Exhibit 10.2

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (this “Agreement”) is made as of the 24th day of
October, 2005, among Grantors listed on the signature pages hereof
(collectively, jointly and severally, “Grantors” and each individually
“Grantor”), and WELLS FARGO FOOTHILL, INC., in its capacity as administrative
agent for the Lender Group and the Bank Product Provider (together with its
successors, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, certain of the Borrowers, the Agent and certain lenders have entered
into a Loan and Security Agreement providing for a secured credit facility (the
“2001 Credit Agreement”); as of September 24, 2002, the 2001 Credit Agreement
was amended and restated in its entirety (as so amended and restated, and as
further amended thereafter, the “2002 Credit Agreement”); as of April 12, 2005
the 2002 Credit Agreement was amended and restated in its entirety (as amended
and restated, and as further amended thereafter, “April 2005 Credit Agreement”).

 

WHEREAS, the Borrowers have requested that the Lenders (as defined below) agree
to further amend and restate the April 2005 Credit Agreement in order to, among
other things, make available a secured credit facility of $100,000,000;

 

WHEREAS, pursuant to that certain Third Amended and Restated Credit Agreement of
even date herewith (as amended, restated, supplemented or otherwise modified
from time to time, including all schedules thereto, the “Credit Agreement”)
among Silicon Graphics, Inc., a Delaware corporation (“Parent”) and each of
Parent’s Subsidiaries identified on the signature pages thereof (such
Subsidiaries, together with Parent, are referred to hereinafter as a “Borrower”
and individually and collectively, jointly and severally, as the “Borrowers”,
the lenders party thereto as “Lenders” (“Lenders”), and Agent, the Lender Group
is willing to make available to Borrowers a secured credit facility of
$100,000,000 from time to time pursuant to the terms and conditions thereof, and

 

WHEREAS, Agent has agreed to act as agent for the benefit of the Lender Group
and the Bank Product Provider in connection with the transactions contemplated
by this Agreement, and

 

WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement
and the other Loan Documents and to induce the Lender Group to make financial
accommodations to Borrowers as provided for in the Credit Agreement, Grantors
have agreed to grant a continuing security interest in and to the Collateral in
order to secure the prompt and complete payment, observance and performance of,
among other things, (a) the obligations of Grantors arising from this Agreement,
the Credit Agreement, and the other Loan Documents, (b) all Bank Product
Obligations, and (c) all Obligations of any Borrower (including, without
limitation, any interest, fees or expenses that accrue after the filing of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in any Insolvency Proceeding), plus reasonable attorneys fees
and expenses if the obligations represented thereunder are collected by law,
through an attorney-at-law, or under advice therefrom (clauses (a), (b), and
(c) being hereinafter referred to as the “Secured Obligations”), by the granting
of the security interests contemplated by this Agreement, and

 

WHEREAS, as a condition to making the financial accommodations to Borrowers as
provided for in the Credit Agreement, the Lender Group has required that,
concurrently herewith, Grantors execute and deliver to Agent an Intellectual
Property Security Agreement (the “Intellectual Property Security Agreement”) in
the form of Exhibit A attached hereto, and

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NOW, THEREFORE, for and in consideration of the recitals made above and other
good and valuable consideration, the receipt, sufficiency and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:

 

1. Defined Terms. All capitalized terms used herein (including, without
limitation, in the preamble and recitals hereof) without definition shall have
the meanings ascribed thereto in the Credit Agreement or the Intellectual
Property Security Agreement. Any terms used in this Agreement that are defined
in the Code shall be construed and defined as set forth in the Code unless
otherwise defined herein or in the Credit Agreement; provided, however, that to
the extent that the Code is used to define any term herein and such term is
defined differently in different Articles of the Code, the definition of such
term contained in Article 9 of the Code shall govern. In addition to those terms
defined elsewhere in this Agreement, as used in this Agreement, the following
terms shall have the following meanings:

 

(a) “Accounts” means accounts (as that term is defined in the Code).

 

(b) “Code” means the New York Uniform Commercial Code, as in effect from time to
time; provided, however, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, priority, or
remedies with respect to Agent’s Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term “Code” shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority, or
remedies.

 

(c) “Copyrights” has meaning set forth in the Intellectual Property Security
Agreement.

 

(d) “Copyright Security Agreement” means each Copyright Security Agreement among
Grantors, or any of them, and Agent, for the benefit of the Lender Group and the
Bank Product Provider, in substantially the form of Exhibit B attached hereto,
pursuant to which Grantors have granted to Agent, for the benefit of the Lender
Group and the Bank Product Provider, a security interest in all their respective
Copyrights.

 

(e) “Deposit Account” means deposit account (as that term is defined in the
Code).

 

(f) “Equipment” means equipment (as that term is defined in the Code).

 

(g) “General Intangibles” means general intangibles (as that term is defined in
the Code and, in any event, including, without limitation, payment intangibles,
contract rights, rights to payment, rights arising under common law, statutes,
or regulations, choses or things in action, goodwill (including the goodwill
associated with any Trademark, Patent, or Copyright), Patents, Trademarks,
Copyrights, URLs and domain names, industrial designs, other industrial or
intellectual property or rights therein or applications therefor, whether under
license or otherwise, programs, programming materials, blueprints, drawings,
purchase orders, customer lists, monies due or recoverable from pension funds,
route lists, rights to payment and other rights under any royalty or licensing
agreements, including intellectual property licenses, infringement claims,
computer programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, pension plan refunds, pension plan refund claims,
insurance premium rebates, tax refunds, and tax refund claims, uncertificated
securities, and any other personal property other than commercial tort claims,
money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related
Property, Negotiable Collateral, and oil, gas, or other minerals before
extraction).

 

(h) “Intellectual Property Collateral” has meaning set forth in the Intellectual
Property Security Agreement.

 

(i) [INTENTIONALLY OMITTED]

 

(j) “Inventory” means inventory (as that term is defined in the Code).

 

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(k) “Investment Related Property” means (i) investment property (as that term is
defined in the Code), and (ii) all of the following regardless of whether
classified as investment property under the Code: all Pledged Interests, Pledged
Operating Agreements, and Pledged Partnership Agreements.

 

(l) “Patents” has meaning set forth in the Intellectual Property Security
Agreement.

 

(m) “Patent Security Agreement” means each Patent Security Agreement among
Grantors, or any of them, and Agent, for the benefit of the Lender Group and the
Bank Product Provider, in substantially the form of Exhibit C attached hereto,
pursuant to which Grantors have granted to Agent, for the benefit of the Lender
Group and the Bank Product Provider, a security interest in all their respective
Patents.

 

(n) “Pledged Companies” means, each Person listed on Schedule 1 hereto as a
“Pledged Company”, together with each other Person, all or a portion of whose
Stock, is acquired or otherwise owned by a Grantor after the Closing Date.

 

(o) “Pledged Interests” means all of each Grantor’s right, title and interest in
and to all of the Stock now or hereafter owned by such Grantor, regardless of
class or designation, including, without limitation, in each of the Pledged
Companies, and all substitutions therefor and replacements thereof, all proceeds
thereof and all rights relating thereto, including, without limitation, any
certificates representing the Stock, the right to request after the occurrence
and during the continuation of an Event of Default that such Stock be registered
in the name of Agent or any of its nominees, the right to receive any
certificates representing any of the Stock and the right to require that such
certificates be delivered to Agent together with undated powers or assignments
of investment securities with respect thereto, duly endorsed in blank by such
Grantor, all warrants, options, share appreciation rights and other rights,
contractual or otherwise, in respect thereof and of all dividends, distributions
of income, profits, surplus, or other compensation by way of income or
liquidating distributions, in cash or in kind, and cash, instruments, and other
property from time to time received, receivable, or otherwise distributed in
respect of or in addition to, in substitution of, on account of, or in exchange
for any or all of the foregoing.

 

(p) “Pledged Interests Addendum” means a Pledged Interests Addendum
substantially in the form of Exhibit D to this Agreement.

 

(q) “Pledged Operating Agreements” means all of each Grantor’s rights, powers,
and remedies under the limited liability company operating agreements of the
Pledged Companies that are limited liability companies.

 

(r) “Pledged Partnership Agreements” means all of each Grantor’s rights, powers,
and remedies under the partnership agreements of each of the Pledged Companies
that are partnerships.

 

(s) “Records” means information that is inscribed on a tangible medium or which
is stored in an electronic or other medium and is retrievable in perceivable
form.

 

(t) “Securities Accounts” means securities accounts (as that term is defined in
the Code).

 

(u) “Specified Permitted Liens” means those Permitted Liens set forth in clauses
(b) and (g) of the definition of “Permitted Liens” in Schedule 1.1 of the Credit
Agreement and which, as to all Grantors, do not secure obligations of more than
$500,000 in the aggregate at any time.

 

(v) “Trademarks” has meaning set forth in the Intellectual Property Security
Agreement.

 

(w) “Trademark Security Agreement” means each Trademark Security Agreement among
Grantors, or any of them, and Agent, for the benefit of the Lender Group and the
Bank Product Provider, in substantially the form of Exhibit E attached hereto,
pursuant to which Grantors have granted to Agent, for the benefit of the Lender
Group and the Bank Product Provider, a security interest in all their respective
Trademarks.

 

(x) “URL” means “uniform recourse locator,” an internet web address.

 

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2. Grant of Security. Each Grantor hereby unconditionally grants, assigns and
pledges to Agent, for the benefit of the Lender Group and the Bank Product
Provider, a continuing security interest in all personal property of such
Grantor whether now owned or hereafter acquired or arising and wherever located
(hereinafter referred to as the “Security Interest”), including, without
limitation, such Grantor’s right, title, and interest in and to the following,
whether now owned or hereafter acquired or arising and wherever located (the
“Collateral”):

 

(a) all of such Grantor’s Accounts;

 

(b) all of such Grantor’s books and records (including all of its Records
indicating, summarizing, or evidencing its assets (including the Collateral) or
liabilities, all of its Records relating to its business operations or financial
condition, and all of its goods or General Intangibles related to such
information) (“Books”);

 

(c) all of such Grantor’s chattel paper (as that term is defined in the Code)
and, in any event, including, without limitation, tangible chattel paper and
electronic chattel paper (“Chattel Paper”);

 

(d) all of such Grantor’s interest with respect to any Deposit Account;

 

(e) all of such Grantor’s Equipment and fixtures;

 

(f) all of such Grantor’s General Intangibles;

 

(g) all of such Grantor’s Inventory;

 

(h) all of such Grantor’s Investment Related Property;

 

(i) all of such Grantor’s letters of credit, letter of credit rights,
instruments, promissory notes, drafts, and documents (as such terms may be
defined in the Code) (“Negotiable Collateral”);

 

(j) all of such Grantor’s rights in respect of supporting obligations (as such
term is defined in the Code), including letters of credit and guaranties issued
in support of Accounts, Chattel Paper, documents, General Intangibles,
instruments, or Investment Related Property (“Supporting Obligations”);

 

(k) all of such Grantor’s interest with respect to any commercial tort claims
(as that term is defined in the Code), including, without limitation those
commercial tort claims listed on Schedule 2 attached hereto (“Commercial Tort
Claims”);

 

(l) all of such Grantor’s money, Cash Equivalents, or other assets of each such
Grantor that now or hereafter come into the possession, custody, or control of
Agent or any other member of the Lender Group or the Bank Product Provider;

 

(m) all of the proceeds and products, whether tangible or intangible, of any of
the foregoing, including proceeds of insurance or commercial tort claims
covering or relating to any or all of the foregoing, and any and all Accounts,
Books, Chattel Paper, Deposit Accounts, Equipment, General Intangibles,
Inventory, Investment Related Property, Negotiable Collateral, Supporting
Obligations, money, or other tangible or intangible property resulting from the
sale, lease, license, exchange, collection, or other disposition of any of the
foregoing, the proceeds of any award in condemnation with respect to any of the
property of Grantors, any rebates or refunds, whether for taxes or otherwise,
and all proceeds of any such proceeds, or any portion thereof or interest
therein, and the proceeds thereof, and all proceeds of any loss of, damage to,
or destruction of the above, whether insured or not insured, and, to the extent
not otherwise included, any indemnity, warranty, or guaranty payable by reason
of loss or damage to, or otherwise with respect to any of the foregoing
Collateral (the “Proceeds”). Without limiting the generality of the foregoing,
the term “Proceeds” includes whatever is receivable or received when Investment
Related Property or proceeds are sold, exchanged, collected, or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes,
without limitation, proceeds of any indemnity or guaranty payable to any Grantor
or Agent from time to time with respect to any of the Investment Related
Property.

 

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3. Security for Obligations. This Agreement and the Security Interest created
hereby secures the payment and performance of all the Secured Obligations,
whether now existing or arising hereafter. Without limiting the generality of
the foregoing, this Agreement secures the payment of all amounts which
constitute part of the Obligations owed by Grantors, or any of them, to Agent,
the Lender Group, the Bank Product Provider or any of them.

 

4. Grantors Remain Liable. Anything herein to the contrary notwithstanding,
(a) each of the Grantors shall remain liable under the contracts and agreements
included in the Collateral, including, without limitation, the Pledged Operating
Agreements and the Pledged Partnership Agreements, to perform all of the duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Agent or any other member of the Lender Group or
the Bank Product Provider of any of the rights hereunder shall not release any
Grantor from any of its duties or obligations under such contracts and
agreements included in the Collateral, and (c) none of the members of the Lender
Group or the Bank Product Provider shall have any obligation or liability under
such contracts and agreements included in the Collateral by reason of this
Agreement, nor shall any of the members of the Lender Group or the Bank Product
Provider be obligated to perform any of the obligations or duties of any
Grantors thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder. Until an Event of Default shall occur and be
continuing, except as otherwise provided in this Agreement, the Credit
Agreement, or other Loan Documents, Grantors shall have the right to possession
and enjoyment of the Collateral for the purpose of conducting the ordinary
course of their respective businesses, subject to and upon the terms hereof and
of the Credit Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, it is the intention of the parties hereto that
record and beneficial ownership of the Pledged Interests, including, without
limitation, all voting, consensual, and dividend rights, shall remain in the
applicable Grantor until the occurrence of an Event of Default and until Agent
shall notify the applicable Grantor of Agent’s exercise of voting, consensual,
and/or dividend rights with respect to the Pledged Interests pursuant to
Section 15 hereof.

 

5. Representations and Warranties. Each Grantor hereby represents and warrants
as follows:

 

(a) The exact legal name of each of the Grantors is set forth on the signature
pages of this Agreement or a written notice provided to Agent pursuant to
Section 6.5 of the Credit Agreement.

 

(b) Schedule 3 attached hereto sets forth all Real Property owned by Grantors as
of the Closing Date.

 

(c) [INTENTIONALLY OMITTED]

 

(d) This Agreement creates a valid security interest in the Collateral of each
of Grantors, to the extent a security interest therein can be created under the
Code, securing the payment of the Secured Obligations. Except to the extent a
security interest in the Collateral cannot be perfected by the filing of a
financing statement under the Code, all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or
will have been taken upon the filing of financing statements listing each
applicable Grantor, as a debtor, and Agent, as secured party, in the
jurisdictions listed next to such Grantor’s name on Schedule 4 attached hereto.
Upon the making of such filings, Agent shall have a first priority perfected
security interest in the Collateral (subject to (x) Liens encumbering certain
cash collateral in favor of certain secured creditors, all as set forth in
Schedule 5 attached hereto and (y) Specified Permitted Liens) of each Grantor to
the extent such security interest can be perfected by the filing of a financing
statement.

 

(e) Except for the Security Interest created hereby, each Grantor is and will at
all times be the sole holder of record and the legal and beneficial owner, free
and clear of all Liens other than Permitted Liens, of the Pledged Interests
indicated on Schedule 1 as being owned by such Grantor and, when acquired by
such Grantor, any Pledged Interests acquired after the Closing Date; (ii) all of
the Pledged Interests are duly authorized, validly issued, fully paid and
nonassessable and the Pledged Interests constitute or will constitute the
percentage of the issued and outstanding equity interests of the Pledged
Companies of such Grantor identified on Schedule 1 hereto as supplemented or
modified by any Pledged Interests Addendum or any Supplement to this Agreement;
(ii) such Grantor has the right and requisite authority to pledge, the
Investment Related Property pledged by such Grantor to Agent as provided herein;
(iii) all actions necessary or desirable to perfect, establish the first
priority (subject to (x) Liens encumbering certain cash collateral in favor of
certain secured creditors, all as described in Schedule 5

 

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attached hereto and (y) Specific Permitted Liens) of, or otherwise protect,
Agent’s Liens in the Investment Related Collateral, and the proceeds thereof,
have been duly taken, (A) upon the execution and delivery of this Agreement;
(B) upon the taking of possession by Agent of any certificates constituting the
Pledged Interests, to the extent such Pledged Interests are represented by
certificates, together with undated powers endorsed in blank by the applicable
Grantor; (C) upon the filing of financing statements in the applicable
jurisdiction set forth on Schedule 4 attached hereto for such Grantor with
respect to the Pledged Interests of such Grantor that are not represented by
certificates, and (D) with respect to any Securities Accounts, upon the delivery
of Control Agreements with respect thereto; and (iv) each Grantor has delivered
to and deposited with Agent (or, with respect to any Pledged Interests created
after the Closing Date, will deliver and deposit in accordance with Sections
6(a) and 8 hereof) all certificates representing the Pledged Interests owned by
such Grantor to the extent such Pledged Interests are represented by
certificates, and undated powers endorsed in blank with respect to such
certificates.

 

(f) Other than the filing of financing statements, Mortgages and the security
agreements attached hereto as Exhibits B, C and E and any requirement under
applicable law to register Stock, no consent, approval, authorization, or other
order or other action by, and no notice to or filing with, any Governmental
Authority or any other Person is required (i) for the grant of a Security
Interest by such Grantor in and to the Collateral pursuant to this Agreement or
for the execution, delivery, or performance of this Agreement by such Grantor,
or (ii) for the exercise by Agent of the voting or other rights provided for in
this Agreement with respect to the Investment Related Property or the remedies
in respect of the Collateral pursuant to this Agreement, except (x) as may be
required in connection with such disposition of Investment Related Property by
laws affecting the offering and sale of securities generally; and (y) for
consents and approvals that have been obtained and that are still in force and
effect.

 

6. Covenants. Each Grantor, jointly and severally, covenants and agrees with
Agent and the Lender Group and the Bank Product Provider that from and after the
date of this Agreement and until the date of termination of this Agreement in
accordance with Section 22 hereof:

 

(a) Possession of Collateral. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, Investment
Related Property, or Chattel Paper, and if and to the extent that perfection or
priority of Agent’s Security Interest is dependent on or enhanced by possession,
the applicable Grantor, immediately upon the request of Agent and in accordance
with Section 8 hereof, shall execute such other documents as shall be reasonably
requested by Agent or, if applicable, endorse and deliver physical possession of
such Negotiable Collateral, Investment Related Property, or Chattel Paper to
Agent, together with such undated powers endorsed in blank as shall be requested
by Agent;

 

(b) Chattel Paper.

 

(i) Upon the request of Agent, each Grantor shall take all steps reasonably
necessary to grant Agent control of all electronic Chattel Paper in accordance
with the Code and all “transferable records” as that term is defined in
Section 16 of the Uniform Electronic Transaction Act and Section 201 of the
federal Electronic Signatures in Global and National Commerce Act as in effect
in any relevant jurisdiction;

 

(ii) If any Grantor retains possession of any Chattel Paper or instruments
(which retention of possession shall be subject to the extent permitted hereby
and by the Credit Agreement), promptly upon the request of Agent, such Chattel
Paper and instruments shall be marked with the following legend: “This writing
and the obligations evidenced or secured hereby are subject to the Security
Interest of Wells Fargo Foothill, Inc., as Agent for the benefit of the Lender
Group and the Bank Product Provider”;

 

(c) Control Agreements.

 

(i) Except to the extent otherwise permitted by the Credit Agreement, each
Grantor shall obtain an authenticated Control Agreement from each bank holding a
domestic Deposit Account for such Grantor;

 

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(ii) Except to the extent otherwise permitted by the Credit Agreement, each
Grantor shall obtain authenticated Control Agreements, from each issuer of
uncertificated securities, securities intermediary, or commodities intermediary
issuing or holding any financial assets or commodities to or for any Grantor;

 

(d) Letter of Credit Rights. Each Grantor that is or becomes the beneficiary of
a letter of credit in excess of $50,000 shall promptly (and in any event within
5 Business Days after becoming a beneficiary), notify Agent thereof and, upon
the request by Agent, enter into a tri-party agreement with Agent and the issuer
and/or confirmation bank with respect to letter-of-credit rights (as that term
is defined in the Code) assigning such letter-of-credit rights to Agent and
directing all payments thereunder to Agent’s Account, all in form and substance
satisfactory to Agent;

 

(e) Commercial Tort Claims. Each Grantor shall promptly (and in any event within
5 Business Days of receipt thereof), notify Agent in writing upon incurring or
otherwise obtaining a Commercial Tort Claim after the date hereof against any
third party in an amount exceeding $500,000 and, upon request of Agent, promptly
amend Schedule 2 to this Agreement, authorize the filing of additional or
amendments to existing financing statements and do such other acts or things
deemed necessary or desirable by Agent to give Agent a first priority, perfected
security interest in any such Commercial Tort Claim;

 

(f) Investment Related Property.

 

(i) If any Grantor shall receive or become entitled to receive any Pledged
Interests after the Closing Date, it shall promptly (and in any event within 5
Business Days of receipt thereof) deliver to Agent a duly executed Pledged
Interests Addendum identifying such Pledged Interests;

 

(ii) Each Grantor agrees that it will cooperate with Agent in obtaining all
necessary approvals and making all necessary filings under federal, state,
local, or foreign law in connection with the Security Interest on the Investment
Related Property or any sale or transfer thereof;

 

(iii) As to all limited liability company or partnership interests issued under
any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor
hereby represents, warrants and covenants that the Pledged Interests issued
pursuant to such agreement (A) are not and shall not be dealt in or traded on
securities exchanges or in securities markets, (B) do not and will not
constitute investment company securities, and (C) are not and will not be held
by such Pledgor in a securities account. In addition, none of the Pledged
Operating Agreements, the Pledged Partnership Agreements, or any other
agreements governing any of the Pledged Interests issued under any Pledged
Operating Agreement or Pledged Partnership Agreement, provide or shall provide
that such Pledged Interests are securities governed by Article 8 of the Uniform
Commercial Code as in effect in any relevant jurisdiction;

 

(g) Real Property; Fixtures. Each Grantor covenants and agrees that upon the
acquisition of any fee interest in Real Property it will promptly (and in any
event within 10 Business Days of acquisition) notify Agent of the acquisition of
such Real Property and will grant to Agent, for the benefit of the Lender Group
and the Bank Product Provider, a first priority (subject to existing Liens)
Mortgage on each fee interest in Real Property now or hereafter owned by such
Grantor and shall deliver such other documentation and opinions, in form and
substance reasonably satisfactory to Agent, in connection with the grant of such
Mortgage as Agent shall request in its Permitted Discretion, including, without
limitation, title insurance policies, financing statements, fixture filings and
environmental audits and such Grantor shall pay all recording costs, intangible
taxes and other fees and costs (including reasonable attorneys fees and
expenses) incurred in connection therewith. Each Grantor acknowledges and agrees
that, to the extent permitted by applicable law, all of the Collateral shall
remain personal property regardless of the manner of its attachment or
affixation to real property.

 

(h) Transfers and Other Liens. Grantors shall not (i) sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, any of the Collateral, except expressly permitted by the Credit Agreement,
or (ii) create or permit to exist any Lien upon or with respect to any of the
Collateral of any of Grantors, except for Permitted Liens. The inclusion of
Proceeds in the Collateral shall not be deemed to constitute Agent’s consent to
any sale or other disposition of any of the Collateral except as expressly
permitted in this Agreement or the other Loan Documents; and

 

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(i) Other Actions as to Any and All Collateral. Each Grantor shall promptly (and
in any event within 5 Business Days of acquiring or obtaining such Collateral)
notify Agent in writing upon acquiring or otherwise obtaining any Collateral
after the date hereof consisting of Investment Related Property, Chattel Paper
(electronic, tangible or otherwise), documents (as defined in the Code), or
instruments (as defined in the Code) and, upon the request of Agent and in
accordance with Section 8 hereof, promptly execute such other documents, or if
applicable, deliver such Chattel Paper, other documents or certificates
evidencing any Investment Related Property in accordance with Section 6 hereof
and do such other acts or things deemed necessary or desirable by Agent to
protect Agent’s Security Interest therein.

 

7. Relation to Other Security Documents. The provisions of this Agreement shall
be read and construed with the other Loan Documents referred to below in the
manner so indicated.

 

(a) Credit Agreement. In the event of any conflict between any provision in this
Agreement and a provision in the Credit Agreement, such provision of the Credit
Agreement shall control.

 

(b) The Intellectual Property Security Agreement and Patent, Trademark,
Copyright Security Agreements. The provisions of the Intellectual Property
Security Agreement and the Copyright Security Agreements, Trademark Security
Agreements, and Patent Security Agreements are supplemental to the provisions of
this Agreement, and nothing contained in the Intellectual Property Security
Agreement, Copyright Security Agreements, Trademark Security Agreements, or the
Patent Security Agreements shall limit any of the rights or remedies of Agent
hereunder. In the event of a conflict between any provision of this Agreement
and any provision in the Intellectual Property Security Agreement, the provision
in the Intellectual Property Security Agreement shall control.

 

8. Further Assurances.

 

(a) Each Grantor agrees that from time to time, at its own expense, such Grantor
will promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or that Agent may reasonably
request, in order to perfect and protect any Security Interest granted or
purported to be granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any of the Collateral; provided
that no Grantor shall be required to perfect any such Security Interest in motor
vehicles or to deliver Collateral Access Agreements or Control Agreements except
as required by the Credit Agreement.

 

(b) Each Grantor authorizes the filing of such financing or continuation
statements, or amendments thereto, and such Grantor will execute and deliver to
Agent such other instruments or notices, as may be necessary or as Agent may
reasonably request, in order to perfect and preserve the Security Interest
granted or purported to be granted hereby.

 

(c) Each Grantor authorizes Agent to file, transmit, or communicate, as
applicable, financing statements and amendments describing the Collateral as
“all personal property of debtor” or “all assets of debtor” or words of similar
effect, in order to perfect Agent’s security interest in the Collateral without
such Grantor’s signature. Each Grantor also hereby ratifies its authorization
for Agent to have filed in any jurisdiction any financing statements filed prior
to the date hereof.

 

(d) Each Grantor acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any financing
statement filed in connection with this Agreement without the prior written
consent of Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of
the Code.

 

9. Agent’s Right to Perform Contracts. Upon the occurrence of an Event of
Default, Agent (or its designee) may proceed to perform any and all of the
obligations of any Grantor contained in any contract, lease, or other agreement
and exercise any and all rights of any Grantor therein contained as fully as
such Grantor itself could.

 

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10. Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints
Agent its attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor or otherwise, at such time as an Event
of Default has occurred and is continuing under the Credit Agreement, to take
any action and to execute any instrument which Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, without
notice to any Grantor or Borrower, including, without limitation:

 

(a) to ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in connection
with the Accounts or any other Collateral of such Grantor;

 

(b) to receive and open all mail addressed to such Grantor and to notify postal
authorities to change the address for the delivery of mail to such Grantor to
that of Agent;

 

(c) to receive, indorse, and collect any drafts or other instruments, documents,
Negotiable Collateral or Chattel Paper;

 

(d) to file any claims or take any action or institute any proceedings which
Agent may deem necessary or desirable for the collection of any of the
Collateral of such Grantor or otherwise to enforce the rights of Agent with
respect to any of the Collateral;

 

(e) to repair, alter, or supply goods, if any, necessary to fulfill in whole or
in part the purchase order of any Person obligated to such Grantor in respect of
any Account of such Grantor;

 

(f) to use any labels, Patents, Trademarks, trade names, URLs, domain names,
industrial designs, Copyrights, advertising matter or other industrial or
intellectual property rights, in advertising for sale and selling Inventory and
other Collateral and to collect any amounts due under Accounts, contracts or
Negotiable Collateral of such Grantor; and

 

(g) Agent on behalf of the Lender Group and the Bank Product Provider shall have
the right, but shall not be obligated, to bring suit in its own name to enforce
the Trademarks, Patents, Copyrights and any intellectual property licenses
included within the Collateral and, if Agent shall commence any such suit, the
appropriate Grantor shall, at the request of Agent, do any and all lawful acts
and execute any and all proper documents reasonably required by Agent in aid of
such enforcement.

 

To the extent permitted by law, each Grantor hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and shall be irrevocable until
this Agreement is terminated.

 

11. Agent May Perform. If any of Grantors fails to perform any agreement
contained herein, Agent may itself perform, or cause performance of, such
agreement, and the reasonable expenses of Agent incurred in connection therewith
shall be payable, jointly and severally, by Grantors.

 

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

 

13. Collection of Accounts, General Intangibles and Negotiable Collateral;
Control Agreements. At any time upon the occurrence and during the continuation
of an Event of Default, Agent or Agent’s designee may (a) notify Account Debtors
of any Grantor that the Accounts, General Intangibles, Chattel Paper or
Negotiable Collateral have been assigned to Agent, for the benefit of the Lender
Group and the Bank Product Provider, or that

 

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Agent has a security interest therein, and (b) collect the Accounts, General
Intangibles and Negotiable Collateral directly, and any collection costs and
expenses shall constitute part of such Grantor’s Secured Obligations under the
Loan Documents. With respect to each Control Agreement delivered pursuant to
Section 6(c), at any time upon the occurrence and during the continuation of an
Event of Default, Agent shall be entitled to give any bank or securities
intermediary holding the relevant deposit or securities account instructions as
to the withdrawal or disposition of funds or assets held therein, all without
further consent of any Grantor; provided that Agent agrees it shall not give any
bank or securities intermediary such instructions unless an Event of Default has
occurred and is continuing.

 

14. Disposition of Pledged Interests by Agent. None of the Pledged Interests
existing as of the date of this Agreement are, and none of the Pledged Interests
hereafter acquired on the date of acquisition thereof will be, registered or
qualified under the various federal or state securities laws of the United
States and disposition thereof after an Event of Default may be restricted to
one or more private (instead of public) sales in view of the lack of such
registration. Each Grantor understands that in connection with such disposition,
Agent may approach only a restricted number of potential purchasers and further
understands that a sale under such circumstances may yield a lower price for the
Pledged Interests than if the Pledged Interests were registered and qualified
pursuant to federal and state securities laws and sold on the open market. Each
Grantor, therefore, agrees that: (a) if Agent shall, pursuant to the terms of
this Agreement, sell or cause the Pledged Interests or any portion thereof to be
sold at a private sale, Agent shall have the right to rely upon the advice and
opinion of any nationally recognized brokerage or investment firm (but shall not
be obligated to seek such advice and the failure to do so shall not be
considered in determining the commercial reasonableness of such action) as to
the best manner in which to offer the Pledged Interest for sale and as to the
best price reasonably obtainable at the private sale thereof; and (b) such
reliance shall be conclusive evidence that Agent has handled the disposition in
a commercially reasonable manner.

 

15. Voting Rights.

 

(a) Upon the occurrence and during the continuation of an Event of Default,
(i) Agent may, at its option, and with 5 Business Days prior notice to any
Grantor, and in addition to all rights and remedies available to Agent under any
other agreement, at law, in equity, or otherwise, exercise all voting rights,
and all other ownership or consensual rights in respect of the Pledged Interests
owned by such Grantor, but under no circumstances is Agent obligated by the
terms of this Agreement to exercise such rights, and (ii) if Agent duly
exercises its right to vote any of such Pledged Interests, each Grantor hereby
appoints Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE
PROXY to vote such Pledged Interests in any manner Agent deems advisable for or
against all matters submitted or which may be submitted to a vote of
shareholders, partners or members, as the case may be. The power-of-attorney
granted hereby is coupled with an interest and shall be irrevocable.

 

(b) For so long as any Grantor shall have the right to vote the Pledged
Interests owned by it, such Grantor covenants and agrees that it will not,
without the prior written consent of Agent, vote or take any consensual action
with respect to such Pledged Interests which would materially adversely affect
the rights of Agent and the other members of the Lender Group and the Bank
Product Provider or the value of the Pledged Interests.

 

16. Remedies. Upon the occurrence and during the continuance of an Event of
Default:

 

(a) Agent may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein, in the other Loan Documents, or otherwise
available to it, all the rights and remedies of a secured party on default under
the Code or any other applicable law. Without limiting the generality of the
foregoing, each Grantor expressly agrees that, in any such event, Agent without
demand of performance or other demand, advertisement or notice of any kind
(except a notice specified below of time and place of public or private sale) to
or upon any of Grantors or any other Person (all and each of which demands,
advertisements and notices are hereby expressly waived to the maximum extent
permitted by the Code or any other applicable law), may take immediate
possession of all or any portion of the Collateral and (i) require Grantors to,
and each Grantor hereby agrees that it will at its own expense and upon request
of Agent forthwith, assemble all or part of the Collateral as directed by Agent
and make it available to Agent at one or more locations where such Grantor
regularly maintains Inventory, and (ii) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of Agent’s offices or elsewhere, for cash, on credit,
and upon such other terms as Agent may deem commercially reasonable. Each
Grantor agrees that, to the extent notice of sale shall be

 

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required by law, at least 10 days notice to any of Grantors of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification and specifically such notice shall
constitute a reasonable “authenticated notification of disposition” within the
meaning of Section 9-611 of the Code. Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.

 

(b) Agent is hereby granted a non-exclusive license or other right to use,
without liability for royalties or any other charge, each Grantor’s labels,
Patents, Copyrights, rights of use of any name, trade secrets, trade names,
Trademarks, service marks and advertising matter, URLs, domain names, industrial
designs, other industrial or intellectual property or any property of a similar
nature, whether owned by any of Grantors or with respect to which any of
Grantors have rights under license, sublicense, or other agreements, as it
pertains to the Collateral, in preparing for sale, advertising for sale and
selling any Collateral, and each Grantor’s rights under all licenses and all
franchise agreements shall inure to the benefit of Agent.

 

(c) Any cash held by Agent as Collateral and all cash proceeds received by Agent
in respect of any sale of, collection from, or other realization upon all or any
part of the Collateral shall be applied against the Secured Obligations in the
order set forth in the Credit Agreement. In the event the proceeds of Collateral
are insufficient to satisfy all of the Secured Obligations in full, each Grantor
shall remain jointly and severally liable for any such deficiency.

 

(d) Each Grantor hereby acknowledges that the Secured Obligations arose out of a
commercial transaction, and agrees that if an Event of Default shall occur and
be continuing Agent shall have the right to an immediate writ of possession
without notice of a hearing. Agent shall have the right to the appointment of a
receiver for the properties and assets of each of Grantors, and each Grantor
hereby consents to such rights and such appointment and hereby waives, to the
fullest extent permitted by law, any objection such Grantors may have thereto or
the right to have a bond or other security posted by Agent.

 

17. Remedies Cumulative. Each right, power, and remedy of Agent as provided for
in this Agreement or in the other Loan Documents or now or hereafter existing at
law or in equity or by statute or otherwise shall be cumulative and concurrent
and shall be in addition to every other right, power, or remedy provided for in
this Agreement or in the other Loan Documents or now or hereafter existing at
law or in equity or by statute or otherwise, and the exercise or beginning of
the exercise by Agent, of any one or more of such rights, powers, or remedies
shall not preclude the simultaneous or later exercise by Agent of any or all
such other rights, powers, or remedies.

 

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

 

19. Indemnity and Expenses.

 

(a) Each Grantor agrees to indemnify Agent and the other members of the Lender
Group and the Bank Product Provider from and against all claims, lawsuits and
liabilities (including reasonable attorneys fees) growing out of or resulting
from this Agreement (including, without limitation, enforcement of this
Agreement) or any other Loan Document to which such Grantor is a party, except
claims, losses or liabilities resulting from the gross negligence or willful
misconduct of the party seeking indemnification as determined by a final
non-appealable order of a court of competent jurisdiction. This provision shall
survive the termination of this Agreement and the Credit Agreement and the
repayment of the Secured Obligations.

 

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(b) Grantors, jointly and severally, shall, upon demand, pay to Agent (or Agent,
may charge to the Loan Account) all the Lender Group Expenses which Agent may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or, upon an Event of Default, the
sale of, collection from, or other realization upon, any of the Collateral in
accordance with this Agreement and the other Loan Documents, (iii) the exercise
or enforcement of any of the rights of Agent hereunder or (iv) the failure by
any of Grantors to perform or observe any of the provisions hereof.

 

20. Merger, Amendments; Etc. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER
LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES. No waiver of any provision of this Agreement, and no consent to any
departure by any of Grantors herefrom, shall in any event be effective unless
the same shall be in writing and signed by Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment of any provision of this Agreement shall
be effective unless the same shall be in writing and signed by Agent and each of
Grantors to which such amendment applies.

 

21. Addresses for Notices. All notices and other communications provided for
hereunder shall be given in the form and manner and delivered to Agent at its
address specified in the Credit Agreement, and to any of the Grantors at their
respective addresses specified in the Credit Agreement or, as to any party, at
such other address as shall be designated by such party in a written notice to
the other party.

 

22. Continuing Security Interest; Assignments under Credit Agreement. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the Obligations have been paid
in full in cash in accordance with the provisions of the Credit Agreement and
the Commitments have expired or have been terminated, (b) be binding upon each
of Grantors, and their respective successors and assigns, and (c) inure to the
benefit of, and be enforceable by, Agent, and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any Lender
may, in accordance with the provisions of the Credit Agreement, assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise. Upon payment in full in cash of the Obligations in
accordance with the provisions of the Credit Agreement and the expiration or
termination of the Commitments, the Security Interest granted hereby shall
terminate and all rights to the Collateral shall revert to Grantors or any other
Person entitled thereto. At such time, Agent will authorize the filing of
appropriate termination statements to terminate such Security Interests. No
transfer or renewal, extension, assignment, or termination of this Agreement or
of the Credit Agreement, any other Loan Document, or any other instrument or
document executed and delivered by any Grantor to Agent nor any additional
Advances or other loans made by any Lender Group to Borrowers, nor the taking of
further security, nor the retaking or re-delivery of the Collateral to Grantors,
or any of them, by Agent, nor any other act of the Lender Group or the Bank
Product Provider, or any of them, shall release any of Grantors from any
obligation, except a release or discharge executed in writing by Agent in
accordance with the provisions of the Credit Agreement. Agent shall not by any
act, delay, omission or otherwise, be deemed to have waived any of its rights or
remedies hereunder, unless such waiver is in writing and signed by Agent and
then only to the extent therein set forth. A waiver by Agent of any right or
remedy on any occasion shall not be construed as a bar to the exercise of any
such right or remedy which Agent would otherwise have had on any other occasion.

 

23. Governing Law.

 

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAWS AND PRINCIPLES BUT
INCLUDING AND GIVING EFFECT TO SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

 

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(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED
IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING
SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. GRANTORS
AND EACH MEMBER OF THE LENDER GROUP AND THE BANK PRODUCT PROVIDER WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 23(b).

 

(c) GRANTORS AND EACH MEMBER OF THE LENDER GROUP AND THE BANK PRODUCT PROVIDER
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. GRANTORS
AND EACH MEMBER OF THE LENDER GROUP AND THE BANK PRODUCT PROVIDER REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

 

(d) New Subsidiaries. Pursuant to Section 5.18 of the Credit Agreement, certain
new direct or indirect Subsidiaries (whether by acquisition or creation) of
Parent are required to enter into this Agreement by executing and delivering in
favor of Agent an instrument in the form of Annex 1 attached hereto. Upon the
execution and delivery of Annex 1 by such new Subsidiary, such Subsidiary shall
become a Grantor hereunder with the same force and effect as if originally named
as a Grantor herein. The execution and delivery of any instrument adding an
additional Grantor as a party to this Agreement shall not require the consent of
any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Grantor hereunder.

 

24. Agent. Each reference herein to any right granted to, benefit conferred upon
or power exercisable by the “Agent” shall be a reference to Agent, for the
benefit of the Lender Group and the Bank Product Provider.

 

25. Miscellaneous.

 

(a) This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement. Delivery of an
executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission shall be equally as effective as delivery of an original
executed counterpart of this Agreement. Any party delivering an executed
counterpart of this Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement. The
foregoing shall apply to each other Loan Document mutatis mutandis.

 

(b) Any provision of this Agreement which is prohibited or unenforceable shall
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting
the validity or enforceability of such provision in any other jurisdiction.

 

(c) Headings used in this Agreement are for convenience only and shall not be
used in connection with the interpretation of any provision hereof.

 

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(d) The pronouns used herein shall include, when appropriate, either gender and
both singular and plural, and the grammatical construction of sentences shall
conform thereto.

 

(e) The representation, warranties and covenants of each Grantor hereunder are
joint and several.

 

(f) All exhibits and schedules hereto are incorporated into this Agreement.

 

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IN WITNESS WHEREOF, the undersigned parties hereto have executed this Agreement
by and through their duly authorized officers, as of the day and year first
above written.

 

        GRANTORS:  

SILICON GRAPHICS, INC.,

a Delaware corporation

    By:  

/s/ Jean Furter

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

    Name:   Jean Furter     Title:   Vice President, Treasurer    

SILICON GRAPHICS FEDERAL, INC.,

a Delaware corporation

    By:  

/s/ Jeff Zellmer

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

    Name:   Jeff Zellmer     Title:   Vice President    

SILICON GRAPHICS WORLD TRADE

CORPORATION,

a Delaware corporation

    By:  

/s/ Warren Pratt

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

    Name:   Warren Pratt     Title:   Executive Vice President     WELLS FARGO
FOOTHILL, INC., as Agent     By:  

/s/ Mara Vaisz

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

    Name:   Mara Vaisz     Title:   Vice President

 

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