Document:

exhibit10-6.htm

Exhibit 10.6

 

EXECUTION VERSION

 

 

GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

PAPERWEIGHT DEVELOPMENT CORP.,

 

APPLETON PAPERS INC.,

 

and certain of its Subsidiaries

 

in favor of

 

FIFTH THIRD BANK,

 

as Administrative Agent

 

Dated as of February 8, 2010

 

 

TABLE OF CONTENTS

 

Page

 

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GUARANTEE AND COLLATERAL AGREEMENT, dated as of February 8, 2010, made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the "Grantors"), in favor of Fifth Third Bank, as Administrative Agent (in such capacity, the "Administrative Agent") for the banks, financial institutions and other entities (the "Lenders") from time to time parties to the Credit Agreement, dated as of the date hereof (as amended, restated, supplemented and/or otherwise modified from time to time, the "Credit Agreement"), among Appleton Papers Inc., a Delaware corporation (the "Borrower"), Paperweight Development Corp., a Wisconsin corporation ("Holdings"), the Administrative Agent and the Lenders.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;

 

WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Grantor;

 

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part (i) to repay certain existing indebtedness and (ii) to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses;

 

WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; and

 

WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the Administrative Agent and Lenders;

 

NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Administrative Agent for the ratable benefit of the Administrative Agent and Lenders, as follows:

 

SECTION 1.                                DEFINED TERMS

 

1.1                                 Definitions.

 

(a)                                  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms are used herein as defined in the New York UCC: Account, Certificated Security, Chattel Paper, Commercial Tort Claim, Document, Equipment, Farm Products, General Intangible, Instruments, Inventory, Letter-of-Credit Right and Supporting Obligation.

 

 

(b)                                 The following terms shall have the following meanings:

 

"Agreement": this Guarantee and Collateral Agreement, as the same may be amended, restated, supplemented and/or otherwise modified from time to time.

 

"Borrower Credit Agreement Obligations": with respect to the Borrower, the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations and all other obligations and liabilities of the Borrower (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to the Administrative Agent or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, this Agreement, the other Loan Documents, any Letter of Credit or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements).

 

"Borrower Obligations": with respect to the Borrower, the collective reference to (i) the Borrower Credit Agreement Obligations, (ii) the Secured Hedge Agreement Obligations, (iii) Secured Cash Management Obligations and (iv) all other obligations and liabilities of the Loan Parties to the Administrative Agent or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by the Borrower pursuant to the terms of this Agreement).

 

"Collateral": as defined in Section 3.

 

"Collateral Account": any collateral account established by the Administrative Agent as provided in Section 6.1 or 6.4.

 

"Copyrights": (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished (including, without limitation, those listed in Schedule 6), all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office or any other similar authority throughout the world, (ii) all rights corresponding thereto throughout the world and (iii) the right to obtain all extensions and renewals thereof.

 

"Copyright Licenses": any written or oral agreement naming any Grantor as licensor or licensee (including, without limitation, those listed in Schedule 6), granting any right 

 

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under any Copyright, including, without limitation, the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

 

"Credit Agreement Collateral": all "Collateral" under, and as defined in, the Credit Agreement.

 

"Deposit Account": as defined in the New York UCC and, in any event, including, without limitation, any demand, time, savings, passbook or like account maintained with a depositary institution. The Deposit Accounts of the Grantors as of the Closing Date are listed on Schedule 8.

 

"Excluded Stock": means all interests of the Borrower or any Grantor in any of their respective Subsidiaries that are not a Domestic Subsidiary and are not a Guarantor (as such term is defined in the Credit Agreement).

 

"Governmental Authority": the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

"Guarantor Obligations": with respect to any Guarantor, the collective reference to (i) the Borrower Credit Agreement Obligations, (ii) the Secured Hedge Agreement Obligations, (iii) the Secured Cash Management Obligations and (iv) all other obligations and liabilities of such Guarantor to the Administrative Agent or any Lender which may arise under or in connection with this Agreement (including, without limitation, Section 2) or any other Loan Document to which such Guarantor is a party, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by such Guarantor pursuant to the terms of this Agreement or any other Loan Document).

 

"Guarantors": the collective reference to each Grantor other than the Borrower.

 

"Intellectual Property": the collective reference to all rights, priorities and privileges relating to intellectual property or similar proprietary rights, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, Trade Secrets and Trade Secret Licenses and all rights thereto throughout the world including, without limitation, all claims, causes of action, defenses arising out of or related to any of the foregoing and the right to sue at law or in equity for any past, present and future infringement, misappropriation, misuse, dilution or other impairment thereof, including the right to receive all proceeds and damages from all of the foregoing.

 

"Intercompany Note": any promissory note evidencing loans made by any Grantor to Holdings or any of its Subsidiaries.

 

"Intercreditor Agreement": as defined in Section 3.

 

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"Investment Property": the collective reference to (i) all "investment property" as such term is defined in Section 9-102(a)49 of the New York UCC and (ii) whether or not constituting "investment property" as so defined in the preceding clause (i), all Pledged Notes and all Pledged Stock.

 

"Issuers": the collective reference to each issuer of any Investment Property.

 

"New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York.

 

"Obligations": in the case of any Grantor, such Person's (i) Borrower Obligations and/or (ii) Guarantor Obligations.

 

"Patent License": all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent, including, without limitation, any of the foregoing referred to in Schedule 6.

 

"Patents": (i) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, including, without limitation, any of the foregoing referred to in Schedule 6, (ii) all applications for letters patent of the United States or any other country and all reissues, extensions, renewals, reexaminations, divisions, continuations and continuations-in-part thereof, including, without limitation, any of the foregoing referred to in Schedule 6, (iii) all invention disclosures, utility models or similar industrial property rights and (iv) all rights corresponding thereto throughout the world, including rights to obtain any reissues or extensions of the foregoing.

 

"Permitted Unperfected Account": with respect to any Grantor, any Deposit Account or Securities Account of such Grantor (a) that contains a balance of deposits equal to or less than $10,000; provided that such Deposit Account or Securities Account shall not cease to be a Permitted Unperfected Account if it contains a balance greater than $10,000 for not longer than 2 consecutive Business Days and provided that the balance of deposits in all such Deposit Accounts and Securities Accounts of the Grantors and all other Guarantors combined shall not exceed $100,000 in the aggregate at any time, (b) with respect to Deposit Accounts only, is used solely as (i) a payroll account, (ii) an employee benefit account, (ii) an operating expenses disbursement account that is zero-balanced on a daily basis, (iii) a sub-concentration account that is zero-balanced on a daily basis, or (iii) a fiduciary or trust account; or (c) as to which the Administrative Agent otherwise agrees that no control agreement need be obtained. The Permitted Unperfected Accounts of the Grantors as of the Closing Date are so indicated on Schedule 8. Notwithstanding the foregoing, no "Notes Priority Collateral Account" (as such term is defined in the First Lien Note Indenture) shall in any event constitute a "Permitted Unperfected Account" for purposes of this Agreement.

 

"Pledged Notes": all promissory notes listed on Schedule 2, all Intercompany Notes at any time issued to any Grantor and all other promissory notes issued to or held by any Grantor (other than promissory notes issued in connection with extensions of trade credit by any Grantor in the ordinary course of business).

 

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"Pledged Stock": the shares of Capital Stock listed on Schedule 2, together with any other shares, stock certificates, options, interests or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect; provided that such term shall not, in any case, include any Excluded Stock.

 

"Proceeds": all "proceeds" as such term is defined in Section 9-102(a)(64) of the New York UCC and, in any event, shall include, without limitation, all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

 

"Receivable": any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account).

 

"Requirement of Law": as to any Person, the certificate or articles of incorporation and by laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

"Secured Cash Management Obligations": the collective reference to all obligations and liabilities of a Loan Party (including, without limitation, interest accruing at the then applicable rate provided in any Secured Cash Management Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to a Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to any Cash Management Bank, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any Secured Cash Management Agreement or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the relevant Lender or affiliate thereof that are required to be paid by any Loan Party pursuant to the terms of any Secured Cash Management Agreement).

 

"Secured Hedge Agreement Obligations": the collective reference to all obligations and liabilities of a Loan Party (including, without limitation, interest accruing at the then applicable rate provided in any Secured Hedge Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to any Hedge Bank, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any Secured Hedge Agreement or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the relevant Lender or affiliate thereof that are required to be paid by the Borrower pursuant to the terms of any Secured Hedge Agreement).

 

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"Securities Account": as defined in the New York UCC. The Securities Accounts of the Grantors as of the Closing Date are listed on Schedule 8.

 

"Securities Act": the Securities Act of 1933, as amended.

 

"Trade Secret Licenses" means any and all written or oral agreements granting any right in or to Trade Secrets (whether a Grantor is licensee or licensor thereunder).

 

"Trade Secrets" means all trade secrets, as recognized under applicable local law, whether or not reduced to a writing or other tangible form, now or hereafter in force, owned or used in, or contemplated at any time for use in, the business of any Grantor, including with respect to any and all of the foregoing: (i) all documents and things embodying, incorporating, or referring in any way thereto, (ii) all rights to sue for past, present and future infringement thereof, (iii) all claims, damages, and proceeds of suit arising therefrom, and (iv) all payments and royalties and rights to payments and royalties arising out of the sale, lease, license, assignment, or other dispositions thereof.

 

"Trademark License": any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including, without limitation, any of the foregoing referred to in Schedule 6.

 

"Trademarks": (i) 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 all 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, and all common-law rights related thereto, including, without limitation, any of the foregoing referred to in Schedule 6, and (ii) the right to obtain all extensions and renewals thereof. Notwithstanding the foregoing, the Trademarks shall not include any "intent-to-use" applications for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. Section 1051, unless and until an Amendment to Allege Use or a Statement of Use under Section 1(c) or Section 1(d) of the Lanham Act has been filed, to the extent that any assignment of an "intent-to-use" application prior to such filing would violate the Lanham Act or cause the trademark that is the subject thereof to be invalidated or abandoned.

 

1.2                                 Other Definitional Provisions.

 

(a)                                  The words "hereof," "herein," "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified.

 

(b)                                 The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

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(c)                                  Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor's Collateral or the relevant part thereof.

 

(d)                                 Unless the context otherwise requires, any Cash Management Bank or Hedge Bank which is party to a Secured Hedge Agreement or a Secured Cash Management Agreement shall be deemed to be a "Lender" for purposes of this Agreement.

 

SECTION 2.                                GUARANTEE

 

2.1                                 Guarantee.

 

(a)                                  Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders and their respective successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower when due (whether at the stated maturity, by acceleration or otherwise) of all Obligations.

 

(b)                                 Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2).

 

(c)                                  Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent or any Lender hereunder.

 

(d)                                 The guarantee contained in this Section 2 shall remain in full force and effect until all the Obligations and the obligations of each Guarantor under the guarantee contained in this Section 2 shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and the Commitments shall be terminated, notwithstanding that from time to time during the term of the Credit Agreement the Borrower may be free from any Obligations.

 

(e)                                  No payment made by the Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any Lender from the Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Borrower Obligations shall be deemed to release the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect of the Obligations), remain liable for the Borrower Obligations up to the maximum liability of such Guarantor hereunder until the Borrower Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. Notwithstanding the foregoing, in no event shall the Guarantors be liable for payment of any amount in excess of the then outstanding Borrower Obligations and, without duplication, Guarantor Obligations.

 

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2.2                                 Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor's right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the Lenders, and each Guarantor shall remain liable to the Administrative Agent and the Lenders for the full amount guaranteed by such Guarantor hereunder.

 

2.3                                 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Administrative Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Borrower Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Administrative Agent and the Lenders by the Borrower on account of the Borrower Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Borrower Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly endorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Borrower Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

 

2.4                                 Amendments, etc. with respect to the Borrower Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Borrower Obligations made by the Administrative Agent or any Lender may be rescinded by such Agent or such Lender and any of the Borrower Obligations continued, and the Borrower Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Lender for the payment of the Borrower Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor the Lenders shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Borrower Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

 

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2.5                                 Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Borrower Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Borrower Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Administrative Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Guarantors with respect to the Borrower Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Borrower Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against the Administrative Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Borrower Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Borrower Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any Lender against any Guarantor. For the purposes hereof "demand" shall include, but not be limited to the commencement and continuance of any legal proceedings.

 

2.6                                 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Borrower Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

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2.7                                 Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars in accordance with the direction of the Administrative Agent.

 

SECTION 3.                                GRANT OF SECURITY INTEREST

 

Each Grantor hereby assigns and transfers to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders, a security interest in, all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of such Grantor's Obligations:

 

(a)                                  all Accounts;

 

(b)                                 all Chattel Paper;

 

(c)                                  all contracts;

 

(d)                                 all Deposit Accounts;

 

(e)                                  all Documents;

 

(f)                                    all Equipment;

 

(g)                                 all General Intangibles;

 

(h)                                 all Instruments;

 

(i)                                     all Intellectual Property;

 

(j)                                     all Inventory;

 

(k)                                  all Investment Property;

 

(l)                                     all Letter-of-Credit Rights;

 

(m)                               all books and records pertaining to the Collateral;

 

(n)                                 those certain Commercial Tort Claims of the Obligors set forth on Schedule 7 attached hereto; and

 

(o)                                 to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

 

provided, however, that notwithstanding any of the other provisions set forth in this Section 3, this Agreement shall not constitute a grant of a security interest in any property to the extent that

 

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(x) such grant of a security interest is prohibited by any Requirement of Law, requires a consent not obtained of any Governmental Authority pursuant to any such Requirement of Law or is prohibited by, or constitutes a breach or default under, or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property or, in the case of any Investment Property, Pledged Stock or Pledged Note, any applicable shareholder or similar agreement, except to the extent that such Requirement of Law or the applicable terms in such contract, license, agreement, instrument or other document or shareholder or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law or (y) such property constitutes "Collateral" under and as defined in the Fox River Security Agreement;

 

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, ALL TERMS OF THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE REPRESENTATIONS AND WARRANTIES MADE HEREIN, THE LIENS AND SECURITY INTERESTS GRANTED TO THE ADMINISTRATIVE AGENT PURSUANT TO THIS AGREEMENT, THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ADMINISTRATIVE AGENT AND LENDERS HEREUNDER, ALL OTHER RIGHTS AND BENEFITS AFFORDED HEREUNDER TO THE ADMINISTRATIVE AGENT AND THE LENDERS AND ALL OBLIGATIONS OF THE BORROWER AND OTHER GRANTORS HEREUNDER) ARE SUBJECT IN ALL RESPECTS TO THE TERMS, CONDITIONS AND PROVISIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT, DATED AS OF FEBRUARY 8, 2010 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, THE "INTERCREDITOR AGREEMENT") BY AND AMONG FIFTH THIRD BANK, AS RCF REPRESENTATIVE FOR THE BENEFIT OF THE RCF SECURED PARTIES (AS DEFINED THEREIN), U.S. BANK NATIONAL ASSOCIATION, AS NOTE REPRESENTATIVE FOR THE NOTE SECURED PARTIES (AS DEFINED THEREIN), FIFTH THIRD BANK, IN ITS CAPACITY AS FIRST LIEN REPRESENTATIVE (AS DEFINED THEREIN), AND CERTAIN OTHER PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THE TERMS OF THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.

 

SECTION 4.                                REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby represents and warrants to each Agent and each Lender that:

 

4.1                                 Representations in Credit Agreement. In the case of each Guarantor, the representations and warranties set forth in Article V of the Credit Agreement as they relate to such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which is hereby incorporated herein by reference, are true and correct, and each Agent and each Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed to be a reference to such Guarantor's knowledge.

 

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4.2                                 Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Administrative Agent and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreement, such Grantor owns its Collateral in all material respects free and clear of any and all Liens or claims of others. For the avoidance of doubt, it is understood and agreed that any Grantor may, as part of its business, grant licenses to third parties to use Intellectual Property owned or developed by a Grantor. For purposes of this Agreement and the other Loan Documents, such licensing activity shall not constitute a "Lien" or a "claim" on such Intellectual Property. Each of the Administrative Agent and each Lender understands that any such licenses may be exclusive to the applicable licensees, and such exclusivity provisions may limit the ability of the Administrative Agent to utilize, sell, Lease or transfer the related Intellectual Property or otherwise realize value from such Intellectual Property pursuant hereto.

 

4.3                                 Perfected First Priority Liens. The security interests granted pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (including obtaining "control" (within the meaning of the applicable Uniform Commercial Code) of Deposit Accounts and Securities Accounts (other than Permitted Unperfected Accounts), Investment Property and, to the extent requested in writing by the Administrative Agent, Letter-of-Credit Rights (which, in the case of all filings and other documents referred to on said Schedule, unless otherwise noted, have been delivered to the Administrative Agent in completed and, where applicable, duly executed form) will constitute valid perfected security interests (to the extent perfection of security interests therein may be perfected by filing of UCC-1 financing statements and/or filings with the United States Patent and Trademark Office and United States Copyright Office, possession by the Administrative Agent of the respective Investment Property or "control" of Deposit Accounts and Securities Accounts) in all of the Collateral (excluding Letter-of-Credit Rights where written request has not been made by the Administrative Agent) in favor of the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders, as collateral security for such Grantor's Obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor, other than purchasers in the ordinary course of business, and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreement and other Liens which have priority over the Liens granted hereunder on the Collateral by operation of law. Notwithstanding anything to the contrary contained above or elsewhere in this Agreement, but nonetheless subject to the terms of the Intercreditor Agreement, with respect to Letter-of-Credit Rights where the relevant Grantor has been requested by the Administrative Agent to obtain "control" of same, the respective Grantor shall have a reasonable period of time to comply with such request and such "control" shall not be required if the respective Grantor is unable to obtain any required consents for such "control" after using commercially reasonable efforts to obtain same, and unless and until "control" of the respective Letter-of-Credit Rights is obtained in accordance with the above provisions of this Section 4.3 (including this sentence), there shall be no violation of any representation or warranty or covenant contained in this Agreement as a result thereof.

 

4.4                                 Jurisdiction of Organization; Chief Executive Office. On the date hereof, such Grantor's jurisdiction of organization, identification number from the jurisdiction of organization (if any), and the location of such Grantor's chief executive office or sole place of business or principal residence, as the case may be, are specified on Schedule 4.

 

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4.5                                 Inventory and Equipment. On the date hereof, except where the value of such Inventory and Equipment at any one location does not exceed $250,000 in the aggregate for the Grantors and all other Guarantors combined, all of the Grantors' Inventory and Equipment (other than goods in transit) is kept at the locations listed on Schedule 5.

 

4.6                                 Farm Products. None of the Collateral constitutes, or is the Proceeds of, Farm Products.

 

4.7                                 Investment Property.

 

(a)                                  The shares of Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor, except for Excluded Stock.

 

(b)                                 On the date hereof, all the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable.

 

(c)                                  Each of the Pledged Notes issued by a Loan Party constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

 

(d)                                 Such Grantor is the record and beneficial owner of, and has good and marketable title to, the Investment Property pledged by it hereunder, free of any and all Liens in favor of, or claims of, any other Person, except the security interest created by this Agreement and as otherwise would not violate the applicable requirements of the Credit Agreement.

 

4.8                                 Receivables.

 

(a)                                  Except to the extent that such amounts so payable to Grantors and the other Guarantors combined do not exceed $50,000 in aggregate, no amount payable to such Grantor under or in connection with any Receivable is evidenced by any Instrument or Chattel Paper that has not been delivered to the Administrative Agent..

 

(b)                                 As of the date hereof, not more than ten percent (10%) of the Receivables have a Governmental Authority as an obligor.

 

4.9                                 Intellectual Property.

 

(a)                                  Schedule 6 lists all registered and applied for Patents, Trademarks and Copyrights in the United States that are owned by such Grantor in its own name on the date hereof. As of the date hereof, all Intellectual Property owned by such Grantor and set forth on Schedule 6 is valid, in full force and effect, subsisting, unexpired and enforceable, and has not been abandoned. The business of such Grantor and the use of any Intellectual Property in connection therewith, does not infringe, misappropriate, dilute or violate the intellectual property rights of any third Person. There are no pending or, to such Grantor's knowledge, threatened 

 

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claims of infringement, misappropriation, dilution or violation by Grantor of any third Person's intellectual property rights, and there are no facts or circumstances that such Grantor reasonably believes are likely to form the basis for any such claim, and such Grantor has not received written notice of any such claim

 

(b)                                 Except as set forth in Schedule 6, on the date hereof none of the material Intellectual Property is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor.

 

SECTION 5.                                COVENANTS.

 

Each Grantor covenants and agrees with the Administrative Agent and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated:

 

5.1                                 Covenants in Credit Agreement. In the case of each Guarantor, such Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such Guarantor or any of its Subsidiaries.

 

5.2                                 Delivery of Instruments, Certificated Securities and Chattel Paper. Except to the extent that such amounts so payable to Grantors and the other Guarantors combined do not exceed $50,000 in aggregate, if any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument, Certificated Security or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall be promptly delivered to the Administrative Agent, duly endorsed in a manner reasonably satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement.

 

5.3                                 Maintenance of Insurance.

 

(a)                                  Such Grantor will maintain, with financially sound and reputable companies, insurance policies, in accordance with the terms of the Credit Agreement, (i) insuring the Inventory and Equipment against loss by fire, explosion, theft and such other casualties in accordance with the terms of the Credit Agreement and (ii) insuring such Grantor against liability for personal injury and property damage relating to such Inventory and Equipment.

 

(b)                                 All such insurance shall (i) provide for not less than 30 days' prior notice to the Administrative Agent of termination, lapse or cancellation of such insurance (to the extent such provision is obtainable using commercially reasonably efforts) and (ii) name the Administrative Agent as an additional insured and/or loss payee, as applicable.

 

(c)                                  The Borrower shall deliver to the Administrative Agent, substantially concurrently with the annual renewal of each insurance policy covered by the certificates of insurance delivered on the Closing Date pursuant to Section 4.01(a)(xi) of the Credit Agreement, updated insurance certificates with respect to each such insurance policy and, in addition, such supplemental information with respect to each such insurance policy as the Administrative Agent may from time to time reasonably request.

 

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5.4                                 Maintenance of Perfected Security Interest; Further Documentation.

 

(a)                                  Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest (but only to the extent that such security interest can be perfected by filing a filing a financing statements under the Uniform Commercial Code (or other similar laws) or obtaining "control" (within the meaning of the applicable Uniform Commercial Code) of Deposit Accounts (other than Permitted Unperfected Accounts) or Investment Property) having at least the priority described in Section 4.3 and shall defend such security interest against the claims and demands of all Persons whomsoever (other than Persons with prior Liens permitted under clause (b) of Section 4.3), subject to the rights of such Grantor under the Loan Documents to dispose of the Collateral.

 

(b)                                 Such Grantor will furnish to the Administrative Agent and the Lenders from time to time statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail.

 

(c)                                  At any time and from time to time, upon the reasonable written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (i) filing any financing or continuation statements under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to the security interests created hereby (ii) in the case of Investment Property, Deposit Accounts and Securities Accounts (other than Permitted Unperfected Accounts), Letter-of-Credit Rights (but, in the case of such Letter-of-Credit Rights, only after written request from the Administrative Agent and subject to the last sentence of Section 4.3) and any other relevant Collateral, taking any actions necessary to enable the Administrative Agent to obtain "control" (within the meaning of the applicable Uniform Commercial Code) with respect thereto and (iii) in the case of Intellectual Property, filings to the United States Patent and Trademark Office, the United States Copyright Office or other similar authority in any jurisdiction in the world.

 

5.5                                 Changes in Locations, Name, etc. Such Grantor will not, except upon 15 days' prior written notice to the Administrative Agent and delivery to the Administrative Agent of all additional financing statements and other documents reasonably requested by the Administrative Agent to maintain the validity, perfection and priority of the security interests provided for herein:

 

(i)                                     change its jurisdiction of organization from that referred to in Section 4.4; or

 

(ii)                                  change its name.

 

5.6                                 Notices. Such Grantor will advise the Administrative Agent and the Lenders promptly, in reasonable detail, of the occurrence of any event which could reasonably be 

 

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expected to have a material adverse effect on the aggregate value of the Credit Agreement Collateral or on the security interests created hereby.

 

5.7                                 Investment Property.

 

(a)                                  If such Grantor shall become entitled to receive or shall receive any certificate (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Administrative Agent and the Lenders, hold the same in trust for the Administrative Agent and the Lenders and deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. If an Event of Default has occurred and is continuing, any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of, or as a distribution of capital by, any Issuer shall be paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any property (if an Event of Default has occurred and is continuing) or any Investment Property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be delivered to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations. If any sums of money or property so paid or distributed in respect of the Investment Property shall be received by such Grantor (when otherwise required to be paid or delivered over to the Administrative Agent as set forth above), such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor, as additional collateral security for the Obligations.

 

(b)                                 Without the prior written consent of the Administrative Agent, such Grantor will not (i) if an Event of Default has occurred and is continuing, vote to enable, or take any other action to permit, any Issuer to issue any Capital Stock of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any Capital Stock of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof (except pursuant to a transaction permitted by the Credit Agreement), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or otherwise permitted in the Credit Agreement or (iv) enter into any agreement or undertaking, other than as permitted under the Credit Agreement, restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any of the Investment Property or Proceeds thereof.

 

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(c)                                  In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Investment Property issued by it and will comply with such terms insofar as such terms are applicable to it and (ii) the terms of Section 6.3(c) shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 6.3(c) with respect to the Investment Property issued by it.

 

5.8                                 Receivables.

 

(a)                                  Other than in the ordinary course of business, such Grantor will not, with respect to any material portion of the Receivables, (i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable in any manner that could materially adversely affect the value thereof.

 

(b)                                 Such Grantor will deliver to the Administrative Agent a copy of each material demand, notice or document received by it that challenges the validity or enforceability of more than five percent (5%) of the aggregate amount of the then outstanding Receivables.

 

(c)                                  If, as of any fiscal quarter end occurring after the Closing Date, the Grantors determine that more than ten percent (10%) of Receivables (in the aggregate for all Grantors) have a Governmental Authority as an obligor, then the Grantors shall so notify the Administrative Agent (such notice to be given substantially concurrently with the delivery of the quarterly financial statements required pursuant to Section 6.01(b) of the Credit Agreement) and, upon the reasonable request of the Administrative Agent, promptly take such steps as may be necessary to comply with any applicable federal assignment of claims laws and other comparable laws.

 

5.9                                 Intellectual Property.

 

(a)                                  Except as would not have a material adverse effect on the aggregate value of the Credit Agreement Collateral, such Grantor will (i) continue to use each Trademark on each and every trademark class of goods applicable to its current line as reflected in its current catalogs, brochures and price lists in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the past the quality of products and services offered under such Trademark, (iii) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, (iv) not adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders, shall obtain a perfected security interest in such mark pursuant to this Agreement, and (v) not do any act or knowingly omit to do any act whereby such Trademark may become invalidated or impaired in any way.

 

(b)                                 Except as would not have a material adverse effect on the aggregate value of the Credit Agreement Collateral, such Grantor will not do any act, or omit to do any act, whereby any Patent may become forfeited, abandoned or dedicated to the public.

 

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(c)                                  Except as would not have a material adverse effect on the aggregate value of the Credit Agreement Collateral, such Grantor (i) will employ each Copyright and (ii) will not do any act or knowingly omit to do any act whereby any Copyright may become invalidated or otherwise impaired. Such Grantor will not do any act whereby any Copyright may fall into the public domain, to the extent such Copyright is material to the aggregate value of the Credit Agreement Collateral.

 

(d)                                 Except as would not have a material adverse effect on the aggregate value of the Credit Agreement Collateral, such Grantor will not do any act that knowingly uses any Intellectual Property to infringe the intellectual property rights of any other Person.

 

(e)                                  Such Grantor will promptly notify the Administrative Agent and the Lenders if it knows, or has reason to know, that any application or registration relating to any Intellectual Property may become forfeited, abandoned or dedicated to the public, 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, the United States Copyright Office or any court or tribunal in any country) regarding such Grantor's ownership of, or the validity of, any Intellectual Property or such Grantor's right to register the same or to own and maintain the same, in each case to the extent such Intellectual Property is material to the aggregate value of the Credit Agreement Collateral.

 

(f)                                    Whenever such Grantor, either by itself or through the Administrative Agent, employee, licensee or designee, shall file an application for the registration of any Intellectual Property with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, such Grantor shall report such filing to the Administrative Agent in accordance with Section 6.02(a)(iii)(y) of the Credit Agreement. Upon reasonable request of the Administrative Agent, such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as the Administrative Agent may request to evidence the Administrative Agent' and the Lenders' security interest in any Copyright, Patent or Trademark and the goodwill and general intangibles of such Grantor relating thereto or represented thereby.

 

(g)                                 Such Grantor will take all reasonable and necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of Intellectual Property, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability, in each case to the extent such Intellectual Property is material to the aggregate value of the Credit Agreement Collateral.

 

(h)                                 In the event that any Intellectual Property is infringed, misappropriated or diluted by a third party, such Grantor shall (i) take such actions as such Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii) promptly notify the Administrative Agent after it learns thereof, in each case to the extent such Intellectual Property is material to the aggregate value of the Credit Agreement Collateral.

 

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(i)                                     Upon the occurrence and during the continuance of an Event of Default, each Grantor shall use its best efforts to obtain all requisite consents or approvals from the licensor of each Copyright License, Patent License, Trade Secret License or Trademark License to effect the assignment or sublicense of all of such Grantor's right, title and interest thereunder to the Grantee or its designee for the benefit of the Grantees in accordance with this Agreement or the Credit Agreement.

 

5.10                           Commercial Tort Claims. Each Grantor shall (i) forward to the Administrative Agent written notification (such notice to be given substantially concurrently with the delivery of the quarterly financial statements required pursuant to Section 6.01(b) of the Credit Agreement) of any and all Commercial Tort Claims where the expected recovery could reasonably be expected to be in an amount in excess of $200,000, including, but not limited to, any and all actions, suits and proceedings before any court or Governmental Authority by or affecting such Grantor or any of its Subsidiaries and (ii) if and to the extent requested by the Administrative Agent in writing, execute and deliver such statements, documents and notices and do and cause to be done all such things as may be required by the Administrative Agent, or required by law, including all things which may from time to time be necessary under the UCC to fully create, preserve, perfect and protect the priority of the Administrative Agent's security interest in any such Commercial Tort Claims.

 

5.11                           Cash Management Systems.

 

(a)                                  On or prior to the Closing Date, the Borrower shall have established and shall thereafter maintain in existence one or more lockboxes (each a "Lockbox") with the Administrative Agent or such other Lender as shall be reasonably acceptable to the Administrative Agent (each a "Depositary Account Bank") and shall instruct all account debtors on the Borrower's Accounts to remit all payments to a Lockbox. All payments remitted by account debtors of the Borrower to any Lockbox, all other amounts received by the Borrower from any account debtor and all other cash received by the Borrower from any other source shall in each case upon receipt thereof be deposited into a Deposit Account.

 

(b)                                 Each Deposit Account or Securities Account of the Borrower or any other Grantor that is not a Permitted Unperfected Account (each such Deposit Account, a "Controlled Deposit Account," and each such Securities Account, a "Controlled Securities Account," Controlled Securities Accounts together with Controlled Deposit Accounts may sometimes be referred to herein individually as a "Controlled Account" and, collectively, as "Controlled Accounts") shall be maintained with a Depositary Account Bank.

 

(c)                                  On or prior to the Closing Date, the Borrower and each other Grantor shall have entered into a deposit account control agreement or securities account control agreement in form and substance satisfactory to the Administrative Agent with respect to each Controlled Account with the respective Depositary Account Bank and in favor of the Administrative Agent (each an "Account Control Agreement"), which, in the case of Account Control Agreements with respect to Controlled Deposit Accounts, shall provide that, among other things, (i) upon the occurrence and during the continuance of an Event of Default or (ii) upon the commencement and during the continuance of an Availability Trigger Period, all available amounts held in each Controlled Deposit Account maintained at such Depositary Account Bank shall be wired on each 

 

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Business Day into an account (the "Administrative Agent Account") maintained by the Administrative Agent; provided, that the Administrative Agent hereby agrees that it will not give any instructions under any Account Control Agreement unless and until an Event of Default shall have occurred and be continuing or the occurrence of an Availability Trigger Period. All amounts swept and wired into an Administrative Agent Account pursuant to any Account Control Agreement during the continuance of an Availability Trigger Period shall, subject to Section 6.5 if an Event of Default shall have occurred and be continuing and subject to the Administrative Agent's election to subject such amounts to Section 6.5, be applied first to reduce that portion of the Obligations consisting of the then aggregate outstanding balance of the Loans, L/C Borrowings and all other Obligations, second to Cash Collateralize that portion of the L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit, and last, after all other Obligations then due have been indefeasibly paid in full, to be deposited into an account as directed by the Borrower.

 

(d)                                 The closing of any Lockbox or Controlled Account and the termination of any Account Control Agreement shall require in each case the prior written consent of the Administrative Agent.

 

SECTION 6.                                REMEDIAL PROVISIONS

 

6.1                                 Certain Matters Relating to Receivables.

 

(a)                                  If an Event of Default shall have occurred and be continuing, (x) the Administrative Agent shall have the right to make test verifications of the Receivables in any reasonable manner and through any medium that it reasonably considers advisable, and each Grantor shall furnish all such assistance and information as the Administrative Agent may require in connection with such test verifications and (y) upon the Administrative Agent's reasonable request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants or others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Receivables.

 

(b)                                 The Administrative Agent hereby authorizes each Grantor to collect such Grantor's Receivables and the Administrative Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default. If required by the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form received, duly endorsed by such Grantor to the Administrative Agent if required, in a Collateral Account maintained under the sole dominion and control of the Administrative Agent, subject to withdrawal by the Administrative Agent for the account of the Lenders only as provided in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor.

 

(c)                                  If an Event of Default shall have occurred and be continuing, at the Administrative Agent's reasonable request, (i) each Grantor shall deliver to the Administrative Agent all original (to the extent such Grantor has original copies) and other documents 

 

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evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including, without limitation, all original (to the extent such Grantor has original copies) orders, invoices and shipping receipts and (ii) the applicable Grantor shall take such steps as may be necessary to comply with any applicable federal assignment of claims laws and other comparable laws.

 

6.2                                 Communications with Obligors; Grantors Remain Liable.

 

(a)                                  The Administrative Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default communicate with obligors under the Receivables and parties to the Contracts to verify with them to the Administrative Agent's satisfaction the existence, amount and terms of any Receivables or Contracts.

 

(b)                                 Upon the request of the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify obligors on the Receivables and parties to the Contracts that the Receivables and the Contracts have been assigned to the Administrative Agent for the ratable benefit of the Administrative Agent and the Lenders and that payments in respect thereof shall be made directly to the Administrative Agent.

 

(c)                                  Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables and Contracts 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 thereto. No Agent or Lender shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) or Contract by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any Lender of any payment relating thereto, nor shall the Administrative Agent or any Lender be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto) or Contract, 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 thereunder, 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.

 

6.3                                 Pledged Stock.

 

(a)                                  Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent's intent to exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive all dividends paid in respect of the Pledged Stock and all payments made in respect of the Pledged Notes and to exercise all voting and corporate or other organizational rights with respect to the Investment Property; provided, however, that no vote shall be cast or corporate or other organizational right exercised or other action taken which would materially impair the Collateral or which would be inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document.

 

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(b)                                 If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Investment Property and make application thereof to the Obligations in the order set forth in Section 6.5, and (ii) any or all of the Investment Property shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Investment Property at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other organizational structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of the Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

 

(c)                                  Each Grantor hereby authorizes and instructs each Issuer of any Investment Property pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Investment Property directly to the Administrative Agent.

 

6.4                                 Proceeds to be Turned Over to Administrative Agent. In addition to the rights of the Administrative Agent and the Lenders specified in Section 6.1 with respect to payments of Receivables, if an Event of Default shall occur and be continuing, all Proceeds received by any Grantor consisting of cash, checks and other similar near-cash items shall be held by such Grantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor, and shall, upon the request of the Administrative Agent, be turned over to the Administrative Agent forthwith upon receipt by such Grantor in the exact form received by such Grantor (duly endorsed by such Grantor to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a Collateral Account maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in Section 6.5.

 

6.5                                 Application of Proceeds. Subject to any different order of payment set forth in the Credit Agreement (which different order shall be controlling), if an Event of Default shall 

 

22

 

have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds constituting Collateral, whether or not held in any Collateral Account, and any proceeds of the guarantee set forth in Section 2, in payment of the Obligations in the following order:

 

(a)                                  First, to pay incurred and unpaid fees and expenses of the Administrative Agent under the Loan Documents;

 

(b)                                 Second, to the Administrative Agent, for application by it towards payment of amounts then due and owing and remaining unpaid in respect of the Obligations, pro rata among the Lenders according to the amounts of the Obligations then due and owing and remaining unpaid to the Lenders;

 

(c)                                  Third, to the Administrative Agent, for application by it towards prepayment of the Obligations, pro rata among the Lenders according to the amounts of the Obligations then held by the Lenders; and

 

(d)                                 Fourth, to any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same.

 

6.6                                 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, have assigned to it, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, license, sublicense, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of the Administrative Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Upon written demand from the Administrative Agent, each Grantor shall grant, assign, convey or otherwise transfer to the Collateral Agent an absolute assignment of all of such Grantor's right, title and interest in and to the Intellectual Property and shall execute and deliver to the Collateral Agent such documents as are necessary or appropriate to carry out the intent and purposes of this Agreement. The Administrative Agent or any Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released to the extent permitted by law. Each Grantor further agrees, at the Administrative Agent's request, to assemble the Collateral and make it 

 

23

 

available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor's premises or elsewhere. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in the order set forth in Section 6.5 hereof, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-615(a)(3) of the New York UCC, need the Administrative Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent or any Lender arising out of the exercise by them of any rights hereunder, except for gross negligence or willful misconduct on the part of the Administrative Agent or such Lender. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 20 days before such sale or other disposition.

 

6.7                                 Private Sales.

 

(a)                                  Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.

 

(b)                                 Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance with any and all other applicable Requirements of Law. Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.7 will cause irreparable injury to the Administrative Agent and the Lenders, that the Administrative Agent and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.7 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreement.

 

6.8                                 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the 

 

24

 

reasonable fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency.

 

6.9                                 Intellectual Property License. The Grantors hereby grant the Grantee a non-exclusive, transferable, sublicensable, worldwide license and right, effective solely during an Event of Default, to the maximum extent permitted by applicable law and to the extent of the Grantors' interest therein, exercisable without payment of royalty or other compensation, under and to any and all of the Intellectual Property now or hereafter owned by, licensed to, or otherwise used by the Grantors to purchase, use, market, repossess, possess, store, assemble, manufacture, process, sell, transfer, distribute, lease, license and otherwise exploit and dispose of any asset included in the Collateral to the extent the Grantee takes possession of such in accordance with the terms and conditions of this Agreement and the Credit Agreement. For the avoidance of doubt, in the event that any such Event of Default is cured in accordance with the terms and conditions of this Agreement and the Credit Agreement, the foregoing license shall automatically be suspended. The Grantors agree that any sale, transfer, grant of an exclusive license or other disposition of any of the foregoing Intellectual Property (whether by foreclosure or otherwise) will be subject to the Grantee's rights as set forth in this Section 6.9. Any use of Trademarks under the foregoing license shall be consistent with the historical use of such Trademarks by the Grantors and shall meet the Grantors' standards of quality in all material respects. At the Grantors' reasonable request, the Grantee shall provide samples of any goods to be sold under a Grantor Trademark.

 

SECTION 7.                                THE ADMINISTRATIVE AGENT

 

7.1                                 Administrative Agent's Appointment as Attorney-in-Fact, etc.

 

(a)                                  Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:

 

(i)                                     in the name of such Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or Contract or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under any Receivable or Contract or with respect to any other Collateral whenever payable;

 

(ii)                                  in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Administrative Agent may reasonably request to evidence the Administrative Agent' and 

 

25

 

the Lenders' security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

 

(iii)                               pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

 

(iv)                              execute, in connection with any sale provided for in Section 6.6, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

 

(v)                                 (1) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (3) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Administrative Agent shall in its sole discretion determine; and (8) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent's option and such Grantor's expense, at any time, or from time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and the Administrative Agent's and the Lenders' security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

 

Anything in this Section 7.1 to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1 unless an Event of Default shall have occurred and be continuing.

 

(b)                                 If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

 

(c)                                  The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this Section 7.1, together with interest thereon at a rate per 

 

26

 

annum equal to the rate per annum at which interest would then be payable on Revolving Loans that are Base Rate Loans (which rate shall increase to the rate applicable to such Loans that are past due for periods after the date that is 5 days after demand for payment has been made upon the Borrower by the Administrative Agent) under the Credit Agreement, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand.

 

(d)                                 Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

 

7.2                                 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Administrative Agent and the Lenders hereunder are solely to protect the Administrative Agent's and the Lenders' interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Lender to exercise any such powers. The Administrative Agent and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

 

7.3                                 Filing of Financing Statements. Pursuant to any applicable law, each Grantor authorizes the Administrative Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form and in such offices as the Administrative Agent determines appropriate to perfect the security interests of the Administrative Agent under this Agreement. Each Grantor authorizes the Administrative Agent to use the collateral description "all personal property" or such similar language in any such financing statements. Each Grantor hereby ratifies and authorizes the filing by the Administrative Agent of any financing statement with respect to the Collateral made prior to the date hereof.

 

7.4                                 Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent 

 

27

 

for the Administrative Agent and the Lenders with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

 

SECTION 8.                                MISCELLANEOUS

 

8.1                                 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 10.01 of the Credit Agreement.

 

8.2                                 Notices. All notices, requests and demands to or upon the Administrative Agent or any Grantor hereunder shall be effected in the manner provided for in Section 10.02 of the Credit Agreement; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 1.

 

8.3                                 No Waiver by Course of Conduct; Cumulative Remedies. No Agent or Lender shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which such Agent or such Lender would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

8.4                                 Enforcement Expenses; Indemnification.

 

(a)                                  Each Guarantor agrees to pay or reimburse the Administrative Agent, and during the existence of an Event of Default, each Lender, for all its costs and expenses incurred in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to each Lender and of counsel to the Administrative Agent.

 

(b)                                 Each Grantor agrees to pay, and to save the Administrative Agent and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement.

 

(c)                                  Each Guarantor agrees to pay, and to save the Administrative Agent and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this 

 

28

 

Agreement to the extent the Borrower would be required to do so pursuant to Section 10.04 of the Credit Agreement.

 

(d)                                 The agreements in this Section 8.4 shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents.

 

8.5                                 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Administrative Agent and the Lenders and their successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent.

 

8.6                                 Set-Off. Each Grantor hereby irrevocably authorizes each Agent and each Lender at any time after the Loans and other amounts payable under the Credit Agreement shall have become due and payable pursuant to Article VIII of the Credit Agreement, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or such Lender to or for the credit or the account of such Grantor, or any part thereof in such amounts as such Agent or such Lender may elect, against and on account of the obligations and liabilities of such Grantor to such Agent or such Lender hereunder and claims of every nature and description of such Agent or such Lender against such Grantor, in any currency, whether arising hereunder, under the Credit Agreement, any other Loan Document or otherwise, as such Agent or such Lender may elect, whether or not the Administrative Agent or any Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each Agent and each Lender shall notify such Grantor promptly of any such set-off and the application made by such Agent or such Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and each Lender under this Section 8.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or such Lender may have.

 

8.7                                 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

8.8                                 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

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8.9                                 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

8.10                           Integration. This Agreement and the other Loan Documents represent the agreement of the Grantors, the Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.

 

8.11                           GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

8.12                           Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and unconditionally:

 

(a)                                  submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

 

(b)                                 consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c)                                  agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Grantor at its address referred to in Section 8.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

 

(d)                                 agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e)                                  waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

8.13                           Acknowledgements. Each Grantor hereby acknowledges that:

 

(a)                                  it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

 

(b)                                 no Agent or Lender has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Administrative Agent and 

 

30

 

Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)                                  no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Grantors and the Lenders.

 

8.14                           Additional Grantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to Section 6.09 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

 

8.15                           Releases.

 

(a)                                  At such time as the Loans, the Reimbursement Obligations and the other Obligations (other than Secured Hedge Agreement Obligations and Secured Cash Management Obligations to the extent (x) such Obligations have been secured or backstopped to the satisfaction of the Lender holding such Obligations or (y) the Lender holding such Obligations has otherwise consented to such exclusion) shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding (other than those Letters of Credit secured or backstopped to the satisfaction of the L/C Issuer), the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, the Administrative Agent shall deliver to such Grantor any Collateral held by the Administrative Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination and to authorize the filing by Grantors of any necessary UCC terminations or other terminations or releases.

 

(b)                                 If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement, then the Administrative Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request and sole expense of the Borrower, a Subsidiary Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement; provided that the Borrower shall have delivered to the Administrative Agent a certification by the Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents.

 

8.16                           WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

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8.17                           Permitted Liens. Subject to the terms of the Intercreditor Agreement, the inclusion or reference to liens permitted under the Credit Agreement in this Agreement or in any other Loan Document is not intended to subordinate and shall not subordinate, and shall not be interpreted as subordinating, the Lien and security interest created by this Agreement or any other Loan Document to any liens permitted under the Credit Agreement.

 

[Signature Pages Follow]

 

32

 

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement to be duly executed and delivered as of the date first above written.

 

	
 

	
PAPERWEIGHT DEVELOPMENT

	
 

	
CORP., a Wisconsin corporation

	
 

	
 

	
 

	
 

	
 

	
By: 

	
/s/ Jeffrey J. Fletcher

	
 

	
Name: Jeffrey J. Fletcher

	
 

	
Title:  Controller

	
 

	
 

	
 

	
APPLETON PAPERS INC., a Delaware

	
 

	
corporation

	
 

	
 

	
 

	
 

	
 

	
By: 

	
/s/ Jeffrey J. Fletcher

	
 

	
Name: Jeffrey J. Fletcher

	
 

	
Title:  Controller

	
 

	
 

	
 

	
AMERICAN PLASTICS COMPANY,

	
 

	
INC., a Wisconsin corporation

	
 

	
 

	
 

	
 

	
 

	
By: 

	
/s/ Jeffrey J. Fletcher

	
 

	
Name: Jeffrey J. Fletcher

	
 

	
Title:  Treasurer

	
 

	
 

	
 

	
NEW ENGLAND EXTRUSION INC., a

	
 

	
Wisconsin corporation

	
 

	
 

	
 

	
 

	
 

	
By: 

	
/s/ Jeffrey J. Fletcher

	
 

	
Name: Jeffrey J. Fletcher

	
 

	
Title:  Treasurer

 

 

Annex I

to

Guarantee and Collateral Agreement

 

ASSUMPTION AGREEMENT, dated as of                                 , 20      , made by                                                             , a                              [corporation] (the "Additional Grantor"), in favor of Fifth Third Bank, as administrative agent (in such capacity, the "Administrative Agent") for the banks and other financial institutions (the "Lenders") parties to the Credit Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such Credit Agreement.

 

W I T N E S S E T H:

 

WHEREAS, Appleton Papers Inc., a Delaware corporation (the "Borrower"), PAPERWEIGHT DEVELOPMENT CORP., a Wisconsin corporation ("Holdings"), the Lenders and the Administrative Agent have entered into a Credit Agreement, dated as of February 8, 2010 (as amended, restated, supplemented and/or otherwise modified from time to time, the "Credit Agreement");

 

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of its Affiliates (other than the Additional Grantor) have entered into the Guarantee and Collateral Agreement, dated as of February 8, 2010 (as amended, restated, supplemented and/or otherwise modified from time to time, the "Guarantee and Collateral Agreement") in favor of the Administrative Agent for the benefit of the Lenders;

 

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party to the Guarantee and Collateral Agreement; and

 

WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee and Collateral Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

1.   Guarantee and Collateral Agreement. By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and Collateral Agreement as a Grantor thereunder and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Grantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules                         [*] to the Guarantee and Collateral Agreement. The Additional Grantor hereby represents and warrants that each of the representations and warranties contained in Section 4 of the Guarantee and Collateral Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date.

 

*                                         Refer to each Schedule which needs to be supplemented.

 

 

2.                                       GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

	
 

	
[ADDITIONAL GRANTOR]

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Name:

	
 

	
 

	
Title:

 

 

SCHEDULE 1

 

Notices

 

GRANTORS:

 

Paperweight Development Corp.

825 E. Wisconsin Avenue

Appleton, WI 54912-0353

Attention: Jeffrey J. Fletcher

Telephone: 920-991-8452

Telecopier: 920-991-8852

Electronic Mail: jfletcher@appletonideas.com

U.S. Taxpayer Identification Number: 39-2014992

 

Appleton Papers Inc.

825 E. Wisconsin Avenue

Appleton, WI 54912-0353

Attention: Jeffrey J. Fletcher

Telephone: 920-991-8452

Telecopier: 920-991-8852

Electronic Mail: jfletcher@appletonideas.com

U.S. Taxpayer Identification Number: 36-2556469

 

American Plastics Company, Inc.

3606 Red Arrow Drive

Rhinelander, WI 54501

Attention: Jeffrey J. Fletcher

Telephone: 920-991-8452

Telecopier: 920-991-8852

Electronic Mail: jfletcher@appletonideas.com

U.S. Taxpayer Identification Number: 39-1712123

 

New England Extrusion Inc.

18 Industrial Boulevard

Turners Falls, MA 01376

Attention: Jeffrey J. Fletcher

Telephone: 920-991-8452

Telecopier: 920-991-8852

Electronic Mail: jfletcher@appletonideas.com

U.S. Taxpayer Identification Number: 20-2033299

 

 

ADMINISTRATIVE AGENT, ANY L/C ISSUER, SWING LINE LENDER OR FIFTH THIRD BANK AS A LENDER:

 

Fifth Third Bank

38 Fountain Square Plaza

Cincinnati, Ohio 45263

Attention: Loan Syndications/Judy Huls

Facsimile: 513-534-0875

 

with copies to:

 

FIFTH THIRD BANK

222 South Riverside Plaza

Suite 3300

Chicago, Illinois 60606

Attention: Elizabeth Di Cola

Facsimile: 312-704-4127

 

KATTEN MUCHIN ROSENMAN LLP

525 West Monroe Street

Chicago, Illinois 60661-3693

Attention: Denise S. Burn, Esq.

Facsimile: 312-577-8778

 

 

SCHEDULE 2

 

Pledged Notes

 

1.                                       Promissory Note by Paperweight Development Corp. to Appleton Papers Inc., effective June 11, 2004, in the amount of $167,066,667.00.

 

Pledged Stock

 

	
Issuer

	
 

	
Class of Stock/

Membership Interest

	
 

	
Record Owner

	
 

	
Number of

Shares/

Membership

Interest Issued

	
 

	
Percentage of

Ownership

Interest

	
 

	
Percentage of

Ownership

Interest

Pledged

	
 

	
PDC Capital Corporation

	
 

	
Common Stock

	
 

	
Paperweight Development Corp

	
 

	
100

	
 

	
100

	
%

	
100

	
%

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Appleton Papers Inc. ("API")

	
 

	
Common Stock

	
 

	
Paperweight Development Corp

	
 

	
100

	
 

	
100

	
%

	
100

	
%

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
American Plastics Company, Inc.

	
 

	
Voting Common Stock

	
 

	
API

	
 

	
5

	
 

	
100

	
%

	
100

	
%

	
 

	
 

	
Non-Voting Common Stock

	
 

	
API

	
 

	
5,000

	
 

	
100

	
%

	
100

	
%

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
New England Extrusion Inc.

	
 

	
Common Stock

	
 

	
API

	
 

	
10

	
 

	
100

	
%

	
100

	
%

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Appleton Papers Canada Ltd.

	
 

	
Common Stock

	
 

	
API

	
 

	
66

	
 

	
66

	
%

	
100

	
%

	
 

	
 

	
Common Stock

	
 

	
API

	
 

	
34

	
 

	
34

	
%

	
100

	
%

 

 

SCHEDULE 3

 

Perfection of Liens

 

Uniform Commercial Code Filings

 

	
Grantor

	
 

	
Filing Jurisdiction of

Organization

	
 

	
State Identification No.

	
 

	
 

	
 

	
 

	
 

	
American Plastics Company, Inc.

	
 

	
Wisconsin

	
 

	
A029483

	
 

	
 

	
 

	
 

	
 

	
Paperweight Development Corp.

	
 

	
Wisconsin

	
 

	
P037701

	
 

	
 

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
Delaware

	
 

	
0627720

	
 

	
 

	
 

	
 

	
 

	
New England Extrusion Inc.

	
 

	
Wisconsin

	
 

	
A049404

 

Patent and Trademark Filings

 

U.S. Patent and Trademark Office

 

Copyright Filings

 

U.S. Copyright Office

 

Other Actions

 

1.             Obtaining "control" (within the meaning of the applicable Uniform Commercial Code) of Deposit Accounts (other than Permitted Unperfected Accounts) and Securities Accounts listed on Schedule 8 by entering into the necessary control agreements.

 

2.             Obtaining "control" (within the meaning of the applicable Uniform Commercial Code) of Investment Property listed on Schedule 2 by delivery of such Investment Property to the Administrative Agent.

 

3.             Obtaining "control" (within the meaning of the applicable Uniform Commercial Code) of letter-of-credit rights (to the extent requested in writing by the Administrative Agent).

 

 

SCHEDULE 4

 

Jurisdiction of Organization

 

	
Name of Loan Party

	
 

	
Jurisdiction of

Organization

	
 

	
Chief Executive

Office

	
 

	
Federal Tax ID No.

	
Paperweight Development Corp.

	
 

	
Wisconsin

	
 

	
825 E. Wisconsin Ave. Appleton, WI

	
 

	
39-2014992

	
Appleton Papers Inc.

	
 

	
Delaware

	
 

	
825 E. Wisconsin Ave. Appleton, WI

	
 

	
36-2556469

	
American Plastics Company, Inc.

	
 

	
Wisconsin

	
 

	
3606 Red Arrow Drive Rhinelander, WI

	
 

	
39-1712123

	
New England Extrusion Inc.

	
 

	
Wisconsin

	
 

	
18 Industrial Blvd Turners Falls, MA

	
 

	
20-2033299

 

 

SCHEDULE 5

 

Locations of Collateral

 

	
Party

	
 

	
Location

	
 

	
Address

	
 

	
 

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
Appleton, WI - Plant

	
 

	
825 E. Wisconsin Avenue

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
 

	
 

	
1100 N. Lawe Street

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
 

	
 

	
N. Lawe St. Parking Lot

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
 

	
 

	
Hancock St. Parking Lot

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
 

	
 

	
702 E. Hancock Street

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
 

	
 

	
600 E. Hancock Street

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
 

	
 

	
714 E. Hancock Street

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
 

	
 

	
N. Viola Street

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
 

	
 

	
1408 N. Meade Street

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
 

	
 

	
1325 and 1401 N. Rankin

	
 

	
 

	
 

	
 

	
Street

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
Portage, WI - Plant

	
 

	
2500 W. Wisconsin St.

	
 

	
 

	
 

	
 

	
Portage, WI

	
 

	
 

	
West Carrollton, OH - Mill

	
 

	
4000 Hydraulic Road

	
 

	
 

	
 

	
 

	
West Carrollton, OH

	
 

	
 

	
 

	
 

	
1030 W. Alex-Bell Road

	
 

	
 

	
 

	
 

	
West Carrollton, OH

	
 

	
 

	
 

	
 

	
Alexanderville - Bellbrook

	
 

	
 

	
 

	
 

	
West Carrollton, OH

	
 

	
 

	
Roaring Spring, PA - Mill

	
 

	
100 Paper Mill Road

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
301 Pine Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
244 N. Main Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
N. Main Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
201-05 Locust Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
202 Locust Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
204 Locust Street

 

 

	
Party

	
 

	
Location

	
 

	
Address

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
209-13 Locust Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
212 Locust Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
300 Locust Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
308 Locust Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
309 Locust Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
305 Locust Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
304 Pine Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
 

	
 

	
305 Pine Street

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
Distribution Center

	
 

	
3000 Warehouse Road

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
Distribution Center

	
 

	
115 Kensington Drive

	
 

	
 

	
 

	
 

	
Appleton, WI

	
 

	
 

	
Distribution Center

	
 

	
120 Declaration Drive

	
 

	
 

	
 

	
 

	
McDonough, GA

	
 

	
 

	
Distribution Center

	
 

	
1100 Blake Street

	
 

	
 

	
 

	
 

	
Edwardsville, KS

	
 

	
 

	
Distribution Center

	
 

	
2300 Progress Drive

	
 

	
 

	
 

	
 

	
Hebron, KY

	
 

	
 

	
Distribution Center

	
 

	
5491 E. Philadelphia

	
 

	
 

	
 

	
 

	
Ontario, CA

	
 

	
 

	
Distribution Center

	
 

	
5915 North Marine Drive

	
 

	
 

	
 

	
 

	
Portland, OR

	
 

	
 

	
Distribution Center

	
 

	
6210 North Marine Drive

	
 

	
 

	
 

	
 

	
Portland, OR

	
 

	
 

	
Distribution Center

	
 

	
2850 Appleton Street

	
 

	
 

	
 

	
 

	
Camp Hill, PA

	
 

	
 

	
Miscellaneous Storage Space

	
 

	
331 E. Closson Road

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
 

	
 

	
Miscellaneous Storage Space

	
 

	
221 Cove Lane Road

	
 

	
 

	
 

	
 

	
Roaring Spring, PA

	
American Plastics Company, Inc.

	
 

	
Rhinelander, WI - Plant

	
 

	
3606 Red Arrow Drive

	
 

	
 

	
 

	
 

	
Rhinelander, WI 54501

	
New England Extrusion Inc.

	
 

	
Milton, WI - Plant

	
 

	
1264 East High Street

	
 

	
 

	
 

	
 

	
Milton, WI 53563

	
 

	
 

	
Turners Falls - Plant

	
 

	
18 Industrial Boulevard

	
 

	
 

	
 

	
 

	
Turners Falls, MA 01376

 

 

SCHEDULE 6

 

Intellectual Property

 

I.            COPYRIGHTS AND COPYRIGHT LICENSES

 

1.                    Certificate of Registration No. Txu 833-593 dated November 1997 re: Retail POS Market Research Project.

2.                    Certificate of Registration No. Txu 913-413 dated August 1999 re: Guide to the Internet.

3.                    Certificate of Registration No. VAu 558-602 dated May 16, 2002 to watermark Cordoba.

4.                    Certificate of Registration No. VAu 558-601 dated May 16, 2002 to watermark HEXMARK.

5.                    Certificate of Registration, Form Txu 1-158-471 dated February 26, 2004 eDigitalPaper computer program and screen display.

6.                    Certificate of Registration No. VAu 613-127 dated April 12, 2004 re: NATURE'S PAINTBRUSH, 2 dimensional artwork.

7.                    Certificate of Registration No. Txu 1-282-752 dated February 22, 2006 to Appleton Diversity Unplugged 2006.

8.                    Certificate of Registration No. Txu 710863 dated October 2, 1995 to TRANSLATE C.

9.                    Certificate of Registration No. VA 675934 dated July 21, 1993 to Appleton Papers: no. PA0201.

10.              Certificate of Registration No. TX 998251 dated October 22, 1982.

 

8

 

 

II.             PATENTS

 

U.S. Issued Patents and Patent Applications:

 

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
6360A

	
 

	
Fluorene compounds

	
 

	
06/910,045

	
 

	
6395681

	
 

	
28-May-2002

	
 

	
22-May-86

	
 

	
28-May-2019

	
 

	
Appleton Papers Inc.

	
6403

	
 

	
Di [bis-(indolyl) ethylenyl] tetrahalophthalide record materials

	
 

	
557284

	
 

	
5157012

	
 

	
20-Oct-1992

	
 

	
24-Jul-1990

	
 

	
24-Jul-2010

	
 

	
Appleton Papers Inc.

	
6409 CON

	
 

	
Overlap cam

	
 

	
864,378

	
 

	
5222423

	
 

	
29-Jun-1993

	
 

	
06-Apr-1992

	
 

	
20-Jun-2011

	
 

	
Appleton Papers Inc.

	
6414

	
 

	
Straight cut coater unwind knife

	
 

	
658,819

	
 

	
5146829

	
 

	
15-Sep-1992

	
 

	
22-Feb-1991

	
 

	
22-Feb-2011

	
 

	
Appleton Papers Inc.

	
6419

	
 

	
Process for microencapsulation

	
 

	
665,206

	
 

	
5164126

	
 

	
17-Nov-1992

	
 

	
05-Mar-1991

	
 

	
05-Mar-2011

	
 

	
Appleton Papers Inc.

	
6420

	
 

	
Thermally- responsive record material

	
 

	
791,754

	
 

	
5164356

	
 

	
17-Nov-1992

	
 

	
12-Nov-1991

	
 

	
12-Nov-2011

	
 

	
Appleton Papers Inc.

	
6422

	
 

	
Thermally responsive record material

	
 

	
745,571

	
 

	
5124307

	
 

	
23-Jun-1992

	
 

	
15-Aug-1991

	
 

	
15-Aug-2011

	
 

	
Appleton Papers Inc.

	
6423

	
 

	
Vertical foam wrapping machine and method for wrapping a roll of carbonless paper

	
 

	
717,467

	
 

	
5131209

	
 

	
21-Jul-1992

	
 

	
19-Jun-1991

	
 

	
19-Jun-2011

	
 

	
Appleton Papers Inc.

	
6426

	
 

	
Capsule coating

	
 

	
840,422

	
 

	
5330566

	
 

	
19-Jul-1994

	
 

	
24-Feb-1992

	
 

	
24-Feb-2012

	
 

	
Appleton Papers Inc.

	
6427

	
 

	
Mono (indolylethylenyl) phthalides

	
 

	
817,263

	
 

	
5200519

	
 

	
06-Apr-1993

	
 

	
03-Jan-1992

	
 

	
03-Jan-2012

	
 

	
Appleton Papers Inc.

	
6427 CON

	
 

	
Method of preparing mono (indolylethylenyl) phthalides

	
 

	
972,407

	
 

	
5218127

	
 

	
08-Jun-1993

	
 

	
06-Nov-1992

	
 

	
03-Jan-2012

	
 

	
Appleton Papers Inc.

	
6428

	
 

	
Thermally- responsive record material

	
 

	
789,716

	
 

	
5114903

	
 

	
19-May-1992

	
 

	
08-Nov-1991

	
 

	
08-Nov-2011

	
 

	
Appleton Papers Inc.

	
6431

	
 

	
Desensitizable record material

	
 

	
943,090

	
 

	
5340680

	
 

	
23-Aug-1994

	
 

	
10-Sep-1992

	
 

	
10-Sep-2012

	
 

	
Appleton Papers Inc.

	
6431A

	
 

	
Imaging process

	
 

	
208,395

	
 

	
5427886

	
 

	
27-Jun-1995

	
 

	
09-Mar-1994

	
 

	
27-Jun-2012

	
 

	
Appleton Papers Inc.

	
6435

	
 

	
Mulching Composite

	
 

	
660,894

	
 

	
5672434

	
 

	
30-Sep-1997

	
 

	
10-Jun-1996

	
 

	
10-Jun-2016

	
 

	
Appleton Papers Inc.

	
6436 CON

	
 

	
Coater and a method for coating a substrate

	
 

	
09/040,380

	
 

	
5895542

	
 

	
20-Apr-1999

	
 

	
18-Mar-1998

	
 

	
 

	
 

	
Appleton Papers Inc.

	
6438

	
 

	
Film bubble wrap interleaf

	
 

	
214,250

	
 

	
5873464

	
 

	
23-Feb-1999

	
 

	
17-Mar-1994

	
 

	
23-Feb-2016

	
 

	
Appleton Papers Inc.

 

9

 

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
6438 DIV

	
 

	
Film bubble wrap interleaf

	
 

	
09/197,502

	
 

	
6038834

	
 

	
21-Mar-2000

	
 

	
01-Jan-1999

	
 

	
17-Mar-2014

	
 

	
Appleton Papers Inc.

	
6444B 

	
 

	
Linerless labels 

	
 

	
10/848,148 

	
 

	
7125824 

	
 

	
24-Oct-2006 

	
 

	
19-May-2004 

	
 

	
19-May-2024 

	
 

	
Appleton Papers Inc. 

	
6453

	
 

	
Cross direction web processor

	
 

	
08/867,119

	
 

	
6038487

	
 

	
14-Mar-2000

	
 

	
05-Jun-1997

	
 

	
05-Jun-2017

	
 

	
Appleton Papers Inc.

	
6455

	
 

	
Agricultural mulch with extended longevity

	
 

	
08/781,516

	
 

	
5866269

	
 

	
02-Feb-1999

	
 

	
09-Jan-1997

	
 

	
09-Jan-2017

	
 

	
Appleton Papers Inc.

	
6456

	
 

	
Thermally- responsive record material

	
 

	
08/759,805

	
 

	
5668080

	
 

	
16-Sep-1997

	
 

	
03-Dec-1996

	
 

	
10-Mar-2017

	
 

	
Appleton Papers Inc.

	
6457

	
 

	
Thermally responsive record material

	
 

	
08/835,701

	
 

	
5821196

	
 

	
13-Oct-1998

	
 

	
10-Apr-1997

	
 

	
10-Apr-2017

	
 

	
Appleton Papers Inc.

	
6458

	
 

	
Thermally-responsive record material

	
 

	
08/842,965

	
 

	
5955398

	
 

	
21-Sep-1999

	
 

	
25-Apr-1997

	
 

	
 

	
 

	
Appleton Papers Inc.

	
6468

	
 

	
CF sheets; carbonless copy paper assembly comprising at least one back coating sheet and one front coating sheet, in which the front sheet has a color developer resin coating of less than .39 pounds per ream

	
 

	
09/824,669

	
 

	
6660687

	
 

	
09-Dec-2003

	
 

	
04-Apr-2001

	
 

	
04-Apr-2021

	
 

	
Appleton Papers Inc.

	
6469

	
 

	
Hand-held barcode reader receptacle, base member and method of reading barcodes

	
 

	
09/326,674

	
 

	
6244511

	
 

	
12-Jun-2001

	
 

	
07-Jun-1999

	
 

	
07-Jun-2019

	
 

	
Appleton Papers Inc.

	
6474 CIP

	
 

	
Thermally responsive record material

	
 

	
09/950,194

	
 

	
6559097

	
 

	
06-May-2003

	
 

	
10-Sep-2001

	
 

	
08-Sep-2019

	
 

	
Appleton Papers Inc.

	
6475

	
 

	
In situ microencapsulated adhesive

	
 

	
09/942,648

	
 

	
6592990

	
 

	
15-Jul-2003

	
 

	
30-Aug-2001

	
 

	
30-Aug-2021

	
 

	
Appleton Papers Inc.

	
6476

	
 

	
Record material

	
 

	
09/520,909

	
 

	
6310002

	
 

	
30-Oct-2001

	
 

	
07-Mar-2000

	
 

	
07-Mar-2020

	
 

	
Appleton Papers Inc.

	
6477

	
 

	
Thermally-responsive record material

	
 

	
09/741,372

	
 

	
6566301

	
 

	
20-May-2003

	
 

	
19-Dec-2000

	
 

	
19-Dec-2020

	
 

	
Appleton Papers Inc.

	
6477 CIP

	
 

	
Thermally- responsive record material

	
 

	
10/389,932

	
 

	
6835691

	
 

	
28-Dec-2004

	
 

	
18-Mar-2003

	
 

	
19-Dec-2020

	
 

	
Appleton Papers Inc.

 

10

 

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
6477A

	
 

	
Modifier compounds

	
 

	
09/754,643

	
 

	
6429341

	
 

	
06-Aug-2002

	
 

	
04-Jan-2001

	
 

	
04-Jan-2021

	
 

	
Appleton Papers Inc.

	
6480

	
 

	
Microcapsules having improved printing and efficiency

	
 

	
09/975,882

	
 

	
6544926

	
 

	
08-Apr-2003

	
 

	
11-Oct-2001

	
 

	
ll-Oct-2021

	
 

	
Appleton Papers Inc.

	
6482

	
 

	
Process for preparing alkoxy or arylmethoxy aroxyethanes

	
 

	
09/775,027

	
 

	
6323376

	
 

	
27-Nov-2001

	
 

	
01-Feb-2001

	
 

	
01-Feb-2021

	
 

	
Appleton Papers Inc.

	
6483

	
 

	
Mixture concentration control in manufacturing processes

	
 

	
09/893,883

	
 

	
6496781

	
 

	
17-Dec-2002

	
 

	
29-Jun-2001

	
 

	
29-Jun-2021

	
 

	
Appleton Papers Inc.

	
6487

	
 

	
System and method for rupturing encapsulated adhesive in sheet media

	
 

	
09/816,321

	
 

	
6830645

	
 

	
14-Dec-2004

	
 

	
26-Mar-2001

	
 

	
26-Mar-2021

	
 

	
Appleton Papers Inc.

	
6488

	
 

	
Method for forming electrically conductive pathways

	
 

	
09/839,126

	
 

	
6892441

	
 

	
17-May-2005

	
 

	
23-Apr-2001

	
 

	
23-Apr-2021

	
 

	
Appleton Papers Inc.

	
6491

	
 

	
Pressure sensitive labeler-liner eliminator

	
 

	
09/994,047

	
 

	
6726796

	
 

	
27-Apr-2004

	
 

	
27-Nov-2001

	
 

	
27-Nov-2021

	
 

	
Appleton Papers Inc.

	
6492

	
 

	
Method for making security paper

	
 

	
09/870,886

	
 

	
6368455

	
 

	
09-Apr-2002

	
 

	
31-May-2001

	
 

	
31-May-2021

	
 

	
Appleton Papers Inc.

	
6492A

	
 

	
Security paper

	
 

	
10/097,766

	
 

	
6531032

	
 

	
11-Mar-2003

	
 

	
14-Mar-2002

	
 

	
14-Mar-2022

	
 

	
Appleton Papers Inc.

	
6492B

	
 

	
Security paper and methods for production thereof

	
 

	
10/098,088

	
 

	
6582556

	
 

	
24-Jun-2003

	
 

	
14-Mar-2002

	
 

	
14-Mar-2022

	
 

	
Appleton Papers Inc.

	
6494

	
 

	
Beverage and food containers, inwardly direct foam

	
 

	
10/113,077

	
 

	
7074466

	
 

	
11-Jul-2006

	
 

	
01-Apr-2002

	
 

	
01-Apr-2022

	
 

	
Appleton Papers Inc.

	
6501

	
 

	
Insulated beverage or food container

	
 

	
09/923,332

	
 

	
6811843

	
 

	
02-Nov-2004

	
 

	
08-Aug-2001

	
 

	
08-Aug-2021

	
 

	
Appleton Papers Inc.

	
6507

	
 

	
Insulated beverage or food container

	
 

	
10/167,463

	
 

	
6852381

	
 

	
08-Feb-2005

	
 

	
13-Jun-2002

	
 

	
13-Jun-2022

	
 

	
Appleton Papers Inc.

	
6509

	
 

	
Process for preparing a non-woven fibrous web

	
 

	
10/001,121

	
 

	
6517648

	
 

	
11-Feb-2003

	
 

	
02-Nov-2001

	
 

	
02-Nov-2021

	
 

	
Appleton Papers Inc.

	
6509B

	
 

	
Process for preparing a non-woven fibrous web

	
 

	
10/298,200

	
 

	
6843871

	
 

	
18-Jan-2005

	
 

	
15-Nov-2002

	
 

	
02-Nov-2021

	
 

	
Appleton Papers Inc.

	
6510

	
 

	
Uniform microcapsules

	
 

	
10/099,757

	
 

	
6890592

	
 

	
10-May-2005

	
 

	
13-Mar-2002

	
 

	
13-Mar-2022

	
 

	
Appleton Papers Inc.

	
6510 DIV

	
 

	
Uniform microcapsules

	
 

	
11/051,744

	
 

	
7122503

	
 

	
17-Oct-2006

	
 

	
07-Feb-2005

	
 

	
13-Mar-2022

	
 

	
Appleton Papers Inc.

	
6511

	
 

	
Determination of gas solubility, entrained gas content and true liquid density in manufacturing processes

	
 

	
10/046,240

	
 

	
6766680

	
 

	
27-Jul-2004

	
 

	
16-Jan-2002

	
 

	
16-Jan-2022

	
 

	
Appleton Papers Inc.

 

11

 

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
6511 DIV

	
 

	
Determination of gas-free densities and relative amounts of gases in liquids in manufacturing processes

	
 

	
10/841,530

	
 

	
7017388

	
 

	
28-Mar-2006

	
 

	
10-May-2004

	
 

	
16-Jan-2022

	
 

	
Appleton Papers Inc.

	
6518

	
 

	
Product authentication

	
 

	
10/180,688

	
 

	
6939826

	
 

	
06-Sep-2005

	
 

	
25-Jun-2002

	
 

	
25-Jun-2022

	
 

	
Appleton Papers Inc.

	
6519

	
 

	
Thermal imaging paper laminate

	
 

	
10/183,511

	
 

	
6937153

	
 

	
30-Aug-2005

	
 

	
28-Jun-2002

	
 

	
28-Jun-2022

	
 

	
Appleton Papers Inc.

	
6519A

	
 

	
Thermal imaging paper laminate

	
 

	
11/036,042

	
 

	
7183928

	
 

	
27-Feb-2007

	
 

	
18-Jan-2005

	
 

	
28-Jun-2022

	
 

	
Appleton Papers Inc.

	
6520

	
 

	
Token array and method employing authentication tokens bearing scent formulation information

	
 

	
10/377,534

	
 

	
7108190

	
 

	
19-Sep-2006

	
 

	
28-Feb-2003

	
 

	
28-Feb-2023

	
 

	
Appleton Papers Inc.

	
6522

	
 

	
Secure point of sale imageable substrate

	
 

	
10/703,496

	
 

	
6995784

	
 

	
07-Feb-2006

	
 

	
10-Nov-2003

	
 

	
10-Nov-2023

	
 

	
Appleton Papers Inc.

	
6532

	
 

	
Dental articulation kit and method

	
 

	
10/420,663

	
 

	
6932602

	
 

	
23-Aug-2005

	
 

	
22-Apr-2003

	
 

	
22-Apr-2023

	
 

	
Appleton Papers Inc.

	
6539

	
 

	
Authenticity indicator

	
 

	
10/831,525

	
 

	
7163909

	
 

	
16-Jan-2007

	
 

	
23-Apr-2004

	
 

	
23-Apr-2024

	
 

	
Appleton Papers Inc.

	
6541

	
 

	
Real time determination of gas solubility and related parameters in manufacturing processes

	
 

	
10/644,997

	
 

	
6847898

	
 

	
25-Jan-2005

	
 

	
21-Aug-2003

	
 

	
21-Aug-2023

	
 

	
Appleton Papers Inc.

	
6540

	
 

	
Apparatus and method for real time determination of density and related parameters in manufacturing processes

	
 

	
10/644,994

	
 

	
7257985

	
 

	
21-Aug-2007

	
 

	
21-Aug-2003

	
 

	
21-Aug-2023

	
 

	
Appleton Papers Inc.

	
6541

	
 

	
Real time determination of gas solubility and related parameters in manufacturing processes

	
 

	
11/009,044

	
 

	
7559223

	
 

	
14-Jul-2009

	
 

	
13-Dec-2004

	
 

	
14-Jul-2029

	
 

	
Appleton Papers Inc.

	
6509D

	
 

	
Process for preparing a non-woven fibrous web

	
 

	
11/036,726

	
 

	
7300530

	
 

	
27-Nov-2007

	
 

	
14-Jan-2005

	
 

	
02-Nov-2021

	
 

	
Appleton Papers Inc.

	
6545

	
 

	
Recyclable repulpable coated paper stock

	
 

	
10/969,859

	
 

	
7235308

	
 

	
26-Jun-2007

	
 

	
22-Oct-2004

	
 

	
22-Oct-2024

	
 

	
Appleton Papers Inc.

	
6566

	
 

	
Secure thermally imaged documents susceptible to rapid information destruction by induction

	
 

	
10/872,010

	
 

	
7262150

	
 

	
28-Aug-2007

	
 

	
21-Jun-2004

	
 

	
21-Jun-2024

	
 

	
Appleton Papers Inc.

 

12

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
 

	
6585

	
 

	
Controlled COF films

	
 

	
10/728,726

	
 

	
7267862

	
 

	
11-Sep-2007

	
 

	
05-Dec-2003

	
 

	
05-Dec-2023

	
 

	
Appleton Papers Inc.

	
 

	
6594

	
 

	
Process for manufacture of fluoran dyes

	
 

	
11/201,528

	
 

	
7294724

	
 

	
13-Nov-2007

	
 

	
11-Aug-2005

	
 

	
11-Aug-2025

	
 

	
Appleton Papers Inc.

	
 

	
6577

	
 

	
UV curable coating material of encapsulated water dispersed core material

	
 

	
11/358,817

	
 

	
7629394

	
 

	
08-Dec-2009

	
 

	
21-Feb-2006

	
 

	
21-Feb-2026

	
 

	
Appleton Papers Inc.

	
 

	
6607

	
 

	
Security paper authentication system with dual instant color

	
 

	
11/730,755

	
 

	
7648842

	
 

	
19-Jan-2010

	
 

	
04-Apr-2007

	
 

	
04-Apr-2027

	
 

	
Appleton Papers Inc.

	
 

	
6606

	
 

	
Benefit agent containing delivery particle

	
 

	
12/216941

	
 

	
US-2010- 0008870- A1

	
 

	
14-Jan-2010

	
 

	
14-Jul-08

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6616

	
 

	
Ink jet recording sheet useful as transfer substrate

	
 

	
12/384716

	
 

	
US-2009 0286021- A1

	
 

	
19-Nov-2009

	
 

	
08-Apr-09

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6610 CIP

	
 

	
Particle with selected permeance wall

	
 

	
12/221781

	
 

	
US-2009 0274907- A1

	
 

	
05-Nov-2009

	
 

	
06-Aug-08

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6610

	
 

	
Particle with low permeance wall

	
 

	
12/149424

	
 

	
US-2009 0274906- A1

	
 

	
05-Nov-200

	
 

	
01-May-08

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6627

	
 

	
Cationic microcapsule particles

	
 

	
12/382946

	
 

	
US-2009 0274905- A1

	
 

	
05-Nov-2009

	
 

	
27-Mar-09

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6597 DIV

	
 

	
Process for manufacturing diphenylamines

	
 

	
12/379317

	
 

	
US-2009 0156864- A1

	
 

	
18-Jun-2009

	
 

	
19-Feb-09

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6614

	
 

	
Heat-Sensitive record material

	
 

	
12/292578

	
 

	
US-2009 0155613- A1

	
 

	
18-Jun-2009

	
 

	
21-Nov-08

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6604

	
 

	
Surface insensitive anaerobic adhesive and sealant

	
 

	
11/800589

	
 

	
 

	
 

	
 

	
 

	
07-May-07

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6602

	
 

	
Transparent paper and method of making same

	
 

	
11/655101

	
 

	
US-2008 176037- A1

	
 

	
24-Jul-2008

	
 

	
19-Jan-07

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

 

13

 

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
 

	
6602A

	
 

	
Secure documents- methods and applications

	
 

	
12/009331

	
 

	
US-2008- 0174104- A1

	
 

	
24-Jul-2008

	
 

	
17-Jan-08

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6577

	
 

	
UV curable coating material of encapsulated water dispersed core material

	
 

	
11/358817

	
 

	
US-2007- 0197384- A1

	
 

	
23-Aug-2007

	
 

	
21-Feb-06

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6595

	
 

	
Encapsulated structural adhesive

	
 

	
11/451833

	
 

	
US-2007- 0021533- A1

	
 

	
25-Jan-2007

	
 

	
13-Jun-06

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6568

	
 

	
Water-in-oil capsule manufacture process and microcapsules produced by such process

	
 

	
11/436496

	
 

	
US-2006- 0263519- A1

	
 

	
23-Nov-2006

	
 

	
18-May-06

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6568B

	
 

	
Oil-in-water capsule manufacture process and microcapsules produced by such process

	
 

	
11/436317

	
 

	
US-2006- 0263518- A1

	
 

	
23-Nov-2006

	
 

	
18-May-06

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6566

	
 

	
Secure thermally imaged documents susceptible to rapid information destruction by induction

	
 

	
10/872010

	
 

	
7,262,150

	
 

	
28-Aug-2007

	
 

	
21-Jun-04

	
 

	
21-Jun-2024

	
 

	
Appleton Papers Inc.

	
 

	
6562

	
 

	
Faux metallic imaging thermally responsive record material

	
 

	
11/126191

	
 

	
US-2005- 0255997- A1

	
 

	
17-Nov-2005

	
 

	
11-May-04

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6539

	
 

	
Authenticity indicator

	
 

	
10/831525

	
 

	
7,163,909

	
 

	
16-Jan-2007

	
 

	
23-Apr-04

	
 

	
23-Apr-2024

	
 

	
Appleton Papers Inc.

	
 

	
6510 DIV

	
 

	
Uniform microcapsules

	
 

	
11/051744

	
 

	
7,122,503

	
 

	
17-Oct-2006

	
 

	
28-Mar-05

	
 

	
13-Mar-2022

	
 

	
Appleton Papers Inc.

	
 

	
6488

	
 

	
Method and system for forming electronically conductive pathways

	
 

	
11/078443

	
 

	
 

	
 

	
 

	
 

	
14-Mar-05

	
 

	
 

	
 

	
Appleton Papers Inc.

	
 

	
6519A

	
 

	
Thermal imaging paper laminate

	
 

	
11/036042

	
 

	
7,183,928

	
 

	
27-Feb-2007

	
 

	
18-Jan-05

	
 

	
28-Jun-2022

	
 

	
Appleton Papers Inc.

	
 

	
6545

	
 

	
Recyclable repulpable coated paper stock

	
 

	
10/969859

	
 

	
7,235,308

	
 

	
26-Jun-2007

	
 

	
22-Oct-04

	
 

	
22-Oct-2024

	
 

	
Appleton Papers Inc.

	
 

	
6541A

	
 

	
Real time determination of gas solubility and related parameters in manufacturing processes

	
 

	
11/009044

	
 

	
7,559,223

	
 

	
14-Jul-2009

	
 

	
13-Dec-04

	
 

	
14-Jul-2029

	
 

	
Appleton Papers Inc.

	
 

	
 

	
 

	
Visual validation mark for bank checks and other security documents

	
 

	
 

	
 

	
5,695,220

	
 

	
12/9/97

	
 

	
 

	
 

	
 

	
 

	
Appleton Papers, Inc

	
 

 

14

 

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
 

	
 

	
 

	
Benefit agent containing delivery particle

	
 

	
12/216941

	
 

	
 

	
 

	
 

	
 

	
7/14/08

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Ink jet recording sheet useful as transfer substrate

	
 

	
12/384716

	
 

	
 

	
 

	
 

	
 

	
4/8/09

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Particle with selected permeance wall

	
 

	
12/221781

	
 

	
 

	
 

	
 

	
 

	
8/6/08

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Particle with low permeance wall

	
 

	
12/149424

	
 

	
 

	
 

	
 

	
 

	
5/1/08

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Process for manufacturing diphenylamines

	
 

	
12/379317

	
 

	
 

	
 

	
 

	
 

	
2/19/09

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Heat-Sensitive record material

	
 

	
12/292578

	
 

	
 

	
 

	
 

	
 

	
11/21/08

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Surface insensitive anaerobic adhesive and sealant

	
 

	
11/800589

	
 

	
 

	
 

	
 

	
 

	
5/7/07

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Security paper authentication system with dual instant color

	
 

	
11/730755

	
 

	
 

	
 

	
 

	
 

	
4/4/07

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Transparent paper and method of making same

	
 

	
11/655101

	
 

	
 

	
 

	
 

	
 

	
1/19/07

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Secure documents- methods and applications

	
 

	
12/009331

	
 

	
 

	
 

	
 

	
 

	
1/17/08

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
UV curable coating material of encapsulated water dispersed core material

	
 

	
11/358817

	
 

	
 

	
 

	
 

	
 

	
2/21/06

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Process for manufacturing diphenylamines

	
 

	
11/236539

	
 

	
 

	
 

	
 

	
 

	
9/28/05

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Encapsulated structural adhesive

	
 

	
11/451833

	
 

	
 

	
 

	
 

	
 

	
6/13/06

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Heat-sensitive record material

	
 

	
11/432582

	
 

	
 

	
 

	
 

	
 

	
5/11/06

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Water-in-oil capsule manufacture process and microcapsules produced by such process

	
 

	
11/436496

	
 

	
 

	
 

	
 

	
 

	
5/18/06

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Oil-in-water capsule manufacture process and microcapsules produced by such process

	
 

	
11/436317

	
 

	
 

	
 

	
 

	
 

	
5/18/06

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Heating container sleeve or tape

	
 

	
10/942920

	
 

	
 

	
 

	
 

	
 

	
9/17/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

 

15

 

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
 

	
 

	
 

	
Secure thermally imaged documents susceptible to rapid information destruction by induction

	
 

	
10/943248

	
 

	
 

	
 

	
 

	
 

	
9/17/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Secure thermally imaged documents susceptible to rapid information destruction by induction

	
 

	
10/872010

	
 

	
 

	
 

	
 

	
 

	
6/21/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Faux metallic imaging thermally responsive record material

	
 

	
10/842732

	
 

	
 

	
 

	
 

	
 

	
5/11/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Faux metallic imaging thermally responsive record material

	
 

	
11/126191

	
 

	
 

	
 

	
 

	
 

	
5/11/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Authenticity indicator

	
 

	
10/831525

	
 

	
 

	
 

	
 

	
 

	
4/23/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Uniform microcapsules

	
 

	
11/051744

	
 

	
 

	
 

	
 

	
 

	
3/28/05

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Method and system for forming electronically conductive pathways

	
 

	
11/078443

	
 

	
 

	
 

	
 

	
 

	
3/14/05

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Process for preparing a non-woven fibrous web

	
 

	
11/036726

	
 

	
 

	
 

	
 

	
 

	
1/14/05

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Process for preparing a non-woven fibrous web

	
 

	
11/035502

	
 

	
 

	
 

	
 

	
 

	
1/14/05

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Thermal imaging paper laminate

	
 

	
11/036042

	
 

	
 

	
 

	
 

	
 

	
1/18/05

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Recyclable repulpable coated paper stock

	
 

	
10/969859

	
 

	
 

	
 

	
 

	
 

	
10/22/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Real time determination of gas solubility and related parameters in manufacturing processes

	
 

	
11/009044

	
 

	
 

	
 

	
 

	
 

	
12/13/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Thermally-responsive record material

	
 

	
10/694857

	
 

	
 

	
 

	
 

	
 

	
10/29/03

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Product authentication

	
 

	
10/928445

	
 

	
 

	
 

	
 

	
 

	
8/26/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Method and system for forming RF reflective pathways

	
 

	
10/913461

	
 

	
 

	
 

	
 

	
 

	
8/9/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Insulated beverage or food container

	
 

	
10/885676

	
 

	
 

	
 

	
 

	
 

	
7/8/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

 

16

 

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
 

	
 

	
 

	
Token bearing magnetic image information in registration with visible image information

	
 

	
10/458124

	
 

	
 

	
 

	
 

	
 

	
6/10/03

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Dental articulation kit and method

	
 

	
10/420663

	
 

	
 

	
 

	
 

	
 

	
4/22/03

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Determination of gas-free densities and relative amounts of gases in liquids in manufacturing processes

	
 

	
10/841530

	
 

	
 

	
 

	
 

	
 

	
5/10/04

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Token array and method employing authentication tokens bearing scent formulation information

	
 

	
10/377534

	
 

	
 

	
 

	
 

	
 

	
2/28/03

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Secure point of sale imageable substrate

	
 

	
10/703496

	
 

	
 

	
 

	
 

	
 

	
11/10/03

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Insulated beverage or food container stock

	
 

	
10/645486

	
 

	
 

	
 

	
 

	
 

	
8/22/03

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Product authentication

	
 

	
10/180688

	
 

	
 

	
 

	
 

	
 

	
6/25/02

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Composite packaging materials and printable sheets, and methods of making

	
 

	
10/173289

	
 

	
 

	
 

	
 

	
 

	
6/17/02

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Uniform microcapsules

	
 

	
10/099757

	
 

	
 

	
 

	
 

	
 

	
3/13/02

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Thermally-responsive record material

	
 

	
10/389932

	
 

	
 

	
 

	
 

	
 

	
3/18/03

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Process for preparing a non-woven fibrous web

	
 

	
10/298200

	
 

	
 

	
 

	
 

	
 

	
11/15/02

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Beverage food containers, inwardly directed foam

	
 

	
10/113077

	
 

	
 

	
 

	
 

	
 

	
4/1/02

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Security paper and method for production thereof

	
 

	
10/097766

	
 

	
 

	
 

	
 

	
 

	
3/14/02

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Beverage and food containers and substrates

	
 

	
10/113991

	
 

	
 

	
 

	
 

	
 

	
4/1/02

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Beverage and food containers, outwardly directed foam

	
 

	
10/113116

	
 

	
 

	
 

	
 

	
 

	
4/1/02

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Method and system for forming RF reflective pathways

	
 

	
09/880001

	
 

	
 

	
 

	
 

	
 

	
6/14/01

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

 

17

 

	
 

	
 

	
 

	
 

	
Application

	
 

	
Patent

	
 

	
 

	
 

	
Application

	
 

	
 

	
 

	
 

	
 

	
Docket #

	
 

	
Description

	
 

	
Number

	
 

	
No.

	
 

	
Issued Date

	
 

	
Date

	
 

	
Expiration Date

	
 

	
Owner

	
 

	
 

	
 

	
Pressure sensitive labeler-liner eliminator

	
 

	
09/994047

	
 

	
 

	
 

	
 

	
 

	
11/27/01

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Modifier compounds

	
 

	
09/754643

	
 

	
 

	
 

	
 

	
 

	
1/4/01

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Process for preparing alkoxy or arylemethoxy aroxyethanes

	
 

	
09/775027

	
 

	
 

	
 

	
 

	
 

	
2/1/01

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
Process for manufacturing diphenylamines

	
 

	
11/730755

	
 

	
 

	
 

	
 

	
 

	
4/4/07

	
 

	
 

	
 

	
Appleton Papers, Inc.

	
 

	
 

	
 

	
 

	
 

	
12/010,190

	
 

	
 

	
 

	
 

	
 

	
1/22/08

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/078,853

	
 

	
 

	
 

	
 

	
 

	
4/7/08

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/149,424

	
 

	
 

	
 

	
 

	
 

	
5/1/08

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/289,010

	
 

	
 

	
 

	
 

	
 

	
10/17/08

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/292,578

	
 

	
 

	
 

	
 

	
 

	
11/21/08

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/379,317

	
 

	
 

	
 

	
 

	
 

	
2/19/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
61/202,651

	
 

	
 

	
 

	
 

	
 

	
3/23/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/382,946

	
 

	
 

	
 

	
 

	
 

	
3/27/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
61/167,336

	
 

	
 

	
 

	
 

	
 

	
4/7/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/384,685

	
 

	
 

	
 

	
 

	
 

	
4/8/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/384,716

	
 

	
 

	
 

	
 

	
 

	
4/8/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/489,587

	
 

	
 

	
 

	
 

	
 

	
6/23/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/508,214

	
 

	
 

	
 

	
 

	
 

	
7/23/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/587,669

	
 

	
 

	
 

	
 

	
 

	
10/9/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/587,840

	
 

	
 

	
 

	
 

	
 

	
10/14/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
61/251,822

	
 

	
 

	
 

	
 

	
 

	
10/15/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
12/590,904

	
 

	
 

	
 

	
 

	
 

	
11/16/09

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
61/288,466

	
 

	
 

	
 

	
 

	
 

	
12/21/09

	
 

	
 

	
 

	
 

	
 

 

18

 

III.           TRADEMARKS

 

U.S. Registered Trademarks:

 

	
 

	
 

	
 

	
 

	
Registration

	
 

	
Registration

	
 

	
 

	
Trademark Name

	
 

	
Serial Number

	
 

	
Number

	
 

	
Date

	
 

	
Owner

	
A design & APPLETON PAPERS INC,

	
 

	
73258747

	
 

	
1197835

	
 

	
15-Jun-1982

	
 

	
Appleton Papers Inc.

	
ALPHA

	
 

	
76384973

	
 

	
2879977

	
 

	
31-Aug-2004

	
 

	
Appleton Papers Inc

	
Appleton (new design)

	
 

	
76264905

	
 

	
2730105

	
 

	
24-Jun-2003

	
 

	
Appleton Papers Inc

	
APPLETON PAPERS & Design

	
 

	
75026306

	
 

	
2084804

	
 

	
29-Jul-1997

	
 

	
Appleton Papers Inc

	
APPLETON WHAT IDEAS CAN DO

	
 

	
78269164

	
 

	
2860269

	
 

	
06-Jul-2004

	
 

	
Appleton Papers Inc

	
ASSURMARK

	
 

	
78295654

	
 

	
2973698

	
 

	
19-Jul-2005

	
 

	
Appleton Papers Inc

	
DOCUCHECK

	
 

	
74559314

	
 

	
1989113

	
 

	
23-Jul-1996

	
 

	
Appleton Papers Inc

	
DOCUCHECK & Design

	
 

	
74581221

	
 

	
2037533

	
 

	
11-Feb-1997

	
 

	
Appleton Papers Inc

	
DOCUCHECK BASIC

	
 

	
75022678

	
 

	
2155258

	
 

	
05-May-1998

	
 

	
Appleton Papers Inc

	
DOCUCHECK GHOST

	
 

	
78602211

	
 

	
3169940

	
 

	
07-Nov-2006

	
 

	
Appleton Papers Inc

	
DOCUCHECK WATERMARK

	
 

	
75022679

	
 

	
2155259

	
 

	
05-May-1998

	
 

	
Appleton Papers Inc

	
DOCUMARK

	
 

	
78367122

	
 

	
2933082

	
 

	
15-Mar-2005

	
 

	
Appleton Papers Inc

	
DUAL

	
 

	
76372736

	
 

	
2767808

	
 

	
23-Sep-2003

	
 

	
Appleton Papers Inc

	
E and design

	
 

	
74459804

	
 

	
2019512

	
 

	
26-Nov-1996

	
 

	
Appleton Papers Inc

	
ECARBONLESS

	
 

	
75896050

	
 

	
2556953

	
 

	
02-Apr-2002

	
 

	
Appleton Papers Inc

	
ECOGUARD

	
 

	
74720888

	
 

	
1995462

	
 

	
20-Aug-1996

	
 

	
Appleton Papers Inc

	
ENCAPSYS

	
 

	
77976524

	
 

	
3592902

	
 

	
17-Mar-2009

	
 

	
Appleton Papers Inc

	
HEATSAFE

	
 

	
76372735

	
 

	
2787242

	
 

	
25-Nov-2003

	
 

	
Appleton Papers Inc

	
HIYIELD

	
 

	
78303979

	
 

	
2918274

	
 

	
11-Jan-2005

	
 

	
Appleton Papers Inc

	
IMPEDE

	
 

	
76228628

	
 

	
2602692

	
 

	
30-Jul-2002

	
 

	
Appleton Papers Inc

	
INSTANT REPLAY

	
 

	
78432653

	
 

	
2987512

	
 

	
23-Aug-2005

	
 

	
Appleton Papers Inc

	
INTEGRA

	
 

	
73818573

	
 

	
1587789

	
 

	
20-Mar-1990

	
 

	
Appleton Papers Inc

	
JAZZ

	
 

	
73730018

	
 

	
1526859

	
 

	
28-Feb-1989

	
 

	
Appleton Papers Inc

	
LASERSNAP

	
 

	
75057309

	
 

	
2093635

	
 

	
02-Sep-1997

	
 

	
Appleton Papers Inc

	
LIGHTSAFE

	
 

	
78619917

	
 

	
3269539

	
 

	
24-Jul-2007

	
 

	
Appleton Papers Inc

	
LINEMARK

	
 

	
77356691

	
 

	
3476165

	
 

	
29-Jul-2008

	
 

	
Appleton Papers Inc

	
MOISTURE BLOC

	
 

	
78302614

	
 

	
2981967

	
 

	
02-Aug-2005

	
 

	
Appleton Papers Inc

	
MONDIAL MARK

	
 

	
78215246

	
 

	
2960835

	
 

	
07-Jun-2005

	
 

	
Appleton Papers Inc

	
OPTIMA

	
 

	
73825645

	
 

	
1590869

	
 

	
10-Apr-1990

	
 

	
Appleton Papers Inc

	
PAPER Design

	
 

	
75026304

	
 

	
2086442

	
 

	
05-Aug-1997

	
 

	
Appleton Papers Inc

	
PIP

	
 

	
78370108

	
 

	
3001133

	
 

	
27-Sep-2005

	
 

	
Appleton Papers Inc

	
POLYTHERM

	
 

	
73736617

	
 

	
1542493

	
 

	
06-Jun-1989

	
 

	
Appleton Papers Inc

	
POS PLUS

	
 

	
75896051

	
 

	
2425100

	
 

	
30-Jan-2001

	
 

	
Appleton Papers Inc

	
PRESSPRO

	
 

	
76372738

	
 

	
2772409

	
 

	
07-Oct-2003

	
 

	
Appleton Papers Inc

	
RECOVER (for carbonless)

	
 

	
74032744

	
 

	
1665465

	
 

	
19-Nov-1991

	
 

	
Appleton Papers Inc

	
RECOVER (for thermal)

	
 

	
74073357

	
 

	
1685781

	
 

	
05-May-1992

	
 

	
Appleton Papers Inc

	
RESISTE

	
 

	
76450463

	
 

	
2960163

	
 

	
07-Jun-2005

	
 

	
Appleton Papers Inc

	
SECURATHERM

	
 

	
74356402

	
 

	
1856253

	
 

	
27-Sep-1994

	
 

	
Appleton Papers Inc

	
SMARTSTRATE

	
 

	
76384321

	
 

	
2757278

	
 

	
26-Aug-2003

	
 

	
Appleton Papers Inc

	
Stylized A design

	
 

	
73258780

	
 

	
1197836

	
 

	
15-Jun-1982

	
 

	
Appleton Papers Inc

	
Stylized A design

	
 

	
78496846

	
 

	
3108753

	
 

	
27-Jun-2006

	
 

	
Appleton Papers Inc

	
TECHMARK

	
 

	
76296148

	
 

	
2757017

	
 

	
26-Aug-2003

	
 

	
Appleton Papers Inc

	
TECHMARK PENTICK PLUS

	
 

	
78574465

	
 

	
3175214

	
 

	
21-Nov-2006

	
 

	
Appleton Papers Inc

	
TECHMARK PENTICK PLUS

	
 

	
78573978

	
 

	
3366652

	
 

	
01-Jan-2008

	
 

	
Appleton Papers Inc

	
SWIPER

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

	
 

	
 

	
 

	
 

	
Registration

	
 

	
Registration

	
 

	
 

	
Trademark Name

	
 

	
Serial Number

	
 

	
Number

	
 

	
Date

	
 

	
Owner

	
E THE SEAL OF EXCELLENCE

	
 

	
74581904

	
 

	
1981668

	
 

	
18-Jun-1996

	
 

	
Appleton Papers Inc

	
THERMART

	
 

	
78297150

	
 

	
3131845

	
 

	
22-Aug-2006

	
 

	
Appleton Papers Inc

	
THERMASENSE

	
 

	
76320347

	
 

	
2960058

	
 

	
07-Jun-2005

	
 

	
Appleton Papers Inc

	
TONERFUSE

	
 

	
75053445

	
 

	
2137772

	
 

	
17-Feb-1998

	
 

	
Appleton Papers Inc

	
ULTIMARK

	
 

	
74653678

	
 

	
2022561

	
 

	
10-Dec-1996

	
 

	
Appleton Papers Inc

	
WAVE Design

	
 

	
75028257

	
 

	
2112800

	
 

	
11-Nov-1997

	
 

	
Appleton Papers Inc

	
WAVEX

	
 

	
74669538

	
 

	
2051395

	
 

	
08-Apr-1997

	
 

	
Appleton Papers Inc

	
WHAT IDEAS CAN DO

	
 

	
76168328

	
 

	
2802815

	
 

	
06-Jan-2004

	
 

	
Appleton Papers Inc

	
XERO/FORM

	
 

	
74237127

	
 

	
1743930

	
 

	
29-Dec-1992

	
 

	
Appleton Papers Inc

	
INFLEX

	
 

	
78597462

	
 

	
3144631

	
 

	
21-Jul-1998

	
 

	
New England Extrusion Inc.

	
NEX

	
 

	
78583585

	
 

	
3144493

	
 

	
19-Sep-2006

	
 

	
New England Extrusion Inc.

	
APPLETON COATED

	
 

	
76244959

	
 

	
2774509

	
 

	
21-Oct-2003

	
 

	
Appleton Papers Inc

	
CHAUCER

	
 

	
72333680

	
 

	
0909125

	
 

	
2-Mar-1971

	
 

	
Appleton Papers Inc

	
EAGLE

	
 

	
78309895

	
 

	
2925099

	
 

	
8-Feb-2005

	
 

	
Appleton Papers, Inc.

	
EAGLE

	
 

	
78282920

	
 

	
2920051

	
 

	
18-Jan-2005

	
 

	
Appleton Papers, Inc.

	
FORGEBLOC

	
 

	
78184068

	
 

	
2834385

	
 

	
20-April-2004

	
 

	
Appleton Papers, Inc.

	
AVARIO

	
 

	
76407678

	
 

	
2784878

	
 

	
18-Nov-2003

	
 

	
Appleton Papers, Inc.

	
ROYALE 700

	
 

	
76296562

	
 

	
2727918

	
 

	
17-June-2003

	
 

	
Appleton Papers, Inc.

 

Trademark Registrations with the Office of the Secretary of State - State of Wisconsin

 

	
Mark

	
 

	
Last Name/ Corporation

	
 

	
File Date

	
SUCCESS RESOURCES

	
 

	
APPLETON PAPERS INC

	
 

	
3/11/1998

	
POS PLUS

	
 

	
APPLETON PAPERS INC

	
 

	
1/19/2000

	
ECARBONLESS

	
 

	
APPLETON PAPERS INC

	
 

	
8/16/2000

	
AVARIO

	
 

	
APPLETON PAPERS INC

	
 

	
3/13/2002

	
FORGEBLOC

	
 

	
APPLETON PAPERS INC

	
 

	
8/7/2002

	
WHAT IDEAS CAN DO

	
 

	
APPLETON PAPERS INC

	
 

	
12/11/2002

	
ROYALE

	
 

	
APPLETON PAPERS INC

	
 

	
7/9/2003

	
DOCUMARK

	
 

	
APPLETON PAPERS INC

	
 

	
2/18/2004

	
ENCAPSYS

	
 

	
APPLETON PAPERS INC.

	
 

	
10/7/2009

 

 

IV.           INTELLECTUAL PROPERTY LICENSES

 

1.                                       Amended and Restated Intellectual Property Agreement among Appleton, WTA and Appleton Coated LLC ("Appleton Coated"), effective as of November 9, 2001, whereby there is a cross license of various patents and know-how in existence as of January 1, 2000.

 

2.                                       Trademark License Agreement between Appleton and Appleton Coated, effective as of January 1, 2000, whereby the term "Appleton Coated" is licensed by Appleton to Appleton Coated.

 

3.                                       Intellectual Property Agreement among Appleton, WTA, Arjo Wiggins Appleton Holdings Limited and Arjo Wiggins Limited, effective as of August 23, 2000, whereby there is a cross license pertaining to the parties' respective carbonless and thermal patents.

 

4.                                       Trademark License Agreement among Appleton, Arjo Wiggins Appleton Holdings Limited and Arjo Wiggins Limited, effective as of August 23, 2000, whereby Appleton is licensing Xero/Form§ to Arjo Wiggins Limited.

 

5.                                       Lemelson - License Agreement, effective as of July 30, 2001. This Agreement is the settlement of a suit filed on April 14, 2000, by the Lemelson Foundation Partnership against Arjo Wiggins Appleton p.l.c. in the U.S. District Court in Arizona alleging infringement of bar coding and machine vision patents.

 

6.                                       Trademark Sublicense Agreement between Appleton and Appleton's wholly owned subsidiary, Appleton Papers Canada Ltd., effective as of January 1, 1987.

 

7.                                       Trademark License Agreement between Appleton and Lentheric, Inc., effective as of June 30, 1978. This is the original license pertaining to NCR Corporation's NCR Paper registered trademark.

 

8.                                       Cross License Agreement between Kanzaki Paper Mfg. ("Kanzaki") and Appleton, dated January 1, 1986, whereby Appleton has a non-exclusive license to use DPE, a sensitizer used in some grades of thermal paper.

 

9.                                       License Agreement between National Starch Chemical Company ("NSCC") and Appleton, dated October 1, 2001, whereby NSCC has granted Appleton a license to use various proprietary coating methods.

 

10.                                 License Agreement between NCR Corporation and Appleton dated December 29, 2006, whereby NCR has granted Appleton a license under certain NCR "2ST" patents, including U.S. Patent No. 6,759,366.

 

11.                                 Covenant not to sue dated October 15, 2007 from Standard Register to Appleton regarding U.S. Patents 5,810,397 and 6,015,589.

 

 

V.            LICENSES TO THIRD PARTIES

 

	
 

	
Agreement

	
 

	
Parties

	
 

	
Effective Date

	
1.

	
License Agreement

	
 

	
Yamamoto Chemicals Inc.

	
 

	
1-March-1987

	
2.

	
Patent Know-How Agreement

	
 

	
Yamamoto Chemicals Inc.

	
 

	
1-Oct-1990

	
3.

	
License Agreement

	
 

	
WTA, Inc. and Yamamoto

	
 

	
1-Dec-1997

	
4.

	
License Agreement

	
 

	
WTA, Inc. and Yamamoto

	
 

	
1-Jan-1992

	
5.

	
License Agreement

	
 

	
Yamamoto Chemicals Inc.

	
 

	
1-Jan-1991

	
6.

	
Patent and Know-How License Agreement

	
 

	
Wiggins Teape Group Limited

	
 

	
16-April-1979

	
7.

	
Amendment to Patent and Know-How License Agreement

	
 

	
Wiggins Teape Group Limited

	
 

	
1-Jan-1997

	
8.

	
Thermal License Agreement

	
 

	
Wiggins Teape Group Limited

	
 

	
1-Dec-1974

	
9.

	
Thermal License Agreement

	
 

	
NCR and Wiggins Teape

	
 

	
1-Dec-1974

	
 

	
 

	
 

	
Group Limited

	
 

	
 

 

 

SCHEDULE 7

 

Commercial Tort Claims

 

None.

 

 

SCHEDULE 8

 

Accounts

 

Deposit Accounts

 

 

	
Financial

	
 

	
Name on

	
 

	
 

	
 

	
Account

	
 

	
Value in

	
 

	
Date of

	
 

	
Institution

	
 

	
Account

	
 

	
Account Type

	
 

	
Number

	
 

	
Account

	
 

	
Value

	
 

	
M&I

	
 

	
Appleton Papers Inc.

	
 

	
Depository

	
 

	
Redacted

	
 

	
$

	
386,329.72

	
 

	
02/05/10

	
 

	
Bank of America

	
 

	
Appleton Papers Inc.

	
 

	
Checking

	
 

	

Redacted

	
 

	
$

	
566,050.69

	
 

	
02/05/10

	
 

	
Bank of America

	
 

	
Appleton Papers Inc.

	
 

	
Depository

	
 

	

Redacted

	
 

	
€

	
306,645.40

	
 

	
02/05/10

	
 

	
Bank of America

	
 

	
Appleton Papers Inc.

	
 

	
Money Market

	
 

	

Redacted

	
 

	
€

	
24,996.07

	
 

	
02/05/10

	
 

	
M&I*

	
 

	
Appleton Papers Inc.

	
 

	
Payroll

	
 

	

Redacted

	
 

	
0 Balance Account

	
 

	
02/05/10

	
 

	
US Bank*

	
 

	
Appleton Papers Inc.

	
 

	
Funding - checking

	
 

	

Redacted

	
 

	
0 Balance Account

	
 

	
02/05/10

	
 

	
US Bank*

	
 

	
Appleton Papers Inc.

	
 

	
Payables - checking

	
 

	

Redacted

	
 

	
0 Balance Account

	
 

	
2/5/10

	
 

	
US Bank*

	
 

	
Appleton Papers Inc.

	
 

	
Workers Compensation - checking

	
 

	

Redacted

	
 

	
0 Balance Account

	
 

	
02/05/10

	
 

	
US Bank*

	
 

	
Appleton Papers Inc.

	
 

	
Freight - checking

	
 

	

Redacted

	
 

	
0 Balance Account

	
 

	
02/05/10

	
 

	
Northern Trust*

	
 

	
Appleton Papers Inc.

	
 

	
Pension - Investment

	
 

	
Various

	
 

	
$

	
227,378,422.00

	
 

	
12/31/09

	
 

 

Securities Accounts

 

	
Financial

	
 

	
Name on

	
 

	
Account

	
 

	
Account

	
 

	
Value in

	
 

	
Date of

	
 

	
Institution

	
 

	
Account

	
 

	
Type

	
 

	
Number

	
 

	
Account

	
 

	
Value

	
 

	
M&I*

	
 

	
Appleton Papers Inc.

	
 

	
Depository Sweep Account

	
 

	

Redacted

	
 

	
0 Balance Account

	
 

	
02/05/10

	
 

	
Associated Bank

	
 

	
Appleton Papers Inc.

	
 

	
Funding - checking

	
 

	

Redacted

	
 

	
$

	
2,098,419.09

	
 

	
02/05/10

	
 

	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

	
Fifth/Third*

	
 

	
Appleton Papers Inc.

	
 

	
Cash Collateral Account

	
 

	

Redacted

	
 

	
59.00

	
 

	
02/05/10

	
 

 

*Permitted Unperfected Accountsexhibit10-7.htm

Exhibit 10.7

 

EXECUTION VERSION

 

 

GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

APPLETON PAPERS CANADA LTD.,

 

in favor of

 

FIFTH THIRD BANK,

 

as Administrative Agent

 

Dated as of February 8, 2010

 

 

 

TABLE OF CONTENTS

 

	
 

	
Page

	
 

	
 

	
ANNEX I - Form of Assumption Agreement

	
 

	
 

	
 

	
Schedule 1 - Notices

	
 

	
Schedule 2 - Pledged Collateral

	
 

	
Schedule 3 - Perfected Liens

	
 

	
Schedule 4 - Jurisdiction of Organization

	
 

	
Schedule 5 - Inventory and Equipment

	
 

	
Schedule 6 - Intellectual Property

	
 

	
Schedule 7 - Accounts

	
 

 

i

 

GUARANTEE AND COLLATERAL AGREEMENT, dated as of February 8, 2010, made by Appleton Papers Canada Ltd., a corporation formed under the laws of the Province of Ontario, Canada ("Appleton Canada"; together with any other entity that may become a party hereto as provided herein, the "Grantors"), in favor of Fifth Third Bank, as administrative agent (in such capacity, the "Administrative Agent") for the banks, financial institutions and other entities (the "Lenders") from time to time parties to the Credit Agreement, dated as of the date hereof (as amended, restated, supplemented and/or otherwise modified from time to time, the "Credit Agreement"), among Appleton Papers Inc., a Delaware corporation (the "Borrower"), Paperweight Development Corp., a Wisconsin corporation ("Holdings"), the Administrative Agent and the Lenders.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;

 

WHEREAS, the Borrower is a member of an affiliated group of companies that includes each Grantor;

 

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part (i) to repay certain existing indebtedness and (ii) to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses;

 

WHEREAS, the Borrower and the Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; and

 

WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Administrative Agent for the ratable benefit of the Administrative Agent and the Lenders;

 

NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Administrative Agent for the ratable benefit of the Administrative Agent and the Lenders as follows:

 

SECTION 1.                                                        DEFINED TERMS

 

1.1                                               Definitions.

 

(a)                                  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms are used herein as defined in the PPSA: Accounts, Certificated Security, Chattel

 

 

Paper, Documents of Title, Equipment, Financial Assets, Goods, Intangibles, Instruments, Inventory, Money, Personal Property, Proceeds and Securities Account, .

 

(b)                                 The following terms shall have the following meanings:

 

"Agreement": this Guarantee and Collateral Agreement, as the same may be amended, restated, supplemented and/or otherwise modified from time to time.

 

"Borrower Credit Agreement Obligations": with respect to the Borrower, the collective reference to the unpaid principal of and interest on the Loans and Reimbursement Obligations and all other obligations and liabilities of the Borrower (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to the Administrative Agent or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, this Agreement, the other Loan Documents, any Letter of Credit or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements).

 

"Borrower Obligations": with respect to the Borrower, the collective reference to (i) the Borrower Credit Agreement Obligations, (ii) the Secured Hedge Agreement Obligations, (iii) Secured Cash Management Obligations and (iv) all other obligations and liabilities of the Loan Parties to the Administrative Agent or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by the Borrower pursuant to the terms of this Agreement).

 

"Collateral": as defined in Section 3.

 

"Collateral Account": any collateral account established by the Administrative Agent as provided in Section 6.1 or 6.4.

 

"Copyrights": (i) all copyrights arising under the laws of Canada, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished (including, without limitation, those listed in Schedule 6), all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the Canadian Intellectual Property Office or any other similar authority throughout the world, (ii) all rights corresponding thereto throughout the world and (iii) the right to obtain all extensions and renewals thereof.

 

2

 

"Copyright Licenses": any written or oral agreement naming any Grantor as licensor or licensee (including, without limitation, those listed in Schedule 6), granting any right under any Copyright, including, without limitation, the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

 

"Credit Agreement Collateral": all "Collateral" under, and as defined in, the Credit Agreement.

 

"Deposit Account": a demand, savings, passbook, or similar account maintained with a bank or other deposit taking institution. The Deposit Accounts of the Grantors as of the Closing Date are listed on Schedule 8.

 

"Excluded Stock": all interests of any Grantor in any of their respective Subsidiaries that are not a Domestic Subsidiary and are not a Guarantor (as such term is defined in the Credit Agreement).

 

"Governmental Authority": the government of Canada or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

"Guarantor Obligations": with respect to any Guarantor, the collective reference to (i) the Borrower Credit Agreement Obligations, (ii) the Secured Hedge Agreement Obligations, (iii) the Secured Cash Management Obligations and (iv) all other obligations and liabilities of such Guarantor to the Administrative Agent or any Lender which may arise under or in connection with this Agreement (including, without limitation, Section 2) or any other Loan Document to which such Guarantor is a party, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or the Lenders that are required to be paid by such Guarantor pursuant to the terms of this Agreement or any other Loan Document).

 

"Guarantors": the collective reference to each Grantor. 

 

"Intellectual Property": the collective reference to all rights, priorities and privileges relating to intellectual property or similar proprietary rights, whether arising under Canadian, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, Trade Secrets and Trade Secret Licenses and all rights thereto throughout the world including, without limitation, all claims, causes of action, defenses arising out of or related to any of the foregoing and the right to sue at law or in equity for any past, present and future infringement, misappropriation, misuse, dilution or other impairment thereof, including the right to receive all proceeds and damages from all of the foregoing.

 

"Intercompany Note": any promissory note evidencing loans made by any Grantor to Holdings or any of its Subsidiaries.

 

3

 

"Intercreditor Agreement" as defined in Section 3.

 

"Investment Property": the collective reference to (i) a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract or commodity account and (ii) whether or not constituting "investment property" as so defined in the preceding clause (i), all Pledged Notes and all Pledged Stock.

 

"Issuers": the collective reference to each issuer of any Investment Property.

 

"Obligations": in the case of any Grantor, such Person's (i) Borrower Obligations and/or (ii) Guarantor Obligations.

 

"Patent License": all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent, including, without limitation, any of the foregoing referred to in Schedule 6.

 

Patents: (i) all letters patent of Canada, any other country or any political subdivision thereof, all reissues and extensions thereof, including, without limitation, any of the foregoing referred to in Schedule 6, (ii) all applications for letters patent of Canada or any other country and all reissues, extensions, renewals, reexaminations, divisions, continuations and continuations-in-part thereof, including, without limitation, any of the foregoing referred to in Schedule 6, (iii) all invention disclosures, utility models or similar industrial property rights and (iv) all rights corresponding thereto throughout the world, including rights to obtain any reissues or extensions of the foregoing.

 

"Permitted Unperfected Account": with respect to any Grantor, any Deposit Account or Securities Account of such Grantor (a) that contains a balance of deposits equal to or less than $10,000; provided that such Deposit Account or Securities Account shall not cease to be a Permitted Unperfected Account if it contains a balance greater than $10,000 for not longer than 2 consecutive Business Days and provided that the balance of deposits in all such Deposit Accounts and Securities Accounts of the Grantors and all other Guarantors combined shall not exceed $100,000 in the aggregate at any time, (b) with respect to Deposit Accounts only, is used solely as (i) a payroll account, (ii) an employee benefit account, (ii) an operating expenses disbursement account that is zero-balanced on a daily basis, (iii) a sub-concentration account that is zero-balanced on a daily basis, or (iii) a fiduciary or trust account; or (c) as to which the Administrative Agent otherwise agrees that no control agreement need be obtained. The Permitted Unperfected Accounts of the Grantors as of the Closing Date are so indicated on Schedule 8. Notwithstanding the foregoing, no "Notes Priority Collateral Account" (as such term is defined in the First Lien Note Indenture) shall in any event constitute a "Permitted Unperfected Account" for purposes of this Agreement.

 

"Pledged Notes": all promissory notes listed on Schedule 2, all Intercompany Notes at any time issued to any Grantor and all other promissory notes issued to or held by any Grantor (other than promissory notes issued in connection with extensions of trade credit by any Grantor in the ordinary course of business).

 

"Pledged Stock": the shares of Capital Stock listed on Schedule 2, together with any other shares, stock certificates, options, interests or rights of any nature whatsoever in 

 

4

 

respect of the Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect; provided that such term shall not, in any case, include any Excluded Stock.

 

"PPSA": the Personal Property Security Act (Ontario); provided, that if the attachment, perfection or priority of the Administrative Agent's security interests, for the benefit of the Lenders, in any Collateral are governed by the personal property security laws of any jurisdiction other than Ontario, PPSA shall mean those personal property laws in such other jurisdiction in Canada for the purpose of the provisions hereof relating to such attachment, perfection or priority and for the definitions related to such provisions.

 

"Receivable": any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account).

 

"Requirement of Law": as to any Person, the certificate or articles of incorporation and by laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

"Secured Cash Management Obligations": the collective reference to all obligations and liabilities of a Loan Party (including, without limitation, interest accruing at the then applicable rate provided in any Secured Cash Management Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to a Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to any Cash Management Bank, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any Secured Cash Management Agreement or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the relevant Lender or affiliate thereof that are required to be paid by any Loan Party pursuant to the terms of any Secured Cash Management Agreement).

 

"Secured Hedge Agreement Obligations": the collective reference to all obligations and liabilities of a Loan Party (including, without limitation, interest accruing at the then applicable rate provided in any Secured Hedge Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to any Hedge Bank, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any Secured Hedge Agreement or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the relevant Lender or affiliate thereof that are required to be paid by the Borrower pursuant to the terms of any Secured Hedge Agreement).

 

5

 

"Securities Account": the Securities Accounts, as defined in the PPSA, of the Grantors as of the Closing Date are listed on Schedule 8.

 

"Securities Laws": applicable federal, provincial, state, territorial or foreign securities laws and regulations.

 

"STA": the Securities Transfer Act, 2006 (Ontario).

 

"Trade Secret Licenses": any and all written or oral agreements granting any right in or to Trade Secrets (whether a Grantor is a licensee or licensor thereunder).

 

"Trade Secrets": all trade secrets, as recognized under applicable local law, whether or not reduced to a writing or other tangible form, now or hereafter in force, owned or used in, or contemplated at any time for use in, the business of any Grantor, including with respect to any and all of the foregoing: (i) all documents and things embodying, incorporating, or referring in any way thereto, (ii) all rights to sue for past, present and future infringement thereof, (iii) all claims, damages, and proceeds of suit arising therefrom, and (iv) all payments and royalties and rights to payments and royalties arising out of the sale, lease, license, assignment or other dispositions thereof.

 

"Trademark License": any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including, without limitation, any of the foregoing referred to in Schedule 6.

 

"Trademarks": (i) 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 all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the Canadian Intellectual Property Office or in any similar office or agency of Canada, any province thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, including, without limitation, any of the foregoing referred to in Schedule 6, and (ii) the right to obtain all renewals thereof.

 

1.2                                               Other Definitional Provisions.

 

(a)                                  The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified.

 

(b)                                 The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

(c)                                  Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor's Collateral or the relevant part thereof.

 

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(d)                                 Unless the context otherwise requires, any Cash Management Bank or Hedge Bank which is party to a Secured Hedge Agreement or a Secured Cash Management Agreement shall be deemed to be a "Lender" for purposes of this Agreement.

 

SECTION 2.                                                        GUARANTEE

 

2.1                                               Guarantee.

 

(a)                                  Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent for the ratable benefit of the Administrative Agent and the Lenders and their respective successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower when due (whether at the stated maturity, by acceleration or otherwise) of all Obligations.

 

(b)                                 The guarantee contained in this Section 2 shall remain in full force and effect until all the Obligations and the obligations of each Guarantor under the guarantee contained in this Section 2 shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and the Commitments shall be terminated, notwithstanding that from time to time during the term of the Credit Agreement the Borrower may be free from any Obligations.

 

(c)                                  No payment made by the Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any Lender from the Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Borrower Obligations shall be deemed to release the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect of the Obligations), remain liable for the Borrower Obligations up to the maximum liability of such Guarantor hereunder until the Borrower Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. Notwithstanding the foregoing, in no event shall the Guarantors be liable for payment of any amount in excess of the then outstanding Borrower Obligations and, without duplication, Guarantor Obligations.

 

2.2                                               Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor's right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the Lenders, and each Guarantor shall remain liable to the Administrative Agent and the Lenders for the full amount guaranteed by such Guarantor hereunder.

 

2.3                                               No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Administrative Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of the rights of the

 

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Administrative Agent or any Lender against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Borrower Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Administrative Agent and the Lenders by the Borrower on account of the Borrower Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Borrower Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly endorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Borrower Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

 

2.4                                               Amendments, etc. with respect to the Borrower Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Borrower Obligations made by the Administrative Agent or any Lender may be rescinded by such Agent or such Lender and any of the Borrower Obligations continued, and the Borrower Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Lender for the payment of the Borrower Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor the Lenders shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Borrower Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

 

2.5                                               Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Borrower Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Borrower Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Administrative Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Guarantors with respect to the Borrower Obligations. Each Guarantor understands and agrees that the

 

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guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Borrower Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against the Administrative Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Borrower Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Borrower Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any Lender against any Guarantor. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings.

 

2.6                                               Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Borrower Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

2.7                                               Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the appropriate funding office as set forth in the Credit Agreement.

 

SECTION 3.                                                        GRANT OF SECURITY INTEREST

 

3.1                                               Grant of Security Interest in Collateral. Each Grantor hereby assigns and transfers to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders, a security interest in, all present and after-acquired personal property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and

 

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performance when due (whether at the stated maturity, by acceleration or otherwise) of such Grantor's Obligations consisting of:

 

(a)                                  all Accounts;

 

(b)                                 all Chattel Paper;

 

(c)                                  all contracts;

 

(d)                                 all Deposit Accounts;

 

(e)                                  all Documents of Title;

 

(f)                                    all Equipment;

 

(g)                                 all Financial Assets;

 

(h)                                 all Goods;

 

(i)                                     all Intangibles;

 

(j)                                     all Instruments;

 

(k)                                  all Intellectual Property;

 

(l)                                     all Inventory;

 

(m)                               all Investment Property;

 

(n)                                 all Letter-of-Credit Rights;

 

(o)                                 all Money;

 

(p)                                 all books and records pertaining to the Collateral; and

 

(q)                                 to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

 

provided, however, that notwithstanding any of the other provisions set forth in this Section 3, this Agreement shall not constitute a grant of a security interest in (x) any consumer goods, (y) any property to the extent that such grant of a security interest is prohibited by any Requirement of Law, requires a consent not obtained of any Governmental Authority pursuant to any such Requirement of Law or is prohibited by, or constitutes a breach or default under, or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property or, in the case of any Investment Property, Pledged Stock or Pledged Note, any applicable shareholder or similar agreement, except to the extent that such Requirement of Law or the applicable terms in such contract, license, agreement, instrument or other document or shareholder or similar agreement

 

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providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law or (z) such property constitutes "Collateral" under and as defined in the Fox River Security Agreement.

 

3.2                                               Exception to Last Day. The security interest granted hereby shall not extend or apply to, and Collateral shall not include, the last day of the term of any lease or agreement therefor, but upon enforcement of the security interest, each Grantor shall stand possessed of such last day in trust or assign the same to any person acquiring such term.

 

3.3                                               Attachment. Each Grantor acknowledges that (i) value has been given, (ii) it has rights in the Collateral, (iii) it has not agreed to postpone the time for attachment of the Lien granted hereunder, and (iv) it has received a copy of this Agreement.

 

3.4                                               NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, ALL TERMS OF THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE REPRESENTATIONS AND WARRANTIES MADE HEREIN, THE LIENS AND SECURITY INTERESTS GRANTED TO THE ADMINISTRATIVE AGENT PURSUANT TO THIS AGREEMENT, THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ADMINISTRATIVE AGENT AND LENDERS HEREUNDER, ALL OTHER RIGHTS AND BENEFITS AFFORDED HEREUNDER TO THE ADMINISTRATIVE AGENT AND THE LENDERS AND ALL OBLIGATIONS OF THE GRANTORS HEREUNDER) ARE SUBJECT IN ALL RESPECTS TO THE TERMS, CONDITIONS AND PROVISIONS OF THAT CERTAIN INTERCREDITOR AGREEMENT, DATED AS OF FEBRUARY           , 2010 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, THE "INTERCREDITOR AGREEMENT") BY AND AMONG FIFTH THIRD BANK, AS RCF REPRESENTATIVE FOR THE BENEFIT OF THE RCF SECURED PARTIES (AS DEFINED THEREIN), AND U.S. BANK NATIONAL ASSOCIATION, AS NOTE REPRESENTATIVE FOR THE NOTE SECURED PARTIES (AS DEFINED THEREIN), FIFTH THIRD BANK, IN ITS CAPACITY AS FIRST LIEN REPRESENTATIVE (AS DEFINED THEREIN), AND CERTAIN OTHER PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THE TERMS OF THIS AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.

 

SECTION 4.                                                        REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby represents and warrants to Agent and each Lender that:

 

4.1                                               Representations in Credit Agreement. In the case of each Guarantor, the representations and warranties set forth in Article V of the Credit Agreement as they relate to such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which is hereby incorporated herein by reference, are true and correct, and each Agent and each Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided that each

 

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reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed to be a reference to such Guarantor's knowledge.

 

4.2                                               Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Administrative Agent and the Lenders pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreement, such Grantor owns its Collateral in all material respects free and clear of any and all Liens or claims of others. For the avoidance of doubt, it is understood and agreed that any Grantor may, as part of its business, grant licenses to third parties to use Intellectual Property owned or developed by a Grantor. For purposes of this Agreement and the other Loan Documents, such licensing activity shall not constitute a "Lien" or a "claim" on such Intellectual Property. Each of the Administrative Agent and each Lender understands that any such licenses may be exclusive to the applicable licensees, and such exclusivity provisions may limit the ability of the Administrative Agent to utilize, sell, Lease or transfer the related Intellectual Property or otherwise realize value from such Intellectual Property pursuant hereto.

 

4.3                                               Perfected First Priority Liens. The security interests granted pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (including obtaining "control" (within the meaning of the STA) of Deposit Accounts and Securities Accounts (other than Permitted Unperfected Accounts), Investment Property and, to the extent requested in writing by the Administrative Agent, Letter-of-Credit Rights (which, in the case of all filings and other documents referred to on said Schedule, unless otherwise noted, have been delivered to the Administrative Agent in completed and, where applicable, duly executed form) will constitute valid perfected security interests (to the extent perfection of security interests therein may be perfected by filing of a financing statement under the PPSA and/or filings with the Canadian Intellectual Property Office or Canadian Industrial Design Office, as applicable, possession by the Administrative Agent of the respective Investment Property or "control" of Deposit Accounts and Securities Accounts) in all of the Collateral (excluding Letter-of-Credit Rights where written request has not been made by the Administrative Agent) in favor of the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders, as collateral security for such Grantor's Obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor, other than purchasers in the ordinary course of business, and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreement and other Liens which have priority over the Liens granted hereunder on the Collateral by operation of law. Notwithstanding anything to the contrary contained above or elsewhere in this Agreement, but nonetheless subject to the terms of the Intercreditor Agreement, with respect to Letter-of-Credit Rights where the relevant Grantor has been requested by the Administrative Agent to obtain "control" of same, the respective Grantor shall have a reasonable period of time to comply with such request and such "control" shall not be required if the respective Grantor is unable to obtain any required consents for such "control" after using commercially reasonable efforts to obtain same, and unless and until "control" of the respective Letter-of-Credit Rights is obtained in accordance with the above provisions of this Section 4.3 (including this sentence), there shall be no violation of any representation or warranty or covenant contained in this Agreement as a result thereof.

 

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4.4                                               Jurisdiction of Organization; Chief Executive Office. On the date hereof, such Grantor's jurisdiction of organization, identification number from the jurisdiction of organization (if any), and the location of such Grantor's chief executive office or sole place of business or principal residence, as the case may be, are specified on Schedule 4.

 

4.5                                               Inventory and Equipment. On the date hereof, except where the value of such Inventory and Equipment at any one location does not exceed $250,000 in the aggregate for the Grantors and all other Guarantors combined, all of the Grantors' Inventory and Equipment (other than goods in transit) is kept at the locations listed on Schedule 5.

 

4.6                                               Reserved.

 

4.7                                               Investment Property.

 

(a)                                  The shares of Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor, except for Excluded Stock.

 

(b)                                 On the date hereof, all the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable.

 

(c)                                  Each of the Pledged Notes issued by a Loan Party constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

 

(d)                                 Such Grantor is the record and beneficial owner of, and has good and marketable title to, the Investment Property pledged by it hereunder, free of any and all Liens in favor of, or claims of, any other Person, except the security interest created by this Agreement and as otherwise would not violate the applicable requirements of the Credit Agreement.

 

4.8                                               Receivables.

 

(a)                                  Except to the extent that such amounts so payable to Grantors and the other Guarantors combined do not exceed $50,000, no amount payable to such Grantor under or in connection with any Receivable is evidenced by any Instrument or Chattel Paper that has not been delivered to the Administrative Agent.

 

(b)                                 As of the date hereof, not more than ten percent (10%) of the Receivables have a Governmental Authority as an obligor.

 

4.9                                               Intellectual Property.

 

(a)                                  Schedule 6 lists all registered and applied for Patents, Trademarks and Copyrights in Canada and the United States that are owned by such Grantor in its own name on the date hereof. As of the date hereof, all Intellectual Property owned by such Grantor and set

 

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forth on Schedule 6 is valid, in full force and effect, subsisting, unexpired and enforceable, and has not been abandoned. The business of such Grantor and the use of any Intellectual Property in connection therewith, does not infringe, misappropriate, dilute or violate the intellectual property rights of any third Person. There are no pending or, to such Grantor's knowledge, threatened claims of infringement, misappropriation, dilution or violation by Grantor of any third Person's intellectual property rights, and there are no facts or circumstances that such Grantor reasonably believes are likely to form the basis for any such claim, and such Grantor has not received written notice of any such claim.

 

(b)                                 Except as set forth in Schedule 6, on the date hereof none of the material Intellectual Property is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor.

 

SECTION 5.                                                        COVENANTS.

 

Each Grantor covenants and agrees with the Administrative Agent and the Lenders that, from and after the date of this Agreement until the Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated:

 

5.1                                               Covenants in Credit Agreement. In the case of each Guarantor, such Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such Guarantor or any of its Subsidiaries.

 

5.2                                               Delivery of Instruments, Certificated Securities and Chattel Paper. Except to the extent that such amounts so payable to Grantors and the other Guarantors combined do not exceed $50,000, if any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument, Certificated Security or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall be promptly delivered to the Administrative Agent, duly endorsed in a manner reasonably satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement.

 

5.3                                               Maintenance of Insurance.

 

(a)                                  Such Grantor will maintain, with financially sound and reputable companies, insurance policies, in accordance with the terms of the Credit Agreement, (i) insuring the Inventory and Equipment against loss by fire, explosion, theft and such other casualties in accordance with the terms of the Credit Agreement and (ii) insuring such Grantor against liability for personal injury and property damage relating to such Inventory and Equipment.

 

(b)                                 All such insurance shall (i) provide for not less than 30 days' prior notice to the Administrative Agent of termination, lapse or cancellation of such insurance (the extent such provision is obtainable using commercially reasonably efforts) and (ii) name the Administrative Agent as an additional insured and/or loss payee, as applicable.

 

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5.4                                               Maintenance of Perfected Security Interest; Further Documentation.

 

(a)                                  Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest (but only to the extent that such security interest can be perfected by filing a filing a financing statements under the PPSA (or other similar laws) or obtaining "control" (within the meaning of the STA) of Deposit Accounts (other than Permitted Unperfected Accounts) or Investment Property) having at least the priority described in Section 4.3 and shall defend such security interest against the claims and demands of all Persons whomsoever (other than Persons with prior Liens permitted under clause (b) of Section 4.3), subject to the rights of such Grantor under the Loan Documents to dispose of the Collateral.

 

(b)                                 Such Grantor will furnish to the Administrative Agent and the Lenders from time to time statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail.

 

(c)                                  At any time and from time to time, upon the reasonable written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (i) filing any financing statements or financing change statements under the PPSA in effect in any jurisdiction with respect to the security interests created hereby, (ii) in the case of Investment Property, Deposit Accounts and Securities Accounts (other than Permitted Unperfected Accounts), Letter-of-Credit Rights (but, in the case of such Letter-of-Credit Rights, only after written request from the Administrative Agent and subject to the last sentence of Section 4.3) and any other relevant Collateral, taking any actions necessary to enable the Administrative Agent to obtain "control" (within the meaning of the STA) with respect thereto and (iii) in the case of Intellectual Property, filings to the Canadian Intellectual Property Office or Canadian Industrial Design Office, as applicable, or other similar authority in any jurisdiction in the world.

 

5.5                                               Changes in Locations, Name, etc. Such Grantor will not, except upon 15 days' prior written notice to the Administrative Agent and delivery to the Administrative Agent of all additional financing statements and other documents reasonably requested by the Administrative Agent to maintain the validity, perfection and priority of the security interests provided for herein:

 

(i)                                     change its jurisdiction of organization from that referred to in Section 4.4; or

 

(ii)     change its name.

 

5.6                                               Notices. Such Grantor will advise the Administrative Agent and the Lenders promptly, in reasonable detail, of the occurrence of any event which could reasonably be expected to have a material adverse effect on the aggregate value of the Credit Agreement Collateral or on the security interests created hereby.

 

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5.7                                               Investment Property.

 

(a)                                  If such Grantor shall become entitled to receive or shall receive any certificate (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Administrative Agent and the Lenders, hold the same in trust for the Administrative Agent and the Lenders and deliver the same forthwith to the Administrative Agent in the exact form received, duly endorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations. If an Event of Default has occurred and is continuing, any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of, or as a distribution of capital by, any Issuer shall be paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any property (if an Event of Default has occurred and is continuing) or any Investment Property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be delivered to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations. If any sums of money or property so paid or distributed in respect of the Investment Property shall be received by such Grantor (when otherwise required to be paid or delivered over to the Administrative Agent as set forth above), such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor, as additional collateral security for the Obligations.

 

(b)                                 Without the prior written consent of the Administrative Agent, such Grantor will not (i) if an Event of Default has occurred and is continuing, vote to enable, or take any other action to permit, any Issuer to issue any Capital Stock of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any Capital Stock of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof (except pursuant to a transaction permitted by the Credit Agreement), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or otherwise permitted in the Credit Agreement or (iv) enter into any agreement or undertaking, other than as permitted under the Credit Agreement, restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any of the Investment Property or Proceeds thereof.

 

(c)                                  In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Investment Property issued by it and will comply with such terms insofar as such terms are applicable to it and (ii) the terms of

 

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Section 6.3(c) shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 6.3(c) with respect to the Investment Property issued by it.

 

5.8                                               Receivables.

 

(a)                                  Other than in the ordinary course of business, such Grantor will not, with respect to any material portion of the Receivables, (i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable in any manner that could materially adversely affect the value thereof.

 

(b)                                 Such Grantor will deliver to the Administrative Agent a copy of each material demand, notice or document received by it that challenges the validity or enforceability of more than five percent (5%) of the aggregate amount of the then outstanding Receivables.

 

(c)                                  If, as of any fiscal quarter end occurring after the Closing Date, the Grantors determine that more than ten percent (10%) of Receivables (in the aggregate for all Grantors) have a Governmental Authority as an obligor, then the Grantors shall so notify the Administrative Agent (such notice to be given substantially concurrently with the delivery of the quarterly financial statements required pursuant to Section 6.01(b) of the Credit Agreement) and, upon the reasonable request of the Administrative Agent, promptly take such steps as may be necessary to comply with any applicable assignment of claims laws and other comparable laws.

 

5.9                                               Intellectual Property.

 

(a)                                  Except as would not have a material adverse effect on the aggregate value of the Credit Agreement Collateral, such Grantor will (i) continue to use each Trademark on each and every trademark class of goods applicable to its current line as reflected in its current catalogs, brochures and price lists in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the past the quality of products and services offered under such Trademark, (iii) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, (iv) not adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent, for the ratable benefit of the Administrative Agent and the Lenders, shall obtain a perfected security interest in such mark pursuant to this Agreement, and (v) not do any act or knowingly omit to do any act whereby such Trademark may become invalidated or impaired in any way.

 

(b)                                 Except as would not have a material adverse effect on the aggregate value of the Credit Agreement Collateral, such Grantor will not do any act, or omit to do any act, whereby any Patent may become forfeited, abandoned or dedicated to the public.

 

(c)                                  Except as would not have a material adverse effect on the aggregate value of the Credit Agreement Collateral, such Grantor (i) will employ each Copyright and (ii) will not do any act or knowingly omit to do any act whereby any Copyright may become invalidated or otherwise impaired. Such Grantor will not do any act whereby any Copyright may fall into the

 

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public domain, to the extent such Copyright is material to the aggregate value of the Credit Agreement Collateral.

 

(d)                                 Except as would not have a material adverse effect on the aggregate value of the Credit Agreement Collateral, such Grantor will not do any act that knowingly uses any Intellectual Property to infringe the intellectual property rights of any other Person.

 

(e)                                  Such Grantor will promptly notify the Administrative Agent and the Lenders if it knows, or has reason to know, that any application or registration relating to any Intellectual Property may become forfeited, abandoned or dedicated to the public, or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the Canadian Intellectual Property Office, the Canadian Industrial Design Office or any court or tribunal in any country) regarding such Grantor's ownership of, or the validity of, any Intellectual Property or such Grantor's right to register the same or to own and maintain the same, in each case to the extent such Intellectual Property is material to the aggregate value of the Credit Agreement Collateral.

 

(f)                                    Whenever such Grantor, either by itself or through the Administrative Agent, employee, licensee or designee, shall file an application for the registration of any Intellectual Property with the Canadian Intellectual Property Office, the Canadian Industrial Design Office or any similar office or agency in any other country or any political subdivision thereof, such Grantor shall report such filing to the Administrative Agent in accordance with Section 6.02(a)(iii)(y) of the Credit Agreement. Upon reasonable request of the Administrative Agent, such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as the Administrative Agent may request to evidence the Administrative Agent's and the Lenders' security interest in any Copyright, Patent or Trademark and the goodwill and intangibles of such Grantor relating thereto or represented thereby.

 

(g)                                 Such Grantor will take all reasonable and necessary steps, including, without limitation, in any proceeding before the Canadian Intellectual Property Office, the Canadian Industrial Design Office or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of Intellectual Property, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability, in each case to the extent such Intellectual Property is material to the aggregate value of the Credit Agreement Collateral.

 

(h)                                 In the event that any Intellectual Property is infringed, misappropriated or diluted by a third party, such Grantor shall (i) take such actions as such Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii) promptly notify the Administrative Agent after it learns thereof, in each case to the extent such Intellectual Property is material to the aggregate value of the Credit Agreement Collateral.

 

(i)                                     Upon the occurrence and during the continuance of an Event of Default, each Grantor shall use its best efforts to obtain all requisite consents or approvals from the licensor of each Copyright License, Patent License, Trade Secret License or Trademark License to effect the assignment or sublicense of all of such Grantor's right, title and interest thereunder

 

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to the Grantee or its designee for the benefit of the Grantees in accordance with this Agreement or the Credit Agreement.

 

5.10                                         [Reserved.]

 

5.11                                         Cash Management Systems.

 

(a)                                  Each Deposit Account or Securities Account of any Grantor that is not a Permitted Unperfected Account (each such Deposit Account, a "Controlled Deposit Account," and each such Securities Account, a "Controlled Securities Account," Controlled Securities Accounts together with Controlled Deposit Accounts may sometimes be referred to herein individually as a "Controlled Account" and, collectively, as "Controlled Accounts") shall be maintained with the Administrative Agent or such other Lender as shall be reasonably acceptable to the Administrative Agent (each, a "Depositary Account Bank").

 

(b)                                 On or prior to the Closing Date, each Grantor shall have entered into a deposit account control agreement or securities account control agreement in form and substance satisfactory to the Administrative Agent with respect to each Controlled Account with the respective Depositary Account Bank and in favor of the Administrative Agent (each an "Account Control Agreement"), which, in the case of Account Control Agreements with respect to Controlled Deposit Accounts, shall provide that, among other things, (i) upon the occurrence and during the continuance of an Event of Default or (ii) upon the commencement and during the continuance of an Availability Trigger Period, all available amounts held in each Controlled Deposit Account maintained at such Depositary Account Bank shall be wired on each Business Day into an account (the "Administrative Agent Account") maintained by the Administrative Agent; provided, that the Administrative Agent hereby agrees that it will not give any instructions under any Account Control Agreement unless and until an Event of Default shall have occurred and be continuing or the occurrence of an Availability Trigger Period. All amounts swept and wired into an Administrative Agent Account pursuant to any Account Control Agreement during the continuance of an Availability Trigger Period shall, subject to Section 6.5 if an Event of Default shall have occurred and be continuing and subject to the Administrative Agent's election to subject such amounts to Section 6.5, be applied first to reduce that portion of the Obligations consisting of the then aggregate outstanding balance of the Loans, L/C Borrowings and all other Obligations, second to Cash Collateralize that portion of the L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit, and last, after all other Obligations then due have been indefeasibly paid in full, to be deposited into an account as directed by the Grantor.

 

(c)                                  The closing of any Controlled Deposit Account and the termination of any Account Control Agreement shall require in each case the prior written consent of the Administrative Agent.

 

SECTION 6.                                                        REMEDIAL PROVISIONS

 

6.1                                               Certain Matters Relating to Receivables.

 

(a)                                  If an Event of Default shall have occurred and be continuing, (x) the Administrative Agent shall have the right to make test verifications of the Receivables in any

 

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reasonable manner and through any medium that it reasonably considers advisable, and each Grantor shall furnish all such assistance and information as the Administrative Agent may require in connection with such test verifications and (y) upon the Administrative Agent's reasonable request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants or others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Receivables.

 

(b)                                 The Administrative Agent hereby authorizes each Grantor to collect such Grantor's Receivables and the Administrative Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default. If required by the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form received, duly endorsed by such Grantor to the Administrative Agent if required, in a Collateral Account maintained under the sole dominion and control of the Administrative Agent, subject to withdrawal by the Administrative Agent for the account of the Lenders only as provided in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor.

 

(c)                                  If an Event of Default shall have occurred and be continuing, at the Administrative Agent's reasonable request, (i) each Grantor shall deliver to the Administrative Agent all original (to the extent such Grantor has original copies) and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including, without limitation, all original (to the extent such Grantor has original copies) orders, invoices and shipping receipts and (ii) the applicable Grantor shall take such steps as may be necessary to comply with any applicable assignment of claims laws and other comparable laws.

 

6.2                                               Communications with Obligors; Grantors Remain Liable.

 

(a)                                  The Administrative Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default communicate with obligors under the Receivables and parties to the Contracts to verify with them to the Administrative Agent's satisfaction the existence, amount and terms of any Receivables or Contracts.

 

(b)                                 Upon the request of the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify obligors on the Receivables and parties to the Contracts that the Receivables and the Contracts have been assigned to the Administrative Agent for the ratable benefit of the Administrative Agent and the Lenders and that payments in respect thereof shall be made directly to the Administrative Agent.

 

(c)                                  Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables and Contracts 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 thereto. No Agent or Lender shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) or Contract by reason of or

 

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arising out of this Agreement or the receipt by the Administrative Agent or any Lender of any payment relating thereto, nor shall the Administrative Agent or any Lender be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto) or Contract, 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 thereunder, 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.

 

6.3                                               Pledged Stock.

 

(a)                                  Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent's intent to exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive all dividends paid in respect of the Pledged Stock and all payments made in respect of the Pledged Notes and to exercise all voting and corporate or other organizational rights with respect to the Investment Property; provided, however, that no vote shall be cast or corporate or other organizational right exercised or other action taken which would materially impair the Collateral or which would be inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document.

 

(b)                                 If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Investment Property and make application thereof to the Obligations in the order set forth in Section 6.5, and (ii) any or all of the Investment Property shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Investment Property at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other organizational structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of the Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

 

(c)                                  Each Grantor hereby authorizes and instructs each Issuer of any Investment Property pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this

 

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Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Investment Property directly to the Administrative Agent.

 

6.4                                 Proceeds to be Turned Over to Administrative Agent. In addition to the rights of the Administrative Agent and the Lenders specified in Section 6.1 with respect to payments of Receivables, if an Event of Default shall occur and be continuing, all Proceeds received by any Grantor consisting of cash, checks and other similar near-cash items shall be held by such Grantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor, and shall, upon the request of the Administrative Agent, be turned over to the Administrative Agent forthwith upon receipt by such Grantor in the exact form received by such Grantor (duly endorsed by such Grantor to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a Collateral Account maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the Lenders) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in Section 6.5.

 

6.5                                 Application of Proceeds. Subject to any different order of payment set forth in the Credit Agreement (which different order shall be controlling), if an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds constituting Collateral, whether or not held in any Collateral Account, and any proceeds of the guarantee set forth in Section 2, in payment of the Obligations in the following order:

 

(a)                        First, to pay incurred and unpaid fees and expenses of the Administrative Agent under the Loan Documents;

 

(b)                       Second, to the Administrative Agent, for application by it towards payment of amounts then due and owing and remaining unpaid in respect of the Obligations, pro rata among the Lenders according to the amounts of the Obligations then due and owing and remaining unpaid to the Lenders;

 

(c)                        Third, to the Administrative Agent, for application by it towards prepayment of the Obligations, pro rata among the Lenders according to the amounts of the Obligations then held by the Lenders; and

 

(d)                       Fourth, to any balance of such Proceeds remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same.

 

6.6                                               Other Remedies.

 

(a)                                  PPSA Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing,

 

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evidencing or relating to the Obligations, all rights and remedies of a secured party under the PPSA or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, have assigned to it, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, license, sublicense, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of the Administrative Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Upon written demand from the Administrative Agent, each Grantor shall grant, assign, convey or otherwise transfer to the Collateral Agent an absolute assignment of all of such Grantor's right, title and interest in and to the Intellectual Property and shall execute and deliver to the Collateral Agent such documents as are necessary or appropriate to carry out the intent and purposes of this Agreement. The Administrative Agent or any Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released to the extent permitted by law. Each Grantor further agrees, at the Administrative Agent's request, to assemble the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor's premises or elsewhere. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the Lenders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations, in the order set forth in Section 6.5 hereof, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law need the Administrative Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent or any Lender arising out of the exercise by them of any rights hereunder, except for gross negligence or willful misconduct on the part of the Administrative Agent or such Lender. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 20 days before such sale or other disposition.

 

(b)                                 Appointment of Receiver. Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent may appoint or reappoint by instrument in writing, any Person or Persons, whether an officer or officers or an employee or employees of the Administrative Agent or not, to be an interim receiver, receiver or receivers (hereinafter called a "Receiver," which term when used herein shall include a receiver and manager) of Collateral (including any interest, income or profits therefrom) and may remove any Receiver so appointed and appoint another in his/her/its stead. Any such Receiver shall, so far as concerns responsibility for his/her/its acts, be deemed the agent of the applicable Grantor and not

 

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the Administrative Agent or any of the Lenders, and neither the Administrative Agent nor any Lender shall be in any way responsible for any misconduct, negligence or nonfeasance on the part of any such Receiver or his/her/its servants, agents or employees. Subject to the provisions of the instrument appointing him/her/it and the provisions of applicable law, any such Receiver shall have power to take possession of Collateral, to preserve Collateral or its value, to carry on or concur in carrying on all or any part of the business of the applicable Grantor and to sell, lease, license or otherwise dispose of or concur in selling, leasing, licensing or otherwise disposing of Collateral. To facilitate the foregoing powers, any such Receiver may, to the exclusion of all others, including the applicable Grantor, enter upon, use and occupy all premises owned or occupied by the applicable Grantor wherein Collateral may be situated, maintain Collateral upon such premises, borrow money on a secured or unsecured basis and use Collateral directly in carrying on the applicable Grantor's business or as security for loans or advances to enable the Receiver to carry on the applicable Grantor's business or otherwise, as such Receiver shall, in its discretion, determine. Except as may be otherwise directed by the Agent, all Money received from time to time by such Receiver in carrying out his/her/its appointment shall be received in trust for and be paid over to the Administrative Agent. Every such Receiver may, in the discretion of the Administrative Agent, be vested with all or any of the rights and powers of the Administrative Agent.

 

(i)                                     The Administrative Agent may, either directly or through its agents or nominees, exercise any or all of the powers and rights given to a Receiver by virtue of this Section 6.6(b).

 

6.7                                               Private Sales.

 

(a)                                  Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Laws, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Laws even if such Issuer would agree to do so.

 

(b)                                 Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance with any and all other applicable Requirements of Law. Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.7 will cause irreparable injury to the Administrative Agent and the Lenders, that the Administrative Agent and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.7 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such

 

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covenants except for a defense that no Event of Default has occurred under the Credit Agreement.

 

6.8                                               Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the reasonable fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency.

 

6.9                                               Intellectual Property License. The Grantors hereby grant the Grantee a non-exclusive, transferable, sublicensable, worldwide license and right, effective solely during an Event of Default, to the maximum extent permitted by applicable law and to the extent of the Grantors' interest therein, exercisable without payment of royalty or other compensation, under and to any and all of the Intellectual Property now or hereafter owned by, licensed to, or otherwise used by the Grantors to purchase, use, market, repossess, possess, store, assemble, manufacture, process, sell, transfer, distribute, lease, license and otherwise exploit and dispose of any asset included in the Collateral to the extent the Grantee takes possession of such in accordance with the terms and conditions of this Agreement and the Credit Agreement. For the avoidance of doubt, in the event that any such Event of Default is cured in accordance with the terms and conditions of this Agreement and the Credit Agreement, the foregoing license shall automatically be suspended. The Grantors agree that any sale, transfer, grant of an exclusive license or other disposition of any of the foregoing Intellectual Property (whether by foreclosure or otherwise) will be subject to the Grantee's rights as set forth in this Section 6.9. Any use of Trademarks under the foregoing license shall be consistent with the historical use of such Trademarks by the Grantors and shall meet the Grantors' standards of quality in all material respects. At the Grantors' reasonable request, the Grantee shall provide samples of any goods to be sold under a Grantor Trademark.

 

SECTION 7.                                                        THE ADMINISTRATIVE AGENT

 

7.1                                               Administrative Agent's Appointment as Attorney-in-Fact, etc.

 

(a)                                  Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:

 

(i)                                     in the name of such Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or Contract or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent

 

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for the purpose of collecting any and all such moneys due under any Receivable or Contract or with respect to any other Collateral whenever payable;

 

(ii)                                  in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Administrative Agent may reasonably request to evidence the Administrative Agent's and Lenders' security interest in such Intellectual Property and the goodwill and intangibles of such Grantor relating thereto or represented thereby;

 

(iii)                               pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

 

(iv) execute, in connection with any sale provided for in Section 6.6, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

 

(v)                                 (1) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (3) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Administrative Agent shall in its sole discretion determine; and (8) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent's option and such Grantor's expense, at any time, or from time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and the Administrative Agent's and the Lenders' security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

 

Anything in this Section 7.1 to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1 unless an Event of Default shall have occurred and be continuing.

 

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(b)                                 If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

 

(c)                                  The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this Section 7.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on Revolving Loans that are Base Rate Loans (which rate shall increase to the rate applicable to such Loans that are past due for periods after the date that is 5 days after demand for payment has been made upon the Borrower by the Administrative Agent) under the Credit Agreement, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand.

 

(d)                                 Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

 

7.2                                               Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any Lender nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Administrative Agent and the Lenders hereunder are solely to protect the Administrative Agent's and the Lenders' interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Lender to exercise any such powers. The Administrative Agent and the Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

 

7.3                                               Filing of Financing Statements. Pursuant to any applicable law, each Grantor authorizes the Administrative Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form and in such offices as the Administrative Agent determines appropriate to perfect the security interests of the Administrative Agent under this Agreement. Each Grantor authorizes the Administrative Agent to use the collateral description "all personal property" or similar language containing an equally effective description in any such financing statements. Each Grantor hereby ratifies and authorizes the filing by the Administrative Agent of any financing statement with respect to the Collateral made prior to the date hereof.

 

7.4                                               Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent

 

27

 

of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Administrative Agent and the Lenders with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

 

SECTION 8.                                                        MISCELLANEOUS

 

8.1                                               Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 10.01 of the Credit Agreement.

 

8.2                                               Notices. All notices, requests and demands to or upon the Administrative Agent or any Grantor hereunder shall be effected in the manner provided for in Section 10.02 of the Credit Agreement; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 1.

 

8.3                                               No Waiver by Course of Conduct; Cumulative Remedies. No Agent or Lender shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which such Agent or such Lender would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

8.4                                               Enforcement Expenses; Indemnification.

 

(a)                                  Each Guarantor agrees to pay or reimburse the Administrative Agent, and during the existence of an Event of Default, each Lender, for all its costs and expenses incurred in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to each Lender and of counsel to the Administrative Agent.

 

(b)                                 Each Grantor agrees to pay, and to save the Administrative Agent and the Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement.

 

28

 

(c)                                  Each Guarantor agrees to pay, and to save the Administrative Agent and the Lenders harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to Section 10.04 of the Credit Agreement.

 

(d)                                 Any amounts received by the Administrative Agent or the Lenders as a consequence of the exercise of the Administrative Agent's rights provided for herein, including in respect of an Event of Default shall be applied pursuant to the terms of this Agreement. Where applicable, such amounts will be converted into U.S. Dollars at the reasonable market rates in force on the day of such conversion and then remitted (minus any commission or other amounts charged in connection with such conversion, if applicable) to the Administrative Agent for the benefit of the Lenders or directly to the Lenders, provided that if such conversion or remittance is not legally permitted or possible for any reason outside the Administrative Agent's control at the time, such amounts may, at the sole discretion of the Administrative Agent or the Lenders, and if so permitted under applicable law and regulations, be received in Canadian Dollars by the Administrative Agent or the Lenders.

 

(e)                                  The agreements in this Section 8.4 shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents.

 

8.5                                               Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Administrative Agent and the Lenders and their successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent.

 

8.6                                               Set-Off. Each Grantor hereby irrevocably authorizes each Agent and each Lender at any time after the Loans and other amounts payable under the Credit Agreement shall have become due and payable pursuant to Article VIII of the Credit Agreement, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or such Lender to or for the credit or the account of such Grantor, or any part thereof in such amounts as such Agent or such Lender may elect, against and on account of the obligations and liabilities of such Grantor to such Agent or such Lender hereunder and claims of every nature and description of such Agent or such Lender against such Grantor, in any currency, whether arising hereunder, under the Credit Agreement, any other Loan Document or otherwise, as such Agent or such Lender may elect, whether or not the Administrative Agent or any Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each Agent and each Lender shall notify such Grantor promptly of any such set-off and the application made by such Agent or such Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and each Lender under this Section 8.6 are in

 

29

 

addition to other rights and remedies (including, without limitation, other rights of set-off) which such Agent or such Lender may have.

 

8.7                                               Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

8.8                                               Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

8.9                                               Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

8.10                                         Integration. This Agreement and the other Loan Documents represent the agreement of the Grantors, the Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.

 

8.11                                         GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

 

8.12                                         Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and unconditionally:

 

(a)                                  submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the Province of Ontario;

 

(b)                                 consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c)                                  agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Grantor at its address referred to in Section 8.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

 

30

 

(d)                                 agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e)                                  waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

8.13                                         Acknowledgements. Each Grantor hereby acknowledges that:

 

(a)                                  it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

 

(b)                                 no Agent or Lender has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Administrative Agent and Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)                                  no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Grantors and the Lenders.

 

8.14                                         Additional Grantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to Section 6.09 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

 

8.15                                         Releases.

 

(a)                                  At such time as the Loans, the Reimbursement Obligations and the other Obligations (other than Secured Hedge Agreement Obligations and Secured Cash Management Obligations to the extent (x) such Obligations have been secured or backstopped to the satisfaction of the Lender holding such Obligations or (y) the Lender holding such Obligations has otherwise consented to such exclusion) shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding (other than those Letters of Credit secured or backstopped to the satisfaction of the L/C Issuer), the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, the Administrative Agent shall deliver to such Grantor any Collateral held by the Administrative Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination and to authorize the filing by Grantors of any necessary PPSA financing change statements evidencing the termination of the Liens so released or other terminations or releases.

 

(b)                                 If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement, then the Administrative

 

31

 

Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request and sole expense of the Borrower, a Subsidiary Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement; provided that the Borrower shall have delivered to the Administrative Agent a certification by the Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents.

 

8.16                                         WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

8.17                                         Permitted Liens. Subject to the terms of the Intercreditor Agreement, The inclusion or reference to liens permitted under the Credit Agreement in this Agreement or in any other Loan Document is not intended to subordinate and shall not subordinate, and shall not be interpreted as subordinating, the Lien and security interest created by this Agreement or any other Loan Document to any liens permitted under the Credit Agreement.

 

8.18                                         Amalgamation. Each Grantor acknowledges and agrees that, in the event it amalgamates with any other corporation or corporations, it is the intention of the parties hereto that the term "Grantor," when used herein, shall apply to each of the amalgamating corporations and to the amalgamated corporation, such that the security interest granted hereby:

 

(a)           Shall extend the Collateral owned by each of the amalgamating corporations and the amalgamated corporation at the time of amalgamation and to any Collateral thereafter owned or acquired by the amalgamated corporation, and

 

(b)           Shall secure all Obligations of each of the amalgamating corporations and the amalgamated corporation to Administrative Agent and Secured Parties thereafter arising. The security interest shall attach to all Collateral owned by each corporation amalgamating with any debtor and by the amalgamated company, at the time of the amalgamation, and shall attach to all Collateral thereafter owned or acquired by the amalgamated corporation when such becomes owned or is acquired.

 

[Signature Pages Follow]

 

32

 

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement to be duly executed and delivered as of the date first above written.

 

	
 

	
APPLETON PAPERS CANADA LTD., a

	
 

	
corporation formed under the laws of the Province

	
 

	
of Ontario, Canada

	
 

	
 

	
 

	
 

	
 

	
By: 

	
/s/ Jeffrey J. Fletcher

	
 

	
Name: 

	
Jeffrey J. Fletcher

	
 

	
Title: 

	
Treasurer

	
 

	
 

	
Guarantee and Collateral Agreement (Canada)

	
 

 

 

Annex I

to

Guarantee and Collateral Agreement

 

ASSUMPTION AGREEMENT, dated as of                           , 20                 , made by                                   , a                                                    [corporation] (the "Additional Grantor"), in favor of Fifth Third Bank, as administrative agent (in such capacity, the "Administrative Agent") for the banks and other financial institutions (the "Lenders") parties to the Credit Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such Credit Agreement.

 

W I T N E S S E T H:

 

WHEREAS, Appleton Papers Inc., a Delaware corporation (the "Borrower"), Paperweight Development Corp., a Wisconsin corporation ("Holdings"), the Lenders and Fifth Third Bank, as administrative agent (in such capacity, the "Administrative Agent") have entered into a Credit Agreement, dated as of February              , 2010 (as amended, restated, supplemented and/or otherwise modified from time to time, the "Credit Agreement");

 

WHEREAS, in connection with the Credit Agreement, certain of Borrower's Subsidiaries (other than the Additional Grantor) have entered into the Guarantee and Collateral Agreement, dated as of February                                      , 2010 (as amended, restated, supplemented and/or otherwise modified from time to time, the "Canadian Guarantee and Collateral Agreement") in favor of the Administrative Agent for the benefit of the Lenders;

 

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party to the Canadian Guarantee and Collateral Agreement; and 

 

WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Canadian Guarantee and Collateral Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

1.                                                     Canadian Guarantee and Collateral Agreement. By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the Canadian Guarantee and Collateral Agreement, hereby becomes a party to the Canadian Guarantee and Collateral Agreement as a Grantor thereunder and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Grantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules                                 (*) to the Canadian Guarantee and Collateral Agreement. The Additional Grantor hereby represents and warrants that each of the representations and warranties contained in Section 4 of the Canadian Guarantee and Collateral Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date.

 

* Refer to each Schedule which needs to be supplemented.

 

Guaranty and Collateral Agreement

 

 

2.                                                     GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

 

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

	
 

	
[ADDITIONAL GRANTOR]

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
Guaranty and Collateral Agreement

	
 

 

 

SCHEDULE 1

 

Notices

 

GRANTOR:

 

Appleton Papers Canada Ltd.

550 Braidwood Avenue

Peterborough, Ontario Canada

Attention: Jeffrey J. Fletcher

Telephone: 920-991-8452

Telecopier: 920-991-8852

Electronic Mail: jfletcher@appletonideas.com

Taxpayer Identification Number: 100236892 (Ontario: 2446981)

 

ADMINISTRATIVE AGENT, ANY L/C ISSUER, SWING LINE LENDER OR FIFTH THIRD BANK AS A LENDER:

 

Fifth Third Bank

38 Fountain Square Plaza

Cincinnati, Ohio 45263

Attention: Loan Syndications/Judy Huls

Facsimile: 513-534-0875

 

with copies to:

 

FIFTH THIRD BANK

222 South Riverside Plaza

Suite 3300

Chicago, Illinois 60606

Attention: Elizabeth Di Cola

Facsimile: 312-704-4127

 

KATTEN MUCHIN ROSENMAN LLP

525 West Monroe Street

Chicago, Illinois 60661-3693

Attention: Denise S. Burn, Esq.

Facsimile: 312-577-8778

 

 

SCHEDULE 2

 

Pledged Notes

 

None.

 

Pledged Stock

 

None.

 

 

SCHEDULE 3

 

Perfection of Liens

 

PPSA Filing

 

	
 

	
 

	
Filing Jurisdiction of

	
 

	
 

	
Grantor

	
 

	
Organization

	
 

	
Corporation No.

	
 

	
 

	
 

	
 

	
 

	
Appleton Papers Canada Ltd.

	
 

	
Ontario

	
 

	
41268-6

 

 

SCHEDULE 4

 

Jurisdiction of Organization

 

	
 

	
 

	
Jurisdiction of

	
 

	
Chief Executive

	
 

	
 

	
Name of Loan Party

	
 

	
Organization

	
 

	
Office

	
 

	
Federal Tax ID No.

	
Appleton Papers Canada Ltd.

	
 

	
Ontario, Canada

	
 

	
550 Braidwood Avenue

	
 

	
100236892;

	
 

	
 

	
 

	
 

	
Peterborough, Ontario

	
 

	
2446981 (Ontario)

	
 

	
 

	
 

	
 

	
Canada

	
 

	
 

 

 

SCHEDULE 5

 

Location of Collateral

 

	
Party

	
 

	
Location

	
 

	
Address

	
 

	
 

	
 

	
 

	
 

	
Appleton Papers Canada Ltd.

	
 

	
Distribution Center

	
 

	
550 Braidwood Avenue

	
 

	
 

	
 

	
 

	
Peterborough, Ontario Canada

 

 

SCHEDULE 6

 

Intellectual Property

 

None.

 

 

SCHEDULE 7

 

Commercial Tort Claims

 

None.

 

 

SCHEDULE 8

 

Accounts

 

Deposit Accounts

 

	
Financial

	
 

	
Name on

	
 

	
Account

	
 

	
Account

	
 

	
Value in

	
 

	
Date of

	
Institution

	
 

	
Account

	
 

	
Type

	
 

	
Number

	
 

	
Account

	
 

	
Value

	
Bank of Nova Scotia

	
 

	
Appleton Papers Canada Ltd.

	
 

	
Payroll, payables

	
 

	

Redacted

	
 

	
870,446.24 CAD

	
 

	
02/05/10

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Bank of Nova Scotia

	
 

	
Appleton Papers Canada Ltd.

	
 

	
Depository

	
 

	

Redacted

	
 

	
$108,439.31

	
 

	
02/05/10

 

Securities Accounts

 

None.

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