignment dated September 25, 1997, by
and between the Debtor and the Agent.
WITNESSETH:
WHEREAS, pursuant to the Revolving Credit and Letter of Credit
Issuance Agreement dated as of September 25, 1997(such Revolving Credit and
Letter of Credit Issuance Agreement, as amended to the date hereof and as it may
be amended, restated, modified or supplemented from time to time, is herein
referred to as the "Credit Agreement") by and among the Agent, the L/C Issuer
and the Lenders, and the Debtor, as the borrower, the Lenders agreed to lend to
the Debtor certain amounts, and the L/C Issuer agreed to issue certain letters
of credit for the account of the Debtor; and
WHEREAS, the Debtor has agreed to assign and pledge to the
Agent (for the benefit of the Agent, the Lenders and the L/C Issuer), and to
grant to the Agent (for the benefit of the Agent, the Lenders and the L/C
Issuer) a lien and security interest on and in, certain property of the Debtor
to secure certain indebtedness and other obligations of the Debtor, including
the payment and performance of the Lender Obligations of the Debtor; and
WHEREAS, the Debtor has good and marketable right, title and
interest in and to all the property which is subject to this Security Agreement;
and
WHEREAS, each of the capitalized terms used herein (including
the preamble and these recitals to this Security Agreement) which is not defined
herein but which is defined in the Credit Agreement shall have the meaning
herein ascribed to such term in the Credit Agreement.
NOW, THEREFORE, in consideration of the premises (each of
which is hereby incorporated by reference) and with the intent of being legally
bound hereby, and for the purpose of securing the payment and performance of the
following (individually and collectively, the "Secured Obligations"):
(i) the Lender Obligations of the Debtor including but not
limited to:
(a) all unpaid principal and accrued and unpaid
interest under the Revolving Credit Loans
and the Swingline Loan;
EXHIBIT "B-1"
19
(b) all accrued and unpaid Fees under the Credit
Agreement or under any of the other Loan
Documents;
(c) the face amount of all Letters of Credit
then outstanding, together with all
Unreimbursed L/C Draws and all accrued and
unpaid interest on such Unreimbursed L/C
Draws;
(d) the actual (as opposed to nominal) credit
exposure determined in accordance with
standard industry practices to any Lender or
Affiliate of a Lender under an Interest
Hedge Agreement between such Person and the
Debtor;
(e) any other amounts payable under any of the
other Loan Documents, including all
reimbursements, indemnities, fees, costs,
expenses, prepayment premiums, and other
obligations of the Debtor to a Lender in any
capacity under the Credit Agreement or any
Indemnified Party thereunder;
(f) all out-of-pocket costs and expenses
incurred by the Agent in connection with the
Credit Agreement or any other Loan Document,
including but not limited to the reasonable
fees and expenses of such Lender's counsel;
and
(ii) all other liabilities, obligations, covenants, duties and
Indebtedness of the Debtor to the Agent, the L/C Issuer and the Lenders
of any and every kind and nature, however evidenced, and to the extent
arising under this Security Agreement, the Notes, the Credit Agreement
or the other Loan Documents, whether heretofore, now or hereafter
owing, arising, due or payable from the Debtor to the Agent, the L/C
Issuer or the Lenders.
As collateral security for the Secured Obligations, the Debtor hereby assigns
and pledges to the Agent, for the benefit of the Agent, the Lenders and the L/C
Issuer, and their respective successors and assigns, and grants to the Agent,
for the benefit of the Agent, the Lenders and the L/C Issuer, and their
respective successors and assigns, a perfected and continuing lien and security
interest on and in all of the Debtor's property described below, as well as all
products thereof and proceeds derived therefrom (including, without limitation,
all proceeds of insurance), whether now owned or existing or hereafter acquired
or arising or created, and all of the Debtor's right, title and interest in and
to and relating to all such property, products or proceeds, wherever located:
(a) All Accounts, Chattel Paper, Documents and
Instruments, and all other rights to
payments of moneys for any reason (whether
or not evidenced by a contract, instrument,
chattel paper or document), and all other
rights, powers and privileges of the Debtor
arising thereunder or related thereto;
(b) All of the Debtor's Inventory (whether or
not included within raw materials, the
work-in-process or finished goods) and all
accessories, accessions, attachments,
modifications, parts, and
2
20
fittings thereto, thereof or therefor, and
all documents of title evidencing or
representing any part thereof;
(c) All Special Collateral (as defined in
paragraph 4 hereof);
(d) All of Debtor's Equipment, Fixtures and
Goods, and all accessories, accessions,
attachments, modifications, parts, fittings
and special tools thereto, thereof or
therefor;
(e) All of Debtor's General Intangibles relating
or pertaining to the collateral described in
items (a) through (d), inclusive above;
(f) All accessories, accessions, attachments,
modifications, parts, fittings and special
tools to, of or for, and all substitutions,
replacements, renewals, additions and
improvements to, of or for any of the
collateral listed in items (a) through (e),
inclusive, above;
(g) All products and proceeds of any of the
collateral listed in items (a) through (f),
inclusive, above, including, without
limitation, all proceeds of insurance
policies insuring the aforesaid collateral
and documents covering the aforesaid
collateral, and all rents, revenues, issues,
profits and proceeds arising from the sale,
lease, license, encumbrance, collection or
any other temporary or permanent disposition
or encumbrance of such items (or any part
thereof) or any interest therein, whether or
not constituting "proceeds" as defined in
the Uniform Commercial Code; and
(h) All books, records, documents, ledger
receipts and other information of the
Borrower pertaining to any of the collateral
listed in items (a) through (g), inclusive,
above, including, without limitation, all
customer lists, credit files, computer
records, computer programs, storage media
and computer software used or required in
connection with the establishment,
generation, processing, maintenance or
storage of such books, records or documents
or otherwise used or acquired in connection
with documenting information pertaining to
any of the aforesaid collateral.
All of the Debtor's property described in items (a) through (h) above, both
inclusive, as well as all products thereof and proceeds derived therefrom,
whether now owned or existing or hereafter acquired or arising or created, and
all of the Debtor's right, title and interest in and to and relating to all such
property, or proceeds, wherever located, are hereinafter referred to
collectively and individually as the "Assigned Collateral". The terms
"Accounts," "Chattel Paper," "Documents," "Instruments," "Inventory,"
"Equipment," "Goods," "Fixtures" and "General Intangibles," if not otherwise
defined in the Credit Agreement, shall have the meaning given those terms in the
Uniform Commercial Code as enacted in the Commonwealth of Pennsylvania.
3
21
The Debtor hereby warrants, represents and covenants to the
Agent (for the benefit of the Agent, the L/C Issuer and the Lenders) that:
1. (a) The Debtor is the sole, legal and
beneficial owner of, and has good and
marketable right, title and interest in and
to, all of the presently owned or existing
Assigned Collateral, and will be the sole,
legal and beneficial owner of, and will have
good and marketable right, title and
interest in and to, all of the Assigned
Collateral hereafter acquired or created or
arising, free and clear of all Liens except
(i) the liens and security interests granted
hereby or by the Loan Documents or pursuant
hereto or thereto and (ii) the Permitted
Liens.
(b) Except for Permitted Liens, the Debtor has
not heretofore assigned or pledged, or
granted any other Lien upon or in, any of
the Assigned Collateral; at its expense, the
Debtor shall generally warrant title to the
Assigned Collateral, and shall defend the
Assigned Collateral, and the right, title
and interest of the Agent (for the benefit
of the Agent, the L/C Issuer and the
Lenders) therein and thereto, against all
claims and demands of any and all Persons,
other than those holding Permitted Liens,
whomsoever; the Debtor shall not grant,
create, incur or permit to exist any Lien on
or in any of the Assigned Collateral, other
than the liens and security interests
granted hereby or pursuant hereto and the
Permitted Liens; the Debtor shall not permit
any of the Assigned Collateral to be levied
upon under any legal process; the Debtor
shall not assign, transfer or otherwise
dispose of any of the Assigned Collateral
(other than as permitted pursuant to Section
7.05 of the Credit Agreement) without the
prior written consent of the Agent; and the
Debtor shall not do, or permit to be done,
anything that may impair the value of any of
the Assigned Collateral or any of the liens
and security interests granted hereby or
pursuant hereto.
(c) The Debtor's principal executive office and
place of business is at Xxx Xxxxxxx Xxxxxx,
00xx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
The Debtor will promptly advise the Agent in
writing of any change in the principal
executive office or place of business of the
Debtor or any change in its name.
(d) The records relating to the Assigned
Collateral consisting of Accounts, Chattel
Paper, Documents, Instruments and Special
Collateral in the possession of, or subject
to the control of, the Debtor will be kept
at the Debtor's principal executive office
and place of business at Xxx Xxxxxxx Xxxxxx,
00xx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000
and it will not remove, or permit the
removal of, any of the records relating to
the Assigned Collateral from such location
without the prior written consent of the
Agent.
4
22
(e) The Assigned Collateral which consists of
Inventory shall be located at those sites
more fully described on Schedule 1 attached
hereto and made a part hereof; and the
Debtor will not remove or permit the removal
of any such Inventory from those sites,
except for the sale of such Inventory in the
ordinary course of business for fair
consideration or as otherwise permitted by
Section 7.05 of the Credit Agreement. The
Debtor shall keep correct and accurate
records, in all material respects, of all
Inventory on a FIFO (first-in, first-out)
basis, itemizing and describing the kind,
type and quantity of Inventory, Debtor's
costs therefor and the selling prices
thereof, and the withdrawals from and
additions to Inventory. The Debtor agrees
that, upon the reasonable request of the
Agent, the Debtor shall deliver, or cause to
be delivered, a complete and accurate list,
in all material respects, of Inventory as of
the last day of such fiscal quarter,
including in each case such information as
the Agent may reasonably require. The Debtor
shall conduct a physical inventory of the
Inventory at least once each year, and shall
make a written report to the Agent of such
physical inventory within forty-five (45)
days after the taking of such physical
count. The Debtor shall promptly furnish to
the Agent all such additional information
and documents (including, without
limitation, invoices, purchase orders,
shipping and receipt records and inventory
logs) as the Agent may from time to time
reasonably request.
(f) The Debtor will not invoice any Person
responsible for the payment or other
performance of any Account (each, an
"Account Debtor", and collectively the
"Account Debtors") or maintain the records
of the Debtor relating to the Assigned
Collateral in any name other than its proper
corporate name, except such new name(s) as
it may establish in accordance with
subparagraph (g) below.
(g) If the Debtor desires to establish a new
location for its principal executive office
and place of business or to establish a new
name or names in which it may invoice
Account Debtors or maintain records
concerning the Assigned Collateral, then the
Debtor shall first, with respect to each
such new location or name:
(1) give the Agent prior written notice
of its intention to do so and
provide the Agent with such
information in connection therewith
as the Agent may reasonably request;
and
(2) take such action, reasonably
satisfactory to the Agent, as may be
necessary to maintain at all times
the perfection and priority of the
liens and security interests granted
to the Agent (for the benefit of the
Agent, the Lenders and the L/C
Issuer) under this Security
Agreement or pursuant hereto.
5
23
(h) The Agent may at any time, with notice to
the Debtor, verify with any Account Debtors
or any other Person, the status of any
Account. The Debtor from time to time will
execute and deliver such instruments and
take all such action as the Agent may
reasonably request in order to effectuate
the purposes of this subparagraph (h).
(i) The Debtor shall promptly notify the Agent
of all disputes (including without
limitation any rejection or revocation of
acceptance of goods) between the Debtor and
any Account Debtor concerning any amount in
excess of $1,000,000 due and owing under any
single Account or in excess of $2,000,000 in
the aggregate due and owing under all
Accounts from all Account Debtors, including
the reason for the disputes, all claims
related thereto and the amounts in
controversy. The Debtor will promptly notify
the Agent if the Debtor has notice or
knowledge of claims or materially adverse
changes which will or which would be
reasonably likely to affect the ultimate
collectibility of any or all of the Accounts
of an Account Debtor then obligated to pay
the Debtor in excess of $1,000,000 in the
aggregate. The Debtor shall not accept any
return of Inventory the sale of which
generated an Account on which the Account
Debtor is then obligated to pay an amount in
excess of $1,000,000, and shall not accept
any returns of Inventory the sale of which
together with all other sales of Inventory
generated Accounts on which all Account
Debtors are obligated to pay an amount in
excess of $2,000,000 in the aggregate,
without the prior written consent of the
Agent.
(j) The Debtor will not remove or permit the
removal of any of the Assigned Collateral
consisting of Equipment and Fixtures from
the locations shown on Schedule 2, and will
not locate any Equipment or Fixtures at
locations other than the locations shown on
Schedule 2, except for asset dispositions
which are specifically permitted pursuant to
Section 7.05 of the Credit Agreement without
the prior written consent of the Agent,
which consent shall not be unreasonably
withheld. The Debtor shall provide to the
Secured Party promptly upon request adequate
evidence that any removal or location of any
such Assigned Collateral was permitted by
such Section 7.05, and shall ensure that any
replacement Equipment, Goods and Fixtures
are free and clear of all Liens, except for
Permitted Liens.
(k) If the Debtor fails to comply with the
provisions of Section 6.04 of the Credit
Agreement, the Agent may (but shall not be
obligated to) pay any taxes, levies or
impositions relative to the Assigned
Collateral, for the account of the Debtor
and add the amounts thereof to the Secured
Obligations.
(l) If the Debtor fails to effect and keep in
force insurance covering the Assigned
Collateral as required by Section 6.05 of
the Credit
6
24
Agreement or fails to pay any of the
premiums thereon when due, the Agent may
(but shall not be obligated to) do so for
the account of the Debtor and add the cost
thereof to the Secured Obligations. The
Debtor hereby collaterally assigns and sets
over to the Agent (for the benefit of the
Agent, the Lenders and the L/C Issuer) all
monies which may become payable on account
of all insurance covering the Assigned
Collateral, including without limitation any
return of unearned premiums which may be due
upon cancellation of any such insurance.
Prior to the occurrence of a Default or
Event of Default, if the Agent determines in
its reasonable discretion that the Assigned
Collateral may be satisfactorily repaired or
replaced, then the proceeds of any insurance
payment may be used by the Debtor to repair
or replace the damaged Assigned Collateral.
After the occurrence, and during the
continuance, of an Event of Default, the
Agent may direct the insurers to pay
directly to the Agent (for the benefit of
the Agent, the Lenders and the L/C Issuer)
any amount so due. The Agent, its officers,
employees and agents, are hereby appointed
the attorneys-in-fact of the Debtor to
endorse any draft, check, instrument or
other item of payment that may be payable to
the Debtor in order to collect the proceeds
of such insurance or any return of unearned
premiums. Subject to the third sentence of
this subparagraph 1(l) and to paragraph 8
hereof, any such proceeds or returns of
unearned premiums shall be applied by Agent
first to the payment of the Notes and then,
in such order and manner as the Agent shall
elect in its sole discretion, to the payment
of the other Secured Obligations; any
balance of insurance proceeds or unearned
premiums remaining in the possession of the
Agent after payment in full of the Secured
Obligations shall be paid to the Debtor or
its order as the Debtor shall instruct the
Agent in writing.
(m) Neither the value of the Inventory upon
disposition thereof, nor the ability to
freely transfer the Inventory, is limited by
any licenses, franchises, trademarks,
royalty agreements, or other general
intangible or contract right, to which
Debtor is a party or which is otherwise
applicable to Debtor.
2. The Debtor agrees that for so long as any of the Secured
Obligations remains unpaid or unperformed and until the Revolving Credit
Commitment is terminated, the Debtor shall perform in all material respects all
obligations, covenants, conditions and agreements to be performed by it relating
to the Assigned Collateral.
3. Upon the reasonable request of the Agent at any time after
the execution of this Security Agreement, the Debtor agrees to establish within
sixty (60) days of such request a lockbox arrangement with the Agent and to
execute and deliver to Agent one or more lockbox agreements (collectively, the
"Lockbox Agreement"), each in form and substance satisfactory to the Agent and
its counsel. The Debtor agrees (i) to promptly notify and direct all Account
Debtors to remit all payments on Accounts directly to the lockbox or lockboxes
established under the Lockbox Agreement and (ii) upon the occurrence of, and
during the continuance of, a
7
25
Default or an Event of Default and the request of the Agent, to promptly notify
all Account Debtors of the assignment and pledge to the Agent (for the benefit
of the Agent, the L/C Issuer and the Lenders) of, and the grant to the Agent
(for the benefit of the Agent, the L/C Issuer and the Lenders) of liens and
security interests upon and in, the Accounts and the other Assigned Collateral.
To the extent that any law or custom or any contract or agreement with any
Account Debtors requires notice to or the approval of such Account Debtors in
order to perfect such assignment of and security interest in the Accounts, the
Debtor agrees to give such notice or obtain such approval promptly. If the Agent
learns that the Debtor has failed to give such notice or direction to any of the
Account Debtors, then the Agent may itself so notify the Account Debtors (or any
of them). This Security Agreement shall be sufficient evidence of such right and
the Account Debtors may rely hereon and shall be under no obligation to see to
the application of such moneys or other property by the Agent. The Agent is, and
its duly authorized agents are, hereby authorized by the Debtor to endorse for
and on the Debtor's behalf and deposit all drafts and checks payable to the
Debtor in the lockbox established pursuant to the Lockbox Agreement.
All checks, drafts, acceptances, notes, cash and other forms
of payment received from Account Debtors in payment on account of Accounts and
transmitted to the lockbox established pursuant to the Lockbox Agreement or
otherwise to the Agent will be deposited in a cash collateral account opened and
maintained pursuant to the Lockbox Agreement. The Debtor acknowledges and agrees
that the cash collateral account will be maintained for the convenience and
benefit of the Agent (for the benefit of the Agent, the L/C Issuer and the
Lenders) and that the Debtor does not, and shall not, have any rights or
interest in the cash collateral account or the lockbox account established
pursuant to the Lockbox Agreement, or any credits thereto or proceeds thereof,
except upon the payment in full of the Lender Obligations.
4. The Debtor will faithfully preserve and protect the Agent's
security interests and liens in and on the Assigned Collateral. At the request
of the Agent, the Debtor will, at its own cost and expense, cause such security
interests as are governed by the Uniform Commercial Code to be perfected and to
continue to be perfected so long as the Secured Obligations or any portion
thereof are outstanding and unpaid or unperformed and until the Revolving Credit
Commitment is terminated; and, at the request of the Agent, the Debtor will, at
its own cost and expense, cause such liens and security interests as are
governed by laws or regulations other than the Uniform Commercial Code to be
perfected and to continue to be perfected to the fullest extent permitted by
such laws or regulations, so long as the Secured Obligations or any portion
thereof are outstanding and unpaid or unperformed and until the Revolving Credit
Commitment is terminated.
Without limiting the foregoing:
(a) Upon request of the Agent, the Debtor will
join in the execution of all financing
statements, continuation statements, and
other documents required by the Agent to
evidence and perfect all of the liens and
security interests granted hereby or
pursuant hereto and the Debtor shall pay the
cost of filing or recording such in all
public offices where deemed necessary by the
Agent;
(b) Upon the request of the Agent, Debtor will
promptly furnish all documents, affidavits
and other papers reasonably required by
8
26
the Agent to further evidence or to perfect
the liens and the security interests granted
hereby or pursuant hereto; and
(c) Upon the request of the Agent, immediately
upon the Debtor's receipt of any portion of
the Assigned Collateral which itself, or the
ownership of which, is or becomes evidenced
by Chattel Paper, a Document, an Instrument,
an agreement, or other writing, including
but not limited to promissory notes,
documents of title, trade acceptances and
warehouse receipts (herein referred to as
the "Special Collateral"), the Debtor shall
deliver the original thereof to the Agent
(for the benefit of the Agent, the Lenders
and the L/C Issuer), together with
appropriate endorsements or other specific
evidence, in form and substance acceptable
to the Agent, of the assignment thereof to
the Agent (for the benefit of the Agent, the
Lenders and the L/C Issuer).
Effective upon an Event of Default, the Debtor hereby makes,
constitutes and appoints the Agent (for the benefit of the Agent, the Lenders
and the L/C Issuer) and any of its officers, employees and agents the true and
lawful agent and attorney-in-fact of the Debtor, with full power of
substitution, to sign the name of the Debtor to all financing statements and all
other chattel paper, instruments and documents, and all amendments and
modifications thereof and supplements thereto, in connection with the grant,
perfection, continuation of perfection and protection of the liens and security
interests granted hereby or pursuant hereto.
5. Upon the reasonable request of the Agent, the Debtor agrees
that within thirty (30) days after the end of each Fiscal Quarter, the Debtor
shall deliver, or cause to be delivered, to the Agent (i) a complete and
accurate list in all material respects as of the last day of such Fiscal Quarter
of all Accounts, including the names and addresses of the Account Debtors, the
dates when the Accounts first became due, the amount of any offsets or claims of
the Account Debtors with a notation indicating whether or not disputed by the
Debtor, and such additional information as the Agent may from time to time
reasonably request, and (ii) a complete and accurate list in all material
respects as of the last day of such Fiscal Quarter of all Inventory of the
Debtor, the location of such Inventory and such additional information
concerning the Inventory as the Agent may from time to time reasonably request.
6. The Debtor will at all times keep, or cause to be kept,
accurate and complete books and records (in all material respects) relating to
the Assigned Collateral; and from time to time during normal business hours, the
Agent, or any of its representatives, shall have the right upon reasonable prior
notice and other reasonable terms and conditions to inspect the Assigned
Collateral and to make extracts from the books and records relating to the
Assigned Collateral. The Debtor shall promptly furnish, or cause to be
furnished, to the Agent such data and information and copies of such papers and
documents relating to the Assigned Collateral as the Agent may reasonably
request from time to time and in such form and substance as may be reasonably
requested. The Debtor will promptly deliver to the Agent all written notices,
and will promptly give the Agent written notice of any other notices, received
by it with respect to a material diminution of the value of the Assigned
Collateral or the impairment of the liens and security interests of the Agent
(on behalf of the Agent, the Lenders and the L/C Issuer) on and in the Assigned
Collateral.
9
27
7. Upon the occurrence and during the continuance of an Event
of Default, the Agent shall be entitled at its option, at any time and from
time, to time, to exercise any or all of the rights and remedies afforded by the
Uniform Commercial Code or other applicable law as in effect, in addition to
such rights and remedies as are provided herein, in the Notes, in the Credit
Agreement, in any other Loan Document or any other agreement, document or
instrument evidencing or securing the Secured Obligations. The Debtor agrees to
pay to the Agent on demand all expenses including legal expenses and reasonable
attorneys' fees incurred in protecting the Assigned Collateral or enforcing the
Agent's rights and remedies (on behalf of the Agent, the Lenders and the L/C
Issuer), together with interest thereon at the highest rate of interest set
forth on the then outstanding Notes, such liability being one of the Secured
Obligations. To assist the Agent in the implementation of such rights and
remedies the Debtor will, at the Agent's request and at the Debtor's expense,
assemble and prepare for removal at and to places to be designated by the Agent
such items of the Assigned Collateral as are selected by the Agent. Without
limitation upon the foregoing, upon the occurrence and during the continuance of
an Event of Default, the Agent shall have the right to:
(a) take over and direct collection of the
Debtor's Accounts and the proceeds thereof;
give notice of the Agent's security interest
(on behalf of the Agent, the Lenders and the
L/C Issuer) in the Accounts and the proceeds
thereof to the Account Debtors, and the
Agent will have no liability to the Debtor
by reason of giving or not giving such
notice; direct the Account Debtors to make
payments of all monies paid or payable
thereon directly to the Agent (on behalf of
the Agent, the Lenders and the L/C Issuer)
(and, at the request of the Agent, the
Debtor shall indicate on all xxxxxxxx that
payments thereon are to be made to the
Agent); and give any Account Debtors so
notified and directed the receipt of the
Agent for any such payment as full release
for the amount so paid;
(b) enforce collection, either in the name of
the Agent (on behalf of the Agent, the
Lenders and the L/C Issuer) or in the name
of the Debtor, of any or all of the Accounts
and the proceeds thereof by suit or
otherwise; receive, give receipt for,
surrender, release or exchange all or any
part thereof; compromise, settle, extend or
renew (whether or not longer than the
original period) any indebtedness
thereunder; and sell or assign any or all of
the Accounts upon such terms, for such
amounts and at such time or times as the
Agent reasonably deems commercially
advisable;
(c) endorse in the name of the Debtor any
instrument, howsoever received by the Agent,
representing Assigned Collateral (including
proceeds);
(d) enter any premises where Assigned Collateral
is located, with process of law and if
necessary, with force, and take possession
and control of the same and take possession
and control of all books and records of the
Debtor relating to the Assigned Collateral;
and keep and store the Assigned Collateral
on such premises until sold (and if such
premises be the property of the
10
28
Debtor, the Debtor agrees not to charge the
Agent for storage thereof during the period
the Agent is exercising its rights with
respect to the Assigned Collateral under the
Uniform Commercial Code or other applicable
law, this Security Agreement, the Notes, the
Credit Agreement, or any other Loan Document
or other agreement, document or instrument
evidencing or securing the Secured
Obligations) or remove the Assigned
Collateral from such premises to the
premises of the Agent or an agent of the
Agent until sold;
(e) sell all or any portion of the Assigned
Collateral at public or private sale at such
place or places and at such time or times
and in such manner and upon such terms,
whether for cash or credit, as the Agent in
its sole discretion may determine. The Agent
may purchase all or any of the Assigned
Collateral at such public sale or sales, and
any such private sale or sales, free from
any equity or right of redemption. The
Debtor waives and releases any right to
require the Agent to collect the Secured
Obligations or any part thereof, from a
source or security other than the Assigned
Collateral, under any theory of marshalling
of assets or otherwise; and
(f) do all acts and things permitted by
applicable law which the Agent, in its sole
discretion, deems necessary or advisable to
fulfill or cause the fulfillment of the
Debtor's obligations hereunder and under the
Notes, the Credit Agreement, the other Loan
Documents and any other agreement, document
or instrument evidencing or securing the
Secured Obligations.
The Debtor hereby makes, constitutes and appoints the Agent
(on behalf of the Agent, the Lenders and the L/C Issuer) and any of its
officers, employees and agents the true and lawful agent and attorney-in-fact of
the Debtor, with full power of substitution, upon the occurrence and during the
continuance of an Event of Default (a) to administer the Assigned Collateral and
proceeds thereof, (b) to receive, and endorse the name of the Debtor upon, any
notes, checks, acceptances, drafts, money orders, instruments or other documents
relating to the Assigned Collateral and to effect the deposit and collection
thereof for application to the payment of the Secured Obligations in such order
and manner as the Agent shall elect in its sole discretion, (c) to endorse the
Debtor's name on any xxxx of lading, receipt, freight item or similar document,
(d) to sign the name of the Debtor to notices to Account Debtors, and to
assignments and notices of assignments and to all other instruments and
documents, and all amendments and modifications thereof and supplements thereto,
relating to the Assigned Collateral, and to receive, open and dispose of mail
addressed to the Debtor and in connection therewith, to execute and deliver
notices and authorizations, in the name of the Debtor, as the United States
Postal Department or other agency may require, (e) to send verifications to any
Account Debtors to verify the status of any Account payable by such Account
Debtors and to sign the name of the Debtor to all audit inquiries made of
Account Debtors, to all information release authorizations in connection
therewith, to all applications for documents of title, title certificates and
similar documents, to any notice of claim, satisfaction or release in connection
with any Account, and to any proof of claim in bankruptcy or similar document,
(f) to settle, adjust or compromise any Account or any legal action involving
any other Assigned Collateral,
11
29
(g) to take all necessary action to collect Accounts, including bringing legal
proceedings in the name of the Debtor and (h) to do any and all other things and
to take any and all other action (including but not limited to commencing legal
proceedings), in the name and on behalf of the Debtor, which the Agent (on
behalf of the Agent, the Lenders and the L/C Issuer) may deem in its sole
discretion necessary or advisable to carry out the intent of this Security
Agreement.
The Debtor agrees that neither the Agent nor any of its
agents, designees or attorneys-in-fact will be liable for any acts of commission
or omission, or for any error of judgment or mistake of fact or law in respect
to the exercise of the powers of attorney granted under this Security Agreement,
including this paragraph 7 and subparagraph 1(l) and paragraph 4 hereof, except
that the Agent shall be liable for the acts of commission or omission of the
Agent, its agents, designees and attorneys-in-fact that constitute recklessness
or willful misconduct. The powers of attorney granted under this Security
Agreement, including this paragraph 7 and subparagraph 1(l) and paragraph 4
hereof, are coupled with an interest and shall be irrevocable until all Secured
Obligations are paid and performed in full and until the Revolving Credit
Commitment is terminated.
No waiver by the Agent of any default shall operate as a
waiver of any other default or of the same default on a future occasion. No
failure or delay on the part of the Agent in the exercise of any power, remedy
or right shall operate as a waiver thereof, nor shall any single or partial
exercise of any power, remedy or right preclude other or further exercise
thereof, or the exercise of any other power, remedy or right. The Agent may
assert any of its powers, rights or remedies successively, concurrently,
independently or cumulatively and all such powers, rights and remedies shall be
non-exclusive.
Any requirement of law as to reasonable notification of the
time and place of any public sale, or of the time after which any private sale
or other intended disposition of the Assigned Collateral is to be made, shall be
met by giving the Debtor at least ten (10) days' prior written notice of the
time and place of any such public sale or the time after which any such private
sale or any other intended disposition is to be made.
8. After the occurrence of an Event of Default, the Agent
shall apply the proceeds of any sale of or other disposition or realization upon
the Assigned Collateral as follows:
(a) First, to the payment or reimbursement of
all reasonable advances, expenses and
disbursements of the Agent (including,
without limitation, the reasonable fees and
disbursements of its counsel and agents)
incurred in connection with the
administration and enforcement of, or the
preservation of, any of the Agent's, any
Lender's or the L/C Issuer's rights, powers
and remedies under this Security Agreement,
the Notes, the Credit Agreement, or any
other Loan Documents or other agreement,
document or instrument evidencing or
securing the Secured Obligations, including
but not limited to the acquisition,
completion, protection, removal, storage,
sale or delivery of the Assigned Collateral;
(b) Second, to the repayment of the Secured
Obligations whether for principal, interest,
fees or expenses, in such order and manner
as the Agent, in its sole discretion, shall
determine; and
12
30
(c) Third, any balance to be distributed as
required by law.
In no event shall the Agent, any Lender or the L/C Issuer be
liable to the Debtor for interest on any surplus. If the proceeds of any such
sale of or other disposition or realization upon the Assigned Collateral are
insufficient to pay and perform the Secured Obligations in full, then the Debtor
shall remain liable for such deficiency.
9. The Debtor shall have full responsibility for taking any
and all steps to preserve and protect the Assigned Collateral in its possession
or subject to its control. The Debtor agrees that neither the Agent, the L/C
Issuer nor any of the Lenders, nor any of their respective officers, directors,
employees or agents will be liable for any acts of commission or omission, or
for any error of judgment or mistake of fact or law, with respect to the
preservation or protection of any Assigned Collateral in their custody except
for acts of commission or omission that constitute recklessness or willful
misconduct.
10. This Security Agreement is executed only as security for
the Secured Obligations and, therefore, the execution and delivery of this
Security Agreement shall not subject the Agent, the Lenders or the L/C Issuer,
or transfer or pass to the Agent, the Lenders or the L/C Issuer, or in any way
affect or modify, the liability of the Debtor under any or all of the Assigned
Collateral; it being understood and agreed that notwithstanding the execution
and delivery of this Security Agreement, the Notes, the Credit Agreement, or any
other Loan Document or other agreement, document or instrument evidencing or
securing the Secured Obligations (including but not limited to the provisions
hereof and thereof as to the assignment to Agent of right, title and interest in
and to the Assigned Collateral), all of the duties and liabilities of the Debtor
to each and every other party under each and every item of the Assigned
Collateral shall be and remain enforceable by such other party, its successors
and assigns, against, but only against, the Debtor or the Debtor's successors
and assigns other than the Agent, the Lenders or the L/C Issuer, or their
respective representatives, successors and assigns.
11. Upon the full discharge and satisfaction of the Secured
Obligations (other than Contingent Lender Obligations), the termination or
cancellation of all outstanding Letters of Credit and the termination of the
Revolving Credit Commitment, (a) all right, title and interest herein assigned
to the Agent, the Lenders or the L/C Issuer, shall terminate, and all right,
title and interest of the Agent, the Lenders or the L/C Issuer in and to each
and every one of the items of Assigned Collateral shall revert to the Debtor and
(b) the Agent shall, at the expense of Debtor, file all requisite termination
statements and do all such other acts as are reasonably required of it to
evidence the termination of the liens and security interests granted hereby or
pursuant hereto. For purposes of this Security Agreement, the term "Contingent
Lender Obligations" shall mean at any time of determination any Lender
Obligations which at such time are contingent obligations under indemnification
provisions of the various Loan Documents which survive indefinitely. Lender
Obligations under such indemnification provisions shall not be considered to be
Contingent Lender Obligations if (x) an unsatisfied claim for payment has been
made under such indemnification provisions at or before such time, or (y) a
proceeding is pending or threatened in writing at such time which may give rise
to a claim under such indemnification provisions.
12. Any notice or other communication required hereunder shall
be in writing, and shall be served, given or delivered by (i) registered or
certified mail, return receipt
13
31
requested, with proper postage prepaid, (ii) hand delivery, (iii) overnight
express mail courier, with receipt acknowledged, or (iv) telecopier with receipt
confirmed, and addressed to the party to be notified at the address set forth
below or to such other address as each party may designate for itself in writing
by like notice:
(a) If to the Agent, at
PNC Bank, National Association
One PNC Plaza, 22nd Floor
Agency Services
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to:
PNC Bank, National Association
One PNC Plaza, 3rd Floor
249 Fifth Avenue
Metals Group
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Senior Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to the Debtor, at
The Carbide/Graphite Group, Inc.
Xxx Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President-Finance and Chief
Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Such notice or other communication shall be deemed to have been duly given or
served on the date on which delivered.
13. The Agent, the L/C Issuer or any Lender may have or in the
future may hold other security and/or guaranties to secure all or any part of
the Secured Obligations, but it is specifically understood and agreed that
neither the execution and delivery of this Security Agreement nor the holding of
any other security and/or guaranty shall at any time or in any way operate to
prevent or hinder the Agent, the L/C Issuer or any Lender from resorting first
to such other security and/or guaranty or first to the Assigned Collateral, or
first from time to time to both; and the Agent (on behalf of the Agent, the
Lenders and the L/C Issuer) may from time to time as the Agent sees fit, in the
Agent's sole and uncontrolled discretion, resort to all or any
14
32
part of the Assigned Collateral without resorting to all or any other security
and/or guaranty securing such Secured Obligations, or to all or any part of any
other security and/or guaranty securing the Secured Obligations without
resorting to all or any part of the Assigned Collateral, and such action on the
Agent's part shall not in any way be considered as a waiver of any of the
benefits or rights of the Agent relating to the Assigned Collateral or such
other security and/or guaranties.
14. This Security Agreement shall be binding upon the Debtor
and the successors and assigns of the Debtor, and shall inure to the benefit of
the Agent, the Lenders and the L/C Issuer, and their respective successors and
assigns.
15. Whenever possible each provision of this Security
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law but if any provision of this Security Agreement or any part of
such provision shall be prohibited by or invalid under applicable law, such
provision or part thereof shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Security Agreement.
16. The obligations of the Debtor under this Security
Agreement, and the grant of security interests hereunder to the Agent for the
benefit of Agent, the Lenders and the L/C Issuer, shall be continuing,
unconditional, irrevocable and absolute and shall be independent of any other
collateral given by the Debtor to secure the Secured Obligations or of any
obligations of, and any security interests granted by, any guarantor of the
repayment of the Secured Obligations, and, without limiting the generality of
the foregoing, shall not be released, discharged or otherwise affected by any of
the following matters and no right or remedy of the Agent, the Lenders or the
L/C Issuer hereunder shall be in any way prejudiced or adversely affected by any
of the following matters (whether or not the Agent, the Lenders or the L/C
Issuer shall make any reservation of rights against, give or attempt to give any
notice to, or request or obtain any further assent of the Debtor with respect to
any of the following matters):
(a) any extension, renewal, settlement,
compromise, waiver or release in respect of
any of the Secured Obligations or any other
obligation of the Debtor under the Notes,
the Credit Agreement, any other Loan
Document, or any other document, instrument
or agreement evidencing or securing the
Secured Obligations;
(b) any modification or amendment of or
supplement to the Notes, the Credit
Agreement, any other Loan Document, or any
other document, instrument or agreement
evidencing or securing the Secured
Obligations;
(c) any modification, amendment, waiver,
release, compromise, non-perfection or
invalidity of any direct or indirect
security, or of any guarantee or other
liability of any third party, for any of the
Secured Obligations or any other obligation
of the Debtor under the Notes, the Credit
Agreement, any other Loan Document, or any
other document, instrument or agreement
evidencing or securing the Secured
Obligations;
15
33
(d) any change in the corporate existence,
structure or ownership of the Debtor, or any
insolvency, bankruptcy, reorganization or
other similar proceeding affecting the
Debtor or its assets (irrespective of any
release or deferral of the liability of any
guarantor of the Secured Obligations, to pay
all or any part of the Secured Obligations
or any of the Debtor's other obligations
under the Notes, the Credit Agreement, any
other Loan Document, or any other document,
instrument or agreement evidencing or
securing the Secured Obligations);
(e) the existence of any claim, set-off or other
rights which the Debtor may have at any time
against a Lender, the Agent, the L/C Issuer
or any other Person, whether or not arising
in connection with this Security Agreement,
the Secured Obligations, the Notes, the
Credit Agreement, any other Loan Document or
any other document, instrument or agreement
evidencing or securing the Secured
Obligations;
(f) any invalidity or unenforceability relating
to or against the Debtor for any reason of
any of the Notes, the Credit Agreement, any
other Loan Document, or any other document,
instrument or agreement evidencing or
securing the Secured Obligations, or any
provision of applicable law or regulation
purporting to prohibit the payment by the
Debtor of the Secured Obligations or any
other amount payable by the Debtor under the
Notes, the Credit Agreement, any other Loan
Document, or any other document, instrument
or agreement evidencing or securing the
Secured Obligations;
(g) any invalidity or unenforceability relating
to or against the Debtor for any reason of
any of its obligations and liabilities under
the Notes, the Credit Agreement, any other
Loan Document, or any other document,
instrument or agreement evidencing or
securing the Secured Obligations;
(h) any other act or failure to act or delay of
any kind by a Lender, the Agent, the L/C
Issuer or any other Person or any other
circumstance whatsoever that might, but for
the provisions of this paragraph, constitute
a legal or equitable discharge of the
obligations of the Debtor under this
Security Agreement;
(i) the existence of, or any execution on or
attachment of, or any failure by the Agent,
the Lenders or the L/C Issuer (voluntarily
or otherwise) to resort to, any other
security or any other rights held or
hereafter held or to be held by the Agent,
the Lenders or the L/C Issuer to secure any
or all of the Secured Obligations or other
obligations of the Debtor under the Notes,
the Credit Agreement, any other Loan
Document, or any other document, instrument
or agreement evidencing or securing the
Secured Obligations or any judgment obtained
by the Agent, the Lenders or the L/C Issuer;
16
34
(j) any demand for payment of any of the Secured
Obligations is rescinded by the Agent, the
Lenders or the L/C Issuer and any of the
Secured Obligations is continued;
(k) the refusal or failure (whether intentional,
negligent or otherwise) of the Agent, the
Lenders or the L/C Issuer or any agent of
the Agent, the Lenders or the L/C Issuer to
protect, secure, perfect, continue, maintain
or insure any Lien at any time held by it as
security for the Secured Obligations or any
other obligations of the Debtor under the
Notes, the Credit Agreement, any other Loan
Document, or any other document, instrument
or agreement evidencing or securing the
Secured Obligations or any property subject
thereto; or
(l) the termination of the Revolving Credit
Commitments or the refusal of the Agent, the
Lenders or the L/C Issuer to provide further
credit or other financial accommodations to
the Debtor.
17. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD
TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, EXCEPTING APPLICABLE
FEDERAL LAW AND EXCEPT ONLY TO THE EXTENT PRECLUDED BY THE MANDATORY APPLICATION
OF THE LAW OF ANOTHER JURISDICTION.
18. THE PARTIES HERETO AGREE THAT ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT MAY BE COMMENCED IN THE
COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA OR IN XXX XXXXXXXX XXXXX
XX XXX XXXXXX XXXXXX FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND THE PARTIES
HERETO AGREE THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN
EITHER OF SUCH COURTS SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL
JURISDICTION IF SERVED PERSONALLY OR BY CERTIFIED MAIL TO THE PARTIES AT THEIR
ADDRESSES SET FORTH IN SECTION 12, OR AS OTHERWISE PROVIDED UNDER THE LAWS OF
THE COMMONWEALTH OF PENNSYLVANIA. FURTHER, THE DEBTOR HEREBY SPECIFICALLY
CONSENTS TO THE PERSONAL JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY
COUNTY, PENNSYLVANIA AND THE DISTRICT COURT OF THE UNITED STATES FOR THE WESTERN
DISTRICT OF PENNSYLVANIA AND WAIVES AND HEREBY ACKNOWLEDGES THAT IT IS ESTOPPED
FROM RAISING ANY OBJECTION BASED ON FORUM NON CONVENIENS, OR ANY CLAIM THAT
EITHER SUCH COURT LACKS PERSONAL JURISDICTION OVER THE DEBTOR SO AS TO PROHIBIT
EITHER SUCH COURT FROM ADJUDICATING ANY ISSUES RAISED IN A COMPLAINT FILED WITH
EITHER SUCH COURT AGAINST THE DEBTOR BY THE AGENT, THE LENDERS OR THE L/C ISSUER
CONCERNING THIS SECURITY AGREEMENT. THE DEBTOR HEREBY ACKNOWLEDGES AND AGREES
THAT THE CHOICE OF FORUM CONTAINED IN THIS SECTION 18 SHALL NOT BE DEEMED TO
PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN ANY FORUM OR THE TAKING OF
ANY ACTION UNDER THE LOAN DOCUMENTS TO ENFORCE THE SAME IN ANY APPROPRIATE
JURISDICTION.
17
35
19. THE PARTIES HERETO HEREBY WAIVE THE RIGHT TO A TRIAL BY
JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING OF ANY TYPE TO WHICH THEY OR
ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS MAY BE PARTIES AS TO ALL MATTERS
OR THINGS ARISING OUT OF THIS SECURITY AGREEMENT.
20. Whenever required by the context of this Security
Agreement the singular shall include the plural, and vice-versa, and the
masculine and feminine genders shall include the neuter gender, and vice-versa.
21. This Security Agreement may be executed in as many
counterparts as shall be convenient, each of which when executed by the parties
hereto shall be regarded as an original. All such counterparts shall constitute
but one and the same instrument. In proving this Security Agreement, it shall
not be necessary to produce or account for more than one such counterpart signed
by the other party against whom enforcement is sought. Delivery of an executed
counterpart of a signature page to this Security Agreement by telecopier shall
be as effective as delivery of a manually executed counterpart of this Security
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
36
WITNESS the due execution of this Security Agreement and
Collateral Assignment by the Debtor by its duly authorized officer the day and
year first above written with intent of the Debtor to be legally bound hereby,
and with the further intention that this Security Agreement and Collateral
Assignment shall constituted a sealed instrument.
DEBTOR:
THE CARBIDE/GRAPHITE GROUP,
INC., a Delaware corporation
By
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President - Finance and Chief
Financial Officer
AGENT:
PNC BANK, NATIONAL ASSOCIATION, in
its capacity as Agent
By
---------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
19
37
List of Schedules
-----------------
Schedule 1 - Inventory Locations
Schedule 2 - Equipment Locations
EXHIBIT "B-1"
38
AMENDED AND RESTATED
SUBSIDIARY SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT
THIS AMENDED AND RESTATED SUBSIDIARY SECURITY AGREEMENT AND
COLLATERAL ASSIGNMENT (this Subsidiary Security Agreement and Collateral
Assignment and all amendments, modifications and supplements hereto is referred
to herein as this "Security Agreement") dated the 30th day of April, 1999 and
made and entered into by and between SEADRIFT COKE, L.P., a Texas limited
partnership (the "Debtor"), having its principal executive office and place of
business at Highway 000 Xxxxx, Xxxxx Xxxxxxxx, Xxxxx 00000 and PNC BANK,
NATIONAL ASSOCIATION, as agent for the Lenders and the L/C Issuer as such terms
are defined in that certain Revolving Credit and Letter of Credit Issuance
Agreement dated as of September 25, 1997, as amended and as further described in
the recitals below (in such capacity, the "Agent"). This Security Agreement
amends and restates in its entirety the Subsidiary Security Agreement and
Collateral Assignment dated as of September 25, 1997 between the Debtor and the
Agent.
WITNESSETH:
WHEREAS, The Carbide/Graphite Group, Inc., a Delaware
corporation (the "Borrower"), has entered into that certain Revolving Credit and
Letter of Credit Agreement dated as of September 25, 1997 (the Revolving Credit
and Letter of Credit Issuance Agreement together with all amendments,
extensions, renewals, substitutions and replacements thereto or thereof from
time to time, the "Credit Agreement") with the Lenders (as defined in the Credit
Agreement) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as the issuer of
letters of credit under the terms of the Credit Agreement for the account of the
Borrower (in such capacity, as more fully defined in the Credit Agreement, the
"L/C Issuer") and as agent for the L/C Issuer and the Lenders under the Credit
Agreement, pursuant to which the Lenders agree (a) to make available to the
Borrower a Revolving Credit Commitment and to make Revolving Credit Loans to the
Borrower in a maximum aggregate principal amount not to exceed One Hundred and
Fifty Million Dollars ($150,000,000), which indebtedness will be evidenced by
one or more Revolving Credit Notes dated September 25, 1997 (such Revolving
Credit Notes together with all amendments, extensions, renewals, substitutions
and replacements thereto or thereof from time to time (including without
limitation any replacement notes issued pursuant to Section 10.05 of the Credit
Agreement), individually a "Revolving Credit Note" and collectively the
"Revolving Credit Notes") in an aggregate principal face amount of One Hundred
and Fifty Million Dollars ($150,000,000), (b) to make available to the Borrower
a Swingline Option in an aggregate principal amount not to exceed Five Million
Dollars ($5,000,000) which indebtedness will be evidenced by a Swingline Note
dated September 25, 1997 executed by the Borrower in favor of PNC Bank, National
Association (such Swingline Note together with all amendments, extensions,
renewals, substitutions and replacements thereto and there of from time to time,
the "Swingline Note"), and (c) to make available to the Borrower a letter of
credit subfacility pursuant to which the L/C Issuer will issue Letters of Credit
with a Stated Amount in a maximum aggregate principal amount for the account of
the Borrower not to exceed Fifteen Million Dollars ($15,000,000); and
WHEREAS, the Debtor is a wholly-owned Subsidiary of the
Borrower and under the terms of the Credit Agreement the Borrower may borrow the
amounts of the credit availability under the Credit Agreement for its corporate
purposes, including without limitation to make advances to the Debtor, and may
obtain one or more Letters of Credit under the terms of
EXHIBIT "J-1"
39
the Credit Agreement for the corporate purposes of the Borrower, including
without limitation Letters of Credit to support the obligations of the Debtor;
and
WHEREAS, Debtor has executed that certain Subsidiary Guaranty
Agreement dated as of September 25, 1997 (the Subsidiary Guaranty Agreement
together with all amendments, extensions, renewals, substitutions and
replacements hereto or hereof from time to time, the "Subsidiary Guaranty") by
Debtor in favor of the Agent to secure the repayment of all Lender Obligations
incurred by the Borrower under the Credit Agreement and the other Loan
Documents; and
WHEREAS, to secure the obligations and liabilities of the
Debtor under the Subsidiary Guaranty and to further secure the repayment of the
Lender Obligations, Debtor has agreed to assign and pledge to Agent (for the
benefit of Agent, Lenders and L/C Issuer), and to grant to Agent (for the
benefit of Agent, Lenders and L/C Issuer) a lien and security interest on and
in, certain property of the Debtor; and
WHEREAS, Debtor has good and marketable right, title and
interest in and to all the property which is subject to this Security Agreement;
and
WHEREAS, each of the terms used herein (including the preamble
and these recitals to this Security Agreement) as a defined term which is not
defined herein but which is defined in the Credit Agreement shall have the
meaning herein ascribed to such term in the Credit Agreement.
NOW, THEREFORE, in consideration of the premises (each of
which is hereby incorporated by reference) and with the intent of being legally
bound hereby, and for the purpose of securing the payment and performance of the
following (individually and collectively, the "Secured Obligations"):
(i) the indebtedness, obligations and liabilities of the
Debtor, whether now existing or hereafter arising or created, evidenced
by and set forth in:
(a) the Subsidiary Guaranty executed by the
Debtor, including, but not limited to, the
payment of the Maximum Guaranteed Amount
thereunder, and reimbursement of any sums
advanced by Agent, a Lender or the L/C
Issuer or which may otherwise be payable to,
or recoverable by, Agent, a Lender or the
L/C Issuer pursuant to the provisions of
such Subsidiary Guaranty, the terms and
provisions of the Subsidiary Guaranty being
specifically incorporated herein by
reference thereto;
(b) this Security Agreement, including, but not
limited to, reimbursement of any sums
advanced by Agent, a Lender or the L/C
Issuer or which may otherwise become payable
to, or recoverable by, Agent, a Lender or
L/C Issuer pursuant to the provisions of
this Security Agreement, as it may be
amended, restated, modified or supplemented
from time to time;
(c) the other Loan Documents to which the Debtor
is a party, including, but not limited to,
the reimbursement of any sums
-2-
40
advanced by Agent, a Lender or the L/C
Issuer or which may otherwise be payable to,
or recoverable by, Agent, a Lender or the
L/C Issuer pursuant to the other Loan
Documents to which the Debtor is a party, as
one or more may be amended, modified or
supplemented from time to time (such other
Loan Documents, as one or more may be
amended, modified or supplemented from time
to time are hereinafter referred to as the
"Other Debtor Documents"), the terms and
provisions of the Other Debtor Documents
being specifically incorporated herein by
reference thereto; and
(ii) the Lender Obligations of the Borrower, including but not
limited to:
(a) all unpaid principal and accrued and unpaid
interest under the Revolving Credit Loans
and the Swingline Loan;
(b) all accrued and unpaid Fees under the Credit
Agreement or under any of the other Loan
Documents;
(c) the face amount of all Letters of Credit
then outstanding, together with all
Unreimbursed L/C Draws and all accrued and
unpaid interest on such Unreimbursed L/C
Draws;
(d) the actual (as opposed to nominal) credit
exposure determined in accordance with
standard industry practices to any Lender or
Affiliate of a Lender under an Interest
Hedge Agreement between such Person and the
Borrower;
(e) any other amounts payable under any of the
other Loan Documents, including all
reimbursements, indemnities, fees, costs,
expenses, prepayment premiums, and other
obligations of the Borrower to a Lender in
any capacity under the Credit Agreement or
any Indemnified Party thereunder;
(f) all out-of-pocket costs and expenses
incurred by the Agent in connection with the
Credit Agreement or any other Loan Document,
including but not limited to the reasonable
fees and expenses of such Lender's counsel;
and
(iii) all other liabilities, obligations, covenants, duties
and Indebtedness of the Borrower to the Agent, the L/C Issuer and the
Lenders of any and every kind and nature, however evidenced, and to the
extent arising under the Credit Agreement, this Security Agreement, or
the other Loan Documents, whether heretofore, now or hereafter owing,
arising, due or payable from the Borrower to the Agent, the L/C Issuer
or the Lenders.
As collateral security for the Secured Obligations, the Debtor hereby assigns
and pledges to the Agent, for the benefit of Agent, Lenders and L/C Issuer, and
their respective successors and assigns, and grants to the Agent, for the
benefit of Agent, Lenders and L/C Issuer, and their respective successors and
assigns, a perfected and continuing lien and security interest on and
-3-
41
in all of the Debtor's property described below, as well as all products thereof
and proceeds derived therefrom (including, without limitation, all proceeds of
insurance), whether now owned or existing or hereafter acquired or arising or
created, and all of the Debtor's right, title and interest in and to and
relating to all such property, products or proceeds, wherever located:
(a) All Accounts, Chattel Paper, Documents and
Instruments, and all other rights to
payments of moneys for any reason (whether
or not evidenced by a contract, instrument,
chattel paper or document), and all other
rights, powers and privileges of the Debtor
arising thereunder or related thereto;
(b) All of the Debtor's Inventory (whether or
not included within raw materials, the
work-in-process or finished goods) and all
accessories, accessions, attachments,
modifications, parts, and fittings thereto,
thereof or therefor, and all documents of
title evidencing or representing any part
thereof;
(c) All Special Collateral (as defined in
paragraph 4 hereof);
(d) All of Debtor's Equipment, Fixtures and
Goods, and all accessories, accessions,
attachments, modifications, parts, fittings
and special tools thereto, thereof or
therefor;
(e) All of Debtor's General Intangibles relating
or pertaining to the collateral described in
items (a) through (d) inclusive above;
(f) All accessories, accessions, attachments,
modifications, parts, fittings and special
tools to, of or for, and all substitutions,
replacements, renewals, additions and
improvements to, of or for any of the
collateral listed in items (a) through (e),
inclusive, above;
(g) All products and proceeds of any of the
collateral listed in items (a) through (f),
inclusive, above, including, without
limitation, all proceeds of insurance
policies insuring the aforesaid collateral
and documents covering the aforesaid
collateral, and all rents, revenues, issues,
profits and proceeds arising from the sale,
lease, license, encumbrance, collection or
any other temporary or permanent disposition
or encumbrance of such items (or any part
thereof) or any interest therein, whether or
not constituting "proceeds" as defined in
the Uniform Commercial Code; and
(h) All books, records, documents, ledger
receipts and other information of the Debtor
pertaining to any of the collateral listed
in items (a) through (g), inclusive, above,
including, without limitation, all customer
lists, credit files, computer records,
computer programs, storage media and
computer software used or required in
connection with the establishment,
generation, processing, maintenance or
storage of such books, records or documents
or otherwise used or acquired in connection
with
-4-
42
documenting information pertaining to any of
the aforesaid collateral.
All of the Debtor's property described in items (a) through (h) above, both
inclusive, as well as all products thereof and proceeds derived therefrom,
whether now owned or existing or hereafter acquired or arising or created, and
all of the Debtor's right, title and interest in and to and relating to all such
property, or proceeds, wherever located, are hereinafter referred to
collectively and individually as the "Assigned Collateral". The terms
"Accounts," "Chattel Paper," "Documents," "Instruments," "Equipment," "Goods,"
"Fixtures" and "General Intangibles," if not otherwise defined in the Credit
Agreement, shall have the meaning given those terms in the Uniform Commercial
Code as enacted in the Commonwealth of Pennsylvania.
The Debtor hereby warrants, represents and covenants to the
Agent (for the benefit of Agent, L/C Issuer and Lenders) that:
1. (a) The Debtor is the sole, legal and
beneficial owner of, and has good and
marketable right, title and interest in and
to, all of the presently owned or existing
Assigned Collateral, and will be the sole,
legal and beneficial owner of, and will have
good and marketable right, title and
interest in and to, all of the Assigned
Collateral hereafter acquired or created or
arising, free and clear of all Liens except
(i) the liens and security interests granted
hereby or by the Loan Documents or pursuant
hereto or thereto and (ii) the Permitted
Liens.
(b) Except for Permitted Liens, the Debtor has
not heretofore assigned or pledged, or
granted any other Lien upon or in, any of
the Assigned Collateral; at its expense, the
Debtor shall generally warrant title to the
Assigned Collateral, and shall defend the
Assigned Collateral, and the right, title
and interest of the Agent (for the benefit
of Agent, L/C Issuer and Lenders) therein
and thereto, against all claims and demands
of any and all Persons, other than those
holding Permitted Liens, whomsoever; the
Debtor shall not grant, create, incur or
permit to exist any Lien on or in any of the
Assigned Collateral, other than the liens
and security interests granted hereby or
pursuant hereto and the Permitted Liens; the
Debtor shall not permit any of the Assigned
Collateral to be levied upon under any legal
process; the Debtor shall not assign,
transfer or otherwise dispose of any of the
Assigned Collateral (other than as permitted
pursuant to Section 7.05 of the Credit
Agreement) without the prior written consent
of the Agent; and the Debtor shall not do,
or permit to be done, anything that may
impair the value of any of the Assigned
Collateral or any of the liens and security
interests granted hereby or pursuant hereto.
(c) The Debtor's principal executive office and
place of business is at Highway 000 Xxxxx,
Xxxxx Xxxxxxxx, Xxxxx 00000. The Debtor will
promptly advise the Agent in writing of any
change in the principal
-5-
43
executive office or place of business of the
Debtor or any change in its name.
(d) The records relating to the Assigned
Collateral consisting of Accounts, Chattel
Paper, Documents, Instruments and Special
Collateral in the possession of, or subject
to the control of, the Debtor will be kept
at the Debtor's principal executive office
and place of business at Highway 000 Xxxxx,
Xxxxx Xxxxxxxx, Xxxxx 00000 and it will not
remove, or permit the removal of, any of the
records relating to the Assigned Collateral
from such location without the prior written
consent of the Agent.
(e) The Assigned Collateral which consists of
Inventory shall be located at those sites
more fully described on Schedule 1 attached
hereto and made a part hereof; and the
Debtor will not remove or permit the removal
of any such Inventory from those sites,
except for the sale of such Inventory in the
ordinary course of business for fair
consideration or as otherwise permitted by
Section 7.05 of the Credit Agreement. The
Debtor shall keep correct and accurate
records, in all material respects, of all
Inventory on a FIFO (first-in, first-out)
basis, itemizing and describing the kind,
type and quantity of Inventory, Debtor's
costs therefor and the selling prices
thereof, and the withdrawals from and
additions to Inventory. The Debtor agrees
that, upon the reasonable request of the
Agent, the Debtor shall deliver, or cause to
be delivered, a complete and accurate list,
in all material respects, of Inventory as of
the last day of such fiscal quarter,
including in each case such information as
the Agent may reasonably require. The Debtor
shall conduct a physical inventory of the
Inventory at least once each year, and shall
make a written report to the Agent of such
physical inventory within forty-five (45)
days after the taking of such physical
count. The Debtor shall promptly furnish to
the Agent all such additional information
and documents (including, without
limitation, invoices, purchase orders,
shipping and receipt records and inventory
logs) as the Agent may from time to time
reasonably request.
(f) The Debtor will not invoice any Person
responsible for the payment or other
performance of any Account (each, an
"Account Debtor", and collectively the
"Account Debtors") or maintain the records
of the Debtor relating to the Assigned
Collateral in any name other than its proper
corporate name, except such new name(s) as
it may establish in accordance with
subparagraph (g) below.
(g) If the Debtor desires to establish a new
location for its principal executive office
and place of business or to establish a new
name or names in which it may invoice
Account Debtors or maintain records
concerning the Assigned Collateral, then the
Debtor shall first, with respect to each
such new location or name:
-6-
44
(1) give the Agent prior written notice
of its intention to do so and
provide the Agent with such
information in connection therewith
as the Agent may reasonably request;
and
(2) take such action, reasonably
satisfactory to the Agent, as may be
necessary to maintain at all times
the perfection and priority of the
liens and security interests granted
to the Agent (for the benefit of
Agent, Lenders and L/C Issuer) under
this Security Agreement or pursuant
hereto.
(h) The Agent may at any time, with notice to
the Debtor, verify with any Account Debtors
or any other Person, the status of any
Account. The Debtor from time to time will
execute and deliver such instruments and
take all such action as the Agent may
reasonably request in order to effectuate
the purposes of this subparagraph (h).
(i) The Debtor shall promptly notify the Agent
of all disputes (including without
limitation any rejection or revocation of
acceptance of goods) between the Debtor and
any Account Debtor concerning any amount in
excess of $1,000,000 due and owing under any
single Account or in excess of $2,000,000 in
the aggregate due and owing under all
Accounts from all Account Debtors, including
the reason for the disputes, all claims
related thereto and the amounts in
controversy. The Debtor will promptly notify
the Agent if the Debtor has notice or
knowledge of claims or materially adverse
changes which will or would be reasonably
likely to affect the ultimate collectibility
of any or all of the Accounts of an Account
Debtor then obligated to pay the Debtor in
excess of $1,000,000 in the aggregate. The
Debtor shall not accept any return of
Inventory the sale of which generated an
Account on which the Account Debtor is then
obligated to pay an amount in excess of
$1,000,000, and shall not accept any returns
of Inventory the sale of which together with
all other sales of Inventory generated
Accounts on which all Account Debtors are
obligated to pay an amount in excess of
$2,000,000 in the aggregate, without the
prior written consent of the Agent.
(j) The Debtor will not remove or permit the
removal of any of the Assigned Collateral
consisting of Equipment and Fixtures from
the locations shown on Schedule 2, and will
not locate any Equipment or Fixtures at
locations other than the locations shown on
Schedule 2, except for asset dispositions
which are specifically permitted pursuant to
Section 7.05 of the Credit Agreement,
without the prior written consent of the
Agent, which consent will not be
unreasonably withheld. The Debtor shall
provide to the Secured Party promptly upon
request adequate evidence that any removal
or location of any such Assigned Collateral
was permitted by such Section 7.05, and
shall ensure that any replacement
-7-
45
Equipment and Fixtures are free and clear of
all Liens, except for Permitted Liens.
(k) The Debtor shall fully comply at all times
with the provisions of Section 6.04 of the
Credit Agreement as if set forth fully
herein. If the Debtor fails to comply with
the provisions of Section 6.04 of the Credit
Agreement, the Agent may (but shall not be
obligated to) pay any taxes, levies or
impositions relative to the Assigned
Collateral, for the account of the Debtor
and add the amounts thereof to the Secured
Obligations.
(l) The Debtor shall fully comply at all times
with the provisions of Section 6.05 of the
Credit Agreement as if set forth fully
herein. If the Debtor fails to effect and
keep in force insurance covering the
Assigned Collateral as required by Section
6.05 of the Credit Agreement or fails to pay
any of the premiums thereon when due, the
Agent may (but shall not be obligated to) do
so for the account of the Debtor and add the
cost thereof to the Secured Obligations. The
Debtor hereby collaterally assigns and sets
over to the Agent (for the benefit of Agent,
Lenders and L/C Issuer) all monies which may
become payable on account of all insurance
covering the Assigned Collateral, including
without limitation any return of unearned
premiums which may be due upon cancellation
of any such insurance. Prior to the
occurrence of a Default or Event of Default,
if the Agent determines in its reasonable
discretion that the Assigned Collateral may
be satisfactorily repaired or replaced, then
the proceeds of any insurance payment may be
used by the Debtor to repair or replace the
damaged Assigned Collateral. After the
occurrence, and during the continuance, of
an Event of Default, the Debtor may direct
the insurers to pay directly to the Agent
(for the benefit of Agent, Lenders and L/C
Issuer) any amount so due. The Agent, its
officers, employees and agents, are hereby
appointed the attorneys-in-fact of the
Debtor to endorse any draft, check,
instrument or other item of payment that may
be payable to the Debtor in order to collect
the proceeds of such insurance or any return
of unearned premiums. Subject to the third
sentence of this subparagraph (l) and to
paragraph 8 hereof, any such proceeds or
returns of unearned premiums shall be
applied by Agent first to the payment of the
Note and then, in such order and manner as
the Agent shall elect in its sole
discretion, to the payment of the other
Secured Obligations; any balance of
insurance proceeds or unearned premiums
remaining in the possession of the Agent
after payment in full of the Secured
Obligations shall be paid to the Debtor or
its order as the Debtor shall instruct the
Agent in writing.
(m) Neither the value of the Inventory upon
disposition thereof, nor the ability to
freely transfer the Inventory, is limited by
any licenses, franchises, trademarks,
royalty agreements, or other general
-8-
46
intangible or contract right, to which
Debtor is a party or which is otherwise
applicable to Debtor.
(n) In addition to the rights of Agent set forth
elsewhere herein:
(i) The Debtor shall permit any of the
officers or authorized employees or
representatives of the Agent or any
of the Lenders to visit and inspect
any of the properties of the
Debtor, and to examine and make
excerpts from its books and records
and discuss its respective business
affairs, finances and accounts with
its officers, all in such detail
and at such times and as often as
the Agent or any of the Lenders may
reasonably request, provided that
each Lender shall provide the
Debtor and the Agent with
reasonable notice prior to any
visit or inspection and only the
Agent and its authorized employees
or representatives are permitted to
conduct audits.
(ii) In addition to the visitation
rights set forth in item (i) above
or item (iii) below, so long as no
Default or Event of Default has
occurred and is continuing, the
Debtor shall permit any of the
officers or authorized employees or
representatives of the Agent to
visit the properties of the Debtor
one (1) time in each year to
perform audits of Accounts and
Inventory of the Debtor and to
examine and make excerpts from the
applicable books and records of the
Debtor relating to such Accounts
and Inventory.
(iii) In addition to the visitation
rights set forth in items (i) and
(ii) above, upon the occurrence of,
and during the continuance of, a
Default of an Event of Default, the
Debtor shall permit any of the
officers or authorized employees or
representatives of the Agent to
visit the properties of the Debtor
as often as the Agent reasonably
requests to perform audits of
Accounts and Inventory of the
Debtor and to examine and make
excerpts from the applicable books
and records of the Debtor relating
to such Account and Inventory.
2. The Debtor agrees that for so long as any of the Secured
Obligations remains unpaid or unperformed and until the Revolving Credit
Commitment is terminated, the Debtor shall perform in all material respects all
obligations, covenants, conditions and agreements to be performed by it relating
to the Assigned Collateral and shall comply with all Laws (including without
limitation Environmental Laws) in all respects, provided that there shall not be
deemed to be a violation of this provision if any failure to comply with any Law
would not result in fines, penalties, or other similar liabilities or injunctive
relief which in the aggregate would constitute a Material Adverse Change.
3. Upon the reasonable request of the Agent at any time after
the execution of this Security Agreement, the Debtor agrees to establish within
sixty (60) days of such request
-9-
47
a lockbox arrangement with the Agent and to execute and deliver to Agent one or
more lockbox agreements (collectively, the "Lockbox Agreement"), each in form
and substance satisfactory to Agent and its counsel. Debtor agrees (i) to
promptly notify and direct all Account Debtors to remit all payments on Accounts
directly to the lockbox or lockboxes established under the Lockbox Agreement and
(ii) upon the occurrence of, and during the continuance of, a Default or an
Event of Default and the request of the Agent, to promptly notify all Account
Debtors of the assignment and pledge to the Agent (for the benefit of Agent, L/C
Issuer and Lenders) of, and the grant to the Agent (for the benefit of Agent,
L/C Issuer and Lenders) of liens and security interests upon and in, the
Accounts and the other Assigned Collateral. To the extent that any law or custom
or any contract or agreement with any Account Debtors requires notice to or the
approval of such Account Debtors in order to perfect such assignment of and
security interest in the Accounts, the Debtor agrees to give such notice or
obtain such approval promptly. If the Agent learns that the Debtor has failed to
give such notice or direction to any of the Account Debtors, then the Agent may
itself so notify the Account Debtors (or any of them). This Security Agreement
shall be sufficient evidence of such right and the Account Debtors may rely
hereon and shall be under no obligation to see to the application of such moneys
or other property by the Agent. The Agent is, and its duly authorized agents
are, hereby authorized by the Debtor to endorse for and on the Debtor's behalf
and deposit all drafts and checks payable to the Debtor in the lockbox
established pursuant to the Lockbox Agreement.
All checks, drafts, acceptances, notes, cash and other forms
of payment received from Account Debtors in payment on account of Accounts and
transmitted to the lockbox established pursuant to the Lockbox Agreement or
otherwise to the Agent will be deposited in a cash collateral account opened and
maintained pursuant to the Lockbox Agreement. The Debtor acknowledges and agrees
that the cash collateral account will be maintained for the convenience and
benefit of the Agent (for the benefit of Agent, L/C Issuer and Lenders) and that
the Debtor does not, and shall not, have any rights or interest in the cash
collateral account or the lockbox account established pursuant to the Lockbox
Agreement, or any credits thereto or proceeds thereof, except upon the payment
in full of the Lender Obligations.
4. The Debtor will faithfully preserve and protect the Agent's
security interests and liens in and on the Assigned Collateral. At the request
of the Agent, the Debtor will, at its own cost and expense, cause such security
interests as are governed by the Uniform Commercial Code to be perfected and to
continue to be perfected so long as the Secured Obligations or any portion
thereof are outstanding and unpaid or unperformed and until the Revolving Credit
Commitment is terminated; and, at the request of the Agent, the Debtor will, at
its own cost and expense, cause such liens and security interests as are
governed by laws or regulations other than the Uniform Commercial Code to be
perfected and to continue to be perfected to the fullest extent permitted by
such laws or regulations, so long as the Secured Obligations or any portion
thereof are outstanding and unpaid or unperformed and until the Revolving Credit
Commitment is terminated.
Without limiting the foregoing:
(a) Upon request of the Agent, Debtor will join
in the execution of all financing
statements, continuation statements, and
other documents required by the Agent to
evidence and perfect all of the liens and
security interests granted hereby or
pursuant hereto
-10-
48
and the Debtor shall pay the cost of filing
or recording such in all public offices
where deemed necessary by the Agent;
(b) Upon the request of the Agent, Debtor will
promptly furnish all documents, affidavits
and other papers reasonably required by the
Agent to further evidence or to perfect the
liens and the security interests granted
hereby or pursuant hereto; and
(c) Upon the request of the Agent, immediately
upon the Debtor's receipt of any portion of
the Assigned Collateral which itself, or the
ownership of which, is or becomes evidenced
by Chattel Paper, a Document, an Instrument,
an agreement, or other writing, including
but not limited to promissory notes,
documents of title, trade acceptances and
warehouse receipts (herein referred to as
the "Special Collateral"), the Debtor shall
deliver the original thereof to the Agent
(for the benefit of Agent, Lenders and L/C
Issuer), together with appropriate
endorsements or other specific evidence, in
form and substance acceptable to the Agent,
of the assignment thereof to the Agent (for
the benefit of Agent, Lenders and L/C
Issuer).
Effective upon an Event of Default, the Debtor hereby makes,
constitutes and appoints the Agent (for the benefit of Agent, Lenders and L/C
Issuer) and any of its officers, employees and agents the true and lawful agent
and attorney-in-fact of the Debtor, with full power of substitution, to sign the
name of the Debtor to all financing statements and all other chattel paper,
instruments and documents, and all amendments and modifications thereof and
supplements thereto, in connection with the grant, perfection, continuation of
perfection and protection of the liens and security interests granted hereby or
pursuant hereto.
5. Upon the reasonable request of the Agent, the Debtor agrees
that within thirty (30) days after the end of each fiscal quarter of the Debtor,
the Debtor shall deliver, or cause to be delivered, to the Agent (i) a complete
and accurate list in all material respects as of the last day of such Fiscal
Quarter of all Accounts, including the names and addresses of the Account
Debtors, the dates when the Account first became due, the amount of any offsets
or claims of the Account Debtors with a notation indicating whether or not
disputed by the Debtor, and such additional information as the Agent may from
time to time reasonably request, and (ii) a complete and accurate list in all
material respects as of the last day of such Fiscal Quarter of all Inventory of
the Debtor, the location of such Inventory and such additional information
concerning the Inventory as the Agent may from time to time reasonably request.
6. The Debtor will at all times keep, or cause to be kept,
accurate and complete books and records in all material respects relating to the
Assigned Collateral; and from time to time during normal business hours, the
Agent, or any of its representatives, shall have the right upon reasonable prior
notice and other reasonable terms and conditions to inspect the Assigned
Collateral and to make extracts from the books and records relating to the
Assigned Collateral. The Debtor shall promptly furnish, or cause to be
furnished, to the Agent such data and information and copies of such papers and
documents relating to the Assigned Collateral as the Agent may reasonably
request from time to time and in such form and substance as may be reasonably
requested. The Debtor will promptly deliver to the Agent all written notices,
and will promptly give the Agent written notice of any other notices, received
by
-11-
49
it with respect to a material diminution of the value of the Assigned Collateral
or the impairment of the liens and security interests of the Agent (on behalf of
Agent, Lenders and L/C Issuer) on and in the Assigned Collateral.
7. Upon the occurrence and during the continuance of an Event
of Default, the Agent shall be entitled at its option, at any time and from
time, to time to exercise any or all of the rights and remedies afforded by the
Uniform Commercial Code or other applicable law as in effect, in addition to
such rights and remedies as are provided herein, in the Notes, in the Credit
Agreement, in the Subsidiary Guaranty, in any Other Debtor Document or any other
agreement, document or instrument evidencing or securing the Secured
Obligations. The Debtor agrees to pay to the Agent on demand all expenses
including legal expenses and reasonable attorneys' fees incurred in protecting
the Assigned Collateral or enforcing the Agent's rights and remedies (on behalf
of Agent, Lenders and L/C Issuer), together with interest thereon at the highest
rate of interest set forth on the then outstanding Notes, such liability being
one of the Secured Obligations. To assist the Agent in the implementation of
such rights and remedies the Debtor will, at the Agent's request and at the
Debtor's expense, assemble and prepare for removal at and to places to be
designated by the Agent such items of the Assigned Collateral as are selected by
the Agent. Without limitation upon the foregoing, upon the occurrence and during
the continuance of an Event of Default, the Agent shall have the right to:
(a) take over and direct collection of the
Debtor's Accounts and the proceeds thereof;
give notice of the Agent's security interest
(on behalf of Agent, Lenders and L/C Issuer)
in the Accounts and the proceeds thereof to
the Account Debtors, and the Agent will have
no liability to the Debtor by reason of
giving or not giving such notice; direct the
Account Debtors to make payments of all
monies paid or payable thereon directly to
the Agent (on behalf of Agent, Lenders and
L/C Issuer) (and, at the request of the
Agent, the Debtor shall indicate on all
xxxxxxxx that payments thereon are to be
made to the Agent); and give any Account
Debtors so notified and directed the receipt
of the Agent for any such payment as full
release for the amount so paid;
(b) enforce collection, either in the name of
the Agent (on behalf of Agent, Lenders and
L/C Issuer) or in the name of the Debtor, of
any or all of the Accounts and the proceeds
thereof by suit or otherwise; receive, give
receipt for, surrender, release or exchange
all or any part thereof; compromise, settle,
extend or renew (whether or not longer than
the original period) any indebtedness
thereunder; and sell or assign any or all of
the Accounts upon such terms, for such
amounts and at such time or times as the
Agent reasonably deems commercially
advisable;
(c) endorse in the name of the Debtor any
instrument, howsoever received by the Agent,
representing Assigned Collateral (including
proceeds);
(d) enter any premises where Assigned Collateral
is located, with process of law and if
necessary, with force, and take possession
-12-
50
and control of the same and take possession
and control of all books and records of the
Debtor relating to the Assigned Collateral;
and keep and store the Assigned Collateral
on such premises until sold (and if such
premises be the property of the Debtor, the
Debtor agrees not to charge the Agent for
storage thereof during the period the Agent
is exercising its rights with respect to the
Assigned Collateral under the Uniform
Commercial Code or other applicable law,
this Security Agreement, the Notes, the
Credit Agreement, the Subsidiary Guaranty,
or any Other Debtor Document or other
agreement, document or instrument evidencing
or securing the Secured Obligations) or
remove the Assigned Collateral from such
premises to the premises of the Agent or an
agent of the Agent until sold;
(e) sell all or any portion of the Assigned
Collateral at public or private sale at such
place or places and at such time or times
and in such manner and upon such terms,
whether for cash or credit, as the Agent in
its sole discretion may determine. The Agent
may purchase all or any of the Assigned
Collateral at such public sale or sales, and
any such private sale or sales, free from
any equity or right of redemption. The
Debtor waives and releases any right to
require the Agent to collect the Secured
Obligations or any part thereof, from a
source or security other than the Assigned
Collateral, under any theory of marshalling
of assets or otherwise; and
(f) do all acts and things permitted by
applicable law which the Agent, in its sole
discretion, deems necessary or advisable to
fulfill or cause the fulfillment of the
Debtor's obligations hereunder and under the
Notes, the Credit Agreement, the Subsidiary
Guaranty, the Other Debtor Documents and any
other agreement, document or instrument
evidencing or securing the Secured
Obligations.
The Debtor hereby makes, constitutes and appoints the Agent
(on behalf of Agent, Lenders and L/C Issuer) and any of its officers, employees
and agents the true and lawful agent and attorney-in-fact of the Debtor, with
full power of substitution, upon the occurrence and during the continuance of an
Event of Default (a) to administer the Assigned Collateral and proceeds thereof,
(b) to receive, and endorse the name of the Debtor upon, any notes, checks,
acceptances, drafts, money orders, instruments or other documents relating to
the Assigned Collateral and to effect the deposit and collection thereof for
application to the payment of the Secured Obligations in such order and manner
as the Agent shall elect in its sole discretion, (c) to endorse the Debtor's
name on any xxxx of lading, receipt, freight item or similar document, (d) to
sign the name of the Debtor to notices to Account Debtors, and to assignments
and notices of assignments and to all other instruments and documents, and all
amendments and modifications thereof and supplements thereto, relating to the
Assigned Collateral, and to receive, open and dispose of mail addressed to the
Debtor and in connection therewith, to execute and deliver notices and
authorizations, in the name of the Debtor, as the United States Postal
Department or other agency may require, (e) to send verifications to any Account
Debtors to verify the status of any Account payable by such Account Debtors and
to sign the name of the Debtor to all audit inquiries made of Account Debtors,
to all information
-13-
51
release authorizations in connection therewith, to all applications for
documents of title, title certificates and similar documents, to any notice of
claim, satisfaction or release in connection with any Account, and to any proof
of claim in bankruptcy or similar document, (f) to settle, adjust or compromise
any Account or any legal action involving any other Assigned Collateral, (g) to
take all necessary action to collect Accounts, including bringing legal
proceedings in the name of the Debtor and (h) to do any and all other things and
to take any and all other action (including but not limited to commencing legal
proceedings), in the name and on behalf of the Debtor, which the Agent (on
behalf of Agent, Lenders and L/C Issuer) may deem in its sole discretion
necessary or advisable to carry out the intent of this Security Agreement.
The Debtor agrees that neither the Agent nor any of its
agents, designees or attorneys-in-fact will be liable for any acts of commission
or omission, or for any error of judgment or mistake of fact or law in respect
to the exercise of the powers of attorney granted under this Security Agreement,
including this paragraph 7 and subparagraph 1(l) and paragraph 4 hereof, except
that the Agent shall be liable for the acts of commission or omission of the
Agent, its agents, designees and attorneys-in-fact that constitute recklessness
or willful misconduct. The powers of attorney granted under this Security
Agreement, including this paragraph 7 and subparagraph 1(l) and paragraph 4
hereof, are coupled with an interest and shall be irrevocable until all Secured
Obligations are paid and performed in full and until the Revolving Credit
Commitment is terminated.
No waiver by the Agent of any default shall operate as a
waiver of any other default or of the same default on a future occasion. No
failure or delay on the part of the Agent in the exercise of any power, remedy
or right shall operate as a waiver thereof, nor shall any single or partial
exercise of any power, remedy or right preclude other or further exercise
thereof, or the exercise of any other power, remedy or right. The Agent may
assert any of its powers, rights or remedies successively, concurrently,
independently or cumulatively and all such powers, rights and remedies shall be
non-exclusive.
Any requirement of law as to reasonable notification of the
time and place of any public sale, or of the time after which any private sale
or other intended disposition of the Assigned Collateral is to be made, shall be
met by giving the Debtor at least ten (10) days' prior written notice of the
time and place of any such public sale or the time after which any such private
sale or any other intended disposition is to be made.
8. After the occurrence of an Event of Default, the Agent
shall apply the proceeds of any sale of or other disposition or realization upon
the Assigned Collateral as follows:
(a) First, to the payment or reimbursement of all
reasonable advances, expenses and disbursements of the Agent (including, without
limitation, the reasonable fees and disbursements of its counsel and agents)
incurred in connection with the administration and enforcement of, or the
preservation of, any of the Agent's, any Lender's or the L/C Issuer's rights,
powers and remedies under this Security Agreement, the Notes, the Credit
Agreement, the Subsidiary Guaranty or any Other Debtor Documents or other
agreement, document or instrument evidencing or securing the Secured
Obligations, including but not limited to the acquisition, completion,
protection, removal, storage, sale or delivery of the Assigned Collateral;
-14-
52
(b) Second, to the repayment of the Secured
Obligations whether for principal, interest, fees or expenses, in such order and
manner as the Agent, in its sole discretion, shall determine; and
(c) Third, any balance to be distributed as required
by law.
In no event shall the Agent, any Lender or the L/C Issuer be
liable to the Debtor for interest on any surplus. If the proceeds of any such
sale of or other disposition or realization upon the Assigned Collateral are
insufficient to pay and perform the Secured Obligations in full, then the Debtor
shall remain liable for such deficiency. Notwithstanding any other provision of
this Security Agreement to the contrary, only 80% of the proceeds of the
disposition of any Inventory shall be applied to repay the Secured Obligations
and the other 20% of such proceeds shall be returned to the Debtor free of the
Lien of this Security Agreement pursuant to this paragraph 8. In accordance with
the provisions of clause (viii)(a) of the definition of "Permitted Liens"
contained within the Indenture, the amount of the Secured Obligations secured by
Inventory shall be deemed to not exceed 80% of the fair market value of such
Inventory at any one time.
9. The Debtor shall have full responsibility for taking any
and all steps to preserve and protect the Assigned Collateral in its possession
or subject to its control. The Debtor agrees that neither the Agent, Lenders or
L/C Issuer, nor any of their respective officers, directors, employees or agents
will be liable for any acts of commission or omission, or for any error of
judgment or mistake of fact or law, with respect to the preservation or
protection of any Assigned Collateral in their custody except for acts of
commission or omission that constitute recklessness or willful misconduct.
10. This Security Agreement is executed only as security for
the Secured Obligations and, therefore, the execution and delivery of this
Security Agreement shall not subject the Agent, Lenders or L/C Issuer, or
transfer or pass to the Agent, Lenders or L/C Issuer, or in any way affect or
modify, the liability of the Debtor under any or all of the Assigned Collateral;
it being understood and agreed that notwithstanding the execution and delivery
of this Security Agreement, the Notes, the Credit Agreement, the Subsidiary
Guaranty or any Other Debtor Document or other agreement, document or instrument
evidencing or securing the Secured Obligations (including but not limited to the
provisions hereof and thereof as to the assignment to Agent of right, title and
interest in and to the Assigned Collateral), all of the duties and liabilities
of the Debtor to each and every other party under each and every item of the
Assigned Collateral shall be and remain enforceable by such other party, its
successors and assigns, against, but only against, the Debtor or the Debtor's
successors and assigns other than the Agent, Lenders or L/C Issuer, or their
respective representatives, successors and assigns.
11. Upon the full discharge and satisfaction of the Secured
Obligations (other than Contingent Lender Obligations), the termination or
cancellation of all outstanding Letters of Credit and the termination of the
Revolving Credit Commitment, (a) all right, title and interest herein assigned
to the Agent, Lenders or L/C Issuer, shall terminate, and all right, title and
interest of the Agent, Lenders or L/C Issuer in and to each and every one of the
items of Assigned Collateral shall revert to the Debtor and (b) the Agent shall,
at the expense of Debtor, file all requisite termination statements and do all
such other acts as are reasonably required of it to evidence the termination of
the liens and security interests granted hereby or pursuant hereto. For purposes
of this Security Agreement the term "Contingent Lender Obligations" shall
-15-
53
mean at any time of determination any Lender Obligations which at such time are
contingent obligations under indemnification provisions of the various Loan
Documents which survive indefinitely. Lender Obligations under such
indemnification provisions shall not be considered to be Contingent Lender
Obligations if (x) an unsatisfied claim for payment has been made under such
indemnification provisions at or before such time, or (y) a proceeding is
pending or threatened in writing at such time which may give rise to a claim
under such indemnification provisions.
12. Any notice or other communication required hereunder shall
be in writing, and shall be served, given or delivered by (i) registered or
certified mail, return receipt requested, with proper postage prepaid, (ii) hand
delivery, (iii) overnight express mail courier, with receipt acknowledged, or
(iv) telecopier with receipt confirmed, and addressed to the party to be
notified at the address set forth below or to such other address as each party
may designate for itself in writing by like notice:
(a) If to the Agent, at
PNC Bank, National Association
One PNC Plaza, 22nd Floor
249 Fifth Avenue
Agency Services
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to:
PNC Bank, National Association
One PNC Plaza, 3rd Floor
249 Fifth Avenue
Metals Group
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Senior Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to the Debtor, at
Seadrift Coke, L.P.
c/o The Carbide/Graphite Group, Inc.
Xxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President-Finance and
Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
-16-
54
Such notice or other communication shall be deemed to have been duly given or
served on the date on which delivered.
13. The Agent, L/C Issuer or any Lender may have or in the
future may hold other security and/or guaranties to secure all or any part of
the Secured Obligations, but it is specifically understood and agreed that
neither the execution and delivery of this Security Agreement nor the holding of
any other security and/or guaranty shall at any time or in any way operate to
prevent or hinder the Agent, L/C Issuer or any Lender from resorting first to
such other security and/or guaranty or first to the Assigned Collateral, or
first from time to time to both; and the Agent (on behalf of Agent, Lenders and
L/C Issuer) may from time to time as the Agent sees fit, in the Agent's sole and
uncontrolled discretion, resort to all or any part of the Assigned Collateral
without resorting to all or any other security and/or guaranty securing such
Secured Obligations, or to all or any part of any other security and/or guaranty
securing the Secured Obligations without resorting to all or any part of the
Assigned Collateral, and such action on the Agent's part shall not in any way be
considered as a waiver of any of the benefits or rights of the Agent relating to
the Assigned Collateral or such other security and/or guaranties.
14. This Security Agreement shall be binding upon the Debtor
and the successors and assigns of the Debtor, and shall inure to the benefit of
the Agent, Lenders and L/C Issuer, and their respective successors and assigns.
15. Whenever possible each provision of this Security
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law but if any provision of this Security Agreement or any part of
such provision shall be prohibited by or invalid under applicable law, such
provision or part thereof shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Security Agreement.
16. The obligations of the Debtor under this Security
Agreement, and the grant of security interests hereunder to the Agent for the
benefit of Agent, the Lenders and the L/C Issuer, shall be continuing,
unconditional, irrevocable and absolute and shall be independent of any
obligations of, and any security interests granted by, the Borrower or any other
Person and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by any of the following matters and
no right or remedy of the Agent, the Lenders or the L/C Issuer hereunder shall
be in any way prejudiced or adversely affected by any of the following matters
(whether or not the Agent, the Lenders or the L/C Issuer shall make any
reservation of rights against, give or attempt to give any notice to, or request
or obtain any further assent of the Debtor with respect to any of the following
matters):
(a) any extension, renewal, settlement,
compromise, waiver or release in respect of
any of the Secured Obligations or any other
obligation of the Borrower under the Notes,
the Credit Agreement, any other Loan
Document, or any other document, instrument
or agreement evidencing or securing the
Secured Obligations;
(b) any modification or amendment of or
supplement to the Notes, the Credit
Agreement, any other
-17-
55
Loan Document, or any other document,
instrument or agreement evidencing or
securing the Secured Obligations;
(c) any modification, amendment, waiver,
release, compromise, non-perfection or
invalidity of any direct or indirect
security, or of any guarantee or other
liability of any third party, for any of the
Secured Obligations or any other obligation
of the Borrower under the Notes, the Credit
Agreement, any other Loan Document, or any
other document, instrument or agreement
evidencing or securing the Secured
Obligations;
(d) any change in the partnership or corporate
existence, structure or ownership of the
Debtor or Borrower, or any insolvency,
bankruptcy, reorganization or other similar
proceeding affecting the Borrower or the
Debtor or their respective assets
irrespective of any release or deferral of
the liability of any Subsidiary Guarantor to
pay all or any part of the Secured
Obligations or any of the Borrower's or the
Debtor's other obligations under the Notes,
the Credit Agreement, any other Loan
Document, or any other document, instrument
or agreement evidencing or securing the
Secured Obligations;
(e) the existence of any claim, set-off or other
rights which the Debtor or the Borrower may
have at any time against the Borrower, a
Lender, the Agent, the L/C Issuer or any
other Person, whether or not arising in
connection with this Security Agreement, the
Secured Obligations, the Notes, the Credit
Agreement, any other Loan Document, or any
other document, instrument or agreement
evidencing or securing the Secured
Obligations;
(f) any invalidity or unenforceability relating
to or against the Borrower for any reason of
the Notes, the Credit Agreement, any other
Loan Document, or any other document,
instrument or agreement evidencing or
securing the Secured Obligations, or any
provision of applicable law or regulation
purporting to prohibit the payment by the
Borrower of the Secured Obligations or any
other amount payable by the Borrower under
the Notes, the Credit Agreement, or any
other document, instrument or agreement
evidencing or securing the Secured
Obligations;
(g) any invalidity or unenforceability relating
to or against the Debtor for any reason of
its obligations and liabilities under the
Notes, the Credit Agreement, any other Loan
Document, or any other document, instrument
or agreement evidencing or securing the
Secured Obligations;
(h) any other act or failure to act or delay of
any kind by the Borrower, a Lender, the
Agent, the L/C Issuer or any other Person or
any other circumstance whatsoever that
might, but for the provisions
-18-
56
of this paragraph, constitute a legal or
equitable discharge of the obligations of
the Debtor under this Security Agreement;
(i) the existence of, or any execution on or
attachment of, or any failure by the Agent,
the Lenders or the L/C Issuer (voluntarily
or otherwise) to resort to, any other
security or any other rights held or
hereafter held or to be held by the Agent,
the Lenders or the L/C Issuer to secure any
or all of the Secured Obligations or other
obligations of the Borrower under the Notes,
the Credit Agreement, any other Loan
Document, or any other document, instrument
or agreement evidencing or securing the
Secured Obligations or any judgment obtained
by the Agent, the Lenders or the L/C Issuer;
(j) any demand for payment of any of the Secured
Obligations is rescinded by the Agent, the
Lenders or the L/C Issuer and any of the
Secured Obligations continued;
(k) the refusal or failure (whether intentional,
negligent or otherwise) of the Agent, the
Lenders or the L/C Issuer or any agent of
the Agent, the Lenders or the L/C Issuer to
protect, secure, perfect, continue, maintain
or insure any Lien at any time held by it as
security for the Secured Obligations or any
other obligations of the Borrower under the
Notes, the Credit Agreement, any other Loan
Document, or any other document, instrument
or agreement evidencing or securing the
Secured Obligations or any property subject
thereto; or
(l) the termination of the Revolving Credit
Commitments or the refusal of the Agent, the
Lenders or the L/C Issuer to provide further
credit or other financial accommodations to
the Borrower.
17. THIS SECURITY AGREEMENT, THE OTHER DEBTOR DOCUMENTS AND
OTHER AGREEMENTS, DOCUMENTS AND INSTRUMENTS EVIDENCING OR SECURING THE SECURED
OBLIGATIONS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO THE PRINCIPLES THEREOF
REGARDING CONFLICT OF LAWS, EXCEPTING APPLICABLE FEDERAL LAW AND EXCEPT ONLY TO
THE EXTENT PRECLUDED BY THE MANDATORY APPLICATION OF THE LAW OF ANOTHER
JURISDICTION.
18. THE PARTIES HERETO AGREE THAT ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT, THE OTHER DEBTOR
DOCUMENTS OR ANY OTHER AGREEMENTS, DOCUMENTS AND INSTRUMENTS EVIDENCING OR
SECURING THE SECURED OBLIGATIONS TO WHICH THE DEBTOR IS A PARTY MAY BE COMMENCED
THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA OR IN XXX XXXXXXXX
XXXXX XX XXX XXXXXX XXXXXX FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND THE
PARTIES HERETO AGREE THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION OR
PROCEEDING IN EITHER OF SUCH COURTS SHALL BE PROPERLY SERVED AND
-19-
57
SHALL CONFER PERSONAL JURISDICTION IF SERVED PERSONALLY OR BY CERTIFIED MAIL TO
THE PARTIES AT THEIR ADDRESSES SET FORTH IN PARAGRAPH 12 HEREOF, OR AS OTHERWISE
PROVIDED UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. FURTHER, THE DEBTOR
HEREBY SPECIFICALLY CONSENTS TO THE PERSONAL JURISDICTION OF THE COURT OF COMMON
PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA AND THE DISTRICT COURT OF THE UNITED
STATES FOR THE WESTERN DISTRICT OF PENNSYLVANIA AND WAIVES AND HEREBY
ACKNOWLEDGES THAT IT IS ESTOPPED FROM RAISING ANY OBJECTION BASED ON FORUM NON
CONVENIENS, OR ANY CLAIM THAT EITHER SUCH COURT LACKS PERSONAL JURISDICTION OVER
THE DEBTOR SO AS TO PROHIBIT EITHER SUCH COURT FROM ADJUDICATING ANY ISSUES
RAISED IN A COMPLAINT FILED WITH EITHER SUCH COURT AGAINST THE DEBTOR BY THE
AGENT, THE LENDERS OR THE L/C ISSUER CONCERNING THIS SECURITY AGREEMENT, THE
OTHER DEBTOR DOCUMENTS OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT EVIDENCING
OR SECURING THE SECURED OBLIGATIONS OR PAYMENT TO THE AGENT, LENDERS OR THE L/C
ISSUER. THE DEBTOR HEREBY ACKNOWLEDGES AND AGREES THAT THE CHOICE OF FORUM
CONTAINED IN THIS PARAGRAPH 18 SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT
OF ANY JUDGMENT OBTAINED IN ANY FORUM OR THE TAKING OF ANY ACTION UNDER THE LOAN
DOCUMENTS TO ENFORCE THE SAME IN ANY APPROPRIATE JURISDICTION.
19. THE DEBTOR HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
COURT AND IN ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH THE DEBTOR, THE
LENDERS, THE AGENT, THE ISSUING BANK, OR ANY OF THEIR SUCCESSORS OR ASSIGNS IS A
PARTY, AS TO ALL MATTERS AND THINGS ARISING OUT OF THIS AGREEMENT, THE CREDIT
AGREEMENT, OR THE OTHER LOAN DOCUMENTS.
20. Whenever required by the context of this Security
Agreement the singular shall include the plural, and vice-versa, and the
masculine and feminine genders shall include the neuter gender, and vice-versa.
21. This Security Agreement may be executed in as many
counterparts as shall be convenient, each of which when executed by the parties
hereto shall be regarded as an original. All such counterparts shall constitute
but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-20-
58
WITNESS the due execution of this Subsidiary Security
Agreement and Collateral Assignment by the Debtor by its general partner the day
and year first above written with intent of the Debtor to be legally bound
hereby, and with the further intention that this Subsidiary Security Agreement
and Collateral Assignment shall constitute a sealed instrument.
Debtor:
SEADRIFT COKE, L.P., a Texas limited
partnership
By its General Partner:
The Carbide/Graphite Group, Inc., a
Delaware corporation
By
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President-Finance
and Chief Financial Officer
PNC BANK, NATIONAL ASSOCIATION, as Agent
for Lenders and L/C Issuer
By
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
-21-
59
LIST OF SCHEDULES
-----------------
Schedule 1 - Inventory Locations
Schedule 2 - Equipment Locations
EXHIBIT "J-1"
60
OPEN END MORTGAGE
THIS OPEN END MORTGAGE (the Open End Mortgage together with
all extensions, renewals, amendments, substitutions and replacements hereto and
hereof referred to as the "MORTGAGE") is dated as of April 30, 1999, and is made
and entered into by and between THE CARBIDE/GRAPHITE GROUP, INC., a Delaware
corporation (the "MORTGAGOR"), and PNC BANK, NATIONAL ASSOCIATION, in its
capacity as agent for the Lenders (as defined in the Credit Agreement) and the
L/C Issuer (as defined in the Credit Agreement) (in such capacity, as defined in
the Credit Agreement, the "AGENT" and referred to herein as the "MORTGAGEE")
pursuant to the Credit Agreement referred to below.
WITNESSETH:
WHEREAS, pursuant to a certain Revolving Credit and Letter of
Credit Issuance Agreement dated as of September 25, 1997, as amended by First
Amendment to Revolving Issuance Credit and Letter of Credit Agreement dated as
of October 28, 1997, the Second Amendment to Revolving Credit and Letter of
Credit Issuance Agreement and Waiver dated as of April 30, 1998, and the Third
Amendment to Revolving Credit and Letter of Credit Issuance Agreement and
Amendment to Revolving Credit Notes dated as of April 30, 1999, entered into by
and among the Mortgagor, the Lenders which are or which become parties thereto,
the L/C Issuer and the Mortgagee (the Revolving Credit and Letter of Credit
Issuance Agreement, as amended to date, together with all further amendments,
extensions, renewals, substitutions and replacements thereto and thereof
referred to as the "CREDIT AGREEMENT") the Mortgagor has requested and the
Lenders have agreed to make available to the Mortgagor (i) a Revolving Credit
Commitment in an aggregate principal amount not to exceed $150,000,000, (ii) a
Swingline Loan facility in a principal amount not to exceed $5,000,000 at any
one time outstanding and (iii) Letters of Credit in a principal amount not to
exceed $15,000,000 at any one time outstanding; provided that at no time will
Total Utilization exceed $150,000,000 (the Revolving Credit Commitment,
Swingline Loan and Letters of Credit, as they may be amended, extended, renewed,
or increased from time to time, are collectively referred to herein as the
"CREDIT FACILITY" and the Revolving Credit Notes and Swingline Note issued
pursuant thereto, together with all amendments, extensions, renewals,
substitutions and replacements thereto and thereof are collectively referred to
herein as the "NOTES"); and
WHEREAS, the Mortgagor is the owner of certain tracts or
parcels of land, described in Exhibit A attached hereto and made a part hereof,
together with the improvements now or hereafter erected thereon; and
WHEREAS, to secure the prompt payment in full to the Lenders
and the L/C Issuer of the Lender Obligations (as defined in the Credit
Agreement), the Mortgagor has agreed to execute and deliver to the Mortgagee,
for and on behalf of the Lenders and the L/C Issuer, this Mortgage.
NOW, THEREFORE, in consideration of the premises (each of
which is incorporated herein by reference) and the mutual promises contained
herein and other valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and with the intent to be legally bound hereby, and for the
purpose of securing:
(i) the performance of all terms and provisions contained in
the Notes, including, but not limited to, the payment of the aggregate unpaid
principal balance of the Notes
EXHIBIT "M-1"
61
(including all advances heretofore and hereafter made and evidenced by any Note)
and interest thereon unto the Lenders and the L/C Issuer and their respective
successors and assigns, according to the provisions and conditions of the Notes,
as they may be amended, extended, or renewed from time to time, and in discharge
thereof;
(ii) the performance by the Mortgagor of all of the terms and
provisions contained in the Credit Agreement, this Mortgage and all of the other
Loan Documents, as they may be amended, modified or supplemented from time to
time, the terms and provisions of all of such documents being specifically
incorporated herein by reference as though set forth herein; and
(iii) the Mortgagor's payment of any and all of its Lender
Obligations to the Lenders, L/C Issuer or Mortgagee, whether now or hereafter
existing or incurred and whether direct or indirect as guarantor, by virtue of
any assignment, pledge or other transfer or disposition to the Lenders of
Indebtedness and other obligations of the Mortgagor to one or more third
parties, or otherwise,
the Mortgagor, for good and valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound hereby, does hereby give, grant,
bargain, sell, convey, assign, transfer, mortgage, hypothecate, pledge, set over
and confirm unto the Mortgagee, for and on behalf of the Lenders and the L/C
Issuer, and agrees that the Mortgagee, for and on behalf of the Lenders and the
L/C Issuer, shall have a lien and security interest in the following described
property, all accessions and additions thereto, all substitutions therefor and
replacements and proceeds thereof, and all reversions and remainders of such
property (collectively, the "MORTGAGED PROPERTY") now owned or held or hereafter
acquired, to wit:
(a) All of the Mortgagor's estate in the premises described in
Exhibit "A", together with all of the easements, rights of way, privileges,
liberties, hereditaments, gores, streets, alleys, passages, ways, waters,
watercourses, rights and appurtenances thereunto belonging or appertaining, and
all of the estate, right, title, interest, claim and demand whatsoever of the
Mortgagor therein and in the public streets and ways adjacent thereto, either in
law or in equity, in possession or expectancy (collectively, the "LAND");
(b) All the buildings, structures and improvements of every
kind and description now or hereafter erected or placed on the Land, and all
facilities, fixtures, machinery, apparatus, appliances, installations,
machinery, equipment and other property, whether real, personal or mixed,
including, without limitation, electrical equipment necessary for the operation
of such buildings and heating, air conditioning and plumbing equipment now or
hereafter attached to, located in or used in connection with those buildings,
structures or other improvements, and owned by the Mortgagor, and including all
of the Mortgagor's right, title and interest (including, purchase options and
similar rights) under any equipment leases which do not prohibit the mortgaging
of such interests (hereinafter collectively called the "IMPROVEMENTS");
(c) The Mortgagor's right, title and interest in, to and under
all rights of way, servitudes, permits, licenses, approvals, franchises,
management agreements, easements, rights of way, tenements, hereditaments,
privileges, warranties, plans, specifications, environmental reports, covenants,
agreements (including, without limitation, agreements providing for the
construction, or reconstruction of the Mortgaged Property) and appurtenances
-2-
62
now or hereafter belonging or appertaining to any of the Land or Improvements,
to the extent the same are assignable or to the extent a Lien can be granted
therein;
(d) All rents, issues and profits arising or issuing from said
Land and from the Improvements (the "RENTS") including, but not limited to, the
Rents arising or issuing from all leases and subleases now or hereafter entered
into covering all or any part of said Land and or Improvements (the "LEASES"),
all of which Leases and Rents are hereby assigned to the Mortgagee by the
Mortgagor. The foregoing assignment shall include without limitation, cash or
securities deposited under Leases to secure performance of lessees of their
obligations thereunder, whether such cash or securities are to be held until the
expiration of the terms of such leases or applied to one or more installments of
rent coming due prior to the expiration of such terms. The Mortgagee, or any of
its officers, directors, employees and authorized agents as the Mortgagee may
select, is hereby irrevocably appointed attorney-in-fact for the Mortgagor
(without requiring any of them to act as such), such appointment being coupled
with an interest, to collect such Rents, after the occurrence of an Event of
Default. The Mortgagor will execute and deliver to the Mortgagee, on demand,
such assignments and instruments as the Mortgagee may require to implement,
confirm, maintain and continue the assignment hereunder;
(e) Any and all awards, damages, payments and other
compensation and any and all claims therefor and rights thereto which may result
from taking or injury by virtue of the exercise of the power of eminent domain
of or to, or any damage, injury or destruction in any manner caused to, said
Land and Improvements, or any part thereof, or from any change of grade or
vacation of any street abutting thereon, all of which awards, damages, payments,
compensation, claims and rights are hereby assigned, transferred and set over by
the Mortgagor to the Mortgagee to the fullest extent possible under applicable
laws. The Mortgagee, or any of its officers, directors, employees and authorized
agents as the Mortgagee may select, is hereby irrevocably appointed
attorney-in-fact for the Mortgagor (without requiring any of them to act as
such), such appointment being coupled with an interest, to settle for, with the
consent of the Mortgagor unless an Event of Default has occurred, in which case
the Mortgagor's consent shall not be required, collect and receive any such
awards, damages, payments and compensation from the authorities making the same;
(f) The Mortgagor's right, title and interest in, to and under
all property of whatsoever nature now or hereafter situate upon the Mortgaged
Property and used or intended to be used in connection with any Improvement,
including all the Mortgagor's right, title and interest (including, purchase
options and similar rights) under any equipment leases which do not prohibit the
mortgaging of such interests;
(g) All proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or liquidated claims;
(h) And without limiting any of the other provisions of this
Mortgage, the Mortgagor expressly grants unto the Mortgagee a security interest
in all those portions of the Mortgaged Property which may be subject to the UCC
provisions applicable to secured transactions under the laws of Pennsylvania,
including, without limitation, Accounts, General Intangibles, Goods, Inventory,
Chattel Paper, Documents and Instruments (as such terms are defined in Article 9
of the Uniform Commercial Code), and the Mortgagor will execute and deliver to
the Mortgagee on demand, and hereby irrevocably appoint the Mortgagee or any
officer of the Mortgagee the attorney-in-fact of the Mortgagor (without
requiring any of them to act as such), such appointment being coupled with an
interest, to execute, deliver and file such
-3-
63
financing statements and other instruments as the Mortgagee may require in order
to perfect and maintain such security interest under the UCC on the aforesaid
collateral.
To have and to hold the same unto the Mortgagee and its successors and
assigns, forever, for and on behalf of the Lenders and the L/C Issuer.
Provided, however, that if the Mortgagor shall pay to the Lenders and
the L/C Issuer the Lender Obligations, and if the Mortgagor shall keep and
perform each of its other covenants, conditions and agreements set forth herein
and in the other Loan Documents, then, upon the termination of all obligations,
duties and commitments of the Mortgagor under the Lender Obligations and this
Mortgage, the estate hereby granted and conveyed shall become null and void.
This Mortgage is an "Open-End Mortgage" as set forth in 42 PA. C.S.A.
Section 8143 and secures obligations up to a maximum principal amount of
indebtedness outstanding at any time equal to $150,000,000, plus accrued and
unpaid interest, including, but not limited to, advances for the payment of
taxes and municipal assessments, maintenance charges, insurance premiums, costs
incurred for the protection of the Mortgaged Property or the lien of this
Mortgage, expenses incurred by the Mortgagee by reason of default by the
Mortgagor under this Mortgage and advances for construction, alteration or
renovation on the Mortgaged Property or for any other purpose, together with all
other sums due hereunder or secured hereby. All notices to be given to the
Mortgagee pursuant to 42 PA. C.S.A. Section 8143 shall be given as set forth in
Section 17 of this Mortgage.
1. REPRESENTATIONS AND WARRANTIES. The Mortgagor represents and
warrants to the Mortgagee that the Mortgagor has good and marketable title to an
estate in fee simple absolute in the Land and Improvements and has all right,
title and interest in all other property constituting a part of the Mortgaged
Property, in each case free and clear of all Liens, except for Permitted Liens.
This Mortgage is a valid and enforceable first Lien on the Mortgaged Property
(except for Permitted Liens), and the Mortgagee shall, subject to the
Mortgagor's right of possession prior to an Event of Default, quietly enjoy and
possess the Mortgaged Property. The Mortgagor shall preserve such title as it
warrants herein and the validity and priority of the Lien hereof and shall
forever warrant and defend the same to the Mortgagee against the claims of all
Persons and parties whomsoever.
2. AFFIRMATIVE COVENANTS. Until all of the Lender Obligations shall
have been fully paid, satisfied and discharged and the Credit Facility shall
have terminated, the Mortgagor shall:
(a) PAYMENT AND PERFORMANCE OF LENDER OBLIGATIONS. Pay or
cause to be paid and perform all Lender Obligations when due as provided in the
Loan Documents.
(b) LEGAL REQUIREMENTS. Promptly comply with and conform in
all material respects to all present and future Laws and all covenants,
restrictions and conditions which may be applicable to the Mortgagor or to any
of the Mortgaged Property (collectively, the "LEGAL REQUIREMENTS").
(c) IMPOSITIONS. Except as otherwise permitted by the Credit
Agreement, before interest or penalties are delinquent thereon and otherwise
when due, the Mortgagor shall pay all taxes of every kind and nature, all
charges for any easement or agreement maintained for the benefit of any of the
Mortgaged Property, all general and special assessments
-4-
64
(including, without limitation, any condominium or planned unit development
assessments, if any), levies, permits, inspection and license fees, all water
and sewer rents and charges, and all other charges and Liens, whether of a like
or different nature, imposed upon or assessed against the Mortgagor or any of
the Mortgaged Property. The obligations referred to in this Section are
hereinafter collectively referred to as the "IMPOSITIONS". The Mortgagor shall
deliver to the Mortgagee evidence acceptable to the Mortgagee of any such
payment, promptly upon any request therefor by the Mortgagee. The Mortgagor's
obligation to pay the Impositions which were imposed upon or assessed against
the Mortgagor or the Mortgaged Property up to any date on which the Mortgagee or
its assignee takes title to the Mortgaged Property, whether through foreclosure,
deed-in-lieu or otherwise, shall survive the Mortgagee's or any assignee's
taking title to the Mortgaged Property through foreclosure, deed-in-lieu or
otherwise.
(d) MAINTENANCE OF SECURITY. The Mortgagor shall keep the
Mortgaged Property in good condition and order and in a rentable and tenantable
state of repair and will make or cause to be made, as and when necessary, all
repairs, renewals, and replacements, structural and nonstructural, exterior and
interior, foreseen and unforeseen, ordinary and extraordinary, provided,
however, that no material structural repairs, renewals or replacements shall be
made without the Mortgagee's prior written consent, which consent shall not be
unreasonably withheld or delayed. The Mortgagor shall not remove or demolish the
Mortgaged Property, nor commit or suffer waste with respect thereto, nor permit
the Mortgaged Property to become deserted or abandoned. The Mortgagor shall
permit the Mortgagee and its agents at any time, and from time to time, upon
five (5) days' notice and during normal business hours, to enter upon and visit
the Mortgaged Property for the purpose of inspecting and appraising the same;
provided, however, that no notice of an inspection or appraisal need be given
when a Default or Event of Default exists. The Mortgagor covenants and agrees
not to take or permit any action with respect to the Mortgaged Property which
will in any material manner impair the security of this Mortgage.
(e) USE OF MORTGAGED PROPERTY. The Mortgagor shall use, and
permit others to use, the Mortgaged Property only for its present use or such
other uses as permitted by applicable Legal Requirements and approved in writing
by the Mortgagee.
(f) BOOKS AND RECORDS. The Mortgagor shall maintain and the
Mortgagee shall have access to, upon five (5) days' prior notice to the
Mortgagor, complete and adequate books of account and other records relating to
the operation and use of the Mortgaged Property as the Mortgagee may require.
The Mortgagor shall permit the Mortgagee to photocopy such books and records.
3. NEGATIVE COVENANTS. Until all of the Lender Obligations shall have
been fully paid, satisfied and discharged:
(a) LEASES. The Mortgagor shall not (i) execute an assignment
or pledge of the Rents and/or the Leases other than in favor of the Mortgagee;
(ii) accept any prepayment of an installment of any Rents more than one (1)
month prior to the due date of such installment; or (iii) enter into or amend
any of the terms of any of the Leases without the Mortgagee's prior written
consent which consent shall not be unreasonably withheld or delayed. Any or all
leases or subleases of all or any part of the Mortgaged Property shall be
subject in all respects to the prior written consent of the Mortgagee, not to be
unreasonably withheld or delayed, shall be subordinated to this Mortgage and to
the rights of the Mortgagee and, together with any and all rents, issues or
profits relating thereto, shall be assigned at the time of execution to the
-5-
65
Mortgagee as additional collateral security for the Lender Obligations, all in
such form, substance and detail as is satisfactory to the Mortgagee in its sole
discretion. The Mortgagee agrees to execute and deliver any non-disturbance
agreements reasonably requested by the Mortgagor.
(b) TRANSFER. The Mortgagor shall not sell, convey or
otherwise transfer any interest in the Mortgaged Property (whether voluntarily
or by operation of law), or agree to do so, without the Mortgagee's prior
written consent. For the purpose of, and without limiting the generality of the
foregoing, the occurrence at any time of any of the following events except as
may be permitted pursuant to the Credit Agreement, without the Mortgagee's prior
written consent, shall be deemed to be an unpermitted transfer of title to the
Mortgaged Property: (i) any sale, conveyance, assignment, or other transfer of
(including installment land sale contracts), or the grant of a security interest
in, all or any part of the legal and/or equitable title to the Mortgaged
Property; (ii) any lease of all or any portion of the Mortgaged Property, except
as may otherwise be permitted under this Mortgage; or (iii) any sale,
conveyance, assignment, or other transfer of, or the grant of a security
interest in, any equity interest of the Mortgagor.
4. INSURANCE.
(a) The Mortgagor shall keep the Mortgaged Property
continuously insured in accordance with the provisions of Section 6.05 of the
Credit Agreement.
(b) If the Mortgaged Property is located in an area which has
been identified by any Governmental Authority as a flood hazard area or the
like, then the Mortgagor shall maintain a flood insurance policy covering the
Improvements in an amount not less than the original principal amount of the
Lender Obligations or the maximum limit of coverage available under the federal
program, whichever amount is less.
(c) If the Mortgagor shall not at any time comply with the
terms of this Section, irrespective of the passage of any grace period, the
Mortgagee may cure such non-compliance and may purchase such insurance as it may
elect. The Mortgagor shall reimburse the Mortgagee on demand for any costs
incurred by the Mortgagee in connection with any such actions, together with
interest at the rate set forth in Section 2.08(c) of the Credit Agreement. Any
such actions by the Mortgagee shall not constitute a waiver of any
non-compliance of the terms of this Mortgage by the Mortgagor.
5. RIGHTS OF MORTGAGEE TO INSURANCE PROCEEDS. In the event of loss, the
Mortgagee shall have the exclusive right to adjust and compromise (with the
Mortgagor's consent, which consent shall not be required if an Event of Default
exists), and collect all insurance claims, and no Mortgagor shall adjust,
collect or compromise any claims under said policies without the prior written
consent of the Mortgagee. Each insurer is hereby authorized and directed to make
payment under said policies, including return of unearned premiums, directly to
Mortgagee instead of to the Mortgagor and the Mortgagee jointly, and the
Mortgagor appoints the Mortgagee, or any of its officers, directors, employees
or authorized agents as the Mortgagee may select, as the Mortgagor's
attorney-in-fact to endorse any draft therefor. All insurance proceeds shall be
payable to the Mortgagee and such proceeds may, at the Mortgagee's sole option,
be applied to all or any part of the Lender Obligations and in any order
(notwithstanding that such Lender Obligations may not then otherwise be due and
payable) or to the repair and restoration of any of the Mortgaged Property under
such terms and conditions as the Mortgagee may impose; provided, however, that
if no Default or Event of Default exists,
-6-
66
and if the Mortgagee determines in its reasonable discretion that the Mortgaged
Property can be satisfactorily repaired or restored, then the insurance proceeds
shall be applied to repair or restore the Mortgaged Property under such terms
and conditions as the Mortgagee may impose. The Mortgagee shall not be deemed to
have elected any option made available pursuant to this Section 5 until such
option is elected specifically in writing. Until so elected, the Mortgagee shall
not in any circumstances be deemed to have waived its right to make such
election.
6. CONDEMNATION. The Mortgagor, immediately upon obtaining knowledge of
the institution of any proceedings for the condemnation or taking by eminent
domain of any of the Mortgaged Property, shall notify the Mortgagee of the
pendency of such proceedings. The Mortgagee may participate in any such
proceedings and the Mortgagor shall deliver to the Mortgagee all instruments
requested by it to permit such participation. Any award or compensation for
property taken or for damage to property not taken, whether as a result of such
proceedings or in lieu thereof, is hereby assigned to and shall be received and
collected directly by the Mortgagee, and any award or compensation shall be
applied, at the Mortgagee's option, to any part of the Lender Obligations and in
any order (notwithstanding that any of such Lender Obligations may not then be
due and payable) or to the repair and restoration of any of the Mortgaged
Property under such terms and conditions as the Mortgagee may impose; provided,
however, that if no Default or Event of Default exists, and if the Mortgagee
determines in its reasonable discretion that the Mortgaged Property can be
satisfactorily repaired or restored, then the award or compensation shall be
applied to repair or restore the Mortgaged Property under such terms and
conditions as the Mortgagee may impose. The Mortgagee shall not be deemed to
have elected any option made available pursuant to this Section 6 until such
option is elected specifically in writing. Until so elected, the Mortgagee shall
not in any circumstances be deemed to have waived its right to make such
election.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an "EVENT OF DEFAULT" hereunder:
(a) Any "Event of Default" (as defined in the Credit
Agreement) of the Credit Agreement relating to violations of any term,
agreement, covenant, condition set forth in any Loan Document (including,
without limitation, this Mortgage); or
(b) The Mortgagor or any other obligor or guarantor of any of
the Lender Obligations, shall at any time deliver or cause to be delivered to
the Mortgagee a notice pursuant to 42 PA. C.S.A. Section 8143 electing to limit
the indebtedness secured by this Mortgage.
8. RIGHTS AND REMEDIES OF MORTGAGEE. If an Event of Default occurs, the
Mortgagee may, at its option without demand, notice or delay, do one or more of
the following:
(a) The Mortgagee may exercise any remedy available to it
pursuant to the Credit Agreement or any of the other Loan Documents;
(b) The Mortgagee may (i) institute and maintain an action of
mortgage foreclosure against the Mortgaged Property and the interest of the
Mortgagor therein, (ii) institute and maintain an action on any instruments
evidencing the Lender Obligations or any portion thereof, and (iii) take such
other action at law or in equity for the enforcement of any of the Loan
Documents as the law may allow, and in each such action the Mortgagee shall be
entitled to all costs of suit and attorneys fees;
-7-
67
(c) The Mortgagee may, in its sole and absolute discretion,
and without releasing the Mortgagor or any other obligor or guarantor from any
obligation under any of the Loan Documents and without waiving any Event of
Default: (i) collect any or all of the Rents, including any Rents past due and
unpaid, (ii) perform any obligation or exercise any right or remedy of the
Mortgagor under any Lease, or (iii) enforce any obligation of any tenant of any
of the Mortgaged Property. The Mortgagee may exercise any right under this
subsection (c), whether or not the Mortgagee shall have entered into possession
of any of the Mortgaged Property, and nothing herein contained shall be
construed as constituting the Mortgagee a "mortgagee in possession", unless the
Mortgagee shall have entered into and shall continue to be in actual possession
of the Mortgaged Property. The Mortgagor hereby authorizes and directs each and
every present and future tenant of any of the Mortgaged Property to pay all
Rents directly to the Mortgagee and to perform all other obligations of that
tenant for the direct benefit of the Mortgagee, as if the Mortgagee were the
landlord under the Lease with that tenant, immediately upon receipt of a demand
by the Mortgagee to make such payment or perform such obligations. The Mortgagor
hereby waives any rights, claims or demands it may now or hereafter have against
any such tenant by reason of such payment of Rents or performance of obligations
to the Mortgagee, and any such payment or performance to the Mortgagee shall
discharge the obligations of the tenant to make such payment or performance to
the Mortgagor; and
(d) The Mortgagee shall have the right, in connection with the
exercise of its remedies hereunder, to the appointment of a receiver to take
possession and control of the Mortgaged Property and/or to collect the Rents,
without notice and without regard to the adequacy of the Mortgaged Property to
secure the Lender Obligations. A receiver while in possession of the Mortgaged
Property shall have the right to make repairs and to make improvements necessary
or advisable in its or his opinion to preserve the Mortgaged Property, or to
make and keep them rentable to the best advantage, and the Mortgagee may advance
moneys to a receiver for such purposes. Any moneys so expended or advanced by
the Mortgagee or by a receiver shall be added to and become a part of the Lender
Obligations secured by this Mortgage.
9. APPLICATION OF PROCEEDS. The Mortgagee shall apply the proceeds of
any foreclosure sale of, or other disposition or realization upon, or Rents or
profits from, the Mortgaged Property to satisfy the Lender Obligations in such
order of application as the Mortgagee shall determine in its exclusive
discretion and in a manner consistent with the terms of the Credit Agreement.
10. SALE IN PARCELS OR UNITS. In case any sale under this Mortgage
occurs by virtue of judicial proceedings, the Mortgaged Property may be sold in
one parcel or unit and as an entity, or in such parcels or units, and in such
manner or order, as the Mortgagee in its sole discretion may elect.
11. REMEDIES CUMULATIVE. All remedies contained in this Mortgage are
cumulative and the Mortgagee also has all other remedies provided by law or in
equity or in any of the other Loan Documents. No delay or failure by the
Mortgagee to exercise any right or remedy under this Mortgage will be construed
to be a waiver of that right or remedy or a waiver of any Event of Default. The
Mortgagee may exercise any one or more of its rights and remedies without regard
to the adequacy of its security.
-8-
68
12. INSTALLMENTS FOR INSURANCE, TAXES AND OTHER CHARGES. Without
limiting the effect of any other provision of this Mortgage, the Mortgagor
shall, after the occurrence of an Event of Default if requested by the
Mortgagee, pay to the Mortgagee monthly, an amount equal to one-twelfth (1/12)
of the annual premiums for the insurance policies referred to hereinabove and
the annual Impositions and any other item which at any time may be or become a
lien upon the Mortgaged Property (the "ESCROW CHARGES"); and on demand, from
time to time, the Mortgagor shall pay to the Mortgagee any additional sums
necessary to pay when due all Escrow Charges. No amount so paid to the Mortgagee
shall be deemed to be trust funds but may be commingled with general funds of
the Mortgagee, nor shall any sums paid bear interest. The Mortgagee shall have
no obligation to pay any insurance premium or Imposition if at any time the
funds being held by the Mortgagee for such premium or Imposition are
insufficient to make such payments and the Mortgagor shall, within ten days of
the date of demand by the Mortgagee, pay the amount of such insufficiency to the
Mortgagee. The Mortgagee shall have the right, at its election, to apply any
amount so held against the Lender Obligations due and payable in such order as
the Mortgagee may deem fit, and the Mortgagor hereby grants to the Mortgagee a
Lien upon and security interest in such amounts for such purpose.
13. MORTGAGEE'S RIGHT TO PROTECT SECURITY. The Mortgagee is hereby
authorized to do any one or more of the following, irrespective of whether an
Event of Default has occurred: (a) appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of the
Mortgagee hereunder; (b) take such action as the Mortgagee may determine to pay,
perform or comply with any Impositions or Legal Requirements to the extent such
performance or compliance is required pursuant to the terms of this Mortgage, to
cure any Events of Default and to protect its security in the Mortgaged
Property.
14. MORTGAGEE'S COSTS AND EXPENSES. In the event of an Event of Default
or the exercise by the Mortgagee of any of its rights hereunder, or if the
Mortgagee shall become a party, either as plaintiff or defendant or otherwise,
to any suit or legal proceeding affecting any of the Mortgaged Property or the
Lender Obligations, or if review and approval of any document, or any other
matter related to any of the Lender Obligations, is required by, or requested
of, the Mortgagee, the Mortgagor shall pay to the Mortgagee on demand its costs,
expenses and reasonable attorneys fees incurred in connection therewith. If such
amounts are not paid, they shall be added to the principal secured hereby, shall
be included as part of the Lender Obligations and shall bear interest at the
rate of interest set forth in Section 2.08(c) of the Credit Agreement from the
date of demand.
15. FURTHER ASSURANCES. The Mortgagor agrees to execute such further
assurances, documents and instruments as may be desirable by the Mortgagee for
the purposes of further evidencing, carrying out and/or confirming this Mortgage
and for all other purposes intended by this Mortgage.
16. ENVIRONMENTAL MATTERS.
(a) The Mortgagor represents and warrants that to the best of
its knowledge (i) the Mortgaged Property is and has been in compliance, in all
material respects, with all applicable local, state and federal environmental
laws, rules and regulations; and (ii) there have been no releases of any
chemical, material, substance or waste which is a threat to the public health,
safety or welfare or the environment or the health of living organisms, or any
hazardous,
-9-
69
toxic, contaminating or polluting substance as defined by any environmental law,
rule or regulation (individually and collectively "HAZARDOUS SUBSTANCES").
(b) Mortgagor will ensure that the Mortgaged Property remains
in compliance, in all material respects, with all local, state and federal
environmental laws, rules and regulations, and that it will not place or permit
to be placed on the Mortgaged Property any Hazardous Substances, except as not
prohibited by applicable environmental laws, rules or regulations, or in such
quantities as to not constitute a hazard to the environment or subject the
Mortgagor to prosecution or liability in connection therewith.
(c) Mortgagor will employ in connection with its use of the
Mortgaged Property appropriate technology as the Mortgagor determines reasonably
necessary to maintain compliance in all material respects with any applicable
environmental law, rule or regulation and dispose of any and all Hazardous
Substances generated at the Mortgaged Property only at facilities and with
carriers that maintain valid permits under applicable environmental laws, rules
and regulations.
(d) In the event the Mortgagor obtains, gives or receives
notice of any release or threat of release of a reportable quantity of any
Hazardous Substances at the Mortgaged Property or receives any notice of
violation, request for information or notification that it is potentially
responsible for investigation or cleanup of environmental conditions at the
Mortgaged Property, or any demand letter, complaint, order, citation or other
written notice with regard to any Hazardous Substances or violation of any
environmental law, rule or regulation, affecting the Mortgaged Property from any
person or entity, including any state agency responsible in whole or in part for
environmental matters in the state in which the Mortgaged Property is located or
the United States Environmental Protection Agency (any such person or entity is
hereinafter referred to as the "AUTHORITY"), then the Mortgagor shall, within
five (5) days, give written notice of the same to the Mortgagee detailing facts
and circumstances of which the Mortgagor is aware in connection therewith. Such
information is to be provided to allow Mortgagee to protect its security
interest in the Mortgaged Property and is not intended to create any obligation
upon the Mortgagee with respect thereto.
(e) Mortgagor shall promptly forward to the Mortgagee copies
of any request for information, notification of material potential liability,
demand letter for information, notification of material potential liability,
demand letter relating to material potential responsibility with respect to the
investigation or cleanup of Hazardous Substances at the Mortgaged Property and
shall continue to forward to the Mortgagee copies of material correspondence
between the Mortgagor and the Authority regarding such claims until the claims
are settled. The Mortgagor shall promptly forward to the Mortgagee copies of all
documents and reports concerning Hazardous Substances at the Mortgaged Property
that the Mortgagor is required to file under any environmental law, rule or
regulation. Such information is to be provided to allow the Mortgagee to protect
its security interest in the Mortgaged Property and is not intended to create
any obligation upon the Mortgagee with respect thereto.
(f) If the Mortgagor shall fail to comply with any of the
material requirements of any environmental law, rule or regulation, the
Mortgagee may, at its election, but without the obligation to do so, for the
sole purpose of protecting its security interest in the Mortgaged Property,
enter onto the Mortgaged Property (or authorize third parties to enter onto the
Mortgaged Property) and take such actions as the Mortgagee (or such third
parties as directed by the Mortgagee) deems reasonably necessary or advisable,
after consultation with the
-10-
70
Mortgagor, to comply with the requirements of such environmental laws, rules and
regulations including but not limited to cleaning up, removing, mitigating or
otherwise dealing with any release of Hazardous Substances. All reasonable costs
and expenses incurred by the Mortgagee (or such third parties) in the exercise
of any such rights, including any sums paid in connection with any judicial or
administrative investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the highest rate set forth in the
then outstanding Notes, shall be paid upon demand by the Mortgagor, and until
paid shall be added to and become a part of the indebtedness secured hereby.
(g) Mortgagor shall defend and indemnify the Mortgagee and the
Lenders and hold the Mortgagee and the Lenders harmless from and against all
loss, liability, damage and expense, claims, costs, fines and penalties,
including reasonable attorney's fees, suffered or incurred by the Mortgagee and
the Lenders, whether as a mortgagee in possession, or as successor-in-interest
to the Mortgagor, or otherwise, under or on account of any environmental law,
rule or regulation, including the assertion of any lien thereunder, with respect
to any release of Hazardous Substances, the presence of any Hazardous Substances
affecting the Mortgaged Property, whether or not the same originates or emanates
from the Mortgaged Property or any contiguous real estate, including any loss of
value of the Mortgaged Property as a result of the foregoing so long as no such
loss, liability, damage and expense is attributable to any release of Hazardous
Substances resulting from actions on the part of the Mortgagee or the Lenders.
The Mortgagor's obligations under this Section 16 shall arise upon the discovery
of the presence of any Hazardous Substances at the Mortgaged Property, whether
or not any Authority has taken or threatened any action in connection with the
presence of any Hazardous Substances. The Mortgagor's obligation and the
indemnification hereunder shall survive foreclosure or other exercise by
Mortgagee of any remedy hereunder and the payment in full of the indebtedness
secured hereby and the satisfaction in full of the other obligations secured
hereby.
17. NOTICES.
(a) Except as otherwise provided in this Mortgage, all notices
required to be delivered pursuant to this Mortgage shall be in writing and shall
be delivered in accordance with, and to the addresses set forth in, and shall
become effective in accordance with, Section 10.04 of the Credit Agreement. The
giving of any notice required hereunder may be waived.
(b) All notices given to the Mortgagee pursuant to 42 PA.
C.S.A. Section 8143(c) shall be given to the Mortgagee in accordance with this
Section 17 and must be signed by all parties necessary to bind the Mortgagor in
accordance with the applicable documents of formation of the Mortgagor and all
applicable laws.
18. CERTAIN WAIVERS. The Mortgagor hereby waives and releases all
benefits that might accrue to the Mortgagor by virtue of any present or future
law exempting the Mortgaged Property, or any part of the proceeds arising from
any sale thereof, from attachment, levy or sale on execution, or providing for
any stay of execution, exemption from civil process or extension of time for
payment, and, unless specifically required herein, all notices of the
Mortgagor's default or of the Mortgagee's election to exercise, or the
Mortgagee's actual exercise of any option under this Mortgage or any other Loan
Document.
19. GOVERNING LAW; SEVERABILITY. THIS MORTGAGE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. IF
ANY
-11-
71
PROVISION OF THIS MORTGAGE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE
LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR
INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE
REMAINING PROVISIONS OF THIS MORTGAGE.
20. AMENDMENTS. No provision of this Mortgage may be amended,
supplemented, waived or otherwise modified, except by means of a writing
executed by the Mortgagor and the Mortgagee, and then only to the extent set
forth in such writing. Any amendment, supplement, waiver or other modifications
to or of this Mortgage, or any consent hereunder, shall be made or given by the
Mortgagee only with the consent of all the Lenders or the Required Lenders, as
required pursuant to Section 10.01 of the Credit Agreement.
21. BINDING EFFECT. The covenants, conditions and agreements contained
in this Mortgage shall bind, and the benefits thereof shall inure to, the
parties hereto and their respective successors and assigns; provided, however,
that the Mortgagor may not assign this Mortgage without the prior written
consent of the Mortgagee, which may be given or withheld in the Mortgagee's
exclusive discretion. Any act or agreement to be done or performed by the
Mortgagor shall be construed as a covenant running with the Land and shall be
binding upon the Mortgagor and any of its successors and assigns as if they had
personally made such agreement.
22. CONSTRUCTION. Unless the context of this Mortgage otherwise clearly
requires, references to the plural include the singular, the singular the plural
and the part the whole and "or" has the inclusive meaning represented by the
phrase "and/or". The words "hereof", "herein", "hereunder" and similar terms in
this Mortgage refer to this Mortgage as a whole and not to any particular
provision of this Mortgage. The section headings contained in this Mortgage are
for reference purposes only and shall not control or affect the construction of
this Mortgage or the interpretation thereof in any respect.
23. DEFINED TERMS. All capitalized terms used herein as defined terms
which are not defined herein but which are defined in the Credit Agreement shall
have the meanings given them in the Credit Agreement.
24. FORUM. THE PARTIES HERETO AGREE THAT ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT MAY BE COMMENCED IN THE
COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA OR IN XXX XXXXXXXX XXXXX
XX XXX XXXXXX XXXXXX FOR THE WESTERN DISTRICT OF PENNSYLVANIA AND THE PARTIES
HERETO AGREE THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN
EITHER OF SUCH COURTS SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL
JURISDICTION IF SERVED PERSONALLY OR BY CERTIFIED MAIL TO THE PARTIES AT THEIR
ADDRESSES DESCRIBED IN SECTION 10.04 OF THE CREDIT AGREEMENT, OR AS OTHERWISE
PROVIDED UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. FURTHER, THE
MORTGAGOR HEREBY SPECIFICALLY CONSENTS TO THE PERSONAL JURISDICTION OF THE COURT
OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA AND THE DISTRICT COURT OF THE
UNITED STATES FOR THE WESTERN DISTRICT OF PENNSYLVANIA SITTING IN PITTSBURGH,
PENNSYLVANIA AND WAIVES AND HEREBY ACKNOWLEDGES THAT IT IS ESTOPPED FROM RAISING
ANY OBJECTION BASED ON FORUM NON CONVENIENS, ANY CLAIM THAT EITHER
-12-
72
SUCH COURT LACKS PROPER VENUE OR ANY CLAIM THAT EITHER SUCH COURT LACKS PERSONAL
JURISDICTION OVER THE MORTGAGOR SO AS TO PROHIBIT EITHER SUCH COURT FROM
ADJUDICATING ANY ISSUES RAISED IN A COMPLAINT FILED WITH EITHER SUCH COURT
AGAINST THE MORTGAGOR BY THE MORTGAGEE CONCERNING THIS MORTGAGE OR PAYMENT TO
THE MORTGAGEE. THE MORTGAGOR HEREBY ACKNOWLEDGES AND AGREES THAT THE EXCLUSIVE
CHOICE OF FORUM CONTAINED IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION
UNDER THE LOAN DOCUMENTS TO ENFORCE THE SAME IN ANY APPROPRIATE JURISDICTION.
25. WAIVER OF JURY TRIAL. IN ORDER TO EXPEDITE THE RESOLUTION OF ANY
DISPUTES WHICH MAY ARISE UNDER THIS MORTGAGE, AND IN LIGHT OF THE COMPLEXITY OF
THE TRANSACTIONS CONTEMPLATED UNDER THIS MORTGAGE, THE PARTIES HERETO WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY
COURT TO WHICH THEY MAY BE PARTIES, WHETHER ARISING OUT, UNDER, OR BY REASON OF
THIS MORTGAGE OR ANY OTHER TRANSACTION BETWEEN THEM OF ANY KIND OR NATURE, AND
EACH PARTY ACKNOWLEDGES THAT SUCH WAIVER HAS BEEN SPECIFICALLY NEGOTIATED AS
PART OF THIS MORTGAGE.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-13-
73
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed as a document under seal as of the day and year first above written.
WITNESS/ATTEST: THE CARBIDE/GRAPHITE GROUP, INC.
By: By: (SEAL)
---------------------------------- -----------------------
Name: Name:
-------------------------------- ---------------------------
Title: Title:
------------------------------- --------------------------
74
CERTIFICATE OF RESIDENCE
The undersigned certifies that the residence of the Mortgagee is Xxxxx
Xxxxxx xxx Xxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
PNC BANK, NATIONAL ASSOCIATION, as
Agent
By: (SEAL)
-------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
This instrument prepared by, and after recording return to:
Xxxxx X. Pool
Xxxxxx Xxxxxxxxx, P.C.
0000 Xxx XXX Xxxxx
Xxxxxxxxxx, XX 00000
(000) 000-0000
75
ACKNOWLEDGEMENT
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
On this, the ___ day of April, 1999, before me, a Notary Public, the
undersigned officer, personally appeared __________, who acknowledged himself to
be the ____________________ of THE CARBIDE/GRAPHITE GROUP, INC., a Delaware
corporation, the Mortgagor, and that he as such officer, being authorized to do
so, executed the foregoing instrument for the purposes therein contained and in
the capacity therein stated, by signing the name of such corporation by himself
as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
Notary Public
My Commission Expires:
76
EXHIBIT A
LEGAL DESCRIPTION OF MORTGAGED PROPERTY
77
COMPLIANCE CERTIFICATE
[For the Fiscal _______ [Quarter/Year] Ended ____________]
Reference is hereby made to that certain Revolving Credit and
Letter of Credit Issuance Agreement dated as of September 25, 1997, as from time
to time amended (the "Agreement"), by and among THE CARBIDE/GRAPHITE GROUP,
INC., a Delaware corporation (the "Borrower"), the Lenders party thereto and PNC
BANK, NATIONAL ASSOCIATION, in its capacity as L/C Issuer (as hereinafter
defined) and as agent for the L/C Issuer and the Lenders under this Agreement
(in such capacity, as more fully defined below, the "Agent"). All capitalized
terms used herein as defined terms which are not defined herein but which are
defined in the Agreement shall herein have the respective meanings specified in
the Agreement.
This Compliance Certificate (this "Certificate") is being delivered to
the Lenders, pursuant to the reporting requirements of Subsection 6.02(iii) of
the Agreement, simultaneously with the delivery of the financial statements for
the accounting period referred to above.
The undersigned hereby certifies that he/she is ___ [the/a]
___________________ of ___________________, and that, as such officer, he/she is
an Authorized Officer of the Borrower and is duly authorized to execute and
deliver this Certificate for and on behalf of the Borrower.
The undersigned further certifies on behalf of the Borrower that all
computations and determinations as to accounting or financial matters which are
contained in this Certificate have been made in accordance with GAAP (including
principles of consolidation where appropriate), and that, except to the extent
expressly defined otherwise in the Agreement, all accounting and financial terms
used in this Certificate have the meanings ascribed to such terms by GAAP.
The undersigned hereby further certifies on behalf of the Borrower, on
and as of the date of this Certificate, as follows:
1. Events of Default and Defaults. The undersigned has
reviewed the terms of the Agreement and of the Notes and has made, or caused to
be made under his/her supervision, a review of the transactions and condition of
the Borrower and its Subsidiaries during the accounting period covered by the
financial statements being delivered simultaneously herewith. Such review has
not disclosed the existence at any time during such accounting period, and the
undersigned does not have any knowledge of the existence as at the date of this
Certificate, of any condition or event which constitutes an Event of Default or
a Default, except for the following:
[If none, insert "None." If any Event of Default or Default existed at
any time during such accounting period or exists at the date of this
Certificate, specify below in reasonable detail (i) the nature and
period of existence of such Event of Default or Default and (ii) what
actions the Borrower has taken, are taking, or propose to take with
respect thereto.]
EXHIBIT "F-1"
78
2. Section 7.12 Minimum Consolidated Tangible Net Worth.
(a) As of ____________ [insert date of current
financial statements], the Borrower's Consolidated Tangible Net Worth
was $______________.
(b) Fifty percent (50%) of the consolidated positive
net income for each Fiscal Quarter ending after January 31, 1999 of the
Borrower and its Subsidiaries was equal to
$_________________;
(c) The aggregate amount of all increases to equity
from the issuance by the Borrower after January 31, 1999, of further
equity securities or other equity capital investments was equal to
$________________.
(d) The sum of (i) the amounts specified in items
2(b) and 2(c) and (ii) $78,000,000 above, is equal to $_______________.
Under Subsection 7.12 of the Agreement, the amount specified in item 2(a) above
is required to be greater than the amount specified in item 2(d) above;
therefore, the Borrower ______ [is/is not] in compliance with Subsection 7.12 of
the Agreement.
3. Section 7.13 Interest Coverage. As at __________ [insert
date of current financial statements], computed on a rolling four quarter basis:
(a) The Borrower's EBITDA was $_______________;
(b) The Borrower's Cash Interest Expense was
$_______________; and
(c) The ratio of (i) the amount specified in item
3(a) above to (ii) the amount specified in item 3(b) above, is equal to
____ to 1.0.
Under Section 7.13 of the Agreement, the ratio specified in item 3(c) above is
not permitted to be less than 3.5 to 1.0; therefore, the Borrower _______ [is/is
not] in compliance with Section 7.13 of the Agreement. Note that in calculating
Interest Coverage the Special Reserve may be included in calculating the
Borrower's EBITDA by treating it as an extraordinary or unusual loss pursuant to
item (a)(v) of the definition of EBITDA contained in Section 1.01 of the
Agreement.
4. Section 7.14 Leverage Ratio. As of _________ [insert date
of current financial statements], computed on a rolling four quarter basis:
(a) The Borrower's Consolidated Total Indebtedness
was $_______________;
(b) The Borrower's EBITDA was $_______________; and
(c) The ratio of the amount specified in item 4(a)
above to the amount specified in item 4(b) above is ___________.
2
79
Under Section 7.14 of the Agreement, the ratio specified in item 4(c) above is
not permitted to exceed for the applicable period the amount set forth opposite
such period below:
------------------------------------------------- ---------------------------------------------
CONSOLIDATED TOTAL INDEBTEDNESS
PERIOD TO EBITDA RATIO
------------------------------------------------- ---------------------------------------------
From the Third Amendment Effective Date through
April 29, 2002 3.75 to 1.00
------------------------------------------------- ---------------------------------------------
From April 30, 2002 through April 29, 2003
3.50 to 1.00
------------------------------------------------- ---------------------------------------------
On and after April 30, 2003 3.00 to 1.00
------------------------------------------------- ---------------------------------------------
In determining compliance with Section 7.14, the Special Reserve may be included
in calculating Borrower's EBITDA by treating it as an extraordinary or unusual
loss pursuant to item (a)(v) of the definition of EBITDA contained in Section
1.01 of the Agreement. The Borrower _______ [is/is not] in compliance with
Section 7.14 of the Agreement.
5. Section 7.15 Operating Leases. As at ____________ [insert
date of current financial statements]:
(a) The Borrower's operating lease rentals for the
current Fiscal Year, including both lease payments made to date for
such Fiscal Year and lease payments to be made during the remainder of
such Fiscal Year, is $_____________;
Under Section 7.15 of the Agreement, the amount specified in item 5(a) above is
not permitted to be more than $5,000,000; therefore, the Borrower _______ [is/is
not] in compliance with Section 7.15 of the Agreement.
[Include paragraph 6 in fiscal-year-end Certificates only]
6. Insurance. The Borrower and its Subsidiaries have in force
all insurance required by Section 6.05 of the Agreement, and such insurance is
adequate in nature and amount and complies with the obligations of the Borrower
and its Subsidiaries under said Section 6.05.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
80
IN WITNESS WHEREOF, the undersigned has duly executed this Compliance
Certificate as said officer, for and on behalf of the Borrower, on this ______
day of _______________, _____.
THE CARBIDE/GRAPHITE GROUP, INC., a
Delaware corporation
By:__________________________
Name:________________________
Title:_______________________
81
A CREDIT LINE DEED OF TRUST
CREDIT LINE DEED OF TRUST
AND SECURITY AGREEMENT
THIS CREDIT LINE DEED OF TRUST AND SECURITY AGREEMENT (as more
fully defined below, the "DEED OF TRUST"), made and entered into as of the 30th
day of April, 1999, by and among SEADRIFT COKE, L.P., a Texas limited
partnership having its principal executive office and place of business at
Highway 000 Xxxxx, Xxxxx Xxxxxxxx, Xxxxx 00000 (referred to herein as the
"GRANTOR"),
AND
XXXX X. XXXXXXXXXX, a resident of the Commonwealth of Pennsylvania having an
address at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 ("TRUSTEE"),
AND
PNC BANK, NATIONAL ASSOCIATION, the beneficial holder hereof and a national
banking association organized and existing under the laws of the United States
of America, having an office at One PNC Plaza, 000 Xxxxx Xxxxxx xx xxx Xxxx xx
Xxxxxxxxxx, Xxxxxx of Allegheny and Commonwealth of Pennsylvania 15222
("BENEFICIARY") as Agent for the Lenders which are party to that certain
Revolving Credit and Letter of Credit Issuance Agreement by and among The
Carbide/Graphite Group, Inc., said Lenders and the Beneficiary, as Agent for
such Lenders.
WITNESSETH:
WHEREAS, The Carbide/Graphite Group, Inc., a Delaware
corporation (the "BORROWER"), has entered into that certain Revolving Credit and
Letter of Credit Issuance Agreement dated as of September 25, 1997 (the
Revolving Credit and Letter of Credit Issuance Agreement together with all
amendments, extensions, renewals, substitutions and replacements thereto or
thereof from time to time, the "Credit Agreement") with the Lenders (as defined
in the Credit Agreement) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as
the issuer of letters of credit under the terms of the Credit Agreement for the
account of the Borrower (in such capacity, as more fully defined in the Credit
Agreement, the "L/C ISSUER") and as agent for the L/C Issuer and the Lenders
under the Credit Agreement, pursuant to which the Lenders agree (a) to make
available to the Borrower a Revolving Credit Commitment and to make Revolving
Credit Loans to the Borrower in a maximum aggregate principal amount not to
exceed One Hundred and Fifty Million Dollars ($150,000,000), which indebtedness
will be evidenced by one or more Revolving Credit Notes dated September 25, 1997
(such Revolving Credit Notes together with all amendments, extensions, renewals,
substitutions and replacements thereto or thereof from time to time (including
without limitation any replacement notes issued pursuant to Section 10.05 of the
Credit Agreement), individually a "REVOLVING CREDIT NOTE" and collectively the
"REVOLVING CREDIT NOTES") in an aggregate principal face amount of One Hundred
and Fifty Million Dollars ($150,000,000), (b) to make available to the
EXHIBIT "M-2"
82
Borrower a Swingline Option in an aggregate principal amount not to exceed Five
Million Dollars ($5,000,000) which indebtedness will be evidenced by a Swingline
Note dated September 25, 1997 executed by the Borrower in favor of PNC Bank,
National Association (such Swingline Note together with all amendments,
extensions, renewals, substitutions and replacements thereto and thereof from
time to time, the "SWINGLINE NOTE"; the Revolving Credit Notes and the Swingline
Note sometimes collectively referred to herein as the "NOTE" or the "NOTES"),
and (c) to make available to the Borrower a letter of credit subfacility
pursuant to which the L/C Issuer will issue Letters of Credit with a Stated
Amount in a maximum aggregate principal amount for the account of the Borrower
not to exceed Fifteen Million Dollars ($15,000,000); and
WHEREAS, the Grantor is a wholly-owned Subsidiary of the
Borrower and under the terms of the Credit Agreement the Borrower may borrow the
amounts of the credit availability under the Credit Agreement for its corporate
purposes, including without limitation to make advances to the Grantor, and may
obtain one or more Letters of Credit under the terms of the Credit Agreement for
the corporate purposes of the Borrower, including without limitation Letters of
Credit to support the obligations of the Grantor; and
WHEREAS, Grantor has executed that certain Subsidiary Guaranty
Agreement dated as of September 25, 1997 (the Subsidiary Guaranty Agreement
together with all amendments, extensions, renewals, substitutions and
replacements hereto or hereof from time to time, the "SUBSIDIARY GUARANTY") by
Grantor in favor of the Beneficiary to secure the repayment of all Lender
Obligations incurred by the Borrower under the Credit Agreement and the other
Loan Documents; and
WHEREAS, to secure the obligations and liabilities of the
Grantor under the Subsidiary Guaranty and to further secure the repayment of the
Lender Obligations, Debtor has agreed to assign and pledge to Beneficiary (for
the benefit of the Beneficiary, Lenders and L/C Issuer), and to grant to
Beneficiary (for the benefit of the Beneficiary, Lenders and L/C Issuer) a lien
and security interest on and in, certain property of the Grantor; and
WHEREAS, Grantor has good and marketable right, title and
interest in and to all the property which is subject to this Deed of Trust; and
WHEREAS, each of the terms used herein (including the preamble
and these recitals to this Deed of Trust) as a defined term which is not defined
herein but which is defined in the Credit Agreement shall have the meaning
herein ascribed to such term in the Credit Agreement.
NOW, THIS INDENTURE WITNESSETH, That for good and valuable
consideration including the payment of the sum of Ten Dollars ($10.00) unto
Grantor in hand well and truly paid by the Beneficiary at and before the
execution and delivery hereof, the receipt of which is hereby acknowledged, and
intending to be legally bound hereby, and for the purpose of securing the
performance of all of the terms and provisions contained in the Notes including
the payment of the Notes (including all advances heretofore and hereafter made
and evidenced by the Notes) and interest thereon unto the Beneficiary, the
Lenders and their respective successors and assigns, according to the provisions
and conditions of the Notes, and for the purpose of securing the performance by
the Grantor of all of the terms and provisions contained in this Deed of Trust,
as it may be amended, restated, modified or supplemented from time to time (this
Deed of Trust as it may be amended, restated, modified or
-2-
83
supplemented from time to time is hereinafter referred to as the "DEED OF
TRUST") and the performance by the Grantor of all of the terms and provisions
contained in the Subsidiary Guaranty, as well as for the purpose of securing all
other indebtedness and other obligations of the Grantor to the Beneficiary,
under and pursuant to the Loan Documents, whether now or hereafter existing or
incurred and whether direct or indirect or otherwise the Grantor by these
presents, does, WITH COVENANTS OF GENERAL WARRANTY, grant, convey and otherwise
transfer IN TRUST unto the Trustee and his successors and assigns, all of
Grantor's real and personal property (including fixtures and improvements)
described below as well as all of Grantor's property relating thereto and all
appurtenances belonging or in any wise appertaining thereto, whether now owned
or hereafter acquired, and all of Grantor's rights, titles and interests in and
to and relating to such property, and all products thereof and proceeds derived
therefrom including proceeds of insurance, and does, WITH COVENANTS OF GENERAL
WARRANTY, assign and pledge to the Beneficiary and his successors and assigns,
and does, WITH COVENANTS OF GENERAL WARRANTY, grant to the Trustee and his
successors and assigns a security interest in, all of Grantor's property
(including fixtures and improvements) described below as well as all of
Grantor's property relating thereto, and all appurtenances belonging or in any
wise appertaining thereto, whether now owned or hereafter acquired, and all of
Grantor's rights, titles and interests in and to and relating to such personal
property, and all products thereof and proceeds derived therefrom including
proceeds of insurance:
(a) All of the Grantor's estate in the premises described in
Exhibit A, together with all of the easements, rights of way, privileges,
liberties, hereditaments, gores, streets, alleys, passages, ways, waters,
watercourses, rights and appurtenances thereunto belonging or appertaining, and
all of the Grantor's estate, right, title, interest, claim and demand whatsoever
therein and in the public streets and ways adjacent thereto, either in law or in
equity (the "LAND");
(b) All the buildings, structures and improvements of every
kind and description now or hereafter erected or placed on the Land, and all
facilities, fixtures, machinery, apparatus, appliances, installations, machinery
and equipment, including all building materials to be incorporated into such
buildings, all electrical equipment necessary for the operation of such
buildings and heating, air conditioning and plumbing equipment now or hereafter
attached to, located in or used in connection with those buildings, structures
or other improvements (the "IMPROVEMENTS");
(c) All rents, issues and profits arising or issuing from the
Land and the Improvements (the "RENTS") including the Rents arising or issuing
from all leases and subleases now or hereafter entered into covering all or any
part of the Land and Improvements (the "LEASES"), all of which Leases and Rents
are hereby assigned to the Trustee by the Grantor. The foregoing assignment
shall include all cash or securities deposited under Leases to secure
performance of lessees of their obligations thereunder, whether such cash or
securities are to be held until the expiration of the terms of such leases or
applied to one or more installments of rent coming due prior to the expiration
of such terms. The foregoing assignment extends to Rents arising both before and
after the commencement by or against the Grantor of any case or proceeding under
any Federal or State bankruptcy, insolvency or similar law, and is intended as
an absolute assignment and not merely the granting of a security interest. The
Grantor, however, shall have a license to collect, retain and use the Rents so
long as no Event of Default shall have occurred and be continuing or shall
exist. The Grantor will execute and deliver to the Trustee, on demand, such
additional assignments and instruments as the Trustee may require to implement,
confirm, maintain and continue the assignment of Rents hereunder;
-3-
84
(d) All proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or liquidated claims;
(e) And without limiting any of the other provisions of this
Deed of Trust, the Grantor, as debtor, expressly grants unto the Mortgagee, as
secured party, a security interest in all those portions of the Property ( as
defined below) which may be subject to the Uniform Commercial Code provisions
applicable to secured transactions under the laws of any state, and the Grantor
will execute and deliver to the Trustee on demand such financing statements and
other instruments as the Trustee may require in order to perfect and maintain
such security interest under the UCC on the aforesaid collateral.
All of Grantor's real and personal property described above, and all of
Grantor's rights, titles and interests in and to and relating to such property,
are hereinafter referred to individually and collectively as the "PROPERTY".
TO HAVE AND TO HOLD the Property hereby granted, conveyed and
otherwise transferred unto the Trustee and his successors and assigns IN TRUST
and hereby assigned and pledged to the Beneficiary, its successors and assigns,
to the only proper use and behoof of the Trustee and his successors and assigns
and the Beneficiary and its successors and assigns forever, with power of sale.
In the event the Property covered by this Deed of Trust or any
part thereof shall be condemned, taken, injured or destroyed for public use
under the power of eminent domain or otherwise, the Grantor does hereby assign
to the Trustee all damages awarded for the taking of, injury to, destruction of
or damage to the Property or any part thereof, up to the total amount owing and
secured by any and all of the terms of this Deed of Trust. Notwithstanding any
such condemnation, taking, injury or destruction, the indebtedness secured
hereby shall not be reduced until any award or payment thereunder shall have
been actually received and applied by the Trustee to the discharge or reduction
of such indebtedness. The Trustee may apply any such award or payment resulting
from the Property being condemned, taken, injured or destroyed for public use
under the power of eminent domain or otherwise to the reduction of the
indebtedness secured hereby whether or not then due and payable. If the Property
or any part thereof is sold, whether pursuant to this Deed of Trust or
otherwise, prior to the receipt by the Trustee of such award or payment, the
Trustee shall have the right, whether or not a deficiency judgment on any of the
Notes shall have been sought, recovered or denied, to receive such award or
payment, or a portion thereof sufficient to pay the indebtedness secured hereby
and to satisfy the other obligations secured hereby.
PROVIDED, HOWEVER, that if Grantor shall pay, or cause to be
paid, to the Beneficiary the principal debts evidenced by the Notes, including
additional loans or advances, and all other sums payable by Grantor to the
Beneficiary and secured hereby, together with interest thereon, and shall keep
and perform, or cause to be kept and performed, each of the other covenants,
conditions and agreements contained in the Notes, the Subsidiary Guaranty and
this Deed of Trust, then this Deed of Trust and the interests hereby granted,
conveyed and otherwise transferred shall become void.
THE GRANTOR, the Trustee and the Beneficiary intend and agree
that this Deed of Trust shall secure unpaid balances of any advances, including
but not limited to advances for taxes, assessments, maintenance charges,
insurance premiums, costs incurred for the protection of the Property or the
lien of this Deed of Trust and expenses incurred by the
-4-
85
Trustee or the Beneficiary by reason of default by the Grantor under this Deed
of Trust, whether any such advances are obligatory or not and whether or not
evidenced by the Notes and whether heretofore made or made in the future.
This Deed of Trust is given for the purpose of securing loan
advances to the Borrower pursuant and subject to the terms and provisions of the
Credit Agreement. The parties hereto intend that, in addition to any other debt
or obligation secured hereby, this Deed of Trust shall secure unpaid balances of
loan advances made after this Deed of Trust is delivered to the Recorder for
recording, whether made pursuant to an obligation of the Beneficiary or
otherwise. Such loan advances are and will be evidenced by the Notes and may
fluctuate over time between zero and the maximum amount of $150,000,000. A
reduction in the amount of indebtedness to zero shall not affect the existence
or priority of the lien of this Deed of Trust.
THIS DEED OF TRUST includes the following covenants,
conditions and agreements:
FIRST: Grantor does hereby warrant that it has, and will have,
good and marketable rights, titles and interests in and to all the Property free
and clear of all liens and encumbrances except Permitted Liens, and that it will
generally warrant title to the Property and will defend the Property against the
claims and demands of all persons, corporations and any other entities
whatsoever; and Grantor does hereby covenant that it will promptly pay or cause
to be paid any and all other payments, and perform or cause to be performed any
and all other acts (including the delivery to the Beneficiary of such
agreements, instruments and documents as the Beneficiary deems necessary), so
that it will have good and marketable right, title and interest in and to all of
the Property free and clear of all liens and encumbrances other than Permitted
Liens and so that the liens and security interests created or granted hereby or
pursuant hereto are and shall continue to be valid and perfected first liens and
security interests.
SECOND: The Grantor will keep and perform, or cause to be kept
and performed, all the covenants and agreements in this Deed of Trust, in manner
and form as herein set out.
THIRD: The Grantor agrees to pay, or cause to be paid, when
due all taxes, charges, claims and assessments which may be assessed or levied
by any public authority against or upon the Property, and also any taxes,
charges, claims (including claims of mechanics and materialmen) or assessments
for which any present or future owner of the Property may be or become liable or
which may by law become a lien on the Property either having priority over the
indebtedness and other obligations secured hereby whether as to payment or
distribution on judicial sale, or (although not having priority) entitling any
governmental or taxing body to notice of foreclosure proceedings or to any right
of redemption thereafter, and also all other liabilities of any kind or nature
relating to the Property including without limitation all liabilities for labor,
services, materials, supplies and equipment incurred in or arising from the
development and operation of the Property, except that no such tax, charge,
claim, assessment or liability need be paid for so long as its validity or
amount shall be contested in good faith by appropriate proceedings duly
prosecuted and Grantor shall have set up in its books such reserves with respect
thereto as shall be dictated by sound accounting practices, provided, however,
that all such taxes, charges, claims, assessments and liabilities shall be paid,
subject to refund proceedings, if failure to pay would adversely affect the
rights or
-5-
86
titles of Grantor to any of the Property; and Grantor agrees to exhibit, or
cause to be exhibited, to the Beneficiary forthwith, upon request of the
Beneficiary, receipts or other evidence satisfactory to the Beneficiary, showing
the payment of all of such taxes, charges, claims, assessments and liabilities.
FOURTH: Grantor agrees that Grantor will not, without the
written consent of Beneficiary, sell, lease, transfer, mortgage, pledge, charge,
xxxxx x xxxx upon or security interest in, or otherwise dispose of or encumber,
or permit any encumbrance to attach to, the Property or any part thereof, except
as otherwise permitted by the Credit Agreement. Grantor represents and warrants
that to the best of its knowledge after due inquiry, it has obtained, and agrees
that it will obtain, or shall cause to be obtained, all material permissions,
licenses, easements and rights-of-way and all local, state and federal
governmental approvals, authorizations, consents and permits as well as all
other rights, titles and interests reasonably necessary to the ownership and
operation of the Property, all of which are, and shall be kept, in full force
and effect. Grantor will operate, or cause to be operated, the Property in a
good and workmanlike manner on a continuous basis subject to, and in accordance
with, sound and approved business practices; will maintain, or cause to be
maintained, the Property in good repair, working order and condition, subject to
ordinary wear and tear; will not commit or permit any waste or impairment of the
Property; will not permit the Property to be used in violation of any statute or
regulation; will otherwise protect and preserve, or cause to be protected and
preserved, the Property; and upon reasonable prior notice, will permit
Beneficiary and its representatives and agents, or cause them to be permitted,
to inspect the Property during normal business hours.
FIFTH: Grantor will keep, or cause to be kept, with
financially sound and reputable insurers, such insurance with respect to the
Property, in such amounts and insuring against such risks, casualties and
contingencies of such types (including but not limited to insurance for loss or
damage by fire and other hazards and insurance for liability for damage to
persons and property in connection with the Property and the activities
conducted thereon or relating thereto) as is customary for persons, corporations
and other entities of established reputations engaged in the same or similar
businesses as the Grantor and similarly situated, naming Beneficiary as
mortgagee or lender loss payee or additional insured as its interests may
appear, and will keep, or cause to be kept, such insurance as required by any
applicable workmen's compensation laws. If no Default or Event of Default under
the Credit Agreement exists, and if the Beneficiary determines in its reasonable
discretion that the Property can be satisfactorily repaired or restored, then
the insurance proceeds shall be applied to repair or restore the Property under
such terms and conditions as the Beneficiary may impose. The Beneficiary shall
not be deemed to have elected any option made available pursuant to this
Paragraph Fifth until such option is elected specifically in writing. Until so
elected, the Beneficiary shall not in any circumstances be deemed to have waived
its right to make such election. Upon an occurrence of a Default or an Event of
Default under the Credit Agreement all proceeds of insurance for loss or damage
to the Property shall be paid to the Beneficiary and shall be applied to the
payment of the indebtedness and other obligations secured hereby in such manner
and order as the Beneficiary may elect. All policies shall provide that they may
cancelled except on thirty (30) days' prior written notice to the Beneficiary.
SIXTH: If Grantor shall fail to pay or cause to be paid the
premiums on the policies for the above described insurance when due, or shall
fail to pay or cause to be paid all payments or to perform or cause to be
performed all acts so that the liens and security interests created or granted
hereby or pursuant hereto are valid and perfected first priority liens and
-6-
87
security interests in full force and effect or shall fail to pay or cause to be
paid when due any taxes, charges, claims, assessments or liabilities hereinabove
agreed to be paid or caused to be paid by the Grantor, or shall fail to obtain
and keep in full force and effect, or cause to be obtained and kept in full
force and effect, all rights, titles and interests necessary to the ownership,
development and operation of the Property, then the Beneficiary may at its
option do so and the amount and cost thereof shall be added to the balance of
the debts secured hereby, shall be payable on demand and shall bear interest at
the highest rate shown in the then outstanding Notes until paid.
SEVENTH: The Grantor represents and warrants that to the best
of its knowledge (i) the Property is and has been in compliance, in all material
respects, with all applicable local, state and federal environmental laws, rules
and regulations and (ii) there have been no material releases of any chemical,
material, substance or waste which is a threat to the public health, safety or
welfare or the environment or the health of living organisms, or any hazardous,
toxic, contaminating or polluting substance as defined by any environmental law,
rule or regulation (individually and collectively "HAZARDOUS SUBSTANCES").
Grantor will ensure that the Property remains in compliance,
in all material respects, with all local, state and federal environmental laws,
rules and regulations, and that it will not place or permit to be placed on the
Property any Hazardous Substances, except as not prohibited by applicable
environmental laws, rules or regulations, or in such quantities as to not
constitute a hazard to the environment or subject the Grantor to prosecution or
liability in connection therewith.
Grantor will employ in connection with its use of the Property
appropriate technology as the Grantor determines reasonably necessary to
maintain compliance in all material respects with any applicable environmental
law, rule or regulation and dispose of any and all Hazardous Substances
generated at the Property only at facilities and with carriers that maintain
valid permits under applicable environmental laws, rules and regulations.
In the event the Grantor obtains, gives or receives notice of
any release or threat of release of a reportable quantity of any Hazardous
Substances at the Property or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at the Property, or any demand letter,
complaint, order, citation or other written notice with regard to any Hazardous
Substances or violation of any environmental law, rule or regulation, affecting
the Property from any person or entity, including any state agency responsible
in whole or in part for environmental matters in the state in which the Property
is located or the United States Environmental Protection Agency (any such person
or entity is hereinafter referred to as the "AUTHORITY"), then the Grantor
shall, within five (5) days, give written notice of the same to the Beneficiary
detailing facts and circumstances of which the Grantor is aware in connection
therewith. Such information is to be provided to allow Beneficiary to protect
its security interest in the Property and is not intended to create any
obligation upon the Beneficiary with respect thereto.
Grantor shall promptly forward to the Beneficiary copies of
any request for information, notification of material potential liability,
demand letter for information, notification of material potential liability,
demand letter relating to material potential responsibility with respect to the
investigation or cleanup of Hazardous Substances at the Property and shall
continue to forward to the Beneficiary copies of material correspondence between
the Grantor and the Authority regarding such claims until the claims are
settled. The Grantor shall promptly forward
-7-
88
to the Beneficiary copies of all documents and reports concerning Hazardous
Substances at the Property that the Grantor is required to file under any
environmental law, rule or regulation. Such information is to be provided to
allow the Beneficiary to protect its security interest in the Property and is
not intended to create any obligation upon the Beneficiary with respect thereto.
If the Grantor shall fail to comply with any of the material
requirements of any environmental law, rule or regulation, the Beneficiary may,
at its election, but without the obligation to do so, for the sole purpose of
protecting its security interest in the Property, enter onto the Property (or
authorize third parties to enter onto the Property) and take such actions as the
Beneficiary (or such third parties as directed by the Beneficiary) deems
reasonably necessary or advisable, after consultation with the Grantor, to
comply with the requirements of such environmental laws, rules and regulations
including but not limited to cleaning up, removing, mitigating or otherwise
dealing with any release of Hazardous Substances. All reasonable costs and
expenses incurred by the Beneficiary (or such third parties) in the exercise of
any such rights, including any sums paid in connection with any judicial or
administrative investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the highest rate set forth in the
then outstanding Notes, shall be paid upon demand by the Grantor, and until paid
shall be added to and become a part of the indebtedness secured hereby.
Grantor shall defend and indemnify the Beneficiary and hold
the Beneficiary harmless from and against all loss, liability, damage and
expense, claims, costs, fines and penalties, including reasonable attorney's
fees, suffered or incurred by the Beneficiary, whether as a mortgagee in
possession, or as successor-in-interest to the Grantor, or otherwise, under or
on account of any environmental law, rule or regulation, including the assertion
of any lien thereunder, with respect to any release of Hazardous Substances, the
presence of any Hazardous Substances affecting the Property, whether or not the
same originates or emanates from the Property or any contiguous real estate,
including any loss of value of the Property as a result of the foregoing so long
as no such loss, liability, damage and expense is attributable to any release of
Hazardous Substances resulting from actions on the part of the Beneficiary. The
Grantor's obligations under this paragraph Seventh shall arise upon the
discovery of the presence of any Hazardous Substances at the Property, whether
or not any Authority has taken or threatened any action in connection with the
presence of any Hazardous Substances. The Grantor's obligation and the
indemnification hereunder shall survive foreclosure or other exercise by
Beneficiary of any remedy hereunder and the payment in full of the indebtedness
secured hereby and the satisfaction in full of the other obligations secured
hereby.
EIGHTH: Grantor agrees to pay or cause to be paid all costs of
recording, filing, continuing, satisfying or terminating any documents or
instruments executed in connection with or securing the obligations and debts
secured hereby including this Deed of Trust and such financing statements as the
Beneficiary shall deem reasonably necessary such as but not limited to any
documentary or stamp tax or other recordation tax or charge which may at any
time be imposed. Upon the occurrence of an Event of Default under the Credit
Agreement, Grantor hereby makes, constitutes and appoints the Beneficiary the
true and lawful agent and attorney-in-fact of Grantor, with full power of
substitution, to do any and all things and take any and all action, in the name
and on behalf of Grantor, which the Beneficiary may deem necessary or advisable
to carry out the intent of this Deed of Trust, including, without limitation,
the grant of the liens and security interests created hereby and the perfection,
continuation and protection of the liens and security interests created hereby
and the exercise by Beneficiary of the rights created under this Deed of Trust,
such as signing the name of Grantor to financing
-8-
89
statements and all amendments and modifications thereof and supplements thereto.
Grantor agrees that neither the Beneficiary nor any of its agents, designees or
attorneys-in-fact will be liable for any acts of commission or omission, or for
any error of judgment or mistake of fact or law with respect to the exercise of
the power of attorney granted under this paragraph. The power of attorney
granted under this paragraph is coupled with an interest and shall be
irrevocable until all indebtedness secured hereby is paid in full and all other
obligations secured hereby are fully performed. Any costs or fees paid by
Beneficiary and/or the Trustee in connection therewith shall be added to the
balance of the debts secured hereby, shall be payable on demand and shall bear
interest at the highest rate shown in the then outstanding Notes until paid.
NINTH: Grantor agrees to promptly pay or cause to be paid all
sums, including costs, expenses and reasonable attorneys' fees, which the
Beneficiary and/or the Trustee may incur or expend in connection with or
relating to any proceeding to sustain the liens and security interests of this
Deed of Trust, or their priority, or in defending against the liens, security
interests or claims of any person, corporation or other entity asserting
priority over this Deed of Trust, and all such sums to be paid to the
Beneficiary and/or the Trustee shall be added to the balance of the indebtedness
secured hereby, shall be payable on demand and shall bear interest at the
highest rate shown in the then outstanding Notes until paid.
TENTH: Upon the occurrence of an Event of Default under the
Credit Agreement, Grantor does further agree to execute and deliver, or cause to
be executed and delivered, any and all transfer orders, division orders and
other documents and instruments that may be reasonably requested by Beneficiary
for the purpose of implementing this Deed of Trust.
ELEVENTH: Grantor agrees that it will upon the request of
Beneficiary furnish, or cause to be furnished, to Beneficiary copies of invoices
issued by Grantor in connection with the subject matter of this Deed of Trust,
and will make available to Beneficiary, at any time and from time to time, on
its reasonable request, any and all of Grantor's books, records, written
memoranda, correspondence, shipping orders and any other instruments or writings
in any way evidencing or relating to the subject matter hereof, and will also
upon reasonable request, and at its own expense, furnish, or cause to be
furnished, such witnesses as may be required to make legal proof thereof. Any
and all records relating to the Property in the possession of, or subject to the
control of, Grantor will be kept at Grantor's office at the address shown on the
first page hereof, and the Grantor will not remove, nor permit the removal of,
such records from such location without the prior written consent of the
Beneficiary.
TWELFTH: Beneficiary and its successors and assigns are hereby
absolved from all liability of any kind whatsoever for failure for any reason to
enforce collection of any proceeds, accounts, accounts receivable, contract
rights or other rights, titles and interests which are subject to this Deed of
Trust and from all other responsibility in connection therewith, except the
responsibility to account to the Grantor for funds actually received.
THIRTEENTH: It is expressly covenanted and agreed by Grantor
that upon the occurrence of an Event of Default under the Credit Agreement, then
Beneficiary may at any time and from time to time declare any or all of the
secured indebtedness immediately due and payable and such secured indebtedness
shall thereupon be immediately due and payable, without presentment, demand,
protest notice of protest, notice of acceleration or of intention to
-9-
90
accelerate or any other notice or declaration of any kind, all of which are
hereby expressly waived by Grantor.
FOURTEENTH: It is expressly covenanted and agreed by Grantor
that after the occurrence of an Event of Default under the Credit Agreement,
then Trustee, or his successor or substitute, is authorized and empowered and it
shall be his special duty at the request of Beneficiary to sell the Property or
any part thereof situated in the State of Texas, at the courthouse of any county
(whether or not the counties in which the Property is located are contiguous, if
the Property is located in more than one county) in the State of Texas in which
any part of the Property is situated, at public venue to the highest bidder for
cash between the hours of ten o'clock a.m. and four o'clock p.m. on the first
Tuesday in any month or at such other place, time and date as provided by the
statutes of the State of Texas then in force governing sales of real estate
under powers of sale conferred by deed of trust, after having given notice of
such sale in accordance with such statutes. Any sale made by Trustee hereunder
may be as an entirety or in such parcels as Beneficiary may request. To the
extent by applicable law, any sale may be adjourned by announcement at the time
and place appointed for such sale without further notice except as may be
required by law. The sale by Trustee of less than the whole of the Property
shall not exhaust the power of sale herein granted, and Trustee is specifically
empowered to make successive sale or sales under such power until the whole of
the Property shall be sold; and, if the proceeds of such sale of less than the
whole of the Property shall be less than the aggregate of the indebtedness
secured hereby and the expense of executing this trust as provided herein, this
Deed of Trust and the lien hereof shall remain in force and effect as to the
unsold portion of the Property just as though no sale had been made; provided,
however, that Grantor shall never have any right to require the sale of less
than the whole of the Property but Beneficiary shall have the right at its sole
election, to request Trustee to sell less than the whole of the Property.
Trustee may, after any request or direction by Beneficiary, sell not only the
real property but also the personal property and other interests which are a
part of the Property, or any part thereof, as a unit and as a part of 'a single
sale, or may sell any part of the Property separately from the remainder of the
Property. It shall not be necessary for Trustee to have taken possession of any
part of the Property or to have present or to exhibit at any sale any of the
personal property. After each sale, Trustee shall make to the purchaser or
purchasers at such sale good and sufficient conveyances in the name of Grantor,
conveying the property so sold to the purchaser or purchasers with general
warranty of title by Grantor, subject to the Permitted Liens (and to such leases
and other matters, if any, as Trustee may elect upon request of Beneficiary),
and shall receive the proceeds of said sale or sales and apply the same as
herein provided. Payment of the purchase price to the Trustee shall satisfy the
obligation of purchaser at such sale therefor, and such purchaser shall not be
responsible for the application thereof. The power of sale granted herein shall
not be exhausted by any sale held hereunder by Trustee or his substitute or
successor, and such power of sale may be exercised from time to time and as many
times as Beneficiary may deem necessary until all of the Property has been duty'
sold and all secured indebtedness has been fully paid. In the event any sale
hereunder is not completed or is defective in the opinion of Beneficiary, such
sale shall not exhaust the power of sale hereunder and Beneficiary shall have
the right to cause a subsequent sale or sales to be made hereunder. Any and all
statements of fact or other recitals made in any deed or deeds or other
conveyances given by Trustee or any successor or substitute appointed hereunder
as to nonpayment of the secured indebtedness or as to the occurrence of any
default, or as to Beneficiary's having declared all of said indebtedness to be
due and payable, or as to the request to sell, or as to notice of time, place
and terms of sale and the properties to be sold having been duly given, or as to
the refusal, failure or inability to act of Trustee or any substitute or
successor trustee, or as to the appointment of any substitute
-10-
91
or successor trustee, or as to any other act or thing having been duly done by
Beneficiary or by such Trustee, substitute or successor, shall be taken as prima
facie evidence of the truth of the facts so stated and recited. The Trustee or
his successor or substitute may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale held by
Trustee, including the posting of notices and the conduct of sale, but in the
name and on behalf of Trustee, his successor or substitute. If Trustee or his
successor or substitute shall have given notice of sale hereunder, any successor
or substitute Trustee thereafter appointed may complete the sale and the
conveyance of the property pursuant thereto as if such notice had been given by
the successor or substitute Trustee conducting the sale.
FIFTEENTH: Without limitation of Beneficiary's rights of
enforcement with respect to any portion of the Property which constitute
personal property under the Uniform Commercial Code or any part thereof in
accordance with the procedures for foreclosure of real estate, Beneficiary may
exercise its rights of enforcement with respect to such personal property or any
part thereof under the Uniform Commercial Code and in conjunction with, in
addition to or in substitution for those rights and remedies; (1) Beneficiary
may enter upon Grantor's premises to take possession of, assemble and collect
the personal property or, to the extent and for those items of the personal
property permitted under applicable law, to render it unusable; (2) Beneficiary
may require Grantor to assemble the personal property and make it available at a
place Beneficiary designates which is mutually convenient to allow Beneficiary
to take possession or dispose of the personal property; (3) written notice
mailed to Grantor as provided herein at least ten (10) days prior to the date of
public sale of the personal property or prior to the date after which private
sale of the personal property will be made shall constitute reasonable notice;
(4) in the event of a foreclosure sale, whether made by Trustee under the terms
hereof, or under judgment of a court, the personal property and the other
Property may, at the option of Beneficiary, be sold as a whole; (5) it shall not
be necessary that Beneficiary take possession of the personal property or any
part thereof prior to the time that any sale pursuant to the provisions of this
Section is conducted and it shall not be necessary that the personal property or
any part thereof be present at the location of such sale; (1) with respect to
application of proceeds of disposition of the personal property pledged
hereunder, the costs and expenses incident to disposition shall include the
reasonable expenses of retaking, holding, preparing for sale or lease, selling,
leasing and the reasonable attorneys' fees and legal expenses incurred by
Beneficiary; (6) any and all statements of fact or other recitals made in any
xxxx of sale or assignment or other instrument evidencing any foreclosure sale
hereunder as to nonpayment of the secured indebtedness or as to the occurrence
of any default, or as to Beneficiary having declared all of such indebtedness to
be due and payable, or as to notice of time, place and terms of sale and of the
properties to be sold having been duly given, or as to any other act or thing
having been duly done by Beneficiary, shall be taken as prima facie evidence of
the truth of the facts so stated and recited; and (7) Beneficiary may appoint or
delegate any one or more persons as agent to perform any act or acts necessary
or incident to any sale held by Beneficiary, including the sending of notices
and the conduct of the sale, but in the name and on behalf of Beneficiary.
SIXTEENTH: It is expressly covenanted and agreed by Grantor
that in the event that Grantor fails to pay when due, whether by acceleration or
otherwise, the Lender Obligations pursuant to the terms of the Subsidiary
Guaranty or fails to pay when due any other indebtedness secured hereby, or if
Grantor fails to perform, or cause to be performed, any of the other obligations
of the Subsidiary Guaranty, this Deed of Trust, the Subsidiary Security
Agreements or other document or instrument secured hereby or providing security
for the
-11-
92
indebtedness or other obligations secured hereby, then Beneficiary may proceed
by a suit or suits in equity or at law, whether for collection of the
indebtedness secured hereby, the specific performance of any covenant or
agreement herein contained or in aid of the execution of any power herein
granted, or for any foreclosure hereunder or for the sale of the Property under
the judgment or decree of any court or courts of competent jurisdiction.
SEVENTEENTH: It is expressly covenanted and agreed by Grantor
that in the event that Grantor fails to pay when due, whether by acceleration or
otherwise, the Lender Obligations pursuant to the terms of the Subsidiary
Guaranty or fails to pay when due any other indebtedness secured hereby, or if
Grantor fails to perform, or cause to be performed, any of the other obligations
of the Subsidiary Guaranty, this Deed of Trust, the Subsidiary Security
Agreement or other document or instrument secured hereby or providing security
for the indebtedness or other obligations secured hereby, then Beneficiary is
authorized, prior or subsequent to the institution of any foreclosure
proceedings, to the fullest extent permitted by applicable law, to enter upon
the Property, or any part thereof, and to take possession of the Property and
all books and records relating thereto, and to exercise without interference
from Grantor any and all rights which Grantor has with respect to the
management, possession, operation, protection or preservation of the Property.
Beneficiary shall not be deemed to have taken possession of the Property or any
part thereof except upon the exercise of its right to do so, and then only to
the extent evidenced by its demand and overt act specifically for such purpose.
All costs, expenses and liabilities of every character incurred by Beneficiary
in managing, operating, maintaining, protecting or preserving the Property shall
constitute a demand obligation of Grantor (which obligation Grantor hereby
promises to pay) to Beneficiary pursuant to this Deed of Trust If necessary to
obtain the possession provided for above, Beneficiary may invoke any and all
legal remedies to dispossess Grantor. In connection with any action taken by
Beneficiary pursuant to this Section, Beneficiary shall not be liable for any
loss sustained by Grantor resulting from any failure to let the Property or any
part thereof, or from any act or omission of Beneficiary in managing the
Property unless such loss is caused by the willful misconduct, gross negligence
and bad faith of Beneficiary, nor shall Beneficiary be obligated to perform or
discharge any obligation, duty or liability of Grantor arising under any lease
or other agreement relating to the Property or arising under any Permitted
Encumbrance or otherwise arising. Grantor hereby assents to, ratifies and
confirms any and all actions of Beneficiary with respect to the Property taken
under this Section.
EIGHTEENTH: It is expressly covenanted and agreed by Grantor
that in the event that Grantor fails to pay when due, whether by acceleration or
otherwise, the Lender Obligations pursuant to the terms to the terms of the
Subsidiary Guaranty or fails to pay when due any other indebtedness secured
hereby, or if Grantor fails to perform, or cause to be performed, any of the
other obligations of the Subsidiary Guaranty, this Deed of Trust, the Subsidiary
Security Agreement or other document or instrument secured hereby or providing
security for the indebtedness or other obligations secured hereby, then
Beneficiary shall as a matter of right be entitled to the appointment of a
receiver or receivers for all or any part of the Property, whether such
receivership be incident to a proposed sale (or sales) of such property or
otherwise, and without regard to the value of the Property or the solvency of
any person or persons liable for the payment of the indebtedness secured hereby,
and Grantor does hereby irrevocably consent to the appointment of such receiver
or receivers, waives any and all defenses to such appointment, agrees not to
oppose any application therefor by Beneficiary, and agrees that such appointment
shall in no manner impair, prejudice or otherwise affect the rights of
Beneficiary to application of Rents as provided in this Deed of Trust. Nothing
herein is to be construed to deprive Beneficiary of any other right, remedy or
privilege it may have under
-12-
93
the law to have a receiver appointed. Any money advanced by Beneficiary in
connection with any such receivership shall be a demand obligation (which
obligation Grantor hereby promises to pay) owing by Grantor to Beneficiary
pursuant to this Deed of Trust.
NINETEENTH: Beneficiary may exercise any and all other rights
and remedies which Beneficiary may have under the Subsidiary Guaranty, the
Subsidiary Security Agreement or any other document executed in connection
therewith, or at law or in equity or otherwise. In the event that Beneficiary
exercises its rights to commence foreclosure proceedings or to take possession
and control of all or any part of the Property, the Trustee, Beneficiary and/or
any person or entity designated by Beneficiary may operate and maintain the
Property at the expense of Grantor and without any liability to Grantor in
connection with such operations; and the Beneficiary, Trustee and/or any person
or entity designated by Beneficiary will have the right, but not the obligation,
to make repairs, to purchase machinery and equipment and to conduct workover
operations, and in connection therewith, to exercise every power, right and
privilege of Grantor with respect to the Property and after deducting the
expenses of developing, operating and maintaining the Property (including but
not limited to the costs of repairs and improvements, insurance premiums and tax
assessments and other charges on the Property as well as reasonable compensation
for the services of Trustee or other designated parties), the Beneficiary shall
apply the proceeds received from the operation of the Property to the payment of
the indebtedness and obligations secured hereby, in such manner and in such
order as Beneficiary may elect.
TWENTIETH: This instrument shall be effective as a mortgage as
well as a deed of trust and upon the occurrence of a default may be foreclosed
as to any of the Property in any manner permitted by applicable law, and any
foreclosure suit may be brought by Trustee or by Beneficiary; and to the extent,
if any, required to cause this instrument to be so effective as a mortgage as
well as a deed of trust, Grantor hereby mortgages the Property to Beneficiary.
In the event a foreclosure hereunder shall be commenced by Trustee, or his
substitute or successor, Beneficiary may at any time before the sale of the
Property direct Trustee to abandon the sale, and may then institute suit for the
collection of the Subsidiary Guaranty and/or any other secured indebtedness, and
for the foreclosure of this Deed of Trust. It is agreed that if Beneficiary
should institute a suit for the collection of the Subsidiary Guaranty or any
other secured indebtedness and for the foreclosure of this Deed of Trust,
Beneficiary may at any time before the entry of a final judgment in said suit
dismiss the same, and require Trustee, his substitute or successor to sell the
Property in accordance with the provisions of this Deed of Trust.
TWENTY-FIRST: The proceeds of any sale held by Trustee or
Beneficiary or any receiver or public officer in foreclosure of the liens and
security interests evidenced hereby shall be applied: first, to the payment of
all necessary costs and expenses incident to such foreclosure sale, including
but not limited to all reasonable attorneys' fees and legal expenses, all court
costs and charges of every character and a reasonable fee to Trustee if
foreclosed by power of sale as provided herein, and to the payment of the other
secured indebtedness, including specifically without limitation the principal,
accrued interest and attorneys' fees due and unpaid on the Notes and the amounts
due and unpaid and owed to Beneficiary under this Deed of Trust the order and
manner of application to the items in this clause first to be in Beneficiary's
sole discretion; and second, the remainder, if any there shall be, shall be paid
to Grantor, or to Grantor's heirs, devisees, representatives, successors or
assigns, or such other persons (including the Beneficiary or beneficiary of any
inferior lien) as may be entitled thereto by law; provided, however, that if
Beneficiary is uncertain which person or persons are so
-13-
94
entitled, Beneficiary may interplead such remainder in any court of competent
jurisdiction, and the amount of any attorneys' fees, court costs and expenses
incurred in such action shall be a part of the secured indebtedness and shall be
reimbursable (without limitation) from such remainder.
TWENTY-SECOND: Beneficiary shall have the right to become the
purchaser at any sale held by Trustee or substitute or successor or by any
receiver or public officer or at any public sale, and Beneficiary shall have the
right to credit upon the amount of Beneficiary's successful bid, to the extent
necessary to satisfy such bid, all or any part of the indebtedness secured
hereby in such manner and order as Beneficiary may elect.
TWENTY-THIRD: It is expressly covenanted and agreed by Grantor
that in the event that Grantor fails to pay when due, whether by acceleration or
otherwise, any principal or interest pursuant to the terms of the Notes or fails
to pay when due any other indebtedness secured hereby, or if Grantor fails to
perform, or cause to be performed, any of the other obligations of the
Subsidiary Guaranty, this Deed of Trust, the Subsidiary Security Agreement or
other document or instrument secured hereby or providing security for the
indebtedness or other obligations secured hereby, then, Beneficiary shall have
the right to proceed with foreclosure (judicial or nonjudicial) of the liens and
security interests hereunder without declaring the entire secured indebtedness
due, and in such event any such foreclosure sale may be made subject to the
unmatured part of the secured indebtedness; and any such sale shall not in any
manner affect the unmatured part of the secured indebtedness, but as to such
unmatured part this Deed of Trust shall remain in full force and effect just as
though no sale had been made. The proceeds of such sale shall be applied as
provided in paragraph Twenty-First hereof except that the amount paid under
clause first thereof shall be only the matured portion of the secured
indebtedness and any proceeds of such sale in excess of those provided for in
clause first (modified as provided above) shall be applied to the prepayment
(without penalty) of any other secured indebtedness in such manner and order and
to such extent as Beneficiary deems advisable, and the remainder, if any, shall
be applied as provided in clause second of paragraph Twenty-First hereof.
Several sales may be made hereunder without exhausting the right of sale for any
unmatured part of the secured indebtedness.
TWENTY-FOURTH: All rights and remedies provided for herein, in
the Credit Agreement, the Subsidiary Guaranty or in any other document executed
in connection herewith or therewith are cumulative of each other and of any and
all other rights and remedies existing at law or in equity, and Trustee and
Beneficiary shall, in addition to the rights and remedies provided herein or in
any other document be entitled to avail themselves of all such other rights and
remedies as may now or hereafter exist at law or in equity for the collection of
the secured indebtedness and the enforcement of the covenants herein and the
foreclosure of the liens and security interests evidenced hereby, and the resort
to any right or remedy provided for hereunder or under any such other document
or provided for by law or in equity shall not prevent the concurrent or
subsequent employment of any other appropriate right or rights or remedy or
remedies.
TWENTY-FIFTH: In the event there is a foreclosure sale
hereunder and at the time of such sale, Grantor or Grantor's successors or
assigns are occupying or using the Property, or any part thereof, each and all
shall immediately become the tenant of the purchaser at such sale, which tenancy
shall be a tenancy from day to day, terminable at the will of either landlord or
tenant, at a reasonable rental per day based upon the value of the property
occupied, such rental to be due daily to the purchaser; and to the extent
permitted by applicable
-14-
95
law, the purchaser at such sale shall, notwithstanding any language herein
apparently to the contrary, have the sole option to demand immediate possession
following the sale or to permit the occupants to remain as tenants at will. In
the event the tenant fails to surrender possession of said property upon demand,
the purchaser shall be entitled to institute and maintain a summary action for
possession of the property (such as an action for forcible detainer) in any
court having jurisdiction.
TWENTY-SIXTH: To the full extent Grantor may do so, Grantor
agrees that Grantor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement valuation, stay, extension or redemption, and Grantor, for Grantor,
Grantor's successors and assigns, and for any and all persons ever claiming any
interest in the Property, to the extent permitted by applicable law, hereby
waives and releases all rights of redemption, valuation, appraisement, stay of
execution, notice of intention to mature or declare due the whole of the secured
indebtedness, and all rights to a marshaling of assets of Grantor, including the
Property, or to a sale in inverse order of alienation in the event of
foreclosure of the liens and/or security interests hereby created, except for
Grantor's rights under Sections 5 1.003-51.005 of the Texas Property Code, as
amended or replaced. Grantor shall not have or assert any right under any
statute or rule of law pertaining to the marshaling of assets, sale in inverse
order of alienation, the exemption of homestead, the administration of estates
of decedents, or other matters whatever to defeat, reduce or affect the right of
Beneficiary under the terms of this Deed of Trust to a sale of the Property for
the collection of the secured indebtedness without any prior or different resort
for collection, or the right of Beneficiary under the terms of this Deed of
Trust to the payment of the secured indebtedness out of the proceeds of sale of
the Property in preference to every other claimant whatever. Grantor waives any
right or remedy which Grantor may have or be able to assert pursuant to any
provision of any law pertaining to the rights and remedies of sureties. If any
law referred to in this Section and now in force, of which Grantor or Grantor's
heirs, devises, representatives, successors or assigns or any other persons
claiming any interest in the Property might take advantage despite this Section,
shall hereafter be repealed or ceases to be in force, such law shall not
thereafter be deemed to preclude the application of this Section.
TWENTY-SEVENTH: Except as set forth herein, the Trustee shall
serve without compensation; provided, however, the Grantor covenants and agrees
to pay to the Trustee, on demand, all costs and expenses reasonably made or
incurred in and about the execution of the trust created hereby. The Grantor
covenants and agrees to indemnify the Trustee against any and all liabilities or
losses which he may incur hereunder not due to his own gross negligence or
willful misconduct. All monies and other property and proceeds of property
received by the Trustee at any time in the exercise of the trust created hereby
shall be held in trust for the Beneficiary. The Trustee is hereby empowered to
do, and perform, any act or duty in and under this Deed of Trust by and through
an agent or attorney. The Beneficiary hereby reserves, and shall have, the
absolute and unconditioned right and privilege to be exercised at any time and
from time to time to remove the Trustee (or any successor Trustee) by
appointing, by an instrument in writing, another trustee in the place and stead
of the Trustee (or any successor Trustee), which trustee shall have all the
rights, powers and authority and be charged with all the duties that are
conferred or charged upon the Trustee.
TWENTY-EIGHTH: The Trustee and/or the Beneficiary may have or
in the future may hold other security and/or guaranties to secure all or any
part of the indebtedness and other obligations secured hereby, but it is
specifically understood and agreed that neither
-15-
96
the execution and delivery of this Deed of Trust nor the holding of any other
security and/or guaranty shall at any time or in any wise operate to prevent or
hinder the Trustee and/or the Beneficiary from resorting first to such other
security and/or guaranty or first to the Property, or first from time to time to
both; and the Trustee and/or the Beneficiary may from time to time as the
Beneficiary sees fit, in the Beneficiary's sole and uncontrolled discretion,
resort to all or any part of the Property without resorting to all or any other
security and/or guaranty securing such indebtedness and other obligations, or to
all or any part of any other security and/or guaranty securing such indebtedness
and other obligations without resorting to all or any part of the Property, and
such action on the Trustee's and/or the Beneficiary's part shall not in any wise
be considered as a waiver of any of the benefits or rights of the Trustee and/or
the Beneficiary relating to the Property or such other security and/or
guaranties.
TWENTY-NINTH: A copy of any notice of trustee's sale under
this Deed of Trust shall be served on Grantor by certified mail, return receipt
requested, directed to Grantor at its address stated below or such other address
given to Beneficiary in writing by Grantor subsequent to the execution and
delivery of this Deed of Trust and shall be effective when deposited, postage
prepaid, in the United States mail. Any other notice shall be effective upon the
deposit of such notice, in writing, in the regular United States mail, postage
prepaid, addressed to such party or parties to receive notice at the following
addresses or at such other address as any such party may given to the other
parties in writing:
To Grantor:
Seadrift Coke, L.P.
c/o The Carbide/Graphite Group, Inc.
Xxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Vice President Finance
To Beneficiary:
One PNC Plaza
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Agency Services
To Trustee:
Xxxx X. Xxxxxxxxxx
One PNC Plaza, 3rd Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
THIRTIETH: No waiver by the Beneficiary or the Trustee of any
default shall operate as a waiver of any other default or of the same default on
a future occasion. No failure or delay on the part of the Beneficiary or the
Trustee in the exercise of any right or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
preclude other or further exercise thereof, or the exercise of any other right
or remedy.
-16-
97
THIRTY-FIRST: Neither this Deed of Trust nor any term hereof
may be changed, waived, discharged or terminated orally, or by any action or
inaction, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. The
modification hereof or of the Credit Agreement, the Subsidiary Guaranty, the
Subsidiary Security Agreement or any other instrument or document secured hereby
or securing the indebtedness and other obligations secured hereby shall not
impair the priority of the liens and security interests created or granted
hereby or pursuant hereto; and the release of any part of the Property from the
liens and security interests created or granted hereby or pursuant hereto shall
not impair the priority of the liens and security interests created or granted
hereby or pursuant hereto with respect to the part of the Property not so
released. Nothing contained in this Deed of Trust is intended to alter or affect
the provisions of any partial release or subordination agreement of record
heretofore executed by the Beneficiary with respect to any of the Property.
THIRTY-SECOND: In the event that any covenant, condition or
agreement of this Deed of Trust is lawfully held or declared to be invalid,
illegal or unenforceable, it shall be deemed deleted to the extent necessary
under the applicable law and the validity of the other covenants, conditions and
agreements shall not be affected thereby.
THIRTY-THIRD: The covenants, conditions and agreements
contained in this Deed of Trust shall bind, and the benefits thereof shall inure
to, the successors and assigns of the Grantor, the successors and assigns of the
Trustee and the successors and assigns of the Beneficiary.
THIRTY-FOURTH: THIS DEED OF TRUST SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED ACCORDING TO THE LAWS (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF) OF THE COMMONWEALTH OF PENNSYLVANIA EXCEPT
THAT (a) PURSUANT TO THE PROVISIONS OF SECTION 9.103 OF THE UNIFORM COMMERCIAL
CODE AS IN FORCE IN THE COMMONWEALTH OF PENNSYLVANIA, AS IT MAYBE AMENDED FROM
TIME TO TIME, THE LAWS OF THE STATE OF TEXAS MAY GOVERN THE PERFECTION AND
EFFECT OF PERFECTION OR NON-PERFECTION OF SECURITY INTERESTS IN CERTAIN OF THE
PROPERTY AND (b) THE LAWS OF THE STATE OF TEXAS WILL GOVERN WHETHER A
TRANSACTION TRANSFERS OR CREATES AN INTEREST IN REAL PROPERTY WITHIN THE STATE
OF TEXAS FOR SECURITY PURPOSES OR OTHERWISE, THE NATURE OF AN INTEREST IN REAL
PROPERTY WITHIN THE STATE OF TEXAS THAT IS TRANSFERRED OR CREATED BY A
TRANSACTION, THE METHOD FOR FORECLOSURE OF A LIEN ON REAL PROPERTY WITHIN THE
STATE OF TEXAS, THE NATURE OF AN INTEREST IN REAL PROPERTY WITHIN THE STATE OF
TEXAS THAT RESULTS FROM FORECLOSURE, OR THE MANNER AND EFFECT OF RECORDING OR
FAILING TO RECORD EVIDENCE OF A TRANSACTION THAT TRANSFERS OR CREATES AN
INTEREST IN REAL PROPERTY WITHIN THE STATE OF TEXAS. WHENEVER REFERENCE IS MADE
TO THE LOAN AGREEMENT OR OTHER LOAN DOCUMENTS, THOSE INSTRUMENTS SHALL BE DEEMED
TO BE GOVERNED BY AND CONSTRUED ACCORDING TO THE INTERNAL LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA, AS EACH SUCH INSTRUMENT SO PROVIDES.
THIRTY-FIFTH: Whenever required by the context of this Deed of
Trust the singular shall include the plural, and vice-versa; and the masculine
and feminine genders shall include the neuter gender, and vice-versa.
-17-
98
WITNESS the due execution hereof with the intent to be legally
bound hereby as of the day and year first above written.
GRANTOR:
SEADRIFT COKE, L.P., a Texas limited
partnership
By its General Partner:
THE CARBIDE/GRAPHITE GROUP, INC.
ATTEST:
By By
------------------------------------ ------------------------------
Name: Name:
--------------------------------- ---------------------------
Title: Title:
-------------------------------- --------------------------
BENEFICIARY:
PNC BANK, NATIONAL ASSOCIATION
WITNESS:
By
------------------------------------ --------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
99
STATE OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
This instrument was acknowledged before me this 30th day of April,
1999, by___________________, the _________________ of The Carbide/Graphite
Group, Inc., the general partner of Seadrift Coke, L.P., a Texas limited
partnership, on behalf of said corporation.
---------------------------------
Notary Public in and for State of
Pennsylvania
(PERSONALIZED SEAL)
STATE OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
This instrument was acknowledged before me this 30th day of April,
1999, by Xxxx X. Xxxxxxxxxx, Senior Vice President of PNC Bank, National
Association, a national banking association, on behalf of said association
---------------------------------
Notary Public in and for State of
Pennsylvania
(PERSONALIZED SEAL)
100
This Credit Line Deed of Trust and Security Agreement is
delivered to and accepted by PNC Bank, National Association, in Pittsburgh,
Pennsylvania this 30th day of April, 1999.
This instrument was prepared by:
Xxxxx X. Pool, Esquire
Xxxxxx Xxxxxxxxx, P.C.
0000 Xxx XXX Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
(000) 000-0000
This Credit Line Deed of Trust and Security Agreement is also to serve as a
financing statement and is to be filed for record in the real estate records.
