EXHIBIT 10.29
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SECURITY AGREEMENT
By
ATRIUM COMPANIES, INC.,
as Borrower
and
THE GUARANTORS PARTY HERETO
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
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Dated as of December 10, 2003
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TABLE OF CONTENTS
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PREAMBLE................................................................................................
RECITALS................................................................................................1
AGREEMENT...............................................................................................2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions...............................................................................2
SECTION 1.2. Interpretation............................................................................9
SECTION 1.3. Resolution of Drafting Ambiguities.......................................................10
SECTION 1.4. Perfection Certificate...................................................................10
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Security Interest...............................................................10
SECTION 2.2. Filings..................................................................................11
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral...........................................12
SECTION 3.2. Perfection of Uncertificated Securities Collateral.......................................12
SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected Security
Interest..............................................................................13
SECTION 3.4. Other Actions............................................................................13
SECTION 3.5. Joinder of Additional Guarantors.........................................................17
SECTION 3.6. Supplements; Further Assurances..........................................................17
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1. Title....................................................................................18
SECTION 4.2. Validity of Security Interest............................................................18
SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral.................................19
SECTION 4.4. Other Financing Statements...............................................................19
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SECTION 4.5. Chief Executive Office; Change of Name; Jurisdiction of Organization.....................19
SECTION 4.6. Location of Inventory and Equipment......................................................20
SECTION 4.7. Due Authorization and Issuance...........................................................20
SECTION 4.8. Consents, etc............................................................................20
SECTION 4.9. Pledged Collateral.......................................................................20
SECTION 4.10. Insurance................................................................................20
SECTION 4.11. Payment of Taxes; Compliance with Laws; Contesting Liens; Claims.........................20
SECTION 4.12. Access to Pledged Collateral, Books and Records; Other Information.......................21
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral...............................................21
SECTION 5.2. Voting Rights; Distributions; etc........................................................21
SECTION 5.3. Defaults, etc............................................................................22
SECTION 5.4. Certain Agreements of Pledgors As Issuers and Holders of Equity Interests................23
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of License.........................................................................23
SECTION 6.2. Protection of Collateral Agent's Security................................................23
SECTION 6.3. After-Acquired Property..................................................................24
SECTION 6.4. Litigation...............................................................................25
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. Maintenance of Records...................................................................25
SECTION 7.2. Legend...................................................................................26
SECTION 7.3. Modification of Terms, etc...............................................................26
SECTION 7.4. Collection...............................................................................26
ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral..........................................................27
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ARTICLE IX
REMEDIES
SECTION 9.1. Remedies.................................................................................27
SECTION 9.2. Notice of Sale...........................................................................29
SECTION 9.3. Waiver of Notice and Claims..............................................................29
SECTION 9.4. Certain Sales of Pledged Collateral......................................................29
SECTION 9.5. No Waiver; Cumulative Remedies...........................................................31
SECTION 9.6. Certain Additional Actions Regarding Intellectual Property...............................31
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. Proceeds of Casualty Events and Collateral Dispositions..................................31
SECTION 10.2. Application of Proceeds..................................................................31
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Collateral Agent..............................................................32
SECTION 11.2. Collateral Agent May Perform; Collateral Agent Appointed Attorney-in-Fact................33
SECTION 11.3. Continuing Security Interest; Assignment.................................................33
SECTION 11.4. Termination; Release.....................................................................33
SECTION 11.5. Modification in Writing..................................................................34
SECTION 11.6. Notices..................................................................................34
SECTION 11.7. Governing Law, Consent to Jurisdiction and Service of Process; Waiver of Jury
Trial.................................................................................34
SECTION 11.8. Severability of Provisions...............................................................34
SECTION 11.9. Execution in Counterparts................................................................34
SECTION 11.10. Business Days............................................................................34
SECTION 11.11. Waiver of Stay...........................................................................34
SECTION 11.12. No Credit for Payment of Taxes or Imposition.............................................35
SECTION 11.13. No Claims Against Collateral Agent.......................................................35
SECTION 11.14. No Release...............................................................................35
SECTION 11.15. Obligations Absolute.....................................................................36
SIGNATURES.............................................................................................S-1
EXHIBIT 1 Form of Issuer's Acknowledgment
EXHIBIT 2 Form of Securities Pledge Amendment
EXHIBIT 3 Form of Control Agreement Concerning Securities Accounts
EXHIBIT 4 Form of Control Agreement Concerning Deposit Accounts
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EXHIBIT 5 Form of Copyright Security Agreement
EXHIBIT 6 Form of Patent Security Agreement
EXHIBIT 7 Form of Trademark Security Agreement
EXHIBIT 8 Form of Bailee's Letter
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SECURITY AGREEMENT
SECURITY AGREEMENT dated as of December 10, 2003 (as amended, amended
and restated, supplemented or otherwise modified from time to time in accordance
with the provisions hereof, the "Agreement") made by ATRIUM COMPANIES, INC., a
Delaware corporation (the "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 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 CANADIAN IMPERIAL BANK OF COMMERCE, 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 :
A. The Borrower, 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 December 10, 2003 (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 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 Credit 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.
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 Lender issuing
Letters of Credit under the Credit Agreement that each Pledgor execute and
deliver the applicable Credit Documents, including this Agreement.
A G R E E M E N T :
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.
(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 Merger Agreement, 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 Merger Agreement, (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 Merger Agreement 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 Organic 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 interests, 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,
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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 Organic 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 Organic 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
Organic 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 8 annexed hereto.
"Borrower" shall have the meaning assigned to such term in the Preamble
hereof.
"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.
"Collateral Account" shall mean a collateral account or sub-account
established and maintained in accordance with the provisions of Section 12.01 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
Administrative Agent.
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"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 are
Permitted Liens under the Credit Agreement.
"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 xxx for past, present or future
infringements thereof.
"Copyright Security Agreement" shall mean an agreement substantially in
the form annexed hereto as Exhibit 7.
"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 4 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.
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"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(f), 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, 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.
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"Goodwill" shall mean, collectively, with respect to each Pledgor, the
goodwill connected with such Pledgor's business including all goodwill connected
with the use of and symbolized by any Trademark or Trademark License in which
such Pledgor has any interest.
"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 described in Schedule 10 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 Organic 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
described in Schedule 10 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 Organic Document of each such issuer,
and the certificates, instruments and agreements representing 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 and Licenses and 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 Patents, Trademarks,
Copyrights and Licenses.
"Intercompany Notes" shall mean, with respect to each Pledgor, all
intercompany notes described in Schedule 11 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.
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"Joinder Agreement" shall mean an agreement substantially in the form
annexed to the Credit Agreement as Exhibit K.
"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 xxx, 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 xxx 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.
"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 established 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 xxx for past, present or future infringements thereof.
"Patent Security Agreement" shall mean an agreement substantially in
the form annexed hereto as Exhibit 6.
"Perfection Certificate" shall mean that certain perfection certificate
dated December 10, 2003, executed and delivered by each Pledgor 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.
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"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 9.12 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
9.12 of the Credit Agreement.
"Pledgor" shall have the meaning assigned to such term in the Preamble
hereof.
"Purchase Money Obligations" shall mean, for any Person, the
obligations of such person in respect of Indebtedness (including Capital Lease
Obligations) incurred for the purpose of financing all or any part of the
purchase price of any property (including Equity Interests of any Person) or the
cost of installation, construction or improvement of any property or assets and
any refinancing thereof; provided, however, that such Indebtedness is incurred
within 90 days after such acquisition or the completion of such installation,
construction or improvement.
"Secured Parties" shall mean, collectively, the Agents, the Issuing
Lender, the Lenders and each party to a Swap Contract relating to the Loans if
at the date of entering into such Swap Contract such person was a Lender or an
Affiliate of a Lender.
"Securities Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 3 or such other form that is
reasonably satisfactory to the Collateral Agent.
"Securities Collateral" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
"Special Property" shall mean:
(a) any permit, lease or license held by any Pledgor that validly
prohibits the creation by such Pledgor of a security interest therein;
(b) any Account to the extent transferred to a Receivables Co. in
connection with a Permitted Receivables Transaction;
(c) any 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; and
(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 pursuant to the
provisions of the Credit Agreement if the contract or other agreement in
which such Lien is granted (or the documentation providing
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for such Purchase Money Obligation or Capital Lease Obligation) validly
prohibits the creation of any other Lien on such Equipment;
provided, however, that in each case described in clauses (a), (b) and (c) 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."
"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 9.12 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 xxx for past, present and future infringements thereof.
"Trademark Security Agreement" shall mean an agreement substantially in
the form annexed hereto as Exhibit 7.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York; provided that if, with respect to any UCC
financing statement or by reason of any provisions of law, the perfection or the
effect of perfection or non-perfection of the security interests granted to the
Collateral Agent pursuant to the applicable Credit Document is governed by the
Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, then "UCC" means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions of
each Credit Document and any UCC financing statement relating to such perfection
or effect of perfection or non-perfection.
SECTION 1.2. Interpretation. The rules of interpretation specified in
the Credit Agreement (including Section 1.04 thereof) shall be applicable to
this Agreement.
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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 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;
(vi) all Collateral Accounts;
(vii) all Investment Property;
(viii) all Intellectual Property Collateral;
(ix) the Commercial Tort Claims described on Schedule 14 to the
Perfection Certificate;
(x) all General Intangibles;
(xi) all Deposit Accounts;
(xii) the Merger Agreement and all Acquisition Document Rights;
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(xiii) all Supporting Obligations;
(xiv) to the extent determined to be the property of any Pledgor,
the Escrow Account and all interests in items in the Escrow
Account;
(xv) all books and records relating to the Pledged Collateral;
and
(xvi) to the extent not covered by clauses (i) through (xv) 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 (xvi) 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 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.
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 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.
(a) 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 Security Agreement, the Patent
Security Agreement and the Trademark Security Agreement,
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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, agreements 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,
agreements or instruments representing or evidencing Securities Collateral
acquired by such Pledgor after the date hereof shall promptly upon receipt
thereof by such Pledgor be delivered to the Collateral Agent. 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.
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 are 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) request the issuer of such Pledged Securities 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.
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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 6 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 and shall defend such
security interest against the claims and demands of all persons except Permitted
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 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.
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 or Tangible Chattel Paper other than such Instruments and
Tangible Chattel Paper listed in Schedule 11 annexed to the Perfection
Certificate and (ii) each Instrument and each item of Tangible Chattel
Paper listed in Schedule 11 annexed to the Perfection Certificate 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 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 $1.0 million in the aggregate
for all Pledgors, the Pledgor acquiring such Instrument or Tangible
Chattel Paper shall forthwith endorse, assign and
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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. (i) Each Pledgor has neither opened nor maintains
any Deposit Accounts other than the accounts listed in Schedule 15 annexed
to the Perfection Certificate and (ii) the Collateral Agent has a
perfected first priority security interest in each Deposit Account listed
in Schedule 7.01(xiv)(c) to the Credit Agreement by Control. No Pledgor
shall hereafter establish and maintain any Deposit Account unless (1) the
applicable Pledgor shall have given the Collateral Agent 15 days' prior
written notice of its intention to establish such new Deposit Account with
a Bank and (2) 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, unless such requirement is waived by the
Collateral Agent. Each Pledgor agrees that at the time it establishes any
additional Deposit Accounts it shall enter into a duly authorized,
executed and delivered Deposit Account Control Agreement with respect to
such Deposit Account, unless such requirement is waived by the Collateral
Agent. 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 has
occurred and is continuing. 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. Without the prior written consent
of the Collateral Agent, no Pledgor shall grant Control of any Deposit
Account to any person other than the Collateral Agent.
(c) Investment Property. (i) Each Pledgor (1) has no Securities
Accounts or Commodity Accounts other than those listed in Schedule 15
annexed to the Perfection Certificate and the Collateral Agent has a
perfected first priority security interest in such Securities Accounts and
Commodity Accounts by Control, (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 15 annexed to the
Perfection Certificate and (3) 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 15 annexed to
the Perfection Certificate, as applicable.
(i) If any Pledgor shall at any time hold or acquire any certificated
securities constituting Investment Property and which have a value in
excess of $500,000 in the aggregate, 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
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substance satisfactory to the Collateral Agent, either (a) cause the
issuer to 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 15 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) 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 three (3) Business Days 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 Section
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
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.
(ii) 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. In the event any Pledgor shall fail to make such payment
contemplated in the immediately preceding sentence, the Collateral Agent
may do so for the account of such 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 13.03 of the Credit Agreement.
(d) Electronic Chattel Paper and Transferable Records. No amount under
or in connection with any of the Pledged Collateral is evidenced by any
Electronic Chattel
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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 11 annexed to the Perfection
Certificate. 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 reasonably 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, 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 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 14 annexed to the Perfection Certificate. 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 Pledges in
which the Collateral Agent does not have a security interest
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in excess of $1.0 million in the aggregate, such Pledgor shall immediately
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
7.01(xiv) 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 is less then $100,000, provided
that the aggregate value of the Pledged Collateral held by all bailees who
have not delivered a Bailee Letter is less than $1.0 million in the
aggregate.
(h) Motor Vehicles. Upon the request of the Collateral Agent at any
time after the occurrence and during the continuance of an Event of
Default, each Pledgor shall deliver to the Collateral Agent originals of
the certificates of title or ownership for the motor vehicles (and any
other Equipment covered by Certificates of Title or ownership) owned by it
with the Collateral Agent listed as lienholder therein. Such requirement
shall apply to the Pledgors if any such motor vehicle (or any such other
Equipment) is valued at over $100,000, provided that the value of all such
motor vehicles (and such Equipment) as to which any Pledgor has not
delivered a Certificate of Title or ownership is over $1.0 million.
SECTION 3.5. Joinder of Additional Guarantors. The Pledgors shall cause
each Subsidiary of the 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 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 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
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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 reasonably 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 Liens. In addition, no
Liens or claims exist on the Securities Collateral, other than as permitted by
Section 9.07 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 8(a) to the 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 Documents or the Collateral Agent.
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
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described in Schedule 6 annexed to the Perfection Certificate, a perfected
security interest in all the Pledged Collateral (provided that no representation
is made with respect to perfection under laws other than those of the United
States or any State thereof or to the perfection of security interests in
Deposit Accounts that are not subject to a Control 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 at all
times constitute a perfected, continuing security interest therein, other than
as a result of the failure of the Collateral Agent to take such actions as are
required of it to maintain the perfection of such security interest, subject
only to Permitted Liens (provided that no covenant is made with respect to
perfection under laws other than those of the United States or any State thereof
or with respect to the perfection of security interests in Deposit Accounts that
are not required by the terms hereof or of the Credit Agreement to be subject to
a Control Agreement).
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 Liens (other than Contested Liens). There is
no agreement, and no Pledgor shall enter into any agreement or take any other
action, that would restrict the transferability of any of the Pledged Collateral
or otherwise impair or conflict 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 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 Liens.
SECTION 4.5. Chief Executive Office; Change of Name; Jurisdiction of
Organization. (a) It shall comply with the provisions of Section 9.01(p) of the
Credit Agreement.
(a) 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 9.01(p) 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 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
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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
Equipment or Inventory to any new location not listed on Schedule 7 to the
Perfection Certificate until (i) it shall have given the Collateral Agent not
less than 15 days' prior written notice (in the form of an Officers'
Certificate) of its intention so to do, clearly describing such new location
within the continental United States and providing such other information in
connection therewith as the Collateral Agent may reasonably 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.
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 reasonably determines it
necessary to obtain any approvals or consents of any Governmental Authority or
any other person therefor, then, upon the request of the Collateral Agent, such
Pledgor agrees to use its reasonable best 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, in connection
with this Agreement, in each case, relating to the Pledged Collateral, is
accurate and complete in all material respects. The Pledged Collateral described
on the Schedules annexed to the Perfection Certificate 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 Available 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
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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 Permitted 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.
SECTION 4.12. Access to Pledged Collateral, Books and Records; Other
Information. Upon reasonable request to each Pledgor and pursuant to Section
9.03(v) of the Credit Agreement, the Collateral Agent and its representatives
shall have access to visit and inspect all of the Pledged Collateral and
Mortgaged Property. 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.
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
promptly 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 Credit Document; 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.
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(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 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 promptly delivered to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary endorsement).
(ii) The Collateral Agent shall not exercise any such voting rights or
other rights, shall be deemed without further action or formality to have
granted to each Pledgor all necessary consents relating to such 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
5.2(i)(A) hereof and to receive the Distributions which it is authorized to
receive and retain pursuant to Section 5.2(i)(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 Sections 5.2(i)(B) or 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
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Pledgor is not in default or violation of any other material provisions of any
such agreement to which such Pledgor is a party. 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, and as of the date hereof, there are no
certificates, instruments, documents or other writings (other than the Organic
Documents and certificates, if any, delivered to the Administrative Agent) which
evidence any Pledged Securities of such Pledgor.
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 or member in a
partnership, limited liability company or other entity, such Pledgor hereby
consents to the extent required by the applicable Organic 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, solely to
exercise those 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
assignable, an irrevocable, non-exclusive license 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
thereof.
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
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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 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 such Pledgor's 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 material portion thereof, (v) not license the Intellectual
Property Collateral other than licenses entered into by such Pledgor in, or
incidental to, the ordinary course of business, or amend or permit the amendment
of any of the licenses in a manner that materially and adversely affects the
right to receive payments thereunder, or in any manner that would materially
impair the value of the Intellectual Property Collateral, other than in the
ordinary course of business, 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, (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
from time to time reasonably 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 reasonable
request of the Collateral Agent, confirm the attachment of the Lien and security
interest created by this
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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 Schedules 13(a), 13(b), 13(c) and 13(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 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 13.03 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, 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, material
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
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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 of an interest in the Accounts or the Collateral Agent's security
interest therein without the consent of any Pledgor; provided that such person
agrees to keep such information confidential pursuant to terms similar to those
of Section 13.11 of the Credit Agreement.
SECTION 7.2. Legend. Each Pledgor shall legend, at the request of the
Collateral Agent and in form and manner reasonably 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 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. Each Pledgor shall
timely fulfill all obligations on its part to be fulfilled under or in
connection with the Accounts.
SECTION 7.4. Collection. Each Pledgor shall 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 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, xxx 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 two (2) Business Days 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;
(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
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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 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.
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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, (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 the grant of
options to purchase, 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,
optioned 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
not be deemed to have been made in a commercially unreasonable manner by reason
of such sale being a sale made in accordance with such requirements, and that,
except as may be required by applicable law, the Collateral Agent shall have no
obligation to engage in public sales.
(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
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registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall not be deemed to have
been made in a commercially unreasonable manner by reason of such sale being a
private sale 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) Notwithstanding the foregoing, each Pledgor shall, upon the
occurrence and during the continuance of any Event of Default, at the reasonable
request of the Collateral Agent, for the benefit of the Collateral Agent, cause
any registration, qualification under or compliance with any Federal or state
securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of
the Pledgors. Each Pledgor will use its commercially reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including
registration under the Securities Act (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with all other requirements of any Governmental
Authority. Each Pledgor shall use its commercially reasonable efforts to cause
the Collateral Agent to be kept advised in writing as to the progress of each
such registration, qualification or compliance and as to the completion thereof,
shall furnish to the Collateral Agent such number of prospectuses, offering
circulars or other documents incident thereto as the Collateral Agent from time
to time may request, and shall indemnify and shall cause the issuer of the
Securities Collateral to indemnify the Collateral Agent and all others
participating in the distribution of such Securities Collateral against all
claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, other than with respect
to information relating to and provided by any Secured Party.
(iv) 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 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
Commission thereunder, as the same are from time to time in effect.
(v) 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
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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 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 Collateral Agent, each Pledgor shall execute and deliver
to Collateral Agent an assignment or assignments of any Intellectual Property
Collateral and/or Goodwill and such other documents as are necessary or
appropriate to carry out the intent and purposes hereof.
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 Available 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.
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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 provisions 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 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, Collateral Agent, in its sole discretion, shall select which
provision or provisions shall control.
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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) after giving effect to any applicable
grade periods or if any representation or warranty on the part of any Pledgor
contained herein shall be breached, the Collateral Agent may (but shall not be
obligated to) do the same or cause it to be done or remedy any such breach, and
may expend funds for such purpose; provided, however, that 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 13.03 of the Credit Agreement. Neither the
provisions of this Section 11.2 nor any action taken by 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 after giving
effect to all applicable grace periods. 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, from time
to time 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. 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 Swap
Contract.
SECTION 11.4. Termination; Release. The Pledged Collateral shall be
released from the Lien of this Agreement in accordance with the provisions of
the Credit Agreement. 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,
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proper documents and instruments (including UCC-3 termination statements or
releases) 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
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. Section 13.10 of the Credit Agreement is
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.
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
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hereafter become the subject of a voluntary or involuntary proceeding under the
Bankruptcy 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 Bankruptcy
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 way 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
Collateral 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. Such
Pledgor shall not be entitled to any credit against the principal, premium, if
any, or interest payable under the Credit Agreement, and such Pledgor shall not
be entitled to any credit against any other sums which may become payable under
the terms thereof or hereof, by reason of the payment of any Taxes 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.
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 Credit
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 Credit Documents.
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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 Swap Contract or any other Credit 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 Swap Contract or any other Credit 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 Swap
Contract or any other Credit 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.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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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.
PLEDGORS:
ATRIUM COMPANIES, INC.
By:
--------------------------------
Name:
Title:
ATRIUM CORPORATION
By:
--------------------------------
Name:
Title:
ATRIUM DOOR AND WINDOW COMPANY -
WEST COAST
By:
--------------------------------
Name:
Title:
S-1
ATRIUM DOOR AND WINDOW COMPANY OF
THE NORTHWEST
By:
--------------------------------
Name:
Title:
ATRIUM DOOR AND WINDOW COMPANY OF
THE NORTHEAST
By:
--------------------------------
Name:
Title:
ATRIUM DOOR AND WINDOW COMPANY
OF ARIZONA
By:
--------------------------------
Name:
Title:
ATRIUM DOOR AND WINDOW COMPANY OF
THE ROCKIES
By:
--------------------------------
Name:
Title:
S-2
X.X. XXXXX COMPANY, INC.
By:
--------------------------------
Name:
Title:
TOTAL TRIM, INC.
By:
--------------------------------
Name:
Title:
S-3
WING INDUSTRIES, INC.
By:
--------------------------------
Name:
Title:
ATRIUM VINYL, INC.
By:
--------------------------------
Name:
Title:
THERMAL INDUSTRIES, INC.
By:
--------------------------------
Name:
Title:
ATRIUM EXTRUSION SYSTEMS, INC.
By:
--------------------------------
Name:
Title:
S-4
ALUMINUM SCREEN MANUFACTURERS, INC.
By:
--------------------------------
Name:
Title:
MD CASTING, INC.
By:
--------------------------------
Name:
Title:
S-5
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
By:
--------------------------------
Name:
Title:
S-6
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 "Security Agreement;" capitalized
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the Security Agreement), dated as of December 10, 2003, made by
ATRIUM COMPANIES, INC., a Delaware corporation (the "Borrower"), the Guarantors
party thereto and CANADIAN IMPERIAL BANK OF COMMERCE, 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 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 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:
--------------------------------
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
"Security Agreement;" capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement), dated
as of December 10, 2003, made by ATRIUM COMPANIES, INC., a Delaware corporation
(the "Borrower"), the Guarantors party thereto and CANADIAN IMPERIAL BANK OF
COMMERCE, 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 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
-------- ------------ ----- ----------- --------- -------------------
INTERCOMPANY NOTES
PRINCIPAL DATE OF INTEREST MATURITY
ISSUER AMOUNT ISSUANCE RATE DATE
---------- --------- -------- -------- --------
[ ],
as Pledgor
By:
--------------------------------
Name:
Title:
AGREED TO AND ACCEPTED:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
By:
----------------------------------
Name:
Title:
-2-
EXHIBIT 3
[Form of]
CONTROL AGREEMENT CONCERNING SECURITIES ACCOUNTS
This Control Agreement Concerning Securities Accounts (this "Control
Agreement"), dated as of [ ], by and among [ ] (the "Pledgor"),
CANADIAN IMPERIAL BANK OF COMMERCE (the "Collateral Agent") 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
December 10, 2003, made by the Pledgor and each of the Guarantors listed on the
signature pages thereto in favor of CANADIAN IMPERIAL BANK OF COMMERCE, 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
Securities 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.
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 location 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 credited 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.
-------------
(1) The location of the Securities Intermediary may result in a different
choice of governing law, which may require opinion of Borrower counsel.
-2-
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.
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.
-3-
(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.
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:
-4-
with copy to:
[ ]
[Address]
Attention:
Telecopy:
Telephone:
Securities
Intermediary: [ ]
[Address]
Attention:
Telecopy:
Telephone:
Collateral
Agent: CANADIAN IMPERIAL BANK OF COMMERCE
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx LLP
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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.
-5-
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.
-6-
[ ],
as Pledgor
By:
--------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
By:
--------------------------------
Name:
Title:
[ ],
as Securities Intermediary
By:
--------------------------------
Name:
Title:
S-1
SCHEDULE I
Designated Account(s)
EXHIBIT A
[Letterhead of CANADIAN IMPERIAL BANK OF COMMERCE]
[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.
You are instructed to deliver a copy of this notice by facsimile
transmission to [Pledgor].
Very truly yours,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
By:
--------------------------------
Name:
Title:
cc: [Pledgor]
-2-
EXHIBIT 4
[Form of]
CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS
This CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS (this "Control
Agreement"), dated as of [ ], by and among [ ] (the "Pledgor"),
CANADIAN IMPERIAL BANK OF COMMERCE (the "Collateral Agent") 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 December 10, 2003,
made by the Pledgor and each of the Guarantors listed on the signature pages
thereto in favor of CANADIAN IMPERIAL BANK OF COMMERCE, 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 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.
(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.
------------------
(2) The location of the bank may result in a different choice of governing
law, which may require opinion of Borrower counsel.
-2-
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.
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:
-3-
with copy to:
[ ]
[Address]
Attention:
Telecopy:
Telephone:
Bank: [ ]
[ ]
[ ]
Attention:
Telecopy:
Telephone:
Collateral
Agent: CANADIAN IMPERIAL BANK OF COMMERCE
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx LLP
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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.
-4-
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.
-5-
[ ]
By:
--------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
By:
--------------------------------
Name:
Title:
[ ],
as Bank
By:
--------------------------------
Name:
Title:
S-1
SCHEDULE 1
Designated Account(s)
EXHIBIT A
[Letterhead of CANADIAN IMPERIAL BANK OF COMMERCE]
[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.
You are instructed to deliver a copy of this notice by facsimile
transmission to [Pledgor].
Very truly yours,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
By:
----------------------------------
Name:
Title:
cc: [Pledgor]
-2-
EXHIBIT 5
[FORM OF]
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT SECURITY AGREEMENT, dated as of December 10, 2003, by ATRIUM
COMPANIES, INC. (the "Borrower") and each Guarantor listed on Schedule II hereto
(collectively, the "Original Guarantors," together with the Borrower, the
"Pledgors"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, 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 Security Agreement of even date
herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to
which the Pledgors are required to execute and deliver this Copyright 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 Security Agreement and used herein have the meaning given to them
in the 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).
SECTION 3. Security Agreement. The security interest granted pursuant
to this Copyright Security Agreement is granted in conjunction with the security
interest granted to the Collateral Agent pursuant to the 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 Security Agreement, the
------------------------
(3) Should include same Copyrights listed on Schedule 13(d) of the Perfection
Certificate.
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 Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the 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
Security Agreement.
[signature page follows]
-2-
IN WITNESS WHEREOF, each Pledgor has caused this Copyright Security
Agreement to be executed and delivered by its duly authorized offer as of the
date first set forth above.
Very truly yours,
ATRIUM COMPANIES, INC.
By:
------------------------------------
Name:
Title:
[ORIGINAL GUARANTORS](4)
By:
------------------------------------
Name:
Title:
Accepted and Agreed:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
By:
-------------------------------
Name:
Title:
------------------------
(4) This document needs only to be executed by any Guarantor which owns a
pledged Copyright.
-3-
SCHEDULE I
TO
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS(5)
-----------------------------------------------------
COPYRIGHT REGISTRATIONS:
---------------------------------- --------------------- ---------------------
REGISTRATION
OWNER NUMBER TITLE
---------------------------------- --------------------- ---------------------
---------------------------------- --------------------- ---------------------
COPYRIGHT APPLICATIONS:
---------------------------------- ---------------------
OWNER TITLE
---------------------------------- ---------------------
---------------------------------- ---------------------
------------------------
(5) Note: These schedules include the minimum information required to perfect in
the Copyright Office. A conformed version of perfection certificate would be
adequate, provided it contains this information.
SCHEDULE II
TO
COPYRIGHT SECURITY AGREEMENT
ORIGINAL GUARANTORS
----------------------------
------------------------------------- ------------------------------------------
NAME ADDRESS
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
------------------------------------- ------------------------------------------
EXHIBIT 6
[FORM OF]
PATENT SECURITY AGREEMENT
PATENT SECURITY AGREEMENT, dated as of December 10, 2003, by ATRIUM
COMPANIES, INC. (the "Borrower") and each Guarantor listed on Schedule II hereto
(collectively, the "Original Guarantors," and together with the Borrower, the
"Pledgors"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, 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 Security Agreement of even date
herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to
which the Pledgors are required to execute and deliver this Patent 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 Security Agreement and used herein have the meaning given to them
in the 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 I6 attached hereto; and
(b) all Proceeds of any and all of the foregoing (other than Excluded
Property).
SECTION 3. Security Agreement. The security interest granted pursuant
to this Patent Security Agreement is granted in conjunction with the security
interest granted to the Collateral Agent pursuant to the 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 Security Agreement, the terms
------------------------
(6) Should include same Patents listed on Schedule 13(c) of the Perfection
Certificate.
and provisions of which are incorporated by reference herein as if fully set
forth herein. In the event that any provision of this Patent Security Agreement
is deemed to conflict with the Security Agreement, the provisions of the
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 Security
Agreement.
[signature page follows]
-2-
IN WITNESS WHEREOF, each Pledgor has caused this Patent Security
Agreement to be executed and delivered by its duly authorized offer as of the
date first set forth above.
Very truly yours,
ATRIUM COMPANIES, INC.
By:
-------------------------------------
Name:
Title:
[ORIGINAL GUARANTORS](7)
By:
-------------------------------------
Name:
Title:
Accepted and Agreed:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
By:
-------------------------------
Name:
Title:
------------------------
(7) This document needs only to be executed by any Guarantor which owns a
pledged Patent.
-3-
SCHEDULE I
TO
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS AND PATENT APPLICATIONS(8)
-----------------------------------------------
PATENT REGISTRATIONS:
---------------------------------- --------------------- ---------------------
REGISTRATION
OWNER NUMBER NAME
---------------------------------- --------------------- ---------------------
---------------------------------- --------------------- ---------------------
PATENT APPLICATIONS:
---------------------------------- --------------------- ---------------------
APPLICATION
OWNER NUMBER NAME
---------------------------------- --------------------- ---------------------
---------------------------------- --------------------- ---------------------
------------------------
(8) Note: These schedules include the minimum information required to perfect in
the PTO. A conformed version of perfection certificate would be adequate,
provided it contains this information.
SCHEDULE II
TO
PATENT SECURITY AGREEMENT
ORIGINAL GUARANTORS
-------------------------
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NAME ADDRESS
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EXHIBIT 7
[FORM OF]
TRADEMARK SECURITY AGREEMENT
TRADEMARK SECURITY AGREEMENT, dated as of December 10, 2003, by ATRIUM
COMPANIES, INC. (the "Borrower") and each Guarantor listed on Schedule II hereto
(collectively, the "Original Guarantors," together with the Borrower, the
"Pledgors"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, 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 Security Agreement of even date
herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to
which the Pledgors are required to execute and deliver this Trademark 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 Security Agreement and used herein have the meaning given to them
in the 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 I(9) attached hereto;
(b) all Goodwill associated with such Trademarks; and
(c) all Proceeds of any and all of the foregoing (other than Excluded
Property).
SECTION 3. Security Agreement. The security interest granted pursuant
to this Trademark Security Agreement is granted in conjunction with the security
interest granted to the Collateral Agent pursuant to the Security Agreement and
Pledgors hereby acknowledge and
------------------------
(9) Should include same Trademarks listed on Schedule 13(c) of the Perfection
Certificate.
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Trademarks made and granted hereby are more fully set
forth in the 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 Security Agreement is deemed to conflict with
the Security Agreement, the provisions of the 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
Security Agreement.
[signature page follows]
-2-
IN WITNESS WHEREOF, each Pledgor has caused this Trademark Security
Agreement to be executed and delivered by its duly authorized offer as of the
date first set forth above.
Very truly yours,
ATRIUM COMPANIES, INC.
By:
-----------------------------------
Name:
Title:
[ORIGINAL GUARANTORS](10)
By:
-----------------------------------
Name:
Title:
Accepted and Agreed:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
By:
-------------------------------
Name:
Title:
------------------------
(10) This document needs only to be executed by any Guarantor which owns a
pledged Trademark.
-3-
SCHEDULE I(11)
TO
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS
--------------------------------------------------
TRADEMARK REGISTRATIONS:
---------------------------------- --------------------- ---------------------
REGISTRATION
OWNER NUMBER TRADEMARK
---------------------------------- --------------------- ---------------------
---------------------------------- --------------------- ---------------------
TRADEMARK APPLICATIONS:
---------------------------------- --------------------- ---------------------
APPLICATION
OWNER NUMBER TRADEMARK
---------------------------------- --------------------- ---------------------
---------------------------------- --------------------- ---------------------
------------------------
(11) Note: These schedules include the minimum information required to
perfect in the PTO. A conformed version of perfection certificate
would be adequate, provided it contains this information.
SCHEDULE II
TO
TRADEMARK SECURITY AGREEMENT
ORIGINAL GUARANTORS
----------------------------
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NAME ADDRESS
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EXHIBIT 8
FORM OF NOTICE TO BAILEE OF SECURITY INTEREST IN INVENTORY
CERTIFIED MAIL -- RETURN RECEIPT REQUESTED
[ ], 200[ ]
TO: [Bailee's Name]
[Bailee's Address]
Re: ATRIUM COMPANIES, INC.
----------------------
Ladies and Gentlemen:
In connection with that certain Security Agreement, dated as of
December 10, 2003 (the "Security Agreement"), made by ATRIUM COMPANIES, INC.,
the Guarantors party thereto and CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC") as
Collateral Agent, we have granted to CIBC 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 CIBC'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 CIBC, 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 CIBC'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.
Receipt acknowledged, confirmed Very truly yours,
and approved:
[BAILEE] [APPLICABLE PLEDGOR]
By: By:
--------------------------- ------------------------------
Name: Name:
Title: Title:
cc: CANADIAN IMPERIAL BANK OF COMMERCE
