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EXHIBIT 4.4
AMENDED AND RESTATED
SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Security
Agreement") is entered into as October 2, 1997 among IPC, INC., a Delaware
corporation (the "Borrower"), IVEX PACKAGING CORPORATION, a Delaware
corporation ("Holdings"), each of the Domestic Subsidiaries of the Borrower
(the Borrower's Domestic Subsidiaries, together with Holdings, individually a
"Guarantor" and collectively the "Guarantors"), BANKERS TRUST COMPANY, in its
capacity as documentation agent (in such capacity, the "Documentation Agent")
and NATIONSBANK, N.A., in its capacity as collateral agent (in such capacity,
the "Collateral Agent") for the lenders from time to time party to the Credit
Agreement described below (the "Lenders").
RECITALS
WHEREAS, the Borrower, the Guarantors, the lenders party thereto and
NationsBank, N.A., as agent entered into that certain Amended and Restated
Credit Agreement dated as of March 24, 1997 which provided a $205 million
credit facility to the Borrower (the "Prior Credit Agreement"). The credit
facility provided pursuant to the Prior Credit Agreement replaced and
refinanced the credit facilities provided to the Borrower by NationsBank, N.A.,
as agent and certain other lenders pursuant to a credit agreement dated as of
December 7, 1995.
WHEREAS, the Borrower and the Guarantors have requested the Lenders to
provide and the Lenders have agreed to provide a new amended and restated
senior secured credit facility to replace and refinance the credit facility
provided pursuant to the Prior Credit Agreement. Specifically, the Borrower
and the Guarantors have requested that, among other things, the new amended and
restated senior secured credit facility (i) provide up to $475 million of
indebtedness to the Borrower and (ii) extend the final maturity of the credit
facilities provided under the Prior Credit Agreement.
WHEREAS, the Prior Credit Agreement has been amended and restated
pursuant to that certain Amended and Restated Credit Agreement, dated as of the
date hereof (as amended, modified, extended, renewed or replaced from time to
time, the "Credit Agreement"), among the Borrower, the Guarantors, the Lenders,
the Documentation Agent and the Collateral Agent, in its capacity as
administrative agent.
WHEREAS, the Lenders have required that the Borrower and the
Guarantors (the Guarantors together with the Borrower, individually an
"Obligor", and collectively the "Obligors") secure or resecure, as applicable,
their respective obligations under the Credit Agreement and the other Credit
Documents in accordance with the terms of this Security Agreement.
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NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to such terms in the
Credit Agreement. All terms used in this Security Agreement that are
defined in the Uniform Commercial Code in effect in the State of New
York (the "UCC") and which are not otherwise defined herein shall have
the meanings set forth therein. For purposes of this Security
Agreement, the term "Lender" shall include any Affiliate of any Lender
which has entered into a Hedging Agreement with the Borrower.
(b) In addition, the following terms shall have the
following meanings:
"Copyright Licenses": any written agreement, naming
any Obligor as licensor, granting any right under any
Copyright including, without limitation, any thereof referred
to in Schedule 6.19 to the Credit Agreement.
"Copyrights": (a) all copyrights in all works
subject to copyright protection pursuant to Title 17 of the
United States Code or applicable copyright legislation in any
other country, now existing or hereafter created or acquired,
all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States
Copyright Office or in any similar office or agency of the
United States, any State thereof or any other country or any
political subdivision thereof, or otherwise, including,
without limitation, any thereof referred to in Schedule 6.19
to the Credit Agreement, (b) all renewals thereof including,
without limitation, any thereof referred to in Schedule 6.19
to the Credit Agreement and (c) all actions for infringement
concerning the foregoing.
"Excluded Equipment": all de-inking equipment (not
to exceed a maximum aggregate value of $6,000,000) purchased
from Milnor Corporation for use at the Detroit, Michigan
facility of IPMC, Inc.
"Material Intellectual Property": means all
Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trademarks and Trademark Licenses in which the failure by a
Credit Party to maintain such Copyright, Copyright License,
Patent, Patent License, Trademark and Trademark License would
have a Material Adverse Effect.
"Patent License": all agreements, whether written or
oral, providing for the grant by or to an Obligor of any right
to manufacture, use or sell any invention covered by a Patent,
including, without limitation, any thereof referred to in
Schedule 6.19 to the Credit Agreement.
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"Patents": (a) all letters patent of the United
States or any other country, and all reissues and extensions
thereof, including, without limitation, any thereof referred
to in Schedule 6.19 to the Credit Agreement, (b) all
applications for letters patent of the United States or any
other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation,
any thereof referred to in Schedule 6.19 to the Credit
Agreement and (c) all actions for infringement concerning the
foregoing, including the right to xxx for and to recover and
retain all damages and profits arising from past
infringements.
"Trademark License": means any agreement, written or
oral, providing for the grant by or to an Obligor of any right
to use any Trademark, including, without limitation, any
thereof referred to in Schedule 6.19 to the Credit Agreement.
"Trademarks": (a) all trademarks, trade names,
corporate names, company names, business names, fictitious
business names, trade styles, service marks, logos and other
source or business identifiers, and the goodwill associated
therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any
political subdivision thereof, or otherwise, including,
without limitation, any thereof referred to in Schedule 6.19
to the Credit Agreement, (b) all renewals thereof including,
without limitation, any thereof referred to in Schedule 6.19
to the Credit Agreement and (c) all actions for infringement
concerning the foregoing, including the right to xxx for and
to recover and retain all damages and profits arising from
past infringements.
2. Grant of Security Interest in the Collateral. To secure the
prompt payment and performance in full when due, whether by lapse of time,
acceleration or otherwise, of the Secured Obligations (as defined in Section 3
hereof), each Obligor hereby grants to the Collateral Agent, for the benefit of
the Lenders, a continuing security interest in (and, as applicable,
acknowledges and reaffirms any prior security interest granted to the
Collateral Agent, for the benefit of the Lenders), and a right to set off
against, any and all right, title and interest of such Obligor in and to the
following, whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the "Collateral"):
(a) All equipment, including, without limitation, all
vehicles, rolling stock, machinery, tools, furniture, furnishings,
office equipment and trade fixtures, but excluding any computer
equipment in which ABB Credit has a first priority security interest
as of the date hereof; provided, however that no security interest
shall exist in the Excluded Equipment until such time as the Michigan
Department of Natural Resources shall have released its security
interest in the same;
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(b) All accounts and receivables and all goods
represented by or securing accounts and receivables, including,
without limitation, all rents and tenant payments, if any; provided,
that such security interest will be released as necessary and
appropriate if, and to the extent that, a Receivables Transaction
occurs;
(c) All inventory, including, without limitation, all raw
materials, all work in process and all goods held by an Obligor for
sale or lease;
(d) All contract rights, including, without limitation,
all rights under management agreements, tax sharing agreements and
lease agreements and all rights to payment of money, tax refunds and
insurance proceeds, but excluding any contract (other than those
contracts with respect to any Leasehold Mortgaged Property) identified
on Schedule 5(e) hereto;
(e) All other general intangibles;
(f) All instruments, documents, chattel paper,
securities, policies and certificates of insurance, deposits, cash or
other goods;
(g) All books, records, ledger cards, files,
correspondence, computer software, tapes, disks and related data
processing software (owned by an Obligor or in which an Obligor has an
interest) that at any time evidence or contain information relating to
any Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon;
(h) All Copyrights, Copyright Licenses, Patents, Patent
Licenses, Trademarks and Trademark Licenses;
(i) All other personal property of any kind or type
whatsoever owned by an Obligor;
(j) All accessions and additions to, and substitutions
and replacements of, any and all of the foregoing, whether now
existing or hereafter arising; and
(k) All proceeds and products of the foregoing and all
insurance relating to the foregoing collateral and all proceeds
thereof (including, without limitation, insurance proceeds payable on
account of business interruption), whether now existing or hereafter
arising.
Notwithstanding anything in this Security Agreement to the contrary,
with respect to each item of Collateral constituting an agreement, license,
permit or other instrument of any Obligor, such item shall be subject to the
security interest created hereby only to the extent that the granting of such
security interest does not, under the terms of such agreement, license, permit
or other instrument, or as provided by law, cause any default under or
termination of such agreement, license, permit or other instrument or the loss
of any material right of such Obligor
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thereunder; provided, however, that in no event shall the foregoing be
construed to exclude from the security interest created by this Security
Agreement, proceeds or products of any such agreement, license, permit or other
instrument of such Obligor or any accounts receivable or the right to payments
due or become due such Obligor under any such agreement or other instrument.
The Obligors and the Collateral Agent, on behalf of the Lenders,
hereby acknowledge and agree that (i) the Collateral shall exclude the Xxxxxx
Property until such time as any Obligor shall obtain a fee interest in the
Xxxxxx Property and (ii) the security interest created hereby in the Collateral
is not to be construed as an assignment of any Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks or Trademark Licenses.
3. Security for Obligations. The security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the following, whether now existing or hereafter incurred (the "Secured
Obligations"):
(a) In the case of the Borrower, the prompt performance
and observance by the Borrower of all obligations of the Borrower
under the Credit Agreement, the Notes, this Security Agreement and the
other Credit Documents to which the Borrower is a party;
(b) In the case of the Guarantors, the prompt performance
and observance by such Guarantor of all obligations of such Guarantor
under the Credit Agreement, this Security Agreement and the other
Credit Documents to which such Guarantor is a party, including,
without limitation, its guaranty obligations arising under Section 4
of the Credit Agreement; and
(c) Subject to Section 25 hereof, all other indebtedness,
liabilities and obligations of any kind or nature owing from any
Obligor to any Lender or the Collateral Agent in connection with (i)
this Security Agreement or any other Credit Document, whether now
existing or hereafter arising, due or to become due, direct or
indirect, absolute or contingent, and howsoever evidenced, held or
acquired, together with any and all modifications, extensions,
renewals and/or substitutions of any of the foregoing, (ii) collecting
and enforcing the Credit Party Obligations and (iii) liabilities
arising under Hedging Agreements entered into pursuant to the Credit
Agreement.
4. Provisions Relating to Accounts Receivable.
(a) Anything herein to the contrary notwithstanding, each
of the Obligors shall remain liable under each of the accounts
receivable to observe and perform all the conditions and obligations
to be observed and performed by it thereunder, all in accordance with
the terms of any agreement giving rise to each such account
receivable. Neither the Collateral Agent nor any Lender shall have
any obligation or liability under any account receivable (or any
agreement giving rise thereto) by reason of or arising out of this
Security Agreement or the receipt by the Collateral Agent or any
Lender of any payment relating to
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such account receivable pursuant hereto, nor shall the Collateral
Agent or any Lender be obligated in any manner to perform any of the
obligations of an Obligor under or pursuant to any account receivable
(or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any
party under any account receivable (or any agreement giving rise
thereto), to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or
times; provided, however, that the Collateral Agent agrees to execute
all documents reasonably necessary to enable the Obligors to collect
upon any accounts receivable.
(b) Once during each calendar year or at any time after
the occurrence and during the continuation of an Event of Default, the
Collateral Agent shall have the right, but not the obligation, to make
test verifications of the accounts receivable in any manner and
through any medium that it reasonably considers advisable, and the
Obligors shall furnish all such assistance and information as the
Collateral Agent may require in connection with such test
verifications. At any time and from time to time, upon the Collateral
Agent's request, the Obligors shall cause independent public
accountants or others satisfactory to the Collateral Agent to furnish
(once each calendar year at the expense of the Obligors and at all
other times at the expense of the Lenders) to the Collateral Agent
reports showing reconciliations, aging and test verifications of, and
trial balances for, the accounts receivable. After the occurrence and
during the continuance of an Event of Default, the Collateral Agent in
its own name or in the name of others may communicate with account
debtors on the accounts receivable to verify with them to the
Collateral Agent's satisfaction the existence, amount and terms of any
accounts receivable.
5. Representations and Warranties. Each Obligor hereby represents
and warrants to the Collateral Agent, for the benefit of the Lenders:
(a) Chief Executive Office; Books & Records. As of the
Closing Date, each Obligor's chief executive office and chief place of
business is (and for the prior four months have been) located at the
locations set forth on Schedule 6.22(c) to the Credit Agreement, and
each Obligor keeps its books and records at such locations.
(b) Location of Collateral. As of the Closing Date, the
location of all tangible property included in the Collateral owned by
each Obligor is as shown on Schedule 6.22(b) to the Credit Agreement;
provided, however that the Obligors, in the aggregate, may have up to
$10,000,000 (determined on the basis of Obligors' costs) of inventory
held by customers pursuant to consignment arrangements or held in
third party warehouses.
(c) Ownership. Each Obligor is the legal and beneficial
owner of its Collateral and has the right to pledge, sell, assign or
transfer the same (excluding any Collateral which is non-assignable by
its terms). As of the Closing Date, each Obligor's legal name is as
shown in this Security Agreement and no Obligor has in the past four
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months changed its name, been party to a merger, consolidation or
other change in structure or used any tradename except as set forth in
Schedule 5(c) attached hereto.
(d) Security Interest/Priority. This Security Agreement
creates a valid security interest in favor of the Collateral Agent,
for the benefit of the Lenders, in the Collateral (excluding any
Collateral which is non-assignable by its terms) of such Obligor and,
when properly perfected by filing, recordation or registration, shall
constitute a valid perfected security interest in such Collateral, to
the extent such security can be perfected by filing under the UCC or
other applicable personal property security legislation, free and
clear of all Liens except for Permitted Liens.
(e) Contracts; Agreements. Except as provided in
Schedule 5(e) attached hereto, as of the Closing Date, the Obligors
have no material contracts or agreements which are non-assignable by
their terms or which prevent the granting of a security interest
therein.
(f) Receivables. (i) Each receivable of the Obligors and
the papers and documents relating thereto are genuine and in all
material respects what they purport to be, (ii) in the case of each
receivable which is an account receivable, each receivable arises out
of (A) a bona fide sale of goods sold and delivered by such Obligor
(or is in the process of being delivered) or (B) services theretofore
actually rendered by such Obligor to, the account debtor named
therein, (iii) no receivable (excluding inter-company receivables) of
an Obligor is evidenced by any instrument or chattel paper valued in
excess of $100,000, unless such instrument or chattel paper has been
theretofore endorsed over and delivered to the Collateral Agent except
as otherwise provided in Section 6(c) below and (iv) no surety bond
was required or given in connection with any receivables of an Obligor
or the contracts or purchase orders out of which they arose.
(g) Inventory. As of the Closing Date, except as
permitted under Section 5(b) hereof, no inventory is held by an
Obligor pursuant to consignment, sale or return, sale on approval or
similar arrangement.
(h) Copyrights, Patents and Trademarks.
(i) Schedule 6.19 to the Credit Agreement
includes all Material Intellectual Property which is the
subject of a registration or application and all material
Trademark Licenses, Copyright Licenses and Patent Licenses
owned by the Obligors in their own names as of the date
hereof.
(ii) Except as set forth in Schedule 6.19 to the
Credit Agreement, to the best of each Obligor's knowledge,
each Copyright, Copyright License, Patent, Patent License,
Trademark and Trademark License of such Obligor included in
the Material Intellectual Property is valid, subsisting,
unexpired, enforceable and has not been abandoned.
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(iii) Except as set forth in Schedule 6.19 to the
Credit Agreement, none of the Copyrights, Patents or
Trademarks included in the Material Intellectual Property
owned by the Obligor is the subject of any licensing or
franchise agreement.
(iv) No holding, decision or judgment has been
rendered by any Governmental Authority which would be
reasonably likely to limit, cancel or question the validity of
any Material Intellectual Property.
(v) No action or proceeding is pending seeking to
limit, cancel or question the validity of any Material
Intellectual Property, which, if adversely determined, would
be reasonably likely to have a Material Adverse Effect.
(vi) All applications pertaining to the Material
Intellectual Property of each Obligor have been duly and
properly filed, and all registrations or letters pertaining to
such Material Intellectual Property have been duly and
properly filed and issued.
(vii) Except as permitted under the Credit
Agreement, no Obligor has made any assignment or agreement in
conflict with the security interest in the Material
Intellectual Property of each Obligor hereunder.
6. Covenants. Each Obligor covenants that, so long as any of the
Secured Obligations remain outstanding (other than any obligations with respect
to the indemnities set forth in the Credit Documents which shall survive the
termination of the Credit Documents) and until all of the Commitments shall
have been terminated, such Obligor shall:
(a) Other Liens. Defend the Collateral against the
claims and demands of all other parties claiming an interest therein,
keep the Collateral free from all Liens, except for Permitted Liens
and Liens arising pursuant to consignment arrangements permitted under
Sections 5(b) and 5(g) hereto, and not sell, exchange, transfer,
assign, lease or otherwise dispose of the Collateral or any interest
therein, except as permitted under the Credit Agreement.
(b) Preservation of Collateral. Keep the Collateral in
good order, condition and repair in all material respects and not use
the Collateral in violation of the provisions of this Security
Agreement or any other agreement relating to the Collateral or any
policy insuring the Collateral or any applicable statute, law, bylaw,
rule, regulation or ordinance, except as permitted under the Credit
Agreement.
(c) Instruments/Chattel Paper. Deliver to the Collateral
Agent all instruments and chattel paper valued in excess of $100,000
which represents or relates to the Collateral other than (i)
instruments evidencing debt obligations from one Credit Party to
another Credit Party and (ii) instruments evidencing debt obligations
from employees of a
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Credit Party to a Credit Party if such debt was incurred as a result
of tax obligations attributed from the owning of stock options.
(d) Change in Location/Change of Name. Not, without
providing 30 days prior written notice to the Collateral Agent and
without filing such further financing statements or amendments to any
previously filed financing statements as the Collateral Agent may
require; provided that the Collateral Agent shall promptly provide
information to the Obligors regarding financing statements and
amendments to be required after receipt of such notice, (i) change the
location of its chief executive office and chief place of business (as
well as its books and records) from the locations set forth on
Schedule 6.22(c) to the Credit Agreement, (ii) change the location of
its Collateral from the locations set forth for such Obligor on
Schedule 6.22(b) of the Credit Agreement, except as otherwise
permitted by Section 5(b) hereof or as set forth in the Credit
Agreement, or (iii) change its name, be party to a merger,
consolidation or other change in structure or use any tradename other
than as set forth on Schedule 5(c) attached hereto.
(e) Inspection. Upon reasonable notice, and during
reasonable hours, at all times allow the Collateral Agent or its
representatives to visit and inspect the Collateral as set forth in
Section 7.12 of the Credit Agreement.
(f) Inventory. Not change the location of the Collateral
from that set forth on Schedule 6.22(b) of the Credit Agreement
(unless proper notice is given as required by Section 6(d) above) or
subject any inventory to consignment arrangements; provided that
inventory, up to an aggregate amount of $10,000,000, may be held by
customers pursuant to consignment arrangements or held in third party
warehouses.
(g) Contracts; Agreements. Not enter into any material
contracts or agreements which are non-assignable to the Collateral
Agent or the Lenders by their terms or which prevent the granting of a
security interest to the Collateral Agent or the Lenders.
(h) Perfection of Security Interest. Execute and deliver
to the Collateral Agent such agreements, assignments or instruments
(including affidavits, notices, reaffirmations and amendments and
restatements of existing documents, as the Collateral Agent may
reasonably request) and do all such other things as the Collateral
Agent may reasonably deem necessary or appropriate (i) to assure to
the Collateral Agent its security interests hereunder, including, but
not limited to, (A) such financing statements (including renewal
statements) or amendments thereof or supplements thereto or other
instruments as the Collateral Agent may from time to time reasonably
request in order to perfect and maintain the security interests
granted hereunder in accordance with the UCC, (B) with regard to
Copyrights that would constitute Material Intellectual Property, a
Notice of Grant of Security Interest in such Copyrights for filing
with the United States Copyright Office a form satisfactory to the
Collateral Agent (C) with regard to Patents that would constitute
Material Intellectual Property, a Notice of Grant of Security Interest
in such Patents for filing with the United States Patent and Trademark
Office in a form
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satisfactory to the Collateral Agent, and (D) with regard to
Trademarks that would constitute Material Intellectual Property, a
Notice of Grant of Security Interest in such Trademarks for filing
with the United States Patent and Trademark Office in a form
satisfactory to the Collateral Agent (ii) to consummate the
transactions contemplated hereby and (iii) to otherwise protect and
assure the Collateral Agent of its rights and interests hereunder. To
that end, each Obligor agrees that the Collateral Agent may file one
or more financing statements disclosing the Collateral Agent's
security interest in any or all of the Collateral of such Obligor
without, to the extent permitted by law, such Obligor's signature
thereon; provided that the Collateral Agent will provide a notice to
the appropriate Obligor of any of the foregoing within 10 days of the
execution, delivery and filing, if any, thereof and will promptly
thereafter provide copies of any of the foregoing executed and
delivered by the Collateral Agent, including, if received by the
Collateral Agent, acknowledgment copies of any financing statements as
filed. Furthermore, each Obligor hereby irrevocably makes, constitutes
and appoints the Collateral Agent, its nominee or any other person
whom the Collateral Agent may designate, as such Obligor's attorney in
fact with full power and for the limited purpose to sign in the name
of such Obligor any such financing statements, or amendments and
supplements to financing statements, renewal financing statements,
notices or any similar documents which in the Collateral Agent's
reasonable discretion would be necessary or appropriate in order to
perfect and maintain perfection of the security interests granted
hereunder. The power of attorney granted hereunder is coupled with an
interest and is and shall remain irrevocable so long as the Credit
Agreement is in effect (other than any obligations with respect to the
indemnities and the representations and warranties set forth in the
Credit Documents which shall survive the termination of the Credit
Documents) or any amounts payable thereunder, under any other Credit
Document or Hedging Agreement, or under any Letter of Credit shall
remain outstanding, and until all of the Commitments thereunder shall
have terminated. Each Obligor hereby agrees that a carbon,
photographic or other reproduction of this Security Agreement or any
such financing statement is sufficient for filing as a financing
statement by the Collateral Agent without notice thereof to such
Obligor wherever the Collateral Agent may in its sole discretion
desire to file the same. In the event for any reason the law of any
jurisdiction other than New York becomes or is applicable to the
Collateral of any Obligor or any part thereof, or to any of the
Secured Obligations, such Obligor agrees to execute and deliver all
such instruments and to do all such other things as the Collateral
Agent in its sole discretion reasonably deems necessary or appropriate
to preserve, protect and enforce the security interests of the
Collateral Agent under the law of such other jurisdiction (and, if an
Obligor shall fail to do so promptly upon the request of the
Collateral Agent, then the Collateral Agent may execute any and all
such requested documents on behalf of such Obligor pursuant to the
power of attorney granted hereinabove). If any Collateral is in the
possession or control of an Obligor's agents and the Collateral Agent
so requests, such Obligor agrees to notify such agents in writing of
the Collateral Agent's security interest therein and, upon occurrence
and continuance of an Event of Default, upon the Collateral Agent's
request, instruct them to hold all such Collateral for the Lenders'
account and subject to the Collateral Agent's instructions.
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Each Obligor agrees to xxxx its books and records to reflect the security
interest of the Collateral Agent in the Collateral.
(i) Treatment of Receivables. Not grant or extend the time for
payment of any receivable, or compromise or settle any receivable for less than
the full amount thereof, or release any person or property, in whole or in
part, from payment thereof, or allow any credit or discount thereon, other than
as normal and customary in the ordinary course of an Obligor's business
(including the acceptance of certain notes by the Borrower in its sales of
polystyrene sheets and films).
(j) Covenants Relating to Copyrights.
(i) Except as otherwise permitted by the Credit
Agreement, employ any Copyright that would constitute Material
Intellectual Property with such notice of copyright as may be
required by law to secure copyright protection.
(ii) Except as otherwise permitted by the Credit
Agreement, not do any act or knowingly omit to do any act
whereby any Copyright that would constitute Material
Intellectual Property may become invalidated and (A) not do
any act, or knowingly omit to do any act, whereby any such
Copyright may become injected into the public domain; (B)
notify the Collateral Agent immediately if it knows, or has
reason to know, that any such Copyright may become injected
into the public domain or of any adverse determination or
development (including, without limitation, the institution
of, or any such determination or development in, any court or
tribunal in the United States or any other country), other
than a non-final determination of any such court, regarding an
Obligor's ownership of any such Copyright or its validity; (C)
take all necessary steps as it shall deem appropriate under
the circumstances to maintain and pursue each application (and
to use its reasonable efforts to obtain the relevant
registration) and to maintain each registration of each such
Copyright owned by an Obligor including, without limitation,
filing of applications for renewal where necessary; and (D)
promptly notify the Collateral Agent of any material
infringement of any such Copyright of an Obligor of which it
becomes aware and take such actions as it shall reasonably
deem appropriate under the circumstances to protect such
Copyright, including, where appropriate, the bringing of suit
for infringement, seeking injunctive relief and seeking to
recover any and all damages for such infringement.
(iii) Except as otherwise permitted by the Credit
Agreement, not make any assignment or agreement in conflict
with the security interest in any Copyright that would
constitute Material Intellectual Property of each Obligor
hereunder.
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(k) Covenants Relating to Patents and Trademarks.
(i) (A) Except as otherwise permitted by the
Credit Agreement, continue to use each Trademark that would
constitute Material Intellectual Property in such a manner as
to maintain such Trademark in full force free from any claim
of abandonment for non-use, (B) use its best efforts to
control the quality of products and services offered under
such Trademark by licensees of the Trademark, (C) employ such
Trademark with the appropriate notice of registration or
notice of trademark, as applicable, sufficient to protect such
Trademark, (D) not adopt or use any xxxx which is confusingly
similar or a colorable imitation of such Trademark unless the
Collateral Agent, for the ratable benefit of the Lenders,
shall obtain a perfected security interest in such xxxx
pursuant to this Security Agreement, and (E) except as
otherwise permitted by the Credit Agreement, not (and not
permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any such Trademark may
become invalidated.
(ii) Except as otherwise permitted by the Credit
Agreement, not do any act, or knowingly omit to do any act,
whereby any Patent that would constitute Material Intellectual
Property may become abandoned or dedicated.
(iii) Notify the Collateral Agent and the Lenders
immediately if it knows, or has reason to know, that any
application or registration relating to any Patent or
Trademark that would constitute Material Intellectual Property
may become abandoned or dedicated, or of any adverse
determination or development (including, without limitation,
the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark
Office or any court or tribunal in any country), other than
non-final determinations of any such office or court,
regarding an Obligor's ownership of any such Patent or
Trademark or its right to register the same or to keep and
maintain the same.
(iv) Take all reasonable and necessary steps, as
it shall deem appropriate under the circumstances, including,
without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency
in any other country or any political subdivision thereof, to
maintain and pursue each application (and use its best efforts
to obtain the relevant registration) and to maintain each
registration of the Patents and Trademarks that would
constitute Material Intellectual Property, including, without
limitation, filing of applications for renewal, affidavits of
use and affidavits of incontestability.
(v) Promptly notify the Collateral Agent and the
Lenders after it learns that any Patent or Trademark that
would constitute Material Intellectual Property included in
the Collateral is infringed, misappropriated or diluted by a
third party, and take such actions as it shall reasonably deem
appropriate under the circumstances to protect such Patent or
Trademark, including, where appropriate, the bringing of suit
for infringement, misappropriation or dilution, seeking
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injunctive relief where appropriate and seeking to recover any
and all damages for such infringement, misappropriation or
dilution.
(vi) Except as otherwise permitted by the Credit
Agreement, not make any assignment or agreement in conflict
with the security interest in the Patents or Trademarks that
would constitute Material Intellectual Property of each
Obligor hereunder.
(l) New Patents, Copyrights and Trademarks. Whenever an
Obligor, either by itself or through an agent, employee, licensee or
designee, shall file an application for the registration of any
Copyright, Patent or Trademark that would constitute Material
Intellectual Property with the United States Patent and Trademark
Office or any similar office or agency in any other country or any
political subdivision thereof, an Obligor shall report such filing to
the Collateral Agent and the Lenders within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Upon
request of the Collateral Agent, an Obligor shall promptly provide the
Collateral Agent with (i) a listing of all such applications (together
with a listing of the issuance of registrations or letters on present
applications), which new applications and issued registrations or
letters shall be subject to the terms and conditions hereunder, and
(ii) (A) with respect to new registrations of Copyrights that would
constitute Material Intellectual Property, a duly executed amendment
or modification to the Notice of Security Interest in such Copyrights,
(B) with respect to new Patents that would constitute Material
Intellectual Property, a duly executed amendment or modification to
the Notice of Security Interest in such Patents, (C) with respect to
new applications or registrations of Trademarks that would constitute
Material Intellectual Property, a duly executed amendment or
modification to the Notice of Security Interest in such Trademarks or
(D) such other duly executed documents as the Collateral Agent may
request in a form acceptable to counsel for the Collateral Agent and
suitable for recording to evidence the security interest in the
Copyright, Patent or Trademark that would constitute Material
Intellectual Property which is the subject of such new application or
registration to the Collateral Agent as provided in Section 2 hereof,
and subject to all the terms hereof; provided, however, that unless an
Event of Default shall have occurred and be continuing, no special
documents need be provided with respect to recording a security
interest or assignment in Copyrights, Patents or Trademarks filed or
registered in jurisdictions outside the United States.
(m) Insurance. Insure, repair and replace the Collateral
of such Obligor as set forth in the Credit Agreement. All insurance
proceeds received in connection with the Collateral shall be subject
to the security interest of the Collateral Agent hereunder.
7. Advances by Lenders. On failure of any Obligor to perform any
of the covenants and agreements contained herein, the Collateral Agent may, at
its sole option and in its sole discretion, perform the same and in so doing
may expend such sums as the Collateral Agent may reasonably deem advisable in
the performance thereof, including, without limitation, the payment of any
insurance premiums, the payment of any taxes, a payment to obtain a release of
a Lien or
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potential Lien, expenditures made in defending against any adverse claim and
all other expenditures which the Collateral Agent or the Lenders may make for
the protection of the security hereof or which may be compelled to make by
operation of law. All such sums and amounts so expended shall be repayable by
the Obligors on a joint and several basis promptly upon timely notice thereof
and demand therefor, shall constitute additional Secured Obligations and shall
bear interest from the date said amounts are expended at the default rate
provided in Section 3.1(b) of the Credit Agreement for Revolving Loans that are
Base Rate Loans. No such performance of any covenant or agreement by the
Collateral Agent or the Lenders on behalf of any Obligor, and no such advance
or expenditure therefor, shall relieve the Obligors of any default under the
terms of this Security Agreement, the other Credit Documents or any Hedging
Agreement. The Lenders may make any payment hereby authorized in accordance
with any xxxx, statement or estimate procured from the appropriate public
office or holder of the claim to be discharged without inquiry into the
accuracy of such xxxx, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax lien, title or claim except to the extent
such payment is being contested in good faith by an Obligor in appropriate
proceedings and against which adequate reserves are being maintained in
accordance with GAAP in effect from time to time.
8. Events of Default.
The occurrence of an event which under the Credit Agreement would
constitute an Event of Default shall be an Event of Default hereunder (an
"Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during continuation thereof, the Lenders shall have, in
addition to the rights and remedies provided herein, in the Credit
Documents, in the Hedging Agreements or by law (including, but not
limited to, the rights and remedies set forth in the Uniform
Commercial Code of the jurisdiction applicable to the affected
Collateral), the rights and remedies of a secured party under the UCC
to the extent permitted by law and further, the Collateral Agent may,
with or without judicial process or the aid and assistance of others,
(i) enter on any premises on which any of the Collateral may be
located and, without resistance or interference by the Obligors, take
possession of the Collateral, (ii) dispose of any Collateral on any
such premises, (iii) require the Obligors to assemble and make
available to the Collateral Agent at the expense of the Obligors any
Collateral at any place and time designated by the Collateral Agent
which is reasonably convenient to both parties, (iv) remove any
Collateral from any such premises for the purpose of effecting sale or
other disposition thereof, and/or (v) without demand and without
advertisement, notice, hearing or process of law, all of which each of
the Obligors hereby waives to the fullest extent permitted by law, at
any place and time or times, sell and deliver any or all Collateral
held by or for it at public or private sale, by one or more contracts,
in one or more parcels, for cash, upon credit or otherwise, at such
prices and upon such terms as the Collateral Agent deems advisable, in
its sole discretion (subject to any and all mandatory legal
requirements). In addition to all other sums due the Collateral Agent
and the
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Lenders with respect to the Secured Obligations, the Obligors shall
pay the Collateral Agent and each of the Lenders all reasonable
documented costs and expenses incurred by the Collateral Agent or any
such Lender, including, but not limited to, reasonable attorneys' fees
and court costs, in obtaining or liquidating the Collateral, in
enforcing payment of the Secured Obligations, or in the prosecution or
defense of any action or proceeding by or against the Collateral Agent
or the Lenders or the Obligors concerning any matter arising out of or
connected with this Security Agreement, any Collateral or the Secured
Obligations, including, without limitation, any of the foregoing
arising in, arising under or related to a case under the Bankruptcy
Code. To the extent the rights of notice cannot be legally waived
hereunder, each Obligor agrees that any requirement of reasonable
notice shall be met if such notice is personally served on or mailed,
postage prepaid, to the Borrower in accordance with the notice
provisions of Section 11.1 of the Credit Agreement at least 10 days
before the time of sale or other event giving rise to the requirement
of such notice. The Collateral Agent and the Lenders shall not be
obligated to make any sale or other disposition of the Collateral
regardless of notice having been given. To the extent permitted by
law, any Lender may be a purchaser at any such sale. To the extent
permitted by applicable law, each of the Obligors hereby waives all of
its rights of redemption with respect to any such sale. Subject to
the provisions of applicable law, the Collateral Agent and the Lenders
may postpone or cause the postponement of the sale of all or any
portion of the Collateral by announcement at the time and place of
such sale, and such sale may, without further notice, to the extent
permitted by law, be made at the time and place to which the sale was
postponed, or the Collateral Agent and the Lenders may further
postpone such sale by announcement made at such time and place.
(b) Remedies relating to Receivables. Upon the
occurrence of an Event of Default and during the continuation thereof,
whether or not the Collateral Agent has exercised any or all of its
rights and remedies hereunder, each Obligor will promptly upon written
request of the Collateral Agent instruct all account debtors to remit
all payments in respect of the receivables to a mailing location
selected by the Collateral Agent. In addition, upon the occurrence
and during the continuance of an Event of Default, the Collateral
Agent or its designee may notify any Obligor's customers and account
debtors that the receivables of such Obligor have been assigned to the
Collateral Agent or of the Collateral Agent's security interest
therein, and may (either in its own name or in the name of an Obligor
or both) demand, collect (including without limitation by way of a
lockbox arrangement), receive, take receipt for, sell, xxx for,
compound, settle, compromise and give acquittance for any and all
amounts due or to become due on receivables, and, in the Collateral
Agent's discretion, file any claim or take any other action or
proceeding to protect and realize upon the security interest of the
Lenders in the receivables. Each Obligor acknowledges and agrees that
the proceeds of its receivables remitted to or on behalf of the
Collateral Agent in accordance with the provisions hereof shall be
solely for the Collateral Agent's own convenience and that such
Obligor shall not have any right, title or interest in such accounts
or in any such other amounts except as expressly provided herein. The
Collateral Agent and the Lenders shall have no liability or
responsibility to any Obligor for acceptance of a check, draft or
other order for payment of money bearing the legend "payment in full"
or words of similar import or any
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other restrictive legend or endorsement or be responsible for
determining the correctness of any remittance. Each Obligor hereby
agrees to indemnify the Collateral Agent and the Lenders from and
against all liabilities, damages, losses, actions, claims, judgments,
costs, expenses, charges and reasonable attorneys' fees suffered or
incurred by the Collateral Agent or the Lenders (each, an "Indemnified
Party") as a result of actions taken by the Collateral Agent in
accordance with the foregoing except as relating to or arising out of
the gross negligence or willful misconduct of an Indemnified Party or
its officers, employees or agents. In the case of any investigation,
litigation or other proceeding, the foregoing indemnity shall be
effective whether or not such investigation, litigation or proceeding
is brought by an Obligor, its directors, shareholders or creditors or
an Indemnified Party or any other Person. The foregoing indemnity
shall survive the repayment of the Secured Obligations and the
termination of the Commitments.
(c) Access. In addition to the rights and remedies
hereunder, upon the occurrence of an Event of Default and during the
continuance thereof, the Collateral Agent shall have the right to
enter and remain upon the various premises of the Obligors without
cost or charge to the Collateral Agent, and use the same, together
with materials, supplies, books and records of the Obligors for the
purpose of collecting and liquidating the Collateral, or for preparing
for sale and conducting the sale of the Collateral, whether by
foreclosure, auction or otherwise. In addition, upon the occurrence
of an Event of Default and during the continuance thereof, the
Collateral Agent may remove Collateral, or any part thereof, from such
premises and/or any records with respect thereto, in order to
effectively collect or liquidate such Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the
Collateral Agent or the Lenders to exercise any right, remedy or
option under this Security Agreement, any other Credit Document or any
Hedging Agreement or as provided by law, or any delay by the
Collateral Agent or the Lenders in exercising the same, shall not
operate as a waiver of any such right, remedy or option. No waiver
hereunder shall be effective unless it is in writing, signed by the
party against whom such waiver is sought to be enforced and then only
to the extent specifically stated, which in the case of the Collateral
Agent or the Lenders shall only be granted as provided herein. To the
extent permitted by law, neither the Collateral Agent, the Lenders,
nor any party acting as attorney for the Collateral Agent or the
Lenders, shall be liable hereunder for any acts or omissions or for
any error of judgment or mistake of fact or law other than their gross
negligence or willful misconduct. The rights and remedies of the
Collateral Agent and the Lenders under this Security Agreement shall
be cumulative and not exclusive of any other right or remedy which the
Collateral Agent or the Lenders may have.
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(e) Retention of Collateral. The Collateral Agent may,
after complying with Section 9-505(2) of the UCC or otherwise
complying with the requirements of applicable law of the relevant
jurisdiction, to the extent the Collateral Agent is in possession of
any of the Collateral, retain the Collateral in satisfaction of the
Secured Obligations. Unless and until the Collateral Agent shall have
provided such notices, however, the Collateral Agent shall not be
deemed to have retained any Collateral in satisfaction of any Secured
Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any
sale, collection or realization are insufficient to pay all amounts to
which the Collateral Agent or the Lenders are legally entitled, the
Obligors shall be jointly and severally liable for the deficiency,
together with interest thereon at the default rate specified in
Section 3.1(b) of the Credit Agreement for Revolving Loans that are
Base Rate Loans, together with the costs of collection and the
reasonable fees of any attorneys employed by the Collateral Agent to
collect such deficiency. Any surplus remaining after the full payment
and satisfaction of the Secured Obligations shall be returned to the
Obligors or to whomsoever a court of competent jurisdiction shall
determine to be entitled thereto.
10. Rights of the Collateral Agent.
(a) Power of Attorney. In addition to other powers of
attorney contained herein, each Obligor hereby designates and appoints
the Collateral Agent, on behalf of the Lenders, and each of its
designees or agents, as attorney-in-fact of such Obligor, irrevocably
and with power of substitution, with authority to take any or all of
the following actions upon the occurrence and during the continuance
of an Event of Default:
(i) to demand, collect, settle, compromise,
adjust and give discharges and releases concerning the
Collateral, all as the Collateral Agent may reasonably
determine;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any Collateral and
enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action
brought and, in connection therewith, give such discharge or
release as the Collateral Agent may deem reasonably
appropriate;
(iv) receive, open and dispose of mail addressed
to an Obligor and endorse checks, notes, drafts, acceptances,
money orders, bills of lading, warehouse receipts or other
instruments or documents evidencing payment, shipment or
storage of the goods giving rise to the Collateral of such
Obligor on behalf of and in the name of such Obligor, or
securing, or relating to such Collateral;
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(v) sell, assign, transfer, make any agreement
in respect of, or otherwise deal with or exercise rights in
respect of, any Collateral or the goods or services which have
given rise thereto, as fully and completely as though the
Collateral Agent were the absolute owner thereof for all
purposes;
(vi) adjust and settle claims under any insurance
policy relating thereto;
(vii) execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, security agreements, affidavits, notices
and other agreements, instruments and documents that the
Collateral Agent may reasonably determine necessary in order
to perfect and maintain the security interests and liens
granted in this Security Agreement and in order to fully
consummate all of the transactions contemplated therein;
(viii) institute any foreclosure proceedings that the
Collateral Agent may deem appropriate; and
(ix) do and perform all such other acts and things
as the Collateral Agent may reasonably deem to be necessary,
proper or convenient in connection with the Collateral.
This power of attorney is a power coupled with an interest and shall
be irrevocable (i) for so long as any of the Secured Obligations
remain outstanding, and (ii) until all of the Commitments shall have
been terminated. The Collateral Agent shall be under no duty to
exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the
Collateral Agent in this Security Agreement, and shall not be liable
for any failure to do so or any delay in doing so. The Collateral
Agent shall not be liable for any act or omission or for any error of
judgment or any mistake of fact or law in its individual capacity or
its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of
attorney is conferred on the Collateral Agent solely to protect,
preserve and realize upon its security interest in the Collateral.
(b) Assignment by the Collateral Agent. The Collateral
Agent may in accordance with the terms of the Credit Agreement be
replaced and the successor Collateral Agent shall be entitled to all
of the rights and remedies of the Collateral Agent under this Security
Agreement in relation thereto.
(c) The Collateral Agent's Duty of Care. Other than the
exercise of reasonable care to assure the safe custody of the
Collateral while being held by the Collateral Agent hereunder, the
Collateral Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that the Obligors
shall be responsible for preservation of all rights in the Collateral,
and the Collateral Agent shall be relieved of all responsibility for
the Collateral upon surrendering it or tendering the surrender of it
to the Obligors. The Collateral Agent shall be deemed to have
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exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own
property, which shall be no less than the treatment employed by a
reasonable and prudent agent in the industry, it being understood that
the Collateral Agent shall not have responsibility for taking any
necessary steps to preserve rights against any parties with respect to
any of the Collateral.
11. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the Collateral
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Secured Obligations in the order set forth in Section 9.3 of
the Credit Agreement, and each Obligor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Collateral Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the Collateral Agent's sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.
12. Costs of Counsel. At all times hereafter, the Obligors agree
to promptly pay upon demand any and all reasonable documented costs and
expenses of the Collateral Agent or the Lenders, (i) as required under Section
11.5 of the Credit Agreement and (ii) as necessary to protect the Collateral or
to exercise any rights or remedies under this Security Agreement with respect
to any Collateral. All of the foregoing costs and expenses shall constitute
Secured Obligations hereunder.
13. Continuing Agreement.
(a) This Security Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect
so long as the Secured Obligations are outstanding, any amounts
payable thereunder or under any other Credit Document shall remain
outstanding, and until all of the Commitments thereunder shall have
terminated (other than any obligations with respect to the indemnities
set forth in the Credit Documents which shall survive the termination
of the Credit Documents). Upon such payment and termination, this
Security Agreement shall be automatically terminated and, the
Collateral Agent and the Lenders shall, upon the request and at the
expense of the Obligors, forthwith release all of its liens and
security interests hereunder and shall execute and deliver all UCC
termination statements and/or other documents reasonably requested by
the Obligors evidencing such termination. Notwithstanding the
foregoing all releases and indemnities provided hereunder shall
survive termination of this Security Agreement.
(b) This Security Agreement shall continue to be
effective or be automatically reinstated, as the case may be, if at
any time payment, in whole or in part, of any of the Secured
Obligations is rescinded or must otherwise be restored or returned by
the Collateral Agent or any Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar
law, all as though such payment had not been
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made; provided that in the event payment of all or any part of the
Secured Obligations is rescinded or must be restored or returned, all
reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Collateral
Agent or any Lender in defending and enforcing such reinstatement
shall be deemed to be included as a part of the Secured Obligations.
14. Amendments; Waivers; Modifications. This Security Agreement
and the provisions hereof may not be amended, waived, modified, changed,
discharged or terminated except as set forth in Section 11.6 of the Credit
Agreement.
15. Successors in Interest. This Security Agreement shall create
a continuing security interest in the Collateral and shall be binding upon each
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Collateral Agent and the Lenders hereunder, to the benefit
of the Collateral Agent and the Lenders and their successors and permitted
assigns; provided, however, that none of the Obligors may assign its rights or
delegate its duties hereunder without the prior written consent of each Lender
or the Required Lenders, as required by the Credit Agreement. To the fullest
extent permitted by law, each Obligor hereby releases the Collateral Agent and
each Lender, and its successors and assigns, from any liability for any act or
omission relating to this Security Agreement or the Collateral, except for any
liability arising from the gross negligence or willful misconduct of the
Collateral Agent, or such Lender, or its officers, employees or agents.
16. Notices. All notices required or permitted to be given under
this Security Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
17. Counterparts. This Security Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart.
18. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning
or construction of any provision of this Security Agreement.
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19. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. Any legal action or proceeding with respect to this
Security Agreement may be brought in the courts of the State of North
Carolina, or of the United States for the Western District of North
Carolina, and, by execution and delivery of this Security Agreement,
each Obligor hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of such
courts. Each Obligor further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address for notices pursuant to
Section 11.1 of the Credit Agreement, such service to become effective
30 days after such mailing. Nothing herein shall affect the right of
the Collateral Agent to serve process in any other manner permitted by
law or to commence legal proceedings or to otherwise proceed against
any Obligor in any other jurisdiction.
(b) Each Obligor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection
with this Security Agreement brought in the courts referred to in
subsection (a) hereof and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an
inconvenient forum.
20. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
21. Severability. If any provision of this Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
22. Entirety. This Security Agreement, the other Credit Documents
and the Hedging Agreements represent the entire agreement of the parties hereto
and thereto, and supersede all prior agreements and understandings, oral or
written, if any, including any commitment letters or correspondence relating to
the Credit Documents and the Hedging Agreements or the transactions
contemplated herein and therein.
23. Survival. All representations and warranties of the Obligors
hereunder shall survive the execution and delivery of this Security Agreement,
the other Credit Documents and
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the Hedging Agreements, the delivery of the Notes and the making of the Loans
and the issuance of the Letters of Credit under the Credit Agreement.
24. Other Security. To the extent that any of the Secured
Obligations are now or hereafter secured by property other than the Collateral
(including, without limitation, real property and securities owned by an
Obligor), or by a guarantee, endorsement or property of any other Person, then
to the extent the Collateral Agent and the Lenders shall have the right to
proceed against such other property, guarantee or endorsement upon the
occurrence and continuance of any Event of Default to the extent the applicable
security agreement, guarantee or endorsement or other applicable document so
provides, and the Collateral Agent and the Lenders have the right, in their
sole discretion, to determine which rights, security, liens, security interests
or remedies the Collateral Agent and the Lenders shall at any time pursue,
relinquish, subordinate, modify or take with respect thereto, without in any
way modifying or affecting any of them or any of the Collateral Agent's and the
Lenders' rights or the Secured Obligations under this Security Agreement, under
any other Credit Document or under any Hedging Agreement.
25. Joint and Several Obligations of Obligors.
(a) Subject to clause (c), each of the Obligors is
accepting joint and several liability hereunder in consideration of
the financial accommodation to be provided by the Lenders under the
Credit Agreement, for the mutual benefit, directly and indirectly, of
each of the Obligors and in consideration of the undertakings of each
of the Obligors to accept joint and several liability for the
obligations of each of them.
(b) Subject to clause (c), each of the Obligors jointly
and severally hereby irrevocably and unconditionally accepts, not
merely as a surety but also as a co-debtor, joint and several
liability with the other Obligors with respect to the payment and
performance of all of the Secured Obligations arising under this
Security Agreement and the other Credit Documents, it being the
intention of the parties hereto that all the Obligations shall be the
joint and several obligations of each of the Obligors without
preferences or distinction among them.
(c) Notwithstanding any provision to the contrary
contained herein or in any other of the Credit Documents,
(i) to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent
conveyances or transfers) then the obligations of each
Guarantor hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or
state and including, without limitation, the Bankruptcy Code),
and
(ii) the obligations of Holdings hereunder and
under the Credit Documents, in the aggregate, shall be limited
to an amount equal to $146,298,000,
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unless at least ninety percent (90%) of the Holdings
Debentures have been repurchased, in which case no such
limitation shall apply.
26. Rights of Required Lenders. All rights of the Collateral
Agent hereunder, if not exercised by the Collateral Agent, must be exercised by
the Collateral Agent if directed by the Required Lenders.
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Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: IPC, INC.
-------- Delaware corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
[signatures continue]
25
GUARANTORS: IVEX PACKAGING CORPORATION,
---------- a Delaware corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
IVEX PAPER MILL CORPORATION,
a Delaware corporation
IPMC HOLDING CORPORATION,
a Delaware corporation
IPMC, INC.,
a Delaware corporation
VALLEY EXPRESS LINES, INC.,
a Delaware corporation
KAMA OF ILLINOIS CORPORATION,
a Delaware corporation
PACKAGING PRODUCTS, INC.,
a Delaware corporation
CFI INDUSTRIES, INC.,
a Delaware corporation
PLASTOFILM INDUSTRIES, INC.,
a Delaware corporation
CFI RECYCLING, INC.,
a Delaware corporation
TRIO PRODUCTS, INC.,
a Delaware corporation
By:
----------------------------------------
Name:
--------------------------------------
Title: of each of
----------------------------
the above named Guarantors
26
Accepted and agreed to as of the date first above written.
NATIONSBANK, N.A., as Collateral Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
