SECURITY ASSIGNMENT AGREEMENT
THIS SECURITY ASSIGNMENT AGREEMENT is made on 16 January 1995 between:
1. Freedom Chemical Company, a corporation organized under the laws of
Delaware, USA, having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇; (hereinafter referred
to as the "Assignor").
2. Citicorp USA, Inc., a corporation, organized under the laws of
Dela-ware, USA, having an office at ▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇, for itself and on behalf of the Lenders and Issuing Banks
referred to in Annex I; (hereinafter referred to as the "Assignee"
and together with such Lenders and Issuing Banks, the "Assignees").
WHEREAS:
A. he Assignees have made available to the Assignor a USD 27,500,000
million revolving credit facility dated 26 May 1994 and certain term
loan facilities aggregating USD 84,500,000.
B. By an amendment to the aftersaid amended and restated revolving
credit and term loan agreement dated as of 9 January 1995 (such
agreement as from time to time amended, varied, cancelled, restated,
supplemented or novated being herein referred to as the "Agreement")
the Assignor and the Assignees have extended the facility to a USD
42,500,000 million revolving credit and USD 85,500,000 term loan
facility to enable Freedom and some of its subsidiaries to purchase
certain assets in Germany.
C. The Assignor has agreed in return to grant certain security as more
detailed herein in respect of its obligations under and with respect
to the Agreement.
NOW IT IS AGREED as follows:
1. Definitions
Capitalised words and expressions defined in the Agreement and used
and not otherwise defined herein bear the respective meaning as
ascribed to them in the Agreement. For purposes of this Security
Assignment Agreement the Assignee shall mean the Assignee as Trustee
for the Assignees.
2. Acquired Intellectual Property Rights
Pursuant to section 3 paragraph 4 of an acquisition agreement dated
5 January 1995, role of deeds No. 3/ 1995 of the notary public
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Frankfurt, the Assignor has acquired from Diamalt
GmbH, ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇-▇▇▇. ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, registered in the
Commercial Register of the Local Court Munich under HRB 91647, all
of the intangible assets of Diamalt GmbH, except its accounts
receivable, including, without limitation, all intellectual property
rights, belonging or used in the business of Diamalt GmbH as
described in more detail in said acquisition agreement and in annex
2 attached to this Security Assignment Agreement (such intangible
assets hereinafter referred to as the "Intellectual Property
Rights").
3. Secured Obligations
This Security Assignment Agreement is entered into in order to
secure the prompt and complete satisfaction of any and all present
and future, actual or contingent obligations and liabilities
whatsoever of the Assignor to the Assignees, whether for principal,
interest, fees, expenses or otherwise under the Agreement,
guarantees thereof, and under this Security Assignment Agreement, as
amended, varied or supplemented from time to time (together the
"Secured Obligations").
4. Assignment for Security Purposes
(a) The Assignor hereby assigns to the Assignee the Intellectual
Property Rights together with all present and future rights,
ancillary rights and claims associated with the Intellectual
Property Rights, including, without limitation, any claims to
fees, charges or royalties arising from the Intellectual
Property Rights (together the "Assigned Rights ").
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(b) The Assignee hereby accepts the assignment. The assignment is
in addition, and without prejudice, to any other security any
of the Assignees may now or hereafter hold in respect of the
Secured Obligations. The validity and effect of the assignment
of any of the Assigned Rights shall be independent from the
validity and the effect of the assignment of any other of the
Assigned Rights made hereunder.
(c) Notwithstanding that all rights for payments are assigned
hereunder as mentioned under Clause 4(a), the Assignor shall
be entitled to collect, receive and retain all such payments
in respect of the Assigned Rights until such time as the
Assignees are entitled to realize their security from the
Assigned Rights. For this purpose the Assignee hereby
authorizes and appoints the Assignor to exercise all rights
assigned and transferred to it under this Security
Assignment Agreement in its own name and the Assignor may deal
solely with third parties, unless otherwise expressed in this
Agreement. This authorization and appointment may be revoked
or suspended if an event as specified in Clause 5(a) has
occurred, is continuing or has been declared.
5. Realization of Security
(a) If the Assignor failed to satisfy any of the Secured
Obligations, and the Assignee has given written notice to the
Assignor that the Assignees will realize their security, the
Assignee shall have the right to sell and transfer any of the
Assigned Rights and/or collect any payments due under any of
the Assigned Rights or take any other step that may be
appropriate and economically reasonable to satisfy outstanding
claims arising from or in connection with the Secured
Obligations.
(b) In case the Assignees should seek to realize their security
pursuant to, and in accordance with Clause 5(a) above, the
Assignor shall, at its own expense, render forthwith all
necessary assistance in order to facilitate the prompt sale
and assignment or other realization of the Assigned Rights
and/or the exercise by the Assignees of any other right they
may have. The Assignor shall in particular supply the
Assignees with all data, including but not limited to
customers' names and accounts, required for the collection of
any payments that are or will become due under or in
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respect of the Assigned Rights and, upon the Assignee's
request, assist in the collection of all such payments.
(c) The proceeds from the realization of the Assigned Rights shall
be applied in the following order:
(i) expenses incurred in the realization of securities
provided in respect of the Secured Obligations
(including, but not limited to, taxes, legal fees and
other costs);
(ii) payment of any sums due as part or in respect of the
Secured Obligations as interest, late or penalty
interest, commission, fees and ancillary expenses;
(iii) repayment of any sums due as part or in respect of the
Secured Obligations as principal; and
(iv) payment of any other sums due under the Agreement, any
guarantees thereof or hereunder.
The balance of such proceeds attributable to each of the
Assigned Rights, if any, will be paid to the Assignor unless
the Assignees are required by law to pay such balance to a
third party.
(d) The Assignees may, in their sole discretion, determine which
of several securities shall be used to satisfy the Secured
Obligations.
(e) Upon complete satisfaction and settlement of the Secured
Obligations the Assignee undertakes to retransfer to the
Assignor all Assigned Rights received as security under this
agreement as well as any excess proceeds arising from the
realization of the security.
6. Duration and Independence
(a) This Security Assignment Agreement shall remain in full force
and effect until complete satisfaction of the Secured
Obligations. No obligation for release of the Assigned Rights
shall arise, if the Assignors or any of them have only
temporarily discharged the Secured Obligations.
(b) This Security Assignment Agreement shall create a continuing
security and no change or amendment whatsoever in the Agree-
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ment or in any document or agreement related to the Agreement
shall affect the validity or the scope of this Security
Assignment Agreement nor the obligations which are imposed on
the Assignor pursuant to it.
(c) This Security Assignment Agreement is independent from any
other security or guarantee which may have been given to the
Assignees with respect to any obligation of the Assignor. None
of such other securities shall prejudice, or shall be
prejudiced by, or shall be merged in any way with, this
Agreement.
7. Undertakings of the Assignor
(a) The Assignor undertakes to provide for the protection and
maintenance of the Assigned Rights, in particular pay annual
charges and/or other expenses necessary for the protection and
maintenance of the Intellectual Property Rights, and to take
any action required to ensure the validity of the Assigned
Rights. Upon the Assignee's request the Assignor shall prove
payment of the aforementioned annual charges and/or other
expenses to the Assignees. The Assignees shall be entitled,
although not obliged, to effect payment of such annual charges
or other expenses themselves on behalf and for the account of
the Assignor. The Assignor shall notify the Assignees
immediately, if the Assignor knows or has reason to believe,
that any or all of the Assigned Rights are impaired or
endangered by any act or any party or third party.
(b) The Assignee shall be entitled, although not obliged, to have
the Intellectual Property Rights assigned to it under this
Agreement registered under its name or the name of a third
party appointed by it, at the Assignor's expense. Therefore
the Assignor undertakes to declare upon the Assignee's request
in each case its consent, attested by a public notary, to the
reregistration of the Intellectual Property Rights.
(c) The Assignor grants to the Assignees the right to inspect at
any time its books and other documents and data in order to
inspect the Assigned Rights.
8. Costs and Expenses
All costs, charges, fees and expenses triggered by this Security
Assignment Agreement or incurred in connection with its preparation,
execution
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and enforcement (including the fees of legal advisers and notarial
fees) shall be bome by the Assignor.
9. Partial Invalidity
If any provision of this Agreement should be or become invalid or
unenforceable, this shall not affect the validity of the remaining
provisions hereof. The invalid or unenforceable provision shall be
replaced by that provision which best meets the intent of the
replaced provision.
10. Amendments
Changes and amendments of this Agreement including this Clause must
be made in writing unless notarial form is required. The waiving of
this requirement must also be made in writing, unless mandatory law
requires notarization.
11. Notices and their Language
(a) Any notice or other communication under or in connection with
this Security Assignment Agreement shall be in writing and
shall be delivered personally, or sent by post, telex (with
answerback received), or facsimile transmission (to be
confirmed in writing) to the following addresses:
to Freedom: Freedom Chemical Company
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Mellon Center, Suite 3905
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
fax: ▇▇▇ ▇▇▇ ▇▇▇▇
to Assignees: Citicorp USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ 4
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇
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Attn.: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
fax: 212 -758 -6278
or to such other address as the recipient may notify or may
have notified to the other parties in writing.
(b) Any notices or other communications under or in connection
with this Security Assignment Agreement to any party hereto
shall be deemed to have been given when delivered by hand,
when sent by telex or facsimile transmission, two (2) days
after being delivered to any overnight delivery service
freight pre-paid or five (5) days after deposit in the mail,
postage prepaid, and addressed to such party at the address
given under Clause 14 (a) of this Security Assignment
Agreement or at any other address specified in writing.
(c) Any notice or other communication under or in connection with
this Security Assignment Agreement shall be in the English
language or, if in any other language accompanied by a
translation into English. In the event of any conflict between
the English text and the text in any other language, the
English text shall prevail.
12. Applicable Law; Jurisdiction; Service of Process
(a) This Security Assignment Agreement shall be governed by and
construed in accordance with the laws of the Federal Republic
of Germany.
(b) The place of jurisdiction for all parties shall for the
benefit of the Assignees be Frankfurt am Main. The Assignees,
however, shall also be entitled to take legal action against
the Assignor before any other court of law having jurisdiction
over such Assignor or any of its assets.
(c) For any service of process in any court in the Federal
Republic of Germany the Assignor hereby appoints
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Rechtsanwalt,
c/o Boesebeck, Barz & Partner,
Darmstadter ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany
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as agent for the receipt of service of process and acknowledges its obligation
to retain this process agent for the whole duration of this Security Assignment
Agreement, unless otherwise agreed with the Assignees.
Munchen, den 16.01.1995
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Place/Date Place/Date
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Freedom Chemical Company Citicorp USA, Inc.
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