EXHIBIT 10.6
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PCA SECURITY AGREEMENT
among
PACKAGING CORPORATION OF AMERICA,
VARIOUS SUBSIDIARIES OF
PACKAGING CORPORATION OF AMERICA
and
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent
Dated as of April 12, 1999
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TABLE OF CONTENTS
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ARTICLE I SECURITY INTERESTS. . . . . . . . . . . . . . . . . . . . . . . 2
1.1. Grant of Security Interests . . . . . . . . . . . . . . . 2
1.2. Power of Attorney . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . 5
2.1. Necessary Filings . . . . . . . . . . . . . . . . . . . . 5
2.2. No Liens. . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3. Other Financing Statements. . . . . . . . . . . . . . . . 5
2.4. Chief Executive Office; Records . . . . . . . . . . . . . 6
2.5. Location of Inventory and Equipment . . . . . . . . . . . 6
2.6. Recourse. . . . . . . . . . . . . . . . . . . . . . . . . 6
2.7. Trade Names; Change of Name . . . . . . . . . . . . . . . 7
2.8. Location of Standing Timber . . . . . . . . . . . . . . . 7
ARTICLE III SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS . . . . . . . . . . . 8
3.1. Additional Representations and Warranties . . . . . . . . 8
3.2. Maintenance of Records. . . . . . . . . . . . . . . . . . 8
3.3. Direction to Account Debtors; Contracting Parties; etc. . 8
3.4. Modification of Terms; etc. . . . . . . . . . . . . . . . 9
3.5. Collection. . . . . . . . . . . . . . . . . . . . . . . . 9
3.6. Instruments . . . . . . . . . . . . . . . . . . . . . . . 9
3.7. Further Actions . . . . . . . . . . . . . . . . . . . . .10
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS. . . . . . . . . . . .10
4.1. Additional Representations and Warranties . . . . . . . .10
4.2. Licenses and Assignments. . . . . . . . . . . . . . . . .11
4.3. Infringements . . . . . . . . . . . . . . . . . . . . . .11
4.4. Preservation of Marks . . . . . . . . . . . . . . . . . .11
4.5. Maintenance of Registration . . . . . . . . . . . . . . .11
4.6. Future Registered Marks . . . . . . . . . . . . . . . . .11
4.7. Remedies. . . . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE V SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS . . . . . . . . . . . . .12
5.1. Additional Representations and Warranties . . . . . . . .12
5.2. Licenses and Assignments. . . . . . . . . . . . . . . . .13
(i)
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5.3. Infringements . . . . . . . . . . . . . . . . . . . . . .13
5.4. Maintenance of Patents and Copyrights . . . . . . . . . .13
5.5. Prosecution of Patent or Copyright Applications . . . . .13
5.6. Other Patents and Copyrights. . . . . . . . . . . . . . .14
5.7. Remedies. . . . . . . . . . . . . . . . . . . . . . . . .14
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL. . . . . . . . . . . . . .14
6.1. Protection of Collateral Agent's Security . . . . . . . .14
6.2. Warehouse Receipts Non-Negotiable . . . . . . . . . . . .15
6.3. Further Actions . . . . . . . . . . . . . . . . . . . . .15
6.4. Financing Statements. . . . . . . . . . . . . . . . . . .15
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT. . . . . . . . . .16
7.1. Remedies; Obtaining the Collateral Upon Default . . . . .16
7.2. Remedies; Disposition of the Collateral . . . . . . . . .17
7.3. Waiver of Claims. . . . . . . . . . . . . . . . . . . . .18
7.4. Application of Proceeds . . . . . . . . . . . . . . . . .18
7.5. Remedies Cumulative . . . . . . . . . . . . . . . . . . .20
7.6. Discontinuance of Proceedings . . . . . . . . . . . . . .21
ARTICLE VIII INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . .21
8.1. Indemnity . . . . . . . . . . . . . . . . . . . . . . . .21
8.2. Indemnity Obligations Secured by Collateral; Survival . .22
ARTICLE IX DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . .23
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . .29
10.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . .29
10.2. Waiver; Amendment. . . . . . . . . . . . . . . . . . . .29
10.3. Obligations Absolute . . . . . . . . . . . . . . . . . .30
10.4. Successors and Assigns . . . . . . . . . . . . . . . . .30
10.5. Headings Descriptive . . . . . . . . . . . . . . . . . .30
10.6. Governing Law. . . . . . . . . . . . . . . . . . . . . .31
10.7. Assignors' Duties. . . . . . . . . . . . . . . . . . . .31
10.8. Termination; Release . . . . . . . . . . . . . . . . . .31
10.9. Counterparts . . . . . . . . . . . . . . . . . . . . . .32
10.10. The Collateral Agent. . . . . . . . . . . . . . . . . .32
10.11. Severability. . . . . . . . . . . . . . . . . . . . . .32
10.12. Limited Obligations . . . . . . . . . . . . . . . . . .32
10.13. Additional Assignors. . . . . . . . . . . . . . . . . .32
10.14. Effectiveness . . . . . . . . . . . . . . . . . . . . .33
(ii)
PCA SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of April 12, 1999 (as amended, restated,
modified and/or supplemented from time to time in accordance with the terms
hereof, this "AGREEMENT"), among each of the undersigned (each, an "ASSIGNOR"
and, together with each other entity which becomes a party hereto pursuant to
Section 10.13, collectively, the "ASSIGNORS") and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent (the "COLLATERAL AGENT"), for the benefit of
the Secured Creditors (as defined below). Except as otherwise defined in
Article IX hereof, terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Tenneco Packaging, Inc. ("TPI"), various financial
institutions from time to time party thereto (the "LENDERS"), ▇.▇. ▇▇▇▇▇▇
Securities Inc. and BT Alex. ▇▇▇▇▇ Incorporated, as Co-Lead Arrangers (the
"CO-LEAD ARRANGERS"), Bankers Trust Company, as Syndication Agent (the
"SYNDICATION AGENT"), and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent (the "ADMINISTRATIVE AGENT", and together with the
Lenders, the Co-Lead Arrangers, the Syndication Agent, each Issuing Bank, the
Pledgee and the Collateral Agent, the "LENDER CREDITORS") have entered into
the Credit Agreement, providing for the making of Term Loans to TPI as
contemplated therein;
WHEREAS, TPI and Packaging Corporation of America ("PCA") have entered
into (i) the Contribution Agreement pursuant to which (x) TPI will contribute
the Containerboard Business to PCA and (y) PCA will acquire the Containerboard
Business and (ii) the Bank Credit Agreement Assignment and Assumption Agreement
pursuant to which (x) TPI will assign (without recourse, representation or
warranty) all of its rights, interests and obligations under the Credit
Agreement and the Notes to PCA and (y) PCA will assume all of the rights,
interests and obligations of TPI under the Credit Agreement and the Notes, all
as contemplated therein;
WHEREAS, upon the Contribution Effective Time, PCA will become the
"Borrower" for all purposes of the Credit Agreement, this Agreement and the
other Credit Documents;
WHEREAS, PCA may from time to time enter into one or more (i)
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements), (ii) foreign
exchange contracts, currency swap agreements, commodity agreements or other
similar agreements or arrangements designed to protect against the
fluctuations in currency values and/or (iii) other types of hedging
agreements from time to time (each such agreement or arrangement with an
Other Creditor (as hereinafter defined), an "INTEREST RATE PROTECTION
AGREEMENT OR OTHER HEDGING AGREEMENT"), with ▇▇▇▇▇▇ Guaranty Trust Company of
New York in its individual capacity ("▇▇▇▇▇▇ GUARANTY"), any Lender or a
syndicate of financial institutions organized by ▇▇▇▇▇▇ Guaranty or any such
Lender, or an affiliate of ▇▇▇▇▇▇ Guaranty or any such Lender (▇▇▇▇▇▇
Guaranty, any such Lender or Lenders
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or affiliate or affiliates of ▇▇▇▇▇▇ Guaranty or such Lender or Lenders (even
if ▇▇▇▇▇▇ Guaranty or any such Lender ceases to be a Lender under the Credit
Agreement for any reason) and any such institution that participates in such
Interest Rate Protection Agreements or Other Hedging Agreements, and in each
case their subsequent successors and assigns, collectively, the "OTHER
CREDITORS", and together with the Lender Creditors, the "SECURED CREDITORS");
WHEREAS, pursuant to a Subsidiaries Guaranty, dated as of April 12,
1999 (as amended, restated, modified and/or supplemented from time to time, the
"SUBSIDIARIES GUARANTY"), each Assignor (other than PCA) has, on and after the
Contribution Effective Time, jointly and severally guaranteed to the Secured
Creditors the payment when due of all obligations and liabilities of PCA under
or with respect to the Credit Documents and each Interest Rate Protection
Agreement and Other Hedging Agreement;
WHEREAS, it is a condition precedent to the making of Loans to TPI and
PCA and the issuance of, and participation in, Letters of Credit for the account
of PCA under the Credit Agreement and to the Other Creditors entering into
Interest Rate Protection Agreements and Other Hedging Agreements that each
Assignor shall have executed and delivered to the Collateral Agent this
Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence and/or
assumption of Loans by PCA and the issuance of Letters of Credit for the account
of PCA under the Credit Agreement and PCA's entering into Interest Rate
Protection Agreements or Other Hedging Agreements and, accordingly, desires to
execute this Agreement in order to satisfy the conditions precedent described in
the preceding paragraph and to induce the Lenders to make Loans to TPI and PCA
and to issue, and participate in, Letters of Credit for the account of PCA, and
to induce the Other Creditors to enter into Interest Rate Protection Agreements
and Other Hedging Agreements with PCA;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties to the
Collateral Agent and hereby covenants and agrees with the Collateral Agent as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. GRANT OF SECURITY INTERESTS. (a) As security for the prompt
and complete payment and performance when due of all of its Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and does
hereby pledge and grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest of first priority (subject to
Permitted Liens) in, all of the right, title and interest of such Assignor in,
to and under all of the following, whether now existing or hereafter from time
to time acquired:
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(i) each and every Receivable;
(ii) all Contracts, together with all Contract Rights arising
thereunder (including, without limitation, the Contribution Agreement);
(iii) all Inventory;
(iv) the Cash Collateral Account and any other cash collateral account
established for such Assignor for the benefit of the Secured Creditors and
all moneys, securities and instruments deposited or required to be
deposited in such Cash Collateral Account;
(v) all Equipment;
(vi) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of such Assignor
symbolized by the Marks;
(vii) all Patents and Copyrights and all reissues, renewals and
extensions thereof;
(viii) all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such
Assignor, including, but not limited to, Trade Secrets and Trade Secret
Rights;
(ix) all insurance policies;
(x) all other Goods (including, without limitation, Standing Timber),
General Intangibles, Chattel Paper, Documents and Instruments of such
Assignor (other than the Pledged Securities);
(xi) all Permits; and
(xii) all Proceeds and products of any and all of the foregoing (all of
the above, collectively, the "COLLATERAL").
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
(c) Notwithstanding anything to the contrary contained in clauses (a)
and (b) above, the security interest created by this Agreement shall not extend
to, and the term "Collateral" shall not include any Equipment subject to a
purchase money Lien permitted under Section 9.01(iii), (vii) or (xvi) of the
Credit Agreement or a Lien securing Capital Lease Obligations permitted under
Section 9.01(xv) of the Credit Agreement, in each case to the extent, and only
to the extent, that the instrument evidencing the purchase money Indebtedness or
Capitalized Lease Obligations, as the case may be, secured by such Lien
expressly prohibits any other Lien on such Equipment and only for so long as
such purchase money Indebtedness or Capitalized Lease Obligations, as the case
may be, remains or remain outstanding and upon the earlier of the termination of
such prohibition or the satisfaction of such Indebtedness, such
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Equipment shall be included in the term "Collateral" without any further
action on the part of any Assignor, the Collateral Agent or any other Secured
Creditor.
(d) Notwithstanding anything to the contrary contained in clauses
(a) and (b) above, the security interest created by this Agreement shall not
extend to, and the term "Collateral" shall not include (i) any permit, lease
or license held by any Assignor that is subject to any agreement which
validly prohibits the creation by such Assignor of a security interest in
such permit, lease or license, and (ii) any permit, lease or license to the
extent that any valid enforceable law or regulation applicable to such
permit, lease or license prohibits the creation of a security interest
therein; PROVIDED, HOWEVER, that (A) to the extent permitted under applicable
law, the right to receive payments of money under such permits, leases or
licenses described in the preceding clauses (i) and (ii) above shall not be
excluded from the security interest created hereunder and (B) such rights and
property described in the preceding clauses (i) and (ii) above shall be
excluded from the Collateral only to the extent and for so long as such
agreement (in the case of clause (i)) or such law (in the case of clause
(ii)) continues validly to prohibit the creation of such security interest,
and upon the expiration of such prohibition, the permits, leases and licenses
as to which such prohibition previously applied shall automatically be
included in the Collateral, without further action on the part of each
Assignor.
(e) Notwithstanding anything to the contrary contained in clauses
(a) and (b) above, it is acknowledged and agreed that the security interest
created hereby shall not extend to any Marks, patents or copyrights owned by
a third Person in which any Assignor has rights of usage thereof to the
extent (and only to the extent) the granting of a security interest therein
is expressly prohibited by an agreement relating thereto to which such
Assignor is a party PROVIDED, HOWEVER, that such Marks, patents or
copyrights, as the case may be, shall be excluded from the Collateral only to
the extent and only for so long as the relevant agreement continues validly
to prohibit the creation of such security interest, and upon the expiration
of such prohibition, all Marks, patents or copyrights, as the case may be, as
to which such prohibition previously applied shall automatically be included
in the Collateral, without any further action on the part of any Assignor,
the Collateral Agent, or any other Secured Creditor.
1.2. POWER OF ATTORNEY. Each Assignor hereby appoints the
Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all monies and claims for monies
due or to become due to such Assignor under or arising out of the Collateral,
to endorse any checks or other instruments or orders in connection therewith
and to file any claims or take any action or institute any proceedings which
the Collateral Agent may deem to be necessary or advisable to accomplish the
purposes of this Agreement, which appointment as attorney is coupled with an
interest.
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ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. NECESSARY FILINGS. (i) All filings, registrations and
recordings necessary or appropriate to create, preserve, protect and perfect
the security interest granted by such Assignor to the Collateral Agent hereby
in respect of the Collateral have been accomplished (or, in the case of
Collateral for which it is necessary to file a UCC-1 financing statement or
the filing of the Grants of Security Interests set forth in Annexes G and H
in order to perfect a security interest in such Collateral, such filings will
be accomplished within 10 days following the Initial Borrowing Date (or to
the extent such Collateral is acquired after the Initial Borrowing Date,
within 10 days following the date of the acquisition of such Collateral)),
and (ii) the security interest granted to the Collateral Agent pursuant to
this Agreement in and to the Collateral constitutes (or, in the case of
Collateral referred to in the parenthetical in clause (i) above, upon
compliance with the requirements of such parenthetical, will constitute) a
perfected security interest therein prior to the rights of all other Persons
therein and subject to no other Liens (other than Permitted Liens) and is
entitled to all the rights, priorities and benefits afforded by the Uniform
Commercial Code or other relevant law as enacted in any relevant jurisdiction
to perfected security interests.
2.2. NO LIENS. Such Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of, or
has rights in, all Collateral free from any Lien, security interest, encumbrance
or other right, title or interest of any Person (other than Permitted Liens and
Liens created under this Agreement), and such Assignor shall defend the
Collateral against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to the Collateral Agent.
2.3. OTHER FINANCING STATEMENTS. There is no financing statement
evidencing a valid security interest against the Borrower or any of its
Subsidiaries (or similar statement or instrument of registration under the
law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than (x) as may be filed in connection with
Liens permitted pursuant to Section 9.01 of the Credit Agreement and (y)
those with respect to which appropriate termination statements executed by
the secured lender thereunder have been delivered to the Administrative Agent
pursuant to the terms of the Credit Agreement), and so long as the Total
Commitments have not been terminated or any Note or Letter of Credit remains
outstanding or any of the Obligations (other than arising from indemnities
for which no request has been made) remain unpaid or any Interest Rate
Protection Agreement or Other Hedging Agreement remains in effect or any
Obligations are owed with respect thereto, such Assignor will not execute or
authorize to be filed in any public office any financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) or statements relating to the Collateral, except financing
statements filed or to be filed in respect of and covering the security
interests granted hereby by such Assignor or as permitted by the Credit
Agreement.
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2.4. CHIEF EXECUTIVE OFFICE; RECORDS. The chief executive office
of such Assignor is located at the address or addresses indicated on Annex A
hereto. Such Assignor will not move its chief executive office except to
such new location as such Assignor may establish in accordance with the last
sentence of this Section 2.4. The originals of all documents evidencing all
Receivables, Contract Rights and Trade Secret Rights of such Assignor and the
only original books of account and records of such Assignor relating thereto
are, and will continue to be, kept at such chief executive office or at such
new locations as such Assignor may establish in accordance with the last
sentence of this Section 2.4. All Receivables, Contract Rights and Trade
Secret Rights of such Assignor are, and will continue to be, maintained at,
and controlled and directed (including, without limitation, for general
accounting purposes) from, the office locations described above or such new
location established in accordance with the last sentence of this Section
2.4. Such Assignor shall not establish new locations for such offices until
(i) it shall have given to the Collateral Agent not less than 30 days' prior
written notice of its intention to do so, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new
location, it shall have taken all action, satisfactory to the Collateral
Agent, to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect, (iii) at the reasonable request of the Collateral
Agent, it shall have furnished an opinion of counsel reasonably acceptable to
the Collateral Agent to the effect that all financing or continuation
statements and amendments or supplements thereto have been filed in the
appropriate filing office or offices, and (iv) the Collateral Agent shall
have received reasonable evidence that all other actions (including, without
limitation, the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and
maintain the perfection and priority of) the security interest granted hereby.
2.5. LOCATION OF INVENTORY AND EQUIPMENT. All Inventory and
Equipment held on the date hereof by such Assignor is located at one of the
locations shown on Annex B hereto. Such Assignor agrees that all Inventory
and Equipment now held or subsequently acquired by it shall be kept at (or
shall be in transport to) any one of the locations shown on Annex B hereto,
or such new location as such Assignor may establish in accordance with the
last sentence of this Section 2.5. Such Assignor may establish a new
location for Inventory and Equipment only if (i) it shall have given to the
Collateral Agent not less than 30 days' prior written notice of its intention
to do so, clearly describing such new location and providing such other
information in connection therewith as the Collateral Agent may reasonably
request, (ii) with respect to such new location, it shall take all action as
the Collateral Agent may reasonably request to maintain the security interest
of the Collateral Agent in the Collateral intended to be granted hereby at
all times fully perfected and in full force and effect, (iii) at the
reasonable request of the Collateral Agent, it shall have furnished an
opinion of counsel reasonably acceptable to the Collateral Agent to the
effect that all financing or continuation statements and amendments or
supplements thereto have been filed in the appropriate filing office or
offices, and (iv) the Collateral Agent shall have received reasonable
evidence that all other actions (including, without limitation, the payment
of all filing fees and taxes, if any, payable in connection with such
filings) have been taken, in order to perfect (and maintain the perfection
and priority of) the security interest granted hereby.
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2.6. RECOURSE. This Agreement is made with full recourse to such
Assignor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in
the other Credit Documents, in the Interest Rate Protection Agreements or
Other Hedging Agreements and otherwise in writing in connection herewith or
therewith.
2.7. TRADE NAMES; CHANGE OF NAME. Such Assignor does not have or
operate in any jurisdiction under, or within the five year period preceding
the date of this Agreement previously has not had or has not operated in any
jurisdiction under, any trade names, fictitious names or other names
(including any names of divisions or operations) except its legal name and
such other trade or fictitious names as are listed on Annex C hereto. Such
Assignor shall not change its legal name or assume or operate in any
jurisdiction under any trade, fictitious or other name except those names
listed on Annex C hereto in the jurisdictions listed with respect to such
names and new names (including, without limitation, any names of divisions or
operations) and/or jurisdictions established in accordance with the last
sentence of this Section 2.7. Such Assignor shall not assume or operate in
any jurisdiction under any new trade, fictitious or other name or operate
under any existing name in any additional jurisdiction until (i) it shall
have given to the Collateral Agent not less than 30 days' prior written
notice of its intention so to do, clearly describing such new name and/or
jurisdiction and, in the case of a new name, the jurisdictions in which such
new name shall be used and providing such other information in connection
therewith as the Collateral Agent may reasonably request, (ii) with respect
to such new name and/or jurisdiction, it shall have taken all action to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force
and effect, (iii) at the reasonable request of the Collateral Agent, it shall
have furnished an opinion of counsel reasonably acceptable to the Collateral
Agent to the effect that all financing or continuation statements and
amendments or supplements thereto have been filed in the appropriate filing
office or offices, and (iv) the Collateral Agent shall have received
reasonable evidence that all other actions (including, without limitation,
the payment of all filing fees and taxes, if any, payable in connection with
such filings) have been taken, in order to perfect (and maintain the
perfection and priority of) the security interest granted hereby.
2.8. LOCATION OF STANDING TIMBER. All Standing Timber held on the
date hereof by such Assignor is located at one of the locations shown on
Annex I hereto, which Annex includes a description of the land concerned.
Within 30 days following the end of each fiscal quarter of the Borrower and
at any other time if requested by the Collateral Agent each Assignor shall
deliver to the Collateral Agent an updated Annex I (as of the end of such
fiscal quarter or such date as shall be specified by the Collateral Agent, as
the case may be) and at such Assignor's expense, it shall file UCC financing
statements and take all such other action as the Collateral Agent may
reasonably request to maintain the security interest of the Collateral Agent
in such Standing Timber intended to be granted hereby at all times fully
protected and in full force and effect.
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ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. As of the time
when each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are genuine and in all material respects
what they purport to be, and that all papers and documents (if any) relating
thereto (i) will represent the genuine legal, valid and binding (except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws generally
affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or law) obligation of the account
debtor evidencing indebtedness unpaid and owed by the respective account
debtor arising out of the performance of labor or services or the sale or
lease and delivery of the inventory, materials, equipment or merchandise
listed therein, or both, (ii) will be the only original writings evidencing
and embodying such obligation of the account debtor named therein (other than
copies created for general accounting purposes), (iii) will evidence true,
legal and valid obligations, enforceable in accordance with their respective
terms (except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles (regardless
of whether enforcement is sought in equity or law)) and (iv) will be in
compliance and will conform in all material respects with all applicable
federal, state and local laws and applicable laws of any relevant foreign
jurisdiction.
3.2. MAINTENANCE OF RECORDS. Each Assignor will keep and maintain
at its own cost and expense satisfactory and complete records of its
Receivables and Contracts, including, but not limited to, originals of all
documentation (including each Contract) with respect thereto, records of all
payments received, all credits granted thereon, all merchandise returned and
all other dealings therewith, and such Assignor will make the same available
on such Assignor's premises to the Collateral Agent for inspection, at such
Assignor's own cost and expense, at any and all reasonable times and
intervals as the Collateral Agent may request. Upon the occurrence and
during the continuance of an Event of Default and at the request of the
Collateral Agent, such Assignor shall, at its own cost and expense, deliver
all tangible evidence of its Receivables and Contract Rights (including,
without limitation, all documents evidencing the Receivables and all
Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be
retained by such Assignor). If the Collateral Agent so directs, such
Assignor shall legend, in form and manner reasonably satisfactory to the
Collateral Agent, the Receivables and the Contracts, as well as books,
records and documents of such Assignor evidencing or pertaining to such
Receivables and Contracts with an appropriate reference to the fact that such
Receivables and Contracts have been assigned to the Collateral Agent and that
the Collateral Agent has a security interest therein.
3.3. DIRECTION TO ACCOUNT DEBTORS; CONTRACTING PARTIES; ETC. Upon
the occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any
8
Assignor, such Assignor agrees (x) to cause all payments on account of the
Receivables and Contracts to be made directly to the Cash Collateral Account,
(y) that the Collateral Agent may, at its option, directly notify the
obligors with respect to any Receivables and/or under any Contracts to make
payments with respect thereto as provided in preceding clause (x), and (z)
that the Collateral Agent may enforce collection of any such Receivables or
Contracts and may adjust, settle or compromise the amount of payment thereof,
in the same manner and to the same extent as such Assignor. Upon the
occurrence and during the continuance of an Event of Default, without notice
to or assent by any Assignor, the Collateral Agent may apply any or all
amounts then in, or thereafter deposited in, the Cash Collateral Account in
the manner provided in Section 7.4 of this Agreement. The costs and expenses
(including attorneys' fees) of collection, whether incurred by any Assignor
or the Collateral Agent, shall be borne by such Assignor.
3.4. MODIFICATION OF TERMS; ETC. No Assignor shall rescind or
cancel any indebtedness evidenced by any Receivable, or modify any term
thereof or make any adjustment with respect thereto, or extend or renew the
same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable, or interest therein,
without the prior written consent of the Collateral Agent, except as
permitted by Section 3.5. No Assignor shall rescind or cancel any
indebtedness evidenced by any Contract, or modify any term thereof or make
any adjustment with respect thereto, or extend or renew the same, or
compromise or settle any material dispute, claim, suit or legal proceeding
relating thereto, or sell any Contract, or interest therein, without the
prior written consent of the Collateral Agent, except (i) as permitted by
Section 3.5 and (ii) so long as no Default or Event of Default is then in
existence, to the extent that the aggregate cost to such Assignor resulting
from any such recission, cancellation, modification, adjustment, extension,
compromise, settlement or sale is not material to such Assignor. Each
Assignor will duly fulfill all material obligations on its part to be
fulfilled under or in connection with the Receivables and Contracts and will
do nothing to impair the rights of the Collateral Agent in the Receivables or
the Contracts, except as permitted by this Section 3.4 and Section 3.5.
3.5. COLLECTION. Each Assignor shall use reasonable efforts to
endeavor to cause to be collected from the account debtor named in each of
its Receivables or obligor under any Contract, as and when due (including,
without limitation, amounts, services or products which are delinquent, such
amounts, services or products to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts, services or
products owing under or on account of such Receivable or Contract, and apply
forthwith upon receipt thereof all such amounts, services or products as are
so collected to the outstanding balance of such Receivable or under such
Contract, except that, prior to the occurrence of an Event of Default, any
Assignor may allow in the ordinary course of business as adjustments to
amounts, services or products owing under its Receivables and Contracts (i)
an extension or renewal of the time or times of payment or exchange, or
settlement for less than the total unpaid balance, which such Assignor finds
appropriate in accordance with reasonable business judgment and (ii) a refund
or credit due as a result of returned or damaged merchandise or improperly
performed services. The costs and expenses (including, without limitation,
attorneys' fees) of collection, whether incurred by an Assignor or the
Collateral Agent, shall be borne by the relevant Assignor.
9
3.6. INSTRUMENTS. If any Assignor owns or acquires any Instrument
constituting Collateral, such Assignor will within 10 days notify the Collateral
Agent thereof and, upon request by the Collateral Agent, promptly deliver such
Instrument to the Collateral Agent appropriately endorsed to the order of the
Collateral Agent as further security hereunder.
3.7. FURTHER ACTIONS. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral
Agent from time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers
of attorney, certificates, reports and other assurances or instruments and
take such further steps relating to its Receivables, Contracts, Instruments
and other property or rights covered by the security interest hereby granted,
as the Collateral Agent may reasonably request to preserve and protect its
security interest in the Collateral.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each Assignor
represents and warrants that it is the true, lawful, sole and exclusive owner
of or otherwise has the right to use the Marks listed in Annex D hereto and
that said listed Marks constitute all the Marks that such Assignor presently
owns or uses in connection with its business (other than immaterial
unregistered Marks) and include all Marks registered in the United States
Patent and Trademark Office or the equivalent thereof in any foreign country
and all unregistered Marks (other than immaterial unregistered Marks) that
such Assignor now owns, licenses or uses for products developed by such
Assignor in connection with its business. Each Assignor further warrants
that it has no knowledge of any material third party claim that any aspect of
such Assignor's present or contemplated business operations infringes or will
infringe any rights in any trademark, service ▇▇▇▇ or trade name. Each
Assignor represents and warrants that it is the beneficial and record owner
of all trademark registrations and applications listed in Annex D hereto and
designated as "owned" thereon and that said registrations are valid,
subsisting and have not been canceled and that such Assignor is not aware of
any material third-party claim that any of said registrations is invalid or
unenforceable, or that there is any reason that any of said applications will
not pass to registration. Each Assignor represents and warrants that upon
the recordation of a Grant of Security Interest in United States Trademarks
and Patents in the form of Annex G hereto in the United States Patent and
Trademark Office, together with filings on Form UCC-1 pursuant to this
Agreement, all filings, registrations and recordings necessary or appropriate
to perfect the security interest granted to the Collateral Agent in the
registered United States Marks covered by this Agreement under federal law
will have been accomplished. Each Assignor agrees to execute such a Grant of
Security Interest in United States Trademark and Patents covering all right,
title and interest in each registered United States ▇▇▇▇, and the associated
goodwill, of such Assignor, and to record the same. Each Assignor hereby
grants to the Collateral Agent an absolute power of attorney to sign, upon
the occurrence and during the continuance of an Event of Default, any
document which may be required by the United States Patent and Trademark
Office or secretary of state or equivalent governmental agency of any State
10
of the United States or any foreign jurisdiction in order to effect an
absolute assignment of all right, title and interest in each ▇▇▇▇, and record
the same.
4.2. LICENSES AND ASSIGNMENTS. Each Assignor hereby agrees not to
divest itself of any right under any ▇▇▇▇ that is material to the business of
such Assignor absent prior written approval of the Collateral Agent, except
as otherwise permitted by this Agreement or the Credit Agreement.
4.3. INFRINGEMENTS. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
(i) any party who such Assignor believes is infringing or diluting or otherwise
violating in any material respect any of such Assignor's rights in and to any
material ▇▇▇▇, or (ii) with respect to any party claiming that such Assignor's
use of any material ▇▇▇▇ violates in any material respect any property right of
that party. Each Assignor further agrees, unless otherwise agreed by the
Collateral Agent, to prosecute, in accordance with reasonable business
practices, any Person infringing any material ▇▇▇▇ owned by such Assignor.
4.4. PRESERVATION OF MARKS. Each Assignor agrees to use its Marks in
interstate or foreign commerce, as the case may be, during the time in which
this Agreement is in effect, sufficiently to preserve such Marks as valid and
subsisting trademarks or service marks under the laws of the United States or
the relevant foreign jurisdiction; PROVIDED that no Assignor shall be obligated
to preserve any ▇▇▇▇ to the extent the Assignor determines, in its reasonable
business judgment, that the preservation of such ▇▇▇▇ is no longer desirable in
the conduct of its business.
4.5. MAINTENANCE OF REGISTRATION. Each Assignor shall, at its own
expense and in accordance with reasonable business practices, process all
documents required by the Trademark Act of 1946, as amended, 15 U. S. C.
Sections 1051 ET SEQ. and any foreign equivalent thereof to maintain
trademark registrations, including but not limited to affidavits of continued
use and applications for renewals of registration in the United States Patent
and Trademark Office or equivalent governmental agency in any foreign
jurisdiction for all of its registered Marks pursuant to 15 U. S. C. Sections
1058(a), 1059 and 1065 or any foreign equivalent thereof, as applicable, and
shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of
renewal prior to the exhaustion of all administrative and judicial remedies
without prior written consent of the Collateral Agent; PROVIDED that no
Assignor shall be obligated to maintain any ▇▇▇▇ to the extent such Assignor
determines, in its reasonable business judgment, that the maintenance of such
▇▇▇▇ is no longer necessary or desirable in the conduct of its business.
4.6. FUTURE REGISTERED MARKS. Within 30 days following the end
of each fiscal quarter of the Borrower, Assignors shall deliver to the
Collateral Agent, an updated Annex D listing (as of the end of such fiscal
quarter) any and all newly issued Marks (other than immaterial unregistered
Marks) not previously listed on such Annex D or any such update. Upon the
Collateral Agent's request, the relevant Assignor shall, at such Assignor's
expense, deliver to the Collateral Agent an assignment for security in any
such newly issued ▇▇▇▇, the form of such
11
assignment for security to be substantially the same as the form hereof or in
such other form as may be reasonably satisfactory to the Collateral Agent.
4.7. REMEDIES. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title and interest of such Assignor in and to each of the Marks,
together with all trademark rights and rights of protection to the same and
the goodwill of such Assignor's business symbolized by said Marks and the
right to recover for past infringements thereof, vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such rights,
title and interest shall immediately vest, in the Collateral Agent for the
benefit of the Secured Creditors, and the Collateral Agent shall be entitled
to exercise the power of attorney referred to in Section 4.1 to execute,
cause to be acknowledged and notarized and to record an absolute assignment
with the applicable agency; (ii) take and use or sell the Marks and the
goodwill of such Assignor's business symbolized by the Marks and the right to
carry on the business and use the assets of such Assignor in connection with
which the Marks have been used; and (iii) direct such Assignor to refrain, in
which event such Assignor shall refrain, from using the Marks in any manner
whatsoever, directly or indirectly, and, if requested by the Collateral
Agent, change such Assignor's corporate name to eliminate therefrom any use
of any ▇▇▇▇ and execute such other and further documents that the Collateral
Agent may request to further confirm this and to transfer ownership of the
Marks and registrations and any pending trademark applications therefor in
the United States Patent and Trademark Office or any equivalent government
agency or office in any foreign jurisdiction to the Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of or
otherwise has the right to use all (i) Trade Secret Rights of such Assignor,
(ii) rights in the Patents of such Assignor listed in Annex E hereto and that
said Patents constitute all the patents and applications for patents that such
Assignor now owns or that are otherwise used, pursuant to a license or
sublicense, in the conduct of the business of such Assignor and (iii) rights in
the Copyrights of such Assignor listed in Annex F hereto, and that such
Copyrights constitute all registrations of copyrights and applications for
copyright registrations that the Assignor now owns or that are otherwise used,
pursuant to a license or sublicense, in the conduct of the business of such
Assignor. Each Assignor further represents and warrants that it has the
exclusive right (or, in the case of any Patents or Copyrights subject to an
agreement which provides such right is non-exclusive, non-exclusive rights) to
use and practice under all Patents and Copyrights that it owns, uses, pursuant
to a license or sublicense, or under which it practices and has the exclusive
right (or, in the case of Patent subject to an agreement which provides such
right is non-exclusive, non-exclusive right) to exclude others from using or
practicing under any Patents it owns, uses, pursuant to a license or sublicense,
or under which it practices. Each Assignor further warrants that it has no
12
knowledge of any material third party claim that any aspect of such
Assignor's present or contemplated business operations infringes or will
infringe any rights in any Patent or Copyright or that such Assignor has
misappropriated any Trade Secrets, Trade Secret Rights or other proprietary
information. Each Assignor represents and warrants that upon the recordation
of a Grant of Security Interest in United States Trademarks and Patents in
the form of Annex G hereto in the United States Patent and Trademark Office
and the recordation of a Grant of Security Interest in United States
Copyrights in the form of Annex H hereto in the United States Copyright
Office, together with filings on Form UCC-1 pursuant to this Agreement, all
filings, registrations and recordings necessary or appropriate to perfect the
security interest granted to the Collateral Agent in the registered United
States Patents and registered United States Copyrights covered by this
Agreement under federal law will have been accomplished. Each Assignor
agrees to execute a Grant of Security Interest in registered United States
Trademarks and Patents covering all right, title and interest in each
registered United States Patent of such Assignor and to record the same, and
to execute such a Grant of Security Interest in registered United States
Copyrights covering all right, title and interest in each registered United
States Copyright of such Assignor and to record the same. Each Assignor
hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of any Event of Default, any
document which may be required by the United States Patent and Trademark
Office or equivalent governmental agency in any foreign jurisdiction or the
United States Copyright Office or equivalent governmental agency in any
foreign jurisdiction in order to effect an absolute assignment of all right,
title and interest in each registered Patent and registered Copyright of such
Assignor, as the case may be, and to record the same.
5.2. LICENSES AND ASSIGNMENTS. Each Assignor hereby agrees not to
divest itself of any right under any Patent or Copyright that is material to the
business of such Assignor absent prior written approval of the Collateral Agent,
except as otherwise permitted by this Agreement or the Credit Agreement.
5.3. INFRINGEMENTS. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe any of such
Assignor's rights in any material Patent or material Copyright or to any
claim that the practice of any material Patent or the use of any material
Copyright of such Assignor violates any property right of a third party, or
with respect to any misappropriation of any material Trade Secret Right of
such Assignor or any claim that practice of any material Trade Secret Right
of such Assignor violates any property right of a third party. Each Assignor
further agrees, absent direction of the Collateral Agent to the contrary,
diligently to prosecute, in accordance with reasonable business practices,
any Person infringing any material Patent or material Copyright of such
Assignor or any Person misappropriating any material Trade Secret Right of
such Assignor.
5.4. MAINTENANCE OF PATENTS AND COPYRIGHTS. At its own expense,
each Assignor shall make timely payment of all post-issuance fees required
pursuant to 35 U. S. C. Section 41 and any foreign equivalent thereof to
maintain in force rights under each of its Patents, and to apply as permitted
pursuant to applicable law for any renewal of each of its Copyrights, in any
case absent prior written consent of the Collateral Agent; PROVIDED, that, no
Assignor shall be obligated to
13
pay any such fees or apply for any such renewal to the extent that such
Assignor determines, in its reasonable business judgment, that the
maintenance of such Patent or Copyright is no longer necessary or desirable
in the conduct of its business.
5.5. PROSECUTION OF PATENT OR COPYRIGHT APPLICATIONS. At its own
expense, each Assignor shall diligently prosecute, in accordance with reasonable
business practices, all of its applications for Patents listed in Annex E hereto
and for Copyrights listed in Annex F hereto and shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies,
absent written consent of the Collateral Agent, PROVIDED that no Assignor shall
be obligated to prosecute such application for any such Patent or Copyright to
the extent that such Assignor determines, in its reasonable business judgment,
that the prosecution of such application for any such Patent or Copyright is no
longer necessary or desirable in the conduct of its business.
5.6. OTHER PATENTS AND COPYRIGHTS. Within 30 days following the end
of each fiscal quarter of the Borrower, Assignors shall deliver to the
Collateral Agent updated Annexes E and F listing, as of the end of such fiscal
quarter, any and all newly issued or acquired United States Patent or Copyright
registrations and any and all newly filed applications for United States Patent
or Copyright registrations. Upon the Collateral Agent's reasonable request, the
relevant Assignor shall, at such Assignor's expense, deliver to the Collateral
Agent an assignment for security as to any such newly issued or acquired Patent
or Copyright (or newly filed application therefor), the form of such assignment
for security to be substantially the same as the form hereof or in such other
form as may be reasonably satisfactory to the Collateral Agent.
5.7. REMEDIES. If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the relevant Assignor, take any or
all of the following actions: (i) declare the entire right, title, and interest
of such Assignor in each of the Patents and Copyrights vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such right,
title, and interest shall immediately vest in the Collateral Agent for the
benefit of the Secured Creditors, and the Collateral Agent shall be entitled to
exercise the power of attorney referred to in Section 5.1 to execute, cause to
be acknowledged and notarized and to record an absolute assignment with the
applicable agency; (ii) take and use, practice or sell the Patents, Copyrights
and Trade Secret Rights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights and/or Trade Secret Rights directly or indirectly, and such Assignor
shall execute such other and further documents as the Collateral Agent may
request further to confirm this and to transfer ownership of the Patents,
Copyrights and Trade Secret Rights to the Collateral Agent for the benefit of
the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. PROTECTION OF COLLATERAL AGENT'S SECURITY. Each Assignor will
do nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep
14
its Inventory and Equipment insured in favor of the Collateral Agent, at such
Assignor's own expense to the extent and in the manner provided in the Credit
Agreement and the other Credit Documents. All policies or certificates with
respect to such insurance (and any other insurance maintained by such
Assignor) (i) shall be endorsed to the Collateral Agent's reasonable
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and naming each of
the Lenders, the Administrative Agent and the Collateral Agent as additional
insureds); (ii) shall state that such insurance policies shall not be
canceled or revised without 30 days' (or at least 10 days' in the case of
nonpayment of any premium) prior written notice thereof by the insurer to the
Collateral Agent; and (iii) certified copies of such policies or certificates
shall be deposited with the Collateral Agent to the extent, at the times and
in the manner specified in the Credit Agreement. If any Assignor shall fail
to insure its Inventory and Equipment in accordance with the preceding
sentence, or if any Assignor shall fail to so endorse and deposit all
policies or certificates with respect thereto, the Collateral Agent shall
have the right (but shall be under no obligation) to procure such insurance
and such Assignor agrees to promptly reimburse the Collateral Agent for all
costs and expenses of procuring such insurance. Except as otherwise
permitted to be retained or expended by the relevant Assignor pursuant to the
Credit Agreement, the Collateral Agent shall, at the time such proceeds of
such insurance are distributed to the Secured Creditors, apply such proceeds
in accordance with the Credit Agreement, or after the Obligations have been
accelerated or otherwise become due and payable, in accordance with Section
7.4. Each Assignor assumes all liability and responsibility in connection
with the Collateral acquired by it and the liability of such Assignor to pay
the Obligations shall in no way be affected or diminished by reason of the
fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
6.2. WAREHOUSE RECEIPTS NON-NEGOTIABLE. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in Section 7-104
of the Uniform Commercial Code as in effect in any relevant jurisdiction or
under other relevant law).
6.3. FURTHER ACTIONS. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral
Agent from time to time such lists, descriptions and designations of its
Collateral, warehouse receipts, receipts in the nature of warehouse receipts,
bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances
or instruments and take such further steps relating to the Collateral and
other property or rights covered by the security interest hereby granted,
which the Collateral Agent deems reasonably appropriate or advisable to
perfect, preserve or protect its security interest in the Collateral.
6.4. FINANCING STATEMENTS. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form acceptable
to the Collateral Agent, as the Collateral Agent may from time to time
reasonably request or as are reasonably necessary or desirable in the opinion
of the Collateral Agent to establish and maintain a valid, enforceable,
15
first priority (subject to Permitted Liens) perfected security interest in
the Collateral as provided herein and the other rights and security
contemplated hereby all in accordance with the Uniform Commercial Code as
enacted in any and all relevant jurisdictions or any other relevant law.
Each Assignor will pay any applicable filing fees, recordation taxes and
related expenses relating to its Collateral. Each Assignor hereby authorizes
the Collateral Agent to file any such financing statements without the
signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions and may
also:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or any
other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent;
(iii) withdraw all monies, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4;
(iv) sell, assign or otherwise liquidate, or direct such Assignor to
sell, assign or otherwise liquidate, any or all of the Collateral or any
part thereof in accordance with Section 7.2, or direct the relevant
Assignor to sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof, and, in each case, take possession of the
proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral Agent,
in which event such Assignor shall at its own expense:
16
(x) forthwith cause the same to be moved to the place or places
so reasonably designated by the Collateral Agent and there delivered
to the Collateral Agent;
(y) store and keep any Collateral so delivered to the Collateral
Agent at such place or places pending further action by the Collateral
Agent as provided in Section 7.2; and
(z) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to protect
the same and to preserve and maintain them in good condition; and
(vi) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for such
term and on such conditions and in such manner as the Collateral Agent
shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly, upon
application to a court of equity having jurisdiction, the Collateral Agent
shall be entitled to a decree requiring specific performance by such Assignor
of said obligation. The Secured Creditors agree that this Agreement may be
enforced only by the action of the Administrative Agent or the Collateral
Agent, in each case acting upon the instructions of the Required Lenders (or,
after the date on which all Credit Document Obligations have been paid in
full, the holders of at least the majority of the outstanding Other
Obligations) and that no other Secured Creditor shall have any right
individually to seek to enforce or to enforce this Agreement or to realize
upon the security to be granted hereby, it being understood and agreed that
such rights and remedies may be exercised by the Administrative Agent or the
Collateral Agent or the holders of at least a majority of the outstanding
Other Obligations, as the case may be, for the benefit of the Secured
Creditors upon the terms of this Agreement.
7.2. REMEDIES; DISPOSITION OF THE COLLATERAL. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 and any
other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more
contracts or as an entirety, and without the necessity of gathering at the
place of sale the property to be sold, and in general in such manner, at such
time or times, at such place or places and on such terms as the Collateral
Agent may, in compliance with any mandatory requirements of applicable law,
determine to be commercially reasonable. Any of the Collateral may be sold,
leased or otherwise disposed of, in the condition in which the same existed
when taken by the Collateral Agent or after any overhaul or repair at the
expense of the relevant Assignor which the Collateral Agent shall determine
to be commercially reasonable. Any such disposition which shall be a private
sale or other private proceedings permitted by such requirements shall be
made upon not less than 10 days' written notice to the relevant Assignor
specifying the time at which such disposition is to be made and the intended
sale price or other consideration therefor, and shall be subject, for the 10
days after the giving of such notice, to the right of the relevant Assignor
or any nominee of such Assignor to acquire the Collateral involved
17
at a price or for such other consideration at least equal to the intended
sale price or other consideration so specified. Any such disposition which
shall be a public sale permitted by such requirements shall be made upon not
less than 10 days' written notice to the relevant Assignor specifying the
time and place of such sale and, in the absence of applicable requirements of
law, shall be by public auction (which may, at the Collateral Agent's option,
be subject to reserve), after publication of notice of such auction not less
than 10 days prior thereto in two newspapers in general circulation to be
selected by the Collateral Agent. To the extent permitted by any such
requirement of law, the Collateral Agent on behalf of the Secured Creditors
(or certain of them) may bid for and become the purchaser of the Collateral
or any item thereof, offered for sale in accordance with this Section without
accountability to the relevant Assignor. If, under mandatory requirements of
applicable law, the Collateral Agent shall be required to make a disposition
of the Collateral within a period of time which does not permit the giving of
notice to the relevant Assignor as hereinabove specified, the Collateral
Agent need give such Assignor only such notice of disposition as shall be
reasonably practicable in view of such mandatory requirements of applicable
law. Each Assignor agrees to do or cause to be done all such other acts and
things as may be reasonably necessary to make such sale or sales of all or
any portion of the Collateral of such Assignor valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrations or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
7.3. WAIVER OF CLAIMS. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND
HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH
ASSIGNOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, and such Assignor hereby further waives, to
the extent permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
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Any sale of, or the grant of options to purchase, or any other realization
upon, any Collateral shall, to the fullest extent permitted under applicable
law, operate to divest all right, title, interest, claim and demand, either
at law or in equity, of the relevant Assignor therein and thereto and shall
be a perpetual bar both at law and in equity against such Assignor and
against any and all Persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, from, through and under
such Assignor.
7.4. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Collateral Agent upon any sale or other disposition of the Collateral (or, to
the extent the Pledge Agreement, any Mortgage or any other Security Document
requires proceeds of collateral thereunder to be applied in accordance with
the provisions of this Agreement, the Pledgee under the Pledge Agreement, the
mortgagee under such Mortgage or the collateral agent under such other
Security Document), together with all other moneys received by the Collateral
Agent hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing to the Pledgee or
the Collateral Agent of the type described in clauses (iii) and (iv) of the
definition of "Obligations";
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Primary Obligations shall be paid to the Secured Creditors as provided in
Section 7.4(e), with each Secured Creditor receiving an amount equal to its
outstanding Primary Obligations or, if the proceeds are insufficient to pay
in full all such Primary Obligations, its PRO RATA Share of the amount
remaining to be distributed;
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured Creditors as
provided in Section 7.4(e), with each Secured Creditor receiving an amount
equal to its outstanding Secondary Obligations or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its PRO RATA
Share of the amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iii), inclusive, and
following the termination of this Agreement pursuant to Section 10.8(a)
hereof, to the relevant Assignor or to whomever may be lawfully entitled to
receive such surplus.
(b) For purposes of this Agreement (x) "PRO RATA SHARE" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) "PRIMARY OBLIGATIONS" shall mean (i) in the case of the
Credit Document Obligations, all principal of, and interest on, all Loans under
the Credit Agreement, all Unpaid Drawings theretofore made (together with all
interest accrued thereon), the aggregate Stated Amounts of all Letters of Credit
issued (or deemed issued) under the Credit
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Agreement, and all Fees and (ii) in the case of the Other Obligations, all
amounts due under the Interest Rate Protection Agreements or Other Hedging
Agreements (other than indemnities, fees (including, without limitation,
attorneys' fees) and similar obligations and liabilities) and (z) "SECONDARY
OBLIGATIONS" shall mean all Obligations other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their
respective PRO RATA Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its
PRO RATA Share of any distribution would result in overpayment to such
Secured Creditor, such excess amount shall instead be distributed in respect
of the unpaid Primary Obligations or Secondary Obligations, as the case may
be, of the other Secured Creditors, with each Secured Creditor whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid
in full to receive an amount equal to such excess amount multiplied by a
fraction the numerator of which is the unpaid Primary Obligations or
Secondary Obligations, as the case may be, of such Secured Creditor and the
denominator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of all Secured Creditors entitled to such
distribution.
(d) Each of the Secured Creditors agrees and acknowledges that if
the Lender Creditors are to receive a distribution on account of undrawn
amounts with respect to Letters of Credit issued (or deemed issued) under the
Credit Agreement (which shall only occur after all outstanding Loans and
Unpaid Drawings with respect to such Letters of Credit have been paid in
full), such amounts shall be paid to the Administrative Agent under the
Credit Agreement and held by it, for the equal and ratable benefit of the
Lender Creditors, as cash security for the repayment of Obligations owing to
the Lender Creditors as such. If any amounts are held as cash security
pursuant to the immediately preceding sentence, then upon the termination of
all outstanding Letters of Credit, and after the application of all such cash
security to the repayment of all Obligations owing to the Lender Creditors
after giving effect to the termination of all such Letters of Credit, if
there remains any excess cash, such excess cash shall be returned by the
Agent to the Collateral Agent for distribution in accordance with Section
7.4(a) hereof.
(e) Except as set forth in Section 7.4(d), all payments required to
be made hereunder shall be made (x) if to the Lender Creditors, to the
Administrative Agent under the Credit Agreement for the account of the Lender
Creditors, and (y) if to the Other Creditors, to the trustee, paying agent or
other similar representative (each, a "REPRESENTATIVE") for the Other Creditors
or, in the absence of such a Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in accordance with
this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Representative
for the Other Creditors or, in the absence of such a Representative, upon the
Other Creditors for a determination (which the Administrative Agent, each
Representative for any Secured Creditors and the Secured Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the
outstanding Primary Obligations and Secondary Obligations owed to the Lender
Creditors or the Other Creditors, as the case may be. Unless it has actual
knowledge (including by way of written notice from a Lender Creditor or an
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Other Creditor) to the contrary, the Administrative Agent and each
Representative, in furnishing information pursuant to the preceding sentence,
and the Collateral Agent, in acting hereunder, shall be entitled to assume
that no Secondary Obligations are outstanding. Unless it has actual
knowledge (including by way of written notice from an Other Creditor) to the
contrary, the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Interest Rate Protection Agreements or Other Hedging
Agreements are in existence.
(g) It is understood and agreed that each Assignor shall remain
liable to the extent of any deficiency between the amount of the proceeds of
the Collateral in which it has granted a security interest hereunder and the
aggregate amount of its Obligations.
7.5. REMEDIES CUMULATIVE. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement,
the Interest Rate Protection Agreements or Other Hedging Agreements or the
other Credit Documents or now or hereafter existing at law, in equity or by
statute and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by
the Collateral Agent. All such rights, powers and remedies shall be
cumulative and the exercise or the beginning of the exercise of one shall not
be deemed a waiver of the right to exercise any other or others. No delay or
omission of the Collateral Agent in the exercise of any such right, power or
remedy and no renewal or extension of any of the Obligations shall impair any
such right, power or remedy or shall be construed to be a waiver of any
Default or Event of Default or an acquiescence therein. No notice to or
demand on any Assignor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
any of the rights of the Collateral Agent to any other or further action in
any circumstances without notice or demand. In the event that the Collateral
Agent shall bring any suit to enforce any of its rights hereunder and shall
be entitled to judgment, then in such suit the Collateral Agent may recover
expenses, including reasonable attorneys' fees, and the amounts thereof shall
be included in such judgment.
7.6. DISCONTINUANCE OF PROCEEDINGS. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every
such case the relevant Assignor, the Collateral Agent and each holder of any
of the Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interest
created under this Agreement, and all rights, remedies and powers of the
Collateral Agent shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. INDEMNITY. (a) Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective
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successors, assigns, employees, agents and servants (hereinafter in this
Section 8.1 referred to individually as an "INDEMNITEE," and, collectively,
as "INDEMNITEES") harmless from any and all liabilities, obligations, losses,
damages, injuries, penalties, claims, demands, actions, suits, judgments and
any and all costs, expenses or disbursements (including attorneys' fees and
expenses) (for the purposes of this Section 8.1, the foregoing are
collectively called "EXPENSES") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnitees in any way relating to
or arising out of this Agreement, any Interest Rate Protection Agreement or
Other Hedging Agreement, any other Credit Document or any other document
executed in connection herewith or therewith or in any other way connected
with the administration of the transactions contemplated hereby or thereby or
the enforcement of any of the terms of, or the preservation of any rights
under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent
or other defects, whether or not discoverable), the violation of the laws of
any country, state or other governmental body or unit, any tort (including,
without limitation, claims arising or imposed under the doctrine of strict
liability, or for or on account of injury to or the death of any Person
(including any Indemnitee), or property damage), or contract claim; PROVIDED
that no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for
losses, damages or liabilities to the extent caused by the gross negligence
or willful misconduct of such Indemnitee. Each Assignor agrees that upon
written notice by any Indemnitee of the assertion of such a liability,
obligation, loss, damage, injury, penalty, claim, demand, action, suit or
judgment, the relevant Assignor shall assume full responsibility for the
defense thereof. Each Indemnitee agrees to use its best efforts to promptly
notify the relevant Assignor of any such assertion of which such Indemnitee
has knowledge.
(b) Without limiting the application of Section 8.1(a), each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment
or discharge of any taxes or Liens upon or in respect of the Collateral,
premiums for insurance with respect to the Collateral and all other fees,
costs and expenses in connection with protecting, maintaining or preserving
the Collateral and the Collateral Agent's interest therein, whether through
judicial proceedings or otherwise, or in defending or prosecuting any
actions, suits or proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b),
each Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or
growing out of any misrepresentation by any Assignor in this Agreement, any
Interest Rate Protection Agreement or Other Hedging Agreement, any other
Credit Document or in any writing contemplated by or made or delivered
pursuant to or in connection with this Agreement, any Interest Rate
Protection Agreement or Other Hedging Agreement or any other Credit Document.
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(d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of
such obligations which is permissible under applicable law.
8.2. INDEMNITY OBLIGATIONS SECURED BY COLLATERAL; SURVIVAL. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements or Other Hedging Agreements and Letters of Credit, and
the payment of all other Obligations and notwithstanding the discharge
thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"ADMINISTRATIVE AGENT" shall have the meaning provided in the recitals
hereto.
"AGREEMENT" shall have the meaning provided in the preamble to this
Agreement.
"ASSIGNOR" shall have the meaning provided in the preamble to this
Agreement.
"BANK CREDIT AGREEMENT ASSIGNMENT AND ASSUMPTION AGREEMENT" shall have
the meaning provided in the Credit Agreement.
"BORROWER" shall mean (i) at any time prior to the Contribution
Effective Time, TPI and (ii) at any time after the Contribution Effective Time,
PCA.
"CASH COLLATERAL ACCOUNT" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.
"CHATTEL PAPER" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"CLASS" shall have the meaning provided in Section 10.2 of this
Agreement.
"CO-LEAD ARRANGERS" shall have the meaning provided in the recitals
hereto.
"COLLATERAL" shall have the meaning provided in Section 1.1(a) of this
Agreement.
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"COLLATERAL AGENT" shall have the meaning provided in the preamble to
this Agreement.
"CONTRACT RIGHTS" shall mean (i) all rights of an Assignor (including,
without limitation, all rights to payment) under each Contract and (ii) any
Receivable or any money(ies) due or to become due under any Excluded Contract.
"CONTRACTS" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreement or Other Hedging Agreement) to the extent the grant by an
Assignor of a security interest pursuant to this Agreement in its right, title
and interest in any such contract is not prohibited by such contract (or, if
prohibited, the consent of each other party to such grant of a security interest
is obtained) and would not give any other party to such contract the right to
terminate, or automatically result in the termination of, such other party's
obligations thereunder or the Assignor's rights thereunder (those contracts
where such grant is so prohibited (and consent not obtained) or resulting in
such a right of, or automatic, termination are referred to herein as "EXCLUDED
CONTRACTS").
"CONTAINERBOARD BUSINESS" shall have the meaning provided in the
Credit Agreement.
"CONTRIBUTION AGREEMENT" shall have the meaning provided in the Credit
Agreement.
"CONTRIBUTION EFFECTIVE TIME" shall have the meaning provided in the
Credit Agreement.
"COPYRIGHTS" shall mean any United States or foreign copyright owned
by any Assignor, including any registrations of any Copyright in the United
States Copyright Office or the equivalent thereof in any foreign country, other
than any country outside the United States where the grant of a security
interest would violate such Copyrights, as well as any application for a United
States or foreign copyright registration now or hereafter made with the United
States Copyright Office or the equivalent thereof in any foreign jurisdiction by
any Assignor.
"CREDIT AGREEMENT" shall mean the Credit Agreement , dated as of
April 12, 1999, among the Borrower, the Lenders, the Co-Lead Arrangers, the
Syndication Agent and the Administrative Agent, providing for the making of
Loans to the Borrower and, after the Contribution Effective Time, the
issuance of, and participation in, Letters of Credit for the account of the
Borrower as contemplated therein, as the same may be amended, restated,
modified, extended, renewed, replaced, supplemented, restructured and/or
refinanced from time to time, and including any agreement extending the
maturity of, refinancing or restructuring (including, but not limited to, the
inclusion of additional borrowers thereunder that are Subsidiaries of the
Borrower and whose obligations are guaranteed by the Borrower and/or the
Subsidiary Guarantors thereunder or any increase in the amount borrowed) all,
or any portion of, the Indebtedness under such agreement or any successor
agreements; PROVIDED, that with respect to any agreement providing for the
refinancing of Indebtedness under the Credit Agreement, such agreement shall
only be treated as, or as part of, the Credit Agreement hereunder if (i)
either (A)
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all obligations under the Credit Agreement being refinanced shall be paid in
full at the time of such refinancing, and all commitments under the
refinanced Credit Agreement shall have terminated in accordance with their
terms or (B) the Required Lenders shall have consented in writing to the
refinancing Indebtedness being treated, along with their Indebtedness, as
Indebtedness pursuant to the Credit Agreement, (ii) the refinancing
Indebtedness shall be permitted to be incurred under the Credit Agreement
being refinanced (if such Credit Agreement is to remain outstanding) and
(iii) a notice to the effect that the refinancing Indebtedness shall be
treated as issued under the Credit Agreement shall be delivered by the
Borrower to the Collateral Agent).
"CREDIT DOCUMENT OBLIGATIONS" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"DEFAULT" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"DOCUMENTS" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"EQUIPMENT" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor and any and
all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"EVENT OF DEFAULT" shall mean any Event of Default under, and as
defined in, the Credit Agreement or any payment default under any Interest Rate
Protection Agreement or Other Hedging Agreement and shall in any event, without
limitation, include any payment default on any of the Obligations after the
expiration of any applicable grace period.
"EXCLUDED CONTRACTS" shall have the meaning provided in the definition
of Contracts.
"GENERAL INTANGIBLES" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York, but
excluding those General Intangibles constituting Excluded Contracts (other than
any Receivable or any money(ies) due or to become due under any such Excluded
Contract).
"GOODS" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.
"INDEMNITEE" shall have the meaning provided in Section 8.1 of this
Agreement.
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"INSTRUMENT" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"INTEREST RATE PROTECTION AGREEMENT OR OTHER HEDGING AGREEMENT" shall
have the meaning provided in the recitals to this Agreement.
"INVENTORY" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of
whatever sort and wherever located and any portion thereof which may be
returned, rejected, reclaimed or repossessed by the Collateral Agent from any
Assignor's customers, and shall specifically include all "inventory" as such
term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by any Assignor.
"LENDER CREDITORS" shall have the meaning provided in the recitals to
this Agreement.
"LENDERS" shall have the meaning provided in the recitals to this
Agreement.
"LIENS" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"MARKS" shall mean all right, title and interest in and to any United
States or foreign trademarks, service marks and trade names now held or
hereafter acquired by any Assignor, including any registration or application
for registration of any trademarks and service marks in the United States Patent
and Trademark Office, or the equivalent thereof in any State of the United
States or in any foreign country, other than any country outside the United
States where the grant of a security interest would violate such Marks and any
trade dress including logos, designs, trade names, company names, business
names, fictitious business names and other business identifiers used by any
Assignor in the United States or any foreign country.
"OBLIGATIONS" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of each
Assignor owing to the Lender Creditors, now existing or hereafter incurred
under, arising out of or in connection with any Credit Document to which such
Assignor is a party (including all such obligations and indebtedness under any
Subsidiaries Guaranty to which such Assignor is a party) and the due performance
and compliance by each Assignor with the terms, conditions and agreements of
each such Credit Document (all such obligations and liabilities under this
clause (i), except to the extent consisting of obligations or indebtedness with
respect to Interest Rate Protection Agreements or Other Hedging Agreements,
being herein collectively called the "CREDIT DOCUMENT OBLIGATIONS"); (ii) the
full and prompt payment when due (whether at the
26
stated maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees and interest thereon) of each Assignor owing to
the Other Creditors, now existing or hereafter incurred under, arising out of
or in connection with any Interest Rate Protection Agreement or Other Hedging
Agreement, whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereafter arising, including, in the case of
each Subsidiary Guarantor, all obligations under the Subsidiaries Guaranty in
respect of Interest Rate Protection Agreements or Other Hedging Agreements,
and the due performance and compliance by each Assignor with all of the
terms, conditions and agreements contained in any such Interest Rate
Protection Agreement or Other Hedging Agreement (all such obligations and
indebtedness under this clause (ii) being herein collectively called the
"OTHER OBLIGATIONS"); (iii) any and all sums advanced by the Collateral Agent
or the Pledgee in order to preserve the Collateral or preserve its security
interest in the Collateral; (iv) in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations, or liabilities of
each Assignor referred to in clauses (i), (ii) and (iii) after an Event of
Default shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent or the Pledgee of its rights hereunder, together with
reasonable attorneys' fees and court costs; and (v) all amounts paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement under
Section 8.1 of this Agreement. It is acknowledged and agreed that the
"Obligations" shall include extensions of credit of the types described
above, whether outstanding on the date of this Agreement or extended from
time to time after the date of this Agreement.
"OTHER CREDITORS" shall have the meaning provided in the recitals to
this Agreement.
"OTHER OBLIGATIONS" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
"PATENTS" shall mean any United States or foreign patent to which any
Assignor now or hereafter has title and any divisions or continuations thereof,
as well as any application for a United States or foreign patent now or
hereafter made by any Assignor, except as to patents or patent applications in
any country where the granting of a security interest therein is not permissible
under the laws of such country.
"PERMITS" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations (including certificates of need) of or
from any governmental authority or agency.
"PLEDGE AGREEMENT" shall have the meaning provided in the Credit
Agreement.
"PLEDGED SECURITIES" shall mean all Securities under, and as defined
in, the Pledge Agreement, which have been pledged by the Assignors pursuant
thereto.
"PLEDGEE" shall have the meaning provided in the Pledge Agreement.
27
"PRIMARY OBLIGATIONS" shall have the meaning provided in Section
7.4(b) of this Agreement.
"PROCEEDS" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"PRO RATA SHARE" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"RECEIVABLES" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for, or
exchange of, goods sold or leased or services performed or product exchanged by
such Assignor, whether now in existence or arising from time to time hereafter,
including, without limitation, rights evidenced by an account, note, contract,
barter arrangement, security agreement, chattel paper, or other evidence of
indebtedness or security, together with (a) all security pledged, assigned,
hypothecated or granted to or held by such Assignor to secure the foregoing, (b)
all of any Assignor's right, title and interest in and to any goods or services,
the sale or exchange of which gave rise thereto, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (d) all
powers of attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith, (e) all books, records, ledger cards,
and invoices relating thereto, (f) all evidences of the filing of financing
statements and other statements and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(g) all credit information, reports and memoranda relating thereto and (h) all
other writings related in any way to the foregoing.
"REPRESENTATIVE" shall have the meaning provided in Section 7.4(e) of
this Agreement.
"REQUISITE CREDITORS" shall have the meaning provided in Section 10.2
of this Agreement.
"SECONDARY OBLIGATIONS" shall have the meaning provided in Section
7.4(b) of this Agreement.
"SECURED CREDITORS" shall have the meaning provided in the recitals to
this Agreement.
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"STANDING TIMBER" shall mean standing timber which is to be cut and
removed under a conveyance or contract for sale.
"SUBSIDIARIES GUARANTY" shall have the meaning provided in the
recitals to this Agreement.
"SYNDICATION AGENT" shall have the meaning provided in the recitals to
this Agreement.
"TERMINATION DATE" shall have the meaning provided in Section 10.8 of
this Agreement.
"TRADE SECRET RIGHTS" shall mean the rights of an Assignor in any
Trade Secrets it holds or owns.
"TRADE SECRETS" means any secretly held existing engineering and
other data, information, production procedures and other know-how relating to
the design, manufacture, assembly, installation, use, operation, marketing,
sale and servicing of any products or business of an Assignor worldwide,
whether written or not written.
ARTICLE X
MISCELLANEOUS
10.1. NOTICES. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed:
(a) if to any Assignor, at:
c/o Packaging Corporation of America
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Collateral Agent:
29
▇▇▇▇▇▇ Guaranty Trust Company of New York
c/o ▇.▇. ▇▇▇▇▇▇ Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Lender Creditor (other than the Collateral Agent), at
such address as such Lender Creditor shall have specified in the Credit
Agreement; and
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to each Assignor and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor directly and adversely
affected thereby and the Collateral Agent (with the consent of (x) the
Required Lenders (or all the Lenders if required by Section 13.12 of the
Credit Agreement) at all times prior to the time at which all Credit Document
Obligations (other than those arising from indemnities for which no request
has been made) have been paid in full and all Commitments and Letters of
Credit under the Credit Agreement have been terminated or (y) the holders of
at least a majority of the outstanding Other Obligations at all times after
the time on which all Credit Document Obligations have been paid in full and
all Commitments and Letters of Credit under the Credit Agreement have been
terminated); PROVIDED, HOWEVER, that no such change, waiver, modification or
variance shall be made to Section 8 hereof or this Section 10.2 without the
consent of each Secured Creditor adversely affected thereby, PROVIDED
FURTHER, that any change, waiver, modification or variance affecting the
rights and benefits of a single Class (as defined below) of Secured Creditors
(and not all Secured Creditors in a like or similar manner) shall require the
written consent of the Requisite Creditors (as defined below) of such Class
of Secured Creditors. For the purpose of this Agreement, the term "CLASS"
shall mean each class of Secured Creditors, I.E., whether (x) the Lender
Creditors as holders of the Credit Document Obligations or (y) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "REQUISITE CREDITORS" of any Class shall mean each of (x)
with respect to the Credit Document Obligations, the Required Lenders and (y)
with respect to the Other Obligations, the holders of at least a majority of
all obligations outstanding from time to time under the Interest Rate
Protection Agreements and Other Hedging Agreements.
10.3. OBLIGATIONS ABSOLUTE. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall
not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of such
Assignor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Agreement, any other
Credit Document or any
30
Interest Rate Protection Agreement or Other Hedging Agreement; or (c) any
renewal, extension, amendment or modification of or addition or supplement to
or deletion from any Credit Document or any Interest Rate Protection
Agreement or Other Hedging Agreement or any security for any of the
Obligations; (d) any waiver, consent, extension, indulgence or other action
or inaction under or in respect of any such agreement or instrument
including, without limitation, this Agreement; (e) any furnishing of any
additional security to the Collateral Agent or its assignee or any acceptance
thereof or any release of any security by the Collateral Agent or its
assignee; or (f) any limitation on any party's liability or obligations under
any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof;
whether or not any Assignor shall have notice or knowledge of any of the
foregoing. The rights and remedies of the Collateral Agent herein provided
are cumulative and not exclusive of any rights or remedies which the
Collateral Agent would otherwise have.
10.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon each Assignor and its successors and assigns and shall inure to the
benefit of the Collateral Agent and its successors and assigns; PROVIDED,
that no Assignor may transfer or assign any or all of its rights or
obligations hereunder without the prior written consent of the Collateral
Agent. All agreements, statements, representations and warranties made by
each Assignor herein or in any certificate or other instrument delivered by
such Assignor or on its behalf under this Agreement shall be considered to
have been relied upon by the Secured Creditors and shall survive the
execution and delivery of this Agreement, the other Credit Documents and the
Interest Rate Protection Agreements or Other Hedging Agreements regardless of
any investigation made by the Secured Creditors or on their behalf.
10.5. HEADINGS DESCRIPTIVE. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
10.6. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
10.7. ASSIGNORS' DUTIES. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral.
10.8. TERMINATION; RELEASE. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 8.1 hereof shall
survive such termination) and the Collateral Agent, at the request and expense
of the relevant Assignor, will execute and deliver to such Assignor a proper
31
instrument or instruments (including, without limitation, Uniform Commercial
Code termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Assignor (without recourse and without any representation or warranty)
such of the Collateral as may be in the possession of the Collateral Agent
and as has not theretofore been sold or otherwise applied or released
pursuant to this Agreement. As used in this Agreement, "TERMINATION DATE"
shall mean the date upon which the Total Commitments and all Interest Rate
Protection Agreements or Other Hedging Agreements have been terminated, no
Note is outstanding (and all Loans have been paid in full), all Letters of
Credit have been terminated and all other Obligations (other than those
arising from indemnities for which no request has been made) then owing have
been paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of (to a Person other than the Borrower or a Subsidiary
thereof) (x) at any time prior to the time at which all Credit Document
Obligations have been paid in full and all Commitments under the Credit
Agreement have been terminated, in connection with a sale or other
disposition (including the sale of the capital stock or other equity
interests of an Assignor) permitted by Section 9.02 of the Credit Agreement
or is otherwise released at the direction of the Required Lenders (or all the
Lenders if required by Section 13.12 of the Credit Agreement) or (y) at any
time thereafter, in accordance with the terms of the Interest Rate Protection
Agreements or Other Hedging Agreements, and the proceeds of any such sale or
disposition are applied in accordance with the terms of the Credit Agreement
or such Interest Rate Protection Agreements or Other Hedging Agreements, as
the case may be, to the extent required to be so applied, the Collateral
Agent, at the request and expense of such Assignor, will (i) duly assign,
transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold, disposed of or released and as may be in the possession of the
Collateral Agent and has not theretofore been released pursuant to this
Agreement and/or (ii) execute such releases and discharges in respect of such
Collateral as is then being (or has been) so sold, disposed of or released as
such Assignor may reasonably request.
(c) At any time that the respective Assignor desires that
Collateral be released as provided in the foregoing Section 10.8(a) or (b),
it shall deliver to the Collateral Agent a certificate signed by an
Authorized Officer stating that the release of the respective Collateral is
permitted pursuant to Section 10.8(a) or (b). If requested by the Collateral
Agent (although the Collateral Agent shall have no obligation to make any
such request), the relevant Assignor shall furnish appropriate legal opinions
(from counsel, which may be in-house counsel, reasonably acceptable to the
Collateral Agent) to the effect set forth in the immediately preceding
sentence. The Collateral Agent shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it as
permitted (or which the Collateral Agent in the absence of gross negligence
or willful misconduct believes to be permitted) by this Section 10.8.
10.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Collateral Agent.
32
10.10. THE COLLATERAL AGENT. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time
received under this Agreement. It is expressly understood and agreed that
the obligations of the Collateral Agent as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise
under this Agreement, are only those expressly set forth in this Agreement.
The Collateral Agent shall act hereunder on the terms and conditions set
forth in Section 12 of the Credit Agreement.
10.11. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
10.12. LIMITED OBLIGATIONS. It is the desire and intent of each
Assignor and the Secured Creditors that this Agreement shall be enforced
against each Assignor to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Notwithstanding anything to the contrary contained herein, in furtherance of
the foregoing, it is noted that, on and after the execution and delivery of
the Subsidiaries Guaranty, the obligations of each Subsidiary Guarantor
constituting an Assignor have been limited as provided in the Subsidiaries
Guaranty.
10.13. ADDITIONAL ASSIGNORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to Section 8.11, 8.13 or 9.14 of the
Credit Agreement shall automatically become an Assignor hereunder by executing a
counterpart hereof and delivering the same to the Collateral Agent.
10.14. EFFECTIVENESS. This Agreement shall become effective when
(i) the Contribution Effective Time shall have occurred and (ii) the
Collateral Agent, PCA and each Subsidiary of PCA whose name appears on the
signature pages hereto shall have signed a counterpart hereof (whether the
same or different counterparts) and shall have delivered (including by way of
facsimile transmission) the same to the Administrative Agent at its Notice
Office or the offices of its counsel.
* * *
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
PACKAGING CORPORATION OF AMERICA,
as an Assignor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Chairman of the Board and
Chief Executive Officer
DAHLANEGA PACKAGING CORPORATION,
as an Assignor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Chief Executive Officer
▇▇▇▇▇ CONTAINER CORPORATION,
as an Assignor
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Chief Executive Officer
PCA HYDRO, INC.,
as an Assignor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Chief Executive Officer
PCA TOMAHAWK CORPORATION,
as an Assignor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Chief Executive Officer
PCA VALDOSTA CORPORATION,
as an Assignor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Chief Executive Officer
Accepted and Agreed to:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as Collateral Agent, as Assignee
By /s/ Unn ▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
