dated as of June 9, 2008 among PLY GEM INDUSTRIES, INC., PLY GEM HOLDINGS, INC., the Subsidiaries of the Specified U.S. Borrower from time to time party hereto, GENERAL ELECTRIC CAPITAL CORPORATION, as Collateral Agent and CREDIT SUISSE, as...
U.S.
SECURITY AGREEMENT
dated as
of
June 9,
2008
among
PLY GEM
INDUSTRIES, INC.,
PLY GEM
HOLDINGS, INC.,
the
Subsidiaries of the Specified U.S. Borrower
from time
to time party hereto,
GENERAL
ELECTRIC CAPITAL CORPORATION,
as
Collateral Agent
and
CREDIT
SUISSE,
as
Administrative Agent
[[NYCORP:3076986v8:4434D:06/09/08--10:53
a]]
TABLE OF
CONTENTS
Page
|
Section
1.
|
Grant
of Security
|
4
|
|
Section
2.
|
Security
for Obligations
|
7
|
|
Section
3.
|
Grantors
Remain Liable
|
7
|
|
Section
4.
|
Delivery
and Control of Security Collateral
|
8
|
|
Section
5.
|
Maintaining
Electronic Chattel Paper, Transferable Records and Letter-of-Credit Rights
and Giving Notice of Commercial Tort Claims
|
9
|
|
Section
6.
|
Representations
and Warranties
|
10
|
|
Section
7.
|
Further
Assurances
|
13
|
|
Section
8.
|
As
to Equipment and Inventory and Insurance
|
14
|
|
Section
9.
|
Post-Closing
Changes; Bailees; Collections on Assigned Agreements and Accounts;
Assigned Agreements
|
15
|
|
Section
10.
|
As
to Intellectual Property Collateral
|
17
|
|
Section
11.
|
Voting
Rights; Dividends; Etc
|
19
|
|
Section
12.
|
Transfers
and Other Liens; Additional Shares
|
21
|
|
Section
13.
|
Collateral
Agent Appointed Attorney-in-Fact
|
21
|
|
Section
14.
|
Collateral
Agent May Perform
|
22
|
|
Section
15.
|
The
Collateral Agent’s Duties
|
22
|
|
Section
16.
|
Remedies
|
23
|
|
Section
17.
|
Indemnity
and Expenses
|
26
|
|
Section
18.
|
Amendments;
Waivers; Additional Grantors; Etc
|
26
|
|
Section
19.
|
Notices,
Etc
|
27
|
|
Section
20.
|
Continuing
Security Interest; Assignments under the Credit Agreement
|
27
|
|
Section
21.
|
Release;
Termination
|
27
|
|
Section
22.
|
Execution
in Counterparts
|
28
|
|
Section
23.
|
The
Mortgages
|
28
|
|
Section
24.
|
Governing
Law
|
28
|
|
Section
25.
|
Intercreditor
Agreement
|
28
|
U.S.
SECURITY AGREEMENT
U.S.
SECURITY AGREEMENT, dated as of June 9, 2008, among PLY GEM INDUSTRIES, INC., a
Delaware corporation (the “Specified U.S.
Borrower”), PLY GEM HOLDINGS, INC., a Delaware corporation (“Holdings”),
the other Persons listed on Schedule I hereto (the Specified U.S. Borrower and
the Persons so listed being, collectively, the “Grantors”),
GENERAL ELECTRIC CAPITAL CORPORATION, as collateral agent under the Credit
Agreement referred to herein (in such capacity, the “Collateral
Agent”) and CREDIT SUISSE, as administrative agent under the Credit
Agreement referred to herein (in such capacity, the “Administrative
Agent”).
PRELIMINARY
STATEMENTS
(1) The
Specified U.S. Borrower and the other Loan Parties party thereto have entered
into a Credit Agreement dated of even date herewith (said Agreement, as it may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the “Credit
Agreement”) with the Lenders, the L/C Issuers and the agents party
thereto.
(2) Pursuant
to the Credit Agreement, the Grantors are entering into this Agreement in order
to grant to the Collateral Agent for the ratable benefit of the Secured Parties
a security interest in the Collateral (as hereinafter defined) to secure the
Obligations, including in the case of each Grantor that is a Guarantor, its
Obligations under the U.S. Guaranty.
(3) It
is a condition precedent to the making of Loans and the issuance of Letters of
Credit by the Lenders under the Credit Agreement, the entry into Secured Hedge
Agreements by the Hedge Banks and the entry into Secured Cash Management
Agreements by the Cash Management Banks from time to time that the Grantors
shall have granted the assignment and security interest and made the pledge and
assignment contemplated by this Agreement.
(4) Each
Grantor will derive substantial direct and indirect benefit from the
transactions contemplated by the Loan Documents.
(5) Terms
defined in the Credit Agreement or the Intercreditor Agreement and not otherwise
defined in this Agreement are used in this Agreement as defined in the Credit
Agreement or the Intercreditor Agreement, as applicable. Further,
unless otherwise defined in this Agreement or in the Credit Agreement, terms
defined in Article 8 or 9 of the UCC (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or 9 (including Accounts,
Certificated Security, Chattel Paper, Commercial Tort Claims, Commodity Account,
Commodity Contract, Deposit Accounts, Documents, Equipment, Farm Products,
Financial Assets, Fixtures, General Intangibles, Goods, Instruments, Inventory,
Investment Property, Letter of Credit Rights, Securities Accounts, Securities
Intermediary, Security, Security Entitlements and Supporting
Obligations). Additionally, the following terms shall have the
following meanings:
“Commodity Account
Control Agreement” shall mean an agreement in form reasonably
satisfactory to the Collateral Agent sufficient to grant the Collateral Agent
Control over a specified Commodity Account.
“Control”
shall mean (i) in the case of each Deposit Account, “control,” as such term
is defined in Section 9-104 of the UCC, (ii) in the case of any Security
Entitlement, “control,” as such term is defined in Section 8-106 of the UCC and
(iii) in the case of any Commodity Contract, “control,” as such term is
defined in Section 9-106 of the UCC.
“Control
Agreements” shall mean, collectively, the Deposit Account Control
Agreements, the Securities Account Control Agreements and the Commodity Account
Control Agreements.
“Deposit Account
Control Agreement” shall mean an agreement in form reasonably
satisfactory to the Collateral Agent sufficient to grant the Collateral Agent
Control over a specified Deposit Account.
“Excluded
Accounts” shall mean each of the following, but in each case only to the
extent that Control of the same has not been provided to or for the benefit of
any other creditor or as security for any other obligations:
(i) all
Deposit Accounts maintained by the Grantors solely for the purpose of making
current payments of payroll obligations in the ordinary course of
business;
(ii) for
a period of not more than 30 days (or such longer period as may be approved by
the Collateral Agent in its sole discretion) following any Permitted Acquisition
of a new Subsidiary, the Deposit Accounts, Securities Accounts and Commodity
Accounts of such new Subsidiary; and
(iii) any
Deposit Accounts, Securities Accounts and Commodity Accounts as to which (A)
during the first 90 days following the Closing Date, the aggregate book balances
thereof, taken as a whole, do not exceed $5,000,000, and (B) thereafter, the
aggregate collected balances thereof, taken as a whole, do not exceed $5,000,000
(or such greater amount as may be agreed from time to time by the Collateral
Agent in its discretion).
“Excluded
Assets” shall mean (i) Excluded Equity and (ii) Special Property other
than the following:
(a) the
right to receive any payment of money (including Accounts, General Intangibles
and Payment Intangibles) or any other rights referred to in Sections 9-406,
9-407, 9-408, 9-409 of the UCC to the extent that such sections of the UCC are
effective to limit the prohibitions which make such property “Special
Property”;
(b) any
Proceeds, substitutions or replacements of any Special Property (unless such
Proceeds, substitutions or replacements would constitute Special
Property).
“Excluded
Equity” means Equity Interests solely to the extent:
(a) in
excess of 66% of the issued and outstanding voting Equity Interests of any
Foreign Subsidiary; or
-2-
(b) any
Equity Interests of any Subsidiary with respect to which the Agents and the
Grantors agree that the costs of providing a pledge of such Equity Interests
hereunder is excessive in view of the benefits to be provided by such
pledge.
“Noteholder
Security Agreement” shall have the meaning specified in the Intercreditor
Agreement.
“Release
Date” shall have the meaning specified in Section 20.
“Securities
Account Control Agreement” shall mean an agreement in form reasonably
satisfactory to the Collateral Agent sufficient to grant the Collateral Agent
Control with respect to a specified Securities Account.
“Special
Property” shall mean (a) any contract, General Intangible, permit, lease
or license held by any Grantor that validly prohibits the creation by such
Grantor of a security interest therein;
(b) any
contract, General Intangible, permit, lease or license held by any Grantor to
the extent that any Law applicable thereto prohibits the creation of a security
interest therein;
(c) any
contract, General Intangible, permit, lease or license held by any Grantor to
the extent that the creation by such Grantor of a security interest therein is
permitted only with the consent of another party, if the requirement to obtain
such consent is legally enforceable and such consent has not been
obtained;
(d)
Equipment owned by any Grantor on the date hereof or hereafter acquired that is
subject to a purchase money lien or capital lease permitted to be incurred or
outstanding pursuant to the provisions of the Credit Agreement if the contract
or other agreement in which such Lien is granted (or the documentation providing
for such purchase money lien or capital lease) validly prohibits the creation of
any other Lien on such Equipment or requires consent of another party (which
requirement is legally enforceable) to create such other Lien, which consent can
not be obtained; and
(e) any
property owned on the date hereof or acquired after the date hereof by an
Grantor that is subject to a Lien permitted by either Section 7.01(c) or (q) of
the Credit Agreement if the contract or agreement pursuant to which such Lien is
granted validly prohibits the creation of any other Lien on such property or
requires the consent of another party to create such Lien, if the requirement to
obtain such consent is legally enforceable and such consent has not been
obtained;
provided, however, that to the extent
such property constitutes Special Property due to a prohibition on the creation
of any other Lien in the relevant permit, lease, license, contract or other
agreement or by Law, then in each case described in clauses (a), (b), (c) (d) or
(e) of this definition, such property shall constitute “Special Property” only
to the extent and for so long as such permit, lease, license, contract or other
agreement or by Law applicable thereto validly prohibits the creation of a Lien
on such property in favor of the Collateral Agent and, upon the termination of
such prohibition (howsoever occurring), such property shall cease to constitute
“Special Property.” In addition, to the extent such property constitutes
“Special
-3-
Property”
due to failure of Grantor to obtain consent as described in clauses (c), (d) and
(e), such Grantor shall use its commercially reasonable efforts to obtain such
consent, and, upon obtaining such consent, such property shall cease to
constitute “Special Property.”
“Trustee”
shall mean the Noteholder Collateral Agent as defined in the Intercreditor
Agreement.
“UCC” shall
mean the Uniform Commercial Code (as defined in the Credit
Agreement).
NOW,
THEREFORE, in consideration of the premises and in order to induce the Lenders
to make Loans and issue Letters of Credit under the Credit Agreement, to induce
the Hedge Banks to enter into Secured Hedge Agreements and to induce the Cash
Management Banks to enter into Secured Cash Management Agreements from time to
time, each Grantor hereby agrees with the Collateral Agent for the ratable
benefit of the Secured Parties as follows:
Section
1. Grant of
Security. Each Grantor hereby grants to the Collateral Agent,
for the ratable benefit of the Secured Parties, a security interest in, such
Grantor’s right, title and interest in and to the following, in each case, as to
each type of property described below, whether now owned or hereafter acquired
by such Grantor, wherever located, and whether now or hereafter existing or
arising (collectively, the “Collateral”):
(a) all
Accounts;
(b) all cash
and Cash Equivalents;
(c) all
Chattel Paper;
(d) all
Commercial Tort Claims (including, without limitation, the Commercial Tort
Claims set forth on Schedule 14 to the Perfection Certificate);
(e) all
Deposit Accounts;
(f) all
Documents;
(g) all
Equipment;
(h) all Farm
Products;
(i) all
Fixtures;
(j) all
General Intangibles;
(k) all
Goods;
(l) all
Instruments;
(m) all
Inventory;
-4-
(n) all
Letter-of-Credit Rights (together with all Accounts, Chattel Paper, Instruments,
Deposit Accounts, General Intangibles and other obligations of any
kind, whether or not arising out of or in connection with the sale or lease of
goods or the rendering of services and whether or not earned by performance, the
“Receivables”;
and all rights now or hereafter existing in and to all supporting obligations
and in and to all security agreements, mortgages, Liens, leases, letters of
credit and other contracts securing or otherwise relating to the Receivables,
being the “Related
Contracts”);
(o) the
following (the “Security
Collateral”):
(i) all
indebtedness from time to time owed to such Grantor, including without
limitation, all promissory notes or instruments, if any, evidencing such
indebtedness, all indebtedness owed to such Grantor pursuant to the Intercompany
Note and the instruments set forth on Schedule 8 to the Perfection Certificate
(the “Pledged
Debt”), and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt;
(ii) all
Equity Interests, other than Excluded Equity, from time to time acquired, owned
or held by such Grantor in any manner, including, without limitation, the Equity
Interests of each Grantor set forth opposite such Grantor’s name on and
otherwise described on Schedule 7 to the Perfection Certificate, and the
certificates, if any, representing such shares or units or other Equity
Interests (collectively, the “Pledged
Equity”), and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other Equity Interests and all subscription warrants, rights or options
issued thereon or with respect thereto; and
(iii) all
Investment Property and all Financial Assets (including, without limitation, all
securities, security entitlements and securities accounts), the certificates or
instruments, if any, representing or evidencing such Investment Property or
Financial Assets and all dividends, distributions, return of capital, interest,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange therefor and all subscription
warrants, rights or options issued thereon or with respect thereto;
(p) all
contracts and agreements between any Grantor and one or more additional parties
(including, without limitation, any Swap Contracts, licensing agreements and any
partnership agreements, joint venture agreements, limited liability company
agreements), the Related Contracts and the IP Agreements (as hereinafter
defined), in each case as such agreements may be amended, amended and restated,
supplemented or otherwise modified from time to time (collectively, the “Assigned
Agreements”), including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due under or pursuant to the
Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) claims of such Grantor for damages arising out of or for
breach of or default under the Assigned Agreements, to
-5-
perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder (all such Collateral being the “Agreement
Collateral”);
(q) the
following (collectively, the “Intellectual
Property Collateral”):
(i) all
patents, patent applications, utility models and statutory invention
registrations, all inventions claimed or disclosed therein and all improvements
thereto (“Patents”);
(ii) all
trademarks, service marks, domain names, trade dress, logos, designs, slogans,
trade names, business names, corporate names and other source identifiers,
whether registered or unregistered (provided that no security interest shall be
granted in any trademark, whether registered, unregistered or applied for, to
the extent that, and solely during the period in which, the grant of a security
interest therein would impair the validity or enforceability of such trademark
under applicable federal law), together, in each case, with the goodwill
symbolized thereby (“Trademarks”);
(iii) all
copyrights, including, without limitation, copyrights in Computer Software (as
hereinafter defined), internet web sites and the content thereof, whether
registered or unregistered (“Copyrights”);
(iv) all
computer software, programs and databases (including, without limitation, source
code, object code and all related applications and data files), firmware and
documentation and materials relating thereto, together with any and all
maintenance rights, service rights, programming rights, hosting rights, test
rights, improvement rights, renewal rights and indemnification rights and any
substitutions, replacements, improvements, error corrections, updates and new
versions of any of the foregoing (“Computer
Software”);
(v) all
confidential and proprietary information of the Grantor, including, without
limitation, know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, databases and
data, including, without limitation, technical data, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information (collectively, “Trade
Secrets”), and all other intellectual, industrial and intangible property
of any type, including, without limitation, industrial designs and mask
works;
(vi) all
registrations and applications for registration for any of the foregoing,
including, without limitation, those registrations and applications for
registration set forth in Schedule 13 to the Perfection Certificate,
together with all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations thereof;
(vii) all
tangible embodiments of the foregoing, all rights in the foregoing provided by
international treaties or conventions, all rights
-6-
corresponding
thereto throughout the world and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto;
(viii) all
agreements, permits, consents, orders and franchises relating to the license,
development, use or disclosure of any of the foregoing to which such Grantor,
now or hereafter, is a party or a beneficiary (“IP
Agreements”); and
(ix) any and
all claims for damages and injunctive relief for past, present and future
infringement, dilution, misappropriation, violation, misuse or breach with
respect to any of the foregoing, with the right, but not the obligation, to xxx
for and collect, or otherwise recover, such damages (the property described in
this Section 1(q) is referred to herein as the “Intellectual
Property”);
(r) all books
and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of such Grantor
pertaining to any of the Collateral;
(s) and all
other tangible and intangible personal property of whatever nature whether or
not covered by Article 9 of the UCC;
(t) all
proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to and Supporting Obligations relating
to, any and all of the Collateral (including, without limitation, proceeds,
collateral and supporting obligations that constitute property of the types
described in clauses (a) through (t) of this Section 1) and, to the extent not
otherwise included, all payments under insurance (whether or not the
Collateral Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral;
provided that notwithstanding
anything to the contrary in this Agreement, this Agreement shall not constitute
a grant of a security interest in any Excluded Asset.
Section
2. Security for
Obligations. This Agreement secures, in the case of each
Grantor, the payment of all Obligations of such Grantor now or hereafter
existing under the Loan Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest
(including interest and fees that accrue after the commencement by or against
any Grantor of any proceeding under any Debtor Relief Laws naming such Person as
the debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding), fees, premiums, penalties, indemnifications,
contract causes of action, costs, expenses or otherwise (all such obligations
being the “Secured
Obligations”).
Section
3. Grantors Remain
Liable. Anything herein to the contrary notwithstanding,
(a) each Grantor shall remain liable under the contracts and agreements
included in such Grantor’s Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Collateral Agent
of any of the rights hereunder shall not release any Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral and (c) no Secured Party shall have any obligation or liability
under the contracts and agreements
-7-
included
in the Collateral by reason of this Agreement or any other Loan Document, nor
shall 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.
Section
4. Delivery and Control of
Security Collateral. (a) (i) All certificates
representing or evidencing the Pledged Equity and (ii) all instruments
representing or evidencing the Pledged Debt (excluding, unless an Event of
Default has occurred and is continuing, Pledged Debt in an aggregate principal
amount not in excess of $1,000,000), shall be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto (unless the Trustee is granted a
prior security interest in such certificates and instruments and the same are
required to be delivered (and are delivered) to the Trustee for the benefit of
the Secured Parties pursuant to the Intercreditor Agreement) and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent. During the continuation of an
Event of Default, the Collateral Agent shall have the right, at any time in its
discretion and without notice to any Grantor, to (i) transfer to or to
register in the name of the Collateral Agent or any of its nominees any or all
of the Security Collateral, subject only to the revocable rights specified in
Section 11(a), (ii) exchange certificates or instruments representing or
evidencing Security Collateral for certificates or instruments of smaller or
larger denominations, and (iii) convert Security Collateral consisting of
financial assets credited to any Securities Account to Security Collateral
consisting of financial assets held directly by the Collateral Agent, and to
convert Security Collateral consisting of financial assets held directly by the
Collateral Agent to Security Collateral consisting of financial assets credited
to any Securities Account.
(b) Each
Grantor acknowledges and agrees that (i) to the extent each interest in any
limited liability company or limited partnership controlled now or in the future
by such Grantor and pledged hereunder is a “security” within the meaning of
Article 8 of the UCC and is governed by Article 8 of the UCC, such interest
shall be certificated and (ii) each such interest shall at all times hereafter
continue to be such a security and represented by such
certificate. Each Grantor further acknowledges and agrees that with
respect to any interest in any limited liability company or limited partnership
controlled now or in the future by such Grantor and pledged hereunder that is
not a “security” within the meaning of Article 8 of the UCC, such Grantor shall
at no time elect to treat any such interest as a “security” within the meaning
of Article 8 of the UCC, nor shall such interest be represented by a
certificate, unless such Grantor provides prior written notification to the
Collateral Agent of such election and such interest is thereafter represented by
a certificate that is promptly delivered to the Collateral Agent pursuant to the
terms hereof.
(c) With
respect to any Security Collateral in which any Grantor has any right, title or
interest and that constitutes an uncertificated security, such Grantor will
promptly notify the Collateral Agent thereof and, at the Collateral Agent’s
request and option, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (i) cause the issuer to agree to
comply with instructions from the Collateral Agent as to such securities,
without further consent of any Grantor or such nominee, or (ii) arrange for the
Collateral Agent to become the registered owner of the
securities. During the continuation of an Event of Default, with
respect to any Security Collateral in which any Grantor has any right, title or
interest, promptly upon the request of the Collateral Agent, such Grantor will
notify each such
-8-
issuer of
Security Collateral that such Security Collateral is subject to the security
interest granted hereunder.
(d) Except as
otherwise set forth herein, if any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any Instrument,
certificated security or Chattel Paper, such Instrument, certificated security
or Chattel Paper shall be promptly delivered to the Collateral Agent (unless the
Trustee is granted a prior security interest in such Collateral and the same is
required to be delivered (and is delivered) to the Trustee for the benefit of
the Secured Parties pursuant to the Intercreditor Agreement), duly endorsed in a
manner satisfactory to the Collateral Agent, to be held as Collateral pursuant
to this Agreement and, if applicable, the Intercreditor Agreement, provided that, unless an
Event of Default has occurred and is continuing, the Grantors shall not be
required to deliver the same pursuant to this clause (c) to the extent that the
aggregate value of the Collateral not so delivered does not exceed
$1,000,000.
Section
5. Maintaining Electronic
Chattel Paper, Transferable Records and Letter-of-Credit Rights and Giving
Notice of Commercial Tort Claims. Unless the Release Date
shall have occurred:
(a) Each
Grantor will maintain Deposit Accounts (other than Excluded Accounts) only with
a bank (which may include the Collateral Agent) (a “Pledged Account
Bank”) that has entered into a Deposit Account Control
Agreement. The Collateral Agent hereby agrees that it will not
deliver a notice indicating that the Collateral Agent will take Control over a
Deposit Account, Securities Account or Commodity Account under any Control
Agreement unless an Event of Default or Cash Dominion Event has occurred and is
continuing.
(b) The
Collateral Agent may, at any time and without notice to, or consent from, the
Grantor, transfer, or direct the transfer of, funds from the Pledged Deposit
Accounts to satisfy the Grantor’s obligations under the Loan Documents if an
Event of Default or Cash Dominion Event shall have occurred and be
continuing.
(c) Upon any
termination by a Grantor of any Pledged Deposit Account, such Grantor will
immediately (i) transfer all funds and property held in such terminated Pledged
Deposit Account to another Pledged Deposit Account and (ii) notify all Account
Debtors and any other obligors that were making payments to such Pledged Deposit
Account to make all future payments to another Pledged Deposit Account, in each
case so that the Collateral Agent shall have a continuously perfected security
interest in such Account Collateral, funds and property.
(d) Upon the
occurrence of and during the continuation of an Event of Default, promptly upon
the request of the Collateral Agent, each Grantor will maintain (i) all
Electronic Chattel Paper with a value individually in excess of $500,000 or in
the aggregate in excess of $2,000,000 so that the Collateral Agent has control
of the Electronic Chattel Paper in the manner specified in Section 9-105 of the
UCC and (ii) all transferable records so that the Collateral Agent has
control of the transferable records in
-9-
the
manner specified in Section 16 of the Uniform Electronic Transactions Act, as in
effect in the jurisdiction governing such transferable record (“UETA”
).
(e) Each
Grantor, by granting a security interest in its Receivables consisting of
Letter-of-Credit Rights to the Collateral Agent, intends to (and hereby does)
assign to the Collateral Agent its rights (including its contingent rights) to
the proceeds of all Related Contracts consisting of letters of credit of which
it is or hereafter becomes a beneficiary or assignee (except to the extent that
the applicable Grantor is required by applicable law to apply such proceeds to a
specified purpose). If any Grantor is at any time a beneficiary under
a letter of credit now or hereafter issued in favor of such Grantor, and
(i) the face amount of such letter of credit is in excess of $1,000,000
individually or (ii) the face amount of such letter of credit, together
with the face amount of all other letters of credit issued in favor of any
Grantor in which the Collateral Agent does not have a perfected security
interest exceeds $2,500,000 in the aggregate, such Grantor shall promptly notify
the Collateral Agent thereof and such Grantor shall use commercially reasonable
efforts to either (A) arrange for the issuer and any confirmer of such
letter of credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under such letter of credit or (B) arrange for the
Collateral Agent to become the transferee beneficiary of such letter of credit,
with the Collateral Agent agreeing, in each case, that the proceeds of any
drawing under such letter of credit are to be applied as provided in the Credit
Agreement.
(f) Upon the
occurrence of an Event of Default, each Grantor shall, promptly upon request by
the Collateral Agent, (i) notify (and such Grantor hereby authorizes the
Collateral Agent to notify) the issuer and each nominated person with respect to
each of the Related Contracts consisting of letters of credit that the proceeds
thereof have been assigned to the Collateral Agent hereunder and any payments
due or to become due in respect thereof are to be made directly to the
Collateral Agent or its designee and (ii) arrange for the Collateral Agent to
become the transferee beneficiary of letter of credit.
(g) Each
Grantor will give prompt notice in writing (which notice shall reference this
Section 5(g) to the Collateral Agent of any Commercial Tort Claim individually
valued in excess of $500,000 that may arise in the future and, if requested by
the Collateral Agent, will promptly execute or otherwise authenticate a
supplement to this Agreement, and otherwise take all necessary action, to
subject such Commercial Tort Claim to the first priority security interest
created under this Agreement.
Section
6. Representations and
Warranties. Each Grantor represents and warrants as
follows:
(a) All
Pledged Equity consisting of certificated securities and all Pledged Debt has
been delivered to the Collateral Agent (or the Trustee) in accordance
herewith. If such Grantor is an issuer of Security Collateral, such
Grantor confirms that it has received notice of the security interest granted
hereunder.
(b) Such
Grantor is the legal and beneficial owner of the Collateral granted or purported
to be granted by such Grantor free and clear of any Lien, claim, option or
right
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of
others, except for the security interest created under this Agreement, subject
to Liens permitted under Section 7.01 of the Credit Agreement. To the
best knowledge of the Grantors, no effective financing statement or other
instrument similar in effect covering all or any part of the Collateral or
listing such Grantor or any trade name of such Grantor as debtor is on file in
any recording office, except such as may have been filed in favor of the
Collateral Agent relating to the Loan Documents or as otherwise permitted under
the Credit Agreement.
(c) All of
the Equipment and Inventory of such Grantor are located at the places specified
therefor in Schedule 2 to the Perfection Certificate or at another location as
to which such Grantor has complied with the requirements of Sections 8 and
9(b). Such Grantor has obtained and maintains insurance with respect
to its Equipment and Inventory incompliance with Section 8(d).
(d) The
Pledged Equity issued by the Company or any of its Subsidiaries hereunder has
been duly authorized and validly issued and is fully paid and
non-assessable. The Pledged Debt issued by the Company or any of its
Subsidiaries and pledged by such Grantor hereunder has been duly authorized,
authenticated or issued and delivered and is the legal, valid and binding
obligation of the issuers thereof and such Pledged Debt is evidenced by one or
more promissory notes (which promissory notes have been delivered to the
Collateral Agent unless required to be delivered and so delivered to the Trustee
pursuant to the Intercreditor Agreement) and the issuers thereof are not in
default under such Pledged Debt.
(e) As of the
Closing Date, the Pledged Equity pledged by such Grantor constitutes the
percentage of the issued and outstanding Equity Interests of the issuers thereof
indicated on Schedule 7 to the Perfection Certificate. As of the
Closing Date, no Grantor has any Investment Property or Financial Assets other
than the Investment Property and Financial Assets listed on Schedules 7, 8 and 9
to the Perfection Certificate.
(f) Each
Grantor has good and valid rights in and title to the Collateral with respect to
which it has purported to grant a security interest hereunder and has full power
and authority to grant to the Collateral Agent the security interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other person, other than any consent or approval that has been obtained
and is in full force and effect or the need for which has been specifically
disclosed herein or in the Credit Agreement.
(g) The
Perfection Certificate has been duly prepared, completed and executed by
Holdings and the Specified U.S. Borrower and the information set forth therein,
including the exact legal name of each Grantor, its jurisdiction of organization
and its organizational number, is true, accurate and complete as of the Closing
Date and as of each subsequent delivery required pursuant to Section 6.2(g) of
the Credit Agreement.
(h) This
Agreement creates in favor of the Collateral Agent for the benefit of the
Secured Parties a valid security interest in the Collateral granted by such
Grantor,
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securing
the payment of the Secured Obligations; and (i) when the financing statements
set forth in Schedule 5 of the Perfection Certificate are filed or recorded with
the appropriate Governmental Authority referred to therein with respect to the
Collateral described therein in which a security interest may be perfected by
filing or recordation and (ii) upon the taking of possession or control by the
Senior Representative pursuant to Article III of the Intercreditor Agreement of
the Collateral described in Schedules 7, 8 and 9 of the Perfection Certificate
with respect to which a security interest may be perfected only by possession or
control, all filings and other actions necessary to perfect the security
interest in the Collateral granted by such Grantor have been duly made or taken
and are in full force and effect; and such security interest is, in the case of
ABL Priority Collateral, first priority and, in the case of Noteholder Priority
Collateral, second priority.
(i) None of
the Grantors has filed or consented to the filing of (i) any financing statement
or analogous document under the UCC or any other applicable laws covering any
Collateral, (ii) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Collateral with the
United States Patent and Trademark Office, the United States Copyright Office or
the Canadian Intellectual Property Office or (iii) any assignment in which any
Grantor assigns any Collateral or any security agreement or similar instrument
covering any Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Liens expressly permitted pursuant to Section 7.01 of the Credit
Agreement.
(j) The
Inventory that has been produced or distributed by such Grantor has been
produced in compliance with all requirements of applicable law, including,
without limitation, the Fair Labor Standards Act.
(k) No amount
payable to such Grantor under or in connection with any Receivable is evidenced
by any Instrument or Chattel Paper in excess of $500,000 which has not been
delivered to the Collateral Agent to the extent otherwise required to be
delivered hereunder (other than purchase orders, supply agreements and
invoices).
(l) As to
itself and its Intellectual Property Collateral:
(i) To such
Grantor’s knowledge, the operation of such Grantor’s business as currently
conducted and the use of the Intellectual Property in connection therewith do
not materially infringe, misappropriate or otherwise violate the intellectual
property rights of any third party.
(ii) Such
Grantor is the exclusive owner of all right, title and interest in and to the
material Intellectual Property Collateral owned by such Grantor and is entitled
to use all material Intellectual Property Collateral subject only to the terms
of the IP Agreements, in each case as used in or necessary to its
operations.
(iii) The IP
Agreements, patents, trademarks, service marks, trade
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names and
all applications for any of the foregoing included in the Intellectual Property
Collateral are set forth on Schedule 13 to the Perfection Certificate and such
Intellectual Property Collateral constitutes all Intellectual Property and all
IP Agreements material to the operations of the Grantors.
(iv) None of
such Grantor's Intellectual Property material to the operations of the Grantors,
has been abandoned or has been adjudged invalid or unenforceable in whole or
part.
Section
7. Further
Assurances. (a) Each Grantor agrees that from time to time, at
the expense of such Grantor, such Grantor will promptly execute and deliver, or
otherwise authenticate, all further instruments and documents, and take all
further action that may be reasonably necessary or desirable, or that the
Collateral Agent may reasonably request, in order to perfect and protect any
pledge or security interest granted or purported to be granted by such Grantor
hereunder or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral of such
Grantor. Without limiting the generality of the foregoing, each
Grantor will promptly with respect to Collateral of such Grantor:
(i) xxxx
conspicuously each document included in Inventory and, at the request of the
Collateral Agent if an Event of Default has occurred and is continuing, each
Chattel Paper, each Related Contract and each Assigned Agreement and, at the
request of the Collateral Agent, each of its records pertaining to such
Collateral with a legend, in form and substance reasonably satisfactory to the
Collateral Agent, indicating that such document, Chattel Paper, Related
Contract, Assigned Agreement or Collateral is subject to the security interest
granted hereby
(ii) execute
or authenticate and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be reasonably
necessary or desirable, or as the Collateral Agent may reasonably request, in
order to perfect and preserve the security interest granted or purported to be
granted by such Grantor hereunder;
(iii) execute
and deliver to the Collateral Agent an executed Control Agreement with respect
to each Deposit Account of any Grantor owned, maintained or established by any
Grantor after the Closing Date (other than an Excluded Account), including any
such Deposit Account which at any time ceases to be an Excluded Account (it
being understood that the Collateral Agent shall not give any instructions
directing the disposition of funds from time to time credited to any Deposit
Account or withhold any withdrawal rights from such Grantor with respect to
funds from time to time credited to any Deposit Account unless an Event of
Default or Cash Dominion Event has occurred and is continuing);
(iv) if any
Grantor shall, following the Closing Date, establish and maintain any Securities
Account or Commodity Account (other than an Excluded Account) with any
Securities Intermediary or Commodity Intermediary, such
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Grantor
shall, within 30 days (or such longer period as the Collateral Agent may agree
in its sole discretion) of opening such Securities Account or Commodity Account,
notify the Collateral Agent thereof and deliver to the Collateral Agent an
executed Control Agreement with respect to such Securities Account or Commodity
Account, as the case may be; and
(v) deliver
to the Collateral Agent evidence that all other actions that the Collateral
Agent may deem reasonably necessary or desirable in order to perfect and protect
the security interest granted or purported to be granted by such Grantor under
this Agreement has been taken.
(b) Each
Grantor hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, including, without limitation,
one or more financing statements indicating that such financing statements cover
all assets or all personal property (or words of similar effect) of such
Grantor, in each case without the signature of such Grantor, and regardless of
whether any particular asset described in such financing statements falls within
the scope of the UCC or the granting clause of this Agreement. A
photocopy or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law. Each Grantor ratifies its
authorization for the Collateral Agent to have filed such financing statements,
continuation statements or amendments filed prior to the date
hereof.
(c) Each
Grantor will furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral of such Grantor and
such other reports in connection with such Collateral as the Collateral Agent
may reasonably request, all in reasonable detail.
(d) Each Loan
Party shall at all times defend its title to Collateral and the Collateral
Agent’s Liens therein against all Persons, claims and demands whatsoever, except
for Liens permitted under Section 7.01 of the Credit Agreement.
Section
8. As to Equipment and
Inventory and Insurance. (a) Each Grantor will keep its
Equipment and Inventory (other than Inventory sold in the ordinary course of
business or pursuant to a disposition in accordance with Section 7.05 of the
Credit Agreement) at the places therefor specified in Section 2 to the
Perfection Certificate or at such other locations as such Grantor may determine
from time to time, provided that such Grantor
shall give written notice to the Collateral Agent specifying any such other
location within 30 days’ after the first date on which any Equipment
or Inventory is moved to such location.
(b) Each
Grantor will promptly furnish to the Collateral Agent a statement respecting any
loss or damage exceeding $1,000,000 to any of the Inventory of such
Grantor.
(c) In
producing its Inventory, each Grantor will comply in all material respects with
all requirements of applicable law, including, without limitation, the Fair
Labor Standards Act.
(d) Each
Grantor will, at its own expense, maintain insurance with respect to its
Equipment and Inventory in such amounts, against such risks, in such form and
with such
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insurers,
as required under Section 6.07 of the Credit Agreement. Without
limitation to the foregoing, each Loan Party shall maintain insurance with
respect to the Collateral, covering casualty, hazard, public liability, theft,
malicious mischief, flood and other risks, in amounts, with endorsements and
with insurers (with a Best Rating of at least A7, unless otherwise approved by
the Collateral Agent) reasonably satisfactory to the Collateral
Agent. All proceeds under each policy shall be payable to the
Collateral Agent or deposited directly to a Dominion Account. From
time to time upon request, the Loan Parties shall deliver to the Collateral
Agent the originals or certified copies of its insurance policies and updated
flood plain searches. Unless the Collateral Agent shall agree
otherwise, each policy of property insurance shall include satisfactory
endorsements: (i) showing the Collateral Agent (or, in the case of property
insurance, the Collateral Agent and the Trustee, as their interests may appear)
as sole loss payee; (ii) requiring the insurer to endeavor to provide 30 days
prior written notice to the Collateral Agent in the event of cancellation of the
policy for any reason whatsoever; and (iii) specifying that the interest of the
Collateral Agent shall not be impaired or invalidated by any act or neglect of
any Loan Party or the owner of the property, nor by the occupation of the
premises for purposes more hazardous than are permitted by the
policy. If any Loan Party fails to provide and pay for any insurance,
the Collateral Agent may, at its option, but shall not be required to, procure
the insurance and charge the Borrowers therefor. Each Loan Party
agrees to deliver to the Collateral Agent, promptly as rendered, copies of all
material reports made to insurance companies in respect of the insurance
described herein. So long as no Event of Default has occurred and is
continuing, the Loan Parties may settle, adjust or compromise any insurance
claim, as long as the proceeds are delivered to the Collateral Agent or
deposited to a Dominion Account as provided above. If an Event of
Default has occurred and is continuing, only the Collateral Agent shall be
authorized to settle, adjust and compromise such claims. Further,
each Grantor will, at the request of the Collateral Agent, duly execute and
deliver instruments of assignment of such insurance policies to comply with the
requirements of the Loan Documents and cause the insurers to acknowledge notice
of such assignment.
(e) So long
as no Event of Default or Cash Dominion Event shall have occurred and be
continuing, all insurance payments, proceeds of insurance and any awards arising
from condemnation of any Collateral received by the Collateral Agent in
connection with any loss, damage or destruction of any Collateral shall be
transferred to a Dominion Account, and to the extent required to be applied to
the Obligations in accordance with Section 2.05(b) of the Credit Agreement, the
Collateral Agent may direct the applicable Pledged Account Bank to release to
such Grantor any such amount if and to the extent that any prepayment of
Obligations is required under the Credit Agreement in connection with the
receipt of such amount and such prepayment has been
made. Reimbursement under any liability insurance maintained by any
Grantor pursuant to this Section 8 may be paid directly to the Person who shall
have incurred liability covered by such insurance.
Section
9. Post-Closing Changes;
Bailees; Collections on Assigned Agreements and Accounts; Assigned
Agreements. (a) No Grantor will change its name, type of
organization, jurisdiction of organization, organizational identification number
or location from those set forth in Schedule 1 to the Perfection Certificate
without giving notice thereof to the Collateral Agent within 30 days (or such
lesser period of time as the Collateral Agent may agree) of such change and
thereafter taking all action required by the Collateral Agent for the purpose of
perfecting or protecting the security interest granted by this
Agreement. Each Grantor will
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hold and
preserve its records relating to the Collateral, including, without limitation,
the Assigned Agreements and Related Contracts.
(b) If any
Collateral of any Grantor is at any time in the possession or control of a
warehouseman, bailee or agent (including as set forth on Schedule 2(g) to the
Perfection Certificate) or is located at leased premises or mortgaged property,
upon the request of the Collateral Agent, such Grantor will (i) notify any such
warehouseman, bailee, agent or landlord of the security interest created
hereunder, (ii) instruct any such warehouseman, bailee or agent to hold all such
Collateral solely for the Collateral Agent’s account subject only to the
Collateral Agent’s instructions, and (iii) if at any time the value of the
Collateral in the possession or control of such warehouseman, bailee or agent or
located at such leased or mortgaged premises exceeds or is reasonably likely to
exceed $1,000,000, use commercially reasonable efforts to (A) cause such
warehouseman, bailee or agent to authenticate a record acknowledging that it
holds possession of such Collateral for the Collateral Agent’s benefit and shall
act solely on the instructions of the Collateral Agent without the further
consent of the Grantor or any other Person and make such authenticated
record available to the Collateral Agent, and (B) obtain a Lien Waiver from such
warehouseman, bailee or agent or the applicable landlord or
mortgagee.
(c) Except as
otherwise provided in this subsection (c), each Grantor will continue to
collect, at its own expense, all amounts due or to become due such Grantor under
the Receivables, Assigned Agreements and Related Contracts. In
connection with such collections, such Grantor may take (and, at the Collateral
Agent’s direction during the continuation of an Event of Default, may take) such
commercially reasonable action as such Grantor (or the Collateral Agent) may
deem necessary or advisable to enforce collection thereof; provided, however, that the
Collateral Agent shall have the right at any time upon the occurrence and during
the continuance of an Event of Default, to notify the Obligors under any
Receivables, Assigned Agreements and Related Contracts, of the assignment of
such Receivables, Assigned Agreements and Related Contracts, to the Collateral
Agent and to direct such Obligors to make payment of all amounts due or to
become due to such Grantor thereunder directly to the Collateral Agent and, upon
such notification and at the expense of such Grantor, to enforce collection of
any such Receivables, Assigned Contracts and Related Contracts, to adjust,
settle or compromise the amount or payment thereof, and to otherwise exercise
all rights with respect to such Receivables, Assigned Agreements and Related
Contracts, including, without limitation, those set forth set forth in Section
9-607 of the UCC. Upon the occurrence and during the continuation of
an Event of Default or a Cash Dominion Event, all amounts and proceeds
(including, without limitation, Instruments) received by such Grantor in respect
of the Receivables, Assigned Agreements and Related Contracts of such Grantor
shall be received in trust for the benefit of the Collateral Agent hereunder,
shall be segregated from other funds of such Grantor and shall be transferred to
the Payment Accounts as set forth in Section 6.18 of the Credit Agreement for
application to the Obligations as provided in Section 8.03 of the Credit
Agreement. Upon the occurrence and during the continuation of an
Event of Default, (i) without the prior written consent of the Collateral Agent,
no Grantor will grant any extension with respect to the time of payment of any
Receivable or any amount due on any Assigned Agreement or Related Contract,
adjust, settle or compromise the amount or payment of any Receivable or any
amount due on any Assigned Agreement or Related Contract for less than the full
amount thereof, release wholly or partly any Account Debtor or obligor thereof,
allow any credit or discount thereon (except, in each case, in the ordinary
course of business consistent with past
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practice
unless the Collateral Agent shall have notified such Grantor that its right to
do so has been terminated) or make any amendment, supplement or modification
thereto, in each case in any manner that could adversely affect the value
thereof and (ii) the applicable Grantor shall deliver to the Collateral Agent a
copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 5% of the
aggregate amount of its then outstanding Accounts. Except in the
ordinary course of business and consistent with past practice, no Grantor will
permit or consent to the subordination of its right to payment under any of the
Receivables, Assigned Agreements or Related Contracts to any other indebtedness
or obligations of the Account Debtor or obligor thereof.
(d) Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Receivables, Assigned Agreements and Related Contracts to observe
and perform all the conditions and obligations to be observed and performed by
it thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Collateral Agent nor any Secured Party shall
have any obligation or liability under any Receivable, Assigned Agreement or
Related Contract by reason of or arising out of this Agreement or the receipt by
the Collateral Agent or any Secured Party of any payment relating thereto, nor
shall the Collateral Agent, nor any Secured Party, be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant to any
Receivable, Assigned Agreement or Related Contract, to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
(e) Each
Grantor will at its expense: (i) maintain the Assigned Agreements to which it is
a party in full force and effect and enforce the Assigned Agreements to which it
is a party in accordance with the terms thereof, except where the failure to do
could not reasonably be expected to have a Material Adverse Effect; and (ii) if
reasonably requested by the Collateral Agent following the occurrence and
continuation of a Cash Dominion Event, furnish to the Collateral Agent promptly
upon receipt thereof copies of all material notices, requests and other
documents received by such Grantor under or pursuant to any material Assigned
Agreements to which it is a party, and from time to time (A) furnish to the
Collateral Agent such information and reports regarding the Assigned Agreements
and such other Collateral of such Grantor as the Collateral Agent may reasonably
request and (B) upon the reasonable request of the Collateral Agent, make to
each other party to any Assigned Agreement to which it is a party such demands
and requests for information and reports or for action as such Grantor is
entitled to make thereunder.
(f) Each
Grantor hereby consents on its behalf and on behalf of its Subsidiaries to the
assignment and pledge to the Collateral Agent for benefit of the Secured Parties
of each Assigned Agreement to which it is a party by any other Grantor
hereunder. Each Grantor agrees, and will promptly instruct each other
party to each Assigned Agreement to which it is a party, that all payments due
or to become due under or in connection with such Assigned Agreement will be
made directly to a Pledged Deposit Account.
Section
10. As to Intellectual Property
Collateral. (a) With respect to material
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Intellectual
Property Collateral owned by each Grantor, each Grantor agrees to take, at its
expense, all commercially reasonable steps, including, without limitation, in
the U.S. Patent and Trademark Office, the U.S. Copyright Office, the Canadian
Intellectual Property Office and any other governmental authority located in the
United States or Canada, to (i) maintain the validity and enforceability of such
Intellectual Property Collateral and maintain such Intellectual Property
Collateral in full force and effect, and (ii) if consistent with the reasonable
business judgment of such Grantor, pursue the registration and maintenance of
each patent, trademark, or copyright registration or application, now or
hereafter included in such Intellectual Property Collateral owned by such
Grantor, including, without limitation, the payment of required fees and taxes,
the filing of responses to office actions issued by the U.S. Patent and
Trademark Office, the U.S. Copyright Office or other governmental authorities,
the filing of applications for renewal or extension, the filing of affidavits
under Sections 8 and 15 of the U.S. Trademark Act, the filing of divisional,
continuation, continuation-in-part, reissue and renewal applications or
extensions, the payment of maintenance fees and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings. No Grantor shall, without the written
consent of the Collateral Agent, discontinue use of or otherwise abandon any of
its material Intellectual Property Collateral, unless such Grantor shall have
previously determined that such use or the pursuit or maintenance of such
Intellectual Property Collateral is no longer desirable in the conduct of such
Grantor’s business.
(b) Each
Grantor agrees promptly to notify the Collateral Agent if such Grantor becomes
aware that any item of Intellectual Property Collateral material to the conduct
of its business may have become abandoned, placed in the public domain, invalid
or unenforceable, or of any adverse determination or development regarding such
Grantor’s ownership of any of such Intellectual Property Collateral or its right
to register the same or to keep and maintain and enforce the same, unless the
maintenance of such Intellectual Property Collateral is no longer desirable in
the conduct of such Grantor’s business.
(c) In the
event that any Grantor becomes aware that any material item of its Intellectual
Property Collateral is being infringed or misappropriated by a third party in
any way that would reasonably be expected to have a Material Adverse Effect,
such Grantor shall promptly notify the Collateral Agent and shall take such
actions, at its expense, as such Grantor or the Collateral Agent reasonably
deems appropriate under the circumstances to protect or enforce such
Intellectual Property Collateral, including, without limitation, suing for
infringement or misappropriation and for an injunction against such infringement
or misappropriation.
(d) No
Grantor shall do or permit any act or knowingly omit to do any act whereby any
Intellectual Property Collateral material to the conduct of its business may
lapse or become invalid or unenforceable or placed in the public domain, unless
the maintenance of such Intellectual Property Collateral is no longer desirable
in the conduct of such Grantor’s business.
(e) Each
Grantor shall take all commercially reasonable steps which it or the Collateral
Agent (during the continuation of an Event of Default) reasonably deems
appropriate under the circumstances to preserve and protect each item of its
material Intellectual Property Collateral, including, without limitation,
maintaining the quality of any and all products or services used or provided in
connection with any of the Trademarks, consistent with the quality
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of the
products and services as of the date hereof, and taking all steps necessary to
ensure that all licensed users of any of the Trademarks use such consistent
standards of quality.
(f) With
respect to its Intellectual Property Collateral, each Grantor agrees to execute
or otherwise authenticate an agreement, in substantially the form set forth in
Exhibit B hereto or otherwise in form and substance satisfactory to the
Collateral Agent (an “Intellectual
Property Security Agreement”), for recording the security interest
granted hereunder to the Collateral Agent in such Intellectual Property
Collateral with the U.S. Patent and Trademark Office, the U.S. Copyright Office,
the Canadian Intellectual Property Office and any other U.S. or Canadian
governmental authorities necessary to perfect the security interest hereunder in
such Intellectual Property Collateral.
(g) Each
Grantor agrees that should it obtain an ownership interest in any item of the
type set forth in Section 1(q) that is not on the date hereof a part of the
Intellectual Property Collateral (“After-Acquired
Intellectual Property”) (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such After-Acquired Intellectual
Property and, in the case of trademarks, the goodwill symbolized thereby, shall
automatically become part of the Intellectual Property Collateral subject to the
terms and conditions of this Agreement with respect thereto. Each
Grantor shall, concurrently with the delivery of financial statements under
Section 6.01(a) of the Credit Agreement, execute and deliver to the
Collateral Agent, or otherwise authenticate, an agreement substantially in the
form of Exhibit C hereto or otherwise in form and substance satisfactory to the
Collateral Agent (an “IP Security
Agreement Supplement”) covering such After-Acquired Intellectual Property
which IP Security Agreement Supplement shall be recorded with the U.S. Patent
and Trademark Office, the U.S. Copyright Office, the Canadian Intellectual
Property Office and any other U.S. or Canadian governmental authorities
necessary to perfect the security interest hereunder in such After-Acquired
Intellectual Property.
(h) Nothing
in this Agreement prevents any Grantor from discontinuing the use or maintenance
of any of its Intellectual Property Collateral to the extent permitted by the
Credit Agreement if such Grantor determines in its reasonable business judgment
that such discontinuance is desirable in the conduct of its
business.
Section
11. Voting Rights; Dividends;
Etc. (a) So long as no Event of Default shall have occurred
and be continuing:
(i) Each
Grantor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Security Collateral of such Grantor or any part thereof
for any purpose consistent with this Agreement, the Credit Agreement and the
other Loan Documents; provided
however, that such Grantor will not exercise or refrain from exercising
any such right if such action could materially and adversely affect the rights
and remedies of any of the Collateral Agent or the other Secured Parties under
this Agreement or the Credit Agreement or any other Loan Document or the ability
of the Secured Parties to exercise the same.
(ii) Each
Grantor shall be entitled to receive and retain any and all
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dividends,
interest and other distributions paid in respect of the Security Collateral of
such Grantor if and to the extent that the payment thereof is not otherwise
prohibited by the terms of the Loan Documents; provided, however, that any and all
dividends, interest and other distributions paid or payable other than in cash
in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security Collateral
shall be, and shall be forthwith delivered to the Collateral Agent (unless
required to be delivered to the Trustee pursuant to the Intercreditor Agreement)
to hold as Security Collateral and shall, if received by such Grantor, be
received in trust for the benefit of the Collateral Agent, be segregated from
the other property or funds of such Grantor and be forthwith delivered to the
Collateral Agent (unless required to be delivered to the Trustee pursuant to the
Intercreditor Agreement) as Security Collateral in the same form as so received
(with any necessary indorsement).
(iii) The
Collateral Agent will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments as such
Grantor may reasonably request for the purpose of enabling such Grantor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends or interest payments that
it is authorized to receive and retain pursuant to paragraph (ii)
above.
(b) Upon the
occurrence and during the continuance of an Event of Default:
(i) All
rights of each Grantor (x) to exercise or refrain from exercising the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 11(a)(i) shall, upon notice to such Grantor by the
Collateral Agent, cease and (y) to receive the dividends, interest and
other distributions that it would otherwise be authorized to receive and retain
pursuant to Section 11(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in the Collateral Agent (or the Trustee, if
required pursuant to the Intercreditor Agreement), which shall thereupon have
the sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such dividends,
interest and other distributions.
(ii) All
dividends, interest and other distributions that are received by any Grantor
contrary to the provisions of paragraph (i) of this Section 11(b) shall be
received in trust for the benefit of the Collateral Agent, shall be segregated
from other funds of such Grantor and shall be forthwith paid over to the
Collateral Agent (unless required to be delivered to the Trustee pursuant to the
Intercreditor Agreement) as Security Collateral in the same form as so received
(with any necessary indorsement).
(c) Upon the
occurrence and during the continuation of an Event of Default or a Cash Dominion
Event, the Collateral Agent shall be authorized to exercise exclusive control
over all Deposit Accounts, Securities Accounts and Commodity Accounts (other
than Excluded Accounts).
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Section
12. Transfers and Other Liens;
Additional Shares. (a) Each Grantor agrees that it will not
(i) sell, assign or otherwise dispose of, or grant any option with respect
to, any of the Collateral, other than sales, assignments and other dispositions
of Collateral, and options relating to Collateral, permitted under the terms of
the Credit Agreement, or (ii) create or suffer to exist any Lien upon or
with respect to any of the Collateral of such Grantor except for the pledge,
assignment and security interest created under this Agreement and Liens
permitted under the Credit Agreement.
(b) Each
Grantor agrees that it will (i) cause each issuer of the Pledged Equity
pledged by such Grantor that is Controlled by such Grantor not to issue any
Equity Interests or other securities in addition to or in substitution for the
Pledged Equity issued by such issuer, except to such Grantor or another Loan
Party, and (ii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all additional Equity Interests (other
than Excluded Equity) or other securities.
Section
13. Collateral Agent Appointed
Attorney-in-Fact. Each Grantor hereby irrevocably appoints the
Collateral Agent such Grantor’s 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 Collateral Agent’s discretion, to take any action and
to execute any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes of this Agreement (but at the cost and
expense of the Grantors). Without limiting the generality of the
foregoing, the Collateral Agent shall have the right, upon and the occurrence
and during the continuance of an Event of Default:
(a) to
endorse a Grantor’s name on any Payment Item or other proceeds of Collateral
(including proceeds of insurance) that come into the Collateral Agent’s
possession or control;
(b) to obtain
and adjust insurance required to be paid to the Collateral Agent; and, upon the
occurrence and during the continuance of an Event of Default:
(c) to ask
for, 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;
(d) to
receive, indorse and collect any drafts or other instruments, documents and
Chattel Paper;
(e) to (i)
notify any Account Debtors of the assignment of any Grantor’s Accounts, demand
and enforce payment of any Grantor’s Accounts, by legal proceedings or
otherwise, and generally exercise any rights and remedies with respect to any
Grantor’s Accounts; (ii) settle, adjust, modify, compromise, discharge or
release any Accounts or other Collateral, or any legal proceedings brought to
collect Accounts or Collateral; (iii) sell or assign any Accounts and other
Collateral upon such terms, for such amounts and at such times as the Collateral
Agent deems advisable; (iv) take control, in any manner, of any proceeds of
Collateral; (v) prepare, file and sign a Grantor’s name to a proof of claim or
other document in a bankruptcy of an Account Debtor, or to any
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notice,
assignment or satisfaction of Lien or similar document; (vi) receive, open and
dispose of mail addressed to a Grantor, and notify postal authorities to change
the address for delivery thereof to such address as the Collateral Agent may
designate; (vii) endorse any Chattel Paper, Document, Instrument, invoice,
freight xxxx, xxxx of lading, or similar document or agreement relating to any
Accounts, Inventory or other Collateral; (viii) use a Grantor’s stationery and
sign its name to verifications of Accounts and notices to Account Debtors; (ix)
use the information recorded on or contained in any data processing equipment
and computer hardware and software relating to any Collateral; or (x) take any
action as may be necessary or appropriate to obtain payment under any letter of
credit or banker’s acceptance for which a Grantor is a beneficiary;
and
(f) to file
any claims or take any action or institute any proceedings that the Collateral
Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce compliance with the terms and conditions of
any Assigned Agreement or the rights of the Collateral Agent with respect to any
of the Collateral or any other action as the Collateral Agent deems appropriate
to fulfill any Grantor’s obligations under the Loan Documents.
Section
14. Collateral Agent May
Perform. If any Grantor fails to perform any agreement
contained herein, the Collateral Agent may, but without any obligation to do so
and without notice, itself perform, or cause performance of, such agreement, and
the expenses of the Collateral Agent incurred in connection therewith shall be
payable by such Grantor under Section 17.
Section
15. The Collateral Agent’s
Duties. The powers conferred on the Collateral Agent hereunder
are solely to protect the Secured Parties’ interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for
the safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Collateral Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not any Secured Party has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which it accords its own property.
(a) Anything
contained herein to the contrary notwithstanding, the Collateral Agent may from
time to time, when the Collateral Agent in its reasonable discretion deems it to
be necessary, appoint one or more subagents (each a “Subagent”)
for the Collateral Agent hereunder with respect to all or any part of the
Collateral. In the event that the Collateral Agent so appoints any
Subagent with respect to any Collateral, (i) the assignment and pledge of such
Collateral and the security interest granted in such Collateral by each Grantor
hereunder shall be deemed for purposes of this Agreement to have been made to
such Subagent, in addition to the Collateral Agent, for the ratable benefit of
the Secured Parties, as security for the Secured Obligations of such Grantor,
(ii) such Subagent shall automatically be vested, in addition to the Collateral
Agent, with all rights, powers, privileges, interests and remedies of the
Collateral Agent hereunder with respect to such Collateral, and (iii) the term
“Collateral Agent,” when used
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herein in
relation to any rights, powers, privileges, interests and remedies of the
Collateral Agent with respect to such Collateral, shall include such Subagent;
provided, however, that no such
Subagent shall be authorized to take any action with respect to any such
Collateral unless and except to the extent expressly authorized in writing by
the Collateral Agent.
(b) All
expenses of protecting, storing, warehousing, insuring, handling, maintaining
and shipping any Collateral, all Taxes payable with respect to any Collateral
(including any sale thereof), and all other payments required to be made by the
Collateral Agent to any Person to realize upon any Collateral, shall be borne
and paid by the Grantors. The Collateral Agent shall not be liable or
responsible in any way for the safekeeping of any Collateral, for any loss or
damage thereto (except for reasonable care in its custody while Collateral is in
the Collateral Agent actual possession), for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier, forwarding
agency or other Person whatsoever, but the same shall be at the Grantors’ sole
risk.
Section
16. Remedies. If
any Event of Default shall have occurred and be continuing:
(a) The
Collateral 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 upon 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 Collateral Agent forthwith,
assemble all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place and time to be designated
by the Collateral Agent that is reasonably convenient to both parties;
(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
Collateral Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable; (iii) occupy any premises owned or to the extent lawful
and permitted leased by any of the Grantors where the Collateral or any part
thereof is assembled or located for a reasonable period in order to effectuate
its rights and remedies hereunder or under law, without obligation to such
Grantor in respect of such occupation; and (iv) exercise any and all rights and
remedies of any of the Grantors under or in connection with the Collateral, or
otherwise in respect of the Collateral, including, without limitation, (A) any
and all rights of such Grantor to demand or otherwise require payment of any
amount under, or performance of any provision of, the Receivables, Assigned
Agreements, Related Contracts and the other Collateral, (B) withdraw, or
cause or direct the withdrawal of, all funds and all other property held in or
credited to any Deposit Account, Securities Account or Commodity Account and (C)
exercise all other rights and remedies with respect to the Receivables, Assigned
Agreements, the Related Contracts and the other Collateral, including, without
limitation, those set forth in Section 9-607 of the UCC. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) days’ 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 Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been
given. The Collateral Agent may adjourn any
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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) Any cash
held by or on behalf of the Collateral Agent and all cash proceeds received by
or on behalf of the Collateral 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 Collateral Agent, be held by the Collateral Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Collateral Agent pursuant to Section 17) in whole or
in part by the Collateral Agent for the ratable benefit of the Secured Parties
against, all or any part of the Secured Obligations, as set forth in Section
8.03 of the Credit Agreement. Any surplus of such cash or cash
proceeds held by or on the behalf of the Collateral Agent and remaining after
payment in full of all the Secured Obligations shall be paid over to the
applicable Grantor or to whomsoever may be lawfully entitled to receive such
surplus.
(c) All
payments received by any Grantor under or in connection with any Assigned
Agreement or otherwise in respect of the Collateral shall be received in trust
for the benefit of the Collateral Agent, shall be segregated from other funds of
such Grantor and shall be forthwith paid over to the Collateral Agent in the
same form as so received (with any necessary indorsement).
(d) The
Collateral Agent may, without notice to any Grantor except as required by law
and at any time or from time to time, charge, set-off and otherwise apply all or
any part of the Secured Obligations against any funds held with respect to any
Deposit Account.
(e) In the
event of any sale or other disposition of any of the Intellectual Property
Collateral of any Grantor, the goodwill symbolized by any Trademarks subject to
such sale or other disposition shall be included therein, and, upon the
Collateral Agent’s reasonable request, such Grantor shall supply to the
Collateral Agent or its designee such Grantor’s know-how and expertise, such
Grantor’s documents and things relating to any Intellectual Property Collateral
subject to such sale or other disposition, and such Grantor’s customer lists and
other records and documents relating to such Intellectual Property Collateral
and to the manufacture, distribution, advertising and sale of products and
services of such Grantor.
(f) If the
Collateral Agent shall determine to exercise its right to sell all or any of the
Security Collateral of any Grantor pursuant to this Section 16, each Grantor
agrees that, upon request of the Collateral Agent, such Grantor will, at its own
expense, do or cause to be done all such other acts and things as may be
necessary to make such sale of such Security Collateral or any part thereof
valid and binding and in compliance with applicable law.
(g) The
Collateral Agent is authorized, in connection with any sale of the Security
Collateral pursuant to this Section 17, to deliver or otherwise disclose to any
prospective purchaser of the Security Collateral: (i) any
registration statement or
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prospectus,
and all supplements and amendments thereto; (ii) any information and
projections; and (iii) any other information in its possession relating to
such Security Collateral.
(h) Each
Grantor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Secured Parties by reason of the failure by such
Grantor to perform any of the covenants contained in subsection (d) above
and, consequently, agrees that, if such Grantor shall fail to perform any of
such covenants, it will pay, as liquidated damages and not as a penalty, an
amount equal to the value of the Security Collateral on the date the Collateral
Agent shall demand compliance with subsection (d) above.
(i) For the
purpose of enabling the Collateral Agent, during the continuance of an Event of
Default, to exercise rights and remedies under this Section 17 at such time as
the Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Grantor hereby grants to the Collateral
Agent, to the extent assignable, an irrevocable, non-exclusive license to use,
license or sublicense any of the Intellectual Property Collateral now owned or
hereafter acquired by such Grantor, wherever the same may be
located. Such license shall include access to all media in which any
of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof to the extent that such
non-exclusive license does not violate the express terms of any agreement
between a Grantor and a third party governing the applicable Grantor’s use of
such Intellectual Property Collateral. If (i) an Event of Default
shall have occurred and, by reason of cure, waiver, modification, amendment or
otherwise, no longer be continuing, (ii) no other Event of Default shall have
occurred and be continuing, (iii) an assignment or other transfer to the
Collateral Agent of any rights, title and interests in and to the Intellectual
Property Collateral shall have been previously made in accordance with the terms
hereof and shall have become absolute and effective, and (iv) the Obligations
shall not have become immediately due and payable, the Collateral Agent shall
promptly execute and deliver to such Grantor, at such Grantor’s sole cost and
expense, such assignments or other transfer as may be necessary to reassign to
such Grantor any such rights, title and interests as may have been assigned to
the Collateral Agent; provided, after giving effect to such reassignment, the
Collateral Agent’s security interest granted pursuant hereto, as well as all
other rights and remedies of the Collateral Agent granted hereunder, shall
continue to be in full force and effect; and provided further, the rights, title
and interest so reassigned shall be free and clear of any other Liens granted by
or on behalf of the Collateral Agent and the Secured Parties.
(j) Each
Grantor recognizes that, by reason of certain prohibitions contained in the
Securities Act, and applicable state securities laws, the Collateral Agent may
be compelled, with respect to any sale of all or any part of the Securities
Collateral and Investment Property, to limit purchasers to persons who will
agree, among other things, to acquire such Security Collateral or Investment
Property for their own account, for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges that any
such private sales may be at prices and on terms less favorable to the
Collateral Agent than those obtainable through a public sale without such
restrictions
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(including
a public offering made pursuant to a registration statement under the Securities
Act), and, so long as such private sale is made in a commercially reasonable
manner and that the Collateral Agent shall have no obligation to engage in
public sales and no obligation to delay the sale of any Security Collateral or
Investment Property for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would agree to do so.
Section
17. Indemnity and
Expenses. (a) Each Grantor agrees to indemnify, defend and
save and hold harmless each Secured Party and each of their Affiliates and their
respective officers, directors, employees, agents and advisors (each, an “Indemnified
Party”) from and against, and shall pay on demand, any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s bad faith,
gross negligence or willful misconduct.
(b) Each
Grantor will upon demand pay to the Collateral Agent the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and
expenses of its counsel and of any experts and agents, that the Collateral Agent
may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the Collateral of such
Grantor, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or the other Secured Parties hereunder or (iv) the failure
by such Grantor to perform or observe any of the provisions hereof.
Section
18. Amendments; Waivers;
Additional Grantors; Etc. (a) Subject to Section 10.01 of the
Credit Agreement and Section 2.11(b) of the Intercreditor Agreement, no
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by (i) each Grantor (other than the
Specified U.S. Borrower) to which such amendment or waiver is to apply, (ii) the
Specified U.S. Borrower and (iii) the Collateral Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Collateral
Agent or any other 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 such right preclude any other or further exercise
thereof or the exercise of any other right.
(b) Upon the
execution and delivery, or authentication, by any Person of a security agreement
supplement in substantially the form of Exhibit A hereto (each a “Security
Agreement Supplement”), such Person shall be referred to as an “Additional
Grantor” and shall be and become a Grantor hereunder, and each reference
in this Agreement and the other Loan Documents to “Grantor” shall also mean and
be a reference to such Additional Grantor, and each reference in this Agreement
and the other Loan Documents to “Collateral” shall also mean and be a reference
to the Collateral of such Additional Grantor. Concurrently with the
delivery or
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authentication
by such Additional Grantor of a Security Agreement Supplement, such Additional
Grantor shall deliver a supplement to the Perfection Certificate attaching
supplemental schedules 1 through 14 to the Perfection Certificate and each
reference in this Agreement and in the other Loan Documents to the Perfection
Certificate shall mean and be a reference to the Perfection Certificate as
supplemented thereby.
Section
19. Notices,
Etc. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopy or telex
communication or facsimile transmission) and mailed, telegraphed, telecopied,
telexed, faxed or delivered to it, if to any Grantor, addressed to it in care of
the Specified U.S. Borrower at the Specified U.S. Borrower’s address specified
in Section 10.02 of
the Credit Agreement and if to the Collateral Agent, at its address specified in
Section 10.02 of
the Credit Agreement. All such notices and other communications shall
be deemed to be given or made at such time as shall be set forth in Section 10.02 of the
Credit Agreement.
Section
20. Continuing Security
Interest; Assignments under the Credit Agreement. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the date (such date being
the “Release
Date”) of (i) the termination of the Aggregate Commitments and payment in
full of all Obligations (other than (A) contingent indemnification obligations
and (B) obligations and liabilities under Secured Cash Management Agreements and
Secured Hedge Agreements as to which arrangements satisfactory to the applicable
Cash Management Bank or Hedge Bank shall have been made) and (ii) the expiration
or termination of all Letters of Credit (other than Letters of Credit as to
which other arrangements satisfactory to the Collateral Agent and the applicable
L/C Issuer shall have been made), (b) be binding upon each Grantor, its
successors and assigns and (c) inure, together with the rights and remedies
of the Collateral Agent hereunder, to the benefit of the Secured Parties and
their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender may assign
or otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its
Commitments, the Loans owing to it and the Note or Notes, if any, held by it) to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to such Lender herein or otherwise, in
each case as provided in Section 10.06 of the Credit Agreement.
Section
21. Release;
Termination. (a) Upon (x) any sale, lease, transfer or other
disposition of any item of Collateral of any Grantor permitted by, and in
accordance with, the terms of the Loan Documents, or upon the effectiveness of
any consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 9.10 of the Credit Agreement, (y) the release of
any Grantor from its obligations under the applicable Guaranty, if any, in
accordance with the terms of the Loan Documents or (z) the release of a Lien in
any Collateral of any Grantor required by Section 2.05 of the Intercreditor
Agreement, the Collateral Agent will, at such Grantor’s expense, execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence the release of such item of Collateral or such Grantor, as the case
may be from the assignment and security interest granted hereby; provided, however, that (i)
at the time of such request and such release no Default shall have occurred and
be continuing and (ii) such Grantor shall have delivered to the Collateral
Agent, at least ten Business Days (or such shorter period as the
Collateral Agent may agree) prior to the date of the
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proposed
release, a written request for release describing the item of Collateral or
Grantor and the terms of the sale, lease, transfer or other disposition in
reasonable detail, including, without limitation, the price thereof and any
expenses in connection therewith, together with a form of release for execution
by the Collateral Agent and a certificate of such Grantor to the effect that the
transaction is in compliance with the Loan Documents and as to such other
matters as the Collateral Agent may reasonably request and (iii) the proceeds of
any such sale, lease, transfer or other disposition required to be applied, or
any payment to be made in connection therewith, in accordance with Section 2.05
of the Credit Agreement shall, to the extent so required, be paid or made to, or
in accordance with the instructions of, the Collateral Agent when and as
required under Section 2.05 of the Credit Agreement.
(b) Upon the
occurrence of the Release Date, the pledge and security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the applicable
Grantor. Upon any such termination, the Collateral Agent will, at the
applicable Grantor’s expense, execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence such
termination.
Section
22. Execution in
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to
this Agreement, or of any amendment or waiver of any provision of this Agreement
or of any Security Agreement Supplement, by telecopier or in “pdf” or similar
format by electronic mail, shall be effective as delivery of an original
executed counterpart thereof.
Section
23. The Mortgages. In the
event that any of the Collateral hereunder is also subject to a valid and
enforceable Lien under the terms of any Mortgage and the terms of such Mortgage
are inconsistent with the terms of this Agreement, then with respect to such
Collateral, the terms of such Mortgage shall be controlling in the case of
fixtures and real estate leases, letting and licenses of, and contracts and
agreements relating to the lease of, real property, and the terms of this
Agreement shall be controlling in the case of all other Collateral.
Section
24. Governing Law. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York.
Section
25. Intercreditor
Agreement. Reference is made to the Lien Subordination and Intercreditor
Agreement dated as of June 9, 2008, among General Electric Capital Corporation,
as Collateral Agent for the Revolving Facility Secured Parties referred to
therein, U.S. Bank National Association, as Trustee and as Noteholder Collateral
Agent, Ply Gem Holdings, Inc., Ply Gem Industries, Inc. and the subsidiaries of
Ply Gem Industries, Inc. named therein (the “Intercreditor
Agreement”). Notwithstanding any other provision contained herein,
this Agreement, the Liens created hereby and the rights, remedies, duties and
obligations provided for herein are subject in all respects to the provisions of
the Intercreditor Agreement and, to the extent provided therein, the applicable
Senior Secured Obligations Security Documents (as defined in the Intercreditor
Agreement). In the event of any conflict or inconsistency between the
provisions of this Agreement and the Intercreditor Agreement, the provisions of
the Intercreditor Agreement
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shall
control.
[Remainder
of Page Intentionally Blank]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
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PLY
GEM INDUSTRIES, INC.,
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by
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Name:
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Title:
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PLY
GEM HOLDINGS, INC.,
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by
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Name:
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Title:
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EACH
OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO,
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by
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Name:
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Title:
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GENERAL
ELECTRIC CAPITAL CORPORATION, AS COLLATERAL AGENT,
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by
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Name:
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Title:
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CREDIT
SUISSE, CAYMAN ISLANDS BRANCH, AS ADMINISTRATIVE AGENT,
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by
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Name:
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Title:
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by
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Name:
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Title:
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Schedule
I to the
Security
Agreement
Schedule
I to U.S. Security Agreement
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Ply
Gem Holdings, Inc.
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Alcoa
Home Exteriors, Inc.
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Alenco
Building Products Management, L.L.C.
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Alenco
Extrusion GA, L.L.C.
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Alenco
Extrusion Management, L.L.C.
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Alenco
Holding Corporation
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Alenco
Interests, L.L.C.
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Alenco
Trans, Inc.
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Alenco
Window GA, L.L.C.
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Aluminum
Scrap Recycle, L.L.C.
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AWC
Arizona, Inc.
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AWC
Holding Company
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Glazing
Industries Management, L.L.C.
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Great
Lakes Window, Inc.
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Kroy
Building Products, Inc.
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MW
Manufacturers Inc.
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MWM
Holding, Inc.
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Napco,
Inc.
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New
Alenco Extrusion, Ltd.
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New
Alenco Window, Ltd.
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New
Glazing Industries, Ltd.
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Ply
Gem Pacific Windows Corporation
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Variform,
Inc.
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Exhibit
A to the
Security
Agreement
FORM
OF SECURITY AGREEMENT SUPPLEMENT
SUPPLEMENT
NO. [l] (this
“Supplement”)
dated as of [l],
200[l] to the
Security Agreement dated as of June 9, 2008 (the “Security
Agreement”), among PLY GEM INDUSTRIES, INC., a Delaware corporation (the
“Specified
U.S. Borrower”), PLY GEM HOLDINGS, INC., a Delaware company (“Holdings”),
each Subsidiary of the Specified U.S. Borrower from time to time party thereto
(each such Subsidiary individually a “Subsidiary
Grantor” and collectively, the “Subsidiary
Grantors”; the Subsidiary Grantors, the Specified U.S. Borrower and
Holdings are referred to collectively herein as the “Grantors”),
GENERAL ELECTRIC CAPITAL CORPORATION, as collateral agent (in such capacity, the
“Collateral
Agent”) for the Secured Parties and CREDIT SUISSE, as Administrative
Agent for the Secured Parties
Reference
is made to the Credit Agreement, dated as of June 9, 2008 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Specified U.S. Borrower, the other Loan Parties
party thereto, the Lenders party thereto, the Collateral Agent and the
Administrative Agent. Terms defined in the Security Agreement or the
Credit Agreement and not otherwise defined herein are used herein as defined in
the Security Agreement or the Credit Agreement, as applicable.
The
Grantors have entered into the Security Agreement in order to induce the Lenders
to make Loans and the Issuing Banks to issue Letters of
Credit. Section 18(b) of the Security Agreement provides that
additional Persons may become Grantors under the Security Agreement by execution
and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the “New
Subsidiary”) is executing this Supplement in accordance with the
requirements of the Credit Agreement in order to induce the Lenders to make
additional Loans and the Issuing Banks to issue additional Letters of Credit and
as consideration for Loans previously made and Letters of Credit previously
issued.
SECTION
1. In accordance with Section 18(b) of the Security Agreement, the
New Subsidiary by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Subsidiary hereby (a) agrees to all terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and represents
and warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct on and as of the date hereof. In
furtherance for the foregoing, the New Subsidiary, as security for the payment
and performance in full of the Secured Obligations (as defined in the Security
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the ratable benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all the New Subsidiary’s right,
title and interest in and to the Collateral (as defined in the Security
Agreement) of the New Subsidiary. The Security Agreement is hereby
incorporated herein by reference.
[[NYCORP:3076986v8:4434D:06/09/08--10:53
a]]
Exhibit
A to the
Security
Agreement
SECTION
2. The New Subsidiary has delivered concurrently herewith a
supplement to the Perfection Certificate attaching supplemental schedules 1
through 14 to the Perfection Certificate. Such supplemental
Perfection Certificate has been duly prepared, completed and executed by the
undersigned and the information set forth therein, including the exact legal
name of the undersigned, its jurisdiction of organization and its organizational
number, is true, accurate and complete.
SECTION
3. The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION
4. Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect.
SECTION
5. This Security Agreement Supplement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION
6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of an particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION
5. This New Subsidiary agrees to reimburse the Collateral Agent for
its out-of-pocket expenses in connection with this Supplement, including the
fees, other chargers and disbursements of counsel for the Collateral
Agent..
Reference
is made to the Lien Subordination and Intercreditor Agreement dated as of June
9, 2008, among General Electric Capital Corporation, as Collateral Agent for the
Revolving Facility Secured Parties referred to therein; U.S. Bank National
Association, as Trustee and as Noteholder Collateral Agent; Ply Gem Holdings,
Inc., Ply Gem Industries, Inc.; and the subsidiaries of Ply Gem Industries, Inc.
named therein (the “Intercreditor Agreement”). Notwithstanding any
other provision contained herein, this Supplement, the Liens created hereby and
the rights, remedies, duties and obligations provided for herein are subject in
all respects to the provisions of the Intercreditor Agreement and, to the extent
provided therein, the applicable Senior Secured Obligations Security Documents
(as defined in the Intercreditor Agreement). In the event of any
conflict or inconsistency between the provisions of this Supplement and the
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall
control.
[[NYCORP:3076986v8:4434D:06/09/08--10:53
a]]
IN
WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed
this Supplement to the Security Agreement as of the day and year first above
written.
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[NAME
OF NEW SUBSIDIARY],
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by
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Name:
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Title:
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Address:
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Legal
Name:
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Jurisdiction
of Formation:
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GENERAL
ELECTRIC CAPITAL CORPORATION, AS COLLATERAL AGENT,
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by
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Name:
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Title:
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Exhibit
B to the
Security
Agreement
FORM
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
This
INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “IP Security
Agreement”) dated June 9, 2008, is made by Ply Gem Industries, Inc., a
Delaware corporation (the “Specified U.S.
Borrower”), Ply Gem Holdings, Inc., a Delaware Corporation (“Holdings”)
and the Subsidiaries of the Specified U.S. Borrower listed on the Annex hereto
(the “Subsidiaries”,
and together with the Specified U.S. Borrower and Holdings, the “Grantors”)
in favor of General Electric Capital Corporation, as collateral agent (the
“Collateral
Agent”) for the Secured Parties (as defined in the Credit Agreement
referred to below).
WHEREAS,
The Specified U.S. Borrower and the other Loan Parties party thereto have
entered into a Credit Agreement dated as of June 9, 2008 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), with Credit Suisse, as Administrative Agent, and the Lenders
party thereto. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as defined in the Credit
Agreement.
WHEREAS,
as a condition precedent to the making of Loans and the issuance of Letters of
Credit by the Lender Parties under the Credit Agreement and the entry into
Secured Hedge Agreements by the Hedge Banks and the entry into Secured Cash
Management Agreements by the Cash Management Banks from time to time, each
Grantor has executed and delivered that certain Security Agreement dated June 9,
2008, made by the Grantors to the Collateral Agent (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Security
Agreement”).
WHEREAS,
under the terms of the Security Agreement, the Grantors have granted to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in, among other property, certain intellectual property of the
Grantors, and have agreed as a condition thereof to execute this IP Security
Agreement for recording with the U.S. Patent and Trademark Office, the United
States Copyright Office, the Canadian Intellectual Property Office and other
governmental authorities.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Grantor agrees as follows:
SECTION
1. Grant of
Security. Each Grantor hereby grants to the Administrative
Agent for the ratable benefit of the Secured Parties a security interest in all
of such Grantor’s right, title and interest in and to the following (the “Collateral”):
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(a)
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the
patents and patent applications set forth in Schedule A hereto (the
“Patents”);
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(b)
|
the
trademark and service xxxx registrations and applications set forth in
Schedule B hereto (provided that no security interest shall be granted in
any trademark, whether registered, unregistered or applied for, to the
extent that, and solely during the period in which, the grant of a
security interest therein would impair the validity
or
|
Exhibit
B to the
Security
Agreement
|
|
enforceability
of such trademark under applicable federal law), together with the
goodwill symbolized thereby (the
“Trademarks”);
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(c)
|
all
copyrights, whether registered or unregistered, now owned or hereafter
acquired by such Grantor, including, without limitation, the copyright
registrations and applications and exclusive copyright licenses set forth
in Schedule C hereto (the
“Copyrights”);
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(d)
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all
reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the foregoing, all rights in the
foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any
kind whatsoever of such Grantor accruing thereunder or pertaining
thereto;
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(e)
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any
and all claims for damages and injunctive relief for past, present and
future infringement, dilution, misappropriation, violation, misuse or
breach with respect to any of the foregoing, with the right, but not the
obligation, to xxx for and collect, or otherwise recover, such damages;
and
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(f)
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any
and all proceeds of, collateral for, income, royalties and other payments
now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral of or arising from
any of the foregoing.
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SECTION
2. Security
for Obligations. The grant of a security interest in, the
Collateral by each Grantor under this IP Security Agreement secures the payment
of all Secured Obligations of such Grantor now or hereafter existing under or in
respect of the Loan Documents. Without limiting the generality of the
foregoing, this IP Security Agreement secures, as to each Grantor, the payment
of all amounts that constitute part of the Secured Obligations and that would be
owed by such Grantor to any Secured Party under the Loan Documents but for the
fact that such Secured Obligations are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving a Loan
Party.
SECTION
3. Recordation. Each
Grantor authorizes and requests that the Register of Copyrights, the
Commissioner for Patents and the Commissioner for Trademarks and any other
applicable government officer record this IP Security Agreement.
SECTION
4. Execution in
Counterparts. This IP Security Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
SECTION
5. Grants,
Rights and Remedies. This IP Security Agreement has been
entered into in conjunction with the provisions of the Security
Agreement. Each Grantor does hereby acknowledge and confirm that the
grant of the security interest hereunder to, and the rights and remedies of, the
Administrative Agent with respect to the Collateral are more fully set forth in
the Security Agreement, the terms and provisions of which are incorporated
herein by reference as if fully set forth herein.
Exhibit
B to the
Security
Agreement
SECTION
6. Governing
Law. This IP Security Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
Reference
is made to the Lien Subordination and Intercreditor Agreement dated as of June
9, 2008, among General Electric Capital Corporation, as Collateral Agent for the
Revolving Facility Secured Parties referred to therein, U.S. Bank National
Association, as Trustee and as Noteholder Collateral Agent, Ply Gem Holdings,
Inc., Ply Gem Industries, Inc. and the subsidiaries of Ply Gem Industries, Inc.
named therein (the “Intercreditor Agreement”). Notwithstanding any
other provision contained herein, this Agreement, the Liens created hereby and
the rights, remedies, duties and obligations provided for herein are subject in
all respects to the provisions of the Intercreditor Agreement and, to the extent
provided therein, the applicable Senior Secured Obligations Security Documents
(as defined in the Intercreditor Agreement). In the event of any
conflict or inconsistency between the provisions of this Agreement and the
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall
control.
[Remainder
of Page Intentionally Blank]
IN
WITNESS WHEREOF, each Grantor has caused this IP Security Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
|
PLY
GEM INDUSTRIES, INC.,
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by
|
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Name:
|
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Title:
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PLY
GEM HOLDINGS, INC.,
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By
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Name:
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Title:
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EACH
OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO,
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by
|
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Name:
|
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|
Title:
|
Exhibit
C to the
Security
Agreement
FORM
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT
This
INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this “IP Security
Agreement Supplement”) dated __________, 200_, is made by the Person
listed on the signature page hereof (the “Grantor”)
in favor of General Electric Capital Corporation, as collateral agent (the
“Collateral
Agent”) for the Secured Parties (as defined in the Credit Agreement
referred to below).
WHEREAS,
Ply Gem Industries, Inc., a Delaware corporation (the “Specified U.S.
Borrower”) and the other Loan Parties party thereto have entered into a
Credit Agreement dated as of June 9, 2008 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit
Agreement”), with Credit Suisse, as Administrative Agent, and the Lenders
party thereto. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as defined in the Credit
Agreement.
WHEREAS,
pursuant to the Credit Agreement, the Grantor and certain other Persons have
executed and delivered that certain Security Agreement dated June 9, 2008, made
by the Grantor and such other Persons to the Collateral Agent (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Security
Agreement”).
WHEREAS,
under the terms of the Security Agreement, the Grantor has granted to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in the Additional Collateral (as defined in Section 1 below) of the
Grantor and has agreed as a condition thereof to execute this IP Security
Agreement Supplement for recording with the U.S. Patent and Trademark Office,
the United States Copyright Office, the Canadian Intellectual Property Office
and other governmental authorities.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Grantor agrees as follows:
SECTION 1
.. Grant of
Security. Each Grantor hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in all of such
Grantor’s right, title and interest in and to the following (the “Additional
Collateral”):
|
|
(a)
|
the
patents and patent applications set forth in Schedule A hereto (the “Patents”);
|
|
|
(b)
|
the
trademark and service xxxx registrations and applications set forth in
Schedule B hereto (provided that no security interest shall be granted in
any trademark, whether registered, unregistered or applied for, to the
extent that, and solely during the period in which, the grant of a
security interest therein would impair the validity or enforceability of
such trademark under applicable federal law), together with the goodwill
symbolized thereby (the “Trademarks”);
|
|
|
(c)
|
all
copyrights, whether registered or unregistered, now owned or hereafter
acquired by such Grantor, including, without limitation, the copyright
registrations and applications and exclusive copyright licenses set forth
in Schedule C hereto (the “Copyrights”);
|
Exhibit
C to the
Security
Agreement
|
|
(d)
|
all
reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the foregoing, all rights in the
foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any
kind whatsoever of such Grantor accruing thereunder or pertaining
thereto;
|
|
|
(e)
|
any
and all claims for damages and injunctive relief for past, present and
future infringement, dilution, misappropriation, violation, misuse or
breach with respect to any of the foregoing, with the right, but not the
obligation, to xxx for and collect, or otherwise recover, such damages;
and
|
|
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(f)
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any
and all proceeds of, collateral for, income, royalties and other payments
now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Additional Collateral of or
arising from any of the foregoing.
|
SECTION
2. Security
for Obligations. The grant of a security interest in the
Additional Collateral by the Grantor under this IP Security Agreement Supplement
secures the payment of all Secured Obligations of the Grantor now or hereafter
existing under or in respect of the Loan Documents.
SECTION
3. Recordation. The
Grantor authorizes and requests that the Register of Copyrights, the
Commissioner for Patents and the Commissioner for Trademarks and any other
applicable government officer record this IP Security Agreement
Supplement.
SECTION
4. Grants,
Rights and Remedies. This IP Security Agreement Supplement has
been entered into in conjunction with the provisions of the Security
Agreement. The Grantor does hereby acknowledge and confirm that the
grant of the security interest hereunder to, and the rights and remedies of, the
Administrative Agent with respect to the Additional Collateral are more fully
set forth in the Security Agreement, the terms and provisions of which are
incorporated herein by reference as if fully set forth herein.
SECTION
5. Governing
Law. This IP Security Agreement Supplement shall be governed
by, and construed in accordance with, the laws of the State of New
York.
Reference
is made to the Lien Subordination and Intercreditor Agreement dated as of June
9, 2008, among General Electric Capital Corporation, as Collateral Agent for the
Revolving Facility Secured Parties referred to therein, U.S. Bank National
Association, as Trustee and as Noteholder Collateral Agent, Ply Gem Holdings,
Inc., Ply Gem Industries, Inc. and the subsidiaries of Ply Gem Industries, Inc.
named therein (the “Intercreditor Agreement”). Notwithstanding any
other provision contained herein, this Agreement, the Liens created hereby and
the rights, remedies, duties and obligations provided for herein are subject in
all respects to the provisions of the Intercreditor Agreement and, to the extent
provided therein, the applicable Senior Secured Obligations Security Documents
(as defined in the Intercreditor Agreement). In the event of any
conflict or inconsistency between the provisions of this Agreement and the
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall
control.
Exhibit
C to the
Security
Agreement
[Remainder
of Page Intentionally Blank]
IN
WITNESS WHEREOF, the Grantor has caused this IP Security Agreement Supplement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
By__________________________
Name:
Title:
Address
for Notices:
____________________________
____________________________
____________________________
