EXHIBIT 10.4
FORM OF SUBSIDIARY SECURITY AND PLEDGE AGREEMENT
This SUBSIDIARY SECURITY AND PLEDGE AGREEMENT, dated as of _____ __,
____ (as amended, supplemented, amended and restated or otherwise modified from
time to time, this "Security Agreement"), is made by each Subsidiary of
Associated Materials Incorporated from time to time party hereto (each
individually a "Grantor" and collectively the "Grantors") in favor of UBS AG,
STAMFORD BRANCH, as 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 :
WHEREAS, pursuant to a Credit Agreement, dated as of April 19, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among Associated Materials Incorporated, as the
Borrower, Associated Materials Holdings Inc., the various financial institutions
and other Persons as are or may become parties thereto, as the Lenders, the
Administrative Agent, Credit Suisse First Boston, Cayman Islands Branch, as
Syndication Agent, CIBC World Markets Corp., as Documentation Agent, and UBS
Warburg LLC and Credit Suisse First Boston Corporation, as Joint Lead Arrangers,
the Lenders and the Issuers have extended Commitments to make Credit Extensions
to the Borrower; and
WHEREAS, as a condition precedent to the making of the Credit
Extensions under the Credit Agreement, each Grantor is required to execute and
deliver this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor 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 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.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in clause (b) of Section 4.3.
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical
supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware;
(b) all software programs (including both source code, object
code and all related applications and data files), whether now owned,
licensed or leased or hereafter acquired by a Grantor, designed for use
on the computers and electronic data processing hardware described in
clause (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a) through
(c); and
(e) all rights with respect to all of the foregoing, including
any and all copyrights, licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of
the foregoing.
"Control Agreement" means an agreement in form and substance
satisfactory to the Administrative Agent which provides for the Administrative
Agent to have "control" (as defined in Section 8-106 of the UCC, as such term
relates to investment property (other than certificated securities or commodity
contracts), or as used in Section 9-106 of the UCC, as such term relates to
commodity contracts).
"Copyright Collateral" means all copyrights of the Grantors, whether
statutory or common law, registered or unregistered and whether published or
unpublished, now or hereafter in force throughout the world including all of the
Grantors' rights, titles and interests in and to all copyrights registered in
the United States Copyright Office or anywhere else in the world and also
including the United States copyrights referred to in Schedule V hereto, and
registrations and recordings thereof and all applications for registration
thereof, whether pending or in preparation, all copyright licenses, the right to
xxx for past, present and future infringements of any of the foregoing, all
rights corresponding thereto, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"Credit Agreement" is defined in the first recital.
"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,
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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.
"Grantor" and "Grantors" are defined in the preamble.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing and each United States patent and patent application
referred to in Schedule III hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, and other agreements providing a
Grantor with the right to use any items of the type referred to in
clauses (a) and (b) above; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, and for breach or enforcement of any
patent license.
"Receivables" is defined in clause (c) of Section 2.1.
"Related Contracts" is defined in clause (c) of Section 2.1.
"Securities Act" is defined in clause (a) of Section 6.2.
"Security Agreement" is defined in the preamble.
"Trademark Collateral" means:
(a) (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos and other source or
business identifiers, whether statutory or common law or registered or
unregistered, and all goodwill of the business associated therewith,
now existing or hereafter adopted or acquired including those
registered in the United States Patent and
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Trademark Office and referred to in Schedule IV hereto, whether
currently in use or not, all registrations and recordings thereof and
all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America or any State thereof
or any other country or political subdivision thereof or otherwise, and
(ii) the right to obtain all reissues, extensions or renewals of the
foregoing (collectively referred to as the "Trademark");
(b) all Trademark licenses for the grant by or to a Grantor of
any right to use any Trademark; and
(c) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clause (a), and to the
extent applicable clause (b);
(d) the right to xxx third parties for past, present and
future infringements of any Trademark Collateral described in clause
(a) and, to the extent applicable, clause (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by a Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, or for any injury to the
goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license and all rights corresponding
thereto throughout the world.
"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential, proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of a Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses, and
including the right to xxx for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this 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 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. Each Grantor 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 such Grantor'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 such Grantor, and wherever located (collectively, the
"Collateral"):
(a) (i) all investment property in which such Grantor has an
interest (including the Capital Stock of each issuer of such Capital
Stock described in Schedule I hereto) and (ii) all other Capital Stock
which are interests in limited liability companies or partnerships in
which such Grantor has an interest (including the Capital Stock of each
issuer of such Capital Stock described in Schedule I hereto), in each
case together with Dividends and Distributions payable in respect of
the Collateral described in the foregoing clauses (a)(i) and (a)(ii);
(b) all goods, including all equipment and inventory in all of
its forms;
(c) all accounts, contracts, contract rights, chattel paper,
documents, instruments, promissory notes and general intangibles
(including tax refunds and all payment intangibles), whether or not
arising out of or in connection with the sale or lease of goods or the
rendering of services, and all rights now or hereafter existing in and
to all security agreements, guaranties, leases and other contracts
securing or otherwise relating to any such accounts, contracts,
contract rights, chattel paper, documents, instruments, promissory
notes, general intangibles and payment intangibles (all of the
foregoing collectively referred to as the "Receivables", and any and
all such security agreements, guaranties, leases and other contracts
collectively referred to as the "Related Contracts");
(d) all Intellectual Property Collateral;
(e) all deposit accounts;
(f) all letter of credit rights;
(g) all commercial tort claims in which such Grantor has
rights (including as a plaintiff);
(h) the Collateral Account, all cash, checks, drafts, notes,
bills of exchange, money orders, other like instruments and all
investment property held in the Collateral Account (or in any
sub-account thereof) and all interest and earnings in respect thereof;
(i) all books, records, writings, data-bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section;
(j) all other property and rights of every kind and
description and interests therein; and
(k) all products, offspring, rents, issues, profits, returns,
income, supporting obligations and proceeds of and from any and all of
the foregoing Collateral (including proceeds which constitute property
of the types described in clauses (a) through (j), and, to the extent
not otherwise included, all payments under insurance (whether or not
the Administrative Agent is the loss payee thereof), or any indemnity,
warranty or guaranty,
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payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include (i) such Grantor's
real property leaseholds, (ii) any general intangibles or other rights arising
under any contracts, instruments, licenses or other documents as to which the
grant of a security interest would (A) constitute a violation of a valid and
enforceable restriction in favor of a third party on such grant, unless and
until any required consents shall have been obtained or (B) give any other party
to such contract, instrument, license or other document the right to terminate
its obligations thereunder, or (iii) investment property consisting of Capital
Stock of an issuer that is a Foreign Subsidiary (other than a Foreign Subsidiary
that (x) is treated as a partnership under the Code, other than a partnership
that owns, directly or indirectly in excess of 65% of the total combined voting
power of all Capital Stock of an entity organized under the laws of any
jurisdiction outside the United States that is treated as a "controlled foreign
corporation" within the meaning of section 957(a) of the Code or (y) for U.S.
federal income tax purposes, is not treated as an entity that is separate from
(A) such Grantor; (B) any Person that is treated as a partnership under the Code
, other than a partnership that owns, directly or indirectly in excess of 65% of
the total combined voting power of all Capital Stock of an entity organized
under the laws of any jurisdiction outside the United States that is treated as
a "controlled foreign corporation" within the meaning of section 957(a) of the
Code or (C) any "United States person" (as defined in Section 7701(a)(30) of the
Code)) of such Grantor, in excess of 65% of the total combined voting power of
all Capital Stock of each such Foreign Subsidiary.
SECTION 2.2. Security for Obligations. This 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 Grantors secure the
payment of all Obligations now or hereafter existing.
SECTION 2.3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding
(a) the Grantors will remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and will perform all of their duties and obligations under such
contracts and agreements to the same extent as if this Security
Agreement had not been executed;
(b) the exercise by the Administrative Agent of any of its
rights hereunder will not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral; and
(c) no Secured Party will have any obligation or liability
under any contracts or agreements included in the Collateral by reason
of this Security Agreement, nor will any Secured Party be obligated to
perform any of the obligations or duties of any Grantor thereunder or
to take any action to collect or enforce any claim for payment assigned
hereunder.
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SECTION 2.4. Dividends on Pledged Shares. 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 applicable Grantor. If any Dividend or payment is paid in
contravention of the Credit Agreement, such Grantor shall hold the same
segregated and in trust for the Administrative Agent until paid to the
Administrative Agent in accordance with Section 4.1.5 hereto.
SECTION 2.5. Security Interest Absolute, etc. This 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 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 Grantors
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 (i) 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, or (ii) to exercise any right or remedy
against any guarantor (including any Guarantor) of, or collateral
securing, any Obligations;
(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
each Grantor 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 Grantors
hereunder) 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.
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SECTION 2.6. Postponement of Subrogation. Each Grantor agrees that it
will not prior to the Termination Date exercise any rights which it may acquire
by way of rights of subrogation under any Loan Document to which it is a party.
No Grantor shall 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 such Grantor
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 such Grantor (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 such Grantor has made payment to the Secured Parties of all or
any part of the Obligations and the Termination Date has occurred, then at such
Grantor's request, the Administrative Agent (on behalf of the Secured Parties)
will, at the expense of such Grantor, execute and deliver to such Grantor
appropriate documents (without recourse and without representation or warranty)
necessary to evidence the transfer by subrogation to such Grantor of an interest
in the Obligations resulting from such payment. In furtherance of the foregoing,
at all times prior to the Termination Date, such Grantor 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
Security Agreement to any Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into the Credit
Agreement and make Credit Extensions thereunder, and to induce Secured Parties
to enter into Rate Protection Agreements, the Grantors represent and warrant to
each Secured Party as set forth below.
SECTION 3.1. As to Capital Stock of Subsidiaries. With respect to any
Subsidiary of any Grantor 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 any Grantor hereunder is as set forth on Schedule I hereto.
SECTION 3.2. Grantor Name, Location, etc. The jurisdiction in which
each Grantor is located for purposes of Sections 9-301 and 9-307 of the UCC is
set forth in Item A of Schedule II hereto. Set forth in Item B of Schedule II
hereto is each location a secured party would have filed a UCC financing
statement prior to July 1, 2001 (or October 1, 2001 if the location is
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Connecticut and January 1, 2002 if the location is Alabama, Florida or
Mississippi) to perfect a security interest in equipment, inventory and general
intangibles owned by each Grantor. No Grantor has any trade names other than
those set forth in Item C of Schedule II hereto. During the four months
preceding the date hereof, no Grantor has been known by any legal name different
from the one set forth on the signature page hereto, nor has such Grantor been
the subject of any merger or other corporate reorganization, except as set forth
in Item D of Schedule II hereto. The name set forth on the signature page hereto
is the true and correct name of such Grantor. Each Grantor's federal taxpayer
identification number is (and, during the four months preceding the date hereof,
such Grantor has not had a federal taxpayer identification number different from
that) set forth in Item E of Schedule II hereto. If the Collateral of any
Grantor includes any inventory located in the State of California, such Grantor
is not a "retail merchant" within the meaning of Section 9102 of the California
UCC. On the Closing Date, no Grantor is a party to any material federal, state
or local government contract except as set forth in Item F of Schedule II
hereto.
SECTION 3.3. Ownership, No Liens, etc. Such Grantor owns its Collateral
free and clear of any Lien, except for Liens (a) created by this Security
Agreement, and, (b) in the case of Collateral other than the Capital Stock of
each Subsidiary pledged hereunder, permitted by the Credit Agreement. No
effective financing statement or other filing similar in effect covering any
Collateral is on file in any recording office, except those filed in favor of
the Administrative Agent relating to this Security Agreement or those filed in
connection with Liens permitted by the Credit Agreement or as to which a duly
executed termination statement relating to such financing statement or other
instrument has been delivered to the Administrative Agent on the Closing Date.
SECTION 3.4. Possession of Inventory, etc. Each Grantor agrees that it
will maintain exclusive possession of its goods, instruments, promissory notes
and inventory, other than (a) inventory in transit in the ordinary course of
business, (b) inventory which is in the possession or control of a warehouseman,
bailee agent or other Person in the ordinary course of business (other than a
Person controlled by or under common control with such Grantor) that, upon the
reasonable request of the Administrative Agent has been notified of the security
interest created in favor of the Secured Parties pursuant to this Security
Agreement, and has agreed to hold such inventory subject to the Secured Parties'
Lien and waive any Lien held by it against such inventory and (c) instruments or
promissory notes that have been delivered to the Administrative Agent pursuant
to Section 3.5.
SECTION 3.5. Negotiable Documents, Instruments and Chattel Paper. Such
Grantor has delivered to the Administrative Agent possession of all originals of
all negotiable documents, instruments, promissory notes and chattel paper that
have a principal amount, or value, in excess of $50,000 and are owned or held by
such Grantor on the Closing Date; provided that no more than $500,000 in
principal amount, or value, of the foregoing shall be excluded from the delivery
request.
SECTION 3.6. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
could reasonably be expected to have a Material Adverse Effect:
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(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and
enforceable;
(c) such Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property
Collateral that are registered, issued, or for which applications are
pending, including recordations of all of its interests in the Patent
Collateral and Trademark Collateral in the United States Patent and
Trademark Office and (subject to the terms of the Credit Agreement) in
corresponding offices throughout the world, where necessary, and its
claims to the Copyright Collateral in the United States Copyright
Office and (subject to the terms of the Credit Agreement) in
corresponding offices throughout the world, where necessary;
(d) such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to the owned Intellectual
Property Collateral and no claim has been made that the use of such
owned Intellectual Property Collateral does or may violate the asserted
rights of any third party; and
(e) such Grantor has performed and will continue to perform in
all material respects all acts and has paid and will continue to pay
all required fees and taxes to prosecute and maintain each and every
such item of Intellectual Property Collateral in full force and effect
throughout the world, as applicable.
Each Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for the conduct of such Grantor's business, except where the
failure to so own or be entitled to use could not reasonably be expected to have
a Material Adverse Effect.
SECTION 3.7. Validity, etc. This Security Agreement creates a valid
security interest in the Collateral securing the payment of the Obligations.
Each Grantor has filed or caused to be filed or will promptly file or cause to
be filed all Filing Statements in the appropriate offices therefor (or has
authenticated and delivered to the Administrative Agent Filing Statements
suitable for filing in such offices) and has taken or will promptly take all of
the actions necessary to create perfected and (in the case of Collateral other
than the Capital Stock of each Subsidiary pledged hereunder, subject to the
Credit Agreement) first-priority security interests in the applicable Collateral
to the extent that such security interest can be perfected by a filing under the
UCC, in the United States Copyright Office or in the United States Patent and
Trademark Office, or in the case of Capital Stock (if certificated) and
promissory notes, by delivery to the Administrative Agent .
SECTION 3.8. 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 Grantors of the security interest
granted hereby, the pledge by the Grantors of any Collateral pursuant
hereto or for the execution, delivery and performance of this Security
Agreement by the Grantors;
(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 Security Agreement, except (i)
with respect to any securities issued by a Subsidiary of the Grantors,
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 Security
Agreement, (ii) any "change of control" or similar filings required by
state licensing agencies and (iii) for any filings or notice required
to be delivered to a Governmental Authority in connection with
governmental Receivables.
SECTION 3.9. Best Interests. It is in the best interests of such
Grantor to execute this Security Agreement inasmuch as such Grantor will, as a
result of being a Subsidiary of the Borrower, derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuer pursuant to the Credit Agreement and the
execution and delivery of Rate Protection Agreements between the Borrower, other
Obligors and certain Secured Parties, and each Grantor agrees that the Secured
Parties are relying on this representation in agreeing to make Credit Extensions
to the Borrower.
ARTICLE IV
COVENANTS
Each Grantor covenants and agrees that, until the Termination Date,
such Grantor will perform, comply with and be bound by the obligations set forth
below.
SECTION 4.1. As to Investment Property, etc.
SECTION 4.1.1. Capital Stock of Subsidiaries. No Grantor will 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 by such Grantor to grant to the
Administrative Agent a perfected first priority security interest in such
Collateral.
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SECTION 4.1.2. Investment Property (other than Certificated
Securities). With respect to any investment property (other than certificated
securities) owned by any Grantor, such Grantor will use commercially reasonable
efforts to cause a Control Agreement relating to such investment property to be
executed and delivered by such Grantor and the applicable financial intermediary
in favor of the Administrative Agent; provided that if after using commercially
reasonable efforts such Grantor shall fail to cause such Control Agreement to be
executed and delivered by such financial intermediary, such Grantor shall, upon
the request of the Administrative Agent, transfer such investment property to a
financial intermediary mutually satisfactory to the Administrative Agent that
has agreed to execute and deliver such Control Agreement.
SECTION 4.1.3. Stock Powers, etc. Each Grantor agrees that all
certificated securities delivered by such Grantor pursuant to this Security
Agreement will be accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer acceptable to the Administrative Agent.
SECTION 4.1.4. Continuous Pledge. Each Grantor will (subject to the
terms of the Credit Agreement and this Security Agreement) deliver to the
Administrative Agent and at all times keep pledged to the Administrative Agent
pursuant hereto, on a first-priority, perfected basis all investment property
constituting Collateral, all Dividends and Distributions with respect thereto,
all payment intangibles to the extent they are evidenced by a document,
instrument, promissory note or chattel paper, and all interest and principal
with respect to such payment intangibles, and all proceeds and rights from time
to time received by or distributable to such Grantor in respect of any of the
foregoing Collateral. Each Grantor agrees that it will, promptly following
receipt thereof, deliver to the Administrative Agent possession of all originals
of negotiable documents, instruments, promissory notes and chattel paper that
have a principal amount, or value, in excess of $50,000 that it acquires
following the Closing Date; provided that no more than $500,000 in principal
amount, or value, of the foregoing shall be excluded from the delivery request.
SECTION 4.1.5. Voting Rights; Dividends, etc. Each Grantor 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, other cash payments on
payment intangibles, and all proceeds of the Collateral, in each case
thereafter received by such Grantor, 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 such Grantor of
the Administrative Agent's intention to exercise its voting power under
this clause,
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(i) that the Administrative Agent may exercise (to
the exclusion of such Grantor) the voting power and all other
incidental rights of ownership with respect to any investment
property constituting Collateral and such Grantor 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.
All Dividends, Distributions, interest, principal, cash payments, payment
intangibles and proceeds which may at any time and from time to time be held by
such Grantor but which such Grantor is then obligated to deliver to the
Administrative Agent pursuant to the terms of this Security Agreement, shall,
until delivery to the Administrative Agent, be held by such Grantor 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), such Grantor will have the exclusive voting power
with respect to any investment property constituting Collateral and the
Administrative Agent will, upon the written request of such Grantor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by such Grantor which are necessary to allow such Grantor to exercise
that voting power; provided that no vote shall be cast, or consent, waiver, or
ratification given, or action taken by such Grantor that would impair any such
Collateral or be inconsistent with or violate any provision of any Loan
Document.
SECTION 4.2. Change of Name, etc. No Grantor will change its name or
place of incorporation or organization or federal taxpayer identification number
except upon 30 days' prior written notice to the Administrative Agent. If any
Grantor is organized outside of the United States, it will not change its
"location" as determined in accordance with Section 9-301 and 9-307 of the UCC
and as set forth in Item A of Schedule II hereto except upon 30 days' prior
written notice to the Administrative Agent.
SECTION 4.3. As to Receivables.
(a) Each Grantor shall have the right to collect all
Receivables so long as no Event of Default shall have occurred and be
continuing.
(b) Upon (i) the occurrence and continuance of an Event of
Default and (ii) the delivery of written notice by the Administrative
Agent to each Grantor, all proceeds of Receivables constituting
Collateral received by such Grantor shall be delivered in kind to the
Administrative Agent for deposit to a deposit account (the "Collateral
Account") of such Grantor maintained with the Administrative Agent, and
such Grantor shall not commingle any such proceeds, and shall hold
separate and apart from all other property, all such proceeds in
express trust for the benefit of the Administrative Agent until
delivery thereof is made to the Administrative Agent provided that any
amounts remaining in the Collateral Account which were received and
deposited pursuant to this
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clause (b) are to be returned to such Grantor if such Event of Default
is cured or otherwise ceases and there is no longer any Event of
Default that is continuing.
(c) Following the delivery of notice pursuant to clause
(b)(ii) of this Section, and so long as an Event of Default is
continuing the Administrative Agent shall have the right to apply any
amount in the Collateral Account to the payment of any Obligations
which are due and payable.
(d) With respect to the Collateral Account, it is hereby
confirmed and agreed that (i) deposits in each Collateral Account are
subject to a security interest as contemplated hereby, (ii) each such
Collateral Account shall be under the sole dominion and control of the
Administrative Agent and (iii) the Administrative Agent shall have the
sole right of withdrawal over such Collateral Account.
SECTION 4.4. As to Collateral.
(a) Subject to clause (b) of this Section, each Grantor (i)
may in the ordinary course of its business, at its own expense, sell,
lease or furnish under the contracts of service any of the inventory
normally held by such Grantor for such purpose, and use and consume, in
the ordinary course of its business, any raw materials, work in process
or materials normally held by such Grantor for such purpose, (ii) will,
at its own expense, endeavor to collect, as and when due, all amounts
due with respect to any of the Collateral, including the taking of such
action with respect to such collection as the Administrative Agent may
reasonably request following the occurrence and during the continuance
of an Event of Default or, in the absence of such request, as such
Grantor may deem advisable, and (iii) may grant, in the ordinary course
of business, to any party obligated on any of the Collateral, any
rebate, refund or allowance to which such party may be lawfully
entitled, and may accept, in connection therewith, the return of goods,
the sale or lease of which shall have given rise to such Collateral.
(b) At any time following the occurrence and during the
continuance of an Event of Default, whether before or after the
maturity of any of the Obligations, the Administrative Agent may upon
written notice to the Grantor (i) revoke any or all of the rights of
each Grantor set forth in clause (a), (ii) notify any parties obligated
on any of the Collateral to make payment to the Administrative Agent of
any amounts due or to become due thereunder and (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 indebtedness thereunder or evidenced thereby.
(c) Upon request of the Administrative Agent following the
occurrence and during the continuance of an Event of Default, each
Grantor will, at its own expense, notify any parties obligated on any
of the Collateral to make payment to the Administrative Agent of any
amounts due or to become due thereunder.
(d) At any time following the occurrence and during the
continuation of an Event of Default, the Administrative Agent may
endorse, in the name of such Grantor,
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any item, howsoever received by the Administrative Agent, representing
any payment on or other proceeds of any of the Collateral.
SECTION 4.5. As to Intellectual Property Collateral. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral material to the operations or
business of such Grantor:
(a) such Grantor will use commercially reasonable efforts to
not (i) do or fail to perform any act whereby any of the Patent
Collateral may lapse or become abandoned or dedicated to the public or
unenforceable, (ii) permit any of its licensees to (A) fail to continue
to use any of the Trademark Collateral in order to maintain all of the
Trademark Collateral in full force free from any claim of abandonment
for non-use, (B) fail to maintain as in the past the quality of
products and services offered under all of the Trademark Collateral,
(C) fail to employ all of the Trademark Collateral registered with any
federal or state or foreign authority with an appropriate notice of
such registration, (D) adopt or use any other Trademark which is
confusingly similar or a colorable imitation of any of the Trademark
Collateral, (E) use any of the Trademark Collateral registered with any
federal, state or foreign authority except for the uses for which
registration or application for registration of all of the Trademark
Collateral has been made or (F) do or permit any act or knowingly omit
to do any act whereby any of the Trademark Collateral may lapse or
become invalid or unenforceable, or (iii) do or permit any act or
knowingly omit to do any act whereby any of the Copyright Collateral or
any of the Trade Secrets Collateral may lapse or become invalid or
unenforceable or placed in the public domain except upon expiration of
the end of an unrenewable term of a registration thereof, unless, in
the case of any of the foregoing requirements in clauses (i), (ii) and
(iii), such Grantor shall either (x) reasonably and in good faith
determine that any of such Intellectual Property Collateral is of
immaterial economic value to such Grantor, or (y) have a valid business
purpose to do otherwise;
(b) such Grantor shall promptly notify the Administrative
Agent if it knows, or has reason to know, that any application or
registration relating to any material item of the Intellectual Property
Collateral may become abandoned or dedicated to the public or placed in
the public domain or invalid or unenforceable, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any
foreign counterpart thereof or any court) regarding such Grantor's
ownership of any of the Intellectual Property Collateral, its right to
register the same or to keep and maintain and enforce the same;
(c) in no event will such Grantor or any of its agents,
employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United
States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency in any other country or any political
subdivision thereof, unless it informs the Administrative Agent within
60 days after such filing, and upon request of the Administrative Agent
(subject to the terms of the Credit Agreement), executes and delivers
all agreements, instruments and documents as the Administrative
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Agent may reasonably request to evidence the Administrative Agent's
security interest in such Intellectual Property Collateral;
(d) such Grantor will use commercially reasonable efforts,
including in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or (subject to the
terms of the Credit Agreement) any similar office or agency in any
other country or any political subdivision thereof, to maintain and
pursue any application (and to obtain the relevant registration) filed
with respect to, and to maintain any registration of, any material
Intellectual Property Collateral, including the filing of applications
for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and the payment
of fees and taxes (except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing clause (a) or (b)); and
(e) such Grantor will promptly (but no less than quarterly)
execute and deliver to the Administrative Agent (as applicable) a
Patent Security Agreement, Trademark Security Agreement and/or
Copyright Security Agreement, as the case may be, in the forms of
Exhibit A, Exhibit B and Exhibit C hereto following its obtaining an
interest in any such registered, issued or pending Intellectual
Property, and shall execute and deliver to the Administrative Agent any
other document required to acknowledge or register or perfect the
Administrative Agent's interest in any part of such item of
Intellectual Property Collateral unless the Grantor shall determine in
good faith that any Intellectual Property Collateral is of immaterial
economic value to the Grantor.
SECTION 4.6. Further Assurances, etc. Each Grantor 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, such Grantor 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; if any Collateral shall
be evidenced by an instrument, negotiable document, promissory note or
chattel paper, deliver and pledge to the Administrative Agent hereunder
such instrument, negotiable document, promissory note or chattel paper
duly endorsed and accompanied by duly executed instruments of transfer
or assignment, all in form and substance satisfactory to the
Administrative Agent;
(b) file (or cause to be filed) such Filing Statements or
continuation statements, or amendments thereto, and such other
instruments or notices (including any
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assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. Section 3726, any successor or amended
version thereof or any regulation promulgated under or pursuant to any
version thereof), as may be necessary or that the Administrative Agent
may reasonably request in order to perfect and preserve the security
interests and other rights granted or purported to be granted to the
Administrative Agent hereby;
(c) 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 interest
and principal with respect to promissory notes, and all proceeds and
rights from time to time received by or distributable to such Grantor
in respect of any of the foregoing Collateral;
(d) except as otherwise provided by the Credit Agreement or
this Security Agreement not take or omit to take any action the taking
or the omission of which would result in any impairment or alteration
of any obligation of the maker of any payment intangible or other
instrument constituting Collateral;
(e) 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, all in reasonable detail;
(f) after the occurrence and during the continuance of an
Event of Default do all things reasonably requested by the
Administrative Agent in order to enable the Administrative Agent to
have control (as such term is defined in Article 8 and Article 9 of any
applicable Uniform Commercial Code relevant to the creation, perfection
or priority of Collateral consisting of deposit accounts, investment
property, electronic chattel paper and letter of credit rights) over
any Collateral; and
(g) notify the Administrative Agent if such Grantor reasonably
believes it is entitled to recover a commercial tort claim the value of
which is in excess of $2,500,000 and such Grantor take all such action
reasonably requested by the Administrative Agent to grant to the
Administrative Agent and perfect a security interest in such commercial
tort claim.
With respect to the foregoing and the grant of the security interest hereunder,
each Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral. Each Grantor agrees that a carbon, photographic or
other reproduction of this Security Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.
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ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints the Administrative Agent its
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor 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 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 such Grantor
hereunder.
Each Grantor 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 any Grantor 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 such
Grantor 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
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
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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 each Grantor to, and each Grantor 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. Each Grantor agrees
that, to the extent notice of sale shall be required by law,
at least ten days prior notice to such Grantor 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;
(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
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(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 applicable Grantor or
to whomsoever may be lawfully entitled to receive such
surplus.
For purposes of this 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
any Grantor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral,
and
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(vi) execute (in the name, place and stead of any
Grantor) 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, each Grantor agrees that, upon request of the Administrative Agent,
such Grantor will, at its own expense:
(a) execute and deliver, and cause (or, with respect to any
issuer which is not a Subsidiary of such Grantor, 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 such Grantor, 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. Each Grantor 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 such
Grantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to such Grantor for
any discount allowed by the
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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 any Grantor 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 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 Security Agreement shall remain in full force and effect until
the Termination Date has occurred, shall be binding upon the Grantors and their
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 no Grantor may (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 Security Agreement, nor consent to any departure by any
Grantor from its obligations under this 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 Grantors
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.
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
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clause (a)) or (ii) all Collateral (in the case of clause (b)). Upon any such
Disposition or termination, the Administrative Agent will, at the Grantors' sole
expense, deliver to the Grantors, without any representations, warranties or
recourse of any kind whatsoever, all Collateral held by the Administrative Agent
hereunder, and execute and deliver to the Grantors such documents as the
Grantors shall reasonably request to evidence such termination.
SECTION 7.6. Additional Grantors. Upon the execution and delivery by
any other Person of a supplement in the form of Annex I hereto, such Person
shall become a "Grantor" hereunder with the same force and effect as if it were
originally a party to this Security Agreement and named as a "Grantor"
hereunder. The execution and delivery of such supplement shall not require the
consent of any other Grantor hereunder, and the rights and obligations of each
Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor as a party to this Security Agreement.
SECTION 7.7. No Waiver; Remedies. In addition to, and not in limitation
of Section 2.4, 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 7.8. Headings. The various headings of this Security Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this Security Agreement or any provisions thereof.
SECTION 7.9. Severability. Any provision of this 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 Security Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 7.10. Governing Law, Entire Agreement, etc. THIS 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
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 7.11. Counterparts. This 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.
-23-
SECTION 7.12. Foreign Pledge Agreements. Without limiting any of the
rights, remedies, privileges or benefits provided hereunder to the
Administrative Agent for its benefit and the ratable benefit of the other
Secured Parties, each Grantor and the Administrative Agent hereby agree that the
terms and provisions of this Security Agreement in respect of any Collateral
subject to the pledge or other Lien of a Foreign Pledge Agreement are, and shall
be deemed to be, supplemental and in addition to the rights, remedies,
privileges and benefits provided to the Administrative Agent and the other
Secured Parties under such Foreign Pledge Agreement and under applicable law to
the extent consistent with applicable law; provided that in the event that the
terms of this Security Agreement conflict or are inconsistent with the
applicable Foreign Pledge Agreement or applicable law governing such Foreign
Pledge Agreement, (i) to the extent that the provisions of such Foreign Pledge
Agreement or applicable foreign law are, under applicable foreign law, necessary
for the creation, perfection or priority of the security interests in the
Collateral subject to such Foreign Pledge Agreement, the terms of such Foreign
Pledge Agreement or such applicable law shall be controlling and (ii) otherwise,
the terms hereof shall be controlling.
-24-
IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.
[NAME OF GRANTOR]
By:___________________________
Title:
UBS AG, STAMFORD BRANCH,
as Administrative Agent
By:___________________________
Title:
By:___________________________
Title:
SCHEDULE I
to Subsidiary Security and Pledge Agreement
Name of Grantor:
Common Stock
------------
Issuer (corporate) # of Authorized Outstanding % of Shares
Cert.# Shares Shares Shares Pledged
------ ------ ------ ------ -------
Limited Liability Company Interests
-----------------------------------
Issuer (limited liability % of Limited Liability Type of Limited Liability
company) Company Interests Pledged Company Interests Pledged
-------- ------------------------- -------------------------
Partnership Interests
---------------------
% of Partnership % of Partnership
Issuer (partnership) Interests Owned Interests Pledged
-------------------- --------------- -----------------
SCHEDULE II
to Subsidiary Security and Pledge Agreement
Item A. Locations of each Grantor:
Name of Grantor: Location for purposes of UCC:
Item B. Filing locations prior to July 1, 2001
Name of Grantor: Filing Locations prior to July 1, 2001 (or October 1,
2001 if the location is Connecticut and January 1, 2002
if the location is Alabama, Florida or Mississippi):
Item C. Trade names.
Name of Grantor: Trade Names:
Item D. Merger or other corporate reorganization.
Name of Grantor: Merger or other corporate reorganization:
Item E. Taxpayer ID numbers.
Name of Grantor: Taxpayer ID numbers:
Item F. Government Contracts:
Name of Grantor: Description of Contract:
SCHEDULE III
to Subsidiary Security and Pledge Agreement
United States Patents
---------------------
Issued United States Patents
----------------------------
Country Patent No. Issue Date Inventor(s) Title
------- ---------- ---------- ----------- -----
Pending United States Patent Applications
-----------------------------------------
Country Serial No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
SCHEDULE IV
to Subsidiary Security and Pledge Agreement
United States Trademarks
------------------------
Registered United States Trademarks
-----------------------------------
Country Trademark Registration No. Registration Date
------- --------- ---------------- -----------------
Pending United States Trademark Applications
--------------------------------------------
Country Trademark Serial No. Filing Date
------- --------- ---------- -----------
SCHEDULE V
to Subsidiary Security and Pledge Agreement
United States Copyrights/Mask Works
-----------------------------------
Registered United States Copyrights/Mask Works
----------------------------------------------
Country Registration No. Registration Date Author(s) Title
------- ---------------- ----------------- --------- -----
United States Copyright/Mask Work Pending Registration Applications
-------------------------------------------------------------------
Country Serial No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
EXHIBIT A
to Subsidiary Security and Pledge Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT, dated as of ________ __, 200_ (this
"Agreement"), is made between [NAME OF GRANTOR] (the "Grantor"), in favor of UBS
AG, STAMFORD BRANCH, as 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 :
WHEREAS, pursuant to a Credit Agreement, dated as of April 19, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among Associated Materials Incorporated, as the
Borrower, Associated Materials Holdings Inc., the various financial institutions
and other Persons as are or may become parties thereto, as the Lenders, the
Administrative Agent, Credit Suisse First Boston, Cayman Islands Branch, as
Syndication Agent, CIBC World Markets Corp., as Documentation Agent, and UBS
Warburg LLC and Credit Suisse First Boston Corporation, as Joint Lead Arrangers,
the Lenders and the Issuers have extended Commitments to make Credit Extensions
to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Subsidiary Security and Pledge Agreement, dated as of _____ __,
____ (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Security Agreement");
WHEREAS, pursuant to the Credit Agreement and pursuant to clause (e) of
Section 4.5 of the Security Agreement, the Grantor is required to execute and
deliver this Agreement and to grant to the Administrative Agent a continuing
security interest in all of the Patent Collateral (as defined below) to secure
all Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.
SECTION 2. Grant of Security Interest. The Grantor 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 following property,
whether now or hereafter existing or acquired by the Grantor (the "Patent
Collateral"):
(a) all of its letters patent and applications for letters patent
throughout the world, including all patent applications in preparation for
filing and each patent and patent application referred to in Schedule I
attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
clause (a);
(c) all of its patent licenses, and other agreements providing the
Grantor with the right to use any items of the type referred to in clauses
(a) and (b) above; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, and for breach or enforcement of any
patent license.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Patent Collateral with the United States Patent
and Trademark Office and corresponding offices in other countries of the world,
as applicable. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the ratable benefit of each other
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Secured Party
thereunder) shall remain in full force and effect in accordance with its terms.
SECTION 4. Release of Liens. Upon (i) the Disposition of Patent Collateral
in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Patent Collateral (in the case of clause (i))
or (B) all Patent Collateral (in the case of clause (ii)). Upon any such
Disposition or termination, the Administrative Agent will, at the Grantor's sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Patent Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Patent Collateral granted hereby are more fully set
forth in the Security
Agreement, the terms and provisions of which (including the remedies provided
for therein) are incorporated by reference herein as if fully set forth herein.
SECTION 6. Loan Document. This 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. Counterparts. This 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.
* * * * *
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by its Authorized Officer as of the date first
above written.
[NAME OF GRANTOR]
By:_________________________________
Title:
UBS AG, STAMFORD BRANCH,
as Administrative Agent
By:_________________________________
Title:
By:_________________________________
Title:
SCHEDULE I
to Patent Security Agreement
United States Patents
---------------------
United States Issued Patents
----------------------------
Country Patent No. Issue Date Inventor(s) Title
------- ---------- ---------- ----------- -----
Pending United States Patent Applications
-----------------------------------------
Country Serial No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
EXHIBIT B
to Subsidiary Security and Pledge Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT, dated as of ________ __, 200_ (this
"Agreement"), is made between [NAME OF GRANTOR] (the "Grantor"), in favor of UBS
AG, STAMFORD BRANCH, as 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 :
WHEREAS, pursuant to a Credit Agreement, dated as of April 19, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among Associated Materials Incorporated, as the
Borrower, Associated Materials Holdings Inc., the various financial institutions
and other Persons as are or may become parties thereto, as the Lenders, the
Administrative Agent, Credit Suisse First Boston, Cayman Islands Branch, as
Syndication Agent, CIBC World Markets Corp., as Documentation Agent, and UBS
Warburg LLC and Credit Suisse First Boston Corporation, as Joint Lead Arrangers,
the Lenders and the Issuers have extended Commitments to make Credit Extensions
to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Subsidiary Security and Pledge Agreement, dated as of _____ __,
____ (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Security Agreement");
WHEREAS, pursuant to the Credit Agreement and pursuant to clause (e) of
Section 4.5 of the Security Agreement, the Grantor is required to execute and
deliver this Agreement and to grant to the Administrative Agent a continuing
security interest in all of the Trademark Collateral (as defined below) to
secure all Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.
SECTION 2. Grant of Security Interest. The Grantor 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 following property,
whether now or hereafter existing or acquired by the Grantor (the "Trademark
Collateral"):
(a) (i) all of its trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, certification marks, collective marks, logos and other
source or business identifiers, and all goodwill of the business
associated therewith, now existing or hereafter adopted or acquired
including those registered in the United States Patent and Trademark
Office and referred to in Schedule I hereto, whether currently in use or
not, all registrations and recordings thereof and all applications in
connection therewith, whether pending or in preparation for filing,
including registrations, recordings and applications in the United States
Patent and Trademark Office or in any office or agency of the United
States of America or any State thereof or any other country or political
subdivision thereof or otherwise, and all common-law rights relating to
the foregoing, and (ii) the right to obtain all reissues, extensions or
renewals of the foregoing (collectively referred to as the "Trademark");
(b) all Trademark licenses for the grant by or to the Grantor of
any right to use any Trademark;
(c) all of the goodwill of the business connected with the use of,
and symbolized by the items described in, clause (a), and to the extent
applicable clause (b);
(d) the right to xxx third parties for past, present and future
infringements of any Trademark Collateral described in clause (a) and, to
the extent applicable, clause (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, or for any injury to the goodwill
associated with the use of any such Trademark or for breach or enforcement
of any Trademark license and all rights corresponding thereto throughout
the world.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Trademark Collateral with the United States
Patent and Trademark Office and corresponding offices in other countries of the
world, as applicable. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the ratable benefit of each other
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Secured Party
thereunder) shall remain in full force and effect in accordance with its terms.
SECTION 4. Release of Liens. Upon (i) the Disposition of Trademark
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Trademark Collateral (in the case of clause
(i)) or (B) all Trademark Collateral (in the case of clause (ii)). Upon any such
Disposition or termination, the Administrative Agent will, at the Grantor's sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Trademark Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Trademark Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6. Loan Document. This 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. Counterparts. This 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.
* * * * *
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by Authorized Officer as of the date first
above written.
[NAME OF GRANTOR]
By:_________________________________
Title:
UBS AG, STAMFORD BRANCH,
as Administrative Agent
By:_________________________________
Title:
By:_________________________________
Title:
SCHEDULE I
to Trademark Security Agreement
United States Trademarks
------------------------
Registered United States Trademarks
-----------------------------------
Country Trademark Registration No. Registration Date
------- --------- ---------------- -----------------
Pending United States Trademark Applications
--------------------------------------------
Country Trademark Serial No. Filing Date
------- --------- ---------- -----------
EXHIBIT C
to Subsidiary Security and Pledge Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT, dated as of ________ __, 200_ (this
"Agreement"), is made between [NAME OF GRANTOR] (the "Grantor"), in favor of UBS
AG, STAMFORD BRANCH, as 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 :
WHEREAS, pursuant to a Credit Agreement, dated as of April 19, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Associated Materials Incorporated, as
the Borrower, Associated Materials Holdings Inc., the various financial
institutions and other Persons as are or may become parties thereto, as the
Lenders, the Administrative Agent, Credit Suisse First Boston, Cayman Islands
Branch, as Syndication Agent, CIBC World Markets Corp., as Documentation Agent,
and UBS Warburg LLC and Credit Suisse First Boston Corporation, as Joint Lead
Arrangers, the Lenders and the Issuers have extended Commitments to make Credit
Extensions to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Subsidiary Security and Pledge Agreement, dated as of ____ __,
____ (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Security Agreement");
WHEREAS, pursuant to the Credit Agreement and pursuant to clause (e) of
Section 4.5 of the Security Agreement, the Grantor is required to execute and
deliver this Agreement and to grant to the Administrative Agent a continuing
security interest in all of the Copyright Collateral (as defined below) to
secure all Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Security Agreement.
SECTION 2. Grant of Security Interest. The Grantor 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 following (the
"Copyright Collateral"), whether now or hereafter existing or acquired by the
Grantor: all copyrights of the Grantor, whether statutory or
common law, registered or unregistered and whether published or unpublished, now
or hereafter in force throughout the world including all of the Grantor's right,
title and interest in and to all copyrights registered in the United States
Copyright Office or anywhere else in the world and also including the United
States copyrights referred to in Schedule I hereto, and registrations and
recordings thereof and all applications for registration thereof, whether
pending or in preparation, all copyright licenses, the right to xxx for past,
present and future infringements of any of the foregoing, all rights
corresponding thereto, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Administrative Agent in the Copyright Collateral with the United States
Copyright Office and corresponding offices in other countries of the world, as
applicable. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the ratable benefit of each other
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Secured Party
thereunder) shall remain in full force and effect in accordance with its terms.
SECTION 4. Release of Liens. Upon (i) the Disposition of Copyright
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Copyright Collateral (in the case of clause
(i)) or (B) all Copyright Collateral (in the case of clause (ii)). Upon any such
Disposition or termination, the Administrative Agent will, at the Grantor's sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Copyright Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6. Loan Document. This 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. Counterparts. This 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.
* * * * *
Subsidiary Security and Pledge Agreement
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by its Authorized Officer as of the date first
above written.
[NAME OF GRANTOR]
By:_________________________________
Title:
UBS AG, STAMFORD BRANCH,
as Administrative Agent
By:_________________________________
Title:
By:_________________________________
Title:
Subsidiary Security and Pledge Agreement
SCHEDULE I
to Copyright Security Agreement
United States Copyrights/Mask Works
-----------------------------------
Registered United States Copyrights/Mask Works
----------------------------------------------
Registered United States Copyrights/Mask Works
----------------------------------------------
Country Registration No. Registration Date Author(s) Title
------- ---------------- ----------------- --------- -----
United States Copyright/Mask Work Pending Registration Applications
-------------------------------------------------------------------
Country Serial No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
Subsidiary Security and Pledge Agreement
ANNEX I
to the Subsidiary Security and Pledge Agreement
SUPPLEMENT NO. __ TO SUBSIDIARY
Security and Pledge AGREEMENT
This SUPPLEMENT, dated as of ____________ ___, _____ (this "Supplement"),
is to the Subsidiary Security and Pledge Agreement, dated as of ____ __, ____
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Subsidiary Security and Pledge Agreement"), among the Grantors
(such capitalized term, and other terms used in this Supplement, to have the
meanings set forth in Article I of the Subsidiary Security and Pledge Agreement)
from time to time party thereto, in favor of UBS AG, STAMFORD BRANCH, as
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 :
WHEREAS, pursuant to a Credit Agreement, dated as of April 19, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Associated Materials Incorporated, as
the Borrower, Associated Materials Holdings Inc., the various financial
institutions and other Persons as are or may become parties thereto, as the
Lenders, the Administrative Agent, Credit Suisse First Boston, Cayman Islands
Branch, as Syndication Agent, CIBC World Markets Corp., as Documentation Agent,
and UBS Warburg LLC and Credit Suisse First Boston Corporation, as Joint Lead
Arrangers, the Lenders and the Issuers have extended Commitments to make Credit
Extensions to the Borrower;
WHEREAS, pursuant to the provisions of Section 7.6 of the Subsidiary
Security and Pledge Agreement, each of the undersigned is becoming a Grantor
under the Subsidiary Security and Pledge Agreement; and
WHEREAS, each of the undersigned desires to become a "Grantor" under the
Subsidiary Security and Pledge Agreement in order to induce the Secured Parties
to continue to extend Credit Extensions under the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of the undersigned agrees, for
the benefit of each Secured Party, as follows.
SECTION 1. Party to Subsidiary Security and Pledge Agreement, etc. In
accordance with the terms of the Subsidiary Security and Pledge Agreement, by
its signature below each of the undersigned hereby irrevocably agrees to become
a Grantor under the Subsidiary Security and Pledge Agreement with the same force
and effect as if it were an original signatory thereto
and each of the undersigned hereby (a) agrees to be bound by and comply with all
of the terms and provisions of the Subsidiary Security and Pledge Agreement
applicable to it as a Grantor and (b) represents and warrants that the
representations and warranties made by it as a Grantor thereunder are true and
correct as of the date hereof, unless stated to relate solely to an earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date. In furtherance of the foregoing, each reference
to a "Grantor" and/or "Grantors" in the Subsidiary Security and Pledge Agreement
shall be deemed to include each of the undersigned.
SECTION 2. Representations. Each of the undersigned Grantor hereby
represents and warrants that this Supplement has been duly authorized, executed
and delivered by it and that this Supplement and the Subsidiary Security and
Pledge Agreement constitute the legal, valid and binding obligation of each of
the undersigned, enforceable against it in accordance with its terms.
SECTION 3. Full Force of Subsidiary Security and Pledge Agreement. Except
as expressly supplemented hereby, the Subsidiary Security and Pledge Agreement
shall remain in full force and effect in accordance with its terms.
SECTION 4. Severability. Wherever possible each provision of this
Supplement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Supplement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Supplement or the
Subsidiary Security and Pledge Agreement.
SECTION 5. Governing Law, Entire Agreement, etc. THIS SUPPLEMENT 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). This Supplement and the other
Loan Documents constitute the entire understanding among the parties hereto with
respect to the subject matter thereof and supersede any prior agreements,
written or oral, with respect thereto.
SECTION 6. Counterparts. This Supplement 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.
* * * * *
Subsidiary Security and Pledge Agreement
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by its Authorized Officer as of the date first
above written.
[NAME OF ADDITIONAL SUBSIDIARY]
By:_________________________________
Title:
[NAME OF ADDITIONAL SUBSIDIARY]
By:_________________________________
Title:
Subsidiary Security and Pledge Agreement
ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:
UBS AG, STAMFORD BRANCH,
as Administrative Agent
By:_________________________________
Name:
Title:
Subsidiary Security and Pledge Agreement
SCHEDULE I
to Supplement No. ___
to Subsidiary Security and Pledge Agreement
([Name of Additional Subsidiary])
Capital Stock
-------------
Common Stock
------------
Authorized Outstanding % of Shares
Issuer (corporate) Shares Shares Pledged
------------------ ---------- ----------- -----------
Limited Liability Company Interests
-----------------------------------
% of Limited Liability Type of Limited Liability
Issuer (limited liability company) Company Interests Pledged Company Interests Pledged
---------------------------------- ------------------------- -------------------------
Partnership Interests
---------------------
% of Partnership % of Partnership
Issuer (partnership) Interests Owned Interests Pledged
-------------------- --------------- -----------------
Subsidiary Security and Pledge Agreement
SCHEDULE II
to Supplement No. ___
to Subsidiary Security and Pledge Agreement
Item A. Locations of each Grantor:
Name of Grantor: Location for purposes of UCC:
Item B. Filing locations prior to July 1, 2001
Name of Grantor: Filing Locations prior to July 1, 2001 (or October 1,
2001 if the location is Connecticut and January 1,
2002 if the location is Alabama, Florida or
Mississippi):
Item C. Trade names.
Name of Grantor: Trade Names:
Subsidiary Security and Pledge Agreement
Item D. Merger or other corporate reorganization.
Name of Grantor: Merger or other corporate reorganization:
Item E. Taxpayer ID numbers.
Name of Grantor: Taxpayer ID numbers:
Item F. Government Contracts:
Name of Grantor: Description of Contract:
Subsidiary Security and Pledge Agreement
SCHEDULE III
to Supplement No. ___
to Subsidiary Security and Pledge Agreement
([Name of Additional Subsidiary])
United States Patents
---------------------
United States Issued Patents
----------------------------
Country Patent No. Issue Date Inventor(s) Title
------- ---------- ---------- ----------- -----
Pending United States Patent Applications
-----------------------------------------
Country Serial No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
Subsidiary Security and Pledge Agreement
SCHEDULE IV
to Supplement No. ___
to Subsidiary Security and Pledge Agreement
([Name of Additional Subsidiary])
Item A. Trademarks
ACTIVE U.S. TRADEMARKS
OWNERSHIP (PTO DATABASE) LISTED AS:
-----------------------------------
XXXX SERIAL/REG. FILING/REG. STATUS NOTES
# DATE
---- ----------- ----------- ------ -----
OWNERSHIP (PTO DATABASE) LISTED AS:
-----------------------------------
TRADEMARKS RENDERED ABANDONED, CANCELLED OR EXPIRED
---------------------------------------------------
OWNER (PTO DATABASE) LISTED AS:
-------------------------------
Pending United States Trademark Applications
--------------------------------------------
Country Trademark Serial No. Filing Date
------- --------- ---------- -----------
Subsidiary Security and Pledge Agreement
SCHEDULE V
to Supplement No. ___
to Subsidiary Security and Pledge Agreement
([Name of Additional Subsidiary])
United States Copyrights/Mask Works
-----------------------------------
Registered United States Copyrights/Mask Works
----------------------------------------------
Country Registration No. Registration Date Author(s) Title
------- ---------------- ----------------- --------- -----
United States Copyright/Mask Work Pending Registration Applications
-------------------------------------------------------------------
Country Serial No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
Subsidiary Security and Pledge Agreement
