Exhibit 10.12
 
GUARANTEE AND COLLATERAL AGREEMENT
dated as of
December 21, 2005,
among
CCE SPINCO, INC.,
SFX ENTERTAINMENT, INC.,
THE OTHER SUBSIDIARIES OF CCE SPINCO, INC.
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     5  
SECTION 2.02.
  Guarantee of Payment     6  
SECTION 2.03.
  No Limitations     6  
SECTION 2.04.
  Reinstatement     7  
SECTION 2.05.
  Agreement To Pay; Subrogation     7  
SECTION 2.06.
  Information     7  
 
           
 
  ARTICLE III        
 
           
 
  Pledge of Securities        
 
           
SECTION 3.01.
  Pledge     7  
SECTION 3.02.
  Delivery of the Pledged Collateral     8  
SECTION 3.03.
  Representations, Warranties and Covenants     9  
SECTION 3.04.
  Limited Liability Company and Limited Partnership Interests     10  
SECTION 3.05.
  Registration in Nominee Name; Denominations     10  
SECTION 3.06.
  Voting Rights; Dividends and Interest     10  
 
           
 
  ARTICLE IV        
 
           
 
  Security Interests in Personal Property        
 
           
SECTION 4.01.
  Security Interest     13  
SECTION 4.02.
  Representations and Warranties     15  
SECTION 4.03.
  Covenants     16  
SECTION 4.04.
  Other Actions     20  
SECTION 4.05.
  Covenants Regarding Patent, Trademark and Copyright Collateral     23  

--------------------------------------------------------------------------------

 

 

             
 
  ARTICLE V        
 
           
 
  Remedies        
 
           
SECTION 5.01.
  Remedies Upon Default     25  
SECTION 5.02.
  Application of Proceeds     26  
SECTION 5.03.
  Grant of License to Use Intellectual Property     27  
SECTION 5.04.
  Securities Act     27  
SECTION 5.05.
  Registration     28  
 
           
 
  ARTICLE VI        
 
           
 
  Indemnity, Subrogation and Subordination        
 
           
SECTION 6.01.
  Indemnity and Subrogation     29  
SECTION 6.02.
  Contribution and Subrogation     29  
SECTION 6.03.
  Subordination     29  
 
           
 
  ARTICLE VII        
 
           
 
  Miscellaneous        
 
           
SECTION 7.01.
  Notices     30  
SECTION 7.02.
  Waivers; Amendment     30  
SECTION 7.03.
  Administrative Agent’s Fees and Expenses; Indemnification     31  
SECTION 7.04.
  Successors and Assigns     31  
SECTION 7.05.
  Survival of Agreement     32  
SECTION 7.06.
  Counterparts; Effectiveness; Several Agreement     32  
SECTION 7.07.
  Severability     32  
SECTION 7.08.
  Right of Set-Off     33  
SECTION 7.09.
  Governing Law; Jurisdiction; Consent to Service of Process     33  
SECTION 7.10.
  WAIVER OF JURY TRIAL     34  
SECTION 7.11.
  Headings     34  
SECTION 7.12.
  Security Interest Absolute     34  
SECTION 7.13.
  Termination or Release     34  
SECTION 7.14.
  Additional Subsidiaries     35  
SECTION 7.15.
  Administrative Agent Appointed Attorney-in-Fact     35  

--------------------------------------------------------------------------------

 

 

     
Schedules
   
 
   
Schedule I
  Subsidiary Loan Parties
Schedule II
  Pledged Stock; Pledged Debt Securities
Schedule III
  Intellectual Property
Schedule IV
  Insurance Requirements
Schedule V
  Commercial Tort Claims
 
   
Exhibits
   
 
   
Exhibit I
  Form of Supplement
Exhibit II
  Form of Perfection Certificate

--------------------------------------------------------------------------------

 

 

     GUARANTEE AND COLLATERAL AGREEMENT dated as of December 21, 2005, among CCE
SPINCO, INC., SFX ENTERTAINMENT, INC., the other Subsidiaries of CCE SPINCO,
INC. identified herein and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
          Reference is made to the Credit Agreement dated as of December 21,
2005 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among CCE Spinco, Inc. (“Parent”), SFX Entertainment, Inc.
(the “US Borrower”), the Foreign Borrowers party thereto (together with the US
Borrower, the “Borrowers”), the Lenders party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as
Canadian Agent, J.P. Morgan Europe Limited, as London Agent, and Bank of
America, N.A., as Syndication 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. Parent
and the Subsidiary Loan Parties 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. All terms defined in the New York UCC (as defined herein) and
not defined in this Agreement have the meanings specified therein; the term
“instrument” shall have the meaning specified in Article 9 of the New York UCC.
          (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:
          “Account Debtor” means any Person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.
          “Agreement” means this Guarantee and Collateral Agreement.
          “Article 9 Collateral” has the meaning assigned to such term in
Section 4.01.

--------------------------------------------------------------------------------

 

 

 2
          “Borrowers” has the meaning assigned to such term in the preliminary
statement of this Agreement.
          “Claiming Party” has the meaning assigned to such term in
Section 6.02.
          “Collateral” means Article 9 Collateral and Pledged Collateral.
          “Contributing Party” has the meaning assigned to such term in
Section 6.02.
          “Copyright License” means any written agreement, now or hereafter in
effect, granting any right to any third party under any copyright now or
hereafter owned by any Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
          “Copyrights” means all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Schedule III.
          “Credit Agreement” has the meaning assigned to such term in the
preliminary statement of this Agreement.
          “Federal Securities Laws” has the meaning assigned to such term in
Section 5.04.
          “General Intangibles” means all choses in action and causes of action
and all other intangible personal property of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Grantor, including corporate or
other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, Swap Agreements
and other agreements)1, Intellectual Property, goodwill, registrations,
franchises, tax refund claims and any letter of credit, guarantee, claim,
security interest or other security held by or granted to any Grantor to secure
payment by an Account Debtor of any of the Accounts.
          “Grantors” means Parent, the US Borrower and each other Material
Subsidiary that is a Domestic Subsidiary.
          “Guarantors” means Parent, the US Borrower and each other Material
Subsidiary that is a Domestic Subsidiary.
 

1   Name any specific contracts and include party names and dates.

--------------------------------------------------------------------------------

 

3

          “Guarantee and Collateral Agreement Supplement” means an instrument in
the form of Exhibit I hereto.
          “Parent” has the meaning assigned to such term in the preliminary
statement of this Agreement.
          “Intellectual Property” means all intellectual and similar property of
every kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
          “License” means any Patent License, Trademark License, Copyright
License or other license or sublicense agreement to which any Grantor is a
party.
          “Loan Document Obligations” means (a) the due and punctual payment by
the Borrowers of (i) the principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by any Borrower in respect of any Letter of Credit, when and as due,
including payments in respect of reimbursement of LC Disbursements, interest
thereon (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) and obligations to provide cash
collateral, (iii) all reimbursement obligations of the Canadian Borrowers in
respect of B/As accepted under or pursuant to the Credit Agreement and (iv) all
other monetary obligations of the Borrowers under the Credit Agreement and each
of the other Loan Documents, including obligations to pay fees, expense
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise, arising under the Loan
Documents (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) and (b) the due and punctual
payment of all the monetary obligations of each other Loan Party under or
pursuant to the Credit Agreement and each of the other Loan Documents
          “New York UCC” means the Uniform Commercial Code as from time to time
in effect in the State of New York.
          “Obligations” means (a) Loan Document Obligations and (b) the due and
punctual payment of all monetary obligations of each Loan Party under each Swap
Agreement that (i) is in effect on the Effective Date with a counterparty that
is a Lender or an Affiliate of a Lender as of the Effective Date or (ii) is
entered into after the Effective Date with any counterparty that is a Lender or
an Affiliate of a Lender at the

--------------------------------------------------------------------------------

 

4

time such Swap Agreement is entered into (other than Swap Agreements entered
into after (A) the principal of and interest on each Loan and all fees payable
under or pursuant to the Credit Agreement have been paid in full, (B) the
Lenders have no further commitment to lend under or pursuant to the Credit
Agreement, (C) the LC exposures have been reduced to zero and (D) the Issuing
Banks have no further obligations to issue Letters of Credit).
          “Patent License” means any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
          “Patents” means all of the following now owned or hereafter acquired
by any Grantor: (a) all letters patent of the United States or the equivalent
thereof in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or any similar
offices in any other country, including those listed on Schedule III, and
(b) all reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.
          “Perfection Certificate” means a certificate substantially in the form
of Exhibit II, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Financial Officer and the chief
legal officer of the US Borrower.
          “Pledged Collateral” has the meaning assigned to such term in
Section 3.01.
          “Pledged Debt Securities” has the meaning assigned to such term in
Section 3.01.
          “Pledged Securities” means any promissory notes, stock certificates or
other securities now or hereafter included in the Pledged Collateral, including
all certificates, instruments or other documents representing or evidencing any
Pledged Collateral.
          “Pledged Stock” has the meaning assigned to such term in Section 3.01.
          “Proceeds” has the meaning specified in Section 9-102 of the New York
UCC.
          “Secured Parties” means (a) the Lenders, (b) the Administrative Agent,
(c) any Issuing Bank, (d) each counterparty to any Swap Agreement with a Loan
Party the obligations under which constitute Obligations, (e) the beneficiaries
of each

--------------------------------------------------------------------------------

 

5

indemnification obligation undertaken by any Loan Party under any Loan Document
and (f) the successors and assigns of each of the foregoing.
          “Security Interest” has the meaning assigned to such term in
Section 4.01.
          “Subsidiary Loan Parties” means (a) the Subsidiaries identified on
Schedule I and (b) each other Subsidiary that becomes a party to this Agreement
as a Subsidiary Loan Party after the Effective Date.
          “Trademark License” means any written agreement, now or hereafter in
effect, granting to any third party any right to use any trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
          “Trademarks” means all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
          “US Borrower” has the meaning assigned to such term in the preliminary
statement of this Agreement.
          “US Borrower Subsidiary Party” means each party hereto that is a
Subsidiary of the US Borrower.
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 of the Obligations. Each
Guarantor further agrees that the 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
Obligation. Each Guarantor waives presentment to, demand of payment from and
protest to the applicable Borrower or any other Loan Party of any of the
Obligations, and also waives notice of acceptance of its guarantee and notice of
protest for nonpayment.

--------------------------------------------------------------------------------

 

6

          SECTION 2.02. Guarantee of Payment. Each Guarantor 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 Secured Party to any security held for the
payment of the Obligations or to any balance of any deposit account or credit on
the books of the Administrative Agent or any other Secured Party in favor of the
applicable Borrower or any other Person.
          SECTION 2.03. No Limitations. (a) Except for termination of a
Guarantor’s obligations hereunder as expressly provided in Section 7.13, 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 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 Secured
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 held by
the Administrative Agent or any other Secured Party for the Obligations or any
of them; (iv) any default, failure or delay, wilful or otherwise, in the
performance of the 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 indefeasible payment in full in cash of all the Obligations). Each Guarantor
expressly authorizes the Administrative Agent and the other Secured Parties to
take and hold security for the payment of the Obligations, to exchange, waive or
release any or all such security (with or without consideration), to enforce or
apply such security and direct the order and manner of any sale thereof in their
sole discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.
          (b) To the fullest extent permitted by applicable law, each Guarantor
waives any defense based on or arising out of any defense of the applicable
Borrower or any other Loan Party or the unenforceability of the Obligations or
any part thereof from any cause, or the cessation from any cause of the
liability of the applicable Borrower or any other Loan Party, other than the
indefeasible payment in full in cash of all the Obligations. The Administrative
Agent and the other Secured Parties may, at their election, foreclose on any
security held by one or more of them 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 Obligations, make any other accommodation
with the applicable Borrower or any other Loan Party or exercise any other right
or remedy available to them against the applicable Borrower or any other Loan
Party, without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations have been indefeasibly paid in
full in cash. To the fullest extent

--------------------------------------------------------------------------------

 

7

permitted by applicable law, each Guarantor waives any defense arising out of
any such election even though such election operates, 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 applicable Borrower or any
other Loan Party, as the case may be, or any security.
          SECTION 2.04. Reinstatement. Each Guarantor 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 Secured
Party upon the bankruptcy or reorganization of any Borrower, any other Loan
Party or otherwise.
          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 Secured Party has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the applicable Borrower or any other Loan
Party to pay any Obligation when and as the same shall become due and after the
expiration of any applicable grace period, 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 Secured Parties in cash the amount of such unpaid
Obligation. Upon payment by any Guarantor of any sums to the Administrative
Agent as provided above, all rights of such Guarantor against the applicable
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 VI.
          SECTION 2.06. Information. Each Guarantor assumes all responsibility
for being and keeping itself informed of each 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 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 Secured 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
Pledge of Securities
          SECTION 3.01. Pledge. As security for the payment, as the case may be,
in full of the Obligations, each Grantor hereby assigns and pledges to the
Administrative Agent, its successors and assigns, for the benefit of the other
Secured Parties, and hereby grants to the Administrative Agent, its successors
and assigns, for the benefit of the other Secured Parties, a security interest
in, all of such Grantor’s right, title and interest in, to and under (a) all
Equity Interests owned by it and listed on Schedule II and any other Equity
Interests obtained in the future by such Grantor and, as reasonably requested by
the Administrative Agent, the certificates or other instruments representing all
such Equity Interests (the “Pledged Stock”), provided that the Pledged Stock
shall not include

--------------------------------------------------------------------------------

 

8

more than 66.5% of the issued and outstanding voting Equity Interests of any
Foreign Subsidiary to the extent that the pledge of any greater percentage would
result in adverse tax consequences; (b)(i) all Indebtedness of Parent, any
Borrower or any other Subsidiary that is evidenced by a promissory note, owing
to any Loan Party and constitutes Collateral and listed opposite the name of
such Grantor on Schedule II, (ii) any debt securities in the future issued to
such Grantor and (iii) the promissory notes and any other instruments evidencing
such debt securities (the “Pledged Debt Securities”); (c) all other property
that may be delivered to and held by the Administrative Agent pursuant to the
terms of this Section 3.01; (d) subject to Section 3.06, all payments of
principal or interest, dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of, in exchange
for or upon the conversion of, and all other Proceeds received in respect of,
the securities referred to in clauses (a) and (b) above; (e) subject to
Section 3.06, all rights and privileges of such Grantor with respect to the
securities and other property referred to in clauses (a), (b), (c) and
(d) above; and (f) all Proceeds of any of the foregoing (the items referred to
in clauses (a) through (f) above being collectively referred to as the “Pledged
Collateral”), provided that notwithstanding anything to the contrary in this
Agreement, this Agreement shall not constitute a pledge or grant of a security
interest in any Pledged Collateral if and for so long as the Administrative
Agent, in consultation with the US Borrower, reasonably determines that the cost
to any Borrower of creating or perfecting a pledge or security interest in such
Pledged Collateral (taking into account any adverse tax consequences to Parent,
the Borrowers and the other Subsidiaries (including the imposition of
withholding or other material taxes on Lenders)) shall be commercially
unreasonable in view of the benefits to be obtained by the Lenders therefrom.
          TO HAVE AND TO HOLD the Pledged Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Administrative Agent, its successors and assigns, for the
benefit of the other Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.
          SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Grantor
agrees promptly to deliver or cause to be delivered to the Administrative Agent,
for the benefit of the other Secured Parties, any and all Pledged Securities.
          (b) Upon delivery to the Administrative Agent, (i) any Pledged
Securities shall be accompanied by stock powers duly endorsed in blank by the
applicable Grantor or other instruments of transfer satisfactory to the
Administrative Agent and by such other instruments and documents as the
Administrative Agent may reasonably request and (ii) all other property
comprising part of the Pledged Collateral shall be accompanied by proper
instruments of assignment duly executed by the applicable Grantor and such other
instruments or documents as the Administrative Agent may reasonably request.
Each delivery of Pledged Securities shall be accompanied by a schedule
describing the securities, which schedule shall be attached hereto as
Schedule II and made a part hereof, provided that failure to attach any such
schedule hereto shall not affect the validity of such pledge of such Pledged
Securities. Each schedule so delivered shall supplement any prior schedules so
delivered.

--------------------------------------------------------------------------------

 

9

          SECTION 3.03. Representations, Warranties and Covenants. Each Grantor
represents, warrants and covenants to and with the Administrative Agent, for the
benefit of the other Secured Parties, that with respect to such Grantor:
     (a) Schedule II correctly sets forth the percentage of the issued and
outstanding units of each class of the Equity Interests of the issuer thereof
represented by such Grantor’s Pledged Stock and includes all Equity Interests,
debt securities and promissory notes required to be pledged hereunder by such
Grantor in order to satisfy the Collateral and Guarantee Requirement;
     (b) the Grantor’s Pledged Stock and Pledged Debt Securities have been duly
and validly authorized and issued by such Grantor and (i) in the case of such
Pledged Stock, are fully paid and nonassessable and (ii) in the case of such
Pledged Debt Securities, are legal, valid and binding obligations of such
Grantor, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or law;
     (c) except for the security interests granted hereunder, such Grantor
(i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner, beneficially and of record, of
the Pledged Securities indicated on Schedule II as owned by such Grantor,
(ii) holds the same free and clear of all Liens, other than Liens created by
this Agreement, Permitted Encumbrances and transfers made in compliance with the
Credit Agreement, (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or permit to exist any security interest in or other Lien
on, the Pledged Collateral, other than Liens created by this Agreement,
Permitted Encumbrances and transfers made in compliance with the Credit
Agreement and (iv) will defend its title or interest thereto or therein against
any and all Liens (other than Liens created by this Agreement and Permitted
Encumbrances), however, arising, of all Persons whomsoever;
     (d) except for restrictions and limitations imposed by the Loan Documents
or securities laws generally, all of such Grantor’s Pledged Collateral is and
will continue to be freely transferable and assignable, and none of such Pledged
Collateral is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any nature that might prohibit, impair, delay or otherwise affect the pledge
of such Pledged Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Administrative Agent of rights and remedies
hereunder;
     (e) each Grantor has the corporate or equivalent power and authority to
pledge all of such Grantor’s Pledged Collateral pledged by it hereunder in the
manner hereby done or contemplated;
     (f) no consent or approval of any Governmental Authority, any securities
exchange or any other Person to be obtained by any Loan Party pursuant to any

--------------------------------------------------------------------------------

 

10

applicable law, rule or regulation applicable to it was or is necessary to the
validity of such Grantor’s pledge effected hereby (other than such as have been
obtained and are in full force and effect);
     (g) by virtue of the execution and delivery by such Grantor of this
Agreement, when any of such Grantor’s Pledged Securities are delivered to the
Administrative Agent in accordance with this Agreement, the Administrative Agent
will obtain a legal, valid and perfected first-priority lien upon and security
interest in such Pledged Securities as security for the payment of the
Obligations;
     (h) such Grantor’s pledge effected hereby is effective to vest in the
Administrative Agent, for the benefit of the other Secured Parties, the rights
of the Administrative Agent in all of such Grantor’s Pledged Collateral as set
forth herein; and
     (i) none of such Grantor’s Pledged Stock consisting of partnership or
limited liability company interests (i) is dealt in or traded on a securities
exchange or securities market, (ii) is a security governed by Article 8 of the
New York UCC, (iii) is an investment company security, (iv) is held in a
securities account or (v) constitutes a “security” or “financial asset” as such
terms are defined in Article 8 of the New York UCC.
          SECTION 3.04. Limited Liability Company and Limited Partnership
Interests. So 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 or any Letter of Credit or B/A is outstanding and so long as the
Commitments have not expired or terminated, such Grantor shall not elect to
treat any interest in any limited liability company or limited partnership
pledged hereunder as a “security” within the meaning of Article 8 of the New
York UCC or issue any certificate representing such interest, unless such
Grantor provides prior written notification to the Administrative Agent of such
election and immediately delivers any such certificate to the Administrative
Agent pursuant to the terms hereof.
          SECTION 3.05. Registration in Nominee Name; Denominations. The
Administrative Agent, on behalf of the Secured Parties, shall have the right (in
its sole and absolute discretion) to hold the Pledged Securities in its own name
as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of
the applicable Grantor, endorsed or assigned in blank or in favor of the
Administrative Agent. Each Grantor will promptly give to the Administrative
Agent copies of any notices or other communications received by it with respect
to Pledged Securities registered in the name of such Grantor. The Administrative
Agent shall at all times have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.
          SECTION 3.06. Voting Rights; Dividends and Interest. (a) Unless and
until an Event of Default shall have occurred and be continuing and the
Administrative

--------------------------------------------------------------------------------

 

11

Agent shall have notified the US Borrower that the rights of the Grantors under
this Section 3.06 are being suspended:
     (i) Each Grantor shall be entitled to exercise any and all voting and/or
other consensual rights and powers inuring to an owner of Pledged Securities or
any part thereof for any purpose consistent with the terms of this Agreement,
the Credit Agreement and the other Loan Documents, provided that such rights and
powers shall not be exercised in any manner that could reasonably be expected to
materially and adversely affect the rights inuring to a holder of any Pledged
Securities or the rights and remedies of any of the Administrative Agent or the
other Secured Parties under this Agreement or the Credit Agreement or any other
Loan Document or the ability of the Secured Parties to exercise the same.
     (ii) The Administrative Agent shall execute and deliver to each Grantor, or
cause to be executed and delivered to such Grantor, all such proxies, powers of
attorney and other instruments as such Grantor may reasonably request for the
purpose of enabling such Grantor to exercise the voting and/or consensual rights
and powers it is entitled to exercise pursuant to subparagraph (i) above.
     (iii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Securities to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable laws, provided
that any noncash dividends, interest, principal or other distributions that
would constitute Pledged Stock or Pledged Debt Securities, whether resulting
from a subdivision, combination or reclassification of the outstanding Equity
Interests of the issuer of any Pledged Securities or received in exchange for
Pledged Securities or any part thereof, or in redemption thereof, or as a result
of any merger, consolidation, acquisition or other exchange of assets to which
such issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall not be commingled by such
Grantor with any of its other funds or property but shall be held separate and
apart therefrom, shall be held in trust for the benefit of the Administrative
Agent and the other Secured Parties and shall be forthwith delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement reasonably requested by the Administrative Agent).
          (b) Upon the occurrence and during the continuance of an Event of
Default, after the Administrative Agent shall have notified the US Borrower of
the suspension of the rights of the Grantors under paragraph (a)(i) of this
Section 3.06, then all rights of any Grantor to exercise the voting and/or
consensual rights and powers it is entitled to exercise pursuant to paragraph
(a)(i) of this Section 3.06, and the obligations of the Administrative Agent
under paragraph (a)(ii) of this Section 3.06, shall cease, and all such rights
shall thereupon become vested in the Administrative Agent, for the benefit of
the other Secured Parties, which shall have the sole and exclusive right and
authority

--------------------------------------------------------------------------------

 

12

to exercise such voting and/or consensual rights and powers, provided that,
unless otherwise directed by the Required Lenders, the Administrative Agent
shall have the right from time to time following and during the continuance of
an Event of Default to permit the Grantors to exercise such rights. After all
Events of Default have been cured or waived and the US Borrower has delivered to
the Administrative Agent a certificate to that effect, each Grantor shall have
the exclusive right to exercise the voting and/or consensual rights and powers
that such Grantor would otherwise be entitled to exercise pursuant to the terms
of paragraph (a)(i) above and the obligations of the Administrative Agent under
paragraph (a)(ii) of this Section 3.06 shall be reinstated.
          (c) Upon the occurrence and during the continuance of an Event of
Default, after the Administrative Agent shall have notified the US Borrower of
the suspension of the rights of the Grantors under paragraph (a)(iii) of this
Section 3.06, then all rights of any Grantor to dividends, interest, principal
or other distributions that such Grantor is authorized to receive pursuant to
paragraph (a)(iii) of this Section 3.06 shall cease, and all such rights shall
thereupon become vested in the Administrative Agent, for the benefit of the
other Secured Parties, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal or other
distributions. All dividends, interest, principal or other distributions
received by any Grantor contrary to the provisions of this Section 3.06 shall be
held in trust for the benefit of the Administrative Agent and the other Secured
Parties, shall be segregated from other property or funds of such Grantor and
shall be forthwith delivered to the Administrative Agent in the same form as so
received (with any necessary endorsement reasonably requested by the
Administrative Agent). Any and all money and other property paid over to or
received by the Administrative Agent pursuant to the provisions of this
paragraph (b) shall be retained by the Administrative Agent in an account to be
established by the Administrative Agent upon receipt of such money or other
property and shall be applied in accordance with the provisions of Section 5.02.
After all Events of Default have been cured or waived and the US Borrower has
delivered to the Administrative Agent a certificate to that effect, the
Administrative Agent shall promptly repay to each Grantor (without interest) all
dividends, interest, principal or other distributions that such Grantor would
otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of
this Section 3.06 and that remain in such account.
          (d) Any notice given by the Administrative Agent to the US Borrower
suspending the rights of the Grantors under paragraph (a) of this Section 3.06
(i) may be given by telephone if promptly confirmed in writing, (ii) may be
given with respect to one or more of the Grantors at the same or different times
and (iii) may suspend the rights of the Grantors under paragraph (a)(i) or
paragraph (a)(iii) in part without suspending all such rights (as specified by
the Administrative Agent in its sole and absolute discretion) and without
waiving or otherwise affecting the Administrative Agent’s rights to give
additional notices from time to time suspending other rights so long as an Event
of Default has occurred and is continuing.

--------------------------------------------------------------------------------

 

13

ARTICLE IV
Security Interests in Personal Property
          SECTION 4.01. Security Interest. (a) As security for the payment in
full of the Obligations, each Grantor hereby assigns and pledges to the
Administrative Agent, its successors and assigns, for the benefit of the other
Secured Parties, and hereby grants to the Administrative Agent, its successors
and assigns, for the benefit of the other Secured Parties, a security interest
(the “Security Interest”) in, all right, title or interest in or to any and all
of the following assets and properties now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the “Article 9
Collateral”):
     (i) all Accounts;
     (ii) all Chattel Paper;
     (iii) all Deposit Accounts;
     (iv) all Documents;
     (v) all Equipment;
     (vi) all General Intangibles;
     (vii) all Instruments;
     (viii) all Inventory;
     (ix) all Investment Property;
     (x) letter of credit rights;
     (xi) commercial tort claims listed on Schedule V;
     (xii) all books and records pertaining to the Article 9 Collateral; and
     (xiii) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and guarantees given by
any Person with respect to any of the foregoing,
provided that notwithstanding anything to the contrary in this Agreement, this
Agreement shall not constitute a grant of a security interest in (A) any
Excluded Assets or (B) any asset if and for so long as the Administrative Agent,
in consultation with the US Borrower, reasonably determines that the cost to any
Borrower of creating or perfecting a pledge or security interest in such asset
(taking into account any adverse tax consequences to Parent, the Borrowers and
the other Subsidiaries (including the

--------------------------------------------------------------------------------

 

14

imposition of withholding or other material taxes on Lenders)) shall be
commercially unreasonable in view of the benefits to be obtained by the Lenders
therefrom.
          (b) Each Grantor hereby irrevocably authorizes the Administrative
Agent at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings) with respect to the
Article 9 Collateral or any part thereof and amendments thereto that
(i) indicate the Collateral as all assets of such Grantor or words of similar
effect as being of an equal or lesser scope or with greater detail and
(ii) contain the information required by Article 9 of the Uniform Commercial
Code of each applicable jurisdiction for the filing of any financing statement
or amendment, including (a) whether such Grantor is an organization, the type of
organization and any organizational identification number issued to such Grantor
and (b) in the case of a financing statement filed as a fixture filing, a
sufficient description of the real property to which such Article 9 Collateral
relates. Each Grantor agrees to provide such information to the Administrative
Agent promptly upon request.
          Each Grantor also ratifies its authorization for the Administrative
Agent to file in any relevant jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.
          The Administrative Agent is further authorized to file with the United
States Patent and Trademark Office or United States Copyright Office (or any
successor office or any similar office in any other country) such documents as
may be necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantor, and naming any Grantor or the
Grantors as debtors and the Administrative Agent as secured party.
          (c) The Security Interest 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 Article 9 Collateral.
          (d) Notwithstanding anything herein to the contrary, in no event shall
the security interest granted hereunder attach to any contract, agreement or
instrument to which a Grantor is a party or any of its rights or interests
thereunder if and for so long as the grant of such security interest shall
constitute or result in (i) the unenforceability of any right of the Grantor
therein or (ii) in a breach or termination pursuant to the terms of, or a
default under, any such contract, agreement or instrument (other than to the
extent that any such term would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other
applicable law or principles of equity), provided, however, that such security
interest shall attach immediately at such time as the condition causing such
unenforceability shall be remedied and, to the extent severable, shall attach
immediately to any portion of such contract or agreement that does not result in
any of the consequences specified in clause (i) or (ii) above including any
proceeds of such contract or agreement.

--------------------------------------------------------------------------------

 

15

          SECTION 4.02. Representations and Warranties. Each Grantor represents
and warrants to the Administrative Agent and the other Secured Parties that with
respect to such Grantor:
          (a) Such Grantor has good and valid rights in and title to such
Grantor’s Article 9 Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full corporate or equivalent power and
authority to grant to the Administrative Agent, for the benefit of the other
Secured Parties, the Security Interest in such Article 9 Collateral 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 and in full force and
effect.
          (b) The Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein, including the exact legal name
of such Grantor, is correct and complete as of the Effective Date. The Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations prepared by the
Administrative Agent based upon the information provided to the Administrative
Agent by such Grantor 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 US Borrower to the
Administrative Agent after the Effective Date in the case of filings, recordings
or registrations required by Section 5.03(a) or 5.12 of the Credit Agreement),
are all the filings, recordings and registrations (other than filings required
to be made in the United States Patent and Trademark Office and the United
States Copyright Office in order to perfect the Security Interest in all of such
Grantor’s Article 9 Collateral consisting of United States Patents, Trademarks
and Copyrights) that are necessary to publish notice of and protect the validity
of and to establish a legal, valid and perfected security interest in favor of
the Administrative Agent, for the benefit of the other Secured Parties, in
respect of all of such Grantor’s Article 9 Collateral in which the Security
Interest may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof) and its territories and
possessions, 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. Each Grantor represents and warrants that a fully
executed agreement in the form hereof and containing a description of all of
such Grantor’s Article 9 Collateral consisting of Intellectual Property with
respect to United States Patents and United States registered Trademarks (and
Trademarks for which United States registration applications are pending) and
United States registered Copyrights have been delivered to the Administrative
Agent for recording by the United States Patent and Trademark Office and the
United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or
17 U.S.C. § 205 and the regulations thereunder, as applicable, and otherwise as
may be required pursuant to the laws of any other necessary jurisdiction, to
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Administrative Agent, for the benefit of the other
Secured Parties, in respect of all of such Grantor’s Article 9 Collateral
consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or

--------------------------------------------------------------------------------

 

16
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary (other than
such actions as are necessary to perfect the Security Interest with respect to
any of such Grantor’s Article 9 Collateral consisting of Patents, Trademarks and
Copyrights (or registration or application for registration thereof) acquired or
developed after the Effective Date)).
          (c) The Security Interest constitutes (i) a legal and valid security
interest in all of such Grantor’s Article 9 Collateral securing the payment of
the Obligations, (ii) subject to the filings described in Section 4.02(b), a
perfected security interest in all of such Grantor’s Article 9 Collateral in
which a security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all of such Grantor’s Article 9
Collateral in which a security interest may be perfected upon the receipt and
recording of this Agreement with the United States Patent and Trademark Office
and the United States Copyright Office, as applicable, within the three-month
period (commencing as of the date hereof) pursuant to 35 U.S.C. § 261 or 15
U.S.C. § 1060 or the one month period (commencing as of the date hereof)
pursuant to 17 U.S.C. § 205 and otherwise as may be required pursuant to the
laws of any other necessary jurisdiction. The Security Interest is and shall be
prior to any other Lien on any of such Grantor’s Article 9 Collateral, other
than Permitted Encumbrances that have priority as a matter of law and Liens
expressly permitted to be prior to the Security Interest pursuant to
Section 6.02(a) of the Credit Agreement.
          (d) All of such Grantor’s Article 9 Collateral is owned by such
Grantor free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.02(a) of the Credit Agreement. Such Grantor has not filed
or consented to the filing of (i) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any of
such Grantor’s Article 9 Collateral, (ii) any assignment in which any such
Grantor assigns any Collateral or any security agreement or similar instrument
covering any of such Grantor’s Article 9 Collateral with the United States
Patent and Trademark Office or the United States Copyright Office or (iii) any
assignment in which any such Grantor assigns any of such Grantor’s Article 9
Collateral or any security agreement or similar instrument covering any of such
Grantor’s Article 9 Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Liens expressly permitted pursuant to Section 6.02(a) of the Credit Agreement.
          SECTION 4.03. Covenants. (a) Each Grantor agrees promptly to notify
the Administrative Agent in writing of any change (i) in its corporate name or
in any trade name used to identify it in the conduct of its business or in the
ownership of its properties, (ii) in the location of its chief executive office,
its principal place of business, any office in which it maintains books or
records relating to Article 9 Collateral owned by it or any office or facility
at which Article 9 Collateral owned by it is located

--------------------------------------------------------------------------------

 

17

(including the establishment of any such new office or facility), (iii) in its
identity or type of organization or corporate structure, (iv) to the extent
applicable, in its Federal Taxpayer Identification Number or organizational
identification number or (v) in its jurisdiction of organization. Each Grantor
agrees to promptly provide the Administrative Agent with certified
organizational documents reflecting any of the changes described in the first
sentence of this paragraph. Each Grantor agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
the Administrative Agent to continue at all times following such change to have
a valid, legal and perfected first priority security interest in all of such
Grantor’s Article 9 Collateral. Each Grantor agrees promptly to notify the
Administrative Agent if any material portion of the Article 9 Collateral owned
or held by such Grantor is damaged or destroyed.
          (b) Each Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Article 9 Collateral owned by
it as is consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to include
complete accounting records indicating all payments and proceeds received with
respect to any part of the Article 9 Collateral owned by it, and, at such time
or times as the Administrative Agent may reasonably request, promptly to prepare
and deliver to the Administrative Agent a duly certified schedule or schedules
in form and detail satisfactory to the Administrative Agent showing the
identity, amount and location of any and all Article 9 Collateral owned by it.
          (c) 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, Parent shall deliver to the Administrative Agent a certificate
executed by a Financial Officer and the general counsel of Parent (i) setting
forth the information required pursuant to Section 2 of the Perfection
Certificate or confirming that there has been no change in such information
since the date of the Perfection Certificate delivered on the Effective Date or
the date of the most recent certificate delivered pursuant to this
Section 4.03(c) and (ii) certifying that, to the best knowledge of such
Financial Officer and general counsel, all Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Article 9 Collateral have been
filed of record in each governmental, municipal or other appropriate office in
each jurisdiction identified pursuant to clause (a) of this Section 4.03 to the
extent necessary to protect and perfect the Security Interest for a period of
not less than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period). Each certificate delivered pursuant to this Section 4.03(c) shall
identify in the format of Schedule III all Intellectual Property of any Grantor
in existence on the date thereof and not then listed on such Schedules or
previously so identified to the Administrative Agent.
          (d) Each Grantor shall, at its own expense, take any and all actions
necessary to defend title to the Article 9 Collateral owned by it against all
Persons and to defend the Security Interest of the Administrative Agent in the
Article 9 Collateral owned

--------------------------------------------------------------------------------

 

18

by it and the priority thereof against any Lien not expressly permitted pursuant
to Section 6.02 of the Credit Agreement.
          (e) 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 better assure, 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 (including fixture filings) or other documents in
connection herewith or therewith. If any amount payable under or in connection
with any of the Article 9 Collateral owned by it shall be or become evidenced by
any promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Administrative Agent, duly endorsed in
a manner satisfactory to the Administrative Agent.
          Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Administrative Agent, with prompt notice thereof to the Grantors,
to supplement this Agreement by supplementing Schedule III or adding additional
schedules hereto to specifically identify any asset or item that may constitute
Copyrights, Licenses, Patents or Trademarks, provided that any Grantor shall
have the right, exercisable within 10 days after it has been notified by the
Administrative Agent of the specific identification of such Collateral, to
advise the Administrative Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Collateral. Each Grantor agrees that it will use its commercially
reasonable efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct in all
material respects with respect to such Collateral within 30 days after the date
it has been notified by the Administrative Agent of the specific identification
of such Collateral.
          (f) The Administrative Agent and such Persons as the Administrative
Agent may reasonably designate shall have the right, at the Grantors’ own cost
and expense, to inspect the Article 9 Collateral, all records related thereto
(and to make extracts and copies from such records) and the premises upon which
any of the Article 9 Collateral is located, to discuss the Grantors’ affairs
with the officers of the Grantors and their independent accountants and to
verify under reasonable procedures, the validity, amount, quality, quantity,
value, condition and status of, or any other matter relating to, the Article 9
Collateral, including, in the case of Accounts or Article 9 Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such a
verification. The Administrative Agent shall have the absolute right to share
any information it gains from such inspection or verification with any Secured
Party.
          (g) At its option, the Administrative Agent may discharge past due
taxes, assessments, charges, fees, Liens, security interests or other
encumbrances at any time levied or placed on the Article 9 Collateral and not
permitted pursuant to Section 6.02 of the Credit Agreement, and may pay for the
maintenance and preservation of the Article 9

--------------------------------------------------------------------------------

 

19

Collateral to the extent any Grantor fails to do so as required by the Credit
Agreement or this Agreement, and each Grantor jointly and severally agrees to
reimburse the Administrative Agent on demand for any payment made or any
reasonable expense incurred by the Administrative Agent pursuant to the
foregoing authorization, provided that nothing in this paragraph shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Administrative Agent or any other Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, Liens, security interests or other encumbrances or
maintenance as set forth herein or in the other Loan Documents.
          (h) 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 for the benefit of the other Secured
Parties. 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.
          (i) Each Grantor (rather than the Administrative Agent or any Secured
Party) shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Article 9 Collateral, all in accordance with the
terms and conditions thereof, and each Grantor jointly and severally agrees to
indemnify and hold harmless the Administrative Agent and the other Secured
Parties from and against any and all liability for such performance.
          (j) None of the Grantors shall make or permit to be made an
assignment, pledge or hypothecation of the Article 9 Collateral or shall grant
any other Lien in respect of the Article 9 Collateral, except as permitted by
the Credit Agreement. None of the Grantors shall make or permit to be made any
transfer of the Article 9 Collateral and each Grantor shall remain at all times
in possession of the Article 9 Collateral owned by it, except that unless and
until the Administrative Agent shall notify the Grantors that an Event of
Default shall have occurred and be continuing and that during the continuance
thereof the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Article 9 Collateral (which notice may be given by
telephone if promptly confirmed in writing), the Grantors may use and dispose of
the Article 9 Collateral in any lawful manner not inconsistent with the
provisions of this Agreement, the Credit Agreement or any other Loan Document.
Without limiting the generality of the foregoing, each Grantor agrees that it
shall not permit any Inventory to be in the possession or control of any
warehouseman, agent, bailee, or processor at any time unless such warehouseman,
bailee, agent or processor shall have been notified of the Security Interest and
shall have acknowledged in writing, in form and substance reasonably
satisfactory to the Administrative Agent, that such warehouseman, agent, bailee
or processor holds the Inventory for the benefit of the Administrative Agent
subject to the Security Interest and shall act upon the instructions of the
Administrative Agent without further consent from the Grantor, and that such
warehouseman, agent, bailee or processor further agrees to

--------------------------------------------------------------------------------

 

20

waive and release any Lien held by it with respect to such Inventory, whether
arising by operation of law or otherwise.
          (k) None of the Grantors will, without the Administrative Agent’s
prior written consent, grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or settle
the same for less than the full amount thereof, release, wholly or partly, any
Person liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, compromises, settlements, releases, credits or
discounts granted or made in the ordinary course of business and consistent with
its current practices and in accordance with such prudent and standard practice
used in industries that are the same as or similar to those in which such
Grantor is engaged.
          (l) The Grantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory and
Equipment in accordance with the requirements set forth in Schedule IV hereto
and Section 5.07 of the Credit Agreement. Each Grantor irrevocably makes,
constitutes and appoints the Administrative Agent (and all officers, employees
or agents designated by the Administrative Agent) as such Grantor’s true and
lawful agent (and attorney-in-fact) for the purpose, during the continuance of
an Event of Default, of making, settling and adjusting claims in respect of
Article 9 Collateral under policies of insurance, endorsing the name of such
Grantor on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or part relating thereto, the
Administrative Agent may, without waiving or releasing any obligation or
liability of the Grantors hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Administrative Agent
reasonably deems advisable. All reasonable out-of-pocket sums disbursed by the
Administrative Agent in connection with this paragraph, including reasonable
attorneys’ fees, court costs, reasonable out-of-pocket expenses and other
reasonable charges relating thereto, shall be payable, upon demand, by the
Grantors to the Administrative Agent and shall be additional Obligations secured
hereby.
          (m) Each Grantor shall maintain, in form and manner reasonably
satisfactory to the Administrative Agent, records of its Chattel Paper and its
books, records and documents evidencing or pertaining thereto.
          SECTION 4.04. Other Actions. In order to further insure the
attachment, perfection and priority of, and the ability of the Administrative
Agent to enforce, the Security Interest, each Grantor agrees, in each case at
such Grantor’s own expense, to take the following actions with respect to the
following Article 9 Collateral:
     (a) Instruments. If any Grantor shall at any time hold or acquire any
Instruments, such Grantor shall forthwith endorse, assign and deliver the same
to the Administrative Agent, for the benefit of the other Secured Parties,

--------------------------------------------------------------------------------

 

21

accompanied by such instruments of transfer or assignment duly endorsed in blank
by such Grantor as the Administrative Agent may from time to time reasonably
request.
     (b) Deposit Accounts. For each deposit account that any Grantor at any time
opens or maintains, such Grantor shall, either (i) cause the depositary bank to
agree to comply with instructions from the Administrative Agent to such
depositary bank directing the disposition of funds from time to time credited to
such deposit account, without further consent of such Grantor or any other
Person, pursuant to an agreement satisfactory to the Administrative Agent, or
(ii) arrange for the Administrative Agent to become the customer of the
depositary bank with respect to the deposit account, with the Grantor being
permitted, only with the consent of the Administrative Agent, to exercise rights
to withdraw funds from such deposit account. The Administrative Agent agrees
with each Grantor that the Administrative Agent shall not give any such
instructions or withhold any withdrawal rights from any Grantor unless an Event
of Default has occurred and is continuing, or, after giving effect to any such
withdrawal rights, would occur. The provisions of this paragraph shall not apply
to (A) any deposit account for which any Grantor, the depositary bank and the
Administrative Agent have entered into a cash collateral agreement specially
negotiated among such Grantor, the depositary bank and the Administrative Agent
for the specific purpose set forth therein and (B) deposit accounts for which
the Administrative Agent is the depositary.
     (c) Investment Property. Except to the extent otherwise provided in
Article III, if any Grantor shall at any time hold or acquire any certificated
securities, such Grantor shall forthwith endorse, assign and deliver the same to
the Administrative Agent, for the benefit of the other Secured Parties,
accompanied by such instruments of transfer or assignment duly endorsed in blank
by such Grantor as the Administrative Agent may from time to time specify. If
any securities now or hereafter acquired by any Grantor are uncertificated and
are issued to such Grantor or its nominee directly by the issuer thereof, such
Grantor shall immediately notify the Administrative Agent thereof and, at the
Administrative Agent’s request and option, pursuant to an agreement in form and
substance reasonably satisfactory to the Administrative Agent, either (i) cause
the issuer to agree to comply with instructions from the Administrative Agent as
to such securities, without further consent of any Grantor or such nominee, or
(ii) arrange for the Administrative Agent to become the registered owner of the
securities. If any securities, whether certificated or uncertificated, or other
investment property now or hereafter acquired by any Grantor are held by such
Grantor or its nominee through a securities intermediary or commodity
intermediary, such Grantor shall immediately notify the Administrative Agent
thereof and, at the Administrative Agent’s request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the Administrative
Agent, either (i) cause such securities intermediary or (as the case may be)
commodity intermediary to agree to comply with entitlement orders or other
instructions from the Administrative Agent to such securities intermediary as to

--------------------------------------------------------------------------------

 

22

such security entitlements, or (as the case may be) to apply any value
distributed on account of any commodity contract as directed by the
Administrative Agent to such commodity intermediary, in each case without
further consent of any Grantor or such nominee, or (ii) in the case of financial
assets or other Investment Property held through a securities intermediary,
arrange for the Administrative Agent to become the entitlement holder with
respect to such investment property, with the Grantor being permitted, only with
the consent of the Administrative Agent, to exercise rights to withdraw or
otherwise deal with such investment property. The Administrative Agent agrees
with each Grantor that the Administrative Agent shall not give any such
entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its consent to
the exercise of any withdrawal or dealing rights by any Grantor, unless an Event
of Default has occurred and is continuing, or, after giving effect to any such
investment and withdrawal rights, would occur. The provisions of this paragraph
shall not apply to any financial assets credited to a securities account for
which the Administrative Agent is the securities intermediary.
     (d) Electronic Chattel Paper and Transferable Records. If any Grantor at
any time holds or acquires an interest in any electronic chattel paper or any
“transferable record,” as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify the Administrative Agent
thereof and, at the request of the Administrative Agent, shall take such action
as the Administrative Agent may reasonably request to vest in the Administrative
Agent control under New York UCC Section 9-105 of such electronic chattel paper
or control under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The Administrative Agent agrees with such Grantor that the
Administrative Agent will arrange, pursuant to procedures reasonably
satisfactory to the Administrative Agent and so long as such procedures will not
result in the Administrative Agent’s loss of control, for the Grantor to make
alterations to the electronic chattel paper or transferable record permitted
under UCC Section 9-105 or, as the case may be, Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transactions Act for a party in control to allow without loss
of control, unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by such Grantor with respect to such
electronic chattel paper or transferable record.
     (e) Letter of Credit Rights. If any Grantor is at any time a beneficiary
under a letter of credit now or hereafter issued in favor of such Grantor, such
Grantor shall promptly notify the Administrative Agent thereof and, at the
request and option of the Administrative Agent, such Grantor shall, pursuant to
an agreement in form and substance reasonably satisfactory to the Administrative

--------------------------------------------------------------------------------

 

23

Agent, either (i) arrange for the issuer and any confirmer of such letter of
credit to consent to an assignment to the Administrative Agent of the proceeds
of any drawing under the letter of credit or (ii) arrange for the Administrative
Agent to become the transferee beneficiary of the letter of credit, with the
Administrative Agent agreeing, in each case, that the proceeds of any drawing
under the letter of credit are to be paid to the applicable Grantor unless an
Event of Default has occurred or is continuing.
     ((f) Commercial Tort Claims. If any Grantor shall at any time hold or
acquire a commercial tort claim in an amount reasonably estimated to exceed
$250,000, the Grantor shall promptly notify the Administrative Agent thereof in
a writing signed by such Grantor including a summary description of such claim
and grant to the Administrative Agent in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to the
Administrative Agent.
          SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not do any act or omit do to
any act (and will exercise commercially reasonable efforts to prevent its
licensees from doing any act or omitting to do any act) whereby any Patent that
is material to the conduct of such Grantor’s business may become invalidated or
dedicated to the public, and agrees that it shall continue to mark any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.
          (b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor’s
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
          (c) Each Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a material Copyright, continue to
publish, reproduce, display, adopt and distribute the work with appropriate
copyright notice as necessary and sufficient to establish and preserve its
maximum rights under applicable copyright laws.
          (d) Each Grantor shall notify the Administrative Agent promptly if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any materially adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any

--------------------------------------------------------------------------------

 

24

country) regarding such Grantor’s ownership of any Patent, Trademark or
Copyright, its right to register the same, or its right to keep and maintain the
same.
          (e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly informs
the Administrative Agent, and, upon request of the Administrative Agent,
executes and delivers any and all agreements, instruments, documents and papers
as the Administrative Agent may reasonably request to evidence the
Administrative Agent’s security interest in such Patent, Trademark or Copyright,
and each Grantor hereby appoints the Administrative Agent as its
attorney-in-fact to execute and file such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed; such power, being
coupled with an interest, is irrevocable.
          (f) Each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor’s business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancelation proceedings against third parties.
          (g) In the event that any Grantor has reason to believe that any
Article 9 Collateral consisting of a Patent, Trademark or Copyright material to
the conduct of any Grantor’s business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Administrative Agent and shall, if consistent with good business judgment,
promptly sue for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Article 9 Collateral.
          (h) Upon and during the continuance of an Event of Default, each
Grantor shall use its commercially reasonable efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all such Grantor’s right, title
and interest thereunder to the Administrative Agent or its designee.

--------------------------------------------------------------------------------

 

25

ARTICLE V
Remedies
          SECTION 5.01. Remedies Upon Default. Upon the occurrence and during
the continuance of an Event of Default, each Grantor agrees to deliver each item
of Collateral to the Administrative Agent on demand, and it is agreed that the
Administrative Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Grantors to the Administrative Agent, or
to license or sublicense, whether general, special or otherwise, and whether on
an exclusive or nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Administrative
Agent shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained on commercially
reasonable terms), and (b) with or without legal process and with or without
prior notice or demand for performance, to take possession of the Article 9
Collateral and without liability for trespass to enter any premises where the
Article 9 Collateral may be located for the purpose of taking possession of or
removing the Article 9 Collateral and, generally, to exercise any and all rights
afforded to a secured party under the Uniform Commercial Code or other
applicable law. Without limiting the generality of the foregoing, each Grantor
agrees that the Administrative Agent shall have the right, subject to the
mandatory requirements of applicable law, to sell or otherwise dispose of all or
any part of the Collateral at a public or private sale or at any broker’s board
or on any securities exchange, for cash, upon credit or for future delivery as
the Administrative Agent shall deem appropriate. The Administrative Agent shall
be authorized at any such sale of securities (if it deems it advisable to do so)
to restrict the prospective bidders or purchasers to Persons who will represent
and agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Administrative Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any sale of Collateral shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
          The Administrative Agent shall give the applicable Grantors 10 days’
written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Administrative Agent’s intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker’s board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the

--------------------------------------------------------------------------------

 

26

Administrative Agent may fix and state in the notice (if any) of such sale. At
any such sale, the Collateral, or portion thereof, to be sold may be sold in one
lot as an entirety or in separate parcels, as the Administrative Agent may (in
its sole and absolute discretion) determine. The Administrative Agent shall not
be obligated to make any sale of any Collateral if it shall determine not to do
so, regardless of the fact that notice of sale of such Collateral shall have
been given. The Administrative Agent may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Administrative Agent shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon
like notice. At any public (or, to the extent permitted by law, private) sale
made pursuant to this Agreement, any Secured Party may bid for or purchase, free
(to the extent permitted by law) from any right of redemption, stay, valuation
or appraisal on the part of any Grantor (all said rights being also hereby
waived and released to the extent permitted by law), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to such Secured Party from any Grantor as a credit
against the purchase price, and such Secured Party may, upon compliance with the
terms of sale, hold, retain and dispose of such property without further
accountability to any Grantor therefor. For purposes hereof, a written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Administrative Agent shall be free to carry out such sale pursuant
to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Administrative Agent shall have entered into such an agreement all
Events of Default shall have been remedied and the Obligations paid in full. As
an alternative to exercising the power of sale herein conferred upon it, the
Administrative Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale
pursuant to the provisions of this Section 5.01 shall be deemed to conform to
the commercially reasonable standards as provided in Section 9-610(b) of the New
York UCC or its equivalent in other jurisdictions.
          SECTION 5.02. Application of Proceeds. The Administrative Agent shall
apply the proceeds of any collection or sale of Collateral, including any
Collateral consisting of cash, as follows:
     FIRST, to the payment of all reasonable out-of-pocket costs and expenses
incurred by the Administrative Agent in connection with such collection or sale
or otherwise in connection with this Agreement, any other Loan Document or any
of the Obligations, including all court costs and the reasonable fees and
expenses of its agents and legal counsel, the repayment of all advances made by
the Administrative Agent hereunder or under any other Loan Document on behalf of

--------------------------------------------------------------------------------

 

27

any Grantor and any other reasonable out-of-pocket costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under any other
Loan Document;
     SECOND, to the payment in full of the Obligations (the amounts so applied
to be distributed among the Secured Parties pro rata in accordance with the
amounts of the Obligations owed to them on the date of any such distribution);
and
     THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Administrative Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Administrative Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Administrative Agent or of the officer making the sale shall
be a sufficient discharge to the purchaser or purchasers of the Collateral so
sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Administrative
Agent or such officer or be answerable in any way for the misapplication
thereof.
          SECTION 5.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Administrative Agent to exercise rights and remedies
under this Agreement at such time as the Administrative Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Administrative Agent an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sublicense any of the Article 9 Collateral consisting of Intellectual Property
now owned or hereafter acquired by such Grantor, and wherever the same may be
located, and including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer software
and programs used for the compilation or printout thereof. The use of such
license by the Administrative Agent may be exercised, at the option of the
Administrative Agent, upon the occurrence and during the continuation of an
Event of Default, provided that any license, sublicense or other transaction
entered into by the Administrative Agent in accordance herewith shall be binding
upon the Grantors notwithstanding any subsequent cure of an Event of Default.
          SECTION 5.04. Securities Act. In view of the position of the Grantors
in relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being called the “Federal Securities Laws”) with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Administrative Agent if the Administrative
Agent were to attempt to dispose of all or any part of the Pledged Collateral,
and might also limit the

--------------------------------------------------------------------------------

 

28

extent to which or the manner in which any subsequent transferee of any Pledged
Collateral could dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Administrative Agent in any attempt to
dispose of all or part of the Pledged Collateral under applicable Blue Sky or
other state securities laws or similar laws analogous in purpose or effect. Each
Grantor recognizes that in light of such restrictions and limitations the
Administrative Agent may, with respect to any sale of the Pledged Collateral,
limit the purchasers to those who will agree, among other things, to acquire
such Pledged Collateral for their own account, for investment, and not with a
view to the distribution or resale thereof. Each Grantor acknowledges and agrees
that in light of such restrictions and limitations, the Administrative Agent, in
its sole and absolute discretion (a) may proceed to make such a sale whether or
not a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale. Each Grantor acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if such sale
were a public sale without such restrictions. In the event of any such sale, the
Administrative Agent shall incur no responsibility or liability for selling all
or any part of the Pledged Collateral at a price that the Administrative Agent,
in its sole and absolute discretion, may in good faith deem reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might have been realized if the sale were deferred until after registration as
aforesaid or if more than a single purchaser were approached. The provisions of
this Section 5.04 will apply notwithstanding the existence of a public or
private market upon which the quotations or sales prices may exceed
substantially the price at which the Administrative Agent sells.
          SECTION 5.05. Registration. Each Grantor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any reason
the Administrative Agent desires to sell any of the Pledged Collateral at a
public sale, such Grantor will, at any time and from time to time, upon the
written request of the Administrative Agent, use its commercially reasonable
efforts to take or to cause the issuer of such Pledged Collateral to take such
action and prepare, distribute and/or file such documents, as are required or
advisable in the reasonable opinion of counsel for the Administrative Agent to
permit the public sale of such Pledged Collateral. Each Grantor further agrees
to indemnify, defend and hold harmless the Administrative Agent, each other
Secured Party, any underwriter and their respective officers, directors,
affiliates and controlling persons from and against all loss, liability,
reasonable out-of-pocket expenses, reasonable costs of counsel (including
reasonable fees and expenses to the Administrative Agent of legal counsel), and
claims (including the reasonable costs of investigation) that they may incur
insofar as such loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
in any thereof not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information furnished in writing
to such Grantor or the issuer of such Pledged Collateral by the Administrative
Agent or any other Secured Party expressly for use therein. Each Grantor further
agrees, upon such written request referred to above, to use its

--------------------------------------------------------------------------------

 

29

commercially reasonable efforts to qualify, file or register, or cause the
issuer of such Pledged Collateral to qualify, file or register, any of the
Pledged Collateral under the Blue Sky or other securities laws of such states as
may be requested by the Administrative Agent and keep effective, or cause to be
kept effective, all such qualifications, filings or registrations. Each Grantor
will bear all costs and expenses of carrying out its obligations under this
Section 5.05. Each Grantor acknowledges that there is no adequate remedy at law
for failure by it to comply with the provisions of this Section 5.05 and that
such failure would not be adequately compensable in damages, and therefore
agrees that its agreements contained in this Section 5.05 may be specifically
enforced.
ARTICLE VI
Indemnity, Subrogation and Subordination
          SECTION 6.01. 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 6.03), each Borrower agrees that (a) in the event a
payment of an obligation shall be made by any Guarantor under this Agreement,
such Borrower shall indemnify such Guarantor for the full amount of such payment
and such Guarantor shall be subrogated to the rights of the Person to whom such
payment shall have been made to the extent of such payment and (b) in the event
any assets of any Grantor shall be sold pursuant to this Agreement or any other
Security Document to satisfy in whole or in part an obligation owed to any
Secured Party, the applicable Borrower shall indemnify such Grantor in an amount
equal to the greater of the book value or the fair market value of the assets so
sold.
          SECTION 6.02. Contribution and Subrogation. Each US Borrower
Subsidiary Party (a “Contributing Party”) agrees (subject to Section 6.03) that,
in the event a payment shall be made by any other US Borrower Subsidiary Party
hereunder in respect of any Obligation or assets of any other US Borrower
Subsidiary Party shall be sold pursuant to any Security Document to satisfy any
Obligation owed to any Secured Party and such other US Borrower Subsidiary Party
(the “Claiming Party”) shall not have been fully indemnified by the applicable
Borrower as provided in Section 6.01, the Contributing Party shall indemnify the
Claiming Party in an amount equal to the amount of such payment or the greater
of the book value or the fair market value of such assets, as the case may be,
in each case multiplied by a fraction of which the numerator shall be the net
worth of the Contributing Party on the date hereof and the denominator shall be
the aggregate net worth of all the US Borrower Subsidiary Parties on the date
hereof (or, in the case of any US Borrower Subsidiary Party becoming a party
hereto pursuant to Section 7.14, the date of the Guarantee and Collateral
Agreement Supplement hereto executed and delivered by such US Borrower
Subsidiary Party). Any Contributing Party making any payment to a Claiming Party
pursuant to this Section 6.02 shall be subrogated to the rights of such Claiming
Party under Section 6.01 to the extent of such payment.
          SECTION 6.03. Subordination. (a) Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors and Grantors under

--------------------------------------------------------------------------------

 

30

Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations. No failure on the part
of any Borrower or any Guarantor or Grantor to make the payments required by
Sections 6.01 and 6.02 (or any other payments required under applicable law or
otherwise) shall in any respect limit the obligations and liabilities of any
Guarantor or Grantor with respect to its obligations hereunder, and each
Guarantor or Grantor shall remain liable for the full amount of the obligations
of such Guarantor or Grantor hereunder.
          (b) Each Guarantor and Grantor hereby agrees that all Indebtedness and
other monetary obligations owed by it to any other Subsidiary shall be fully
subordinated to the indefeasible payment in full in cash of the Obligations.
ARTICLE VII
Miscellaneous
          SECTION 7.01. 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 Subsidiary Loan Party shall be given to it in care of the US
Borrower as provided in Section 9.01 of the Credit Agreement.
          SECTION 7.02. Waivers; Amendment. (a) No failure or delay by the
Administrative Agent, any Issuing Bank 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, the Issuing
Banks 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 Loan Party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section 7.02, 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 or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, any
Issuing Bank or any Lender may have had notice or knowledge of such Default at
the time. No notice to or demand on any Loan Party in any case shall entitle any
Loan Party 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 Loan Party or Loan Parties 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.

--------------------------------------------------------------------------------

 

31

          SECTION 7.03. Administrative Agent’s Fees and Expenses;
Indemnification. (a) The parties hereto agree that the Administrative Agent
shall be entitled to reimbursement of its reasonable out-of-pocket 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 Grantor and each Guarantor agrees to indemnify the
Administrative Agent and the other Indemnitees (as defined in Section 9.03(b) of
the Credit Agreement) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related reasonable out-of-pocket
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, reasonably incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
arrangement and the syndication of the credit facilities provided for herein,
the preparation, execution, delivery and administration of the Loan Documents or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan, B/A or Letter of Credit or the use of the proceeds therefrom
(including any refusal by an Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by Parent, the Borrowers or any of the
other Subsidiaries, or any Environmental Liability related in any way to Parent,
the Borrowers or any of the other Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto and regardless of
whether such matter is initiated by a third party or by Parent or any Affiliate
thereof, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related reasonable out-of-pocket expenses are determined by a court of competent
jurisdiction by final and non-appealed judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee or such Indemnitee’s
violation of any applicable law or breach of its obligations under the Loan
Documents.
          (c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.03 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 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 7.03 shall be payable on written demand therefor.
          SECTION 7.04. 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

--------------------------------------------------------------------------------

 

32

agreements by or on behalf of any Guarantor, Grantor or the Administrative Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
          SECTION 7.05. Survival of Agreement. All covenants, agreements,
representations and warranties made by 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 and
issuance of any Letters of Credit, regardless of any investigation made by any
Lender or on its behalf and notwithstanding that the Administrative Agent, any
Issuing Bank 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 or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated.
          SECTION 7.06. Counterparts; Effectiveness; Several Agreement. This
Agreement 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. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement. This
Agreement shall become effective as to any Loan Party when a counterpart hereof
executed on behalf of such Loan Party 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 such Loan
Party and the Administrative Agent and their respective permitted successors and
assigns, and shall inure to the benefit of such Loan Party, the Administrative
Agent and the other Secured Parties and their respective successors and assigns,
except that no Loan Party shall have the right to assign or transfer its rights
or obligations hereunder or any interest herein or in the Collateral (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 Loan Party and may be amended, modified,
supplemented, waived or released with respect to any Loan Party without the
approval of any other Loan Party and without affecting the obligations of any
other Loan Party hereunder.
          SECTION 7.07. 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
uneforceability 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.

--------------------------------------------------------------------------------

 

33

          SECTION 7.08. 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
Subsidiary Loan Party against any of and all the obligations of such Subsidiary
Loan Party 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 7.08 are in addition to other rights and remedies
(including other rights of set-off) which such Lender may have.
          SECTION 7.09. 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 Parent, the US Borrower and the Subsidiary Loan Parties
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive 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, non-appealed 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.
Nothing in this Agreement or any other Loan Document shall affect any right that
Parent, the US Borrower, the Subsidiary Loan Parties, any Agent, any Issuing
Bank or any Lender may otherwise have to bring any action or proceeding relating
to this Agreement or any other Loan Document against any other party hereto or
their properties in the courts of any jurisdiction.
          (c) Each of Parent, the US Borrower and the Subsidiary Loan Parties
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 7.09. 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 7.01. 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.

--------------------------------------------------------------------------------

 

34

          SECTION 7.10. 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 7.10.
          SECTION 7.11. 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 shall not affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
          SECTION 7.12. Security Interest Absolute. All rights of the
Administrative Agent hereunder, the Security Interest, the grant of a security
interest in the Pledged Collateral and all obligations of each Grantor and
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 with respect to any of the 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
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, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor or Guarantor in respect of
the Obligations or this Agreement.
          SECTION 7.13. Termination or Release. (a) This Agreement, the
Guarantees made herein, the Security Interest and all other security interests
granted hereby shall terminate when all the outstanding Loan Document
Obligations have been indefeasibly paid in full and the Lenders have no further
commitment to lend under the Credit Agreement, the LC Exposure has been reduced
to zero and the Issuing Banks have no further obligations to issue Letters of
Credit under the Credit Agreement.
          (b) A Subsidiary Loan Party shall automatically be released from its
obligations hereunder and the Security Interest in the Collateral of such
Subsidiary Loan Party shall be automatically released and all provisions of the
Loan Documents shall cease to apply to such Subsidiary Loan Party upon the
consummation of any transaction permitted by the Credit Agreement as a result of
which such Subsidiary Loan Party

--------------------------------------------------------------------------------

 

35

ceases to be a Subsidiary, provided that if so required by the Credit Agreement,
the Required Lenders shall have consented to such transaction and the terms of
such consent did not provide otherwise.
          (c) Upon any sale or other transfer by any Grantor (other than to
Parent or any Subsidiary) of any Collateral that is permitted under any Loan
Document, 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 clause
(a), (b) or (c) of this Section 7.13, the Administrative Agent shall 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. Any
execution and delivery of documents pursuant to this Section 7.13 shall be
without recourse to or warranty by the Administrative Agent.
          SECTION 7.14. Additional Subsidiaries. Each Domestic Subsidiary of a
Loan Party that is not a Foreign Subsidiary that was not in existence or not
such a Subsidiary on the date of the Credit Agreement is required to enter in
this Agreement as a Subsidiary Loan Party in accordance with Section 5.11 of the
Credit Agreement. Upon execution and delivery by the Administrative Agent and a
Subsidiary of a Guarantee and Collateral Agreement Supplement, such Subsidiary
shall become a Subsidiary Loan Party hereunder with the same force and effect as
if originally named as a Subsidiary Loan Party herein. The execution and
delivery of any such instrument shall not require the consent of any other Loan
Party hereunder. The rights and obligations of each Loan Party hereunder shall
remain in full force and effect notwithstanding the addition of any new Loan
Party as a party to this Agreement.
          SECTION 7.15. Administrative Agent Appointed Attorney-in-Fact. 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
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, upon the
occurrence and during the continuance of an Event of Default, with full power of
substitution either in the Administrative Agent’s name or in the name of such
Grantor (a) to receive, endorse, assign and/or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment relating
to the Collateral or any part thereof; (b) to demand, collect, receive payment
of, give receipt for and give discharges and releases of all or any of the
Collateral; (c) to sign the name of any Grantor on any invoice or bill of lading
relating to any of the Collateral; (d) to send verifications of Accounts
Receivable to any Account Debtor; (e) to commence and prosecute any and all
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the Collateral or
to enforce any rights in respect of any Collateral; (f) to settle, compromise,
compound, adjust or defend any actions, suits or proceedings relating to all

--------------------------------------------------------------------------------

 

36
or any of the Collateral; (g) to notify, or to require any Grantor to notify,
Account Debtors to make payment directly to the Administrative Agent; and (h) to
use, sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and to 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 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.
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 (as
determined by a court of competent jurisdiction by final and non-appealed
judgment).

 

--------------------------------------------------------------------------------

 

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

                  CCE SPINCO, INC.,    
 
           
 
  by        
 
      /s/ Michael Rapino    
 
           
 
      Name: Michael Rapino    
 
      Title: Chief Executive Officer    

 

--------------------------------------------------------------------------------

 

                  SFX ENTERTAINMENT, INC.,    
 
           
 
  by   /s/ Michael Rapino    
 
           
 
      Name: Michael Rapino    
 
      Title: Chief Executive Officer    

 

--------------------------------------------------------------------------------

 

                  EACH OF THE SUBSIDIARIES         LISTED ON SCHEDULE I HERETO,
   
 
           
 
  by   /s/ Michael Rapino    
 
           
 
      Name: Michael Rapino    
 
      Title: Chief Executive Officer    

 

--------------------------------------------------------------------------------

 

                  JPMORGAN CHASE BANK, N.A., AS         ADMINISTRATIVE AGENT,  
 
 
           
 
  by   /s/ Thomas H. Kozlark    
 
           
 
        Name: Thomas H. Kozlark  
 
        Title:   Vice President