COLLATERAL AGREEMENT dated as of June 9, 2008 among PLY GEM INDUSTRIES, INC., PLY GEM HOLDINGS, INC., the GUARANTORS named herein and as Noteholder Collateral Agent
EXECUTION COPY
dated as
of
June 9,
2008
among
PLY GEM
INDUSTRIES, INC.,
PLY GEM
HOLDINGS, INC.,
the
GUARANTORS named herein
and
U.S. BANK
NATIONAL ASSOCIATION,
as
Noteholder 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 Industries,
Inc.; Ply Gem Holdings, Inc.; and the other 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.
TABLE OF
CONTENTS
Page
|
Section
1
|
Grant
of Security
|
4
|
|
Section
2
|
Security
for Obligations
|
8
|
|
Section
3
|
Grantors
Remain Liable
|
8
|
|
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
|
11
|
|
Section
7
|
Further
Assurances
|
13
|
|
Section
8
|
As
to Equipment and Inventory and Insurance
|
15
|
|
Section
9
|
Post-Closing
Changes; Bailees; Collections on Assigned Agreements and Accounts;
Assigned Agreements
|
16
|
|
Section
10
|
As
to Intellectual Property Collateral
|
18
|
|
Section
11
|
Voting
Rights; Dividends; Etc
|
20
|
|
Section
12
|
Transfers
and Other Liens; Additional Shares
|
21
|
|
Section
13
|
Noteholder
Collateral Agent Appointed Attorney-in-Fact
|
21
|
|
Section
14
|
Noteholder
Collateral Agent May Perform
|
22
|
|
Section
15
|
The
Noteholder Collateral Agent’s Duties
|
22
|
|
Section
16
|
Remedies
|
24
|
|
Section
17
|
Indemnity
and Expenses
|
27
|
|
Section
18
|
Amendments;
Waivers; Additional Grantors; Etc
|
27
|
|
Section
19
|
Notices,
Etc
|
28
|
|
Section
20
|
Continuing
Security Interest; Assignments and Transfers under the
Indenture
|
28
|
|
Section
21
|
Release;
Termination
|
28
|
|
Section
22
|
Execution
in Counterparts
|
29
|
|
Section
23
|
The
Mortgages
|
29
|
|
Section
24
|
Governing
Law
|
29
|
|
Section
25
|
Intercreditor
Agreement
|
29
|
COLLATERAL
AGREEMENT, dated as of June 9, 2008, among PLY GEM INDUSTRIES, INC., a Delaware
corporation (the “Issuer”),
PLY GEM HOLDINGS, INC., a Delaware corporation (“Holdings”),
the other Persons listed on Schedule I hereto (Holdings and the Persons so
listed being, collectively, the “Guarantors”
and together with the Issuer, the “Grantors”)
and U.S. BANK NATIONAL ASSOCIATION, as Noteholder Collateral Agent under the
Indenture referred to herein (in such capacity, the “Noteholder
Collateral Agent”).
PRELIMINARY
STATEMENTS
(1) The
Issuer, Holdings and the other Grantors party thereto have entered into (a) an
Indenture dated of even date herewith (said Indenture, as it may hereafter be
amended, amended and restated, supplemented or otherwise modified from time to
time, being the “Indenture”)
with U.S. Bank National Association, as trustee (in such capacity, the “Trustee”)
and as Noteholder Collateral Agent and (b) a Purchase Agreement, dated as
of June 2, 2008 (the “Purchase
Agreement”), among the Issuer, Holdings, the Guarantors and the Initial
Purchasers named therein (the “Initial
Purchasers”).
(2) Pursuant
to the Indenture, the Grantors are entering into this Agreement in order to
grant to the Noteholder Collateral Agent for the ratable benefit of the Secured
Parties a security interest in the Collateral (as hereinafter defined) to secure
the Obligations.
(3) It
is a condition precedent to the purchasing of the Notes by the Initial
Purchasers 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 Purchase Agreement and the
Indenture.
(5) Terms
defined in the Indenture or the Intercreditor Agreement and not otherwise
defined in this Agreement are used in this Agreement as defined in the Indenture
or the Intercreditor Agreement, as applicable. Further, unless
otherwise defined in this Agreement or in the Indenture or Intercreditor
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:
“Account
Debtor” shall mean a Person who is obligated under an Account, Chattel
Paper or General Intangible.
“Bank Collateral
Agent” shall have the meaning given to the term “Collateral Agent” in the
Intercreditor Agreement.
“Commodity Account
Control Agreement” shall mean an agreement in form reasonably
satisfactory to the Controlling Agent sufficient to grant the Controlling 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.
“Controlling
Agent” shall mean (i) (x) in the case of any Asset Sale Proceeds Account
or (y) following the Discharge of Senior Secured Obligations (where Revolving
Facility Obligations constitute Senior Secured Obligations), the Noteholder
Collateral Agent and (ii) in all other cases, the Bank Collateral
Agent.
“Deposit Account
Control Agreement” shall mean an agreement in form reasonably
satisfactory to the Controlling Agent sufficient to grant the Controlling Agent
Control over a specified Deposit Account.
“Dominion
Account” means any Deposit Account of a Grantor at the Controlling Agent
or its Affiliates or branches or another bank acceptable to the Controlling
Agent, in each case which is subject to a Deposit Account Control
Agreement.
“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 Controlling Agent in its sole discretion) after a Person becomes a
Guarantor, the Deposit Accounts, Securities Accounts and Commodity Accounts of
such new Guarantor; and
(iii) any
Deposit Accounts, Securities Accounts and Commodity Accounts (in each case other
than Asset Sale Proceeds Accounts) as to which (A) during the first 90 days
following the Issue 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 Noteholder Collateral Agent in its
discretion).
“Excluded
Assets” shall mean (i) Excluded Equity and (ii) Special Property other
than the following:
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(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
(b) the
inclusion of such Equity Interests in the Collateral would require separate
financial statements for a Subsidiary of Holdings or the Issuer to be filed with
the SEC (or any successor federal agency) pursuant to Rule 3-16 of Regulation
S-X (or any successor law or regulation), as in effect from time to
time.
“Lien
Waiver” means an agreement, in form and substance reasonably satisfactory
to the Controlling Agent, by which (a) for any Collateral located on leased
premises, the lessor waives or subordinates any Lien it may have on the
Collateral, and agrees to permit the Controlling Agent to enter upon the
premises and remove the Collateral or to use the premises for an agreed upon
period of time to store or dispose of the Collateral; (b) for any Collateral
held by a warehouseman, processor, shipper, customs broker or freight forwarder,
such Person waives or subordinates any Lien it may have on the Collateral,
agrees to hold any documents in its possession relating to the Collateral as
agent for the Controlling Agent, and agrees to deliver the Collateral to the
Controlling Agent upon request and (c) for any Collateral held by a repairman,
mechanic or bailee, such Person acknowledges the Controlling Agent’s Lien,
waives or subordinates any Lien it may have on the Collateral, and agrees to
deliver the Collateral to the Controlling Agent upon request.
“Majority
Noteholders” means the Holders of 25% or more of the outstanding
principal amount of the Notes issued under the Indenture.
“Note
Documents” means the Indenture (including the Note Guarantees set forth
therein), the Notes, this Agreement, the other Noteholder Security Documents,
the Intercreditor Agreement and the other documents and instruments executed and
delivered pursuant to the foregoing, as such documents and instruments may be
amended, amended, restated, supplemented or otherwise modified from time to
time.
“Obligations”
means (a) the Indebtedness evidenced by the Notes and all obligations in respect
thereof, including principal, premium (if any), interest (including Additional
Interest, if any, and interest accruing on or after the filing of any petition
in bankruptcy or for reorganization relating to the Issuer or any Guarantor
whether or not a claim for post-filing interest is allowed in such proceedings),
fees, charges, expenses, reimbursement obligations, Guarantees and all other
amounts payable thereunder or in respect thereof, and (b) any other obligations
of the Issuer or any Guarantor under the Indenture or any other Note
Document.
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“Payment
Item” means each
check, draft or other item of payment payable to a Grantor, including those
constituting proceeds of any Collateral.
“Release
Date” shall have the meaning specified in Section 20.
“Secured
Parties” means, collectively, (a) the Holders (as defined in the
Indenture), (b) the Trustee, (c) the Noteholder Collateral Agent, (d) each other
Person that holds, or is an obligee in respect of, any Obligations, and (e) the
successors and assigns of each of the foregoing.
“Securities
Account Control Agreement” shall mean an agreement in form reasonably
satisfactory to the Controlling Agent sufficient to grant the Controlling Agent
Control with respect to a specified Securities Account.
“UCC” shall
mean the Uniform Commercial Code (as defined in the Indenture).
NOW,
THEREFORE, in consideration of the premises and in order to induce the Initial
Purchasers to purchase the Notes and the Trustee and Noteholder Collateral Agent
to enter into the Indenture, each Grantor hereby agrees with the Noteholder
Collateral Agent for the ratable benefit of the Secured Parties as
follows:
Section
1. Grant of
Security. Each Grantor hereby grants to the Noteholder
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;
(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;
provided, however, that
(i) the Equity Interests and other securities of a Subsidiary will
constitute Security Collateral only to the extent that such Equity Interests and
other securities can secure the Notes without Rule 3-16 of
Regulation S-X under the Securities Act (“Rule 3-16”)
(or any other law, rule or regulation) requiring separate financial statements
of such Subsidiary to be filed with the SEC (or any other governmental agency);
(ii) in the event that Rule 3-16 requires or is amended, modified or
interpreted by the SEC to require (or is replaced with another rule
or
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regulation,
or any other law, rule or regulation is adopted, which would require) the filing
with the SEC (or any other governmental agency) of separate financial statements
of any Subsidiary due to the fact that such Subsidiary’s Equity Interests or
other securities constitute Security Collateral, then such Equity Interests or
other securities shall automatically be deemed not to be Security Collateral,
but only to the extent necessary to not be subject to such requirement; and
(iii) in the event that Rule 3-16 is amended, modified or interpreted
by the SEC to permit (or is replaced with another rule or regulation, or any
other law, rule or regulation is adopted, which would permit) such Equity
Interests or other securities to constitute Security Collateral without the
filing with the SEC (or any other governmental agency) of separate financial
statements of such Subsidiary, then such Equity Interests and other securities
shall automatically be deemed to be Security Collateral, but only to the extent
necessary to not be subject to any such financial statement
requirement.
(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 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 United States intent-to-use trademark applications 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 intent-to-use
trademark applications 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),
-5-
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 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
Noteholder
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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 Note 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 Noteholder
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 included in the
Collateral by reason of this Agreement or any other Note 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 Noteholder Collateral Agent pursuant hereto 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 Noteholder Collateral Agent. During the
continuation of an Event of Default, the Noteholder 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 Noteholder 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 Noteholder Collateral Agent, and to convert Security
Collateral consisting of financial assets held directly by the Noteholder
Collateral Agent to Security Collateral consisting of financial assets credited
to any Securities Account.
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(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
Noteholder Collateral Agent of such election and such interest is thereafter
represented by a certificate that is promptly delivered to the Noteholder
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 Noteholder Collateral Agent thereof and, at the Noteholder
Collateral Agent’s request and option, pursuant to an agreement in form and
substance reasonably satisfactory to the Noteholder Collateral Agent, either (i)
cause the issuer to agree to comply with instructions from the Noteholder
Collateral Agent as to such securities, without further consent of any Grantor
or such nominee, or (ii) arrange for the Noteholder 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 Noteholder
Collateral Agent, such Grantor will notify each such 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 Noteholder Collateral Agent
(unless delivered to the Bank Collateral Agent because the same constitutes
Revolving Faciltiy First Lien Collateral), duly endorsed in a manner
satisfactory to the Noteholder 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 (d) 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 Noteholder Collateral Agent) (a “Pledged Account
Bank”) that has entered into a Deposit Account Control
Agreement. The Noteholder Collateral Agent hereby agrees that it will
not deliver a notice indicating that the Noteholder Collateral Agent will take
Control over a Deposit Account, Securities
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Account
or Commodity Account under any Control Agreement unless an Event of Default has
occurred and is continuing.
(b) The
Noteholder 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 Note Documents
if an Event of Default 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 Noteholder 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 Noteholder 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 Noteholder
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 Noteholder Collateral Agent has control of the transferable records in
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 Noteholder Collateral Agent, intends to (and
hereby does) assign to the Noteholder 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 Noteholder Collateral Agent does not have a
perfected security interest exceeds $2,500,000 in the aggregate, such Grantor
shall promptly notify the Noteholder 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 Noteholder Collateral Agent of the proceeds of any drawing under such letter
of credit or (B) arrange for the Noteholder Collateral Agent to become the
transferee beneficiary of such letter of credit.
(f) Upon the
occurrence of an Event of Default, each Grantor shall, promptly upon request by
the Noteholder Collateral Agent, (i) notify (and such Grantor hereby authorizes
the Noteholder Collateral Agent to notify) the issuer and each
nominated
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person
with respect to each of the Related Contracts consisting of letters of credit
that the proceeds thereof have been assigned to the Noteholder Collateral Agent
hereunder and any payments due or to become due in respect thereof are to be
made directly to the Noteholder Collateral Agent or its designee and (ii)
arrange for the Noteholder 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 Noteholder 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 Noteholder 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 Noteholder Collateral Agent 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
of others, except for the security interest created under this Agreement,
subject to Liens permitted under Section 4.12 of the Indenture. 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
Noteholder Collateral Agent relating to the Note Documents or as otherwise
permitted under the Indenture.
(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 Holdings, the Issuer 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 Holdings, the Issuer 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
Noteholder Collateral Agent) and the issuers thereof are not in default under
such Pledged Debt.
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(e) As of the
Issue 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
Issue 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 Noteholder 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 Indenture.
(g) The
Perfection Certificate has been duly prepared, completed and executed by
Holdings and the Issuer 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 Issue Date and
as of each subsequent delivery required pursuant to Section 4.21 of the
Indenture.
(h) This
Agreement creates in favor of the Noteholder Collateral Agent for the benefit of
the Secured Parties a valid security interest in the Collateral granted by such
Grantor, 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 Revolving Facility First Lien Collateral, second
priority and, in the case of all Collateral other than Revolving Facility First
Lien Collateral, first 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 4.12 of the
Indenture.
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(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 Noteholder Collateral Agent (or the Bank 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 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 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
Noteholder 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 Noteholder 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
Noteholder 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 Noteholder Collateral Agent, each of its
records pertaining to such Collateral with a legend, in form and substance
reasonably satisfactory to the Noteholder Collateral Agent, indicating that
such
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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 Noteholder 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 Noteholder Collateral Agent an executed Control Agreement
with respect to each Deposit Account of any Grantor owned, maintained or
established by any Grantor after the Issue 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 Noteholder 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 has occurred and is continuing);
(iv) if any
Grantor shall, following the Issue Date, establish and maintain any Securities
Account or Commodity Account (other than an Excluded Account) with any
Securities Intermediary or Commodity Intermediary, such Grantor shall, within 30
days (or such longer period as the Controlling Agent may agree in its sole
discretion) of opening such Securities Account or Commodity Account, notify the
Controlling Agent thereof and deliver to the Controlling Agent an executed
Control Agreement with respect to such Securities Account or Commodity Account,
as the case may be; and
(v) deliver
to the Noteholder Collateral Agent evidence that all other actions that the
Noteholder 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 Noteholder 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 Noteholder 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 Noteholder Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral of
such Grantor
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and such
other reports in connection with such Collateral as the Noteholder Collateral
Agent may reasonably request, all in reasonable detail.
(d) Each
Grantor shall at all times defend its title to Collateral and the Noteholder
Collateral Agent’s Liens therein against all Persons, claims and demands
whatsoever, except for Liens permitted under Section 4.12 of the
Indenture.
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 4.13 of the
Indenture) 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 Noteholder 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 Noteholder 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 insurers, as required under Section 4.23 of the
Indenture. Without limitation to the foregoing, each Grantor 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 Noteholder Collateral Agent) reasonably satisfactory
to the Noteholder Collateral Agent. All proceeds under each policy
shall be payable to the Noteholder Collateral Agent or deposited directly to a
Dominion Account. From time to time upon request, the Grantors shall
deliver to the Noteholder Collateral Agent the originals or certified copies of
its insurance policies and updated flood plain searches. Unless the
Noteholder Collateral Agent shall agree otherwise, each policy of property
insurance shall include satisfactory endorsements: (i) showing the Noteholder
Collateral Agent as sole loss payee; (ii) requiring the insurer to endeavor to
provide 30 days prior written notice to the Noteholder Collateral Agent in the
event of cancellation of the policy for any reason whatsoever; and (iii)
specifying that the interest of the Noteholder Collateral Agent shall not be
impaired or invalidated by any act or neglect of any Grantor 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 Grantor fails to provide and pay
for any insurance, the Noteholder Collateral Agent may, at its option, but shall
not be required to, procure the insurance and charge the Issuer
therefor. Each Grantor agrees to deliver to the Noteholder 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 Grantors may settle, adjust
or compromise any insurance claim, as long as the proceeds are delivered to the
Noteholder Collateral Agent or deposited to a Dominion Account
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as
provided above. If an Event of Default has occurred and is
continuing, only the Noteholder Collateral Agent shall be authorized to settle,
adjust and compromise such claims. Further, each Grantor will, at the
request of the Noteholder Collateral Agent, duly execute and deliver instruments
of assignment of such insurance policies to comply with the requirements of the
Note Documents and cause the insurers to acknowledge notice of such
assignment.
(e) So long
as no Event of Default shall have occurred and be continuing, all insurance
payments, proceeds of insurance and any awards arising from condemnation of any
Collateral received by the Noteholder Collateral Agent in connection with any
loss, damage or destruction of any Collateral shall be transferred to a Dominion
Account. 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 Noteholder Collateral Agent within 30 days
(or such lesser period of time as the Noteholder Collateral Agent may agree) of
such change and thereafter taking all action required by the Noteholder
Collateral Agent for the purpose of perfecting or protecting the security
interest granted by this Agreement. Each Grantor will 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 Noteholder 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 Noteholder Collateral Agent’s account subject
only to the Noteholder 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 Noteholder
Collateral Agent’s benefit and shall act solely on the instructions of the
Noteholder Collateral Agent without the further consent of the Grantor or any
other Person and make such authenticated record available to the Noteholder
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 Noteholder
Collateral Agent’s direction during the continuation of an Event of Default, may
take) such commercially reasonable action as such Grantor (or the Noteholder
Collateral Agent) may deem necessary or advisable to enforce collection thereof;
provided, however, that
the Noteholder Collateral Agent shall have the right at any time upon the
occurrence and during the continuance of an Event of Default, to notify
the
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obligors
under any Receivables, Assigned Agreements and Related Contracts, of the
assignment of such Receivables, Assigned Agreements and Related Contracts, to
the Noteholder 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
Noteholder 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, 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 Noteholder Collateral Agent
hereunder, shall be segregated from other funds of such Grantor and shall be
applied as provided in Section 6.10 of the Indenture. Upon the
occurrence and during the continuation of an Event of Default, (i) without the
prior written consent of the Noteholder 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 practice unless the Noteholder 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 Noteholder 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 Noteholder 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 Noteholder Collateral Agent or any Secured Party of any
payment relating thereto, nor shall the Noteholder 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.
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(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 Noteholder Collateral Agent, furnish to the
Noteholder 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 Noteholder Collateral Agent such information and reports
regarding the Assigned Agreements and such other Collateral of such Grantor as
the Noteholder Collateral Agent may reasonably request and (B) upon the
reasonable request of the Noteholder 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 Noteholder 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 Intellectual Property
Collateral, 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 and any other governmental authority
located in the United States, 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 Noteholder Collateral Agent, discontinue use of or otherwise
abandon any such 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 Noteholder 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.
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(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 Noteholder Collateral Agent and shall
take such actions, at its expense, as such Grantor or the Noteholder 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 Noteholder
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 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
Noteholder Collateral Agent (an “Intellectual
Property Collateral Agreement”), for recording the security interest
granted hereunder to the Noteholder Collateral Agent in such Intellectual
Property Collateral with the U.S. Patent and Trademark Office, the U.S.
Copyright Office and any other U.S. 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 4.17 of the Indenture, execute and deliver to the Noteholder
Collateral Agent, or otherwise authenticate, an agreement substantially in the
form of Exhibit C hereto or otherwise in form and substance satisfactory to the
Noteholder Collateral Agent (an “IP Collateral
Agreement Supplement”) covering such After-Acquired Intellectual Property
which IP Collateral Agreement Supplement shall be recorded with the U.S. Patent
and Trademark Office, the U.S. Copyright Office and any other U.S. governmental
authorities necessary to perfect the security interest hereunder in such
After-Acquired Intellectual Property.
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(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
Indenture 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 Indenture and the other Note
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 Noteholder Collateral Agent or the other Secured
Parties under this Agreement or the Indenture or any other Note 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 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 Note 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 Noteholder Collateral Agent to
hold as Security Collateral and shall, if received by such Grantor, be received
in trust for the benefit of the Noteholder Collateral Agent, be segregated from
the other property or funds of such Grantor and be forthwith delivered to the
Noteholder Collateral Agent as Security Collateral in the same form as so
received (with any necessary indorsement).
(iii) The
Noteholder 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
Noteholder 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 Noteholder Collateral
Agent, which shall
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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 Noteholder Collateral Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Noteholder Collateral Agent 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, the Noteholder
Collateral Agent shall be authorized to exercise exclusive control over all
Deposit Accounts, Securities Accounts, Commodity Accounts and Asset Sale
Proceeds Accounts (other than Excluded Accounts).
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 Indenture, 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 Indenture.
(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 Grantor,
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. Noteholder Collateral Agent
Appointed Attorney-in-Fact. Each Grantor hereby irrevocably
appoints the Noteholder 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 Noteholder Collateral Agent’s
discretion, to take any action and to execute any instrument that the Noteholder
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 Noteholder 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 Noteholder Collateral
Agent’s possession or control;
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(b) to obtain
and adjust insurance required to be paid to the Noteholder 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 Noteholder
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
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 Noteholder
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 Noteholder
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 Noteholder Collateral Agent with
respect to any of the Collateral or any other action as the Noteholder
Collateral Agent deems appropriate to fulfill any Grantor’s obligations under
the Note Documents.
Section
14. Noteholder Collateral Agent
May Perform. If any Grantor fails to perform any agreement
contained herein, the Noteholder 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 Noteholder Collateral Agent incurred in
connection therewith shall be payable by such Grantor under Section
17.
Section
15. The Noteholder Collateral
Agent’s Duties. (a) The powers conferred on the
Noteholder Collateral Agent hereunder are solely to protect the Secured
Parties’
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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
Noteholder 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 Noteholder 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.
(b) The
Noteholder Collateral Agent shall not have any duties or obligations except
those expressly set forth in the Note Documents. Without limiting the
generality of the foregoing, (i) the Noteholder Collateral Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether an Event
of Default has occurred and is continuing and (ii) the Noteholder
Collateral Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Note Documents that the Noteholder Collateral
Agent is expressly required under the terms of the Note Documents to exercise
upon direction by the Trustee (or by Majority Noteholders). The
Noteholder Collateral Agent shall take such actions and exercise such remedies
hereunder and under the other Note Documents as it is from time to time
directed, in writing, to take or exercise by the Trustee; provided that the Noteholder
Collateral Agent shall not be obligated to take any such action that adversely
affects the rights, duties, liabilities or immunities of the Noteholder
Collateral Agent (and subject to the terms of the Note
Documents). The Noteholder Collateral Agent shall be entitled to rely
conclusively, without any independent investigation whatsoever, and shall be
fully protected in so relying, on any direction, instruction or consent of the
Trustee, if such direction, instruction or consent is purported to be given on
behalf of the Trustee. The Noteholder Collateral Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Trustee (or Majority Noteholders) or in the absence of its own
gross negligence or willful misconduct. In no event shall the
Noteholder Collateral Agent be liable, directly or indirectly, for any special,
indirect or consequential damages, even if the Noteholder Collateral Agent has
been advised of the possibility of such damages.
(c) Anything
contained herein to the contrary notwithstanding, the Noteholder Collateral
Agent may from time to time, when the Noteholder Collateral Agent in its
reasonable discretion deems it to be necessary, appoint one or more subagents
(each a “Subagent”)
for the Noteholder Collateral Agent hereunder with respect to all or any part of
the Collateral. In the event that the Noteholder 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 Noteholder 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 Noteholder Collateral Agent, with all rights, powers,
privileges, interests and remedies of the Noteholder Collateral Agent hereunder
with respect to such Collateral, and (iii) the term “Noteholder Collateral
Agent,” when used herein in relation to any rights, powers, privileges,
interests and remedies of the Noteholder
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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 Noteholder Collateral Agent.
(d) 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
Noteholder Collateral Agent to any Person to realize upon any Collateral, shall
be borne and paid by the Grantors. The Noteholder 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 Noteholder 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
Noteholder 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 Noteholder Collateral Agent
forthwith, assemble all or part of the Collateral as directed by the Noteholder
Collateral Agent and make it available to the Noteholder Collateral Agent at a
place and time to be designated by the Noteholder 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 Noteholder Collateral Agent’s offices
or elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Noteholder 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 Noteholder Collateral Agent shall not be obligated
to make any sale of
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Collateral
regardless of notice of sale having been given. The Noteholder
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so
adjourned.
(b) Any cash
held by or on behalf of the Noteholder Collateral Agent and all cash proceeds
received by or on behalf of the Noteholder 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 Noteholder Collateral Agent, be held by
the Noteholder Collateral Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the Noteholder
Collateral Agent pursuant to Section 17) in whole or in part by the Noteholder
Collateral Agent for the ratable benefit of the Secured Parties against, all or
any part of the Secured Obligations, as set forth in Section 6.10 of the
Indenture. Any surplus of such cash or cash proceeds held by or on
the behalf of the Noteholder 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 Noteholder Collateral Agent, shall be segregated from
other funds of such Grantor and shall be forthwith paid over to the Noteholder
Collateral Agent in the same form as so received (with any necessary
indorsement).
(d) The
Noteholder 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
Noteholder Collateral Agent’s reasonable request, such Grantor shall supply to
the Noteholder 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
Noteholder 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 Noteholder 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.
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(g) The
Noteholder 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 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 Noteholder
Collateral Agent shall demand compliance with subsection (d)
above.
(i) For the
purpose of enabling the Noteholder Collateral Agent, during the continuance of
an Event of Default, to exercise rights and remedies under this Section 17 at
such time as the Noteholder Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, and for no other purpose, each Grantor hereby
grants to the Noteholder 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 Noteholder 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 Noteholder
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 Noteholder Collateral Agent; provided, after
giving effect to such reassignment, the Noteholder Collateral Agent’s security
interest granted pursuant hereto, as well as all other rights and remedies of
the Noteholder 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 Noteholder 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 Noteholder 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
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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 Noteholder Collateral Agent than
those obtainable through a public sale without such restrictions (including a
public offering made pursuant to a registration statement under the Securities
Act), and, so long as such private sale is made in a commercially reasonable
manner and that the Noteholder 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 Noteholder 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
Noteholder 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 Noteholder 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 Article IX of
the Indenture 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 Issuer) to which such
amendment or waiver is to apply, (ii) the Issuer and (iii) the Noteholder
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 Noteholder 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 “Collateral
Agreement Supplement”), such Person shall be referred to as an “Additional
Grantor” and shall
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be and
become a Grantor hereunder, and each reference in this Agreement and the other
Note Documents to “Grantor” shall also mean and be a reference to such
Additional Grantor, and each reference in this Agreement and the other Note
Documents to “Collateral” shall also mean and be a reference to the Collateral
of such Additional Grantor. Concurrently with the delivery or
authentication by such Additional Grantor of a Collateral 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 Note 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 Issuer at the Issuer’s address specified in Section 12.02 of the
Indenture and if to the Noteholder Collateral Agent, at its address specified in
Section 12.02 of the Indenture. All such notices and other
communications shall be deemed to be given or made at such time as shall be set
forth in Section 12.02 of the Indenture.
Section
20. Continuing Security
Interest; Assignments and Transfers under the Indenture. 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 payment in full of all Obligations (other than
contingent indemnification obligations), (b) be binding upon each Grantor,
its successors and assigns and (c) inure, together with the rights and
remedies of the Noteholder 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 Holder may assign or otherwise transfer all or any portion
of its rights and obligations under the Indenture (including, without
limitation, all or any portion of its 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 Holder herein or otherwise, in each
case as provided in Section 2.06 of the Indenture.
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 Note Documents, or upon the effectiveness of
any consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 10.03 of the Indenture, (y) the release of
any Grantor from its obligations under the applicable Note Guarantee, if any, in
accordance with the terms of the Note Documents or (z) the release of a Lien in
any Collateral of any Grantor required by Section 2.05 of the Intercreditor
Agreement, the Noteholder 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 Noteholder Collateral Agent, at least ten Business
Days (or such shorter period as the Noteholder Collateral Agent may agree) prior
to the date of the 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,
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together
with a form of release for execution by the Noteholder Collateral Agent and a
certificate of such Grantor to the effect that the transaction is in compliance
with the Note Documents and as to such other matters as the Noteholder
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 4.13 of the
Indenture shall, to the extent so required, be paid or made to, or in accordance
with the instructions of, the Noteholder Collateral Agent when and as required
under Section 4.13 of the Indenture.
(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 Noteholder 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 Collateral 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 shall control.
[Remainder
of Page Intentionally Blank]
-28-
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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U.S.
BANK NATIONAL ASSOCIATION, AS NOTEHOLDER COLLATERAL
AGENT,
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by
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Name:
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Title:
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Schedule
I to Collateral 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.
|
--
-1-
Exhibit
A to the
Collateral
Agreement
FORM
OF COLLATERAL AGREEMENT SUPPLEMENT
SUPPLEMENT
NO. [l] (this
“Supplement”)
dated as of [l],
200[l] to the
Collateral Agreement dated as of June 9, 2008 (the “Collateral
Agreement”), among PLY GEM INDUSTRIES, INC., a Delaware corporation (the
“Issuer”),
PLY GEM HOLDINGS, INC., a Delaware company (“Holdings”),
each Subsidiary of the Issuer from time to time party thereto (each such
Subsidiary individually a “Subsidiary
Grantor” and collectively, the “Subsidiary
Grantors”; the Subsidiary Grantors, the Issuer and Holdings are referred
to collectively herein as the “Grantors”)
and U.S. BANK NATIONAL ASSOCIATION, as Noteholder Collateral Agent (in such
capacity, the “Noteholder
Collateral Agent”) for the Secured Parties.
Reference
is made to the Indenture, dated as of June 9, 2008 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Indenture”),
among the Issuer, the other Guarantors party thereto and U.S. Bank National
Association as Noteholder Collateral Agent and Trustee. Terms defined
in the Collateral Agreement or the Indenture and not otherwise defined herein
are used herein as defined in the Collateral Agreement or the Indenture, as
applicable.
The
Grantors have entered into the Collateral Agreement in order to induce the
Initial Purchasers to purchase the Notes and the Trustee and Noteholder
Collateral Agent to enter into the Indenture. Section 18(b) of the
Collateral Agreement provides that additional Persons may become Grantors under
the Collateral 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 Indenture.
SECTION
1. In accordance with Section 18(b) of the Collateral Agreement, the
New Subsidiary by its signature below becomes a Grantor under the Collateral
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 Collateral 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 Collateral
Agreement), does hereby create and grant to the Noteholder 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 Collateral Agreement) of the New Subsidiary. The Collateral
Agreement is hereby incorporated herein by reference.
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,
Exhibit
A to the
Collateral
Agreement
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 Noteholder
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 Collateral Agreement
shall remain in full force and effect.
SECTION
5. This Collateral 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 Collateral 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
7. This New Subsidiary agrees to reimburse the Noteholder Collateral
Agent for its out-of-pocket expenses in connection with this Supplement,
including the fees, other chargers and disbursements of counsel for the
Noteholder 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.
-2-
IN
WITNESS WHEREOF, the New Subsidiary and the Noteholder Collateral Agent have
duly executed this Supplement to the Collateral 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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U.S.
BANK NATIONAL ASSOCIATION, AS NOTEHOLDER COLLATERAL
AGENT,
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by
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Name:
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Title:
|
|
Exhibit
B to the
Collateral
Agreement
FORM
OF INTELLECTUAL PROPERTY COLLATERAL AGREEMENT
This
INTELLECTUAL PROPERTY COLLATERAL AGREEMENT (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “IP Collateral
Agreement”) dated June 9, 2008, is made by Ply Gem Industries, Inc., a
Delaware corporation (the “Issuer”),
Ply Gem Holdings, Inc., a Delaware Corporation (“Holdings”)
and the Subsidiaries of the Issuer listed on the Annex hereto (the “Subsidiaries”,
and together with the Issuer and Holdings, the “Grantors”)
in favor of U.S. Bank National Association, as Noteholder Collateral Agent (the
“Noteholder
Collateral Agent”) for the Secured Parties (as defined in the Collateral
Agreement referred to below).
WHEREAS,
the Issuer and the other Grantors party thereto have entered into an Indenture
dated as of June 9, 2008 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Indenture”),
with U.S. Bank National Association, as Trustee and Noteholder Collateral
Agent. Terms defined in the Collateral Agreement and Indenture and
not otherwise defined herein are used herein as defined in the Collateral
Agreement and Indenture.
WHEREAS,
as a condition precedent to the purchasing of the Notes by the Initial
Purchasers, each Grantor has executed and delivered that certain Collateral
Agreement dated June 9, 2008, made by the Grantors to the Noteholder Collateral
Agent (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Collateral
Agreement”).
WHEREAS,
under the terms of the Collateral Agreement, the Grantors have granted to the
Noteholder Collateral 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 Collateral
Agreement for recording with the U.S. Patent and Trademark Office, the United
States Copyright 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 Noteholder
Collateral 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”):
|
(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
United States intent-to-use trademark applications 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 intent-to-use
trademark applications under applicable federal law), together with the
goodwill symbolized thereby (the “Trademarks”);
|
Exhibit
B to the
Collateral
Agreement
|
|
(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)
|
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)
|
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.
|
SECTION
2. Security
for Obligations. The grant of a security interest in, the
Collateral by each Grantor under this IP Collateral Agreement secures the
payment of all Secured Obligations of such Grantor now or hereafter existing
under or in respect of the Note Documents. Without limiting the
generality of the foregoing, this IP Collateral 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 Note 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 Grantor.
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 Collateral Agreement.
SECTION
4. Execution in
Counterparts. This IP Collateral 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 Collateral Agreement has been
entered into in conjunction with the provisions of the Collateral
Agreement. Each Grantor does hereby acknowledge and confirm that the
grant of the security interest hereunder to, and the rights and remedies of, the
Noteholder Collateral Agent with respect to the Collateral are more fully set
forth in the Collateral Agreement, the terms and provisions of which are
incorporated herein by reference as if fully set forth herein.
SECTION
6. Governing
Law. This IP Collateral Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
-3-
Exhibit
B to the
Collateral
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 shall
control.
[Remainder
of Page Intentionally Blank]
-4-
IN
WITNESS WHEREOF, each Grantor has caused this IP Collateral Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
|
PLY
GEM INDUSTRIES, INC.,
|
|
|
by
|
|
|
Name:
|
|
|
Title:
|
|
|
PLY
GEM HOLDINGS, INC.,
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
|
EACH
OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO,
|
|
|
by
|
|
|
Name:
|
|
|
Title:
|
|
Exhibit
C to the
Collateral
Agreement
FORM
OF INTELLECTUAL PROPERTY COLLATERAL AGREEMENT SUPPLEMENT
This
INTELLECTUAL PROPERTY COLLATERAL AGREEMENT SUPPLEMENT (this “IP Collateral
Agreement Supplement”) dated __________, 200_, is made by the Person
listed on the signature page hereof (the “Grantor”)
in favor of U.S. Bank National Association, as Noteholder Collateral Agent (the
“Noteholder
Collateral Agent”) for the Secured Parties (as defined in the Collateral
Agreement referred to below).
WHEREAS,
Ply Gem Industries, Inc., a Delaware corporation (the “Issuer”)
and the other Grantors party thereto have entered into an Indenture dated as of
June 9, 2008 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Indenture”),
with U.S. Bank National Association, as Trustee and Noteholder Collateral
Agent. Terms defined in the Collateral Agreement and Indenture and
not otherwise defined herein are used herein as defined in the Collateral
Agreement and Indenture.
WHEREAS,
pursuant to the Indenture, the Grantor and certain other Persons have executed
and delivered that certain Collateral Agreement dated June 9, 2008, made by the
Grantor and such other Persons to the Noteholder Collateral Agent (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Collateral
Agreement”).
WHEREAS,
under the terms of the Collateral Agreement, the Grantor has granted to the
Noteholder Collateral 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
Collateral Agreement Supplement for recording with the U.S. Patent and Trademark
Office, the United States Copyright 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 Noteholder Collateral 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
United States intent-to-use trademark applications 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 intent-to-use
trademark applications 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
|
Exhibit
C to the
Collateral
Agreement
|
|
applications
and exclusive copyright licenses set forth in Schedule C hereto (the
“Copyrights”);
|
|
|
(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
|
|
|
(f)
|
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 Collateral Agreement
Supplement secures the payment of all Secured Obligations of the Grantor now or
hereafter existing under or in respect of the Note 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 Collateral Agreement
Supplement.
SECTION
4. Grants,
Rights and Remedies. This IP Collateral Agreement Supplement
has been entered into in conjunction with the provisions of the Collateral
Agreement. The Grantor does hereby acknowledge and confirm that the
grant of the security interest hereunder to, and the rights and remedies of, the
Noteholder Collateral Agent with respect to the Additional Collateral are more
fully set forth in the Collateral Agreement, the terms and provisions of which
are incorporated herein by reference as if fully set forth herein.
SECTION
5. Governing
Law. This IP Collateral 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
-2-
Exhibit
C to the
Collateral
Agreement
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]
-3-
IN
WITNESS WHEREOF, the Grantor has caused this IP Collateral 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:
____________________________
____________________________
____________________________
