Document:

Filed by Bowne Pure Compliance

Exhibit 10.2

 

GUARANTEE AGREEMENT

dated as of

September 9, 2008,

among

USG CORPORATION,

THE SUBSIDIARIES OF USG CORPORATION

IDENTIFIED HEREIN

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I

	 
	 	 	 	 
	Definitions

	 
	 	 	 	 
	SECTION 1.01. Credit Agreement
	 	 	1	 
	SECTION 1.02. Other Defined Terms
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II

	 
	 	 	 	 
	Guarantee

	 
	 	 	 	 
	SECTION 2.01. Guarantee
	 	 	2	 
	SECTION 2.02. Guarantee of Payment
	 	 	2	 
	SECTION 2.03. No Limitations
	 	 	3	 
	SECTION 2.04. Reinstatement
	 	 	3	 
	SECTION 2.05. Agreement To Pay; Subrogation
	 	 	4	 
	SECTION 2.06. Information
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III

	 
	 	 	 	 
	Indemnity, Subrogation and Subordination

	 
	 	 	 	 
	SECTION 3.01. Indemnity and Subrogation
	 	 	4	 
	SECTION 3.02. Contribution and Subrogation
	 	 	4	 
	SECTION 3.03. Subordination
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV

	 
	 	 	 	 
	Miscellaneous

	 
	 	 	 	 
	SECTION 4.01. Notices
	 	 	5	 
	SECTION 4.02. Waivers; Amendment
	 	 	5	 
	SECTION 4.03. Administrative Agent’s Fees and Expenses; Indemnification
	 	 	6	 
	SECTION 4.04. Successors and Assigns
	 	 	6	 
	SECTION 4.05. Survival of Agreement
	 	 	6	 
	SECTION 4.06. Counterparts; Effectiveness; Several Agreement
	 	 	7	 
	SECTION 4.07. Severability
	 	 	7	 
	SECTION 4.08. Right of Set-Off
	 	 	7	 
	SECTION 4.09. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	8	 
	SECTION 4.10. WAIVER OF JURY TRIAL
	 	 	8	 
	SECTION 4.11. Headings
	 	 	9	 
	SECTION 4.12. Guarantee Absolute
	 	 	9	 
	SECTION 4.13. Termination or Release
	 	 	9	 
	SECTION 4.14. Additional Subsidiaries
	 	 	10	 
	SECTION 4.15. Loan Party Representative
	 	 	10	 

 

 

 

	 	 	 	 	 
	 
	 	 	 	 
	Schedules
	 	 	 	 
	 
	 	 	 	 
	Schedule I Subsidiary Guarantors
	 	 	 	 
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	 
	 	 	 	 
	Exhibit I Form of New Subsidiary Supplement
	 	 	 	 

 

 

 

GUARANTEE AGREEMENT dated as of September 9, 2008 (this
“Agreement”), among USG CORPORATION, a Delaware corporation, in
its capacity as a Guarantor (in such capacity, the “Parent
Borrower”) and in its capacity as the Loan Party Representative (as
such term is defined herein), each Subsidiary of the Parent Borrower from
time to time party hereto and JPMORGAN CHASE BANK, N.A., as Administrative
Agent.

Reference is made to the Credit Agreement dated as of September 9, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among the
Parent Borrower, the Loan Party Representative, the Subsidiary Borrowers from time to time party
thereto, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”). The Lenders have
agreed to extend credit to the Borrowers subject to the terms and conditions set forth in the
Credit Agreement. The obligations of the Lenders to extend such credit are conditioned upon, among
other things, the execution and delivery of this Agreement. The Subsidiaries party hereto are
affiliates of the Borrowers, will derive substantial benefits from the extension of credit to the
Borrowers pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in
order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree as
follows:

ARTICLE I

Definitions

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and not
otherwise defined herein have the meanings specified in the Credit Agreement.

(b) The rules of construction specified in Section 1.03 of the Credit Agreement also apply to
this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

“Claiming Party” has the meaning assigned to such term in Section 3.02.

“Contributing Party” has the meaning assigned to such term in Section 3.02.

“Credit Agreement” has the meaning assigned to such term in the preliminary statement
of this Agreement.

“Guaranteed Parties” means (a) the Lenders, (b) the Administrative Agent, (c) the
beneficiaries of each indemnification obligation undertaken by any Loan Party
under any Loan Document and (d) the permitted successors and assigns of each of the foregoing.

 

 

 

“Guarantors” means (a) the Parent Borrower, (b) the Subsidiaries identified on
Schedule I and (c) each other Subsidiary that becomes a party to this Agreement after the Effective
Date, provided that no Borrower shall be deemed to be a Guarantor with respect to any of
the Secured Obligations of such Borrower (other than the Obligations of such Borrower described in
clause (c) of the definition of the term “Obligations”).

“Loan Party Representative” has the meaning assigned to such term in Section 4.15.

“Parent Borrower” has the meaning assigned to such term in the preliminary statement
of this Agreement.

ARTICLE II

Guarantee

SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with the
other Guarantors and severally, as a primary obligor and not merely as a surety, the due and
punctual payment and performance of the Secured Obligations (including the Secured Obligations of
any Subsidiary Borrower designated as such on or after the Effective Date). Each of the Guarantors
further agrees that the Secured Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Secured Obligation. Each of the Guarantors waives
presentment to, demand of payment from and protest to the Borrowers or any other Loan Party of any
of the Secured Obligations, and also waives notice of acceptance of its guarantee and notice of
protest for nonpayment. For purposes of clarity, each of the Guarantors agrees that the Secured
Obligations shall include all obligations under the Loan Documents and all obligations associated
with any Banking Services, in each case of any Subsidiary Borrower that is designated as such after
the Effective Date.

SECTION 2.02. Guarantee of Payment. Each of the Guarantors further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives
any right to require that any resort be had by the Administrative Agent or any other Guaranteed
Party to any security held for the payment of the Secured Obligations or to any balance of any
deposit account or credit on the books of the Administrative Agent or any other Guaranteed Party in
favor of the Borrowers or any other Person.

 

2

 

SECTION 2.03. No Limitations. (a) Except for termination of a Guarantor’s
obligations hereunder as expressly provided in Section 4.13, the obligations of each Guarantor
hereunder shall not be subject to any reduction, limitation, impairment
or termination for any reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or unenforceability of the Secured
Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the
failure of the Administrative Agent or any other Guaranteed Party to assert any claim or demand or
to enforce any right or remedy under the provisions of any Loan Document or otherwise; (ii) any
rescission, waiver, amendment or modification of, or any release from any of the terms or
provisions of, any Loan Document or any other agreement, including with respect to any other
Guarantor under this Agreement; (iii) the release of any security, if any, held by the
Administrative Agent or any other Guaranteed Party for the Secured Obligations or any of them;
(iv) any default, failure or delay, wilful or otherwise, in the performance of the Secured
Obligations; or (v) any other act or omission that may or might in any manner or to any extent vary
the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law
or equity (other than the payment in full in cash of all the Secured Obligations).

(b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based
on or arising out of any defense of the Parent Borrower or any other Loan Party or the
unenforceability of the Secured Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of the Parent Borrower or any other Loan Party, other than the
payment in full in cash of all the Secured Obligations. The Administrative Agent may, at its
election, foreclose on any security held by it by one or more judicial or nonjudicial sales, accept
an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the
Secured Obligations, make any other accommodation with the Parent Borrower or any other Loan Party
or exercise any other right or remedy available to it against the Parent Borrower or any other Loan
Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to
the extent the Secured Obligations have been paid in full in cash. To the fullest extent permitted
by applicable law, each Guarantor waives any defense arising out of any such election even though
such election may operate, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against the Parent Borrower
or any other Loan Party, as the case may be, or any security.

SECTION 2.04. Reinstatement. Each of the Guarantors agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the
Administrative Agent or any other Guaranteed Party upon the bankruptcy or reorganization of the
Parent Borrower, any other Loan Party or otherwise.

 

3

 

SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not
in limitation of any other right that the Administrative Agent or any other Guaranteed Party has at
law or in equity against any Guarantor by virtue hereof, upon the failure of the Parent Borrower or
any other Loan Party to pay any Secured
Obligation when and as the same shall become due, whether at maturity, by acceleration, after
notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or
cause to be paid, to the Administrative Agent for distribution to the applicable Guaranteed Parties
in cash the amount of such unpaid Secured Obligation. Upon payment by any Guarantor of any sums to
the Administrative Agent as provided above, all rights of such Guarantor against the Parent
Borrower or any other Loan Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be subject to
Article III.

SECTION 2.06. Information. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Parent Borrower’s and each other Loan Party’s financial condition
and assets, and of all other circumstances bearing upon the risk of nonpayment of the Secured
Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs
hereunder, and agrees that none of the Administrative Agent or the other Guaranteed Parties will
have any duty to advise such Guarantor of information known to it or any of them regarding such
circumstances or risks.

ARTICLE III

Indemnity, Subrogation and Subordination

SECTION 3.01. Indemnity and Subrogation. In addition to all such rights of indemnity
and subrogation as the Guarantors may have under applicable law (but subject to Section 3.03), each
Guarantor that is a Borrower agrees, in its capacity as a Borrower, that in the event a payment of
an obligation of such Guarantor shall be made by any other Guarantor under this Agreement, such
Guarantor, in its capacity as a Borrower, shall indemnify such other Guarantor for the full amount
of such payment and such other Guarantor shall be subrogated to the rights of the Person to whom
such payment shall have been made to the extent of such payment.

SECTION 3.02. Contribution and Subrogation. Each Guarantor (a “Contributing
Party”) agrees (subject to Section 3.03) that, in the event a payment shall be made by any
other Guarantor hereunder in respect of any Secured Obligation and such other Guarantor (the
“Claiming Party”) shall not have been fully indemnified by the applicable Borrower as
provided in Section 3.01, the Contributing Party shall indemnify the Claiming Party in an amount
equal to the amount of such payment multiplied by a fraction of which the numerator shall be the
net worth of the Contributing Party on the date hereof (or, in the case of any Guarantor becoming a
party hereto pursuant to Section 4.14, the date of the supplement hereto executed and delivered by
such Guarantor) and the denominator shall be the aggregate net worth of all the Guarantors on the
date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 4.14, the
date of the supplement hereto executed and delivered by such Guarantor). Any Contributing Party
making any payment to a Claiming Party pursuant to this Section 3.02 shall be subrogated to the
rights of such Claiming Party under Section 3.01 to the extent of such payment.

 

4

 

SECTION 3.03. Subordination. (a) Notwithstanding any provision of this Agreement to
the contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and all other rights of
indemnity, contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the payment in full in cash of the Secured Obligations. No failure on the part of
any Borrower or any Guarantor to make the payments required by Sections 3.01 and 3.02 (or any other
payments required under applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall
remain liable for the full amount of the obligations of such Guarantor hereunder.

(b) Each Guarantor hereby agrees that, on and after the Existing Credit Agreement Termination
Date, all Indebtedness owed by it to any other Subsidiary that is not a Loan Party shall be fully
subordinated to the payment in full in cash of the Secured Obligations.

ARTICLE IV

Miscellaneous

SECTION 4.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in Section 9.01 of the
Credit Agreement. All communications and notices hereunder to any Guarantor shall be given to it
in care of the Loan Party Representative as provided in Section 9.01 of the Credit Agreement.

SECTION 4.02. Waivers; Amendment. (a) No failure or delay by the Administrative
Agent or any Lender in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or power. The rights and
remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any Guarantor or the Loan
Party Representative therefrom shall in any event be effective unless the same shall be permitted
by paragraph (b) of this Section 4.02, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of
whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at
the time. No notice or demand on any Guarantor in any case shall entitle any Guarantor to any
other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the
Guarantor or Guarantors (or, if applicable, the Loan Party Representative) with respect to which
such waiver, amendment or
modification is to apply, subject to any consent required in accordance with Section 9.02 of
the Credit Agreement.

 

5

 

SECTION 4.03. Administrative Agent’s Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Administrative Agent shall be entitled to reimbursement of its
expenses incurred hereunder as provided in Section 9.03 of the Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan Documents, each
Guarantor jointly and severally agrees to indemnify the Administrative Agent and the other
Indemnitees (as defined in Section 9.03 of the Credit Agreement) against, and hold each Indemnitee
harmless from, any and all out-of-pocket losses, claims, damages, liabilities and related
reasonable expenses, including the reasonable fees, charges and disbursements of any counsel for
any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with,
or as a result of, the execution, delivery or performance of this Agreement or any claim,
litigation, investigation or proceeding relating to this Agreement or any instrument contemplated
hereby, whether or not any Indemnitee is a party thereto, provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.

(c) Any such amounts payable as provided hereunder shall be additional Secured Obligations
guaranteed hereby. The provisions of this Section 4.03 shall remain operative and in full force
and effect regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of the Secured
Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the Administrative Agent or any
other Guaranteed Party. All amounts due under this Section 4.03 shall be payable not later than
three Business Days after written demand therefor setting forth the basis for such claim in
reasonable detail.

SECTION 4.04. Successors and Assigns. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the permitted successors and
assigns of such party; and all covenants, promises and agreements by or on behalf of any Guarantor
or the Administrative Agent that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.

SECTION 4.05. Survival of Agreement. All covenants, agreements, representations and
warranties made by the Loan Party Representative and the Loan Parties in the Loan Documents and in
the certificates or other instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders
and shall survive the execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any Lender or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended under the Credit Agreement,
and shall continue in full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under any Loan Document is outstanding and unpaid
and so long as the Commitments have not expired or terminated.

 

6

 

SECTION 4.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be
executed in counterparts, each of which shall constitute an original but all of which when taken
together shall constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile or electronic transmission shall be as effective as delivery of a manually
signed counterpart of this Agreement. This Agreement shall become effective as to the Loan Party
Representative or any Guarantor when a counterpart hereof executed on behalf of the Loan Party
Representative or such Guarantor, as the case may be, shall have been delivered to the
Administrative Agent and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon the Loan Party Representative, such
Guarantor and the Administrative Agent and their respective permitted successors and assigns, and
shall inure to the benefit of the Loan Party Representative, such Guarantor, the Administrative
Agent and the other Guaranteed Parties and their respective successors and assigns, except that
neither the Loan Party Representative nor any Guarantor shall have the right to assign or transfer
its rights or obligations hereunder or any interest herein (and any such assignment or transfer
shall be void) except as expressly contemplated by this Agreement or the Credit Agreement. This
Agreement shall be construed as a separate agreement with respect to each of the Loan Party
Representative and each Guarantor and may be amended, modified, supplemented, waived or released
with respect to the Loan Party Representative or any Guarantor without the approval of the Loan
Party Representative or any other Guarantor, as the case may be, and without affecting the
obligations of the Loan Party Representative or any other Guarantor as the case may be, hereunder.

SECTION 4.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

SECTION 4.08. Right of Set-Off. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of any Guarantor against
any of and all the obligations of such
Guarantor now or hereafter existing under this Agreement owed to such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section 4.08 are in addition to
other rights and remedies (including other rights of set-off) which such Lender may have.

 

7

 

SECTION 4.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern District of New York,
and any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any court referred to in paragraph (b) of this Section 4.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 4.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.

SECTION 4.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.10.

 

8

 

SECTION 4.11. Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this Agreement.

SECTION 4.12. Guarantee Absolute. All rights of the Administrative Agent hereunder
and all obligations of each Guarantor hereunder shall be absolute and unconditional irrespective of
(a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any
agreement or instrument governing or evidencing any of the Secured Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or
place of payment of, or in any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument governing or evidencing any Secured Obligations,
(c) any release or amendment or waiver of or consent under or departure from any guarantee
guaranteeing all or any of the Secured Obligations, or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Guarantor in respect of the
Secured Obligations or this Agreement (other than the payment in full, in cash, of the Secured
Obligations).

SECTION 4.13. Termination or Release. (a) This Agreement and the Guarantees made
herein shall terminate when all the Obligations (as distinguished from the Secured Obligations)
have been paid in full, in cash, and the Lenders have no further commitment to lend under the
Credit Agreement.

(b) A Guarantor shall automatically be released from its obligations hereunder upon the
consummation of any transaction permitted by, or that would not otherwise result in a Default
under, the Credit Agreement as a result of which such Guarantor ceases to be a Domestic Material
Subsidiary, provided that the Required Lenders shall have consented to such transaction (to
the extent required by the Credit Agreement) and the terms of such consent did not provide
otherwise.

(c) In connection with any termination or release pursuant to paragraph (a) or (b) of this
Section 4.13, the Administrative Agent shall execute and deliver to any Guarantor, at such
Guarantor’s expense, all documents that such Guarantor shall reasonably request to evidence such
termination or release. Any execution and delivery of documents pursuant to this Section 4.13
shall be without recourse to or warranty by the Administrative Agent.

 

9

 

SECTION 4.14. Additional Subsidiaries. Pursuant to Section 5.10(a) of the Credit
Agreement, certain Domestic Material Subsidiaries that were not in existence or not Domestic
Material Subsidiaries on the date of the Credit Agreement are required to enter in this Agreement
as a Guarantor upon becoming such a Domestic Material
Subsidiary. Upon execution and delivery by the Administrative Agent and a Subsidiary of an
instrument in the form of Exhibit I hereto, such Subsidiary shall become a Guarantor hereunder with
the same force and effect as if originally named as a Guarantor herein. The execution and delivery
of any such instrument shall not require the consent of any other Guarantor. The rights and
obligations of the Loan Party Representative and each Guarantor hereunder shall remain in full
force and effect notwithstanding the addition of any new Guarantor as a party to this Agreement.

SECTION 4.15. Loan Party Representative. In addition to the powers granted by any
Guarantor in its capacity as a Borrower to the Loan Party Representative under Section 9.17 of the
Credit Agreement, each Guarantor hereby designates the Parent Borrower as its representative, agent
and attorney-in-fact to act on its behalf (in such capacity, the “Loan Party
Representative”) as specified herein or in any other Loan Document. Each Guarantor hereby
authorizes the Loan Party Representative to take such actions on its behalf under the terms of this
Agreement and the other Loan Documents and to exercise such powers and perform such duties
hereunder and thereunder as are specified in such agreements or are reasonably incidental thereto,
in each case, on behalf of the Loan Parties under the Loan Documents. The Loan Party
Representative hereby accepts such appointment. The Administrative Agent and the Lenders shall be
entitled to rely on all notices, requests, consents, certifications and/or authorizations or other
similar acts delivered or taken by the Loan Party Representative for or on behalf of any Guarantor
pursuant hereto or the other Loan Documents without inquiry and as if such notices, requests,
consents, certifications and/or authorizations or other similar acts were delivered by such
Guarantor. Each representation, warranty, covenant, agreement and undertaking made on behalf of
any Guarantor by the Loan Party Representative shall be deemed for all purposes to have been made
by all Guarantors (or any of the them, as applicable) and shall be binding upon and enforceable
against such Guarantor to the same extent as it if the same had been made directly by such
Guarantor. To the extent that any successor Loan Party Representative is appointed pursuant to
Section 9.17 of the Credit Agreement, the Guarantors hereby agree that such Person thereafter shall
be vested with all rights, powers, privileges and authority of the Loan Party Representative
hereunder without any further action by any Person.

[Signature Pages Follow]

 

10

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 
	 	USG CORPORATION, as a Guarantor 
Borrower
and Loan Party Representative,

 	 
	 	by  	/s/ Karen L. Leets
 	 
	 	 	Name:  	Karen L. Leets 	 
	 	 	Title:  	Vice President and Treasurer 	 

 

11

 

	 	 	 	 	 

	 	 	 	 	 
	 	EACH OF THE SUBSIDIARIES

LISTED ON SCHEDULE I HERETO,

 	 
	 	by  	/s/ Karen L. Leets
 	 
	 	 	Name:  	Karen L. Leets 	 
	 	 	Title:  	In the capacity listed on Schedule I corresponding
to such Subsidiary 	 

 

12

 

	 	 	 	 	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as the

Administrative Agent,

 	 
	 	by  	/s/ Peter S. Predun
 	 
	 	 	Name:  	Peter S. Predun 	 
	 	 	Title:  	Executive Director 	 
	 

 

13

 

Schedule I to the

Guarantee Agreement

GUARANTORS

	 	 	 
	 	 	Title of Karen L. Leets with respect
	Company	 	 to such Company
	California Wholesale Material Supply, LLC

	 	Vice President and Treasurer
	L&W Supply Corporation

	 	Vice President and Treasurer
	Livonia Building Materials, LLC

	 	Vice President and Treasurer
	Livonia Holdings, Inc.

	 	Vice President and Treasurer
	River City Materials, Inc.

	 	Vice President and Treasurer
	United States Gypsum Company

	 	Vice President and Treasurer
	USG Foreign Investments, Ltd.

	 	Vice President and Treasurer
	USG Interiors, Inc.

	 	Vice President and Treasurer

 

 

 

Exhibit I to the

Guarantee Agreement

SUPPLEMENT NO.
 _____ 

dated as of
 _____, 20
 _____ 

(this
“Supplement”), to the Guarantee Agreement dated as of September 9,
2008 (as amended, supplemented or otherwise modified from time to time,
the “Guarantee Agreement”), among USG CORPORATION, a Delaware
corporation, in its capacity as a Guarantor (in such capacity, the
“Parent Borrower”) and in its capacity as the Loan Party
Representative, the Subsidiaries of the Parent Borrower from time to time
party thereto (together with the Parent Borrower, the
“Guarantors”) and JPMORGAN CHASE BANK, N.A. (“JPMCB”), as
Administrative Agent (in such capacity, the “Administrative
Agent”).

A. Reference is made to the Credit Agreement dated as of September 9, 2008 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among the
Parent Borrower, the Loan Party Representative, the Subsidiary Borrowers from time to time party
thereto, the Lenders from time to time party thereto and the Administrative Agent.

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement and the Guarantee Agreement referred to therein.

C. The Guarantors have entered into the Guarantee Agreement in order to induce the Lenders to
make Loans. Section 4.14 of the Guarantee Agreement provides that additional Domestic Material
Subsidiaries may become Guarantors under the Guarantee Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Domestic Material Subsidiary (the
“New Subsidiary”) is executing this Supplement in accordance with the requirements of the
Credit Agreement to become a Guarantor under the Guarantee Agreement in order to induce the Lenders
to make additional Loans and as consideration for Loans previously made.

Accordingly, the Administrative Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 4.14 of the Guarantee Agreement, the New Subsidiary by
its signature below becomes a Guarantor under the Guarantee Agreement with the same force and
effect as if originally named therein as a Guarantor and the New Subsidiary hereby (a) agrees to
all the terms and provisions of the Guarantee Agreement applicable to it as a Guarantor thereunder,
(b) represents and warrants that the representations and warranties made by it as a Guarantor
thereunder are true and correct on and as of the date hereof and (c) hereby designates the Person
currently acting as Loan Party Representative pursuant to Section 4.15 of the Guarantee Agreement
as its representative, agent and attorney-in-fact for all purposes set forth in such Section 4.15.
Each reference to a “Guarantor” in the Guarantee Agreement shall be deemed to include the New
Subsidiary. The Guarantee Agreement is hereby incorporated herein by reference.

 

 

 

SECTION 2. The New Subsidiary represents and warrants to the Administrative Agent and the
other Guaranteed Parties that this Supplement has been duly authorized, executed and delivered by
it and constitutes its legal, valid and binding obligation, enforceable against it in accordance
with its terms.

SECTION 3. This Supplement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Supplement shall become effective when the
Administrative Agent shall have received a counterpart of this Supplement that bears the signature
of the New Subsidiary and the Administrative Agent has executed a counterpart hereof. Delivery of
an executed signature page to this Supplement by facsimile or electronic transmission shall be as
effective as delivery of a manually signed counterpart of this Supplement.

SECTION 4. Except as expressly supplemented hereby, the Guarantee Agreement shall remain in
full force and effect.

SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.

SECTION 6. In case any one or more of the provisions contained in this Supplement should be
held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and in the Guarantee Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a particular provision in
a particular jurisdiction shall not in and of itself affect the validity of such provision in any
other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7. All communications and notices hereunder shall be in writing and given as provided
in Section 4.01 of the Guarantee Agreement.

SECTION 8. The New Subsidiary agrees to reimburse the Administrative Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other
charges and disbursements of counsel for the Administrative Agent.

[Signature Pages Follow]

 

2

 

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

	 	 	 	 	 
	 	[NAME OF NEW SUBSIDIARY],

 	 
	 	by  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

 	 
	 	by  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 	 
	Acknowledged and accepted

as of the date first written above by:

 	 

	[NAME OF LOAN PARTY REPRESENTATIVE],

as Loan Party Representative,

 	 
	by:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

 

3Filed by Bowne Pure Compliance

Exhibit 10.3

 

PLEDGE AND SECURITY AGREEMENT

dated as of September 9, 2008,

among

USG CORPORATION,

as Loan Party Representative,

The Grantors Party Hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

 

 

TABLE OF CONTENTS

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

 

 

 

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

 

ii

 

ARTICLE X

THE ADMINISTRATIVE AGENT

	 	 	 
	Schedule 1

	 	Subsidiary Grantors
	 
	 	 
	Exhibit A

	 	Information for each Grantor
	 
	 	 
	Exhibit B

	 	Collateral Deposit Accounts
	 
	 	 
	Exhibit C

	 	Form of Perfection Certificate
	 
	 	 
	Exhibit D

	 	Financing Statement Filing Offices
	 
	 	 
	Exhibit E

	 	Form of New Subsidiary Supplement

 

iii

 

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”) is entered into as of September
9, 2008, among USG Corporation, a Delaware corporation, in its capacity as the Loan Party
Representative (the “Loan Party Representative”), each Subsidiary identified on Schedule I
hereto and each other Subsidiary that becomes a party to this Security Agreement after the
Effective Date pursuant to Section 8.15 hereof (each a “Grantor” and, collectively, the
“Grantors”) and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the
“Administrative Agent”) for the lenders party to the Credit Agreement referred to below.

PRELIMINARY STATEMENT

Reference is made to the Credit Agreement dated as of September 9, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among USG
Corporation, in its capacity as a Borrower (in such capacity, the “Parent Borrower”) and as
the Loan Party Representative, the Subsidiary Borrowers from time to time party thereto, the
Lenders from time to time party thereto and the Administrative Agent. Each Grantor is entering
into this Agreement in order to induce the Lenders to enter into and extend credit to the Borrowers
under the Credit Agreement and to secure the Secured Obligations.

ACCORDINGLY, the Loan Party Representative, the Grantors and the Administrative Agent, on
behalf of the Lenders, hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Terms Defined in Credit Agreement. All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

SECTION 1.02. Terms Defined in UCC. Terms defined in the UCC which are not otherwise
defined in this Agreement are used herein as defined in the UCC.

SECTION 1.03. Definitions of Certain Terms Used Herein. As used in this Agreement, in
addition to the terms defined in the Preliminary Statement, the following terms shall have the
following meanings:

“Accounts” means all rights to payment, whether or not earned by performance, for the
sale or lease of goods or the rendition of services, in each case in the ordinary course of the
Grantors’ business, whether such rights constitute or are evidenced by any Account (as defined in
Article 9 of the UCC), Chattel Paper, Instrument or General Intangible.

 

 

 

“Article” means a numbered article of this Agreement, unless another document is
specifically referenced.

“Cash Dominion Period” means each of a period (a) commencing on the date on which
Excess Availability shall have been less than $75,000,000 for five consecutive Business Days and
ending on the first date thereafter on which Excess Availability shall have been at least
$75,000,000 for 30 consecutive calendar days and (b) during which an Event of Default has occurred
and is continuing. For purposes of clarity, if, during the continuance of a Cash Dominion Period
triggered by an event described in either clause (a) or (b) of this definition, an event described
in clause (a) or (b) of this definition shall occur, then such Cash Dominion Period shall be deemed
not to have terminated until such time as a Cash Dominion Period would no longer exist under both
clauses (a) and (b) of this definition.

“Cash Dominion Period Notice” shall have the meaning set forth in Section 7.03(a).

“Cash Dominion Termination Notice” shall have the meaning set forth in
Section 7.03(a).

“Cash Dominion Termination Period” shall have the meaning set forth in
Section 7.03(a).

“Collateral” shall have the meaning set forth in Article II.

“Collateral Deposit Account” means, with respect to each Grantor, any and all Deposit
Accounts maintained by such Grantor into which any cash, checks or other similar payments
constituting payments made in respect of Accounts are or are to be deposited.

“Collateral Deposit Account Bank” means each bank or other financial institution at
which any Grantor maintains a Collateral Deposit Account.

“Collateral Report” means any certificate (including any Borrowing Base Certificate),
report or other document delivered by any Grantor, or by the Loan Party Representative on behalf of
any Grantor, to the Administrative Agent relating to the Collateral pursuant to any Loan Document.

“Collection Account” shall have the meaning set forth in Section 7.03(a).

“Control” shall have the meaning set forth in Section 9-104 or Section 9-105, as
applicable, of Article 9 of the UCC.

“Deposit Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Administrative Agent, among any Grantor, a Collateral Deposit
Account Bank and the Administrative Agent with respect to Control of the Collateral Deposit
Accounts listed therein and the disposition of funds on deposit in such Collateral Deposit
Accounts.

 

2

 

“Exhibit” refers to a specific exhibit to this Agreement, unless another document is
specifically referenced.

“Financing Statement” means, with respect to any Grantor, each UCC financing statement
naming the Administrative Agent as secured party and such Grantor as debtor and describing the
Collateral in a manner consistent with the requirements set forth in Section 4.01(b).

“Grantors” has the meaning set forth in the preamble to this Agreement.

“Perfection Certificate” means a certificate substantially in the form of Exhibit
C, completed and supplemented with the schedules and attachments contemplated thereby, and duly
executed by a Financial Officer of the Parent Borrower.

“Proceeds” shall have the meaning set forth in Article 9 of the UCC.

“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

“Security Interest” has the meaning assigned to such term in Section 2.01.

“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) the
beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan
Document, (d) each provider of Banking Services in respect of which constitute Secured Obligations
and (e) the successors and assigns of each of the foregoing.

“Specified L&W Grantors” means, collectively, each of L & W Supply Corporation, a
Delaware corporation, California Wholesale Material Supply, LLC, a Delaware limited liability
company, Livonia Building Materials, LLC, a Michigan limited liability company, Livonia Holdings,
Inc., a Delaware corporation, and River City Materials, Inc., an Arkansas corporation, in each case
for so long as such entity is required to be a Grantor hereunder.

“Supplement” shall have the meaning set forth in Section 8.14.

The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms.

ARTICLE II

GRANT OF SECURITY INTEREST

SECTION 2.01. Security Interest. As security for the payment or performance, as the
case may be, in full of the Secured Obligations, each Grantor hereby pledges, assigns and grants to
the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of
the Secured Parties, a security interest in all of such Grantor’s right, title and interest in (a)
Accounts, and Proceeds in respect thereof, whether now owned by or owing to, or hereafter acquired
by or arising in favor of, such
Grantor (including under any trade name or derivations thereof), and regardless of where
located, and (b) all Collateral Deposit Accounts of such Grantor (all of which will be collectively
referred to as the “Collateral”; the security interest in the Collateral granted pursuant
to this Section 2.01 is referred to as the “Security Interest”).

 

3

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Grantor represents, warrants and covenants to and with the Secured Parties that:

SECTION 3.01. Title, Perfection and Priority. Such Grantor has good and valid rights
in or the power to transfer the Collateral and title to the Collateral with respect to which it has
purported to grant the Security Interest hereunder, free and clear of all Liens except for Liens
permitted under Section 4.01(g), and has full power and authority to grant to the Administrative
Agent, for the benefit of the Secured Parties, the Security Interest pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of this Agreement,
without the consent or approval of any other Person other than any consent or approval that has
been obtained, except such consents or approvals the failure of which to have been obtained will
not impair the Security Interest. When a properly completed Financing Statement has been filed in
the appropriate office against such Grantor in the applicable location listed on Exhibit D
(or, in the case of any Grantor that becomes a party hereto after the Effective Date, in the
jurisdiction of organization of such Grantor specified in Schedule I to the Supplement for such
Grantor) and any applicable filing fees or taxes are paid in connection with such filing, the
Administrative Agent will have a fully perfected first priority security interest in that
Collateral of such Grantor in which a security interest may be perfected by filing a UCC financing
statement, subject only to Liens permitted under Section 4.01(g).

SECTION 3.02. Type and Jurisdiction of Organization, Organizational and Identification
Numbers. The type of entity of such Grantor, its state of organization, the organizational
number issued to it by its state of organization and its federal employer identification number are
set forth on Exhibit A (as amended from time to time pursuant to Section 4.03 or
supplemented from time to time pursuant to any Supplement).

SECTION 3.03. Principal Location. The location of such Grantor’s place of business
(if it has only one) or its chief executive office (if it has more than one place of business) is
disclosed in Exhibit A (as amended from time to time pursuant to Section 4.03 or
supplemented from time to time pursuant to any Supplement). In addition, such Grantor has no other
places of business where books and records with respect to the Collateral are maintained, except
those set forth in Exhibit A (as amended from time to time pursuant to Section 4.03 or
supplemented from time to time pursuant to any Supplement).

SECTION 3.04. Deposit Accounts. Exhibit B (as amended or supplemented from
time to time pursuant to Section 7.02 or any Supplement) sets forth a
complete list of the Collateral Deposit Accounts of such Grantor, including, with respect to
each such Collateral Deposit Account, each depositary institution’s name and location and such
Grantor’s account number.

 

4

 

SECTION 3.05. Exact Names. Such Grantor’s name, as set forth on Exhibit A (as
amended from time to time pursuant to Section 4.03 or supplemented from time to time pursuant to
any Supplement), is the exact name as it appears in such Grantor’s organizational documents, as
amended, as filed with such Grantor’s jurisdiction of organization. Such Grantor has not, during
the past two years prior to the Effective Date, been known by or used any other corporate or
fictitious name, or been a party to any merger or consolidation, or been a party to any
acquisition, in each case except as otherwise specified in the Perfection Certificate or any
certificate delivered to the Administrative Agent pursuant to Section 4.01(f).

SECTION 3.06. Perfection Certificate. The Perfection Certificate has been duly
prepared, completed and executed by the Parent Borrower and the information set forth therein with
respect to each Grantor is correct and complete as of the Effective Date, and the Financing
Statements (including any amendments thereto) prepared by the Administrative Agent based upon the
information provided to the Administrative Agent in the Perfection Certificate for filing in each
governmental, municipal or other office specified in Schedule 2 to the Perfection Certificate (or
specified by notice from the Loan Party Representative to the Administrative Agent after the
Effective Date in the case of filings, recordings or registrations required by Section 5.10 of the
Credit Agreement or Sections 4.01 and 4.03 hereof) are all the filings, recordings and
registrations that are necessary to perfect a security interest in favor of the Administrative
Agent (for the benefit of the Secured Parties) in respect of all the Collateral in which the
Security Interest may be perfected by filing, recording or registering in the U.S. (or any
political subdivision thereof), and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such jurisdiction, except as
provided under applicable law with respect to the filing of continuation statements.

SECTION 3.07. Validity of Security Interest. The Security Interest constitutes a
legal and valid security interest in all the Collateral securing the payment and performance of the
Secured Obligations.

SECTION 3.08. Security Interest as Security Only. The Security Interest granted by
such Grantor is granted as security only and shall not subject the Administrative Agent or any
other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor
with respect to or arising out of the Collateral.

SECTION 3.09. Accounts. (a) The names of the Account Debtors, amounts owing, due
dates and other information with respect to such Grantor’s Accounts are and will be complete, true
and correct in all material respects in the records of such Grantor relating thereto and in all
invoices and Collateral Reports with respect thereto furnished to the Administrative Agent pursuant
to the Loan Documents from time to time. As of the time when each Account arises, such Grantor
shall be deemed to have
represented and warranted that such Account and all records relating thereto are genuine and
in all respects what they purport to be.

 

5

 

(b) In addition, with respect to all of its Accounts, except as disclosed in the most recent
Collateral Report, (i) the amounts shown on all invoices, statements and Collateral Reports with
respect thereto are actually and absolutely owing to such Grantor as indicated thereon and are not
in any way contingent (other than with respect to discounts, rebates, billing errors, setoffs,
counterclaims and other Dilution Factors); (ii) no payments have been or shall be made thereon
except payments delivered or to be delivered to a Collateral Deposit Account as required pursuant
to Section 7.01; and (iii) to such Grantor’s knowledge, all Account Debtors relating to such
Accounts have the capacity to contract.

SECTION 3.10. Filing Requirements. None of the Collateral owned by it is of a type
for which security interests or liens may be perfected by filing under any Federal statute.
Notwithstanding anything in any Loan Document to the contrary, the Administrative Agent agrees that
the Grantors shall not be required to make filings under the Assignment of Claims Act of 1940, 31
U.S.C. §3727 and 41 U.S.C. § 15.

SECTION 3.11. No Financing Statements, Security Agreements. No financing statement or
security agreement describing all or any portion of the Collateral which has not lapsed or been
terminated naming such Grantor as debtor has been filed or is of record in any jurisdiction except
(a) for the Financing Statements and (b) as permitted under Section 4.01(g).

ARTICLE IV

COVENANTS

From the date of this Agreement, and thereafter until this Agreement is terminated, each
Grantor agrees that:

SECTION 4.01. General. (a) Collateral Records. Such Grantor will maintain
books and records with respect to the Collateral owned by it in accordance Section 5.06 of the
Credit Agreement, and furnish to the Administrative Agent, with sufficient copies for each of the
Lenders, such reports relating to such Collateral as the Administrative Agent may from time to time
reasonably request.

(b) Authorization to File Financing Statements; Ratification. Such Grantor hereby
authorizes the Administrative Agent to file, and if requested will deliver to the Administrative
Agent, all Financing Statements and other documents and take such other actions as may from time to
time be reasonably requested by the Administrative Agent in order to maintain, subject to any Liens
permitted under Section 4.01(g), a first priority perfected security interest in and, if applicable
and contemplated by the terms hereof, Control of, the Collateral owned by such Grantor. Any
Financing Statement (or amendment thereto) filed by the Administrative Agent shall (i) indicate
such Grantor’s Collateral by any description that reasonably approximates the description of such
Collateral contained in this Agreement and (ii) contain any other information required by part
5 of Article 9 of the UCC for the sufficiency or filing office acceptance of such Financing
Statement (or amendment thereto). Such Grantor agrees to furnish any such information to the
Administrative Agent promptly upon request. Such Grantor also ratifies its authorization for the
Administrative Agent to have filed any initial Financing Statements if filed prior to the Effective
Date.

 

6

 

(c) Further Assurances. Such Grantor agrees to take any and all actions that it shall
reasonably deem necessary to defend title to the Collateral against all persons and to defend the
Security Interest of the Administrative Agent in its Collateral and the priority thereof against
any Lien not expressly permitted under Section 4.01(g).

(d) Disposition of Collateral. Such Grantor will not sell, lease or otherwise dispose
of the Collateral owned by it except for dispositions not otherwise prohibited by Section 6.03 of
the Credit Agreement.

(e) Maintaining Perfection of Security Interest. Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments
and documents and take all such actions as the Administrative Agent may from time to time
reasonably request to preserve, protect and perfect the Security Interest and the rights and
remedies created hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security Interest and the filing
of any Financing Statements or other documents in connection herewith or therewith. If any amount
payable under or in connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument (other than any promissory note or other instrument in an
aggregate principal amount of less than $250,000 owed to the applicable Grantor by any Person that
is not the Parent Borrower or any Subsidiary, provided that the aggregate principal amount
of promissory notes that may be excluded from the delivery requirements of this paragraph (e) may
not exceed $1,000,000 at any one time), such note or instrument shall be immediately pledged and
delivered to the Administrative Agent, duly endorsed in a manner satisfactory to the Administrative
Agent.

(f) Annual Confirmation of Perfection Certificate. Each year, at the time of delivery
of annual financial statements with respect to the preceding fiscal year pursuant to Section
5.01(a) of the Credit Agreement, such Grantor shall cause the Loan Party Representative to deliver
to the Administrative Agent a certificate executed by a Financial Officer of the Parent Borrower
(i) setting forth any changes to the information required pursuant to the Perfection Certificate,
or confirming that there has been no change in such information, in each case since the date of the
Perfection Certificate or the date of the most recent certificate delivered pursuant to this
Section 4.01(f) and (ii) certifying that all initial UCC financing statements or other appropriate
filings, recordings or registrations, including all refilings, rerecordings, reregistrations and
amendments to the initial UCC financing statements, containing a description of the Collateral have
been filed of record in each governmental, municipal or other appropriate office in the
jurisdiction identified pursuant to Section 4.03 to the extent necessary to protect and perfect the
Security Interest as of the date of such certificate.

 

7

 

(g) Liens. Such Grantor will not create, incur, or suffer to exist any Lien on the
Collateral owned by it except Liens permitted under clauses (i) through (iv), (vi) and (xi) of
Section 6.02 of the Credit Agreement.

(h) Other Financing Statements. Such Grantor will not authorize the filing of any
financing statement naming it as debtor covering all or any portion of the Collateral owned by it,
except with respect to any Lien permitted under Section 4.01(g). Such Grantor acknowledges that it
is not authorized to file (i) any financing statement with respect to the Collateral, except with
respect to any Lien permitted under Section 4.01(g), without providing prior written notice to the
Administrative Agent or (ii) any amendment or termination statement with respect to any Financing
Statement filed in accordance with the terms hereof without the prior written consent of the
Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.

(i) Compliance with Terms. Such Grantor shall observe, perform and comply with all
obligations in respect of the Collateral owned by it (in each case, in a manner consistent with
past business practices of such Grantor), unless the failure to observe, perform or comply with
such obligations would not adversely affect the validity, perfection and priority of the Security
Interest.

SECTION 4.02. Accounts. (a) Certain Agreements on Accounts. No Grantor will
make or agree to make any discount, credit, rebate or other reduction in the original amount owing
on an Account or accept in satisfaction of an Account less than the original amount thereof, except
that, for so long as no Event of Default is continuing, such Grantor may reduce the amount owing on
Accounts arising from the sale of Inventory in accordance with its past business practices.

(b) Collection of Accounts. Except as otherwise provided in this Agreement, each
Grantor will, consistent with its past business practices, collect and enforce, at no expense to
any Secured Party, all amounts due or hereafter due to such Grantor under the Accounts owned by it.

(c) Security Interest in Property to Satisfy Account Debt. If at any time any Grantor
shall take a security interest in any property of an Account Debtor or any other Person to secure
payment and performance of an Account, such Grantor shall promptly assign such security interest to
the Administrative Agent. Such assignment need not be filed of public record unless necessary to
continue the perfected status of the security interest against creditors of and transferees from
the Account Debtor or other Person granting the security interest.

(d) Delivery of Invoices. Such Grantor will deliver to the Administrative Agent,
immediately upon its request after the occurrence and during the continuation of an Event of
Default, duplicate invoices with respect to each Account owned by it bearing such language of
assignment as the Administrative Agent shall specify.

(e) Disclosure of Material Reductions in Accounts. Such Grantor, promptly upon
obtaining knowledge of any event, circumstance or change that has
occurred since the most recent date on which a Borrowing Base Certificate was required to be
delivered pursuant to Section 5.01(e) of the Credit Agreement that would materially reduce the
aggregate amount of Eligible Accounts or result in a material portion of the Eligible Accounts
ceasing to be Eligible Accounts, shall cause the Loan Party Representative to promptly disclose
such fact to the Administrative Agent in writing.

 

8

 

SECTION 4.03. Change of Name or Location; Change of Fiscal Year. Such Grantor shall
not (a) change its name as it appears in official filings in the state of its incorporation or
organization, (b) change its chief executive office, principal place of business or corporate
offices, or the location of its records concerning the Collateral as set forth in the Security
Agreement, (c) change the type of entity that it is, (d) change its organization identification
number, if any, issued by its state of incorporation or other organization or (e) change its state
of incorporation or organization, in each case, unless the Administrative Agent shall have received
at least ten days prior written notice of such change and such Grantor (or the Administrative Agent
on behalf of such Grantor) shall have taken all action reasonably requested by the Administrative
Agent to continue the validity, perfection and priority of any Liens in favor of the Administrative
Agent, on behalf of the Secured Parties, in any Collateral, provided that any new
jurisdiction of organization shall be in the U.S., any State thereof or the District of Columbia.
In connection with any such change permitted under this Section 4.03, Exhibit A hereto
shall be deemed to be amended to reflect such change (effective as of the date of such change).

ARTICLE V

REMEDIES

SECTION 5.01. Remedies. (a) Upon the occurrence, and during the continuance, of an
Event of Default, the Administrative Agent may exercise any or all of the following rights and
remedies:

(i) those rights and remedies provided in this Agreement, the Credit Agreement or any
other Loan Document, provided that this Section 5.01(a) shall not be understood to
limit any rights or remedies available to the Secured Parties prior to an Event of Default;

(ii) those rights and remedies available to a secured party under the UCC (whether or
not the UCC applies to the affected Collateral) or under any other applicable law
(including, without limitation, any law governing the exercise of a bank’s right of setoff
or bankers’ lien) when a debtor is in default under a security agreement; and

(iii) institute a Cash Dominion Period as per the terms of Section 7.03.

(b) The Administrative Agent, on behalf of the Secured Parties, may comply with any applicable
state or federal law requirements in connection with a
disposition of the Collateral and such compliance will not be considered to adversely affect
the commercial reasonableness of any sale of the Collateral.

 

9

 

(c) The Administrative Agent shall have the right upon any such public sale or sales and, to
the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of
the Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity
redemption, which equity redemption the Grantor hereby expressly releases.

(d) The Administrative Agent may, if it so elects, seek the appointment of a receiver or
keeper to enforce any of the Administrative Agent’s remedies (for the benefit of the Secured
Parties) with respect to such appointment without prior notice or hearing as to such appointment.

(e) Notwithstanding the foregoing, no Secured Party shall be required to (i) make any demand
upon, or pursue or exhaust any of their rights or remedies against, any Grantor, any other obligor,
guarantor, pledgor or any other Person with respect to the payment of the Secured Obligations or to
pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any
direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured
Obligations or resort to the Collateral or any such guarantee in any particular order or (iii)
effect a public sale of any Collateral.

SECTION 5.02. Grantor’s Obligations Upon an Event of Default. Without limiting the
foregoing or any other inspection rights the Administrative Agent may have under the Loan
Documents, upon the request of the Administrative Agent after the occurrence and during the
continuance of an Event of Default, each Grantor will:

(a) assemble and make available to the Administrative Agent all books and records relating to
the Collateral at any place or places specified by the Administrative Agent, whether at a Grantor’s
premises or elsewhere;

(b) permit the Administrative Agent, by the Administrative Agent’s representatives and agents,
to enter, occupy and use any premises where the books and records relating to the Collateral are
located, to make and remove copies of all or any part of such books and records, without any
obligation to pay the Grantor for such use and occupancy; and

(c) at its own expense, cause the independent certified public accountants then engaged by
each Grantor to prepare and deliver to the Administrative Agent, promptly upon the Administrative
Agent’s request, the following reports with respect to the Accounts of such Grantor: (i) a
reconciliation of all such Accounts; (ii) an aging of all such Accounts; (iii) trial balances; and
(iv) a test verification of all such Accounts.

 

10

 

ARTICLE VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

SECTION 6.01. Account Verification. The Administrative Agent may at any time, in the
name of the applicable Grantor or, after the occurrence, and during the continuance, of an Event of
Default, in the Administrative Agent’s own name or in the name of a nominee of the Administrative
Agent, communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any
such Grantor to verify with such Account Debtors, to the Administrative Agent’s reasonable
satisfaction, any information relating to the existence, amount, terms of, and any other material
matter relating to, the Accounts of such Account Debtors.

SECTION 6.02. Authorization for Secured Party to Take Certain Action. (a) Each
Grantor hereby appoints the Administrative Agent the attorney-in-fact of such Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action and executing any
instrument that the Administrative Agent may reasonably deem necessary or advisable to accomplish
the purposes hereof, which appointment is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, the Administrative Agent shall have the right with full
power of substitution either in the name of such Grantor or, after the occurrence, and during the
continuance, of an Event of Default, in the Administrative Agent’s name, to (i) file Financing
Statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to
maintain the perfection and priority of the Administrative Agent’s security interest in the
Collateral, (ii) endorse and collect any cash proceeds of the Collateral of such Grantor, (iii)
file a carbon, photographic or other reproduction of this Agreement or any Financing Statement as a
financing statement and to file any other financing statement or amendment of a financing statement
(which does not add new collateral or add a debtor) in such offices as the Administrative Agent in
its sole discretion deems necessary or desirable to perfect and to maintain the perfection and
priority of the Security Interest, (iv) apply the proceeds of any Collateral of such Grantor
received by the Administrative Agent to the Secured Obligations as provided in Section 2.08(b) or
Section 2.16(b) of the Credit Agreement, as applicable, (v) discharge past due taxes, assessments,
charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted under
Section 4.01(g)), (vi) contact the Account Debtors of such Grantor for any reason, (vii) demand
payment or enforce payment of the Accounts in the name of the Administrative Agent or such Grantor,
(viii) endorse any and all checks, drafts and other instruments for the payment of money relating
to the Accounts, (ix) sign such Grantor’s name on any invoice or bill of lading relating to the
Accounts, drafts against any Account Debtor or assignments and verifications of Accounts, (x)
exercise all of such Grantor’s rights and remedies with respect to the collection of the Accounts
and any other Collateral, (xi) settle, adjust, compromise, extend or renew the Accounts or any
legal proceedings brought to collect Accounts, (xii) prepare, file and sign such Grantor’s name on
a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor,
(xiii) prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction
of Lien or similar document in connection with the Accounts, (xiv) change the address for delivery
of mail relating to the Accounts of such Grantor to such address
as the Administrative Agent may designate and to receive, open and dispose of

 

11

 

 all such mail
addressed to such Grantor, (xv) use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral and (xvi) do all other acts and
things necessary to carry out the purposes of this Agreement, as fully and completely as though the
Administrative Agent were the absolute owner of the Collateral for all purposes, provided
that (A) nothing herein contained shall be construed as requiring or obligating the Administrative
Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Administrative Agent, or to present or file any claim or notice, or to take any
action with respect to the Collateral or any part thereof or the moneys due or to become due in
respect thereof or any property covered thereby and such Grantor agrees to reimburse the
Administrative Agent on demand for any payment made or any expense incurred by the Administrative
Agent in connection with any of the foregoing and (B) this authorization shall not relieve such
Grantor of any of its obligations under this Agreement or under the Credit Agreement. The
Administrative Agent and the other Secured Parties shall be accountable only for amounts actually
received as a result of the exercise of the powers granted to them herein, and neither they nor
their officers, directors, employees or agents shall be responsible to any Grantor for any act or
failure to act hereunder, except for their own gross negligence or wilful misconduct.
Notwithstanding the foregoing, if the Administrative Agent or a Secured Party determines (after
being given notice of such) that any portion of a payment from an Account Debtor received by it
constitutes the excess portion of a joint remittance from such Account Debtor (which such portion
was not owed to a Grantor but paid to the joint order of a Grantor and a non-Affiliated contractor
or sub-contractor in respect of an Account), the Administrative Agent or other Secured Party, as
applicable, shall promptly remit such excess portion of the payment to the Grantors.

(b) All acts of said attorney or designee are hereby ratified and approved. The powers
conferred on the Administrative Agent, for the benefit of the Secured Parties, under this
Section 6.02 are solely to protect the Administrative Agent’s interests in the Collateral and shall
not impose any duty upon the Administrative Agent or any other Secured Party to exercise any such
powers. The Administrative Agent agrees that, except for the powers granted in
Sections 6.02(a)(i), (a)(iii) or (a)(v), it shall not exercise any power or authority granted to it
unless an Event of Default has occurred and is continuing, provided, however, that
the Administrative Agent may exercise the powers granted in Sections 6.02(a)(ii), (a)(iv) and
(a)(viii) at any time during the continuance of a Cash Dominion Period.

ARTICLE VII

COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS

SECTION 7.01. Collection of Accounts. (a) On or before the date that is 60 days
following the Effective Date, each Grantor shall execute and deliver to the Administrative Agent
Deposit Account Control Agreements for each Collateral Deposit
Account maintained by such Grantor as of the Effective Date. After the Effective Date, each
Grantor will comply with the terms of Section 7.02.

 

12

 

(b) Within 45 days after the Effective Date, each Grantor shall direct all of its Account
Debtors to forward payments directly to one or more of the Collateral Deposit Accounts of such
Grantor; provided, however, that with respect to the Account Debtors of the
Specified L&W Grantors, the Specified L&W Grantors shall not be required to so direct such Account
Debtors (and, accordingly, shall not be deemed to have breached this Section 7.01(b)) so long as
the Specified L&W Grantors each deposit any cash, checks or other similar payments constituting
payments made with respect to any Account of such Account Debtors into a Collateral Deposit Account
in accordance with the last sentence of this Section 7.01(b). If any Grantor (other than a
Specified L&W Grantor) should refuse or neglect to notify any Account Debtor to forward payments
with respect to such Account Debtor’s Accounts directly to a Collateral Deposit Account following
its receipt of a written request to do so from the Administrative Agent, the Administrative Agent
shall, notwithstanding the language set forth in Section 6.02(b), be entitled to make such
notification directly to Account Debtor. If notwithstanding the foregoing instructions, any
Grantor receives any cash, checks or other similar payments constituting payments made with respect
to any Account, such Grantor shall receive such cash, checks or other similar payments as the
Administrative Agent’s trustee and shall promptly (but in no event later than two Business Days
after receipt thereof) deposit all such cash, checks or other similar payments into a Collateral
Deposit Account.

SECTION 7.02. Covenant Regarding New Deposit Accounts. No Grantor may open a
Collateral Deposit Account unless the bank or financial institution at which such Grantor seeks to
open such Collateral Deposit Account has entered into a Deposit Account Control Agreement in order
to give the Administrative Agent Control of such Collateral Deposit Account, provided that
(a) no such Deposit Account Control Agreement will be required to be effective prior to the date
that is 60 days following the Effective Date and (b) after the conclusion of such 60-day period,
the Administrative Agent may, in its discretion, with respect to the Collateral Deposit Accounts of
any Collateral Deposit Account Bank that is not subject to a Deposit Account Control Agreement, (i)
defer delivery of a Deposit Account Control Agreement with respect to such Collateral Deposit
Accounts and (ii) require such Grantor to replace such Collateral Deposit Accounts with one or more
new Collateral Deposit Accounts opened and maintained with a bank or financial institution that is
subject to a Deposit Account Control Agreement (it being understood and agreed that, prior to the
opening of such new Collateral Deposit Accounts referenced in the immediately preceding clause (ii)
(but after the conclusion of the 60-day period following the Effective Date), the Administrative
Agent shall be entitled to establish a Reserve with respect to those Collateral Deposit Account
referenced in the immediately preceding clause (i) for which a Deposit Account Control Agreement
has not been executed and delivered). Upon the opening of any new Collateral Deposit Account in
accordance with this Section 7.02, the Loan Party Representative shall deliver to the
Administrative Agent a supplement to Exhibit B, setting forth the information with respect
to such Collateral Deposit Account required therein. Upon the closing of any Collateral Deposit
Account, the Loan Party
Representative shall deliver to the Administrative Agent a supplement to Exhibit B
reflecting such closing. In the case of Collateral Deposit Accounts maintained with any Lender,
the terms of each Deposit Account Control Agreement entered into with such Lender shall be subject
to the provisions of the Credit Agreement regarding setoff.

 

13

 

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

(b) All amounts deposited in the Collection Account pursuant to this Section 7.03 shall be
deemed received by the Administrative Agent in accordance with Section 2.16(b) of the Credit
Agreement; provided, that, notwithstanding the foregoing, if the Administrative Agent or a
Secured Party determines (after being given notice of such) that any portion of a payment from an
Account Debtor received by it constitutes the excess portion of a joint remittance from such
Account Debtor (which such

 

14

 

portion was not owed to a Grantor but paid to the joint order of a Grantor and a non-Affiliated contractor
or sub-contractor in respect of an Account), the Administrative Agent or other Secured Party, as
applicable, shall promptly remit such excess portion of the payment to the Grantors. The balance,
if any, in the Collection Account after all the Secured Obligations on any day during a Cash
Dominion Period have been satisfied shall be deposited by the Administrative Agent into the Parent
Borrower’s general operating account as instructed by the Loan Party Representative. If, at the
time any Termination Period commences, the Collection Account has a balance, such balance shall be
deposited by the Administrative Agent into the Parent Borrower’s general operating account as
instructed by the Loan Party Representative.

(c) To the extent that the terms of any Deposit Account Control Agreement are inconsistent
with the terms of this Section 7.03 with respect to the rights of the Administrative Agent and the
Grantors, the terms of this Section 7.03 shall control.

ARTICLE VIII

GENERAL PROVISIONS

SECTION 8.01. Waivers. Each Grantor hereby waives notice of the time and place of any
public sale or the time after which any private sale or other disposition of all or any part of the
Collateral may be made. To the extent such notice may not be waived under applicable law, any
notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article
IX, at least ten days prior to (a) the date of any such public sale or (b) the time after which any
such private sale or other disposition may be made. To the maximum extent permitted by applicable
law, each Grantor waives all claims, damages and demands against any Secured Party arising out of
the repossession, retention or sale of the Collateral, except as may arise solely out of the gross
negligence or wilful misconduct of such Secured Party as finally determined by a court of competent
jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives
and relinquishes the benefit and advantage of, and covenants not to assert against any Secured
Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any
and all rights or defenses it may have as a surety now or hereafter existing which, but for this
provision, might be applicable to the sale of any Collateral made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this Agreement, or
otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of
any kind in connection with this Agreement or any Collateral.

SECTION 8.02. Limitation on Administrative Agent’s and Lenders’ Duty with Respect to the
Collateral. Except as imposed under applicable law, no Secured Party shall have any other duty
as to any Collateral in its possession or control or in the possession or control of any agent or
nominee of such Secured Party, or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto. To the extent that applicable law imposes
duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each
Grantor acknowledges and agrees that it is commercially

 

15

 

reasonable for the Administrative Agent (a) to
fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for
disposition, (b) to obtain or, if not required by other law, to fail to obtain governmental or
third party consents for the collection or disposition of Collateral to be collected or disposed
of, (c) to fail to exercise collection remedies against Account Debtors or other Persons obligated
on Collateral or to remove Liens on or any adverse claims against Collateral, (d) to exercise
collection remedies against Account Debtors and other Persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists, (e) to advertise
dispositions of Collateral through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (f) to contact other Persons, whether or not in the same
business as such Grantor, for expressions of interest in acquiring all or any portion of such
Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the Collateral is of a specialized nature, (h) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of
assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim
disposition warranties, such as title, possession or quiet enjoyment, (k) to purchase insurance or
credit enhancements to insure the Administrative Agent against risks of loss, collection or
disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the
collection or disposition of Collateral, or (l) to the extent deemed appropriate by the
Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and
other professionals to assist the Administrative Agent in the collection or disposition of any of
the Collateral. Each Grantor acknowledges that the purpose of this Section 8.02 is to provide
non-exhaustive indications of what actions or omissions by the Administrative Agent would be
commercially reasonable in the Administrative Agent’s exercise of remedies against the Collateral
and that other actions or omissions by the Administrative Agent shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section 8.02. Without limitation
upon the foregoing, nothing contained in this Section 8.02 shall be construed to grant any rights
to any Grantor or to impose any duties on the Administrative Agent that would not have been granted
or imposed by this Agreement or by applicable law in the absence of this Section 8.02.

SECTION 8.03. Compromises and Collection of Collateral. The Grantors and the
Administrative Agent recognize that setoffs, counterclaims, defenses and other claims may be
asserted by obligors with respect to certain of the Accounts, that certain of the Accounts may be
or become uncollectible in whole or in part and that the expense and probability of success in
litigating a disputed Account may exceed the amount that reasonably may be expected to be recovered
with respect to an Account. In view of the foregoing, each Grantor agrees that the Administrative
Agent may at any time and from time to time, if an Event of Default has occurred and is continuing,
and subject to applicable law, compromise with the obligor on any Account, accept in full payment
of any Account such amount as the Administrative Agent in its sole discretion shall determine or
abandon any Account, and any such action by the Administrative Agent shall be commercially
reasonable so long as the Administrative Agent acts in good faith based on information known to it
at the time it takes any such action.

 

16

 

SECTION 8.04. Secured Party Performance of Debtor Obligations. Without having any
obligation to do so, and, except after the occurrence and during the continuance of an Event of
Default, after having made a request of a Grantor to do so and the Grantor having not complied with
such request to do so as promptly as practicable after receipt of such request, the Administrative
Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this
Agreement and the Grantors shall reimburse the Administrative Agent for any amounts paid by the
Administrative Agent pursuant to this Section 8.04. The Grantors’ obligation to reimburse the
Administrative Agent pursuant to the preceding sentence shall be a Secured Obligation payable on
demand.

SECTION 8.05. Specific Performance of Certain Covenants. Each Grantor acknowledges
and agrees that a breach of any of the covenants contained in Sections 4.01(d), 4.01(e), 4.03,
5.02, or 8.07 or in Article VII will cause irreparable injury to the Secured Parties, that the
Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees,
without limiting the right of the Secured Parties to seek and obtain specific performance of other
obligations of the Grantors contained in this Agreement, that the covenants of the Grantors
contained in the Sections referred to in this Section 8.05 shall be specifically enforceable
against the Grantors.

SECTION 8.06. Dispositions Not Authorized. No Grantor is authorized to sell or
otherwise dispose of the Collateral except as set forth in Section 4.01(d) and notwithstanding any
course of dealing between any Grantor and the Administrative Agent or other conduct of the
Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as
set forth in Section 4.01(d)) shall be binding upon the Secured Parties unless such authorization
is in writing signed by the Administrative Agent.

SECTION 8.07. No Waiver; Amendments; Cumulative Remedies. No failure, delay or
omission of any Secured Party to exercise any right or remedy granted under this Agreement shall
impair such right or remedy or be construed to be a waiver of any Default or an acquiescence
therein, and any single or partial exercise of any such right or remedy shall not preclude any
other or further exercise thereof or the exercise of any other right or remedy. No waiver,
amendment or other variation of the terms, conditions or provisions of this Agreement whatsoever
shall be valid unless in writing signed by the Administrative Agent with the concurrence or at the
direction of the Lenders required under Section 9.02 of the Credit Agreement and then only to the
extent in such writing specifically set forth. All rights and remedies contained in this Agreement
or by law afforded shall be cumulative and all shall be available to the Secured Parties until the
Obligations have been paid and performed in full.

SECTION 8.08. Limitation by Law; Severability of Provisions. All rights, remedies and
powers provided in this Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this Agreement are
intended to be subject to all applicable mandatory provisions of law that may be controlling and to
be limited to the extent necessary so that they shall not render this Agreement invalid,
unenforceable, illegal or not entitled to be
recorded or registered, in whole or in part. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability without affecting the
validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

17

 

SECTION 8.09. Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Grantor for liquidation or
reorganization, should any Grantor become insolvent or make an assignment for the benefit of any
creditor or creditors or should a receiver or trustee be appointed for all or any significant part
of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any
obligee of the Obligations, whether as a “voidable preference”, “fraudulent conveyance” or
otherwise, all as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or
returned.

SECTION 8.10. Benefit of Agreement. The terms and provisions of this Agreement shall
be binding upon and inure to the benefit of the Grantors, the Secured Parties and their respective
successors and assigns (including all persons who become bound as a debtor to this Agreement),
except that no Grantor shall have the right to assign its rights or delegate its obligations under
this Agreement or any interest herein, without the prior written consent of the Administrative
Agent. No sales of participations, assignments, transfers or other dispositions of any agreement
governing the Secured Obligations or any portion thereof or interest therein shall in any manner
impair the Lien granted to the Administrative Agent, for the benefit of the Secured Parties.

SECTION 8.11. Survival of Representations. All representations and warranties of the
Grantors contained in this Agreement shall survive the execution and delivery of this Agreement.

SECTION 8.12. Headings. The title of and section headings in this Agreement are for
convenience of reference only, and shall not govern the interpretation of any of the terms and
provisions of this Agreement.

SECTION 8.13. Termination. (a) This Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Secured Obligations outstanding)
until (i) the Credit Agreement has terminated pursuant to its express terms and (ii) all of the
Obligations (as distinguished from the Secured Obligations) have been paid and performed in full
and no commitments of the Administrative Agent or the Lenders which would give rise to any
Obligations are outstanding.

 

18

 

(b) A Grantor shall automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Grantor shall be automatically released upon the consummation of
any transaction permitted by, or that would not otherwise result in a Default under, the Credit
Agreement as a result of which such Grantor ceases to be a Domestic Material Subsidiary that is a
wholly-owned Subsidiary, provided that the Required Lenders shall have consented to such
transaction (to the extent required by the Credit Agreement) and the terms of such consent did not
provide otherwise.

(c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted under
the Credit Agreement (other than a sale or other transfer to a Grantor), or upon the effectiveness
of any written consent to the release of the Security Interest granted hereby in any Collateral
pursuant to Section 9.02 of the Credit Agreement, the Security Interest in such Collateral shall be
automatically released.

(d) In connection with any termination or release pursuant to paragraph (a), (b) or (c) of
this Section 8.13, the Administrative Agent shall (i) execute and deliver to any Grantor, at such
Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such
termination or release and (ii) with respect to any Collateral Deposit Account of any Grantor that
is so released from its obligations hereunder, deliver to each Collateral Deposit Account Bank that
has entered into a Deposit Account Control Agreement with respect to the Collateral Deposit
Accounts of such Grantor a written notice of termination of each such Deposit Account Control
Agreement in accordance with the terms of such Deposit Account Control Agreement. The
Administrative Agent hereby consents to the applicable Grantor filing all UCC termination
statements corresponding to any Collateral that is so released if the Administrative Agent has
failed to file such UCC termination statements within 5 Business Days of notice of such release
delivered by such Grantor to the Administrative Agent. Any execution and delivery of documents
pursuant to this Section 8.13 shall be without recourse to or warranty by the Administrative Agent.

SECTION 8.14. Additional Subsidiaries. Pursuant to Section 5.10(a) of the Credit
Agreement, certain Domestic Material Subsidiaries that were not in existence or not Domestic
Material Subsidiaries on the date of the Credit Agreement, as well as each Subsidiary that is
designated as a Subsidiary Borrower after the date of the Credit Agreement, are required to enter
into this Agreement as a Grantor upon becoming such a Domestic Material Subsidiary or Subsidiary
Borrower, as the case may be. Upon execution and delivery by the Administrative Agent and a
Subsidiary of an instrument in the form of Exhibit E hereto (each such instrument, a
“Supplement”), such Subsidiary shall become a Grantor hereunder with the same force and
effect as if originally named as a Grantor herein. The execution and delivery of any such
Supplement shall not require the consent of any other Grantor hereunder. The rights and
obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor as a party to this Agreement.

 

19

 

SECTION 8.15. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever currency) at any time owing
by such Lender or any such Affiliate to or for the credit or the account of any Grantor against any
of and all obligations of such Grantor now or hereafter existing under this Agreement held by such
Lender, irrespective of whether or not such Lender shall have made any demand hereunder and
although such obligations may be unmatured or are owed to a branch or office of such Lender
different from the branch or office holding such deposit or obligation. The applicable Lender
shall notify the Loan Party Representative and the Administrative Agent of such set-off or
application, provided that any failure to give or any delay in giving such notice shall not
affect the validity of any such set-off or application under this Section 8.15. The rights of each
Lender under this Section 8.15 are in addition to other rights and remedies (including other rights
of setoff) which such Lender may have.

SECTION 8.16. Lien Absolute. All rights of the Administrative Agent hereunder, and
all obligations of each Grantor hereunder, shall be absolute and unconditional irrespective of:

(a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document or
any other agreement or instrument governing or evidencing any Secured Obligations;

(b) any change in the time, manner or place of payment of, or in any other term of, all or any
part of the Secured Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other agreement or instrument
governing or evidencing any Secured Obligations;

(c) any exchange, release or non-perfection of any other Collateral, or any release or
amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured
Obligations;

(d) the insolvency of any Person; or

(e) any other circumstance which might otherwise constitute a defense available to, or a
discharge of, any Grantor.

SECTION 8.17. Release. Each Grantor consents and agrees that the Administrative Agent
may at any time, or from time to time, in its discretion:

(a) as contemplated by the Credit Agreement and in conformance therewith, renew, extend or
change the time of payment, and/or the manner, place or terms of payment, of all or any part of the
Secured Obligations; and

(b) exchange, release and/or surrender all or any of the Collateral or any part thereof, by
whomsoever deposited, which is now or may hereafter be held by the Administrative Agent in
connection with all or any of the Secured Obligations; all in such manner and upon such terms as
the Administrative Agent may deem proper, and without
notice to or further assent from any Grantor, it being hereby agreed that each Grantor shall
be and remain bound upon this Agreement, irrespective of the value or condition of any of the
Collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender,
release, renewal or extension, and notwithstanding also that the Secured Obligations may, at any
time, exceed the aggregate principal amount thereof set forth in the Credit Agreement, or any other
agreement governing any Secured Obligations.

 

20

 

SECTION 8.18. Entire Agreement. This Agreement and the other Loan Documents embody
the entire agreement and understanding between the Grantors and the Administrative Agent relating
to the Collateral and supersede all prior agreements and understandings between the Grantors and
the Administrative Agent relating to the Collateral.

SECTION 8.19. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement shall be construed in accordance with and governed by the law of the State
of New York.

(b) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern District of New York,
and any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any court referred to in paragraph (b) of this Section 8.19. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.

 

21

 

SECTION 8.20. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 8.20.

SECTION 8.21. Taxes and Expenses; Indemnity. (a) Any taxes (including income taxes
but excluding any Excluded Taxes) payable or ruled payable by Federal or State authority in respect
of this Agreement shall be paid by the Grantors, together with interest and penalties, if any. The
parties hereto agree that the Administrative Agent and each of the other Secured Parties shall be
entitled to reimbursement of its reasonable expenses incurred hereunder as provided in and subject
to the limitations set forth in Section 9.03(a) of the Credit Agreement.

(b) Without limitation of any of its indemnification obligations under the other Loan
Documents, each Grantor shall, jointly and severally with each other Grantor, indemnify each
Indemnitee against, and hold each Indemnitee harmless from, any and all out-of-pocket losses,
claims, damages, liabilities and related reasonable expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee by any third party or by any Grantor arising out of, in connection with, or as a result
of (i) the execution and delivery of this Agreement or any other agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective obligations
hereunder or the consummation of any transactions contemplated hereby or (ii) any actual or
prospective claim, litigation, investigation or proceeding relating to any of the foregoing or to
the Collateral, whether based on contract, tort or any other theory, whether brought by a third
party or by any Grantor and regardless of whether any Indemnitee is a party thereto,
provided that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.

(c) Any amounts payable pursuant to this Section 8.21 shall be additional Secured Obligations
secured hereby and by the other Collateral Documents. The provisions of this Section 8.21 shall
remain operative and in full force and effect regardless of the termination of this Agreement or
any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of
any of the Secured Obligations, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document or any investigation made by or on behalf of the
Administrative Agent or any other Secured Party. All amounts due under this Section 8.21 shall be
payable not later than three Business Days after written demand therefor setting forth the basis
for such claim in reasonable detail.

 

22

 

SECTION 8.22. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart.

ARTICLE IX

NOTICES

SECTION 9.01. Sending Notices. Any notice required or permitted to be given under
this Agreement shall be made in accordance with, and deemed to be received pursuant to the terms
of, Section 9.01 of the Credit Agreement, in each case addressed to the Loan Party Representative
(with respect to notices to any Grantor) and to the Administrative Agent and the Lenders at the
addresses set forth in accordance with Section 9.01 of the Credit Agreement.

ARTICLE X

THE ADMINISTRATIVE AGENT

JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the Lenders hereunder
pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed by the
parties to this Agreement that any authority conferred upon the Administrative Agent hereunder is
subject to the terms of the delegation of authority made by the Lenders to the Administrative Agent
pursuant to the Credit Agreement, and that the Administrative Agent has agreed to act (and any
successor Administrative Agent shall act) as such hereunder only on the express conditions
contained in such Article VIII. Any successor Administrative Agent appointed pursuant to Article
VIII of the Credit Agreement shall be entitled to all the rights, interests and benefits of the
Administrative Agent hereunder.

[Signature Page Follows]

 

23

 

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

	 	 	 	 	 	 	 	 	 
	 	 	USG CORPORATION, as Loan Party Representative
	 
	 	 	 	 	 	 	 	 
	 	 	by	 	/s/ Karen L. Leets	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Karen L. Leets	 	 
	 

	 	 	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EACH OF THE SUBSIDIARIES LISTED 
ON SCHEDULE I HERETO,
	 
	 	 	 	 	 	 	 	 
	 	 	by	 	/s/ Karen L. Leets	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Karen L. Leets	 	 
	 

	 	 	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., as 
Administrative Agent
	 
	 	 	 	 	 	 	 	 
	 	 	by	 	/s/ Peter S. Predun	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Peter S. Predun	 	 
	 

	 	 	 	Title:
	 	Executive Director	 	 

 

 

 

Schedule I to the Pledge

and Security Agreement

SUBSIDIARY GRANTORS

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

 

 

 

EXHIBIT A

(See Sections 3.02, 3.03 and 9.01 of Security Agreement)

NOTICE ADDRESS FOR ALL GRANTORS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	c/o	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	Facsimile:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

INFORMATION OF {Insert name of applicable Grantor}

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

	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	VII.	 	Other Places of Business:                                              
                       
                                

 

 

 

INFORMATION OF {Insert name of applicable Grantor}

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

	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	VII.	 	Other Places of Business:        
                    
                    
                    
                    
             

[NOTE: ADD ADDITIONAL INFORMATION PAGE FOR EACH GRANTOR]

 

 

 

EXHIBIT B

(See Sections 3.04 and 7.01(a) of Security Agreement)

COLLATERAL DEPOSIT ACCOUNTS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Location of	 	 	 	 
	Name of Grantor	 	Name of Institution	 	 	Institution	 	 	Account Number	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

 

 

 

EXHIBIT C

PERFECTION CERTIFICATE

Reference is made to the Credit Agreement dated as of September 9, 2008 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among USG
Corporation, a Delaware corporation, in its capacity as a Borrower (in such capacity, the
“Parent Borrower”) and in its capacity as the Loan Party Representative, the Subsidiary
Borrowers from time to time party thereto, the Lenders from time to time party thereto and JPMorgan
Chase Bank, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”).
Capitalized terms used but not defined herein have the meanings assigned in the Credit Agreement or
the Security Agreement referred to therein, as applicable. For purposes of this Perfection
Certificate (this “Certificate”), “Grantors” shall mean each Domestic Material
Subsidiary that is a wholly-owned Subsidiary.

The undersigned, a Financial Officer of the Parent Borrower, hereby certify to the
Administrative Agent and each other Secured Party as follows:

1. Names. (a) The exact legal name of each Grantor, as such name appears in its
respective certificate of formation, is as follows:

(b) Set forth below is each other legal name each Grantor has had in the past two years, together
with the date of the relevant change:

(c) Except as set forth in Schedule 1 hereto, no Grantor has changed its identity or corporate
structure in any way within the past two years. Changes in identity or corporate structure would
include mergers, consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of organization. If any such change has occurred, include in Schedule 1 the
information required by Sections 1 and 2 of this certificate as to each acquiree or constituent
party to a merger or consolidation.

(d) The following is a list of all other names (including trade names or similar appellations) used
by each Grantor or any of its divisions or other business units in connection with the conduct of
its business or the ownership of its properties at any time during the past two years:

(e) Set forth below is the Organizational Identification Number, if any, issued by the jurisdiction
of formation of each Grantor that is a registered organization:

(f) Set forth below is the Federal Taxpayer Identification Number of each Grantor:1

 

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

 

 

 

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

	 	 	 	 	 	 	 
	Grantor

	 	Mailing Address
	 	County
	 	State
	 
	 	 
	 	 
	 	 

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

	 	 	 	 	 	 	 
	Grantor
	 	Mailing Address
	 	County
	 	State
	 
	 	 
	 	 
	 	 

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

	 	 	 
	Grantor:
	 	Jurisdiction:
	 
	 	 

3. Unusual Transactions. All Accounts have been originated by the Grantors in the ordinary
course of business.

4. File Search Reports. File search reports have been obtained from each Uniform
Commercial Code filing office identified with respect to such Grantor in Section 2 hereof, and such
search reports reflect no liens against any of the Collateral other than those permitted under the
Credit Agreement.

5. UCC Filings. Financing statements in substantially the form of Schedule 5 hereto have
been prepared for filing in the proper Uniform Commercial Code filing office in the jurisdiction in
which each Grantor is located.

6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting forth, with
respect to the filings described in Section 5 above, each filing and the filing office in which
such filing is to be made.

7. Deposit Accounts. Attached hereto as Schedule 7 is a true and correct list of
Collateral Deposit Accounts maintained by each Grantor, including the name and address of the
depositary institution, the type of account and the account number.

 

 

 

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

	 	 	 	 	 	 	 	 	 
	 	 	USG CORPORATION,
	 
	 	 	 	 	 	 	 	 
	 

	 	by	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	Financial Officer	 	 

 

 

 

EXHIBIT D

(See Section 3.01 of Security Agreement)

OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

 

 

 

EXHIBIT E

SUPPLEMENT NO.
 _____ 

dated as of [ ] (this
“Supplement”), to the Pledge and Security Agreement dated as of
September 9, 2008 (as amended, supplemented or otherwise modified from
time to time, the “Security Agreement”), among USG Corporation, a
Delaware corporation, in its capacity as the Loan Party Representative (in
such capacity, the “Loan Party Representative”), the Subsidiaries
of USG Corporation from time to time party thereto (the “Grantors”
and each a “Grantor”) and JPMorgan Chase Bank, N.A., a national
banking association corporation, as Administrative Agent (in such
capacity, the “Administrative Agent”) for the lenders party to the
Credit Agreement referred to below.

A. Reference is made to the Credit Agreement dated as of September 9, 2008 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among USG
Corporation, in its capacity as a Borrower, the Loan Party Representative, the Subsidiary Borrowers
from time to time party thereto, the Lenders from time to time party thereto and the Administrative
Agent.

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement and the Security Agreement.

C. The Grantors have entered into the Security Agreement in order to induce the Lenders to
make Loans. Section 8.14 of Security Agreement provides that certain Subsidiaries must become
Grantors under the Security Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned such Subsidiary (the “New Subsidiary”) is executing this
Supplement in accordance with the requirements of the Credit Agreement to become a Grantor under
the Security Agreement in order to induce the Lenders to make additional Loans and as consideration
for Loans previously made.

Accordingly, the Administrative Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 8.14 of the Security Agreement, the New Subsidiary by
its signature below becomes a Grantor under the Security Agreement with the same force and effect
as if originally named therein as a Grantor and the New Subsidiary hereby (a) agrees to all the
terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and
(b) represents and warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct on and as of the date hereof. In furtherance of the foregoing, the
New Subsidiary, as security for the payment and performance in full of the Secured Obligations,
does hereby
create and grant to the Administrative Agent, its successors and assigns, for the benefit of
the Secured Parties, their successors and assigns, a security interest in and Lien on all of the
New Subsidiary’s right, title and interest in and to the Collateral of the New Subsidiary. Each
reference to a “Grantor” in the Security Agreement shall be deemed to include the New Subsidiary.
The Security Agreement is hereby incorporated herein by reference.

 

 

 

SECTION 2. The New Subsidiary represents and warrants to the Administrative Agent and the
other Secured Parties that this Supplement has been duly authorized, executed and delivered by it
and constitutes its legal, valid and binding obligation, enforceable against it in accordance with
its terms.

SECTION 3. This Supplement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Supplement shall become effective when the
Administrative Agent shall have received a counterpart of this Supplement that bears the signature
of the New Subsidiary and the Administrative Agent has executed a counterpart hereof. Delivery of
an executed signature page to this Supplement by facsimile or electronic transmission (including
Adobe PDF file) shall be as effective as delivery of a manually signed counterpart of this
Supplement.

SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth on
Schedule I attached hereto is the true and correct legal name of the New Subsidiary, its
state of organization, the organizational number issued to it by its state of organization, its
federal employer identification number and the location of its place of business (if it has only
one) or its chief executive office (if it has more than one place of business) and the location of
any other place of business of such New Subsidiary and (b) set forth on Schedule II
attached hereto is a true and correct schedule of the location of any and all Collateral of the New
Subsidiary and a complete list of all Collateral Deposit Accounts maintained by such New
Subsidiary, together with applicable identifying information for such Collateral Deposit Accounts .
The information set forth on such Schedule I shall be deemed to supplement Exhibit
A to the Security Agreement, effective as of the date hereof. The information set forth on
such Schedule II in respect of Collateral Deposit Accounts shall be deemed to supplement
Exhibit B to the Security Agreement, effective as of the date hereof.

SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in
full force and effect.

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.

 

 

 

SECTION 7. In case any one or more of the provisions contained in this Supplement should be
held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and in the Security
Agreement shall not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of the invalid, illegal
or unenforceable provisions.

SECTION 8. All communications and notices hereunder shall be in writing and given as provided
in Section 9.01 of the Security Agreement.

SECTION 9. The New Subsidiary agrees to reimburse the Administrative Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other
charges and disbursements of counsel for the Administrative Agent.

 

 

 

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

	 	 	 	 	 	 	 
	 	 	[NAME OF NEW SUBSIDIARY],
	 
	 	 	 	 	 	 
	 

	 	by	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,
	 	 	as Administrative Agent,
	 
	 	 	 	 	 	 
	 

	 	by	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

 

 

 

Schedule I to

Supplement No. __ to

the Pledge and Security

Agreement

INFORMATION OF {Insert name of applicable Grantor}

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

	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	VII.	 	Other Places of Business:       
                   
                   
                   
                   
                  

 

 

 

Schedule II to

Supplement No. __ to

the Pledge and Security

Agreement

LOCATION OF COLLATERAL

	 	 	 
	Description
	 	Location
	 
	 	 

COLLATERAL DEPOSIT ACCOUNTS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Location of	 	 	 	 
	Name of Grantor	 	Name of Institution	 	 	Institution	 	 	Account Number

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]