SECURITY AGREEMENT
ACCURIDE CANADA INC.
incorporated under the laws of Ontario
THIS SECURITY AGREEMENT is made as of the 27th day of July, 2001
by ACCURIDE CANADA INC. (the "CORPORATION"), whose principal office or place of
business in the Province of Ontario is located at 00 Xxxxxxxxx Xxxx, Xxxxxx,
Xxxxxxx X0X 0X0, telecopy number (000) 000-0000 to CITICORP USA, INC. (the
"ADMINISTRATIVE AGENT") whose address is at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxx Xxxxx, telecopy number (212)
816-0636, in its capacity as Administrative Agent, for the benefit of the
Secured Parties referred to and defined in the Credit Agreement (as defined in
Schedule A).
PRELIMINARY STATEMENTS
(1) Pursuant to the Credit Agreement, the Corporation has agreed
to grant a first priority security interest in all of its assets and property
now owned or hereafter acquired to secure its Obligations under the Term A
Facility and otherwise in respect of the Loan Documents.
(2) It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry into Bank Hedge Agreements by the Hedge Banks from time to time
that the Corporation shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Security Agreement.
FOR VALUABLE CONSIDERATION (the receipt and sufficiency of which
are hereby conclusively acknowledged), the Corporation covenants, acknowledges,
represents and warrants to and in favour of the Administrative Agent as follows:
ARTICLE 1 - INTERPRETATION
SECTION 1.1 DEFINITIONS
Each word and phrase defined in Schedule A is used in this
Security Agreement with the respective defined meaning assigned to it in
Schedule A. Words and phrases defined in the PPSA and used without initial
capitals in this Security Agreement (including in Schedule A) have the meanings
assigned to them in the PPSA, unless the context otherwise requires. Capitalized
terms used in this Security Agreement and not defined herein shall bear the same
meanings as they have in the Credit Agreement.
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SECTION 1.2 STATUTES
A reference in this Security Agreement to a statute refers to
that statute as it may be amended, and to any restated or successor legislation
of comparable effect.
SECTION 1.3 AGREEMENTS
Each reference in this Security Agreement to any Agreement
(including this Security Agreement and any other term defined in Schedule A that
is an Agreement), document or instrument shall be construed so as to include
such Agreement (including any attached schedules, appendices and exhibits),
document or instrument and each amendment, supplement, other modification,
amendment and restatement of it made at or before the time in question.
SECTION 1.4 HEADINGS
The Article and Section headings in this Security Agreement are
included solely for convenience, are not intended to be full or accurate
descriptions and shall not be considered part of this Security Agreement.
SECTION 1.5 NUMBER AND GENDER
In this Security Agreement, words (including defined terms) in
the singular include the plural and vice-versa (the necessary changes being made
to fit the context) and words in one gender include all genders.
SECTION 1.6 SCHEDULES
The schedules to this Security Agreement shall be deemed to form
part hereof as if incorporated in full herein. The schedules are as follows:
Schedule A - Definitions
Schedule B - Account Collateral
Schedule C - Intellectual Property
Schedule D - Corporation's Address(es) and Locations of
Collateral
Schedule E - Corporation's Trade Names
Schedule F - Investment Property
Schedule G - Assigned Agreements
SECTION 1.7 EXHIBITS
The Exhibits for this Security Agreement are as follows:
Exhibit A (Section 3.1.7) - IP Security Agreement Supplement
Exhibit B (Section 4.1.2) - Pledged Account Letter
Exhibit C (Section 5.7) - Assigned Agreement Consent
Exhibit D (Section 12.2) - Cash Concentration Account Letter
Exhibit E (Section 13.2) - Cash Collateral Account Letter
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ARTICLE 2 - SECURED OBLIGATIONS
Notwithstanding anything to the contrary herein, the pledge and
assignment of, and the grant of a lien on and a security interest in, the
Collateral (as hereinafter defined) by the Corporation secures the payment of
all Obligations of the Corporation now or hereafter existing under the Loan
Documents, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, fees, premiums, penalties,
indemnifications, causes of action, costs, expenses or otherwise (all such
Obligations being the "SECURED OBLIGATIONS").
ARTICLE 3 - GRANT OF SECURITY
SECTION 3.1 SECURITY INTEREST
The Corporation hereby assigns and pledges to the Administrative
Agent for the ratable benefit of the Secured Parties, and hereby grants to the
Administrative Agent for the ratable benefit of the Secured Parties a security
interest in, the Corporation's right, title and interest in and to the
following, in each case, as to each type of property described below, whether
now owned or hereafter acquired by the Corporation, wherever located, and
whether now or hereafter existing or arising (collectively, the "COLLATERAL"):
3.1.1 all equipment in all of its forms, all fixtures and all parts
thereof and all accessions thereto (any and all such equipment,
fixtures, parts and accessions being the "EQUIPMENT");
3.1.2 all inventory in all of its forms (including, without limitation,
(i) all wheels) and raw materials and work in process therefor,
finished goods thereof and materials used or consumed in the
manufacture, production, preparation or shipping thereof, (ii)
goods in which the Corporation has an interest in mass or a joint
or other interest or right of any kind including, without
limitation, goods in which the Corporation has an interest or
right as consignee, and (iii) goods that are returned to or
repossessed or stopped in transit by the Corporation), and all
accessions thereto and products thereof and documents therefor
(any and all such inventory, accessions, products and documents
being the "INVENTORY");
3.1.3 all Accounts, chattel paper, instruments, deposit accounts,
general intangibles and other obligations of any kind, whether or
not arising out of or in connection with the sale or lease of
goods or the rendering of services and whether or not earned by
performance, and all rights now or hereafter existing in and to
all security agreements, leases and other contracts securing or
otherwise relating to any such Accounts, chattel paper,
instruments, deposit accounts, general intangibles or obligations
(any and all such accounts, chattel paper, instruments, deposit
accounts, general intangibles and obligations, to the extent not
referred to in Sections 3.1.4, 3.1.5 or 3.1.6 below, being the
"RECEIVABLES", and any and all
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such security agreements, leases and other contracts being the
"RELATED CONTRACTS");
3.1.4 the following (the "SECURITY COLLATERAL"), namely, all investment
property in which the Corporation has now, or acquires from time
to time hereafter, any right, title or interest in any manner,
and the certificates or instruments, if any, representing or
evidencing such investment property, and all dividends, interest,
distributions, value, cash, instruments and other property from
time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such investment
property;
3.1.5 each of the agreements (including, without limitation, the
agreement described in Schedule G and each Hedge Agreement), to
which the Corporation is now or may hereafter become a party, in
each case as such agreements may be amended, amended and
restated, supplemented or otherwise modified from time to time
(collectively, the "ASSIGNED AGREEMENTS"), including, without
limitation, (i) all rights of the Corporation to receive moneys
due and to become due under or pursuant to the Assigned
Agreements, (ii) all rights of the Corporation to receive
proceeds of any insurance, indemnity, warranty or guaranty with
respect to the Assigned Agreements, (iii) claims of such
Corporation for damages arising out of or for breach of or
default under the Assigned Agreements and (iv) the right of the
Corporation to terminate the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all
remedies thereunder (all the Collateral being the "AGREEMENT
COLLATERAL");
3.1.6 the following (collectively, the "ACCOUNT COLLATERAL"):
(i) the accounts described in Part 1 of Schedule B
(collectively, the "CASH CONCENTRATION ACCOUNTS" and
each, a "CASH CONCENTRATION ACCOUNT", which expression
shall extend to any new account opened by the Corporation
as a Cash Concentration Account in accordance with the
provisions of Section 12.2), all financial assets from
time to time credited to the Cash Concentration Accounts
(including, without limitation, all Canadian Cash
Equivalents, as hereinafter defined, from time to time
credited to the Cash Concentration Accounts), and all
funds held therein and all certificates and instruments,
if any, from time to time representing or evidencing the
Cash Concentration Accounts, and all of the Concentration
Investments (as defined in Section 12.6) from time to
time and all certificates and instruments, if any, from
time to time representing or evidencing such
Concentration Investments;
(ii) all the accounts described in Part 2 of Schedule B
(the "PLEDGED ACCOUNTS") from time to time, all funds
held therein and all certificates and instruments, if
any, from time to time representing or evidencing the
Pledged Accounts;
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(iii) the Cash Collateral Account (as defined in Section
13.2), all financial assets from time to time credited to
the Cash Collateral Account (including, without
limitation, all Canadian Cash Equivalents, as hereinafter
defined, from time to time credited to the Cash
Collateral Account), all funds held therein and all
certificates and instruments, if any, from time to time
representing or evidencing the Cash Collateral Account,
and all of the Collateral Investments (as defined in
Section 13.6) from time to time and all certificates and
instruments, if any, from time to time representing or
evidencing such Collateral Investments;
(iv) all other deposit or operating accounts of the
Corporation from time to time all funds held therein and
all certificates and instruments, if any, from time to
time representing or evidencing such deposit or operating
accounts (including, without limitation, the accounts
described in Part 3 of Schedule B);
(v) all notes, certificates of deposit, deposit
accounts, cheques and other instruments from time to
time delivered to or otherwise possessed by the
Administrative Agent for or on behalf of the
Corporation, including, without limitation, those
delivered or possessed in substitution for or in
addition to any or all of the then existing Account
Collateral; and
(vi) all interest, dividends, cash, instruments and
other property from time to time received, receivable
or otherwise distributed in respect of or in exchange
for any or all of the then existing Account
Collateral; and
3.1.7 the following (collectively, the "INTELLECTUAL PROPERTY
COLLATERAL"):
(i) all Canadian, international and foreign
patents, patent applications and statutory invention
registrations, including, without limitation, the patents and
patent applications set forth in Part 1 of Schedule C hereto (as
such Schedule C may be supplemented from time to time by
supplements to this Security Agreement, each such supplement
being in substantially the form of Exhibit A hereto (an "IP
SECURITY AGREEMENT SUPPLEMENT"), executed and delivered by the
Corporation to the Administrative Agent from time to time),
together with all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations thereof, all
inventions therein, all rights therein provided by international
treaties or conventions and all improvements thereto, and all
other rights of any kind whatsoever of the Corporation accruing
thereunder or pertaining thereto (the "PATENTS");
(ii) all trademarks (including, without limitation,
service marks), certification marks, collective marks, trade
dress, logos, domain names, product configurations, trade names,
business names, corporate names and other source identifiers,
whether or not registered, whether currently in use or not,
including, without limitation, all common law rights and
registrations and applications for registration thereof,
including, without limitation, the trademark
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registrations and trademark applications set forth
in Part 2 of Schedule C hereto (as such Schedule C may be
supplemented from time to time by IP Security Agreement
Supplements executed and delivered by the Corporation to the
Administrative Agent from time to time), and all other marks
registered in the Patent and Trademark Office or in any office or
agency of any State or Territory of the United States or any
foreign country (but excluding any United States intent-to-use
trademark application prior to the filing and acceptance of a
Statement of Use or an Amendment to allege use in connection
therewith to the extent that a valid security interest may not be
taken in such an intent-to-use trademark application under
applicable law), and all rights therein provided by international
treaties or conventions, all reissues, extensions and renewals of
any of the foregoing, together in each case with the goodwill of
the business connected therewith and symbolized thereby, and all
rights corresponding thereto throughout the world and all other
rights of any kind whatsoever of the Corporation accruing
thereunder or pertaining thereto (the "TRADEMARKS");
(iii) all copyrights, copyright applications,
copyright registrations and like protections in each work of
authorship, whether statutory or common law, whether published or
unpublished, any renewals or extensions thereof, all copyrights
of works based on, incorporated in, derived from, or relating to
works covered by such copyrights, including, without limitation,
the copyright registrations and copyright applications set forth
in Schedule C hereto including, without limitation, the trademark
registrations and trademark applications set forth in Part 3
Schedule C hereto (as such Schedule C may be supplemented from
time to time by IP Security Agreement Supplements executed and
delivered by the Corporation to the Administrative Agent from
time to time), together with all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever
of the Corporation accruing thereunder or pertaining thereto (the
"COPYRIGHTS");
(iv) all confidential and proprietary information,
including, without limitation, know-how, trade secrets,
manufacturing and production processes and techniques,
inventions, research and development information, technical data,
financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and
supplier lists and information (the "TRADE SECRETS");
(v) all computer software programs and databases
(including, without limitation, source code, object code and all
related applications and data files), firmware, and documentation
and materials relating thereto, and all rights with respect to
the foregoing, together with any and all options, warranties,
service contracts, program services, test rights, maintenance
rights, improvement rights, renewal rights and indemnifications
and any substitutions, replacements, additions or model
conversions of any of the foregoing (the "COMPUTER SOFTWARE");
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(vi) all license agreements, permits,
authorizations and franchises, whether with respect to the
Patents, Trademarks, Copyrights, Trade Secrets or Computer
Software, or with respect to the patents, trademarks, copyrights,
trade secrets, computer software or other proprietary right of
any other Person, including, without limitation, the license
agreements set forth in Part 4 of Schedule C hereto (as such
Schedule C may be supplemented from time to time by IP Security
Agreement Supplements executed and delivered by the Corporation
to the Administrative Agent from time to time), and all income,
royalties and other payments now or hereafter due and/or payable
with respect thereto, subject, in each case, to the terms of such
license agreements, permits, authorizations and franchises, (the
"LICENSES"); and
(vii) any and all claims for damages for past,
present and future infringement, misappropriation or breach with
respect to the Patents, Trademarks, Copyrights, Trade Secrets,
Computer Software or Licenses, with the right, but not the
obligation, to xxx for and collect, or otherwise recover, such
damages; and
3.1.8 all proceeds of any and all of the Collateral (including, without
limitation, proceeds that constitute property of the types
described in Sections 3.1.1 to 3.1.7 and this Section 3.1.8 and,
to the extent not otherwise included, all (i) payments under
insurance (whether or not the Administrative Agent is the loss
payee thereof), or any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise with respect to any
of the foregoing Collateral and (ii) cash.
SECTION 3.2 PURCHASE-MONEY SECURITY INTERESTS
The Security Interests are purchase-money security interests to
the extent that they satisfy the criteria for such interests in the PPSA.
SECTION 3.3 ATTACHMENT
The Corporation acknowledges that value has been given, that the
Corporation and the Administrative Agent have not agreed to postpone the time
for attachment and that the Security Interests are intended to attach, as to all
of the Collateral in which the Corporation now has rights, when the Corporation
executes this Security Agreement, and, as to all Collateral in which the
Corporation does not have rights until after the execution of this Security
Agreement, when the Corporation first has such rights. For certainty, the
Corporation confirms and agrees that the Security Interests are intended to
attach to all Collateral in which each successor of the Corporation at any time
has rights.
SECTION 3.4 SALE OF INVENTORY
Prior to any Default under Section 7.01(a) or (f) of the Credit
Agreement or any Event of Default, the Corporation may, provided to do so is not
contrary to any provision hereof or of any Loan Document or any other Agreement
from time to time in effect to which the Corporation and the Administrative
Agent are party, dispose of or deal with its inventory,
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equipment and other goods on ordinary commercial terms, in the ordinary course
of its business and for the purpose of carrying on such business, except that
the Corporation shall not create, assume or have outstanding, other than to the
Administrative Agent, any Lien on the Collateral other than Permitted Liens. All
rights of the Corporation as vendor, consignor or lessor of inventory and all
resulting Accounts shall be subject to the Security Interests.
SECTION 3.5 CORPORATION REMAINS LIABLE
Anything herein to the contrary notwithstanding, (a) the
Corporation shall remain liable under the contracts and agreements included in
the Corporation's Collateral to the extent set forth therein to perform all of
its duties and obligations thereunder to the same extent as if this Security
Agreement had not been executed, (b) the exercise by the Administrative Agent of
any of the rights hereunder shall not release the Corporation from any of its
duties or obligations under the contracts and agreements included in the
Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Security Agreement or any other Loan Document, nor shall any Secured Party be
obligated to perform any of the obligations or duties of the Corporation
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 3.6 COMMINGLED GOODS
If any Collateral subsequently becomes part of a product or mass
to which the security interest of another secured party attaches, "the cost of
the total product or mass" within the meaning of Section 37 of the PPSA shall
not exceed the sum of the cost of such Collateral and the cost of all other
goods forming part of such product or mass in which other secured parties have a
security interest. The Security Interests shall extend to all Accounts,
Replacements or Proceeds arising from any dealing with such product or mass,
ranking in priority to those of any other Person holding a Lien upon such
product or mass.
SECTION 3.7 LEASES
The last day of the term of any lease, oral or written, or any
Agreement therefor, now held by the Corporation, or in which the Corporation
hereinafter has rights, shall be exempted from the Security Interests but the
Corporation shall stand possessed of such one day remaining upon trust for the
Administrative Agent to assign and dispose of the same as the Administrative
Agent directs.
SECTION 3.8 LICENSES, ASSIGNED AGREEMENTS AND CONTRACTS
If the Corporation cannot lawfully or effectively grant the
Security Interests in any License, Assigned Agreement or other contract
(collectively the "INTANGIBLES") in which it now or hereafter has rights because
the Intangible prohibits or restricts such Security Interests, the Intangible
requires the consent of any Person which has not been obtained or the grant of
such Security Interests in the Intangible would contravene Applicable Law, that
Intangible shall not be subject to the Security Interests unless and until such
Agreements, consents, waivers and approvals as may be required to render the
grant of the Security Interests in such Intangible
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lawful and effective have been obtained ("REQUIRED APPROVALS"). The Security
Interests shall nonetheless immediately attach to any rights of the Corporation
arising under, by reason of, or otherwise in respect of such Intangible, such as
the right to receive payments thereunder and all Proceeds of the Intangible,
("RELATED RIGHTS") if and to the extent and as at the time such attachment to
the Related Rights is not unlawful. To the extent permitted by Applicable Law,
the Corporation will provide the Administrative Agent with the benefits of such
License and will enforce all Related Rights at the direction of the
Administrative Agent for the benefit of the Secured Parties or such other Person
(including any purchaser of Collateral from the Administrative Agent or any
Receiver) as the Administrative Agent may designate. After a Default occurs
under Section 7.01(a) or (f) of the Credit Agreement and is continuing, or upon
the occurrence of an Event of Default, the Corporation shall forthwith use best
efforts to obtain, as soon as reasonably practicable, all such Required
Approvals. The Corporation agrees with the Administrative Agent to obtain,
maintain and preserve all Intangibles necessary or of advantage to conduct its
business and to own its assets and it will ensure that all such Intangibles are
issued in the Corporation's name or directly in favour of the Corporation, and
the Corporation shall promptly notify the Administrative Agent of any pending or
threatened changes to, expiry of or losses of such Intangibles.
SECTION 3.9 UNLIMITED LIABILITY COMPANIES
If the grant by the Corporation of the Security Interests in any
rights of the Corporation in or to any shares in the capital stock of an
Unlimited Liability Company would impose obligations on the Secured Parties,
such shares shall not be subject to the Security Interests. The Security
Interests shall nonetheless immediately attach to any rights of the Corporation
arising under, by reason of or otherwise in respect of such shares, such as the
right to receive dividends and all proceeds of such shares, ("SHARE-RELATED
RIGHTS") if and to the extent and as at the time such attachment to the
Share-related Rights would not impose obligations on the Secured Parties. To the
extent obligations would not be imposed on the Secured Parties, the Corporation
will provide the Administrative Agent with the benefits of such shares and will
enforce all Share-related Rights at the direction of the Administrative Agent
for the benefit of the Secured Parties or such other Person (including any
purchaser of Collateral from the Administrative Agent or any Receiver) as the
Administrative Agent may designate.
SECTION 3.10 SECURITIES
3.10.1 Within five Business Days of acquiring rights in securities (with
respect to securities in which the Corporation hereafter has
rights), the Corporation shall from time to time physically
deliver to the Administrative Agent the certificates and other
evidences of ownership representing any securities in which the
Corporation now or hereafter has rights to be held in pledge by
the Administrative Agent under this Security Agreement.
3.10.2 The Administrative Agent may at any time require the Corporation
to transfer registered ownership of securities into the name of
the Administrative Agent, any Representative of the
Administrative Agent or a nominee for the Administrative Agent.
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3.10.3 Subject to Subsection 3.10.4, all rights conferred by statute or
otherwise upon a registered holder of securities shall:
3.10.3.1 with respect to any securities assigned by or pursuant
to this Security Agreement and registered in the name
of the Administrative Agent or its Representative or
its nominee, be exercised as the Corporation may
direct; and
3.10.3.2 with respect to any securities assigned by or pursuant
to this Security Agreement and registered in the name
of the Corporation or its nominee, be exercised by the
Corporation.
3.10.4 With respect to the Corporation's rights relating to any
securities:
3.10.4.1 such rights shall not be exercised in any manner which
would be reasonably likely to be inconsistent with the
security intended to be conferred on the Administrative
Agent by or pursuant to this Security Agreement;
3.10.4.2 the Corporation shall not, without the prior written
consent of the Administrative Agent, by the exercise of
any of such rights or otherwise, permit or agree to any
variation of the rights attached to or conferred by any
of the securities, participate in any rights issue,
elect to receive or vote in favour of receiving any
dividends other than in the form of cash or participate
in any vote concerning a dissolution, liquidation or
winding-up pursuant to the OBCA (or any similar
proceeding under any other applicable statute) other
than as expressly permitted by written agreement with
the Administrative Agent; and
3.10.4.3 after the occurrence of a Default under Section 7.01(a)
or (f) of the Credit Agreement that is continuing, or
upon the occurrence of an Event of Default (and without
any consent or authority on the part of the
Corporation), unless the Administrative Agent waives in
writing such Default or, as applicable, Event of
Default, the Administrative Agent and its
Representatives and nominees may at the Administrative
Agent's discretion (in the name of the Corporation or
otherwise) exercise or cause to be exercised in respect
of any of the securities any voting rights or rights to
receive dividends, interest, principal or other
payments of money, as the case may be, (which in the
case of such payments of money shall be applied by the
Administrative Agent in accordance with the Credit
Agreement) forming part of the securities and all other
rights conferred on or exercisable by the bearer or
holder thereof.
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SECTION 3.11 TRANSFERS AND OTHER LIENS
The Corporation shall not (i) convey, transfer, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option or
other right to purchase or otherwise acquire, any of the Collateral, except for
such conveyances, sales, transfers, assignments and dispositions that are
expressly permitted under the Loan Documents, or (ii) create, incur, assume or
suffer to exist any Lien upon or with respect to any of the Collateral except
for the pledge, assignment and security interest created or otherwise expressly
permitted under the terms of the Loan Documents.
ARTICLE 4 - THE PLEDGED ACCOUNTS
SECTION 4.1 THE PLEDGED ACCOUNTS
So long as any Advance under the Term A Facility or any other
Obligation of the Corporation under any Loan Document shall remain unpaid, any
Letter of Credit issued at the request of the Corporation shall be outstanding,
any Bank Hedge Agreement to which the Corporation is a party shall be in effect
or the Corporation shall have any Commitment under the Credit Agreement:
4.1.1 The Corporation will instruct each Person obligated at any time
to make any payment to the Corporation for any reason (an
"OBLIGOR") to make such payment to a Cash Concentration Account
or a Pledged Account of the Corporation.
4.1.2 The Corporation agrees that it will not add any bank as a Pledged
Account Bank or add any account as a Pledged Account to those
listed in Part 2 of Schedule B hereto, unless the Administrative
Agent shall have received at least 10 days' prior written notice
of such addition and shall have received a Pledged Account Letter
in the form set out in Exhibit B hereto or otherwise in form and
substance reasonably satisfactory to the Administrative Agent
(the "PLEDGED ACCOUNT LETTER") executed by the bank that has
opened the said Pledged Account (a "PLEDGED ACCOUNT BANK") in
favour of the Administrative Agent and the Corporation, or a
supplement to an existing Pledged Account Letter covering such
new Pledged Account, as the case may be (and, upon the receipt by
the Administrative Agent of such Pledged Account Letter or
supplement, Schedule B hereto shall be automatically amended to
include such Pledged Account Bank or Pledged Account). The
Corporation agrees that it will not terminate any bank as a
Pledged Account Bank or terminate any account as a Pledged
Account, unless the Administrative Agent shall have received at
least 10 days' prior written notice of such termination (and,
upon such termination, Schedule B hereto shall be automatically
amended to delete such Pledged Account Bank or Pledged Account).
4.1.3 Upon any termination of any Pledged Account Letter or other
agreement with respect to the maintenance of a Pledged Account by
the Corporation or any Pledged Account Bank, the Corporation will
immediately notify all Obligors that were making payments to such
Pledged Account to make all future payments to
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another Pledged Account or to a Cash Concentration Account. The
Corporation agrees to terminate any or all Pledged Accounts and
Pledged Account Letters upon request by the Administrative Agent.
4.1.4 Concurrently with or promptly after entering into a Pledged
Account Letter with any Pledged Account Bank, the Corporation
will instruct such Pledged Account Bank by way of the Pledged
Account Letter to transfer to a Cash Concentration Account, at
the end of each Business Day, in same day funds, an amount equal
to the credit balance of the Pledged Account with such Pledged
Account Bank. If the Corporation shall fail to give any such
instructions to any Pledged Account Bank, the Administrative
Agent may do so without further notice to the Corporation.
SECTION 4.2 NO INSTRUCTIONS BEFORE DEFAULT
The Administrative Agent hereby agrees with the Corporation that,
unless a Default under Section 7.01(a) or (f) of the Credit Agreement has
occurred and is continuing, or an Event of Default has occurred, the
Administrative Agent shall not issue instructions under the Pledged Account
Letters.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
The corporation represents and warrants to and in favour of the
Administrative Agent for the benefit of the Secured Parties as follows:
SECTION 5.1 INCORPORATION
The Corporation is validly incorporated and organized and is a
valid and subsisting corporation under the laws of Ontario.
SECTION 5.2 CORPORATE POWER
The Corporation has the power, capacity, legal right and
authority, and has taken all necessary corporate action, to issue and perform
this Security Agreement and to grant the Security Interests.
SECTION 5.3 OWNERSHIP OF THE CORPORATION'S COLLATERAL
The Corporation is the legal and beneficial owner of the
Collateral of the Corporation free and clear of any Lien, claim, option or right
of others, except for the security interest created under this Security
Agreement or permitted under the Credit Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of such
Collateral or listing the Corporation or any trade name of the Corporation as
debtor is on file in any recording office, except such as may have been filed in
favor of the Administrative Agent relating to the Loan Documents or as otherwise
permitted under the Credit Agreement. The Corporation has the trade names listed
on Schedule E hereto.
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SECTION 5.4 CORPORATION'S ADDRESS AND LOCATIONS OF COLLATERAL
All of the Equipment and Inventory of the Corporation are located
at the places specified therefor in Schedule D hereto, as such Schedule D may be
amended from time to time to reflect a change in the location of such Equipment
or Inventory. The jurisdiction of organization and the address of the chief
executive office of the Corporation and the original copies of each material
Assigned Agreement and Related Contract to which the Corporation is a party and
all originals of all chattel paper that evidence Receivables of the Corporation,
are located at the address or addresses specified therefor in Schedule D hereto,
as such Schedule D may be amended from time to time pursuant to Section 9.2.
Copies of each material Assigned Agreement have been delivered to the
Administrative Agent. None of the Receivables or Agreement Collateral is
evidenced by a promissory note or other instrument in an aggregate amount
exceeding $100,000 that has not been delivered to the Administrative Agent.
SECTION 5.5 EQUIPMENT AND INVENTORY
The Corporation has exclusive possession and control of the
Equipment and Inventory other than (i) Inventory with an aggregate value not
exceeding $100,000 that is being processed by third-party processors pursuant to
a contract with the Corporation, and (ii) Inventory stored at any leased
premises or warehouse for which a landlord's or warehouseman's agreement, in
form and substance reasonably satisfactory to the Administrative Agent, is in
effect and which leased premises or warehouse is so indicated by an asterisk on
Schedule D hereto, as such Schedule D may be amended from time to time to
reflect a change in the location of such Equipment or Inventory.
SECTION 5.6 INVESTMENT PROPERTY
All of the investment property owned by the Corporation as of the
date hereof is listed on Schedule F hereto.
SECTION 5.7 ASSIGNED AGREEMENTS
The Assigned Agreements to which the Corporation is a party have
been duly authorized, executed and delivered by the Corporation and, to the
knowledge of the Corporation, all other parties thereto, are in full force and
effect and are binding upon and enforceable against all other parties thereto in
accordance with their terms. There exists no default under any material Assigned
Agreement to which the Corporation is a party by any party thereto. Each party
to the Assigned Agreements for which the Administrative Agent has requested
consent and to which the Corporation is a party (other than the Corporation) has
executed and delivered to the Corporation a consent, in substantially the form
of Exhibit C hereto or otherwise in form and substance reasonably satisfactory
to the Administrative Agent, to the assignment of the Agreement Collateral to
the Administrative Agent pursuant to this Security Agreement, provided that such
consent shall not be required from any party if it is not obtained from such
party after the exercise by the Corporation of commercially reasonable efforts.
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SECTION 5.8 BANK ACCOUNTS
The Corporation has no bank accounts other than those listed on
Schedule B hereto, as such Schedule B may be amended from time to time pursuant
to Section 4.1.2, 12.2, 12.11 or, as applicable, Section 13.2. The Corporation
has instructed all existing Obligors to make all payments to a Cash
Concentration Account or to a Pledged Account.
SECTION 5.9 PERFECTION OF SECURITY INTERESTS
All filings and other actions necessary or desirable to perfect
and protect the security interest in the Collateral of the Corporation created
under this Security Agreement have been duly made or taken and are in full force
and effect, and this Security Agreement creates in favor of the Administrative
Agent for the benefit of the Secured Parties a valid and, together with such
filings and other actions, perfected first priority security interest in the
Collateral of the Corporation, securing the payment of the Secured Obligations.
SECTION 5.10 NO AUTHORIZATION REQUIRED
Subject to Section 3.8, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for (i) the grant by the
Corporation of the assignment, pledge and security interest granted hereunder or
for the execution, delivery or performance of this Security Agreement by the
Corporation, (ii) the perfection or maintenance of the assignment, pledge and
security interest created hereunder (including the first priority nature of such
assignment, pledge or security interest), except for the filing of financing and
financing change (renewal) statements under the PPSA, which financing statements
have been duly filed and are in full force and effect, or (iii) for the exercise
by the Administrative Agent of its rights provided for in this Security
Agreement or the remedies in respect of the Collateral pursuant to this Security
Agreement.
SECTION 5.11 PRODUCTION OF INVENTORY
The Inventory that has been produced or distributed by the
Corporation has been produced in compliance with all requirements of applicable
law.
SECTION 5.12 INTELLECTUAL PROPERTY
As to itself and its Intellectual Property Collateral:
5.12.1 To the knowledge of the Corporation, the rights of the
Corporation in or to the Intellectual Property Collateral do not
conflict with, misappropriate or infringe upon the intellectual
property rights of any third party, and no claim has been
asserted that the use of such Intellectual Property Collateral
does or may infringe upon the intellectual property rights of any
third party that could reasonably be expected to have a Material
Adverse Effect.
5.12.2 The Corporation is the exclusive owner of the entire and
unencumbered right, title and interest in and to the Intellectual
Property Collateral and is entitled to use all
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such Intellectual Property Collateral without limitation, subject
only to the license terms of the Licenses.
5.12.3 The Intellectual Property Collateral set forth on Schedule C
hereto includes all of the patents, patent applications,
trademark registrations and applications, copyright registrations
and applications and Licenses owned by the Corporation.
5.12.4 Except for immaterial portions thereof, the Intellectual Property
Collateral is subsisting and has not been adjudged invalid or
unenforceable in whole or part, and to the Corporation's
knowledge, is valid and enforceable. The Corporation is not aware
of any uses of any material item of Intellectual Property
Collateral that could be expected to lead to such item becoming
invalid or unenforceable.
5.12.5 The Corporation has made or performed all filings, recordings and
other acts and has paid all required fees and taxes to maintain
and protect its interest in each and every material item of
Intellectual Property Collateral in full force and effect
throughout the world in all jurisdictions reasonably necessary
for the Corporation's use thereof, and to protect and maintain
its interest therein including, without limitation, recordations
of any of its interests in the Patents and Trademarks with the
Patent and Trademark Office and in corresponding national and
international patent offices, and recordation of any of its
interests in the Copyrights with the Copyright Office and in
corresponding national and international copyright offices. The
Corporation has used proper statutory notice in connection with
its use of each material patent, trademark and copyright of the
Intellectual Property Collateral.
5.12.6 No action, suit, investigation, litigation or proceeding has been
asserted or is pending or, to the Corporation's knowledge,
threatened against the Corporation (i) based upon or challenging
or seeking to deny or restrict the use of any of the Intellectual
Property Collateral, or (ii) alleging that any services provided
by, processes used by, or products manufactured or sold by, the
Corporation infringe upon or misappropriate any patent,
trademark, copyright or any other proprietary right of any third
party, except for such matters as could not reasonably be
expected to have a Material Adverse Effect. To the best of the
Corporation's knowledge, no Person is engaging in any activity
that infringes upon or misappropriates the Intellectual Property
Collateral or upon the rights of the Corporation therein, except
for such matters as could not reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule C
hereto, the Corporation has not granted any license, release,
covenant not to xxx, non-assertion assurance, or other right to
any Person with respect to any part of the Intellectual Property
Collateral, except for those that do not interfere in any
material respect with the Corporation's use thereof.
5.12.7 With respect to each material License: (A) such License is valid
and binding and in full force and effect and represents the
entire agreement between the respective licensor and licensee
with respect to the subject matter of such License; (B) such
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License will not cease to be valid and binding and in full force
and effect on terms identical to those currently in effect as a
result of the rights and interest granted herein, nor will the
grant of such rights and interest constitute a breach or default
under such License or otherwise give the licensor or licensee a
right to terminate such License; (C) the Corporation has not
received any notice of termination or cancellation under such
License; (D) the Corporation has not received any notice of a
breach or default under such License, which breach or default has
not been cured; (E) the Corporation has not granted to any other
third party any rights, adverse or otherwise, under such License;
and (F) neither the Corporation nor any other party to such
License is in breach or default in any material respect, and no
event has occurred that, with notice or lapse of time or both,
would constitute such a breach or default or permit termination,
modification or acceleration under such License.
5.12.8 To the best of the Corporation's knowledge, except for such
matters as could not reasonably be expected to have a Material
Adverse Effect. (A) none of the Trade Secrets of the Corporation
has been used, divulged, disclosed or appropriated to the
detriment of the Corporation for the benefit of any other Person
other than the Corporation; (B) no employee, independent
contractor or agent of the Corporation has misappropriated any
trade secrets of any other Person in the course of the
performance of his or her duties as an employee, independent
contractor or agent of the Corporation; and (C) no employee,
independent contractor or agent of the Corporation is in default
or breach of any term of any employment agreement, non-disclosure
agreement, assignment of inventions agreement or similar
agreement or contract relating in any way to the protection,
ownership, development, use or transfer of the Corporation's
Intellectual Property Collateral.
ARTICLE 6 - FURTHER ASSURANCES
SECTION 6.1 FURTHER ASSURANCES
The Corporation agrees from time to time, at its sole expense,
to promptly execute and deliver all further instruments and documents, and take
all further action, that may be necessary or desirable, or that the
Administrative Agent may reasonably request, in order to perfect and protect any
pledge, assignment or security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Corporation will: (i) at the request of the
Administrative Agent, xxxx conspicuously each document included in Inventory,
each chattel paper included in Receivables, each Related Contract, each Assigned
Agreement and, at the request of the Administrative Agent, each of its records
pertaining to the Collateral with a legend, in form and substance satisfactory
to the Administrative Agent, indicating that such document, chattel paper,
Related Contract, Assigned Agreement or Collateral is subject to the security
interest granted hereby; (ii) if any Collateral shall be evidenced by a
promissory note or other instrument or chattel paper, deliver and pledge
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to the Administrative Agent hereunder such note or instrument or chattel paper
duly indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Administrative Agent;
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Administrative Agent may reasonably request, in order to
perfect and preserve the pledge, assignment and security interest granted or
purported to be granted hereby, and (iv) deliver to the Administrative Agent
evidence that all other action that the Administrative Agent may deem reasonably
necessary or desirable in order to perfect and protect the Security Interest
created by the Corporation under this Security Agreement has been taken.
SECTION 6.2 FINANCING STATEMENTS
The Corporation hereby authorizes the Administrative Agent to
file, electronically or otherwise one or more financing or financing change
statements, relating to all or any part of the Collateral without the signature
of the Corporation where permitted by law. A photocopy or other reproduction of
this Security Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where permitted by
law.
SECTION 6.3 FURTHER COLLATERAL LISTS
The Corporation will furnish to the Administrative Agent from
time to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.
ARTICLE 7 - AS TO EQUIPMENT AND INVENTORY
SECTION 7.1 EQUIPMENT
The Corporation will promptly furnish to the Administrative Agent
a statement respecting any loss or damage exceeding $1,000,000 to any of the
Equipment or Inventory of such the Corporation.
SECTION 7.2 TAXES
The Corporation will pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including, without limitation, claims for labor, materials and supplies)
against, the Equipment and Inventory of the Corporation except to the extent
payment thereof is not required by Section 5.01(b) of the Credit Agreement. In
producing its Inventory, the Corporation will comply with all requirements of
applicable law.
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ARTICLE 8 - INSURANCE
SECTION 8.1 CORPORATION TO MAINTAIN INSURANCE
The Corporation will, at its own expense, establish within 30
days of the Effective Date and maintain insurance with respect to the Equipment
and Inventory of the Corporation in such amounts, against such risks, in such
form and with such insurers, as shall be reasonably satisfactory to the
Administrative Agent from time to time. Each policy of the Corporation for
liability insurance shall provide for all losses to be paid on behalf of the
Administrative Agent and the Corporation as their interests may appear, and each
policy for property damage insurance shall provide for all losses (except for
losses of less than $500,000 per occurrence) to be paid directly to the
Administrative Agent. Each such policy shall in addition (i) name the
Corporation and the Administrative Agent as insured parties thereunder (without
any representation or warranty by or obligation upon the Administrative Agent)
as their interests may appear, (ii) contain the agreement by the insurer that
any loss thereunder shall be payable to the Administrative Agent notwithstanding
any action, inaction or breach of representation or warranty by the Corporation,
(iii) provide that there shall be no recourse against the Administrative Agent
for payment of premiums or other amounts with respect thereto and (iv) provide
that at least 10 days' prior written notice of cancellation or of lapse shall be
given to the Administrative Agent by the insurer. The Corporation will, if so
requested by the Administrative Agent, deliver to the Administrative Agent
original or duplicate policies of such insurance and, as often as the
Administrative Agent may reasonably request, a report of a reputable insurance
broker with respect to such insurance. Further, the Corporation will, at the
request of the Administrative Agent, duly execute and deliver instruments of
assignment of such insurance policies and cause the insurers to acknowledge
notice of such assignment.
SECTION 8.2 APPLICATION OF CLAIMS PROCEEDS
Reimbursement under any liability insurance maintained by the
Corporation pursuant to this Article 8 may be paid directly to the Person who
shall have incurred liability covered by such insurance. In case of any loss
involving damage to Equipment or Inventory when Section 8.3 is not applicable,
the Corporation will make or cause to be made the necessary repairs to or
replacements of such Equipment or Inventory, and any proceeds of insurance
properly received by or released to the Corporation shall be used by the
Corporation, except as otherwise required hereunder or by the Credit Agreement,
to pay or as reimbursement for the costs of such repairs or replacements.
SECTION 8.3 INSURANCE PROCEEDS AFTER EVENT OF DEFAULT
So long as no Event of Default has occurred that is continuing,
all insurance payments received by the Administrative Agent in connection with
any loss, damage or destruction of any Inventory or Equipment will be released
by the Administrative Agent to the Corporation and such payments may be invested
by the Corporation in the business or used to repay or retire Debt as permitted
under the Credit Agreement within one year following such release; provided,
however, that any portion of such payments that has not been invested in the
business or used to prepay or retire Debt as permitted under the Credit
Agreement within such one-year period shall (i) be deemed be Net Cash Proceeds
occurring on the first day of such one-
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year period and (ii) be applied to the prepayment of Advances in accordance with
Section 2.06(b)(ii) of the Credit Agreement; provided further that, for purposes
of the preceding proviso, such one-year period shall be extended by up to six
months from the last day of such one-year period so long as (A) such payments
are to be invested in the business or used to prepay or retire Debt as permitted
under the Credit Agreement within such additional six-month period under the
Corporation's business plan as most recently adopted in good faith by its board
of directors and (B) the Corporation believes in good faith that such proceeds
will be so reinvested within such additional six-month period. Upon the
occurrence and during the continuance of any Event of Default, all insurance
payments in respect of such Equipment or Inventory shall be paid to the
Administrative Agent and shall, in the Administrative Agent's sole discretion,
(i) be released to the Corporation to be applied as set forth in the first
sentence of this Section 8.3 or (ii) be held as additional Collateral hereunder
or applied as specified in Section 17.4.
ARTICLE 9 - LOCATION OF RECORDS AND COLLECTION OF RECEIVABLES
SECTION 9.1 JURISDICTION OF INCORPORATION
The Corporation will not continue into another jurisdiction or
merge, amalgamate or otherwise reorganize its corporate structure so as to cease
being a corporation under the OBCA.
SECTION 9.2 LOCATION OF AGREEMENTS
The Corporation will keep originals of the Assigned Agreements,
and Related Contracts to which the Corporation is a party and all originals of
all chattel paper that evidence Receivables of the Corporation, at the location
therefor specified in Section 5.4 or, upon 30 days' prior written notice to the
Administrative Agent, at such other location in a jurisdiction where all actions
required by Article 6 shall have been taken with respect to the Collateral of
the Corporation (and, upon the taking of such action in such jurisdiction,
Schedule D hereto shall be automatically amended to include such other
location). The Corporation will hold and preserve its records relating to the
Collateral, the Assigned Agreements, the Related Contracts and chattel paper and
will permit representatives of the Administrative Agent at any time during
normal business hours and upon reasonable notice to inspect and make abstracts
from such records and other documents.
SECTION 9.3 COLLECTION OF RECEIVABLES
Except as otherwise provided in this Section 9.3, the Corporation
will continue to collect, at its own expense, all amounts due or to become due
the Corporation under the Receivables and the Related Contracts. In connection
with such collections, the Corporation may take (and, at the Administrative
Agent's direction, will take) such action as the Corporation or the
Administrative Agent may deem necessary or advisable to enforce collection of
the Receivables and the Related Contracts; PROVIDED, HOWEVER, that the
Administrative Agent shall have the right at any time, upon the occurrence and
during the continuance of a Default under Section 7.01(a) or (f) of the Credit
Agreement or upon the occurrence of an Event of Default, in its sole discretion
and upon written notice to the Corporation of its intention to do so, to notify
the Obligors under any Receivables or Related Contracts of the assignment of
such Receivables
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or Related Contracts to the Administrative Agent and to direct such Obligors to
make payment of all amounts due or to become due to the Corporation thereunder
directly to the Administrative Agent and, upon such notification and at the
expense of the Corporation, to enforce collection of any such Receivables or
Related Contracts, and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as the Corporation might have
done. After receipt by the Corporation of the notice from the Administrative
Agent referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including instruments) received by the Corporation in respect of the
Receivables and the Related Contracts of the Corporation shall be received in
trust for the benefit of the Administrative Agent hereunder, shall be segregated
from other funds of the Corporation and shall be forthwith paid over to the
Administrative Agent in the same form as so received (with any necessary
endorsement) to be deposited in a cash collateral account in the name of the
Administrative Agent, and either (A) released to the Corporation so long as no
default under Section 7.01(a) or (f) of the Credit Agreement or Event of Default
shall have occurred and be continuing, or (B) if any default under Section
7.01(a) or (f) of the Credit Agreement or Event of Default shall have occurred
and be continuing, applied as provided in Section 17.4, and (ii) the Corporation
will not adjust, settle or compromise the amount or payment of any Receivable,
release wholly or partly any Obligor thereof, or allow any credit or discount
thereon without the consent of the Administrative Agent. Upon the occurrence and
during the continuance, of a Default under Section 7.01(a) or (f) of the Credit
Agreement, or upon the occurrence of an Event of Default, the Corporation will
not permit or consent to the subordination of its right to payment under any of
the Receivables or the Related Contracts to any other indebtedness or
obligations of the Obligor thereof.
ARTICLE 10 - INTELLECTUAL PROPERTY
SECTION 10.1 MAINTAINING VALIDITY
With respect to each material item of its Intellectual Property
Collateral, the Corporation agrees to take, at its expense, all necessary steps,
including, without limitation, in the Patent and Trademark Office, the Copyright
Office and any other governmental authority, to (i) maintain the validity and
enforceability of each such item of Intellectual Property Collateral and
maintain each such item of Intellectual Property Collateral in full force and
effect, and (ii) pursue the registration and maintenance of each such patent,
trademark, or copyright registration or application, now or hereafter included
in the Intellectual Property Collateral of the Corporation, including, without
limitation, the payment of required fees and taxes, the filing of responses to
office actions issued by the Patent and Trademark Office, the Copyright Office
or other governmental authorities, the filing of applications for renewal or
extension, the filing of affidavits, the filing of divisional, continuation,
continuation-in-part, reissue and renewal applications or extensions, the
payment of maintenance fees and the participation in interference,
reexamination, opposition, cancellation, infringement and misappropriation
proceedings. The Corporation shall not, without the written consent of the
Administrative Agent, discontinue use of or otherwise abandon any Intellectual
Property Collateral, or abandon any right to file an application for letters
patent, trademark, or copyright, unless the Corporation shall have previously
determined that such use or the pursuit or maintenance of such Intellectual
Property Collateral is no longer desirable in the conduct of the Corporation's
business and that the loss thereof would not be reasonably likely to have a
Material Adverse Effect, in which case the
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Corporation will give notice of any such abandonment of any material
Intellectual Property to the Administrative Agent.
SECTION 10.2 NOTICE OF CHALLENGE
The Corporation agrees promptly to notify the Administrative
Agent if the Corporation learns (i) that any material item of the Intellectual
Property Collateral may have become abandoned, placed in the public domain,
invalid or unenforceable, or of any adverse determination or development
regarding the Corporation's ownership of any of the Intellectual Property
Collateral or its right to register the same or to keep and maintain and enforce
the same, or (ii) of any adverse determination or the institution of any
proceeding (including, without limitation, the institution of any proceeding in
the Patent and Trademark Office or any court) regarding any material item of the
Intellectual Property Collateral.
SECTION 10.3 RESPONSE TO ADVERSE CLAIM
In the event that the Corporation becomes aware that any material
item of the Intellectual Property Collateral is being infringed or
misappropriated by a third party, the Corporation shall promptly notify the
Administrative Agent and shall take such actions, at its expense, as the
Corporation or the Administrative Agent deems reasonable and appropriate under
the circumstances to protect such Intellectual Property Collateral, including,
without limitation, suing for infringement or misappropriation and for an
injunction against such infringement or misappropriation.
SECTION 10.4 COMPLIANCE
The Corporation shall use proper statutory notice in connection
with its use of each material item of its Intellectual Property Collateral. The
Corporation shall not do or permit any act or knowingly omit to do any act
whereby any of its Intellectual Property Collateral may lapse or become invalid
or unenforceable or placed in the public domain.
SECTION 10.5 PRESERVATION
The Corporation shall take all steps which it or the
Administrative Agent deems reasonable and appropriate under the circumstances to
preserve and protect each material item of its Intellectual Property Collateral,
including, without limitation, maintaining the quality of any and all products
or services used or provided in connection with any of the Trademarks,
consistent with the quality of the products and services as of the date hereof,
and taking all steps necessary to ensure that all licensed users of any of the
Trademarks use such consistent standards of quality.
SECTION 10.6 AFTER-ACQUIRED INTELLECTUAL PROPERTY
Subject to Section 5.02 of the Credit Agreement, the Corporation
agrees that, should it obtain an ownership interest in any material item of the
type set forth in Section 3.1.7
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which is not on the date hereof a part of the Intellectual Property Collateral
(the "AFTER-ACQUIRED INTELLECTUAL PROPERTY"), (i) the provisions of Article 3
shall automatically apply thereto, (ii) any such After-Acquired Intellectual
Property and, in the case of trademarks, the goodwill of the business connected
therewith or symbolized thereby, shall automatically become part of the
Intellectual Property Collateral subject to the terms and conditions of this
Security Agreement with respect thereto, (iii) the Corporation shall give prompt
written notice thereof to the Administrative Agent in accordance herewith and
(iv) the Corporation shall execute and deliver to the Administrative Agent an IP
Security Agreement Supplement covering such After-Acquired Intellectual Property
as "Additional Collateral" thereunder and as defined therein, and shall record
such IP Security Agreement Supplement with the Patent and Trademark Office, the
Copyright Office and any other governmental authorities necessary to perfect the
security interest hereunder in such After-Acquired Intellectual Property.
ARTICLE 11 - ASSIGNED AGREEMENTS
SECTION 11.1 PERFORMANCE AND NOTICES
The Corporation will at its expense:
11.1.1 perform and observe all terms and provisions of the Assigned
Agreements to be performed or observed by it, maintain the
Assigned Agreements to which it is a party in full force and
effect, enforce the Assigned Agreements to which it is a party in
accordance with the terms thereof and take all such action to
such end as may be reasonably requested from time to time by the
Administrative Agent; and
11.1.2 upon the Administrative Agent's reasonable request, furnish to
the Administrative Agent promptly upon receipt thereof copies of
all notices, requests and other documents received by the
Corporation under or pursuant to the Assigned Agreements to which
it is a party, and from time to time (A) furnish to the
Administrative Agent such information and reports regarding the
Assigned Agreements and such other Collateral of the Corporation
as the Administrative Agent may reasonably request and (B) upon
request of the Administrative Agent make to each other party to
any Assigned Agreement to which it is a party such demands and
requests for information and reports or for action as the
Corporation is entitled to make thereunder.
SECTION 11.2 NO TERMINATION OR AMENDMENT
The Corporation agrees that it will not, unless a Default under
section 7.01(a) or (f) of the Credit Agreement has occurred that is continuing
or an Event of Default has occurred, and except to the extent otherwise
permitted under the Credit Agreement:
11.2.1 cancel or terminate any Assigned Agreement to which it is a party
or consent to or accept any cancellation or termination thereof;
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11.2.2 amend, amend and restate, supplement or otherwise modify any such
Assigned Agreement or give any consent, waiver or approval
thereunder;
11.2.3 waive any default under or breach of any such Assigned Agreement;
or
11.2.4 take any other action in connection with any such Assigned
Agreement that would impair the value of the interests or rights
of the Corporation thereunder or that would impair the interests
or rights of any Secured Party.
SECTION 11.3 PAYMENTS INTO CASH CONCENTRATION ACCOUNTS
The Corporation agrees, and has effectively so instructed each
other party to each Assigned Agreement to which it is a party, that all payments
due or to become due under or in connection with such Assigned Agreement will be
made to a Cash Concentration Account or a Pledged Account.
SECTION 11.4 RELEASE OF PAYMENTS
All moneys received or collected pursuant to Section 11.3 shall
be (i) released to the Corporation on the terms set forth in Article 4 or, as
applicable, Article 12 so long as no Default under Section 7.01(a) or (f) of the
Credit Agreement or Event of Default shall have occurred and be continuing or
(ii) if any Default under Section 7.01(a) or (f) of the Credit Agreement or
Event of Default shall have occurred and be continuing, applied as provided in
Section 17.4.
ARTICLE 12 - THE CASH CONCENTRATION ACCOUNTS
SECTION 12.1 MAINTENANCE OF CASH CONCENTRATION ACCOUNT
The Corporation agrees that it will maintain a Cash Concentration
Account with a commercial bank reasonably acceptable to the Administrative Agent
(a "CASH CONCENTRATION ACCOUNT BANK") in accordance with this Security Agreement
for so long as any of the Advances under the Term A Facility shall remain
unpaid, any Letter of Credit issued at the request of the Corporation shall be
outstanding, any Bank Hedge Agreement to which the Corporation is a party shall
be in effect or the Corporation shall have any Commitment under the Credit
Agreement. The Administrative Agent shall have sole and exclusive control of the
Cash Concentration Accounts subject to the terms of this Security Agreement.
SECTION 12.2 CASH CONCENTRATION ACCOUNT LETTER
The Corporation shall within 30 days of the Effective Date obtain
from the Cash Concentration Account Bank with which each existing Cash
Concentration Account is maintained a letter agreement (the "CASH CONCENTRATION
ACCOUNT LETTER") among the Corporation, the Cash Concentration Account Bank and
the Administrative Agent, which letter agreement is in substantially the form of
Exhibit D hereto or otherwise in form and substance
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reasonably satisfactory to the Administrative Agent. The Corporation agrees that
it will not add any bank as a Cash Concentration Account Bank or add any account
as a Cash Concentration Account to those listed in Part 1 of Schedule B hereto,
unless the Administrative Agent shall have received at least 10 days' prior
written notice of such addition and shall have received a Cash Concentration
Account Letter executed by the relevant Cash Concentration Account Bank, or a
supplement to an existing Cash Concentration Account Letter covering such new
Cash Concentration Account, as the case may be (and, upon the receipt by the
Administrative Agent of such Cash Concentration Account Letter or supplement,
Schedule B hereto shall be automatically amended to include such Cash
Concentration Account Bank or Cash Concentration Account). The Corporation
agrees that it will not terminate any bank as a Cash Concentration Account Bank
or terminate any account as a Cash Concentration Account, unless the
Administrative Agent shall have received at least 10 days' prior written notice
of such termination (and, upon such termination, Schedule B hereto shall be
automatically amended to delete such Cash Concentration Account Bank or Cash
Concentration Account).
SECTION 12.3 OPERATION OF CASH CONCENTRATION ACCOUNTS
The Corporation will draw cheques on, and otherwise withdraw
amounts from, its operating account or the Cash Concentration Accounts in such
amounts as may be required in the ordinary course of business (including,
without limitation, to pay or repay Debt outstanding under the Loan Documents
for which the Corporation is liable under the Credit Agreement). It shall be a
term and condition of the Cash Concentration Accounts, notwithstanding any term
or condition to the contrary in any other Agreement relating to the Cash
Concentration Accounts, that no amount (including, without limitation, interest
on Concentration Investments, as defined below, related thereto) shall be paid
or released to or for the account of, or withdrawn by or for the account of, the
Corporation or any other Person from the Cash Concentration Accounts, except as
otherwise provided in this Section and in Sections 12.9 and 17.4.
SECTION 12.4 APPLICABLE LAWS
The Cash Concentration Accounts shall be subject to such
applicable laws (including, without limitation, such applicable regulations of
the Bank of Canada and the Superintendent of Financial Institutions and of any
other appropriate banking authority or other governmental authority) as are in
effect from time to time.
SECTION 12.5 CONCENTRATION INVESTMENTS
If requested by the Corporation, the Corporation may, from time
to time, so long as no Default under Section 7.01(a) or 7.01(f) of the Credit
Agreement or an Event of Default has occurred and is continuing, direct the
Administrative Agent (i) to invest amounts on deposit in a Cash Concentration
Account in such Cash Equivalents or Canadian equivalents thereto acceptable to
the Administrative Agent acting reasonably (collectively, "CANADIAN CASH
EQUIVALENTS") as the Corporation may select, in each case which investments
shall be made in the name of, and with the entitlement holder being, the
Corporation, and (ii) to invest interest paid on the Cash Equivalents referred
to in clause (i) above, and reinvest other proceeds of any such Cash Equivalents
that may mature or be sold, in each case in such Cash Equivalents as the
Corporation may select, in each case which investments shall be made in the name
of, and with
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the entitlement holder being, the Corporation (the Cash Equivalents referred to
in clauses (i) and (ii) of this Section 12.5 being, collectively, the
"CORPORATION'S CONCENTRATION INVESTMENTS").
SECTION 12.6 INVESTMENT AFTER DEFAULT
Upon the occurrence and during the continuance of a Default under
Section 7.01(a) or 7.01(f) of the Credit Agreement or an Event of Default, the
Administrative Agent may, subject to the provisions of Article 17, from time to
time (i) invest amounts on deposit in the Cash Concentration Account, and any
cash proceeds collected by or on behalf of the Administrative Agent and held
pursuant to Section 17.4, in such Canadian Cash Equivalents as the
Administrative Agent may select, in each case which investments shall be made in
the name of, and with the entitlement holder being, the Administrative Agent, on
behalf of the Corporation, and (ii) invest interest paid on the Canadian Cash
Equivalents referred to in clause (i) above, and reinvest other proceeds of any
such Canadian Cash Equivalents that may mature or be sold, in such Canadian Cash
Equivalents as the Administrative Agent may select, in each case which
investments shall be made in the name of, and with the entitlement holder being,
the Administrative Agent, on behalf of the Corporation (the Canadian Cash
Equivalents referred to in clauses (i) and (ii) of this Section 12.6, together
with the Corporation's Concentration Investments, being, collectively, the
"CONCENTRATION INVESTMENTS").
SECTION 12.7 INTEREST AND PROCEEDS
Interest and proceeds that are not invested or reinvested in
Concentration Investments as provided in Sections 12.5 or 12.6 shall be
deposited and held in a Cash Concentration Account.
SECTION 12.8 NO LIABILITY
The Administrative Agent shall not have any liability to the
Corporation or any of the other Secured Parties for, or as a result of, any
losses suffered from any Concentration Investment made by it in accordance with
this Article 12 or if the earnings realized on any such Concentration Investment
are less than otherwise could have been achieved had other Canadian Cash
Equivalents been selected by the Corporation or the Administrative Agent
pursuant to the terms Sections 12.5 or 12.6.
SECTION 12.9 RELEASE OF AMOUNTS
All of the Concentration Investments made in respect of the Cash
Concentration Accounts and all interest and income received thereon and
therefrom, and the net proceeds realized upon the maturity or sale thereof,
shall be held in the Cash Concentration Accounts as Account Collateral, which
amounts may be released solely in accordance with the provisions of Section 17.4
and of the Cash Concentration Account Letters.
SECTION 12.10 NO INSTRUCTIONS BEFORE DEFAULT
The Administrative Agent hereby agrees with the Corporation that,
unless a Default under Section 7.01(a) or (f) of the Credit Agreement has
occurred and is continuing, or
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an Event of Default has occurred, the Administrative Agent shall not issue
instructions under the Cash Concentration Account Letters.
SECTION 12.11 UNBLOCKED ACCOUNTS
The Corporation agrees that it will not add any account (an
"UNBLOCKED ACCOUNT") that is not a Pledged Account, a Cash Concentration Account
or a Cash Collateral Account, and will not terminate any account as an Unblocked
Account, unless the Administrative Agent shall have received at least 10 days'
prior written notice of such addition or termination (and, upon the receipt by
the Administrative Agent of such notice, Part 3 of Schedule B hereto shall be
automatically amended to include or, as applicable, delete such Unblocked
Account).
ARTICLE 13 - CASH COLLATERAL ACCOUNT
SECTION 13.1 MAINTENANCE OF CASH COLLATERAL ACCOUNT
The Corporation agrees that it will maintain a Cash Collateral
Account in accordance with this Security Agreement for so long as any of the
Advances under the Term A Facility shall remain unpaid, any Letter of Credit
issued at the request of the Corporation shall be outstanding, any Bank Hedge
Agreement to which the Corporation is a party shall be in effect or the
Corporation shall have any Commitment under the Credit Agreement.
SECTION 13.2 OPENING OF CASH COLLATERAL ACCOUNT
The Corporation shall within 30 days of the Effective Date open
an account (the "CASH COLLATERAL ACCOUNT") with Citibank (or, if the account is
in Ontario, with Citibank Canada) in accordance with the terms of this Security
Agreement and the letter agreement dated as of the Effective Date (the "CASH
COLLATERAL ACCOUNT LETTER") among the Corporation, Citibank (or, as applicable,
Citibank Canada) and the Administrative Agent, which letter agreement is in
substantially the form of Exhibit E hereto or otherwise in form and substance
reasonably satisfactory to the Administrative Agent. The Administrative Agent
shall have sole and exclusive control of the Cash Collateral Account subject to
the terms of this Security Agreement.
SECTION 13.3 OPERATION OF CASH COLLATERAL ACCOUNT
It shall be a term and condition of the Cash Collateral Account,
notwithstanding any term or condition to the contrary in any other Agreement
relating to the Cash Collateral Account, that no amount (including, without
limitation, interest on Collateral Investments related thereto) shall be paid or
released to or for the account of, or withdrawn by or for the account of, the
Corporation or any other Person from the Cash Collateral Account, except as
otherwise provided in Sections 13.10, 13.11 and 17.4.
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SECTION 13.4 APPLICABLE LAWS
The Cash Collateral Account shall be subject to such applicable
laws (including, without limitation, such applicable regulations of the Bank of
Canada and the Superintendent of Financial Institutions and of any other
appropriate banking authority or other governmental authority) as are in effect
from time to time.
SECTION 13.5 COLLATERAL INVESTMENTS
If requested by the Corporation, the Administrative Agent will,
subject to the provisions of Sections 13.10, 13.11 and 17.4, from time to time,
so long as no Default under Section 7.01(a) or 7.01(f) of the Credit Agreement
or Event of Default has occurred and is continuing, (i) invest amounts on
deposit in the Cash Collateral Account in such Canadian Cash Equivalents as the
Corporation may select, in each case which investments shall be made in the name
of, and with the entitlement holder being, the Administrative Agent, on behalf
of the Corporation, and (ii) invest interest paid on the Canadian Cash
Equivalents referred to in clause (i) above, and reinvest other proceeds of any
such Cash Equivalents that may mature or be sold, in each case in such Canadian
Cash Equivalents as the Corporation may select, in each case which investments
shall be made in the name of, and with the entitlement holder being, the
Administrative Agent, on behalf of the Corporation (the Canadian Cash
Equivalents referred to in clauses (i) and (ii) of this Section 13.5 being,
collectively, the "CORPORATION'S COLLATERAL INVESTMENTS").
SECTION 13.6 INVESTMENT AFTER DEFAULT
Upon the occurrence and during the continuance of a Default under
Section 7.01(a) or 7.01(f) of the Credit Agreement or an Event of Default, the
Administrative Agent may, subject to the provisions of Article 17, from time to
time (i) invest amounts on deposit in the Cash Collateral Account, and any cash
proceeds collected by or on behalf of the Administrative Agent and held pursuant
to Section 17.4, in such Canadian Cash Equivalents as the Administrative Agent
may select, in each case which investments shall be made in the name of, and
with the entitlement holder being, the Administrative Agent, on behalf of the
Corporation, and (ii) invest interest paid on the Cash Equivalents referred to
in clause (i) above, and reinvest other proceeds of any such Canadian Cash
Equivalents that may mature or be sold, in such Canadian Cash Equivalents as the
Administrative Agent may select, in each case which investments shall be made in
the name of, and with the entitlement holder being, the Administrative Agent, on
behalf of the Corporation (the Cash Equivalents referred to in clauses (i) and
(ii) of this Section 13.6, together with the Corporation's Collateral
Investments, being, collectively, the "COLLATERAL INVESTMENTS").
SECTION 13.7 INTEREST AND PROCEEDS
Interest and proceeds that are not invested or reinvested in
Collateral Investments as provided in Sections 13.5 or 13.6 shall be deposited
and held in the Cash Collateral Account.
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SECTION 13.8 NO LIABILITY
The Administrative Agent shall not have any liability to the
Corporation or any of the other Secured Parties for, or as a result of, any
losses suffered from any Collateral Investment made by it in accordance with
this Article 13 or if the earnings realized on any such Collateral Investment
are less than otherwise could have been achieved had other Canadian Cash
Equivalents been selected by the Corporation or the Administrative Agent
pursuant to the terms of Sections 13.5 or 13.6.
SECTION 13.9 RESTRICTION ON RELEASE
All of the Collateral Investments made in respect of the Cash
Collateral Account and all interest and income received thereon and therefrom,
and the net proceeds realized upon the maturity or sale thereof, shall be held
in the Cash Collateral Account as Account Collateral, which amounts may be
released solely in accordance with the provisions of Sections 13.10, 13.11 and
17.4.
SECTION 13.10 RELEASE OF AMOUNTS
The Administrative Agent is hereby authorized, without any
further action by or notice to or from the Corporation, to maintain any amounts
deposited into the Cash Collateral Account of the Corporation pursuant to
Section 2.06(b)(vii) of the Credit Agreement until the last day of the Interest
Period then in effect for any outstanding Eurodollar Rate Advances and, on such
last day, to pay and release such amounts from such Cash Collateral Account for
the prepayment to each of the Appropriate Lenders (other than the Declining
Lenders) of the Eurodollar Rate Advances outstanding on such day in accordance
with Section 2.06(b) of the Credit Agreement, with any excess amounts in such
Cash Collateral Account to be transmitted to the account designated by the
Corporation, provided that no Default under section 7.01(a) or (f) of the Credit
Agreement or no Event of Default has occurred and is continuing.
SECTION 13.11 RELEASE BEFORE DEFAULT
Subject to Section 12.10, so long as no Default under Section
7.01(a) or (f) of the Credit Agreement or no Event of Default shall have
occurred and be continuing, the Administrative Agent will pay and release to the
Corporation or at its order and at the request of the Corporation, the amount,
if any, by which the credit balance of the Cash Collateral Account of the
Corporation exceeds all amounts then due and payable by the Corporation under
the Loan Documents together with all accrued and unpaid interest and fees under
the Credit Agreement.
ARTICLE 14 - ADMINISTRATIVE AGENT APPOINTED
ATTORNEY OF CORPORATION
SECTION 14.1 APPOINTMENT OF ATTORNEY
The Corporation hereby irrevocably appoints the Administrative
Agent the Corporation's attorney with full authority in the place and stead of
the Corporation and in the name of the Corporation or otherwise, from time to
time in the Administrative Agent's discretion
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following the occurrence and continuance of a Default under Section 7.01(a) or
7.01(f) of the Credit Agreement or an Event of Default, to take any action and
to execute any instrument that the Administrative Agent may deem necessary or
advisable to accomplish the purposes of this Security Agreement and the other
Loan Documents, including, without limitation:
14.1.1 to obtain and adjust insurance required to be paid to the
Administrative Agent pursuant to Article 8,
14.1.2 to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
14.1.3 to receive, indorse, assign and collect any drafts, acceptances,
instruments, chattel paper and other documents in connection with
this Security Agreement and give full discharge to same,
14.1.4 to sell, transfer, assign or otherwise deal with the Collateral
or any part thereof in the same manner and to the same extent as
if the Administrative Agent were the absolute owner thereof,
14.1.5 to direct any Person liable to the Corporation for any payment
with respect to its Collateral to make payment of any and all
moneys due and to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct,
(ii) to receive payment of and receipt for any and all moneys,
claims and other amounts due and to become due at any time in
respect of or arising out of any of its Collateral, (iii) to
defend any action, suit or proceeding brought against the
Corporation with respect to any of its Collateral and (iv) to
settle, compromise or adjust any action, suit or proceeding
described in clause (iii) of this Section 14.1.5 and, in
connection therewith, to give any such discharge or release as
the Administrative Agent may deem appropriate,
14.1.6 to file any application, petition or other request with any
governmental authority for the purpose of obtaining any consent,
approval or authorization therefrom or satisfying any
registration, filing, notice or other requirement thereof
necessary in order to fully and properly effect the sale,
transfer or other disposition of any or all of its Collateral,
and
14.1.7 to file any claims or take any action or institute any
proceedings at the sole expense of the Corporation that the
Administrative Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce
compliance with the terms and conditions of any Assigned
Agreement or the rights of the Administrative Agent with respect
to any of the Collateral.
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SECTION 14.2 PERFORMANCE BY ADMINISTRATIVE AGENT
If the Corporation fails to perform any agreement contained
herein, the Administrative Agent may as the Administrative Agent deems necessary
but without any obligation to do so and without notice, itself perform, or cause
performance of, such agreement, and the expenses of the Administrative Agent
incurred in connection therewith shall be payable by the Corporation under
Section 16.2.
ARTICLE 15 - ADMINISTRATIVE AGENT'S DUTIES
SECTION 15.1 LIMITATION OF DUTIES
The powers conferred to the Administrative Agent hereunder are
solely to protect its interest (and the interest of the other Secured Parties)
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder and to dispose of the
Collateral in a commercially reasonable manner, the Administrative Agent shall
have no duty as to any Collateral, as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral, whether or not any Secured Party has or is deemed to have knowledge
of such matters. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Administrative Agent accords its own property.
SECTION 15.2 SUBAGENTS
Anything contained herein to the contrary notwithstanding, the
Administrative Agent may from time to time, when the Administrative Agent deems
it to be necessary, appoint one or more subagents (each a "SUBAGENT") for the
Administrative Agent hereunder with respect to all or any part of the
Collateral. In the event that the Administrative Agent so appoints any Subagent
with respect to any Collateral, (i) the assignment and pledge of such Collateral
and the security interest granted in such Collateral by the Corporation
hereunder shall be deemed for purposes of this Security Agreement to have been
made to such Subagent, in addition to the Administrative Agent, for the ratable
benefit of the Secured Parties, as security for the Secured Obligations of the
Corporation, (ii) such Subagent shall automatically be vested, in addition to
the Administrative Agent, with all rights, powers, privileges, interests and
remedies of the Administrative Agent hereunder with respect to such Collateral,
and (iii) the term "Administrative Agent," when used herein in relation to any
rights, powers, privileges, interests and remedies of the Administrative Agent
with respect to such Collateral, shall include such Subagent; PROVIDED, HOWEVER,
that no such Subagent shall be authorized to take any action with respect to any
such Collateral unless and except to the extent expressly authorized in writing
by the Administrative Agent.
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ARTICLE 16 - INDEMNITY AND EXPENSES
SECTION 16.1 INDEMNITY
Without limiting any of the provisions of Section 9.04 of the
Credit Agreement, the Corporation agrees to indemnify the Administrative Agent
from and against any and all claims, damages, expenses, losses and liabilities
growing out of or resulting from this Security Agreement (including, without
limitation, enforcement of this Agreement), except claims, damages, expenses,
losses or liabilities resulting from the Administrative Agent's gross negligence
or willful misconduct as determined by a final, non-appealable judgment of a
court of competent jurisdiction.
SECTION 16.2 REIMBURSEMENT OF EXPENSES
Without limiting any of the provisions of Section 9.04 of the
Credit Agreement, the Corporation will upon demand pay to the Administrative
Agent the amount of any and all reasonable expenses, including without
limitation the reasonable fees and expenses of its counsel and of any experts
and agents, that the Administrative Agent may incur in connection with (i) the
administration of this Security Agreement, (ii) the custody, preservation, use
or operation of, or the sale of, collection from or other realization upon, any
of the Collateral, (iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the Lenders hereunder or (iv) the failure by the
Corporation to perform or observe any of the provisions hereof.
SECTION 16.3 SURVIVAL OF PROVISIONS
Without prejudice to the survival of any of the other agreements
of the Corporation under this Security Agreement or any of the other Loan
Documents, the agreements and obligations of the Corporation contained in this
Article 16 shall survive the payment in full of all of the Secured Obligations
and all of the other Obligations of the Corporation owing under or in respect of
the Loan Documents.
ARTICLE 17 - REMEDIES ON DEFAULT
If the Security Interests become enforceable, the Administrative
Agent shall have the following rights:
SECTION 17.1 RECEIVER
The Administrative Agent may appoint by instrument in writing one
or more Receivers of any Collateral. Any such Receiver shall have the rights
set out in Sections 17.2 through 17.9 and Sections 17.13, 17.17, 17.19 and
17.20. In exercising such rights and powers, any Receiver shall act as and for
all purposes shall be deemed to be the agent of the Corporation and none of the
Secured Parties shall be responsible for any act or default of any Receiver. The
Administrative Agent may remove any Receiver and appoint another from time to
time. An officer or employee of the Administrative Agent may be appointed as a
Receiver. No Receiver appointed by the Administrative Agent need be appointed
by, nor need its appointment be ratified by, or its actions in any way
supervised by, a court. If two or more Receivers are
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appointed to act concurrently, they shall, unless otherwise expressly provided
in the instrument appointing them, so act severally and not jointly and
severally. The appointment of any Receiver or anything done by a Receiver or the
removal or termination of any Receiver shall not have the effect of constituting
any of the Secured Parties a mortgagee in possession in respect of the
Collateral.
SECTION 17.2 POWER OF ENTRY
The Corporation shall forthwith upon demand deliver to a Receiver
possession of any Collateral at the place specified by the Receiver. Any
Receiver may at any time enter upon any premises where any Collateral is located
to take possession of, disable or remove any Collateral, and may use whatever
means the Receiver considers advisable to do so.
SECTION 17.3 POWER OF SALE
17.3.1 Any Receiver may sell, lease, consign or otherwise dispose of any
Collateral by public auction, private tender or private contract
with or without notice, advertising or any other formality, all
of which are hereby waived by the Corporation. Any Receiver may,
at its discretion, establish the terms of such disposition,
including terms and conditions as to credit, upset, reserve bid
or price. All payments made pursuant to such dispositions shall
be credited against the Secured Obligations only as they are
actually received. Any Receiver may buy in, rescind or vary any
contract for the disposition of any Collateral and may dispose of
any Collateral again without being answerable for any loss
occasioned thereby. Any such disposition may take place whether
or not the Receiver has taken possession of the Collateral.
17.3.2 The Corporation agrees that any Receiver may, in its discretion,
approach a restricted number of potential purchasers to effect
any sale of any securities comprised in the Collateral pursuant
to Subsection 17.3.1 and that a sale under such circumstances may
yield a lower price for Collateral than would otherwise be
obtainable if the same were registered and sold in the open
market. The Corporation agrees that:
17.3.2.1 in the event any Receiver shall so sell
Collateral at such private sale or sales, the
Receiver shall have the right to rely upon the
advice and opinion of any Person who regularly
deals in or evaluates securities of the type
constituting the Collateral as to the best price
obtainable in a commercially reasonable manner;
and
17.3.2.2 such reliance shall be conclusive evidence that
the Receiver handled such matter in a
commercially reasonable manner.
SECTION 17.4 CASH AND PROCEEDS
All cash held by or on behalf of the Administrative Agent and all
cash proceeds received by or on behalf of the Administrative Agent in respect of
any sale of, collection from, or
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other realization upon all or any part of the Collateral may, in the discretion
of the Administrative Agent, be held by the Administrative Agent as collateral
for, and/or then or at any time thereafter applied (after payment of any amounts
payable to the Administrative Agent pursuant to Section 16.2 in whole or in part
by the Administrative Agent, for the ratable benefit of the Secured Parties,
against all or any part of the Secured Obligations, in such order as the
Administrative Agent shall elect. In determining the amounts owing to the Hedge
Banks under the Bank Hedge Agreements, the Administrative Agent shall be
entitled to rely, and be fully protected in relying, upon the Agreement Values
(as hereinafter defined) of the Bank Hedge Agreements. The term "Agreement
Value" means, with respect to any of the Bank Hedge Agreements at any date of
determination, the amount, if any, that would be payable to the Hedge Bank party
to such Bank Hedge Agreement in respect of any "AGREEMENT VALUE" under such Bank
Hedge Agreement if such Bank Hedge Agreement were terminated on such date,
calculated as provided in the International Swap Dealers Association, Inc. Code
of Standard Wording, Assumptions and Provisions for Swaps, 1986 Edition. Each
determination of the Agreement Value of any of the Bank Hedge Agreements shall
be made by the Administrative Agent in good faith and in reliance on any
information (including information provided by such Hedge Bank) that it believes
to be accurate, but without any obligation to verify such information. Any
surplus of cash or cash proceeds held by or on behalf of the Administrative
Agent in accordance with this Article 17 and remaining after payment in full in
cash of all of the Secured Obligations shall be paid over to the Corporation or
to whomsoever may be lawfully entitled to receive such surplus.
SECTION 17.5 CARRYING ON BUSINESS
Any Receiver may carry on, or concur in the carrying on of, any
of the business or undertaking of the Corporation and may, to the exclusion of
all others, including the Corporation, enter upon, occupy and use any of the
premises, buildings, plant and undertaking of or occupied or used by the
Corporation and may use any of the equipment and intangibles of the Corporation
for such time and such purposes as the Receiver sees fit. No Receiver shall be
liable to the Corporation for any negligence in so doing or in respect of any
rent, charges, costs, depreciation or damages in connection with any such
action.
SECTION 17.6 PAY LIENS
Any Receiver may pay any liability secured by any actual or
threatened Lien against any Collateral. A Receiver may borrow money for the
maintenance, preservation or protection of any Collateral or for carrying on any
of the business or undertaking of the Corporation and may grant Liens in any
Collateral in priority to the Security Interests as security for the money so
borrowed. The Corporation will forthwith on demand reimburse the Receiver for
all such payments and borrowings.
SECTION 17.7 DEALING WITH COLLATERAL
Any Receiver may seize, collect, realize, dispose of, enforce,
release to third parties or otherwise deal with any Collateral in such manner,
upon such terms and conditions and at such time as it deems advisable without
notice to the Corporation, and may charge on its own behalf and pay to others
its costs and expenses (including legal, Receiver's and accounting fees
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and expenses on a full indemnity basis) incurred in connection with such
actions. The Corporation will forthwith upon demand reimburse the Receiver for
all such costs or expenses.
SECTION 17.8 POWERS RE COLLATERAL
Any Receiver may have, enjoy and exercise all of the powers and
rights of and enjoyed by the Corporation with respect to the Collateral or
incidental, ancillary, attaching or deriving from the ownership by the
Corporation of the Collateral, including the power to enter into Agreements,
grant or agree to Liens and grant or reserve profits a prendre, easements,
rights of ways, rights in the nature of easements and licenses over or
pertaining to the whole or any part of the Collateral.
SECTION 17.9 RETAIN SERVICES
Any Receiver may retain the services of such real estate brokers
and agents, lawyers, accountants, appraisers and other consultants as the
Receiver may deem necessary or desirable in connection with anything done or to
be done by the Receiver or with any of the powers of the Receiver set out herein
and pay their commissions, fees and disbursements (which payment shall
constitute part of the Receiver's disbursements). The Corporation shall
forthwith on demand reimburse the Receiver for all such payments.
SECTION 17.10 RIGHT TO HAVE COURT APPOINT A RECEIVER
The Administrative Agent may, at any time, apply to a court of
competent jurisdiction for the appointment of a Receiver, or other official, who
may have powers the same as, greater or lesser than, or otherwise different
from, those capable of being granted to a Receiver appointed by the
Administrative Agent pursuant to this Security Agreement.
SECTION 17.11 ADMINISTRATIVE AGENT MAY EXERCISE RIGHTS OF A RECEIVER
In lieu of, or in addition to, exercising its rights under
Sections 17.1, 17.10, 17.12 and 17.20 the Administrative Agent has, and may
exercise, any of the rights which are capable of being granted to a Receiver
appointed by the Administrative Agent pursuant to this Security Agreement.
SECTION 17.12 RETENTION OF COLLATERAL
The Administrative Agent, on behalf of the Secured Parties, may
elect to retain any Collateral in satisfaction of the Secured Obligations. The
Administrative Agent may designate any part of the Secured Obligations to be
satisfied by the retention of particular Collateral which the Administrative
Agent considers to have a net realizable value approximating the amount of the
designated part of the Secured Obligations, in which case only the designated
part of the Secured Obligations shall be deemed to be satisfied by the retention
of the particular Collateral.
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SECTION 17.13 LIMITATION OF LIABILITY
None of the Secured Parties and any Receiver shall be liable or
accountable for any failure to seize, collect, realize, dispose of, enforce or
otherwise deal with any Collateral nor shall any of them be bound to institute
proceedings for any such purposes or for the purpose of preserving any rights of
any of the Secured Parties, the Corporation or any other Person in respect of
any Collateral. None of the Secured Parties and any Receiver shall be liable or
responsible for any loss and expense whatever which may accrue in consequence of
any such failure resulting from any negligence of any of the Secured Parties,
any Receiver or any of their respective Representatives or otherwise. If any
Receiver or the Administrative Agent takes possession of any Collateral, none of
the Secured Parties nor any Receiver shall have any liability as a mortgagee in
possession or be accountable for anything except actual receipts.
SECTION 17.14 EXTENSIONS OF TIME
The Administrative Agent may grant renewals, extensions of time
and other indulgences, take and give up securities, accept compositions, grant
releases and discharges, perfect or fail to perfect any securities, release any
Collateral to third parties and otherwise deal or fail to deal with the
Corporation, debtors of the Corporation, guarantors, sureties and others and
with any Collateral and other securities as the Administrative Agent may see
fit, all without prejudice to the liability of the Corporation to each of the
Secured Parties or the rights of each of the Secured Parties and any Receiver
under this Security Agreement.
SECTION 17.15 SET-OFF, COMBINATION OF ACCOUNTS AND CROSSCLAIMS
The Secured Obligations will be paid by the Corporation without
regard to any equities between the Corporation and any of the Secured Parties or
any right of set-off, combination of accounts or cross-claim. Any indebtedness
owing by any of the Secured Parties to the Corporation, direct or indirect,
extended or renewed, actual or contingent, mutual or not, may be set off or
applied against, or combined with, the Secured Obligations by any of the Secured
Parties at any time either before or after maturity, without demand upon or
notice to anyone.
SECTION 17.16 DEFICIENCY
If the proceeds of the realization of any Collateral are
insufficient to repay all liquidated Secured Obligations, the Corporation shall
forthwith pay or cause to be paid to the Administrative Agent, for the benefit
of the Secured Parties, such deficiency.
SECTION 17.17 VALIDITY OF SALE
No Person dealing with the Administrative Agent or any Receiver
or with any Representative of the Administrative Agent or any Receiver shall be
concerned to inquire whether the Security Interests have become enforceable,
whether any right of the Administrative Agent or any Receiver has become
exercisable, whether any Secured Obligations remain outstanding or otherwise as
to the propriety or regularity of any dealing by the Administrative Agent or any
Receiver with any Collateral or to see to the application of any money paid to
the Administrative Agent or any Receiver, and in the absence of fraud on the
part of such Person
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such dealings shall be deemed, as regards such Person, to be within the rights
hereby conferred and to be valid and effective accordingly.
SECTION 17.18 ADMINISTRATIVE AGENT NOT OBLIGED TO PRESERVE THIRD PARTY
INTERESTS
To the extent that any of the Collateral constitutes an
instrument or chattel paper the Administrative Agent shall not be obliged to
take any steps to preserve rights against prior parties in respect of any such
instrument or chattel paper.
SECTION 17.19 ADMINISTRATIVE AGENT OR RECEIVER MAY PERFORM
If the Corporation fails to perform any Secured Obligations,
without limiting any other provision hereof, the Administrative Agent or any
Receiver may perform those Secured Obligations as attorney for the Corporation
in accordance with Articles 9 and 17. The Corporation shall remain liable under
each Agreement and License to which it is party or by which it or any of its
undertaking or property is bound and shall perform all of its obligations
thereunder, and shall not be released from any of its obligations under any such
Agreement or License by the exercise of any rights by the Administrative Agent
or any Receiver. None of the Secured Parties and any Receiver shall have any
obligation under any such Agreement or License, by reason of this Security
Agreement, nor shall any of the Secured Parties and any Receiver be obliged to
perform any of the obligations of the Corporation thereunder or to take any
action to collect or enforce any claim made subject to the security of this
Security Agreement. The rights conferred on the Administrative Agent under this
Security Agreement are for the purpose of protecting the Security Interests in
the Collateral and shall not impose any obligation upon the Administrative Agent
to exercise any such rights.
SECTION 17.20 EFFECT OF APPOINTMENT OF RECEIVER
As soon as the Administrative Agent takes possession of any
Collateral or appoints a Receiver, all rights of each of the Representatives of
the Corporation with respect to the Collateral shall cease, unless specifically
continued by the written consent of the Administrative Agent or the Receiver.
SECTION 17.21 TIME FOR PAYMENT
If the Administrative Agent demands payment of any Secured
Obligations or if any Secured Obligations are otherwise due by maturity or
acceleration, it shall be deemed reasonable for the Administrative Agent to
exercise its rights under this Security Agreement immediately if such payment is
not made, and any days of grace or any time for payment which might otherwise be
required to be afforded to the Corporation by Applicable Law is hereby
irrevocably waived to the extent permitted by law.
SECTION 17.22 RIGHTS IN ADDITION
The rights conferred by this Article 17 are in addition to, and
not in substitution for, any other rights any of the Secured Parties may have
under this Security Agreement, at law, in equity or by or under Applicable Law.
The Administrative Agent may proceed by way of any
-37-
action, suit or other proceeding at law or in equity including (a) the right to
take proceedings in any court of competent jurisdiction for the sale or
foreclosure of the Collateral and (b) filing proofs of claim and other
documentation to establish the claims of the Secured Parties in any proceeding
relating to the Corporation. No right of the Administrative Agent shall be
exclusive of or dependent on any other. Any such right may be exercised
separately or in combination, and at any time.
ARTICLE 18 - GENERAL
SECTION 18.1 HOLDER EXCLUSIVELY ENTITLED
The holder of this Security Agreement from time to time will be
regarded as exclusively entitled to the benefit of this Security Agreement and
all Persons may act accordingly.
SECTION 18.2 SECURITY IN ADDITION
The Security Interests do not replace or otherwise affect any
existing or future Lien held by any of the Secured Parties. Neither the taking
of any action, suit or proceedings, judicial or extra-judicial, nor the
refraining from so doing, nor any dealing with any other security for any
Secured Obligations shall release or affect the Security Interests. Neither the
taking of any action, suit or proceedings, judicial or extra-judicial, pursuant
to this Security Agreement, nor the refraining from so doing, nor any dealing
with any Collateral shall release or affect any of the other security held by
any of the Secured Parties for the payment or performance of the Secured
Obligations.
SECTION 18.3 NO MERGER
This Security Agreement shall not operate by way of a merger of
the Secured Obligations or of any guarantee or Agreement or other document or
instrument by which the Secured Obligations now or at any time hereafter may be
represented or evidenced. Neither the taking of any judgment nor the exercise of
any power of seizure or disposition shall extinguish the liability of the
Corporation to pay and perform the Secured Obligations nor shall the acceptance
of any payment or alternate security constitute or create any novation. No
covenant, representation or warranty of the Corporation herein shall merge in
any judgment.
SECTION 18.4 NOTICES
Any notice, demand, consent, approval or other communication (in
this Section, a "NOTICE") to be made or given under or in connection with this
Security Agreement shall be in writing and may be made or given by personal
delivery or by facsimile addressed to the respective parties at the addresses
set out at the commencement of this Security Agreement or to such other address
as such party may from time to time notify the other in accordance with this
Section 18.4. Any notice made or given by personal delivery shall be
conclusively deemed to have been given at the time of actual delivery or, if
made or given by facsimile, at the time of sending if sent before 4:00 p.m. (in
the place of intended receipt) on a Business Day or if sent otherwise at the
opening of business on the first Business Day following the transmittal thereof.
-38-
SECTION 18.5 TIME OF THE ESSENCE
Time is and shall remain of the essence of this Security
Agreement and each of its provisions.
SECTION 18.6 GOVERNING LAW
This Security Agreement shall be governed by, and interpreted in
accordance with, the laws in force in the Province of Ontario, including the
federal laws of Canada applicable therein (excluding any conflict of laws rule
or principle which might refer such construction to the laws of another
jurisdiction). The Corporation irrevocably attorns to and submits to the
non-exclusive jurisdiction of the courts of Ontario with respect to any matter
arising hereunder or related hereto. Such choice of law shall, however, be
without prejudice to or limitation of any other rights available to the Secured
Parties under the laws of any other jurisdiction where Collateral may be
located.
SECTION 18.7 SECURITY INTERESTS EFFECTIVE IMMEDIATELY
Neither the issuance nor registration of, or any filings with
respect to, this Security Agreement, nor any partial advance or extension of
credit by any of the Secured Parties, shall bind any of the Secured Parties to
advance any amounts, grant any credit or supply any financial services to the
Corporation, but the Security Interests shall take effect forthwith upon the
issuance of this Security Agreement by the Corporation.
SECTION 18.8 ENTIRE AGREEMENT
There are no representations, warranties, covenants, Agreements
or acknowledgments whether direct or collateral, express or implied, that form
part of or affect this Security Agreement or any Collateral, other than as
expressed herein and other than as may be expressed in the Collateral Agency
Agreement and any other written Agreement entered into between the Corporation
and the Administrative Agent contemporaneously herewith. The execution of this
Security Agreement has not been induced by, nor does the Corporation rely upon
or regard as material, any representations, warranties, conditions, other
Agreements or acknowledgments not expressly made in this Security Agreement and
other documents to be delivered pursuant hereto or contemporaneously herewith.
SECTION 18.9 PROVISIONS REASONABLE
The Corporation acknowledges that the provisions of this Security
Agreement and, in particular, those respecting rights of the Secured Parties or
any Receiver against the Corporation, its business and any Collateral upon a
Default under Section 7.01(a) or (f) of the Credit Agreement or an Event of
Default, are commercially reasonable and not manifestly unreasonable.
-39-
SECTION 18.10 INVALIDITY
If any provision of this Security Agreement is found to be
invalid or unenforceable, by a court of competent jurisdiction from which no
further appeal right lies, that provision shall be deemed to be severed herefrom
and the remaining provisions of this Security Agreement shall not be affected
thereby but shall remain valid and enforceable.
SECTION 18.11 BINDING EFFECT
This Security Agreement shall enure to the benefit of each of the
Secured Parties and any Receiver and their respective successors and assigns and
any subsequent holder of this Security Agreement and shall be binding on the
Corporation, its legal representatives (including receivers, managers, receivers
and managers and trustees) and its successors. Each reference to the Corporation
in this Security Agreement shall be construed so as to include the successors of
the Corporation to the extent the context so admits.
SECTION 18.12 STATUTORY WAIVERS
To the fullest extent permitted by Applicable Law, the
Corporation waives all of the rights, benefits and protections given by the
provisions of any existing or future statute which imposes limitations upon the
rights of a secured party or upon the methods of realization of security,
including any seize or xxx or anti-deficiency statute or any similar provisions
of any other statute. In particular, the Corporation agrees that THE LIMITATION
OF CIVIL RIGHTS ACT of the Province of Saskatchewan shall not apply to this
Security Agreement or any of the rights of any of the Secured Parties or any
Receiver hereunder.
SECTION 18.13 CURRENCY
All references in this Security Agreement to monetary amounts,
unless specifically provided, are to lawful currency of Canada. All sums of
money payable under this Security Agreement shall be paid in the currency in
which such sums are incurred or expressed as due hereunder.
SECTION 18.14 CURRENCY CONVERSIONS
If the Administrative Agent receives or recovers any amount
payable under this Security Agreement in a currency (the "RECOVERED AMOUNT")
which is different than the currency in which the Secured Obligations are
expressed (the "CONTRACT CURRENCY"), the Administrative Agent may convert the
Recovered Amount to the Contract Currency at the rate of exchange which such
Administrative Agent is able, acting in a reasonable manner and in good faith,
to purchase the relevant amount of the Contract Currency. The amount of the
Contract Currency resulting from any such conversion shall then be applied in
accordance with the provisions of Section 17.4.
SECTION 18.15 JUDGMENT CURRENCY
If, for the purposes of obtaining or enforcing judgment in any
court in any jurisdiction, it becomes necessary to convert into the currency of
the country giving such
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judgment (the "JUDGMENT CURRENCY") an amount due hereunder in a different
currency (the "AGREED CURRENCY"), then the date on which the rate of exchange
for conversion is selected by the court is referred to herein as the "CONVERSION
DATE". If there is a change in the rate of exchange between the Judgment
Currency and the Agreed Currency between the Conversion Date and the actual
receipt by the Administrative Agent or any Receiver of the amount due hereunder
or under any such judgment, the Corporation will, notwithstanding any such
judgment, pay all such additional amounts as may be necessary to ensure that the
amount received by the Administrative Agent or Receiver in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
receipt, will produce the amount due in the Agreed Currency. The Corporation's
liability hereunder constitutes a separate and independent liability which shall
not merge with any judgment or any partial payment or enforcement of payment of
sums due under this Security Agreement.
SECTION 18.16 AMENDMENT
No Agreement purporting to amend, supplement or otherwise vary
this Security Agreement shall be binding upon either the Corporation or any of
the Secured Parties unless that Agreement is in writing and signed by the
Corporation and the Administrative Agent.
SECTION 18.17 RECEIPT OF COPY
The Corporation acknowledges receipt of a copy of this Security
Agreement and copies of the verification statements pertaining to the financing
statements filed under the PPSA and under the personal property security
statutes of other provinces by the Administrative Agent, on behalf of the
Secured Parties, in respect of this Security Agreement. To the extent permitted
by applicable law, the Corporation irrevocably waives the right to receive a
copy of each financing statement or financing change statement filed under the
PPSA or under such other personal property security statutes by any of the
Secured Parties in respect of this Security Agreement or any other security
agreement (or any verification statement pertaining thereto), and releases any
and all claims or causes of action it may have against any Secured Parties for
failure to provide any such copy.
SECTION 18.18 INFORMATION
At any time the Administrative Agent may provide to any Person
copies of this Security Agreement or information about it or about the
Collateral or the Secured Obligations.
SECTION 18.19 COUNTERPARTS AND FACSIMILE SIGNATURES
This Security Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Security
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Security Agreement.
-41-
TO WITNESS THIS AGREEMENT, the Corporation has caused this
Security Agreement to be duly executed as of the day and year first above
written.
ACCURIDE CANADA INC.
By:
---------------------------------
Name:
Title:
I have authority to bind the Corporation
-42-
SCHEDULE A
DEFINITIONS
"ACCOUNTS" means all accounts, and any item or part thereof, which are now owned
by or are due, owing or accruing due to the Corporation or which may hereafter
be owned by or become due, owing or accruing due to the Corporation or in which
the Corporation now or hereafter has any other rights, including all debts,
claims and demands of any kind whatever, claims against the Crown and claims
under insurance policies.
"AGREEMENT" means any agreement, oral or written, any simple contract or
specialty, and any indenture, instrument, xxxx of exchange or undertaking.
"APPLICABLE LAW" means any constitution or any federal, provincial, territorial,
municipal, county or local statute, law, ordinance, code, rule, regulation or
order (including any consent decree or administrative order), applicable to, or
any directive, guideline, policy or License of any Governmental Body having
jurisdiction with respect to any specified Person, property, transaction or
event or any of such Person's business assets, and any order, judgment, award or
decree of any Governmental Body or arbitrator in any proceeding or action to
which the Person in question is a party or by which such Person or any of its
business assets is bound.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a statutory or
civic holiday in Xxx Xxxx, Xxx Xxxx xxx Xxxxxxx, Xxxxxxx.
"CREDIT AGREEMENT" means the Second Amended and Restated credit agreement dated
as of July 27, 2001 among Accuride Corporation and Accuride Canada Inc. as
borrowers, the Initial Lenders, Initial Issuing Bank, Initial Swing Line Bank
named therein, the Administrative Agent, Xxxxxxx Xxxxx Inc. as Arranger, Bankers
Trust Company as Syndication Agent, and Xxxxx Fargo Bank N.A. as Documentation
Agent.
"GOVERNMENTAL BODY" means any international tribunal, agency, body, commission
or other authority, any government, executive, parliament, legislature or local
authority, or any governmental body, ministry, department or agency or
regulatory authority, court, tribunal, commission or board of or within Canada
or any foreign jurisdiction, or any political subdivision of any thereof or any
authority having jurisdiction therein.
"INCLUDING" means including without limitation and shall not be construed to
limit any word or statement which it follows to the specific or similar items or
matters immediately following it, and "INCLUDE" and "INCLUDES" shall be
construed in like manner.
"LICENSE" means any authorization, approval, consent, exemption, license,
permit, franchise, concession or no-action letter from any Governmental Body
having jurisdiction with respect to any specified Person, property, transaction
or event, or with respect to any business or assets of such Person or from any
Person in connection with any easements or contractual rights, including those
listed in Schedule C;
-43-
"LIEN" means (i) any right of set-off or combination of accounts intended to
secure the payment or performance of an obligation, (ii) any interest in
property created by way of mortgage, pledge, charge, lien, assignment by way of
security, hypothecation, security interest, hire purchase agreement, conditional
sale agreement, deposit arrangement, title retention, capital lease, discount,
factoring or securitization arrangement on recourse terms, (iii) any preference,
priority, adverse claim, levy, execution, seizure, attachment, garnishment or
other encumbrance which binds property and (iv) any agreement to grant any of
the foregoing rights or interests.
"LOAN DOCUMENTS" has the defined meaning assigned to it in the Credit Agreement.
"LOSSES AND EXPENSES" means losses, costs, expenses, damages, penalties, causes
of action, actions, judgments, suits, proceedings, claims, claims over, claims
for contribution and indemnity, demands and liabilities, including any
applicable court costs and legal fees and disbursements on a solicitor and
client scale, and "LOSS AND EXPENSE" shall be construed in like manner.
"OBCA" means the BUSINESS CORPORATIONS ACT (Ontario).
"OBLIGATIONS" means indebtedness, obligations, responsibilities, duties and
liabilities (actual or contingent, direct or indirect, matured or not, now
existing or arising hereafter), whether arising by contract or statute, at law,
in equity or otherwise, and "OBLIGATION" and "OBLIGATED" shall be construed in
like manner.
"PERSON" means an individual, corporation, estate, partnership, trust, joint
venture, other legal entity, unincorporated association or Governmental Body.
"PPSA" means the PERSONAL PROPERTY SECURITY ACT of the Province of Ontario.
"PROCEEDS" means all fixtures, proceeds and personal property in any form
derived directly or indirectly from any dealing with any item or part of the
Collateral, or that indemnifies or compensates for such property destroyed or
damaged, and proceeds of Proceeds whether or not of the same type, class or kind
as the original Proceeds, and any item or part thereof.
"RATE OF EXCHANGE" means the applicable rate of exchange including any premiums
or costs payable in connection with the currency conversion being effected.
"RECEIVER" means any receiver, manager or receiver and manager for the
Collateral or the business and undertaking of the Corporation appointed by the
Administrative Agent or by a court on application by the Administrative Agent.
"RELATED RIGHTS" has the defined meaning assigned to it in Section 3.8.
"REPLACEMENTS" means all increases, additions and accessions to, and all
substitutions for and replacements of, any item or part of the Collateral, and
any item or part thereof.
-44-
"REPRESENTATIVE" of any Person means any director, officer, employee, agent,
solicitor, accountant, financial advisor, expert, manager, consultant or other
representative appointed, engaged or employed by such Person.
"REQUIRED APPROVALS" has the defined meaning assigned to it in Section 3.8.
"RIGHTS" means rights, powers, authorities, discretions, privileges, immunities
and remedies (actual or contingent, direct or indirect, matured or not, now
existing or arising hereafter), whether arising by contract or statute, at law,
in equity or otherwise, and "RIGHT" shall be construed in like manner.
"SECURITY AGREEMENT" means this security agreement and all schedules attached
hereto, and all references to "hereto", "herein", "hereof", "hereby" and
"hereunder", including similar expressions, refer to this Security Agreement and
not to any particular section or portion of it. References to "Article",
"Section", or "Schedule" refer to the applicable article, section or schedule of
this Security Agreement, as the case may be.
"SECURITY INTERESTS" means any and all Liens granted by the Corporation to the
Administrative Agent under or pursuant to this Security Agreement.
"SUCCESSOR" of a body corporate shall be construed so as to include (i) any
amalgamated or other corporation of which such body corporate or any of its
successors is one of the amalgamating or merging corporations, (ii) any
corporation resulting from any court approved arrangement of which such body
corporate or any of its successors is party, (iii) any corporation resulting
from the continuance of such body corporate or any successor of it under the
laws of another jurisdiction of incorporation and (iv) any successor (determined
as aforesaid or in any similar or comparable procedure under the laws of any
other jurisdiction) of any corporation referred to in clause (i), (ii) or (iii).
Each reference in this Security Agreement to any party hereto or any other
Person shall (where the context so admits) include its successors.
"TAXES" means all taxes of any kind or nature whatsoever including federal large
corporations taxes, provincial capital taxes, realty taxes (including utility
charges which are collectible like realty taxes), business taxes, property
transfer taxes, income taxes, sales taxes, customs duties, payroll taxes,
levies, stamp taxes, duties, and all fees, deductions, compulsory loans and
withholdings imposed, levied, collected, withheld or assessed as of the date
hereof or at any time in the future, by any Governmental Body of or within
Canada, or any other jurisdiction whatsoever having power to tax, together with
penalties, fines, additions to tax and interest thereon.
"UNLIMITED LIABILITY COMPANY" means any unlimited liability company incorporated
or otherwise constituted under the laws of the Province of Nova Scotia or any
similar body corporate formed under the laws of any other jurisdiction whose
members may at any time become responsible for any of the obligations of that
body corporate.
-45-
SCHEDULE B
ACCOUNT COLLATERAL
PART 1
CASH CONCENTRATION ACCOUNTS
ACCURIDE CANADA INC. The Bank of Nova Scotia 372-14 (CDN $
00 Xxxx Xxxxxx Xxxx Concentration Account)
Toronto, Ontario 29-17 (US $
Concentration Account)
PART 2
PLEDGED ACCOUNTS
Nil
PART 3
OTHER ACCOUNTS
ACCURIDE CANADA INC. The Bank of Nova Scotia 535-11 (Payroll)
00 Xxxx Xxxxxx Xxxx 0000-00 (Xxxxxxx)
Xxxxxxx, Xxxxxxx 598-11 (Payroll)
805-19 (Payroll)
1001-10 (Payroll)
756-12 (Payroll)
-46-
SCHEDULE C
INTELLECTUAL PROPERTY
PART 1
PATENTS
None
PART 2
TRADE MARKS
None
PART 3
COPYRIGHTS
None
PART 4
LICENSES
None
-47-
SCHEDULE D
CORPORATION'S ADDRESS(ES) AND LOCATION(S) OF COLLATERAL
ACCURIDE CANADA INC. EQUIPMENT INVENTORY
00 Xxxxxxxxx Xxxx 00 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx
-48-
SCHEDULE E
CORPORATION'S TRADE NAME(S)
none
-49-
SCHEDULE F
INVESTMENT PROPERTY
none
-50-
SCHEDULE G
ASSIGNED AGREEMENTS
Manufacturing Service Agreement by and between Accuride Corporation and
Accuride Canada Inc. dated January 23,1998.
-51-
EXHIBIT A TO THE
CANADIAN SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT
THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this
"IP SECURITY AGREEMENT SUPPLEMENT") dated ________, ____, is made by ACCURIDE
CANADA INC. (the "CORPORATION") in favor of CITICORP USA, INC. ("CUSA"), as
Administrative Agent (the "ADMINISTRATIVE AGENT") for the Secured Parties (as
defined in the Credit Agreement referred to below).
WHEREAS, Accuride Corporation, a Delaware corporation and
Accuride Canada Inc., a corporation existing under the laws of Ontario, Canada,
have entered into the second amended and restated Credit Agreement dated as of
July 27, 2001 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), with Citicorp USA, Inc., as
Administrative Agent and Administrative Agent, and the Lender Parties party
thereto. Terms defined in the Credit Agreement and not otherwise defined herein
are used herein as defined in the Credit Agreement.
WHEREAS, pursuant to the Credit Agreement, the Corporation has
executed and delivered that certain Security Agreement dated July 27, 2001 made
by the Corporation to the Administrative Agent (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "SECURITY
AGREEMENT").
WHEREAS, under the terms of the Security Agreement, the
Corporation has granted a security interest in the Additional Collateral (as
defined in Section 1 below) of the Corporation to the Administrative Agent for
the ratable benefit of the Secured Parties and has agreed as a condition thereof
to execute this IP Security Agreement Supplement.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Corporation agrees as
follows:
SECTION 1. CONFIRMATION OF GRANT OF SECURITY. The Corporation
hereby acknowledges and confirms the grant of a security interest to the
Administrative Agent for the ratable benefit of the Secured Parties under the
Security Agreement in and to all of the Corporation's right, title and interest
in and to the following (the "ADDITIONAL COLLATERAL"):
(i) The Canadian, international, and foreign patents,
patent applications, and patent licenses set forth in Schedule A
hereto, together with all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations thereof, and
all rights therein provided by international treaties or
conventions (the "PATENTS");
-52-
(ii) The Canadian and foreign trademark and service xxxx
registrations, applications, and licenses set forth in Schedule A
hereto (the "TRADEMARKS");
(iii) The copyrights, Canadian and foreign copyright
registrations and applications and copyright licenses set forth
in Schedule A hereto (the "COPYRIGHTS");
(iv) any and all claims for damages for past, present and
future infringement, misappropriation or breach with respect to
the Patents, Trademarks and Copyrights, with the right, but not
the obligation, to xxx for and collect, or otherwise recover,
such damages; and
(v) any and all proceeds of the foregoing.
SECTION 2. SUPPLEMENT TO SECURITY AGREEMENT AND IP SECURITY
AGREEMENT. Schedule C to the Security Agreement is, effective as of the date
hereof, hereby supplemented to add to such Schedule the Additional Collateral.
SECTION 3. GOVERNING LAW. This IP Security Agreement Supplement
shall be governed by, and construed in accordance with, the laws of the Province
of Ontario and the laws of Canada applicable therein.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
ACCURIDE CANADA INC.
By:
--------------------------------
Name:
Title:
Address for Notices:
-----------------------------
-----------------------------
-----------------------------
Acknowledged and agreed to as of the date first above written:
[--------------------]
By:
---------------
Name:
Title:
-53-
EXHIBIT B TO THE
CANADIAN SECURITY AGREEMENT
FORM OF PLEDGED ACCOUNT LETTER
---------------, ----
[Name and address
of Pledged Account Bank]
Dear Sirs:
RE: ACCURIDE CANADA INC.
Reference is made to the lockboxes listed on Schedule 1 hereto
into which certain monies, instruments and other items are deposited from time
to time listed on Schedule 1 hereto (such lockboxes the "PLEDGED ACCOUNTS")
maintained with you by Accuride Canada Inc. (the "CORPORATION"). Pursuant to the
Security Agreement dated as of July 27, 2001 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "SECURITY AGREEMENT"),
the Corporation has granted to Citicorp USA, Inc., as administrative agent
(together with any successor administrative agent appointed pursuant to Article
VIII of the Credit Agreement, the "ADMINISTRATIVE AGENT") for the Secured
Parties referred to in the second amended and restated Credit Agreement dated as
of July 27, 2001, with Accuride Corporation and the Corporation as borrowers,
the Administrative Agent and others, a security interest in certain property of
the Corporation, including, among other things, the following (the "ACCOUNT
COLLATERAL"): each Pledged Account, all funds held therein and all certificates
and instruments, if any, from time to time representing or evidencing such
Pledged Account, all interest, dividends, distributions, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the then existing Account
Collateral and all proceeds of any and all of the foregoing Account Collateral.
It is a condition to the continued maintenance of the Pledged Accounts with you
that you agree to this letter agreement.
By executing this letter agreement, you acknowledge notice of,
and consent to the grant of the security interest in, and the pledge and
assignment of, the Account Collateral to the Administrative Agent for the
benefit of the Secured Parties and you confirm to the Administrative Agent that
the description of the Pledged Accounts set forth on Schedule 1 hereto is
correct and that you have not received any notice of any other security interest
in, pledge or assignment of, or other claim (other than that of the Corporation)
on, any of the Pledged Accounts. Further, you hereby agree with the
Administrative Agent that:
(a) Notwithstanding anything to the contrary in any other agreement
relating to any Pledged Account, each Pledged Account is and will be
subject to the security interest, pledge and assignment created under
the Security Agreement, will be maintained solely for the benefit of
the Secured Parties in accordance with the provisions of the Loan
Documents, will have the title set forth opposite the account number
therefor on Schedule
-54-
1 hereto and will be transferred as provided in (f) below or as
otherwise instructed by the Administrative Agent. Only the
Administrative Agent is authorized to withdraw amounts from, to draw
upon, or, except as otherwise set forth herein, to otherwise exercise
any powers with respect to the Pledged Accounts and the funds deposited
therein. The Administrative Agent authorizes and directs that the sole
signatories authorized to act on behalf of the Administrative Agent
with respect to the Pledged Accounts are and shall be such officers of
the Administrative Agent as the Administrative Agent may from time to
time designate in a writing acceptable to you. You may rely without
liability on any such written designation, absent manifest error,
unless and until you receive a written designation to the contrary. Any
such written designation shall include the specimen signature of each
authorized officer of the Administrative Agent.
(b) You will collect mail from each Pledged Account on each of your
business days at times that coincide with the delivery of mail thereto.
(c) You will follow your usual operating procedures for the handling
of any remittance that contains restrictive endorsements,
irregularities (such as a variance between the written and numerical
amounts), undated or postdated items, missing signatures, incorrect
payees, etc. received in any Pledged Account.
(d) You will endorse and process all eligible cheques and other
remittance items not covered by paragraph (c) and deposit such cheques
and remittance items in the Pledged Accounts.
(e) You will maintain a record of all cheques and other remittance
items received in each Pledged Account and, in addition to providing
the Corporation with photostats, vouchers, enclosures, etc. of such
cheques and remittance items on a daily basis, furnish to the
Administrative Agent a monthly statement of each Pledged Account, to be
mailed or telecopied to the Administrative Agent at 000 Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxx Xxxxx,
telecopy number (000) 000-0000.
(f) You will transfer, in same day funds, on each of your business
days, all amounts collected from each Pledged Account on such day to
the following accounts (the "CASH CONCENTRATION ACCOUNTS"):
ACCURIDE CANADA INC. The Bank of Nova Scotia Account No. 372-14 (for
00 Xxxx Xxxxxx Xxxx Xxxxxxxx $ funds) or
Toronto, Ontario Account No. 29-17 (for US
$ funds)
Each such transfer of funds shall neither comprise only part of a
remittance nor reflect the rounding off of any funds so transferred.
(g) All transfers referred to in paragraph (f) above shall be made by
you irrespective of, and without deduction for, any counterclaim,
defense, recoupment or set-off and shall
-55-
be final, and you will not seek to recover from the Administrative
Agent for any reason any such payment once made.
(h) All service charges and fees with respect to any Pledged Account
shall be payable by the Corporation, and deposited cheques returned for
any reason shall not be charged to the applicable Pledged Account, but
may be charged to another account maintained by the Corporation with
you.
(i) The Administrative Agent shall be entitled to exercise any and
all rights of the Corporation in respect of the Pledged Accounts and
the other Account Collateral in accordance with the terms of the
Security Agreement, and you shall comply in all respects with such
exercise.
You hereby represent and warrant that the person executing
this letter agreement on your behalf is duly authorized to do so.
No amendment or waiver of any provision of this letter
agreement, nor consent to any departures by you or the Corporation herefrom,
shall be effective unless the same shall be in writing as signed by you, the
Corporation and the Administrative Agent.
This letter agreement shall be binding upon you and your
successors and assigns and shall inure to the benefit of the Secured Parties
and their successors, transferees and assigns. You may terminate this letter
agreement upon thirty days' prior written notice to the Corporation and the
Administrative Agent. Upon such termination you shall close the Pledged
Accounts and transfer all funds in the Pledged Accounts to the Cash
Concentration Accounts or another account as instructed by the Administrative
Agent at such time. After any such termination, you shall nonetheless remain
obligated promptly to transfer to the Cash Concentration Accounts or to such
other account as instructed by the Administrative Agent at such time all
funds and other property received in respect of the Pledged Accounts.
This letter agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement. Delivery of
an executed counterpart of a signature page to this letter agreement by
telecopier shall be effective as delivery of an original executed counterpart
of this letter agreement.
Please indicate your acknowledgment of and agreement to the
provisions of this letter agreement by signing in the appropriate space
provided below and returning this letter agreement to Citicorp USA, Inc., 000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxx
Xxxxx, telecopy number (000) 000-0000. If you elect to deliver this letter
agreement by telecopier, please arrange for the executed original to follow
by next-day courier.
-56-
This letter agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario, and the laws of Canada
applicable therein.
Very truly yours,
ACCURIDE CANADA INC.
By:
----------------------------------------
Name:
Title:
CITICORP USA, INC., as Administrative
Agent
By:
----------------------------------------
Name:
Title:
Acknowledged and agreed to as of the date first above written:
[NAME OF PLEDGED ACCOUNT BANK]
By:
-----------------------------
Name: Title:
-57-
EXHIBIT C TO THE
CANADIAN SECURITY AGREEMENT
FORM OF CONSENT AND AGREEMENT
The undersigned hereby (a) acknowledges notice of, and
consents to the terms and provisions of, the Security Agreement dated as of
July 27, 2001 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "SECURITY AGREEMENT", the terms defined
therein being used herein as therein defined) from Accuride Canada Inc. (the
"CORPORATION") to Citicorp USA, Inc., as Administrative Agent (the
"ADMINISTRATIVE AGENT") for the Secured Parties referred to therein, (b)
consents in all respects to the pledge and assignment to the Administrative
Agent of all of the Corporation's right, title and interest in, to and under
the Assigned Agreement (as defined below) pursuant to the Security Agreement,
(c) acknowledges that the Corporation has provided it with notice of the
right of the Administrative Agent in the exercise of its rights and remedies
under the Security Agreement to make all demands, give all notices, take all
actions and exercise all rights of the Corporation under the Assigned
Agreement, and (d) agrees with the Administrative Agent that:
(i) The undersigned will make all payments to be made by it under or
in connection with the __________ Agreement dated _______________,
____ (the "ASSIGNED AGREEMENT") between the undersigned and the
Corporation directly to the Cash Concentration Account of the
Corporation with The Bank of Nova Scotia at 00 Xxxx Xxxxxx Xxxx,
Xxxxxxx, Xxxxxxx, Account No. 372-14 (in the case of Canadian $
funds) or Account No. 29-17 (in the case of US $ funds), or
otherwise in accordance with the instructions of the Administrative
Agent.
(ii) All payments referred to in paragraph (i) above shall be made
by the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and
the undersigned will not seek to recover from any Secured Party for
any reason any such payment once made.
(iii) The Administrative Agent or its designee shall be entitled to
exercise any and all rights and remedies of the Corporation under
the Assigned Agreement in accordance with the terms of the Security
Agreement, and the undersigned shall comply in all respects with
such exercise.
(iv) The undersigned will not, without the prior written consent of
the Administrative Agent, (A) cancel or terminate the Assigned
Agreement or consent to or accept any cancellation or termination
thereof, or (B) amend, amend and restate, supplement or otherwise
modify the Assigned Agreement, except, in each case, to the extent
otherwise permitted under the Credit Agreement referred to in the
Security Agreement.
(v) In the event of a default by the Corporation in the performance
of any of its obligations under the Assigned Agreement, or upon the
occurrence or non-occurrence of any event or condition under the
Assigned Agreement which would immediately or with the passage of
any applicable grace period or the giving of notice, or both, enable
the undersigned to terminate or suspend its obligations under the
Assigned Agreement, the
-58-
undersigned shall not terminate the Assigned Agreement until it
first gives written notice thereof to the Administrative Agent and
permits the Corporation and the Administrative Agent the period of
time afforded to the Corporation under the Assigned Agreement to
cure such default.
(vi) The undersigned shall deliver to the Administrative Agent,
concurrently with the delivery thereof to the Corporation, a copy of
each notice, request or demand given by the undersigned pursuant to
the Assigned Agreement.
(vii) Except as specifically provided in this Consent and Agreement,
neither the Administrative Agent nor any other Secured Party shall
have any liability or obligation under the Assigned Agreement as a
result of this Consent and Agreement, the Security Agreement or
otherwise.
This Consent and Agreement shall be binding upon the
undersigned and its successors and assigns, and shall inure, together with
the rights and remedies of the Administrative Agent hereunder, to the benefit
of the Secured Parties and their successors, transferees and assigns. This
Consent and Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable
therein.
IN WITNESS WHEREOF, the undersigned has duly executed this
Consent and Agreement as of the date set opposite its name below.
Dated: _______________, ____ [NAME OF OBLIGOR]
By:
---------------------------
Name:
Title:
-59-
EXHIBIT D TO THE
CANADIAN SECURITY AGREEMENT
FORM OF CASH CONCENTRATION ACCOUNT LETTER
July _____, 2001.
The Bank of Nova Scotia
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
-
Dear Sirs:
RE: ACCURIDE CANADA INC.
Reference is made to accounts nos. 372-14 and 29-17 (together,
the "CASH CONCENTRATION Accounts"), in each case into which certain monies,
instruments and other items are deposited from time to time maintained with
you by Accuride Canada Inc. (the "CORPORATION"). Pursuant to the Security
Agreement dated as of July 27, 2001 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "SECURITY
AGREEMENT"), the Corporation has granted to Citicorp USA, Inc., as
Administrative Agent (together with any successor Administrative Agent
appointed pursuant to Article VIII of the Credit Agreement, the
"ADMINISTRATIVE AGENT") for the Secured Parties referred to in the second
amended and restated Credit Agreement dated as of July 27, 2001, with the
Corporation, a security interest in, and upon the issuance of written
instructions of the Administrative Agent pursuant to paragraph (e) below,
certain property of the Corporation, including, among other things, the
following (the "ACCOUNT COLLATERAL"): each of the Cash Concentration
Accounts, all funds held therein and all certificates and instruments, if
any, from time to time representing or evidencing either of the Cash
Concentration Accounts, all interest, dividends, distributions, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the then
existing Account Collateral and all proceeds of any and all of the foregoing
Account Collateral. It is a condition to the continued maintenance of the
Cash Concentration Accounts with you that you agree to this letter agreement.
By executing this letter agreement, you acknowledge notice of,
and consent to the grant of the security interest in, and the pledge and
assignment of, the Account Collateral to the Administrative Agent for the
benefit of the Secured Parties and you confirm to the Administrative Agent
that the description of the Cash Concentration Accounts set forth above is
correct and that you have not received any notice of any other security
interest in, pledge or assignment of, or other claim (other than that of the
Corporation) on, any of the Cash Concentration Accounts. Further, you hereby
agree with the Administrative Agent that:
(a) Notwithstanding anything to the contrary in any other
agreement relating to any Cash Concentration Account, each Cash
Concentration Account is and will be subject to the security
interest, pledge and assignment created under the Security
Agreement, will
-60-
have the title and account number therefor set forth above and,
after a Default occurs under Section 7.01(a) or (f) of the Credit
Agreement and is continuing, or upon the occurrence of an Event of
Default, will be subject to written instructions only from an
officer of the Administrative Agent. Upon the issuance of written
---- -------------------
instructions by the Administrative Agent pursuant to paragraph (e)
------------------- -------------------------
below, only the Administrative Agent will be authorized to withdraw
------------------------------------
amounts from, to draw upon, or, except as otherwise set forth
herein, to otherwise exercise any powers with respect to the Cash
Concentration Accounts and the funds deposited therein. You agree to
------------
follow any written instructions of the Administrative Agent without
-------------------------------------------------------------------
any further consent from the Corporation. The Administrative Agent
----------------------------
authorizes and directs that the sole signatories authorized to act
on behalf of the Administrative Agent with respect to the Cash
Concentration Accounts are and shall be such officers of the
Administrative Agent as the Administrative Agent may from time to
time designate in a writing acceptable to you. You may rely without
liability on any such written designation, absent manifest error,
unless and until you receive a written designation to the contrary.
Any such written designation shall include the specimen signature of
each authorized officer of the Administrative Agent.
(b) You will follow your usual operating procedures for the
handling of any remittance that contains restrictive endorsements,
irregularities (such as a variance between the written and numerical
amounts), undated or postdated items, missing signatures, incorrect
payees, etc. received in any Cash Concentration Account.
(c) You will endorse and process all eligible cheques and
other remittance items not covered by paragraph (b) and deposit such
checks and remittance items in the Cash Concentration Accounts.
(d) You will maintain a record of all cheques and other
remittance items received in each Cash Concentration Account and, in
addition to providing the Corporation with photostats, vouchers,
enclosures, etc. of such cheques and remittance items on a daily
basis, furnish to the Administrative Agent a monthly statement of
each Cash Concentration Account, to be mailed or telecopied to the
Administrative Agent at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: Xxxx Xxxxx, telecopy number (212)
816-0636.
(e) After a Default occurs under Section 7.01(a) or (f) of the
Credit Agreement and is continuing, or upon the occurrence of an
Event of Default, the Administrative Agent shall be entitled to
exercise any and all rights of the Corporation in respect of the
Cash Concentration Accounts and the other Account Collateral in
accordance with the terms of the Security Agreement, and you shall
comply in all respects with such exercise and any instructions of
the Administrative Agent pursuant thereto.
You hereby represent and warrant that the person executing
this letter agreement on your behalf is duly authorized to do so.
No amendment or waiver of any provision of this letter
agreement, nor consent to any departures by you or the Corporation herefrom,
shall be effective unless the same shall be in writing as signed by you, the
Corporation and the Administrative Agent.
-61-
This letter agreement shall be binding upon you and your
successors and assigns and shall inure to the benefit of the Secured Parties
and their successors, transferees and assigns. You may terminate this letter
agreement upon thirty days' prior written notice to the Corporation and the
Administrative Agent. Upon such termination you shall close the Cash
Concentration Accounts and transfer all funds in the Cash Concentration
Accounts to such account as instructed by the Administrative Agent at such
time.
This letter agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement. Delivery of
an executed counterpart of a signature page to this letter agreement by
telecopier shall be effective as delivery of an original executed counterpart
of this letter agreement.
Please indicate your acknowledgment of and agreement to the
provisions of this letter agreement by signing in the appropriate space
provided below and returning this letter agreement to Citicorp USA, Inc., 000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxx
Xxxxx, telecopy number (000) 000-0000. If you elect to deliver this letter
agreement by telecopier, please arrange for the executed original to follow
by next-day courier.
This letter agreement shall be governed by, and construed in
accordance with, the laws of the Province of Ontario and the laws of Canada
applicable therein.
Very truly yours,
ACCURIDE CANADA INC.
By:
------------------------------
Name:
Title:
CITICORP USA, INC., as Administrative
Agent
By:
----------------------
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
THE BANK OF NOVA SCOTIA
By:
--------------------
Name:
Title:
-62-
EXHIBIT E TO THE
CANADIAN SECURITY AGREEMENT
FORM OF CASH COLLATERAL ACCOUNT LETTER
Accuride Canada Inc.
00 Xxxxxxxxx Xxxx.,
Xxxxxx, Xxxxxxx
X0X 0X0
[Date]
Citibank Canada
- Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
-
Attention: -
[Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: _______________]
Dear Sirs:
RE: ACCURIDE CANADA INC.
Reference is made to deposit account no.___________ (the "CASH
COLLATERAL ACCOUNT") maintained with you by Accuride Canada Inc. (the
"CORPORATION"). Pursuant to the Security Agreement dated as of July 27, 2001
(as amended, supplemented or otherwise modified hereafter from time to time,
the "SECURITY AGREEMENT"; terms defined therein and not otherwise defined
herein being used herein as therein defined) made by the Corporation in favor
of Citicorp USA, Inc., as administrative agent (together with any successor
thereto appointed pursuant to Article VIII of the Second Amended and Restated
Credit Agreement dated as of July 27, 2001 among
Accuride Corporation, the
Corporation, the Initial Lenders as referred to therein, Citicorp USA, Inc.
and others, the "ADMINISTRATIVE AGENT") for the Secured Parties referred to
therein, the Corporation has granted to the Administrative Agent, on behalf
of the Secured Parties, sole and exclusive control of the Cash Collateral
Account and a lien on and security interest in certain property and assets of
the Corporation, including, among other things, the following (collectively,
the "ACCOUNT COLLATERAL"):
(a) the Cash Collateral Account, all of the funds held therein
and all of the certificates and instruments, if any, from time to
time representing or evidencing the Cash Collateral Account; and
-63-
(b) all of the Collateral Investments made on behalf of the
Corporation from time to time and all of the certificates and
instruments, if any, from time to time representing or evidencing
any such Collateral Investments; and
(c) all of the interest, dividends, distributions, cash,
instruments and other property and assets from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Account Collateral; and
(d) all of the proceeds of any and all of the foregoing
Account Collateral. It is a condition to the continued maintenance
of the Cash Collateral Account with you that you agree to this
letter agreement.
By signing this letter agreement, you acknowledge notice of,
and consent to the terms and conditions of, the Security Agreement and the
grant of the lien and security interest in, and the pledge and assignment of,
the Account Collateral to the Administrative Agent, on behalf of the Secured
Parties, and you confirm to the Administrative Agent that (a) the Cash
Collateral Account is maintained with you at your offices at [Citibank
Canada, - Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, -]/[Citibank, N.A., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000], and is entitled "_____________, cash
collateral account for the benefit of Citicorp USA, Inc., as Administrative
Agent" and the account number therefor is as set forth in the paragraph of
this letter, and (b) you have not received any notice of any other lien or
security interest in, pledge or assignment of, or other claim (other than
that of the Corporation) on or to the Cash Collateral Account or any of the
other Account Collateral. Further, you hereby agree with the Administrative
Agent that:
(i) The Cash Collateral Account will be maintained solely for
the benefit of the Administrative Agent, on behalf of the Secured
Parties, will be and remain entitled as set forth above and will be
subject to written instructions only from an officer of the
Administrative Agent.
(ii) Notwithstanding anything to the contrary in any agreement
relating to the Cash Collateral Account, the Cash Collateral Account
is and will be subject to the terms and conditions of the Security
Agreement and such applicable laws (including, without limitation,
such applicable regulations of the Bank of Canada, the
Superintendent of Financial Institutions and of any other
appropriate banking or other governmental authority) as are in
effect from time to time, and to the extent any term or condition of
this letter agreement is inconsistent with the terms and conditions
of the Security Agreement, the terms and conditions of the Security
Agreement shall govern; PROVIDED, HOWEVER, that you shall not be
liable for any amendment, supplement or other modification of any
term or condition of the Security Agreement until you have received
notice of such amendment, supplement or other modification from the
Administrative Agent, and you hereby agree to promptly amend this
letter agreement to comply with any such amendment, supplement or
other modification. The Administrative Agent shall be entitled to
exercise any and all rights of the Corporation in respect of the
Cash Collateral Account in accordance with the terms of the Security
Agreement, and you shall comply in all respects with such exercise.
-64-
(iii) You will follow your usual operating procedures for the
handling of any remittance received in the Cash Collateral Account
that contains restrictive endorsements, irregularities (such as a
variance between the written and numerical amounts), undated or
post-dated items, missing signatures, incorrect payees, etc. that
are received for deposit in the Cash Collateral Account.
(iv) You are hereby authorized by each of the Corporation and
the Administrative Agent to endorse and process, and you hereby
agree to endorse and process, all eligible cheques and other
remittance items not covered by subparagraph (iii) above and to
deposit such cheques and remittance items into the Cash Collateral
Account.
(v) You will maintain a record of all cheques, deposits and
other remittance items received in, and all disbursements made from,
the Cash Collateral Account and, in addition to providing the
Corporation with photostats, vouchers, enclosures, records and other
documents of such cheques, deposits and disbursements on a monthly
basis, you will furnish to the Administrative Agent a monthly
statement of the Cash Collateral Account (which statement shall be
mailed or telecopied to the Administrative Agent at the address set
forth therefor below its name on the signature pages to this letter
agreement).
(vi) In accordance with written instructions received from the
Administrative Agent, you will, subject to the provisions hereof,
from time to time (A) invest amounts on deposit in the Cash
Collateral Account in such Cash Equivalents as are set forth in such
instructions of the Administrative Agent in the name of the
Administrative Agent, on behalf of the Corporation, and (B) invest
interest paid on the Cash Equivalents referred to in subclause
(vi)(A) above, and reinvest other proceeds of any such Cash
Equivalents that may mature or be sold, in each case in such Cash
Equivalents as are set forth in the instructions of the
Administrative Agent in the name of the Administrative Agent, on
behalf of the Corporation (the Cash Equivalents referred to in
subclauses (vi)(A) and (vi)(B) above being collectively "COLLATERAL
INVESTMENTS"). All of the Collateral Investments and all of the
interest and proceeds that are not invested or reinvested in
Collateral Investments as provided above in this subparagraph (vi)
shall constitute part of the Account Collateral.
(vii) You shall promptly notify each of the Corporation and
the Administrative Agent if the Cash Collateral Account (A) becomes
subject to any writ, garnishment, judgment, warrant of attachment,
execution or similar process or (B) becomes, or is asserted to have
become, subject to any lien, security interest, adverse claim or
other encumbrance of any person or entity other than the
Administrative Agent.
(viii) All transfers from the Cash Collateral Account shall be
made by you irrespective of, and without deduction for, any
counterclaim, defense, recoupment, setoff or similar rights in your
favor and shall be final, and you will not seek to recover from the
Administrative Agent for any reason any such payment once made;
PROVIDED, HOWEVER, that you may charge against the Cash Collateral
Account the face amount of any item deposited into or credited to
the Cash Collateral Account which is subsequently returned
-65-
unpaid due to uncollected or insufficient funds. Each such transfer
of funds shall neither comprise only a part of a remittance nor
reflect the rounding off of any funds so transferred.
(ix) All service charges and fees with respect to the Cash
Collateral Account shall be payable by the Corporation, but may be
charged to another deposit account maintained by the Corporation
with you (other than any other Cash Collateral Account maintained
with you).
(x) The lien and security interest of the Administrative
Agent, on behalf of itself and the other Secured Parties, in the
Cash Collateral Account and the other Account Collateral of the
Corporation shall not be terminated until you receive notice of such
termination from the Administrative Agent.
You hereby represent and warrant that the person executing
this letter agreement on your behalf is duly authorized and fully empowered
to do so.
You shall exercise reasonable care in performing your duties
and responsibilities in respect of the Account Collateral and in fulfilling
your obligations under or in respect of this letter agreement. You shall not
be held liable for any claims, damages, losses or expenses incurred by the
Corporation or the Administrative Agent in connection therewith other than
for (a) claims, damages, losses or expenses resulting from your gross
negligence or willful misconduct or (b) your failure to maintain the Account
Collateral or to fulfill your obligations under or in respect of this letter
agreement with reasonable care; PROVIDED, HOWEVER, that in such case your
liability shall extend only to any direct loss resulting therefrom, as
opposed to any consequential or special loss or damage. Except as expressly
agreed to in this letter agreement, you have no duty other than reasonable
care and other customary duties with respect to the Cash Collateral Account
and the other Account Collateral and the monitoring and safeguarding of all
of the items deposited into the Cash Collateral Account.
No amendment or waiver of any provision of this letter
agreement, and no consent to any departure by you or the Corporation
herefrom, shall be effective unless the same shall be in writing as signed by
each of you, the Corporation and the Administrative Agent.
This letter agreement shall be binding upon you and your
successors and assigns and shall inure to the benefit of, and be enforceable
by, the Administrative Agent and the other Secured Parties and their
respective successors, transferees and assigns. You may terminate this letter
agreement upon 30 days' prior written notice to the Corporation and the
Administrative Agent. Upon such termination, you (a) shall close the Cash
Collateral Account and transfer all funds in the Cash Collateral Account in
accordance with the instructions of the Administrative Agent and (b) shall
nonetheless remain obligated promptly to transfer to the Administrative
Agent, as instructed by the Administrative Agent at such time, all funds and
other property and assets received in respect of the Cash Collateral Account.
This letter agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same
-66-
agreement. Delivery of an executed counterpart of a signature page to this
letter agreement shall be effective as delivery of a manually executed
counterpart of this letter agreement.
This letter agreement shall be governed by, and construed in
accordance with, the laws of the Province of Ontario, and the laws of Canada
applicable therein.
Please indicate your acknowledgment of and agreement to the
provisions of this letter agreement by signing in the appropriate space
provided below and returning this letter agreement to Citicorp USA, Inc., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopier No.: (000) 000-0000,
================ ======
Attention: Xxxx Xxxxx. If you elect to deliver this letter agreement by
==========
telecopier, please arrange for the executed original to follow by next-day
courier.
Very truly yours,
ACCURIDE CANADA INC. as borrower
By
----------------------------------------------
Name:
Title:
PERSON AND ADDRESS FOR NOTICES:
Attention: -
Accuride Canada Inc.
00 Xxxxxxxxx Xxxx.,
Xxxxxx, Xxxxxxx
X0X 0X0
Tel: (519) -
Fax: (000) 000-0000
CITICORP USA, INC., as Administrative
Agent
By
----------------------------------------------
Name:
Title:
PERSON AND ADDRESS FOR NOTICES:
Attn: Xxxx Xxxxx
Citicorp USA, Inc.
000 Xxxxxxxxx Xxxxxx
xxxxxxxxxxxxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
-67-
Acknowledged and agreed to as of
the date first above written:
[CITIBANK, N.A./CITIBANK CANADA]
By
-----------------------------
Name:
Title:
PERSON AND ADDRESS FOR NOTICES:
[Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: -
Tel: (000) 000-0000
Fax: (000) 000-0000]
[Citibank Canada
- Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
-
Attention: -
Tel: (416) -
Fax: (416) -]
