Exhibit 10.58

SECURITY AGREEMENT

between

LARSEN AND BOWMAN HOLDINGS LTD.,

as Pledgor

and

RB TRADEMARK HOLDCO, LLC,

as Secured Party

dated

June 30, 2013

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS AND INTERPRETATION

     2   

Section 1.01 Definitions

     2   

Section 1.03 Resolution of Drafting Ambiguities

     3   

Section 1.04 Schedules

     3   

ARTICLE II GRANT OF SECURITY INTEREST

     4   

Section 2.01 Grant of Security Interest

     4   

Section 2.02 Filings

     4   

ARTICLE III PERFECTION AND FURTHER ASSURANCES

     5   

Section 3.01 Maintenance of Perfected Security Interest

     5   

Section 3.02 Further Assurances

     5   

ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS

     5   

Section 4.01 Representations

     5   

Section 4.02 Ownership of Property and No Other Liens

     6   

Section 4.03 Perfected First Priority Security Interest

     7   

Section 4.04 No Transfer of Pledged Collateral

     7   

Section 4.05 Claims Against Pledged Collateral

     7   

Section 4.06 Other Financing Statements

     7   

Section 4.07 Approvals

     7   

Section 4.08 Pledged Collateral Information

     8   

ARTICLE V PLEDGED COLLATERAL

     8   

Section 5.01 Intellectual Property License

     8   

Section 5.02 Dealing With Intellectual Property

     8   

Section 5.03 Intellectual Property Litigation

     9   

ARTICLE VI REMEDIES

     9   

Section 6.01 Remedies

     9   

Section 6.02 No Waiver and Cumulative Remedies

     11   

Section 6.03 Application of Proceeds

     11   

 

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ARTICLE VII MISCELLANEOUS

     11   

Section 7.01 Performance By Secured Party

     11   

Section 7.02 Power of Attorney

     12   

Section 7.03 Continuing Security Interest and Assignment

     12   

Section 7.04 Termination and Release

     13   

Section 7.05 Modification in Writing

     13   

Section 7.06 Notices

     14   

Section 7.07 Indemnity and Expenses

     14   

Section 7.08 Governing Law, Consent to Jurisdiction and Waiver of Jury Trial

     15   

Section 7.09 Severability of Provisions

     15   

Section 7.10 Counterparts; Integration; Effectiveness

     15   

Section 7.11 No Release

     16   

Section 7.12 Obligations Absolute

     16   

 

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SECURITY AGREEMENT

This SECURITY AGREEMENT, dated June 30, 2013 (as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the
provisions hereof, this “Agreement”) made by and among Larsen and Bowman
Holdings Ltd., a Limited Corporation organized under the laws of British
Columbia (the “Pledgor”), as grantor, pledgor, and assignor, in favor of RB
Trademark Holdco, LLC, a Delaware limited liability company, as pledgee,
assignee and secured party (in such capacities and together with any successors
in such capacities, the “Secured Party”).

RECITALS

The Secured Party, as “Seller”, and Pledgor as “Buyer” are parties to that
certain Acquisition Agreement dated June 30, 2013 (as amended, restated,
supplemented or otherwise modified from time to time, the “Acquisition
Agreement”).

In payment of the purchase price set forth in the Acquisition Agreement, Pledgor
has delivered to the Secured Party a promissory note dated the date hereof in a
principal amount equal to U.S. $1,250,000 (as amended, restated, supplemented or
otherwise modified from time to time, the “Note”; terms used but not otherwise
defined herein that are defined in the Note shall have the meanings given to
them in the Note).

The conditions precedent to the closing of the transactions contemplated by the
Acquisition Agreement (the “Asset Acquisition”) have, prior to or, as of the
date hereof, been satisfied or waived in writing and, accordingly, in exchange
for the payment of the purchase price set forth in the Acquisition Agreement and
the other consideration set forth therein, the Asset Acquisition has been
completed as of the date hereof (the “Closing Date”)

The Pledgor will receive substantial benefits from the execution, delivery and
performance of the obligations under the Acquisition Agreement and is therefore,
willing to enter into this Agreement.

This Agreement is given by the Pledgor in favor of the Secured Party to secure
the payment and performance of the Note.

NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor and the Secured Party hereby agree as follows:

 

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ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.01 Definitions.

(a) Unless otherwise defined herein or in the Acquisition Agreement, capitalized
terms used herein that are defined in the UCC shall have the meanings assigned
to them in the UCC. However, if a term is defined in Article 9 of the UCC
differently than in another Article of the UCC, the term has the meaning
specified in Article 9.

(b) The following terms shall have the following meanings:

“Acquisition Agreement" has the meaning set forth in the first Recital hereof.

“Agreement” has the meaning set forth in the Preamble hereof.

“Claims” means any and all property and other taxes, assessments and special
assessments, levies, fees and all governmental charges imposed upon or assessed
against, and landlords', carriers', mechanics', workmen's, repairmen's,
laborers', materialmen's, suppliers' and warehousemen's Liens and other claims
arising by operation of law against, all or any portion of the Pledged
Collateral.

“Event of Default” has the meaning set forth is Section 5 of the Note.

“First Priority” means, with respect to any Lien purported to be created in any
Pledged Collateral pursuant to this Agreement, such Lien is the most senior lien
to which such Pledged Collateral is subject (subject only to Liens permitted
under the Acquisition Agreement).

“Note” has the meaning set forth in the Recitals hereto.

“Pledged Collateral” has the meaning set forth in Section 2.01.

“Pledgor” has the meaning set forth in the Preamble hereof.

 

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“Related Parties” means, with respect to any Person, such Person's Affiliates
and the directors, officers, employees, partners, agents, trustees,
administrators, managers, advisors and representatives of it and its Affiliates.

“Secured Party” has the meaning set forth in the Preamble hereof.

“Trademarks” means, collectively, with respect to the Pledgor, the trademark
registrations and applications set forth in Schedule 1 hereto, together with the
goodwill connected with the use of and symbolized thereby and all extensions and
renewals thereof and all (i) rights and privileges arising under applicable law
and international treaties and conventions with respect to the Pledgor's use of
any trademarks, (ii) reissues, continuations, extensions and renewals thereof
and amendments thereto, (iii) income, fees, royalties, damages and payments now
and hereafter due and/or payable thereunder and with respect thereto, including
damages, claims and payments for past, present or future infringements thereof,
(iv) rights corresponding thereto throughout the world, (v) rights to sue for
past, present and future infringements thereof and (vi) anything else included
in the IP (as defined in the Acquisition Agreement).

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New Jersey; provided, however, that if by reason of mandatory
provisions of law, any or all of the perfection or priority of the Secured
Party's security interest in any item or portion of the Pledged Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New Jersey, the term “UCC” means the Uniform Commercial Code
as in effect from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or priority and for purposes of
definitions relating to such provisions.

Section 1.02 Resolution of Drafting Ambiguities. The Pledgor acknowledges and
agrees that it was represented by counsel in connection with the execution and
delivery of this Agreement, that it and its counsel reviewed and participated in
the preparation and negotiation of this Agreement and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Secured Party) shall not be employed in the
interpretation of this Agreement.

Section 1.03 Schedules. The Secured Party and the Pledgor agree that the
Schedules hereof and all descriptions of Pledged Collateral contained in the
Schedules and all amendments and supplements thereto are and shall at all times
remain a part of this Agreement.

 

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ARTICLE II

GRANT OF SECURITY INTEREST

Section 2.01 Grant of Security Interest. As collateral security for the payment
and performance in full of the Note, the Pledgor hereby pledges and grants to
the Secured Party, a Lien on and security interest in and to all of the right,
title and interest of the Pledgor in, to and under the Trademarks, wherever
located, (the “Pledged Collateral”), all books and records, customer lists,
credit files, computer files, programs, printouts and other computer materials
and records relating to the Pledged Collateral at any time evidencing or
relating to the foregoing, all Proceeds and products of the Pledged Collateral
and all accessions to, substitutions and replacements for, and rents, profits
and products of, the Pledged Collateral, and any and all Proceeds of any
insurance, indemnity, warranty or guaranty payable to the Pledgor from time to
time with respect to the Pledged Collateral.

Section 2.02 Filings.

(a) Each Pledgor hereby irrevocably authorizes the Secured Party at any time and
from time to time to file in any relevant jurisdiction any financing statements
(including fixture filings) and amendments thereto that contain the information
required by Article 9 of the UCC of each applicable jurisdiction for the filing
of any financing statement or amendment relating to the Pledged Collateral,
including (i) whether the Pledgor is an organization, the type of organization
and any organizational identification number issued to such Grantor and (ii) any
financing or continuation statements or other documents for the purpose of
perfecting, confirming, continuing, enforcing or protecting the security
interest granted by the Pledgor hereunder, without the signature of the Pledgor
where permitted by law. The Pledgor agrees to provide all information described
in the immediately preceding sentence to the Secured Party promptly upon request
by the Secured Party.

(b) The Pledgor hereby authorizes the Secured Party to file with the United
States Patent and Trademark Office (and any successor office and any similar
office in any United States state or other country) this Agreement and other
documents for the purpose of perfecting, confirming, continuing, enforcing or
protecting the security interest granted by the Pledgor hereunder, without the
signature of the Pledgor where permitted by law, and naming the Pledgor as
debtor, and the Secured Party as secured party.

 

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ARTICLE III

PERFECTION AND FURTHER ASSURANCES

Section 3.01 Maintenance of Perfected Security Interest. The Pledgor represents
and warrants that, to the best of its knowledge, and based upon the
representations of the Secured Party in connection with the Acquisition
Agreement, on the date hereof all financing statements, agreements, instruments
and other documents necessary to perfect the security interest granted by it to
the Secured Party in respect of the Pledged Collateral have been delivered to
the Secured Party in completed and, to the extent necessary or appropriate, duly
executed form for filing in each governmental, municipal or other office. The
Pledgor agrees that at its sole cost and expense, the Pledgor will maintain the
security interest created by this Agreement in the Pledged Collateral as a
perfected First Priority security interest.

Section 3.02 Further Assurances. The Pledgor shall take such further actions,
and execute and/or deliver to the Secured Party such additional financing
statements, amendments, assignments, agreements, supplements, powers and
instruments, as the Secured Party may reasonably request in order to perfect,
preserve and protect the security interest in the Pledged Collateral as provided
herein and the rights and interests granted to the Secured Party hereunder, and
enable the Secured Party to exercise and enforce its rights, powers and remedies
hereunder with respect to any Pledged Collateral, including the filing of any
financing statements, continuation statements and other documents under the UCC
(or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby, the filing of this Agreement with the United
States Patent and Trademark Office and in such offices wherever required by law
to perfect, continue and maintain a valid, enforceable, First Priority security
interest in the Pledged Collateral as provided herein and to preserve the other
rights and interests granted to the Secured Party hereunder, as against third
parties, with respect to the Pledged Collateral. Without limiting the generality
of the foregoing, but subject to applicable law, the Pledgor shall make,
execute, endorse, acknowledge, file or refile and/or deliver to the Secured
Party from time to time upon reasonable request by the Secured Party such lists,
schedules, descriptions and designations of the Pledged Collateral, statements,
schedules, confirmatory assignments, supplements, additional security
agreements, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments as the
Secured Party shall reasonably request. If an Event of Default has occurred and
is continuing, the Secured Party may institute and maintain, in its own name or
in the name of the Pledgor, such suits and proceedings as the Secured Party may
deem necessary or expedient to prevent any impairment of the security interest
in or the perfection thereof in the Pledged Collateral. All of the foregoing
shall be at the sole cost and expense of the Pledgor.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

The Pledgor represents, warrants and covenants as follows:

Section 4.01 Representations.

 

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(a) Power and Authorization. The Pledgor has the power and authority, and the
legal right, to own or lease and operate its property, and to carry on the
business as now conducted and as proposed to be conducted. The Pledgor has taken
all necessary organizational action to authorize the execution, delivery and
performance of this Agreement. No consent or authorization of, filing with,
notice to or other act by, or in respect of, any Governmental Authority or any
other Person is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except the filings of
this Agreement with the United States Patent and Trademark Office and any
filings made under Section 2.02(a) of this Agreement.

(b) Enforceability. This Agreement constitutes, a legal, valid and binding
obligation of the Pledgor, enforceable against the Pledgor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

(c) No Contravention. The execution, delivery and performance of this Agreement
will not violate any Requirement of Law or any Contractual Obligation of the
Pledgor and will not result in, or require, the creation or imposition of any
Lien on the Pledged Collateral pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by this Agreement). No
Requirement of Law or Contractual Obligation applicable to the Pledgor would
reasonably be expected to have a Material Adverse Effect.

(d) No Litigation. To the best of Pledgor’s knowledge, and based in part upon
the representations of the Secured Party in connection with the Acquisition
Agreement, no action, suit, litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of the
Pledgor, threatened by or against the Pledgor or against any of its property or
assets (i) with respect to any of the transactions contemplated hereby or
thereby, or (ii) that would reasonably be expected to have a Material Adverse
Effect.

Section 4.02 Ownership of Property and No Other Liens. To the best of Pledgor’s
knowledge, and based in part upon the representations of the Secured Party in
connection with the Acquisition Agreement: (a) Pledgor has good title to all its
Pledged Collateral, and none of such property is subject to any Lien, claim,
option or right of others, except for the security interest granted to the
Secured Party; and (b) no person other than the Secured Party has control or
possession of all or any part of the Pledged Collateral, except as permitted by
the Acquisition Agreement.

 

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Section 4.03 Perfected First Priority Security Interest. This Agreement is
effective to create in favor of the Secured Party, a legal, valid and
enforceable security interest in the Pledged Collateral and the proceeds
thereof. When this Agreement is filed with the United States Patent and
Trademark Office and all filings under Section 2.02(a) of this Agreement are
filed, this Agreement shall constitute, and will at all times that it continues
in force constitute, a fully perfected First Priority Lien on, and security
interest in, all rights, title and interest of the Pledgor in the Pledged
Collateral and the proceeds thereof, as security for the Note.

Section 4.04 No Transfer of Pledged Collateral. The Pledgor shall not sell,
offer to sell, dispose of, convey, assign or otherwise transfer, or grant any
option with respect to, restrict, or grant, create, permit or suffer to exist
any Lien on, any of the Pledged Collateral pledged by it hereunder or any
interest therein except as permitted by the Acquisition Agreement.

Section 4.05 Claims Against Pledged Collateral. The Pledgor shall, at its own
cost and expense, defend title to the Pledged Collateral and the First Priority
security interest and Lien granted to the Secured Party with respect thereto
against all claims and demands of all persons at any time claiming any interest
therein materially adverse to the Secured Party. Except as expressly permitted
by the Acquisition Agreement, there is no agreement, order, judgment or decree,
and the Pledgor shall enter into any agreement or take any other action, that
could restrict the transferability of any of the Pledged Collateral or otherwise
impair or conflict with the Pledgor’s obligations or the rights of the Secured
Party hereunder.

Section 4.06 Other Financing Statements. The Pledgor has not executed, filed,
nor authorized any third party to file any financing statement or other
instrument similar in effect covering all or any part of the Pledged Collateral
in any recording office, except such as have been filed in favor of the Secured
Party pursuant to this Agreement. No financing statement or other instrument
similar in effect covering all or any part of the Pledged Collateral is on file
in any recording office, except such as have been filed in favor of the Secured
Party pursuant to this Agreement.

No Pledgor shall execute, authorize or permit to be filed in any recording
office any financing statement or other instrument similar in effect covering
all or any part of the Pledged Collateral.

Section 4.07 Approvals. In the event that the Secured Party desires to exercise
any remedies or consensual rights or attorney-in-fact powers set forth in this
Agreement and determines it necessary to obtain any approvals or consents of any
Governmental Authority or any other person therefor, then, upon the reasonable
request of the Secured Party, the Pledgor agrees to assist the Secured Party in
obtaining as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.

 

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Section 4.08 Pledged Collateral Information. All information set forth herein,
including the schedules annexed hereto, and all information contained in any
documents, schedules and lists heretofore delivered to the Secured Party, in
connection with this Agreement, in each case, relating to the Pledged
Collateral, is accurate and complete in all material respects.

ARTICLE V

PLEDGED COLLATERAL

Section 5.01 Intellectual Property License. For the purpose of enabling the
Secured Party, during the continuance of an Event of Default, to exercise rights
and remedies under Article VI hereof at such time as the Secured Party shall be
lawfully entitled to exercise such rights and remedies, and for no other
purpose, the Pledgor hereby grants to the Secured Party, to the extent of the
Pledgor's rights and effective only during the continuance of an Event of
Default, an irrevocable, non-exclusive license to use and sublicense any of the
Trademarks then owned by or licensed to the Pledgor. Such license shall include
access to all devices, products and media in which any of the Trademarks are
embodied, embedded, recorded or stored and to all computer programs used for the
compilation or printout hereof.

Section 5.02 Dealing With Intellectual Property. On a continuing basis, the
Pledgor shall, at its sole cost and expense,

(a) promptly following its becoming aware thereof, notify the Secured Party of
any adverse determination in any proceeding or the institution of any proceeding
in any federal, state or local court or administrative body or in the United
States Patent and Trademark Office regarding the Pledgor's claim of ownership in
or right to use any of the Trademarks, the Pledgor's right to register such
Trademark or its right to keep and maintain such registration in full force and
effect,

(b) maintain and protect the Trademarks for use,

(c) not permit to lapse or become abandoned any Trademarks, and not settle or
compromise any pending or future litigation or administrative proceeding with
respect to such Trademark, in each case except as shall be consistent with
commercially reasonable business judgment,

(d) upon the Pledgor obtaining knowledge thereof, promptly notify the Secured
Party in writing of any event which may be reasonably expected to materially and
adversely affect the value or utility of any of the Trademarks, the ability of
the Pledgor or the Secured Party to dispose of the Trademarks or any portion
thereof or the rights and remedies of the Secured Party in relation thereto
including a levy or threat of levy or any legal process against the Trademarks
or any portion thereof,

 

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(e) not license the Trademarks other than licenses entered into by the Pledgor
in, or incidental to, the ordinary course of business, or amend or permit the
amendment of any of the licenses, in any such case in a manner that could
materially impair in the reasonable judgment of the Pledgor, the Lien on and
security interest in the Trademarks created therein hereby or the exercise of
remedies by the secured party hereunder, without the consent of the Secured
Party, and

(f) diligently keep adequate records respecting the Trademarks.

Section 5.03 Intellectual Property Litigation. Unless there shall occur and be
continuing any Event of Default, the Pledgor shall have the right to commence
and prosecute in its own name, as the party in interest, for its own benefit and
at the sole cost and expense of the Pledgor, such applications for protection of
the Trademarks and suits, proceedings or other actions to prevent the
infringement, misappropriation, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to protect the Trademarks.
Upon the occurrence and during the continuance of any Event of Default, the
Secured Party shall have the right but shall in no way be obligated to file
applications for protection of the Trademarks and/or bring suit in the name of
the Pledgor, the Secured Party to enforce the Trademarks and any license
thereunder. In the event of such suit, the Pledgor shall, at the reasonable
request of the Secured Party, do any and all commercially reasonable acts/lawful
acts and execute any and all documents reasonably requested by the Secured Party
in aid of such enforcement and the Pledgor shall promptly reimburse and
indemnify the Secured Party for all reasonable costs and expenses incurred by
the Secured Party in the exercise of its rights under this Section 5.03 in
accordance with Section 7.07. In the event that the Secured Party shall elect
not to bring suit to enforce the Trademarks as permitted by this Section 5.03
and an Event of Default has occurred and is continuing, the Pledgor agrees, at
the reasonable request of the Secured Party, to take all commercially reasonable
actions necessary, whether by suit, proceeding or other action, to prevent the
infringement, misappropriation, counterfeiting, unfair competition, dilution,
diminution in value of or other damage to any of the Trademarks by others and
for that purpose agrees to diligently maintain any suit, proceeding or other
action against any person so infringing necessary to prevent such infringement.

ARTICLE VI

REMEDIES

Section 6.01 Remedies. If any Event of Default shall have occurred and be
continuing:

 

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(a) The Secured Party may exercise, without any other notice to or demand upon
the Pledgor, in addition to the other rights and remedies provided for herein or
in the Acquisition Agreement or otherwise available to it, all the rights and
remedies of a secured party upon default under the UCC (whether or not the UCC
applies to the affected Pledged Collateral) and also may:

(i) without notice except as specified below, sell, resell, assign and deliver
or grant a license to use or otherwise dispose of the Pledged Collateral or any
part thereof, in one or more parcels at public or private sale, at any of the
Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Secured Party may deem commercially
reasonable; and

(ii) exercise any and all rights and remedies of the Pledgor under or in
connection with the Pledged Collateral, or otherwise in respect of the Pledged
Collateral, including without limitation, the exercise any and all rights with
respect to any Pledged Collateral.

The Pledgor agrees that, to the extent notice of sale shall be required by law,
at least ten days' notice to the Pledgor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. At any sale of the Pledged Collateral, if permitted by
applicable law, the Secured Party may be the purchaser, licensee, assignee or
recipient of the Pledged Collateral or any part thereof and shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Pledged Collateral sold, assigned or
licensed at such sale, to use and apply any of the obligations under the Note as
a credit on account of the purchase price of the Pledged Collateral or any part
thereof payable at such sale. To the extent permitted by applicable law, the
Pledgor waives all claims, damages and demands it may acquire against the
Secured Party arising out of the exercise by it of any rights hereunder. The
Pledgor hereby waives and releases to the fullest extent permitted by law any
right or equity of redemption with respect to the Pledged Collateral, whether
before or after sale hereunder, and all rights, if any, of marshalling the
Pledged Collateral and any other security for the Note or otherwise. The Secured
Party shall not be liable for failure to collect or realize upon any or all of
the Pledged Collateral or for any delay in so doing nor shall it be under any
obligation to take any action with regard thereto. The Secured Party shall not
be obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefore, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned.

(b) Upon the written demand of the Secured Party, the Pledgor shall execute and
deliver to the Secured Party an assignment or assignments of any or all of the
Trademarks and such other documents and take such other actions as are necessary
or appropriate to carry out the intent and purposes hereof. Within five Business
Days of written notice thereafter from the Secured Party, the Pledgor shall make
available to the Secured Party, to the extent within the Pledgor's power and
authority, such personnel in the Pledgor's employ on the date of the Event of
Default as the Secured Party may reasonably designate to permit the Pledgor to
continue, directly or indirectly, to produce, advertise and sell the products
and services sold by the Pledgor under the Trademarks, and such persons shall be
available to perform their prior functions on the Secured Party's behalf.

 

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Section 6.02 No Waiver and Exclusive Remedies. The Secured Party shall not by
any act (except by a written instrument pursuant to Section 7.05), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No failure
on the part of the Secured Party to exercise, no course of dealing with respect
to, and no delay on the part of the Secured Party in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right, power, privilege or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power, privilege or remedy; nor shall the Secured Party be required
to look first to, enforce or exhaust any other security, collateral or
guaranties. The Secured Party’s rights and remedies provided herein, in the UCC
and in the Note shall be its sole and exclusive remedies for any breach by the
Pledgor of any of its obligations hereunder.

Section 6.03 Application of Proceeds. Upon the exercise by the Secured Party of
its remedies hereunder, any proceeds received by the Secured Party in respect of
any realization upon any Pledged Collateral shall be applied, together with any
other sums then held by the Secured Party pursuant to this Agreement, in
accordance with the Acquisition Agreement. The Pledgor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the Pledged
Collateral are insufficient to pay the Note and the fees and other charges of
any attorneys employed by the Secured Party to collect such deficiency.

ARTICLE VII

MISCELLANEOUS

Section 7.01 Performance By Secured Party. If the Pledgor shall fail to perform
any covenants contained in this Agreement after giving effect to all applicable
grace periods (including covenants to pay insurance, taxes and claims arising by
operation of law in respect of the Pledged Collateral and to pay or perform any
Pledgor obligations under any Pledged Collateral) or if any representation or
warranty on the part of the Pledgor contained herein shall be breached, the
Secured Party may (but shall not be obligated to) during the existence of an
Event of Default/following notice to the Pledgor of such failure to perform and
such Pledgor's failure to remedy such failure within a commercially reasonable
time period, do the same or cause it to be done or remedy any such breach, and
may make payments for such purpose; provided, however, that the Secured Party
shall in no event be bound to inquire into the validity of any tax, Lien,
imposition or other obligation which the Pledgor fails to pay or perform as and
when required hereby and which the Pledgor does not contest in accordance with
the provisions of the Acquisition Agreement. Any and all amounts so paid by the
Secured Party shall be reimbursed by the Pledgor in accordance with the
provisions of Section 7.07. Neither the provisions of this Section 7.01 nor any
action taken by the Secured Party pursuant to the provisions of this
Section 7.01 shall prevent any such failure to observe any covenant contained in
this Agreement nor any breach of representation or warranty from constituting an
Event of Default.

 

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Section 7.02 Power of Attorney. The Pledgor hereby appoints the Secured Party
its attorney-in-fact, with full power and authority in the place and stead of
the Pledgor and in the name of the Pledgor, or otherwise, from time to time
during the existence of an Event of Default in the Secured Party's discretion to
take any action and to execute any instrument consistent with the terms of the
Acquisition Agreement which the Secured Party may deem necessary or advisable to
accomplish the purposes hereof (but the Secured Party shall not be obligated to
and shall have no liability to the Pledgor or any third party for failure to so
do or take action). The foregoing grant of authority is a power of attorney
coupled with an interest and such appointment shall be irrevocable for the term
hereof. The Pledgor hereby ratifies all that such attorney shall lawfully do or
cause to be done by virtue hereof.

Section 7.03 Continuing Security Interest and Assignment. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (a) be
binding upon the Pledgor, its successors and assigns and (b) inure, together
with the rights and remedies of the Secured Party hereunder, to the benefit of
the Secured Party and each of its permitted successors, transferees and assigns
and their respective officers, directors, employees, affiliates, agents,
advisors and controlling persons; provided that, the Pledgor shall not assign or
otherwise transfer any of its rights or obligations under this Agreement without
the prior written consent of the Secured Party and any attempted assignment or
transfer without such consent shall be null and void. Without limiting the
generality of the foregoing clause (b), any Secured Party may assign or
otherwise transfer any indebtedness held by it secured by this Agreement to any
other person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Acquisition Agreement.

 

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In the event that: (i) the Secured Party shall assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any third party other than
as security for indebtedness; (ii) the Secured Party’s rights under this
Agreement shall be transferred to any third party other than as security for
indebtedness; (iii) the Secured Party commences any case, proceeding or other
action relating to bankruptcy, insolvency, reorganization, or other relief of
debtors, seeking to have an order for relief entered with respect to the Secured
Party, or seeking to adjudicate it as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, or (iv) the
Secured Party seeks appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or makes a general assignment for the benefit of its creditors, the
Secured Party shall notify the Pledgor of the event within seven (7) days of its
occurrence. Pledgor shall then have the right within 60 days of such event to
pay the remaining balance under the Note and thereby terminate any further
obligations under the Note or this Agreement. Nothing in this paragraph shall
affect the schedule of payments under the Note or the Pledgor’s right to prepay
its obligations thereunder.

Section 7.04 Termination and Release.

(a) At such time as the Note shall have been paid in full (other than contingent
indemnification obligations in which no claim has been made or is reasonably
foreseeable), the Pledged Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Secured Party and the Pledgor
hereunder shall terminate, all without delivery of any instrument or any further
action by any party, and all rights to the Pledged Collateral shall revert to
the Pledgor. At the request and sole expense of the Pledgor following any such
termination, the Secured Party shall deliver to the Pledgor any Pledged
Collateral held by the Secured Party hereunder, and execute and deliver to the
Pledgor such documents as the Pledgor shall reasonably request to evidence such
termination.

(b) If any of the Pledged Collateral shall be sold, transferred or otherwise
disposed of by the Pledgor in a transaction permitted by this Agreement, then
the Lien created pursuant to this Agreement in such Pledged Collateral shall be
released, and the Secured Party, at the request and sole expense of the Pledgor,
shall execute and deliver to the Pledgor all releases and other documents
reasonably necessary or advisable for the release of the Liens created hereby on
such Pledged Collateral; provided that the Pledgor shall provide to the Secured
Party evidence of such transaction's compliance with this Agreement as the
Secured Party shall reasonably request.

Section 7.05 Modification in Writing. None of the terms or provisions of this
Agreement may be amended, modified, supplemented, terminated or waived, and no
consent to any departure by the Pledgor therefrom shall be effective, except by
a written instrument signed by the Secured Party in accordance with the terms of
the Acquisition Agreement. Any amendment, modification or supplement of any
provision hereof, any waiver of any provision hereof and any consent to any
departure by the Pledgor from the terms of any provision hereof in each case
shall be effective only in the specific instance and for the specific purpose
for which made or given.

 

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Section 7.06 Notices. Unless otherwise provided herein, any notice or other
communication required or permitted to be given under this Agreement shall be in
writing and shall be given in the manner and become effective as set forth in
the Acquisition Agreement.

Section 7.07 Indemnity and Expenses.

(a) The Pledgor hereby agrees to indemnify and hold harmless the Secured Party
(and any sub-agent thereof) and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") from any losses,
damages, liabilities, claims and related expenses (including the fees and
expenses of any counsel for any Indemnitee), and shall indemnify and hold
harmless each Indemnitee from all fees, expenses and time charges for attorneys
who are employees of any Indemnitee, incurred by any Indemnitee or asserted
against any Indemnitee by any Person (including the Pledgor) other than such
Indemnitee and its Related Parties arising out of, in connection with or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement) or any failure of the Note to be the legal, valid, and binding
obligations of the Pledgor enforceable against the Pledgor in accordance with
their terms, whether brought by a third party or by the Pledgor, 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 (i) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee or (ii) result
from a claim brought by the Pledgor against an Indemnitee for breach in bad
faith of such Indemnitee's obligations hereunder, if the Pledgor has obtained a
final and nonappealable judgment in its favor on such claim as determined by a
court of competent jurisdiction.

(b) To the fullest extent permitted by applicable law, the Pledgor hereby agrees
not to assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby. No Indemnitee shall be
liable for any damages arising from the use of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the
transactions contemplated hereby.

(c) The Pledgor agrees to pay or reimburse the Secured Party for all its costs
and expenses incurred in collecting against the Pledgor its obligations under
the Note or otherwise enforcing or preserving any rights under this Agreement,
including the fees and other charges of counsel (including the allocated fees
and expenses of internal counsel) to the Secured Party.

 

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(d) All amounts due under this Section shall be payable promptly/not later than
ten days after demand therefor, shall constitute obligations under this
Agreement and shall bear interest until paid at a rate per annum equal to 3% per
annum above the Base Rate announced from time to time by Citibank, N.A., but not
in excess of the maximum rate allowed by applicable law.

(e) Without prejudice to the survival of any other agreement of the Pledgor
under this Agreement, the agreements and obligations of the Pledgor contained in
this Section shall survive the payment in full of the Note and all other amounts
payable under this Agreement.

Section 7.08 Governing Law, Consent to Jurisdiction and Waiver of Jury Trial.
This Agreement and any claim, controversy, dispute or cause of action (whether
in contract or tort or otherwise) based upon, arising out of or relating to this
Agreement and the transactions contemplated hereby and thereby shall be governed
by, and construed in accordance with, the laws of the State of New Jersey. The
other provisions of Sections 9.1 and 9.9 of the Acquisition Agreement and
Section 7.6 of the Note are incorporated herein, mutatis mutandis, as if a part
hereof.

Section 7.09 Severability of Provisions. Any provision hereof which is invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating the remaining provisions hereof or affecting the validity,
legality or enforceability of such provision in any other jurisdiction.

Section 7.10 Counterparts; Integration; Effectiveness. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all taken together shall constitute a
single contract. This Agreement constitutes the entire contract among the
parties with respect to the subject matter hereof and supersede all previous
agreements and understandings, oral or written, with respect thereto. This
Agreement shall become effective when it shall have been executed by the Secured
Party and when the Secured Party shall have received counterparts hereof signed
by each of the other parties hereto. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile or in electronic (i.e., "pdf" or
"tif") format shall be effective as delivery of a manually executed counterpart
of this Agreement.

 

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Section 7.11 No Release. Nothing set forth in this Agreement, nor the exercise
by the Secured Party of any of the rights or remedies hereunder, shall relieve
the Pledgor from the performance of any term, covenant, condition or agreement
on the Pledgor's part to be performed or observed in respect of any of the
Pledged Collateral or from any liability to any person in respect of any of the
Pledged Collateral or shall impose any obligation on the Secured Party to
perform or observe any such term, covenant, condition or agreement on the
Pledgor's part to be so performed or observed or shall impose any liability on
the Secured Party for any act or omission on the part of the Pledgor relating
thereto or for any breach of any representation or warranty on the part of the
Pledgor contained in this Agreement or the Acquisition Agreement, or in respect
of the Pledged Collateral or made in connection herewith or therewith. The
obligations of the Pledgor contained in this Section 7.11 shall survive the
termination hereof and the discharge of the Pledgor's other obligations under
this Agreement and the Acquisition Agreement.

Section 7.12 Obligations Absolute. The Pledgor hereby waives demand, notice,
protest, notice of acceptance of this Agreement, or other action taken in
reliance hereon and all other demands and notices of any description. All
obligations of the Pledgor hereunder shall be absolute and unconditional
irrespective of:

(a) any illegality or lack of validity or enforceability of the Note or any
related agreement or instrument;

(b) any change in the time, place or manner of payment of, or in any other term
of, the Note or any other agreement, including any increase in the Note;

(c) any taking, exchange, substitution, release, impairment or non-perfection of
any Pledged Collateral;

(d) any manner of sale, disposition or application of proceeds of any Pledged
Collateral or any other collateral or other assets to all or part of the Note;

(e) any default, failure or delay, willful or otherwise, in the performance of
the Note;

(f) any change, restructuring or termination of the corporate structure,
ownership or existence of the Pledgor or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Pledgor or its assets
or any resulting release or discharge of the Note;

(g) the failure of any other Person to execute or deliver this Agreement, or any
other agreement or the release or reduction of liability of the Pledgor with
respect to the Note;

(h) the failure of the Secured Party to assert any claim or demand or to
exercise or enforce any right or remedy under the provisions of the Acquisition
Agreement or otherwise;

(i) any defense, set-off or counterclaim (other than a defense of payment or
performance) that may at any time be available to, or be asserted by, the
Pledgor against the Secured Party; or

 

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(j) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the
Secured Party that might vary the risk of the Pledgor or otherwise operate as a
defense available to, or a legal or equitable discharge of the Pledgor.

[SIGNATURE PAGE FOLLOWS]

 

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

 

LARSEN AND BOWMAN HOLDINGS LTD. By:   /s/ Stacy Larsen Name:   Stacy Larsen
Title:   President RB TRADEMARK HOLDCO, LLC, as Secured Party] By:   /s/ Marc S.
Goldfarb Name:   Marc S. Goldfarb Title:   Senior Vice President and General
Counsel

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Schedule 1

 

Trademark

  

Country

  

Trademark Application/

Registration Number

RUSS BERRIE AND COMPANY    New Zealand    Reg. No. 168792 APPLAUSE (block
letters)    United States    Reg. No. 1,223,558 APPLAUSE (block letters)   
Benelux    Reg. No. 730983 APPLAUSE (block letters)    Canada    Reg. No.
TMA304,224 APPLAUSE    France    Reg. No. 3136799 APPLAUSE    Germany    Reg.
No. 1,050,030 APPLAUSE & Hands Design    United States    Reg. No. 1,251,348
APPLAUSE & Hands Design    United States    Reg. No. 1,190,130 APPLAUSE & Hand
Device    Australia    Reg. No. 361197 APPLAUSE & Hand Device    Canada    Reg.
No. TMA304,223 APPLAUSE (Design)    Germany    Reg. No. 1,075,372 APPLAUSE &
Hand Device    Mexico    Reg. No. 968460 APPLAUSE & Hand Device    United
Kingdom    Reg. No. 1,155,354 EVERYONE LOVES TO GET APPLAUSE    United States   
Reg. No. 1,230,618 EVERYONE LOVES TO GET APPLAUSE    Benelux    Reg. No. 730984
EVERYONE LOVES TO GET APPLAUSE    European Union    App. 4180717 EVERYONE LOVES
TO GET APPLAUSE    Germany    Reg. No. 2,039,483 EVERYONE LOVES TO GET APPLAUSE
   Mexico    Reg. No. 968941 RUSS    Argentina    Reg. No. 1.889.438 (Renewal of
Reg. No. 1400503) RUSS    Argentina    Reg. No. 1357309 RUSS    Argentina   
Reg. No. 1.743.356 (Renewal of Reg. No. 1339312) RUSS    Chile    Reg. No.
681369 RUSS    China    Reg. No. 924294 RUSS    China    Reg. No. 905751 RUSS   
Columbia    Reg. No. 168902 RUSS    Hong Kong    Reg. No. 1987B1635 RUSS   
Israel    Reg. No. 58748 RUSS    Panama    Reg. No. 36349

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Trademark

  

Country

  

Trademark Application/

Registration Number

RUSS    Paraguay    Reg. No. 225484 RUSS    Poland    App. No. Z200594 RUSS   
South Africa    Reg. No. B84/2503 RUSS    Taiwan    Reg. No. 255821 RUSS   
Taiwan    Reg. No. 255887 RUSS    Taiwan    Reg. No. 259886 RUSS    Taiwan   
Reg. No. 266296 RUSS    Taiwan    Reg. No. 267160 RUSS    Taiwan    Reg. No.
269334 RUSS    Taiwan    Reg. No. 273776 RUSS    Venezuela    Reg. No. 114623-F
Russ and Butterfly Design    Philippines    Reg. No. 49670 RUSS and Design   
Switzerland    Reg. No. 332925 RUSS and Design    Brazil    Reg. No. 816350752
RUSS and Design    Korea    Reg. No. 114480 RUSS and Design    Korea    Reg. No.
36208 RUSS and Design    Mexico    Reg. No. 377590 RUSS and Device    Taiwan   
Reg. No. 255820 RUSS Design    Malaysia    Reg. No. 86005514 RUSS & Design   
Japan    Reg. No. 4774675 RUSS & Device    China    Reg. No. 1092630 RUSS &
Device    China    Reg. No. 1070211 RUSS & Design    United States    Reg. No.
2,891,296 RUSS & Design    Australia    Reg. No. 405292 RUSS & Design    Canada
   Reg. No. 301773 RUSS & Device    Australia    Reg. No. 444252 RUSS & Device
   Australia    Reg. No. 444253 RUSS & Device    China    Reg. No. 1082253 RUSS
(Label)    Italy    Reg. No. 686759 RUSS (Special Form)    South Africa    Reg.
No. B82/2552 RUSS and Design    Peru    Reg. No. 80444 RUSS and Design    Puerto
Rico    Reg. No. 25984 RUSS and Design    Singapore    Reg. No. T8604251 RUSS
and Design    Singapore    Reg. No. T8602247 RUSS and Device    Russia    Reg.
No. 272706 RUSS and Design    France    Reg. No. 1271767 RUSS and Design   
Germany    Reg. No. 1075676 RUSS and Design    Mexico    Reg. No. 393700

 

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Trademark

  

Country

  

Trademark Application/

Registration Number

RUSS and Design    Mexico    Reg. No. 382026 RUSS and Device    New Zealand   
Reg. No. 164554 RUSS and Device    Russia    Reg. No. 290097 RUSS and Device   
Taiwan    Reg. No. 255886 RUSS and Device    Taiwan    Reg. No. 259885 RUSS and
Device    Taiwan    Reg. No. 273775 RUSS and Device    Taiwan    Reg. No. 908088
RUSS and Device    Taiwan    Reg. No. 901998 RUSS and Device    Taiwan    Reg.
No. 917138 RUSS and Device    United Kingdom    Reg. No. 1298343 RUSS and Device
   United Kingdom    Reg. No. 1302734 merged under Reg. No. 1302736 RUSS and
Device    United Kingdom    Reg. No. 1302735 merged under Reg. No. 1302736 RUSS
and Device    United Kingdom    Reg. No. 1302736 RUSS and Logo    Indonesia   
App. No. D00.2008.031745 RUSS BERRIE    Chile    Reg. No. 681370 RUSS LOGO    El
Salvador    180 Book 141 RUSS PLUS    El Salvador    79 BOOK 53 RUSSPLUS   
United States    Reg. No. 2,260,182

 

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