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EXHIBIT 10.10
SECURITY AGREEMENT dated as of June 14, 1995 ("Security
Agreement"), made by JLM CHEMICALS, INC., (the "Borrower") to each of the
Lenders (as defined below) party to the Credit Agreement (as defined
below) and THE CIT GROUP/EQUIPMENT FINANCING, INC., as collateral agent
for the Lenders (in such capacity, together with its successors in such
capacity, the "Collateral Agent").
PRELIMINARY STATEMENTS. 1. Reference is made to the Credit
Agreement, dated as of June 14, 1995 among the Borrower, THE CIT
GROUP/EQUIPMENT FINANCING, INC. ("CITEF"), THE CIT GROUP/BUSINESS CREDIT,
INC. ("CIT-BC"), each other lender which may hereafter execute and
deliver an Assignment and Assumption Agreement with respect to the Loans
and Commitments pursuant to Section 11.01 of the Credit Agreement
(CIT-EF, CIT-BC, each assignee under an Assignment and Assumption
Agreement, each a "Lender" and collectively, the "Lenders") and THE CIT
GROUP/EQUIPMENT FINANCING, INC. as agent for the Term Lenders (in such
capacity, together with its successors in such capacity, "Term Agent")
and THE CIT GROUP/BUSINESS CREDIT, INC., as agent for the Working Capital
Lenders (in such capacity, together with its successors in such capacity,
Working Capital Agent") and the Collateral Agent and THE CIT
GROUP/EQUIPMENT FINANCING, INC., as agent for the Lenders, (in such
capacity, together with its successors in such capacity, "Agent") (the
Credit Agreement, as it may hereafter be amended or otherwise modified
from time to time, being the "Credit Agreement"). The terms defined in
the Credit Agreement and not otherwise defined in this Security Agreement
which are used in this Security Agreement shall have the meanings set
forth in the Credit Agreement.
2. It is a condition precedent to the obligation of the
Lenders to provide the Loans and Commitments to the Borrower as provided
in the Credit Agreement that the Borrower shall have granted the security
interest contemplated by this Security Agreement.
NOW, THEREFORE, in consideration of the premises and in
order to induce the Lenders to provide the Loans and Commitments in
accordance with the terms of the Credit Agreement, the Borrower hereby
agree as follows:
SECTION 1. Grant of Security. The Borrower hereby grants a
security interest to each Lender and to the
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Collateral Agent for the benefit of each Lender, in and to all of the
Borrower's right, title and interest in and to all of the following,
whether now owned or hereafter acquired or existing (all of the
following, the "Collateral"):
(1) all equipment in all of its forms, wherever located,
including, without limitation, all machinery fork lifts, furniture,
furnishings, fixtures, office supplies and all other similar types of
tangible personal property and all parts thereof and all accessions
thereto, together with all parts, fittings, special tools, alterations,
substitutions, additions, accessories, replacements and accessions
thereto (any and all such equipment, parts and accessions being the
"Equipment");
(2) all inventory in all of its forms, wherever located,
including, but not limited to, (a) all raw materials, work in process,
finished goods, and materials used or consumed in manufacture or
production, (b) goods in which the Borrower has an interest in mass or a
joint or other interest or right of any kind (including, without
limitation, goods in which the Borrower has an interest or right as
consignee), and (c) goods which are returned to or repossessed by the
Borrower, and all accessions thereto and products thereof (any and all
such inventory, accessions, and products being the "Inventory");
(3) all documents and documents of title relating to or
covering any Inventory ("Documents");
(4) all accounts, accounts receivable, contract rights,
chattel paper, instruments, acceptances, drafts, and other obligations of
any kind evidencing a right to receive money, whether or not arising out
of or in connection with the sale or lease of goods or the rendering of
services, together with all ledger sheets, files, records and documents
relating to any of the foregoing, including all computer records,
programs, storage media and computer software used or useful in
connection therewith (the "Receivables"), and all of the Borrower's
right, title and interest, powers, privileges and other benefits under
each and every one of the security agreements and other contracts
securing or otherwise relating to any such Receivables;
(5) all Approvals and Permits and all other approvals,
permits, licenses, franchises, certificates that are, by their terms or
pursuant to applicable Law, assignable without the consent of the
Governmental
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Authority or the counterparty thereto, as the case may be;
(6) all rights under all contracts or agreements to
which Borrower is a party, including, but not limited to, all the
Facility Agreements (the "Assigned Agreements");
(7) all trademarks, trade names, trade styles, service
marks, prints and labels on which said trademarks, trade names, trade
styles and service marks have appeared or appear, designs and general
intangibles of like nature, and all registrations and recordings thereof,
including, without limitation, applications, registrations and recordings
in the United States Patent and Trademark Office or in any similar office
or agency of the United States, any State thereof, or any other country
or any political subdivision thereof, together with the goodwill
associated therewith, and all reissues, amendments, extensions or
renewals thereof and all licenses thereof (the "Trademarks") ;
(8) all patents of the United States or any other
country, and all applications therefor, all right, title and interest
therein and thereto, and all registrations and recordings thereof,
including, without limitation, applications, registrations and recordings
in the United States Patent and Trademark Office or in any similar office
or agency of the United States, any State thereof or any other country or
any political subdivision thereof, and all reissues, continuations,
divisionals, continuations-in-part or extensions thereof and all licenses
thereof (the "Patents");
(9) all copyrights, copyrighted works or any item which
embodies such copyrighted work of the United States or any other country,
and all applications therefor, all right, title and interest therein and
thereto, and all registrations and recordings thereof, including, without
limitation, applications, registrations and recordings in the United
States Copyright Office or in any similar office or agency of the United
States, any State thereof or any other country or any political
subdivision thereof, and all derivative works, extensions or renewals
thereof (the "Copyrights");
(10) all general intangibles, including but not limited
to, goodwill and tax refunds;
(11) the Deposit Account, the Insurance Account and any
other cash collateral account established
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pursuant to the terms of the Credit Agreement, all assets held in each
such account, together with all monies, proceeds or sums due or to become
due thereon or therefrom, and all bank accounts now or hereafter held by
the Borrower and all funds in such accounts together with all monies,
proceeds or sums due or to become due thereon or therefrom (each of the
Deposit Account, the Insurance Account and any other cash collateral
account established pursuant to the Credit Agreement, and all such bank
accounts, the "Bank Accounts"), and all documents or instruments
(including but not limited to passbooks, certificates of deposit and
receipts but excluding periodically rendered statements of account and
similar correspondence) necessary to be presented to withdraw funds or
investments held in the Bank Accounts (the "Account Documents");
(12) all motor vehicles (the "Motor Vehicles");
(13) all rolling stock (the "Rolling Stock"); and
(14) all proceeds of any and all of the foregoing
Collateral (including, without limitation, proceeds which constitute
property of the types described in any of the clauses of this Section 1
and, to the extent not otherwise included, all payments under insurance
(whether or not the Collateral Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of the foregoing Collateral.
SECTION 2. Security for Borrower's Obligations This
Security Agreement secures the prompt and complete payment when due of
all Borrower's Obligations. .
SECTION 3. Borrower Remains Liable. Anything herein to the
contrary notwithstanding, (l) the Borrower shall remain liable under the
contracts and agreements included in the Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to
the same extent as if this Security Agreement had not been executed, (2)
the exercise by the Collateral Agent for its own account or on behalf of
any of the Lenders of any of the rights hereunder shall not release the
Borrower from any of its duties or obligations under the contracts and
agreements included in the Collateral, and ( 3 ) neither the Collateral
Agent nor any Lender shall have any obligation or liability under the
contracts and agreements included in the Collateral by reason of this
Security Agreement, nor shall the Collateral Agent or any Lender be
obligated to perform any of the obligations or duties of the Borrower
thereunder
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or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Representations and Warranties. The Borrower
represents and warrants to the Collateral Agent and each Lender as
follows:
(1) Location of Collateral. All of the Equipment and
Inventory are located at the places specified in Schedule I attached
hereto and made a cart hereof. The chief place of business and chief
executive office of the Borrower and the office where the Borrower keens
its records concerning Receivables are located at the address specified
on Schedule III or at a place determined in accordance with the
provisions of Section 5(4) hereof. All originals of all chattel paper
which evidence Receivables in excess of Five Thousand Dollars ($5,000)
have been delivered to the Collateral Agent or have been legended to
reflect the security interest under this Security Agreement. None of the
Receivables is evidenced by a promissory note or other instrument in
excess of Five Thousand Dollars ($5,000), unless such note or instrument
has been delivered to the Collateral Agent. As of the Closing Date, the
Borrower does not own any Patents, Copyrights or Trademarks.
(2) Ownership and Liens. The Borrower owns the
Collateral free and clear of any Lien or encumbrance except for (i) the
security interest created by this Security Agreement, and (ii) Permitted
Liens. No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any
recording office, except those filed in favor of the Collateral Agent
and/or the Lenders relating to this Security Agreement and those
constituting or giving notice of Permitted Liens.
(3) Trade Names. As of the Closing Date, the Borrower
conducts no business under any name or trade name other than the
Borrower's name first recited above.
(4) Possession of Collateral. The Borrower has exclusive
possession and control of the Equipment and Inventory all of which is
located at the Site.
(5) Patents, Trademarks, Copyrights, Computer Programs,
etc. The Borrower has the right to use all Patents, Trademarks, and
Copyrights held by it at that time and all computer programs and other
rights, free from materially burdensome restrictions, which are necessary
for the operation of its business as conducted or as proposed to be
conducted. There is not pending or to Borrower's knowledge threatened any
claim or litigation against or affecting the Borrower contesting the
validity of any of the Patents, Trademarks, Copyrights or computer
programs which,
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if adversely determined, could result in a Material Adverse Change.
(6) Perfection of Lien. This Security Agreement creates
a valid security interest in the Collateral, subject only to Permitted
Liens, securing the payment of the Borrower's Obligations and all actions
necessary to perfect such security interest have been duly taken.
(7) Authorization and Approval. Except for the filings
contemplated herein under the Uniform Commercial Code of Illinois (the
"UCC") no authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority is required either (a) for the
grant by the Borrower of the security interest granted hereby or for the
execution, delivery or performance of this Security Agreement by the
Borrower, or (b) for the perfection of or the exercise by the Collateral
Agent or the Lenders of their respective rights and remedies hereunder.
(8) The Receivables. (a) The Borrower is the sole owner
of the Receivables; (b) all Receivables are based on actual and bona fide
sales of goods and/or services to customers, made by the Borrower in the
ordinary course of its business; (c) Receivables created by the sale of
goods or the rendering of services are the exclusive property of the
Borrower and are not and shall not be subject to any Lien; (d) the
Borrower has not made any prior assignment or transfer of any kind of
said Receivables, the proceeds thereof or interest(s) thereon or therein,
except such as may have been created in favor of the Collateral Agent and
the Lenders; (e) the invoices evidencing such Receivables are in the name
of the Borrower; (f) the customers of the Borrower have accepted the
goods or services, owe and are obligated to pay the full amounts stated
in the invoices according to their terms, without dispute, offset,
defense, counterclaim or contra.
(9) Valid Existence. The Borrower is a duly and validly
existing corporation and is qualified in all states where required to
enable the Borrower to enforce collection of Receivables due from
customers residing in that state.
SECTION 5. Covenants and Agreements. The Borrower covenants
and agrees that:
(1) Further Assurances. (a) The Borrower will from time
to time, at the expense of the Borrower, promptly execute and deliver all
further instruments and documents, and take all further action that the
Collateral Agent may request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable
the Collateral Agent or any Lender to exercise and
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enforce their respective rights and remedies hereunder with respect to
any Collateral.
(b) Without limiting the generality of the foregoing, the
Borrower will: (1) upon the request of the Collateral Agent, ▇▇▇▇
conspicuously each of its records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Collateral Agent,
indicating that such Collateral is subject to the security interest
granted hereby; (2) if any Receivable shall be evidenced by a promissory
note or other instrument in a face amount in excess of Five Thousand
Dollars ($5,000), deliver such to the Collateral Agent duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all
in form and substance satisfactory to the Collateral Agent; (3) if any
Receivable in excess of Five Thousand Dollars ($5,000) shall be evidenced
by chattel paper, either deliver such chattel paper to the Collateral
Agent duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the
Collateral Agent, or place a legend on such chattel paper to reflect the
security interest under this Security Agreement; and (4) execute and file
such financing or continuation statements, or amendments thereto, and
such other instruments or notices as the Collateral Agent may request in
order to perfect and preserve the security interest granted or purported
to be granted hereby.
(c) The Borrower hereby authorizes the Collateral Agent
to file one or more financing statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of
the Borrower where permitted by Law. The Borrower hereby authorizes the
Collateral Agent to file one or more continuation statements relative to
all or any part of the Collateral without the signature of the Borrower
where permitted by Law. A carbon, photographic or other reproduction
of this Security Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing
statement where permitted by Law.
(d) The Borrower will furnish to the Collateral Agent
from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Collateral Agent may request, all in reasonable detail,
including, without limitation, copies of agreements with, or purchase or
service orders from, the Borrower's customers, and copies of invoices to
customers, proof of shipment or delivery. The Borrower's failure,
however, to promptly give such statements or schedules to the Collateral
Agent shall not affect, diminish, modify or otherwise limit or the
Collateral Agent's or any Lender's security interests in the
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Collateral. The Borrower agrees to maintain such books and records
regarding Receivables as the Collateral Agent may reasonably require. All
of the books and records of the Borrower will be available to the
Collateral Agent upon reasonable prior notice at normal business hours,
including any records handled or maintained for the Borrower by any other
Person.
(e) If requested by the Collateral Agent, the Borrower
will at its cost and expense obtain the consent of any Person or
Governmental Authority to the assignment hereunder of any collateral if
such consent may be required by the terms of any such Collateral or by
any Governmental Approval.
(2) Protection Against Liens. The Borrower will defend
the Collateral against all claims and demands of all Persons (other than
the Collateral Agent and the Lenders) claiming an interest therein. The
Borrower will pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against, the
Collateral, except to the extent the validity thereof is the subject of a
Good Faith Contest.
(3) As to Equipment. Inventory, Trademarks, Patents,
Copyrights, Motor Vehicles, and Rolling Stock. The Borrower shall:
(a) Keep the Equipment and Inventory (other than
Inventory sold in the ordinary course of business) at the places therefor
specified in Schedule III.
(b) Cause the Equipment to be maintained and preserved
in accordance with Section 5.04 of the Credit Agreement.
(c) Permit the Collateral Agent or any Lender or any of
the agents of any of them at reasonable times and on reasonable prior
notice to have access to the Inventory and Equipment for purposes of
inspection.
(d) Promptly notify the Collateral Agent in writing of
any material loss or damage to the Inventory or Equipment, Motor
Vehicles, Rolling Stock or other Collateral.
(e) Not use or permit the Inventory or Equipment or
Motor Vehicles or Rolling Stock or other Collateral to be used for any
unlawful purpose or in violation of any Law or for hire.
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(f) Advise the Collateral Agent of all Trademarks,
Patents, or Copyrights or applications for or registration of the same,
created or obtained by Borrower on or after the date of this Security
Agreement.
(g) Take all steps to maintain and enforce the
Trademarks, Patents and Copyrights then held by the Borrower, including
but not limited to (i) payment of all fees, (ii) prosecuting infringers
if any such Trademarks, Patents and Copyrights are material to the
operation of the Borrower's business, and (iii) diligently pursuing any
application or registration related thereto.
(h) As soon as practicable, advise the Collateral Agent
of all Motor Vehicles acquired by Borrower.
(i) As soon as practicable, advise the Collateral Agent
of all Rolling Stock acquired by Borrower.
(4) As to Receivables. The Borrower shall keen its chief
place of business and chief executive office and the office where it
keeps its records concerning the Receivables at the location therefor
specified in Schedule III. The Borrower will hold and preserve such
records and will permit representatives of the Collateral Agent and any
Lender to inspect and make abstracts from such records during normal
business hours.
Except as otherwise provided in this paragraph or under any
of the Loan Documents, the Borrower shall continue to collect, at its own
expense, all amounts due or to become due to the Borrower under the
Receivables. Notwithstanding the foregoing, the Collateral Agent shall
have the right at any time, to notify the account debtors or obligers
under any Receivables of the assignment of such Receivables to the
Collateral Agent and the Lenders and to direct such account debtors or
obligors to make payment of all amounts due or to become due to the
Borrower thereunder directly to the Collateral Agent and, upon such
notification and at the expense of the Borrower, to enforce collection of
any such Receivables, and to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as the
Borrower might have done. After receipt by the Borrower of notice from
the Collateral Agent that the Collateral Agent is collecting the
Receivables, (a) all amounts and proceeds (including instruments), if
any, received by the Borrower in respect of the Receivables shall be
received in trust for the benefit of the Collateral Agent and the
Lenders, shall be segregated from other funds of the Borrower and shall
be forthwith paid over to the Collateral Agent in the same form as so
received (with any necessary endorsement) to be applied as provided in
the Intercreditor Agreement, and (b) the Borrower shall not adjust,
settle or
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compromise the amount or payment of any Receivable, or release wholly or
partly any account debtor or obligors thereof, or allow any credit or
discount thereon.
The Borrower agrees to notify the Collateral Agent promptly
of any matters materially adversely affecting the value, enforceability
or collectability of any Account in excess of Five Thousand Dollars
($5,000) and of all material customer disputes, offsets, defenses,
counterclaims, returns, rejections and all material reclaimed or
repossessed merchandise or goods.
(5) Insurance. The Borrower will maintain such insurance
with respect to the Collateral and its use as required under the Credit
Agreement. Further, the Borrower shall, at the request of the Collateral
Agent, duly execute and deliver instruments of assignment of such
insurance policies in accordance with the terms of the Credit Agreement.
The Borrower will use and apply all Insurance Proceeds in accordance with
the terms of the Credit Agreement.
(6) As to the Bank Accounts. In furtherance of the
security interest granted by Section 1, the Borrower shall upon
establishment of the respective Bank Accounts, deliver copies of all
existing Account Documents to the Collateral Agent. With respect to the
Bank Accounts, the Collateral Agent may (a) execute any and all
instruments required for the withdrawal or repayment of such Bank
Accounts, and (b) in all respects deal with such Bank Accounts as the
owner thereof.
The Borrower hereby irrevocably authorizes and empowers the
Collateral Agent at its option, at any time following the occurrence and
during the continuance of an Event of Default, either in its own name or
in the name of the Borrower: (a) to invest any and all monies or proceeds
representing the Bank Accounts, to renew the Bank Accounts on such terms
and for such period(s) as the Collateral Agent may deem appropriate; (b)
to demand, collect and receive payment of any and all monies or proceeds
due or to become due under the Bank Accounts or any part thereof; (c) to
execute any and all instruments required for the withdrawal or repayment
of same, or any part thereof; and (d) to complete in any respect any
instrument for the withdrawal or repayment of funds. The Borrower waives
any presentation, demand of payments, protest and notice of non-payment
or protest.
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(7) Assigned Agreements. The Borrower will perform and
comply in all respects with the terms and conditions of all of the
Assigned Agreements. The Borrower will not, without the consent of the
Collateral Agent (a) cancel or terminate any of the Assigned Agreements
or consent to or accept any cancellation or termination thereof, (b)
amend, supplement or otherwise modify any of the Assigned Agreements (in
each case as in effect on the date hereof), (c) waive any default under
or breach of any of the Assigned Agreements or waive, fail to enforce,
forgive or release any right, interest, or entitlement of any kind,
howsoever arising, under or in respect of the Assigned Agreements, or
vary or agree to the variation of any of the provisions of any of the
Assigned Agreements or of the performance of any other Person under any
of such Assigned Agreements, or (d) petition, request or take any other
legal or administrative action which seeks, or may reasonably be
expected, to rescind, terminate or suspend, any of the Assigned
Agreements or amend or modify any thereof.
SECTION 6. Transfer and Other Liens. Except as permitted in
the Credit Agreement, the Borrower shall not:
(1) Sell, assign (by operation of Law or otherwise)
lease, mortgage, transfer or otherwise dispose of any interest in
the Collateral; or
(2) Create or suffer to exist any Lien upon or with
respect to any of the Collateral other than the Lien hereof and
Permitted Liens.
SECTION 7. Collateral Agent Appointed Attorney-in-Fact. The
Borrower hereby irrevocably appoints the Collateral Agent as the
Borrower's attorney-in-fact, with full authority in the place and stead
of the Borrower and in the name of the Borrower, to take any action and
to execute any instrument which the Collateral Agent may deem necessary
or advisable to accomplish the purposes of this Security Agreement,
including, without limitation:
(1) to obtain and adjust insurance on the Collateral
required to be paid to the Borrower or the Collateral Agent
pursuant to the Credit Agreement;
(2) to ask, demand, collect, ▇▇▇ for, recover, settle,
compromise, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the
Collateral;
(3) to receive, endorse, assign, and collect any and all
checks, notes, drafts and other negotiable and non-negotiable
instruments, documents and chattel
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paper, in connection with clause (1) or (2) above, and the
Borrower waives notice of presentment, protest and non-payment of
any instrument, document or chattel paper so endorsed or assigned;
(4) to file any claims or taken any action or institute
any proceedings which the Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise
to enforce the rights of the Collateral Agent and the Lenders with
respect to any of the Collateral;
(5) to sell, transfer, assign or otherwise deal in or
with the Collateral or the proceeds or avails thereof, as a
secured party;
(6) to make any reasonable allowances and other
reasonable adjustments with respect to any of the Collateral;
(7) to sign the Borrower's name on any document, on
invoices relating to any account, on drafts against customers, on
schedules of assignments of accounts, on notices of assignment, on
financing statements under the UCC and other public records, on
verifications of accounts, and on notices to customers;
(8) to notify the post office authorities to change the
address for delivery of the Borrower's mail to an address
designated by the Collateral Agent;
(9) to receive, open and dispose of all mail addressed
to the Borrower;
(10) to send requests for verification of accounts to the
Borrower's customers;
(11) to pay or discharge taxes, Liens, or other
encumbrances levied or placed on or threatened against the
Collateral, to effect any repairs or any insurance called for by
the terms of this Security Agreement or the Credit Agreement and
to pay all or any part of the premiums therefor and the costs
thereof;
(12) to direct any party liable for any payment under any
Collateral to make payment of any and all moneys due and to become
due thereunder directly to the Collateral Agent for its benefit
and the benefit of the Lenders and to receive payment of and
receipt for any and all money, claims and other amounts due and to
become due at any time in respect of or arising out of any
Collateral; and
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(13) to take any and all actions with regard to the
Receivables as provided for in this Security Agreement.
The Borrower hereby ratifies and approves all acts of the
Collateral Agent, as its attorney in-fact, pursuant to this Section 7,
and the Collateral Agent, as its attorney in-fact, will not be liable for
any acts of commission or omission, nor for any error of judgment or
mistake of fact or Law other than acts constituting gross negligence or
wilful misconduct. This power, being coupled with an interest, is
irrevocable so long as this Security Agreement remains in effect.
The Borrower also authorizes the Collateral Agent, at any
time and from time to time, to communicate in its own name with any party to
any contract, agreement or instrument included in the Collateral with regard
to the assignment of such contract, agreement or instrument and other
matters relating thereto.
All amounts received by the Collateral Agent in the
exercise of its rights under this Section 7 shall be applied by Collateral
Agent in reduction of the Borrower's Obligations in the order as selected by
the Collateral Agent.
SECTION 8. Collateral Agent May Perform. If the Borrower
fails to perform any agreement contained herein, the Collateral Agent may
(but is not obligated to) itself perform, or cause performance of, such
agreement, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by the Borrower.
SECTION 9. Remedies. If any Event of Default shall have
occurred, the Collateral Agent and the Lenders may exercise in respect of
the Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured party
on default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may (1) require the Borrower to, and the Borrower
hereby agrees that it will at its expense and upon the request of the
Collateral Agent forthwith, assemble all or part of the Collateral as
directed by the Collateral Agent and make it available to the Collateral
Agent at a place to be designated by the Collateral Agent, (2) enter the
premises where any of the Collateral is located and take and carry away the
same, by any of its representatives, with or without legal process, to the
Collateral Agent's place of storage, and (3) without notice, except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Collateral Agent's offices
or elsewhere,
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for cash, on credit or for future delivery and upon such other terms as
the Collateral Agent deems to be commercially reasonable. The Borrower
agrees that, to the extent notice of sale shall be required by Law, at
least five (5) Business Days' notice to the Borrower of the time and
place of any public or private sale is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been
given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place it
was so adjourned.
SECTION 10. Application of Proceeds. All cash proceeds
received by the Collateral Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral shall
be applied in whole or in part by the Collateral Agent against all or any
part of the Borrower's Obligations in the order as selected by the
Collateral Agent. If the proceeds of the sale of the Collateral are
insufficient to pay all the Borrower's Obligations, the Borrower agrees
to pay upon demand any deficiency to the Collateral Agent and the
Lenders.
SECTION 11. Concerning the Collateral Agent and the
Lenders. (1) Collateral Agent's and Lenders' Rights. The powers conferred
on the Collateral Agent and the Lenders hereunder are solely to protect
their interests in the Collateral and shall not impose any duty upon them
to exercise any such powers.
The Collateral Agent is authorized to take all such action
as is provided to be taken by it hereunder and all other action
reasonably incidental thereto.
The Collateral Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the security
interests in any of the Collateral, whether impaired by operation of Law
or by reason of any action or omission to act on its part hereunder. The
Collateral Agent shall not have any duty to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement by
the Borrower.
(2) Limitation on Duty of Collateral Agent and Lenders
in Respect of Collateral. Beyond the exercise of reasonable care in the
custody thereof, the Collateral Agent and the Lenders shall have no duty
as to any Collateral in their possession or control or in the possession
or control of any agent or bailee or any income thereon or as to the
preservation of rights against prior parties or any other
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rights pertaining thereto. The Collateral Agent and the have exercised
reasonable care in the custody of the Collateral in their possession if
the is accorded treatment substantially equal to that accord their own
property, and shall not be liable or responsible for any loss or damage
to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding
agency, consignee or other agent or bailee selected by the Collateral
Agent or such Lenders in good faith.
(3) The Receivables. Neither the Collateral Agent nor
any Lender shall under any circumstances be deemed to assume any
responsibility for or obligations or duty with respect to the Receivables
or any proceeds thereof, and shall not be required to take any action of
any kind to collect, preserve or protect its or the Borrower's rights in
the Receivables.
SECTION 12. Amendments; Etc. No amendment or waiver of any
provision of this Security Agreement nor consent to any departure by the
Borrower herefrom shall in any event be effective unless the same shall
be in writing and signed by the Collateral Agent and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 13. Addresses for Notices. All notices and other
communications to any party hereunder shall be in writing, addressed or
transmitted to such Person at such Person's address or transmission
number as provided in or pursuant to the Credit Agreement.
SECTION 14. Continuing Security Interest. This Security
Agreement shall create a continuing security interest in the Collateral
and shall (1) remain in full force and effect until payment in full of
all of the Borrower's Obligations (after the later of the Capital
Expenditure Loan Commitment Termination Date or the Working Capital Loan
Commitment Termination Date), (2) be binding upon each of the Borrower,
the Collateral Agent and the Lenders and their respective successors and
assigns, and t3) inure to the benefit of the Collateral Agent and the
Lenders and their respective successors, transferees and permitted
assigns.
SECTION 15. Governing Law; Terms. This Security Agreement
shall be governed by and construed in accordance with the laws of the
State of New York, except as to matters which under the laws of Illinois
must be governed by the law of Illinois. Unless otherwise defined herein
or in the
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Credit Agreement terms used in Article 9 of the UCC are used herein as
therein defined.
SECTION 16. Miscellaneous. This Security Agreement is in
addition to, and not in limitation of, any other rights and remedies the
Collateral Agent or any Lender may have by virtue of any other instrument
securing the Borrower's Obligations or agreement heretofore, or
contemporaneously herewith executed by Borrower or by Law or otherwise.
If any provision of this Security Agreement is contrary to applicable
Law, such provision shall be deemed ineffective without invalidating the
remaining provisions hereof. If and to the extent that applicable Law
confers any rights or imposes any duties inconsistent with or in addition
to any of the provisions of this Security Agreement, the affected
provision shall be considered amended to conform thereto.
The Collateral Agent shall not by any act, delay, omission
or otherwise be deemed to have waived any of its rights or remedies
hereunder. A waiver by the Collateral Agent of any right or remedy
hereunder on any one occasion shall not be construed as a bar to or
waiver of any such right or remedy which the Collateral Agent would have
had on any future occasion nor shall the Collateral Agent or the Lender
be liable for exercising or failing to exercise any such right or remedy.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the parties hereto has caused
this Security Agreement to be duly executed and delivered by its
representative "Thereunto duly authorized as of the date first above
written.
JLM CHEMICALS, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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SCHEDULE I
to
Security Agreement
Principal Place of Business and Location of Collateral
Principal Place of Business: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Locations of Equipment: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Locations of Inventory: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
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