Exhibit 10.5


 


SECURITY AGREEMENT


 


This SECURITY AGREEMENT (this “Agreement”) is dated as of September 30,
2005 and entered into by and among PANOLAM INDUSTRIES
INTERNATIONAL, INC., a
Delaware corporation, as successor by merger to PIH Acquisition Co. (“Company”), PANOLAM
HOLDINGS II CO., a
Delaware corporation (“Holdings”), each
of THE UNDERSIGNED DIRECT AND INDIRECT DOMESTIC
SUBSIDIARIES of
Company (each of such undersigned Subsidiaries being a “Subsidiary Grantor” and collectively “Subsidiary
Grantors”) and each ADDITIONAL GRANTOR that
may become a party hereto after the date hereof in accordance with Section 21
hereof (each of Company, Holdings, each Subsidiary Grantor, and each Additional
Grantor being a “Grantor” and collectively the “Grantors”) and
CREDIT SUISSE, Cayman Islands Branch, as Administrative Agent and
representative of (in such capacity herein called “Secured
Party”) the
Beneficiaries (as hereinafter defined).


 


PRELIMINARY STATEMENTS


 


A.                                   Pursuant
to the Credit Agreement dated as of September 30, 2005 (said Credit
Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the “Credit Agreement”; the
terms defined therein and not otherwise defined in Section 31 or elsewhere
herein being used herein as therein defined), by and among Company, Holdings,
the financial institutions listed therein as Lenders, Credit Suisse, Cayman
Islands Branch, as Administrative Agent and the other agents named therein,
Lenders have made certain commitments, subject to the terms and conditions set
forth in the Credit Agreement, to extend certain credit facilities to Company.


 


B.                                     Company
may from time to time enter, or may from time to time have entered,
into one or more Lender Swap Agreements with one or more Swap Counterparties in
accordance with the terms of the Credit Agreement, and it is desired that the
obligations of Company under the Lender Swap Agreements, including, without
imitation, the obligation of Company to make payments thereunder in the event
of early termination thereof, together with all Obligations of Company, be
secured hereunder.


 


C.                                     Holdings
has executed and delivered the Holdings Guaranty, and Subsidiary Grantors have
executed and delivered the Subsidiary Guaranty, in each case in favor of
Secured Party for the benefit of Lenders and any Swap Counterparties, pursuant
to which Holdings and each Subsidiary Grantor have guarantied the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and all obligations of Company under the Lender Swap Agreements.


 


D.                                    It
is a condition precedent to the initial extensions of credit by Lenders under
the Credit Agreement that Grantors listed on the signature pages hereof
shall have granted the security interests and undertaken the obligations
contemplated by this Agreement.


 


NOW, THEREFORE, in consideration of the agreements
set forth herein and in the Credit Agreement and in order to induce Lenders to
make Loans and other extensions of


 


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credit under the
Credit Agreement and to induce Swap Counterparties to enter into the Lender
Swap Agreements, each Grantor hereby agrees with Secured Party as follows:


 


SECTION 1.                                               Grant
of Security.


 


Each Grantor hereby
grants to Secured Party a security interest in, all of such Grantor’s right,
title and interest in and to all of the personal property of such Grantor, in
each case whether now or hereafter existing, whether tangible or intangible,
whether now owned or hereafter acquired, wherever the same may be located
and whether or not subject to the UCC, including all Assigned Agreements and
the following (the “Collateral”):


 


(a)                                  all
Accounts;


 


(b)                                 all
Chattel Paper;


 


(c)                                  all
Documents;


 


(d)                                 all
General Intangibles, including all intellectual property, Payment Intangibles
and Software;


 


(e)                                  all
Goods, including Inventory, Equipment and Fixtures;


 


(f)                                    all
Instruments;


 


(g)                                 all
Investment Property;


 


(h)                                 all
Letter-of-Credit Rights and other Supporting Obligations;


 


(i)                                     all
Records;


 


(j)                                     all
Commercial Tort Claims, including those set forth on Schedule 1
annexed hereto; and


 


(k)                                  all
Proceeds and Accessions with respect to any of the foregoing Collateral.


 


Each category of
Collateral set forth above shall have the meaning set forth in the UCC (to the
extent such term is defined in the UCC), it being the intention of Grantors
that the description of the Collateral set forth above be construed to include
the broadest possible range of assets.


 


Notwithstanding anything
herein to the contrary, in no event shall the Collateral include, and no
Grantor shall be deemed to have granted a security interest in, (i) Deposit
Accounts of a Grantor, (ii) any Securities Account (as defined by Article 8
of the New York UCC) of a Grantor (iii) any deposits permitted to be made
with third parties under subsections 7.2 and 7.3 of the Credit Agreement and (iv) any
General Intangibles (including any Intellectual Property), Investment Property,
any of such Grantor’s rights or interests in or under, any license, contract,
permit, Instrument, Security or franchise to which such Grantor is a party or
any of its


 


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rights or
interests thereunder, in each case, to the extent, but only to the extent, that
such a grant would, under the terms of such General Intangible, Investment
Property or other rights under any license, contract, permit, Instrument,
Security or franchise, result in a breach of the terms of, or constitute a
default under, such license, contract, permit, Instrument, Security or
franchise (other than to the extent that any such term would be rendered
ineffective pursuant to the UCC or any other applicable law (including the
Bankruptcy Code) or principles of equity); provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision the
Collateral shall include, and such Grantor shall be deemed to have granted a
security interest in, all such rights and interests as if such provision had
never been in effect.


 


In the event that any
asset of a Grantor is excluded from the Collateral by virtue of clause (iv) of
the foregoing paragraph, such Grantor agrees to use all commercially reasonable
efforts to obtain all consents to enable such Grantor to provide a security
interest in such asset pursuant hereto as promptly as practicable; provided
that such Grantor shall have no obligation to obtain any such consents to the
extent Secured Party shall reasonably determine that the costs of obtaining any
such consents are unreasonably excessive in relation to the benefit to the
Beneficiaries of obtaining the related security interest.


 


Notwithstanding the
foregoing, the Collateral shall not include any Equity Interests issued by a
Foreign Subsidiary to the extent that creation of a security interest by a
Grantor in such Equity Interests would result in more than 65% of the voting
power of all classes of the Equity Interests of such Foreign Subsidiary
entitled to vote being pledged.


 


SECTION 2.                                               Security
for Obligations.


 


This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all Secured
Obligations of each Grantor. “Secured Obligations”
means:


 


(a)                                  with
respect to Company, all obligations and liabilities of every nature of Company
now or hereafter existing under or arising out of or in connection with the
Credit Agreement and the other Loan Documents and any Lender Swap Agreement;


 


(b)                                 with
respect to each Subsidiary Grantor and Additional Grantor, all obligations and
liabilities of every nature of such Subsidiary Grantor now or hereafter
existing under or arising out of or in connection with the Subsidiary Guaranty;
and


 


(c)                                  with
respect to Holdings all obligations and liabilities of every nature of Holdings
now or hereafter existing under or arising out of or in connection with the
Holdings Guaranty;


 


in each case
together with all extensions or renewals thereof, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit, payments for
early termination of Lender Swap Agreements, fees, expenses, indemnities or
otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that


 


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are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender or Swap Counterparty as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Grantors now or hereafter existing under this Agreement (including,
without limitation, interest and other amounts that, but for the filing of a
petition in bankruptcy with respect to Company or any other Grantor, would
accrue on such obligations, whether or not a claim is allowed against Company
or such Grantor for such amounts in the related bankruptcy proceeding).


 


SECTION 3.                                               Grantors
Remain Liable.


 


Anything contained herein
to the contrary notwithstanding, (a) each Grantor shall remain liable
under any contracts and agreements included in the Collateral, to the extent
set forth therein, to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the
exercise by Secured Party of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral, and (c) Secured Party shall not
have any obligation or liability under any contracts, licenses, and agreements
included in the Collateral by reason of this Agreement, nor shall Secured Party
be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.


 


SECTION 4.                                               Representations
and Warranties.


 


Each Grantor represents
and warrants as follows:


 


(a)                                  Ownership of Collateral.   
Such Grantor owns its interests in the Collateral free and clear of any
Lien except (i) for Liens expressly permitted by the Credit Agreement, (ii) for
minor defects on title that do not materially interfere with such Grantor’s
ability to conduct its business or to utilize any Collateral for its intended
purpose or (iii) where the failure to have such ownership interest could
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Except as expressly permitted by the Credit Agreement,
such Grantor has not authorized the filing or recording of any financing
statement or other instrument similar in effect which purports to perfect a
Lien on, and covering all or any part of, the Collateral in any filing or
recording office, including any IP Filing Office.


 


(b)                                 Perfection.    The
security interests in the Collateral granted to Secured Party for the ratable
benefit of Lenders and Swap Counterparties hereunder constitute valid security
interests in the Collateral, securing the payment of the Secured Obligations.
Upon (i) the filing of UCC financing statements naming each Grantor as “debtor”,
naming Secured Party as “secured party” and describing the Collateral in the
filing offices with respect to such Grantor set forth on Schedule 2
annexed hereto, (ii) in the case of the Securities Collateral consisting
of certificated Securities or evidenced by Instruments, in addition to filing
of such UCC financing statements, delivery of the certificates representing
such certificated Securities and delivery of such Instruments to Secured Party
(and in the case of Securities Collateral issued by a foreign issuer, any
actions required under foreign law to perfect a security interest in such
Securities Collateral), in each case duly endorsed or accompanied by duly
executed instruments of assignment or transfer in blank, and (iii) in the
case of registered Copyrights, in addition to the


 


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filing of such UCC financing statements, the
recordation of a Grant with the U.S. Copyright Office, the security interests
in (x) the Collateral granted to Secured Party for the ratable benefit of
Lenders and Swap Counterparties which may be perfected by filing a
financing statement under the UCC, (y) Securities Collateral consisting of
certificated securities or evidenced by Instruments and (z) U.S. Copyrights
described in the Grant referenced above, respectively, shall be perfected and
are prior to all other Liens (except for Liens permitted by subsections
7.2A(i)-(xvi), (xviii)-(xx) and (xxii) of the Credit Agreement). With respect
to such Collateral existing as of the Closing Date, all filings and other
actions necessary or desirable to perfect and protect such security interests
have been, or promptly after the Closing Date will be, duly made or taken. With
respect to such Collateral acquired after the Closing Date, all filings and
other actions necessary or desirable to perfect and protect such security
interests have been, or promptly after the acquisition thereof will be, duly
made or taken.


 


(c)                                  Office Locations; Type and Jurisdiction of Organization; Locations of Equipment
and Inventory.    Such Grantor’s
name as it appears in official filings in the jurisdiction of its organization,
type of organization (i.e. corporation, limited partnership, etc.),
jurisdiction of organization, and organization number provided by the
applicable Government Authority of the jurisdiction of organization are set
forth on Schedule 3 annexed hereto. As of the Closing Date, all of
the Equipment (excluding vehicles covered by a certificate of title) and
Inventory is located at the places set forth on Schedule 4 annexed
hereto, except for Inventory which, in the ordinary course of business, is in
transit either (i) from a supplier to a Grantor, (ii) between the
locations set forth on Schedule 4 annexed hereto, or (iii) to
customers of a Grantor.


 


(d)                                 Names.    No Grantor
(or predecessor by merger or otherwise of such Grantor) has, within the five
year period preceding the date hereof, or, in the case of an Additional
Grantor, the date of the applicable Counterpart, had a different name from the
name of such Grantor listed on the signature pages hereof, except the
names set forth on Schedule 5 annexed hereto.


 


(e)                                  Delivery of Certain Collateral.    All certificates or Instruments (excluding
checks or Instruments having a face amount of less than or equal to $1,000,000
individually) evidencing, comprising or representing the Collateral have been
delivered to Secured Party duly endorsed or accompanied by duly executed
instruments of transfer or assignment in blank.


 


(f)                                    Securities Collateral.   
All of the Pledged Subsidiary Equity set forth on Schedule 6
annexed hereto has been duly authorized and validly issued and is fully paid
and non-assessable; all of the
Pledged Subsidiary Debt set forth on Schedule 7 annexed hereto has
been duly authorized and is the legally valid and binding obligation of the
issuers thereof and is not in default; Schedule 6 annexed hereto
sets forth all of the Equity Interests and the Pledged Equity owned by each
Grantor, and the percentage ownership in each issuer thereof; and Schedule 7
annexed hereto sets forth all of the Pledged Debt owned by such Grantor.


 


(g)                                 Intellectual Property Collateral.    A true and complete list of all material
Trademark Registrations and applications for any Trademark owned, held (whether
pursuant to a license or otherwise) or used by such Grantor, in whole or in
part, is set forth on Schedule 8 annexed hereto; a true and
complete list of all material Patents owned, held (whether pursuant to


 


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a license or
otherwise) or used by such Grantor, in whole or in part, is set forth on Schedule 9
annexed hereto; a true and complete list of all material Copyright
Registrations and applications for Copyright Registrations held (whether
pursuant to a license or otherwise) by such Grantor, in whole or in part, is
set forth on Schedule 10 annexed hereto.


 


The representations and warranties as to the information set forth in
Schedules referred to herein are made as to each Grantor (other than Additional
Grantors) as of the date hereof and as to each Additional Grantor as of the
date of the applicable Counterpart, except that, in the case of a Pledge
Supplement, IP Supplement or notice delivered pursuant to Section 5(d) hereof,
such representations and warranties are made as of the date of such supplement
or notice.


 


SECTION 5.                                               Further
Assurances.


 


(a)                                  Generally.    Each
Grantor agrees that from time to time, at the expense of Grantors, such Grantor
will promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable, or that
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
each Grantor will: (i) notify Secured Party in writing of receipt by such
Grantor of any interest in Chattel Paper with a value in excess of $ 1,000,000
and at the request of Secured Party, mark conspicuously each such item of
Chattel Paper and each of its records pertaining to the Collateral, with a
legend, in form and substance satisfactory to Secured Party, indicating
that such Collateral is subject to the security interest granted hereby, (ii) deliver
to Secured Party all (1) certificates representing any Pledged Equity, (2) promissory
notes and other Instruments having a face amount in excess of $1,000,00
individually and (3) at the request of Secured Party, all original
counterparts of Chattel Paper with a face value in excess of $1,000,000
individually, in each case duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory
to Secured Party, (iii) (A) execute (if necessary) and file such
financing or continuation statements, or amendments thereto, (B) deliver
such documents, instruments, notices, records and consents, and take such other
actions, necessary to establish that secured party has control over electronic
Chattel Paper and Letter-of-Credit Rights of such Grantor, in each case only to
the extent any such electronic Chattel Paper or Letter-of-Credit Rights have a
value in excess of $1,000,000 individually and (C) deliver such other
instruments or notices, in each case, as may be necessary or desirable, or
as Secured Party may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby, (iv) furnish
to Secured Party from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable
detail, (v) in accordance with subsection 6.5 of the Credit
Agreement, allow inspection of the Collateral by Secured Party, or persons
designated by Secured Party, (vi) at Secured Party’s request, appear in
and defend any action or proceeding that may affect such Grantor’s title
to or Secured Party’s security interest in all or any part of the
Collateral, and (vii) subject to Section 1, use commercially
reasonable efforts to obtain any necessary consents of third parties to the
creation and perfection of a security interest in favor of Secured Party with
respect to any Collateral. Each Grantor hereby authorizes Secured Party to file
one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral (including any financing


 


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statement
indicating that it covers “all assets” or “all personal property” of such
Grantor) without the signature of any Grantor.


 


(b)                                 Securities Collateral.   
Without limiting the generality of the foregoing Section 5(a), each
Grantor agrees that (i) all certificates or Instruments representing or
evidencing the Securities Collateral that are required to be delivered to and
held by or on behalf of Secured Party pursuant hereto shall be so delivered
(whether such Securities Collateral exists as of the Closing Date or is
acquired after the Closing Date) and shall be in suitable form for
transfer by delivery or, as applicable, shall be accompanied by such Grantor’s
endorsement, where necessary, or duly executed instruments of transfer or
assignments in blank, all in form and substance satisfactory to Secured
Party and (ii) it will, upon obtaining any additional Equity Interests or
Indebtedness, promptly (and in any event within ten Business Days) deliver to
Secured Party a Pledge Supplement, duly executed by such Grantor, in respect of
such additional Pledged Equity or Pledged Debt; provided, that (i) no
such Pledge Supplement shall be required in respect of any Pledged Debt having
a face amount of equal to or less than $1,000,000 individually and (ii) the
failure of any Grantor to execute a Pledge Supplement with respect to any
additional Pledged Equity or Pledged Debt shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights and
remedies of Secured Party hereunder with respect thereto.


 


(c)                                  Intellectual Property Collateral.    Each Grantor shall promptly (i) notify
Secured Party in writing of any rights to material Intellectual Property
Collateral acquired by such Grantor after the date hereof and (ii) after
the filing of an application for any material Trademark Registration, Patent or
Copyright Registration, execute and deliver to Secured Party an IP Supplement,
and submit a Grant for recordation with respect thereto in the applicable IP
Filing Office; provided, that (x) such Grantor shall not be required to
make a notification or filing hereunder more often than once in any fiscal
quarter and (y) the failure of any Grantor to execute an IP Supplement or
submit a Grant for recordation with respect to any additional Intellectual
Property Collateral shall not impair the security interest of Secured Party
therein or otherwise adversely affect the rights and remedies of Secured Party
hereunder with respect thereto. Upon delivery to Secured Party of an IP
Supplement, Schedules 8, 9 and 10 annexed hereto and Schedule A
to each Grant, as applicable, shall be deemed modified to include a reference
to any right, title or interest in any existing Intellectual Property
Collateral or any Intellectual Property Collateral set forth on Schedule A
to such IP Supplement.


 


(d)                                 Commercial Tort Claims.   
Grantors have no Commercial Tort Claims as of the date hereof, except as
set forth on Schedule 1 annexed hereto. In the event that a Grantor
shall at any time after the date hereof have any Commercial Tort Claims in an
amount in excess of $1,000,000, such Grantor shall promptly notify Secured
Party thereof in writing, which notice shall (i) set forth in reasonable
detail the basis for and nature of such Commercial Tort Claim and (ii) constitute
an amendment to this Agreement by which such Commercial Tort Claim shall
constitute part of the Collateral.


 


(e)                                  Actions to Perfect.   
Notwithstanding anything in this Agreement to the contrary, Grantors
shall not be obligated to take any actions necessary to enable Secured Party to
perfect any security interest granted hereunder to the extent that Secured
Party shall reasonably


 


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determine that the
costs of obtaining perfection are unreasonably excessive in relation to the
benefit to the Beneficiaries of obtaining such perfection.


 


SECTION 6.                                               Certain
Covenants of Grantors.


 


Each Grantor shall:


 


(a)                                  not
use or permit any Collateral to be used unlawfully or in violation of any
provision of this Agreement or any applicable statute, regulation or ordinance
or any policy of insurance covering the Collateral, except to the extent that
any such use could not reasonably be expected to have a Material Adverse
Effect; and


 


(b)                                 give
Secured Party at least 30 days’ prior written notice of (i) any change in
such Grantor’s name, identity or corporate structure and (ii) any
reincorporation, reorganization or other action that results in a change of the
jurisdiction of organization of such Grantor.


 


SECTION 7.                                               Special
Covenants With Respect to Equipment and Inventory.


 


Each Grantor shall:


 


(a)                                  if
any Inventory is in possession or control of any of such Grantor’s agents or
processors, if the aggregate book value of all such Inventory exceeds
$1,000,000, and in any event upon the occurrence of an Event of Default,
instruct such agent or processor to hold all such Inventory for the account of
Secured Party and subject to the instructions of Secured Party;


 


(b)                                 if
any Inventory is located on premises leased by such Grantor, use its
commercially reasonable efforts to deliver to Secured Party a fully executed
Landlord Consent and Estoppel; and


 


(c)                                  promptly
upon the issuance and delivery to such Grantor of any negotiable Document,
deliver such Document to Secured Party.


 


SECTION 8.                                               Special
Covenants With Respect to Accounts.


 


Except as otherwise
provided in this Section 8, each Grantor shall continue to collect, at its
own expense, all amounts due or to become due to such Grantor under the
Accounts. In connection with such collections, each Grantor may take (and,
upon the occurrence and during the continuance of an Event of Default at
Secured Party’s direction, shall take) such action as such Grantor or Secured
Party may deem necessary or advisable to enforce collection of amounts due
or to become due under the Accounts; provided, however, that Secured
Party shall have the right at any time, upon the occurrence and during the
continuation of an Event of Default and upon written notice to such Grantor of
its intention to do so, to (i) notify the account debtors or obligors
under any Accounts of the assignment of such Accounts to Secured Party and to
direct such account debtors or obligors to make payment of all amounts due or
to become due to such Grantor thereunder directly to Secured Party, (ii) enforce
collection of any such Accounts at the expense of Grantors, and (iii) adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as such Grantor might have done. After receipt by


 


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such Grantor of
the notice from Secured Party referred to in the proviso to the preceding
sentence, (A) all amounts and proceeds (including checks and other
Instruments) received by such Grantor in respect of the Accounts shall be
received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over or
delivered to Secured Party in the same form as so received (with any
necessary endorsement) to be held as cash Collateral and applied as provided by
Section 17 hereof, and (B) such Grantor shall not, without the
written consent of Secured Party, adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.


 


SECTION 9.                                               Special
Covenants With Respect to the Securities Collateral.


 


(a)                                  Form of Securities Collateral.    Secured Party shall have the right upon
reasonable request to exchange certificates or instruments representing or
evidencing Securities Collateral for certificates or instruments of smaller or
larger denominations. If any Securities Collateral is not a security pursuant
to Section 8-103 of the UCC, no Grantor shall take any action that, under
such Section, converts such Securities Collateral into a security without
causing the issuer thereof to issue to it certificates or instruments
evidencing such Securities Collateral, which it shall promptly deliver to
Secured Party as provided in this Section 9(a).


 


(b)                                 Voting and Distributions.    So long as no Event of Default shall have
occurred and be continuing, (i) each Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not prohibited by the terms
of this Agreement or the Credit Agreement; provided, no Grantor shall
exercise or refrain from exercising any such right if Secured Party shall have
notified such Grantor that, in Secured Party’s judgment, such action would have
a material adverse effect on the value of the Securities Collateral or any part thereof;
and (ii) each Grantor shall be entitled to receive and retain any and all
dividends, other distributions, principal and interest paid in respect of the
Securities Collateral.


 


Upon the occurrence and
during the continuation of an Event of Default, (x) upon written notice from
Secured Party to any Grantor, all rights of such Grantor to exercise the voting
and other consensual rights which it would otherwise be entitled to exercise
pursuant hereto shall cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right to exercise such
voting and other consensual rights; (y) except as otherwise specified in the
Credit Agreement, all rights of such Grantor to receive the dividends, other
distributions, principal and interest payments which it would otherwise be
authorized to receive and retain pursuant hereto shall cease, and all such
rights shall thereupon become vested in Secured Party who shall thereupon have
the sole right to receive and hold as Collateral such dividends, other
distributions, principal and interest payments; and (z) all dividends,
principal, interest payments and other distributions which are received by such
Grantor contrary to the provisions of clause (y) above shall be received in
trust for the benefit of Secured Party, shall be segregated from other funds of
such Grantor and shall forthwith be paid over to Secured Party as Collateral in
the same form as so received (with any necessary endorsements).


 


In order to permit
Secured Party to exercise the voting and other consensual rights which it may be
entitled to exercise pursuant hereto and to receive all dividends and other


 


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distributions
which it may be entitled to receive hereunder, (I) each Grantor shall
promptly execute and deliver (or cause to be executed and delivered) to Secured
Party all such proxies, dividend payment orders and other instruments as
Secured Party may from time to time reasonably request, and (II) without
limiting the effect of clause (I) above, each Grantor hereby grants to Secured
Party an irrevocable proxy to vote the Pledged Equity and to exercise all other
rights, powers, privileges and remedies to which a holder of the Pledged Equity
would be entitled (including giving or withholding written consents of holders
of Equity Interests, calling special meetings of holders of Equity Interests
and voting at such meetings), which proxy shall be effective, automatically and
without the necessity of any action (including any transfer of any Pledged
Equity on the record books of the issuer thereof) by any other Person
(including the issuer of the Pledged Equity or any officer or agent thereof),
upon the occurrence of an Event of Default and which proxy shall only terminate
upon the payment in full of the Secured Obligations (other than Unasserted
Obligations and any obligations or liabilities of whatever nature under any
Lender Swap Agreement), the cure of such Event of Default or waiver thereof as
evidenced by a writing executed by Secured Party.


 


SECTION 10.                                        Special
Covenants With Respect to the Intellectual Property Collateral.


 


(a)                                  Each
Grantor shall, except to the extent that failure to so comply could not
reasonably be expected to result in a Material Adverse Effect:


 


(i)                                     take
any and all reasonable steps to protect the secrecy of all trade secrets
relating to the products and services sold or delivered under or in connection
with the Intellectual Property Collateral, including, without limitation, where
appropriate entering into confidentiality agreements with employees and
labeling and restricting access to secret information and documents;


 


(ii)                                  use
proper statutory notice in connection with its use of any of the Intellectual
Property Collateral and products and services covered by the Intellectual
Property Collateral; and


 


(iii)                               use a commercially
appropriate standard of quality (which may be consistent with such Grantor’s
past practices) in the manufacture, sale and delivery of products and services
sold or delivered under or in connection with the Trademarks.


 


(b)                                 Except
as otherwise provided in this Section 10, each Grantor shall continue to
collect, at its own expense, all amounts due or to become due to such Grantor
in respect of the Intellectual Property Collateral or any portion thereof. In
connection with such collections, each Grantor may take (and, after the
occurrence and during the continuance of any Event of Default at Secured Party’s
reasonable direction, shall take) such action as such Grantor or Secured Party may deem
reasonably necessary or advisable to enforce collection of such amounts; provided,
Secured Party shall have the right at any time, upon the occurrence and during
the continuation of an Event of Default and upon written notice to such Grantor
of its intention to do so, to notify the obligors with respect to any such
amounts of the existence of the security interest created hereby and to direct
such obligors to make payment of all such amounts directly to Secured Party,
and, upon such notification and at the expense of such Grantor, to enforce
collection of any such amounts and to adjust, settle or compromise the amount
or


 


10

















 


payment thereof,
in the same manner and to the same extent as such Grantor might have done.
After receipt by any Grantor of the notice from Secured Party referred to in
the proviso to the preceding sentence and upon the occurrence and during the
continuance of any Event of Default, (i) all amounts and proceeds
(including checks and Instruments) received by each Grantor in respect of
amounts due to such Grantor in respect of the Intellectual Property Collateral
or any portion thereof shall be received in trust for the benefit of Secured
Party hereunder, shall be segregated from other funds of such Grantor and shall
be forthwith paid over or delivered to Secured Party in the same form as
so received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 17 hereof, and (ii) such Grantor shall
not adjust, settle or compromise the amount or payment of any such amount or
release wholly or partly any obligor with respect thereto or allow any credit
or discount thereon.


 


(c)                                  Each
Grantor shall have the duty diligently, through counsel reasonably acceptable
to Secured Party, to prosecute, file and/or make, unless and until such
Grantor, in its commercially reasonable judgment, decides otherwise, (i) any
application for registration relating to any of the Intellectual Property
Collateral owned, held or used by such Grantor and set forth on Schedules 8,
9 or 10 annexed hereto, as applicable, that is pending as of the
date of this Agreement, (ii) any Copyright Registration on any existing or
future unregistered but copyrightable works (except for works of nominal
commercial value or with respect to which such Grantor has determined in the exercise
of its commercially reasonable judgment that it shall not seek registration), (iii) any
application on any future patentable but unpatented innovation or invention
comprising Intellectual Property Collateral, and (iv) any Trademark
opposition and cancellation proceedings, renew Trademark Registrations and
Copyright Registrations and do any and all acts which are necessary or
desirable to preserve and maintain all rights in all Intellectual Property
Collateral. Any expenses incurred in connection therewith shall be borne solely
by Grantors. Subject to the foregoing, each Grantor shall give Secured Party
prior written notice of any abandonment of any Intellectual Property
Collateral.


 


(d)                                 Except
as provided herein, each Grantor shall have the right to commence and prosecute
in its own name, as real party in interest, for its own benefit and at its own
expense, such suits, proceedings or other actions for infringement, unfair
competition, dilution, misappropriation or other damage, or reexamination or reissue
proceedings as are necessary to protect the Intellectual Property Collateral.
Each Grantor shall promptly, following its becoming aware thereof, notify
Secured Party of the institution of, or of any adverse determination in, any
proceeding (whether in an IP Filing Office or any federal, state, local or
foreign court) or regarding such Grantor’s ownership, right to use, or interest
in any Intellectual Property Collateral. Each Grantor shall provide to Secured
Party any information with respect thereto requested by Secured Party.


 


(e)                                  In
addition to, and not by way of limitation of, the granting of a security
interest in the Collateral pursuant hereto, each Grantor, effective upon the
occurrence and during the continuance of an Event of Default, hereby assigns,
transfers and conveys to Secured Party the nonexclusive right and license to
use all Trademarks, tradenames, Copyrights, Patents or technical processes
(including, without limitation, the Intellectual Property Collateral) owned or
used by such Grantor that relate to the Collateral, together with any goodwill
associated therewith, all to the extent necessary to enable Secured Party to
realize on the Collateral in accordance with this Agreement and to enable any
transferee or assignee of the Collateral to


 


11

















 


enjoy the benefits
of the Collateral. This right shall inure to the benefit of all successors,
assigns and transferees of Secured Party and its successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license shall be granted free of charge, without requirement that any monetary
payment whatsoever be made to such Grantor. If and to the extent that any
Grantor is permitted to license the Intellectual Property Collateral, Secured
Party shall promptly enter into a non-disturbance agreement or other similar
arrangement, at such Grantor’s request and expense, with such Grantor and any licensee
of any Intellectual Property Collateral permitted hereunder in form and
substance reasonably satisfactory to Secured Party pursuant to which (i) Secured
Party shall agree not to disturb or interfere with such licensee’s rights under
its license agreement with such Grantor so long as such licensee is not in
default thereunder, and (ii) such licensee shall acknowledge and agree
that the Intellectual Property Collateral licensed to it is subject to the
security interest created in favor of Secured Party and the other terms of this
Agreement.


 


SECTION 11.                                        Collateral
Account.


 


(a)                                  Secured
Party is hereby authorized to establish and maintain as a blocked account under
the sole dominion and control of Secured Party, a restricted Deposit Account
designated as “Panolam Collateral Account”. All amounts at any time held in the
Collateral Account shall be beneficially owned by Grantors but shall be held in
the name of Secured Party hereunder, for the benefit of Beneficiaries, as
collateral security for the Secured Obligations upon the terms and conditions
set forth herein. Grantors shall have no right to withdraw, transfer or, except
as expressly set forth herein or in the Credit Agreement, otherwise receive any
funds deposited into the Collateral Account. Anything contained herein to the
contrary notwithstanding, the Collateral Account shall be subject to such
applicable laws, and such applicable regulations of the Board of Governors of
the Federal Reserve System and of any other appropriate banking or Government Authority,
as may now or hereafter be in effect. All deposits of funds in the
Collateral Account shall be made by wire transfer (or, if applicable, by
intra-bank transfer from another account of a Grantor) of immediately available
funds, in each case addressed in accordance with instructions of Secured Party.
Each Grantor shall, promptly after initiating a transfer of funds to the
Collateral Account, give notice to Secured Party by telefacsimile of the date,
amount and method of delivery of such deposit. Cash held by Secured Party in
the Collateral Account shall not be invested by Secured Party but instead shall
be maintained as a cash deposit in the Collateral Account pending application
thereof as elsewhere provided in this Agreement or in the Credit Agreement. To
the extent permitted under Regulation Q of the Board of Governors of the
Federal Reserve System, any cash held in the Collateral Account shall bear
interest at the standard rate paid by Secured Party to its customers for
deposits of like amounts and terms. Subject to Secured Party’s rights
hereunder, any interest earned on deposits of cash in the Collateral Account
shall be deposited directly in, and held in, the Collateral Account.


 


(b)                                 In
the event that Company is required to cash collateralize any Letter of Credit
or Letters of Credit pursuant to the Credit Agreement, other than pursuant to Section 8
of the Credit Agreement, in which case the provisions of Section 15(c) of
this Agreement shall apply, subject to the provisions of the Credit Agreement,
such cash collateral shall be retained by Secured Party until such time as such
Letter of Credit or Letters of Credit shall have expired or


 


12

















 


been surrendered
and any drawings under such Letter of Credit or Letters of Credit paid in full,
whether by reason of application of funds in the Collateral Account or
otherwise. Secured Party is authorized to apply any amount in the Collateral
Account to pay any drawing on a Letter of Credit. Subject to the provisions of Section 15(c) of
this Agreement and the Credit Agreement, if any such cash collateral is no
longer required to be retained in the Collateral Account, it shall be paid by
Secured Party to Company or at Company’s direction.


 


SECTION 12.                                        Secured
Party Appointed Attorney-in-Fact.


 


Each Grantor hereby
irrevocably appoints Secured Party as such Grantor’s attorney-in-fact, with
full authority in the place and stead of such Grantor and in the name of such
Grantor, Secured Party or otherwise, from time to time, upon the occurrence and
during the continuation of an Event of Default, in Secured Party’s discretion
to take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:


 


(a)                                  to
obtain and adjust insurance required to be maintained by such Grantor or paid
to Secured Party pursuant to the Credit Agreement;


 


(b)                                 to
ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral;


 


(c)                                  to
receive, endorse and collect any drafts or other Instruments, Documents,
Chattel Paper and other documents in connection with clauses (a) and (b) above;


 


(d)                                 to
file any claims or take any action or institute any proceedings that Secured
Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce or protect the rights of Secured Party with
respect to any of the Collateral;


 


(e)                                  to
pay or discharge taxes or Liens (other than taxes net required to be discharged
pursuant to the Credit Agreement and Liens permitted under this Agreement or
the Credit Agreement) levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its reasonable
discretion, any such payments made by Secured Party to become obligations of
such Grantor to Secured Party, due and payable immediately without demand;


 


(f)                                    to
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents relating
to the Collateral; and


 


(g)                                 generally
to sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Secured Party were
the absolute owner thereof for all purposes, and to do, at Secured Party’s
option and Grantors’ expense, at any time or from time to time, all acts and
things that Secured Party deems necessary to protect, preserve or realize upon
the Collateral and Secured Party’s security interest therein in order to effect
the intent of this Agreement, all as fully and effectively as such Grantor
might do.


 


13

















 


SECTION 13.                                        Secured
Party May Perform.


 


If any Grantor fails to
perform any agreement contained herein, Secured Party may itself
perform, or cause performance of, such agreement, and the expenses of Secured
Party incurred in connection therewith shall be payable by Grantors under Section 18(b).


 


SECTION 14.                                        Standard
of Care.


 


The powers conferred on
Secured Party hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Secured Party shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which
Secured Party accords its own property.


 


SECTION 15.                                        Remedies.


 


(a)                                  Generally.    If any
Event of Default shall have occurred and be continuing, Secured Party may,
subject to Section 20 hereof, exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the UCC (whether or not the UCC applies to the affected Collateral), and
also may (i) require each Grantor to, and each Grantor hereby agrees
that it will at its expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured Party and
make it available to Secured Party at a place to be designated by Secured Party
that is reasonably convenient to both parties, (ii) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the
Collateral, store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent Secured
Party deems appropriate, (iv) take possession of any Grantor’s premises or
place custodians in exclusive control thereof, remain on such premises and use
the same and any of such Grantor’s equipment for the purpose of completing any
work in process, taking any actions described in the preceding clause (iii) and
collecting any Secured Obligation, (v) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any of Secured Party’ s offices or elsewhere, for
cash, on credit or for future delivery, at such time or times and at such price
or prices and upon such other terms as Secured Party may deem commercially
reasonable, (vi) without notice to any Grantor, transfer to or register in
the name of Secured Party or any of its nominees any or all of the Securities
Collateral; provided that Secured Party shall not exercise its rights under
this Section 15 with respect to any United States intent-to-use trademark
applications solely to the extent that, and solely during the period in which,
such actions would impair the validity or enforceability of such intent-to-use
trademark applications under applicable federal law. Secured Party or any
Lender or Swap Counterparty may be the purchaser of any or all of the
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders and Swap Counterparties (but not any Lender or Swap Counterparty in
its individual capacity unless Requisite Lenders shall otherwise agree in writing),
shall be entitled, for the purpose of bidding and making settlement or payment
of the


 


14

















 


purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the
extent permitted by applicable law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least
ten days’ notice to such Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Each Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if Secured
Party accepts the first offer received and does not offer such Collateral to
more than one offeree. If the proceeds of any sale or other disposition of the
Collateral are insufficient to pay all the Secured Obligations, Grantors shall
be jointly and severally liable for the deficiency. Each Grantor further agrees
that a breach of any of the covenants contained in this Section 15 will
cause irreparable injury to Secured Party, that Secured Party has no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section shall be specifically enforceable
against such Grantor, and each Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants
except for a defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated maturities.


 


(b)                                 Securities Collateral.   
Each Grantor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of
the Securities Collateral conducted without prior registration or qualification
of such Securities Collateral under the Securities Act and/or such state
securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Securities Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges that any such private placement may be at prices and
on terms less favorable than those obtainable through a sale without such
restrictions (including an offering made pursuant to a registration statement
under the Securities Act) and, notwithstanding such circumstances, each Grantor
agrees that any such private placement shall not be deemed, in and of itself,
to be commercially unreasonable and that Secured Party shall have no obligation
to delay the sale of any Securities Collateral for the period of time necessary
to permit the issuer thereof to register it for a form of sale requiring
registration under the Securities Act or under applicable state securities
laws, even if such issuer would, or should, agree to so register it. If Secured
Party determines to exercise its right to sell any or all of the Securities
Collateral, upon written request, each Grantor shall and shall cause each
issuer of any Securities Collateral to be sold hereunder from time to time to
furnish to Secured Party all such information as Secured Party may request
in order to determine the amount of Securities Collateral which may be
sold by Secured Party in exempt transactions


 


15

















 


under the
Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.


 


(c)                                  Collateral Account.   If an Event of Default has
occurred and is continuing, any amounts on deposit in the Collateral Account,
except for funds deposited in the Collateral Account as described in the next
sentence, shall be held by Administrative Agent and applied as Obligations
become due or, if applicable, pursuant to subsection 2.4D of the Credit
Agreement. If, in accordance with Section 8 of the Credit Agreement,
Company is required to pay to Secured Party an amount (the “Aggregate Available Amount”) equal to the maximum amount
that may at any time be drawn under all Letters of Credit then outstanding
under the Credit Agreement, Company shall deliver funds in such an amount for
deposit in the Collateral Account. Following such deposit in the Collateral
Account, (i) upon any drawing under any outstanding Letter of Credit,
Secured Party shall apply any amount in the Collateral Account to reimburse the
Issuing Lender for the amount of such drawing and (ii) in the event of
cancellation or expiration of any Letter of Credit, or in the event of any
reduction in the maximum available amount under any Letter of Credit, Secured
Party shall apply the amount then on deposit in the Collateral Account in
excess of the Aggregate Available Amount (calculated giving effect to such
cancellation, expiration or reduction) as provided in Section 17.


 


SECTION 16.                                        Additional
Remedies for Intellectual Property Collateral.


 


(a)                                  Anything
contained herein to the contrary notwithstanding, upon the occurrence and
during the continuation of an Event of Default, (i) Secured Party shall
have the right (but not the obligation) to bring suit, in the name of any
Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents required by
Secured Party in aid of such enforcement and each Grantor shall promptly, upon
demand, reimburse and indemnify Secured Party as provided in subsections 10.2
and 10.3 of the Credit Agreement and Section 18 hereof, as applicable, in
connection with the exercise of its rights under this Section 16, and, to
the extent that Secured Party shall elect not to bring suit to enforce any
Intellectual Property Collateral as provided in this Section, each Grantor
agrees to use all reasonable measures, whether by action, suit, proceeding or
otherwise, to prevent the infringement of any of the Intellectual Property
Collateral by others and for that purpose agrees to use its commercially
reasonable judgment in maintaining any action, suit or proceeding against any
Person so infringing reasonably necessary to prevent such infringement; (ii) upon
written demand from Secured Party, each Grantor shall execute and deliver to
Secured Party an assignment or assignments of the Intellectual Property
Collateral and such other documents as are necessary or appropriate to carry
out the intent and purposes of this Agreement; and (iii) each Grantor
agrees that such an assignment and/or recording shall be applied to reduce the
Secured Obligations outstanding only to the extent that Secured Party (or any
Lender) receives cash proceeds in respect of the sale of, or other realization
upon, the Intellectual Property Collateral.


 


(b)                                 If
(i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, and (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable,


 


16

















 


upon the written
request of any Grantor, Secured Party shall promptly execute and deliver to
such Grantor such assignments as may be necessary to reassign to such
Grantor any such rights, title and interests as may have been assigned to
Secured Party as aforesaid, subject to any disposition thereof that may have
been made by Secured Party; provided, after giving effect to such reassignment,
Secured Party’s security interest granted pursuant hereto, as well as all other
rights and remedies of Secured Party granted hereunder, shall continue to be in
full force and effect.


 


SECTION 17.                                        Application
of Proceeds.


 


Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any part of
the Collateral shall be applied as provided in the Credit Agreement.


 


SECTION 18.                                        Indemnity
and Expenses.


 


(a)                                  Grantors
jointly and severally agree to indemnify Secured Party, each Lender and each
Swap Counterparty from and against any and all claims, losses and liabilities
in any way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party’s or such Lender’s or Swap Counterparty’s gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction; provided that any claim for indemnification for attorneys fees,
costs or expenses shall be limited to the reasonable out-of-pocket fees, costs
and expenses of counsel (including costs of one special or local counsel for
all parties seeking indemnification hereunder in each appropriate
jurisdiction), provided, however, that all parties seeking
indemnification hereunder use a single outside counsel of each type, except
that in the case of a bona fide conflict of interest, the costs of one
additional counsel shall be included, so that counsel may be retained for
the benefit of the Guarantied Party on the one hand and the other Beneficiaries
on the other hand).


 


(b)                                 Grantors
jointly and severally agree to pay to Secured Party upon demand the amount of
any and all costs and expenses in accordance with subsection 10.2 of the
Credit Agreement.


 


(c)                                  The
obligations of Grantors in this Section 18 shall (i) survive the
termination of this Agreement and the discharge of Grantors’ other
obligations under this Agreement, the Lender Swap Agreements, the Credit
Agreement and the other Loan Documents and (ii), as to any Grantor that is a
party to a Subsidiary Guaranty, be subject to the provisions of Section 1(b) thereof.


 


SECTION 19.                                        Continuing
Security Interest; Transfer of Loans; Termination and Release.


 


(a)                                  This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until the payment in full of the
Secured Obligations (other than Unasserted Obligations and any obligations or
liabilities of whatever nature under any Lender Swap Agreement), the
cancellation or termination of the Commitments and the


 


17

















 


cancellation or
expiration of, or the provision for cash collateral or other support therefor
in a manner reasonably satisfactory to the Issuing Lender with respect to, all
outstanding Letters of Credit, (ii) be binding upon Grantors and their
respective successors and assigns, and (iii) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its successors and permitted assigns. Without limiting the generality of
the foregoing clause (iii), (A) but subject to the provisions of subsection 10.1
of the Credit Agreement, any Lender may assign or otherwise transfer any
Loans held by it to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Lenders
herein or otherwise and (B) any Swap Counterparty may assign or
otherwise transfer any Lender Swap Agreement to which it is a party to any
other Person in accordance with the terms of such Lender Swap Agreement, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Swap Counterparties herein or otherwise.


 


(b)                                 Upon
the payment in full of all Secured Obligations (other than Unasserted Obligations
and any obligations or liabilities of whatever nature under any Lender Swap
Agreement), the cancellation or termination of the Commitments and the
cancellation or expiration of, or the provision for cash collateral or other
support therefor in a manner reasonably satisfactory to the Issuing Lender with
respect to, all outstanding Letters of Credit, the security interest granted
hereby (other than with respect to any cash collateral in respect of Letters of
Credit) shall terminate and all rights to the Collateral shall revert to the
applicable Grantors. Upon any such termination Secured Party will, at Grantors’
expense, execute and deliver to Grantors such documents as Grantors shall
reasonably request to evidence such termination. In addition, upon the proposed
sale or other disposition of any Collateral by a Grantor in accordance with the
Credit Agreement for which such Grantor desires a security interest release
from Secured Party, such a release may be obtained pursuant to the
provisions of subsection 10.14 of the Credit Agreement.


 


SECTION 20.                                        Secured
Party as Agent.


 


(a)                                  Secured
Party has been appointed to act as Secured Party hereunder by Lenders and, by
their acceptance of the benefits hereof, Swap Counterparties. Secured Party
shall be obligated, and shall have the right hereunder, to make demands, to
give notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including, without limitation, the release or
substitution of Collateral), solely in accordance with this Agreement and the
Credit Agreement; provided that Secured Party shall exercise, or refrain from
exercising, any remedies provided for in Section 15 hereof in accordance
with the instructions of Requisite Lenders. In furtherance of the foregoing
provisions of this Section 20(a), each Swap Counterparty, by its
acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Swap Counterparty that all rights and remedies
hereunder may be exercised solely by Secured Party for the benefit of
Lenders and Swap Counterparties in accordance with the terms of this Section 20(a).


 


(b)                                 Secured
Party shall at all times be the same Person that is Administrative Agent under
the Credit Agreement. Written notice of resignation by Administrative Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; and appointment of
a successor Administrative Agent


 


18

















 


pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Administrative Agent under
subsection 9.5 of the Credit Agreement by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Secured Party under this Agreement, and the retiring Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all
sums, securities and other items of Collateral held hereunder, together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute (if necessary) and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Secured Party of the security interests created hereunder, whereupon such
retiring Secured Party shall be discharged from its duties and obligations
under this Agreement. After any retiring Administrative Agent’s resignation
hereunder as Secured Party, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.


 


(c)                                  Secured
Party shall not be deemed to have any duty whatsoever with respect to any Swap
Counterparty until it shall have received written notice in form and
substance satisfactory to Secured Party from a Grantor or the Swap Counterparty
as to the existence and terms of the applicable Lender Swap Agreement.


 


SECTION 21.                                        Additional
Grantors.


 


The initial Grantors
hereunder shall be Company, Holdings and such of the Subsidiaries of Company as
are signatories hereto on the date hereof. From time to time subsequent to the
date hereof, additional Domestic Subsidiaries of Company may become
Additional Grantors, by executing a Counterpart, Upon delivery of any such
Counterpart to Secured Party, notice of which is hereby waived by Grantors,
each such Additional Grantor shall be a Grantor and shall be as fully a party
hereto as if such Additional Grantor were an original signatory hereto. Each
Grantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Secured Party not to cause any Domestic
Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.


 


SECTION 22.                                        Amendments;
Etc.


 


No amendment,
modification, termination or waiver of any provision of this Agreement, and no consent
to any departure by any Grantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by Secured Party and, in the
case of any such amendment or modification, by Grantors; provided this
Agreement may be modified by the execution of a Counterpart by an
Additional Grantor in accordance with Section 21 hereof and Grantors
hereby waive any requirement of notice of or consent to any such amendment. Any


 


19

















 


such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.


 


SECTION 23.                                        Notices.


 


Any notice or other
communication herein required or permitted to be given shall be in writing and may be
personally served or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be
as provided in subsection 10.7 of the Credit Agreement or as set forth
under such party’s name on the signature pages hereof or such other address
as shall be designated by such party in a written notice delivered to the other
parties hereto.


 


SECTION 24.                                        Failure
or Indulgence Not Waiver; Remedies Cumulative.


 


No failure or delay on
the part of Secured Party in the exercise of any power, right or privilege
hereunder shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude any other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.


 


SECTION 25.                                        Severability.


 


In case any provision in
or obligation under this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.


 


SECTION 26.                                        Headings.


 


Section and subsection headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose or be
given any substantive effect.


 


SECTION 27.                                        Governing
Law; Rules of Construction.


 


THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK, IN WHICH CASE THE LAWS OF SUCH JURISDICTION SHALL GOVERN
WITH


 


20

















 


RESPECT TO THE
PERFECTION OF THE SECURITY INTEREST IN, OR THE REMEDIES WITH RESPECT TO, SUCH
PARTICULAR COLLATERAL. The rules of construction set forth in subsection 1.3
of the Credit Agreement shall be applicable to this Agreement mutatis mutandis.


 


SECTION 28.                                        Consent
to Jurisdiction and Service of Process.


 


ALL JUDICIAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
OF THE PARTIES HERETO, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 23
HEREOF; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; AND (V) AGREES THAT THE PROVISIONS OF THIS SECTION 28
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.


 


SECTION 29.                                        Waiver
of Jury Trial.


 


GRANTORS AND SECURED
PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH GRANTOR AND
SECURED PARTY ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR
GRANTORS AND SECURED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT GRANTORS
AND SECURED PARTY HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED
FUTURE DEALINGS. EACH GRANTOR AND SECURED PARTY FURTHER WARRANT AND REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING


 


21

















 


(OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 29 AND
EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.


 


SECTION 30.                                        Counterparts.


 


This Agreement may be
executed in one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same document.


 


SECTION 31.                                        Definitions.


 


(a)                                  Each
capitalized term utilized in this Agreement that is not defined in the Credit
Agreement or in this Agreement, but that is defined in the UCC, including the
categories of Collateral listed in Section 1 hereof, shall have the
meaning set forth in Articles 1, 8 or 9 of the UCC.


 


(b)                                 In
addition, the following terms used in this Agreement shall have the following
meanings:


 


“Additional Grantor” means a
Domestic Subsidiary of Company that becomes a party hereto after the date
hereof as an additional Grantor by executing a Counterpart.


 


“Assigned Agreements” means,
with respect to any Grantor, all contracts and agreements between such Grantor
and one or more additional parties, as each such agreement may be amended,
restated, supplemented or otherwise modified from time to time, including,
without limitation, (a) all rights of such Grantor to receive moneys due
or to become due under or pursuant to the Assigned Agreements, (b) all
rights of such Grantor to receive proceeds of any Supporting Obligations with
respect to the Assigned Agreements, (c) all claims of such Grantor for
damages arising out of any breach of or default under the Assigned Agreements,
and (d) all rights of such Grantor to terminate, amend, supplement, modify
or exercise rights or options under the Assigned Agreements, to perform thereunder
and to compel performance and otherwise exercise all remedies thereunder.


 


“Beneficiary” means
Administrative Agent, each Lender and each Swap Counterparty.


 


“Collateral” has the meaning set forth in Section 1
hereof.


 


“Collateral Account” means the “Panolam
Collateral Account” established pursuant to Section 11.


 


“Copyright Registrations” means
all copyright registrations issued to any Grantor and applications for
copyright registration that have been or may hereafter be issued or
applied for thereon in the United States and any state thereof and in foreign
countries (including, without


 


22

















 


limitation, the
registrations set form on Schedule 10 annexed hereto, as the
same may be amended pursuant hereto from time to time).


 


“Copyright Rights” means all common law and other rights
in and to the Copyrights in the United States and any state thereof and in
foreign countries including all copyright licenses (but with respect to such
copyright licenses, only to the extent permitted by such licensing
arrangements), the right (but not the obligation) to renew and extend Copyright
Registrations and any such rights and to register works protectable by
copyright and the right (but not the obligation) to sue in the name of any
Grantor or in the name of Secured Party or Lenders for past, present and future
infringements of the Copyrights and any such rights.


 


“Copyrights” means all items
under copyright in various published and unpublished works of authorship
including, without limitation, computer programs, computer data bases, other
computer software layouts, trade dress, drawings, designs, writings, and
formulas (including, without limitation, the works set forth on Schedule 10
annexed hereto, as the same may be amended pursuant hereto from time to
time).


 


“Counterpart” means a counterpart to this
Agreement entered into by a Subsidiary of Company pursuant to Section 21
hereof.


 


“Credit Agreement” has the meaning set forth in the
Preliminary Statements of this Agreement.


 


“Equity Interests” means all shares of stock,
partnership interests, interests in Joint Ventures, limited liability company
interests and all other equity interests in a Person, whether such stock or
interests are classified as Investment Property or General Intangibles under
the UCC.


 


“Grant” means a Grant of Trademark Security Interest, substantially in
the form of Exhibit I annexed hereto, and a Grant of Patent
Security Interest, substantially in the form of Exhibit II annexed
hereto, and a Grant of Copyright Security Interest, substantially in the form of
Exhibit III annexed hereto.


 


“Intellectual Property Collateral” means, with respect to any Grantor
all right, title and interest (including rights acquired pursuant to a license
or otherwise but only to the extent permitted by agreements governing such
license or other use) in and to all


 


(a)                                  Copyrights,
Copyright Registrations and Copyright Rights, including, without limitation,
each of the Copyrights, rights, titles and interests in and to the Copyrights,
all derivative works and other works protectable by copyright, which are
presently, or in the future may be, owned, created (as a work for hire for
the benefit of such Grantor), authored (as a work for hire for the benefit of
such Grantor), or acquired by such Grantor, in whole or in part, and all
Copyright Rights with respect thereto and all Copyright Registrations therefor,
heretofore or hereafter granted or applied for, and all renewals and extensions
thereof, throughout the world;


 


(b)                                 Patents;


 


23

















 


(c)                                  Trademarks,
Trademark Registrations, the Trademark Rights and goodwill of such Grantor’s
business symbolized by the Trademarks and associated therewith;


 


(d)                                 all
trade secrets, trade secret rights, know-how, customer lists, processes of
production, ideas, confidential business information, techniques, processes,
formulas, and all other proprietary information; and


 


(e)                                  all
proceeds thereof (such as, by way of example and not by limitation, license
royalties and proceeds of infringement suits).


 


“IP Supplement” means an IP Supplement, substantially
in the form of Exhibit V annexed hereto.


 


“Lender Swap Agreement” means an Interest Rate Agreement,
Currency Agreement or other swap agreement between Company or a Domestic
Subsidiary of Company and a Swap Counterparty.


 


“Patents” means all patents and
patent applications and rights and interests in patents and patent applications
under any domestic or foreign law that are presently, or in the future may be,
owned or held by a Grantor and all patents and patent applications and rights,
title and interests in patents and patent applications under any domestic or
foreign law that are presently, or in the future may be, owned by such
Grantor in whole or in part (including, without limitation, the patents
and patent applications set forth on Schedule 9 annexed hereto),
all rights (but not obligations) corresponding thereto to sue for past, present
and future infringements and all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof.


 


“Pledged Debt” means the Indebtedness from time to
time owed to a Grantor, including the Indebtedness set forth on Schedule 7
annexed hereto and issued by the obligors named therein, the Instruments and
certificates evidencing such Indebtedness and all interest, cash or other
property received, receivable or otherwise distributed in respect of or
exchanged therefor.


 


“Pledged Equity” means all Equity Interests now or hereafter
owned by a Grantor, including all securities convertible into, and rights,
warrants, options and other rights to purchase or otherwise acquire, any of the
foregoing, including those owned on the date hereof and set forth on Schedule 6
annexed hereto, the certificates or other instruments representing any of the
foregoing and any interest of such Grantor in the entries on the books of any
securities intermediary pertaining thereto and all distributions, dividends and
other property received, receivable or otherwise distributed in respect of or
exchanged therefor, but excluding any Equity Interests of Foreign Subsidiaries
to the extent a security interest in such Equity Interests would result in more
than 65% of the voting power of all classes of Equity Interests of any such
Foreign Subsidiary being pledged.


 


“Pledged Subsidiary Debt” means Pledged Debt owed to a Grantor
by any obligor that is, or becomes, a direct or indirect Subsidiary of such
Grantor, of which such Grantor is a direct or indirect Subsidiary or that
controls, is controlled by or under common control with such Grantor.


 


24

















 


“Pledged Subsidiary Equity” means Pledged Equity in a Person that
is, or becomes a direct
Subsidiary of a Grantor.


 


“Pledge Supplement” means a Pledge Supplement, in
substantially the form of Exhibit IV annexed hereto, in
respect of the additional Pledged Equity or Pledged Debt pledged pursuant to
this Agreement.


 


“Secured Obligations” has the meaning set forth in Section 2
hereof.


 


“Securities Collateral” means, with respect to any Grantor,
the Pledged Equity, the Pledged Debt and any other Investment Property in which
such Grantor has an interest.


 


“Trademark Registrations” means all registrations that have
been or may hereafter be issued or applied for thereon in the United
States and any state thereof and in foreign countries (including, without
limitation, the registrations and applications set forth on Schedule 8
annexed hereto).


 


“Trademark Rights” means all common law and other rights
(but in no event any of the obligations) in and to the Trademarks in the United
States and any state thereof and in foreign countries.


 


“Trademarks” means all trademarks, service marks,
designs, logos, indicia, tradenames, trade dress, corporate names, company
names, business names, fictitious business names, trade styles and/or other
source and/or business identifiers and applications pertaining thereto, owned
by a Grantor, or hereafter adopted and used, in its business (including, without
limitation, the trademarks specifically set forth on Schedule 8
annexed hereto).


 


“UCC” means the Uniform Commercial
Code, as it exists on the date of this Agreement or as it may hereafter be
amended, in the State of New York.


[Remainder of page intentionally left blank]


 


25

















 


IN
WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above,


 


	
   

  	
  PANOLAM INDUSTRIES INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  Muller

  	
   

  
	
   

  	
   

  	
  Name:
  Jeffrey Muller

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President, Human Resources

  and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notice Address: See Schedule A annexed hereto.

  
	
   

  	
   

  	
   

  
	
   

  	
  PANOLAM HOLDINGS II CO.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  J. Ryan Clark

  	
   

  
	
   

  	
   

  	
  Name:
  J. Ryan Clark

  
	
   

  	
   

  	
  Title:
     Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Each of the other entities listed on Schedule A

  annexed hereto

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey Muller

  	
   

  
	
   

  	
   

  	
  on
  behalf of each of the other entities listed

  on Schedule A annexed hereto

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Jeffrey Muller

  
	
   

  	
   

  	
  Title:
  Secretary

  
					



 

















 


	
   

  	
  CREDIT SUISSE, Cayman Islands Branch,

  Administrative Agent,

  as Secured Party

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William O’Daly

  	
   

  
	
   

  	
   

  	
  Name:
  William O’Daly

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Rianka Mohan

  	
   

  
	
   

  	
   

  	
  Name:
  Rianka Mohan

  
	
   

  	
   

  	
  Title:
  Associate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice
  Address:

  	
   

  
	
   

  	
   

  	
  OMA-2

  
	
   

  	
   

  	
  Eleven
  Madison Avenue

  
	
   

  	
   

  	
  New
  York, New York 10010

  
	
   

  	
   

  	
  Attention:
  Agency Department Manager

  
	
   

  	
   

  	
  Facsimile:
  (212) 325-8304