EXHIBIT 10.3
AMENDED AND RESTATED
SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Security
Agreement") is entered into as of July 22, 2003 among UNITED STATES CAN COMPANY,
a Delaware corporation (the "Borrower"), U.S. CAN CORPORATION, a Delaware
corporation and each of the Domestic Subsidiaries of the Borrower (individually
a "Domestic Guarantor" and collectively the "Domestic Guarantors"; together with
the Borrower, individually an "Obligor" and collectively the "Obligors") and
BANK OF AMERICA, 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, pursuant to that certain Credit Agreement dated as of October
4, 2000 (as previously amended or modified, as amended as of the date hereof
pursuant to the Third Amendment (as defined below) and as further amended,
modified, extended, renewed, restated or replaced from time to time, the "Credit
Agreement") among the Borrower, the Foreign Subsidiary Borrowers party thereto,
the Domestic Guarantors, the Lenders, the Collateral Agent in its capacity as
Administrative Agent, Citicorp North America, Inc., as Syndication Agent, and
Bank One, NA (Main Office Chicago), as Documentation Agent, the Lenders have
agreed to make Loans and issue Letters of Credit upon the terms and subject to
the conditions set forth therein;
WHEREAS, in connection with the Credit Agreement, the Borrower, the
Domestic Guarantors and the Collateral Agent entered into that certain Security
Agreement dated as of October 4, 2000 (the "Existing Security Agreement"); and
WHEREAS, in connection with that certain Third Amendment to Credit
Agreement dated as of the date hereof (the "Third Amendment") among the
Borrower, the Domestic Guarantors, the Lenders party thereto and the
Administrative Agent, the Obligors and the Collateral Agent, on behalf of the
Lenders, have agreed to amend and restate the Existing Security Agreement in
accordance with the terms of this Security Agreement.
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, and the following terms which are defined in the
Uniform Commercial Code (the "UCC") in effect in the State of New York
are used herein as so defined: Accounts, Chattel Paper, Commercial Tort
Claims, Deposit Accounts, Documents, Electronic Chattel Paper,
Equipment, Farm Products, Fixtures, General Intangibles, Goods,
Instruments, Inventory, Investment Property, Letter-
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of-Credit Rights, Payment Intangibles, Proceeds, Securities
Intermediary, Software and Supporting Obligations. For purposes of this
Security Agreement, the term "Lender" shall include any Affiliate of
any Lender which has entered into a Hedging Agreement with any Credit
Party. Except as otherwise expressly provided, all definitions shall be
equally applicable to the singular and plural forms of the terms
defined.
(b) In addition, the following terms shall have the
following meanings:
"Copyright Licenses": any agreement, whether written or oral,
providing for the grant by or to an Obligor of 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, now existing or
hereafter created or acquired, all registrations and recordings
thereof, and all applications in connection therewith, including,
without limitation, registrations, recordings and applications 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, and including, without
limitation, any thereof referred to in Schedule 6.19 to the Credit
Agreement, and (b) all renewals thereof, including, without limitation,
any thereof referred to in Schedule 6.19 to the Credit Agreement.
"Intellectual Property": all Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, and Trademark Licenses.
"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.
"Patents": (a) all letters patent of the United States or any
other country and all improvement patents, reissues, reexaminations,
patents of additions, renewals and extensions thereof, including,
without limitation, any thereof referred to in Schedule 6.19 to the
Credit Agreement, and (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.
"Secured Obligations": the collective reference to all of the
Credit Party Obligations owing from the Borrower or any other Credit
Party to any Lender or the Collateral Agent, howsoever evidenced,
created, incurred or acquired, whether primary, secondary, direct,
contingent, or joint and several, including, without limitation, all
obligations and liabilities incurred in connection with collecting and
enforcing the foregoing; provided, however the obligations under any
Hedging Agreement owed to any Lender or any Affiliate of a Lender shall
constitute Secured Obligations only so long as the other Credit Party
Obligations remain outstanding and/or the Commitments are in effect.
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"Trademark License": means any agreement, whether 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, service marks, trade names,
corporate names, fictitious business names, all elements of package or
trade dress of goods or services, 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, and (b) all renewals thereof, including, without limitation,
any thereof referred to in Schedule 6.19 to the Credit Agreement.
"Work": any work which is subject to copyright protection
pursuant to Title 17 of the United States Code or the applicable
copyright laws of any other state or country.
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, each Obligor hereby
grants to the Collateral Agent, for the benefit of the Lenders, a continuing
security interest in, 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 Accounts;
(b) all cash and Cash Equivalents;
(c) all Chattel Paper;
(d) all Copyrights;
(e) all Copyright Licenses;
(f) all Deposit Accounts;
(g) all Documents;
(h) all Equipment;
(i) all Fixtures;
(j) all General Intangibles (including
Payment Intangibles and Software);
(k) all Goods;
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(l) all Instruments;
(m) all Inventory;
(n) all Investment Property;
(o) all Patents;
(p) all Patent Licenses;
(q) all Supporting Obligations and
Letter-of-Credit Rights;
(r) all Trademarks;
(s) all Trademark Licenses;
(t) all books, records, ledger cards,
files, correspondence, computer programs, tapes,
disks, and related data processing software (owned by
such Obligor or in which it has an interest) that at
any time evidence or contain information relating to
any Collateral or are otherwise necessary in the
collection thereof or realization thereupon;
(u) all other personal property of any
kind or type whatsoever owned by such Obligor; and
(v) to the extent not otherwise
included, all Proceeds, tort claims, insurance claims
and other rights to payments not otherwise included
in the foregoing and products of any and all of the
foregoing.
Notwithstanding the foregoing, the Obligors do not grant a security
interest in, or a right of setoff against, any of the following:
(i) any contract, license, permit or franchise that validly
prohibits the creation by the Obligor of a security interest
in such contract, license, permit or franchise (or in any
rights or property obtained by the Obligor under such
contract, license, permit or franchise) so long as such
contract, license, permit or franchise was not entered into or
obtained by the Obligors with the intent of avoiding the
requirement that a security interest be granted therein and
except to the extent such prohibition on the creation of a
security interest is rendered ineffective under Sections
9-406, 9-407, 9-408 or 9-409 of the UCC; provided, however,
that the provisions of this paragraph shall not prohibit the
security interests created by this Security Agreement from
extending to the proceeds of such contract, license, permit or
franchise (or such rights or property) or to the monetary
value of the good will and other general intangibles of the
Obligor relating thereto unless the contract, license, permit
or franchise in question so prohibits; or
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(i) any rights or property to the extent that any valid and
enforceable law or regulation applicable to such rights or
property prohibits the creation of a security interest
therein, except to the extent such prohibition on the creation
of a security interest is rendered ineffective under Sections
9-406, 9-407, 9-408 or 9-409 of the UCC; provided, however,
that the provisions of this paragraph shall not prohibit the
security interests created by this Security Agreement from
extending to the proceeds of such rights or property or to the
monetary value of the good will and other general intangibles
of the Obligor relating thereto unless the law or regulation
in question prohibits such extension.
The Obligors and the Collateral Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest created hereby in the
Collateral (A) constitutes continuing collateral security for all of the Secured
Obligations, whether now existing or hereafter arising and (B) is not to be
construed as an assignment of any Intellectual Property.
3. Provisions Relating to Accounts, Contracts and Agreements.
(a) Anything herein to the contrary notwithstanding, each
of the Obligors shall remain liable under each of its Accounts,
contracts and agreements 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 or the terms of such contract or agreement. Neither the
Collateral Agent nor any Lender shall have any obligation or liability
under any Account (or any agreement giving rise thereto), contract or
agreement 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 such Account, contract or agreement 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
(or any agreement giving rise thereto), contract or agreement, 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 (or any agreement giving rise thereto),
contract or agreement, 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.
(b) At any time and from time to time in accordance with
the terms of Section 7.10 of the Credit Agreement, the Collateral Agent
shall have the right, but not the obligation, to make test
verifications of the Accounts 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 reasonably
require in connection with such test verifications. Upon the Collateral
Agent's request and at the expense of the Obligors (when required by
the Credit Agreement), the Obligors shall cause independent public
accountants or others satisfactory to the Collateral Agent to furnish
to the Collateral Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts. The Collateral
Agent in its own name or in the name of others may
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communicate with account debtors on the Accounts to verify with them to
the Collateral Agent's satisfaction the existence, amount and terms of
any Accounts.
4. Representations and Warranties. Each Obligor hereby represents
and warrants to the Collateral Agent, for the benefit of the Lenders, that so
long as any of the Secured Obligations remain outstanding (other than any such
obligations which by the terms thereof are stated to survive termination of the
Credit Documents) or any Credit Document or Hedging Agreement between any Credit
Party and any Lender (to the extent the obligations of such Credit Party
thereunder constitute Credit Party Obligations) is in effect, and until all of
the Commitments shall have been terminated:
(a) Chief Executive Office; Books & Records. Such
Obligor's chief executive office and chief place of business is (and
for the prior four months has been) located at the locations set forth
on Schedule 6.27(c) to the Credit Agreement (as updated from time to
time), and such Obligor keeps its books and records at such locations.
(b) Commercial Tort Claims. As of the date hereof, none
of the Obligors has any Commercial Tort Claims.
(c) Ownership. Such Obligor is the legal and beneficial
owner of the Collateral which it purports to own and has a valid right
to use all of its other Collateral. Such Obligor has the right to
pledge, sell, assign or transfer the same. Such Obligor's legal name is
as shown in this Security Agreement and such Obligor's state of
incorporation and, if required for filing a financing statement under
the applicable UCC, organization identification number issued by such
Obligor's state of incorporation is as set forth in Schedule 4(c)
hereto and such Obligor has not in the past four 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 4(c)
attached hereto. Schedule 4(c) may be updated from time to time by the
Obligors by giving written notice thereof to the Collateral Agent. Such
Obligor has only one state of incorporation or organization.
(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 of such Obligor and, when
properly perfected by filing or otherwise, shall constitute a valid
first priority, perfected security interest in such Collateral, to the
extent such security interest can be perfected by filing or otherwise
under the UCC, federal law or other applicable personal property
security legislation, free and clear of all Liens except for Permitted
Liens.
(e) Consents. Except for the filing or recording of UCC
financing statements to perfect the Liens created by this Security
Agreement that may be perfected through the filing of a UCC financing
statement and/or applicable federal filings for Intellectual Property,
no consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of
any other Person (including, without limitation, any stockholder,
member or creditor of such Obligor), is required (i) for the grant by
such Obligor of the security interest in the Collateral granted hereby
or for the execution, delivery or performance of this Security
Agreement by such Obligor or (ii) for the perfection
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of such security interest or the exercise by the Collateral Agent of
the rights and remedies provided for in this Security Agreement.
(f) Farm Products. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.
(g) Accounts. With respect to the Accounts of the
Obligors: (i) the goods sold and/or services furnished giving rise to
each Account are not subject to any security interest or Lien except
the first priority, perfected security interest granted to the
Collateral Agent herein and except for Permitted Liens; and (ii) each
Account and the papers and documents of the applicable Obligor relating
thereto are genuine and in all material respects what they purport to
be; (iii) no Account of an Obligor is evidenced by any Instrument
unless such Instrument has been theretofore endorsed over and delivered
to the Collateral Agent; (iv) the amount of each Account as shown on
the applicable Obligor's books and records, and on all invoices and
statements which may be delivered to the Collateral Agent with respect
thereto, is due and payable to the applicable Obligor; (v) to each of
the Obligors' knowledge, the account debtor with respect to each
Account has the capacity to contract; and (vi) no surety bond was
required or given in connection with any Account of an Obligor or the
contracts or purchase orders out of which they arose unless the
Collateral Agent was given prior notice thereof.
(h) Inventory. No Inventory of an Obligor is held by a
third party (other than an Obligor) pursuant to consignment, sale or
return, sale on approval or similar arrangement, unless such Obligor
has properly perfected a purchase money security interest therein.
(i) Copyrights, Patents and Trademarks.
(i) Schedule 6.19 to the Credit Agreement
includes all registered Intellectual Property and all other
material Intellectual Property, in each case owned or used by
the Obligors, as such Schedule 6.19 may be updated from time
to time.
(ii) All Intellectual Property of such Obligor is
valid, subsisting, unexpired, enforceable and has not been
abandoned, and each Obligor is legally entitled to use each of
its tradenames.
(iii) Except as set forth on Schedule 6.19 to the
Credit Agreement, no holding, decision or judgment has been
rendered against any Obligor by any Governmental Authority
which would limit, cancel or question the validity of any
material Intellectual Property of the Obligors.
(iv) Except as set forth on Schedule 6.19 to the
Credit Agreement, no action or proceeding is pending seeking
to limit, cancel or question the validity of any material
Intellectual Property of the Obligors.
(v) All applications pertaining to the material
Intellectual Property of each Obligor have been duly and
properly filed, all registrations or letters pertaining
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to such Intellectual Property have been duly and properly
filed and issued, and all of such Intellectual Property is
valid and enforceable.
(vi) No Obligor has made any assignment or
agreement in conflict with the security interest in the
Intellectual Property of any Obligor hereunder.
(j) Documents, Instruments, Letter-of-Credit Rights and
Chattel Paper. All Documents, Instruments,
Letter-of-Credit Rights and Chattel Paper describing, evidencing or
constituting Collateral are, to the Obligor's knowledge, complete,
valid and genuine.
(k) Restrictions on Security Interest. Except as
permitted by Section 8.13 of the Credit Agreement, none of the Obligors
is party to any material contract, license, permit or franchise that
contains legally enforceable restrictions on the granting of a security
interest therein.
(l) Equipment. With respect to each Obligor's Equipment:
(i) such Obligor has good and marketable title thereto; and (ii) all
such Equipment is in normal operating condition and repair, ordinary
wear and tear alone excepted (subject to casualty events).
(m) Investment Property. As of the Closing Date, none of
the Obligors own any Investment Property except as listed on Schedule
6.15 to the Credit Agreement.
5. Covenants. Each Obligor covenants that, so long as any of the
Secured Obligations remain outstanding (other than any such obligations which by
the terms thereof are stated to survive termination of the Credit Documents) or
any Credit Document or Hedging Agreement between any Credit Party and any Lender
(to the extent the obligations of such Credit Party thereunder constitute Credit
Party Obligations) is in effect, 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 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, ordinary
wear and tear excepted, except for property disposed of in accordance
with the Credit Agreement; not use the Collateral in violation of the
provisions of this Security Agreement or any other Credit Document or
any policy insuring the Collateral or any applicable statute, law,
bylaw, rule, regulation or ordinance; not permit Collateral with a fair
market value exceeding $3,000,000 in the aggregate in any year to be or
become a fixture to real property or an accession to other personal
property unless the Collateral Agent has a valid, perfected and first
priority security interest for the benefit of the Lenders in such
fixture or such personal property to which such Collateral has become
an accession; and not, without the prior written consent of the
Collateral Agent, alter or remove any identifying symbol or number on
its Equipment.
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(c) Instruments. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by
any Instrument or if any Collateral shall be stored or shipped subject
to a Document, immediately deliver such Instrument or Document to the
Collateral Agent, duly endorsed in a manner satisfactory to the
Collateral Agent, to be held as Collateral pursuant to this Security
Agreement.
(d) Changes to Chief Executive Office, Jurisdiction of
Incorporation, Name or Structure. Not, without providing 30 days prior
written notice to the Collateral Agent and without filing (or
confirming that the Collateral Agent has filed) such amendments to any
previously filed financing statements or any such new financing
statements as the Collateral Agent may require, (a) 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 6.27(c)
to the Credit Agreement, (b) reincorporate or reorganize itself under
the laws of any jurisdiction other than the jurisdiction in which it is
incorporated or organized as of the date hereof, or (c) 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 4(c) attached
hereto.
(e) Inspection. Allow the Collateral Agent or its
representatives to visit and inspect the Collateral as set forth in
Section 7.10 of the Credit Agreement.
(f) Perfection of Security Interest. Execute and deliver
to the Collateral Agent such agreements, assignments or instruments
(including affidavits, notices, reaffirmations and amendments 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 (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 and any other
personal property security legislation in the appropriate state(s) or
province(s), (B) with regard to Investment Property, execute and cause
the Securities Intermediary with respect to such Investment Property to
execute a securities control agreement in form and substance
satisfactory to the Collateral Agent, (C) with regard to Copyrights, a
Notice of Grant of Security Interest in Copyrights in the form of
Exhibit 5(f)(ii)(A) attached hereto, (D) with regard to Patents, a
Notice of Grant of Security Interest in Patents for filing with the
United States Patent and Trademark Office in the form of Exhibit
5(f)(ii)(B) attached hereto and (E) with regard to Trademarks, a Notice
of Grant of Security Interest in Trademarks for filing with the United
States Patent and Trademark Office in the form of Exhibit 5(f)(ii)(C)
attached hereto, (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
(including financing statements containing a collateral description of
"all assets" and/or "all personal property" of such Obligor) 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, and
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further each Obligor also 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, appropriate or convenient in order to perfect and
maintain perfection of the security interests granted hereunder, such
power, being coupled with an interest, being and remaining irrevocable
so long as any of the Secured Obligations remain outstanding or any
Credit Document or Hedging Agreement between any Credit Party and any
Lender (to the extent the obligations of such Credit Party thereunder
constitute Credit Party Obligations) is in effect, and until all of the
Commitments shall have been 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
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).
Upon the request of the Collateral Agent, each Obligor agrees to mark
its books and records to reflect the security interest of the
Collateral Agent in the Collateral.
(g) Collateral Held by Warehouseman, Bailee, etc. If any
Collateral that is a single asset with a fair market value in excess of
$100,000 or a group of assets with a fair market value in excess of
$500,000 is at any time in the possession or control of a warehouseman,
bailee or any agent or processor of such Obligor, notify the Collateral
Agent of such possession, notify such Person of the Collateral Agent's
security interest for the benefit of the Lenders in such Collateral,
instruct such Person to hold all such Collateral for the Collateral
Agent's account subject to the Collateral Agent's instructions and
obtain acknowledgments from such Person that it is holding the
Collateral for the benefit of the Collateral Agent.
(h) Treatment of Accounts. (i) Not grant or extend the
time for payment of any Account, or compromise or settle any Account
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 in the prudent conduct of an
Obligor's business and (ii) maintain at its principal place of business
a record of Accounts consistent with customary business practices.
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(i) Covenants Relating to Copyrights.
(i) Employ the Copyright for each material Work
with such notice of copyright as may be required by law to
secure copyright protection.
(ii) (A) Not do any act or knowingly omit to do
any act whereby any material Copyright may become invalidated;
(B) not do any act, or knowingly omit to do any act, whereby
any material Copyright may become injected into the public
domain; (C) notify the Collateral Agent immediately if it
knows, or has reason to know, that any material 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 proceeding in any court or tribunal in the United
States or any other country) regarding an Obligor's ownership
of any such material Copyright or its validity; (D) take all
necessary steps as it shall deem appropriate under the
circumstances to maintain and pursue each application, to
obtain the relevant registration and to maintain each
registration of each material Copyright owned by an Obligor
including, without limitation, filing of applications for
renewal where necessary; and (E) promptly notify the
Collateral Agent of any material infringement of any material
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 in connection with sales or other
dispositions permitted under the Credit Agreement, not make
any assignment or agreement in conflict with the security
interest in the Copyrights of each Obligor hereunder other
than in the ordinary course of business.
(j) Covenants Relating to Patents and Trademarks.
(i) (A) Continue to use each material Trademark
in order to maintain such Trademark in full force free from
any claim of abandonment for non-use, (B) maintain as in the
past the quality of products and services offered under such
Trademark, (C) employ such Trademark with the appropriate
notice of registration, or notice of trademark or service
mark, as applicable, sufficient to protect such Trademark, (D)
not adopt or use any mark 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 mark pursuant to this
Security Agreement, and (E) not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do
any act whereby any material Trademark may become invalidated.
(ii) Not do any act, or omit to do any act,
whereby any material Patent may become abandoned or dedicated.
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(iii) Promptly notify the Collateral Agent if it
knows, or has reason to know, that any application or
registration relating to any material Patent or material
Trademark 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) regarding an
Obligor's ownership of any such Patent or Trademark or its
right to register the same or to keep, maintain and use the
same.
(iv) Whenever an Obligor, either by itself or
through an agent, employee, licensee or designee, shall file
an application for the registration of any Patent or Trademark
with the United States Patent and Trademark Office of any
similar office or agency in any other country or any political
subdivision thereof, such Obligor shall promptly report such
filing to the Collateral Agent. Upon request of the Collateral
Agent, an Obligor shall execute and deliver any and all
agreements, instruments, documents and papers as the
Collateral Agent, may reasonably request to evidence the
Collateral Agent's and the Lenders' security interest in any
Patent or Trademark and the goodwill and General Intangibles
of such Obligor relating thereto or represented thereby.
(v) Take all reasonable and necessary steps,
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,
to obtain the relevant registration and to maintain each
registration of the material Patents and Trademarks,
including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.
(vi) Promptly notify the Collateral Agent and the
Lenders after it learns that any material Patent or material
Trademark included in the Collateral is infringed,
misappropriated or diluted by a third party and promptly sue
for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all
damages for such infringement, misappropriation or dilution,
or take such other actions as it shall reasonably deem
appropriate under the circumstances to protect such Patent or
Trademark.
(vii) Except for licenses to third parties in the
ordinary course of business or except in connection with sales
or other dispositions permitted under the Credit Agreement,
not make any assignment or agreement in conflict with the
security interest in the Patents or Trademarks of any Obligor
hereunder.
(k) New Patents, Copyrights and Trademarks. Promptly
provide the Collateral Agent with (i) a listing of all applications, if
any, for new Copyrights, Patents or Trademarks (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 Copyrights, a duly executed Notice of
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Grant of Security Interest in Copyrights in the form of Exhibit
5(f)(ii)(A) attached hereto, (B) with respect to new Patents, a duly
executed Notice of Grant of Security Interest in Patents in the form of
Exhibit 5.1(f)(ii)(B) attached hereto, (C) with respect to new
Trademarks, a duly executed Notice of Grant of Security Interest in
Trademarks in the form of Exhibit 5.1(f)(ii)(C) attached hereto or (D)
such other duly executed documents as the Collateral Agent may
reasonably request in a form acceptable to counsel for the Collateral
Agent and suitable for recording to evidence the security interest of
the Collateral Agent for the benefit of the Lenders in the Copyright,
Patent or Trademark which is the subject of such new application.
(l) Insurance. Insure, repair and replace the Collateral
of such Obligor as set forth in the Credit Agreement. All insurance
proceeds shall be subject to the security interest of the Collateral
Agent hereunder.
(m) Investment Property. Not acquire any Investment
Property without executing and delivering, or causing to be executed
and delivered, to the Collateral Agent such agreements, documents and
instruments as the Collateral Agent may require to perfect the
Collateral Agent's security interest therein.
(n) Contracts. Except as permitted by Section 8.13 of the
Credit Agreement, no Obligor shall (i) enter into any contract,
license, permit or franchise that prohibits the granting of a security
interest in favor of the Collateral Agent or the Lenders or (ii) amend
or modify any existing contracts, licenses, permits or franchises to
prohibit the granting of a security interest in favor of the Collateral
Agent or the Lenders.
(o) Commercial Tort Claims. Within 45 days of the end of
each fiscal quarter of the Obligors, each Obligor shall notify the
Collateral Agent of any commercial tort claim acquired by it and unless
otherwise consented by the Collateral Agent, such Obligor shall enter
into a supplement to this Security Agreement, granting to the
Collateral Agent a Lien in such commercial tort claim.
(p) Letters of Credit. If any Obligor is or becomes the
beneficiary of a letter of credit (other than a letter of credit that
is a Supporting Obligation), such Obligor shall promptly, and in any
event within two (2) Business Days after becoming a beneficiary, notify
the Collateral Agent thereof and enter into a tri-party agreement with
the Collateral Agent and the issuer and/or confirmation bank with
respect to Letter-of-Credit Rights assigning such Letter-of-Credit
Rights to the Collateral Agent, all in form and substance reasonably
satisfactory to the Collateral Agent.
(q) Electronic Chattel Paper. Each Obligor shall take all
steps necessary to grant the Collateral Agent control of all electronic
Chattel Paper in accordance with the UCC and all "transferable records"
as defined in each of the Uniform Electronic Transactions Act and the
Electronic Signatures in Global and National Commerce Act.
6. Performance of Obligations and Advances by Collateral Agent.
On failure of any Obligor to perform any of the covenants and agreements
contained herein, the Collateral Agent
13
may, at its sole option and in its reasonable discretion, perform or cause to be
performed 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 potential Lien, expenditures made in
defending against any adverse claim and all other expenditures which the
Collateral Agent may make for the protection of the security interest hereof or
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 specified in Section 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans. No such performance of
any covenant or agreement by the Collateral Agent 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 between any Credit Party and any Lender. The Collateral
Agent may make any payment hereby authorized in accordance with any bill,
statement or estimate procured from the appropriate public office or holder of
the claim to be discharged without inquiry into the accuracy of such bill,
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.
7. 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").
8. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during the continuance thereof, the Lenders shall have, in
addition to the rights and remedies provided herein, in the Credit
Documents, in any Hedging Agreement between any Credit Party and any
Lender 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 (regardless of whether the UCC is the law
of the jurisdiction where the rights and remedies are asserted and
regardless of whether the UCC applies to the affected Collateral), and
further, the Collateral Agent may, with or without judicial process or
the aid and assistance of others, to the fullest extent permitted by
law, (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
(including Article 9 of the UCC), at any place
14
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 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 Accounts. Upon the occurrence of
an Event of Default and during the continuance thereof, whether or not
the Collateral Agent has exercised any or all of its rights and
remedies hereunder, each Obligor will promptly upon request of the
Collateral Agent instruct all account debtors to remit all payments in
respect of Accounts 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 Accounts 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, sue for, compound, settle, compromise and give acquittance for
any and all amounts due or to become due on any Account, 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 Accounts. 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 other restrictive
legend or endorsement or be responsible for determining the correctness
of any
15
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") because of the
maintenance of the foregoing arrangements 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
or any other Indemnified Party is otherwise a party thereto.
(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 as
between the Collateral Agent and the Obligors 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, 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, any Hedging
Agreement between any Credit Party and any Lender 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 hereunder. 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.
(e) Retention of Collateral. The Collateral Agent may,
after providing the notices required by Section 9-621 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.
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(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 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.
9. Rights of the Collateral Agent.
(a) Power of Attorney. In addition to other powers of
attorney contained herein, to the fullest extent permitted by
applicable law, 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 of such Obligor, 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, adjust or compromise any
action, suit or proceeding brought and, in connection
therewith, give such discharge or release as the Collateral
Agent may deem reasonably appropriate;
(iv) to 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, or securing or relating to such Collateral, on behalf
of and in the name of such Obligor;
(v) to 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) to adjust and settle claims under any
insurance policy relating thereto;
17
(vii) to 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 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 herein;
(viii) to institute any foreclosure proceedings
that the Collateral Agent may deem appropriate; and
(ix) to 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 (other than any such obligations which by the terms thereof
are stated to survive termination of the Credit Documents) or any
Credit Document or any Hedging Agreement between any Credit Party and
any Lender (to the extent the obligations of such Credit Party
thereunder constitute Credit Party Obligations) is in effect 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. Subject to the
terms of the Credit Agreement, the Collateral Agent may from time to
time assign the Secured Obligations and any portion thereof and/or the
Collateral and any portion thereof, and the assignee 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 ensure 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 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,
18
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.
10. 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.
11. Costs of Counsel. At all times hereafter, whether or not an
Event of Default exists, the Obligors agree to promptly pay upon demand any and
all reasonable costs and expenses of the Collateral Agent or the Lenders, (a) as
required under Section 11.5 of the Credit Agreement and (b) as necessary to
protect the Collateral or to exercise any rights or remedies under this Security
Agreement or with respect to any Collateral. All of the foregoing costs and
expenses shall constitute Secured Obligations hereunder.
12. 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 any of the Secured Obligations remain outstanding (other than
any such obligations which by the terms thereof are stated to survive
termination of the Credit Documents) or any Credit Document or any
Hedging Agreement between any Credit Party and any Lender (to the
extent the obligations of such Credit Party thereunder constitute
Credit Party Obligations) is in effect, and until all of the
Commitments thereunder shall have terminated. 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 their 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 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.
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(c) This Security Agreement is in amendment of, and
continuation of, the Existing Security Agreement and the Secured
Obligations represents the same obligations secured pursuant to the
Existing Security Agreement.
13. 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.
14. 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.
15. 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.
16. Counterparts; Telecopy. 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. Delivery of
an executed counterpart by facsimile shall be as effective as an original
executed counterpart and shall be deemed a representation that an original
executed counterpart will be delivered.
17. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning,
construction or interpretation of any provision of this Security Agreement.
18. 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 New York, or of the United
States for the Southern District of New York, 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
20
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.
19. Waiver of Jury Trial; Waiver of Consequential Damages. 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, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY. Each Obligor agrees not to assert any claim
against the Agents, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys or agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to any of the transactions contemplated herein.
20. 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.
21. Entirety. This Security Agreement together with the other
Credit Documents 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 or the transactions contemplated herein and therein.
22. Survival. All representations and warranties of the Obligors
hereunder shall survive the execution and delivery of this Security Agreement,
the other Credit Documents and the Hedging Agreements between any Credit Party
and any Lender (to the extent the obligations of such Credit Party thereunder
constitute Credit Party Obligations), the delivery of the Notes, the making of
the Loans and the issuance of the Letters of Credit.
23. 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
the Collateral Agent and the Lenders shall have the right to proceed against
such other property, guarantee or endorsement upon the occurrence of any Event
of Default, and the Collateral
21
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 of the Credit
Documents or under any Hedging Agreement between any Credit Party and any
Lender.
24. Rights of Required Lenders. To the fullest extent permitted by
law, all rights of the Collateral Agent hereunder, if not exercised by the
Collateral Agent, may be exercised by the Required Lenders.
22
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:
UNITED STATES CAN COMPANY,
a Delaware corporation
By: /s/ Sandra K. Vollman
---------------------------------
Name: Sandra K. Vollman
-------------------------------
Title: Sr. VP and CFO
------------------------------
DOMESTIC
GUARANTORS:
U.S. CAN CORPORATION,
a Delaware corporation
By: /s/ Sandra K. Vollman
---------------------------------
Name: Sandra K. Vollman
-------------------------------
Title: Sr. VP and CFO
------------------------------
USC MAY VERPACKUNGEN HOLDING, INC.,
a Delaware corporation
By: /s/ Sandra K. Vollman
---------------------------------
Name: Sandra K. Vollman
-------------------------------
Title: Sr. VP and CFO
------------------------------
AMENDED AND RESTATED
SECURITY AGREEMENT
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A.,
as Collateral Agent
By: /s/ Liliana Claar
---------------------------------
Name: Liliana Claar
-------------------------------
Title: Vice President
------------------------------
SECURITY AGREEMENT
SCHEDULE 4(c)
MERGERS, CONSOLIDATIONS, CHANGE IN STRUCTURE OR USE OF TRADENAMES
None, except use of "U.S. Can" and "May Verpackungen" as abbreviated forms of
company names.
EXHIBIT 5(f)(ii)(A)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
COPYRIGHTS
United States Copyright Office
Please be advised that pursuant to the Security Agreement dated as of
October 4, 2000 (as the same may be amended, modified, extended or restated from
time to time, the "Security Agreement") by and among the Obligors party thereto
(each a "Obligor" and collectively, the "Obligors") and Bank of America, N.A.,
as Collateral Agent (the "Collateral Agent") for the Lenders referenced therein
(the "Lenders"), the undersigned Obligor has granted a continuing security
interest in and continuing lien upon, the copyrights and copyright applications
shown below to the Collateral Agent for the ratable benefit of the Lenders:
COPYRIGHTS
Date of
Copyright No. Description of Copyright Copyright
- ------------- ------------------------ ---------
Copyright Applications
Copyright Description of Copyright Date of Copyright
Applications No. Applied For Applications
- ---------------- ----------- ------------
The Obligors and the Collateral Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest in the foregoing copyrights and
copyright applications (i) may only be terminated in accordance with the terms
of the Security Agreement and (ii) is not to be construed as an assignment of
any copyright or copyright application.
Very truly yours,
____________________________________
[Obligor]
By:_________________________________
Name:_______________________________
Title:______________________________
Acknowledged and Accepted:
BANK OF AMERICA, N.A.,
as Collateral Agent
By:_________________________________
Name:_______________________________
Title:______________________________
EXHIBIT 5(f)(ii)(B)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
PATENTS
United States Patent and Trademark Office
Please be advised that pursuant to the Security Agreement dated as of
October 4, 2000 (the "Security Agreement") by and among the Obligors party
thereto (each a "Obligor" and collectively, the "Obligors") and Bank of America,
N.A., as Collateral Agent (the "Collateral Agent") for the Lenders referenced
therein (the "Lenders"), the undersigned Obligor has granted a continuing
security interest in and continuing lien upon, the patents and patent
applications shown below to the Collateral Agent for the ratable benefit of the
Lenders:
PATENTS
Description of Patent Date of
Patent No. Item Patent
- ---------- ---- ------
Patent Applications
Patent Date of Patent
Applications No. Applications
- ---------------- ------------
The Obligors and the Collateral Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest in the foregoing patents and
patent applications (i) may only be terminated in accordance with the terms of
the Security Agreement and (ii) is not to be construed as an assignment of any
patent or patent application.
Very truly yours,
____________________________________
[Obligor]
By:_________________________________
Name:_______________________________
Title:______________________________
Acknowledged and Accepted:
BANK OF AMERICA, N.A.,
as Collateral Agent
By:_________________________________
Name:_______________________________
Title:______________________________
EXHIBIT 5(f)(ii)(C)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
TRADEMARKS
United States Patent and Trademark Office
Please be advised that pursuant to the Security Agreement dated as of
October 4, 2000 (the "Security Agreement") by and among the Obligors party
thereto (each a "Obligor" and collectively, the "Obligors") and Bank of America,
N.A., as Collateral Agent (the "Collateral Agent") for the Lenders referenced
therein (the "Lenders"), the undersigned Obligor has granted a continuing
security interest in and continuing lien upon, the trademarks and trademark
applications shown below to the Collateral Agent for the ratable benefit of the
Lenders:
TRADEMARKS
Description of Trademark Date of
Trademark Registration No. Item Trademark
- -------------------------- ---- ---------
Trademark Applications
Trademark Description of Trademark Date of Trademark
Applications No. Applied For Applications
- ---------------- ----------- ------------
The Obligors and the Collateral Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest in the foregoing trademarks and
trademark applications (i) may only be terminated in accordance with the terms
of the Security Agreement and (ii) is not to be construed as an assignment of
any trademark or trademark application.
Very truly yours,
____________________________________
[Obligor]
By:_________________________________
Name:_______________________________
Title:______________________________
Acknowledged and Accepted:
BANK OF AMERICA, N.A.,
as Collateral Agent
By:_________________________________
Name:_______________________________
Title:______________________________