EXHIBIT 10.2
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US SECURITY AGREEMENT
among
SILGAN HOLDINGS INC.,
SILGAN CONTAINERS CORPORATION,
SILGAN PLASTICS CORPORATION,
SILGAN CONTAINERS MANUFACTURING CORPORATION,
SILGAN CAN COMPANY,
CERTAIN OTHER SUBSIDIARIES OF SILGAN HOLDINGS INC.
and
DEUTSCHE BANK AG NEW YORK BRANCH,
as Collateral Agent
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Dated as of June 30, 2005
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SECURITY AGREEMENT
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SECURITY AGREEMENT, dated as of June 30, 2005 (as the same may be
amended, modified and/or supplemented from time to time, this "Agreement"), made
by each of the undersigned assignors (each an "Assignor" and, together with any
other entity that becomes an assignor hereunder pursuant to Section 10.13
hereof, the "Assignors") in favor of DEUTSCHE BANK AG NEW YORK BRANCH, as
Collateral Agent (together with any successor Collateral Agent, the "Collateral
Agent"), for the benefit of the Secured Creditors (as defined below). Except as
otherwise defined herein, all capitalized 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, Silgan Holdings Inc. ("Silgan"), Silgan Containers
Corporation ("Containers"), Silgan Plastics Corporation ("Plastics"), Silgan
Containers Manufacturing Corporation ("Manufacturing"), Silgan Can Company
("CanCo"), each other Borrower from time to time party thereto, the lenders from
time to time party thereto (the "Lenders", and each, a "Lender"), Deutsche Bank
AG New York Branch, as Administrative Agent (in such capacity, and together with
any successor administrative agent, the "Administrative Agent"), Bank of
America, N.A. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bank, as Co-Syndication Agents (in such
capacity, the "Co-Syndication Agents"), BNP Paribas and JPMorgan Chase Bank,
N.A., as Co-Documentation Agents (in such capacity, the "Co-Documentation
Agents"), and Deutsche Bank Securities Inc. and Banc of America Securities LLC,
as Joint Lead Arrangers and Joint Book Managers (in such capacities, the "Joint
Lead Arrangers") have entered into a Credit Agreement, dated as of June 30, 2005
(as amended, modified and/or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans to, and the issuance of, and
participation in, Letters of Credit for the account of, the Borrowers as
contemplated therein (the Lenders, the Administrative Agent, the Issuing
Lenders, the Co-Syndication Agents, the Co-Documentation Agents, the Joint Lead
Arrangers and the Collateral Agent are collectively referred to herein as the
"Lender Creditors");
WHEREAS, one or more of the Borrowers or Subsidiaries thereof have
heretofore entered into, or may from time to time after the date hereof enter
into one or more other Interest Rate Protection Agreements or Other Hedging
Agreements with any Lender or an affiliate of a Lender (each such Lender or
affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, are herein called the "Other Creditors" and,
together with the Lender Creditors are herein called the "Secured Creditors");
WHEREAS, pursuant to the US Borrowers/Subsidiaries Guaranty, each
Assignor (other than CanCo except as may be required after the date hereof
pursuant to the Credit Agreement) has jointly and severally guaranteed to the
Secured Creditors the payment when due of all indebtedness, obligations and
liabilities of each Borrower and Subsidiary thereof under or with respect to the
Credit Documents, the Interest Rate Protection Agreements and the Other Hedging
Agreements;
WHEREAS, it is a condition precedent to the making of Loans to each
Borrower
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and the issuance of, and participation in, Letters of Credit for the account of
each Revolving Borrower under the Credit Agreement that the Assignors shall have
executed and delivered to the Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans by and the issuance of, and participation in, Letters of Credit for the
account of, the Borrowers under the Credit Agreement and the entering into by
one or more of the Borrowers or Subsidiaries thereof of Interest Rate Protection
Agreements and Other Hedging Agreements and, accordingly, each Assignor desires
to enter into this Agreement in order to satisfy the condition described in the
preceding paragraph;
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 for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
1. 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, in each case a continuing security interest in all of the right,
title and interest of such Assignor in, to and under all of the following
personal property and fixtures (and all rights therein) of such Assignor, or in
which or to which such Assignor has any rights, in each case whether now
existing or hereafter from time to time acquired:
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to be deposited in
the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all Tangible
Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims (including those described in Annex H
hereto);
(vi) 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 Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
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(ix) all Equipment;
(x) all Deposit Accounts and all other demand, deposit, time, savings,
cash management, passbook and similar accounts maintained by such Assignor
with any Person and all monies, securities, Instruments and other
investments deposited or required to be deposited in any of the foregoing;
(xi) all Documents;
(xii) all General Intangibles;
(xiii) all Goods;
(xiv) all Instruments (other than Instruments constituting Pledged
Securities);
(xv) all Inventory;
(xvi) all Investment Property (other than Investment Property required
to be pledged under the US Pledge Agreement);
(xvii) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xviii) 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;
(xix) all Patents;
(xx) all Permits;
(xxi) all Software and all Software licensing rights, all writings,
plans, specifications and schematics, all engineering drawings, customer
lists, goodwill and licenses, and all recorded data of any kind or nature,
regardless of the medium of recording;
(xxii) all Supporting Obligations; and
(xxiii) all Proceeds and products of any and all of the foregoing (all
of the above including this clause (xxiii), the "Collateral").
Notwithstanding the foregoing, the term "Collateral" shall not include any
Account and related asset from and after the time that the same is transferred
to the Receivables Subsidiary pursuant to the Accounts Receivable Facility
Documents.
(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, or with respect to which any Assignor may obtain
rights, at any time during the term of this Agreement.
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(c) Notwithstanding anything herein to the contrary, in no event shall
the Collateral include any lease, license or other Contract to which any
Assignor is a party or any of its rights or interests thereunder if and only for
so long as any applicable law prohibits the creation of a security interest
therein or the grant of such security interest shall constitute or result in (i)
the abandonment, invalidation or unenforceability of any right, title or
interest of any Assignor therein or (ii) a breach or termination pursuant to the
terms of, or a default under, any such lease, license or other Contract (other
than to the extent that any such term would be rendered ineffective or
unenforceable pursuant to the UCC of any relevant jurisdiction (including
Section 9-406, 9-407, 9-408 or 9-409 of any UCC (or any successor provision or
provisions)) or any other applicable law (including the Bankruptcy Code) or
principles of equity), provided, however that the Collateral shall include and
such security interest shall attach immediately at such time as (x) such
applicable law that prohibits the creation of such security interest is
repealed, invalidated or no longer effective, or (y) the condition causing such
abandonment, invalidation or unenforceability shall be remedied or any requisite
consent shall have been obtained and to the extent severable, shall attach
immediately to any portion of such lease, license or other Contract that does
not result in any of the consequences specified in (i) or (ii) above.
1.2 Power of Attorney. Each Assignor hereby constitutes and 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 reasonably necessary or advisable to protect the
interests of the Secured Creditors, which appointment as attorney is coupled
with an interest.
2. 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. All filings, registrations, recordings and
other actions necessary to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral (other than in Commercial Tort Claims not listed on Annex H hereto or
any supplement thereto) have been accomplished (or will be accomplished within
10 Business Days from the date hereof or, if later, within 10 Business Days
after an Assignor first becomes a party hereto) and upon such filings,
registrations recordations or other actions, the security interest granted to
the Collateral Agent pursuant to this Agreement in and to the Collateral (other
than in Commercial Tort Claims not listed on Annex H hereto or any supplement
thereto) creates a valid and, together with all such filings, registrations,
recordings and other actions, a perfected security interest therein prior to the
rights of all other Persons therein (other than Permitted Liens) 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, in each case to the extent that the Collateral consists of the type
of property in
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which a security interest may be perfected by possession or control (within the
meaning of the UCC as in effect on the date hereof in the State of New York) or
by filing a financing statement under the Uniform Commercial Code as enacted in
any relevant jurisdiction.
2.2 No Liens. Such Assignor is, and as to all 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 such Assignor shall defend the Collateral to the extent of
its rights therein against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent (other
than in respect of Permitted Liens).
2.3 Other Financing Statements. As of the date hereof (after giving
effect to the Loans incurred on the date hereof), there is no financing
statement (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 in respect of Permitted Liens), and so long as the
Termination Date has not occurred, 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 in connection with Permitted Liens.
2.4 Chief Executive Office, Record Locations. The chief executive
office of such Assignor is, on the date of this Agreement, located at the
address indicated on Annex A hereto for such Assignor. During the period of the
four calendar months preceding the date of this Agreement, the chief executive
office of such Assignor has not been located at any address other than that
indicated on Annex A in accordance with the immediately preceding sentence, in
each case unless each such other address is also indicated on Annex A hereto for
such Assignor.
2.5 Location of Inventory and Equipment. All Inventory and Equipment
held on the date hereof, or held at any time during the four calendar months
prior to the date hereof (to the extent, in the case of an Inventory location,
at least $1,000,000 of Inventory is (or was) located thereon), by each Assignor
is located at one of the locations shown on Annex B hereto for such Assignor.
2.6 Legal Names; Type of Organization (and Whether a Registered
Organization and/or a Transmitting Utility); Jurisdiction of Organization;
Location; Organizational Identification Numbers; Changes Thereto; etc. As of the
date hereof, the exact legal name of each Assignor, the type of organization of
such Assignor, whether or not such Assignor is a Registered Organization, the
jurisdiction of organization of such Assignor, such Assignor's Location, the
organizational identification number (if any) of each Assignor, and whether or
not such Assignor is a Transmitting Utility, is listed on Annex C hereto for
such Assignor. No Assignor shall change its legal name, its type of
organization, its status as a Registered Organization (in the case of a
Registered Organization), its status as a Transmitting Utility or as a Person
which is not a Transmitting Utility, as the case may be, its jurisdiction of
organization, its Location, or its organizational identification number (if any)
from that listed on Annex C hereto for such Assignor, except that any such
changes shall be permitted (so long as
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not in violation of the applicable requirements of the Secured Debt Agreements
and so long as same do not involve (x) a Registered Organization ceasing to
constitute same or (y) any Assignor changing its jurisdiction of organization or
Location from the United States or a State thereof to a jurisdiction of
organization or Location, as the case may be, outside the United States or a
State thereof) if (i) it shall have given to the Collateral Agent not less than
10 days' prior written notice of each change to the information listed on Annex
C (as adjusted for any subsequent changes thereto previously made in accordance
with this sentence), together with a supplement to Annex C which shall correct
all information contained therein for the respective Assignor, and (ii) in
connection with the respective such change or changes, it shall have taken all
action reasonably requested by the Collateral Agent to maintain the security
interests of the Collateral Agent in the Collateral intended to be granted
hereby at all times fully perfected and in full force and effect. In addition,
to the extent that any Assignor does not have an organizational identification
number on the date hereof and later obtains one, such Assignor shall promptly
thereafter notify the Collateral Agent of such organizational identification
number and shall take all actions reasonably satisfactory to the Collateral
Agent to the extent necessary to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby fully perfected
and in full force and effect.
2.7 Trade Names; Etc. No Assignor has or operates in any jurisdiction
under, or in the preceding five years has had or has operated in any
jurisdiction under, any trade names, fictitious names or other names except its
legal name as specified in Annex C and such other trade or fictitious names as
are listed on Annex D hereto for such Assignor. No Assignor shall assume or
operate in any jurisdiction under any new trade, fictitious or other name until
(i) it shall have given to the Collateral Agent not less than 10 days' written
notice of its intention so to do, clearly describing such new name and the
jurisdictions in which such new name will be used and providing such other
information in connection therewith as the Collateral Agent may reasonably
request and (ii) with respect to such new name, it shall have taken all action
reasonably requested by 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.
2.8 Certain Significant Transactions. During the one year period
preceding the date of this Agreement, no Person has merged or consolidated with
or into any Assignor, and no Person has liquidated into, or transferred all or
substantially all of its assets to, any Assignor, in each case except as
described in Annex E hereto. With respect to any transactions so described in
Annex E hereto, the respective Assignor shall have furnished such information
with respect to the Person (and the assets of the Person and locations thereof)
which merged with or into or consolidated with such Assignor, or was liquidated
into or transferred all or substantially all of its assets to such Assignor, and
shall have furnished to the Collateral Agent such UCC lien searches as may have
been requested with respect to such Person and its assets, to establish that no
security interest (excluding Permitted Liens) continues perfected on the date
hereof with respect to any Person described above (or the assets transferred to
the respective Assignor by such Person), including without limitation pursuant
to Section 9-316(a)(3) of the UCC.
2.9 Non-UCC Property. The aggregate fair market value (as determined
by the Assignors in good faith) of all property of the Assignors of the types
described in clauses (1), (2) and (3) of Section 9-311(a) of the UCC (other than
intellectual property) does not exceed
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$10,000,000. If the aggregate value of all such property at any time owned by
all Assignors exceeds $10,000,000, the Assignors shall provide prompt written
notice thereof to the Collateral Agent and, upon the request of the Collateral
Agent, the Assignors shall promptly (and in any event within 30 days) take such
actions (at their own cost and expense) as may be required under the respective
United States, State or other laws referenced in Section 9-311(a) of the UCC to
perfect the security interests granted herein in such property (to the extent
constituting Collateral) where the filing of a financing statement does not
perfect the security interest in such property in accordance with the provisions
of Section 9-311(a) of the UCC.
2.10 As-Extracted Collateral; Timber-to-be-Cut. On the date hereof, no
Assignor owns, or expects to acquire, any property which constitutes, or would
constitute, As-Extracted Collateral or Timber-to-be-Cut in an aggregate amount
for all Assignors of $2,000,000 or more. If at any time after the date of this
Agreement the Assignors own, acquire or obtain rights to As-Extracted Collateral
or Timber-to-be-Cut in an aggregate amount of $1,000,000 or more, such Assignors
shall furnish the Collateral Agent with prompt written notice thereof (which
notice shall describe in reasonable detail or the As-Extracted Collateral and/or
Timber-to-be-Cut and the locations thereof) and shall take all actions as may be
deemed reasonably necessary or desirable by the Collateral Agent to perfect the
security interest of the Collateral Agent therein.
2.11 Collateral in the Possession of a Bailee. If any Inventory or
other Goods in an aggregate amount for all Assignors of $5,000,000 or more are
at any time in the possession of a bailee, the respective Assignors shall
promptly notify the Collateral Agent thereof and, if requested by the Collateral
Agent, shall use its reasonable best efforts to promptly obtain an
acknowledgment from such bailee, in form and substance reasonably satisfactory
to the Collateral Agent, that the bailee holds such Collateral for the benefit
of the Collateral Agent and shall act upon the instructions of the Collateral
Agent, without the further consent of the respective Assignors. The Collateral
Agent agrees with the Assignors that the Collateral Agent shall not give any
such instructions unless an Event of Default has occurred and is continuing or
would occur after taking into account any action by the respective Assignor with
respect to any such bailee.
2.12 Recourse. This Agreement is made with full recourse to each
Assignor pursuant to upon all the warranties, representations, covenants and
agreements on the part of such Assignor contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
3. SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
3.1 Additional Representations and Warranties. As of the time when
each of its Accounts (other than Accounts in an immaterial aggregate amount)
arises, each Assignor shall be deemed to have represented and warranted that
each such Account, and all records, papers and documents relating thereto (if
any) are genuine and what they purport to be, and that all papers and documents
(if any) relating thereto 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).
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3.2 Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense accurate records of its Accounts and Contracts,
including, but not limited to, originals (with facsimile copies being deemed to
constitute 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, to the extent permitted
by, and subject to the conditions set forth in, the Credit Agreement. 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 Accounts and Contract Rights (including,
without limitation, all documents evidencing the Accounts 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). Upon
the occurrence and during the continuance of an Event of Default and if the
Collateral Agent so directs, such Assignor shall legend, in form and manner
satisfactory to the Collateral Agent, the Accounts and the Contracts, as well as
books, records and documents (if any) of such Assignor evidencing or pertaining
to such Accounts and Contracts with an appropriate reference to the fact that
such Accounts 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 Assignor, such Assignor agrees (x) to cause all
payments on account of the Accounts 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 Accounts and/or under any
Contracts to make payments with respect thereto as provided in the preceding
clause (x), and (z) that the Collateral Agent may enforce collection of any such
Accounts and 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 which
application shall be effected in the manner provided in Section 7.4 of this
Agreement. The costs and expenses of collection (including reasonable attorneys'
fees), whether incurred by an Assignor or the Collateral Agent, shall be borne
by the relevant Assignor. The Collateral Agent shall deliver a copy of each
notice referred to in the preceding clause (y) to the relevant Assignor,
provided that (x) the failure by the Collateral Agent to so notify such Assignor
shall not affect the effectiveness of such notice or the other rights of the
Collateral Agent created by this Section 3.3 and (y) no such notice shall be
required if an Event of Default of the type described in Section 9.05 of the
Credit Agreement has occurred and is continuing.
3.4 Modification of Terms; etc. Except (x) as permitted under the
Credit Agreement, (y) as permitted by Section 3.5 hereof or (z) in the ordinary
course of business and consistent with past practices of such Assignor, no
Assignor shall rescind or cancel any indebtedness evidenced by any Account or
under any Contract, or modify in any material respect, any term thereof or make
any material 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 Account or Contract, or interest therein, without
the prior written
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consent of the Collateral Agent. Each Assignor will duly fulfill all of its
material obligations on its part to be fulfilled under or in connection with the
Accounts or Contracts and will not do anything to impair any rights of the
Collateral Agent in the Accounts or Contracts.
3.5 Collection. Each Assignor shall endeavor in accordance with
reasonable business practices to cause to be collected from the account debtor
named in each of its Accounts or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Account or Contract, and
apply forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account 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 owing under its Accounts and
Contracts (i) an extension or renewal of the time or times of payment, 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 or for other reasons which such Assignor finds appropriate in
accordance with reasonable business judgment. The reasonable 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.
3.6 Instruments. If any Assignor owns or acquires any Instrument
constituting Collateral in excess of $250,000 and having a maturity longer than
60 days and otherwise constituting Collateral, such Assignor will within 10
Business Days thereafter notify the Collateral Agent thereof, and upon request
by the Collateral Agent will promptly deliver such Instrument to the Collateral
Agent appropriately endorsed to the order of the Collateral Agent as additional
Collateral hereunder.
3.7 Assignors Remain Liable Under Accounts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Accounts to observe and perform all of the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to such Accounts. Neither the Collateral Agent nor any
other Secured Creditor shall have any obligation or liability under any Account
(or any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by the Collateral Agent or any other Secured Creditor
of any payment relating to such Account pursuant hereto, nor shall the
Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any Account
(or any agreement giving rise thereto), to make any payment, to make any inquiry
as to the nature or the sufficiency of any payment received by them or as to the
sufficiency of any performance by any party under any Account (or any agreement
giving rise thereto), to present or file any claim, to take any action to
enforce any performance or to collect the payment of any amounts which may have
been assigned to them or to which they may be entitled at any time or times.
3.8 Assignors Remain Liable Under Contracts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them
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thereunder, all in accordance with and pursuant to the terms and provisions of
each Contract. Neither the Collateral Agent nor any other Secured Creditor shall
have any obligation or liability under any Contract by reason of or arising out
of this Agreement or the receipt by the Collateral Agent or any other Secured
Creditor of any payment relating to such Contract pursuant hereto, nor shall the
Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any performance by any party under any Contract, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to them or to which they may
be entitled at any time or times.
3.9 Deposit Accounts; Etc. (a) No Assignor maintains, or at any time
after the date of this Agreement shall establish or maintain, any demand, time,
savings, passbook or similar account, except for such accounts maintained with a
bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in
accordance with Section 9-304 of the UCC) is within a State of the United
States. Annex F hereto accurately sets forth, as of the date of this Agreement,
for each Assignor, each Deposit Account maintained by such Assignor (including a
description thereof and the respective account number), the name of the
respective bank with which such Deposit Account is maintained, and the
jurisdiction of the respective Lender with respect to such Deposit Account, in
each case except for local Deposit Accounts which in the aggregate for all of
the Assignors do not hold more than $5,000,000 of cash and Cash Equivalents at
any one time (although no more than $200,000 in the aggregate may be held in any
single local Deposit Account). For each Deposit Account (other than the Cash
Collateral Account or any other Deposit Account maintained with the Collateral
Agent), the respective Assignor shall use its commercially reasonable efforts to
cause the bank with which the Deposit Account is maintained to execute and
deliver to the Collateral Agent, within 90 days after the date of this Agreement
(as such date may be extended by the Collateral Agent in its reasonable
discretion) or, if later, at the time of the establishment of the respective
Deposit Account, a "control agreement" in the form of Annex G hereto
(appropriately completed), with such changes thereto as may be acceptable to the
Collateral Agent. If any bank with which a Deposit Account is maintained refuses
to, or does not, enter into such a "control agreement", then the respective
Assignor shall, to the extent reasonably requested by the Collateral Agent,
promptly close the respective Deposit Account and transfer all balances therein
to another Deposit Account meeting the requirements of this Section 3.9. If any
bank with which a Deposit Account is maintained refuses to subordinate all its
claims with respect to such Deposit Account to the Collateral Agent's security
interest therein on terms satisfactory to the Collateral Agent, then the
Collateral Agent, in its reasonable discretion, may (but will have no
obligations to) (x) require that such Deposit Account be terminated in
accordance with the immediately preceding sentence or (y) agree to a "control
agreement" without such subordination, provided that in such event the
Collateral Agent may at any time, at its option, subsequently require that such
Deposit Account be terminated (within 30 days after notice from the Collateral
Agent) in accordance with the requirements of the immediately preceding
sentence.
(b) After the date of this Agreement, no Assignor shall establish any
new demand, time, savings, passbook or similar account, except for Deposit
Accounts established and maintained with banks and meeting the requirements of
preceding clause (a). At the time any such Deposit Account is established, the
appropriate "control agreement" shall be entered into in
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accordance with the requirements of preceding clause (a) and the respective
Assignor shall furnish to the Collateral Agent a supplement to Annex F hereto
containing the relevant information with respect to the respective Deposit
Account and the bank with which same is established.
(c) Without limiting any provision of Section 7 herein, the Collateral
Agent hereby agrees that unless an Event of Default has occurred and is
continuing, it will not assume exclusive control over any Deposit Account of any
Assignor or give any notice of exclusive control or similar notice to any bank
at which any Deposit Account is maintained by any Assignor.
3.10 Letter-of-Credit Rights. If any Assignor is at any time a
beneficiary under a letter of credit with a stated amount of $500,000 or more,
such Assignor shall promptly notify the Collateral Agent thereof and, at the
request of the Collateral Agent, such Assignor shall, pursuant to an agreement
in form and substance reasonably satisfactory to the Collateral Agent, use its
reasonable best efforts to (i) arrange for the issuer and any confirmer of such
letter of credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under such letter of credit or (ii) arrange for the
Collateral Agent to become the transferee beneficiary of such letter of credit,
with the Collateral Agent agreeing, in each case, that the proceeds of any
drawing under the letter of credit are to be applied as provided in this
Agreement after the occurrence and during the continuance of an Event of
Default.
3.11 Commercial Tort Claims. All Commercial Tort Claims of each
Assignor as of the date of this Agreement are described in Annex H hereto. If
any Assignor shall at any time and from time to time after the date of this
Agreement become aware of any Commercial Tort Claim in an amount (taking the
greater of the aggregate claimed damages thereunder or the reasonably estimated
value thereof) of $3,000,000 or more, such Assignor shall (i) promptly notify
the Collateral Agent thereof in a writing signed by such Assignor and describing
the details thereof and shall grant to the Collateral Agent in such writing a
security interest in all such Commercial Tort Claims and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form
and substance reasonably satisfactory to the Collateral Agent and (ii) perform
all actions reasonably requested by the Collateral Agent to perfect such
security interest in such Commercial Tort Claims.
3.12 Chattel Paper. Upon the request of the Collateral Agent made at
any time or from time to time, each Assignor shall promptly furnish to the
Collateral Agent a list of all Electronic Chattel Paper held or owned by such
Assignor. Furthermore, if requested by the Collateral Agent, each Assignor shall
promptly take all actions which are reasonably practicable so that the
Collateral Agent has "control" of all Electronic Chattel Paper in accordance
with the requirements of Section 9-105 of the UCC. Each Assignor will promptly
(and in any event within 20 days) following any request by the Collateral Agent,
deliver all of its Tangible Chattel Paper to the Collateral Agent.
3.13 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
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instruments and take such further steps, including any and all actions as may be
necessary or required under the Federal Assignment of Claims Act, relating to
its Accounts, Contracts, Instruments and other property or rights covered by the
security interest hereby granted, as the Collateral Agent may reasonably
require.
4. SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1 Additional Representations and Warranties. Each Assignor
represents and warrants that it owns, is licensed to use or otherwise has the
right to use all material Marks that it uses. 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 in any material respect any trademark, service ▇▇▇▇ or trade name. 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 of the
United States in order to effect an absolute assignment of all right, title and
interest in each ▇▇▇▇, and record the same.
4.2 Licenses and Assignments. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any ▇▇▇▇ absent prior written approval of the Collateral Agent.
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,
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 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 material
Marks in interstate commerce during the time in which this Agreement is in
effect and to take all such other actions as are necessary to preserve such
material Marks as trademarks or service marks under the laws of the United
States; provided, that no Assignor shall be obligated to preserve, or prosecute
any Person infringing, any material ▇▇▇▇ in the event such Assignor determines,
in its reasonable business judgment, that the preservation of such material ▇▇▇▇
is no longer desirable in the conduct of its business.
4.5 Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required to maintain trademark
registrations, including but not limited to affidavits of use and applications
for renewals of registration in the United States Patent and Trademark Office
for all of its registered Marks, 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 the registration of
any ▇▇▇▇ in the event that such Assignor determines,
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in its reasonable business judgment, that the maintenance of such ▇▇▇▇ is no
longer necessary or desirable in the conduct of its business.
4.6 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, 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 hereof to execute,
cause to be acknowledged and notarized and record said 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 application in the United States Patent and Trademark Office or any
equivalent government agency or office in any foreign jurisdiction to the
Collateral Agent.
5. 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 all
rights in (i) the material Patents that such Assignor owns and (ii) the material
Copyrights that such Assignor owns. Each Assignor further represents and
warrants that it is the true and lawful exclusive owner or licensee of all
rights in all material United States trade secrets and proprietary information
necessary to operate the business of the Assignor (the "Trade Secret Rights").
Each Assignor further represents and warrants that it has the exclusive right to
use and practice under all material Patents and material Copyrights that it
owns, uses or practices under and has the exclusive right to exclude others from
using or practicing under the claims of any material Patents it owns, uses or
practices under. Each Assignor further warrants that, as of the date hereof, 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 in any material respect on any rights in any third party patent or
copyright or that such Assignor has misappropriated in any material respect any
trade secret or proprietary information. 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 the United States
Copyright Office in order to effect an absolute assignment of all right, title
and interest in each Patent and registered Copyright and to record the same.
5.2 Licenses and Assignments. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any Patent or Copyright absent prior written approval of the
Collateral Agent.
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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 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 violates any property right of a
third party, or with respect to any misappropriation of any material Trade
Secret Right or any claim that practice of any material Trade Secret Right
violates any property right of a third party. Each Assignor further agrees,
absent direction of the Collateral Agent to the contrary, to prosecute in
accordance with reasonable business practice any Person infringing any material
Patent or material Copyright or any Person misappropriating any material Trade
Secret Right.
5.4 Maintenance of Patents or Copyright At its own expense, each
Assignor shall make timely payment of all post-issuance fees required pursuant
to 35 U.S.C. ss. 41 to maintain in force rights under each material Patent, and
to apply as permitted pursuant to applicable law for any renewal of each
material Copyright, in any case absent prior written consent of the Collateral
Agent; provided, that no Assignor shall be obligated to maintain, or prosecute
any Person infringing, any Patent or Copyright in the event 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 and Copyright Applications. At its own
expense, each Assignor shall diligently prosecute all applications for (i)
material United States Patents and (ii) material United States Copyrights, in
each case for such Assignor 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 or not to abandon any such application in the event such Assignor
determines, in its reasonable business judgment, that the prosecuting or
maintenance of any such application is no longer necessary or desirable in the
conduct of its business.
5.6 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, Copyrights and Trade Secret
Rights 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, in which case the
Collateral Agent shall be entitled to exercise the power of attorney referred to
in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to
record said absolute assignment with the applicable agency; (ii) take and
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 reasonably 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.
6. PROVISIONS CONCERNING ALL COLLATERAL
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6.1 Protection of Collateral Agent's Security. Except as otherwise
permitted by the Secured Debt Agreements, each Assignor will do nothing to
impair the rights of the Collateral Agent in the Collateral. Each Assignor will
at all times keep 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 Secured Debt Agreements. 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 to the extent proceeds of insurance are permitted to be
retained by the relevant Assignor pursuant to the terms of 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
Section 7.4 hereof. 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 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 Additional Information. Each Assignor will, at its own expense,
from time to time upon the reasonable request of the Collateral Agent, promptly
(and in any event within 20 days after its receipt of the respective request)
furnish to the Collateral Agent such information with respect to the Collateral
(including the identity of the Collateral or such components thereof as may have
been requested by the Collateral Agent, the value and location of such
Collateral, etc.) as may be reasonably requested by the Collateral Agent.
Without limiting the forgoing, each Assignor agrees that it shall promptly (and
in any event within 20 days after its receipt of the respective request) furnish
to the Collateral Agent such updated Annexes hereto as may from time to time be
reasonably requested by the Collateral Agent.
6.4 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, as the Collateral Agent
reasonably requests to perfect, preserve or protect its security interest in the
Collateral.
6.5 Financing Statements. Each Assignor agrees to execute and deliver
to the Collateral Agent such financing statements, in form reasonably acceptable
to the Collateral Agent, as the Collateral Agent may from time to time
reasonably request or as are necessary or
Page 16
desirable in the opinion of the Collateral Agent to establish and maintain a
valid, enforceable, first priority perfected security interest in the Collateral
(subject to Permitted Liens) as provided herein and the other rights and
security contemplated hereby all in accordance with the UCC 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, as the Collateral Agent shall reasonably deem
necessary or desirable to file any such financing statements without the
signature of such Assignor where permitted by law.
7. REMEDIES UPON OCCURRENCE OF AN 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 and under the other provisions of this
Agreement, shall have all rights as a secured creditor under any UCC, and such
additional rights and remedies to which a secured creditor is entitled under the
laws in effect in all relevant jurisdictions and may:
(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 Accounts 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 and may exercise any and all remedies of such Assignor in
respect of such Collateral;
(iii) instruct all depository banks and/or Securities Intermediaries
which have entered into a control agreement with the Collateral Agent with
respect to any Collateal to transfer all monies, securities, instruments
and Financial Assets held by such depositary bank and/or Securities
Intermediary to the Cash Collateral Account;
(iv) sell, assign or otherwise liquidate any or all of the Collateral
or any part thereof in accordance with Section 7.2 hereof, 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 reasonable place or places designated by the
Collateral Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or places
so designated by the Collateral Agent and there delivered to the
Collateral Agent;
Page 17
(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 hereof; 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 the Collateral in reasonable
working condition;
(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 (taking into account such provisions
as may be necessary to protect and preserve such Marks, Patents or
Copyrights);
(vii) apply any monies constituting Collateral or proceeds thereof in
accordance with the provisions of Section 7.4; and
(viii) take any other action as specified in clauses (1) through (5),
inclusive, of Section 9-607 of the UCC;
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. By
accepting the benefits of this Agreement and each other Security Document, the
Secured Creditors expressly acknowledge and agree that this Agreement and each
other Security Document 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 Secured Creditors and that no other Secured Creditor shall have any
right individually to seek to enforce or to enforce this Agreement or any other
Security Document or to realize upon the security to be granted hereby or
thereby, it being understood and agreed that such rights and remedies may be
exercised by the Administrative Agent or the Collateral Agent for the benefit of
the Secured Creditors upon the terms of this Agreement and the other Security
Documents.
7.2 Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof 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 sale, lease or other disposition may be effected by means
of a public disposition or private disposition, effected in accordance with the
applicable requirements (in each case if and to the extent applicable) of
Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements
of applicable law as may apply to the respective disposition. The
Page 18
Collateral Agent may, without notice or publication, adjourn any public or
private disposition or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the disposition, and such
disposition may be made at any time or place to which the disposition may be so
adjourned. To the extent permitted by any such requirement of law, the
Collateral Agent may bid for and become the purchaser (and may pay all or any
portion of the purchase price by crediting Obligations against the purchase
price) of the Collateral or any item thereof, offered for disposition in
accordance with this Section 7.2 without accountability to the relevant
Assignor. If, under applicable law, the Collateral Agent shall be permitted to
make 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 the applicable law. Each Assignor
agrees to do or cause to be done all such other acts and things as may be
necessary to make such disposition or dispositions of all or any portion of the
Collateral valid and binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and all
courts, arbitrators 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 each Assignor hereby further waives, to the extent
permitted by law:
(i) all damages occasioned by such taking of possession or any such
disposition except to the extent any damages are the result of the
Collateral Agent's gross negligence or willful misconduct (as determined by
a court of competent jurisdiction in a final and non-appealable decision);
(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.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall 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.
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7.4 Application of Proceeds. (a) All monies collected by the
Collateral Agent (or, to the extent the US Pledge Agreement or the Additional
Security Documents constituting US Security Documents require proceeds of
collateral under such US Security Documents to be applied in accordance with the
provisions of this Agreement, the Pledgee under such other US Security Document)
upon any sale or other disposition of the Collateral, together with all other
monies received by the Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all amounts owing the Collateral Agent of
the type described in clauses (iii), (iv) and (v) of the definition of
"Obligations";
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), to the payment of all amounts owing
to the Administrative Agent of the type described in clauses (v) and (vi)
of the definition of "Obligations";
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Primary Obligations shall be paid to the Secured Creditors as
provided in Section 7.4(e) hereof, 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;
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iii), inclusive, an amount
equal to the outstanding Secondary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e) hereof, 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
(v) fifth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iv), 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 and using the Dollar Equivalent thereof
in the case of an amount expressed in a currency other than Dollars) 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, premium and interest on, all Loans, all Unpaid Drawings, the
Stated Amount on all outstanding Letters of Credit and all Fees and (ii) in the
case of the Other Obligations, all amounts due under the Interest Rate
Protection Agreements and the Other Hedging Agreements entitled to the benefits
of this Agreement (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.
Page 20
(c) When payments to the 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, by their acceptance of the benefits
hereof, 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 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 Administrative Agent to the
Collateral Agent for distribution in accordance with Section 7.4(a) hereof.
(e) 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 such
Representative for any Other Creditors or the Other Creditors, as the case may
be 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 the Collateral Agent has received written notice from a Lender
Creditor or an Other Creditor to the contrary, the Administrative Agent and each
Representative, in furnishing information pursuant to the preceding sentence,
the Collateral Agent, in acting hereunder, shall be entitled to assume that no
Secondary Obligations are outstanding. Unless the Collateral Agent has received
written notice from an Other Creditor to the contrary, the Collateral Agent, in
acting hereunder, shall be entitled to assume that no
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Interest Rate Protection Agreements and the Other Hedging Agreements entitled to
the benefits of this Agreement are in existence.
(g) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the Obligations.
(h) Notwithstanding anything to the contrary contained in this Section
7.4, it is understood that, until such time as CanCo is no longer subject to the
restrictions contained in the relevant ▇▇▇▇▇▇▇▇ Can Acquisition Documents
restricting CanCo from being jointly liable with the other Assignors, CanCo
shall not be jointly and severally liable with the other Assignors for any
deficiency described in Section 7.4(g) above to the extent such joint and
several liability is prohibited by such ▇▇▇▇▇▇▇▇ Can Acquisition Documents, but
shall remain liable to the extent of any deficiency between the amount of the
proceeds of the Collateral hereunder and the amount of its own 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 to the Collateral Agent under this
Agreement, the other Secured Debt Agreements 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 thereof. 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 reasonable 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.
8. INDEMNITY
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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 successors, assigns, employees, affiliates, servants and
agents (hereinafter in this Section 8.1 referred to individually as
"Indemnitee," and collectively as "Indemnitees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements
(including reasonable 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 other Secured Debt
Agreement 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 any
expenses to the extent caused by the gross negligence or willful misconduct of
such Indemnitee (as determined by a court of competent jurisdiction in a final
and non-appealable decision); provided that the indemnity described above shall
not apply to any liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses or disbursements incurred by, imposed
on or assessed as a result of, or arising out of, or in any way related to, or
by reason of any litigation, proceeding or other action solely between or among
the Lenders (excluding, however, any liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and disbursements
(all of which shall be covered by such indemnity) incurred by, imposed on or
assessed against the Administrative Agent, the Collateral Agent or any of their
respective officers, directors, employees, affiliates, representatives or agents
as a result of, or arising out of, or in any way related to, or by reason of any
such litigation, proceeding or action to which the Administrative Agent or the
Collateral Agent (or any of their respective officers, directors, employees,
affiliates, representatives or agents) is a party in its capacity as such) to
the extent (and only to the extent) that such litigation, proceeding or other
action does not relate to, or arise from, any action or omission by Siligan or
any of its Subsidiaries. Each Assignor agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, 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) hereof, each
Assignor agrees, jointly and severally, to pay or reimburse the Collateral Agent
for any and all reasonable 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
Page 23
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) hereof,
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 other Secured Debt
Agreement or in any writing contemplated by or made or delivered pursuant to or
in connection with this Agreement or any other Secured Debt Agreement.
(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.
(e) Notwithstanding anything to the contrary contained in this Section
8.1, until such time as the CanCo Restrictions are no longer in effect, CanCo
shall not be jointly and severally liable with the other Assignors for any
indemnity obligations under this Section 8.1 to the extent such joint and
several liability is prohibited by such CanCo Restrictions, but will remain
obligated for indemnity obligations with respect to its own actions.
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 of the
other Obligations and notwithstanding the full payment of all the Notes issued,
and Loans made, under the Credit Agreement, the termination of all Letters of
Credit issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements and Other Hedging Agreements entered into with the Other
Creditors and the payment of all other Obligations and notwithstanding the
discharge thereof.
9. 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.
"Account" 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, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for
Page 24
use with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Administrative Agent" shall have the meaning provided in the recitals
to this Agreement.
"Agreement" shall have the meaning provided in the first paragraph
hereof.
"As-Extracted Collateral" shall mean "as-extracted collateral" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower" shall have the meaning provided in the recitals to this
Agreement.
"CanCo" shall have the meaning provided in the recitals to this
Agreement.
"Cash Collateral Account" shall mean a 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 mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Co-Documentation Agents" shall have the meaning provided in the
recitals to this Agreement.
"Co-Syndication Agents" shall have the meaning provided in the
recitals to this Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Containers" shall have the meaning provided in the recitals to this
Agreement.
Page 25
"Contract Rights" shall mean all rights of any Assignor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreements, licensing agreements and any partnership agreements,
joint venture agreements, operating agreements and limited liability company
agreements), but excluding any contract that is governed by a law other than
that of the United States or any State thereof to the extent that the terms of
any such contract prohibit the granting of a security interest therein which
would be enforceable under any such applicable foreign law.
"Copyrights" shall mean any United States copyright owned by any
Assignor, including any registrations of any copyrights, in the United States
Copyright Office or any foreign equivalent office, as well as any application
for a copyright registration now or hereafter made with the United States
Copyright Office or any foreign equivalent office by any Assignor.
"Credit Agreement" shall have the meaning provided in the recitals to
this Agreement.
"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.
"Deposit Accounts" shall mean all "deposit accounts" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined 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, and in any event, shall include, but shall not be limited to, all
machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned
by any Assignor and any and all additions, substitutions and replacements of any
of the foregoing and all accessions thereto, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto.
Page 26
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event include, without
limitation, any payment default on any of the Obligations after the expiration
of any applicable grace period.
"Financial Asset" shall mean "financial asset" as such term is defined
in Section 8-102(a)(9) of the UCC.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined 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(a) of this
Agreement.
"Instruments" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
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.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Joint Lead Arrangers" shall have the meaning provided in the recitals
to this Agreement.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"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.
Page 27
"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.
"Location" of any Assignor shall mean such Assignor's "location" as
determined pursuant to Section 9-307 of the UCC.
"Manufacturing" shall have the meaning provided in the recitals to
this Agreement.
"Marks" shall mean all right, title and interest in and to any United
States 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 in any equivalent foreign office or the equivalent thereof in any
State of the United States and any trade dress including logos, trade names,
company names, business names, fictitious names, other business identifiers
and/or designs used by any Assignor in the United States.
"Obligations" shall mean and include all of the following:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, principal, premium, interest
(including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganization or similar proceeding of any
Assignor or any Subsidiary thereof at the rate provided for in the
respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding), reimbursement obligations under Letters
of Credit, fees, costs and indemnities) of each Assignor to the Lender
Creditors, whether now existing or hereafter incurred under, arising out
of, or in connection with, the Credit Agreement and the other Credit
Documents to which such Assignor is a party (including, in the case of each
Assignor that is a Guarantor, all such obligations, liabilities and
indebtedness of such Assignor under the US Borrowers/Subsidiaries Guaranty)
and the due performance and compliance by such Assignor with all of the
terms, conditions and agreements contained in the Credit Agreement and in
such other Credit Documents (all such obligations, liabilities and
indebtedness under this clause (i), except to the extent consisting of
obligations, liabilities or indebtedness with respect to Interest Rate
Protection Agreements or Other Hedging Agreements entitled to the benefits
of this Agreement, being herein collectively called the "Credit Document
Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, all interest that accrues
after the commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency, reorganization or similar proceeding of any
Assignor or any Subsidiary thereof at the rate provided for in the
respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by such Assignor to the Other
Creditors under, or with
Page 28
respect to (including, in the case of each Assignor that is a Guarantor,
all such obligations, liabilities and indebtedness of such Assignor under
the US Borrowers/Subsidiaries Guaranty), each Interest Rate Protection
Agreement and Other Hedging Agreement entitled to the benefits of this
Agreement, whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereafter arising, and the due performance
and compliance by such Assignor with all of the terms, conditions and
agreements contained therein (all such obligations, liabilities and
indebtedness described in this clause (ii) being herein collectively called
the "Other Obligations");
(iii) any and all sums advanced by the Collateral Agent 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 such Assignor referred
to in clauses (i) and (ii) above, after an Event of Default shall have
occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing
on the Collateral, or of any exercise by the Collateral Agent of its rights
hereunder, together with reasonable attorneys' fees and court costs;
(v) all amounts paid by any Indemnitee as to which such Indemnitee has
the right to reimbursement under Section 8.1 of this Agreement; and
(vi) all amounts owing to the Administrative Agent pursuant to any of
the Credit Documents in its capacity as such;
it being 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 of
this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
"Patents" shall mean any United States patent to which any Assignor
now or hereafter has any right, title or interest therein, and any divisions,
continuations (including, but not limited to, continuations-in-parts) and
improvements thereof, as well as any application for a United States patent now
or hereafter made by any Assignor.
"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 of or from any governmental authority or
agency.
"Plastics" shall have the meaning provided in the recitals to this
Agreement.
Page 29
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also 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.
"Registered Organization" shall have the meaning provided in the
Uniform Commercial Code as in effect in the State of New York.
"Representative" shall have the meaning provided in Section 7.4(e) of
this Agreement.
"Required Secured Creditors" shall mean (i) at any time when any
Credit Document Obligations are outstanding or any Commitments or Letters of
Credit under the Credit Agreement exist, the Required Lenders (or, to the extent
provided in Section 12.12 of the Credit Agreement, each of the Lenders) and (ii)
at any time after all of the Credit Document Obligations have been paid in full
in cash and all Commitments and Letters of Credit under the Credit Agreement
have been terminated and no further Commitments may be provided thereunder, the
holders of a majority of the outstanding principal amount of the Other
Obligations.
"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.
"Secured Debt Agreements" shall mean and include this Agreement, the
other Credit Documents and the Interest Rate Protection Agreements and Other
Hedging Agreements entitled to the benefits of this Agreement entered into with
an Other Creditor.
"Securities Intermediary" shall mean "securities intermediary" as such
term is defined in Section 8-102(a)(14) of the UCC.
"Silgan" shall have the meaning provided in the recitals to this
Agreement.
Page 30
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Supporting Obligations" shall mean any "supporting obligation" 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, or in
which any Assignor has any rights, and, in any event, shall include, but shall
not be limited to all of such Assignor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Termination Date" shall have the meaning provided in Section 10.8(a)
of this Agreement.
"Timber-to-be-Cut" shall mean "timber-to-be-cut" as such term is used
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"Trade Secret Rights" shall have the meaning provided in Section 5.1
of this Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
10. 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 sent or delivered by mail, telegraph, telex, telecopy, cable or
courier service and all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, cable company
or overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Collateral Agent or any Assignor shall
not be effective until received by the Collateral Agent or such Assignor, as the
case may be. All notices and other communications shall be in writing and
addressed as follows:
(a) if to any Assignor, at :
c/o Silgan Holdings Inc.
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Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
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(b) if to the Collateral Agent, at:
Deutsche Bank AG New York Branch
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
(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;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to Silgan and the Collateral Agent;
or at such other address or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required to
give notice hereunder.
10.2 Waiver; Amendment. Except as provided in Sections 10.8 and 10.13
hereof, none of the terms and conditions of this Agreement, any other Security
Document or any Guaranty may be changed, waived, modified or varied in any
manner whatsoever unless in writing duly signed by each Assignor (or Guarantor,
as the case may be) directly affected thereby and the Collateral Agent (with the
written consent of the Required Secured Creditors); provided, however, that any
change, waiver, modification or variance affecting the rights and benefits of a
single Class of Secured Creditors (and not all Secured Creditors in a like or
similar manner) also shall require the written consent of the Requisite
Creditors of such affected Class. 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 (or, to
the extent provided in Section 12.12 of the Credit Agreement, each of the
Lenders), and (y) with respect to the Other Obligations, the holders of at least
a majority of the outstanding principal amount of all Other Obligations
outstanding from time to time.
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 or any other Secured Debt
Agreement; or (c) any amendment to or modification of any Secured Debt Agreement
or any security for any of the Obligations; whether or not such Assignor shall
have notice or knowledge of any of the foregoing.
10.4 Successors and Assigns. This Agreement shall be binding upon each
Assignor and its successors and assigns (although no Assignor may assign its
rights and obligations hereunder except in accordance with the provisions of the
Secured Debt Agreements)
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and shall inure to the benefit of the Collateral Agent and the other Secured
Creditors and their respective successors and assigns. 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 and the
other Secured Debt 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; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) 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, WITHOUT REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN
THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS. EACH ASSIGNOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS LACK PERSONAL JURISDICTION OVER SUCH ASSIGNOR, AND AGREES NOT TO PLEAD OR
CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT
LACKS PERSONAL JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR AT ITS
ADDRESS FOR NOTICES AS PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES
ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR
UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY
INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL
AGENT UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER JURISDICTION.
(b) EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY
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OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.7 Assignor's 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 each Assignor under or with
respect to any Collateral.
10.8 Termination; Release. (a) After the Termination Date, 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
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including 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
Commitment and all Interest Rate Protection Agreements and Other Hedging
Agreements entitled to the benefits of this Agreement have been terminated, no
Note, Loan or Letter of Credit is outstanding and all other Obligations (other
than indemnities described in Section 8.1 hereof and described in Section 12.13
of the Credit Agreement, and any other indemnities set forth in any other
Security Documents, in each case which are not then due and payable) have been
paid in full in cash.
(b) In the event that any part of the Collateral is sold in connection
with a sale permitted by Section 8.02 of the Credit Agreement or is otherwise
released at the direction of the Required Secured Creditors, such Collateral
shall be sold or released free and clear of the Liens created by this Agreement
and the Collateral Agent, at the request and expense of such Assignor, will
execute and deliver such documentation to evidence such release ( including
UCC-3 termination or partial release statements and the like) and will 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 or released and as may be in the possession of the Collateral
Agent and has not theretofore been released pursuant to this Agreement.
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(c) In the event that all of the capital stock of one or more
Assignors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 8.02 of the Credit Agreement (or such sale or other
disposition or liquidation has been approved in writing by the Required Secured
Creditors), upon the consummation of such sale, disposition or liquidation such
Assignor shall be released from this Agreement and this Agreement shall, as to
each such Assignor or Assignors, terminate, and have no further force or effect
(it being understood and agreed that the sale of one or more Persons that own,
directly or indirectly, all of the capital stock or other equity interests of
any Assignor shall be deemed to be a sale of such Assignor for the purposes of
this Section 10.8(c)).
(d) At any time that the respective Assignor desires that Collateral
be released as provided in the foregoing Section 10.8(a), (b) or (c), it shall
deliver to the Collateral Agent a certificate signed by an authorized officer of
such Assignor stating that the release of the respective Collateral is permitted
pursuant to Section 10.8(a), (b) or (c) hereof.
(e) The Collateral Agent shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with 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 each Assignor and the
Collateral Agent.
10.10 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.
10.11 The Collateral Agent and the other Secured Creditors. 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 and in the Credit Agreement. The Collateral Agent shall act hereunder
on the terms and conditions set forth herein and in Section 11 of the Credit
Agreement.
10.12 Benefit of Agreement. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns.
10.13 Additional Assignors. It is understood and agreed that any
Subsidiary of Silgan that is required to execute a counterpart of this Agreement
after the date hereof pursuant to the requirements of the Credit Agreement or
any other Credit Document shall automatically become an Assignor hereunder by
executing a counterpart hereof and delivering the same to the
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Collateral Agent. Silgan agrees that it shall and shall cause any such
Subsidiary that becomes an Assignor hereunder to (i) deliver supplements to
Annexes A through F hereto, inclusive, as are necessary to cause such Annexes to
be complete and accurate with respect to such additional Assignor on such date
and (ii) take all actions as specified in this Agreement as would have been
taken by such Assignor had it been an original party to this Agreement, in each
case with all documents required above to be delivered to the Collateral Agent
and with all documents and actions required above to be taken to the reasonable
satisfaction of the Collateral Agent.
*****
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.
SILGAN HOLDINGS INC.,
as an Assignor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, III
---------------------------------------------
Title: Senior Vice President, General Counsel
and Secretary
SILGAN CONTAINERS CORPORATION
SILGAN PLASTICS CORPORATION
SILGAN CONTAINERS MANUFACTURING
CORPORATION
SILGAN CAN COMPANY
SILGAN CORPORATION
SILGAN LLC
By: SILGAN CONTAINERS CORPORATION,
as Manager
RXI PLASTICS, INC.
SILGAN CLOSURES CORPORATION
SILGAN CLOSURES LLC
SILGAN CLOSURES HOLDING COMPANY
SILGAN CLOSURES INTERNATIONAL
HOLDING COMPANY
SILGAN EQUIPMENT COMPANY
SILGAN TUBES CORPORATION
SILGAN TUBES HOLDING COMPANY,
each as an Assignor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, III
-----------------------------------
Title: Vice President and Secretary
Accepted and Agreed to:
DEUTSCHE BANK AG NEW YORK BRANCH,
as Collateral Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President