Dated June 28, 2004
AMES TRUE TEMPER, INC.
and
BANK OF AMERICA, N.A.
(as Collateral Agent)
CHARGE OF SHARES
in respect of the shares
of
TRUE TEMPER LIMITED
McCann FitzGerald
Solicitors
2 Harbourmaster Place
International Financial Services Centre
Dublin 1
CONTENTS
Clause Page
1. DEFINITIONS AND INTERPRETATION..........................................3
2. COVENANT TO PAY.........................................................5
3. SECURITY OVER CHARGED PORTFOLIO.........................................5
4. DEPOSIT OF CERTIFICATES.................................................6
5. EXERCISE OF RIGHTS IN RESPECT OF CHARGED PORTFOLIO......................7
6. COVENANTS...............................................................8
7. REPRESENTATIONS AND WARRANTIES..........................................9
8. FURTHER ASSURANCES.....................................................11
9. COLLATERAL AGENT'S POWERS..............................................11
10. RECEIVER...............................................................13
11. POWER OF ATTORNEY......................................................13
12. CONTINUING SECURITY/SUBROGATION........................................14
13. AVOIDANCE OF PAYMENTS..................................................14
14. PROVISO FOR REDEMPTION.................................................14
15. INDEMNITY..............................................................15
16. DEFAULT INTEREST.......................................................15
17. PAYMENTS...............................................................16
18. SET-OFF................................................................16
19. ASSIGNMENT.............................................................16
20. COSTS, EXPENSES AND STAMP DUTY.........................................17
21. NOTICES................................................................17
22. MISCELLANEOUS..........................................................17
23. THE COLLATERAL AGENT AS TRUSTEE........................................18
24. GOVERNING LAW AND JURISDICTION.........................................18
SCHEDULE.....................................................................20
THIS CHARGE is made on June 28, 2004
BETWEEN:
(1) AMES TRUE TEMPER, INC. a corporation incorporated under the laws of the
state of Delaware (the "Chargor" which term includes its successors
and/or assigns); and
(2) BANK OF AMERICA, N.A. as security trustee for the Secured Parties of the
security constituted by this Charge (hereinafter referred to as the
"Collateral Agent" which expression shall, where the context so admits,
include any successor trustee or trustees of the trusts under which the
security hereby constituted is held).
RECITALS
(A) The Principal Company is a wholly owned subsidiary of the Chargor.
(B) The Lenders have agreed to make each Facility available to the Borrower
on the terms and subject to the conditions set out in the Credit
Agreement.
(C) It is one of the conditions to the availability of each Facility that
the Charger executes this Charge and provides to the Collateral Agent
the security created by this Charge.
(D) The Board of Directors of the Chargor is satisfied that it is in the
interests, and for the benefit, of the Chargor to enter into the Charge.
(E) The Collateral Agent has agreed to enter into this Charge as security
trustee for the Secured Parties and to hold the benefit of the security
constituted by this Charge on trust under the terms and conditions of
this Charge and the Credit Agreement.
(F) The authorised share capital of the Principal Company is divided into
700,000 ordinary shares of (euro)1.269738 each, of which 647,350
ordinary have been issued and are fully paid. The Chargor is the
registered and beneficial owner of 647,350 ordinary shares in the
capital of the Principal Company.
NOW IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1. Words and expressions defined in the Credit Agreement, and not otherwise
defined herein shall, unless there is something in the subject or the
context which is inconsistent therewith, bear the same meaning herein as
in the Credit Agreement.
1.2. In this Charge, unless the context requires otherwise:
"Act" means the Conveyancing and Law of Property Act, 1881, as
amended by the Conveyancing Acts, 1882 and 1911;
"Charged Portfolio" means the Shares and the Related Assets
(and shall include, where the context so requires, any part
thereof);
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"Credit Agreement" means the credit agreement dated as of the
date of this Charge among (1) Ames True Temper, Inc. as
Borrower, (2) ATT Holdings Co. as a Guarantor, (3) Bank of
America, N.A. as Administrative Agent, Swing Line Lender and
L/C Issuer, (4) each Lender from time to time a party thereto,
(5) General Electric Capital Corporation as Documentation
Agent, (6) Wachovia Bank, National Association as Syndication
Agent and (7) Bank of America Securities LLC as Sole Lead
Arranger and Sole Book Manager;
"Principal Company" means True Temper Limited, a company
incorporated under the laws of Ireland with registration
number 79790;
"Related Assets" means all dividends, interest and other
monies payable in respect of the Shares and all other rights,
benefits and proceeds in respect of or derived from the Shares
(whether by way of redemption, bonus, preference, option,
substitution, conversion or otherwise);
"Secured Obligations" means each of the Obligations of the
Chargor now or hereafter existing under the Loan Documents,
whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest,
fees, premiums, penalties, indemnifications, contract causes
of action, costs, expenses or otherwise;
"Security Agreement" means the security agreement dated on or
about the date of this Charge from the Grantors referred to
therein (including the Chargor) to the Collateral Agent;
"Shares" means, at any time, 66% of all of the issued shares
in the capital of the Principal Company at such time (being at
the date of this Charge 427,251 shares in the capital of the
Principal Company).
1.3. In this Charge unless the context requires otherwise:
(a) clause headings are inserted for convenience only and shall not
affect the construction of this Charge and all references to
Clauses are to Clauses of this Charge;
(b) words denoting the singular number shall include the plural and
vice versa;
(c) references to a "person" include references to an individual,
firm, company, corporation, unincorporated body of persons or
any state or government or any instrumentality, agency or
political subdivision thereof or authority, board or body
created or constituted thereby;
(d) references to any agreement (including, without limitation, the
Credit Agreement), document or instrument are to be construed as
references to that agreement, document or instrument as amended
or supplemented or varied from time to time; and
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(e) references to any statute shall include re-enactments,
amendments and extensions thereof, whether by statute,
regulation or otherwise.
2. COVENANT TO PAY
The Chargor hereby covenants that it will in accordance with the
provisions of the Loan Documents discharge the Secured Obligations.
3. SECURITY OVER CHARGED PORTFOLIO
3.1. The Chargor, as beneficial owner, as a continuing security for the
purpose of securing the due and punctual payment and discharge of the
Secured Obligations, hereby charges and mortgages, and agrees to charge
and mortgage, to the Collateral Agent (as trustee for the Secured
Parties), by way of first fixed charge and mortgage, all of its rights,
title, benefit and interest whatsoever, present and future, to or in
respect of the Charged Portfolio, but so that the Collateral Agent shall
not in any circumstances incur any liability whatsoever in respect of
any calls, instalments or otherwise in connection with the Charged
Portfolio.
3.2. Forthwith upon the execution and delivery of this Charge, the Chargor
shall if required by the Collateral Agent, procure that the Articles of
Association of the Principal Company are altered in a manner
satisfactory to the Collateral Agent so as to allow a transfer of the
Shares to the Collateral Agent or its nominees and any transfer of the
Shares by or on behalf of the Collateral Agent made pursuant to this
Charge to be registered without requiring the consent of the directors
of the Principal Company or any other condition to be obtained or met.
3.3. The security created by or pursuant to this Charge and the obligations
of the Chargor hereunder shall not be affected or discharged by:
(a) any time, indulgence, waiver or consent at any time given to the
Chargor, the Borrower or any other person;
(b) any amendment to any provision of this Charge or any other Loan
Document, security, guarantee or indemnity;
(c) any increase or decrease in any Facility;
(d) the making or absence of any demand on the Borrower, or any
other person for payment;
(e) the enforcement or absence of enforcement of all or part of this
Charge or any other Loan Document, security, guarantee or
indemnity;
(f) the release of any guarantee, indemnity or security (including
any security created by or pursuant to this Charge or any other
Loan Document);
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(g) the insolvency, winding-up, administration or examination of the
Borrower, the Chargor, the Principal Company or any other person
(or the commencement of any such winding-up, administration or
examination);
(h) the illegality, invalidity or unenforceability of or any defect
in any provision of this Charge or any other Loan Document
(including any security created by or pursuant to this Charge)
or any of the rights or obligations of any of the parties
hereunder or thereunder (whether on the grounds of ultra vires,
not being in the interests of the relevant party, not having
been duly authorised, executed or delivered by the relevant
party or for any other reason whatsoever) or under the any other
Finance Document, security, guarantee or indemnity;
(i) the illegality, invalidity or unenforceability of or any defect
in any other document relating to or securing all or any part of
the Secured Obligations;
(j) any other matter or thing whatsoever,
and, in addition, the Chargor further covenants with the Collateral Agent that
if, by reason of any moneys or liabilities the payment or discharge of which is
expressed or intended to be guaranteed to the Collateral Agent by the Chargor
not being legally recoverable from the relevant third party or for any other
reason whatsoever, such moneys or liabilities (or any part of them) would not be
recoverable from the Chargor as a surety, then (notwithstanding that that was
known to the Collateral Agent) they shall be fully recoverable from the Charger
as sole, original and independent obligor and the Chargor will pay or discharge
them to the Collateral Agent upon demand.
4. DEPOSIT OF CERTIFICATES
4.1. The Chargor will, and will procure that its nominee(s) will, deposit
with the Collateral Agent and permit the Collateral Agent during the
continuance of the security hereby created to hold and retain:
(a) all certificates or other documents representing or evidencing
ownership of the Charged Portfolio together with instruments of
transfer in respect of the Charged Portfolio duly executed by or
on behalf of the Chargor and its nominees but omitting the name
of the transferee and the date and such other documents as the
Collateral Agent may from time to time require for perfecting or
protecting its title to the Charged Portfolio or for vesting or
enabling it to vest title to the Charged Portfolio in the
Collateral Agent or its nominee(s) to the intent that the
Collateral Agent may at any time without notice present for
registration any transfer of the Charged Portfolio to itself or
its nominee for the purpose of protecting or perfecting its
security over the Charged Portfolio and may, upon or at any time
after this Charge has become enforceable pursuant to Clause 9.1,
without notice present for registration any transfer of the
Charged Portfolio to any purchaser;
(b) a certified copy of the Share Register of the Principal Company;
and
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(c) executed undated resignations from each director and officer of
the Principal Company from time to time in the form set out in
the Schedule.
4.2. The Chargor shall, promptly upon the accrual, offer or issue of any
Related Assets (in the form of stocks, shares, warrant or other
securities) in which the Chargor has a beneficial interest, procure the
delivery to the Collateral Agent of (a) all certificates and other
documents of title representing such Related Assets and (b) stock
transfer forms or other instruments of transfer (executed in blank for
or on behalf of the Charger) in respect of those Related Assets as the
Collateral Agent may request.
5. EXERCISE OF RIGHTS IN RESPECT OF CHARGED PORTFOLIO
5.1. Unless and until an Event of Default shall have occurred and is
continuing and following a declaration to that effect by the Collateral
Agent:
(a) all rights and powers conferred by statute or otherwise upon an
absolute owner thereof shall:
(i) with respect to all or any part of the Charged Portfolio
registered in the name of the Collateral Agent or its
nominee(s), be exercised as the Chargor may direct; and
(ii) with respect to all or any part of Charged Portfolio
registered in the name of the Chargor or its nominee(s),
be exercised by the Chargor;
(b) the Chargor shall be entitled to collect and retain the full
benefit of all dividends or other bonus payments or rights
relating to the Charged Portfolio,
provided that the Chargor's title and powers relating to the Charged Portfolio
shall not be exercised in any manner which would result in any variation of the
rights attaching to or conferred by the Charged Portfolio or any part thereof or
which in the opinion of the Collateral Agent is inconsistent with, or
prejudicial to, its security over the Charged Portfolio or any part thereof or
which would result in the Collateral Agent incurring any cost, expense or
liability.
5.2. At any time after the occurrence of an Event of Default which is
continuing and following a declaration to that effect by the Collateral
Agent (and without any consent or authority on the part of the Chargor),
the Collateral Agent and its nominee(s) may at the Collateral Agent's
discretion (in the name of the Chargor or otherwise):
(a) exercise or cause to be exercised in respect of any part of the
Charged Portfolio any voting rights or rights to receive
dividends, interest, principal or other payments of money, as
the case may be, forming part of the Charged Portfolio and all
other powers and rights conferred or exercisable by the bearer
or holder thereof; and
(b) date any or all, as the Collateral Agent in its absolute
discretion may deem appropriate, of the letters of resignation
of the Directors of the Company provided to the Collateral Agent
pursuant to Clause 4.1(c) and sign, seal, execute, deliver,
7
acknowledge, file and register all such documents, instruments,
agreements, certificates and any other document (including, but
not limited to, such letters of resignation) and do any and all
such other acts or things as the Collateral Agent may in its
absolute discretion deem necessary or desirable to remove any or
all of the directors from the office of director of the
Principal Company.
5.3. Without prejudice to Clause 5.2, the Chargor hereby covenants with the
Collateral Agent that, at any time after the occurrence of an Event of
Default which is continuing and following a declaration to that effect
by the Collateral Agent, it will exercise in respect of the Charged
Portfolio any voting rights or any other rights attaching to the Charged
Portfolio in accordance with the direction of the Collateral Agent or
any of its nominee(s).
6. COVENANTS
The Chargor hereby covenants with the Collateral Agent that during the
continuance of this security:
(a) it will remain the registered and the beneficial owner of the
Charged Portfolio charged by it hereunder and that it will not
permit any person other than the Collateral Agent (or such
person as may be specified for this purpose in writing by the
Collateral Agent) to be registered as holder of the Charged
Portfolio or any part thereof;
(b) except for the Liens created pursuant to this Charge and the
other Loan Documents and save as otherwise permitted pursuant to
the Credit Agreement, it will not create or purport to create or
permit to subsist any Liens on or over the Charged Portfolio or
any part thereof or interest therein;
(c) it will not sell, transfer or otherwise dispose of the Charged
Portfolio or any part thereof or interest therein or attempt or
agree so to do except to the extent permitted pursuant to the
Credit Agreement;
(d) it will not do or cause or permit to be done anything which may
in any way depreciate, jeopardise or otherwise prejudice the
value to the Collateral Agent of the security hereby created;
(e) it will not procure or authorise the issue of any further
Charged Portfolio or other securities in the Principal Company;
(f) it will ensure that such (if any) part of the Charged Portfolio
as is not registered in the name of the Chargor are at all times
registered in the names of persons who have executed
declarations of trust in favour of the Chargor in such forms as
the Collateral Agent may specify, being (if at any time the
Collateral Agent so requires) persons nominated by the
Collateral Agent;
(g) no amendments shall be made to any provision of the Memorandum
and Articles of Association of the Principal Company (save as
contemplated by Clause 3.2);
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(h) it will not take from any person in respect of the Secured
Obligations any Lien whether personal or constituting a charge
on the property or assets of the Principal Company or any other
person and in the event of its having taken or at any time
taking such a security the same shall be held by it on trust for
the Collateral Agent as a security for the Secured Obligations
and be deposited by it with the Collateral Agent;
(i) it will duly and promptly pay all calls, instalments or other
payments which may be or become due in respect of the Charged
Portfolio as and when the same from time to time become due;
(j) it will immediately give to the Collateral Agent all material
notices and other material documents received in respect of the
Charged Portfolio;
(k) it will ensure that the Shares are, and at all times remain,
free from any restriction on transfer to the Collateral Agent or
its nominee(s) or to any purchaser from the Collateral Agent
pursuant to the exercise of any rights or remedies of the
Collateral Agent under or pursuant to this Charge;
(l) it will notify the Collateral Agent immediately upon receipt of
any notice issued under section 16(1) of the Companies Act, 1990
in respect of all or any of the Shares or upon becoming aware
that any such notice has been issued or that steps have been
taken or are about to be taken to obtain an order for the sale
of all or any of the Shares under section 16(7) of the Companies
Act, 1990;
(m) it will notify the Collateral Agent immediately upon the
appointment of any additional or replacement director or officer
of the Principal Company; and
(n) it will take such action as the Collateral Agent may, in its
absolute discretion, direct in the event that it becomes
possible (whether under the terms of issue of the Shares, a
reorganisation or otherwise) to convert or exchange the Shares
or have them repaid or in the event that any offer to purchase
is made in respect of the Shares or any proposal is made for
varying or abrogating any rights attaching to them.
7. REPRESENTATIONS AND WARRANTIES
7.1. The Chargor hereby represents and warrants to the Collateral Agent that:
(a) it is the absolute legal and beneficial owner of the Charged
Portfolio;
(b) the Charged Portfolio is, save for this Charge and any other
Lien created pursuant to or permitted by the Loan Documents,
free from all Liens whatsoever or claims whatsoever;
(c) the Shares have been validly issued and are fully paid up;
9
(d) the details of the Principal Company's authorised and issued
share capital in Recital G and in Schedule 2 are correct in all
respects;
(e) it has not received a notice under section 16(1) of the
Companies Act, 1990 in respect of all or any part of the Shares
and, so far as it is aware, no such notice has been issued and,
so far as it is aware, no steps have been taken or are about to
be taken to obtain an order for the sale of all or any part of
the Shares under section 16(7) of the Companies Act, 1990;
(f) it has full power and authority to enter into and deliver this
Charge, to create the security provided for herein and to
perform its obligations hereunder;
(g) this Charge constitutes its legal, valid and binding obligations
and is an effective security over the Charged Portfolio (and
each part thereof);
(h) the execution, delivery and performance of this Charge are
within its corporate or other powers, have been duly authorised
by all necessary corporate or other organisational action and do
not and will not (a) contravene the terms of its Organisation
Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require
any payment to be made under (i) any material Contractual
Obligation to which it or the Principal Company (a "Person") is
a party or affecting such Person or the properties of Such
Person or (ii) any order, injunction, writ or degree of any
Governmental Authority or any arbitral award to which such
Person or its property is subject; or (c) violate any Law.
Neither the Chargor or the Principal Company is in violation of
any Law or in breach of any such Contractual Obligation, the
violation or breach of which could be reasonably likely to have
a Material Adverse Effect;
(i) all consents, licences, approvals and authorisations required in
connection with the entry into, performance, validity and
enforceability of this Charge have been obtained and are in full
force and effect;
(j) it is not necessary for the legality, validity, enforceability
or admissibility in evidence of this Charge that this Charge or
any document relating to it be registered, filed, recorded, or
enrolled with any court, registry or public authority in any
relevant jurisdiction or that any stamp, registration or similar
taxes be paid on or in relation to this Charge;
(k) no Default has occurred and is continuing nor will a Default
result from the entry by the Chargor into this Charge or the
exercise by the Chargor of its rights under, or the performance
by it of any of its obligations, under this Charge; and
(l) no action, suit, proceeding, litigation or dispute against the
Chargor the Principal Company is currently taking place or
pending or, to its knowledge, threatened nor is there subsisting
any judgment or award given against any of them before any
court, board or arbitration or other body which, in any case,
could or might result in any material adverse change in its
financial condition.
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7.2. The representations and warranties of the Chargor in Clause 7.1 shall
survive the execution of this Charge and will be correct and complied
with in all respects so long as any Secured Obligations remain to be
paid or discharged as if repeated then by reference to the then existing
circumstances.
8. FURTHER ASSURANCES
8.1. The Chargor shall at any time, if and when required by the Collateral
Agent, execute such share transfers and such further legal or other
charges or assignments in favour of the Collateral Agent as the
Collateral Agent shall from time to time reasonably require over all or
any part of the Charged Portfolio charged by it hereunder and all rights
relating thereto both present and future (including any substituted
securities and any vendor's lien) and any other transfers or documents
the Collateral Agent may from time to time require for perfecting or
protecting its title to the same or for vesting or enabling it to vest
the same in itself or its nominee(s) to secure or discharge the Secured
Obligations, such further charges or assignments to be prepared by or on
behalf of the Collateral Agent at the cost of the Chargor and to contain
an immediate power of sale without notice, a clause varying the
provisions of Section 20 of the Act (regulation of power of sale)
accordingly, a clause excluding the provisions of Section 17 of the Act
(restriction on consolidation of mortgages) and such other clauses for
the benefit of the Collateral Agent as the Collateral Agent may
reasonably require.
8.2. The Chargor shall on or at any time following the occurrence of an Event
of Default which is continuing and if and when required by the
Collateral Agent, execute such share transfers as the Collateral Agent
shall require over all or any part of the Shares and all Related Rights
both present and future and any other transfers or documents the
Collateral Agent may from time to time require for vesting or enabling
it to vest the same in any purchaser.
9. COLLATERAL AGENT'S POWERS
9.1. The Secured Obligations shall be deemed to have become due for the
purpose of this Charge and of Section 19 of the Act (exercise of power
of sale and other powers), and the security created by the Chargor by or
pursuant to this Charge shall become immediately enforceable, and the
power of sale and other powers conferred by the Act in each case as
varied and extended by this Charge, and the powers and remedies provided
for herein shall be immediately exercisable in relation to the security
created by or pursuant to this Charge, upon the execution and delivery
of this Charge, but, as between the Collateral Agent and the Chargor
only (and not so as to prejudice or affect any third party), the
Collateral Agent agrees not to enforce this security or exercise any
such powers except at any time after an Event of Default occurs.
9.2. Upon or at any time after this Charge has become enforceable pursuant to
Clause 9.1 hereof: -
(a) the Collateral Agent and any nominee of the Collateral Agent
wherever situate may without further notice and without the
restrictions contained in Section 17 of
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the Act (restriction or consolidation of mortgages) in respect
of all or any part of the Charged Portfolio, exercise all the
powers or rights which may be exercisable by the registered
holder of the Charged Portfolio and all other powers conferred
on mortgagees by the Act as hereby varied or extended; and
(b) any dividends or other payments which may be received or
receivable by the Collateral Agent or by any nominee in respect
of any part of the Charged Portfolio may be applied by the
Collateral Agent as though they were proceeds of sale.
9.3. Section 20 of the Act (regulation of the power of sale) shall not apply
in relation to the security created by or pursuant to this Charge and
the statutory power of sale contained in the Act (as extended by this
Charge) and any other power whether implied by statute or otherwise
shall be exercisable immediately upon the security hereby created
becoming enforceable. Section 17 of the Act (restriction on
consolidation of mortgages) shall not apply to the Charged Portfolio or
to any security given to the Collateral Agent pursuant to this Charge.
9.4. In exercising the powers referred to in Clause 9.2, the Charged
Portfolio or any part thereof may be sold or disposed of at such times
in such manner and generally on such terms and conditions and for such
consideration as the Collateral Agent may think fit. Any such sale or
disposition may be for cash, debentures or other obligations, shares,
stock, securities or other valuable consideration and be payable
immediately or by instalments spread over such period as the Collateral
Agent shall think fit. No purchaser or other person shall be bound or
concerned to see or enquire whether the Collateral Agent's right to
exercise any of the powers hereby conferred has arisen or not or be
concerned with notice to the contrary or with the propriety of the
exercise or purported exercise of such powers.
9.5. All moneys received by the Collateral Agent in the exercise of any
powers conferred by this Charge shall be applied after the discharge of
all liabilities having priority thereto in or towards satisfaction of
the Secured Obligations and in the manner specified in Section 22(b) of
the Security Agreement (save that the Collateral Agent may credit the
same to a suspense account for so long and in such manner as the
Collateral Agent may from time to time determine).
9.6. The Collateral Agent shall not be liable to account as mortgagee in
possession in respect of all or any part of the Charged Portfolio and
shall not be liable for any loss upon realisation or for any neglect or
failure to present any dividend coupon or any bond or stock drawn for
repayment or for any failure to pay any call or instalment or to accept
any offer or to notify the Chargor of any such matter or for any other
loss of any nature whatsoever in connection with the Charged Portfolio.
9.7. If the Collateral Agent receives notice of any subsequent security,
assignment or other disposition affecting the Charged Portfolio or any
part thereof or interest therein, the Collateral Agent may open a new
account for the Chargor; if the Collateral Agent does not open a new
account then unless the Collateral Agent gives express written notice to
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the contrary to the Chargor it shall nevertheless be treated as if it
had done so at the time when it received such notice and as from that
time all payments made by or on behalf of the Chargor to the Collateral
Agent shall be credited or be treated as having been credited to the new
account and shall not operate to reduce the amount due from the Chargor
to the Collateral Agent at the time when it received notice.
10. RECEIVER
10.1. After the occurrence of an Event of Default which is continuing or if
requested by the Chargor, the Collateral Agent may by writing (acting
through an authorised officer of the Collateral Agent) without notice to
the Chargor appoint one or more persons to be receiver of the whole or
any part of the Charged Portfolio (each such person being (a) entitled
to act individually as well as jointly and (b) for all purposes deemed
to be the agent of the Chargor and the Chargor shall be responsible for
the remuneration of any such receiver(s)).
10.2. in addition to having the powers of the Collateral Agent conferred by
Clause 9, each person appointed pursuant to Clause 10.1 shall have, in
relation to the part of the Charged Portfolio in respect of which he was
appointed, all the powers conferred by the Act on a receiver appointed
under the Act.
11. POWER OF ATTORNEY
The Chargor hereby by way of security for the performance of its
obligations under this Charge irrevocably appoints the Collateral Agent,
each and every person to whom the Collateral Agent from time to time
shall have delegated the exercise of the power of attorney conferred by
this Clause 11 and any receiver and each of them jointly and also
severally to be the attorney of the Chargor (with full powers of
substitution and delegation) and in its name or otherwise and on its
behalf and as its act and deed to sign, seal, execute, deliver, perfect
and do all deeds, instruments, acts and things which the Chargor may or
ought to do under the covenants and provisions contained in this Charge
and generally in its name and on its behalf to exercise all or any of
the powers, authorities and discretions conferred by or pursuant to this
Charge or by any statute or common law on the Collateral Agent or any
receiver or which may be required or which the Collateral Agent or any
receiver shall deem fit for carrying any sale, charge, mortgage or
dealing by the Collateral Agent or by any receiver into effect or for
giving to the Collateral Agent or any receiver the full benefit of these
presents (including the exercise of a right of a legal or beneficial
owner of the Charged Portfolio) and generally to use the name of the
Chargor in the exercise of all or any of the powers, authorities or
discretions conferred on the Collateral Agent or any receiver and the
Chargor hereby ratifies and confirms and agrees to ratify and confirm
whatsoever any such attorney shall do or purport to do by virtue of this
Clause 11 and all money expended by any such attorney shall be deemed to
be expenses incurred by the Collateral Agent hereunder provided that the
Collateral Agent shall not exercise such power unless an Event of
Default has occurred and is continuing.
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12. CONTINUING SECURITY/SUBROGATION
12.1. This security shall be a continuing security notwithstanding the
insolvency, bankruptcy, liquidation or incapacity for any reason of the
Chargor or the Principal Company or any settlement of account or any
other matter whatsoever and is in addition to and shall not merge with
or otherwise prejudice or affect any contractual or other right or
remedy or any guarantee, lien, pledge, bill, note, mortgage or other
security (whether created by the deposit of documents or otherwise) now
or hereafter held by or available to the Collateral Agent and shall not
be in any way prejudiced or affected thereby or by the invalidity
thereof or by the Collateral Agent now or hereafter dealing with,
exchanging, releasing, varying or abstaining from perfecting or
enforcing any of the same or any rights which it may now or hereafter
have or giving time for payment or indulgence or compounding with any
other person liable.
12.2. Until the Secured Obligations have been paid or satisfied in full (and
notwithstanding payment of a dividend in any liquidation or bankruptcy
or under any compromise or arrangement), the Chargor waives all rights
of subrogation against the Principal Company and agrees not to demand or
accept or to negotiate, assign, charge or otherwise dispose of any
moneys, obligations or liabilities now or hereafter due or owing to it
by the Principal Company or to take any step to enforce any right
against the Principal Company for the same or to claim or prove in
competition with the Collateral Agent in the bankruptcy or liquidation
of the Principal Company. If the Chargor acts in breach of this Clause,
anything so received and any benefit derived directly or indirectly by
it therefrom shall be held in trust for the Collateral Agent as a
continuing security for the Secured Obligations.
13. AVOIDANCE OF PAYMENTS
Any release, discharge or settlement between the Chargor and the
Collateral Agent shall be conditional upon no security, disposition or
payment to the Collateral Agent by the Chargor or any other person being
void, set aside or ordered to be refunded pursuant to any enactment of
law relating to liquidation, administration, examinership or insolvency
or for any other reason whatsoever, and if such condition shall not be
fulfilled, the Collateral Agent shall be entitled to enforce this Charge
subsequently to the full extent of the Secured Obligations as if such
release, discharge or settlement had not occurred and any such payment
had not been made. The Collateral Agent may in its absolute discretion
retain the security hereby created for a period of one month plus such
statutory period within which such security, disposition or payment can
be avoided, set aside or ordered to be refunded after the Secured
Obligations have been paid or discharged in full, notwithstanding any
release, discharge or settlement given or made by the Collateral Agent
on, or as a consequence of, such termination of liability.
14. PROVISO FOR REDEMPTION
Subject to Clause 13, if:
(a) no Obligations (other than contingent indemnification
obligations not yet accrued and payable) of the Chargor under
the Loan Documents remain outstanding; and
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(b) all Secured Obligations have been irrevocably paid or discharged
to the Collateral Agent in full,
the Collateral Agent shall at the request and expense of the Chargor
promptly release the assets hereby charged (or such part thereof as may
then remain vested in the Collateral Agent) from the security created by
or pursuant to this Charge.
15. INDEMNITY
The Chargor covenants with the Collateral Agent fully to indemnify the
Collateral Agent and its subsidiaries and affiliates and their
respective officers, agents, servants and employees and the dependents
of any such officers, agents, servants and employees against all losses,
liabilities, claims, proceedings, taxes, penalties, fines, costs,
charges and expenses incurred (whether before or after this Charge has
become enforceable pursuant to Clause 9.1):
(a) in consequence of anything done or purported to be done by or on
behalf of the Collateral Agent under this Charge or any other
document relating to this Charge or of any failure by the
Chargor to comply with its obligations thereunder or otherwise
in connection therewith; or
(b) in consequence of any payment in respect of the Secured
Obligations (whether made by the Chargor or any other person)
being impeached or declared void for any reason whatsoever; or
(c) in consequence of the preparation, registration or perfecting of
this Charge (or the charge herein contained), or other document
relating to it; or
(d) in consequence of the exercise, or attempted or purported
exercise, or the consideration of the exercise, by or on behalf
of the Collateral Agent of any of the powers of the Collateral
Agent or any other action taken by or on behalf of the
Collateral Agent with a view to or in connection with the
recovery by the Collateral Agent of the Secured Obligations from
the Chargor or any other person; or
(e) in consequence of the carrying out or consideration of any other
act or matter which the Collateral Agent or any other person on
behalf of the Collateral Agent may consider to be necessary for
the preservation of the Charged Portfolio.
16. DEFAULT INTEREST
In the event that the Collateral Agent does not receive on the due date
any sums due under this Charge in respect of the Secured Obligations,
the Chargor shall pay to the Collateral Agent on demand interest on that
sum calculated day by day from the date of the relevant demand until
full discharge (both before and after judgment) calculated at the
Default Rate specified in the Credit Agreement and such amounts and
interest shall form part of the Secured Obligations and accordingly be
secured on the Charged Portfolio under the first fixed charge and pledge
contained in this Charge.
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17. PAYMENTS
All payments of whatever nature to be made by the Chargor to the
Collateral Agent under this Charge shall be made to the Collateral Agent
without set-off and free and clear of and without deduction for or on
account of any tax of any kind unless the Chargor is obliged by law to
make the payment subject to the deduction or withholding of tax, in
which case, the relevant payment shall be increased to the extent
necessary to ensure that, after the making of the deduction or
withholding, the Collateral Agent receives and retains (free from any
liability in respect of any deduction or withholding) a net sum equal to
the sum which it would have received and so retained had no deduction or
withholding been made or required to be made. The Chargor shall
indemnify the Collateral Agent against any liability of the Collateral
Agent in respect of any such tax and shall provide the Collateral Agent
from time to time, on request, with evidence satisfactory to the
Collateral Agent that the Chargor has remitted to the relevant taxation
authority any such tax which it was obliged to deduct.
18. SET-OFF
Without prejudice to any right of set-off or any similar right to which
the Collateral Agent may be entitled at law or in equity or by agreement
between the parties and, without prejudice to anything else herein
contained, the Collateral Agent may at any time without notice to or
further authorisation from the Chargor combine and consolidate all or
any accounts of the Chargor with the Collateral Agent anywhere and/or
set-off any moneys whatsoever and whether on current, deposit or any
other account and in whatever currency or currencies against any moneys
or liabilities whatsoever in whatever currency which may be due, owing
or incurred by the Chargor to the Collateral Agent whether actually or
contingently and whether or not any period of any deposit by reference
to which interest therein is calculated has expired and any conversion
from one currency to another for the purpose of any of the foregoing
shall be made at the Collateral Agent's then prevailing spot selling
rate at its office by which such conversion is made.
19. ASSIGNMENT
19.1. This Charge shall be binding upon and enure to the benefit of each of
the parties and their respective successors and permitted assigns.
19.2. The Chargor may not assign or transfer all or any of its rights,
benefits or obligations under this Charge.
19.3. In the event that any Loan Document is assigned in whole or in part by
the Collateral Agent, then the Collateral Agent may assign its rights,
powers and the benefit of this Charge to the assignee or transferee of
such Loan Document or any part thereof, and, in that event, the Chargor
shall execute such documents as the Collateral Agent may specify with a
view to perfecting such assignment or transfer or, where necessary,
shall execute further security documentation in favour of the assignee
or transferee in like form to this Charge.
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20. COSTS, EXPENSES AND STAMP DUTY
20.1. After the occurrence and during the continuance of a Default, all costs
and expenses (including any tax liability and any reasonable legal costs
and, in each case, value added tax or any similar tax charged or
chargeable in respect thereof) incurred by the Collateral Agent or, as
the case may, any receiver appointed hereunder in the exercise of any of
the rights, remedies and powers conferred on the Collateral Agent by
this Charge or in the perfection or enforcement of any other security
for or guarantee in respect of the Secured Obligations or in connection
with any proceedings instituted by or against the Collateral Agent in
relation to the title to the whole or any part of the Charged Portfolio
shall be reimbursed by the Chargor to the Collateral Agent on demand on
a full indemnity basis and shall carry interest from the date of such
demand until so reimbursed at the rate referred to in Clause 16.
20.2. The Chargor will promptly pay any stamp and other documentary duties and
registration taxes to which this Charge or any transfer of the Charged
Portfolio (or any part thereof) contemplated hereby may be subject to or
give rise and will fully indemnify the Collateral Agent on demand of the
Collateral Agent from and against any loss or liability suffered or
incurred as a result of any delay or omission by the Chargor to pay any
such duties or taxes.
20.3. The cost of the Chargor complying with any of its obligations under this
Charge (including, without limitation, its obligations under Clause 3
and Clause 8) shall be borne by the Chargor.
21. NOTICES
Any notice or other communication to be given under or for the purposes
of this Charge shall be in writing and shall be treated as properly
served or given if delivered in accordance with the provisions of the
Security Agreement.
22. MISCELLANEOUS
22.1. In the event of any conflict between the terms of this Charge and the
terms of the Security Agreement, the terms of the Security Agreement
shall prevail.
22.2. Subject to Clause 22.1, this Charge together with the other documents
referred to herein embodies the entire agreement between the parties and
supersedes all previous statements, representations and agreements
between the parties relating to the subject matter of this Charge.
22.3. Time shall be of the essence of this Charge. No delay or omission on the
part of the Collateral Agent in exercising any right, power or remedy
under this Charge shall impair the right, power or remedy or be
construed as a waiver thereof nor shall any single or partial exercise
of any such right, power or remedy preclude any further exercise thereof
or the exercise of any other right, power or remedy. The rights, powers
and remedies provided in this Charge are cumulative and not exclusive
of any rights, powers
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and remedies provided by law. No waiver by the Collateral Agent of any
terms of this Charge, and no approval or consent by it, shall be
effective unless in writing.
22.4. If at any time any one or more of the provisions in this Charge is or
becomes invalid, illegal or unenforceable in any respect under any law
or regulation, the validity, legality and enforceability of the
remaining provisions of this Charge shall not be in any way affected or
impaired thereby.
22.5. This Charge may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which, when
executed and delivered, shall constitute an original, but all the
counterparts shall together constitute but one and the same instrument.
22.6. In any proceedings relating to this Charge a statement as to any amount
due to the Collateral Agent under this Charge which is certified as
being correct by an officer or agent of the Collateral Agent shall, in
the absence of manifest error, be conclusive evidence that such amount
is in fact due and payable.
23. THE COLLATERAL AGENT AS TRUSTEE
23.1. The Collateral Agent declares itself trustee of the security and other
rights (including but not limited to the benefit of the covenants
contained herein), titles and interests constituted by this Charge and
of all monies, property and assets paid to the Collateral Agent or to
its order or held by the Collateral Agent or its nominee or received or
recovered by the Collateral Agent or its nominee pursuant to or in
connection with this Charge with effect from the date hereof to hold the
same on trust for itself and each of the Secured Parties absolutely pro
rata in accordance with their entitlements under the Loan Documents
(save as may otherwise be agreed between the Collateral Agent and the
other Secured Parties from time to time).
23.2. All moneys received by the Secured Parties shall be held by it upon
trust for itself and the Secured Parties according to their respective
interests to apply the same in accordance with Clause 9.5.
23.3. The parties to this Charge declare that the perpetuity period applicable
to the trusts constituted by this Charge shall be a period of 21 years
after the death of the last survivor of the issue living on the date of
this Charge of his late Britannic Majesty King George VI unless there
has previously been legislation making it lawful for the trusts
constituted by this Charge to continue.
23.4. The rights, powers and discretions conferred on the Collateral Agent by
this Charge shall be supplemental to the Trustee Act 1893 and in
addition to any which may be vested in the Collateral Agent by the Loan
Documents, general law or otherwise.
24. GOVERNING LAW AND JURISDICTION
24.1. This Charge shall be governed by and construed in accordance with the
laws of Ireland.
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24.2. For the exclusive benefit of the Collateral Agent, the Chargor
irrevocably agrees that the courts of Ireland are to have jurisdiction
to settle any disputes which may arise out of or in connection with this
Charge and that accordingly any suit, action or proceedings arising out
of or in connection with this Charge ("Proceedings") may be brought in
such courts.
24.3. The Chargor irrevocably waives any objection which it may have now or
hereafter to the bringing of any Proceedings in any such court as is
referred to in this Clause 24 and any claim that any Proceedings have
been brought in an inconvenient forum and further irrevocably agrees
that a judgment in any Proceedings brought in any court referred to in
this Clause 24 shall be conclusive and binding upon the Chargor and may
be enforced in the courts of any other jurisdiction. The Chargor
undertakes to enter an unconditional appearance within 14 days after the
completion of any service of process in any Proceedings. The Chargor
hereby consents to the service by post of any process issued in that
jurisdiction and appoints the Principal Company at its registered office
for the time being to be its agent for the acceptance of any process
issued in connection with this Charge. Nothing herein shall affect the
right to serve process in any other manner permitted by law.
24.4. Nothing contained in this Clause 24 shall limit the right of the
Collateral Agent to take Proceedings against the Chargor in any court of
competent jurisdiction, nor shall the taking of any Proceedings in one
or more jurisdictions preclude the taking of any Proceedings in any
other jurisdiction whether concurrently or not.
IN WITNESS WHEREOF the parties have executed this Charge on the date written
above.
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SCHEDULE
(Letter of Resignation)
To: (1) Bank of America, NA.
as Collateral Agent
(2) The Secretary
True Temper Limited (the "Principal Company")
[Date]
Dear Sirs
Charge of Shares made or to be made between Ames True Temper, Inc. and Bank of
America, N.A. as Collateral Agent (the "Charge")
1 I hereby resign as a director of the Principal Company and confirm that
I have no claims against the Principal Company for loss of office,
arrears of pay or otherwise howsoever.
2. This resignation is to be effective as at the date hereof. You are
hereby authorised to complete this letter by dating the same at any time
after the occurrence of a Default (as defined in the Charge).
Yours faithfully
- ------------------------------------------------
[ ]
EXECUTION PAGE FOR CHARGOR
THE CHARGOR
AMES TRUE TEMPER, INC.
By: /s/ Judy Schuchart
Name: Judy Schuchart
Title: Chief Financial Officer
EXECUTION PAGE FOR COLLATERAL AGENT
THE COLLATERAL AGENT
/s/ Mr. Thomas Barnett
----------------------
SIGNED by
BANK OF AMERICA, N.A.
in the presence of:
