EXHIBIT 10.3
GENERAL SECURITY AGREEMENT
This General Security Agreement ("Agreement") dated August 27, 2001 is
by RBX Industries, Inc., a Delaware corporation ("Borrower") in favor of
Congress Financial Corporation, a Delaware corporation, in its capacity as
collateral agent pursuant to the Collateral Agency Agreement (as hereinafter
defined) acting for and on behalf of Congress and the Note Trustee, each as
hereinafter defined (in such capacity, together with any successor or
replacement collateral agent, "Secured Party").
W I T N E S S E T H:
WHEREAS, Congress Financial Corporation ("Congress") has entered or is
about to enter into financing arrangements with Borrower, pursuant to which
Congress may make loans and provide other financial accommodations to Borrower
as set forth in the Amended and Restated Loan Agreement, dated of even date
herewith, by and among Congress, RBX Corporation ("Guarantor") and Borrower (as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, the "Loan Agreement") and the other
agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto, including,
but not limited to, this Agreement (all of the foregoing, together with the Loan
Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the "Congress Agreements"); and
WHEREAS, Guarantor, the parent corporation of Borrower, has issued its
12% Senior Secured Notes due 2006 (collectively, the "Senior Notes") pursuant to
the Indenture, dated even date herewith, by and among State Street Bank and
Trust Company, in its capacity as trustee for the holders of the Senior Notes
(in such capacity, "Note Trustee"), Guarantor, as Issuer and Borrower, as
guarantor (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the "Indenture"), and the
other agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto (all of the
foregoing, together with the Indenture and the Senior Notes, as the same now
exist or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, being collectively referred to herein as the "Note
Agreements"); and
WHEREAS, Congress and the Note Trustee, on behalf of itself and the
holders of the Senior Notes (collectively, "Lenders") have authorized and
appointed Secured Party to act for and on behalf of each of them as collateral
agent as set forth in the Intercreditor and Collateral Agency Agreement, dated
of even date herewith, by and among Note Trustee on behalf of the holders of the
Senior Notes, Congress and Secured Party, as acknowledged and agreed to by
Borrower and Guarantor (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, the "Collateral
Agency Agreement"); and
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS
All terms used herein which are defined in Article 1 or Article 9 of
the UCC as in effect on the date hereof shall have the meanings given therein
unless otherwise defined in this Agreement. All references to the plural herein
shall also mean the singular and to the singular shall also mean the plural
unless the context otherwise requires. All references to Borrower, Secured Party
and Lenders pursuant to the definitions set forth in the recitals hereto, or to
any other person herein, shall include their respective successors and assigns.
The words "hereof", "herein", "hereunder", "this Agreement" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not any particular provision of this Agreement and as this Agreement now exists
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced. The word "including" when used in this Agreement shall mean
"including, without limitation". Subject to the terms of the Collateral Agency
Agreement, an Event of Default shall exist or continue or be continuing until
such Event of Default is waived in accordance with Section 5.3 herein or is
cured in a manner satisfactory to Secured Party, if such Event of Default is
capable of being cured as determined by Secured Party. Any accounting term used
herein unless otherwise defined in this Agreement shall have the meanings
customarily given to such term in accordance with GAAP. For purposes of this
Agreement, the following terms shall have the respective meanings given to them
below:
1.1 "Accounts" shall mean all present and future rights of Borrower to
payment of a monetary obligation, whether or not earned by performance, (a) for
property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed, (b) for services rendered or to be rendered, (c) for a
policy of insurance issued or to be issued, and (d) for a secondary obligation
incurred or to be incurred.
1.2 "Bankruptcy Code" shall mean the United States Bankruptcy Code,
being Title 11 of the United States Code, as the same now exists or may from
time to time hereafter be amended, modified, recodified or supplemented,
together with all official rules, regulations and interpretations thereunder or
related thereto.
1.3 "Bankruptcy Court" shall mean the United States Bankruptcy Court
for the Western District of Virginia, Roanoke Division.
1.4 "Benefit Plan" shall mean an employee benefit plan (as defined in
Section 3(3) of ERISA) which Borrower sponsors, maintains, or to which it makes,
is making, or is obligated to make contributions, or in the case of a
Multiemployer Plan has made contributions at any time during the immediately
preceding six (6) plan years.
- 2 -
1.5 "Blocked Accounts" shall mean the blocked accounts and lockboxes
and related blocked accounts established and maintained by Borrower at its
expense.
1.6 "Borrower" shall mean RBX Industries, Inc. (formerly known as
Rubatex Corporation), a Delaware corporation, as successor by merger to each of
the Chapter 11 Borrowers (other than Rubatex) and Chapter 11 Guarantors (other
than RBX Corp. and RBX Group) and the successor upon conclusion of the Chapter
11 Cases pursuant to the Confirmation Order, and its successors and assigns.
1.7 "Chapter 11 Borrowers" shall mean, collectively, each of the
following (together with their respective successors and assigns): (a) Rubatex
Corporation, as debtor and debtor-in-possession, a Delaware corporation
("Rubatex"), (b) Xxxxxxxx Manufacturing Company, Inc., as debtor and
debtor-in-possession, a Delaware corporation, (c) OleTex, Inc., as debtor and
debtor-in-possession, a Delaware corporation, (d) Midwest Rubber Custom Mixing
Corp., as debtor and debtor-in-possession, a Delaware corporation, and (e)
Xxxxxx-Xxxxx Rubber Custom Mixing Corp., as debtor and debtor-in-possession, a
Delaware corporation; each sometimes being referred to herein individually as a
"Chapter 11 Borrower".
1.8 "Chapter 11 Cases" shall mean the Chapter 11 Cases of Chapter 11
Borrowers and Chapter 11 Guarantors under the Bankruptcy Code referred to as In
re RBX Corporation, et al., Case No. 0-00-00000 (WRS), Jointly Administered,
currently pending in the Bankruptcy Court.
1.9 "Chapter 11 Guarantors" shall mean, collectively, the following
(together with their respective successors and assigns: (a) RBX Corporation, as
debtor and debtor-in-possession, a Delaware corporation ("RBX Corp."), (b) RBX
Group, Inc., as debtor and debtor-in-possession, a Delaware corporation ("RBX
Group"), (c) UPR Disposition, Inc., as debtor and debtor-in-possession, a
Delaware corporation, (d) Universal Rubber Company, as debtor and
debtor-in-possession, a Delaware corporation, and (e) Waltex Corporation, as
debtor and debtor-in-possession, a Delaware Corporation; each sometimes being
referred to herein individually as a "Chapter 11 Guarantor".
1.10 "Code" shall mean the Internal Revenue Code of 1986, as the same
now exists or may from time to time hereafter be amended, modified, recodified
or supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
1.11 "Collateral Agency Agreement" shall mean the Intercreditor and
Collateral Agency Agreement, dated of even date herewith, by and among Note
Trustee on behalf of the holders of the Senior Notes, Congress and Secured
Party, as acknowledged and agreed to by Borrower and Guarantor, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
1.12 "Confirmation Order" shall mean the Order and Judgment Confirming
the Second Amended Joint Plan of Reorganization of RBX Group, Inc. and its
Subsidiaries dated July 12, 2001, issued by the Bankruptcy Court and entered and
confirmed on July 12, 2001 in the Chapter 11 Cases.
- 3 -
1.13 "Congress" shall mean Congress Financial Corporation and its
successors and assigns.
1.14 "Congress Agreements" shall mean, collectively, the Loan
Agreement, this Agreement and all notes, guarantees, security agreements and
other agreements, documents and instruments now or at any time hereafter
executed and/or delivered by Borrower, Guarantor or any Obligor in connection
with the Loan Agreement, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
1.15 "Deposit Account Control Agreement" shall mean a written
agreement, in form and substance satisfactory to Secured Party, by and among
Secured Party, Borrower and the bank at which any deposit account of Borrower is
at any time maintained which provides that such bank will comply with
instructions originated by Secured Party directing disposition of the funds in
the deposit account without further consent by Borrower and such other terms and
conditions as Secured Party may require, including as to any such agreement with
respect to any Blocked Account, providing that all items received or deposited
in such Blocked Account are the property of Secured Party, that the bank has no
lien upon, or right to setoff against, the Blocked Account, the items received
for deposit therein, or the funds from time to time on deposit therein and that
the bank will wire, or otherwise transfer, in immediately available funds, on a
daily basis, all funds received or deposited into the Blocked Accounts to the
Secured Party Payment Account.
1.16 "Effective Date" shall mean the date after which the Confirmation
Order shall have become a Final Order and that all of the conditions precedent
to the effectiveness of the Plan shall have been satisfied as determined by
Secured Party in good faith, or with the consent of Secured Party, waived in
accordance with the terms thereof.
1.17 "Equipment" shall mean all of Borrower's now owned and hereafter
acquired equipment, machinery, computers and computer hardware and software
(whether owned or licensed), vehicles, tools, furniture, fixtures, all
attachments, accessions and property now or hereafter affixed thereto or used in
connection therewith, and substitutions and replacements thereof, wherever
located.
1.18 "ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974, as the same now exists or may hereafter from time to time
be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.
1.19 "ERISA Affiliate" shall mean any person required to be aggregated
with Borrower or Guarantor or any Subsidiary of Borrower or Guarantor under
Sections 414(b), 414(c), 414(m) or 414(o) of the Code.
1.20 "Event of Default" shall have the meaning set forth in Section 4.1
hereof.
- 4 -
1.21 "Existing Agreements" shall have the meaning assigned thereto in
the Loan Agreement.
1.22 "Final Order" shall mean a judgement, order, ruling or other
decree issued and entered by the Bankruptcy Court or by any state or other
federal court or other tribunal which judgment, order, ruling or other decree
has not been reversed, stayed, modified or amended and as to which (a) the time
to appeal or petition for review, rehearing or certiorari has expired and as to
which no appeal or petition for review, rehearing or certiorari is pending or
(b) any appeal or petition for review, rehearing or certiorari has been finally
decided and no further appeal or petition for review, review, rehearing or
certiorari can be taken for granted.
1.23 "Financing Agreements" shall mean, collectively, the Congress
Agreements and the Note Agreements.
1.24 "Financing Order" shall mean the Financing Order pursuant to
Sections 361, 363 and 364(c) and (d) of the Bankruptcy Code and Rule 4001 of the
Federal Rules of Bankruptcy Procedure (i) Authorizing Debtors to Obtain
Post-Petition Financing, Granting Senior Liens and Priority Administrative
Expense Status, Modifying the Automatic Stay, Authorizing the Debtors to Enter
into Agreements with Congress Financial Corporation, as Lender, (ii) Granting
Adequate Protection and Administrative Expense Priority to the Trustee for the
Senior Secured Noteholders and (iii) Authorizing Debtors to Indefeasibly Pay in
Full the Secured Claims Asserted by Pre-Petition Secured Lenders entered by the
Bankruptcy Court on April 19, 2001 in the Chapter 11 Cases.
1.25 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Boards which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Section [9.14] of the Loan Agreement, GAAP shall be determined
on the basis of such principles in effect on the date hereof and consistent with
those used in the preparation of the audited financial statements delivered to
Secured Party prior to the date hereof.
1.26 "General Intangibles" shall mean all of Borrower's now owned or
hereafter existing or acquired contracts, contract rights, licenses, customer
lists and other general intangibles of any kind, nature or description,
including any tax and duty refunds, goodwill, licenses, whether as licensor or
licensee, choses in action and other claims and existing and future leasehold
interests in equipment, real estate and fixtures, Intellectual Property,
interests in general partnerships or limited liability companies, including
NeoCork Technologies, L.L.C., agreements or arrangements with sales agents,
distributors or the like and/or consignees, warehouses or other third persons in
possession of any of the Inventory or any other Collateral, the Blocked
Accounts, any other deposit accounts, investment accounts or securities
accounts, loans by Secured Party or any Lender to any Affiliates of Borrower,
letters of credit supporting payment of any Receivables or other obligations
included within the Collateral, documents which evidence rights to Inventory or
any other Collateral, instruments evidencing obligations in respect of any
Receivables or other
- 5 -
obligations included within the Collateral, rights and claims against shippers
and carriers, indemnification rights, guaranty or warranty claims with respect
to any Receivables, Inventory or other Collateral, any funds which may become
payable to Borrower in connection with the termination of any Benefit Plan or
other employee benefit plan and any other amounts payable to Borrower from any
Benefit Plan or other employee benefit plan, business interruption insurance and
proceeds thereof, casualty or any similar types of insurance and any proceeds
thereof and proceeds of insurance covering the lives of employees on which
Borrower is a beneficiary.
1.27 "Governmental Authority" shall mean any nation or government, any
state, province, or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
1.28 "Guarantor" shall mean RBX Corporation, a Delaware corporation, as
successor by merger to RBX Group, Inc., and the successor upon the conclusion of
the Chapter 11 Cases pursuant to the Confirmation Order, and its successors and
assigns.
1.29 "Indenture" shall mean the Indenture, dated on or about the date
hereof, by and among the Note Trustee, Guarantor, as Issuer and Borrower, as
guarantor, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.30 "Information Certificate" shall mean the Information Certificate
with respect to Borrower and Guarantor constituting Exhibit A hereto containing
material information with respect to Borrower and Guarantor, its business and
assets provided by or on behalf of Borrower or Guarantor to Secured Party in
connection with the preparation of this Agreement and the other Financing
Agreements and the financing arrangements provided for in the Loan Agreement.
1.31 "Intellectual Property" shall mean all of Borrower's now owned and
hereafter arising or acquired: patents, patent rights, patent applications,
copyrights, works which are the subject matter of copyrights, copyright
registrations, trademarks, trade names, trade styles, trademark and service xxxx
applications, and licenses and rights to use any of the foregoing; all
extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing; all rights to xxx for past,
present and future infringement of any of the foregoing; inventions, trade
secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys,
reports, manuals, and operating standards; goodwill; customer and other lists in
whatever form maintained; and trade secret rights, copyright rights, rights in
works of authorship, and contract rights relating to computer software programs,
in whatever form created or maintained.
1.32 "Inventory" shall mean all of Borrower's now owned and hereafter
existing or acquired goods held for sale or lease, or furnished or to be
furnished under contracts of service or consumed in Borrower's business and all
other inventory of whatsoever kind or nature, wherever located, including raw
materials, intermediates, work-in-process, packaging materials, semi-finished
inventory, finished goods, manufacturing supplies and spare parts.
- 6 -
1.33 "Investment Property Control Agreement" shall mean an agreement in
writing, in form and substance satisfactory to Secured Party, by and among
Secured Party, Borrower and any securities intermediary, commodity intermediary
or other person who has custody, control or possession of any investment
property of Borrower acknowledging that such securities intermediary, commodity
intermediary or other person has custody, control or possession of such
investment property on behalf of Secured Party, that it will comply with
entitlement orders originated by Secured Party with respect to such investment
property, or other instructions of Secured Party, or (as the case may be) apply
any value distributed on account of any commodity contract as directed by
Secured Party, in each case, without the further consent of Borrower and
including such other terms and conditions as Secured Party may require.
1.34 "Lenders" shall mean, collectively, Congress and the Note Trustee;
each sometimes being referred to herein individually as a "Lender".
1.35 "Loan Agreement" shall mean the Amended and Restated Loan
Agreement, dated of even date herewith, by and among Congress, Borrower and
Guarantor, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.36 "Multiemployer Plan" shall mean a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by Borrower or
any ERISA Affiliate.
1.37 "Note Agreements" shall mean, collectively, the Indenture, the
Senior Notes and the other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.38 "Note Trustee" shall mean State Street Bank and Trust Company, in
its capacity as trustee for the holders of the Senior Notes under the Indenture
and any successor, replacement or additional trustee and their respective
successors and assigns.
1.39 "Obligations" shall mean, collectively, the Pre-Effective Date
Obligations and the Post-Effective Date Obligations.
1.40 "Obligor" shall mean any other guarantor, endorser, acceptor,
surety or other person liable on or with respect to the Obligations or who is
the owner of any property which is security for the Obligations (including
Guarantor), other than Borrower.
1.41 "Person" or "person" shall mean any individual, sole
proprietorship, partnership, corporation (including any corporation which elects
subchapter S status under the Internal Revenue Code of 1986, as amended),
limited liability company, limited liability partnership, business trust,
unincorporated association, joint stock corporation, trust, joint venture or
other entity or any government or any agency or instrumentality or political
subdivision thereof.
- 7 -
1.42 "Plan" shall mean the Second Amended Joint Plan of Reorganization
of RBX Group, Inc. and its Subsidiaries dated May 11, 2001, in the form filed
with and confirmed by the Bankruptcy Court on July 12, 2001 and any amendments,
supplements or modifications thereto.
1.43 "Post-Effective Date Obligations" shall mean any and all
obligations, liabilities and indebtedness of every kind, nature and description
owing by Borrower to Secured Party or any Lender arising on and after the
Effective Date, including principal, interest, charges, fees, costs and
expenses, however evidenced, whether as principal, surety, endorser, guarantor
or otherwise, whether arising under this Agreement, the Existing Agreements or
any of the other Financing Agreements, whether now existing or hereafter
arising, whether arising before, during or after the initial or any renewal term
of the Loan Agreement or after the commencement of any case with respect to
Borrower under the Bankruptcy Code or any similar statute (including, without
limitation, the payment of interest and other amounts which would accrue and
become due but for the commencement of such case, whether or not such amounts
are allowed or allowable in whole or in part in such case), whether direct or
indirect, absolute or contingent, joint or several, due or not due, primary or
secondary, liquidated or unliquidated, secured or unsecured, and however
acquired by Secured Party or any Lender.
1.44 "Pre-Effective Date Obligations" shall mean any and all
obligations, liabilities and indebtedness of every kind, nature and description
owing by Chapter 11 Borrowers and Borrower to Secured Party or any Lender and/or
any of their respective affiliates arising prior to the Effective Date,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
arising under the Existing Agreements, now existing, whether arising before,
during or after the initial or any renewal term of the Loan and Security
Agreement, dated April 20, 2001, by and among Congress, Chapter 11 Borrowers and
Chapter 11 Guarantors or during the Chapter 11 Cases, or before, during or after
the confirmation of any plan of reorganization in the Chapter 11 Cases (and
including any principal, interest, fees, costs, expenses and other amounts owed
to Secured Party or any Lender by any Chapter 11 Borrower in the Chapter 11
Cases or any similar case or proceeding), whether direct or indirect, absolute
or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, and however acquired by
Secured Party or any Lender.
1.45 "Real Property" shall mean all now owned and hereafter acquired
real property of Borrower, including leasehold interests, together with such
Borrower's interests in all buildings, structures, and other improvements
located thereon and all licenses, easements and appurtenances relating thereto,
wherever located.
1.46 "Receivables" shall mean all of the following now owned or
hereafter arising or acquired property of Borrower: (a) all Accounts; (b) all
interest, fees, late charges, penalties, collection fees and other amounts due
or to become due or otherwise payable in connection with any Account; (c) all
payment intangibles of Borrower and other contract rights, chattel paper,
instruments, notes and other forms of obligations owing to Borrower, whether
from the sale and lease of goods or other property, licensing of any property
(including General Intangibles), rendition of services or from loans or advances
by Borrower to or for the benefit of any third
- 8 -
person (including loans or advances to any Affiliates or Subsidiaries of
Borrower) or otherwise associated with any Accounts, Inventory, other
Receivables or General Intangibles of Borrower (including, without limitation,
choses in action, causes of action, tax refunds, tax refund claims, any funds
which may become payable to Borrower in connection with the termination of any
Benefit Plan or other employee benefit plan and any other amounts payable to
Borrower from any Benefit Plan or other employee benefit plan, rights and claims
against carriers and shippers, rights to indemnification, business interruption
insurance and proceeds thereof, casualty or any similar types of insurance and
any proceeds thereof and proceeds of insurance covering the lives of employees
on which Borrower is beneficiary); and (d) credit and other insurance with
respect to any Receivables or Inventory.
1.47 "Records" shall mean all of Borrower's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Collateral or any account
debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrower with respect to the
foregoing maintained with or by any other person).
1.48 "Secured Party" shall mean Congress Financial Corporation, in its
capacity as collateral agent pursuant to the Collateral Agency Agreement and any
successor, replacement or additional collateral agent and their respective
successors and assigns.
1.49 "Senior Notes" shall mean, collectively, the 12% Senior Secured
Notes due 2006 issued by Guarantor in the aggregate principal amount of
$25,000,000, pursuant to the Indenture, as such notes now exist or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced.
1.50 "Secured Party Payment Account" shall mean such bank account of
Secured Party as Secured Party may from time to time specify for purposes of
receiving payments in respect of the Obligations.
1.51 "UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York on the date hereof.
SECTION 2. GRANT OF SECURITY INTEREST
2.1 To secure payment and performance of all Obligations, Borrower
hereby grants to Secured Party for the benefit of Lenders a continuing security
interest in, a lien upon, and a right of set off against, and hereby assigns to
Secured Party as security, and hereby confirms, reaffirms and restates the prior
grant thereof to Secured Party pursuant to the Existing Agreements and the
Financing Order, all of the property and interests in property of Borrower,
whether now owned or hereafter acquired or existing and including whether owned
or arising prior to the Effective Date or thereafter, and wherever located
(together with all other collateral security for the Obligations at any time
granted to or held by Secured Party, collectively, the "Collateral"), including:
- 9 -
(a) all Accounts;
(b) all goods, including, without limitation, all Inventory
and Equipment;
(c) General Intangibles and all other chattel paper,
documents, instruments, investment property (including securities, whether
certificated or uncertificated, securities accounts, security entitlements,
commodity contracts or commodity accounts);
(d) all present and future claims, rights, interests, assets
and properties recovered by or on behalf of Borrower or any trustee of Borrower
(whether in any of the Chapter 11 Cases or any subsequent case to which any of
the Chapter 11 Cases is converted), including, without limitation, all such
property recovered as a result of transfers or obligations avoided or actions
maintained or taken pursuant to, inter alia, Sections 542, 545, 548, 549, 550,
552 and 553 of the U.S. Bankruptcy Code;
(e) all Real Property and fixtures;
(f) all chattel paper (including all tangible and electronic
chattel paper);
(g) all instruments (including all promissory notes);
(h) all documents;
(i) all deposit accounts;
(j) all letters of credit, banker's acceptances and similar
instruments and including all letter-of-credit rights;
(k) all supporting obligations and all present and future
liens, security interests, rights, remedies, title and interest in, to and in
respect of Receivables and other Collateral, including (i) rights and remedies
under or relating to guaranties, contracts of suretyship, letters of credit and
credit and other insurance related to the Collateral, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other Collateral, including returned, repossessed
and reclaimed goods, and (iv) deposits by and property of account debtors or
other persons securing the obligations of account debtors;
(l) all (i) investment property (including securities, whether
certificated or uncertificated, securities accounts, security entitlements,
commodity contracts or commodity accounts) and (ii) monies, credit balances,
deposits and other property of Borrower now or hereafter held or received by or
in transit to Secured Party or any Lender or any of their respective affiliates
or at any other depository or other institution from or for the account of
Borrower, whether for safekeeping, pledge, custody, transmission, collection or
otherwise;
- 10 -
(m) all commercial tort claims, including, without limitation,
those identified in the Information Certificate, if any;
(n) to the extent not otherwise described above, all
Receivables;
(o) all Records; and
(p) all products and proceeds of the foregoing, in any form,
including insurance proceeds and all claims against third parties for loss or
damage to or destruction of or other involuntary conversion of any kind or
nature of any or all of the other Collateral.
2.2 Notwithstanding anything to the contrary set forth in Section 2.1
above, the types or items of Collateral described in such Section shall not
include any rights or interests in any contract, lease, permit, license, charter
or license agreement covering real or personal property, as such, if under the
terms of such contract, lease, permit, license, charter or license agreement, or
applicable law with respect thereto, the valid grant of a security interest or
lien therein to Secured Party is prohibited and such prohibition has not been or
is not waived or the consent of the other party to such contract, lease, permit,
license, charter or license agreement has not been or is not otherwise obtained
or under applicable law such prohibition cannot be waived; provided, that, the
foregoing exclusion shall in no way be construed (a) to apply if any such
prohibition is unenforceable under Section 9-406 of the UCC or other applicable
law or (b) so as to limit, impair or otherwise affect Secured Party's
unconditional continuing security interests in and liens upon any rights or
interests of any Borrower in or to monies due or to become due under any such
contract, lease, permit, license, charter or license agreement (including any
Receivables).
2.3 Perfection of Security Interests.
(a) Borrower irrevocably and unconditionally authorizes
Secured Party (or its agent) to file at any time and from time to time such
financing statements with respect to the Collateral naming Secured Party or its
designee as the secured party and Borrower as debtor, as Secured Party may
require, and including any other information with respect to Borrower or
otherwise required by part 5 of Article 9 of the Uniform Commercial Code of such
jurisdiction as Secured Party may determine, together with any amendment and
continuations with respect thereto, which authorization shall apply to all
financing statements filed on, prior to or after the date hereof. Borrower
hereby ratifies and approves all financing statements naming Secured Party or
its designee as secured party and Borrower as debtor with respect to the
Collateral (and any amendments with respect to such financing statements) filed
by or on behalf of Secured Party prior to the date hereof and ratifies and
confirms the authorization of Secured Party to file such financing statements
(and amendments, if any). In the event that the description of the collateral in
any financing statement naming Secured Party or its designee as the secured
party and Borrower as debtor includes assets and properties of Borrower that do
not at any time constitute Collateral, whether hereunder, under any of the other
Financing Agreements or otherwise, the filing of such financing statement shall
nonetheless be deemed authorized by Borrower to the extent of the Collateral
included in such description and it shall not render the financing statement
- 11 -
ineffective as to any of the Collateral or otherwise affect the financing
statement as it applies to any of the Collateral. Borrower hereby authorizes
Secured Party to adopt on behalf of Borrower any symbol required for
authenticating any electronic filing. In no event shall Borrower at any time
file, or permit or cause to be filed, any correction statement or termination
statement with respect to any financing statement (or amendment or continuation
with respect thereto) naming Secured Party or its designee as secured party and
Borrower as debtor.
(b) Borrower does not have any chattel paper (whether tangible
or electronic) or instruments as of the date hereof, except as set forth in the
Information Certificate. In the event that Borrower shall be entitled to or
shall receive any chattel paper or instrument after the date hereof, Borrower
shall promptly notify Secured Party thereof in writing. Promptly upon the
receipt thereof by or on behalf of Borrower (including by any agent or
representative), Borrower shall deliver, or cause to be delivered to Secured
Party, all tangible chattel paper and instruments that Borrower or may at any
time acquire, accompanied by such instruments of transfer or assignment duly
executed in blank as Secured Party may from time to time specify, in each case
except as Secured Party may otherwise agree. At Secured Party's option, Borrower
shall, or Secured Party may at any time on behalf of Borrower, cause the
original of any such instrument or chattel paper to be conspicuously marked in a
form and manner acceptable to Secured Party with the following legend referring
to chattel paper or instruments as applicable: "This [chattel paper][instrument]
is subject to the security interest of Congress Financial Corporation, as
Collateral Agent and any sale, transfer, assignment or encumbrance of this
[chattel paper][instrument] violates the rights of such secured party."
(c) In the event that Borrower shall at any time hold or
acquire an interest in any electronic chattel paper or any "transferable record"
(as such term is defined in Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction), Borrower shall
promptly notify Secured Party thereof in writing. Promptly upon Secured Party's
request, Borrower shall take, or cause to be taken, such actions as Secured
Party may reasonably request to give Secured Party control of such electronic
chattel paper under Section 9-105 of the UCC and control of such transferable
record under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as in effect in such jurisdiction.
(d) Borrower does not have any deposit accounts as of the date
hereof, except as set forth in the Information Certificate. Borrower shall not,
directly or indirectly, after the date hereof open, establish or maintain any
deposit account unless each of the following conditions is satisfied: (i)
Secured Party shall have received not less than five (5) Business Days prior
written notice of the intention of Borrower to open or establish such account
which notice shall specify in reasonable detail and specificity acceptable to
Secured Party the name of the account, the owner of the account, the name and
address of the bank or other financial institution at which such account is to
be opened or established, the individual at such bank or other financial
institution with whom Borrower is dealing and the purpose of the account, (ii)
the bank or other financial institution where such account is opened or
maintained shall be acceptable to Secured Party, and (iii) on or before the
opening of such deposit account, Borrower shall as Secured Party
- 12 -
may specify either (A) deliver to Secured Party a Deposit Account Control
Agreement with respect to such deposit account duly authorized, executed and
delivered by Borrower and the bank at which such deposit account is opened and
maintained or (B) arrange for Secured Party to become the customer of the bank
with respect to the deposit account on terms and conditions acceptable to
Secured Party. The terms of this subsection (d) shall not apply to deposit
accounts specifically and exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of Borrower's salaried
employees.
(e) Borrower does not own or hold, directly or indirectly,
beneficially or as record owner or both, any investment property, as of the date
hereof, or have any investment account, securities account, commodity account or
other similar account with any bank or other financial institution or other
securities intermediary or commodity intermediary as of the date hereof, in each
case except as set forth in the Information Certificate.
(i) In the event that Borrower shall be entitled to
or shall at any time after the date hereof hold or acquire any certificated
securities, Borrower shall promptly endorse, assign and deliver the same to
Secured Party, accompanied by such instruments of transfer or assignment duly
executed in blank as Secured Party may from time to time specify. If any
securities, now or hereafter acquired by Borrower are uncertificated and are
issued to Borrower or its nominee directly by the issuer thereof, Borrower shall
immediately notify Secured Party thereof and shall, as Secured Party may
specify, either (A) cause the issuer to agree to comply with instructions from
Secured Party as to such securities, without further consent of Borrower or such
nominee, or (B) arrange for Secured Party to become the registered owner of the
securities.
(ii) Borrower shall not, directly or indirectly,
after the date hereof open, establish or maintain any investment account,
securities account, commodity account or any other similar account (other than a
deposit account) with any securities intermediary or commodity intermediary
unless each of the following conditions is satisfied: (A) Secured Party shall
have received not less than five (5) Business Days prior written notice of the
intention of Borrower to open or establish such account which notice shall
specify in reasonable detail and specificity acceptable to Secured Party the
name of the account, the owner of the account, the name and address of the
securities intermediary or commodity intermediary at which such account is to be
opened or established, the individual at such intermediary with whom Borrower is
dealing and the purpose of the account, (B) the securities intermediary or
commodity intermediary (as the case may be) where such account is opened or
maintained shall be acceptable to Secured Party, and (C) on or before the
opening of such investment account, securities account or other similar account
with a securities intermediary or commodity intermediary, Borrower shall as
Secured Party may specify either (1) execute and deliver, and cause to be
executed and delivered to Secured Party, an Investment Property Control
Agreement with respect thereto duly authorized, executed and delivered by
Borrower and such securities intermediary or commodity intermediary or (2)
arrange for Secured Party to become the entitlement holder with respect to such
investment property on terms and conditions acceptable to Secured Party.
- 13 -
(f) Borrower is not the beneficiary or otherwise entitled to
any right to payment under any letter of credit, banker's acceptance or similar
instrument as of the date hereof, except as set forth in the Information
Certificate. In the event that Borrower shall be entitled to or shall receive
any right to payment under any letter of credit, banker's acceptance or any
similar instrument, whether as beneficiary thereof or otherwise after the date
hereof, Borrower shall promptly notify Secured Party thereof in writing.
Borrower shall immediately, as Secured Party may specify, either (i) deliver, or
cause to be delivered to Secured Party, with respect to any such letter of
credit, banker's acceptance or similar instrument, the written agreement of the
issuer and any other nominated person obligated to make any payment in respect
thereof (including any confirming or negotiating bank), in form and substance
satisfactory to Secured Party, consenting to the assignment of the proceeds of
the letter of credit to Secured Party by Borrower and agreeing to make all
payments thereon directly to Secured Party or as Secured Party may otherwise
direct or (ii) cause Secured Party to become, at Borrower's expense, the
transferee beneficiary of the letter of credit, banker's acceptance or similar
instrument (as the case may be).
(g) Borrower has no commercial tort claims as of the date
hereof, except as set forth in the Information Certificate. In the event that
Borrower shall at any time after the date hereof have any commercial tort
claims, Borrower shall promptly notify Secured Party thereof in writing, which
notice shall (i) set forth in reasonable detail the basis for and nature of such
commercial tort claim and (ii) include the express grant by Borrower to Secured
Party of a security interest in such commercial tort claim (and the proceeds
thereof). In the event that such notice does not include such grant of a
security interest, the sending thereof by Borrower to Secured Party shall be
deemed to constitute such grant to Secured Party. Upon the sending of such
notice, any commercial tort claim described therein shall constitute part of the
Collateral and shall be deemed included therein. Without limiting the
authorization of Secured Party provided in Section 2.3(a) hereof or otherwise
arising by the execution by Borrower of this Agreement, Secured Party is hereby
irrevocably authorized from time to time and at any time to file such financing
statements naming Secured Party or its designee as secured party and Borrower as
debtor, or any amendments to any financing statements, covering any such
commercial tort claim as Collateral. In addition, Borrower shall promptly upon
Secured Party's request, execute and deliver, or cause to be executed and
delivered, to Secured Party such other agreements, documents and instruments as
Secured Party may require in connection with such commercial tort claim.
(h) Borrower does not have any goods, documents of title or
other Collateral in the custody, control or possession of a third party as of
the date hereof, except as set forth in the Information Certificate and except
for goods located in the United States in transit to a location of Borrower
permitted herein in the ordinary course of business of Borrower in the
possession of the carrier transporting such goods. In the event that any goods,
documents of the title or other Collateral are at any time after the date hereof
in the custody, control or possession of any other person not referred to in the
Information Certificate or such carriers, Borrower shall promptly notify Secured
Party thereof in writing. Promptly upon Secured Party's request, Borrower shall
deliver to Secured Party a Collateral Access Agreement (as such term is defined
in the Loan Agreement) duly authorized, executed and delivered by such person
and Borrower.
- 14 -
(i) Borrower shall take any other actions reasonably requested
by Secured Party from time to time to cause the attachment, perfection and first
priority of, and the ability of Secured Party to enforce, the security interest
of Secured Party in any and all of the Collateral, including, without
limitation, (i) executing, delivering and, where appropriate, filing financing
statements and amendments relating thereto under the UCC or other applicable
law, to the extent, if any, that Borrower's signature thereon is required
therefor, (ii) causing Secured Party's name to be noted as secured party on any
certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of Secured Party to enforce,
the security interest of Secured Party in such Collateral, (iii) complying with
any provision of any statute, regulation or treaty of the United States as to
any Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of Secured Party to enforce, the security
interest of Secured Party in such Collateral, (iv) obtaining the consents and
approvals of any Governmental Authority or third party, including, without
limitation, any consent of any licensor, lessor or other person obligated on
Collateral, and taking all actions required by any earlier versions of the UCC
or by other law, as applicable in any relevant jurisdiction.
SECTION 3. COLLATERAL COVENANTS
3.1 Accounts Covenants. Secured Party shall have the right at any time
or times, in Secured Party's name or in the name of a nominee of Secured Party,
to verify the validity, amount or any other matter relating to any Account or
other Collateral, by mail, telephone, facsimile transmission or otherwise.
3.2 Inventory Covenants. With respect to the Inventory, if any: (a)
Borrower shall at all times maintain inventory records reasonably satisfactory
to Secured Party, keeping in all material respects correct and accurate records
itemizing and describing the kind, type, quality and quantity of Inventory, the
cost therefor and daily withdrawals therefrom and additions thereto; (b)
Borrower shall conduct a physical count of the Inventory of Borrower at least
once each year, but at any time or times as Secured Party may request on or
after an Event of Default and for so long as the same is continuing, and
promptly following such physical inventory shall supply Secured Party with a
report in the form and with such specificity as may be reasonably satisfactory
to Secured Party concerning such physical count; (c) Borrower shall not remove
any Inventory from the locations permitted herein, without the prior written
consent of Secured Party, except for sales of Inventory in the ordinary course
of Borrower's business and except to move Inventory directly from one location
of Borrower permitted under the Loan Agreement to another such location and
except to discard obsolete Inventory or Inventory damaged or destroyed by
casualty; (d) upon Secured Party's request, Borrower shall, at its expense, no
more than twice in any twelve (12) month period, but at any time or times as
Secured Party may request on or after an Event of Default and for so long as the
same is continuing, deliver or cause to be delivered to Secured Party written
reports or appraisals as to the Inventory in form, scope and methodology
reasonably acceptable to Secured Party and by an appraiser with experience in
the appraising of rubber and rubber related assets, acceptable to Secured Party,
addressed to Secured Party, and upon which Secured Party is expressly permitted
to rely; (e) Borrower shall produce, use, store and maintain the Inventory, with
all reasonable care and caution and in accordance with applicable standards of
any insurance and in conformity with applicable laws (including, but not
- 15 -
limited to, the requirements of the Federal Fair Labor Standards Act of 1938, as
amended and all rules, regulations and orders related thereto); (f) as between
Secured Party and Borrower, Borrower assumes all responsibility and liability
arising from or relating to the production, use, sale or other disposition of
the Inventory; (g) Borrower shall not sell Inventory to any customer on
approval, or any other basis which entitles the customer to return or may
obligate Borrower to repurchase such Inventory (except in the ordinary course of
business in accordance with the customary practices of Borrower as of the date
hereof); (h) Borrower shall keep the Inventory in good and marketable condition
in all material respects (other than obsolete Inventory or Inventory lost or
damaged by any casualty or similar event); and (i) Borrower shall not, without
prior written notice to Secured Party, acquire or accept any Inventory on
consignment or approval.
3.3 Equipment and Real Property Covenants. With respect to the
Equipment and Real Property, if any: (a) upon Secured Party's request, Borrower
shall, at its expense, no more than once in any twelve (12) month period, but at
any time or times as Secured Party may request on or after an Event of Default,
deliver or cause to be delivered to Secured Party written appraisals as to the
Equipment and/or Real Property in form, scope and methodology acceptable to
Secured Party and by an appraiser acceptable to Secured Party, addressed to
Secured Party, and upon which Secured Party is expressly permitted to rely; (b)
Borrower shall keep its Equipment in good order, repair, running and marketable
condition (ordinary wear and tear excepted); (c) Borrower shall use its
Equipment and Real Property with all reasonable care and caution and in
accordance with applicable standards of any insurance and in conformity in all
material respects with all applicable laws; (d) the Equipment is and shall be
used in Borrower's business and not for personal, family, household or farming
use; (e) each Borrower shall not remove any Equipment from the locations set
forth or permitted herein, except to the extent necessary to have any Equipment
repaired or maintained in the ordinary course of the business of such Borrower
or to move Equipment directly from one location set forth or permitted under the
Loan Agreement to another such location; (f) the Equipment is now and shall
remain personal property and Borrower shall not permit any of the Equipment to
be or become a part of or affixed to real property; and (g) Borrower assumes all
responsibility and liability arising from the use of the Equipment and Real
Property.
3.4 Power of Attorney. Borrower hereby irrevocably designates and
appoints Secured Party (and all persons designated by Secured Party), as
Borrower's true and lawful attorney-in-fact, and authorizes Secured Party, in
Borrower's or Secured Party's name, to: (a) at any time an Event of Default
exists or has occurred and is continuing (i) demand payment on Receivables or
other proceeds of Inventory or other Collateral, (ii) enforce payment of
Receivables by legal proceedings or otherwise, (iii) exercise all of Borrower's
rights and remedies to collect any Receivable or other Collateral, (iv) sell or
assign any Receivable or other Collateral upon such terms, for such amount and
at such time or times as Secured Party deems advisable, (v) settle, adjust,
compromise, extend or renew an Account, (vi) discharge and release any
Receivables, (vii) prepare, file and sign Borrower's name on any proof of claim
in bankruptcy or other similar document in connection with the Collateral
against an account debtor or other obligor in respect thereof, (viii) notify the
post office authorities to change the address for delivery of Borrower's mail to
an address designated by Secured Party, and open ands dispose of all mail
addressed to
- 16 -
Borrower and handle and store all mail relating to any Collateral, and (ix) do
all acts and things which are necessary, in Secured Party's determination, to
fulfill Borrower's obligations under this Agreement and the other Financing
Agreements and (b) at any time to (i) take control in any manner of any item of
payment constituting Collateral or in respect of Collateral or proceeds thereof,
(ii) have access to any lockbox or postal box into which Borrower's mail
relating to any of the Collateral or which Secured Party believes may be related
to Collateral is deposited, (iii) endorse Borrower's name upon any items of
payment constituting Collateral or proceeds thereof and deposit the same in
Secured Party's or a Lender's account for application to the Obligations, (iv)
endorse Borrower's name upon any chattel paper, document, instrument, invoice,
or similar document or agreement relating to any Account or any goods pertaining
thereto or any other Collateral, (v) clear Inventory the purchase of which was
financed with letter of credit accommodations arranged by Secured Party through
US Customs, in Borrower's name, Secured Party's name or the name of Secured
Party's designee, and to sign and deliver to customs officials powers of
attorney in Borrower's name for such purpose, (vi) sign Borrower's name on any
verification of Accounts and notices thereof to account debtors and other
obligors in respect thereof and (vii) execute in Borrower's name and file any
UCC financing statements or amendments thereto. Borrower hereby releases Secured
Party and each Lender and each of their respective officers, employees and
designees from any liabilities arising from any act or acts under this power of
attorney and in furtherance thereof, whether of omission or commission, except
as a result of Secured Party's or any Lender's own gross negligence, wilful
misconduct or bad faith as determined pursuant to a final non-appealable order
of a court of competent jurisdiction.
3.5 Right to Cure. Secured Party may, at its option, (a) upon notice
to Borrower, cure any default by Borrower under any material agreement with a
third party which affects any Collateral, the value of such Collateral or the
ability of Secured Party to collect, sell or otherwise dispose of such
Collateral or the rights and remedies of Secured Party hereunder or under any of
the other Financing Agreements, (b) pay or bond on appeal any judgment entered
against Borrower, (c) discharge taxes, liens, security interests or other
encumbrances at any time levied on or existing with respect to the Collateral
and (d) pay any amount, incur any expense or perform any act which, in Secured
Party's good faith judgment, is reasonably necessary or appropriate to preserve,
protect, insure or maintain the Collateral and the rights of Secured Party with
respect thereto. Secured Party may add any amounts so expended to the
Obligations and charge Borrower's account therefor, such amounts to be repayable
by Borrower on demand. Secured Party shall be under no obligation to effect such
cure, payment or bonding and shall not, by doing so, be deemed to have assumed
any obligation or liability of Borrower. Any payment made or other action taken
by Secured Party under this Section shall be without prejudice to any right to
assert an Event of Default hereunder and to proceed accordingly.
3.6 Access to Premises. From time to time as requested by Secured
Party, at the cost and expense of Borrower, (a) Secured Party or its designee
shall have complete access to all premises of Borrower during normal business
hours and after reasonable prior notice to Borrower, or at any time and without
notice to Borrower if an Event of Default exists or has occurred and is
continuing, for the purposes of inspecting, verifying and auditing the
Collateral and all of
- 17 -
Borrower's books and records, including, without limitation, the Records (but as
to the costs of field examinations conducted by Secured Party, subject to the
limitations set forth in Section 9.18 of the Loan Agreement), and (b) Borrower
shall promptly furnish to Secured Party such copies of such books and records or
extracts therefrom as Secured Party may reasonably request, and (c) Secured
Party or its designee may use during normal business hours such of Borrower's
personnel, equipment, supplies and premises as may be reasonably necessary for
the foregoing and if an Event of Default exists or has occurred and is
continuing for the collection of Accounts and realization of other Collateral.
SECTION 4. EVENTS OF DEFAULT AND REMEDIES
4.1 Events of Default. The occurrence or existence of any Event of
Default under the Loan Agreement or the Indenture is referred to herein
individually as an "Event of Default", and collectively as "Events of Default".
4.2 Remedies.
(a) At any time an Event of Default exists or has occurred and
is continuing, Secured Party shall have all rights and remedies provided in this
Agreement, the other Financing Agreements, the UCC and other applicable law, all
of which rights and remedies may be exercised without notice to or consent by
Borrower or any Obligor, except as such notice or consent is expressly provided
for hereunder or required by applicable law. All rights, remedies and powers
granted to Secured Party hereunder, under any of the other Financing Agreements,
the UCC or other applicable law, are cumulative, not exclusive and enforceable,
in Secured Party's discretion, alternatively, successively, or concurrently on
any one or more occasions, and shall include, without limitation, the right to
apply to a court of equity for an injunction to restrain a breach or threatened
breach by Borrower of this Agreement or any of the other Financing Agreements.
Secured Party may, at any time or times, proceed directly against Borrower or
any Obligor to collect the Obligations without prior recourse to the Collateral.
(b) Without limiting the foregoing, at any time an Event of
Default exists or has occurred and is continuing, Secured Party may, in its
discretion and without limitation, (i) with or without judicial process or the
aid or assistance of others, enter upon any premises on or in which any of the
Collateral may be located and take possession of the Collateral or complete
processing, manufacturing and repair of all or any portion of the Collateral,
(ii) require Borrower, at Borrowers' expense, to assemble and make available to
Secured Party any part or all of the Collateral at any place and time designated
by Secured Party, (iii) collect, foreclose, receive, appropriate, setoff and
realize upon any and all Collateral, (iv) remove any or all of the Collateral
from any premises on or in which the same may be located for the purpose of
effecting the sale, foreclosure or other disposition thereof or for any other
purpose, (v) sell, lease, transfer, assign, deliver or otherwise dispose of any
and all Collateral (including, without limitation, entering into contracts with
respect thereto, public or private sales at any exchange, broker's board, at any
office of Secured Party or elsewhere) at such prices or terms as Secured Party
may deem reasonable, for cash, upon credit or for future delivery, with the
Secured Party having the right to
- 18 -
purchase the whole or any part of the Collateral at any such public sale, all of
the foregoing being free from any right or equity of redemption of Borrower,
which right or equity of redemption is hereby expressly waived and released by
Borrower and/or (vi) terminate this Agreement. If any of the Collateral is sold
or leased by Secured Party upon credit terms or for future delivery, the
Obligations shall not be reduced as a result thereof until payment therefor is
finally collected by Secured Party. If notice of disposition of Collateral is
required by law, ten (10) days prior notice by Secured Party to Borrower
designating the time and place of any public sale or the time after which any
private sale or other intended disposition of Collateral is to be made, shall be
deemed to be reasonable notice thereof and Borrower waives any other notice. In
the event Secured Party institutes an action to recover any Collateral or seeks
recovery of any Collateral by way of prejudgment remedy, Borrower waives the
posting of any bond which might otherwise be required.
(c) Without limiting the foregoing, Secured Party may, at any
time or times that an Event of Default exists or has occurred and is continuing,
(i) notify any or all account debtors or any other obligors that the Receivables
have been assigned to Secured Party and that Secured Party has a security
interest therein and Secured Party may direct any or all accounts debtors to
make payment of Receivables directly to Secured Party, (ii) extend the time of
payment of, compromise, settle or adjust for cash, credit, return of merchandise
or otherwise, and upon any terms or conditions, any and all Receivables or other
obligations included in the Collateral and thereby discharge or release the
account debtor or any other party or parties in any way liable for payment
thereof without affecting any of the Obligations, (iii) demand, collect or
enforce payment of any Receivables or such other obligations, but without any
duty to do so, and Secured Party shall not be liable for any failure to collect
or enforce the payment thereof nor for the negligence of its agents or attorneys
with respect thereto and (iv) take whatever other action Secured Party may in
good xxxxx xxxx necessary or desirable for the protection of its or their
interests. At any time that an Event of Default exists or has occurred and is
continuing, at Secured Party's request, all invoices and statements sent to any
account debtor or other obligor shall state that the Accounts and such other
obligations have been assigned to Secured Party, and are payable directly and
only to Secured Party and Borrower shall deliver to Secured Party such originals
of documents evidencing the sale and delivery of goods or the performance of
services giving rise to any Accounts as Secured Party may require.
(d) To the extent that applicable law imposes duties on
Secured Party to exercise remedies in a commercially reasonable manner (which
duties cannot be waived under such law), Borrower acknowledges and agrees that
it is not commercially unreasonable for Secured Party (i) to fail to incur
expenses reasonably deemed significant by Secured Party to prepare Collateral
for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain consents of any
Governmental Authority or other third party for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against account debtors, secondary obligors or other persons obligated
on Collateral or to remove liens or encumbrances on or any adverse claims
against Collateral, (iv) to exercise collection remedies against account debtors
and other persons obligated on Collateral directly or through the use of
collection
- 19 -
agencies and other collection specialists, (v) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not
the Collateral is of a specialized nature, (vi) to contact other persons,
whether or not in the same business as Borrower, for expressions of interest in
acquiring all or any portion of the Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (ix) to dispose of assets in
wholesale rather than retail markets, (x) to disclaim disposition warranties,
(xi) to purchase insurance or credit enhancements to insure Secured Party
against risks of loss, collection or disposition of Collateral or to provide to
Secured Party a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by Secured Party, to
obtain the services of other brokers, investment bankers, consultants and other
professionals to assist Secured Party in the collection or disposition of any of
the Collateral. Borrower acknowledges that the purpose of this Section is to
provide non-exhaustive indications of those actions or omissions by Secured
Party that would not be commercially unreasonable in Secured Party's exercise of
remedies against the Collateral and that other actions or omissions by Secured
Party shall not be deemed commercially unreasonable solely on account of not
being indicated in this Section. Without limitation of the foregoing, nothing
contained in this Section shall be construed to grant any rights to Borrower or
to impose any duties on Secured Party that would not have been granted or
imposed by this Agreement or by applicable law in the absence of this Section.
(e) For the purpose of enabling Secured Party to exercise the
rights and remedies hereunder, Borrower hereby grants to Secured Party, to the
extent assignable, an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to Borrower) to use, assign, license or
sublicense any of the trademarks, service-marks, trade names, business names,
trade styles, designs, logos and other source of business identifiers and other
Intellectual Property and General Intangibles now owned or hereafter acquired by
Borrower, wherever the same maybe located, including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer programs used for the compilation or printout thereof.
(f) Secured Party may apply the cash proceeds of Collateral
actually received by Secured Party from any sale, lease, foreclosure or other
disposition of the Collateral to payment of the Obligations, in whole or in part
and in such order as Secured Party may elect (subject to the Collateral Agency
Agreement), whether or not then due. Borrower shall remain liable to Lenders for
the payment of any deficiency with interest at the highest rate payable on the
indebtedness of Borrower under the Loan Agreement or the Indenture, as the case
may be, and all costs and expenses of collection or enforcement, including
reasonable attorneys' fees and legal expenses.
SECTION 5. JURY TRIAL WAIVER; OTHER WAIVERS
AND CONSENTS; GOVERNING LAW
5.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.
- 20 -
(a) The validity, interpretation and enforcement of this
Agreement and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York
(without giving effect to principles of conflicts of law).
(b) Borrower irrevocably consents and submits to the
non-exclusive jurisdiction of the Supreme Court of the State of New York in New
York County and the United States District Court for the Southern District of
New York, whichever Secured Party may elect, and waives any objection based on
venue or forum non conveniens with respect to any action instituted therein
arising under this Agreement or any of the other Financing Agreements or in any
way connected or related or incidental to the dealings of Borrower and Secured
Party or any Lender in respect of this Agreement or the other Financing
Agreements or the transactions related hereto or thereto, in each case whether
now existing or hereafter arising, and whether in contract, tort, equity or
otherwise, and agrees that any dispute with respect to any such matters shall be
heard only in the courts described above (except that Secured Party shall have
the right to bring any action or proceeding against Borrower or its property in
the courts of any other jurisdiction which Secured Party deems necessary or
appropriate in order to realize on the Collateral or to otherwise enforce the
rights of Secured Party against Borrower or its property).
(c) Borrower hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth on
the signature pages hereof and service so made shall be deemed to be completed
five (5) days after the same shall have been so deposited in the U.S. mails, or,
at Secured Party's option, by service upon Borrower in any other manner provided
under the rules of any such courts. Within thirty (30) days after such service,
Borrower shall appear in answer to such process, failing which Borrower shall be
deemed in default and judgment may be entered by Secured Party against such
Borrower for the amount of the claim and other relief requested.
(d) BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY
OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF BORROWER AND SECURED PARTY IN RESPECT OF THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED
HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWER HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY AND THAT BORROWER OR SECURED PARTY MAY FILE AN
ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF BORROWER AND SECURED PARTY TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
- 21 -
(e) Secured Party and Lenders shall not have any liability to
Borrower (whether in tort, contract, equity or otherwise) for losses suffered by
Borrower in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by this Agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Secured Party or
such Lender that the losses were the result of acts or omissions constituting
gross negligence, willful misconduct or bad faith. In any such litigation,
Secured Party and Lenders shall be entitled to the benefit of the rebuttable
presumption that each acted in good faith and with the exercise of ordinary care
in the performance by it of the terms of this Agreement and the other Financing
Agreements.
5.2 Waiver of Notices. Borrower hereby expressly waives demand,
presentment, notice of intent to accelerate, notice of acceleration, protest and
notice of protest and notice of dishonor with respect to any and all instruments
and commercial paper, included in or evidencing any of the Obligations or the
Collateral, and any and all other demands and notices of any kind or nature
whatsoever with respect to the Obligations, the Collateral and this Agreement,
except such as are expressly provided for herein or in the Loan Agreement. No
notice to or demand on Borrower which Secured Party or any Lender may elect to
give shall entitle Borrower to any other or further notice or demand in the
same, similar or other circumstances.
5.3 Amendments and Waivers. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Secured Party, and as to amendments and modifications, also signed by an
authorized officer of Borrower. Secured Party and Lenders shall not, by any act,
delay, omission or otherwise be deemed to have expressly or impliedly waived any
of its rights, powers and/or remedies unless such waiver shall be in writing and
signed by an authorized officer of Secured Party (and Lenders with respect to
any waiver of an Event of Default). Any such waiver shall be enforceable only to
the extent specifically set forth therein. A waiver by Secured Party or any
Lender of any right, power and/or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right, power and/or remedy which
Secured Party would otherwise have on any future occasion, whether similar in
kind or otherwise.
5.4 Waiver of Counterclaims. Borrower waives all rights to interpose
any claims, deductions, setoffs or counterclaims of any nature (other then
compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.
5.5 Indemnification. Borrower shall indemnify and hold Secured Party
and Lenders and any of their respective directors, agents, employees and
counsel, harmless from and against any and all losses, claims, damages,
liabilities, costs or expenses imposed on, incurred by or asserted against any
of them in connection with any litigation, investigation, claim or proceeding
commenced or threatened related to the negotiation, preparation, execution,
delivery, enforcement, performance or administration of this Agreement, any
other Financing Agreements, or any undertaking or proceeding related to any of
the transactions contemplated hereby or any act, omission, event or transaction
related or attendant thereto, including, without limitation,
- 22 -
amounts paid in settlement, court costs, and the reasonable fees and expenses of
counsel, except for such losses, claims, damages, liabilities, costs or expenses
resulting from the gross negligence or wilful misconduct of Secured Party or any
Lender, or any of their respective directors, agents, employees or counsel as
determined pursuant to a final, non-appealable order of a court of competent
jurisdiction. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section may be unenforceable because it violates any
law or public policy, Borrower shall pay the maximum portion which it is
permitted to pay under applicable law to Secured Party in satisfaction of
indemnified matters under this Section. The foregoing indemnity shall survive
the payment of the Obligations, the termination of this Agreement and the
termination of the Loan Agreement.
SECTION 6. ACKNOWLEDGMENT AND RESTATEMENT
6.1 Mergers. Chapter 11 Borrowers and Chapter 11 Guarantors have
previously granted to Congress a security interest in and lien upon the
Collateral pursuant to the Existing Agreements. Concurrently with the effective
date of the Plan, Chapter 11 Borrowers (other than Rubatex) and Chapter 11
Guarantors (other than RBX Corp. and RBX Group) have each merged with and into
Rubatex, with Rubatex as the surviving corporation (the "Merger"). In connection
with the Merger, Rubatex has changed its corporate name to RBX Industries, Inc.
(the entity defined herein as "Borrower"). Concurrently with the effective date
of the Plan, RBX Group has merged with and into Guarantor, with Guarantor as the
surviving corporation. Pursuant to the Merger, Borrower has assumed all of the
obligations and liabilities of the Chapter 11 Borrowers and Chapter 11
Guarantors (other than RBX Corp. and RBX Group) pursuant to the Existing
Agreements.
6.2 Existing Agreements and Acknowledgment of Security Interests.
(a) Borrower as the survivor of the Merger hereby expressly
assumes, adopts and ratifies the Existing Agreements and acknowledges, confirms
and agrees that: (i) Borrower as the survivor of the Merger is and shall
continue to be unconditionally liable in all respects for all of the Obligations
pursuant to the Existing Agreements, without offset, defense or counterclaim of
any kind, nature or description whatsoever, (ii) the agreements and obligations
of the Chapter 11 Borrowers (other than Rubatex) and Chapter 11 Guarantors
(other than RBX Corp. and RBX Group) contained in the Existing Agreements
constitute the legal, valid and binding obligations of Borrower (as successor by
merger to the Chapter 11 Borrowers and Chapter 11 Guarantors (other than RBX
Corp. and RBX Group)) enforceable against Borrower in accordance with its
respective terms, and (iii) Secured Party and Lenders are entitled to all of the
rights, remedies and benefits of the Existing Agreements.
(b) The liens and security interests of Secured Party in the
Collateral shall be deemed to be continuously granted and perfected from the
earliest date of the granting and perfection of such liens and security
interests, whether under the Existing Agreements, this Agreement or any of the
other Financing Agreements.
- 23 -
6.3 Restatement. Except as otherwise stated in Section 6.2 above, as
of the date hereof, the terms, conditions, covenants, agreements,
representations and warranties set forth in the Existing Agreements are hereby
replaced and superseded in their entirety by the terms, conditions, covenants,
agreements, representations and warranties set forth in this Agreement and the
other Financing Agreements, except that nothing contained herein or in the other
Financing Agreements shall impair or adversely affect the continuation of the
liability of Borrower for the Obligations heretofore incurred during the Chapter
11 Cases (as successor by merger to the Chapter 11 Borrowers (other than
Rubatex) and Chapter 11 Guarantors (other than RBX Corp. and RBX Group). The
amendment and restatement contained herein shall not, in any manner, be
construed to constitute payment of, or impair, limit, cancel or extinguish, or
constitute a novation in respect of, the indebtedness and other obligations and
liabilities of Borrower evidenced by or arising under the Existing Agreements
and the liens and security interests securing such indebtedness and other
obligations and liabilities, which shall not in any manner be impaired, limited,
terminated, waived or released.
6.4 Release. Borrower for itself and its successors and assigns does
hereby remise, release, discharge and hold Secured Party and Lenders, and any of
their respective officers, directors, agents and employees and their respective
predecessors, successors and assigns harmless from all claims, demands, debts,
sums of money, accounts, damages, judgments, financial obligations, actions,
causes of action, suits at law or in equity, of any kind or nature whatsoever,
whether or not now existing or known, which Borrower or its respective
successors or assigns has had or may now or hereafter claim to have against
Secured Party or any Lender or any of their respective officers, directors,
agents and employees and their respective predecessors, successors and assigns
in any way arising from or connected with the Existing Agreements or the
arrangements set forth therein or transactions thereunder up to and including
the date hereof.
SECTION 7. MISCELLANEOUS
7.1 Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to Secured Party at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Portfolio Manager, Telecopy No.: 000-000-0000, and to
Borrower at its chief executive office and telecopier number set forth below or
to such other address or telecopier number as any party may designate by written
notice to the others in accordance with this provision, and (b) deemed to have
been given or made: if delivered in person, immediately upon delivery; if by
telex, telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service
with instructions to deliver the next business day, one (1) business day after
sending; and if by certified mail, return receipt requested, five (5) days after
mailing.
7.2 Partial Invalidity. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to
- 24 -
be invalid or unenforceable and the rights and obligations of the parties shall
be construed and enforced only to such extent as shall be permitted by
applicable law.
7.3 Successors. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon Borrower and
its respective successors and assigns and inure to the benefit of and be
enforceable by Secured Party and its successors and assigns, except that
Borrower may not assign its rights under this Agreement, the other Financing
Agreements and any other document referred to herein or therein without the
prior written consent of Secured Party.
7.4 Entire Agreement. This Agreement, the other Financing Agreements,
any supplements hereto or thereto, and any instruments or documents delivered or
to be delivered in connection herewith or therewith represents the entire
agreement and understanding concerning the subject matter hereof and thereof
between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. In the event of any inconsistency between the
terms of this Agreement and any schedule or exhibit hereto, the terms of this
Agreement shall govern.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 25 -
IN WITNESS WHEREOF, Borrower has caused these presents to be duly
executed as of the day and year first above written.
BORROWER
RBX INDUSTRIES, INC.
By:/s/ Xxxxxx X. Xxxxx
-------------------
Title:CRO and President
-----------------
Chief Executive Office
----------------------
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: 000-000-0000
- 26 -
EXHIBIT A
TO
GENERAL SECURITY AGREEMENT
Information Certificate
[See Attached]
- 27 -
