EXHIBIT 10.5
SUPERHOLDCO PLEDGE AND SECURITY AGREEMENT
This SUPERHOLDCO PLEDGE AND SECURITY AGREEMENT, dated as of December 22,
2004 (as amended, supplemented, amended and restated or otherwise modified from
time to time, this "Pledge and Security Agreement"), is made by AMH HOLDINGS,
INC., a Delaware corporation (the "Pledgor"), in favor of UBS AG, STAMFORD
BRANCH, as the administrative agent (together with its successor(s) thereto, in
such capacity the "Administrative Agent") for each of the Secured Parties.
W I T N E S S E T H :
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WHEREAS, pursuant to the Second Amended and Restated Credit Agreement,
dated as of December 22, 2004 and, as further amended, supplemented, amended and
restated or otherwise modified from time to time the "Credit Agreement", among
Associated Materials Incorporated as U.S. Borrower, Gentek Building Products
Limited, as Canadian Borrower, Associated Material Holdings Inc., the Pledgor,
the various financial institutions and other Persons as are or may become
parties thereto, as the Lenders, UBS AG, Stamford Branch, as the U.S.
Administrative Agent, Canadian Imperial Bank of Commerce, as the Canadian
Administrative Agent, Citigroup Global Markets Inc., as the Syndication Agent,
General Electric Capital Corporation and National City Bank, as the
Co-Documentation Agents, and Citigroup Global Markets Inc. and UBS Securities
LLC, as the Joint Lead Arrangers, the Lenders and the Issuers have extended
Commitments to make Credit Extensions to the Borrowers; and
WHEREAS, as a condition precedent to the effectiveness of the Amendment
Agreement, the Pledgor is required to execute and deliver this Pledge and
Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge and Security Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Bank" is defined in the Deposit Account Control Agreement.
"Collateral" is defined in Section 2.1.
"Control" means, in the case of the Deposit Account, "control" as such
term is defined in Section 9-104 of the UCC.
"Credit Agreement" is defined in the first recital.
"Deposit Account Control Agreement" means an agreement substantially
in the form annexed hereto as Exhibit II or such other agreement as is
reasonably acceptable to the U.S. Administrative Agent or such other form
acceptable to the Administrative Agent.
"Deposit Account" shall mean with respect to the Pledgor, (i) a
"deposit account" as such term is defined in the UCC and (ii) all cash,
funds, checks, notes and instruments from time to time on deposit in the
account described in clause (i) of this definition.
"Distributions" means all non cash dividends paid on Capital Stock,
liquidating dividends paid on Capital Stock, shares of Capital Stock
resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar
to the foregoing) on or with respect to any Capital Stock constituting
Collateral, but excluding Dividends.
"Dividends" means cash dividends and cash distributions with respect
to any Capital Stock constituting Collateral that are not a liquidating
dividend.
"Event of Default" is defined in the Credit Agreement.
"Pledgor" is defined in the preamble.
"Pledge and Security Agreement" is defined in the preamble.
"Securities Act" is defined in clause (a) of Section 6.2.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Pledge and Security
Agreement, including its preamble and recitals, have the meanings provided in
the Credit Agreement.
SECTION 1.3. UCC Definitions. Unless otherwise defined herein or in the
Credit Agreement or the context otherwise requires, terms for which meanings are
provided in the UCC are used in this Pledge and Security Agreement (whether or
not capitalized herein), including its preamble and recitals, with such
meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security Interest. The Pledgor hereby assigns,
pledges, hypothecates, charges, mortgages, delivers and transfers to the
Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the Pledgor's right, title and interest in the following
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property, whether tangible or intangible, whether now or hereafter existing,
owned or acquired by the Pledgor, and wherever located (collectively, the
"Collateral"):
(a) all investment property in which the Pledgor has an interest
(including the Capital Stock of each issuer of such Capital Stock described
in Schedule I hereto),
(b) all other Capital Stock which are interests in limited liability
companies or partnerships in which the Pledgor has an interest (including
the Capital Stock of each issuer of such Capital Stock described in
Schedule I hereto); and
(c) all Deposit Accounts established for purposes of Section 4.5;
in each case together with Dividends and Distributions payable in respect of the
Collateral described in the foregoing clauses (a) and (b).
SECTION 2.2. Security for Obligations. This Pledge and Security Agreement
and the Collateral in which the Administrative Agent for the benefit of the
Secured Parties is granted a security interest hereunder by the Pledgor secure
the payment of all Obligations now or hereafter existing.
SECTION 2.3. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding
(a) the Pledgor will remain liable under the contracts and agreements,
included in or relating to the Collateral to the extent set forth therein,
and will perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Pledge and Security Agreement had
not been executed;
(b) the exercise by the Administrative Agent of any of its rights
hereunder will not release the Pledgor from any of its duties or
obligations under any such contracts or agreements relating to the
Collateral; and
(c) no Secured Party will have any obligation or liability under any
contracts or agreements, included in or relating to the Collateral by
reason of this Pledge and Security Agreement, nor will any Secured Party be
obligated to perform any of the obligations or duties of the Pledgor
thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 2.4. Dividends. In the event that any Dividend with respect to any
Capital Stock pledged hereunder is permitted to be paid (in accordance with the
Credit Agreement), such Dividend or payment may be paid directly to the Pledgor.
If any Dividend or payment is paid in contravention of the Credit Agreement, the
Pledgor shall hold the same segregated and in trust for the Administrative Agent
until paid to the Administrative Agent in accordance with Section 4.5 hereto.
SECTION 2.5. Security Interest Absolute, etc. This Pledge and Security
Agreement shall in all respects be a continuing, absolute, unconditional and
irrevocable grant of security interest, and shall remain in full force and
effect until the Termination Date. All rights of the
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Secured Parties and the security interests granted to the Administrative Agent
(for its benefit and the ratable benefit of each other Secured Party) hereunder,
and all obligations of the Pledgor hereunder, shall, in each case, be absolute,
unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of any Loan
Document;
(b) the failure of any Secured Party to assert any claim or demand or
to enforce any right or remedy against any Obligor or any other Person
(including any other Guarantor) under the provisions of any Loan Document
or otherwise;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Obligations, or any other extension,
compromise or renewal of any Obligation;
(d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations or otherwise;
(e) any amendment to, rescission, waiver or other modification of, or
any consent to or departure from, any of the terms of any Loan Document;
(f) any addition, exchange or release of any collateral or of any
Person that is (or will become) a guarantor (including the Pledgor) of the
Obligations, or any surrender or non perfection of any collateral, or any
amendment to or waiver or release or addition to, or consent to or
departure from, any other guaranty held by any Secured Party securing any
of the Obligations; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Obligor, any surety
or any guarantor.
SECTION 2.6. Postponement of Subrogation. The Pledgor agrees that prior to
the Termination Date it will not exercise any rights which it may acquire by way
of rights of subrogation under any Loan Document to which it is a party. The
Pledgor shall not seek or be entitled to seek any contribution or reimbursement
from any Obligor, in respect of any payment made under any Loan Document or
otherwise, until following the Termination Date. Any amount paid to the Pledgor
on account of any such subrogation rights prior to the Termination Date shall be
held in trust for the benefit of the Secured Parties and shall immediately be
paid and turned over to the Administrative Agent for the benefit of the Secured
Parties in the exact form received by the Pledgor (duly endorsed in favor of the
Administrative Agent, if required), to be credited and applied against the
Obligations, whether matured or unmatured, in accordance with Section 6.1;
provided that if the Pledgor has made payment to the Secured Parties of all or
any part of the Obligations and the Termination Date has occurred, then at the
Pledgor's request, the Administrative Agent (on behalf of the Secured Parties)
will, at the expense of the Pledgor, execute and deliver to the Pledgor
appropriate documents (without recourse and without representation or warranty)
necessary to evidence the transfer by subrogation to the Pledgor of an
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interest in the Obligations resulting from such payment. In furtherance of the
foregoing, at all times prior to the Termination Date, the Pledgor shall refrain
from taking any action or commencing any proceeding against any Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in respect of payments made under this Pledge
and Security Agreement to any Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to make Credit Extensions under the
Credit Agreement, and to induce the Secured Parties to enter into Rate
Protection Agreements, the Pledgor represents and warrants to each Secured Party
as set forth below.
SECTION 3.1. As to Capital Stock of Subsidiaries. With respect to any
Subsidiary of the Pledgor that is
(a) a corporation, business trust, joint stock company or similar
Person, all Capital Stock issued by such Subsidiary is duly authorized and
validly issued, fully paid and non assessable; and
(b) a partnership or limited liability company, no Capital Stock
issued by such Subsidiary (i) is dealt in or traded on securities exchanges
or in securities markets, (ii) is expressly provided in such Subsidiary's
Organic Documents to be a security governed by Article 8 of the UCC or
(iii) is held in a securities account.
The percentage of the issued and outstanding Capital Stock of each Subsidiary
pledged by the Pledgor hereunder is as set forth on Schedule I hereto. On the
Closing Date, the Pledgor has no direct Subsidiary other than Holdings.
SECTION 3.2. Ownership, No Liens, etc. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) the Collateral free and clear of any Lien,
except for Liens created by this Pledge and Security Agreement or otherwise
permitted by the Credit Agreement.
SECTION 3.3. Valid Security Interest. The execution and delivery of this
Pledge and Security Agreement, together with the delivery of such Collateral to
the Administrative Agent, is effective to create a valid, perfected,
first-priority security interest in such Collateral and all proceeds thereof,
securing the Obligations. Possession by the Administrative Agent of the
Collateral is sufficient to perfect or protect such security interest in the
Collateral.
SECTION 3.4. Authorization, Approval, etc. Except as have been obtained or
made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority is
required either
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(a) for the grant by the Pledgor of the security interest granted
hereby, the pledge by the Pledgor of any Collateral pursuant hereto or for
the execution, delivery and performance of this Pledge and Security
Agreement by the Pledgor;
(b) for the perfection of or the exercise by the Administrative Agent
of its rights and remedies hereunder; or
(c) for the exercise by the Administrative Agent of the voting or
other rights provided for in this Pledge and Security Agreement, except (i)
as may be required in connection with a disposition of such securities by
laws affecting the offering and sale of securities generally, the remedies
in respect of the Collateral pursuant to this Pledge and Security Agreement
and (ii) any "change of control" or similar filings required by state
licensing agencies.
SECTION 3.5. Deposit Accounts. On the date hereof the Pledgor has neither
opened nor maintains any Deposit Accounts. The Pledgor shall not hereafter
establish and maintain any Deposit Account for purposes of Section 4.5 unless
(1) such Bank shall be acceptable to the Administrative Agent in its sole
judgment and (2) such Bank and the Pledgor shall have duly executed and
delivered to the Administrative Agent a Deposit Account Control Agreement with
respect to such Deposit Account. Each Pledgor agrees that at the time it
establishes any such Deposit Accounts it shall enter into a duly authorized,
executed and delivered Deposit Account Control Agreement with respect to such
Deposit Account. The Pledgor shall not grant Control of any such Deposit Account
to any person other than the Administrative Agent.
ARTICLE IV
COVENANTS
The Pledgor covenants and agrees that, until the Termination Date, the
Pledgor will perform, comply with and be bound by the obligations set forth
below.
SECTION 4.1. Capital Stock of Subsidiaries. The Pledgor will not allow any
of its Subsidiaries that is:
(a) a corporation, business trust, joint stock company or similar
Person, to issue uncertificated securities; and
(b) a partnership or limited liability company, to (i) issue Capital
Stock that is to be dealt in or traded on securities exchanges or in
securities markets, (ii) expressly provide in its Organic Documents that
its Capital Stock is a security governed by Article 8 of the UCC, or (iii)
place such Subsidiary's Capital Stock in a securities account;
unless, in each case, all actions are taken to grant to the Administrative Agent
a perfected first priority security interest in such Collateral.
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SECTION 4.2. Stock Powers, etc. The Pledgor agrees that all certificated
securities delivered by the Pledgor pursuant to this Pledge and Security
Agreement will be accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer acceptable to the Administrative Agent.
SECTION 4.3. Continuous Pledge, etc.
(a) Subject to the Credit Agreement, the Pledgor will, at all times, keep
pledged to the Administrative Agent pursuant hereto, on a first-priority,
perfected basis all investment property constituting Collateral and, to the
extent required under the Credit Agreement, all Dividends and Distributions with
respect thereto and all other Collateral and other securities, instruments,
proceeds, and rights from time to time received by or distributable to the
Pledgor in respect of any Collateral, and will not permit Holdings to issue any
Capital Stock which shall not have been immediately duly pledged hereunder on a
first priority perfected basis.
(b) The Pledgor will not sell, assign, transfer, pledge, or encumber in any
other manner the Collateral (except in favor of the Administrative Agent
hereunder) to the extent prohibited under the Credit Agreement. The Pledgor will
warrant and defend the right and title herein granted unto the Administrative
Agent in and to the Collateral (and all right, title, and interest represented
by the Collateral) against the claims and demands of all Persons whomsoever.
SECTION 4.4. Voting Rights; Dividends, etc. The Pledgor agrees:
(a) promptly upon receipt of notice of the occurrence and continuance
of an Event of Default from the Administrative Agent and upon request
therefor by the Administrative Agent (although no such request shall be
required if an Event of Default under Section 8.1.9 of the Credit Agreement
has occurred and is continuing), so long as such Event of Default shall
continue, to deliver (properly endorsed where required hereby or requested
by the Administrative Agent) to the Administrative Agent all Dividends and
Distributions with respect to investment property, all interest, principal
and all proceeds of the Collateral, in each case thereafter received by the
Pledgor, all of which shall be held by the Administrative Agent as
additional Collateral; and
(b) after any Event of Default shall have occurred and be continuing
and the Administrative Agent has notified the Pledgor of the Administrative
Agent's intention to exercise its voting power under this clause,
(i) that the Administrative Agent may exercise (to the exclusion
of the Pledgor) the voting power and all other incidental rights of
ownership with respect to any investment property constituting
Collateral and the Pledgor hereby grants the Administrative Agent an
irrevocable proxy, exercisable under such circumstances, to vote such
investment property; and
(ii) to promptly deliver to the Administrative Agent such
additional proxies and other documents as may be necessary to allow
the Administrative Agent to exercise such voting power.
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All Dividends, Distributions and proceeds which may at any time and from time to
time be held by the Pledgor but which the Pledgor is then obligated to deliver
to the Administrative Agent pursuant to the terms of this Pledge and Security
Agreement, shall, until delivery to the Administrative Agent, be held by the
Pledgor separate and apart from its other property in trust for the
Administrative Agent. The Administrative Agent agrees that unless an Event of
Default shall have occurred and be continuing and the Administrative Agent shall
have given the notice referred to in clause (b), the Pledgor will have the
exclusive voting power with respect to any investment property constituting
Collateral and the Administrative Agent will, upon the written request of the
Pledgor, promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by the Pledgor which are necessary to allow the Pledgor to
exercise that voting power; provided that no vote shall be cast, or consent,
waiver, or ratification given, or action taken by the Pledgor that would impair
any such Collateral or be inconsistent with or violate any provision of any Loan
Document.
SECTION 4.5. Deposit Account. All amounts received by the Pledgor pursuant
to each of Sections 7.2.6(g) and (h) of the Credit Agreement shall either (x)
immediately be paid to Parentholdco and used (or deposited in trust to be used)
as contemplated in Section 7.2.6(g) or (h), as applicable, or (y) be deposited
(on the date received) in the Deposit Account and once so deposited shall only
be withdrawn as follows:
(i) with respect to amounts paid to the Pledgor pursuant to Section
7.2.6(g)(x) of the Credit Agreement, such amounts may be used to (x) so
long as no Event of Default has occurred and is continuing, pay regularly
scheduled cash interest when due on the Parentholdco Notes pursuant to the
terms of the then outstanding Parentholdco Notes Indenture as in effect on
the Amendment Effective Date in an amount equal to 10% per annum or be
contributed to Parentholdco and used for such purpose, (y) make capital
contributions to Holdings (and Pledgor shall cause Holdings to contribute
such amount to U.S. Borrower) or (z) repay the Loans; provided that to the
extent that amounts deposited into the Pledged Account exceed an amount
equal to the next succeeding cash interest payment on the then outstanding
Parentholdco Notes (calculated at the rate per annum for cash interest
required to be paid on the Parentholdco Notes pursuant to the terms of the
Parentholdco Notes Indenture as in effect on the Amendment Effective Date
and assuming such succeeding interest payment shall occur within 180 days
of the deposit of such amounts) (the "Interest Payment Amount") for ten
(10) Business Days, such excess amounts shall immediately be applied by the
Pledgor to make capital contributions to Holdings (and Pledgor shall cause
Holdings to contribute such amount to U.S. Borrower) or to repay Loans;
(ii) with respect to amounts paid to the Pledgor pursuant to Section
7.2.6(g)(y) of the Credit Agreement, such amounts may only be used to (x)
make payments of the type described in such Section 7.2.6(g)(y), (y) make
capital contributions to Parentholdco and used for such purpose or (z)
repay Loans; provided that to the extent any such amounts, together with
all other amounts in such account in excess of the Interest Payment Amount,
are not used within ten (10) Business Days of the deposit thereof, such
excess amounts immediately shall be applied by the Pledgor to make capital
contributions to Holdings (and Pledgor shall cause Holdings to contribute
such amount to U.S. Borrower) or to repay Loans; and
(iii) with respect to amounts paid to the Pledgor pursuant to Section
7.2.6(h) of the Credit Agreement, such amounts may only be used to (x) pay
the portion of the Transactions Dividend not previously paid (but not to
exceed $34.3 million), (y) make capital contributions to Parentholdco and
used for such purpose or (z) to repay Loans; provided that to the extent
any such amounts, together with all other amounts in such account in excess
of the Interest Payment Amount, are not used within ten (10) Business
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Days of the deposit thereof, such excess amounts immediately shall be
applied by the Pledgor to make capital contributions to Holdings (and
Pledgor shall cause Holdings to contribute such amount to U.S. Borrower)
or to repay Loans;
provided, further, that with respect to clauses (i)(x) and (ii)(x) above, such
payments may only be made at the times described in the proviso to Section 7.2.6
of the Credit Agreement, and with respect to clauses (i)(x), (ii)(x) and (iii)
above, the amount of such payments shall not exceed the amounts permitted to be
used pursuant to Section 4.6 of the Superholdco Guaranty.
SECTION 4.6. Further Assurances, etc. The Pledgor agrees that, from time to
time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
that the Administrative Agent may reasonably request, in order to perfect,
preserve and protect any security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Pledgor will:
(a) from time to time upon the request of the Administrative Agent,
promptly deliver to the Administrative Agent such stock powers, instruments
and similar documents, reasonably satisfactory in form and substance to the
Administrative Agent, with respect to such Collateral as the Administrative
Agent may reasonably request and will, from time to time upon the request
of the Administrative Agent after the occurrence and during the continuance
of any Event of Default promptly transfer any securities constituting
Collateral into the name of any nominee designated by the Administrative
Agent;
(b) deliver to the Administrative Agent and at all times keep pledged
to the Administrative Agent pursuant hereto, on a first priority, perfected
basis, at the reasonable request of the Administrative Agent, all
investment property constituting Collateral, all Dividends and
Distributions with respect thereto, and all proceeds and rights from time
to time received by or distributable to the Pledgor in respect of any of
the foregoing Collateral;
(c) furnish to the Administrative Agent, from time to time at the
Administrative Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request; and
(d) not permit any Lien (other Liens created pursuant to this Pledge
and Security Agreement) to be incurred on any Deposit Account and shall
cause any such Lien to promptly be removed.
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ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney in Fact. The Pledgor
hereby irrevocably appoints the Administrative Agent its attorney-in-fact, with
full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time in the Administrative Agent's
discretion, following the occurrence and during the continuance of an Event of
Default, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Pledge and Security Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above;
(c) to file any claims or take any action or institute any proceedings
which the Administrative Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Administrative Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of the Pledgor hereunder.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Administrative Agent May Perform. If the Pledgor fails to
perform any agreement contained herein within five Business Days after written
notice from the Administrative Agent, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by the
Pledgor pursuant to Section 11.3 of the Credit Agreement.
SECTION 5.3. Administrative Agent Has No Duty. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest (on behalf of
the Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or responsibility
for:
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any investment
property, whether or not the Administrative Agent has or is deemed to have
knowledge of such matters, or
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(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent shall exercise
reasonable care in the custody and preservation of all of the Collateral in its
possession.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party
on default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may:
(i) require the Pledgor to, and the Pledgor hereby agrees that it
will, at its expense and upon request of the Administrative Agent
forthwith, assemble all or part of the Collateral as directed by the
Administrative Agent and make it available to the Administrative Agent
at a place to be designated by the Administrative Agent which is
reasonably convenient to both parties, and
(ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Administrative Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Administrative Agent may deem commercially
reasonable. The Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days prior notice to the
Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given.
The Administrative 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.
(b) All cash proceeds received by the Administrative Agent in respect
of any sale of, collection from, or other realization upon, all or any part
of the Collateral may, in the discretion of the Administrative Agent, be
held by the Administrative Agent as collateral for, and/or then or at any
time thereafter applied by the Administrative Agent against, all or any
part of the Obligations as follows:
(i) first, to the payment of all Obligations owing to the
Administrative Agent, in its capacity as the Administrative Agent,
including fees and expenses of counsel to the Administrative Agent;
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(ii) second, to the equal and ratable payment of Obligations, in
accordance with each Secured Party's Obligations owing to it under or
pursuant to the Credit Agreement or any other Loan Document, applied;
(A) first to fees and expense reimbursements then due to
such Secured Party,
(B) second to interest due to such Secured Party,
(C) third to pay or prepay principal of the Loans owing to
such Secured Party or to reduce the credit exposure of such
Secured Party under such Rate Protection Agreement, as the case
may be, and
(D) fourth to pay the remaining outstanding Obligations and
Cash Collateralize all Letter of Credit Outstandings;
(iii) third, without duplication of any amounts paid pursuant to
clause (b)(ii) above, to the Indemnified Parties to the extent of any
amounts owing pursuant to Section 11.4 of the Credit Agreement; and
(iv) fourth, paid over to the Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
For purposes of this Pledge and Security Agreement, the "credit exposure"
at any time of any Secured Party with respect to a Rate Protection
Agreement to which such Secured Party is a party shall be determined at
such time in accordance with the customary methods of calculating credit
exposure under similar arrangements by the counterparty to such
arrangements, taking into account potential interest rate movements and the
respective termination provisions and notional principal amount and term of
such Rate Protection Agreement.
(c) The Administrative Agent may:
(i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without disclosing
that such Collateral is subject to the Lien hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amount due or to
become due thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party
with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Collateral,
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(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION 6.2. Securities Laws. If the Administrative Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
6.1, the Pledgor agrees that, upon request of the Administrative Agent, the
Pledgor will, at its own expense:
(a) execute and deliver, and cause (or, with respect to any issuer
which is not a Subsidiary of the Pledgor, use its best efforts to cause)
each issuer of the Collateral contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as
may be necessary or, in the opinion of the Administrative Agent, advisable
to register such Collateral under the provisions of the Securities Act of
1933, as from time to time amended (the "Securities Act"), and cause the
registration statement relating thereto to become effective
and to remain effective for such period as prospectuses are required by law
to be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the reasonable opinion of the
Administrative Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of the
SEC applicable thereto;
(b) use its best efforts to exempt the Collateral under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the
Administrative Agent;
(c) cause (or, with respect to any issuer which is not a Subsidiary of
the Pledgor, use its best efforts to cause) each such issuer to make
available to its security holders, as soon as practicable, an earnings
statement that will satisfy the provisions of Section 11(a) of the
Securities Act; and
(d) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.
SECTION 6.3. Compliance with Restrictions. The Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Administrative Agent is hereby authorized to comply with
any limitation or restriction in connection with such sale as it may be advised
by counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and the
Pledgor further agrees that such compliance shall not result in such sale being
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considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to the Pledgor for
any discount allowed by reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
SECTION 6.4. Protection of Collateral. The Administrative Agent may from
time to time, at its option, perform any act which the Pledgor fails to perform
after being requested in writing so to perform (it being understood that no such
request need be given after the occurrence and during the continuance of a
Default of the type described in Section 8.1.9 of the Credit Agreement) and the
Administrative Agent may from time to time take any other action which the
Administrative Agent reasonably deems necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge and Security Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof, including Article XI thereof.
SECTION 7.2. Binding on Successors, Transferees and Assigns; Assignment.
This Pledge and Security Agreement shall remain in full force and effect until
the Termination Date has occurred, shall be binding upon the Pledgor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided that the Pledgor may not (unless otherwise permitted under the terms of
the Credit Agreement) assign any of its obligations hereunder without the prior
written consent of all Lenders.
SECTION 7.3. Amendments, etc. No amendment to or waiver of any provision of
this Pledge and Security Agreement, nor consent to any departure by the Pledgor
from its obligations under this Pledge and Security Agreement, shall in any
event be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be, pursuant to Section 11.1 of the Credit Agreement) and the Pledgor
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 7.4. Notices. All notices and other communications provided for
hereunder shall be in writing or by facsimile and addressed, delivered or
transmitted to the appropriate party at the address or facsimile number of such
party specified in the Credit Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other party. Any
notice or other communication, if mailed and properly addressed with postage
prepaid or if properly addressed and sent by pre-paid courier service, shall be
deemed given when received; any such notice or other communication, if
transmitted by facsimile, shall be deemed given when transmitted and
electronically confirmed.
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SECTION 7.5. Release of Liens. Upon (a) the Disposition of Collateral in
accordance with the Credit Agreement or (b) the occurrence of the Termination
Date, the security interests granted herein shall automatically terminate with
respect to (i) such Collateral (in the case of clause (a)) or (ii) all
Collateral (in the case of clause (b)). Upon any such Disposition or
termination, the Administrative Agent will, at the Pledgor's sole expense,
deliver to the Pledgor, without any representations, warranties or recourse of
any kind whatsoever, all Collateral held by the Administrative Agent hereunder,
and execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence such termination.
SECTION 7.6. No Waiver; Remedies. In addition to, and not in limitation of
Section 2.5, no failure on the part of any Secured Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 7.7. Headings. The various headings of this Pledge and Security
Agreement are inserted for convenience only and shall not affect the meaning or
interpretation of this Pledge and Security Agreement or any provisions thereof.
SECTION 7.8. Severability. Any provision of this Pledge and Security
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Pledge and Security Agreement or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 7.9. Governing Law, Entire Agreement, etc. THIS PLEDGE AND SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK),
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. This
Pledge and Security Agreement and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and thereof and supersede any prior agreements, written or oral, with respect
thereto.
SECTION 7.10. Counterparts. This Pledge and Security Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
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EXHIBIT 10.5
IN WITNESS WHEREOF, each of the parties hereto has caused this Pledge and
Security Agreement to be duly executed and delivered by its Authorized Officer
as of the date first above written.
AMH HOLDINGS, INC.
By:
-------------------------------------
Name:
Title:
S-1
UBS AG, STAMFORD BRANCH,
as Administrative Agent
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
S-2
