EXHIBIT 10.3
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U.S. SECURITY AGREEMENT
By
PLY GEM INDUSTRIES, INC.,
as U.S. Borrower
and
THE GUARANTORS PARTY HERETO
and
UBS AG, STAMFORD BRANCH,
as Collateral Agent
______________________
Dated as of February 12, 2004
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TABLE OF CONTENTS
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PREAMBLE.......................................................................1
RECITALS.......................................................................1
AGREEMENT......................................................................2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions.....................................................2
SECTION 1.2. Interpretation.................................................10
SECTION 1.3. Resolution of Drafting Ambiguities.............................11
SECTION 1.4. Perfection Certificate.........................................11
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Security Interest.....................................11
SECTION 2.2. Filings........................................................12
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral.................13
SECTION 3.2. Perfection of Uncertificated Securities Collateral.............14
SECTION 3.3. Financing Statements and Other Filings; Maintenance
of Perfected Security Interest..............................14
SECTION 3.4. Other Actions..................................................15
SECTION 3.5. Joinder of Additional Guarantors...............................19
SECTION 3.6. Supplements; Further Assurances................................20
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1. Title..........................................................20
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SECTION 4.2. Validity of Security Interest..................................21
SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral.......21
SECTION 4.4. Other Financing Statements.....................................21
SECTION 4.5. Chief Executive Office; Change of Name; Jurisdiction
of Organization.............................................21
SECTION 4.6. Location of Inventory and Equipment............................22
SECTION 4.7. Due Authorization and Issuance.................................22
SECTION 4.8. Consents, etc..................................................22
SECTION 4.9. Pledged Collateral.............................................22
SECTION 4.10. Insurance......................................................23
SECTION 4.11. Payment of Taxes; Compliance with Laws;
Contesting Liens; Claims....................................23
SECTION 4.12. Access to Pledged Collateral, Books and Records;
Other Information...........................................23
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral.....................24
SECTION 5.2. Voting Rights; Distributions; etc..............................24
SECTION 5.3. Defaults, etc..................................................25
SECTION 5.4. Certain Agreements of Pledgors As Issuers and
Holders of Equity Interests................................26
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of License...............................................26
SECTION 6.2. Protection of Collateral Agent's Security......................26
SECTION 6.3. After-Acquired Property........................................27
SECTION 6.4. Litigation.....................................................28
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. Maintenance of Records.........................................28
SECTION 7.2. Legend.........................................................29
SECTION 7.3. Modification of Terms, etc.....................................29
SECTION 7.4. Collection.....................................................29
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ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral................................30
ARTICLE IX
REMEDIES
SECTION 9.1. Remedies.......................................................30
SECTION 9.2. Notice of Sale.................................................32
SECTION 9.3. Waiver of Notice and Claims....................................32
SECTION 9.4. Certain Sales of Pledged Collateral............................32
SECTION 9.5. No Waiver; Cumulative Remedies.................................33
SECTION 9.6. Certain Additional Actions Regarding Intellectual Property.....34
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. Proceeds of Casualty Events and Collateral Dispositions........34
SECTION 10.2. Application of Proceeds........................................34
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Collateral Agent....................................34
SECTION 11.2. Collateral Agent May Perform; Collateral Agent
Appointed Attorney-in-Fact................ .................35
SECTION 11.3. Continuing Security Interest; Assignment.......................36
SECTION 11.4. Termination; Release...........................................36
SECTION 11.5. Modification in Writing........................................37
SECTION 11.6. Notices........................................................37
SECTION 11.7. Governing Law, Consent to Jurisdiction and Service
of Process; Waiver of Jury Trial............................37
SECTION 11.8. Severability of Provisions.....................................37
SECTION 11.9. Execution in Counterparts......................................38
SECTION 11.10. Business Days..................................................38
SECTION 11.11. Waiver of Stay.................................................38
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SECTION 11.12. No Credit for Payment of Taxes or Imposition...................38
SECTION 11.13. No Claims Against Collateral Agent.............................38
SECTION 11.14. No Release.....................................................39
SECTION 11.15. Obligations Absolute...........................................39
SIGNATURES...................................................................S-1
EXHIBIT 1 Form of Issuer's Acknowledgment
EXHIBIT 2 Form of Securities Pledge Amendment
EXHIBIT 3 Form of Joinder Agreement
EXHIBIT 4 Form of Control Agreement Concerning Securities Accounts
EXHIBIT 5 Form of Control Agreement Concerning Deposit Accounts
EXHIBIT 6 Form of Copyright U.S. Security Agreement
EXHIBIT 7 Form of Patent U.S. Security Agreement
EXHIBIT 8 Form of Trademark U.S. Security Agreement
EXHIBIT 9 Form of Bailee's Letter
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U.S. SECURITY AGREEMENT
U.S. SECURITY AGREEMENT dated as of February 12, 2004 (as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, the "AGREEMENT") made by PLY GEM
INDUSTRIES, INC., a Delaware corporation (the "U.S. BORROWER") and THE
GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO (the "ORIGINAL GUARANTORS") OR
FROM TIME TO TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the
"ADDITIONAL GUARANTORS," and together with the Original Guarantors, the
"GUARANTORS"), as pledgors, assignors and debtors (the U.S. Borrower, together
with the Guarantors, in such capacities and together with any successors in such
capacities, the "PLEDGORS," and each, a "PLEDGOR"), in favor of UBS AG, STAMFORD
BRANCH, in its capacity as collateral agent pursuant to the Credit Agreement (as
hereinafter defined), as pledgee, assignee and secured party (in such capacities
and together with any successors in such capacities, the "COLLATERAL AGENT").
R E C I T A L S :
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A. The U.S. Borrower, CWD Windows and Doors, Inc., the Original
Guarantors, the Collateral Agent and the lending institutions listed therein
(the "LENDERS") have, in connection with the execution and delivery of this
Agreement, entered into that certain credit agreement, dated as of February 12,
2004 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT").
B. Each Original Guarantor has, pursuant to the Credit Agreement,
unconditionally guaranteed the Obligations.
C. The U.S. Borrower and each Original Guarantor will receive
substantial benefits from the execution, delivery and performance of the
obligations under the Credit Agreement and the other Loan Documents and each is,
therefore, willing to enter into this Agreement.
D. Each Pledgor is or, as to Pledged Collateral (as hereinafter
defined) acquired by such Pledgor after the date hereof will be, the legal
and/or beneficial owner of the Pledged Collateral pledged by it hereunder.
E. This Agreement is given by each Pledgor in favor of the
Collateral Agent for the benefit of the Secured Parties (as hereinafter defined)
to secure the payment and performance of all of the Obligations (as defined in
the Credit Agreement).
F. It is a condition to the obligations of the Lenders to make
the Loans under the Credit Agreement and a condition to the Issuing Bank issuing
Letters of Credit under the Credit Agreement that each Pledgor execute and
deliver the applicable Loan Documents, including this Agreement.
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A G R E E M E N T :
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NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Collateral Agent hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS.
(a) Unless otherwise defined herein or in the Credit Agreement,
capitalized terms used herein that are defined in the UCC shall have the
meanings assigned to them in the UCC.
(b) Terms used but not otherwise defined herein that are defined
in the Credit Agreement shall have the meanings given to them in the Credit
Agreement. Section 1.03 of the Credit Agreement shall apply herein MUTATIS
MUTANDIS.
(c) The following terms shall have the following meanings:
"ACQUISITION DOCUMENT RIGHTS" shall mean, with respect to each Pledgor,
collectively, all of such Pledgor's rights, title and interest in, to and under
the Acquisition Documents, including (i) all rights and remedies relating to
monetary damages, including indemnification rights and remedies, and claims for
damages or other relief pursuant to or in respect of the Acquisition Documents,
(ii) all rights and remedies relating to monetary damages, including
indemnification rights and remedies, and claims for monetary damages under or in
respect of the agreements, documents and instruments referred to in the
Acquisition Documents or related thereto and (iii) all proceeds, collections,
recoveries and rights of subrogation with respect to the foregoing.
"ADDITIONAL GUARANTORS" shall have the meaning assigned to such term in
the Preamble hereof.
"ADDITIONAL PLEDGED INTERESTS" shall mean, collectively, with respect
to each Pledgor, (i) all options, warrants, rights, agreements, additional
membership, partnership or other equity interests of whatever class of any
issuer of Initial Pledged Interests or any interest in any such issuer, together
with all rights, privileges, authority and powers of such Pledgor relating to
such interests in each such issuer or under any Organizational Document of any
such issuer, and the certificates, instruments and agreements representing such
membership, partnership or other interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such membership, partnership or other equity interests from time to time
acquired by such Pledgor in any manner and (ii) all membership, partnership or
other equity in-
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terests, as applicable, of each limited liability company, partnership or other
entity (other than a corporation) hereafter acquired or formed by such Pledgor
and all options, warrants, rights, agreements, additional membership,
partnership or other equity interests of whatever class of such limited
liability company, partnership or other entity, together with all rights,
privileges, authority and powers of such Pledgor relating to such interests or
under any Organizational Document of any such issuer, and the certificates,
instruments and agreements representing such membership, partnership or other
equity interests and any and all interest of such Pledgor in the entries on the
books of any financial intermediary pertaining to such membership, partnership
or other interests, from time to time acquired by such Pledgor in any manner.
"ADDITIONAL PLEDGED SHARES" shall mean, collectively, with respect to
each Pledgor, (i) all options, warrants, rights, agreements, additional shares
of capital stock of whatever class of any issuer of the Initial Pledged Shares
or any other equity interest in any such issuer, together with all rights,
privileges, authority and powers of such Pledgor relating to such interests
issued by any such issuer under any Organizational Document of any such issuer,
and the certificates, instruments and agreements representing such interests and
any and all interest of such Pledgor in the entries on the books of any
financial intermediary pertaining to such interests, from time to time acquired
by such Pledgor in any manner and (ii) all the issued and outstanding shares of
capital stock of each corporation hereafter acquired or formed by such Pledgor
and all options, warrants, rights, agreements or additional shares of capital
stock of whatever class of such corporation, together with all rights,
privileges, authority and powers of such Pledgor relating to such shares or
under any Organizational Document of such corporation, and the certificates,
instruments and agreements representing such shares and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such shares, from time to time acquired by such Pledgor in any
manner.
"AGREEMENT" shall have the meaning assigned to such term in the
Preamble hereof.
"BAILEE LETTER" shall be an agreement in form substantially similar to
Exhibit 9 annexed hereto.
"CANADIAN COLLATERAL" shall have the meaning assigned to such term in
SECTION 2.01.
"CANADIAN SHARE CERTIFICATE" shall have the meaning assigned to such
term in SECTION 2.01.
"CLAIMS" shall mean any and all property and other taxes, assessments
and special assessments, levies, fees and all governmental charges imposed upon
or assessed against, and landlords', carriers', mechanics', workmen's,
repairmen's, laborers', materialmen's, suppliers' and warehousemen's Liens and
other claims arising by operation of law against, all or any portion of the
Pledged Collateral.
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"COLLATERAL ACCOUNT" shall mean a collateral account or sub-account
established and maintained in accordance with the provisions of SECTION 9.01 of
the Credit Agreement and all property from time to time on deposit in the
Collateral Account.
"COLLATERAL AGENT" shall have the meaning assigned to such term in the
Preamble hereof.
"COMMODITY ACCOUNT CONTROL AGREEMENT" shall mean a commodity account
control agreement in a form that is reasonably satisfactory to the Collateral
Agent.
"CONTESTED LIENS" shall mean, collectively, any Liens incurred in
respect of any Claims to the extent that the amounts owing in respect thereof
are not yet delinquent or are being contested and otherwise comply with the
provisions of SECTION 4.11 hereof; PROVIDED, HOWEVER, that such Liens shall in
all respects be subject and subordinate in priority to the Lien and security
interest created by this Agreement, except if and to the extent that the law or
regulation creating, permitting or authorizing such Lien provides that such Lien
must be superior to the Lien and security interest created and evidenced hereby.
"CONTRACTS" shall mean, collectively, with respect to each Pledgor, all
sale, service, performance, equipment or property lease contracts, agreements
and grants and all other contracts, agreements or grants (in each case, whether
written or oral, or third party or intercompany), between such Pledgor and third
parties, and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof.
"CONTROL" shall mean (i) in the case of each Deposit Account,
"control," as such term is defined in Section 9-104 of the UCC, and (ii) in the
case of any Security Entitlement, "control," as such term is defined in Section
8-106 of the UCC and (iii) in the case of any Commodity Contract, "control," as
such term is defined in Section 9-106 of the UCC.
"CONTROL AGREEMENTS" shall mean, collectively, the Deposit Account
Control Agreement, the Securities Account Control Agreement and the Commodity
Account Control Agreement.
"COPYRIGHTS" shall mean, collectively, with respect to each Pledgor,
all copyrights (whether statutory or common law, whether established or
registered in the United States or any other country or any political
subdivision thereof, whether registered or unregistered and whether published or
unpublished) and all copyright registrations and applications made by such
Pledgor, in each case, whether now owned or hereafter created or acquired by or
assigned to such Pledgor, together with any and all (i) rights and privileges
arising under applicable law with respect to such Pledgor's use of such
copyrights, (ii) reissues, renewals, continuations and extensions thereof, (iii)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto, including damages and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future
infringements thereof.
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"COPYRIGHT U.S. SECURITY AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 6.
"CREDIT AGREEMENT" shall have the meaning assigned to such term in
RECITAL A hereof.
"DEPOSIT ACCOUNT CONTROL AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 5 or such other form that is
reasonably satisfactory to the Collateral Agent.
"DEPOSIT ACCOUNTS" shall mean, collectively, with respect to each
Pledgor, (i) all "deposit accounts" as such term is defined in the UCC and in
any event shall include the LC Sub-Account and the Collateral Account and all
accounts and sub-accounts relating to any of the foregoing accounts and (ii) all
cash, funds, checks, notes and instruments from time to time on deposit in any
of the accounts or sub-accounts described in clause (i) of this definition.
"DISTRIBUTIONS" shall mean, collectively, with respect to each Pledgor,
all dividends, cash, options, warrants, rights, instruments, distributions,
returns of capital or principal, income, interest, profits and other property,
interests (debt or equity) or proceeds, including as a result of a split,
revision, reclassification or other like change of the Pledged Securities, from
time to time received, receivable or otherwise distributed to such Pledgor in
respect of or in exchange for any or all of the Pledged Securities or
Intercompany Notes.
"EXCLUDED PROPERTY" shall mean Special Property other than the
following:
(a) the right to receive any payment of money (including Accounts,
General Intangibles and Payment Intangibles) or any other rights referred
to in Sections 9-406(d), 9-407(a) or 9-408(a) of the UCC to the extent
that such sections of the UCC are effective to limit the prohibitions
which make such property "Special Property"; and
(b) any Proceeds, substitutions or replacements of any Special
Property (unless such Proceeds, substitutions or replacements would
constitute Special Property).
"GENERAL INTANGIBLES" shall mean, collectively, with respect to each
Pledgor, all "general intangibles," as such term is defined in the UCC, of such
Pledgor and, in any event, shall include (i) all of such Pledgor's rights, title
and interest in, to and under all insurance policies and Contracts, (ii) all
know-how and warranties relating to any of the Pledged Collateral or the
Mortgaged Property, (iii) any and all other rights, claims, choses-in-action and
causes of action of such Pledgor against any other person and the benefits of
any and all collateral or other security given by any other person in connection
therewith, (iv) all guarantees, endorsements and indemnifications on, or of, any
of the Pledged Collateral or any of the Mortgaged Property, (v) all lists,
books, records, correspondence, ledgers, printouts, files (whether in printed
form or stored electronically), tapes and other papers or materials containing
information relating to any of the Pledged Collateral or any of the Mortgaged
Property, including all customer or tenant lists, identification of suppliers,
data, plans, blueprints, specifications, designs, drawings, appraisals,
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recorded knowledge, surveys, studies, engineering reports, test reports,
manuals, standards, processing standards, performance standards, catalogs,
research data, computer and automatic machinery software and programs and the
like, field repair data, accounting information pertaining to such Pledgor's
operations or any of the Pledged Collateral or any of the Mortgaged Property and
all media in which or on which any of the information or knowledge or data or
records may be recorded or stored and all computer programs used for the
compilation or printout of such information, knowledge, records or data, (vi)
all licenses, consents, permits, variances, certifications, authorizations and
approvals, however characterized, of any Governmental Authority (or any person
acting on behalf of a Governmental Authority) now or hereafter acquired or held
by such Pledgor pertaining to operations now or hereafter conducted by such
Pledgor or any of the Pledged Collateral or any of the Mortgaged Property
including building permits, certificates of occupancy, environmental
certificates, industrial permits or licenses and certificates of operation and
(vii) all rights to reserves, deferred payments, deposits, refunds,
indemnification of claims to the extent the foregoing relate to any Pledged
Collateral or Mortgaged Property and claims for tax or other refunds against any
Governmental Authority relating to any Pledged Collateral or any of the
Mortgaged Property.
"GOODWILL" shall mean, collectively, with respect to each Pledgor, the
goodwill connected with such Pledgor's business including (i) all goodwill
connected with the use of and symbolized by any Trademark in which such Pledgor
has any interest, (ii) all know-how, trade secrets, customer and supplier lists,
proprietary information, inventions, methods, procedures, formulae,
descriptions, compositions, technical data, drawings, specifications, name
plates, catalogs, confidential information and the right to limit the use or
disclosure thereof by any person, pricing and cost information, business and
marketing plans and proposals, consulting agreements, engineering contracts and
such other assets which relate to such goodwill and (iii) all product lines of
such Pledgor's business.
"GUARANTORS" shall have the meaning assigned to such term in the
Preamble hereof.
"INITIAL PLEDGED INTERESTS" shall mean, with respect to each Pledgor,
all membership, partnership or other equity interests (other than in a
corporation), as applicable, of each issuer owned by such Pledgor described in
SCHEDULE 11 annexed to the Perfection Certificate, together with all rights,
privileges, authority and powers of such Pledgor in and to each such issuer or
under any Organizational Document of each such issuer, and the certificates,
instruments and agreements representing such membership, partnership or other
interests and any and all interest of such Pledgor in the entries on the books
of any financial intermediary pertaining to such membership, partnership or
other interests.
"INITIAL PLEDGED SHARES" shall mean, collectively, with respect to each
Pledgor, the issued and outstanding shares of capital stock of each issuer owned
by such Pledgor described in SCHEDULE 11 annexed to the Perfection Certificate
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of each such issuer, and the certificates, instruments and agreements
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ing such shares of capital stock and any and all interest of such Pledgor in
the entries on the books of any financial intermediary pertaining to the Initial
Pledged Shares.
"INSTRUMENTS" shall mean, collectively, with respect to each Pledgor,
all "instruments," as such term is defined in Article 9, rather than Article 3,
of the UCC, and shall include all promissory notes, drafts, bills of exchange or
acceptances.
"INTELLECTUAL PROPERTY COLLATERAL" shall mean, collectively, the
Patents, Trademarks, Copyrights, Licenses and Goodwill.
"INTERCOMPANY NOTES" shall mean, with respect to each Pledgor, all
intercompany notes described in SCHEDULE 12 annexed to the Perfection
Certificate and intercompany notes hereafter acquired by such Pledgor and all
certificates, instruments or agreements evidencing such intercompany notes, and
all assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.
"INVESTMENT PROPERTY" shall mean a security, whether certificated or
uncertificated, Security Entitlement, Securities Account, Commodity Contract or
Commodity Account, excluding, however, the Securities Collateral.
"JOINDER AGREEMENT" shall mean an agreement substantially in the form
annexed hereto as EXHIBIT 3.
"LENDERS" shall have the meaning assigned to such term in RECITAL A
hereof.
"LICENSES" shall mean, collectively, with respect to each Pledgor, all
license and distribution agreements with, and covenants not to sue, any other
party with respect to any Patent, Trademark or Copyright or any other patent,
trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements
or violations thereof, (iii) rights to sue for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or
practice any or all of the Patents, Trademarks or Copyrights or any other
patent, trademark or copyright.
"MORTGAGED PROPERTY" shall have the meaning assigned to such term in
the Mortgages.
"ORIGINAL GUARANTORS" shall have the meaning assigned to such term in
the Preamble hereof.
"PATENTS" shall mean, collectively, with respect to each Pledgor, all
patents issued or assigned to and all patent applications and registrations made
by such Pledgor (whether estab-
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lished or registered or recorded in the United States or any other country or
any political subdivision thereof), together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor's use of
any patents, (ii) inventions and improvements described and claimed therein,
(iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (iv) income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements
thereof, (v) rights corresponding thereto throughout the world and (vi) rights
to sue for past, present or future infringements thereof.
"PATENT U.S. SECURITY AGREEMENT" shall mean an agreement substantially
in the form annexed hereto as EXHIBIT 7.
"PERFECTION CERTIFICATE" shall mean that certain perfection certificate
dated February 12, 2004, executed and delivered by each Pledgor and Canadian
Borrower in favor of the Collateral Agent for the benefit of the Secured
Parties, and each other Perfection Certificate (which shall be in form and
substance reasonably acceptable to the Collateral Agent) executed and delivered
by the applicable Guarantor in favor of the Collateral Agent for the benefit of
the Secured Parties contemporaneously with the execution and delivery of each
Joinder Agreement executed in accordance with SECTION 3.5 hereof, in each case,
as the same may be amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with the Credit Agreement or upon the
request of the Collateral Agent.
"PLEDGE AMENDMENT" shall have the meaning assigned to such term in
SECTION 5.1 hereof.
"PLEDGED COLLATERAL" shall have the meaning assigned to such term in
SECTION 2.1 hereof.
"PLEDGED INTERESTS" shall mean, collectively, the Initial Pledged
Interests and the Additional Pledged Interests; PROVIDED, HOWEVER, that to the
extent applicable, Pledged Interests shall not include any interest which is not
required to be pledged pursuant to SECTION 5.10(B) of the Credit Agreement.
"PLEDGED SECURITIES" shall mean, collectively, the Pledged Interests,
the Pledged Shares and the Successor Interests.
"PLEDGED SHARES" shall mean, collectively, the Initial Pledged Shares
and the Additional Pledged Shares; PROVIDED, HOWEVER, that Pledged Shares shall
not include any shares which are not required to be pledged pursuant to SECTION
5.10(B) of the Credit Agreement.
"PLEDGOR" shall have the meaning assigned to such term in the Preamble
hereof.
"SECURITIES ACCOUNT CONTROL AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 4 or such other form that is
reasonably satisfactory to the Collateral Agent.
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"SECURITIES COLLATERAL" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
"SPECIAL PROPERTY" shall mean:
(a) any contract, General Intangible, permit, lease or license
held by any Pledgor that validly prohibits the creation by such Pledgor of
a security interest therein;
(b) any contract, General Intangible, permit, lease or license
held by any Pledgor to the extent that any Requirement of Law applicable
thereto prohibits the creation of a security interest therein;
(c) any contract, General Intangible, permit, lease or license
held by any Pledgor to the extent that the creation by such Pledgor of a
security interest therein is permitted only with the consent of another
party, if the requirement to obtain such consent is legally enforceable
and such consent has not been obtained;
(d) Equipment owned by any Pledgor on the date hereof or hereafter
acquired that is subject to a Lien securing a Purchase Money Obligation or
Capital Lease Obligation permitted to be incurred or outstanding pursuant
to the provisions of the Credit Agreement if the contract or other
agreement in which such Lien is granted (or the documentation providing
for such Purchase Money Obligation or Capital Lease Obligation) validly
prohibits the creation of any other Lien on such Equipment or requires
consent of another party (which requirement is legally enforceable) to
create such other Lien, which consent can not be obtained; and
(e) any property owned on the date hereof or acquired after the
date hereof by any Pledgor that is subject to a Lien permitted by either
Section 6.02(k) or Section 6.02(c) of the Credit Agreement if the contract
or agreement pursuant to which such Lien is granted validly prohibits the
creation of any other Lien on such property or requires the consent of
another party to create such Lien, if the requirement to obtain such
consent is legally enforceable and such consent has not been obtained.
PROVIDED, HOWEVER, that to the extent such property constitutes Special Property
due to a prohibition on the creation of any other Lien in the relevant permit,
lease, license, contract or other agreement or by Requirement of Law applicable
thereto, then in each case described in clauses (a) or (b), (c), (d) or (e) of
this definition, such property shall constitute "Special Property" only to the
extent and for so long as such permit, lease, license, contract or other
agreement or Requirement of Law applicable thereto validly prohibits the
creation of a Lien on such property in favor of the Collateral Agent and, upon
the termination of such prohibition (howsoever occurring), such property shall
cease to constitute "Special Property." In addition, to the extent such property
constitutes "Special Property" due to failure of Pledgor to obtain consent as
described in clauses (c), (d) and (e), such Pledgor shall use its commercially
reasonable efforts to obtain such consent, and, upon obtaining such consent,
such property shall cease to constitute "Special Property."
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"SUCCESSOR INTERESTS" shall mean, collectively, with respect to each
Pledgor, all shares of each class of the capital stock of the successor
corporation or interests or certificates of the successor limited liability
company, partnership or other entity owned by such Pledgor (unless such
successor is such Pledgor itself) formed by or resulting from any consolidation
or merger in which any person listed in SCHEDULE 1(A) annexed to the Perfection
Certificate is not the surviving entity; PROVIDED, HOWEVER, that to the extent
applicable, Successor Interest shall not include any shares or interests which
are not required to be pledged pursuant to SECTION 5.10(B) of the Credit
Agreement.
"TRADEMARKS" shall mean, collectively, with respect to each Pledgor,
all trademarks (including service marks), slogans, logos, certification marks,
trade dress, uniform resource locations (URLs), domain names, corporate names
and trade names, whether registered or unregistered, owned by or assigned to
such Pledgor and all registrations and applications for the foregoing (whether
statutory or common law and whether established or registered in the United
States or any other country or any political subdivision thereof), together with
any and all (i) rights and privileges arising under applicable law with respect
to such Pledgor's use of any trademarks, (ii) reissues, continuations,
extensions and renewals thereof, (iii) income, fees, royalties, damages and
payments now and hereafter due and/or payable thereunder and with respect
thereto, including damages, claims and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto throughout the world
and (v) rights to sue for past, present and future infringements thereof.
"TRADEMARK U.S. SECURITY AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 8.
"UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in the State of New York; PROVIDED, HOWEVER, that if by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of the Collateral Agent's and the Secured Parties' security interest in
any item or portion of the Pledged Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term "UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection or priority and for purposes of definitions
relating to such provisions.
"U.S. BORROWER" shall have the meaning assigned to such term in the
Preamble hereof.
SECTION 1.2. INTERPRETATION. The rules of interpretation specified
in the Credit Agreement (including SECTION 1.03 thereof) shall be applicable to
this Agreement. Notwithstanding anything herein to the contrary, to the extent
the term "Obligations" refers to the obligations secured by the Canadian
Collateral, such term shall be deemed to apply only to the Canadian Guaranteed
Obligations. Notwithstanding anything herein to the contrary, to the extent the
term "Secured Parties" refers to the parties secured by the Canadian Collateral,
such term shall be deemed to apply only to the Canadian Secured Parties.
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SECTION 1.3. RESOLUTION OF DRAFTING AMBIGUITIES. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (I.E., the Collateral Agent) shall not be employed in the
interpretation hereof.
SECTION 1.4. PERFECTION CERTIFICATE. The Collateral Agent and each
Secured Party agree that the Perfection Certificate and all descriptions of
Pledged Collateral, schedules, amendments and supplements thereto applicable to
the Pledgors are and shall at all times remain a part of this Agreement.
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. GRANT OF SECURITY INTEREST. As collateral security
for the payment and performance in full of all the Obligations, each Pledgor
hereby pledges and grants to the Collateral Agent for the benefit of the Secured
Parties, a lien on and security interest in and to all of the right, title and
interest of such Pledgor in, to and under the following property, wherever
located, whether now existing or hereafter arising or acquired from time to time
(collectively, the "PLEDGED COLLATERAL"):
(i) all Accounts;
(ii) all Equipment, Goods, Inventory and Fixtures;
(iii) all Documents, Instruments and Chattel Paper;
(iv) all Letters of Credit and Letter-of-Credit Rights;
(v) all Securities Collateral; PROVIDED that a lien on and
security interest in the Initial Pledged Shares represented by
Canadian Borrower's share certificate number C-3 described in
SCHEDULE 11 to the Perfection Certificate (the "CANADIAN SHARE
CERTIFICATE") and all Successor Interests and Distributions
related thereto (collectively, the "CANADIAN COLLATERAL") is
pledged and granted only to secure U.S. Borrower's guarantee
of the Canadian Obligations;
(vi) all Collateral Accounts;
(vii) all Investment Property;
(viii) all Intellectual Property Collateral;
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(ix) the Commercial Tort Claims described on SCHEDULE 15 to the
Perfection Certificate;
(x) all General Intangibles;
(xi) all Deposit Accounts;
(xii) all Acquisition Documents and Acquisition Document Rights;
(xiii) all Supporting Obligations;
(xiv) all books and records relating to the Pledged Collateral; and
(xv) to the extent not covered by clauses (i) through (xiv) of this
sentence, all other personal property of such Pledgor, whether
tangible or intangible and all Proceeds and products of each
of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of, each of
the foregoing, any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such Pledgor from
time to time with respect to any of the foregoing.
Notwithstanding anything to the contrary contained in clauses (i)
through (xv) above, the security interest created by this Agreement shall not
extend to, and the term "Pledged Collateral" shall not include, any Excluded
Property and (i) the Pledgors shall from time to time at the request of the
Collateral Agent give written notice to the Collateral Agent identifying in
reasonable detail the Special Property (and stating in such notice that such
Special Property constitutes "Excluded Property") and shall provide to the
Collateral Agent such other information regarding the Special Property as the
Collateral Agent may reasonably request provided that failure to provide such
notice to the Collateral Agent shall not affect the status of any property as
Special Property and (ii) from and after the Closing Date, no Pledgor shall
permit to become effective in any document creating, governing or providing for
any permit, lease or license, a provision that would prohibit the creation of a
Lien on such permit, lease or license in favor of the Collateral Agent unless
such Pledgor believes, in its reasonable judgment, that such prohibition is
usual and customary in transactions of such type. The security interest granted
in clause (viii) shall not extend to any "intent to use" application for a
Trademark until such time as a statement of use has been filed with the United
States Patent and Trademark Office.
SECTION 2.2. FILINGS. (a) Each Pledgor hereby irrevocably
authorizes the Collateral Agent at any time and from time to time to file in any
relevant jurisdiction any initial financing statements (including fixture
filings) and amendments thereto that contain the information required by Article
9 of the Uniform Commercial Code of each applicable jurisdiction for the filing
of any financing statement or amendment relating to the Pledged Collateral,
including (i) whether such Pledgor is an organization, the type of organization
and any organizational identification number issued to such Pledgor, (ii) any
financing or continuation statements or other documents without the signature of
such Pledgor where permitted by law, including the filing of
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a financing statement describing the Pledged Collateral as "all assets in which
the Pledgor now owns or hereafter acquires rights" and (iii) in the case of a
financing statement filed as a fixture filing or covering Pledged Collateral
constituting minerals or the like to be extracted or timber to be cut, a
sufficient description of the real property to which such Pledged Collateral
relates. Each Pledgor agrees to provide all information described in the
immediately preceding sentence to the Collateral Agent promptly upon request.
(b) Each Pledgor hereby ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto relating to the Pledged Collateral if filed
prior to the date hereof.
(c) Each Pledgor hereby further authorizes the Collateral Agent to
file filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country), including this Agreement, the Copyright U.S. Security Agreement, the
Patent U.S. Security Agreement and the Trademark U.S. Security Agreement, or
other documents for the purpose of perfecting, confirming, continuing, enforcing
or protecting the security interest granted by such Pledgor hereunder, without
the signature of such Pledgor, and naming such Pledgor, as debtor, and the
Collateral Agent, as secured party.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. DELIVERY OF CERTIFICATED SECURITIES COLLATERAL. Each
Pledgor represents and warrants that all certificates or instruments
representing or evidencing the Securities Collateral in existence on the date
hereof have been delivered to the Collateral Agent in suitable form for transfer
by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that the Collateral Agent has a perfected first priority
security interest therein. Each Pledgor hereby agrees that all certificates or
instruments representing or evidencing Securities Collateral acquired by such
Pledgor after the date hereof shall immediately upon receipt thereof by such
Pledgor be delivered to and held by or on behalf of the Collateral Agent
pursuant hereto. All certificated Securities Collateral shall be in suitable
form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Collateral Agent. The Collateral Agent shall have
the right, at any time upon the occurrence and during the continuance of any
Event of Default, to endorse, assign or otherwise transfer to or to register in
the name of the Collateral Agent or any of its nominees or endorse for
negotiation any or all of the Securities Collateral, without any indication that
such Securities Collateral is subject to the security interest hereunder. In
addition, upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right at any time to exchange certificates
representing or evidencing Securities Collateral for certificates of smaller or
larger denominations.
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SECTION 3.2. PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL.
Each Pledgor represents and warrants that the Collateral Agent has a perfected
first priority security interest in all uncertificated Pledged Securities
pledged by it hereunder that is in existence on the date hereof. Each Pledgor
hereby agrees that if any of the Pledged Securities are at any time not
evidenced by certificates of ownership, then each applicable Pledgor shall, to
the extent permitted by applicable law (i) if necessary or desirable to perfect
a security interest in such Pledged Securities, cause such pledge to be recorded
on the equityholder register or the books of the issuer, cause the issuer to
execute and deliver to the Collateral Agent an acknowledgment of the pledge of
such Pledged Securities substantially in the form of EXHIBIT 1 annexed hereto,
execute any customary pledge forms or other documents necessary or appropriate
to complete the pledge and give the Collateral Agent the right to transfer such
Pledged Securities under the terms hereof and, upon request, provide to the
Collateral Agent an opinion of counsel, in form and substance reasonably
satisfactory to the Collateral Agent, confirming such pledge and perfection
thereof and (ii) if reasonably requested by the Collateral Agent, use its
commercially reasonable efforts to cause such Pledged Securities to become
certificated and in the event such Pledged Securities become certificated, to
deliver such Pledged Securities to the Collateral Agent in accordance with the
provisions of SECTION 3.1.
SECTION 3.3. FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE
OF PERFECTED SECURITY INTEREST. Each Pledgor represents and warrants that all
filings necessary to perfect the security interest granted by it to the
Collateral Agent in respect of the Pledged Collateral have been delivered to the
Collateral Agent in completed and, to the extent necessary or appropriate, duly
executed form for filing in each governmental, municipal or other office
specified in SCHEDULE 7 annexed to the Perfection Certificate. Each Pledgor
agrees that at the sole cost and expense of the Pledgors, (i) such Pledgor will
maintain the security interest created by this Agreement in the Pledged
Collateral as a perfected first priority security interest to the extent
required by this Agreement and shall defend such security interest against the
claims and demands of all persons except Permitted Collateral Liens, (ii) such
Pledgor shall furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Pledged Collateral and such
other reports in connection with the Pledged Collateral as the Collateral Agent
may reasonably request, all in reasonable detail and (iii) at any time and from
time to time, upon the written request of the Collateral Agent, such Pledgor
shall promptly and duly execute and deliver, and file and have recorded, such
further instruments and documents and take such further action as the Collateral
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and the rights and powers herein granted, including
the filing (including by electronic filing) of any financing statements,
continuation statements and other documents (including this Agreement) under the
Uniform Commercial Code (or other similar laws) in effect in any jurisdiction
with respect to the security interest created hereby and the execution and
delivery of Control Agreements, all in form reasonably satisfactory to the
Collateral Agent and in such offices (including the United States Patent and
Trademark Office and the United States Copyright Office) wherever required by
law to perfect, continue and maintain a valid, enforceable, first priority
security interest in the Pledged Collateral as provided herein and to preserve
the other rights and interests granted to the Collateral Agent hereunder, as
against third parties, with respect to the Pledged Collateral. Notwithstanding
anything to the
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contrary contained in this Agreement, no representation or warranty is made by
any Pledgor as to the perfection or priority of any security interest in
Intellectual Property Collateral which is registered in a jurisdiction other
than and outside of the United States or any equipment covered by a certificate
of title which cannot be perfected by UCC filings with the relevant Governmental
Authority.
SECTION 3.4. OTHER ACTIONS. In order to further ensure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interest in the Pledged Collateral,
each Pledgor represents and warrants (as to itself) as follows and agrees, in
each case at such Pledgor's own expense, to take the following actions with
respect to the following Pledged Collateral:
(a) INSTRUMENTS AND TANGIBLE CHATTEL PAPER. (i) No amounts payable
under or in connection with any of the Pledged Collateral are evidenced by
any Instrument (other than a check to be deposited) or Tangible Chattel
Paper, other than such Instruments and Tangible Chattel Paper listed in
SCHEDULE 12 annexed to the Perfection Certificate (to the extent required
to be listed on the schedules to the Perfection Certificate as of the date
this representation is made or deemed made) and (ii) each Instrument and
each item of Tangible Chattel Paper listed in SCHEDULE 12 annexed to the
Perfection Certificate, other than Instruments and Chattel Paper
representing amounts in the aggregate for all Pledgors of less than
$500,000, has been properly endorsed, assigned and delivered to the
Collateral Agent, accompanied by instruments of transfer or assignment
duly executed in blank. If any amount then payable under or in connection
with any of the Pledged Collateral shall be evidenced by any Instrument
(other than a check to be deposited) or Tangible Chattel Paper, and such
amount, together with all amounts payable evidenced by any Instrument or
Tangible Chattel Paper not previously delivered to the Collateral Agent
exceeds $500,000 in the aggregate for all Pledgors, the Pledgor acquiring
such Instrument or Tangible Chattel Paper shall forthwith endorse, assign
and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time specify.
(b) DEPOSIT ACCOUNTS. Each Pledgor has neither opened nor
maintains any Deposit Accounts other than the accounts listed in SCHEDULE
16 annexed to the Perfection Certificate (to the extent required to be
listed on the schedules to the Perfection Certificate as of the date this
representation is made or deemed made) and (ii) upon execution of a
Deposit Account Control Agreement by such Pledgor, the applicable Bank and
the Collateral Agent, the Collateral Agent will have a perfected first
priority security interest in each Deposit Account listed in SCHEDULE 16
annexed to the Perfection Certificate by Control. No Pledgor shall
hereafter establish and maintain any Deposit Account unless (1) the
applicable Pledgor shall have given the Collateral Agent 30 days' prior
written notice of its intention to establish such new Deposit Account with
a Bank and (2) unless the Collateral Agent agrees in writing that it is
not required, such Bank and such Pledgor shall have duly executed and
delivered to the Collateral Agent a Deposit Account Control Agreement with
respect to such Deposit Account. Each Pledgor agrees that at the time it
establishes any additional Deposit Accounts it shall enter into a duly
authorized, executed
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and delivered Deposit Account Control Agreement with respect to such
Deposit Account. The Collateral Agent agrees with each Pledgor that the
Collateral Agent shall not give any instructions directing the disposition
of funds from time to time credited to any Deposit Account or withhold any
withdrawal rights from such Pledgor with respect to funds from time to
time credited to any Deposit Account unless an Event of Default of the
type specified in clause (a), (g) or (h) of ARTICLE VIII the Credit
Agreement has occurred and is continuing or if the Loans or other
Obligations shall be declared or otherwise become immediately due and
payable or, after an Event of Default has occurred, the Commitments shall
be terminated. The provisions of this SECTION 3.4(B) shall not apply to
the Collateral Account or to any other Deposit Accounts for which the
Collateral Agent is the Bank. No Pledgor shall grant Control of any
Deposit Account to any person other than the Collateral Agent. The
provisions of this Section 3.4(b) shall not apply to any Deposit Account
which (i) solely contains any property not beneficially owned by any
Pledgor or (ii) has a restricted purpose under the terms of documents
relating to the Assumed Debt and the funds therein can only be used for
such purpose.
(c) INVESTMENT PROPERTY. (i) Each Pledgor (1) has no Securities
Accounts or Commodity Accounts other than those listed in SCHEDULE 16
annexed to the Perfection Certificate (to the extent required to be listed
on the schedules to the Perfection Certificate as of the date this
representation is made or deemed made) and the Collateral Agent has a
perfected first priority security interest in such Securities Accounts and
Commodity Accounts, if any, by Control unless the Collateral Agent agrees
in writing that it is not required, (2) does not hold, own or have any
interest in any certificated securities or uncertificated securities other
than those constituting Pledged Securities and those maintained in
Securities Accounts or Commodity Accounts listed in SCHEDULE 16 annexed to
the Perfection Certificate (to the extent required to be listed on the
schedules to the Perfection Certificate as of the date this representation
is made or deemed made) and (3) unless the Collateral Agent agrees in
writing that it is not necessary, as of the date hereof, has entered into
a duly authorized, executed and delivered Securities Account Control
Agreement or a Commodity Account Control Agreement with respect to each
Securities Account or Commodity Account listed in SCHEDULE 16 annexed to
the Perfection Certificate (to the extent required to be listed on the
schedules to the Perfection Certificate as of the date this representation
is made or deemed made), if any, as applicable.
(ii) If any Pledgor shall at any time hold or acquire any
certificated securities constituting Investment Property, such Pledgor
shall promptly (a) endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment duly
executed in blank, all in form and substance reasonably satisfactory to
the Collateral Agent or (b) deliver such securities into a Securities
Account with respect to which a Control Agreement is in effect in favor of
the Collateral Agent. If any securities now or hereafter acquired by any
Pledgor constituting Investment Property are uncertificated and are issued
to such Pledgor or its nominee directly by the issuer thereof, such
Pledgor shall promptly notify the Collateral Agent thereof and pursuant to
an agreement in form and substance satisfactory to the Collateral Agent,
either (a) cause the issuer to
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agree to comply with instructions from the Collateral Agent as to such
securities, without further consent of any Pledgor or such nominee, (b)
cause a Security Entitlement with respect to such uncertificated security
to be held in a Securities Account with respect to which the Collateral
Agent has Control or (c) arrange for the Collateral Agent to become the
registered owner of the securities. Pledgor shall not hereafter establish
and maintain any Securities Account or Commodity Account with any
Securities Intermediary or Commodity Intermediary unless (1) the
applicable Pledgor shall have given the Collateral Agent 30 days' prior
written notice of its intention to establish such new Securities Account
or Commodity Account with such Securities Intermediary or Commodity
Intermediary, and (2) unless the Collateral Agent in agrees in writing
that it is not required, such Securities Intermediary or Commodity
Intermediary, as the case may be, and such Pledgor shall have duly
executed and delivered a Control Agreement with respect to such Securities
Account or Commodity Account, as the case may be. Each Pledgor shall
accept any cash and Investment Property in trust for the benefit of the
Collateral Agent and within one (1) Business Day of actual receipt
thereof, deposit any cash or Investment Property and any new securities,
instruments, documents or other property by reason of ownership of the
Investment Property (other than payments of a kind described in, and which
such Pledgor is entitled to retain pursuant to the provision of, Sections
5.2 and 7.4 hereof) received by it into a Controlled Account. The
Collateral Agent agrees with each Pledgor that the Collateral Agent shall
not give any Entitlement Orders or instructions or directions to any
issuer of uncertificated securities, Securities Intermediary or Commodity
Intermediary, and shall not withhold its consent to the exercise of any
withdrawal or dealing rights by such Pledgor, unless an Event of Default
has occurred and is continuing, or, after giving effect to any such
investment, withdrawal or dealing rights would occur. The provisions of
this SECTION 3.4(C) shall not apply to any Financial Assets credited to a
Securities Account for which the Collateral Agent is the Securities
Intermediary. No Pledgor shall grant control over any Investment Property
to any person other than the Collateral Agent.
(iii) As between the Collateral Agent and the Pledgors, the Pledgors
shall bear the investment risk with respect to the Investment Property and
Pledged Securities, and the risk of loss of, damage to, or the destruction
of the Investment Property and Pledged Securities, whether in the
possession of, or maintained as a security entitlement or deposit by, or
subject to the control of, the Collateral Agent, a Securities
Intermediary, Commodity Intermediary, any Pledgor or any other person;
PROVIDED, HOWEVER, that nothing contained in this SECTION 3.4(C) shall
release or relieve any Securities Intermediary or Commodity Intermediary
of its duties and obligations to the Pledgors or any other person under
any Control Agreement or under applicable law. Each Pledgor shall promptly
pay all Claims and fees of whatever kind or nature with respect to the
Investment Property and Pledged Securities pledged by it under this
Agreement except for claims subject to Contested Liens. In the event any
Pledgor shall fail to make such payment contemplated in the immediately
preceding sentence, the Collateral Agent may (following notice to the
Pledgor, to the extent practicable taking into account the value of its
interest in such Pledged Securities, of its intention to pay any such
Claim) do so for the account of such
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Pledgor and the Pledgors shall promptly reimburse and indemnify the
Collateral Agent from all costs and expenses incurred by the Collateral
Agent under this SECTION 3.4(C) in accordance with SECTION 11.03 of the
Credit Agreement.
(d) ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS. No amount
under or in connection with any of the Pledged Collateral in the aggregate
for all Pledgors in excess of $500,000 is evidenced by any Electronic
Chattel Paper or any "transferable record" (as that term is defined in
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act
as in effect in any relevant jurisdiction) other than such Electronic
Chattel Paper and transferable records listed in SCHEDULE 12 annexed to
the Perfection Certificate (to the extent required to be listed on the
schedules to the Perfection Certificate as of the date this representation
is made or deemed made). If any amount payable under or in connection with
any of the Pledged Collateral shall be evidenced by any Electronic Chattel
Paper or any transferable record, the Pledgor acquiring such Electronic
Chattel Paper or transferable record shall promptly notify the Collateral
Agent thereof and shall take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control under UCC
Section 9-105 of such Electronic Chattel Paper or control under Section
201 of the Federal Electronic Signatures in Global and National Commerce
Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The requirement in the preceding sentence shall apply
to the extent that such amount, together with all amounts payable
evidenced by Electronic Chattel Paper or any transferable record in which
the Collateral Agent has not been vested control within the meaning of the
statutes described in this sentence exceeds $500,000 in the aggregate for
all Pledgors. The Collateral Agent agrees with such Pledgor that the
Collateral Agent will arrange, pursuant to procedures satisfactory to the
Collateral Agent and so long as such procedures will not result in the
Collateral Agent's loss of control, for the Pledgor to make alterations to
the Electronic Chattel Paper or transferable record permitted under UCC
Section 9-105 or, as the case may be, Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or Section 16 of
the Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such
Pledgor with respect to such Electronic Chattel Paper or transferable
record.
(e) LETTER-OF-CREDIT RIGHTS. If any Pledgor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor of
such Pledgor, other than a Letter of Credit issued pursuant to the Credit
Agreement, such Pledgor shall promptly notify the Collateral Agent thereof
and such Pledgor shall, at the request of the Collateral Agent, pursuant
to an agreement in form and substance reasonably satisfactory to the
Collateral Agent, use commercially reasonable efforts to either (i)
arrange for the issuer and any confirmer of such Letter of Credit to
consent to an assignment to the Collateral Agent of the proceeds of any
drawing under the Letter of Credit or (ii) arrange for the Collateral
Agent to become the transferee beneficiary of such Letter of Credit, with
the Collateral
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Agent agreeing, in each case, that the proceeds of any drawing under the
Letter of Credit are to be applied as provided in the Credit Agreement.
The actions in the preceding sentence shall be taken to the extent that
the amount under such Letter of Credit, together with all amounts under
Letters of Credit for which the actions described above in clause (i) and
(ii) have not been taken, exceeds $500,000 in the aggregate for all
Pledgors.
(f) COMMERCIAL TORT CLAIMS. As of the date hereof each Pledgor
hereby represents and warrants that it holds no Commercial Tort Claims
other than those listed in SCHEDULE 15 annexed to the Perfection
Certificate (to the extent required to be listed on the schedules to the
Perfection Certificate as of the date this representation is made or
deemed made). If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim having a value together with all other Commercial
Tort Claims of all Pledgors in which the Collateral Agent does not have a
security interest in excess of $500,000 in the aggregate, such Pledgor
shall promptly notify the Collateral Agent in writing signed by such
Pledgor of the brief details thereof and grant to the Collateral Agent in
such writing a security interest therein and in the Proceeds thereof, all
upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Collateral Agent.
(g) LANDLORD'S ACCESS AGREEMENTS/BAILEE LETTERS. Each Pledgor
shall use its commercially reasonable efforts to obtain as soon as
practicable after the date hereof with respect to each location set forth
in SCHEDULE 4.01(N)(VI) annexed to the Credit Agreement, where such
Pledgor maintains Pledged Collateral, a Bailee Letter and/or Landlord
Access Agreement, as applicable, and use commercially reasonable efforts
to obtain a Bailee Letter, Landlord Access Agreement and/or landlord's
lien waiver, as applicable, from all such bailees and landlords, as
applicable, who from time to time have possession of Pledged Collateral in
the ordinary course of such Pledgor's business and if reasonably requested
by the Collateral Agent. A waiver of bailee's lien shall not be required
if the value of the Pledged Collateral held by such bailee at the relevent
location is less then $100,000. A Landlord Access Agreement and/or
landlord's lien waiver shall not be required if the value of the Pledged
Collateral held at the relevant leased location is less then $100,000.
SECTION 3.5. JOINDER OF ADDITIONAL GUARANTORS. The Pledgors shall
cause each Subsidiary of the U.S. Borrower which, from time to time, after the
date hereof shall be required to pledge any assets to the Collateral Agent for
the benefit of the Secured Parties pursuant to the provisions of the Credit
Agreement, (a) to execute and deliver to the Collateral Agent (i) a Joinder
Agreement substantially in the form of EXHIBIT 3 annexed hereto within thirty
(30) Business Days on which it was acquired or created and (ii) a Perfection
Certificate, in each case, within thirty (30) Business Days of the date on which
it was acquired or created or (b) in the case of a Subsidiary organized outside
of the United States required to pledge any assets to the Collateral Agent
pursuant to the Credit Agreement, execute and deliver such documentation as the
Collateral Agent shall reasonably request and, in each case, upon such execution
and delivery, such Subsidiary shall, to the extent required by the Credit
Agreement, constitute a "Guarantor" and a "Pledgor" for all purposes hereunder
with the same force and effect as if originally named as a
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Guarantor and Pledgor herein. The execution and delivery of such Joinder
Agreement shall not require the consent of any Pledgor hereunder. The rights and
obligations of each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor and Pledgor as a party to this
Agreement.
SECTION 3.6. SUPPLEMENTS; FURTHER ASSURANCES. Each Pledgor shall
take such further actions, and shall execute and deliver to the Collateral Agent
such additional assignments, agreements, supplements, powers and instruments, as
the Collateral Agent may in its reasonable judgment deem necessary or
appropriate, wherever required by law, in order to perfect, preserve and protect
the security interest in the Pledged Collateral as provided herein and the
rights and interests granted to the Collateral Agent hereunder, to carry into
effect the purposes hereof or better to assure and confirm unto the Collateral
Agent the Pledged Collateral or permit the Collateral Agent to exercise and
enforce its rights, powers and remedies hereunder with respect to any Pledged
Collateral. Without limiting the generality of the foregoing, each Pledgor shall
make, execute, endorse, acknowledge, file or refile and/or deliver to the
Collateral Agent from time to time upon reasonable request such lists,
descriptions and designations of the Pledged Collateral, copies of warehouse
receipts, receipts in the nature of warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory assignments,
supplements, additional security agreements, conveyances, financing statements,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments as the Collateral Agent shall reasonably request. If
an Event of Default has occurred and is continuing, the Collateral Agent may
institute and maintain, in its own name or in the name of any Pledgor, such
suits and proceedings as the Collateral Agent may be advised by counsel shall be
necessary or expedient to prevent any impairment of the security interest in or
the perfection thereof in the Pledged Collateral. All of the foregoing shall be
at the sole cost and expense of the Pledgors.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Pledgor represents, warrants and covenants as follows:
SECTION 4.1. TITLE. Except for the security interest granted to
the Collateral Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and Permitted Liens, such Pledgor owns and, as to Pledged
Collateral acquired by it from time to time after the date hereof, will own the
rights in each item of Pledged Collateral pledged by it hereunder free and clear
of any and all Liens or claims of others other than Permitted Collateral Liens.
In addition, no Liens or claims exist on the Securities Collateral, other than
as permitted by SECTION 6.02 of the Credit Agreement. Such Pledgor has not
filed, nor authorized any third party to file a financing statement or other
public notice with respect to all or any part of the Pledged Collateral on file
or of record in any public office, except such as have been filed in favor of
the Collateral Agent pursuant to this Agreement or as are permitted by the
Credit Agreement or financing statements or public notices relating to the
termination statements listed on SCHEDULE 9 to the
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Perfection Certificate. No person other than the Collateral Agent has control or
possession of all or any part of the Pledged Collateral, except as permitted by
the Credit Agreement.
SECTION 4.2. VALIDITY OF SECURITY INTEREST. The security interest
in and Lien on the Pledged Collateral granted to the Collateral Agent for the
benefit of the Secured Parties hereunder constitutes (a) a legal and valid
security interest in all the Pledged Collateral securing the payment and
performance of the Obligations, and (b) subject to the filings and other actions
described in SCHEDULE 7 annexed to the Perfection Certificate (to the extent
required to be listed on the schedules to the Perfection Certificate as of the
date this representation is made or deemed made), a perfected security interest
in all the Pledged Collateral, except as otherwise permitted in this Agreement.
The security interest and Lien granted to the Collateral Agent for the benefit
of the Secured Parties pursuant to this Agreement in and on the Pledged
Collateral will, except as otherwise provided in this Agreement, at all times
constitute a perfected, continuing security interest therein, subject only to
Permitted Collateral Liens.
SECTION 4.3. DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED
COLLATERAL. Each Pledgor shall, at its own cost and expense, defend title to the
Pledged Collateral pledged by it hereunder and the security interest therein and
Lien thereon granted to the Collateral Agent and the priority thereof against
all claims and demands of all persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Collateral Agent or any other
Secured Party other than Permitted Collateral Liens (other than Contested
Liens). Except as expressly permitted by the Credit Agreement, this Agreement or
any other Loan Document, there is no agreement to which any Pledgor is a party,
and no Pledgor shall enter into any agreement or take any other action, that
would reasonably be expected to restrict the transferability of any of the
Pledged Collateral or otherwise impair or conflict in any material respect with
such Pledgors' obligations or the rights of the Collateral Agent hereunder.
SECTION 4.4. OTHER FINANCING STATEMENTS. It has not filed, nor
authorized any third party to file a (nor will there be any) valid or effective
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Pledged Collateral other than financing statements and other
statements and instruments relating to Permitted Collateral Liens. So long as
any of the Obligations remain unpaid, no Pledgor shall execute, authorize or
permit to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction)
relating to any Pledged Collateral, except financing statements and other
statements and instruments filed or to be filed in respect of and covering the
security interests granted by such Pledgor to the holder of the Permitted
Collateral Liens.
SECTION 4.5. CHIEF EXECUTIVE OFFICE; CHANGE OF NAME; JURISDICTION
OF ORGANIZATION. (a) It shall comply with the provisions of SECTION 5.12(A) of
the Credit Agreement.
(b) The Collateral Agent may rely on opinions of counsel as to
whether any or all UCC financing statements of the Pledgors need to be amended
as a result of any of the changes described in SECTION 5.12(A) of the Credit
Agreement. If any Pledgor fails to provide information to the Collateral Agent
about such changes on a timely basis, the Collateral Agent
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shall not be liable or responsible to any party for any failure to maintain a
perfected security interest in such Pledgor's property constituting Pledged
Collateral, for which the Collateral Agent needed to have information relating
to such changes. The Collateral Agent shall have no duty to inquire about such
changes if any Pledgor does not inform the Collateral Agent of such changes, the
parties acknowledging and agreeing that it would not be feasible or practical
for the Collateral Agent to search for information on such changes if such
information is not provided by any Pledgor.
SECTION 4.6. LOCATION OF INVENTORY AND EQUIPMENT. It shall not
move any material Equipment or Inventory to any location other than one within
the United States until (i) it shall have given the Collateral Agent not less
than 30 days' prior written notice (in the form of an Officers' Certificate) of
its intention so to do, clearly describing such new location within the United
States and providing such other information in connection therewith as the
Collateral Agent may request and (ii) with respect to such new location, such
Pledgor shall have taken all action reasonably satisfactory to the Collateral
Agent to maintain the perfection and priority of the security interest of the
Collateral Agent for the benefit of the Secured Parties in the Pledged
Collateral intended to be granted hereby, including using commercially
reasonable efforts to obtain waivers of landlord's or warehousemen's and/or
bailee's liens with respect to such new location, if applicable, and if
requested by the Collateral Agent. Such Pledgor agrees to provide the Collateral
Agent with prompt notice following the movement of any material Equipment or
Inventory to any location other than one that is listed in the relevant
Schedules to the Perfection Certificate.
SECTION 4.7. DUE AUTHORIZATION AND ISSUANCE. All of the Initial
Pledged Shares have been, and to the extent any Pledged Shares are hereafter
issued, such Pledged Shares will be, upon such issuance, duly authorized,
validly issued and fully paid and non-assessable. All of the Initial Pledged
Interests have been fully paid for, and there is no amount or other obligation
owing by any Pledgor to any issuer of the Initial Pledged Interests in exchange
for or in connection with the issuance of the Initial Pledged Interests or any
Pledgor's status as a partner or a member of any issuer of the Initial Pledged
Interests.
SECTION 4.8. CONSENTS, ETC. In the event that the Collateral Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Collateral Agent, such
Pledgor agrees to use its commercially reasonable efforts to assist and aid the
Collateral Agent to obtain as soon as practicable any necessary approvals or
consents for the exercise of any such remedies, rights and powers.
SECTION 4.9. PLEDGED COLLATERAL. All information set forth herein,
including the schedules annexed hereto, and all information contained in any
documents, schedules and lists heretofore delivered to any Secured Party,
including the Perfection Certificate and the schedules thereto as supplemented
from time to time through the date as of which this representation is made or
deemed made, by or on behalf of any Pledgor in connection with this Agreement,
in each case, relating to the Pledged Collateral, is accurate and complete in
all material re-
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spects. The Pledged Collateral described on the Schedules annexed to the
Perfection Certificate (to the extent required to be listed on the schedules to
the Perfection Certificate as of the date this representation is made or deemed
made) constitutes all of the property of such type of Pledged Collateral owned
or held by the Pledgors.
SECTION 4.10. INSURANCE. In the event that the proceeds of any
insurance claim are paid after the Collateral Agent has exercised its right to
foreclose after an Event of Default, such Net Cash Proceeds shall be paid to the
Collateral Agent to satisfy any deficiency remaining after such foreclosure.
SECTION 4.11. PAYMENT OF TAXES; COMPLIANCE WITH LAWS; CONTESTING
LIENS; CLAIMS. Each Pledgor represents and warrants that all Claims imposed upon
or assessed against the Pledged Collateral have been paid and discharged except
to the extent such Claims constitute a Lien not yet due and payable which is a
Contested Lien or a Permitted Collateral Lien. Each Pledgor shall comply with
all Requirements of Law applicable to the Pledged Collateral the failure to
comply with which would, individually or in the aggregate, have a Material
Adverse Effect. Each Pledgor may at its own expense contest the validity, amount
or applicability of any Claims or Requirements of Law so long as the contest
thereof shall be conducted in accordance with, and permitted pursuant to the
provisions of, the Credit Agreement. Notwithstanding the foregoing provisions of
this SECTION 4.11, (i) no contest of any such obligation may be pursued by such
Pledgor if such contest would expose the Collateral Agent or any other Secured
Party to (A) any possible criminal liability or (B) any additional civil
liability for failure to comply with such obligations unless such Pledgor shall
have furnished a bond or other security therefor reasonably satisfactory to the
Collateral Agent, or such Secured Party, as the case may be and (ii) if at any
time payment or performance of any obligation contested by such Pledgor pursuant
to this SECTION 4.11 shall become necessary to prevent the imposition of
remedies because of non-payment, such Pledgor shall pay or perform the same in
sufficient time to prevent the imposition of remedies in respect of such default
or prospective default.
SECTION 4.12. ACCESS TO PLEDGED COLLATERAL, BOOKS AND RECORDS;
OTHER INFORMATION. Upon reasonable request to each Pledgor, the Collateral
Agent, its agents, accountants and attorneys shall have full and free access to
visit and inspect, as applicable, during normal business hours and such other
reasonable times as may be reasonably requested by the Collateral Agent all of
the Pledged Collateral and Mortgaged Property including all of the books,
correspondence and records of such Pledgor relating thereto. The Collateral
Agent and its representatives may examine the same, take extracts therefrom and
make photocopies thereof, and such Pledgor agrees to render to the Collateral
Agent, at such Pledgor's cost and expense, such clerical and other assistance as
may be reasonably requested by the Collateral Agent with regard thereto. Such
Pledgor shall, at any and all times, within a reasonable time after written
request by the Collateral Agent, furnish or cause to be furnished to the
Collateral Agent, in such manner and in such detail as may be reasonably
requested by the Collateral Agent, additional information with respect to the
Pledged Collateral.
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ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. PLEDGE OF ADDITIONAL SECURITIES COLLATERAL. Each
Pledgor shall, upon obtaining any Pledged Securities or Intercompany Notes of
any person, accept the same in trust for the benefit of the Collateral Agent and
forthwith deliver to the Collateral Agent a pledge amendment, duly executed by
such Pledgor, in substantially the form of EXHIBIT 2 annexed hereto (each, a
"PLEDGE AMENDMENT"), and the certificates and other documents required under
SECTION 3.1 and SECTION 3.2 hereof in respect of the additional Pledged
Securities or Intercompany Notes which are to be pledged pursuant to this
Agreement, and confirming the attachment of the Lien hereby created on and in
respect of such additional Pledged Securities or Intercompany Notes. Each
Pledgor hereby authorizes the Collateral Agent to attach each Pledge Amendment
to this Agreement and agrees that all Pledged Securities or Intercompany Notes
listed on any Pledge Amendment delivered to the Collateral Agent shall for all
purposes hereunder be considered Pledged Collateral.
SECTION 5.2. VOTING RIGHTS; DISTRIBUTIONS; ETC.
(i) So long as no Event of Default shall have occurred and be
continuing:
(A) Each Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Securities Collateral or any
part thereof for any purpose not inconsistent with the terms or purposes
hereof, the Credit Agreement or any other document evidencing the
Obligations; PROVIDED, however, that no Pledgor shall in any event
exercise such rights in any manner which could reasonably be expected to
have a Material Adverse Effect.
(B) Each Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the Lien hereof, any and all Distributions, but
only if and to the extent made in accordance with the provisions of the
Credit Agreement; PROVIDED, HOWEVER, that any and all such Distributions
consisting of rights or interests in the form of securities shall, unless
otherwise provided in the Credit Agreement, be promptly delivered to the
Collateral Agent to hold as Pledged Collateral and shall, if received by
any Pledgor, be received in trust for the benefit of the Collateral Agent,
be segregated from the other property or funds of such Pledgor and be
forthwith delivered to the Collateral Agent as Pledged Collateral in the
same form as so received (with any necessary endorsement).
(ii) The Collateral Agent shall be deemed without further action or
formality to have granted to each Pledgor all necessary consents relating to
voting rights and shall, if necessary, upon written request of any Pledgor and
at the sole cost and expense of the Pledgors, from time to time execute and
deliver (or cause to be executed and delivered) to such Pledgor all such
instruments as such Pledgor may reasonably request in order to permit such
Pledgor to exercise the voting and other rights which it is entitled to exercise
pursuant to SECTION
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5.2(I)(A) hereof and to receive the Distributions which it is authorized to
receive and retain pursuant to SECTIONS 5.2(I)(B) AND 5.2(III)(B) hereof.
(iii) Upon the occurrence and during the continuance of any Event of
Default:
(A) All rights of each Pledgor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to
SECTION 5.2(I)(A) hereof shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall thereupon have the sole
right to exercise such voting and other consensual rights.
(B) All rights of each Pledgor to receive Distributions which it
would otherwise be authorized to receive and retain pursuant to SECTION
5.2(I)(B) hereof shall cease and all such rights shall thereupon become
vested in the Collateral Agent, which shall thereupon have the sole right
to receive and hold as Pledged Collateral such Distributions.
(iv) Each Pledgor shall, at its sole cost and expense, from time to
time execute and deliver to the Collateral Agent appropriate instruments as the
Collateral Agent may request in order to permit the Collateral Agent to exercise
the voting and other rights which it may be entitled to exercise pursuant to
SECTION 5.2(iii)(A) hereof and to receive all Distributions which it may be
entitled to receive under SECTION 5.2(III)(B) hereof.
(v) All Distributions which are received by any Pledgor contrary
to the provisions of SECTION 5.2(I)(B) or SECTION 5.2(III)(B) hereof shall be
received in trust for the benefit of the Collateral Agent, shall be segregated
from other funds of such Pledgor and shall immediately be paid over to the
Collateral Agent as Pledged Collateral in the same form as so received (with any
necessary endorsement).
SECTION 5.3. DEFAULTS, ETC. Such Pledgor is not in default in the
payment of any portion of any mandatory capital contribution, if any, required
to be made under any agreement to which such Pledgor is a party relating to the
Pledged Securities pledged by it, and such Pledgor is not in default or
violation of any other provisions of any such agreement to which such Pledgor is
a party which could reasonably be expected to have a Material Adverse Effect. No
Securities Collateral pledged by such Pledgor is subject to any defense, offset
or counterclaim, nor have any of the foregoing been asserted or alleged against
such Pledgor by any person with respect thereto except as have been disclosed to
the Collateral Agent, and as of the date hereof, there are no certificates,
instruments, documents or other writings (other than the Organizational
Documents and certificates, if any, delivered to the Collateral Agent) which
evidence any Pledged Securities of such Pledgor.
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SECTION 5.4. CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS
OF EQUITY INTERESTS.
(i) In the case of each Pledgor which is an issuer of Securities
Collateral, such Pledgor agrees to be bound by the terms of this Agreement
relating to the Securities Collateral issued by it and will comply with such
terms insofar as such terms are applicable to it.
(ii) In the case of each Pledgor which is a partner in a
partnership, limited liability company or other entity, such Pledgor hereby
consents to the extent required by the applicable Organizational Document to the
pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged
Interests in such partnership, limited liability company or other entity and,
upon the occurrence and during the continuance of an Event of Default, to the
transfer of such Pledged Interests to the Collateral Agent or its nominee and to
the substitution of the Collateral Agent or its nominee as a substituted partner
or member in such partnership, limited liability company or other entity with
all the rights, powers and duties of a general partner or a limited partner or
member, as the case may be.
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. GRANT OF LICENSE. For the purpose of enabling the
Collateral Agent, during the continuance of an Event of Default, to exercise
rights and remedies under ARTICLE IX hereof with respect to the Intellectual
Property Collateral, at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Pledgor hereby grants to the Collateral Agent, to the extent permissible, an
irrevocable, non-exclusive license (exercisable only after an Event of Default
has occurred and is continuing) to use, assign, license or sublicense any of the
Intellectual Property Collateral now owned or hereafter acquired by such
Pledgor, wherever the same may be located. Such license shall include access to
all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout hereof.
SECTION 6.2. PROTECTION OF COLLATERAL AGENT'S SECURITY. On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i) promptly
following its becoming aware thereof, notify the Collateral Agent of (A) any
materially adverse determination in any proceeding in the United States Patent
and Trademark Office or the United States Copyright Office with respect to any
material Patent, Trademark or Copyright or (B) the institution of any proceeding
or any adverse determination in any federal, state or local court or
administrative body regarding such Pledgor's claim of ownership in or right to
use any of the Intellectual Property Collateral material to the use and
operation of the Pledged Collateral or Mortgaged Property, its right to register
such Intellectual Property Collateral or its right to keep and maintain such
registration in full force and effect, (ii) maintain and protect the
Intellectual Property Collateral material to the
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use and operation of the Pledged Collateral or Mortgaged Property as presently
used and operated and as contemplated by the Credit Agreement, (iii) not permit
to lapse or become abandoned any Intellectual Property Collateral material to
the use and operation of the Pledged Collateral or Mortgaged Property as
presently used and operated and as contemplated by the Credit Agreement, and not
settle or compromise any pending or future litigation or administrative
proceeding with respect to such Intellectual Property Collateral, in each case
except as shall be consistent with commercially reasonable business judgment,
(iv) upon such Pledgor obtaining knowledge thereof, promptly notify the
Collateral Agent in writing of any event which may be reasonably expected to
materially and adversely affect the value or utility of the Intellectual
Property Collateral or any portion thereof material to the use and operation of
the Pledged Collateral or Mortgaged Property, the ability of such Pledgor or the
Collateral Agent to dispose of the Intellectual Property Collateral or any
portion thereof or the rights and remedies of the Collateral Agent in relation
thereto including a levy or threat of levy or any legal process against the
Intellectual Property Collateral or any portion thereof, (v) not license the
Intellectual Property Collateral or amend or permit the amendment of any of the
licenses in a manner that would materially impair, in the reasonable business
judgment of such Pledgor, the value of the Intellectual Property Collateral or
the Lien on and security interest in the Intellectual Property Collateral
intended to be granted to the Collateral Agent for the benefit of the Secured
Parties, without the consent of the Collateral Agent, which consent shall not be
unreasonably withheld, (vi) diligently keep adequate records respecting the
Intellectual Property Collateral and (vii) furnish to the Collateral Agent from
time to time upon the Collateral Agent's reasonable request therefor reasonably
detailed statements and amended schedules further identifying and describing the
Intellectual Property Collateral and such other materials evidencing or reports
pertaining to the Intellectual Property Collateral as the Collateral Agent may
reasonably from time to time request.
SECTION 6.3. AFTER-ACQUIRED PROPERTY. If any Pledgor shall, at any
time before the Obligations have been paid in full (other than contingent
indemnification obligations which, pursuant to the provisions of the Credit
Agreement or the Security Documents, survive the termination thereof), (i)
obtain any rights to any additional Intellectual Property Collateral or (ii)
become entitled to the benefit of any additional Intellectual Property
Collateral or any renewal or extension thereof, including any reissue, division,
continuation, or continuation-in-part of any Intellectual Property Collateral,
or any improvement on any Intellectual Property Collateral, the provisions
hereof shall automatically apply thereto and any such item enumerated in clause
(i) or (ii) of this SECTION 6.3 with respect to such Pledgor shall automatically
constitute Intellectual Property Collateral if such would have constituted
Intellectual Property Collateral at the time of execution hereof and be subject
to the Lien and security interest created by this Agreement without further
action by any party. Each Pledgor shall promptly (i) provide to the Collateral
Agent written notice of any of the foregoing and (ii) upon the Collateral
Agent's reasonable request, confirm the attachment of the Lien and security
interest created by this Agreement to any rights described in clauses (i) and
(ii) of the immediately preceding sentence of this SECTION 6.3 by execution of
an instrument in form reasonably acceptable to the Collateral Agent and the
filing of any instruments or statements as shall be reasonably necessary to
preserve, protect or perfect the Collateral Agent's security interest in such
Intellectual Property Collateral. Further, each Pledgor authorizes the
Collateral Agent to modify this Agreement by amending
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SCHEDULES 14(C) and 14(D) annexed to the Perfection Certificate to include any
Intellectual Property Collateral acquired or arising after the date hereof of
such Pledgor.
SECTION 6.4. LITIGATION. Unless there shall occur and be
continuing any Event of Default, each Pledgor shall have the right to commence
and prosecute in its own name, as the party in interest, for its own benefit and
at the sole cost and expense of the Pledgors, such applications for protection
of the Intellectual Property Collateral and suits, proceedings or other actions
to prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary or desirable to protect the
Intellectual Property Collateral. Upon the occurrence and during the continuance
of any Event of Default, the Collateral Agent shall have the right but shall in
no way be obligated to file applications for protection of the Intellectual
Property Collateral and/or bring suit in the name of any Pledgor, the Collateral
Agent or the Secured Parties to enforce the Intellectual Property Collateral and
any license thereunder. In the event of such a suit brought by the Collateral
Agent, each Pledgor shall, at the reasonable request of the Collateral Agent, do
any and all lawful acts and execute any and all documents reasonably requested
by the Collateral Agent in aid of such enforcement and the Pledgors shall
promptly reimburse and indemnify the Collateral Agent for all costs and expenses
incurred by the Collateral Agent in the exercise of its rights under this
SECTION 6.4 in accordance with SECTION 11.03 of the Credit Agreement. In the
event that the Collateral Agent shall elect not to bring suit to enforce the
Intellectual Property Collateral as permitted by this SECTION 6.4 and an Event
of Default has occurred and is continuing, each Pledgor agrees, at the
reasonable request of the Collateral Agent, to take all commercially reasonable
actions necessary, whether by suit, proceeding or other action, to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value
of or other damage to any of the Intellectual Property Collateral by others and
for that purpose agrees to diligently maintain any suit, proceeding or other
action against any person so infringing necessary to prevent such infringement.
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. MAINTENANCE OF RECORDS. Each Pledgor shall keep and
maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto. Each Pledgor shall, at such Pledgor's sole
cost and expense, upon the Collateral Agent's demand made at any time after the
occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Accounts, including all documents evidencing Accounts and
any books and records relating thereto to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Pledgor). Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent may transfer a full and complete copy of any
Pledgor's books, records, credit information, reports, memoranda and all other
writings relating to the Accounts to and for the use by any person that has
acquired or is contemplating acquisition
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of an interest in the Accounts or the Collateral Agent's security interest
therein without the consent of any Pledgor.
SECTION 7.2. LEGEND. Each Pledgor shall legend, at the request of
the Collateral Agent made at any time after the occurrence and during the
continuance of an Event of Default, and in form and manner satisfactory to the
Collateral Agent, the Accounts and the other books, records and documents of
such Pledgor evidencing or pertaining to the Accounts with an appropriate
reference to the fact that the Accounts have been assigned to the Collateral
Agent for the benefit of the Secured Parties and that the Collateral Agent has a
security interest therein.
SECTION 7.3. MODIFICATION OF TERMS, ETC. No Pledgor shall rescind
or cancel any obligations evidenced by any Account or modify any term thereof in
any manner that would adversely affect the value as Pledged Collateral thereof
or make any adjustment with respect thereto except in the ordinary course of
business consistent with prudent business practice, or extend or renew any such
obligations except in the ordinary course of business consistent with prudent
business practice or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto or sell any Account or interest therein except in
the ordinary course of business consistent with prudent business practice
without the prior written consent of the Collateral Agent (such consent not to
be unreasonably withheld or delayed). Each Pledgor shall timely fulfill all
obligations on its part to be fulfilled under or in connection with the Accounts
in accordance with this Agreement.
SECTION 7.4. COLLECTION. Each Pledgor shall use commercially
reasonable efforts to cause to be collected from the Account Debtor of each of
the Accounts, as and when due in the ordinary course of business and consistent
with prudent business practice (including Accounts that are delinquent, such
Accounts to be collected in accordance with generally accepted commercial
collection procedures), any and all amounts owing under or on account of such
Account, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Account, except that any Pledgor
may, with respect to an Account, allow in the ordinary course of business (i) a
refund or credit due as a result of returned or damaged or defective merchandise
or for any other reason as determined by such Pledgor in its reasonable business
judgment and (ii) such extensions of time to pay amounts due in respect of
Accounts and such other modifications of payment terms or settlements in respect
of Accounts as shall be commercially reasonable in the circumstances, all in
accordance with such Pledgor's ordinary course of business consistent with its
collection practices as in effect from time to time. The costs and expenses
(including attorneys' fees) of collection, in any case, whether incurred by any
Pledgor, the Collateral Agent or any Secured Party, shall be paid by the
Pledgors.
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ARTICLE VIII
TRANSFERS
SECTION 8.1. TRANSFERS OF PLEDGED COLLATERAL. No Pledgor shall
sell, convey, assign or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral pledged by it hereunder except as permitted by
the Credit Agreement.
ARTICLE IX
REMEDIES
SECTION 9.1. REMEDIES. Upon the occurrence and during the
continuance of any Event of Default the Collateral Agent may from time to time
exercise in respect of the Pledged Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it, the following
remedies:
(i) Personally, or by agents or attorneys, immediately take
possession of the Pledged Collateral or any part thereof, from any Pledgor or
any other person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon any Pledgor's
premises where any of the Pledged Collateral is located, remove such Pledged
Collateral, remain present at such premises to receive copies of all
communications and remittances relating to the Pledged Collateral and use in
connection with such removal and possession any and all services, supplies, aids
and other facilities of any Pledgor;
(ii) Demand, sue for, collect or receive any money or property at
any time payable or receivable in respect of the Pledged Collateral including
instructing the obligor or obligors on any agreement, instrument or other
obligation constituting part of the Pledged Collateral to make any payment
required by the terms of such agreement, instrument or other obligation directly
to the Collateral Agent, and in connection with any of the foregoing,
compromise, settle, extend the time for payment and make other modifications
with respect thereto; PROVIDED, HOWEVER, that in the event that any such
payments are made directly to any Pledgor, prior to receipt by any such obligor
of such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Collateral Agent and shall promptly (but
in no event later than one (1) Business Day after receipt thereof) pay such
amounts to the Collateral Agent;
(iii) Sell, assign, grant a license to use or otherwise liquidate,
or direct any Pledgor to sell, assign, grant a license to use or otherwise
liquidate, any and all investments made in whole or in part with the Pledged
Collateral or any part thereof, and take possession of the proceeds of any such
sale, assignment, license or liquidation;
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(iv) Take possession of the Pledged Collateral or any part thereof,
by directing any Pledgor in writing to deliver the same to the Collateral Agent
at any place or places so designated by the Collateral Agent, in which event
such Pledgor shall at its own expense: (A) forthwith cause the same to be moved
to the place or places designated by the Collateral Agent and therewith
delivered to the Collateral Agent, (B) store and keep any Pledged Collateral so
delivered to the Collateral Agent at such place or places pending further action
by the Collateral Agent and (C) while the Pledged Collateral shall be so stored
and kept, provide such security and maintenance services as shall be necessary
to protect the same and to preserve and maintain them in good condition. Each
Pledgor's obligation to deliver the Pledged Collateral as contemplated in this
SECTION 9.1(IV) is of the essence hereof. Upon application to a court of equity
having jurisdiction, the Collateral Agent shall be entitled to a decree
requiring specific performance by any Pledgor of such obligation;
(v) Withdraw all moneys, instruments, securities and other
property in any bank, financial securities, deposit or other account of any
Pledgor constituting Pledged Collateral for application to the Obligations as
provided in ARTICLE X hereof; (vi) Retain and apply the Distributions to the
Obligations as provided in ARTICLE X hereof;
(vii) Exercise any and all rights as beneficial and legal owner of
the Pledged Collateral, including perfecting assignment of and exercising any
and all voting, consensual and other rights and powers with respect to any
Pledged Collateral; and
(viii) All the rights and remedies of a secured party on default
under the UCC, and the Collateral Agent may also in its sole discretion, without
notice except as specified in SECTION 9.2 hereof, sell, assign or grant a
license to use the Pledged Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker's board or at any of the
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the
Collateral Agent may deem commercially reasonable. The Collateral Agent or any
other Secured Party or any of their respective Affiliates may be the purchaser,
licensee, assignee or recipient of any or all of the Pledged Collateral at any
such sale and shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold, assigned or licensed at such sale, to use and apply any
of the Obligations owed to such person as a credit on account of the purchase
price of any Pledged Collateral payable by such person at such sale. Each
purchaser, assignee, licensee or recipient at any such sale shall acquire the
property sold, assigned or licensed absolutely free from any claim or right on
the part of any Pledgor, and each Pledgor hereby waives, to the fullest extent
permitted by law, all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. The Collateral Agent shall not be obligated to
make any sale of Pledged Collateral regardless of notice of sale having been
given. The Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Pledgor hereby waives, to the fullest extent permitted by law,
any claims
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against the Collateral Agent arising by reason of the fact that the price at
which any Pledged Collateral may have been sold, assigned or licensed at such a
private sale was less than the price which might have been obtained at a public
sale, even if the Collateral Agent accepts the first offer received and does not
offer such Pledged Collateral to more than one offeree.
SECTION 9.2. NOTICE OF SALE. Each Pledgor acknowledges and agrees
that, to the extent notice of sale or other disposition of Pledged Collateral
shall be required by law, ten (10) days' prior notice to such Pledgor of the
time and place of any public sale or of the time after which any private sale or
other intended disposition is to take place shall be commercially reasonable
notification of such matters. No notification need be given to any Pledgor if it
has signed, after the occurrence of an Event of Default, a statement renouncing
or modifying any right to notification of sale or other intended disposition.
SECTION 9.3. WAIVER OF NOTICE AND CLAIMS. Each Pledgor hereby
waives, to the fullest extent permitted by applicable law, notice or judicial
hearing in connection with the Collateral Agent's taking possession or the
Collateral Agent's disposition of any of the Pledged Collateral, including any
and all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable law: (i)
all damages occasioned by such taking of possession except to the extent caused
by the gross negligence or willful misconduct of the Collateral Agent or any
agent acting on its behalf, (ii) all other requirements as to the time, place
and terms of sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder and (iii) all rights of redemption,
appraisal, valuation, stay, extension or moratorium now or hereafter in force
under any applicable law. The Collateral Agent shall not be liable for any
incorrect or improper payment made pursuant to this ARTICLE IX in the absence of
gross negligence or willful misconduct. Any sale of or any other realization
upon, any Pledged Collateral shall operate to divest all right, title, interest,
claim and demand, either at law or in equity, of the applicable Pledgor therein
and thereto, and shall be a perpetual bar both at law and in equity against such
Pledgor and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold or realized upon, or any part thereof, from, through
or under such Pledgor.
SECTION 9.4. CERTAIN SALES OF PLEDGED COLLATERAL.
(i) Each Pledgor recognizes that, by reason of certain
prohibitions contained in law, rules, regulations or orders of any Governmental
Authority, the Collateral Agent may be compelled, with respect to any sale of
all or any part of the Pledged Collateral, to limit purchasers to those who meet
the requirements of such Governmental Authority. Each Pledgor acknowledges that
any such sales may be at prices and on terms less favorable to the Collateral
Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Collateral Agent shall have no
obligation to engage in public sales.
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(ii) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act, and applicable state securities
laws, the Collateral Agent may be compelled, with respect to any sale of all or
any part of the Securities Collateral and Investment Property, to limit
purchasers to persons who will agree, among other things, to acquire such
Securities Collateral or Investment Property for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sales may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Collateral Agent shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Securities Collateral or Investment Property for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would agree to do so.
(iii) If the Collateral Agent determines to exercise its right to
sell any or all of the Securities Collateral or Investment Property, upon
written request, the applicable Pledgor shall from time to time furnish to the
Collateral Agent all such information that is then available to such Pledgor as
the Collateral Agent may reasonably request in order to determine the number of
securities included in the Securities Collateral or Investment Property which
may be sold by the Collateral Agent as exempt transactions under the Securities
Act and the rules of the Securities and Exchange Commission thereunder, as the
same are from time to time in effect.
(iv) Each Pledgor further agrees that a breach of any of the
covenants contained in this SECTION 9.4 will cause irreparable injury to the
Collateral Agent and other Secured Parties, that the Collateral Agent and the
other Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this SECTION
9.4 shall be specifically enforceable against such Pledgor, and such Pledgor
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 and is continuing.
SECTION 9.5. NO WAIVER; CUMULATIVE REMEDIES.
(i) No failure on the part of the Collateral Agent to exercise, no
course of dealing with respect to, and no delay on the part of the Collateral
Agent in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy; nor shall the Collateral Agent be
required to look first to, enforce or exhaust any other security, collateral or
guaranties. The remedies herein provided are cumulative and are not exclusive of
any remedies provided by law.
(ii) In the event that the Collateral Agent shall have instituted
any proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall
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have been determined adversely to the Collateral Agent, then and in every such
case, the Pledgors, the Collateral Agent and each other Secured Party shall be
restored to their respective former positions and rights hereunder with respect
to the Pledged Collateral, and all rights, remedies and powers of the Collateral
Agent and the other Secured Parties shall continue as if no such proceeding had
been instituted.
SECTION 9.6. CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL
PROPERTY. If any Event of Default shall have occurred and be continuing, upon
the written demand of the Collateral Agent, each Pledgor shall execute and
deliver to the Collateral Agent an assignment or assignments of any Intellectual
Property Collateral and such other documents as are necessary or appropriate to
carry out the intent and purposes hereof. Within five (5) Business Days of
written notice thereafter from the Collateral Agent, each Pledgor shall make
available to the Collateral Agent, to the extent within such Pledgor's power and
authority, such personnel in such Pledgor's employ on the date of the Event of
Default as the Collateral Agent may reasonably designate to permit such Pledgor
to continue, directly or indirectly, to produce, advertise and sell the products
and services sold by such Pledgor under the issued Patents, registered
Trademarks and/or registered Copyrights, and such persons shall be available to
perform their prior functions on the Collateral Agent's behalf.
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. PROCEEDS OF CASUALTY EVENTS AND COLLATERAL
DISPOSITIONS. The Pledgors shall take all actions required by the Credit
Agreement with respect to any Net Cash Proceeds of any Casualty Event or from
the sale or disposition of any Pledged Collateral.
SECTION 10.2. APPLICATION OF PROCEEDS. The proceeds received by the
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral pursuant to the exercise by the
Collateral Agent of its remedies shall be applied, together with any other sums
then held by the Collateral Agent pursuant to this Agreement, in accordance with
the Credit Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. CONCERNING COLLATERAL AGENT.
(i) The Collateral Agent has been appointed as collateral agent
pursuant to the Credit Agreement. The actions of the Collateral Agent hereunder
are subject to the provi-
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sions of the Credit Agreement. The Collateral Agent shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including the
release or substitution of the Pledged Collateral), in accordance with this
Agreement and the Credit Agreement. The Collateral Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be liable for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith. The Collateral Agent may resign and a successor Collateral Agent
may be appointed in the manner provided in the Credit Agreement. Upon the
acceptance of any appointment as the Collateral Agent by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent under this Agreement, and the retiring Collateral Agent shall
thereupon be discharged from its duties and obligations under this Agreement.
After any retiring Collateral Agent's resignation, the provisions hereof shall
inure to its benefit as to any actions taken or omitted to be taken by it under
this Agreement while it was the Collateral Agent.
(ii) The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if such Pledged Collateral is accorded treatment substantially
equivalent to that which the Collateral Agent, in its individual capacity,
accords its own property consisting of similar instruments or interests, it
being understood that neither the Collateral Agent nor any of the Secured
Parties shall have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Securities Collateral, whether or not the Collateral Agent or
any other Secured Party has or is deemed to have knowledge of such matters or
(ii) taking any necessary steps to preserve rights against any person with
respect to any Pledged Collateral.
(iii) The Collateral Agent shall be entitled to rely upon any
written notice, statement, certificate, order or other document or any telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper person, and, with respect to all matters pertaining to
this Agreement and its duties hereunder, upon advice of counsel selected by it.
(iv) If any item of Pledged Collateral also constitutes collateral
granted to the Collateral Agent under any other deed of trust, mortgage,
security agreement, pledge or instrument of any type, in the event of any
conflict between the provisions hereof and the provisions of such other deed of
trust, mortgage, security agreement, pledge or instrument of any type in respect
of such collateral, the provisions of this Agreement shall control unless the
other deed of trust, mortgage, security agreement, pledge or instrument of any
type in respect of such collateral expressly states that such document shall
control.
SECTION 11.2. COLLATERAL AGENT MAY PERFORM; COLLATERAL AGENT
APPOINTED ATTORNEY-IN-FACT. If any Pledgor shall fail to perform any covenants
contained in this Agreement (including such Pledgor's covenants to (i) pay the
premiums in respect of all required insurance policies hereunder, (ii) pay
Claims, (iii) make repairs, (iv) discharge Liens or (v) pay or perform any
obligations of such Pledgor under any Pledged Collateral) or if any
representation or
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warranty on the part of any Pledgor contained herein shall be breached, the
Collateral Agent may (but shall not be obligated to), following notice to such
Pledgor of such failure to perform and such Pledgor's failure to remedy such
failure within a commercially reasonable time period, do the same or cause it to
be done or remedy any such breach, and may expend funds for such purpose;
PROVIDED, HOWEVER, that the Collateral Agent shall in no event be bound to
inquire into the validity of any tax, lien, imposition or other obligation which
such Pledgor fails to pay or perform as and when required hereby and which such
Pledgor does not contest in accordance in accordance with the provisions of
SECTION 4.11 hereof. Any and all amounts so expended by the Collateral Agent
shall be paid by the Pledgors in accordance with the provisions of SECTION 11.03
of the Credit Agreement. Neither the provisions of this SECTION 11.2 nor any
action taken by the Collateral Agent pursuant to the provisions of this SECTION
11.2 shall prevent any such failure to observe any covenant contained in this
Agreement nor any breach of representation or warranty from constituting an
Event of Default. Each Pledgor hereby appoints the Collateral Agent its
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, or otherwise, after the occurrence and during the
continuance of an Event of Default, in the Collateral Agent's discretion to take
any action and to execute any instrument consistent with the terms of the Credit
Agreement, this Agreement and the other Security Documents which the Collateral
Agent may deem necessary or advisable to accomplish the purposes hereof. Except
where prior notice is expressly required by the terms of this Agreement, the
Collateral Agent shall use commercially reasonable efforts to provide notice to
the Pledgor prior to taking any action taken in the preceding sentence, PROVIDED
that failure to deliver such notice shall not limit the Collateral Agent's right
to take such action or the validity of any such action. The foregoing grant of
authority is a power of attorney coupled with an interest and such appointment
shall be irrevocable for the term hereof. Each Pledgor hereby ratifies all that
such attorney shall lawfully do or cause to be done by virtue hereof.
SECTION 11.3. CONTINUING SECURITY INTEREST; ASSIGNMENT. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgors, their respective successors and
assigns and (ii) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and the other Secured
Parties and each of their respective successors, transferees and assigns. No
other persons (including any other creditor of any Pledgor) shall have any
interest herein or any right or benefit with respect hereto. Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any indebtedness held by it secured by this Agreement to any
other person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Credit Agreement and any Hedging
Agreement.
SECTION 11.4. TERMINATION; RELEASE. The Pledged Collateral and the
Obligations of any Guarantor shall be released from the Lien of this Agreement
in accordance with the provisions of the Credit Agreement. In addition, if any
Pledged Collateral is sold or otherwise disposed of (other than to a U.S. Loan
Party) in a manner permitted by the Credit Agreement, such Pledged Collateral
shall be released from the Liens created hereby. Furthermore, at such time as
the Obligations shall have been paid in full and the Commitments have been
terminated,
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the Pledged 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 Collateral Agent and each Pledgor hereunder shall terminate,
all without delivery of any instrument or performance of any act by any party,
and all rights to the Pledged Collateral shall revert to the Pledgors. Upon
termination hereof or any release of Pledged Collateral in accordance with the
provisions of the Credit Agreement, the Collateral Agent shall, upon the request
and at the sole cost and expense of the Pledgors, assign, transfer and deliver
to Pledgor, against receipt and without recourse to or warranty by the
Collateral Agent except as to the fact that the Collateral Agent has not
encumbered the released assets, such of the Pledged Collateral to be released
(in the case of a release) as may be in possession of the Collateral Agent and
as shall not have been sold or otherwise applied pursuant to the terms hereof,
and, with respect to any other Pledged Collateral, proper documents and
instruments (including UCC-3 termination statements or releases, or other
documentation as such Pledgor shall reasonably request) acknowledging the
termination hereof or the release of such Pledged Collateral, as the case may
be.
SECTION 11.5. MODIFICATION IN WRITING. No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by any Pledgor therefrom, shall be effective unless the same shall
be made in accordance with the terms of the Credit Agreement and unless in
writing and signed by the Collateral Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision
hereof shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement or any other document evidencing the Obligations, no notice to or
demand on any Pledgor in any case shall entitle any Pledgor to any other or
further notice or demand in similar or other circumstances.
SECTION 11.6. NOTICES. Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of the
U.S. Borrower set forth in the Credit Agreement and as to the Collateral Agent,
addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
SECTION 11.6.
SECTION 11.7. GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF
PROCESS; WAIVER OF JURY TRIAL. This Agreement shall be construed in accordance
with and governed by the law of the State of New York, without regard to
conflicts of law principles that would require the application of the laws of
another jurisdiction. The other provisions of SECTIONS 11.09 and 11.10 of the
Credit Agreement are incorporated herein, MUTATIS MUTANDIS, as if a part hereof.
SECTION 11.8. SEVERABILITY OF PROVISIONS. Any provision hereof
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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
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SECTION 11.9. EXECUTION IN COUNTERPARTS. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
SECTION 11.10. BUSINESS DAYS. In the event any time period or any
date provided in this Agreement ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.
SECTION 11.11. WAIVER OF STAY. Each Pledgor covenants (to the extent
it may lawfully do so) that in the event that such Pledgor or any property or
assets of such Pledgor shall hereafter become the subject of a voluntary or
involuntary proceeding under the Code or such Pledgor shall otherwise be a party
to any federal or state bankruptcy, insolvency, moratorium or similar proceeding
to which the provisions relating to the automatic stay under Section 362 of the
Code or any similar provision in any such law is applicable, then, in any such
case, whether or not the Collateral Agent has commenced foreclosure proceedings
under this Agreement, such Pledgor shall not, and each Pledgor hereby expressly
waives their right to (to the extent it may lawfully do so) at any time insist
upon, plead or in any whatsoever, claim or take the benefit or advantage of any
such automatic stay or such similar provision as it relates to the exercise of
any of the rights and remedies (including any foreclosure proceedings) available
to the Collateral Agent as provided in this Agreement, in any other Security
Document or any other document evidencing the Obligations. Each Pledgor further
covenants (to the extent it may lawfully do so) that it will not hinder, delay
or impede the execution of any power granted herein to the Collateral Agent, but
will suffer and permit the execution of every such power as though no law
relating to any stay or similar provision had been enacted.
SECTION 11.12. NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION. No
Pledgor shall be entitled to any credit against the principal or interest or any
other amount payable under the Credit Agreement, and no Pledgor shall be
entitled to any credit against any other sums which may become payable under the
terms thereof or hereof, in either case, by reason of the payment of any Tax on
the Pledged Collateral or any part thereof.
SECTION 11.13. NO CLAIMS AGAINST COLLATERAL AGENT. Nothing contained
in this Agreement shall constitute any consent or request by the Collateral
Agent, express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Pledged
Collateral or any part thereof, nor as giving any Pledgor any right, power or
authority to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against the Collateral Agent in respect thereof
or any claim that any Lien based on the performance of such labor or services or
the furnishing of any such materials or other property is prior to the Lien
hereof.
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SECTION 11.14. NO RELEASE. Nothing set forth in this Agreement shall
relieve any Pledgor from the performance of any term, covenant, condition or
agreement on such Pledgor's part to be performed or observed under or in respect
of any of the Pledged Collateral or from any liability to any person under or in
respect of any of the Pledged Collateral or shall impose any obligation on the
Collateral Agent or any other Secured Party to perform or observe any such term,
covenant, condition or agreement on such Pledgor's part to be so performed or
observed or shall impose any liability on the Collateral Agent or any other
Secured Party for any act or omission on the part of such Pledgor relating
thereto or for any breach of any representation or warranty on the part of such
Pledgor contained in this Agreement, the Credit Agreement or the other Loan
Documents, or under or in respect of the Pledged Collateral or made in
connection herewith or therewith. The obligations of each Pledgor contained in
this SECTION 11.14 shall survive the termination hereof and the discharge of
such Pledgor's other obligations under this Agreement, the Credit Agreement and
the other Loan Documents.
SECTION 11.15. OBLIGATIONS ABSOLUTE. All obligations of each Pledgor
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Pledgor;
(ii) any lack of validity or enforceability of the Credit
Agreement, any Hedging Agreement or any other Loan Document, or any other
agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to any departure from the Credit Agreement,
any Hedging Agreement or any other Loan Document or any other agreement or
instrument relating thereto;
(iv) any pledge, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Obligations;
(v) any exercise, non-exercise or waiver of any right, remedy,
power or privilege under or in respect hereof, the Credit Agreement, any
Hedging Agreement or any other Loan Document except as specifically set
forth in a waiver granted pursuant to the provisions of SECTION 11.5
hereof; or
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Pledgor, except for the
defense of payment or performance of the Obligations.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
S-1
IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have caused
this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
PLY GEM INDUSTRIES, INC.,
as Pledgor
By: /s/ Shawn K. Poe
-----------------------------
Name: Shawn K. Poe
Title: Vice President, Chief
Financial Officer, Treasurer
and Secretary
PLY GEM HOLDINGS, INC.,
as Pledgor
By: /s/ Shawn K. Poe
-----------------------------
Name: Shawn K. Poe
Title: Vice President, Chief
Financial Officer, Treasurer
and Secretary
GREAT LAKES WINDOW, INC.,
NAPCO, INC.,
NAPCO WINDOW SYSTEMS, INC.,
THERMAL-GARD, INC.,
VARIFORM, INC.,
KROY BUILDING PRODUCTS, INC.,
as Pledgors
By: /s/ Shawn K. Poe
-----------------------------
Name: Shawn K. Poe
Title: Vice President, Treasurer
and Secretary
S-2
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/ Anthony N. Joseph
-----------------------------
Name: Anthony N. Joseph
Title: Associate Director
Banking Products Services US
By: /s/ Wilfred V. Saint
-----------------------------
Name: Wilfred V. Saint
Title: Associate Director
Banking Products Services US
EXHIBIT 1
[Form of]
ISSUER'S ACKNOWLEDGMENT
The undersigned hereby (i) acknowledges receipt of a copy of that
certain security agreement (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "U.S. SECURITY AGREEMENT;" capitalized
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the U.S. Security Agreement), dated as of February 12, 2004, made
by PLY GEM INDUSTRIES, INC., a Delaware Corporation (the "U.S. BORROWER"), the
Guarantors party thereto and UBS AG, STAMFORD BRANCH, as collateral agent (in
such capacity and together with any successors in such capacity, the "COLLATERAL
AGENT"), (ii) agrees promptly to note on its books the security interests
granted to the Collateral Agent and confirmed under the U.S. Security Agreement,
(iii) agrees that it will comply with instructions of the Collateral Agent with
respect to the applicable Securities Collateral without further consent by the
applicable Pledgor, (iv) agrees to notify the Collateral Agent upon obtaining
knowledge of any interest in favor of any person in the applicable Securities
Collateral that is adverse to the interest of the Collateral Agent therein and
(v) waives any right or requirement at any time hereafter to receive a copy of
the U.S. Security Agreement in connection with the registration of any
Securities Collateral thereunder in the name of the Collateral Agent or its
nominee or the exercise of voting rights by the Collateral Agent or its nominee.
[ ]
By: /s/
-----------------------------
Name:
Title:
EXHIBIT 2
[Form of]
SECURITIES PLEDGE AMENDMENT
This Security Pledge Amendment, dated as of [ ], is delivered
pursuant to SECTION 5.1 of that certain security agreement (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "U.S.
SECURITY AGREEMENT;" capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the U.S. Security Agreement),
dated as of February 12, 2004 made by PLY GEM INDUSTRIES, INC., a Delaware
Corporation (the "U.S. BORROWER"), the Guarantors party thereto and UBS AG,
STAMFORD BRANCH, as collateral agent (in such capacity and together with any
successors in such capacity, the "COLLATERAL AGENT"). The undersigned hereby
agrees that this Pledge Amendment may be attached to the U.S. Security Agreement
and that the Pledged Securities and/or Intercompany Notes listed on this Pledge
Amendment shall be deemed to be and shall become part of the Pledged Collateral
and shall secure all Obligations.
PLEDGED SECURITIES
NUMBER OF PERCENTAGE OF
CLASS SHARES ALL ISSUED CAPITAL
OF STOCK PAR CERTIFICATE OR OR OTHER EQUITY
ISSUER OR INTERESTS VALUE NO(S). INTERESTS INTERESTS OF ISSUER
- ------ ------------ ----- ----------- --------- -------------------
-2-
INTERCOMPANY NOTES
PRINCIPAL DATE OF INTEREST MATURITY
ISSUER AMOUNT ISSUANCE RATE DATE
- ------ --------- -------- -------- --------
[ ],
as Pledgor
By: /s/
-----------------------------
Name:
Title:
AGREED TO AND ACCEPTED:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/
-----------------------------
Name:
Title:
By: /s/
-----------------------------
Name:
Title:
EXHIBIT 3
[Form of]
JOINDER AGREEMENT
[Name of New Pledgor]
[Address of New Pledgor]
[Date]
____________________________
____________________________
____________________________
____________________________
Ladies and Gentlemen:
Reference is made to that certain security agreement (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"U.S. SECURITY AGREEMENT;" capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the U.S. Security
Agreement), dated as of February 12, 2004, made by PLY GEM INDUSTRIES, INC., a
Delaware Corporation (the "U.S. BORROWER"), the Guarantors party thereto and UBS
AG, STAMFORD BRANCH, as collateral agent (in such capacity and together with any
successors in such capacity, the "COLLATERAL AGENT").
This letter supplements the U.S. Security Agreement and is delivered by
the undersigned, [ ] (the "NEW PLEDGOR"), pursuant to SECTION 3.5 of
the U.S. Security Agreement. The New Pledgor hereby agrees to be bound as a
Pledgor by all of the terms, covenants and conditions set forth in the U.S.
Security Agreement to the same extent that it would have been bound if it had
been a signatory to the U.S. Security Agreement on the execution date of the
U.S. Security Agreement. Without limiting the generality of the foregoing, the
New Pledgor hereby grants and pledges to the Collateral Agent, as collateral
security for the full, prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations, a
Lien on and security interest in, all of its right, title and interest in, to
and under the Pledged Collateral and expressly assumes all obligations and
liabilities of a Pledgor thereunder. The New Pledgor hereby makes each of the
representations and warranties and agrees to each of the covenants applicable to
the Pledgors contained in the U.S. Security Agreement.
-2-
This agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original, but all such counterparts together shall
constitute one and the same agreement.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
-3-
IN WITNESS WHEREOF, the New Pledgor has caused this letter agreement to
be executed and delivered by its duly authorized officer as of the date first
above written.
[NEW PLEDGOR]
By: /s/
-----------------------------
Name:
Title:
AGREED TO AND ACCEPTED:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/
-----------------------------
Name:
Title:
By: /s/
-----------------------------
Name:
Title:
[Schedules to be attached]
EXHIBIT 4
[Form of]
CONTROL AGREEMENT CONCERNING SECURITIES ACCOUNTS
This Control Agreement Concerning Securities Accounts (this "CONTROL
AGREEMENT"), dated as of [ ], by and among [ ] (the "PLEDGOR"), the Collateral
Agent (as such term is defined below) and [ ] (the "SECURITIES INTERMEDIARY"),
is delivered pursuant to SECTION 3.4(C) of that certain security agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT"), dated as of February 12, 2004, made by the
Pledgor and each of the Guarantors listed on the signature pages thereto in
favor of UBS AG, Stamford Branch, as collateral agent, as pledgee, assignee and
secured party (the "COLLATERAL AGENT"). This Control Agreement is for the
purpose of perfecting the security interests of the Secured Parties granted by
the Pledgor in the Designated Accounts described below. All references herein to
the "UCC" shall mean the Uniform Commercial Code as in effect from time to time
in the State of New York. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Security Agreement.
Section 1. CONFIRMATION OF ESTABLISHMENT AND MAINTENANCE OF
DESIGNATED ACCOUNTS. The Securities Intermediary hereby confirms and agrees that
(i) the Securities Intermediary has established for the Pledgor and maintains
the account(s) listed in SCHEDULE I annexed hereto (such account(s), together
with each such other securities account maintained by the Pledgor with the
Securities Intermediary collectively, the "DESIGNATED ACCOUNTS" and each a
"DESIGNATED ACCOUNT"), (ii) each Designated Account will be maintained in the
manner set forth herein until termination of this Control Agreement, (iii) this
Control Agreement is the valid and legally binding obligation of the Securities
Intermediary, (iv) the Securities Intermediary is a "securities intermediary" as
defined in Article 8-102(a)(14) of the UCC, (v) each of the Designated Accounts
is a "securities account" as such term is defined in Section 8-501(a) of the UCC
and (vi) all securities or other property underlying any financial assets which
are credited to any Designated Account shall be registered in the name of the
Securities Intermediary, endorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to any Designated
Account be registered in the name of the Pledgor, payable to the order of the
Pledgor or specially endorsed to the Pledgor, except to the extent the foregoing
have been specially endorsed to the Securities Intermediary or in blank.
Section 2. "FINANCIAL ASSETS" ELECTION. The Securities
Intermediary hereby agrees that each item of Investment Property credited to any
Designated Account shall be treated as a "financial asset" within the meaning of
Section 8-102(a)(9) of the UCC.
-2-
Section 3. ENTITLEMENT ORDER. If at any time the Securities
Intermediary shall receive an "entitlement order" (within the meaning of Section
8-102(a)(8) of the UCC) issued by the Collateral Agent and relating to any
financial asset maintained in one or more of the Designated Accounts, the
Securities Intermediary shall comply with such entitlement order without further
consent by the Pledgor or any other person. The Securities Intermediary shall
also comply with instructions directing the Securities Intermediary with respect
to the sale, exchange or transfer of financial assets held in each Designated
Account originated by a Pledgor, or any representative of, or investment manager
appointed by, a Pledgor until such time as the Collateral Agent delivers a
Notice of Sole Control pursuant to SECTION 9(I) to the Securities Intermediary.
Section 4. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. The
Securities Intermediary hereby agrees that any security interest in any
Designated Account it now has or subsequently obtains shall be subordinate to
the security interest of the Collateral Agent. The financial assets and other
items deposited to any Designated Account will not be subject to deduction,
set-off, banker's lien, or any other right in favor of any person other than the
Secured Parties (except that the Securities Intermediary may set off all amounts
due to the Securities Intermediary in respect of its customary fees and expenses
for the routine maintenance and operation of the Designated Accounts, including
overdraft fees and amounts advanced to settle authorized transactions.
Section 5. CHOICE OF LAW. Both this Control Agreement and the
Designated Accounts shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's jurisdiction and the
Designated Accounts (as well as the security entitlements related thereto) shall
be governed by the laws of the State of New York. (1)
Section 6. CONFLICT WITH OTHER AGREEMENTS; AMENDMENTS. As of the
date hereof, there are no other agreements entered into between the Securities
Intermediary and the Pledgor with respect to any Designated Account or any
security entitlements or other financial assets credited thereto (other than
standard and customary documentation with respect to the establishment and
maintenance of such Designated Accounts). The Securities Intermediary and the
Pledgor will not enter into any other agreement with respect to any Designated
Account unless the Collateral Agent shall have received prior written notice
thereof. The Securities Intermediary and the Pledgor have not and will not enter
into any other agreement with respect to (i) creation or perfection of any
security interest in or (ii) control of security entitlements maintained in any
of the Designated Accounts or purporting to limit or condition the obligation of
the Securities Intermediary to comply with entitlement orders with respect to
financial assets cred-
- ----------------------
1 The location of the Securities Intermediary may result in a different
choice of governing law, which may require opinion of Borrower counsel.
-3-
ited to any Designated Account as set forth in SECTION 3 hereof without the
prior written consent of the Collateral Agent acting in its sole discretion. In
the event of any conflict with respect to control over any Designated Account
between this Control Agreement (or any portion hereof) and any other agreement
now existing or hereafter entered into, the terms of this Control Agreement
shall prevail. No amendment or modification of this Control Agreement or waiver
of any rights hereunder shall be binding on any party hereto unless it is in
writing and is signed by all the parties hereto.
Section 7. CERTAIN AGREEMENTS.
(i) The Securities Intermediary has furnished to the Collateral
Agent the most recent account statement issued by the Securities Intermediary
with respect to each of the Designated Accounts and the financial assets and
cash balances held therein, identifying the financial assets held therein in a
manner acceptable to the Collateral Agent. Each such statement accurately
reflects the assets held in such Designated Account as of the date thereof.
(ii) The Securities Intermediary will, upon its receipt of each
supplement to the Security Agreement signed by the Pledgor and identifying one
or more financial assets as "Pledged Collateral," enter into its records,
including computer records, with respect to each Designated Account a notation
with respect to any such financial asset so that such records and reports
generated with respect thereto identify such financial asset as "Pledged."
(iii) The Collateral Agent has delivered to the Securities
Intermediary a list, signed by an authorized representative of the officers of
the Collateral Agent authorized to give approvals or instructions under this
Control Agreement (the "AUTHORIZED REPRESENTATIVES") and the Securities
Intermediary shall be entitled to rely on communications from any such
authorized officers until the earlier of the termination of this Control
Agreement in accordance with the terms hereof and notification by an Authorized
Representative of a change in such list at any time.
Section 8. NOTICE OF ADVERSE CLAIMS. Except for the claims and
interest of the Collateral Agent and of the Pledgor in the financial assets
maintained in the Designated Account(s), the Securities Intermediary on the date
hereof does not know of any claim to, or security interest in, any Designated
Account or in any financial asset credited thereto and does not know of any
claim that any person other than the Collateral Agent has been given "control"
(within the meaning of Section 8-106 of the UCC) of any Designated Account or
any such financial asset. If the Securities Intermediary becomes aware that any
person is asserting any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process or
any claim of control) against any of the financial assets maintained in any
Designated Account, the Securities Intermediary promptly notify the Collateral
Agent and the Pledgor thereof.
-4-
Section 9. MAINTENANCE OF DESIGNATED ACCOUNTS. In addition to
the obligations of the Securities Intermediary in SECTION 3 hereof, the
Securities Intermediary agrees to maintain the Designated Accounts as follows:
(i) NOTICE OF SOLE CONTROL. If at any time the Collateral Agent
delivers to the Securities Intermediary a notice of sole control in
substantially the form set forth in EXHIBIT A attached hereto (the "NOTICE
OF SOLE CONTROL") with respect to any Designated Account, the Securities
Intermediary agrees that, after receipt of such notice, it will take all
instructions with respect to such Designated Account solely from the
Collateral Agent and cease taking instructions from Pledgor, including,
without limitation, instructions for investment, distribution or transfer
of any financial asset maintained in any Designated Account. Permitting
settlement of trades pending at the time of receipt of such notice shall
not constitute a violation of the immediately preceding sentence.
(ii) VOTING RIGHTS. Until such time as the Securities Intermediary
receives a Notice of Sole Control, the Pledgor, or an investment manager
on behalf of the Pledgor, shall direct the Securities Intermediary with
respect to the voting of any financial assets credited to any Designated
Account.
(iii) STATEMENTS AND CONFIRMATIONS. The Securities Intermediary will
send copies of all statements and other correspondence (excluding routine
confirmations) concerning any Designated Account or any financial assets
credited thereto simultaneously to each of the Pledgor and the Collateral
Agent at the address set forth in SECTION 11 hereof. The Securities
Intermediary will provide to the Collateral Agent, upon the Collateral
Agent's request therefor from time to time and, in any event, as of the
last business day of each calendar month, a statement of the market value
of each financial asset maintained in each Designated Account. The
Securities Intermediary shall not change the name or account number of any
Designated Account without the prior written consent of the Collateral
Agent.
(iv) BAILEE FOR PERFECTION. The Securities Intermediary
acknowledges that, in the event that it should come into possession of any
certificate representing any security or other assets held as financial
assets in any of the Designated Accounts, the Securities Intermediary
shall retain possession of the same for the benefit of the Collateral
Agent and such act shall cause the Securities Intermediary to be deemed a
bailee for the Collateral Agent, if necessary to perfect the Collateral
Agent's security interest in such securities or assets. The Securities
Intermediary hereby acknowledges its receipt of a copy of the Security
Agreement, which shall also serve as notice to the Securities Intermediary
of a security interest in collateral held by a bailee.
Section 10. SUCCESSORS; ASSIGNMENT. The terms of this Control
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective corporate successors and permitted assignees.
-5-
Section 11. NOTICES. Any notice, request or other communication
required or permitted to be given under this Control Agreement shall be in
writing and deemed to have been properly given when delivered in person, or when
sent by telecopy or other electronic means and electronic confirmation of error
free receipt is received or two (2) days after being sent by certified or
registered United States mail, return receipt requested, postage prepaid,
addressed to the party at the address set forth below.
Pledgor: [ ]
[Address]
Attention:
Telecopy:
Telephone:
with copy to:
[ ]
[Address]
Attention:
Telecopy:
Telephone:
Securities
Intermediary: [ ]
[Address]
Attention:
Telecopy:
Telephone:
Collateral
Agent: UBS AG, Stamford Branch
677 Washington Boulevard
Stamford, Connecticut 06901
Attention:
Telecopy:
Telephone:
-6-
with a copy to:
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005
Attention: Daniel J. Zubkoff, Esq. and
Susanna M. Suh, Esq.
Telecopy: (212) 269-5420
Telephone: (212) 701-3000
Any party may change its address for notices in the manner set forth
above.
Section 12. TERMINATION. The rights and powers granted herein
to the Collateral Agent are powers coupled with an interest and will be affected
neither by the bankruptcy of the Pledgor nor by the lapse of time. The
obligations of the Securities Intermediary hereunder shall continue in effect
until (i) the security interests of the Secured Parties with respect to the
financial assets maintained in the Designated Account(s) have been terminated
and an Authorized Representative has notified the Securities Intermediary of
such termination in writing or (ii) thirty days following the Securities
Intermediary's delivery of written notice of such termination to the Pledgor and
the Collateral Agent.
Section 13. SEVERABILITY. If any term or provision set forth
in this Agreement shall be invalid or unenforceable, the remainder of this
Agreement, other than those provisions held invalid or unenforceable, shall be
construed in all respects as if such invalid or unenforceable term or provision
were omitted.
Section 14. COUNTERPARTS. This Control Agreement may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Control Agreement by
signing and delivering one or more counterparts.
S-1
[ ],
as Pledgor
By: /s/
------------------------------
Name:
Title:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/
------------------------------
Name:
Title:
By: /s/
------------------------------
Name:
Title:
[ ],
as Securities Intermediary
By: /s/
------------------------------
Name:
Title:
SCHEDULE I
DESIGNATED ACCOUNT(S)
EXHIBIT A
[Letterhead of UBS AG, Stamford Branch]
[Date]
[Securities Intermediary]
[Address]
Attention:
Re: NOTICE OF SOLE CONTROL
Ladies and Gentlemen:
As referenced in SECTION 9(I) of the Control Agreement Concerning
Designated Accounts dated as of [ ], by and among [ ], us and you (the "CONTROL
AGREEMENT") (a copy of which is attached) we hereby give you notice of our sole
control over the financial assets maintained in the Designated Account(s)
referred to in the Control Agreement, account numbers: ________________ (the
"SPECIFIED DESIGNATED ACCOUNTS"). You are hereby instructed not to accept any
direction, instruction or entitlement order with respect to financial assets
maintained in the Specified Designated Accounts from any person other than the
undersigned.
-2-
You are instructed to deliver a copy of this notice by facsimile
transmission to [Pledgor].
Very truly yours,
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/
------------------------------
Name:
Title:
By: /s/
------------------------------
Name:
Title:
cc: [Pledgor]
EXHIBIT 5
[Form of]
CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS
This CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS (this "CONTROL
AGREEMENT"), dated as of [ ], by and among [ ] (the "PLEDGOR"), the Collateral
Agent (as such term is defined below) and [ ] (the "BANK"), is delivered
pursuant to SECTION 3.4(B) of that certain security agreement (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"SECURITY AGREEMENT"), dated as of February 12, 2004, made by the Pledgor and
each of the Guarantors listed on the signature pages thereto in favor of UBS AG,
STAMFORD BRANCH, as collateral agent, as pledgee, assignee and secured party
(the "COLLATERAL AGENT"). This Control Agreement is for the purpose of
perfecting the security interests of the Secured Parties granted by the Pledgor
in the Designated Accounts described below. All references herein to the "UCC"
shall mean the Uniform Commercial Code as in effect from time to time in the
State of New York. Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Security Agreement.
Section 1. CONFIRMATION OF ESTABLISHMENT AND MAINTENANCE OF
DESIGNATED ACCOUNTS. The Bank hereby confirms and agrees that (i) the Bank has
established for the Pledgor and maintains the deposit account(s) listed in
SCHEDULE 1 annexed hereto (such account(s), together with each such other
deposit account maintained by the Pledgor with the Bank collectively, the
"DESIGNATED ACCOUNTS" and each a "DESIGNATED ACCOUNT"), (ii) each Designated
Account will be maintained in the manner set forth herein until termination of
this Control Agreement, (iii) the Bank is a "bank," as such term is defined in
the UCC, (iv) this Control Agreement is the valid and legally binding obligation
of the Bank and (v) each Designated Account is a "deposit account" as such term
is defined in Article 9 of the UCC.
Section 2. CONTROL. The Bank shall comply with instructions
originated by the Collateral Agent without further consent of the Pledgor or any
person acting or purporting to act for the Pledgor being required, including,
without limitation, directing disposition of the funds in each Designated
Account. The Bank shall also comply with instructions directing the disposition
of funds in each Designated Account originated by the Pledgor or its authorized
representatives until such time as the Collateral Agent delivers a Notice of
Sole Control pursuant to SECTION 8(I) hereof to the Bank.
Section 3. SUBORDINATION OF LIEN; WAIVER OF SET-OFF. The Bank
hereby agrees that any security interest in any Designated Account it now has or
subsequently obtains shall be subordinate to the security interest of the
Collateral Agent. The funds deposited into any
-2-
Designated Account will not be subject to deduction, set-off, banker's lien, or
any other right in favor of any person other than the Secured Parties (except
that the Bank may set off (i) all amounts due to the Bank in respect of its
customary fees and expenses for the routine maintenance and operation of the
Designated Accounts, including overdraft fees, and (ii) the face amount of any
checks or other items which have been credited to any Designated Account but are
subsequently returned unpaid because of uncollected or insufficient funds).
Section 4. CHOICE OF LAW. Both this Control Agreement and the
Designated Account(s) shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Bank's jurisdiction and the Designated Account(s)
shall be governed by the law of the State of New York. (2)
Section 5. CONFLICT WITH OTHER AGREEMENTS; AMENDMENTS. As of the
date hereof, there are no other agreements entered into between the Bank and the
Pledgor with respect to any Designated Account or any funds credited thereto
(other than standard and customary documentation with respect to the
establishment and maintenance of such Designated Accounts). The Bank and the
Pledgor will not enter into any other agreement with respect to any Designated
Account unless the Collateral Agent shall have received prior written notice
thereof. The Bank and the Pledgor have not and will not enter into any other
agreement with respect to control of the Designated Accounts or purporting to
limit or condition the obligation of the Bank to comply with any orders or
instructions with respect to any Designated Account as set forth in SECTION 2
hereof without the prior written consent of the Collateral Agent acting in its
sole discretion. In the event of any conflict with respect to control over any
Designated Account between this Control Agreement (or any portion hereof) and
any other agreement now existing or hereafter entered into, the terms of this
Control Agreement shall prevail. No amendment or modification of this Control
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.
Section 6. CERTAIN AGREEMENTS.
(i) The Bank has furnished to the Collateral Agent the most recent
account statement issued by the Bank with respect to each of the
Designated Accounts and the cash balances held therein. Each such
statement accurately reflects the assets held in such Designated Account
as of the date thereof.
- -----------------------------
2 The location of the bank may result in a different choice of governing
law, which may require opinion of Borrower counsel.
-3-
(ii) The Collateral Agent has delivered to the Bank a list, signed
by an authorized representative, of the officers of the Collateral Agent
authorized to give approvals or instructions under this Control Agreement
(the "AUTHORIZED REPRESENTATIVES") and the Bank shall be entitled to rely
on communications from any such authorized officers until the earlier of
the termination of this Control Agreement in accordance with the terms
hereof and notification by an Authorized Representative of a change in
such list at any time.
Section 7. NOTICE OF ADVERSE CLAIMS. Except for the claims and
interest of the Secured Parties and of the Pledgor in the Designated Account(s),
the Bank on the date hereof does not know of any claim to, or security interest
in, any Designated Account or in any funds credited thereto and does not know of
any claim that any person other than the Collateral Agent has been given control
(within the meaning of Section 8-106 of the UCC) of any Designated Account or
any such funds. If the Bank becomes aware that any person is asserting any lien,
encumbrance or adverse claim (including any writ, garnishment, judgment, warrant
of attachment, execution or similar process or any claim of control) against any
funds in any Designated Account, the Bank will promptly notify the Collateral
Agent and the Pledgor thereof.
Section 8. MAINTENANCE OF DESIGNATED ACCOUNTS. In addition to
the obligations of the Bank in SECTION 2 hereof, the Bank agrees to maintain the
Designated Accounts as follows:
(i) NOTICE OF SOLE CONTROL. If at any time the Collateral Agent
delivers to the Bank a notice of sole control in substantially the form
set forth in Exhibit A attached hereto (the "NOTICE OF SOLE CONTROL") with
respect to any Designated Account, the Bank agrees that, after receipt of
such notice, it will take all instruction with respect to such Designated
Account solely from the Collateral Agent and cease taking instructions
from the Pledgor, including, without limitation, instructions for
distribution or transfer of any funds in any Designated Account.
(ii) STATEMENTS AND CONFIRMATIONS. The Bank will send copies of all
statements and other correspondence (excluding routine confirmations)
concerning any Designated Account simultaneously to the Pledgor and the
Collateral Agent at the address set forth in SECTION 10 hereof. The Bank
will promptly provide to the Collateral Agent, upon request therefor from
time to time and, in any event, as of the last business day of each
calendar month, a statement of the cash balance in each Designated
Account. The Bank shall not change the name or account number of any
Designated Account without the prior written consent of the Collateral
Agent.
Section 9. SUCCESSORS; ASSIGNMENT. The terms of this Control
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective corporate successors and permitted assignees.
-4-
Section 10. NOTICES. Any notice, request or other communication
required or permitted to be given under this Control Agreement shall be in
writing and deemed to have been properly given when delivered in person, or when
sent by telecopy or other electronic means and electronic confirmation of error
free receipt is received or two (2) days after being sent by certified or
registered United States mail, return receipt requested, postage prepaid,
addressed to the party at the address set forth below.
Pledgor: [ ]
[Address]
Attention:
Telecopy:
Telephone:
with copy to:
[ ]
[Address]
Attention:
Telecopy:
Telephone:
Bank: [ ]
[ ]
[ ]
Attention:
Telecopy:
Telephone:
Collateral
Agent: UBS AG, Stamford Branch
677 Washington Boulevard
Stamford, Connecticut 06901
Attention:
Telecopy:
Telephone:
-5-
with a copy to:
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005
Attention: Daniel J. Zubkoff, Esq. and
Susanna M. Suh, Esq.
Telecopy: (212) 269-5420
Telephone: (212) 701-3000
Any party may change its address for notices in the manner set forth
above.
Section 11. TERMINATION. The rights and powers granted herein to
the Collateral Agent are powers coupled with an interest and will be affected
neither by the bankruptcy of the Pledgor nor by the lapse of time. The
obligations of the Bank hereunder shall continue in effect until (i) the
security interests of the Secured Parties with respect to the Designated
Account(s) have been terminated and an Authorized Representative has notified
the Bank of such termination in writing or (ii) thirty days following the Bank's
delivery of written notice of such termination to the Collateral Agent and
Pledgor.
Section 12. SEVERABILITY. If any term or provision set forth in
this Agreement shall be invalid or unenforceable, the remainder of this
Agreement, other than those provisions held invalid or unenforceable, shall be
construed in all respects as if such invalid or unenforceable term or provision
were omitted.
Section 13. COUNTERPARTS. This Control Agreement may be executed
in any number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Control Agreement by signing
and delivering one or more counterparts.
S-1
[ ],
as Pledgor
By: /s/
------------------------------
Name:
Title:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/
------------------------------
Name:
Title:
By: /s/
------------------------------
Name:
Title:
[ ],
as Securities Intermediary
By: /s/
------------------------------
Name:
Title:
SCHEDULE 1
Designated Account(s)
EXHIBIT A
[Letterhead of UBS AG, Stamford Branch]
[Date]
[Bank]
[Address]
Attention: _______________
Re: NOTICE OF SOLE CONTROL
Ladies and Gentlemen:
As referenced in SECTION 8(I) of the Control Agreement Concerning
Designated Accounts dated as of [ ], by and among [ ], us and you
(the "CONTROL AGREEMENT") (a copy of which is attached) we hereby give you
notice of our sole control over the Designated Account(s) referred to in the
Control Agreement, having account number(s): ___________________________________
(the "SPECIFIED DESIGNATED ACCOUNTS"). You are hereby instructed not to accept
any direction or instructions with respect to the Specified Designated Accounts
or any funds credited thereto from any person other than the undersigned, unless
otherwise ordered by a court of competent jurisdiction.
-2-
You are instructed to deliver a copy of this notice by facsimile
transmission to [Pledgor]
Very truly yours,
UBS AG, Stamford Branch,
as Collateral Agent
By: /s/
--------------------------------
Name:
Title:
By: /s/
--------------------------------
Name:
Title:
cc: [Pledgor]
EXHIBIT 6
[FORM OF]
COPYRIGHT U.S. SECURITY AGREEMENT
COPYRIGHT U.S. SECURITY AGREEMENT, dated as of February 12, 2004, by
PLY GEM INDUSTRIES, INC. (the "U.S. BORROWER") and each Guarantor listed on
Schedule II hereto (collectively, the "ORIGINAL GUARANTORS," together with the
U.S. Borrower, the "PLEDGORS"), in favor of UBS AG, STAMFORD BRANCH, in its
capacity as collateral agent pursuant to the Credit Agreement (in such capacity,
the "COLLATERAL AGENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Pledgors are party to a U.S. Security Agreement of even date
herewith (the "U.S. SECURITY AGREEMENT") in favor of the Collateral Agent
pursuant to which the Pledgors are required to execute and deliver this
Copyright U.S. Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Collateral Agent, for the benefit of the Secured Parties, to enter into Credit
Agreement, the Pledgors hereby agree with the Collateral Agent as follows:
SECTION 1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the U.S. Security Agreement and used herein have the meaning given to
them in the U.S. Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL.
Each Pledgor hereby pledges and grants to the Collateral Agent for the benefit
of the Secured Parties a lien on and security interest in and to all of its
right, title and interest in, to and under all the following Pledged Collateral
of such Pledgor:
(a) Copyrights of such Pledgor listed on Schedule I (3) attached
hereto; and
(b) all Proceeds of any and all of the foregoing (other than
Excluded Property).
- -------------------------
3 Should include same Copyrights listed on Schedule 14(d) of the Perfection
Certificate.
-2-
SECTION 3. U.S. SECURITY AGREEMENT. The security interest
granted pursuant to this Copyright U.S. Security Agreement is granted in
conjunction with the security interest granted to the Collateral Agent pursuant
to the U.S. Security Agreement and Pledgors hereby acknowledge and affirm that
the rights and remedies of the Collateral Agent with respect to the security
interest in the Copyrights made and granted hereby are more fully set forth in
the U.S. Security Agreement, the terms and provisions of which are incorporated
by reference herein as if fully set forth herein. In the event that any
provision of this Copyright U.S. Security Agreement is deemed to conflict with
the U.S. Security Agreement, the provisions of the U.S. Security Agreement shall
control unless the Collateral Agent shall otherwise determine.
SECTION 4. TERMINATION. Upon the full performance of the
Obligations, the Collateral Agent shall execute, acknowledge, and deliver to the
Pledgor an instrument in writing in recordable form releasing the collateral
pledge, grant, assignment, lien and security interest in the Copyrights under
this Copyright U.S. Security Agreement.
[signature page follows]
-3-
IN WITNESS WHEREOF, each Pledgor has caused this Copyright U.S.
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
PLY GEM INDUSTRIES, INC.
By: /s/
----------------------------------
Name:
Title:
[ORIGINAL GUARANTORS] (4)
By: /s/
----------------------------------
Name:
Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/
----------------------------------
Name:
Title:
By: /s/
----------------------------------
Name:
Title:
- ------------------------------------
4 This document needs only to be executed by any U.S. Guarantor which owns a
pledged Copyright.
-4-
SCHEDULE I
TO
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS
COPYRIGHT REGISTRATIONS:
----------------------------------------------------------------------------
REGISTRATION
OWNER NUMBER TITLE
----------------------------------------------------------------------------
----------------------------------------------------------------------------
COPYRIGHT APPLICATIONS:
-------------------------------------------------------
OWNER TITLE
-------------------------------------------------------
-------------------------------------------------------
-5-
SCHEDULE II
TO
COPYRIGHT SECURITY AGREEMENT
ORIGINAL GUARANTORS
- ----------------------------------------------------------------------------
NAME ADDRESS
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
EXHIBIT 7
[FORM OF]
PATENT U.S. SECURITY AGREEMENT
PATENT U.S. SECURITY AGREEMENT, dated as of February 12, 2004, by PLY
GEM INDUSTRIES, INC. (the "U.S. BORROWER") and each Guarantor listed on Schedule
II hereto (collectively, the "ORIGINAL GUARANTORS," and together with the U.S.
Borrower, the "PLEDGORS"), in favor of UBS AG, STAMFORD BRANCH, in its capacity
as collateral agent pursuant to the Credit Agreement (in such capacity, the
"COLLATERAL AGENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Pledgors are party to a U.S. Security Agreement of even date
herewith (the "U.S. SECURITY AGREEMENT") in favor of the Collateral Agent
pursuant to which the Pledgors are required to execute and deliver this Patent
U.S. Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Collateral Agent, for the benefit of the Secured Parties, to enter into Credit
Agreement, the Pledgors hereby agree with the Collateral Agent as follows:
SECTION 1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the U.S. Security Agreement and used herein have the meaning given to
them in the U.S. Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each
Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the
Secured Parties a lien on and security interest in and to all of its right,
title and interest in, to and under all the following Pledged Collateral of such
Pledgor:
(a) Patents of such Pledgor listed on Schedule I (5) attached
hereto; and
(b) all Proceeds of any and all of the foregoing (other than
Excluded Property).
- -----------------------------
5 Should include same Patents listed on Schedule 14(c) of the Perfection
Certificate.
-2-
SECTION 3. U.S. SECURITY AGREEMENT. The security interest
granted pursuant to this Patent U.S. Security Agreement is granted in
conjunction with the security interest granted to the Collateral Agent pursuant
to the U.S. Security Agreement and Pledgors hereby acknowledge and affirm that
the rights and remedies of the Collateral Agent with respect to the security
interest in the Patents made and granted hereby are more fully set forth in the
U.S. Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. In the event that any provision
of this Patent U.S. Security Agreement is deemed to conflict with the U.S.
Security Agreement, the provisions of the U.S. Security Agreement shall control
unless the Collateral Agent shall otherwise determine.
SECTION 4. TERMINATION. Upon the full performance of the
Obligations, the Collateral Agent shall execute, acknowledge, and deliver to the
Pledgor an instrument in writing in recordable form releasing the collateral
pledge, grant, assignment, lien and security interest in the Patents under this
Patent U.S. Security Agreement.
[signature page follows]
-3-
IN WITNESS WHEREOF, each Pledgor has caused this Patent U.S. Security
Agreement to be executed and delivered by its duly authorized offer as of the
date first set forth above.
Very truly yours,
PLY GEM INDUSTRIES, INC.
By: /s/
-----------------------------------
Name:
Title:
[ORIGINAL GUARANTORS] (6)
By: /s/
-----------------------------------
Name:
Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/
-----------------------------------
Name:
Title:
By: /s/
-----------------------------------
Name:
Title:
- ----------------------------------
6 This document needs only to be executed by any U.S. Guarantor which owns a
pledged Patent.
-4-
SCHEDULE I
TO
PATENT SECURITY AGREEMENT
PATENTS AND PATENT APPLICATIONS
PATENTS:
----------------------------------------------------------------------------
OWNER PATENT NAME
----------------------------------------------------------------------------
----------------------------------------------------------------------------
PATENT APPLICATIONS:
----------------------------------------------------------------------------
APPLICATION
OWNER NUMBER NAME
----------------------------------------------------------------------------
----------------------------------------------------------------------------
-5-
SCHEDULE II
TO
PATENT SECURITY AGREEMENT
ORIGINAL GUARANTORS
- ----------------------------------------------------------------------------
NAME ADDRESS
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
EXHIBIT 8
[FORM OF]
TRADEMARK U.S. SECURITY AGREEMENT
TRADEMARK U.S. SECURITY AGREEMENT, dated as of February 12, 2004, by
PLY GEM INDUSTRIES, INC. (the "U.S. BORROWER") and each Guarantor listed on
Schedule II hereto (collectively, the "ORIGINAL GUARANTORS," together with the
U.S. Borrower, the "PLEDGORS"), in favor of UBS AG, STAMFORD BRANCH, in its
capacity as collateral agent pursuant to the Credit Agreement (in such capacity,
the "COLLATERAL AGENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Pledgors are party to a U.S. Security Agreement of even date
herewith (the "U.S. SECURITY AGREEMENT") in favor of the Collateral Agent
pursuant to which the Pledgors are required to execute and deliver this
Trademark U.S. Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Collateral Agent, for the benefit of the Secured Parties, to enter into Credit
Agreement, the Pledgors hereby agree with the Collateral Agent as follows:
SECTION 1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the U.S. Security Agreement and used herein have the meaning given to
them in the U.S. Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL.
Each Pledgor hereby pledges and grants to the Collateral Agent for the benefit
of the Secured Parties a lien on and security interest in and to all of its
right, title and interest in, to and under all the following Pledged Collateral
of such Pledgor:
(a) Trademarks of such Pledgor listed on Schedule I7 attached
hereto, but not including any Trademarks subject to an "intent to use"
application until such time as a statement of use has been filed with the United
States Patent and Trademark Office;
(b) all Goodwill associated with such Trademarks; and
- ----------------------------
7 Should include same Trademarks listed on Schedule 14(c) of the Perfection
Certificate.
-2-
(c) all Proceeds of any and all of the foregoing (other than
Excluded Property).
SECTION 3. U.S. SECURITY AGREEMENT. The security interest
granted pursuant to this Trademark U.S. Security Agreement is granted in
conjunction with the security interest granted to the Collateral Agent pursuant
to the U.S. Security Agreement and Pledgors hereby acknowledge and affirm that
the rights and remedies of the Trustee with respect to the security interest in
the Trademarks made and granted hereby are more fully set forth in the U.S.
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. In the event that any provision
of this Trademark U.S. Security Agreement is deemed to conflict with the U.S.
Security Agreement, the provisions of the U.S. Security Agreement shall control
unless the Collateral Agent shall otherwise determine.
SECTION 4. TERMINATION. Upon the full performance of the
Obligations, the Collateral Agent shall execute, acknowledge, and deliver to the
Pledgor an instrument in writing in recordable form releasing the collateral
pledge, grant, assignment, lien and security interest in the Trademarks under
this Trademark U.S. Security Agreement.
[signature page follows]
-3-
IN WITNESS WHEREOF, each Pledgor has caused this Trademark U.S.
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
PLY GEM INDUSTRIES, INC.
By: /s/
-----------------------------------
Name:
Title:
[ORIGINAL GUARANTORS] (8)
By: /s/
-----------------------------------
Name:
Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/
-----------------------------------
Name:
Title:
By: /s/
-----------------------------------
Name:
Title:
- ----------------------------------
8 This document needs only to be executed by any U.S. Guarantor which owns a
pledged Trademark.
-4-
SCHEDULE I
TO
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS
TRADEMARK REGISTRATIONS:
----------------------------------------------------------------------------
REGISTRATION
OWNER NUMBER TRADEMARK
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TRADEMARK APPLICATIONS:
----------------------------------------------------------------------------
APPLICATION
OWNER NUMBER TRADEMARK
----------------------------------------------------------------------------
----------------------------------------------------------------------------
-5-
SCHEDULE II
TO
TRADEMARK SECURITY AGREEMENT
ORIGINAL GUARANTORS
- ----------------------------------------------------------------------------
NAME ADDRESS
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
EXHIBIT 9
FORM OF NOTICE TO BAILEE OF SECURITY INTEREST IN INVENTORY
CERTIFIED MAIL -- RETURN RECEIPT REQUESTED
- ------------------------------------------
[ ], 200[ ]
TO: [Bailee's Name]
[Bailee's Address]
Re: PLY GEM INDUSTRIES, INC.
------------------------
Ladies and Gentlemen:
In connection with that certain U.S. Security Agreement, dated as
February 12, 2004 (the "U.S. SECURITY AGREEMENT"), made by Ply Gem Industries,
Inc., the Guarantors party thereto and UBS AG, Stamford Branch ("UBS") as
Collateral Agent, we have granted to UBS a security interest in substantially
all of our personal property, including our inventory.
This letter constitutes notice to you, and your signature below will
constitute your acknowledgment, of UBS's continuing first priority security
interest in all goods with respect to which you are acting as bailee. Until you
are notified in writing to the contrary by UBS, however, you may continue to
accept instructions from us regarding the delivery of goods stored by you.
Your acknowledgment also constitutes a waiver and release, for UBS's
benefit, of any and all claims, liens, including bailee's liens, and demands of
every kind which you have or may later have against such property (including any
right to include such property in any secured financing to which you may become
party).
In order to complete our records, kindly have a duplicate of this
letter signed by an officer of your company and return same to us at your
earliest convenience.
-2-
Receipt acknowledged, confirmed and Very truly yours,
approved:
[BAILEE] [APPLICABLE PLEDGOR]
By: /s/ By: /s/
---------------------------- ----------------------------
Name: Name:
Title: Title:
cc: UBS AG, Stamford Branch