FORM OF UNIROYAL SECURITY AGREEMENT
UNIROYAL SECURITY AGREEMENT
Dated August 21, 1996
From
THE PERSONS LISTED ON THE SIGNATURE PAGES
HEREOF
as Pledgors
to
CITICORP USA, INC.,
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security 2
2. Security for Obligations 4
3. Pledgors Remain Liable 4
4. Delivery of Security Collateral and Account Collateral 5
5. Maintaining the Collection Account, the Cash
Concentration Account and the L/C Cash Collateral Account 5
6. As to Account Collateral 6
7. Investing of Amounts in the Cash Concentration Account
and the L/C Cash Collateral Account 7
8. Release of Amounts 7
9. Representations and Warranties 7
10. Further Assurances 9
11. As to Inventory 10
12. Insurance 10
13. Place of Perfection; Records; Collection of Receivables 11
14. Transfers and Other Liens 12
15. Agent Appointed Attorney-in-Fact 12
16. Agent May Perform 12
17. The Agent's Duties 13
18. Remedies 13
19. Indemnity and Expenses 14
20. Amendments; Waivers; Etc 15
21. Addresses for Notices 15
22. Continuing Security Interest; Assignments 16
23. Release and Xxxxxxxxxxx 00
00. Security Interest Absolute 17
25. Execution in Counterparts 17
26. Governing Law; Terms 18
Schedule I-Trade Names
Schedule II-Locations of Inventory
Schedule III-Pledged Debt
Schedule IV-Chief Executive Offices of Pledgors
Exhibit A-Form of Uniroyal Security Agreement Supplement
UNIROYAL SECURITY AGREEMENT
UNIROYAL SECURITY AGREEMENT dated August 21, 1996 made by the
Persons listed on the signature pages hereof and the Additional
Pledgors (as defined in Section 20(b)) (such Persons so listed
and the Additional Pledgors being, collectively, the "Pledgors")
to CITICORP USA, INC. as agent (in such capacity, the "Agent")
for the Secured Parties (as defined in the Credit Agreement
referred to below).
PRELIMINARY STATEMENTS.
(1)Uniroyal Chemical Company, Inc. (the "Uniroyal Borrower") has
entered into a Credit Agreement dated as of August 21, 1996 (said
Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit
Agreement"; capitalized terms used herein and not otherwise
defined herein are used herein as therein defined) with Crompton
& Xxxxxxx Corporation, Crompton & Xxxxxxx Colors Incorporated,
Xxxxx-Standard Corporation, Ingredient Technology Corporation,
the lender parties party thereto (the "Lender Parties"), Citicorp
Securities, Inc., as Arranger, Citicorp USA, Inc., as Agent and
The Chase Manhattan Bank, as Managing Agent.
(2)The Uniroyal Borrower maintains a non-interest bearing cash
collection account (the "Collection Account") with Citibank, N.A.
("Citibank") at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No. 4055-5094, in the name of the Uniroyal
Borrower but under the sole control and dominion of the Agent and
subject to the terms of this Agreement.
(3)The Uniroyal Borrower maintains a non-interest bearing cash
concentration account (the "Cash Concentration Account") with
Citibank at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No. 4049-8376, in the name of the Uniroyal
Borrower and subject to the terms of this Agreement.
(4)The Uniroyal Borrower has opened a non-interest (but subject
to investment pursuant to Section 6) cash collateral account (an
"L/C Cash Collateral Account") with Citibank at its office at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No. 4070-5742, in
the name of the Uniroyal Borrower and subject to the terms of
this Agreement.
(5)Each Pledgor will derive substantial direct and indirect
benefit from the transactions contemplated by the Credit
Agreement.
(6)It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the
Credit Agreement and the entry by the Hedge Banks into Bank Hedge
Agreements with the Borrowers from time to time that each Pledgor
shall have granted the assignment and security interest and made
the pledge and assignment contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to issue Letters
of Credit under the Credit Agreement and to induce the Hedge
Banks to enter into Bank Hedge Agreements with the Borrowers from
time to time, each Pledgor hereby agrees with the Agent for the
ratable benefit of the Secured Parties as follows:
SECTION 1. Grant of Security. Each Pledgor hereby assigns and
pledges to the Agent for the ratable benefit of the Secured
Parties, and hereby grants to the Agent for the ratable benefit
of the Secured Parties a security interest in, the following, in
each case, as to each type of property described below, whether
now owned or hereafter acquired by such Pledgor, wherever located
and whether now or hereafter existing (collectively, the
"Collateral"):
(a)all of such Pledgor's right, title and interest, whether now
owned or hereafter acquired, in and to all inventory in all of
its forms, wherever located, now or hereafter existing
(including, but not limited to, (i) all herbicides, agricides,
insecticides, foliar nutrients, plant growth regulants,
fungicides, seed treatment chemicals and equipment, chemicals and
polymers and specialty chemicals and raw materials and work in
process therefor, finished goods thereof and materials used or
consumed in the manufacture or production thereof, (ii) inventory
in which such Pledgor has an interest in mass or a joint or other
interest or right of any kind (including, without limitation,
goods in which such Pledgor has an interest or right as
consignee) and (iii) inventory that is returned to or repossessed
by such Pledgor), and all accessions thereto and products thereof
and documents therefor (any and all such inventory, accessions,
products and documents being the "Inventory");
(b)all of such Pledgor's (i) right, title and interest, whether
now owned or hereafter acquired, in and to all accounts, contract
rights, chattel paper, instruments, deposit accounts, general
intangibles and other obligations of any kind, now or hereafter
existing, but only to the extent the foregoing arise out of or in
connection with, and constitute a right of payment of money or
other property for, the sale or lease of goods or the rendering
of services other than intercompany royalty payments, licensing
fees, technology transfer payments and other similar intercompany
payments (to the extent not referred to in clause (c) below, the
"Receivables") and (ii) rights now or hereafter existing in and
to all security agreements, leases and other contracts securing
or otherwise relating to the Receivables (the "Related
Contracts");
(c)all of such Pledgor's right, title and interest in and to the
following (collectively, the "Account Collateral"):
(i)the Cash Concentration Account, all funds held therein and all
certificates and instruments, if any, from time to time
representing or evidencing the Cash Concentration Account;
(ii)the Collection Account, all funds held therein and all
certificates and instruments, if any, from time to time
representing or evidencing the Collection Account;
(iii)the L/C Cash Collateral Account, all funds held therein and
all certificates and instruments, if any, from time to time
representing or evidencing such L/C Cash Collateral Account;
(iv)all Pledged Accounts (as hereinafter defined), all funds held
therein and all certificates and instruments, if any, from time
to time representing or evidencing the Pledged Accounts;
(v)all Other Accounts (as hereinafter defined), all funds held
therein and all certificates and instruments, if any, from time
to time representing or evidencing such accounts;
(vi)all notes, certificates of deposit, deposit accounts, checks
and other instruments from time to time hereafter delivered to or
otherwise possessed by the Agent for or on behalf of such Pledgor
in substitution for or in addition to any or all of the then
existing Account Collateral; and
(vii)all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
then existing Account Collateral; and
(d)All of the following (the "Security Collateral"):
(i)the indebtedness (whether or not evidenced by instruments) set
forth opposite such Pledgor's name on Schedule III hereto and
issued by the obligors indicated therein (collectively referred
to herein as the "Initial Pledged Debt", and together with the
indebtedness referred to in clause (ii) below, the "Pledged
Debt") and the instruments (if any) evidencing such Initial
Pledged Debt, all security therefor and all interest, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of such Initial Pledged Debt; and
(ii)all additional indebtedness from time to time owed to such
Pledgor by any obligor of the Initial Pledged Debt (whether or
not evidenced by instruments) and the instruments evidencing such
indebtedness (if any), and all additional indebtedness owed to
such Pledgor by any other obligor to the extent required pursuant
to Section 5.01(k) of the Credit Agreement, all security therefor
and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such indebtedness;
(e)all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property
of the types described in clauses (a), (b), (c) and (d) of this
Section 1) and, to the extent not otherwise included, all
(i) payments under insurance (whether or not the Agent is the
loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect
to any of the foregoing Collateral, and (ii) cash.
SECTION 2. Security for Obligations. This Agreement secures,
in the case of each Pledgor, the payment of all Obligations of
such Pledgor now or hereafter existing under the Loan Documents,
which shall not exceed, so long as any Uniroyal Indenture remains
in effect, the maximum amount of Debt permitted to be incurred by
such Pledgor under such Uniroyal Indenture, whether direct or
indirect, absolute or contingent, including any extensions,
modifications, substitutions, amendments and renewals thereof,
whether for principal (including reimbursement for amounts drawn
under Letters of Credit), interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or
otherwise (all such Obligations being the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement
secures, as to each Pledgor, the payment of all amounts that
constitute part of the Secured Obligations of such Pledgor and
that would be owed by such Pledgor to the Secured Parties under
the Loan Documents but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Pledgor.
SECTION 3. Pledgors Remain Liable. Anything herein to the
contrary notwithstanding, (a) each Pledgor shall remain liable
under the contracts and agreements included in the Collateral to
the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by the Agent of any of
its rights hereunder shall not release any Pledgor from any of
its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Secured Party shall have
any obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement or any
other Loan Document, nor shall any Secured Party be obligated to
perform any of the obligations or duties of any Pledgor
thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
SECTION 4. Delivery of Security Collateral and Account
Collateral. All certificates or instruments representing or
evidencing any Security Collateral or Account Collateral have
been or shall be delivered to and held by or on behalf of the
Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Agent. If any Event of Default
shall have occurred and be continuing, the Agent shall have the
right to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Security Collateral and
Account Collateral. In addition, the Agent shall have the right
at any time to exchange certificates or instruments representing
or evidencing Account Collateral for certificates or instruments
of smaller or larger denominations.
SECTION 5. Maintaining the Collection Account, the Cash
Concentration Account and the L/C Cash Collateral Account. So
long as any Advance shall remain unpaid, any Letter of Credit or
Bank Hedge Agreement shall be outstanding or any Lender Party
shall have any Commitment under the Credit Agreement:
(a)The Pledgor will maintain the Collection Account and the Cash
Concentration Account with Citibank.
(b)It shall be a term and condition of the Collection Account and
the L/C Cash Collateral Account, notwithstanding any term or
condition to the contrary in any other agreement relating to such
Collection Account or such L/C Cash Collateral Account, as the
case may be, and except as otherwise provided by the provisions
of Section 8 and Section 18, that no amount (including interest
on Collateral Investments) shall be paid or released to or for
the account of, or withdrawn by or for the account of, the
Pledgor or any other Person from such Collection Account or L/C
Cash Collateral Account, as the case may be.
The Collection Account, the Cash Concentration Account and the
L/C Cash Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors
of the Federal Reserve System and of any other appropriate
banking or governmental authority, as may now or hereafter be in
effect.
SECTION 6. As to Account Collateral. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding,
any Bank Hedge Agreement shall be in effect or any Lender Party
shall have any Commitment under the Credit Agreement:
(a)Each Pledgor shall comply with its current cash management
policies and practices, and shall not make any material change to
such policies and practices which could adversely affect the
interests of the Secured Parties without the prior written
consent of the Agent.
(b)Each Pledgor shall instruct each Person obligated at any time
to make any payment to such Pledgor for any reason (an "Obligor")
to make such payment to a Pledged Account (as defined in Section
9(d)) or to the Collection Account and shall pay to the Agent for
deposit in the Collection Account, at the end of each Business
Day, all proceeds of Collateral.
(c)Each Pledgor shall not make any deposit in any deposit account
other than a deposit in the Cash Concentration Account or an
Other Account (as defined in Section 9(d)) or an Excepted Account
(as defined in Section 9(d)) in accordance with its then current
cash management policies and practices in accordance with Section
6(a), provided that in the case of deposits in the Excepted
Accounts, no amount deposited therein shall constitute proceeds
of Collateral, other than amounts transferred directly from the
Cash Concentration Account.
(d)Upon the occurrence and during the continuance of an Event of
Default, at the Agent's request, within 15 Business Days of such
request (or such later time as the Agent and Crompton Corp. shall
agree), (i) each Pledgor shall give written notice to the Agent
of (A) the name and address of each bank with which each Pledged
Account or Other Account is maintained by such Pledgor, (B) the
account number of each such Pledged Account or Other Account and
(C) the full name under which such Pledged Account or Other
Account is maintained, (ii) each Pledgor shall enter into letter
agreements (the "Pledged Account Letters") in form and substance
satisfactory to the Agent among such Pledgor, the Agent and each
bank with which such Pledgor maintains a Pledged Account or, at
the option of such Pledgor, shall close such account, (iii) each
Pledgor shall enter into letter agreements (the "Other Account
Letters", and together with the Pledged Account Letters, the
"Blocked Account Letters") in form and substance satisfactory to
the Agent among such Pledgor, the Agent and each bank with which
such Pledgor maintains an Other Account or, at the option of such
Pledgor, shall close such account, (iv) upon any termination of
any Pledged Account Letter or other agreement with respect to the
maintenance of a Pledged Account, such Pledgor shall promptly
notify all Obligors that were making payments to such Pledged
Account to make all future payments to another Pledged Account or
to the Collection Account, and (v) each Pledgor agrees to close
any or all Pledged Accounts and terminate any or all Pledged
Account Letters at the request of the Agent upon five Business
Days' notice thereof.
SECTION 7. Investing of Amounts in the Cash Concentration
Account and the L/C Cash Collateral Account. If requested by the
Uniroyal Borrower and until the Uniroyal Borrower in any way
amends such request, the Agent will direct Citibank to, subject
to the provisions of Section 8 and Section 18, from time to time
(a) invest amounts on deposit in the Cash Concentration Account
and the L/C Cash Collateral Account in such Cash Equivalents in
the name of the Agent or as to which all action required by
Section 10 shall have been taken as the Uniroyal Borrower may
select and the Agent may approve and (b) invest interest paid on
the Cash Equivalents referred to in clause (a) above, and
reinvest other proceeds of any such Cash Equivalents that may
mature or be sold, in each case in such Cash Equivalents in the
name of the Agent or as to which all action required by Section
10 shall have been taken as such Uniroyal Borrower may select and
the Agent may approve (the Cash Equivalents referred to in
clauses (a) and (b) above being collectively "Collateral
Investments"). Interest and proceeds that are not invested or
reinvested in Collateral Investments as provided above shall be
deposited and held in the Cash Concentration Account or the L/C
Cash Collateral Account, as the case may be.
SECTION 8. Release of Amounts. So long as no Event of Default
shall have occurred and be continuing, the Agent will direct
Citibank to pay and release to the Uniroyal Borrower or at its
order or, at the request of the Uniroyal Borrower, apply to the
Obligations of the Uniroyal Borrower under the Loan Documents,
such amounts on deposit in the Collection Account, the Cash
Concentration Account and the L/C Cash Collateral Account at the
times and in the amounts specified in the Credit Agreement, or,
if such times or amounts are not specified in the Credit
Agreement, such amounts on deposit shall be released at the
Uniroyal Borrower's direction.
SECTION 9. Representations and Warranties. Each Pledgor
represents and warrants as follows:
(a)As of the Effective Date, all of the Inventory is located at
the places specified in Schedule II hereto. The chief place of
business and chief executive office of such Pledgor and the
office where such Pledgor keeps its records concerning the
Receivables and all originals of all chattel paper that evidence
Receivables, are located at the address specified opposite the
name of such Pledgor on Schedule IV. None of the Receivables is
evidenced by a promissory note or other instrument which has not
been pledged to the Agent for the ratable benefit of the Secured
Parties and delivered to the Agent pursuant to the terms of this
Agreement.
(b)Such Pledgor is the legal and beneficial owner of the
Collateral of such Pledgor free and clear of any Lien, claim,
option or rights of others except for the liens and security
interests created under this Agreement or permitted under the
Credit Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of such
Collateral (including, without limitation, general intangibles
relating to the Collateral) or listing such Pledgor or any of its
Subsidiaries or any trade names of such Pledgor or any of its
Subsidiaries as debtor is on file in any recording office, except
such as may have been filed in favor of the Agent relating to
this Agreement or such as may have been filed in connection with
other Liens permitted under the Credit Agreement.
(c)Such Pledgor has exclusive possession and control of the
Inventory, except the Inventory locations marked by an asterisk
in Schedule II.
(d)Such Pledgor has no lockbox accounts, deposit accounts,
disbursement accounts or other accounts other than (i) the
deposit accounts into which an Obligor deposits proceeds received
in respect of Inventory Receivables or Related Contracts owing to
such Pledgor (each a "Pledged Account"), (ii) the other accounts
into which such Pledgor deposits proceeds received in respect of
Inventory Receivables or Related Contracts owing to such Pledgor
(each an "Other Account") and (iii) such other accounts into
which no proceeds of Collateral are deposited (each an "Excepted
Account").
(e)The Initial Pledged Debt constitutes all of the outstanding
indebtedness owed to such Pledgor by the issuers thereof.
(f)The principal place of business and chief executive office of
such Pledgor are located at the address specified opposite the
name of such Pledgor on Schedule IV.
(g)Such Pledgor has no trade names except as set forth on
Schedule I hereto; such trade names were adopted in good faith;
and, to the best of such Pledgor's knowledge, there exist no
adverse claims against such trade names as of the Effective Date.
(h)This Agreement and the pledge of the Collateral pursuant
hereto create in favor of the Agent for the benefit of the
Secured Parties a valid and perfected first priority security
interest in the Collateral (other than as to matters of
perfection and priority of the security interest in the Pledged
Accounts and the Other Accounts) of such Pledgor, securing the
payment of the Secured Obligations of such Pledgor, and all
filings and other actions necessary or desirable to perfect and
protect such security interest have been duly taken. Such
Pledgor has not granted any security interest in the Collateral
to any other Person.
(i)No consent of any other Person and no authorization, approval
or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other third party is
required (i) for the grant by such Pledgor of the assignment and
security interest granted hereunder, for the pledge by such
Pledgor of the Collateral pursuant hereto or for the execution,
delivery or performance of this Agreement by such Pledgor, (ii)
for the perfection or maintenance of the pledge, assignment and
security interest created hereunder (including the first priority
nature of such pledge, assignment or security interest), except
for the filing of financing and continuation statements under the
Uniform Commercial Code, which financing statements shall have
been duly filed within 60 days after the Initial Extension of
Credit (or such later date as may be agreed by the Borrowers and
the Agent), or (iii) for the exercise by the Agent of its rights
provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement.
(j)The Inventory that has been produced by such Pledgor has been
produced in compliance with all requirements of the Fair Labor
Standards Act.
(k)There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
SECTION 10. Further Assurances. (a) Each Pledgor agrees that
from time to time, at the expense of such Pledgor, such Pledgor
will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or
desirable, or that the Agent may reasonably request, in order to
perfect and protect any pledge, assignment or security interest
granted or purported to be granted hereby or to enable the Agent
to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of
the foregoing, each Pledgor will: (i) at the request of the
Agent, xxxx conspicuously each document included in the Inventory
of such Pledgor and each chattel paper included in the
Receivables of such Pledgor with a legend, in form and substance
satisfactory to the Agent, indicating that such document or
chattel paper is subject to the security interest granted hereby;
(ii) if any Collateral shall be evidenced by a promissory note or
other instrument or chattel paper, at the request of the Agent,
deliver and pledge to the Agent hereunder such note or instrument
or chattel paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
satisfactory to the Agent; and (iii) execute and file such
financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or
desirable, or as the Agent may reasonably request, in order to
perfect and preserve the pledge, assignment and security
interests granted or purported to be granted hereunder.
(b)Each Pledgor hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, provided that
the Agent shall give reasonably prompt notice of any such filing
to such Pledgor. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement
where permitted by law.
(c)Each Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the
Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable
detail.
SECTION 11. As to Inventory. (a) Each Pledgor shall keep the
Inventory (other than Inventory sold in the ordinary course of
business) at any of the places therefor specified in Section 9(a)
or, upon 20 days' prior written notice to the Agent, at such
other places in a jurisdiction where all action required by
Section 10 shall have been taken with respect to the Inventory.
(b)Each Pledgor shall pay promptly when due all property and
other taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Inventory, except to the
extent not required pursuant to Section 5.01(b) of the Credit
Agreement. In producing the Inventory, each Pledgor shall comply
with all requirements of the Fair Labor Standards Act.
SECTION 12. Insurance. (a) Each Pledgor shall, at its own
expense, maintain insurance with respect to the Inventory in such
amounts, against such risks, in such form and with such insurers,
as shall be satisfactory to the Agent from time to time. Each
policy for property damage insurance with respect to Inventory
shall provide for all losses (except for losses of less than
$250,000 per occurrence) to be paid directly to the Agent. Each
such policy shall in addition (i) name the Agent as loss payee,
(ii) provide that there shall be no recourse against the Agent
for payment of premiums or other amounts with respect thereto and
(iii) provide that at least 10 days' prior written notice of
cancellation or of lapse shall be given to the Agent by the
insurer. Each Pledgor shall, if so requested by the Agent upon
an Event of Default, deliver to the Agent duplicate policies of
such insurance and, as often as the Agent may reasonably request,
a report of a reputable insurance broker with respect to such
insurance. Further, each Pledgor shall, at the request of the
Agent, duly execute and deliver instruments of assignment of such
insurance policies to comply with the requirements of Section 10
and use its best efforts to cause the insurers to acknowledge
notice of such assignment.
(b)Reimbursement under any liability insurance maintained by the
Uniroyal Borrower pursuant to this Section 12 may be paid
directly to the Person who shall have incurred liability covered
by such insurance. In case of any loss involving damage to
Inventory when subsection (c) of this Section 12 is not
applicable, the Uniroyal Borrower shall make or cause to be made
the necessary repairs to such Inventory or replacements of any
Inventory, and any proceeds of insurance maintained by the
Uniroyal Borrower pursuant to this Section 12 shall be paid to
the Uniroyal Borrower as reimbursement for the costs of such
repairs or replacements.
(c)Upon the occurrence and during the continuance of any Event of
Default or the actual or constructive total loss (in excess of
$250,000 per occurrence) of any Inventory, all insurance payments
in respect of such Inventory shall be paid to and applied by the
Agent as specified in Section 18(b).
SECTION 13. Place of Perfection; Records; Collection of
Receivables. (a) Each Pledgor shall keep its chief place of
business and chief executive office and the office where it keeps
its records concerning the Collateral, and all originals of all
chattel paper that evidence Receivables, at the location therefor
specified in Section 9(a) or, upon 20 days' prior written notice
to the Agent, at such other locations in a jurisdiction where all
actions required by Section 10 shall have been taken with respect
to the Collateral. Each Pledgor will hold and preserve such
records and chattel paper and will permit representatives of the
Agent at any reasonable time and from time to time during regular
business hours and upon reasonable prior notice to inspect and
make abstracts from such records and chattel paper.
(b) Except as otherwise provided in this subsection (b), each
Pledgor shall continue to collect in the ordinary course of its
business in a manner consistent with past practices, at its own
expense, all amounts due or to become due to such Pledgor under
the Receivables. The Agent shall have the right at any time,
upon the occurrence and during the continuance of an Event of
Default and upon written notice to the Pledgor of its intention
to do so, to notify the Obligors under any Receivables of the
assignment of such Receivables to the Agent and to direct such
Obligors to make payment of all amounts due or to become due to
such Pledgor thereunder directly to the Agent and, upon such
notification and at the expense of such Pledgor, to enforce
collection of any such Receivables, and to adjust, settle or
compromise the amount or payment thereof, in the same manner and
to the same extent as such Pledgor might have done. After
receipt by such Pledgor of the notice from the Agent referred to
in the preceding sentence and so long as such Event of Default is
continuing, (i) all amounts and proceeds (including instruments)
received by such Pledgor in respect of the Receivables shall be
received in trust for the benefit of the Agent hereunder, shall
be segregated from other funds of such Pledgor and shall be
forthwith paid over to the Agent in the same form as so received
(with any necessary endorsement) to be deposited in the
Collection Account and either (A) released to the Uniroyal
Borrower on the terms set forth in Section 8 so long as no Event
of Default shall have occurred and be continuing or (B) if an
Event of Default shall have occurred and be continuing, applied
as provided by Section 18(b) and (ii) such Pledgor shall not
adjust, settle or compromise the amount or payment of any
Receivable, release wholly or partly any Obligor thereof, or
allow any credit or discount thereon.
SECTION 14. Transfers and Other Liens. Each Pledgor agrees that
it shall not (i) sell, assign (by operation of law or otherwise)
or otherwise dispose of, or grant any option with respect to, any
of the Collateral of such Pledgor (other than sales, assignments,
options and other dispositions permitted under the terms of the
Credit Agreement) or (ii) create or suffer to exist any Lien upon
or with respect to any of the Collateral of such Pledgor, except
for the Liens created under the Collateral Documents and any
other Liens permitted under the Credit Agreement.
SECTION 15. Agent Appointed Attorney-in-Fact. Each Pledgor
hereby irrevocably appoints the Agent such Pledgor's
attorney-in-fact, with full authority in the place and stead of
such Pledgor and in the name of such Pledgor or otherwise, from
time to time after the occurrence and during the continuance of
an Event of Default in the Agent's discretion, to take any action
and to execute any instrument that the Agent may deem necessary
or advisable to accomplish the purposes of this Agreement,
including, without limitation:
(a)to obtain and adjust insurance required to be paid to the
Agent pursuant to Section 12,
(b)to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(c)to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with
clause (a) or (b) above, and
(d)to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce
compliance with the rights of the Agent with respect to any of
the Collateral.
SECTION 16. Agent May Perform. If any Pledgor fails to perform
any agreement contained herein, the Agent may, but without any
obligation to do so and without further notice, itself perform,
or cause performance of, such agreement, and the expenses of the
Agent incurred in connection therewith shall be payable by such
Pledgor under Section 19(b). The Agent agrees to notify the
Uniroyal Borrower of any such performance; provided, however,
that the failure to give such notice shall not affect the Agent's
right to perform or the validity of such performance.
SECTION 17. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by
it hereunder, the Agent shall have no duty as to any Collateral,
as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not the Agent or any other
Secured Party has or is deemed to have knowledge of such matters,
or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral
in its possession if such Collateral is accorded treatment
substantially equal to that which the Agent accords its own
property.
SECTION 18. Remedies. If any Event of Default shall have
occurred and be continuing:
(a)The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a
secured party upon default under the Uniform Commercial Code in
effect in the State of New York at such time (the "Uniform
Commercial Code") (whether or not the Uniform Commercial Code
applies to the affected Collateral) and also may (i) require any
Pledgor to, and each Pledgor hereby agrees that it will at its
expense and upon request of the Agent forthwith, assemble all or
part of the Collateral pledged by it (other than the Receivables
and the Account Collateral) as directed by the Agent and make it
available to the Agent at a place and time to be designated by
the Agent that is reasonably convenient to both parties and (ii)
without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private
sale, at any of the Agent's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the
Agent may deem commercially reasonable. Each Pledgor agrees
that, to the extent notice of sale shall be required by law, at
least ten days' notice to such Pledgor of the time and place of
any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Agent shall
not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Agent may adjourn any
public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned.
(b)Any cash held by the Agent as Collateral and all cash proceeds
received by the Agent in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral may
in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied
(after payment of any amounts payable to the Agent pursuant to
Section 19) in whole or in part by the Agent for the ratable
benefit of the Secured Parties, against all or any part of the
Secured Obligations in such order as the Agent shall elect. In
determining the amount of any such cash to be applied against the
Secured Obligations owing to the Hedge Banks other than Secured
Obligations theretofore accrued and unpaid, the Agent shall be
fully protected in relying on the Agreement Values of the Bank
Hedge Agreements. "Agreement Value" means, for any Bank Hedge
Agreement on any date of determination, the amount, if any, that
would be payable to the Hedge Bank in respect of "agreement
value" as though such Bank Hedge Agreement were terminated on
such date, calculated as provided in the International Swap
Dealers Association Inc. Code of Standard Wording, Assumptions
and Provisions for Swaps, 1992 Edition; each determination of
Agreement Value shall be made by the Agent in good faith and in
reliance on any information, including information provided by
such Hedge Bank, that it believes accurate, but without any
obligation to verify such information. Any surplus of such cash
or cash proceeds held by the Agent and remaining after payment in
full of all the Secured Obligations shall be paid over to the
Pledgors or to whomsoever may be lawfully entitled to receive
such surplus.
(c)The Agent may exercise any and all rights and remedies of the
Pledgors in respect of the Collateral.
(d)All payments received by each Pledgor in respect of the
Collateral shall be received in trust for the benefit of the
Agent, shall be segregated from other funds of such Pledgor and
shall be forthwith paid over to the Agent in the same form as so
received (with any necessary endorsement).
(e)The Agent may, without notice to the Uniroyal Borrower except
as required by law and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Secured
Obligations against the Uniroyal Borrower's Collection Account,
the Cash Concentration Account and the L/C Cash Collateral
Account or any part thereof.
SECTION 19. Indemnity and Expenses. (a) Each Pledgor agrees
to defend, protect, indemnify and hold harmless each Secured
Party from and against any and all claims, losses and liabilities
growing out of or resulting from this Agreement (including,
without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting from the Agent's or such
other Secured Party's gross negligence or willful misconduct as
determined by a final judgment of a court of competent
jurisdiction.
(b)Each Pledgor will upon demand, pay to the Agent the amount of
any and all reasonable expenses, including the reasonable fees
and expenses of its counsel and of any experts and agents, that
the Agent may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation
of, or the sale of, collection from or other realization upon,
any of the Collateral of such Pledgor, (iii) the exercise or
enforcement of any of the rights of the Agent or any other
Secured Party against such Pledgor, or (iv) the failure by such
Pledgor to perform or observe any of the provisions hereof.
(c)Without prejudice to the survival of any other agreement of
any Loan Party hereunder or under any other Loan Document, the
agreements and obligations of the Pledgors contained in this
Section 19 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under any of
the other Loan Documents.
SECTION 20. Amendments; Waivers; Etc. (a) No amendment or
waiver of any provision of this Agreement, and no consent to any
departure by any Pledgor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which
given. No failure on the part of the Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the
exercise of any other right.
(b)Upon the execution and delivery by any Person of a security
agreement supplement in substantially the form of Exhibit A
hereto (each a "Uniroyal Security Agreement Supplement"),
(i) such Person shall be referred to as an "Additional Pledgor"
and shall be and become a Pledgor and each reference in this
Agreement to "Pledgor" shall also mean and be a reference to such
Additional Pledgor, and (ii) the annexes attached to each
Uniroyal Security Agreement Supplement shall be incorporated into
and become a part of and supplement Schedules I, II and III
hereto, and the Collateral Agent may attach such annexes as
supplements to such Schedules; and each reference to such
Schedules shall mean and be a reference to such Schedules as
supplemented pursuant hereto.
SECTION 21. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic or telex communication) and,
if to any Pledgor, mailed, telecopied, telegraphed, telexed or
delivered to it, addressed to it c/o Uniroyal Corp. at its
address at World Headquarters, Xxxxxx Road, Middlebury, CT
06749, Attention: Chief Financial Officer, and if to the Agent,
mailed, telecopied, telegraphed, telexed or delivered to it,
addressed to it at the address of the Agent specified in the
Credit Agreement, or as to any party, at such other address as
shall be designated by such party in a written notice to each
other party complying as to delivery with the terms of this
Section. All such notices and other communications shall (a)
when mailed, be effective three Business Days after the same is
deposited in the mails, (b) when mailed for next day delivery by
a reputable freight company or reputable overnight courier
service, be effective one Business Day thereafter, and (c) when
sent by telegraph, telecopier or telex, be effective when the
same is confirmed by telephone, telecopier confirmation or return
telecopy or telex answerback, respectively.
SECTION 22. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until
the Collateral Release Date, (b) be binding upon each Pledgor,
its successors and assigns and (c) inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the
Secured Parties and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause
(c), any Lender Party may assign or otherwise transfer all or any
portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held
by it) to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to
such Lender Party herein or otherwise, in each case as provided
in Section 8.07 of the Credit Agreement. No Pledgor shall have
the right to assign its rights hereunder or any interest herein
without the prior written consent of the Secured Parties.
SECTION 23. Release and Termination. (a) Upon any sale, lease,
transfer or other disposition of any item of Collateral of any
Pledgor, in accordance with the terms of the Loan Documents, the
Agent will, at such Pledgor's expense, execute and deliver to
such Pledgor such documents as such Pledgor shall reasonably
request to evidence the release of such item of Collateral from
the assignment and security interest granted hereby; provided,
however, that (i) at the time of such request and such release no
Event of Default shall have occurred and be continuing and
(ii) the Uniroyal Borrower shall have delivered to the Agent, at
least ten Business Days prior to the date of the proposed
release, a written request for release describing the item of
Collateral and the terms of the sale, lease, transfer or other
disposition in reasonable detail, including the price thereof and
any expenses in connection therewith, together with a form of
release for execution by the Agent and a certification by the
Uniroyal Borrower to the effect that the transaction is in
compliance with the Loan Documents and as to such other matters
as the Agent may request.
(b)Upon the Collateral Release Date, the pledge, assignment and
security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the respective Pledgor. Upon
any such termination or release, the Agent will, at such
Pledgor's expense, execute and deliver to such Pledgor such
documents as such Pledgor shall reasonably request to evidence
such termination.
SECTION 24. Security Interest Absolute. The Obligations of each
Pledgor hereunder are independent of the Obligations of any other
Loan Party under the Loan Documents, and a separate action or
actions may be brought or prosecuted against each Pledgor whether
action is brought against any other Loan Party or whether any
other Loan Party is joined in any such action or actions. All
rights of the Collateral Agent and security interests hereunder,
and all obligations of each Pledgor hereunder, shall be absolute
and unconditional, irrespective of, and each Pledgor hereby
irrevocably waives any defenses it may now or hereafter have in
any way relating to, any or all of the circumstances described in
the Guaranties or any other circumstance that might constitute a
discharge available to, or a discharge of, any Borrower or any
Guarantor.
This Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the
Secured Obligations is rescinded or must otherwise be returned by
any Secured Party or by any other Person upon the insolvency,
bankruptcy or reorganization of any Loan Party or otherwise, all
as though such payment had not been made.
SECTION 25. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery
of an executed counterpart of a signature page to this Agreement
by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 26. Governing Law; Terms. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York, except to the extent that the validity or
perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed
by the laws of a jurisdiction other than the State of New York.
Unless otherwise defined herein or in the Credit Agreement, terms
used in Article 9 of the Uniform Commercial Code are used herein
as therein defined.
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
XXXXXXXXX, INC.
By
Title:
XXXXXXXXX INTERNATIONAL COMPANY
By
Title:
LOKAR ENTERPRISES, INC.
By
Title:
TRACE CHEMICALS, INC.
By
Title:
UNIROYAL CHEMICAL BRAZIL HOLDING, INC.
By
Title:
UNIROYAL CHEMICAL COMPANY,
INC.
By
Title:
UNIROYAL CHEMICAL CORPORATION
By
Title:
UNIROYAL CHEMICAL EXPORT
LIMITED
By
Title:
UNIROYAL CHEMICAL INTERNATIONAL
COMPANY
By
Title:
UNIROYAL CHEMICAL LEASING
COMPANY, INC.
By
Title:
SCHEDULE I
TO THE UNIROYAL SECURITY AGREEMENT
TRADE NAMES
Uniroyal Chemical Company, Inc. only sells as Uniroyal Chemical
Company, Inc.
SCHEDULE II
TO THE UNIROYAL SECURITY AGREEMENT
LOCATIONS OF INVENTORY
SCHEDULE III
TO THE UNIROYAL SECURITY AGREEMENT
PLEDGED DEBT
Debt of the Uniroyal Borrower and the Uniroyal Guarantors
evidenced by the intercompany promissory note dated
August 21, 1996 made by CK Holding Corporation, CNK
Disposition Corp., Crompton & Xxxxxxx Colors Incorporated,
Crompton & Xxxxxxx Corporation, Crompton & Xxxxxxx Overseas
Corporation, Xxxxx-Standard Corporation, Ingredient Technology
Corporation, Kem Manufacturing Corporation, Xxxxxxxxx, Inc.,
Xxxxxxxxx International Company, Lokar Enterprises, Inc., Trace
Chemicals, Inc., Uniroyal Chemical Brazil Holding, Inc., Uniroyal
Chemical Company, Inc., Uniroyal Chemical Corporation, Uniroyal
Chemical Export Limited, Uniroyal Chemical International Company,
Uniroyal Chemical Leasing Company Inc. and Uniroyal Chemical Ltd.
SCHEDULE IV
TO THE UNIROYAL SECURITY AGREEMENT
CHIEF EXECUTIVE OFFICES OF PLEDGORS
Uniroyal Chemical Corporation Lokar Enterprises, Inc.
c/o Uniroyal Chemical Company, c/o Uniroyal Chemical
Inc. Company, Inc.
Xxxxxx Xxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Fed. Tax ID #: 00-0000000
Xxxxxxxxx International Company Uniroyal Chemical Company, Inc.
c/x Xxxxxxxxx, Inc. Xxxxxx Road
0000 Xxxxxxx Xxxx Xxxxxxxxxx, XX 00000
Suite 400 Fed. Tax ID #: 00-0000000
Xxxxx, XX 00000
Fed. Tax ID #: 00-0000000 Xxxxxxxxx, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Uniroyal Chemical Brazil Holding, Inc. Xxxxx, XX 00000
c/o Uniroyal Chemical Company, Inc. Fed. Tax ID #: 00-0000000
Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000 Trace Chemicals, Inc.
00-0000000 000 Xxxxxxxx Xxxxx
Fed. Tax ID #: 00-0000000 Xxxxx, XX 00000
Fed. Tax ID #: 00-0000000
Uniroyal Chemical Export Limited
c/o Uniroyal Chemical Company, Inc.
Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Fed. Tax ID #: 00-0000000
Uniroyal Chemical International Company
c/x Xxxxxxxxx, Inc.
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxx, XX 00000
Fed. Tax ID #: 00-0000000
Uniroyal Chemical Leasing Company, Inc.
c/o Uniroyal Chemical Company, Inc.
Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
EXHIBIT A TO THE UNIROYAL SECURITY AGREEMENT
FORM OF UNIROYAL SECURITY AGREEMENT SUPPLEMENT
Citicorp USA, Inc., as Agent
under the Credit Agreement
referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 [Date]
Attention: Xxxxxx Xxxxxx
Uniroyal Security Agreement dated as of August 21, 1996
made by Uniroyal Chemical Company, Inc. and the other
Pledgors to Citicorp USA, Inc., as Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Uniroyal Security
Agreement (such Uniroyal Security Agreement, as in effect on the
date hereof and as it may hereafter be amended, modified or
otherwise supplemented from time to time, being the "Uniroyal
Security Agreement"). The terms defined in the Uniroyal
Security Agreement (or in the Credit Agreement referred to
therein) and not otherwise defined herein are used herein as
therein defined.
The undersigned hereby agrees, as of the date first above
written, to become a Pledgor under the Uniroyal Security
Agreement as if it were an original party thereto and agrees
that each reference in the Uniroyal Security Agreement to
"Pledgor" shall also mean and be a reference to the undersigned.
The undersigned hereby assigns and pledges to the Agent for the
ratable benefit of the Secured Parties, and hereby grants to the
Agent for the ratable benefit of the Secured Parties as security
for the Secured Obligations a lien on and security interest in,
all of the right, title and interest of the undersigned, whether
now owned or hereafter acquired, in and to the Collateral owned
by the undersigned, including, but not limited to, the property
listed on Annex I hereto. Schedules I, II and III to the
Uniroyal Security Agreement are hereby supplemented by Annexes
I, II and III hereto, respectively. The undersigned hereby
certifies that such Annexes have been prepared by the
undersigned in substantially the form of Schedules I, II and III
to the Uniroyal Security Agreement and are accurate and complete
as of the date hereof.
The undersigned hereby makes each representation and warranty
set forth in Section 9 of the Uniroyal Security Agreement (as
supplemented by the attached Annexes) to the same extent as each
other Pledgor and hereby agrees to be bound as a Pledgor by all
of the terms and provisions of the Uniroyal Security Agreement
to the same extent as each other Pledgor.
This Uniroyal Security Agreement Supplement shall be governed
by, and construed in accordance with, the laws of the State of
New York.
Very truly yours,
[NAME OF ADDITIONAL
PLEDGOR]
By
Title:
Address of Chief Executive
Office and for Notices:
[Address]
