EXECUTION COPY
================================================================================
AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT
made by
GENTEK INC.
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of April 30, 1999, as amended and restated as of October 30, 2001
================================================================================
TABLE OF CONTENTS
Page
Section 1. DEFINED TERMS...........................................................................2
1.1 Definitions...........................................................................2
1.2 Other Definitional Provisions.........................................................7
Section 2. GUARANTEE...............................................................................7
2.1 Guarantee.............................................................................7
2.2 Right of Contribution.................................................................8
2.3 No Subrogation........................................................................8
2.4 Amendments, etc. with respect to Obligations..........................................9
2.5 Guarantee Absolute and Unconditional..................................................9
2.6 Reinstatement........................................................................10
2.7 Payments.............................................................................10
Section 3. GRANTS OF SECURITY INTERESTS...........................................................10
3.1 Grant by Grantors....................................................................10
Section 4. REPRESENTATIONS AND WARRANTIES.........................................................11
4.1 Title; No Other Liens................................................................11
4.2 Perfected First Priority Liens.......................................................12
4.3 Chief Executive Office...............................................................12
4.4 Inventory and Equipment..............................................................12
4.5 Farm Products........................................................................12
4.6 Investment Property..................................................................12
4.7 Receivables..........................................................................13
4.8 Contracts............................................................................13
4.9 Intellectual Property................................................................14
4.10 Commercial Tort Claims..............................................................14
Section 5. COVENANTS..............................................................................14
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper...................14
5.2 Maintenance of Insurance.............................................................15
5.3 Payment of Obligations...............................................................15
5.4 Maintenance of Perfected Security Interest; Further Documentation....................15
5.5 Changes in Locations, Name, etc......................................................16
5.6 Notices..............................................................................16
5.7 Investment Property..................................................................16
i
Page
5.8 Receivables..........................................................................17
5.9 Contracts............................................................................18
5.10 Intellectual Property...............................................................18
Section 6. REMEDIAL PROVISIONS....................................................................19
6.1 Certain Matters Relating to Receivables..............................................19
6.2 Communications with Obligors; Grantors Remain Liable.................................19
6.3 Pledged Stock........................................................................20
6.4 Proceeds to be Turned Over To Administrative Agent...................................21
6.5 Application of Proceeds..............................................................21
6.6 Code and Other Remedies..............................................................21
6.7 Private Sales........................................................................22
6.8 Deficiency...........................................................................23
Section 7. THE ADMINISTRATIVE AGENT...............................................................23
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc..........................23
7.2 Duty of Administrative Agent.........................................................25
7.3 Execution of Financing Statements....................................................25
7.4 Authority of Administrative Agent....................................................25
Section 8. MISCELLANEOUS..........................................................................25
8.1 Amendments in Writing................................................................25
8.2 Notices..............................................................................25
8.3 No Waiver by Course of Conduct; Cumulative Remedies..................................26
8.4 Enforcement Expenses; Indemnification................................................26
8.5 Successors and Assigns...............................................................26
8.6 Set-Off..............................................................................27
8.7 Counterparts.........................................................................27
8.8 Severability.........................................................................27
8.9 Section Headings.....................................................................27
8.10 Integration.........................................................................27
Section 9.GOVERNING LAW...........................................................................27
9.1 Submission To Jurisdiction; Waivers..................................................27
9.2 Acknowledgements.....................................................................28
9.3 Additional Grantors..................................................................28
9.4 Releases.............................................................................28
9.5 WAIVER OF JURY TRIAL.................................................................29
9.6 Conversion of Currencies.............................................................29
9.7 Amendment and Restatement............................................................30
ii
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization, Identification Number and Chief
Executive Offices
Schedule 5 Inventory and Equipment Locations
Schedule 6 Intellectual Property
Schedule 7 Locations of Records Concerning Receivables
Schedule 8 Locations of Records Concerning Contracts
iii
AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT
AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT (this
"Agreement"), dated as of April 30, 1999, as amended and restated as of October
30, 2001, made by each of the signatories hereto (together with any other entity
that may become a party hereto as provided herein, the "Grantors") in favor of
THE CHASE MANHATTAN BANK, as Administrative Agent (in such capacity, the
"Administrative Agent"), for the benefit of the Lenders under the Credit
Agreement referred to below.
W I T N E S S E T H:
- - - - - - - - - --
WHEREAS, pursuant to the Credit Agreement, dated as of April 30, 1999,
as amended and restated as of August 9, 2000, as further amended and restated as
of August 1, 2001 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Gentek Inc., a Delaware corporation (the
"Company"), Noma Company, a Nova Scotia unlimited liability company (the
"Canadian Borrower" and, together with the Company, the "Borrowers"), the
several banks and other financial institutions from time to time parties thereto
(the "Lenders"), the Administrative Agent, The Bank of Nova Scotia, as
syndication agent for the Lenders (in such capacity, the "Syndication Agent"),
and Bankers Trust Company, as documentation agent for the Lenders (in such
capacity, the "Documentation Agent"), the Lenders have severally agreed to make
loans and other extensions of credit to the Borrowers upon the terms and subject
to the conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, the Borrowers and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement;
WHEREAS, certain Grantors and the Administrative Agent are parties to
the Guarantee and Pledge Agreement, dated as of April 30, 1999 (as amended,
supplemented and otherwise modified prior to the date hereof, the "Existing
Guarantee and Pledge Agreement"), which is being amended and restated by this
Agreement; and
WHEREAS, it is a condition subsequent to the obligation of the Lenders
to make their respective extensions of credit to the Borrowers under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Lenders, to amend and restate the Existing
Guarantee and Pledge Agreement in its entirety to read as follows:
2
Section 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms are used herein as defined in the
New York UCC: Accounts, Certificated Security, Chattel Paper, Commercial Tort
Claims, Documents, Equipment, Farm Products, General Intangibles, Instruments,
Inventory, Letter-of-Credit Rights and Supporting Obligations.
(b) The following terms shall have the following meanings:
"Agreement": this Amended and Restated Guarantee and Collateral
Agreement, as the same may be amended, supplemented or otherwise modified
from time to time.
"Canadian Borrower Obligations": the collective reference to the
unpaid principal of and interest on (including, without limitation,
interest accruing at the then applicable rate provided in the Credit
Agreement after the maturity of the Tranche B Term Loans and interest
accruing at the then applicable rate provided in the Credit Agreement after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Canadian
Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Tranche B Term Loans and all other
obligations and liabilities of the Canadian Borrower to the Administrative
Agent or to any Lender (or, in the case of any Lender Hedge Agreement, any
Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with the Credit Agreement,
this Agreement, any other Loan Document, any Letter of Credit or any Lender
Hedge Agreement or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to
be paid by the Canadian Borrower pursuant hereto) or otherwise.
"Certificated Security": the collective reference to (i) any
"certificated security" as defined in Section 8-102 of the New York UCC and
(ii) all limited liability company certificates, partnership interest
certificates and certificated options therefor that may be issued or
granted by any Issuer.
"Collateral": as defined in Section 3.1.
"Collateral Account": any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.
"Company Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of the Loans and
reimbursement obligations and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) the Loans made to
the Company and all
3
other obligations and liabilities of the Company to the Administrative
Agent or to any Lender under or pursuant to the Loan Documents (or, in the
case of any Lender Hedge Agreement, any Lender or any Affiliate of any
Lender party thereto), including Reimbursement Obligations, whether direct
or indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this Agreement, any other Loan Document, the
Letters of Credit, any Lender Hedge Agreement or any other document made,
delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that
are required to be paid by the Company pursuant hereto) or otherwise.
"Contracts": with respect to any Grantor, all contracts and agreements
to which it is a party, as the same may be amended, supplemented or
otherwise modified from time to time, including, without limitation, (i)
all rights of such Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of such Grantor to
damages arising thereunder and (iii) all rights of such Grantor to perform
and to exercise all remedies thereunder.
"Copyrights": with respect to any Grantor, all of such Grantor's
right, title and interest in and to (i) all copyrights arising under the
laws of the United States or any political subdivision thereof, or under
multinational or foreign laws or otherwise, whether registered or
unregistered and whether published or unpublished (including, without
limitation, those listed in Schedule 6), all registrations and recordings
thereof, and all applications in connection therewith, including, without
limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"Deposit Account": as defined in the Uniform Commercial Code of any
applicable jurisdiction and, in any event, including, without limitation,
any demand, time, savings, passbook or like account maintained with a
depositary institution.
"Excluded Equity Interests": Equity Interests, together with any
shares, stock certificates, options or rights of any nature whatsoever in
respect of any Equity Interests, that represent (i) except as set forth in
the next sentence, more than 65% of the total outstanding Voting Stock of
any Foreign Subsidiary or Foreign Subsidiary Holding Company that is not an
Excluded Issuer or (ii) any Voting Stock of an Excluded Issuer.
Notwithstanding the foregoing, it is the intention of the parties hereto
that all Voting Stock of Foreign Subsidiaries and Foreign Subsidiary
Holding Companies (and the Proceeds thereof) owned by any Grantor shall
constitute Collateral and Investment Property securing the Canadian
Borrower Obligations.
"Excluded Issuer": any Subsidiary of the Company that is a direct or
indirect Subsidiary of a Foreign Subsidiary or a Foreign Subsidiary Holding
Company.
4
"Foreign Subsidiary": any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
"Foreign Subsidiary Holding Company": any Domestic Subsidiary that has
no material assets other than the Capital Stock or other securities of one
or more Foreign Subsidiaries or other Foreign Subsidiary Holding Companies,
and other assets relating solely to an ownership interest in such Capital
Stock or other securities.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of any
Foreign Subsidiary or any Foreign Subsidiary Holding Company.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2)
or any other Loan Document to which such Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative
Agent or to any Lender that are required to be paid by such Guarantor
pursuant to the terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to (i) each Grantor other than
the Borrowers and (ii) with respect to the Canadian Borrower Obligations,
the Company.
"Intellectual Property": with respect to any Grantor, the collective
reference to such Grantor's Copyrights, Copyright Licenses, Patents, Patent
Licenses, Trade Secrets, Trademarks and Trademark Licenses, and all rights
to ▇▇▇ at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made by any
Grantor to the Company or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all "investment
property" as such term is defined in Section 9-102(a)(49) of the New York
UCC (other than any such "investment property" consisting of, or in respect
of, any Excluded Equity Interests) and (ii) whether or not constituting
"investment property" as so defined, all Pledged Interests, all Pledged
Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any Investment
Property, provided that in no event shall "Issuers" include any Excluded
Issuers.
"Lender Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements entered into by a Borrower with any
Lender (or any Affiliate of any Lender) providing for protection against
fluctuations in interest rates or currency exchange rates or the exchange
of nominal interest obligations, either generally or under specific
contingencies.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
5
"Obligations": (i) in the case of the Company, the Company
Obligations, (ii) in the case of the Canadian Borrower, the Canadian
Borrower Obligations, and (iii) in the case of each Guarantor, its
Guarantor Obligations (including its guarantee of the Canadian Borrower
Obligations pursuant to this Agreement).
"Patents": (a) with respect to any Grantor, all of such Grantor's
right, title and interest in and to (i) all letters patent of the United
States or any political subdivision thereof, or of any other country or
entity or political subdivision thereof or otherwise, all reissues and
extensions thereof and all goodwill associated therewith, including,
without limitation, any of the foregoing referred to in Schedule 6, and
(ii) all applications for letters patent of the United States and all
divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in Schedule 6, and (b)
all rights to obtain any reissues or extensions of the foregoing.
"Patent License": with respect to any Grantor, all of such Grantor's
right, title and interest in, to and under all agreements, whether written
or oral, providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a
Patent, including, without limitation, any of the foregoing referred to in
Schedule 6.
"Pledged Interests": the collective reference to:
(i) all right, title and interest, now existing or hereafter acquired,
of each Grantor in any limited liability company or partnership but not any
of its obligations from time to time as a member or partner therein,
including rights under any agreement creating or organizing any limited
liability company or partnership;
(ii) any and all moneys due and to become due to each Grantor now or
in the future or by way of a distribution made to such Grantor in its
capacity as a member or partner of or the owner of any limited liability
company or partnership interest in any limited liability company or
partnership or otherwise in respect of such Grantor's interest as member of
any limited liability company or partner in any partnership or the owner of
any limited liability company or partnership interest;
(iii) any other property of any limited liability company or
partnership to which any Grantor now or in the future may be entitled in
its capacity as a member or partner of or the owner of any limited
liability company or partnership interest in any such limited liability
company or partnership by way of distribution, return of capital or
otherwise; and
(iv) any other claim which each Grantor now has or may have in the
future in its capacity as a member or partner of or the owner of any
limited liability company or partnership interest against any such limited
liability company or partnership interest or its property.
provided that in no event shall "Pledged Interests" include any Excluded Equity
Interests.
"Pledged Notes": all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes in a principal
6
amount in excess of $1,000,000 issued to or held by any Grantor (other than
promissory notes issued in connection with extensions of trade credit by
any Grantor in the ordinary course of business).
"Pledged Stock": the shares of Capital Stock listed on Schedule 2 and
all other shares of Capital Stock issued by any Issuer, together with any
other shares, stock certificates, options or rights of any nature
whatsoever in respect of the Capital Stock of any Issuer that may be issued
or granted to, or held by, any Grantor while this Agreement is in effect;
provided that in no event shall "Pledged Stock" include any Excluded Equity
Interests.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1)
of the New York UCC and, in any event, shall include, without limitation,
all dividends or other income from the Investment Property, collections
thereon or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": with respect to any Grantor, all of such Grantor's
right, title and interest in and to (i) all trademarks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, service marks, logos and other source or business
identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings thereof,
and all applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States or any State thereof, or in any foreign office or otherwise,
and all common-law rights related thereto, including, without limitation,
any of the foregoing referred to in Schedule 6, and (ii) the right to
obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral, providing
for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in Schedule
6.
"Trade Secrets": with respect to any Grantor, all of such Grantor's
right, title and interest in and to all trade secrets, including, without
limitation, know-how, processes, formulae, compositions, designs, and
confidential business and technical information, and all rights of any kind
whatsoever accruing thereunder or pertaining thereto.
"Uncertificated Security": as defined in Section 8-102 of the New York
UCC.
"Vehicles": all cars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title law of any
state and, in any event including, without limitation, all tires and other
appurtenances to any of the foregoing.
7
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
Section 2. GUARANTEE
2.1 Guarantee. (a) (i) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent (for the benefit of the Lenders and their respective successors,
indorsees, transferees, assigns and, with respect to Lender Hedge Agreements,
Affiliates), the prompt and complete payment and performance by the Company when
due (whether at the stated maturity, by acceleration or otherwise) of the
Company Obligations.
(ii) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent (for the
benefit of the Lenders and their respective successors, indorsees, transferees,
assigns and, with respect to Lender Hedge Agreements, Affiliates), the prompt
and complete payment and performance by the Canadian Borrower when due (whether
at the stated maturity, by acceleration or otherwise) of the Canadian Borrower
Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor (other than the
Company) hereunder and under the other Loan Documents shall in no event exceed
the amount which can be guaranteed by such Guarantor under applicable federal
and state laws relating to the insolvency of debtors (after giving effect to the
right of contribution established in Section 2.2).
(c) Each Guarantor agrees that the Company Obligations and the Canadian
Borrower Obligations may at any time and from time to time exceed the amount of
the liability of such Guarantor hereunder without impairing the guarantee
contained in this Section 2 or affecting the rights and remedies of the
Administrative Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Company Obligations, all the Canadian Borrower
Obligations and the obligations of each Guarantor under the guarantee contained
in this Section 2 shall have been satisfied by payment in full, no Letter of
Credit shall be outstanding and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Company may be free from any Company Obligations and/or the Canadian
Borrower may be free from any Canadian Borrower Obligations.
(e) No payment made by the Company, the Canadian Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the
8
Administrative Agent or any Lender from the Company, the Canadian Borrower, any
of the Guarantors, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Company Obligations or
the Canadian Borrower Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Company Obligations or the Canadian Borrower Obligations, as
the case may be, or any payment received or collected from such Guarantor in
respect of the Company Obligations or the Canadian Borrower Obligations, as the
case may be), remain liable for the Company Obligations and the Canadian
Borrower Obligations up to the maximum liability of such Guarantor hereunder
until the Company Obligations and the Canadian Borrower Obligations are paid in
full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
(f) Without limitation of the foregoing, the Company, as a Guarantor
hereunder, unconditionally and irrevocably guarantees to the Administrative
Agent (for the benefit of the Lenders and their respective successors,
indorsees, transferees, assigns and, with respect to Lender Hedge Agreements,
Affiliates), the prompt and complete payment and performance by the Canadian
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Canadian Borrower Obligations.
2.2 Right of Contribution. Each Subsidiary Guarantor hereby agrees that
to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and conditions of Section 2.3. The provisions of this Section shall
in no respect limit the obligations and liabilities of any Subsidiary Guarantor
to the Administrative Agent and the Lenders, and each Subsidiary Guarantor shall
remain liable to the Administrative Agent and the Lenders for the full amount
guaranteed by such Subsidiary Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Collateral Agent, the Administrative
Agent or any Lender against the Company, the Canadian Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by the
Administrative Agent or any Lender for the payment of the Company Obligations or
the Canadian Borrower Obligations, nor shall any Guarantor seek or be entitled
to seek any contribution or reimbursement from the Company, the Canadian
Borrower or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Administrative Agent and the Lenders
by the Company and the Canadian Borrower are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time when all
of the Company Obligations shall not have been paid in full, such amount shall
be held by such Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against such Obligations,
whether matured or unmatured, in such order as the Administrative Agent may
determine.
9
2.4 Amendments, etc. with respect to Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Company Obligations or the
Canadian Borrower Obligations made by the Administrative Agent or any Lender may
be rescinded by the Administrative Agent or such Lender and any of such
Obligations continued, and such Obligations, or the liability of any other
Person upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and the Credit Agreement and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders or all Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Administrative Agent or any Lender for the
payment of such Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Company Obligations, for the Canadian Borrower Obligations
or for the guarantee contained in this Section 2 or any property subject
thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the Company
Obligations and the Canadian Borrower Obligations and notice of or proof of
reliance by the Administrative Agent or any Lender upon the guarantee contained
in this Section 2 or acceptance of the guarantee contained in this Section 2;
the Company Obligations, the Canadian Borrower Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee contained
in this Section 2; and all dealings between each of the Company and the Canadian
Borrower and any of the Guarantors, on the one hand, and each of the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Company, the Canadian Borrower or any of the Guarantors with respect
to the Company Obligations and the Canadian Borrower Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Company Obligations, any of the Canadian
Borrower Obligations, or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Company, the Canadian Borrower or any other
Person against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (other than indefeasible payment in full in cash of the
Company Obligations or the Canadian Borrower Obligations, as the case may be)
(with or without notice to or knowledge of the Company, the Canadian Borrower or
such Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Company for the Company Obligations, of the
Canadian Borrower for the Canadian Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance.
10
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent or any Lender may, but
shall be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against the Company, the Canadian
Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Company Obligations or for the Canadian Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Company, the Canadian
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Company, the Canadian Borrower, any other Guarantor or any other
Person or any such collateral security, guarantee or right of offset, shall not
relieve any Guarantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent or any Lender against any
Guarantor. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Company Obligations or Canadian
Borrower Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company, the Canadian Borrower
or any Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Company,
the Canadian Borrower or any Guarantor or any substantial part of its property,
or otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in
Dollars at the office of the Administrative Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Section 3. GRANTS OF SECURITY INTERESTS
3.1 Grant by Grantors. Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent for the
ratable benefit of the Lenders, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Grantor or in which
such Grantor now has or at any time in the future may acquire any right, title
or interest (collectively, the "Collateral"), as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Deposit Accounts;
(e) all Documents (other than title documents with respect to
Vehicles);
11
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Investment Property;
(l) all Letter-of-Credit Rights
(m) all Commercial Tort Claims;
(n) all other property not otherwise described above;
(o) all books and records pertaining to the Collateral; and
(p) to the extent not otherwise included, all Proceeds, Supporting
Obligations and products of any and all of the foregoing;
provided that in no event shall the Collateral include any Excluded
Equity Interests and provided, further, that notwithstanding any of the other
provisions set forth in this Section 3, this Agreement shall not constitute a
grant of a security interest in any General Intangible to the extent that such
grant of a security interest is prohibited by any Requirements of Law of a
Governmental Authority, requires a consent not obtained of any Governmental
Authority pursuant to such Requirement of Law or is prohibited by, or
constitutes a breach or default under or requires any consent not obtained
under, any contract, license, agreement, instrument or other document evidencing
or giving rise to such General Intangible, except to the extent that such
Requirement of Law or the term in such contract, license, agreement, instrument
or other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law; provided further, that the foregoing
limitation shall not affect, limit, restrict or impair the grant by such Grantor
of a security interest pursuant to this Agreement in any Receivable or any money
or other amounts due or to become due under any such General Intangible.
Section 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrowers thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 Title; No Other Liens. Except for the security interest granted to
the Administrative Agent for the ratable benefit of the Lenders, pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of
12
record in any public office, except such as have been filed in favor of the
Administrative Agent for the benefit of the Lenders, pursuant to this Agreement,
the Existing Guarantee and Pledge Agreement or with respect to Liens permitted
by the Credit Agreement.
4.2 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent for the
ratable benefit of the Lenders, as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for Liens permitted by the Credit Agreement
which have priority over the Liens on the Collateral by operation of law,
provided that the Grantors make no such representation with respect to
Receivables the obligors on which are Governmental Authorities and with respect
to which the Grantor has to comply with the Federal Assignment of Claims Act.
4.3 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization, identification number from the jurisdiction of
organization (if any) and the location of such Grantor's chief executive office
or sole place of business are specified on Schedule 4. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document and long-term good standing
certificate as of a date which is recent to the date hereof.
4.4 Inventory and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on Schedule
5.
4.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.6 Investment Property. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or
13
options in favor of, or claims of, any other Person, except the security
interest created by this Agreement or Liens permitted by the Credit Agreement.
4.7 Receivables. (a) The places where such Grantor keeps its records
concerning such Grantor's Receivables constituting Collateral are listed on
Schedule 7 or such other location or locations of which such Grantor shall have
provided prior written notice to the Administrative Agent pursuant to Section
5.5 hereof.
(b) Except in the case of (1) Receivables in an amount not in excess of
$1,000,000 in the aggregate at any time outstanding, (2) Receivables whose
obligors are local municipalities and (3) any other Receivables with respect
to which the applicable Grantor has complied with the Federal Assignment of
Claims Act, none of the obligors on any Receivables is a Governmental Authority.
(c) The amount represented by such Grantor to the Lenders from time to
time as owing to such Grantor in respect of the Receivables will at such times
be the correct amount, in all material respects, actually owing by such account
debtor or debtors thereunder, except to the extent that appropriate reserves
therefor have been established on the books of such Grantor in accordance with
GAAP.
4.8 Contracts. (a) No consent of any party (other than such Grantor) to
any Contract is required, or purports to be required, in connection with the
execution, delivery and performance of this Agreement, except where the failure
to obtain any such consents, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(b) Each Contract is in full force and effect and constitutes a valid
and legally enforceable obligation of the parties thereto, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing, except
where the failure of any Contracts, individually or in the aggregate, to be in
full force and effect or constitute valid and legally enforceable obligations of
the parties thereto could not reasonably be expected to have a Material Adverse
Effect.
(c) No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, or where the failure to have obtained such consent or
authorization or to make such filing or take such action, could not reasonably
be expected to have a Material Adverse Effect.
(d) Except with respect to Optical Datacom LLC and certain of its
former principals, neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof in any manner that, in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
14
(e) The right, title and interest of such Grantor in, to and under the
Contracts are not subject to any defenses, offsets, counterclaims or claims
that, in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(f) The places where such Grantor keeps its records concerning such
Grantor's Contracts are listed on Schedule 8 or such other location or locations
of which such Grantor shall have provided prior written notice to the
Administrative Agent pursuant to Section 5.5 hereof.
4.9 Intellectual Property. (a) Schedule 6 lists all material United
States Patents and Trademarks registered, or pending registration, in the United
States Patent and Trademark Office and owned by such Grantor in its own name on
the date hereof, and all material Trademark Licenses and Patent Licenses
(including, without limitation, material Trademark Licenses for registered
Trademarks and material Patent Licenses for registered Patents) to which such
Grantor is a party on the date hereof.
(b) On the date hereof, each patent, patent application, trademark
registration and trademark application of such Grantor set forth on Schedule 6
is valid, subsisting, unexpired and enforceable, and has not been abandoned,
and, to the best of each Grantor's knowledge, does not infringe the intellectual
property rights of any other Person, in each case except in any respect that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(c) To the knowledge of each Grantor, no holding, decision or judgment
has been rendered by any Governmental Authority which would limit, cancel or
question the validity of, or such Grantor's rights in, any Intellectual Property
set forth on Schedule 6 in any respect that could reasonably be expected to have
a Material Adverse Effect.
(d) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property set forth on Schedule 6 or such
Grantor's ownership interest therein, and (ii) which, if adversely determined,
would have a Material Adverse Effect.
4.10 Commercial Tort Claims. On the date hereof such Grantor does not
own any Commercial Tort Claims. Upon the creation or acquisition of any
Commercial Tort Claims by any Grantor for amounts in excess of $1,000,000, such
Grantor will promptly provide the Administrative Agent with a reasonable
description thereof and take such other action reasonably requested by the
Administrative Agent in order to create a perfected security interest in such
Commercial Tort Claims as Collateral.
Section 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and the
Lenders that, from and after the date of this Agreement until the Obligations
shall have been paid in full, no Letter of Credit shall be outstanding and the
Commitments shall have terminated:
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper.
If any amount payable under or in connection with any of the Collateral shall be
or become evidenced by any Instrument, Certificated Security or Chattel Paper,
such Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly indorsed in a
15
manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement (subject to the last paragraph of Section 5.7(a));
provided that in no event shall any Excluded Equity Interests be required to be
pledged hereunder.
5.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring
against business interruption and insuring such Grantor's Inventory and
Equipment against loss by fire, explosion, theft and such other casualties as
may be reasonably satisfactory to the Administrative Agent and (ii) to the
extent requested by the Administrative Agent, insuring such Grantor, the
Administrative Agent and the Lenders against liability for personal injury and
property damage relating to such Inventory and Equipment, such policies to be in
such form and amounts and having such coverage as is commercially reasonable.
(b) All such insurance shall (i) provide that the insured shall make
commercially reasonable efforts to give at least 30 days' prior written notice
to the Administrative Agent before any cancellation, material reduction in
amount or material change in coverage thereof shall be effective, (ii) name the
Administrative Agent as its interests may appear, as an additional insured or
loss payee, (iii) if reasonably requested by the Administrative Agent, include a
breach of warranty clause and (iv) be reasonably satisfactory in all other
respects to the Administrative Agent.
(c) The Company shall deliver to the Administrative Agent and the
Lenders a report of a reputable insurance broker with respect to such insurance
substantially concurrently with each delivery of the Company's audited annual
financial statements in the form previously delivered to the Administrative
Agent or in such other form as is reasonably requested by the Administrative
Agent and such supplemental reports with respect thereto as the Administrative
Agent may from time to time reasonably request.
5.3 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind against or with respect to the Collateral, except that no
such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.4 Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement
in such Grantor's Collateral as a perfected security interest having at least
the priority described in Section 4.2 and shall defend such security interest
against the claims and demands of all Persons whomsoever.
(b) Upon reasonable request of the Administrative Agent, such Grantor
will furnish to the Administrative Agent and the Lenders from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Administrative Agent may reasonably request, all in reasonable detail.
16
(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver for filing or recordation, as applicable,
such further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) filing any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts and
any other relevant Collateral, taking any actions necessary to enable the
Administrative Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
5.5 Changes in Locations, Name, etc. Such Grantor will not, except upon
10 days' prior written notice to the Administrative Agent and delivery to the
Administrative Agent of (a) all additional executed financing statements and
other documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein
and (b) if applicable, a written supplement to Schedule 5 showing any additional
location of which Inventory or Equipment shall be kept:
(i) change its jurisdiction of organization or the location of its
chief executive office or sole place of business from that referred to in
Section 4.3; or
(ii) change its name.
5.6 Notices. Such Grantor will advise the Administrative Agent and the
Lenders promptly, in reasonable detail, of (a) any Lien (other than security
interests created hereby or Liens permitted under the Credit Agreement) on any
of the Collateral which would adversely affect the ability of the Administrative
Agent to exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5.7 Investment Property. (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer, whether in addition to, in substitution of, as
a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Administrative Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Investment
Property upon the liquidation or dissolution of any Issuer (other than a
liquidation or dissolution of any wholly-owned Subsidiary into its direct parent
company) shall be paid over to the Administrative Agent to be held by it
hereunder as additional collateral security for the
17
Obligations, and in case any distribution of capital shall be made on or in
respect of the Investment Property or any property shall be distributed upon or
with respect to the Investment Property pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Administrative Agent, be delivered
to the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Investment Property shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Lenders, segregated from other funds of such Grantor, as additional collateral
security for the Obligations. Notwithstanding anything to the contrary in this
Section 5.7(a), in no event shall any Excluded Equity Interests be required to
be pledged hereunder.
The Company has notified the Lenders that the Grantors may from time to
time acquire Equity Interests which are publicly traded on a national securities
exchange or quotation system and which represent no more than 2% of the total
outstanding Equity Interests of the issuer thereof. The Lenders and the Grantors
agree that such Equity Interests shall constitute Collateral and the Lenders
agree that the certificates representing such Equity Interests shall be required
to be delivered to the Administrative Agent only upon the reasonable request of
the Administrative Agent.
(b) Without the prior written consent of the Administrative Agent, such
Grantor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock or other equity securities of any nature or to issue
any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Investment Property or Proceeds thereof (except
pursuant to a transaction permitted by the Credit Agreement), (iii) create,
incur or permit to exist any Lien or option in favor of, or any claim of any
Person with respect to, any of the Investment Property or Proceeds thereof, or
any interest therein, except for the security interests created by this
Agreement or permitted by the Credit Agreement or (iv) enter into any agreement
or undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Investment Property
or Proceeds thereof. It is understood that nothing in this Section 5.7(b) shall
prohibit any Grantor from taking any action (including voting any securities or
entering into any agreement providing for a sale or disposition of any
Investment Property) that is permitted under the Credit Agreement and, prior to
the consummation of such sale or disposition, is made subject to the rights of
the Administrative Agent hereunder.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.7(a) with respect to the Investment Property issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Investment Property issued by it.
5.8 Receivables. (a) Such Grantor will not, except in the exercise of
its reasonable business judgment (i) grant any extension of the time of payment
of any Receivable,
18
(ii) compromise or settle any Receivable for less than the full amount thereof,
(iii) release, wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any Receivable or
(v) amend, supplement or modify any Receivable unless such extensions,
compromises, settlements, releases, credits, discounts, amendments, supplements
or modifications could not reasonably be expected to materially adversely affect
the value of the Receivables constituting Collateral taken as a whole.
(b) Except with respect to any Receivable owing by Optical Datacom LLC
and certain of its formal principals, such Grantor will deliver to the
Administrative Agent a copy of each material demand, notice or document received
by it that questions or calls into doubt the validity or enforceability of more
than 5% of the aggregate amount of the then outstanding Receivables.
5.9 Contracts. Such Grantor will perform and comply in all material
respects with all its obligations under the Contracts.
5.10 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will not knowingly do any act that uses any material
Intellectual Property to infringe the intellectual property rights of any
other Person.
(b) Such Grantor will notify the Administrative Agent and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any Intellectual Property owned by such Grantor may
become forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office or the United States Copyright Office or any court
or tribunal in the United States) regarding such Grantor's ownership of, or the
validity of, any Intellectual Property or such Grantor's right to register the
same or to own and maintain the same, except in each case in which such Grantor
has reasonably determined that any of the foregoing is not of material economic
value to it.
(c) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any material Intellectual Property owned by such Grantor with the United
States Patent and Trademark Office or the United States Copyright Office, such
Grantor shall report such filing to the Administrative Agent within 30 days
after the last day of the fiscal year in which such filing occurs. Upon request
of the Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative Agent's and the
Lenders' security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby.
(d) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency, to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the Intellectual Property
owned by such Grantor, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability, except in each
case in which such Grantor has reasonably determined that any of the foregoing
is not of material economic value to it.
19
(e) In the event that any Intellectual Property owned by such Grantor
is infringed, misappropriated or diluted by a third party, such Grantor shall,
unless such Grantor has reasonably determined that such Intellectual Property is
not of material economic value to it, promptly notify the Administrative Agent
after it learns thereof and take such actions as such Grantor shall reasonably
deem appropriate under the circumstances to protect such Intellectual Property,
including suing for infringement, misappropriation or dilution, seeking
injunctive relief where appropriate and recovering any and all damages for such
infringement, misappropriation or dilution.
Section 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Administrative
Agent shall have the right to make test verifications of the Receivables in any
manner and through any medium that it reasonably considers advisable, and each
Grantor shall furnish all such assistance and information as the Administrative
Agent may require in connection with such test verifications. At any time and
from time to time, upon the Administrative Agent's request and at the expense of
the relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Administrative Agent to furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to collect
such Grantor's Receivables, subject to the Administrative Agent's direction and
control, and the Administrative Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default.
If required by the Administrative Agent at any time after the occurrence and
during the continuance of an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Lenders only as provided in Section 6.5, and (ii) until so turned
over, shall be held by such Grantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.
(c) At the Administrative Agent's request after the occurrence of an
Event of Default, each Grantor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Receivables, including, without limitation,
all original orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the Administrative Agent's satisfaction the existence,
amount and terms of any Receivables or Contracts.
(b) Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables and parties to the Contracts that the
Receivables and the Contracts have been
20
assigned to the Administrative Agent for the ratable benefit of the Lenders and
that payments in respect thereof shall be made directly to the Administrative
Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables and Contracts to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) or Contract by reason of or arising out of this Agreement or the
receipt by the Administrative Agent or any Lender of any payment relating
thereto, nor shall the Administrative Agent or any Lender be obligated in any
manner to perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto) or Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Sections 6.1(b) and 6.3(b), each Grantor shall
be permitted to receive all cash dividends paid in respect of the Pledged Stock
and all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer and consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate right exercised or other action
taken which, in the Administrative Agent's reasonable judgment, would impair the
Collateral or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Investment Property and make application thereof to the
Obligations in such order as the Administrative Agent may determine, as provided
in Section 6.5, and (ii) any or all of the Investment Property shall be
registered in the name of the Administrative Agent or its nominee, and the
Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Investment Property at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Investment Property as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
(other than for its gross negligence or willful misconduct) except to account
for property actually received by it,
21
but the Administrative Agent shall have no duty to any Grantor to exercise any
such right, privilege or option and shall not be responsible for any failure to
do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Administrative Agent. In addition, and
without limitation of the foregoing, each Grantor hereby authorizes and
instructs each Issuer of any Investment Property consisting of Uncertificated
Securities (including the Pledged Interests) pledged by such Grantor hereunder
to comply with any instruction (as defined in Section 8-102 of the New York UCC)
issued to such Issuer by the Administrative Agent with respect to all or any
part of such Uncertificated Securities without further consent by any Grantor.
6.4 Proceeds to be Turned Over To Administrative Agent. In addition to
the rights of the Administrative Agent and the Lenders specified in Section 6.1
with respect to payments of Receivables, if an Event of Default shall occur and
be continuing, and the Administrative Agent shall have instructed the Grantor to
do so, all Proceeds received by any Grantor consisting of cash, checks and other
near-cash items shall be held by such Grantor in trust for the Administrative
Agent and the Lenders, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required). All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Administrative Agent and the Lenders) shall continue to
be held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed upon by
the Company and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent's election,
the Administrative Agent may apply all or any part of Proceeds held in any
Collateral Account in payment of the Obligations in such order as the
Administrative Agent may elect, and any part of such funds which the
Administrative Agent elects not so to apply and deems not required as collateral
security for the Obligations shall be paid over from time to time by the
Collateral Agent to the Company or to whomsoever may be lawfully entitled to
receive the same. Any balance of such Proceeds remaining after the Obligations
shall have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have terminated shall be paid over to the Company or to
whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a
22
secured party under the New York UCC or any other applicable law. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent or any Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Administrative
Agent's request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Administrative
Agent shall apply the net proceeds of any action taken by it pursuant to this
Section, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as the Administrative Agent may elect, and
only after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the New York UCC, need the Administrative
Agent account for the surplus, if any, to any Grantor. To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.
6.7 Private Sales. (a) Each Grantor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the Pledged Stock and
Pledged Interests, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale of
any of the Pledged Stock or Pledged Interests for the period of time necessary
to permit the Issuer thereof to register such securities for public sale under
the Securities Act, or under applicable state securities laws, even if such
Issuer would agree to do so.
23
(b) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock and Pledged Interests pursuant to this
Section 6.7 valid and binding and in compliance with any and all other
applicable Requirements of Law. Each Grantor further agrees that a breach of any
of the covenants contained in this Section 6.7 will cause irreparable injury to
the Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing under the Credit Agreement.
6.8 Deficiency. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Obligations and the reasonable fees and disbursements of any
attorneys employed by the Administrative Agent or any Lender to collect such
deficiency.
Section 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or Contract or with respect to any other Collateral and file any
claim or take any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Administrative Agent for the purpose
of collecting any and all such moneys due under any Receivable or Contract
or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Lenders' security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
24
(iv) execute, in connection with any sale provided for in Section 6.6
or 6.7, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (2) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Administrative
Agent's and the Lenders' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The reasonable expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1 shall be
payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
25
7.2 Duty of Administrative Agent. The Administrative Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent's and the Lenders' interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to any applicable law,
each Grantor authorizes the Administrative Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such form and in such
offices as the Administrative Agent determines appropriate to perfect the
security interests of the Administrative Agent under this Agreement. Each
Grantor authorizes the Administrative Agent to use the collateral description
"all personal property" in any such financing statements. Each Grantor hereby
ratifies and authorizes the filing by the Administrative Agent of any financing
statement with respect to the Collateral made prior to the date hereof.
7.4 Authority of Administrative Agent. Each Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
Section 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with subsection 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1,
26
unless and until such Guarantor shall change such address by notice to the
Administrative Agent given in accordance with subsection 10.2 of the Credit
Agreement.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to
pay or reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to hold the Administrative Agent
and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay not caused by the Administrative Agent or the Lenders
in paying, any and all stamp, excise, sales or other taxes which may be payable
or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Company would be required to do so pursuant to subsection 10.5 of the Credit
Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; provided
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement (except in transactions permitted under
subsection 7.5 of the Credit Agreement) without the prior written consent of the
Administrative Agent.
27
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender, without notice to such Grantor or any
other Grantor, any such notice being expressly waived by each Grantor to the
extent permitted by applicable law, upon any amount becoming due and payable by
such Grantor hereunder (whether at the stated maturity, by acceleration or
otherwise), to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such Lender
to or for the credit or the account of such Grantor. The Administrative Agent
and each Lender agrees promptly to notify such Grantor after any such set-off
and the application made by the Administrative Agent or such Lender, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Administrative Agent and each Lender
under this Section 8.6 are in addition to other rights and remedies provided by
law (including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender may have.
8.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents represent
the agreement of the Grantors, the Administrative Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.
Section 9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.1 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
28
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to ▇▇▇
in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages; provided
that any such waiver shall not apply with respect to claims arising from the
gross negligence or willful misconduct of the Administrative Agent, any Issuing
Bank or any Lender.
9.2 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent and Lenders, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
9.3 Additional Grantors. Each Subsidiary of the Company that is
required to become a party to this Agreement pursuant to subsection 6.10 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
9.4 Releases. (a) At such time as the Loans and the other Obligations
shall have been paid in full, the Commitments have been terminated and no
Letters of Credit shall be outstanding, the Collateral shall be released from
the Liens created hereby, and this Agreement and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Administrative Agent shall deliver
to such Grantor any Collateral held by the Administrative Agent hereunder, and
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.
29
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall promptly execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral and, if such Collateral is held by the Administrative
Agent hereunder, deliver such Collateral to such Grantor or as such Grantor
shall otherwise direct. At the request and sole expense of the Company, in the
event of any sale, transfer or other disposition of Capital Stock of a
Subsidiary Guarantor in a transaction permitted by the Credit Agreement
resulting in 50% or less of the Capital Stock of such Subsidiary Guarantor being
directly or indirectly held by the Company, such Subsidiary Guarantor shall (i)
be released from all its obligations hereunder, including its guarantee
obligations under Section 2 and the security interests on its assets pursuant to
Section 3, and (ii) the Administrative Agent shall execute and deliver to such
Subsidiary Guarantor all releases or other documents reasonably necessary for
the release of the Liens created hereby on such Collateral owned or held by such
Subsidiary Guarantor and if such Collateral is held by the Administrative Agent
hereunder deliver such Collateral to such Subsidiary Guarantor or as such
Subsidiary Guarantor shall otherwise direct; provided that the Company shall
have delivered to the Administrative Agent, at least ten Business Days prior to
the date of the proposed release, a written request for release identifying the
relevant Subsidiary Guarantor and the terms of the sale, transfer or other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Company stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents.
9.5 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.6 Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum due hereunder in Dollars
or Canadian Dollars into another currency, the parties hereto agree, to the
fullest extent that they may legally and effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase Dollars or Canadian Dollars,
as the case may be, with such other currency in New York, New York or Toronto,
Canada, as the case may be, on the Business Day immediately preceding the day on
which final judgment is given.
(b) The obligation of each Grantor in respect of any sum due to the
Administrative Agent, any Lender or any Issuing Bank hereunder in Dollars shall,
to the extent permitted by applicable law, notwithstanding any judgment in a
currency other than Dollars, be discharged only to the extent that on the
Business Day following receipt of any sum adjudged to be so due in the judgment
currency the Administrative Agent, such Lender or such Issuing Bank may in
accordance with normal banking procedures purchase Dollars in the amount
originally due to the Administrative Agent, such Lender or such Issuing Bank
with the judgment currency. If the amount of Dollars so purchased is less than
the sum originally due to the Administrative Agent, such Lender or such Issuing
Bank, the applicable Grantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent, such
Lender or such Issuing Bank against the resulting loss.
30
(c) The obligation of each Grantor in respect of any sum due to the
Administrative Agent, any Lender or any Issuing Bank hereunder in Canadian
Dollars shall, to the extent permitted by applicable law, notwithstanding any
judgment in a currency other than Canadian Dollars, be discharged only to the
extent that on the Business Day following receipt of any sum adjudged to be so
due in the judgment currency the Administrative Agent, such Lender or such
Issuing Bank may in accordance with normal banking procedures purchase Canadian
Dollars in the amount originally due to the Administrative Agent, such Lender or
such Issuing Bank with the judgment currency. If the amount of Canadian Dollars
so purchased is less than the sum originally due to the Administrative Agent,
such Lender or such Issuing Bank, each Grantor agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify the Administrative Agent,
such Lender or such Issuing Bank against the resulting loss.
9.7 Amendment and Restatement. This Agreement amends and restates the
Existing Guarantee and Pledge Agreement and all rights, privileges, security
interests, Liens and remedies thereunder are continued in full force and effect
hereunder.
IN WITNESS WHEREOF, each of the undersigned has caused this Amended and
Restated Guarantee and Collateral Agreement to be duly executed and delivered as
of the date first above written.
GENTEK INC.
By:
---------------------------------------------
Name:
Title:
GENERAL CHEMICAL CORPORATION
By:
---------------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:
---------------------------------------------
Name:
Title:
TOLEDO TECHNOLOGIES INC.
By:
---------------------------------------------
Name:
Title:
PRINTING DEVELOPMENTS, INC.
By:
---------------------------------------------
Name:
Title:
BALCRANK PRODUCTS, INC.
By:
---------------------------------------------
Name:
Title:
DEFIANCE PRECISION PRODUCTS, INC.
By:
---------------------------------------------
Name:
Title:
HY-FORM PRODUCTS, INC.
By:
---------------------------------------------
Name:
Title:
DEFIANCE TESTING AND ENGINEERING SERVICES, INC.
By:
---------------------------------------------
Name:
Title:
HN INVESTMENT HOLDINGS INC.
By:
---------------------------------------------
Name:
Title:
WATERSIDE URBAN RENEWAL CORPORATION
By:
---------------------------------------------
Name:
Title:
▇▇▇▇▇▇, INC.
By:
---------------------------------------------
Name:
Title:
DEFIANCE, INC.
By:
---------------------------------------------
Name:
Title:
BINDERLINE DRAFTLINE, INC.
By:
---------------------------------------------
Name:
Title:
CON-X CORPORATION
By:
---------------------------------------------
Name:
Title:
VIGILANT NETWORKS LLC
By:
---------------------------------------------
Name:
Title:
BIG T-2 COMPANY LLC
By:
---------------------------------------------
Name:
Title:
KRONE DIGITAL COMMUNICATIONS INC.
By:
---------------------------------------------
Name:
Title:
KRONE OPTICAL SYSTEMS INC.
By:
---------------------------------------------
Name:
Title:
FINI ENTERPRISES, INC.
By:
---------------------------------------------
Name:
Title:
TOLEDO TECHNOLOGIES MANAGEMENT LLC
By:
---------------------------------------------
Name:
Title:
TOLEDO TECHNOLOGIES MANUFACTURING LLC
By:
---------------------------------------------
Name:
Title:
NOMA CORPORATION
By:
---------------------------------------------
Name:
Title:
PCT MEXICO CORPORATION
By:
---------------------------------------------
Name:
Title:
NOMA O.P. INC.
By:
---------------------------------------------
Name:
Title:
ELECTRONIC INTERCONNECT SYSTEMS, INC.
By:
---------------------------------------------
Name:
Title:
DEFIANCE KINEMATICS, INC.
By:
---------------------------------------------
Name:
Title:
DEFIANCE PRECISION PRODUCTS MANUFACTURING LLC
By:
---------------------------------------------
Name:
Title:
DEFIANCE PRECISION PRODUCTS MANAGEMENT LLC
By:
---------------------------------------------
Name:
Title:
KRONE INTERNATIONAL HOLDING INC.
By:
---------------------------------------------
Name:
Title:
KRONE USA INCORPORATED
By:
---------------------------------------------
Name:
Title:
KRONE INCORPORATED
By:
---------------------------------------------
Name:
Title:
STATEMENT OF DIFFERENCES
The less-than-or-equal-to sign shall be expressed as..........................<=