Document:

Third Amendment to the Credit Agreement

 

     
EXHIBIT 4.5.2

THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Third Amendment”), dated as of
February 28th, 2003, (the “Third Amendment Date”) is entered into among BUTLER
MANUFACTURING COMPANY, a Delaware corporation (“Borrower”), the banks listed
on the signature pages hereof (collectively, the “Lenders”), and BANK OF
AMERICA, N.A., as Administrative Lender (in said capacity, the “Administrative
Lender”).

Borrower, the Lenders and Administrative Lender are parties to that certain
Credit Agreement, dated as of June 20, 2001, as amended by that First
Amendment to Credit Agreement dated as of December 4, 2001, as amended by that
certain Waiver and Amendment dated as of February 3, 2003, as amended by the
Second Amendment to Credit Agreement dated as of December 17, 2002 (the
“Second Amendment”) (as amended, the “Credit Agreement”; the terms defined in
the Credit Agreement and not otherwise defined herein shall be used herein as
defined in the Credit Agreement).
Borrower has requested that the Administrative Lender and the Lenders amend
the Credit Agreement.
Lenders and Administrative Lender have agreed to amend the Credit Agreement
under certain terms and conditions, which include the Borrower and the
Guarantors granting the Collateral Agent a first priority security interest in
the Collateral, subject to Permitted Liens that was a condition to the relief
granted to Borrower by the Lenders in connection with the Second Amendment.
Borrower and the Guarantors are willing to grant such security interests in
the Collateral. But for Borrower and the Guarantors’ covenant to grant such
security interests, the Administrative Lender and the Lenders would not have
been willing to enter into the Second Amendment or be willing to enter into
this Third Amendment.

NOW, THEREFORE, in consideration of the covenants, conditions and agreements
hereafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which are all hereby acknowledged, Borrower, Lenders
and Administrative Lender covenant and agree as follows:

     1.     AMENDMENTS TO THE CREDIT AGREEMENT.
(a) Section 1.1 of the Credit Agreement is hereby amended by adding a new
definition of “Intercreditor Agreement” thereto in proper alphabetical order to
read as follows:

		
	 	     “Intercreditor Agreement” means that certain Intercreditor and
Agency Services Agreement among Bank of America, N.A., as administrative
agent, issuing bank and collateral agent, the Lenders, the 2001
noteholders, the 1998 noteholders and the 1994 noteholders, and consented
to by the Borrower and the Guarantors dated as of February 28, 2003, as
amended, restated, supplemented or otherwise modified from time to time.

(b)  Section 1.1 of the Credit Agreement is hereby amended by amending and
restating the definition of “Non-recourse Debt” thereto in proper alphabetical
order to read as follows:

		
	 	     “Non-recourse Debt” means (i) non-recourse Debt secured by Liens granted on
real estate, the improvements thereon and related property purchased or held
for development and sale, including any completed project until its sale to a
customer, not to exceed $35,000,000 in aggregate amount outstanding at any time
and in which the Borrower or its Subsidiaries do not invest at any time more
than 45% of the purchase and development costs of such real estate,
improvements and related property and (ii) Debt of Foreign Subsidiaries that is
non-recourse to the Borrower and the Guarantors (a) which is listed on Schedule
7.13 and is existing on the Third Amendment Date and (b) not to
exceed $15,000,000 in aggregate amount outstanding at any time if
not listed on Schedule 7.13. As used in (i) above, “related property”
for a particular real estate project includes: leases, rents, profits and security deposits for
the project; books and records for the project; condemnation rights,
insurance payments (including deductive amounts) and proceeds related
thereto; permits, licenses, certificates of occupancy and other governmental 

1

 

		
	 	authorizations for the project; franchise, management,
service, governmental (including tax incentive) and other agreements
related to the project; trademarks and trade names for the project;
construction contracts, architect’s and engineer’s agreements, plans,
specifications, drawings, surveys, models, sample materal and other items
for the construction, fixturing, renovation or improvement of the
project; and deposit accounts used exclusively for the project.

(c)  Section 1.1 of the Credit Agreement is hereby amended by adding a new
definition of “Third Amendment” thereto in proper alphabetical order to read as
follows:

		
	 	     “Third Amendment” means that certain third amendment to this
Agreement dated as of February 28, 2003.

(d)  Section 7.13 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

		
	 	     Section 7.13 Debt. The Borrower shall not, and shall not permit
any Subsidiary to, create, assume, incur or otherwise become or remain
obligated in respect of, or permit to be outstanding, any Debt, except
any or all of the following:
	 
	 	     (a) Existing Debt described on Schedule 7.13 hereto and renewals,
refinancings and extensions, but not increases thereof, on terms and
conditions not otherwise materially different from the terms and
conditions thereof immediately preceding such renewal, refinancing or
extension;
	 
	 	     (b) In addition to the Existing Debt described on Schedule 7.13
hereto, provided no Default or Event of Default exists both before and
after giving effect thereto, Non-recourse Debt, provided that such Debt
shall not be payable from the proceeds of Investments of the Borrower or
any Domestic Subsidiary in any Foreign Subsidiary;
	 
	 	     (c) In addition to the Existing Debt described on Schedule 7.13
hereto, provided no Default or Event of Default exists both before and
after giving effect thereto, purchase money Debt or Capitalized Lease
Obligations not to exceed $12,000,000 at any time outstanding;
	 
	 	     (d) In addition to the Existing Debt described on Schedule 7.13
hereto, provided no Default or Event of Default exists both before and
after giving effect thereto, Swap Contracts in respect of interest rates,
foreign exchange or aluminum contracts, in each case that are (i) not for
the purpose of speculation and (ii) on an unsecured basis; and
	 
	 	     (e) in addition to the existing Debt described on Schedule 7.13 hereto,
provided no Default or Event of Default exists both before and after giving
effect thereto, letters of credit securing manufacturing and factory equipment
purchases not to exceed $500,000 at any time outstanding.

(e)  New Section 7.21 of the Credit Agreement is hereby added to the Credit
Agreement to read as follows:

		
	 	7.21. Incorporation By Reference. On the effective date of the
Third Amendment, each financial covenant (together with any
defined terms and schedules related thereto) imposed under the
Note Agreements (as defined in the Intercreditor Agreement) is
incorporated into this Agreement and shall apply as if fully set
forth herein.
	 
	 	     If, after the effective date of the Third Amendment, the Noteholders
(as defined in the Intercreditor Agreement) or any other holder of
Indebtedness of the Borrower impose any additional or more restrictive
covenant (including by amendment of an existing covenant, by waiver or
consent or otherwise) of the type or similar to the type contained in
Article 7 of the this 

2

 

		
	 	Agreement (as such this Agreement exists on the
date of the Third Amendment), or the Borrower grants to any Noteholder
(as defined in the Intercreditor Agreement) or other holder of
Indebtedness of the Borrower any new covenant of the type or similar to
the type contained in Article 7 of this Agreement (as this Agreement
exists on the date of the Third Amendment) more favorable to such
Noteholder (as defined in the Intercreditor Agreement) or other holder or
Indebtedness of the Borrower than such covenants or similar covenants
contained in this Agreement, the Borrower shall promptly notify, and
furnish a copy thereof to, each holder of the Administrative Agent, and
this Agreement shall be deemed to be amended automatically to incorporate
such additional, more restrictive or more favorable financial covenant
(together with any defined terms and schedules related thereto).

(f)  Section 11.1(a) of the Credit Agreement is hereby amended to change the
notice address for Borrower under heading (i) to read as follows:

Butler Manufacturing Company

1540 Genessee

Kansas City, MO 64102

Attn: Chief Financial Officer

Telephone: (816) 968-3216

Facsimile: (816) 968-6504

Electronic: lcmiller@butlermfg.com

with a copy to:

Butler Manufacturing Company

1540 Genessee

Kansas City, MO 64102

Attn: General Counsel

Telephone: (816) 968-3214

Facsimile: (816) 968-3211

Electronic: jwhuey@butlermfg.com

3

 

     2.     REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT.
By its execution and delivery hereof, Borrower represents and warrants
that, as of the date hereof and after giving effect to the amendments
contemplated by the foregoing Section 1 and the effectiveness of the First
Amendments to the Note Agreements (as defined in the Intercreditor Agreement),
as amended:

the representations and warranties contained in the Credit Agreement are true
and correct on and as of the date hereof as if made on and as of such date;
no event has occurred and is continuing which constitutes a Default or an Event
of Default;

Borrower has full power and authority to execute and deliver this Third
Amendment, and this Third Amendment and the Credit Agreement, as amended
hereby, constitute the legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, except as enforceability
may be limited by applicable debtor relief laws and by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity
or at law) and except as rights to indemnity may be limited by federal or state
securities laws;

neither the execution, delivery and performance of this Third Amendment or the
Credit Agreement, as amended hereby, nor the consummation of any transactions
contemplated herein or therein, will conflict with any Law to which Borrower or
any of its Subsidiaries is subject, or any indenture, agreement or other
instrument to which Borrower or any of its Subsidiaries or any of their
respective property is subject;

no authorization, approval, consent, or other action by, notice to, or filing
with, any governmental authority or other Person (other than the Board of
Directors of the Borrower and the Guarantors), is required for the execution,
delivery or performance by (i) Borrower of this Third Amendment or (ii) the
acknowledgment of this Third Amendment by each Guarantor; and

each Material Domestic Subsidiary has executed a Subsidiary Guaranty.

     3.     CONDITIONS OF EFFECTIVENESS. This Third Amendment shall be effective
as of the Third Amendment Date first set forth above, subject to the
following:

(a)  Administrative Lender shall have received counterparts of this Third
Amendment executed by all Lenders, the Borrower and the Guarantors;

(b)  there shall be no Default or Event of Default under the Credit Agreement
after giving effect to this Third Amendment;

(c)  Borrower shall cause to be delivered to the Administrative Lender a legal
opinion in connection with the Third Amendment in form and substance reasonably
acceptable to Special Counsel;

(d)  Borrower shall have delivered to the Administrative Lender a secretary’s
certificate, with incumbency provision, certifying the effective corporate
resolutions of the Borrower authorizing the Borrower to enter into this Third
Amendment and deliver the Collateral;

(e)  Borrower shall have caused to be delivered to the Administrative Lender a
secretary’s certificate, with incumbency provision, from each Guarantor
certifying to the effective corporate resolution of such Guarantor authorizing
such Guarantor to execute their respective acknowledgment of this Third
Amendment and if applicable, the delivery of the Collateral;

(f)  Borrower shall deliver to Administrative Lender a fully executed security
agreement of even date therewith together with such other related documents as
the Administrative Lender may require, each on terms and conditions acceptable
to the Administrative Lender;

(g)  Borrower shall deliver or cause to be delivered a fully executed
intercreditor agreement of even date herewith on terms and conditions
acceptable to the Administrative Lender;

(h)  Borrower shall have reimbursed the Administrative Lender for all of the
Administrative Lenders costs, fees and expenses, including attorney fees and
expenses of Special Counsel, incurred in connection with due diligence,
negotiations, drafting and the consummation of the Credit Agreement, the Loan
Documents and this Third Amendment; and

(i)  Administrative Lender and Lenders shall have received in form and substance
satisfactory to Administrative Lender and Lenders, such other documents and
certificates as Lenders shall require.

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     4.     GUARANTOR ACKNOWLEDGMENT. By signing below, each Guarantor (a)
acknowledges, consents and agrees to the execution by the Borrower of this
Third Amendment, (b) acknowledges and agrees that its obligations in respect
of its Subsidiary Guaranty are not released, diminished, waived, modified,
impaired or affected in any manner by this Third Amendment or any of the
provisions contemplated herein, (c) ratifies and confirms its obligations
under its Subsidiary Guaranty, (d) acknowledges and agrees that it has no
claims or offsets against, or defenses or counterclaims to, its Subsidiary
Guaranty, (e) acknowledges, consents and agrees to each of the release
provisions contained in Section 7 of this Third Amendment and (f) to the
extent applicable, agrees to deliver or assist in the delivery of the
Collateral.

     5.     CONSENT REGARDING DISSOLUTION OF SUBSIDIARY. The Lenders and the
Administrative Lender hereby consent to the dissolution and liquidation of
Innovative Building Technology, Inc. and acknowledge that upon its
dissolution and liquidation, it shall no longer be considered as a
Subsidiary for purposes of the Credit Agreement, provided that it
transfers its ownership of all assets of Innovative Building Technology,
Inc. remaining after payment or provision for payment of its claims or
obligations to the Borrower within 20 calendar days of filing its
certificate of dissolution with the Delaware Secretary of State.

     6.     REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Third Amendment, each reference in the
Credit Agreement to “this Agreement”, “hereunder”, or words of like import
shall mean and be a reference to the Credit Agreement, as affected and amended
by this Third Amendment.
(b) The Credit Agreement, as amended by this Third Amendment, and all other
Loan Documents shall remain in full force and effect and are hereby ratified
and confirmed.

     7.     COSTS, EXPENSES AND TAXES. Borrower agrees to pay on demand all costs
and expenses of Administrative Lender in connection with the preparation,
reproduction, execution and delivery of this Third Amendment and the other
instruments and documents to be delivered hereunder (including the reasonable
fees and out-of-pocket expenses of counsel for Administrative Lender with
respect thereto and with respect to advising Administrative Lender as to its
rights and responsibilities under the Credit Agreement, as amended by this
Third Amendment).

     8.     RELEASE.
(a) Borrower and each of its Subsidiaries (collectively, the “Borrower
Parties”) hereby unconditionally and irrevocably remises, acquits, and fully
and forever releases and discharges the Administrative Lender and the Lenders
and all respective Affiliates and subsidiaries of the Administrative Lender and
the Lenders, their respective officers, servants, employees, agents, attorneys,
financial advisors, principals, directors and shareholders, and their
respective heirs, legal
representatives, successors and assigns (collectively, the “Released Lender
Parties”) from any and all claims, demands, causes of action, obligations,
remedies, suits, damages and liabilities of any nature whatsoever, whether now
known, suspected or claimed, whether arising under common law, in equity or
under statute, which any Borrower Party ever had or now has against the
Released Lender Parties which may have arisen at any time on or prior to the
date of this Third Amendment and which were in any manner related to any of the
Loan Documents or the enforcement or attempted enforcement by the
Administrative Lender or the Lenders of rights, remedies or recourses related
thereto which shall include all Borrower claims related to the Credit Agreement
and the other Loan Documents (collectively, the “Borrower Claims”).
(b) Each Borrower Party covenants and agrees never to commence, voluntarily aid
in any way, prosecute or cause to be commenced or prosecuted against any of the
Released Lender Parties any of the Borrower Claims which may have arisen at any
time on or prior to the date of this Third Amendment and were in any manner
related to any of the Loan Documents.

     9.     EXECUTION IN COUNTERPARTS. This Third Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and
the same instrument.

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     10.     GOVERNING LAW; BINDING EFFECT. This Third Amendment shall be
governed by and construed in accordance with the laws of the State of Texas
and shall be binding upon Borrower and each Lender and their respective
successors and assigns.

     11.     HEADINGS. Section headings in this Third Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Third Amendment for any other purpose.

     12.     ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS THIRD
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AS TO THE SUBJECT MATTER THEREIN AND
HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment as
of the date first above written.

	 	 	 	 	 
	BORROWER:	 	 	 	 
	 	 	BUTLER MANUFACTURING COMPANY
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller
	 	 	 	 	

	 	 	 	 	Name: Larry C. Miller
	 	 	 	 	

	 	 	 	 	Title: Vice President — Finance
	 	 	 	 	

7

 

	 	 	 	 	 
	ADMINISTRATIVE LENDER:	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Administrative Lender
	 	 	 	 	 
	 	 	
By:
	 	/s/ John K. Barrett
	 	 	 	 	

	 	 	 	 	Name: John K. Barrett
	 	 	 	 	

	 	 	 	 	Title: Managing Director
	 	 	 	 	

	LENDERS:	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as a Lender and as the
Issuing Bank
	 	 	 	 	 
	 	 	
By:
	 	/s/ John K. Barrett
	 	 	 	 	

	 	 	 	 	Name: John K. Barrett
	 	 	 	 	

	 	 	 	 	Title: Managing Director
	 	 	 	 	

8

 

	 	 	 	 	 
	 	 	COMMERCE BANK, N.A.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Martin Nay
	 	 	 	 	

	 	 	 	 	Name: Martin Nay
	 	 	 	 	

	 	 	 	 	Title: Vice President
	 	 	 	 	

9

 

	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as a Lender
and as the Issuing Bank
	 	 	 	 	 
	 	 	
By:
	 	/s/ Barry P. Sullivan
	 	 	 	 	

	 	 	 	 	Name: Barry P. Sullivan
	 	 	 	 	

	 	 	 	 	Title: Vice President
	 	 	 	 	

10

 

	 	 	 	 
	
ACKNOWLEDGED AND AGREED:
	 	 	 
	
BMC REAL ESTATE, INC.
	 	 	 
	By:	 	
/s/ Larry C. Miller
	 	 	

	 	 	
Name: Larry C. Miller
	 	 	

	 	 	
Title: Vice President — Finance
	 	 	

	 	 	 
	
BUCON, INC.
	 	 	 
	By:	 	
/s/ Larry C. Miller
	 	 	

	 	 	
Name: Larry C. Miller
	 	 	

	 	 	
Title: Vice President — Finance
	 	 	

	 	 	 
	
BUTLER HOLDINGS, INC.
	 	 	 
	By:	 	
/s/ Larry C. Miller
	 	 	

	 	 	
Name: Larry C. Miller
	 	 	

	 	 	
Title: Vice President — Finance
	 	 	

	 	 	 
	
BUTLER REAL ESTATE, INC.
	 	 	 
	By:	 	
/s/ Larry C. Miller
	 	 	

	 	 	
Name: Larry C. Miller
	 	 	

	 	 	
Title: Vice President — Finance
	 	 	

	 	 	 
	
LESTER BUILDINGS, INC.
	 	 	 
	By:	 	
/s/ Larry C. Miller
	 	 	

	 	 	
Name: Larry C. Miller
	 	 	

	 	 	
Title: Vice President — Finance
	 	 	

11

 

	 	 	 	 
	
BUTLER PACIFIC, INC.
	 	 	 
	By:	 	
/s/ Larry C. Miller
	 	 	

	 	 	
Name: Larry C. Miller
	 	 	

	 	 	
Title: Vice President — Finance
	 	 	

	 	 	 
	
MODULINE WINDOWS, INC.
	 	 	 
	By:	 	
/s/ Larry C. Miller
	 	 	

	 	 	
Name: Larry C. Miller
	 	 	

	 	 	
Title: Vice President — Finance
	 	 	

	 	 	 
	
LIBERTY BUILDING SYSTEMS, INC.
	 	 	 
	By:	 	
/s/ Larry C. Miller
	 	 	

	 	 	
Name: Larry C. Miller
	 	 	

	 	 	
Title: Vice President — Finance
	 	 	

12Security Agreement

 

     
EXHIBIT 4.6

SECURITY AGREEMENT

Among

The Grantors Named Herein

as Grantors

and

BANK OF AMERICA, N.A.

as Collateral Agent

February 28, 2003

 

 

     TABLE OF CONTENTS

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	ARTICLE I Grant
	 	 	3	 
	 	Section 1.1 Assignment and Grant of Security
	 	 	3	 
	 	Section 1.2 Description of Obligations
	 	 	3	 
	 	Section 1.3 Grantor Remains Liable
	 	 	5	 
	 	Section 1.4 Delivery of Instruments and Securities Collateral
	 	 	5	 
	 	Section 1.5 Exclusions from Collateral
	 	 	5	 
	ARTICLE II Representations and Warranties
	 	 	5	 
	 	Section 2.1 Representations and Warranties
	 	 	5	 
	ARTICLE III Covenants
	 	 	6	 
	 	Section 3.1 Further Assurances
	 	 	6	 
	 	Section 3.2 Equipment and Inventory
	 	 	7	 
	 	Section 3.3 Insurance
	 	 	8	 
	 	Section 3.4 Place of Perfection; Records; Collection of Receivables, Chattel Paper and Instruments
	 	 	8	 
	 	Section 3.5 Transfers and Other Liens
	 	 	9	 
	 	Section 3.6 Rights to Dividends and Distributions
	 	 	9	 
	 	Section 3.7 Right of the Collateral Agent to Notify Issuers
	 	 	9	 
	 	Section 3.8 The Collateral Agent Appointed Attorney-in-Fact
	 	 	9	 
	ARTICLE IV Rights and Powers of the Collateral Agent
	 	 	11	 
	 	Section 4.1 The Collateral Agent May Perform
	 	 	11	 
	 	Section 4.2 The Collateral Agent’s Duties
	 	 	11	 
	 	Section 4.3 Remedies
	 	 	11	 
	 	Section 4.4 Further Approvals Required
	 	 	13	 
	 	Section 4.5 INDEMNITY AND EXPENSES
	 	 	14	 
	ARTICLE V Miscellaneous
	 	 	15	 
	 	Section 5.1 Cumulative Rights
	 	 	15	 
	 	Section 5.2 Modifications; Amendments; Etc.
	 	 	15	 
	 	Section 5.3 Continuing Security Interest
	 	 	15	 
	 	Section 5.4 GOVERNING LAW; TERMS
	 	 	15	 
	 	Section 5.5 WAIVER OF JURY TRIAL
	 	 	15	 
	 	Section 5.6 The Collateral Agent’s Right to Use Agents
	 	 	15	 
	 	Section 5.7 Waivers of Rights Inhibiting Enforcement
	 	 	16	 
	 	Section 5.8 Notices and Deliveries
	 	 	16	 
	 	Section 5.9 Successors and Assigns
	 	 	16	 
	 	Section 5.10 Consent to Jurisdiction; Waiver of Immunities
	 	 	16	 
	 	Section 5.11 Severability
	 	 	16	 
	 	Section 5.12 Obligations Not Affected
	 	 	16	 
	 	Section 5.13 Counterparts
	 	 	16	 
	 	Section 5.14 ENTIRE AGREEMENT
	 	 	16	 

 

 

SCHEDULES

Schedule 1 Jurisdiction of Incorporation and Trade Names; Locations of Equipment, Inventory, Books and Records

Schedule 2 Restricted Accounts

Schedule 3 Securities Collateral

Schedule 4 Existing Liens

EXHIBITS

Exhibit A Instructions for Registration of Pledge of Uncertificated Securities Collateral

Exhibit B Initial Transaction Statement

Exhibit C Securities Collateral Stop Transfer Letter

 

 

     SECURITY AGREEMENT

     SECURITY AGREEMENT (this “Agreement”), dated as of February 28, 2003, made
among Butler Manufacturing Company, a Delaware corporation (the “Borrower”),
the Subsidiaries of the Borrower party hereto (collectively, the “Guarantors”
and each a “Guarantor” and together with the Borrower, collectively, the
“Grantors” and each a “Grantor”) and Bank of America, N.A., a national banking
association, in its capacity as collateral agent (in such capacity, and
together with its successors and assigns, the “Collateral Agent”).

BACKGROUND

     (1)  The Borrower, Bank of America, N.A., as agent (in such capacity, the
“Bank Agent”), and the lenders named therein (collectively, together with the
other lenders from time to time party to the Credit Agreement and their
successors and assigns, the “Banks” and each a “Bank”) are parties to that
certain Credit Agreement, dated as of June 20, 2001, as amended by that certain
First Amendment to Credit Agreement, dated as of December 4, 2001 (the “First
Amendment”), as further amended by that certain Second Amendment to Credit
Agreement dated as of December 17, 2002 (the “Second Amendment”), as further
amended by that certain Third Amendment to Credit Agreement, dated this date
(said Credit Agreement, as amended, modified, supplemented, replaced or
restated from time to time, the “Credit Agreement”). Term used and not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.

     (2)  The Borrower and each of the holders of 8.02% Senior Notes due
December 30, 2003 (together with their successors and assigns, the “1994
Noteholders”), the holders of the Borrower’s 6.57% Senior Notes due March 20,
2013 (together with their successors and assigns, the “1998 Noteholders”) the
holders of the Company’s 7.87% Senior Notes due December 30, 2016 (together
with their successors and assigns, the “2001 Noteholders” and, together with
the 1994 Noteholders and the 1998 Noteholders, collectively the “Noteholders”
and individually a “Noteholder”) entered into the Note Purchase Agreements as
described below.

     (3)  The Borrower and the 1994 Noteholders entered into a Note Agreement,
dated as of June 1, 1994, as amended by a First Amendment to Note Agreement
dated this date (as so amended and as it may hereafter be further amended,
supplemented or otherwise modified from time to time, the “1994 Note Purchase
Agreement”), pursuant to which the Borrower issued and sold to the 1994
Noteholders its 8.02% Senior Notes due December 30, 2003 (the “1994 Notes”) in
the original aggregate principal amount of $35,000,000.

     (4)  The Borrower and the 1998 Noteholders entered into a Note Agreement,
dated as of March 1, 1998, as amended by a First Amendment to Note Agreement
dated this date (as so amended as it may hereafter be further amended,
supplemented or otherwise modified from time to time, the “1998 Note Purchase
Agreement”), pursuant to which the Borrower issued and sold to the 1998
Noteholders its 6.57% Senior Notes due March 20, 2013 (the “1998 Notes”) in the
original aggregate principal amount of $35,000,000.

     (5) The Borrower and the 2001 Noteholders entered into a Note Purchase
Agreement, dated as of June 20, 2001, as amended by a First Amendment to Note
Purchase Agreement dated this date (as so amended and as it may hereafter be
further amended, supplemented or otherwise modified from time to time, the
“2001 Note Purchase Agreement” and, together with the 1994 Note Purchase
Agreement and the 1998 Note Purchase Agreement, each a “Note Purchase
Agreement” and, collectively, the “Note Purchase Agreements”), pursuant to
which the Borrower issued and sold to the 2001 Noteholders its 7.87% Senior
Notes due December 30, 2016 (the “2001 Notes” and, together with the 1994 Notes
and the 1998 Notes, the “Notes”) in the original aggregate principal amount of
$50,000,000 (each Note Purchase Agreement, Note and each other document related
directly thereto, collectively the “Note Documents”).

 

 

     (6)  The Collateral Agent has been designated as such pursuant to that
certain Intercreditor and Collateral Agency Agreement, dated this date (as
amended, supplemented or otherwise modified from time to time, the
“Intercreditor Agreement”), among the Secured Parties (as defined below), and
the Collateral Agent is acting as such under the Intercreditor Agreement for
the benefit of (i) itself, as the Collateral Agent and the Bank Agent, (ii)
each Bank (and affiliate thereof that has entered into a Swap Contract (as
defined in the Credit Agreement) with any Grantor) and (iii) each Noteholder
(the Collateral Agent, the Bank Agent, the Banks and the Noteholders singularly
a “Secured Party”, and all are collectively, the “Secured Parties”).

     (7)  In consideration for the agreements of the Banks under the Second
Amendment and the Noteholders under each respective First Amendment to Note
Purchase Agreement dated this date, the Borrower agreed, and agreed to cause
each of Guarantors to, grant a first priority security interest in certain of
their respective property.

     (8)  Accordingly, it is the intention of the parties hereto that this
Agreement create a first priority security interest in certain property of the
Grantors securing the payment of the Secured Obligations set forth in Section
1.2 hereof for the benefit of the Secured Parties.

AGREEMENT

     NOW, THEREFORE, in consideration of the premises set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Grantors hereby agree with the Collateral Agent, for
the benefit of the Secured Parties as hereinafter set forth.

 

 

Grant

Assignment and Grant of Security. Each Grantor hereby grants to the
Collateral Agent for the benefit of the Secured Parties a security interest in
the entire right, title and interest of such Grantor in and to the following
assets of such Grantor, whether now owned or hereafter acquired
(“Collateral”):

all Chattel Paper;

all Equipment;

all Instruments;

all Inventory;

all Accounts;

all cash in Deposit Accounts controlled by any Secured Party (including, but
not limited to, any surplus cash after repayment of a funding under a cash
collateralized letter of credit and all fees and expenses related thereto) (the
“Deposit Accounts”);

all right, title and interest of such Grantor in and to the lesser of (i) 100%
of the owned equity interests of each direct foreign Subsidiary of such Grantor
(to the extent that such Grantor owns 65% or less of the equity interests of any foreign Subsidiary) or (ii) 65% of
the aggregate of all outstanding equity interests of each direct foreign
Subsidiary of such Grantor, including, without limitation, the shares of each
class of capital stock in any Person incorporated under the laws of a country
other than the United States that is a corporation, each class of partnership
interests in any Person organized under the laws of a country other than the
United States that is a partnership, and each class of membership interests in
any Person organized under the laws of a country other than the United States
that is a limited liability company, together with all dividends, increases,
proceeds, profits, instruments, distributions and other property from time to
time distributed in respect thereof and any rights to acquire or convertible
into any such equity interests, whether by purchase, exercise of any type of
options, warrants, conversion of debt or otherwise (“Securities Collateral”);

all right, title and interest of such Grantor in, to and under each contract
and other agreement relating to the lease, sale or other disposition of
Collateral;

all rights, claims and benefits of such Grantor against any Person arising out
of, relating to or in connection with Collateral purchased by such Grantor,
including, without limitation, any such rights, claims or benefits against any
Person storing or transporting such Collateral;

all property similar to the above hereafter acquired by such Grantor; and

all accessions to, substitutions for and replacements, proceeds and products of
any and all of the foregoing Collateral (including, without limitation,
proceeds which constitute property of the types described in this Section 1.1)
and, to the extent not otherwise included, all (i) payments under insurance
(whether or not the Collateral Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral and (ii) cash
proceeds.

Description of Obligations. This Agreement creates an enforceable security
interest in the Collateral to secure the payment and performance of the
following obligations (collectively, “Secured Obligations”):

 

 

All debt, obligations, liabilities and agreements of any nature of the Grantors
to the Secured Parties or any Secured Party, whether matured or unmatured,
fixed or contingent, including all future advances, now or hereafter existing,
arising pursuant to or in connection with (i) this Agreement; (ii) the
obligations of the Grantors under the Credit Agreement and the other Loan
Documents (as defined in the Credit Agreement and used herein), including but
not limited to principal, interest, premiums, fees, expenses and indemnities;
(iii) the obligations of the Grantors under the Note Purchase Agreements, the
Notes and the other Note Documents, including but not limited to, principal,
interest, premiums, any Make-Whole Amount (as defined in the Note Purchase
Agreements), fees, expenses and indemnities; and (iv) all amendments,
modifications or supplements (but not any replacements or refinancings unless
consented to in writing by the Required Secured Parties as defined in Section
5.2 of this Agreement) of any of the foregoing.

All costs incurred by any Secured Party to obtain, preserve, perfect and
enforce this Agreement, the pledge and security interest granted hereby,
collect the Secured Obligations, and maintain, preserve, collect and enforce
the Collateral, including, without limitation, taxes, assessments, reasonable
attorneys’ fees and legal expenses, and expenses of sale.

Interest on the above amounts as agreed between the Borrower and the Secured
Parties, including, without limitation, interest, fees and other charges that
would accrue or become owing both prior to and subsequent to and but for the
commencement of any proceeding against or with respect to the Borrower under
any chapter of the Bankruptcy Code of 1978, 11 U.S.C. §101 et seq. whether or
not a claim is allowed for the same in any such proceeding,

 

 

     Without limiting the generality of the foregoing, this Agreement secures
the payment of all amounts which constitute part of the Secured Obligations and
would be owed by any Grantor to any Secured Party under the Credit Agreement,
any other Loan Document, the Note Purchase Agreements, the Notes or any other
Note Document, but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
under any Debtor Law involving such Grantor or any other Person (including all
such amounts which would become due or would be secured but for the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding of such Grantor or any other Person under any
Debtor Law.

     With respect to each Grantor other than the Borrower, notwithstanding
anything herein to the contrary, in any action or proceeding involving any
state corporate law, or any state or federal bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally if the
security interests granted by any such Grantor herein shall be held void,
invalid or unenforceable, or subordinated to the liens or claims of any other
creditors, on account of the amount of the Secured Obligations secured by such
security interests, then, the amount of the Secured Obligations secured by such
security interests shall, without any action by such Grantor, the Collateral
Agent, any other Secured Party or any other Persons, be automatically limited
and reduced to the highest amount that is valid and enforceable as determined
in such action or proceeding.

 

 

Grantor Remains Liable. Anything herein to the contrary notwithstanding, (a)
the Grantors shall remain liable under the 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 the Collateral Agent of any of the rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts and agreements included in the Collateral, and (c) neither
the Collateral Agent nor any Secured Party shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Collateral Agent or any Secured Party
be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.

Delivery of Instruments and Securities Collateral. All certificates or
instruments representing or evidencing the Collateral shall be delivered to
and held by or on behalf of the Collateral Agent pursuant hereto and shall be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. The Collateral Agent shall
have the right, to the extent provided in Section 3.6, to transfer to or to
register in the name of the Collateral Agent or any of its nominees any or all
of the Securities Collateral. Except as provided in Section 3.8(d), the
Grantors maintain all voting rights in the Securities Collateral.

Exclusions from Collateral. Notwithstanding Section 1.1 hereof, to the extent
any of such assets and properties of any Grantor would otherwise be included
in the Collateral, the Collateral does not include:

the Corporate Headquarters (as defined in the Credit Agreement), together with
all other property included in the Corporate Headquarters Sale and Leaseback
(as defined in the Credit Agreement);

any real estate purchased or held for development and sale, and the
improvements thereon and personal property related thereto, including any
completed real estate project until its sale to a customer;

any assets and properties subject to Existing Liens (as defined in the Credit
Agreement) as set forth on Schedule 4 hereto, to the extent that such Existing
Liens remain in place;

any assets owned by any foreign subsidiary of any Grantor, including stock of
another foreign subsidiary hold by a foreign subsidiary;

more than 65% of the issued and outstanding capital stock of any direct foreign
subsidiary of any Grantor; and

		
	 	     (f) any intellectual property of any Grantor.

Representations and Warranties

Representations and Warranties. Each Grantor represents and warrants to the
Collateral Agent, for the benefit of the Secured Parties with respect to
itself and the Collateral now owned or hereafter acquired by it, as follows:

 

 

All of the Equipment and Inventory pledged by such Grantor hereunder are
located at the places specified on Schedule 1 hereto (as supplemented from time
to time by such Grantor by written notice to the Collateral Agent as permitted
herein) or in transit to a place specified on Schedule 1 hereto (as
supplemented from time to time by such Grantor by written notice to Collateral
Agent as permitted herein) or in transit for sale to a third-party purchaser
that upon such sale will become the obligor under a Receivable or promptly pay
for such Equipment, Fixtures and

 

 

Inventory. Each Grantor’s jurisdiction of incorporation, chief place of
business and chief executive office of such Grantor and the offices where such
Grantor keeps all of its records concerning the Receivables are as specified on
Schedule 1 hereto. Schedule 1 is a complete and correct list of, as to any
leased property on which any Collateral is located, the description of such
property sufficient for recording purposes and the name of the record owner of
such property.

Such Grantor is the legal and beneficial owner of the Collateral pledged by it
free and clear of any Lien, other than Liens of the type described in clauses
(b) through (e) of the definition of Permitted Liens under the Credit
Agreement. No effective financing statement or other similar document used to
perfect and preserve a security interest under the laws of any jurisdiction
covering all or any part of the Collateral is on file in any recording office,
except such as may have been filed in favor of the Collateral Agent relating to
this Agreement. As of the date hereof, such Grantor has the trade names set
forth on Schedule 1 (and no others). Such Grantor (including any corporate or
partnership predecessor) has not existed or operated under any name other than
as stated on Schedule 1 since the date seven years preceding the date of this
Agreement.

This Agreement and the grant of a security interest in the Collateral pursuant
hereto, together with the filing of financing statements containing the
description of the Collateral in the jurisdictions of incorporation set forth
on Schedule 1, which will be made immediately following the date of this
Agreement, creates a valid and perfected first priority security interest in
the Collateral in which a security interest can be perfected by filing a UCC
financing statement, securing the payment of the Secured Obligations; provided
that additional actions may be required with respect to the perfection of
proceeds of the Collateral; and further provided that the Collateral Agent
retains physical possession of any Collateral, the possession of which is
required for perfection or for a first priority security interest.
No consent of any Person (including any Governmental Authority) is required (i)
for the pledge by such Grantor of the Collateral pledged by it hereunder, for
the grant by such Grantor of the security interest granted hereby or for the
execution, delivery or performance of this Agreement by such Grantor, (ii) for
the perfection or maintenance of the pledge, assignment and security interest
created hereby (including the first priority nature of such pledge, assignment
and security interest as provided herein) (except for the filing of financing
and continuation statements under the UCC) or (iii) for the exercise by the
Collateral Agent of the rights provided for in this Agreement, except, in each
case, for such consents that already have been obtained by such Grantor
(assuming the effectiveness of the First Amendment to each Note Purchase
Agreement) or as provided in Sections 4.3(e) and 4.4 hereof.
None of the Securities Collateral is subject to any unpaid capital call or
dispute, any buy-sell, voting trust, transfer restriction, preferential right
to purchase or similar agreement or any option, warrant, put or call or similar
agreement or other rights or restrictions in favor of third Persons. All of
the Securities Collateral are duly authorized, validly issued and
non-assessable and were not issued in violation of the Rights (as defined in
the Credit Agreement and as used herein) of any Person. No Securities
Collateral obligates such Grantor to make any additional capital contributions
with respect thereto. Schedule 3 accurately describes, as of the date of this
Agreement, the Securities Collateral owned by such Grantor, the issuer, the
percentage owned by such Grantor, the nature of equity interest owned, and, if
applicable, the number and type of shares of capital stock owned.
No material dispute, right of setoff, counterclaim or defense exists with
respect to any portion of the Collateral, except for Set-Off Rights (as defined
in the Intercreditor Agreement) of the Banks and the Noteholders.

All Inventory produced in the United States of America has been produced in
substantial compliance with the Fair Labor Standards Act.

 

 

 

Covenants

Further Assurances.

Each Grantor agrees that where any agreement existing as of the date hereof or
hereafter to which such Grantor is a party contains any restriction that could
reasonably be expected to prohibit such Grantor from granting any security
interest under this Agreement, upon request of the Collateral Agent such
Grantor will use its best efforts to obtain the necessary consent to or waiver
of such restriction from any Person so as to enable such Grantor to effectively
grant to the Collateral Agent such security interest under this Agreement, and
the obtaining of any such consent or waiver shall cure for all purposes of this
Agreement and the Obligations any default arising as a result of such
restriction.

Each Grantor agrees that from time to time, at the expense of such Grantor,
such Grantor will promptly execute and deliver all further instruments and
documents (including supplements to all schedules), and take all further
action, that may be necessary, and that the Collateral Agent may request, in
order to perfect and protect any pledge, assignment or security interest
granted or purported to be granted hereby, and the priority thereof, or to
enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of
the foregoing, upon request by the Collateral Agent, such Grantor will: (i)
mark conspicuously each Chattel Paper, and each of its records pertaining to
the Collateral with the following legend:

 

 

		
	 	     THIS INSTRUMENT IS SUBJECT TO A SECURITY INTEREST AND LIEN
PURSUANT TO A SECURITY AGREEMENT DATED AS OF FEBRUARY 28, 2003
(AS THE SAME HAS BEEN AND MAY HEREAFTER BE AMENDED, MODIFIED OR
RESTATED) MADE BY GRANTOR IN FAVOR OF BANK OF AMERICA, N.A., AS
COLLATERAL AGENT.

or such other legend, in form and substance satisfactory to and as specified by
the Collateral Agent, indicating that such Chattel Paper or Collateral is
subject to the pledge, assignment and security interest granted hereby; (ii) if
any Collateral shall be evidenced by an Instrument or be Chattel Paper, deliver
and pledge to the Collateral Agent hereunder each such Instrument or Chattel
Paper duly indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Collateral Agent; and
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary, or as the
Collateral Agent may request, in order to perfect and preserve the pledge,
assignment and security interest granted or purported to be granted hereby.

In addition to such other information as shall be specifically provided for
herein, the Grantors will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other lists, documents, reports, and product, service and sales documents
in connection with the Collateral as the Collateral Agent may

request, all in reasonable detail. In connection with its enforcement of the
security interest, the Collateral Agent may use such information or transfer it
to any Secured Party.

Each Grantor hereby authorizes the Collateral Agent to file one or more
continuation statements and during the continuance of an Event of Default,
financing statements, relating to all or any part of the Collateral without the
signature of such Grantor where permitted by Applicable Law (as defined in the
Credit Agreement and as used herein). A photocopy or other reproduction of
this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by
Applicable Law.

Certain securities included in the Securities Collateral are “uncertificated
securities” within the meaning of the UCC or are otherwise not evidenced by any
stock certificate or similar certificate or instrument, as set forth on
Schedule 3 hereto. As to such uncertificated securities and any other
uncertificated securities hereafter included in the Securities Collateral,
Grantor agrees to promptly notify the Collateral Agent and take all actions
required to perfect the security interest of the Collateral Agent under
Applicable Law, including, as applicable, under Article 8 or 9 of the UCC, and,
without limitation of the foregoing, prior to or concurrently with the pledge
hereunder of any Securities Collateral to which this section applies, (i) where
deemed applicable by the Collateral Agent, deliver to the relevant corporation,
partnership, limited liability company, joint venture or other Person a fully
completed and duly executed letter in the form of Exhibit A hereto, to obtain
from such corporation, partnership, limited liability company, joint venture or
other Person, and deliver to the Collateral Agent, promptly upon registration
of such pledge on the books of the issuer, a fully completed and duly executed
letter in the form of Exhibit B hereto, and (ii) where deemed applicable by the
Collateral Agent, deliver to the Collateral Agent a fully completed and duly
executed “Securities Collateral Stop Transfer Letter” in the form of Exhibit C
hereto.

Equipment and Inventory. No Grantor shall keep the Equipment and Inventory
pledged by it hereunder (other than (i) Inventory sold in the ordinary course
of business, (ii) Inventory and Equipment in transit in the ordinary course of
business and (iii) Equipment out for repairs) in any location other than the
places specified in Schedule 1 unless no later than 60 days prior to removal
from any such location such

 

 

Grantor has delivered to the Collateral Agent a
financing statement for such Equipment, fixtures and Inventory kept by such
Grantor at such other location or such other documentation in the opinion of
the Collateral Agent which is necessary to properly perfect or maintain the
perfection of the security interest granted herein in such Collateral.

Insurance. Each Guarantor shall, at its own expense, maintain insurance with
respect to the Collateral in accordance with the terms set forth in Section
5.5 of the Credit Agreement, Section 9.2 of the 2001 Note Purchase Agreement
and Section 6.2 of the 1994 and 1998 Note Purchase Agreements. Each Grantor
further covenants and agrees to keep the Collateral insured in such amounts,
against such risks and with such insurers as is consistent with customary and
usual in the industry for companies of similar size and capability, provided
that none of such insurance shall be in amounts less than the greater of (a)
the replacement value and (b) the original cost of the covered property (less
any deduction standard in the industry for such type of property). All such
policies of insurance shall show the Collateral Agent as loss payee, as its
interests may appear, and shall provide for at least thirty days’ prior
written notice of cancellation or change of coverage to the Collateral Agent,
the Agent and the Holders. Each Grantor shall promptly furnish to the
Collateral Agent evidence of such insurance in form and content reasonably
satisfactory to the Collateral Agent, the Agent and the Holders. If any
Grantor fails to maintain the insurance it is required to maintain with
respect to the Collateral in accordance with this Section 3.3, upon written notice to such Grantor, the
Collateral Agent may at its own option obtain insurance in such Collateral,
any premium thereby paid by the Collateral Agent to become part of the Secured
Obligations, bear interest prior to the existence of an Event of Default (as
defined in the Credit Agreement or the Note Purchase Agreements), at the then
applicable Base Rate (as defined in the Credit Agreement), and during the
occurrence of an Event of Default, at the Highest Lawful Rate (as defined in
the Credit Agreement). In the event the Collateral Agent maintains such
substitute insurance, the additional premium for such insurance shall be due
on demand and payable by such Grantor to the Collateral Agent in accordance
with any notice delivered to any Grantor by the Collateral Agent. Proceeds of
insurance shall be applied as follows: first, to reimburse the Collateral
Agent for all reasonable costs and expenses, if any, including reasonable
attorneys’ fees, incurred in connection with the collection of such proceeds;
second, if an Event of Default has not occurred and is not continuing, the
proceeds shall be reinvested in productive, tangible assets used in the
business of such Grantor, and such Grantor shall provide the Collateral Agent,
the Agent and the Holders with evidence reasonably satisfactory to the
Collateral of such use; and third, if an Event of Default has occurred and is
continuing, the proceeds shall, at the Collateral Agent’s direction, be used
to replace the Collateral or applied to the Secured Obligations as provided in
Section 4.3 of this Agreement.

Place of Perfection; Records; Collection of Receivables, Chattel Paper and
Instruments.

 

 

Each Grantor shall keep its jurisdiction of incorporation, chief place of
business and chief executive office and the office where it keeps its records
concerning the Receivables, and the originals of all Chattel Paper and
Instruments that have not been endorsed and delivered to the Collateral Agent
as provided in Section 3.1(b) hereof, at the locations therefor specified on
Schedule 1, in each case which may be changed upon written notice to the
Collateral Agent at least 60 days prior to such change. Each Grantor will hold
and preserve such records and Chattel Paper and Instruments and will permit
representatives of the Collateral Agent at any time during normal business
hours to inspect and make abstracts from and copies of such records and Chattel
Paper and Instruments.

Except as otherwise provided in this Section 3.4(b), each Grantor shall
continue to collect, at its own expense, all amounts due or to become due such
Grantor under the Receivables, Chattel Paper and Instruments. In connection
with such collections, such Grantor may take (and, during the continuance of an
Event of Default at the Collateral Agent’s direction, shall take) such action
as such Grantor or, during the continuance of an Event of Default, the
Collateral Agent, may deem necessary to enforce collection of the Receivables,
Chattel Paper and Instruments; provided, however, that the Collateral Agent
shall have the right (during the continuance of an Event of Default) to notify
the account debtors or obligors under any Receivables, Chattel Paper and
Instruments of the assignment of such Receivables, Chattel Paper and
Instruments to the Collateral Agent 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 the Collateral Agent and, upon such notification at the
expense of such Grantor, to enforce collection of any such Receivables, Chattel
Paper and Instruments, and to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as such Grantor
might have done or as the Collateral Agent deems necessary. During the
continuance of an Event of Default, all amounts and proceeds (including
Instruments) received by such Grantor in respect of the Receivables, Chattel
Paper and Instruments shall be received in trust for the benefit of the
Collateral Agent hereunder, shall be segregated from other funds of such
Grantor and, after receipt of written notice from the Collateral Agent, shall
be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary indorsement) to be applied as provided
in Section 4.3(b) of this Agreement. During the continuation of an Event of
Default, such Grantor shall not adjust, settle or compromise the amount or
payment of any Receivable, Chattel Paper or Instrument, release wholly or
partly any account debtor or obligor thereof, or allow any credit or discount
thereon.

Transfers and Other Liens. No Grantor shall (a) sell, assign (by operation of
Applicable Law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral, except for sales and dispositions in the
ordinary course of business and except for any sales and dispositions other
than in the ordinary course of business as permitted under the Credit
Agreement and the Note Purchase Agreements, or (b) create or permit to exist
any security interest upon any of the Collateral.

Rights to Dividends and Distributions. With respect to any Securities
Collateral, the Collateral Agent shall have authority during the continuance
of an Event of Default, to the extent the Collateral Agent determines that
such transfer or registration is necessary to perfect a first priority
security interest in such Securities Collateral, either to have the same
registered in the Collateral Agent’s name or in the name of a nominee. If any
Grantor shall become entitled to receive or shall receive any Dividend (as
defined in the Credit Agreement and as used herein) or interest in or
certificate (including, without limitation, any interest in or certificate
representing a Dividend in connection with any reclassification, increase,
reduction of capital, or reorganization), or any option or rights arising from
or relating to any of the Collateral that is evidenced by a certificate or
other instrument or security, whether as an addition to, in substitution of,
as a conversion of, or in exchange for any of the Collateral, or otherwise,
such Grantor agrees to accept the same as the Collateral Agent’s agent and to
hold the same in trust on behalf of and for the benefit of the Collateral
Agent, and, after receipt of written notice from the Collateral Agent, to
deliver the same promptly to the Collateral Agent in the exact form received,
with appropriate undated stock or similar powers, duly executed in blank, to
be held by the Collateral Agent, subject to the terms hereof, as Collateral.
Unless an Event of Default is in existence, such Grantor shall be entitled to
receive all cash Dividends paid in respect of any of the Collateral. During
the continuance of an Event of Default, the Collateral Agent shall be entitled
to all Dividends, and to any sums paid upon or in respect of any Collateral,
and to any additional securities issued in respect of the Securities
Collateral, upon the liquidation, dissolution, or reorganization of the issuer
thereof, all of which shall be paid to the Collateral Agent to be held by it
as additional Collateral and applied to the Secured Obligations pursuant to
Section 4.3(b) of this Agreement. All Dividends paid or distributed in
respect of the Collateral which are received by any Grantor in violation of
this Agreement shall, until paid or delivered to the Collateral Agent, be held
by such Grantor in trust as additional Collateral.

Right of the Collateral Agent to Notify Issuers. At any time during the
continuance of an Event of Default, the Collateral Agent may notify issuers of
the Securities Collateral to make payments of all Dividends directly to the
Collateral Agent and the Collateral Agent may take control of all proceeds of
any Securities Collateral.

The Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby
irrevocably appoints the Collateral Agent such Grantor’s attorney-in-fact
(exercisable only during the continuance of an Event of Default), with full
authority in the place and stead of such Grantor and in the name of such
Grantor or otherwise to take any action and to execute any instrument (in
accordance with this Agreement) which the Collateral Agent may deem necessary
to accomplish the purposes of this Agreement, including, without limitation:

 

 

to obtain and adjust insurance required to be maintained by such Grantor in
accordance with Section 3.3,

to ask for, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due or to become due under or in connection
with the Collateral,

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

to file any claims or take any action or institute any proceedings which the
Collateral Agent may deem necessary for the collection of any of the Collateral
or otherwise to enforce compliance with the terms and conditions of any
Collateral or the rights of the Collateral Agent with respect to any of the
Collateral. EACH GRANTOR HEREBY IRREVOCABLY GRANTS TO THE COLLATERAL AGENT
SUCH GRANTOR’S PROXY (EXERCISABLE ONLY DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT AND AFTER THE COLLATERAL AGENT’S WRITTEN NOTICE OF ITS INTENT TO
EXERCISE SUCH RIGHT) TO VOTE ANY SECURITIES COLLATERAL AND APPOINTS THE
COLLATERAL AGENT SUCH GRANTOR’S ATTORNEY-IN-FACT (EXERCISABLE ONLY DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT) TO PERFORM ALL OBLIGATIONS OF SUCH GRANTOR
UNDER THIS AGREEMENT. THE PROXY AND EACH POWER OF ATTORNEY HEREIN GRANTED ARE
COUPLED WITH AN INTEREST AND ARE IRREVOCABLE PRIOR TO THE DATE THAT THE SECURED
OBLIGATIONS ARE PAID IN FULL AND ALL OBLIGATIONS IF ANY, OF ANY SECURED PARTY
UNDER THE CREDIT AGREEMENT, ANY LOAN DOCUMENT, THE NOTE PURCHASE AGREEMENT AND
ANY NOTE DOCUMENT HAVE BEEN TERMINATED. TO THE EXTENT PERMITTED BY LAW, EACH
GRANTOR HEREBY RATIFIES ALL THAT SAID ATTORNEY SHALL LAWFULLY DO OR CAUSE TO BE
DONE BY VIRTUE HEREOF.

     This appointment as attorney-in-fact and this proxy shall terminate upon
the termination of this Agreement pursuant to Section 5.3 hereof.

     Section 3.9 Deposit Accounts. For each Deposit Account included in the
Collateral, the Grantor shall, at the Collateral Agent’s request and option,
pursuant to an agreement in form and substance satisfactory to the Collateral
Agent, cause the depositary bank to comply at all times with instructions from
the Collateral Agent to such depositary bank directing the disposition of funds
from time to time credited to such Deposit Account during the continuance of an
Event of Default, without the further consent of such Grantor.

     Section 3.10 Collateral in the Possession of a Bailee. If any Collateral
is at any time in the possession of a bailee, the Grantor thereof shall
promptly notify the Collateral Agent thereof and, at the Collateral Agent’s
request and option, shall promptly obtain an acknowledgement from the bailee,
in form and substance reasonably satisfactory to the Collateral Agent, that the
bailee holds such Collateral for the benefit of the Collateral Agent, and that
such bailee agrees to comply, without further consent of such Grantor, with
instructions from the Collateral Agent as to such Collateral; provided,
however, that until such instructions are given by the Collateral Agent, the
Grantor may withdraw such Collateral and otherwise deal with such Collateral.
The Collateral Agent agrees with the Grantor that the Collateral Agent shall
not give any such instructions unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by the Grantor
with respect to the bailee.

     Section 3.11 Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic chattel
paper or any “transferable record,” as that term is defined in Section 201 of
the federal Electronic Signatures in Global and National Commerce Act, or in
§16 of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify the Collateral Agent thereof
and, at the request and option of the Collateral Agent, shall take such action
as the Collateral Agent may reasonably request to vest in the Collateral Agent
control, under UCC §9-105, of such electronic chattel paper or control under
Section 201 of the federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, §16 of the Uniform Electronic Transactions
Act, as so in effect in such jurisdiction, of such transferable record. The

 

 

Collateral Agent agrees with such Grantor that the Collateral Agent will
arrange, pursuant to procedures satisfactory to the Collateral Agent and so
long as such procedures will not result in the Collateral Agent’s loss of
control, for such Grantor to make alterations to the electronic chattel paper
or transferable record permitted under UCC §9-105 or, as the case may be,
Section 201 of the federal Electronic Signatures in Global and National
Commerce Act or §16 of the Uniform Electronic Transactions Act for a party in
control to make without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by such Grantor with respect to such electronic chattel paper or transferable
record.

Rights and Powers of the Collateral Agent

The Collateral Agent May Perform. If any Grantor fails to perform any
agreement contained herein, the Collateral Agent may itself perform, or cause
performance of, such agreement, and the reasonable out-of-pocket expenses of
the Collateral Agent incurred in connection therewith shall be payable by such
Grantor pursuant to Section 4.5 hereof.

The Collateral Agent’s Duties. The powers conferred in the Collateral Agent
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 duty to
exercise reasonable care in respect of any Collateral in its possession and
the accounting for moneys actually received by it hereunder, the Collateral
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not the Collateral Agent
has or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against prior parties. The Collateral
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which the Collateral Agent
accords its own property. Except as provided in this Section 4.2 or under the
UCC and except to the extent of any gross negligence or willful misconduct of
the Collateral Agent, the Collateral Agent shall not have any duty or
liability to protect or preserve any Collateral or to preserve rights
pertaining thereto. Nothing contained in this Agreement shall be construed as
requiring or obligating the Collateral Agent, and the Collateral Agent shall
not be required or obligated, to (i) present or file any claim or notice or
take any action, with respect to any Collateral or in connection therewith or
(ii) notify any Grantor of any decline in the value of any Collateral.

Remedies. If any Event of Default shall have occurred and be continuing:

 

 

The Collateral Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the UCC at that time (to the extent not prohibited by
Applicable Law whether or not the UCC applies to the affected Collateral), and
also may (i) require any Grantor to, and each Grantor hereby agrees that it
will at its expense and upon request of the Collateral Agent forthwith,
assemble all or part of the Collateral which is capable of being assembled as
directed by the Collateral Agent and make it available to the Collateral Agent
at a place to be designated by the Collateral Agent which is reasonably
convenient to both parties or (ii) without notice, except as specified below,
sell the Collateral or any portion thereof in one or more parcels at public or
private sale, at any of the Collateral Agent’s offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Collateral
Agent may deem commercially reasonable. Each Grantor agrees that, to the
extent notice of sale shall be required by Applicable Law, ten days’ written
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, provided that ten days’ written notice does not violate any
Applicable Law. The Collateral Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. To the extent
not prohibited by Applicable Law, the Collateral Agent may adjourn any public
or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
All proceeds received by the Collateral Agent upon any sale of, collection of,
or other realization upon, all or any part of the Collateral shall be applied
as follows:

 

 

		
	 	     First: To the payment of all reasonable out-of-pocket costs and expenses
incurred in connection with the sale of, collection of or other
realization upon Collateral, including reasonable attorneys’ fees and
disbursements;
	 
	 	     Second: To the payment of the Secured Obligations, which payment shall
be shared by the Secured Parties as set forth in the Intercreditor
Agreement or as may otherwise be agreed to in writing by the Secured
Parties (with the Borrower remaining liable for any deficiency); and
	 
	 	     Third: To the extent of the balance (if any) of such proceeds, to the
payment to the Borrower or other Person legally entitled thereto.

 

 

All payments received by such Grantor under or in connection with any
Collateral shall be received in trust for the benefit of the Collateral Agent,
shall be segregated from other funds of such Grantor and, after receipt of
written notice from the Collateral Agent, shall be forthwith paid over to the
Collateral Agent in the same form as so received (with any necessary
indorsement). Any non-cash proceeds shall have the value attributed thereto in
connection with the sale or other disposition of the Collateral giving rise to
such non-cash proceeds for all purposes of this Agreement.

Because of the Securities Act of 1933, as amended (“Securities Act”), and other
Applicable Laws, including without limitation state “blue sky” laws, or
contractual restrictions or agreements, there may be legal restrictions or
limitations affecting the Collateral Agent in any attempts to dispose of the
Collateral and the enforcement of its rights hereunder. For these reasons, the
Collateral Agent is hereby authorized by each Grantor, but not obligated,
during the continuance of any Event of Default, to sell or otherwise dispose of
any of the Collateral at private sale, subject to an investment letter, or in
any other manner which will not require the Collateral, or any part thereof, to
be registered in accordance with the Securities Act, or the rules and
regulations promulgated thereunder, or any other Applicable Law. Each Grantor
clearly
understands that the Collateral Agent may in its discretion approach a
restricted number of potential purchasers and that a sale under such
circumstances may yield a lower price for the Collateral than would otherwise
be obtainable if same were registered and sold in the open market. No sale so
made in good faith by the Collateral Agent shall be deemed to be not
“commercially reasonable” because so made. Each Grantor agrees that in the
event the Collateral Agent shall, during the continuance of an Event of
Default, sell the Collateral or any portion thereof at any private sale or
sales, the Collateral Agent shall have the right to rely upon the advice and
opinion of independent appraisers and other Persons, which appraisers and other
Persons are acceptable to the Collateral Agent, as to the best price obtainable
upon such a private sale thereof.

	 	12.10	 	Each Grantor will maintain the accounts listed as restricted
and blocked accounts on Schedule 2 (the “Restricted Accounts”) with
the Collateral Agent, in the name of such Grantor, but such
Restricted Accounts shall be under the sole control and dominion of
the Collateral Agent.

It shall be a term and condition of each Restricted Account, notwithstanding
any term or condition to the contrary in any other agreement relating to such
Restricted Account (other than the Credit Agreement and the Note Purchase
Agreements), that, while an Event of Default has occurred and is continuing, no
amount (including interest and other proceeds of the cash and other property in
the Restricted Account) shall be paid or released to or for the account of, or
withdrawn by or for the account of, such Grantor or any other Person from such
Restricted Account.

At the request of the Collateral Agent, such Grantor will promptly instruct
each account debtor in respect of Receivables arising from any sale of
Inventory in the ordinary course of business to make payment to the Restricted
Accounts.

The Collateral Agent may remove amounts from the Restricted Accounts from time
to time and use the amounts to reduce the Obligations in accordance with the
terms of the Credit Agreement and the Note Purchase Agreements.

 

 

Each Grantor hereby grants the Collateral Agent a non-exclusive, royalty free,
limited license to use all or any part of such Grantor’s intellectual property
to sell or otherwise dispose of the Collateral in accordance with UCC Article 9
and this Agreement, except to the extent such license expressly violates an
anti-sublicensing provision contained in any license, agreement or other
obligation that is binding upon such Grantor with respect to such intellectual
property.

Further Approvals Required.

In connection with the exercise by the Collateral Agent of its rights hereunder
that effects the disposition of or use of any Collateral, it may be necessary
to obtain the prior consent or approval of Governmental Authorities and other
Persons to a transfer or assignment of Collateral.
Each Grantor hereby agrees, during the continuance of an Event of Default, to
execute, deliver, and file, and hereby appoints the Collateral Agent as its
attorney-in-fact, during the continuance of an Event of Default, to execute,
deliver, and file on such Grantor’s behalf and in such Grantor’s name, all
applications, certificates, filings, instruments, and other documents
(including without limitation any application for an assignment or transfer of
control or ownership) that may be necessary, in the Collateral Agent’s
reasonable opinion, to obtain such consents, waivers, or approvals. Upon
request by the Collateral Agent, each Grantor further agrees to use its
reasonable best efforts to obtain the foregoing consents, waivers, and
approvals. Each Grantor acknowledges that there is no adequate remedy at law
for failure by it to comply with the provisions of this Section 4.4 and that
such failure would not be adequately compensable in damages, and therefore
agrees that this Section 4.4 may be specifically enforced. This
appointment as attorney-in-fact shall terminate upon the termination of this
Agreement pursuant to Section 5.3 hereof.

INDEMNITY AND EXPENSES.

EACH GRANTOR AGREES TO INDEMNIFY THE COLLATERAL AGENT AND EACH OTHER SECURED
PARTY AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND
REPRESENTATIVES (COLLECTIVELY, THE “INDEMNIFIED PARTIES”) FROM AND AGAINST ANY
AND ALL CLAIMS, LOSSES AND LIABILITIES (INCLUDING REASONABLE ATTORNEYS’ FEES)
ARISING OR RESULTING FROM THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION,
ENFORCEMENT OF THIS AGREEMENT), EXPRESSLY INCLUDING SUCH CLAIMS, LOSSES OR
LIABILITIES ARISING OUT OF OR RESULTING FROM, IN WHOLE OR IN PART, NEGLIGENCE
OR STRICT LIABILITY OF ANY INDEMNIFIED PARTY, EXCEPT CLAIMS, LOSSES OR
LIABILITIES AS FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, BUT EXCLUDING (i) ANY CLAIM OR LIABILITY THAT ARISES AS A
DIRECT RESULT OF THE OPERATION OF ANY COLLATERAL BY ANY INDEMNIFIED PARTY AFTER
TAKING POSSESSION THEREOF BY FORECLOSURE OR BY TRANSFER IN LIEU OF FORECLOSURE
(PROVIDED THAT SUCH CLAIM OR LIABILITY DOES NOT RELATE TO ANY CONDITION
EXISTING ON OR WITH RESPECT TO SUCH COLLATERAL PRIOR TO FORECLOSURE OR TRANSFER
IN LIEU OF FORECLOSURE), AND (ii) MATTERS RAISED EXCLUSIVELY BY ANY SECURED
PARTY AGAINST THE COLLATERAL AGENT OR ANY OTHER SECURED PARTY.

The Grantors will, jointly and severally, upon demand pay to the Collateral
Agent the amount of any and all reasonable out-of-pocket expenses, including
the reasonable fees and expenses of its counsel and of any experts and agents,
which the Collateral Agent may incur in connection with (i) the administration
of this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Collateral Agent
hereunder or (iv) the failure by the Grantors to perform or observe any of the
provisions hereof.

     Section 4.6 Marshalling. The Collateral Agent shall not be required to
marshal any present or future collateral security (including but not limited to
the Collateral) for, or other assurances of payment of, the Secured Obligations
or any of them or to resort to such collateral security or other assurances of
payment in any particular order, and all of its rights and remedies hereunder
and in respect of such collateral security and other assurances of payment
shall be cumulative and in addition to all other rights and remedies, however
existing or arising. To the extent that it lawfully may, each Grantor hereby
agrees that it will not invoke any law relating to the marshalling of
collateral which might cause delay in or impede the enforcement of Collateral
Agent’s rights and remedies under this Agreement or under any other instrument
creating or evidencing any of the Secured Obligations or under which any of the
Secured Obligations is outstanding or by which any of the Secured Obligations
is secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, each Grantor hereby irrevocably waives the benefits of all such
laws.

 

 

Miscellaneous

Cumulative Rights. All rights of the Secured Parties under the Loan
Documents, the Note Purchase Agreements, the Notes and the other Note
Documents are cumulative of each other and of every other right which the
Secured Parties may otherwise have at law or in equity or under any other
contract or other writing for the enforcement of the security interest herein
or the collection of the Secured Obligations. The exercise of one or more
rights shall not prejudice or impair the concurrent or subsequent exercise of
other rights.

Modifications; Amendments; Etc. No amendment or waiver of any provision of
this Agreement, and no consent to any departure by any Grantor here from,
shall in any event be effective unless the same shall be in writing and signed
by the Collateral Agent (and such Grantor, in case of amendment). Each
Grantor acknowledges that the Collateral Agent may need to obtain the approval
of the Required Lenders under the Intercreditor Agreement in connection
therewith.

Continuing Security Interest. This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the Secured Obligations are paid in full and all commitments of
any Secured Party under the Loan Documents, the Note Purchase Agreements and
the other Note Documents have been terminated, (b) be binding upon each
Grantor, its successors and assigns, and (c) inure to the benefit of, and be
enforceable by, the Secured Parties and their successors, transferee and
assigns. Upon any such termination, the Collateral Agent will, at such
Grantor’s expense, execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination. Each Grantor
agrees that to the extent that any Secured Party receives any payment or
benefit and such payment or benefit, or any part thereof, is subsequently
invalidated, declared to be fraudulent or preferential, set aside or is
required to be repaid to a trustee, receiver, or any other party under any
Debtor Law, then to the extent of such payment or benefit, the Secured
Obligations or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if such payment or benefit had not been
made and, further, any such repayment by such Secured Party, to the extent
that such Secured Party did not directly receive a corresponding cash payment,
shall be added to and be additional Secured Obligations payable upon demand by
such Secured Party and secured hereby, and, if the lien and security interest
hereof shall have been released, such lien and security interest shall be
reinstated with the same effect and priority as on the date of execution
hereof all as if no release of such lien or security interest had ever
occurred, to the extent not prohibited by Applicable Law.

GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW) AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF
AMERICA, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
TEXAS. ALL OF THE TERMS USED IN THIS AGREEMENT THAT ARE DEFINED IN REVISED
ARTICLE 9 OF THE TEXAS UNIFORM COMMERCIAL CODE (“UCC”) HAVE THE MEANING GIVEN
TO THEM IN THE UCC.

WAIVER OF JURY TRIAL. THE COLLATERAL AGENT AND EACH GRANTOR
HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO
TRIAL BY JURY IN ANY JUDICIAL PROCEEDINGS INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER (WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

The Collateral Agent’s Right to Use Agents. The Collateral Agent may exercise
its rights under this Agreement through an agent or other designee.

 

 

Waivers of Rights Inhibiting Enforcement. To the extent not prohibited by
Applicable Law, each Grantor waives all rights of redemption, appraisal,
valuation or to the marshaling of assets.

Notices and Deliveries.

Manner of Delivery. All notices and other communications provided for
hereunder shall be effectuated in the manner provided for in Section 11.1 of
the Credit Agreement, Section 18 of the 2001 Note Purchase Agreement and
Section 11.2 of the 1994 and 1998 Note Purchase Agreements, and to the extent
that a notice or communication is sent to a Grantor other than the Borrower,
said notice shall be addressed to such Grantor, in care of the Borrower.

Successors and Assigns. All of the provisions of this Agreement shall be
binding and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, however, no Grantor may assign its
liabilities and obligations under this Agreement without the prior written
consent of the Collateral Agent and the Secured Parties.

Consent to Jurisdiction; Waiver of Immunities.

Each Grantor, the Collateral Agent and each other Secured Party each hereby
irrevocably submits to the non-exclusive jurisdiction of any United States
Federal or State courts sitting in Dallas, Texas in any action or proceeding
arising out of or relating to this Agreement, and each Grantor, the Collateral
Agent and each other Secured Party each hereby irrevocably waives any objection
it may now or hereafter have as to the venue of any such suit, action or
proceeding brought in such court or that such court is an inconvenient forum.
Nothing in this section shall limit the right of any Grantor, the Collateral
Agent or any other Secured Party to bring any action or proceeding against any
other party or its property in the courts of any other jurisdictions.

Severability. Any provision of this Agreement which is for any reason
prohibited or found or held invalid or unenforceable by any court or
governmental agency shall be ineffective to the extent of such prohibition or
invalidity or unenforceability, without invalidating the remaining provisions
hereof in such jurisdiction or affecting the validity or enforceability of
such provision in any other jurisdiction.

Obligations Not Affected. To the fullest extent permitted by Applicable Law,
the obligations of each Grantor under this Agreement shall remain in full
force and effect without regard to, and shall not be impaired or affected by:

any amendment, modification, addition or supplement to the Credit Agreement,
any other Loan Document, the Note Purchase Agreement, any Note, any other Note
Document, any instrument delivered in connection therewith, or any assignment
or transfer thereof;

any exercise, non-exercise, or waiver by the Collateral Agent or any other
Secured Party of any right, remedy, power or privilege under or in respect of,
or any release of any guaranty, any collateral or the Collateral or any part
thereof provided pursuant to, this Agreement, any other Loan Document, the Note
Purchase Agreement, any other Note Document or any Note;

any waiver, consent, extension, indulgence or other action or inaction in
respect of this Agreement, any other Loan Document, the Note Purchase
Agreement, any Note, any other Note Document or any assignment or transfer of
any thereof; or

any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of such Grantor, or any other Person,
whether or not such Grantor shall have notice or knowledge of any of the
foregoing.

Counterparts. This Agreement may be executed in any number of 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.

ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE CREDIT AGREEMENT,
THE OTHER LOAN DOCUMENTS, THE NOTE PURCHASE AGREEMENT, THE OTHER NOTE
DOCUMENTS AND THE NOTES, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE

 

 

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

 

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

	 	 	 	 	 
	 	 	 	 	GRANTORS:
	 	 	 	 	 
	 	 	 	 	BUTLER MANUFACTURING COMPANY
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller

Name: Larry C. Miller

Title:Vice President — Finance
	 	 	 	 	 
	 	 	 	 	BMC REAL ESTATE, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller

Name: Larry C. Miller

Title: Vice President — Finance
	 	 	 	 	 
	 	 	 	 	BUCON, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller

Name: Larry C. Miller

Title:Vice President — Finance
	 	 	 	 	 
	 	 	 	 	BUTLER HOLDINGS, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller

Name: Larry C. Miller

Title:Vice President -vFinance

	 	 	 	 	 
	 	 	 	 	BUTLER PACIFIC, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller

Name: Larry C. Miller

Title:Vice President — Finance

 

 

	 	 	 	 	 
	 	 	BUTLER REAL ESTATE, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller

Name: Larry C. Miller

	 	 	 	 	Title:Vice President — Finance
	 	 	 	 	 
	 	 	LESTER BUILDING, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller

Name: Larry C. Miller

Title: Vice President — Finance
	 	 	 	 	 
	 	 	LIBERTY BUILDING SYSTEMS, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller

Name: Larry C. Miller

Title: Vice President — Finance
	 	 	 	 	 
	 	 	MODULINE WINDOWS, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Larry C. Miller

Name: Larry C. Miller

Title: Vice President — Finance

	 	 	 	 	 
	 	 	COLLATERAL AGENT:

 

 

	 	 	 	 	 
	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John K. Barrett

Name: John K. Barrett

Title: Managing Director

 

 

Schedule 1

Jurisdiction of Incorporation and Trade Names

Loctions of Equipment, Inventroy, Books and Records

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Chief Executive
	Grantor and	 	State or Country of	 	 	 	Office and Chief
	Trade Name	 	Incorporation	 	Other Trade Names	 	Place of Business	Other Locations
	
	 	
	 	
	 	
	

	Butler Manufacturing

Company	 	
Delaware
	 	Buildings Division,

Vistawall,
	 	1540 Genessee

Kansas City, MO
	 	 	 	 	 	 	 
	 	 	 	 	 	 	803 Airport Road

Terrell, TX 75160
	 	 	 	 	 	 	 
	BMC Real Estate, Inc.	 	
Delaware
	 	 	 	1540 Genessee

Kansas City, MO

6601 Executive Drive

Kansas City, MO 64120
	 	 	 	 	 	 	 
	BUCON, Inc.	 	
Delaware
	 	 	 	64120
	 	 	 	 	 	 	 
	Butler Holdings, Inc.	 	
Delaware
	 	 	 	1540 Genessee

Kansas City, MO
	 	 	 	 	 	 	 
	Butler Pacific, Inc.
(pending its
dissolution and release
as a Guarantor)	 	
Delaware
	 	 	 	1540 Genessee

Kansas City, MO
	 	 	 	 	 	 	 
	Butler Real Estate, Inc.	 	
Delaware
	 	 	 	1540 Genessee

Kansas City, MO
	 	 	 	 	 	 	 
	Lester Building, Inc.	 	
Minnesota
	 	 	 	1540 Gennessee

Kansas City, MO
	 	 	 	 	 	 	 
	Liberty Building
Systems, Inc.	 	
Delaware
	 	 	 	6591 Summer Knoll
 Cove

Bartlett, TN 38134
	 	 	 	 	 	 	 
	Moduline Windows, Inc.	 	
Wisconsin
	 	 	 	930 Single Ave.

Wausau, WI 54403

 

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Chief Executive
	Grantor and	 	State or Country of	 	 	 	Office and Chief
	Trade Name	 	Incorporation	 	Other Trade Names	 	Place of Business	Other Locations
	
	 	
	 	
	 	
	

	Butler Holdings, Inc.	 	
Delaware
	 	 	 	1540 Genessee

Kansas City, MO
	 	 	 	 	 	 	 
	Butler Pacific, Inc.
(pending its
dissolution and release
as a Guarantor)	 	
Delaware
	 	 	 	1540 Genessee

Kansas City, MO
	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Chief Executive
	Grantor and	 	State or Country of	 	 	 	Office and Chief
	Trade Name	 	Incorporation	 	Other Trade Names	 	Place of Business	Other Locations
	
	 	
	 	
	 	
	

	Butler Real Estate, Inc.	 	
Delaware
	 	 	 	1540 Genessee

Kansas City, MO
	 	 	 	 	 	 	 
	Lester Building, Inc.	 	
Minnesota
	 	 	 	1540 Gennessee

Kansas City, MO
	 	 	 	 	 	 	 
	Liberty Building
Systems, Inc.	 	
Delaware
	 	 	 	6591 Summer Knoll
 Cove

Bartlett, TN 38134
	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Chief Executive
	Grantor and	 	State or Country of	 	 	 	Office and Chief
	Trade Name	 	Incorporation	 	Other Trade Names	 	Place of Business	Other Locations
	
	 	
	 	
	 	
	

	Moduline Windows, Inc.	 	
Wisconsin
	 	 	 	930 Single Ave.

Wausau, WI 54403

 

 

Schedule 1

Jurisdiction of Incorporation and Trade Names

Locations of Equipment, Inventory, Books and Records

Gaurantor and or Trade Name Other Locations

	 	 	 	 	 	 	 
	Bucon, Inc.	 	
6050 Stilwell Street
	 	Kansas City
	 	MO
	Bucon, Inc.	 	
6601 Executive Drive
	 	Kansas City
	 	MO
	Buildings Division	 	
7440 West Doe Avenue
	 	Visalia
	 	CA
	Buildings Division	 	
1020 S. Henderson St
	 	Galesburg
	 	IL
	Buildings Division	 	
931 Avenue “W” Ensley
	 	Birmingham
	 	AL
	Buildings Division	 	
Highway 74
	 	Laurinburg
	 	NC
	Buildings Division	 	
7440 West Doe Avenue
	 	Visalia
	 	CA
	Buildings Division	 	
400 N. Weaber Street
	 	Annville Twnshp
	 	PA
	Buildings Division	 	
San Marcos Ind Park
	 	San Marcos
	 	TX
	Butler Headquarters	 	
1540 Genesee Street
	 	Kansas City
	 	MO
	KC Cave Storage	 	
1501 West 31st Street
	 	Kansas City
	 	MO
	Lester Buildings	 	
PO Box 9, West Rte 316
	 	Charleston
	 	IL
	Lester Buildings	 	
276 Woodbine
	 	Clearbrook
	 	VA
	Lester Buildings — Headquarters	 	
1111 2nd Avenue (S)
	 	Lester Prairie
	 	MN
	Liberty Building Systems	 	
335 Tennessee Ave
	 	Selmer
	 	TN
	Liberty Building Systems	 	
6591 Summer Knoll Cove
	 	Memphis
	 	TN
	Modu-Line Windows (Vistawall)	 	
930 Single Ave
	 	Wausau
	 	WI
	Research Facility	 	
13500 Botts Road
	 	Grandview
	 	MO
	Vistawall	 	
5088-A South Royal Atlanta Dr
	 	Tucker
	 	GA
	Vistawall	 	
1225 Greenbrair Drive
	 	Addison
	 	IL
	Vistawall	 	
5150 Havana
	 	Denver
	 	CO
	Vistawall	 	
8655 Elm Fair Blvd; Bldg 4
	 	Tampa
	 	FL
	Vistawall	 	
301 Garden Oaks Blvd
	 	Houston
	 	TX
	Vistawall	 	
10590 King William Drive
	 	Dallas
	 	TX
	Vistawall	 	
4434 Mulhauser Road, Suite 600
	 	Hamilton
	 	OH
	Vistawall	 	
17500 Engle Lake Drive
	 	Cleveland
	 	OH

 

 

Schedule 1

Jurisdiction of Incorporation and Trade Names

Locations of Equipment, Inventory, Books and Records

	 	 	 	 	 	 	 
	Vistawall	 	
8230 Preston Court
	 	Jessup
	 	MD
	Vistawall	 	
333 Strawberry Field Road
	 	Warwick
	 	RI
	Vistawall	 	
920 Pottertown Road
	 	Midway
	 	TN
	Vistawall	 	
9272 Hyssop Drive
	 	Rancho Cucamonga
	 	CA
	Vistawall	 	
11652 Fairgrove Ind Blvd
	 	Maryland Heights
	 	MO
	Vistawall	 	
2157 Commerce Place
	 	Hayward
	 	CA
	Vistawall	 	
4620 “B” St. NW, Ste. 102
	 	Auburn
	 	WA
	Vistawall	 	
214 Walt Sanders Memorial Blvd
	 	Newnan
	 	GA
	Vistawall Division	 	
814 Kiernan Avenue
	 	Modesto
	 	CA
	Vistawall Service Center	 	
803 Airport Road
	 	Terrell
	 	TX
	Vistawall Warehouses, Bldgs
1-5, Maint.,	 	 	 	 	 	 
	Vinyl, Annodizing, & Training

Bldgs	 	
803 Airport Road
	 	Terrell
	 	TX

 

 

Schedule 3

Securities Collateral

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	No. of	 	 
	 	 	State or Country of	 	 	 	Percentage of	 	 	 	No. of	 	 	 	Shares	 	 
	Issuer of Security	 	Incorporation	 	 	 	Ownership	 	 	 	Shares	 	 	 	Pledged	 	Parent Companies
	
	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 	

	Domestic
Subsidiaries — Active	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BMC Real Estate,

Inc.	 	
Delaware
	 	 	 	100%
	 	 	 	100
	 	 	 	100
	 	Butler Manufacturing

Company
	BUCON, Inc.	 	
Delaware
	 	 	 	100%
	 	 	 	200
	 	 	 	200
	 	Butler Manufacturing
	Butler
Construction, Inc.	 	
Kansas
	 	 	 	100%
	 	 	 	200
	 	 	 	200
	 	Butler Manufacturing

Company
	Butler
Holdings, Inc.	 	
Delaware
	 	 	 	100%
	 	 	 	100
	 	 	 	100
	 	Butler Manufacturing

Company
	Butler
Pacific, Inc.
(pending
its dissolution)	 	
Delaware
	 	 	 	100%
	 	 	 	100
	 	 	 	100
	 	Butler Holdings, Inc.
	Butler
Real Estate, Inc.	 	
Delaware
	 	 	 	100%
	 	 	 	1,000
	 	 	 	1,000
	 	Butler Manufacturing

Company
	Innovative Building
Technology, Inc.	 	
Delaware
	 	 	 	100%
	 	 	 	200
	 	 	 	200
	 	Butler Manufacturing

Company
	Lester
Building, Inc.
f/k/a Lester’s of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Butler Manufacturing
	Minnesota, Inc.	 	
Minnesota
	 	 	 	100%
	 	 	 	547,500
	 	 	 	547,500
	 	Company
	Liberty
Building Systems,
Inc.	 	
Delaware
	 	 	 	100%
	 	 	 	100
	 	 	 	100
	 	Butler Manufacturing

Company
	Moduline
Windows, Inc.	 	
Wisconsin
	 	 	 	100%
	 	 	 	66,187.5
	 	 	 	66,187.5
	 	Butler Manufacturing

Company
	VW Corp.
f/k/a National	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Northeast

Corporation	 	
Delaware
	 	 	 	100%
	 	 	 	100
	 	 	 	100
	 	Butler Manufacturing

Company
	Foreign
Subsidiaries —
First Tier
Restricted
Subsidiaries with
certificated stock	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Butler,
S.A. de C.V.	 	
Mexico
	 	 	 	99.98%
	 	 	 	4,999
	 	 	 	3,250
	 	Butler Holdings, Inc.
	Butler
Argentina, S.A.*	 	
Argentina
	 	 	 	99%
1%	 	 	 	11,880
120
	 	 	 	7,772
78
	 	Butler Holdings, Inc.
Butler Manufacturing

Company
	Butler
Construcciones,
S.A. de C.V.	 	
Mexico
	 	 	 	99.98%
	 	 	 	4,499
	 	 	 	2,925
	 	Butler Holdings, Inc.
	Butler
Export, Inc.*	 	
Barbados
	 	 	 	100%
	 	 	 	1,000
	 	 	 	650
	 	Butler Holdings, Inc.
	Foreign
Subsidiaries —
First Tier
Restricted
Subsidiaries that
are limited
companies with
uncertificated
stock
Butler
Do Brasil Ltda.**

Commercial Butler
Limitada**	 	

Brazil

Chile
	 	 	 	

99.9%

0.1%

99%

1%
	 	 	 	N/A

N/A
	 	 	 	N/A

N/A
	 	Butler Manufacturing
Company
Butler Holdings, Inc.
Butler Holdings, Inc.
Butler Manufacturing
Company
	Global
BMC (Mauritius)
Holdings Ltd.**	 	
Mauritius
	 	 	 	100%
	 	 	 	N/A
	 	 	 	N/A
	 	Butler Pacific, Inc.
[will be Butler
Holdings, Inc. after
dissolution]

	*	 	To be delivered post-execution of the Security Agreement.
	 
	**	 	Exhibits A and B to be delivered post-execution of the Security Agreement

 

 

Schedule 4

Existing Liens

	 	 	 	 	 	 	 
	LIEN TYPE AND PROPERTY	 	LIENHOLDER	 	AMOUNT OF DEBT	 	MATURITY DATE
	
	 	
	 	
	 	

	Mortgage on real estate owned by a Joint
Venture in which BRE is a partner. Recourse
is to real estate only, not the Joint
Venture or any partner:	 	 	 	 	 	 
	Joint Venture interest in Corporate Acres

Real Estate Development, (Sedelia, MO)	 	
Third National Bank
	 	$60,934
50% of Loan balance
	 	December 2004
	Joint Venture interest in Franklin Towne

Center Real Estate Development (Mesquite,

Texas)	 	
Gold Bank
	 	$2,550,000
50% of Loan balance
	 	January 2003
	Capital Leases:	 	 	 	 	 	 
	Various transport and factory equipment of
Lester Buildings	 	
Various
	 	$349,000
	 	Various
	CNC machine	 	
ICX
	 	$165,000
	 	Dec 2007
	Furniture, fixtures and equipment at World
Headquarter, Kansas City	 	
GE Finance
	 	$4,000,000
	 	Jan 2008
	Various Computer equipment, server’s etc.	 	
GE Finance
	 	$400,000
	 	Jan 2006
	Debt secured by Liens:	 	 	 	 	 	 
	Industrial Revenue Bonds (Buildings

Division) San Marcos, Texas	 	
San Marcos

Industrial

Development

Authority
	 	$6,250,000
	 	April 2015
	Vistawall TVA Loan	 	
Tennessee Valley

Authority
	 	$1,600,000
	 	2008
	Europe Line of Credit: Butler Europe,	 	
CIB Central-European
	 	 	 	Renewable Revolver:
	Hungary	 	
International Bank
	 	$500,000
	 	2003
	China #1 Line of Credit: Butler Shanghai Inc.	 	
Bank of
Communication
	 	$8,000,000
60M(RMB)
	 	Renewable Revolver:
2003
	Short-term debt, Umbrella & International

Liability premium payments secured by

insurance proceeds	 	
March & AFCO
	 	$400,000
	 	December 2003
	China #2 Line of Credit: Butler Tianjin Inc.	 	
To be Determined
	 	To be Determined
	 	To be Determined
	Nominal ownership by tax-exempt entity in

connection with bond issues for tax

abatement or tax reduction purposes:	 	 	 	 	 	 
	Office, manufacturing and Warehouse facility
for Vistawall Division, Newman, GA	 	
Coweta County

Development

Authority
	 	$2,306,000
	 	January 2013

 

 

Schedule 4

Existing Liens

	 	 	 	 	 	 	 	 	 
	Land, Business and Factory Midway City, TN	 	
Industrial
Development Board
of Greene County,
TN
	 	$	24,000,000	 	 	December 2006
	Headquarters Project Kansas City, MO	 	
Planned Industrial

Expansion

Authority, Kansas

City, MO
	 	$	28,000,000	 	 	2022

 

 

EXHIBIT A

INSTRUCTIONS FOR REGISTRATION OF PLEDGE

OF

UNCERTIFICATED SECURITIES

		
	 	     Date:
—
To: [name of corporation, partnership, joint venture or other Person]
—

     You are hereby instructed to register the pledge of the following
uncertificated securities to Bank of America, N.A., as Collateral Agent under
that certain Security Agreement, dated as of [Insert date of Agreement], by and
among Butler Manufacturing Company, a Delaware corporation (the “Borrower”),
certain Subsidiaries of the Borrower, and Bank of America, N.A., as Collateral
Agent:

     Section 1.33 A [insert written percentage of interest] (     %) [insert
description of interest, e.g. General Partnership Interest];

     Section 1.34 [insert similar description of any other interests].

     This being all of the interest of [insert name of Pledgor] in [name of
corporation, partnership, joint venture or other Person].

	 	 	 
	 	 	
Very truly yours,
	 	 	 
	 	 	
[GRANTOR]
	 	 	 
	 	 	
By:
	 	 	

	 	 	
Name:
	 	 	

	 	 	
Title:
	 	 	

 

 

EXHIBIT B

INITIAL TRANSACTION STATEMENT

Date:                    

To: Bank of America, N.A.

     This is to advise you that a pledge to Bank of America, N.A., as
Collateral Agent, under that certain Security Agreement, dated as of [insert
date of agreement], by and among Butler Manufacturing Company, a Delaware
corporation (the “Borrower”), certain Subsidiaries of the Borrower, and Bank of
America, N.A., as Collateral Agent, of the following uncertificated securities
owned by [insert name of Pledgor], a [     ] corporation has been
registered on the books of [name of corporation, partnership, joint venture or
other Person]:

     Section 1.35 A [insert written percentage of interest] (     %) [insert
description of interest, e.g. General Partnership Interest];

     Section 1.36 [insert similar description of any other interests].

     This being all of the interest of [insert name of Pledgor] in, as shown on
books and records of, [name of corporation, partnership, joint venture or other
Person].

     There are no liens or restrictions of the undersigned, nor any adverse
claims, in each case registered on the books of the undersigned, to which the
interests described hereinabove are subject.

     The pledge referred to above was registered on                     ,          .

     THIS STATEMENT IS MERELY A RECORD OF THE REGISTRATION OF THE PLEDGE OF THE
ADDRESSEES AS OF THE TIME OF THE ISSUANCE HEREOF. DELIVERY OF THIS STATEMENT,
IN ITSELF, CONFERS NO RIGHTS ON THE RECIPIENT. THIS STATEMENT IS NEITHER A
NEGOTIABLE INSTRUMENT NOR A SECURITY.

	 	 	 	 	 
	 	 	
Very truly yours,	 	 
	 	 	 	 	 
	 	 	
[NAME OF CORPORATION, PARTNERSHIP, JOINT

VENTURE OR OTHER PERSON]	 	 
	 	 	 	 	 
	 	 	
[By:                    
	 	]
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	

	 	 
	 	 	
Name:	 	 
	 	 	

	 	 
	 	 	
Title:	 	 
	 	 	

	 	 

 

 

EXHIBIT C

_________________, 2003

Ladies and Gentlemen:

     This is to advise you that       , a        (“Pledgor”), has granted to Bank of America, N.A., as Collateral Agent (in such
capacity, “Collateral Agent”) under that certain Security Agreement, dated as
of [insert date of agreement], by and among Butler Manufacturing Company, a
Delaware corporation (the “Borrower”), certain Subsidiaries of the Borrower,
and Bank of America, N.A., as Collateral Agent, a security interest in
[describe amount and description of interest, e.g. shares of the common capital
stock] of                     
(the “Company”), and all other [repeat description of interest] of the Company now
owned as well as hereafter acquired by Pledgor (together with any
distributions, interests, stock, liquidating dividends, stock dividends,
preemptive rights, dividends paid in cash or securities, or other properties to
which Pledgor may hereafter be entitled to receive on account of such [repeat
description of interest]), which [repeat description of interest] presently
constitutes     % of the issued and outstanding [repeat description of
interest] of the Company, any other equity interest or right to acquire any
equity interest in Company now owned as well as hereafter acquired by Pledgor,
and all proceeds and products of the foregoing (“Pledged Rights”).

     Until notified otherwise in writing by an authorized officer of Collateral
Agent, you are hereby directed (and you hereby agree) to deliver after the date
hereof all non-cash dividends and other distributions and any and all other
shares of stock, warrants or other property (other than cash) in which the
Secured Parties (as defined in the Security Agreement described above) have a
security interest to Collateral Agent, 901 Main Street, 67th Floor, Dallas,
Texas 75202, Attn:             , Facsimile: (    )             .
Upon written notice from an authorized officer of Collateral Agent, you are
directed (and you hereby agree) to deliver after the date of such notice, all
dividends, distributions and other property in the form of cash directly to
Collateral Agent at the address mentioned in the preceding sentence. Unless
notified otherwise in writing by an authorized officer of Collateral Agent, you
are hereby directed (and you hereby agree) to not acknowledge any encumbrance
in favor of any party other than Collateral Agent with respect to the Pledged
Rights, assign any interest in, encumber, subdivide, issue additional or
different certificates for or otherwise transfer any interest in the Pledged
Rights.

	 	 	 
	 	 	
Very truly yours,
	 	 	 
	 	 	
By:
	 	 	

	 	 	
Name:
	 	 	

	 	 	
Title:

	 	 	 
	 	 	
BANK OF AMERICA, N.A., as Collateral Agent
	 	 	 
	 	 	
By:
	 	 	

	 	 	
Name:
	 	 	

	 	 	
Title:
	Accepted and Agreed this      day of      ,      	 	 
	 	 	
By:
	 	 	

	 	 	
Name:
	 	 	

	 	 	
Title:

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