Exhibit 10.3
 
PLEDGE AND SECURITY AGREEMENT
dated as of September 9, 2008,
among
USG CORPORATION,
as Loan Party Representative,
The Grantors Party Hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
 

 

 

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TABLE OF CONTENTS

         
ARTICLE I
 
 
       
DEFINITIONS
 
 
       
SECTION 1.01. Terms Defined in Credit Agreement
    1  
SECTION 1.02. Terms Defined in UCC
    1  
SECTION 1.03. Definitions of Certain Terms Used Herein
    1  
 
       
ARTICLE II
 
 
       
GRANT OF SECURITY INTEREST
 
 
       
SECTION 2.01. Security Interest
    3  
 
       
ARTICLE III
 
 
       
REPRESENTATIONS AND WARRANTIES
 
 
       
SECTION 3.01. Title, Perfection and Priority
    4  
SECTION 3.02. Type and Jurisdiction of Organization, Organizational and
Identification Numbers
    4  
SECTION 3.03. Principal Location
    4  
SECTION 3.04. Deposit Accounts
    4  
SECTION 3.05. Exact Names
    5  
SECTION 3.06. Perfection Certificate
    5  
SECTION 3.07. Validity of Security Interest
    5  
SECTION 3.08. Security Interest as Security Only
    5  
SECTION 3.09. Accounts
    5  
SECTION 3.10. Filing Requirements
    6  
SECTION 3.11. No Financing Statements, Security Agreements
    6  
 
       
ARTICLE IV
 
 
       
COVENANTS
 
 
       
SECTION 4.01. General
    6  
SECTION 4.02. Accounts
    8  
SECTION 4.03. Change of Name or Location; Change of Fiscal Year
    9  
 
       
ARTICLE V
 
 
       
REMEDIES
 
 
       
SECTION 5.01. Remedies
    9  
SECTION 5.02. Grantor’s Obligations Upon an Event of Default
    10  

 

 

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ARTICLE VI
 
 
       
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
 
 
       
SECTION 6.01. Account Verification
    11  
SECTION 6.02. Authorization for Secured Party to Take Certain Action
    11  
 
       
ARTICLE VII
 
 
       
COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS
 
 
       
SECTION 7.01. Collection of Accounts
    12  
SECTION 7.02. Covenant Regarding New Deposit Accounts
    13  
SECTION 7.03. Cash Dominion Periods; Application of Proceeds
    14  
 
       
ARTICLE VIII
 
 
       
GENERAL PROVISIONS
 
 
       
SECTION 8.01. Waivers
    15  
SECTION 8.02. Limitation on Administrative Agent’s and Lenders’ Duty with
Respect to the Collateral
    15  
SECTION 8.03. Compromises and Collection of Collateral
    16  
SECTION 8.04. Secured Party Performance of Debtor Obligations
    17  
SECTION 8.05. Specific Performance of Certain Covenants
    17  
SECTION 8.06. Dispositions Not Authorized
    17  
SECTION 8.07. No Waiver; Amendments; Cumulative Remedies
    17  
SECTION 8.08. Limitation by Law; Severability of Provisions
    17  
SECTION 8.09. Reinstatement
    18  
SECTION 8.10. Benefit of Agreement
    18  
SECTION 8.11. Survival of Representations
    18  
SECTION 8.12. Headings
    18  
SECTION 8.13. Termination
    18  
SECTION 8.14. Additional Subsidiaries
    19  
SECTION 8.15. Right of Setoff
    20  
SECTION 8.16. Lien Absolute
    20  
SECTION 8.17. Release
    20  
SECTION 8.18. Entire Agreement
    21  
SECTION 8.19. Governing Law; Jurisdiction; Consent to Service of Process
    21  
SECTION 8.20. WAIVER OF JURY TRIAL
    22  
SECTION 8.21. Taxes and Expenses; Indemnity
    22  
SECTION 8.22. Counterparts
    23  
 
       
ARTICLE IX
 
 
       
NOTICES
 
 
       
SECTION 9.01. Sending Notices
    23  
 
       

 

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ARTICLE X
THE ADMINISTRATIVE AGENT

     
Schedule 1
  Subsidiary Grantors
 
   
Exhibit A
  Information for each Grantor
 
   
Exhibit B
  Collateral Deposit Accounts
 
   
Exhibit C
  Form of Perfection Certificate
 
   
Exhibit D
  Financing Statement Filing Offices
 
   
Exhibit E
  Form of New Subsidiary Supplement

 

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PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”) is entered into as of
September 9, 2008, among USG Corporation, a Delaware corporation, in its
capacity as the Loan Party Representative (the “Loan Party Representative”),
each Subsidiary identified on Schedule I hereto and each other Subsidiary that
becomes a party to this Security Agreement after the Effective Date pursuant to
Section 8.15 hereof (each a “Grantor” and, collectively, the “Grantors”) and
JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the
“Administrative Agent”) for the lenders party to the Credit Agreement referred
to below.
PRELIMINARY STATEMENT
Reference is made to the Credit Agreement dated as of September 9, 2008 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among USG Corporation, in its capacity as a Borrower (in
such capacity, the “Parent Borrower”) and as the Loan Party Representative, the
Subsidiary Borrowers from time to time party thereto, the Lenders from time to
time party thereto and the Administrative Agent. Each Grantor is entering into
this Agreement in order to induce the Lenders to enter into and extend credit to
the Borrowers under the Credit Agreement and to secure the Secured Obligations.
ACCORDINGLY, the Loan Party Representative, the Grantors and the Administrative
Agent, on behalf of the Lenders, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Credit Agreement.
SECTION 1.02. Terms Defined in UCC. Terms defined in the UCC which are not
otherwise defined in this Agreement are used herein as defined in the UCC.
SECTION 1.03. Definitions of Certain Terms Used Herein. As used in this
Agreement, in addition to the terms defined in the Preliminary Statement, the
following terms shall have the following meanings:
“Accounts” means all rights to payment, whether or not earned by performance,
for the sale or lease of goods or the rendition of services, in each case in the
ordinary course of the Grantors’ business, whether such rights constitute or are
evidenced by any Account (as defined in Article 9 of the UCC), Chattel Paper,
Instrument or General Intangible.

 

 

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“Article” means a numbered article of this Agreement, unless another document is
specifically referenced.
“Cash Dominion Period” means each of a period (a) commencing on the date on
which Excess Availability shall have been less than $75,000,000 for five
consecutive Business Days and ending on the first date thereafter on which
Excess Availability shall have been at least $75,000,000 for 30 consecutive
calendar days and (b) during which an Event of Default has occurred and is
continuing. For purposes of clarity, if, during the continuance of a Cash
Dominion Period triggered by an event described in either clause (a) or (b) of
this definition, an event described in clause (a) or (b) of this definition
shall occur, then such Cash Dominion Period shall be deemed not to have
terminated until such time as a Cash Dominion Period would no longer exist under
both clauses (a) and (b) of this definition.
“Cash Dominion Period Notice” shall have the meaning set forth in
Section 7.03(a).
“Cash Dominion Termination Notice” shall have the meaning set forth in
Section 7.03(a).
“Cash Dominion Termination Period” shall have the meaning set forth in
Section 7.03(a).
“Collateral” shall have the meaning set forth in Article II.
“Collateral Deposit Account” means, with respect to each Grantor, any and all
Deposit Accounts maintained by such Grantor into which any cash, checks or other
similar payments constituting payments made in respect of Accounts are or are to
be deposited.
“Collateral Deposit Account Bank” means each bank or other financial institution
at which any Grantor maintains a Collateral Deposit Account.
“Collateral Report” means any certificate (including any Borrowing Base
Certificate), report or other document delivered by any Grantor, or by the Loan
Party Representative on behalf of any Grantor, to the Administrative Agent
relating to the Collateral pursuant to any Loan Document.
“Collection Account” shall have the meaning set forth in Section 7.03(a).
“Control” shall have the meaning set forth in Section 9-104 or Section 9-105, as
applicable, of Article 9 of the UCC.
“Deposit Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Administrative Agent, among any Grantor, a
Collateral Deposit Account Bank and the Administrative Agent with respect to
Control of the Collateral Deposit Accounts listed therein and the disposition of
funds on deposit in such Collateral Deposit Accounts.

 

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“Exhibit” refers to a specific exhibit to this Agreement, unless another
document is specifically referenced.
“Financing Statement” means, with respect to any Grantor, each UCC financing
statement naming the Administrative Agent as secured party and such Grantor as
debtor and describing the Collateral in a manner consistent with the
requirements set forth in Section 4.01(b).
“Grantors” has the meaning set forth in the preamble to this Agreement.
“Perfection Certificate” means a certificate substantially in the form of
Exhibit C, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Financial Officer of the Parent
Borrower.
“Proceeds” shall have the meaning set forth in Article 9 of the UCC.
“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.
“Security Interest” has the meaning assigned to such term in Section 2.01.
“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) the
beneficiaries of each indemnification obligation undertaken by any Loan Party
under any Loan Document, (d) each provider of Banking Services in respect of
which constitute Secured Obligations and (e) the successors and assigns of each
of the foregoing.
“Specified L&W Grantors” means, collectively, each of L & W Supply Corporation,
a Delaware corporation, California Wholesale Material Supply, LLC, a Delaware
limited liability company, Livonia Building Materials, LLC, a Michigan limited
liability company, Livonia Holdings, Inc., a Delaware corporation, and River
City Materials, Inc., an Arkansas corporation, in each case for so long as such
entity is required to be a Grantor hereunder.
“Supplement” shall have the meaning set forth in Section 8.14.
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.
ARTICLE II
GRANT OF SECURITY INTEREST
SECTION 2.01. Security Interest. As security for the payment or performance, as
the case may be, in full of the Secured Obligations, each Grantor hereby
pledges, assigns and grants to the Administrative Agent, its successors and
permitted assigns, on behalf of and for the benefit of the Secured Parties, a
security interest in all of such Grantor’s right, title and interest in (a)
Accounts, and Proceeds in respect thereof, whether now owned by or owing to, or
hereafter acquired by or arising in favor of, such Grantor (including under any
trade name or derivations thereof), and regardless of where located, and (b) all
Collateral Deposit Accounts of such Grantor (all of which will be collectively
referred to as the “Collateral”; the security interest in the Collateral granted
pursuant to this Section 2.01 is referred to as the “Security Interest”).

 

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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Grantor represents, warrants and covenants to and with the Secured Parties
that:
SECTION 3.01. Title, Perfection and Priority. Such Grantor has good and valid
rights in or the power to transfer the Collateral and title to the Collateral
with respect to which it has purported to grant the Security Interest hereunder,
free and clear of all Liens except for Liens permitted under Section 4.01(g),
and has full power and authority to grant to the Administrative Agent, for the
benefit of the Secured Parties, the Security Interest 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, except such consents or
approvals the failure of which to have been obtained will not impair the
Security Interest. When a properly completed Financing Statement has been filed
in the appropriate office against such Grantor in the applicable location listed
on Exhibit D (or, in the case of any Grantor that becomes a party hereto after
the Effective Date, in the jurisdiction of organization of such Grantor
specified in Schedule I to the Supplement for such Grantor) and any applicable
filing fees or taxes are paid in connection with such filing, the Administrative
Agent will have a fully perfected first priority security interest in that
Collateral of such Grantor in which a security interest may be perfected by
filing a UCC financing statement, subject only to Liens permitted under
Section 4.01(g).
SECTION 3.02. Type and Jurisdiction of Organization, Organizational and
Identification Numbers. The type of entity of such Grantor, its state of
organization, the organizational number issued to it by its state of
organization and its federal employer identification number are set forth on
Exhibit A (as amended from time to time pursuant to Section 4.03 or supplemented
from time to time pursuant to any Supplement).
SECTION 3.03. Principal Location. The location of such Grantor’s place of
business (if it has only one) or its chief executive office (if it has more than
one place of business) is disclosed in Exhibit A (as amended from time to time
pursuant to Section 4.03 or supplemented from time to time pursuant to any
Supplement). In addition, such Grantor has no other places of business where
books and records with respect to the Collateral are maintained, except those
set forth in Exhibit A (as amended from time to time pursuant to Section 4.03 or
supplemented from time to time pursuant to any Supplement).
SECTION 3.04. Deposit Accounts. Exhibit B (as amended or supplemented from time
to time pursuant to Section 7.02 or any Supplement) sets forth a complete list
of the Collateral Deposit Accounts of such Grantor, including, with respect to
each such Collateral Deposit Account, each depositary institution’s name and
location and such Grantor’s account number.

 

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SECTION 3.05. Exact Names. Such Grantor’s name, as set forth on Exhibit A (as
amended from time to time pursuant to Section 4.03 or supplemented from time to
time pursuant to any Supplement), is the exact name as it appears in such
Grantor’s organizational documents, as amended, as filed with such Grantor’s
jurisdiction of organization. Such Grantor has not, during the past two years
prior to the Effective Date, been known by or used any other corporate or
fictitious name, or been a party to any merger or consolidation, or been a party
to any acquisition, in each case except as otherwise specified in the Perfection
Certificate or any certificate delivered to the Administrative Agent pursuant to
Section 4.01(f).
SECTION 3.06. Perfection Certificate. The Perfection Certificate has been duly
prepared, completed and executed by the Parent Borrower and the information set
forth therein with respect to each Grantor is correct and complete as of the
Effective Date, and the Financing Statements (including any amendments thereto)
prepared by the Administrative Agent based upon the information provided to the
Administrative Agent in the Perfection Certificate for filing in each
governmental, municipal or other office specified in Schedule 2 to the
Perfection Certificate (or specified by notice from the Loan Party
Representative to the Administrative Agent after the Effective Date in the case
of filings, recordings or registrations required by Section 5.10 of the Credit
Agreement or Sections 4.01 and 4.03 hereof) are all the filings, recordings and
registrations that are necessary to perfect a security interest in favor of the
Administrative Agent (for the benefit of the Secured Parties) in respect of all
the Collateral in which the Security Interest may be perfected by filing,
recording or registering in the U.S. (or any political subdivision thereof), and
no further or subsequent filing, refiling, recording, rerecording, registration
or reregistration is necessary in any such jurisdiction, except as provided
under applicable law with respect to the filing of continuation statements.
SECTION 3.07. Validity of Security Interest. The Security Interest constitutes a
legal and valid security interest in all the Collateral securing the payment and
performance of the Secured Obligations.
SECTION 3.08. Security Interest as Security Only. The Security Interest granted
by such Grantor is granted as security only and shall not subject the
Administrative Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Collateral.
SECTION 3.09. Accounts. (a) The names of the Account Debtors, amounts owing, due
dates and other information with respect to such Grantor’s Accounts are and will
be complete, true and correct in all material respects in the records of such
Grantor relating thereto and in all invoices and Collateral Reports with respect
thereto furnished to the Administrative Agent pursuant to the Loan Documents
from time to time. As of the time when each Account arises, such Grantor shall
be deemed to have represented and warranted that such Account and all records
relating thereto are genuine and in all respects what they purport to be.

 

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(b) In addition, with respect to all of its Accounts, except as disclosed in the
most recent Collateral Report, (i) the amounts shown on all invoices, statements
and Collateral Reports with respect thereto are actually and absolutely owing to
such Grantor as indicated thereon and are not in any way contingent (other than
with respect to discounts, rebates, billing errors, setoffs, counterclaims and
other Dilution Factors); (ii) no payments have been or shall be made thereon
except payments delivered or to be delivered to a Collateral Deposit Account as
required pursuant to Section 7.01; and (iii) to such Grantor’s knowledge, all
Account Debtors relating to such Accounts have the capacity to contract.
SECTION 3.10. Filing Requirements. None of the Collateral owned by it is of a
type for which security interests or liens may be perfected by filing under any
Federal statute. Notwithstanding anything in any Loan Document to the contrary,
the Administrative Agent agrees that the Grantors shall not be required to make
filings under the Assignment of Claims Act of 1940, 31 U.S.C. §3727 and 41
U.S.C. § 15.
SECTION 3.11. No Financing Statements, Security Agreements. No financing
statement or security agreement describing all or any portion of the Collateral
which has not lapsed or been terminated naming such Grantor as debtor has been
filed or is of record in any jurisdiction except (a) for the Financing
Statements and (b) as permitted under Section 4.01(g).
ARTICLE IV
COVENANTS
From the date of this Agreement, and thereafter until this Agreement is
terminated, each Grantor agrees that:
SECTION 4.01. General. (a) Collateral Records. Such Grantor will maintain books
and records with respect to the Collateral owned by it in accordance
Section 5.06 of the Credit Agreement, and furnish to the Administrative Agent,
with sufficient copies for each of the Lenders, such reports relating to such
Collateral as the Administrative Agent may from time to time reasonably request.
(b) Authorization to File Financing Statements; Ratification. Such Grantor
hereby authorizes the Administrative Agent to file, and if requested will
deliver to the Administrative Agent, all Financing Statements and other
documents and take such other actions as may from time to time be reasonably
requested by the Administrative Agent in order to maintain, subject to any Liens
permitted under Section 4.01(g), a first priority perfected security interest in
and, if applicable and contemplated by the terms hereof, Control of, the
Collateral owned by such Grantor. Any Financing Statement (or amendment thereto)
filed by the Administrative Agent shall (i) indicate such Grantor’s Collateral
by any description that reasonably approximates the description of such
Collateral contained in this Agreement and (ii) contain any other information
required by part 5 of Article 9 of the UCC for the sufficiency or filing office
acceptance of such Financing Statement (or amendment thereto). Such Grantor
agrees to furnish any such information to the Administrative Agent promptly upon
request. Such Grantor also ratifies its authorization for the Administrative
Agent to have filed any initial Financing Statements if filed prior to the
Effective Date.

 

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(c) Further Assurances. Such Grantor agrees to take any and all actions that it
shall reasonably deem necessary to defend title to the Collateral against all
persons and to defend the Security Interest of the Administrative Agent in its
Collateral and the priority thereof against any Lien not expressly permitted
under Section 4.01(g).
(d) Disposition of Collateral. Such Grantor will not sell, lease or otherwise
dispose of the Collateral owned by it except for dispositions not otherwise
prohibited by Section 6.03 of the Credit Agreement.
(e) Maintaining Perfection of Security Interest. Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the
Administrative Agent may from time to time reasonably request to preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any Financing Statements or other documents in
connection herewith or therewith. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note
or other instrument (other than any promissory note or other instrument in an
aggregate principal amount of less than $250,000 owed to the applicable Grantor
by any Person that is not the Parent Borrower or any Subsidiary, provided that
the aggregate principal amount of promissory notes that may be excluded from the
delivery requirements of this paragraph (e) may not exceed $1,000,000 at any one
time), such note or instrument shall be immediately pledged and delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent.
(f) Annual Confirmation of Perfection Certificate. Each year, at the time of
delivery of annual financial statements with respect to the preceding fiscal
year pursuant to Section 5.01(a) of the Credit Agreement, such Grantor shall
cause the Loan Party Representative to deliver to the Administrative Agent a
certificate executed by a Financial Officer of the Parent Borrower (i) setting
forth any changes to the information required pursuant to the Perfection
Certificate, or confirming that there has been no change in such information, in
each case since the date of the Perfection Certificate or the date of the most
recent certificate delivered pursuant to this Section 4.01(f) and
(ii) certifying that all initial UCC financing statements or other appropriate
filings, recordings or registrations, including all refilings, rerecordings,
reregistrations and amendments to the initial UCC financing statements,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in the jurisdiction
identified pursuant to Section 4.03 to the extent necessary to protect and
perfect the Security Interest as of the date of such certificate.

 

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(g) Liens. Such Grantor will not create, incur, or suffer to exist any Lien on
the Collateral owned by it except Liens permitted under clauses (i) through
(iv), (vi) and (xi) of Section 6.02 of the Credit Agreement.
(h) Other Financing Statements. Such Grantor will not authorize the filing of
any financing statement naming it as debtor covering all or any portion of the
Collateral owned by it, except with respect to any Lien permitted under
Section 4.01(g). Such Grantor acknowledges that it is not authorized to file
(i) any financing statement with respect to the Collateral, except with respect
to any Lien permitted under Section 4.01(g), without providing prior written
notice to the Administrative Agent or (ii) any amendment or termination
statement with respect to any Financing Statement filed in accordance with the
terms hereof without the prior written consent of the Administrative Agent,
subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.
(i) Compliance with Terms. Such Grantor shall observe, perform and comply with
all obligations in respect of the Collateral owned by it (in each case, in a
manner consistent with past business practices of such Grantor), unless the
failure to observe, perform or comply with such obligations would not adversely
affect the validity, perfection and priority of the Security Interest.
SECTION 4.02. Accounts. (a) Certain Agreements on Accounts. No Grantor will make
or agree to make any discount, credit, rebate or other reduction in the original
amount owing on an Account or accept in satisfaction of an Account less than the
original amount thereof, except that, for so long as no Event of Default is
continuing, such Grantor may reduce the amount owing on Accounts arising from
the sale of Inventory in accordance with its past business practices.
(b) Collection of Accounts. Except as otherwise provided in this Agreement, each
Grantor will, consistent with its past business practices, collect and enforce,
at no expense to any Secured Party, all amounts due or hereafter due to such
Grantor under the Accounts owned by it.
(c) Security Interest in Property to Satisfy Account Debt. If at any time any
Grantor shall take a security interest in any property of an Account Debtor or
any other Person to secure payment and performance of an Account, such Grantor
shall promptly assign such security interest to the Administrative Agent. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other Person granting the security interest.
(d) Delivery of Invoices. Such Grantor will deliver to the Administrative Agent,
immediately upon its request after the occurrence and during the continuation of
an Event of Default, duplicate invoices with respect to each Account owned by it
bearing such language of assignment as the Administrative Agent shall specify.
(e) Disclosure of Material Reductions in Accounts. Such Grantor, promptly upon
obtaining knowledge of any event, circumstance or change that has occurred since
the most recent date on which a Borrowing Base Certificate was required to be
delivered pursuant to Section 5.01(e) of the Credit Agreement that would
materially reduce the aggregate amount of Eligible Accounts or result in a
material portion of the Eligible Accounts ceasing to be Eligible Accounts, shall
cause the Loan Party Representative to promptly disclose such fact to the
Administrative Agent in writing.

 

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SECTION 4.03. Change of Name or Location; Change of Fiscal Year. Such Grantor
shall not (a) change its name as it appears in official filings in the state of
its incorporation or organization, (b) change its chief executive office,
principal place of business or corporate offices, or the location of its records
concerning the Collateral as set forth in the Security Agreement, (c) change the
type of entity that it is, (d) change its organization identification number, if
any, issued by its state of incorporation or other organization or (e) change
its state of incorporation or organization, in each case, unless the
Administrative Agent shall have received at least ten days prior written notice
of such change and such Grantor (or the Administrative Agent on behalf of such
Grantor) shall have taken all action reasonably requested by the Administrative
Agent to continue the validity, perfection and priority of any Liens in favor of
the Administrative Agent, on behalf of the Secured Parties, in any Collateral,
provided that any new jurisdiction of organization shall be in the U.S., any
State thereof or the District of Columbia. In connection with any such change
permitted under this Section 4.03, Exhibit A hereto shall be deemed to be
amended to reflect such change (effective as of the date of such change).
ARTICLE V
REMEDIES
SECTION 5.01. Remedies. (a) Upon the occurrence, and during the continuance, of
an Event of Default, the Administrative Agent may exercise any or all of the
following rights and remedies:
(i) those rights and remedies provided in this Agreement, the Credit Agreement
or any other Loan Document, provided that this Section 5.01(a) shall not be
understood to limit any rights or remedies available to the Secured Parties
prior to an Event of Default;
(ii) those rights and remedies available to a secured party under the UCC
(whether or not the UCC applies to the affected Collateral) or under any other
applicable law (including, without limitation, any law governing the exercise of
a bank’s right of setoff or bankers’ lien) when a debtor is in default under a
security agreement; and
(iii) institute a Cash Dominion Period as per the terms of Section 7.03.
(b) The Administrative Agent, on behalf of the Secured Parties, may comply with
any applicable state or federal law requirements in connection with a
disposition of the Collateral and such compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

 

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(c) The Administrative Agent shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of the Secured Parties, the whole or any part of the
Collateral so sold, free of any right of equity redemption, which equity
redemption the Grantor hereby expressly releases.
(d) The Administrative Agent may, if it so elects, seek the appointment of a
receiver or keeper to enforce any of the Administrative Agent’s remedies (for
the benefit of the Secured Parties) with respect to such appointment without
prior notice or hearing as to such appointment.
(e) Notwithstanding the foregoing, no Secured Party shall be required to
(i) make any demand upon, or pursue or exhaust any of their rights or remedies
against, any Grantor, any other obligor, guarantor, pledgor or any other Person
with respect to the payment of the Secured Obligations or to pursue or exhaust
any of their rights or remedies with respect to any Collateral therefor or any
direct or indirect guarantee thereof, (ii) marshal the Collateral or any
guarantee of the Secured Obligations or resort to the Collateral or any such
guarantee in any particular order or (iii) effect a public sale of any
Collateral.
SECTION 5.02. Grantor’s Obligations Upon an Event of Default. Without limiting
the foregoing or any other inspection rights the Administrative Agent may have
under the Loan Documents, upon the request of the Administrative Agent after the
occurrence and during the continuance of an Event of Default, each Grantor will:
(a) assemble and make available to the Administrative Agent all books and
records relating to the Collateral at any place or places specified by the
Administrative Agent, whether at a Grantor’s premises or elsewhere;
(b) permit the Administrative Agent, by the Administrative Agent’s
representatives and agents, to enter, occupy and use any premises where the
books and records relating to the Collateral are located, to make and remove
copies of all or any part of such books and records, without any obligation to
pay the Grantor for such use and occupancy; and
(c) at its own expense, cause the independent certified public accountants then
engaged by each Grantor to prepare and deliver to the Administrative Agent,
promptly upon the Administrative Agent’s request, the following reports with
respect to the Accounts of such Grantor: (i) a reconciliation of all such
Accounts; (ii) an aging of all such Accounts; (iii) trial balances; and (iv) a
test verification of all such Accounts.

 

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ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
SECTION 6.01. Account Verification. The Administrative Agent may at any time, in
the name of the applicable Grantor or, after the occurrence, and during the
continuance, of an Event of Default, in the Administrative Agent’s own name or
in the name of a nominee of the Administrative Agent, communicate (by mail,
telephone, facsimile or otherwise) with the Account Debtors of any such Grantor
to verify with such Account Debtors, to the Administrative Agent’s reasonable
satisfaction, any information relating to the existence, amount, terms of, and
any other material matter relating to, the Accounts of such Account Debtors.
SECTION 6.02. Authorization for Secured Party to Take Certain Action. (a) Each
Grantor hereby appoints the Administrative Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Administrative Agent may
reasonably deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, the Administrative Agent shall have the right with
full power of substitution either in the name of such Grantor or, after the
occurrence, and during the continuance, of an Event of Default, in the
Administrative Agent’s name, to (i) file Financing Statements necessary or
desirable in the Administrative Agent’s sole discretion to perfect and to
maintain the perfection and priority of the Administrative Agent’s security
interest in the Collateral, (ii) endorse and collect any cash proceeds of the
Collateral of such Grantor, (iii) file a carbon, photographic or other
reproduction of this Agreement or any Financing Statement as a financing
statement and to file any other financing statement or amendment of a financing
statement (which does not add new collateral or add a debtor) in such offices as
the Administrative Agent in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the Security Interest,
(iv) apply the proceeds of any Collateral of such Grantor received by the
Administrative Agent to the Secured Obligations as provided in Section 2.08(b)
or Section 2.16(b) of the Credit Agreement, as applicable, (v) discharge past
due taxes, assessments, charges, fees or Liens on the Collateral (except for
such Liens as are specifically permitted under Section 4.01(g)), (vi) contact
the Account Debtors of such Grantor for any reason, (vii) demand payment or
enforce payment of the Accounts in the name of the Administrative Agent or such
Grantor, (viii) endorse any and all checks, drafts and other instruments for the
payment of money relating to the Accounts, (ix) sign such Grantor’s name on any
invoice or bill of lading relating to the Accounts, drafts against any Account
Debtor or assignments and verifications of Accounts, (x) exercise all of such
Grantor’s rights and remedies with respect to the collection of the Accounts and
any other Collateral, (xi) settle, adjust, compromise, extend or renew the
Accounts or any legal proceedings brought to collect Accounts, (xii) prepare,
file and sign such Grantor’s name on a proof of claim in bankruptcy or similar
document against any Account Debtor of such Grantor, (xiii) prepare, file and
sign such Grantor’s name on any notice of Lien, assignment or satisfaction of
Lien or similar document in connection with the Accounts, (xiv) change the
address for delivery of mail relating to the Accounts of such Grantor to such
address as the Administrative Agent may designate and to receive, open and
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all such mail addressed to such Grantor, (xv) use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral and (xvi) do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Administrative
Agent were the absolute owner of the Collateral for all purposes, provided that
(A) nothing herein contained shall be construed as requiring or obligating the
Administrative Agent to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by the Administrative Agent, or to
present or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby and such Grantor agrees to reimburse the
Administrative Agent on demand for any payment made or any expense incurred by
the Administrative Agent in connection with any of the foregoing and (B) this
authorization shall not relieve such Grantor of any of its obligations under
this Agreement or under the Credit Agreement. The Administrative Agent and the
other Secured Parties shall be accountable only for amounts actually received as
a result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct. Notwithstanding the foregoing, if the
Administrative Agent or a Secured Party determines (after being given notice of
such) that any portion of a payment from an Account Debtor received by it
constitutes the excess portion of a joint remittance from such Account Debtor
(which such portion was not owed to a Grantor but paid to the joint order of a
Grantor and a non-Affiliated contractor or sub-contractor in respect of an
Account), the Administrative Agent or other Secured Party, as applicable, shall
promptly remit such excess portion of the payment to the Grantors.
(b) All acts of said attorney or designee are hereby ratified and approved. The
powers conferred on the Administrative Agent, for the benefit of the Secured
Parties, under this Section 6.02 are solely to protect the Administrative
Agent’s interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any other Secured Party to exercise any such powers. The
Administrative Agent agrees that, except for the powers granted in
Sections 6.02(a)(i), (a)(iii) or (a)(v), it shall not exercise any power or
authority granted to it unless an Event of Default has occurred and is
continuing, provided, however, that the Administrative Agent may exercise the
powers granted in Sections 6.02(a)(ii), (a)(iv) and (a)(viii) at any time during
the continuance of a Cash Dominion Period.
ARTICLE VII
COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS
SECTION 7.01. Collection of Accounts. (a) On or before the date that is 60 days
following the Effective Date, each Grantor shall execute and deliver to the
Administrative Agent Deposit Account Control Agreements for each Collateral
Deposit Account maintained by such Grantor as of the Effective Date. After the
Effective Date, each Grantor will comply with the terms of Section 7.02.

 

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(b) Within 45 days after the Effective Date, each Grantor shall direct all of
its Account Debtors to forward payments directly to one or more of the
Collateral Deposit Accounts of such Grantor; provided, however, that with
respect to the Account Debtors of the Specified L&W Grantors, the Specified L&W
Grantors shall not be required to so direct such Account Debtors (and,
accordingly, shall not be deemed to have breached this Section 7.01(b)) so long
as the Specified L&W Grantors each deposit any cash, checks or other similar
payments constituting payments made with respect to any Account of such Account
Debtors into a Collateral Deposit Account in accordance with the last sentence
of this Section 7.01(b). If any Grantor (other than a Specified L&W Grantor)
should refuse or neglect to notify any Account Debtor to forward payments with
respect to such Account Debtor’s Accounts directly to a Collateral Deposit
Account following its receipt of a written request to do so from the
Administrative Agent, the Administrative Agent shall, notwithstanding the
language set forth in Section 6.02(b), be entitled to make such notification
directly to Account Debtor. If notwithstanding the foregoing instructions, any
Grantor receives any cash, checks or other similar payments constituting
payments made with respect to any Account, such Grantor shall receive such cash,
checks or other similar payments as the Administrative Agent’s trustee and shall
promptly (but in no event later than two Business Days after receipt thereof)
deposit all such cash, checks or other similar payments into a Collateral
Deposit Account.
SECTION 7.02. Covenant Regarding New Deposit Accounts. No Grantor may open a
Collateral Deposit Account unless the bank or financial institution at which
such Grantor seeks to open such Collateral Deposit Account has entered into a
Deposit Account Control Agreement in order to give the Administrative Agent
Control of such Collateral Deposit Account, provided that (a) no such Deposit
Account Control Agreement will be required to be effective prior to the date
that is 60 days following the Effective Date and (b) after the conclusion of
such 60-day period, the Administrative Agent may, in its discretion, with
respect to the Collateral Deposit Accounts of any Collateral Deposit Account
Bank that is not subject to a Deposit Account Control Agreement, (i) defer
delivery of a Deposit Account Control Agreement with respect to such Collateral
Deposit Accounts and (ii) require such Grantor to replace such Collateral
Deposit Accounts with one or more new Collateral Deposit Accounts opened and
maintained with a bank or financial institution that is subject to a Deposit
Account Control Agreement (it being understood and agreed that, prior to the
opening of such new Collateral Deposit Accounts referenced in the immediately
preceding clause (ii) (but after the conclusion of the 60-day period following
the Effective Date), the Administrative Agent shall be entitled to establish a
Reserve with respect to those Collateral Deposit Account referenced in the
immediately preceding clause (i) for which a Deposit Account Control Agreement
has not been executed and delivered). Upon the opening of any new Collateral
Deposit Account in accordance with this Section 7.02, the Loan Party
Representative shall deliver to the Administrative Agent a supplement to
Exhibit B, setting forth the information with respect to such Collateral Deposit
Account required therein. Upon the closing of any Collateral Deposit Account,
the Loan Party Representative shall deliver to the Administrative Agent a
supplement to Exhibit B reflecting such closing. In the case of Collateral
Deposit Accounts maintained with any Lender, the terms of each Deposit Account
Control Agreement entered into with such Lender shall be subject to the
provisions of the Credit Agreement regarding setoff.

 

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SECTION 7.03. Cash Dominion Periods; Application of Proceeds. (a) Pursuant to
each Deposit Account Control Agreement entered into pursuant to Section 7.01 or
7.02, the Administrative Agent shall have Control of the relevant Collateral
Deposit Account. The applicable Grantor may operate and transact business
through its Collateral Deposit Accounts in its normal fashion at all times
(except as provided below), including making withdrawals (whether via wire
transfer, ACH transfer, check or otherwise), provided that (i) upon the
commencement and during the continuation of any Cash Dominion Period, the
Administrative Agent may (A) send a notice (a “Cash Dominion Period Notice”) to
each Collateral Deposit Account Bank instructing such Collateral Deposit Bank to
cease complying with any instructions originated by the applicable Grantor
regarding the disposition of funds in the related Collateral Deposit Account and
to begin complying with instructions originated by the Administrative Agent
directing the sweep of available funds from the applicable Collateral Deposit
Account on a daily basis into a collection account maintained by the Parent
Borrower with the Administrative Agent (such account, the “Collection Account”),
without further consent of the applicable Grantor and subject to the terms of
the applicable Deposit Account Control Agreement and (B) apply (and allocate)
the funds in the Collection Account in accordance with Section 2.08(b) or
Section 2.16(b) of the Credit Agreement, as applicable, and (ii) except as
otherwise provided below, upon the termination of each Cash Dominion Period (the
timing of such termination to be determined by reference to the definition of
the term “Cash Dominion Period” set forth in Section 1.03), the Administrative
Agent shall send a notice to each Collateral Deposit Account Bank (a “Cash
Dominion Termination Notice”) terminating such Cash Dominion Period and
commencing a period (each such period, a “Cash Dominion Termination Period”) in
which each Grantor may again transact business through each Collateral Deposit
Account in its normal fashion, including making withdrawals from each Collateral
Deposit Account (whether via wire transfer, ACH transfer, check or otherwise);
provided, however, that following (x) the commencement of the first Cash
Dominion Period occurring during the second Cash Dominion Termination Period,
(y) the termination of the Revolving Commitments as contemplated by Article VII
of the Credit Agreement or (z) a declaration, as contemplated by Article VII of
the Credit Agreement, that the outstanding Loans have become due and payable,
the Administrative Agent shall not be required to give any further Cash Dominion
Termination Notices and shall be entitled to permanently maintain such Cash
Dominion Period and exercise the rights attendant thereto as set forth above.
(b) All amounts deposited in the Collection Account pursuant to this
Section 7.03 shall be deemed received by the Administrative Agent in accordance
with Section 2.16(b) of the Credit Agreement; provided, that, notwithstanding
the foregoing, if the Administrative Agent or a Secured Party determines (after
being given notice of such) that any portion of a payment from an Account Debtor
received by it constitutes the excess portion of a joint remittance from such
Account Debtor (which such

 

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portion was not owed to a Grantor but paid to the joint order of a Grantor and a
non-Affiliated contractor or sub-contractor in respect of an Account), the
Administrative Agent or other Secured Party, as applicable, shall promptly remit
such excess portion of the payment to the Grantors. The balance, if any, in the
Collection Account after all the Secured Obligations on any day during a Cash
Dominion Period have been satisfied shall be deposited by the Administrative
Agent into the Parent Borrower’s general operating account as instructed by the
Loan Party Representative. If, at the time any Termination Period commences, the
Collection Account has a balance, such balance shall be deposited by the
Administrative Agent into the Parent Borrower’s general operating account as
instructed by the Loan Party Representative.
(c) To the extent that the terms of any Deposit Account Control Agreement are
inconsistent with the terms of this Section 7.03 with respect to the rights of
the Administrative Agent and the Grantors, the terms of this Section 7.03 shall
control.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01. Waivers. Each Grantor hereby waives notice of the time and place
of any public sale or the time after which any private sale or other disposition
of all or any part of the Collateral may be made. To the extent such notice may
not be waived under applicable law, any notice made shall be deemed reasonable
if sent to the Grantors, addressed as set forth in Article IX, at least ten days
prior to (a) the date of any such public sale or (b) the time after which any
such private sale or other disposition may be made. To the maximum extent
permitted by applicable law, each Grantor waives all claims, damages and demands
against any Secured Party arising out of the repossession, retention or sale of
the Collateral, except as may arise solely out of the gross negligence or wilful
misconduct of such Secured Party as finally determined by a court of competent
jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and covenants
not to assert against any Secured Party, any valuation, stay, appraisal,
extension, moratorium, redemption or similar laws and any and all rights or
defenses it may have as a surety now or hereafter existing which, but for this
provision, might be applicable to the sale of any Collateral made under the
judgment, order or decree of any court, or privately under the power of sale
conferred by this Agreement, or otherwise. Except as otherwise specifically
provided herein, each Grantor hereby waives presentment, demand, protest or any
notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Agreement or any Collateral.
SECTION 8.02. Limitation on Administrative Agent’s and Lenders’ Duty with
Respect to the Collateral. Except as imposed under applicable law, no Secured
Party shall have any other duty as to any Collateral in its possession or
control or in the possession or control of any agent or nominee of such Secured
Party, or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto. To the extent that applicable
law imposes duties on the Administrative Agent to exercise remedies in a
commercially reasonable manner, each Grantor acknowledges and agrees that it is
commercially

 

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reasonable for the Administrative Agent (a) to fail to incur expenses deemed
significant by the Administrative Agent to prepare Collateral for disposition,
(b) to obtain or, if not required by other law, to fail to obtain governmental
or third party consents for the collection or disposition of Collateral to be
collected or disposed of, (c) to fail to exercise collection remedies against
Account Debtors or other Persons obligated on Collateral or to remove Liens on
or any adverse claims against Collateral, (d) to exercise collection remedies
against Account Debtors and other Persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists, (e) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to
contact other Persons, whether or not in the same business as such Grantor, for
expressions of interest in acquiring all or any portion of such Collateral,
(g) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the Collateral is of a specialized nature, (h) to
dispose of Collateral by utilizing internet sites that provide for the auction
of assets of the types included in the Collateral or that have the reasonable
capacity of doing so, or that match buyers and sellers of assets, (i) to dispose
of assets in wholesale rather than retail markets, (j) to disclaim disposition
warranties, such as title, possession or quiet enjoyment, (k) to purchase
insurance or credit enhancements to insure the Administrative Agent against
risks of loss, collection or disposition of Collateral or to provide to the
Administrative Agent a guaranteed return from the collection or disposition of
Collateral, or (l) to the extent deemed appropriate by the Administrative Agent,
to obtain the services of other brokers, investment bankers, consultants and
other professionals to assist the Administrative Agent in the collection or
disposition of any of the Collateral. Each Grantor acknowledges that the purpose
of this Section 8.02 is to provide non-exhaustive indications of what actions or
omissions by the Administrative Agent would be commercially reasonable in the
Administrative Agent’s exercise of remedies against the Collateral and that
other actions or omissions by the Administrative Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section 8.02. Without limitation upon the foregoing, nothing contained in this
Section 8.02 shall be construed to grant any rights to any Grantor or to impose
any duties on the Administrative Agent that would not have been granted or
imposed by this Agreement or by applicable law in the absence of this
Section 8.02.
SECTION 8.03. Compromises and Collection of Collateral. The Grantors and the
Administrative Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Accounts, that
certain of the Accounts may be or become uncollectible in whole or in part and
that the expense and probability of success in litigating a disputed Account may
exceed the amount that reasonably may be expected to be recovered with respect
to an Account. In view of the foregoing, each Grantor agrees that the
Administrative Agent may at any time and from time to time, if an Event of
Default has occurred and is continuing, and subject to applicable law,
compromise with the obligor on any Account, accept in full payment of any
Account such amount as the Administrative Agent in its sole discretion shall
determine or abandon any Account, and any such action by the Administrative
Agent shall be commercially reasonable so long as the Administrative Agent acts
in good faith based on information known to it at the time it takes any such
action.

 

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SECTION 8.04. Secured Party Performance of Debtor Obligations. Without having
any obligation to do so, and, except after the occurrence and during the
continuance of an Event of Default, after having made a request of a Grantor to
do so and the Grantor having not complied with such request to do so as promptly
as practicable after receipt of such request, the Administrative Agent may
perform or pay any obligation which any Grantor has agreed to perform or pay in
this Agreement and the Grantors shall reimburse the Administrative Agent for any
amounts paid by the Administrative Agent pursuant to this Section 8.04. The
Grantors’ obligation to reimburse the Administrative Agent pursuant to the
preceding sentence shall be a Secured Obligation payable on demand.
SECTION 8.05. Specific Performance of Certain Covenants. Each Grantor
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.01(d), 4.01(e), 4.03, 5.02, or 8.07 or in Article VII will cause
irreparable injury to the Secured Parties, that the Secured Parties have no
adequate remedy at law in respect of such breaches and therefore agrees, without
limiting the right of the Secured Parties to seek and obtain specific
performance of other obligations of the Grantors contained in this Agreement,
that the covenants of the Grantors contained in the Sections referred to in this
Section 8.05 shall be specifically enforceable against the Grantors.
SECTION 8.06. Dispositions Not Authorized. No Grantor is authorized to sell or
otherwise dispose of the Collateral except as set forth in Section 4.01(d) and
notwithstanding any course of dealing between any Grantor and the Administrative
Agent or other conduct of the Administrative Agent, no authorization to sell or
otherwise dispose of the Collateral (except as set forth in Section 4.01(d))
shall be binding upon the Secured Parties unless such authorization is in
writing signed by the Administrative Agent.
SECTION 8.07. No Waiver; Amendments; Cumulative Remedies. No failure, delay or
omission of any Secured Party to exercise any right or remedy granted under this
Agreement shall impair such right or remedy or be construed to be a waiver of
any Default or an acquiescence therein, and any single or partial exercise of
any such right or remedy shall not preclude any other or further exercise
thereof or the exercise of any other right or remedy. No waiver, amendment or
other variation of the terms, conditions or provisions of this Agreement
whatsoever shall be valid unless in writing signed by the Administrative Agent
with the concurrence or at the direction of the Lenders required under
Section 9.02 of the Credit Agreement and then only to the extent in such writing
specifically set forth. All rights and remedies contained in this Agreement or
by law afforded shall be cumulative and all shall be available to the Secured
Parties until the Obligations have been paid and performed in full.
SECTION 8.08. Limitation by Law; Severability of Provisions. All rights,
remedies and powers provided in this Agreement may be exercised only to the
extent that the exercise thereof does not violate any applicable provision of
law, and all the provisions of this Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be limited
to the extent necessary so that they shall not render this Agreement invalid,
unenforceable, illegal or not entitled to be recorded or registered, in whole or
in part. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

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SECTION 8.09. Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Grantor’s assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a “voidable preference”, “fraudulent conveyance” or otherwise, all as
though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
SECTION 8.10. Benefit of Agreement. The terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the Grantors, the Secured
Parties and their respective successors and assigns (including all persons who
become bound as a debtor to this Agreement), except that no Grantor shall have
the right to assign its rights or delegate its obligations under this Agreement
or any interest herein, without the prior written consent of the Administrative
Agent. No sales of participations, assignments, transfers or other dispositions
of any agreement governing the Secured Obligations or any portion thereof or
interest therein shall in any manner impair the Lien granted to the
Administrative Agent, for the benefit of the Secured Parties.
SECTION 8.11. Survival of Representations. All representations and warranties of
the Grantors contained in this Agreement shall survive the execution and
delivery of this Agreement.
SECTION 8.12. Headings. The title of and section headings in this Agreement are
for convenience of reference only, and shall not govern the interpretation of
any of the terms and provisions of this Agreement.
SECTION 8.13. Termination. (a) This Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Secured
Obligations outstanding) until (i) the Credit Agreement has terminated pursuant
to its express terms and (ii) all of the Obligations (as distinguished from the
Secured Obligations) have been paid and performed in full and no commitments of
the Administrative Agent or the Lenders which would give rise to any Obligations
are outstanding.

 

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(b) A Grantor shall automatically be released from its obligations hereunder and
the Security Interest in the Collateral of such Grantor shall be automatically
released upon the consummation of any transaction permitted by, or that would
not otherwise result in a Default under, the Credit Agreement as a result of
which such Grantor ceases to be a Domestic Material Subsidiary that is a
wholly-owned Subsidiary, provided that the Required Lenders shall have consented
to such transaction (to the extent required by the Credit Agreement) and the
terms of such consent did not provide otherwise.
(c) Upon any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement (other than a sale or other transfer to a
Grantor), or upon the effectiveness of any written consent to the release of the
Security Interest granted hereby in any Collateral pursuant to Section 9.02 of
the Credit Agreement, the Security Interest in such Collateral shall be
automatically released.
(d) In connection with any termination or release pursuant to paragraph (a),
(b) or (c) of this Section 8.13, the Administrative Agent shall (i) execute and
deliver to any Grantor, at such Grantor’s expense, all documents that such
Grantor shall reasonably request to evidence such termination or release and
(ii) with respect to any Collateral Deposit Account of any Grantor that is so
released from its obligations hereunder, deliver to each Collateral Deposit
Account Bank that has entered into a Deposit Account Control Agreement with
respect to the Collateral Deposit Accounts of such Grantor a written notice of
termination of each such Deposit Account Control Agreement in accordance with
the terms of such Deposit Account Control Agreement. The Administrative Agent
hereby consents to the applicable Grantor filing all UCC termination statements
corresponding to any Collateral that is so released if the Administrative Agent
has failed to file such UCC termination statements within 5 Business Days of
notice of such release delivered by such Grantor to the Administrative Agent.
Any execution and delivery of documents pursuant to this Section 8.13 shall be
without recourse to or warranty by the Administrative Agent.
SECTION 8.14. Additional Subsidiaries. Pursuant to Section 5.10(a) of the Credit
Agreement, certain Domestic Material Subsidiaries that were not in existence or
not Domestic Material Subsidiaries on the date of the Credit Agreement, as well
as each Subsidiary that is designated as a Subsidiary Borrower after the date of
the Credit Agreement, are required to enter into this Agreement as a Grantor
upon becoming such a Domestic Material Subsidiary or Subsidiary Borrower, as the
case may be. Upon execution and delivery by the Administrative Agent and a
Subsidiary of an instrument in the form of Exhibit E hereto (each such
instrument, a “Supplement”), such Subsidiary shall become a Grantor hereunder
with the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any such Supplement shall not require the consent of
any other Grantor hereunder. The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor as a party to this Agreement.

 

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SECTION 8.15. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such
Affiliate to or for the credit or the account of any Grantor against any of and
all obligations of such Grantor now or hereafter existing under this Agreement
held by such Lender, irrespective of whether or not such Lender shall have made
any demand hereunder and although such obligations may be unmatured or are owed
to a branch or office of such Lender different from the branch or office holding
such deposit or obligation. The applicable Lender shall notify the Loan Party
Representative and the Administrative Agent of such set-off or application,
provided that any failure to give or any delay in giving such notice shall not
affect the validity of any such set-off or application under this Section 8.15.
The rights of each Lender under this Section 8.15 are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 8.16. Lien Absolute. All rights of the Administrative Agent hereunder,
and all obligations of each Grantor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit Agreement, any other
Loan Document or any other agreement or instrument governing or evidencing any
Secured Obligations;
(b) any change in the time, manner or place of payment of, or in any other term
of, all or any part of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument governing or evidencing any
Secured Obligations;
(c) any exchange, release or non-perfection of any other Collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the Secured Obligations;
(d) the insolvency of any Person; or
(e) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, any Grantor.
SECTION 8.17. Release. Each Grantor consents and agrees that the Administrative
Agent may at any time, or from time to time, in its discretion:
(a) as contemplated by the Credit Agreement and in conformance therewith, renew,
extend or change the time of payment, and/or the manner, place or terms of
payment, of all or any part of the Secured Obligations; and
(b) exchange, release and/or surrender all or any of the Collateral or any part
thereof, by whomsoever deposited, which is now or may hereafter be held by the
Administrative Agent in connection with all or any of the Secured Obligations;
all in such manner and upon such terms as the Administrative Agent may deem
proper, and without notice to or further assent from any Grantor, it being
hereby agreed that each Grantor shall be and remain bound upon this Agreement,
irrespective of the value or condition of any of the Collateral, and
notwithstanding any such change, exchange, settlement, compromise, surrender,
release, renewal or extension, and notwithstanding also that the Secured
Obligations may, at any time, exceed the aggregate principal amount thereof set
forth in the Credit Agreement, or any other agreement governing any Secured
Obligations.

 

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SECTION 8.18. Entire Agreement. This Agreement and the other Loan Documents
embody the entire agreement and understanding between the Grantors and the
Administrative Agent relating to the Collateral and supersede all prior
agreements and understandings between the Grantors and the Administrative Agent
relating to the Collateral.
SECTION 8.19. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
(b) Each of the parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(c) Each of the parties hereto hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section 8.19. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

 

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SECTION 8.20. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 8.20.
SECTION 8.21. Taxes and Expenses; Indemnity. (a) Any taxes (including income
taxes but excluding any Excluded Taxes) payable or ruled payable by Federal or
State authority in respect of this Agreement shall be paid by the Grantors,
together with interest and penalties, if any. The parties hereto agree that the
Administrative Agent and each of the other Secured Parties shall be entitled to
reimbursement of its reasonable expenses incurred hereunder as provided in and
subject to the limitations set forth in Section 9.03(a) of the Credit Agreement.
(b) Without limitation of any of its indemnification obligations under the other
Loan Documents, each Grantor shall, jointly and severally with each other
Grantor, indemnify each Indemnitee against, and hold each Indemnitee harmless
from, any and all out-of-pocket losses, claims, damages, liabilities and related
reasonable expenses, including the reasonable fees, charges and disbursements of
any counsel for any Indemnitee, incurred by or asserted against any Indemnitee
by any third party or by any Grantor arising out of, in connection with, or as a
result of (i) the execution and delivery of this Agreement or any other
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of any
transactions contemplated hereby or (ii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing or to
the Collateral, whether based on contract, tort or any other theory, whether
brought by a third party or by any Grantor and regardless of whether any
Indemnitee is a party thereto, provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final judgment to have resulted from the gross negligence or
wilful misconduct of such Indemnitee.
(c) Any amounts payable pursuant to this Section 8.21 shall be additional
Secured Obligations secured hereby and by the other Collateral Documents. The
provisions of this Section 8.21 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Secured Obligations, the invalidity or unenforceability
of any term or provision of this Agreement or any other Loan Document or any
investigation made by or on behalf of the Administrative Agent or any other
Secured Party. All amounts due under this Section 8.21 shall be payable not
later than three Business Days after written demand therefor setting forth the
basis for such claim in reasonable detail.

 

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SECTION 8.22. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart.
ARTICLE IX
NOTICES
SECTION 9.01. Sending Notices. Any notice required or permitted to be given
under this Agreement shall be made in accordance with, and deemed to be received
pursuant to the terms of, Section 9.01 of the Credit Agreement, in each case
addressed to the Loan Party Representative (with respect to notices to any
Grantor) and to the Administrative Agent and the Lenders at the addresses set
forth in accordance with Section 9.01 of the Credit Agreement.
ARTICLE X
THE ADMINISTRATIVE AGENT
JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the
Lenders hereunder pursuant to Article VIII of the Credit Agreement. It is
expressly understood and agreed by the parties to this Agreement that any
authority conferred upon the Administrative Agent hereunder is subject to the
terms of the delegation of authority made by the Lenders to the Administrative
Agent pursuant to the Credit Agreement, and that the Administrative Agent has
agreed to act (and any successor Administrative Agent shall act) as such
hereunder only on the express conditions contained in such Article VIII. Any
successor Administrative Agent appointed pursuant to Article VIII of the Credit
Agreement shall be entitled to all the rights, interests and benefits of the
Administrative Agent hereunder.
[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this
Agreement as of the date first above written.

                      USG CORPORATION, as Loan Party Representative
 
                    by   /s/ Karen L. Leets                  
 
      Name:   Karen L. Leets    
 
      Title:   Vice President and Treasurer    
 
                    EACH OF THE SUBSIDIARIES LISTED
ON SCHEDULE I HERETO,
 
                    by   /s/ Karen L. Leets                  
 
      Name:   Karen L. Leets    
 
      Title:   Vice President and Treasurer    
 
                    JPMORGAN CHASE BANK, N.A., as
Administrative Agent
 
                    by   /s/ Peter S. Predun                  
 
      Name:   Peter S. Predun    
 
      Title:   Executive Director    

 

 

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Schedule I to the Pledge
and Security Agreement
SUBSIDIARY GRANTORS

              Title of Karen L. Leets with respect   Company   to such Company  
California Wholesale Material Supply, LLC
  Vice President and Treasurer
L & W Supply Corporation
  Vice President and Treasurer
Livonia Building Materials, LLC
  Vice President and Treasurer
Livonia Holdings, Inc.
  Vice President and Treasurer
River City Materials, Inc.
  Vice President and Treasurer
United States Gypsum Company
  Vice President and Treasurer
USG Foreign Investments, Ltd.
  Vice President and Treasurer
USG Interiors, Inc.
  Vice President and Treasurer

 

 

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EXHIBIT A
(See Sections 3.02, 3.03 and 9.01 of Security Agreement)
NOTICE ADDRESS FOR ALL GRANTORS

                           
 
  c/o                          
 
                              Attention:        
 
                    Facsimile:        
 
               

INFORMATION OF {Insert name of applicable Grantor}

              I.   Name of Grantor:                                   
                                                                   
 
            II.   State of Incorporation or Organization:
                                                
                                                    
 
            III.   Type of Entity:
                                                  
                                                  
 
            IV.   Organizational Number assigned by State of Incorporation or
Organization:                                         
 
            V.   Federal Identification Number:
                                                    
                                                
 
            VI.   Place of Business (if it has only one) or Chief Executive
Office (if more than one place of business):
 
                     
 
                     
 
                     
 
                     
 
                     
 
           
 
  Attention:        
 
           
 
            VII.   Other Places of Business:
                                                                     
                                

 

 

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INFORMATION OF {Insert name of applicable Grantor}

              I.   Name of Grantor:                              
                                                                           
 
            II.   State of Incorporation or Organization:     
                                                              
                                     
 
            III.   Type of Entity:                                             
                                                           
 
            IV.   Organizational Number assigned by State of Incorporation or
Organization:                                         
 
            V.   Federal Identification Number:                            
                                                                             
 
            VI.   Place of Business (if it has only one) or Chief Executive
Office (if more than one place of business):
 
                     
 
                     
 
                     
 
                     
 
                     
 
           
 
  Attention:        
 
           
 
            VII.   Other Places of Business:                             
                                                                            

[NOTE: ADD ADDITIONAL INFORMATION PAGE FOR EACH GRANTOR]

 

 

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EXHIBIT B
(See Sections 3.04 and 7.01(a) of Security Agreement)
COLLATERAL DEPOSIT ACCOUNTS

                                      Location of         Name of Grantor   Name
of Institution     Institution     Account Number  
 
                       
 
                       
 
                       
 
                       
 
                       

 

 

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EXHIBIT C
PERFECTION CERTIFICATE
Reference is made to the Credit Agreement dated as of September 9, 2008 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among USG Corporation, a Delaware corporation, in its capacity as a
Borrower (in such capacity, the “Parent Borrower”) and in its capacity as the
Loan Party Representative, the Subsidiary Borrowers from time to time party
thereto, the Lenders from time to time party thereto and JPMorgan Chase Bank,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”).
Capitalized terms used but not defined herein have the meanings assigned in the
Credit Agreement or the Security Agreement referred to therein, as applicable.
For purposes of this Perfection Certificate (this “Certificate”), “Grantors”
shall mean each Domestic Material Subsidiary that is a wholly-owned Subsidiary.
The undersigned, a Financial Officer of the Parent Borrower, hereby certify to
the Administrative Agent and each other Secured Party as follows:
1. Names. (a) The exact legal name of each Grantor, as such name appears in its
respective certificate of formation, is as follows:
(b) Set forth below is each other legal name each Grantor has had in the past
two years, together with the date of the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor has changed its
identity or corporate structure in any way within the past two years. Changes in
identity or corporate structure would include mergers, consolidations and
acquisitions, as well as any change in the form, nature or jurisdiction of
organization. If any such change has occurred, include in Schedule 1 the
information required by Sections 1 and 2 of this certificate as to each acquiree
or constituent party to a merger or consolidation.
(d) The following is a list of all other names (including trade names or similar
appellations) used by each Grantor or any of its divisions or other business
units in connection with the conduct of its business or the ownership of its
properties at any time during the past two years:
(e) Set forth below is the Organizational Identification Number, if any, issued
by the jurisdiction of formation of each Grantor that is a registered
organization:
(f) Set forth below is the Federal Taxpayer Identification Number of each
Grantor:1
 

      1   Necessary only for Grantors organized under the laws of North Dakota
or South Dakota.

 

 

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2. Current Locations. (a) The chief executive office of each Grantor is located
at the address set forth opposite its name below:

             
Grantor
  Mailing Address   County   State              

(b) Set forth below opposite the name of each Grantor are all locations where
such Grantor maintains any books or records relating to any Accounts:

              Grantor   Mailing Address   County   State              

(c) The jurisdiction of formation of each Grantor that is a registered
organization is set forth opposite its name below:

      Grantor:   Jurisdiction:      

3. Unusual Transactions. All Accounts have been originated by the Grantors in
the ordinary course of business.
4. File Search Reports. File search reports have been obtained from each Uniform
Commercial Code filing office identified with respect to such Grantor in
Section 2 hereof, and such search reports reflect no liens against any of the
Collateral other than those permitted under the Credit Agreement.
5. UCC Filings. Financing statements in substantially the form of Schedule 5
hereto have been prepared for filing in the proper Uniform Commercial Code
filing office in the jurisdiction in which each Grantor is located.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
forth, with respect to the filings described in Section 5 above, each filing and
the filing office in which such filing is to be made.
7. Deposit Accounts. Attached hereto as Schedule 7 is a true and correct list of
Collateral Deposit Accounts maintained by each Grantor, including the name and
address of the depositary institution, the type of account and the account
number.

 

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Certificate on this
[•] day of [•], 2008.

                      USG CORPORATION,
 
               
 
  by                          
 
      Name:        
 
      Title:   Financial Officer    

 

 

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EXHIBIT D
(See Section 3.01 of Security Agreement)
OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

 

 

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EXHIBIT E
SUPPLEMENT NO.  _____  dated as of [ ] (this “Supplement”), to the Pledge and
Security Agreement dated as of September 9, 2008 (as amended, supplemented or
otherwise modified from time to time, the “Security Agreement”), among USG
Corporation, a Delaware corporation, in its capacity as the Loan Party
Representative (in such capacity, the “Loan Party Representative”), the
Subsidiaries of USG Corporation from time to time party thereto (the “Grantors”
and each a “Grantor”) and JPMorgan Chase Bank, N.A., a national banking
association corporation, as Administrative Agent (in such capacity, the
“Administrative Agent”) for the lenders party to the Credit Agreement referred
to below.
A. Reference is made to the Credit Agreement dated as of September 9, 2008 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among USG Corporation, in its capacity as a Borrower, the Loan
Party Representative, the Subsidiary Borrowers from time to time party thereto,
the Lenders from time to time party thereto and the Administrative Agent.
B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Security
Agreement.
C. The Grantors have entered into the Security Agreement in order to induce the
Lenders to make Loans. Section 8.14 of Security Agreement provides that certain
Subsidiaries must become Grantors under the Security Agreement by execution and
delivery of an instrument in the form of this Supplement. The undersigned such
Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance
with the requirements of the Credit Agreement to become a Grantor under the
Security Agreement in order to induce the Lenders to make additional Loans and
as consideration for Loans previously made.
Accordingly, the Administrative Agent and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 8.14 of the Security Agreement, the New
Subsidiary by its signature below becomes a Grantor under the Security Agreement
with the same force and effect as if originally named therein as a Grantor and
the New Subsidiary hereby (a) agrees to all the terms and provisions of the
Security Agreement applicable to it as a Grantor thereunder and (b) 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 of
the foregoing, the New Subsidiary, as security for the payment and performance
in full of the Secured Obligations, does hereby create and grant to the
Administrative Agent, its successors and assigns, for the benefit of the Secured
Parties, their successors and assigns, a security interest in and Lien on all of
the New Subsidiary’s right, title and interest in and to the Collateral of the
New Subsidiary. Each reference to a “Grantor” in the Security Agreement shall be
deemed to include the New Subsidiary. The Security Agreement is hereby
incorporated herein by reference.

 

 

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SECTION 2. The New Subsidiary represents and warrants to the Administrative
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 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Administrative Agent
shall have received a counterpart of this Supplement that bears the signature of
the New Subsidiary and the Administrative Agent has executed a counterpart
hereof. Delivery of an executed signature page to this Supplement by facsimile
or electronic transmission (including Adobe PDF file) shall be as effective as
delivery of a manually signed counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth
on Schedule I attached hereto is the true and correct legal name of the New
Subsidiary, its state of organization, the organizational number issued to it by
its state of organization, its federal employer identification number and the
location of its place of business (if it has only one) or its chief executive
office (if it has more than one place of business) and the location of any other
place of business of such New Subsidiary and (b) set forth on Schedule II
attached hereto is a true and correct schedule of the location of any and all
Collateral of the New Subsidiary and a complete list of all Collateral Deposit
Accounts maintained by such New Subsidiary, together with applicable identifying
information for such Collateral Deposit Accounts . The information set forth on
such Schedule I shall be deemed to supplement Exhibit A to the Security
Agreement, effective as of the date hereof. The information set forth on such
Schedule II in respect of Collateral Deposit Accounts shall be deemed to
supplement Exhibit B to the Security Agreement, effective as of the date hereof.
SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

 

 

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SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a 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 8. All communications and notices hereunder shall be in writing and
given as provided in Section 9.01 of the Security Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Administrative Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Administrative Agent.

 

 

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IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.

                  [NAME OF NEW SUBSIDIARY],
 
           
 
  by        
 
           
 
      Name:    
 
      Title:    
 
                JPMORGAN CHASE BANK, N.A.,     as Administrative Agent,
 
           
 
  by        
 
           
 
      Name:    
 
      Title:    

 

 

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Schedule I to
Supplement No. __ to
the Pledge and Security
Agreement
INFORMATION OF {Insert name of applicable Grantor}

              I.   Name of Grantor:                             
                                                                             
 
            II.   State of Incorporation or Organization:     
                                                                               
 
            III.   Type of Entity:                             
                                                       
 
            IV.   Organizational Number assigned by State of Incorporation or
Organization:                                                                 
 
            V.   Federal Identification Number:                           
                                                         
 
            VI.   Place of Business (if it has only one) or Chief Executive
Office (if more than one place of business):
 
                     
 
                     
 
                     
 
                     
 
                     
 
           
 
  Attention:        
 
           
 
            VII.   Other Places of Business:                           
                                                                              

 

 

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Schedule II to
Supplement No. __ to
the Pledge and Security
Agreement
LOCATION OF COLLATERAL

      Description   Location      

COLLATERAL DEPOSIT ACCOUNTS

                                      Location of         Name of Grantor   Name
of Institution     Institution     Account Number