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Exhibit 3
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID"). UPON
WRITTEN REQUEST, THE MANAGER OF THE COMPANY, C/O WILMINGTON TRUST COMPANY, 1100
N. MARKET STREET, WILMINGTON, DELAWARE 19890, N/O PPM GK INVESTMENT LLC,
ATTENTION MATTHEW G. WASCHULL, WILL PROMPTLY MAKE AVAILABLE TO THE HOLDER OF
THIS NOTE THE ISSUE PRICE, THE AMOUNT OF OID, THE ISSUE DATE, THE YIELD TO
MATURITY, THE COMPARABLE YIELD AND THE PROJECTED PAYMENT SCHEDULE OF THIS NOTE.
US $__________ PROMISSORY NOTE DUE 2005
PMM GK INVESTMENT LLC
No. 1 Date: ____________
US $__________ New York, New York
FOR VALUE RECEIVED, PMM GK Investment LLC, a Delaware limited
liability company (together with its successors and assigns, the "Company"),
hereby promises to pay to __________, a __________ company (the "Holder"), or
registered assigns, the Maturity Amount (as defined below), upon presentation
and surrender of this Note, on January 31, 2005 (the "Maturity Date"), and to
pay interest (computed on the basis of a 360-day year of twelve 30-day months)
on the Original Principal Amount (as defined below) from the date of original
issuance or from the most recent Interest Payment Date (as defined below) to
which interest has been paid at the rate of 2.0% per annum (the "Interest
Rate"), quarterly in arrears (the "Quarterly Interest"), on March 31, June 30,
September 30 and December 31 of each year (each, an "Interest Payment Date" and,
collectively, the "Interest Payment Dates"), commencing March 31, 2000, until
payment of the Maturity Amount or, if prepaid earlier, the Prepayment Amount (as
defined below). Additional Interest (as defined below), if any, and interest on
any overdue amounts shall be paid as specified herein. Changes in the Contingent
Principal Amount (as defined below) shall not affect the amount of Quarterly
Interest.
All amounts payable hereunder (other than any Additional Interest
paid in respect of non-cash property distributed or on with respect to the
Reference Shares) (i) shall be paid in money of the United States of America
that at the time is legal tender for the payment of public and private debts and
(ii) shall be payable in cash or by certified check at the office or agency the
Company maintains in Wilmington, Delaware (through Wilmington Trust Company,
1100 N. Market Street), or, at the Company's option, by wire transfer of
immediately available funds at such bank or other financial institution in the
United States of America as designated by Holder in writing to the Company.
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If any amount payable hereunder is payable on a date that is not a
Business Day, payment shall be made on the next Business Day (and without any
interest or other payment in respect of such delay); provided that if the next
Business Day is in the next calendar year, payment of such interest shall be
made on the preceding Business Day. A "Business Day" means any day other than a
Saturday, a Sunday or a day on which banking institutions in the City of New
York are authorized or obligated by law or regulation to close.
1. Interest
The Company shall pay Quarterly Interest to the Holder in such
amounts and at such times as specified in the first paragraph of this Note.
The Company shall also pay and deliver to the Holder an amount
("Additional Interest") equal to any property, including cash, distributed on or
with respect to the Reference Shares; provided that the record date for such
distribution by the Reference Company falls during the period from the date of
original issuance of this Note to the earlier of the Prepayment Date (if any)
and the Maturity Date. Notwithstanding the foregoing, no amount shall be paid as
Additional Interest with respect to distribution by a Reference Company of (i)
rights to purchase or subscribe for additional Reference Shares by payment of
consideration therefor, (ii) property that is also a Reference Share, in which
case it shall become part of Reference Shares, and (iii) regular cash dividends
on the Reference Shares not exceeding, in any year, US $ in the aggregate
with respect to all Reference Shares at the time.
Notwithstanding the foregoing, no payment of Quarterly Interest or
Additional Interest shall be made to the extent that such payment, when taken
together with all Quarterly Interest and Additional Interest already paid or
then payable, would result in total payments to the Holder as of the date of
such payment in excess of US $ .
Additional Interest shall be paid and delivered to the Holder on the
20th Business Day after the date on which any property, including cash,
distributed on or with respect to the Reference Shares is distributed to the
holders of Reference Shares ("Reference Shares Distribution Date"). If in
connection with the payment of any Additional Interest the Company shall
otherwise be obligated to deliver fractional units of securities, the Company
shall not be required to deliver such fractional units, and, in lieu thereof,
the Company shall pay and deliver to the Holder cash representing the fair
market value of such fractional units of such securities as determined in good
faith by the Company.
The Company shall pay interest at a rate of 2.0% per annum ("Overdue
Interest") on (i) any overdue Maturity Amount or Prepayment Amount (ii) any
overdue installments
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of Quarterly Interest and (iii) any overdue payments of Additional Interest
based on the fair market value of such Additional Interest, in each case,
without regard to any applicable grace period.
2. Principal Amount
The "Original Principal Amount" of this Note is US $ . The
minimum amount payable upon Prepayment or maturity of this Note (the "Contingent
Principal Amount") shall be initially equal to the Original Principal Amount. If
any Additional Interest is paid, the Contingent Principal Amount shall be
reduced on a quarterly basis to the extent necessary such that the yield on the
Original Principal Amount to the date of computation (including all Quarterly
Interest and the fair market value of all Additional Interests) does not exceed
a yield of 2.0% per annum, compounded annually. In no event will the Contingent
Principal Amount be less than zero.
On the Maturity Date, the Holder shall be entitled to receive the
Maturity Amount. The "Maturity Amount" means:
(1) the higher of (A) the Contingent Principal Amount on the Maturity
Date and (B) the Current Market Value of the Reference Shares on the
Maturity Date, plus
(2) an amount equal to the accrued and unpaid Quarterly Interest and
Overdue Interest to the Maturity Date, plus
(3) an amount equal to the sum of all unpaid Additional Interest,
provided that (i) the Holder shall be entitled to receive such amount
only to the extent that the applicable dividend or distribution is
actually distributed by the Reference Company, and (ii) payment of
such amount related to the property distributed by the Reference
Company may be made up to 20 Business Days after the Reference Shares
Distribution Date;
provided that if such amount, plus all Quarterly Interest and the fair
market value of all Additional Interest paid prior to the Maturity Date,
exceeds US $ then the Maturity Amount shall be the amount equal
to the excess of US $ over all Quarterly Interest and the fair
market value of all Additional Interest paid prior to the Maturity Date.
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3. Prepayments
The Company may prepay this Note ("Optional Prepayment"), at any
time, in whole but not in part, for the Prepayment Amount. "Prepayment Amount"
means:
(1) the higher of (A) the Contingent Principal Amount on the Prepayment
Date and (B) the Current Market Value of the Reference Shares on the
Prepayment Date, plus
(2) an amount equal to the accrued and unpaid Quarterly Interest and
Overdue Interest to the Prepayment Date, plus
(3) a distribution equal to the sum of all unpaid Additional Interest,
provided that (i) the Holder shall be entitled to receive such amount
only to the extent that the applicable dividend or distribution is
actually distributed by the Reference Company, and (ii) payment of
such amount related to the property distributed by the Reference
Company may be made up to 20 Business Days after the Reference Shares
Distribution Date;
provided that if such amount, plus all Quarterly Interest and the fair
market value of all Additional Interest paid prior to the Prepayment Date,
exceeds US $ , then the Prepayment Amount shall be the amount
equal to the excess of US $ over all Quarterly Interest and the
fair market value of all Additional Interest paid prior to the Prepayment
Date.
The Company shall be required to prepay the Note (a "Mandatory
Prepayment" and together with Optional Prepayment, "Prepayment") for the
Prepayment Amount upon Paul M. Montrone ceasing to own or control, directly and
indirectly (through ownership,, contract, arrangement, understanding,
relationship or otherwise), at least 40% of the voting rights of the capital
stock of GenTek Inc., a Delaware corporation ("GenTek"), or, upon the
consolidation or merger of GenTek or a successor of GenTek with or into another
entity, of any surviving entity of GenTek or subsequent serving entity thereof
(a "Mandatory Prepayment Event").
Notice of Optional Prepayment shall be delivered to the Holder at
least 30 Business Days, but not more than 60 Business Days, before the
Prepayment Date. The Company shall give the Holder notice promptly (and in any
event no later than five Business Days) of the occurrence or existence of any
event or condition requiring a Mandatory Prepayment, specifying the Prepayment
Date which shall be not more than ten Business Days from the date of such
notice. "Prepayment Date" means the date for Prepayment specified in the
Company's notice of Optional Prepayment or Mandatory
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Prepayment. Distributions to be paid on or before the Prepayment Date shall be
payable to the Holders on the related dates of distribution, except to the
extent such distributions are payable as part of the Final Period Distribution.
Once notice of Prepayment is given, interest on this Note shall cease
to accrue on and after the Prepayment Date and all rights of the Holder shall
cease, except for the right of the Holder to receive the Prepayment Amount and
any overdue interest thereon.
4. Reference Shares.
The initial Reference Shares are shares of GenTek Common
Stock. In addition to the adjustments to Reference Shares contained in the
definition thereof, the number of Reference Shares shall be adjusted upon the
occurrence of a GenTek Public Offering by multiplying (i) the number of
Reference Shares at such time by (ii) a fraction, (A) the numerator of which is
$10 and (B) the denominator of which is the price at which shares of GenTek
Common Stock are sold to investors in the GenTek Public Offering.
Notwithstanding the foregoing, in no event shall the adjustment for the GenTek
Public Offering (if any) reduce the number of Reference Shares.
5. Certain Definitions
The "Closing Price" of any security on any date of determination
means the closing sale price (or, if no closing sale price is reported, the last
reported sale price) of such security (regular way) on the NYSE on such date or,
if such security is not listed for trading on the NYSE on that date, as reported
in the composite transactions for the principal United States securities
exchange on which such security is so listed, or if such security is not so
listed on a United States national or regional securities exchange, as reported
by the Nasdaq National Market, or if such security is not so reported, the last
quoted bid price for such security in the over-the-counter market as reported by
the National Quotation Bureau or similar organization. In the event that no such
quotation is available for any day, the Company shall be entitled to determine
the Closing Price on the basis of such quotations as it in good faith considers
appropriate.
The "Current Market Value" means, (i) with respect to the Maturity
Date, the average Closing Price per Reference Share over the 20 trading days of
such Reference Share (the "Averaging Period") immediately prior to (but not
including) the fifth Business Day preceding the Maturity Date, and (ii) with
respect to the Prepayment Date, the average Closing Price per Reference Share
during the Averaging Period immediately prior to (but not including) the fifth
Business Day preceding the Prepayment Date; provided that if Prepayment is
required by reason of a Mandatory Prepayment Event, "Current Market Value" means
the greater of (A) the average Closing Price per Reference Share during the
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Averaging Period immediately prior to (but not including) the fifth Business Day
preceding the date of the Mandatory Prepayment Event and (B) the market value
per Reference Share as of the Prepayment Date as determined by an independent
investment banking or valuation firm selected jointly by the Company and the
Holder.
"GenTek Public Offering" means a public offering and sale by GenTek
of newly-issued shares of GenTek Common Stock (including through a rights
offering to existing shareholders of GenTek) pursuant to a registration
statement under the U.S. Securities Act of 1933, as amended, that is consummated
no later than four months from the date of the original issuance of this Note.
"Reference Company" means GenTek and any other issuer of a Reference
Share. A "Reference Share" means, collectively, (i) one share of Common Stock,
par value $0.01 per share of GenTek (the "GenTek Common Stock"); and (ii) each
share of publicly traded equity securities received by a holder of one Reference
Share in respect of such share of the GenTek Common Stock or other Reference
Shares (either directly or as the result of successive applications of this
paragraph) upon any of the following events: (A) the distribution on or in
respect of a Reference Share in Reference Shares; (B) the combination of
Reference Shares into a smaller number of shares or other units; (C) the
subdivision of outstanding shares or other units of Reference Shares; (D) the
conversion or reclassification of Reference Shares by issuance or exchange of
other securities; (E) any consolidation or merger of a Reference Company, or any
surviving entity or subsequent surviving entity of a Reference Company (a
"Reference Company Successor"), with or into another entity (other than a merger
or consolidation in which the Reference Company is the continuing corporation
and in which the Reference Company common stock outstanding immediately prior to
the merger or consolidation is not exchanged for cash, securities or other
property of the Reference Company or another corporation); (F) any statutory
exchange of securities of the Reference Company or any Reference Company
Successor with another corporation (other than in connection with a merger or
acquisition and other than a statutory exchange of securities in which the
Reference Company is the continuing corporation and in which the Reference
Company common stock outstanding immediately prior to the statutory exchange is
not exchanged for cash, securities or other property of the Reference Company or
another corporation); or (G) any liquidation, dissolution or winding up of the
Reference Company or any Reference Company Successor; provided that Reference
Shares shall not include (x) securities received by a holder of Reference Shares
representing the right to purchase or subscribe for additional Reference Shares
by payment of consideration therefor, and (y) securities purchased or subscribed
for by holders of Reference Shares by payment of consideration therefor.
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6. Events of Default
An "Event of Default" shall exist if any of the following conditions
or events shall occur and be continuing:
(1) the Company defaults in the payment of the Maturity Amount or
Prepayment Amount when the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration
or otherwise; or
(2) the Company defaults in the payment of any Quarterly Interest or
Additional Interest, if any, for more than five Business Days
after the same becomes due and payable; or
(3) the Company (i) is generally not paying, or admits in writing
its inability to pay, its debts as they become due, (ii) files,
or consents by answer or otherwise to the filing against it of,
a petition for relief or reorganization or arrangement or any
other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to
the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect
to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action
for the purpose of any of the foregoing; or
(4) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company, a
custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage
of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the
Company, or any such petition shall be filed against the
Company, and such petition shall not be dismissed within 60
days.
If an Event of Default described in paragraph (3) or (4) of the
Events of Default Section above has occurred, this Note shall automatically
become immediately due and payable.
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If any Event of Default described in paragraph (1) or (2) of the
Events of Default Section above has occurred and is continuing, the Holder may
at any time, at its option, by notice or notices to the Company, declare this
Note to be immediately due and payable.
Upon this Note becoming due and payable under this Section 6, whether
automatically or by declaration, this Note will forthwith mature and the entire
unpaid Maturity Amount hereof shall all be immediately due and payable, in each
and every case without presentment, demand, protest or further notice, all of
which are hereby waived.
If any Default or Event of Default has occurred and is continuing,
and irrespective of whether this Note has become or has been declared
immediately due and payable under this Section 6, the Holder may proceed to
protect and enforce the rights of the Holder by an action at law, suit in equity
or other appropriate proceeding, whether for the specific performance of any
agreement contained herein, or for an injunction against a violation of any of
the terms hereof, or in aid of the exercise of any power granted hereby or
thereby or by law or otherwise.
7. Calculations
The books and records of the Company shall, absent manifest error, be
conclusive as to all amounts and determinations payable or made hereunder.
Without limiting the generality of the foregoing, the Company shall be
responsible for making all calculations required under this Note, including the
determination of: (i) the Contingent Principal Amount; (ii) the Current Market
Value of the Reference Shares; (iii) the adjustments in Reference Shares upon a
Reference Share Public Offering (if any); (iv) the Final Period Distribution;
(v) the fair market value of any property distributed on the Reference Shares;
(vi) the composition of Reference Shares; and (vii) the amount of interest
payable upon prepayment or at maturity.
8. Miscellaneous
8.1 Amendments, Etc.
No amendment, alteration, modification or waiver of any term or
provision of this Note, nor consent to any departure by the Company herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Holder, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
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8.2 Further Assurances
The Company agrees that at any time and from time to time, at its
expense, the Company will promptly execute, acknowledge, file, deliver, record
and publish all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and all
such further certificates, instruments and documents, and take all such further
action, as may be required by law, or as may be necessary or desirable, or that
the Holder may reasonably request, in order to enable Holder to exercise and
enforce its rights and remedies hereunder, and to carry out more effectively the
purposes of this Agreement.
8.3 Transfers
This Note is a registered Note and is transferable only with the
consent of the Company upon surrender to the Company of this Note for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the Holder or its attorney duly authorized in
writing. References in this Note to "Holder" shall mean the person in whose name
this Note is at the time issued, and the Company may treat such person as the
owner of this Note for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
8.4 Severability
Any provision of this Note which is prohibited or unenforceable in
any juris diction 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. There shall be substituted for any such provision so
rendered ineffective a provision which, as far as legally possible, most nearly
reflects the intent of the Company and the Holder.
8.5 Computation of Time Periods
In this Note, in the computation of a period of time from a specified
date to a later specified date, the word "from" means "from and including" and
the word "to" means "to but excluding".
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8.6 Waiver of Jury Trial
The Company unconditionally waives the right to trial by jury in any
legal or equitable action, suit or proceeding arising out of or relating to
this Note or any transaction contemplated hereby or the subject matter of any of
the foregoing.
8.7 Non-Recourse Against Others
No member, director, officer, employee or authorized person, as such,
of the Company shall have any liability for any obligation of the Company under
this Note or for any claim based on, in respect of or by reason of, such
obligations or the creation of this Note, except to the extent such person shall
have expressly assumed, guaranteed or otherwise become liable for the
obligations of the Company hereunder by a written instrument delivered to and
for the benefit of the Holder.
8.8 Notices
All notices and other communications required or permitted hereunder
shall be in writing and shall be deemed validly given upon personal delivery
(either by hand or by messenger) or one day after being sent by overnight
courier service or by telecopy, at the following address or telecopy number or
at such other address or telecopy number as the Company or the Holder shall have
furnished to the other: (a) if to the Company, at, Wilmington Trust Company,
1100 N. Market Street, Wilmington, Delaware 19890, n/o PMM GK Investment LLC,
attention: Matthew G. Waschull, fax: 1-302-651-1958; and (b) if to the Holder,
at Walsh Management S.A., c/o Alan Lowe, Alan Lowe & Company, 46 Queen Ann
Street, London England W1M 9LA, fax: 44-171-935-5758.
8.9 Defined Terms
All defined terms used herein shall be equally applicable to the
singular and plural forms of the terms defined. Any agreement defined or
referred to herein shall include each amendment, modification and supplement
thereto and waiver thereof as may become effective from time to time, except
where otherwise indicated. The terms "hereof", "herein", "hereunder" and
comparable terms refer to this entire Note and not to any particular section or
other subdivision hereof. Except as otherwise indicated, references herein to
any "Section" means a "Section" of this Note.
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8.10 No Strict Construction
The language used in this Note has been negotiated by the Company and
the Holder and is, and shall be deemed to be, the language mutually chosen by
them to express their mutual intent, and no rule of strict construction will be
applied against any person.
8.11 Choice of Law
THIS NOTE IS MADE AND DELIVERED IN NEW YORK, NEW YORK AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
PMM GK INVESTMENT LLC
By: _________________________________
Name:
Title:
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