Exhibit 10.4

 

Execution Version

 

PARITY LIEN DEBT
PLEDGE AND SECURITY AGREEMENT

 

dated as of March 28, 2017

 

between

 

EACH OF THE GRANTORS PARTY HERETO

 

and

 

LORD SECURITIES CORPORATION, AS PARITY LIEN COLLATERAL TRUSTEE

 

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST
GRANTED TO THE COLLATERAL TRUSTEE FOR THE BENEFIT OF THE PARITY LIEN SECURED
PARTIES PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY
THE COLLATERAL TRUSTEE FOR THE BENEFIT OF THE PARITY LIEN SECURED PARTIES
HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE COLLATERAL TRUST AGREEMENT, DATED
AS OF MARCH 28, 2017 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED
FROM TIME TO TIME, THE “COLLATERAL TRUST AGREEMENT”), AMONG THE HUNTINGTON
NATIONAL BANK, AS ADMINISTRATIVE AGENT, WILMINGTON TRUST, NATIONAL ASSOCIATION,
AS TRUSTEE, LORD SECURITIES CORPORATION, AS COLLATERAL TRUSTEE AND CERTAIN OTHER
PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME.  IN THE EVENT
OF ANY CONFLICT BETWEEN THE TERMS OF THE COLLATERAL TRUST AGREEMENT AND THIS
AGREEMENT, THE TERMS OF THE COLLATERAL TRUST AGREEMENT SHALL GOVERN AND CONTROL.

 

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TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

SECTION 1.

DEFINITIONS; GRANT OF SECURITY

2

1.1

General Definitions

2

1.2

Definitions; Interpretation

8

 

 

 

SECTION 2.

GRANT OF SECURITY

9

2.1

Grant of Security

9

2.2

Certain Limited Exclusions

9

2.3

Collateral Trust Agreement

12

 

 

 

SECTION 3.

SECURITY FOR PARITY LIEN OBLIGATIONS; GRANTORS REMAIN LIABLE

12

3.1

Security for Parity Lien Obligations

12

3.2

Continuing Liability Under Collateral

12

 

 

 

SECTION 4.

CERTAIN PERFECTION REQUIREMENTS

12

4.1

Delivery Requirements

12

4.2

Control Requirements

13

4.3

Intellectual Property Recording Requirements

14

4.4

[Reserved.]

15

4.5

Timing and Notice

15

 

 

 

SECTION 5.

REPRESENTATIONS AND WARRANTIES

15

5.1

Grantor Information and Status

15

5.2

Collateral Identification; Special Collateral

16

5.3

Ownership of Collateral and Absence of Other Liens

16

5.4

Status of Security Interest

17

5.5

Goods and Receivables

18

5.6

Pledged Equity Interests; Investment Related Property

18

5.7

Intellectual Property

19

 

 

 

SECTION 6.

COVENANTS AND AGREEMENTS

20

6.1

Agreement with respect to Pledged LLC Interests

20

6.2

Collateral Identification; Special Collateral

20

6.3

Ownership of Collateral and Absence of Other Liens

21

6.4

Status of Security Interest

21

6.5

Goods and Receivables

21

6.6

Pledged Equity Interests, Investment Related Property

22

6.7

Intellectual Property

24

6.8

Information Regarding Collateral

25

 

 

 

SECTION 7.

FURTHER ASSURANCES; ADDITIONAL GRANTORS

25

7.1

Further Assurances

25

7.2

Additional Grantors

26

 

 

 

SECTION 8.

PARITY LIEN COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT

27

8.1

Power of Attorney

27

 

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8.2

No Duty on the Part of Parity Lien Collateral Trustee or Secured Parties

28

8.3

Appointment Pursuant to Indenture

28

 

 

 

SECTION 9.

REMEDIES

28

9.1

Generally

28

9.2

Application of Proceeds

30

9.3

Sales on Credit

30

9.4

Investment Related Property

30

9.5

Grant of Intellectual Property License

31

9.6

Intellectual Property

31

9.7

Cash Proceeds; Deposit Accounts

33

 

 

 

SECTION 10.

PARITY LIEN COLLATERAL TRUSTEE

33

 

 

 

SECTION 11.

CONTINUING SECURITY INTEREST; TRANSFER OF NOTES

34

 

 

 

SECTION 12.

STANDARD OF CARE; PARITY LIEN COLLATERAL TRUSTEE MAY PERFORM

34

 

 

 

SECTION 13.

MISCELLANEOUS

35

 

SCHEDULE 5.1 — GENERAL INFORMATION

 

SCHEDULE 5.2 — COLLATERAL IDENTIFICATION

 

SCHEDULE 5.4 — FINANCING STATEMENTS

 

SCHEDULE 5.5 — CERTAIN RECEIVABLES; LOCATION OF EQUIPMENT AND INVENTORY

 

EXHIBIT A — PLEDGE SUPPLEMENT

 

EXHIBIT B — UNCERTIFICATED SECURITIES CONTROL AGREEMENT

 

EXHIBIT C — TRADEMARK SECURITY AGREEMENT

 

EXHIBIT D — PATENT SECURITY AGREEMENT

 

EXHIBIT E — COPYRIGHT SECURITY AGREEMENT

 

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This PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT, dated as of March 28, 2017
(as it may be amended, restated, supplemented or otherwise modified from time to
time, this “Agreement”), between Foresight Energy LLC, a Delaware limited
liability company (the “Company”), Foresight Energy Finance Corporation, a
Delaware corporation (“Co-Issuer” and together with the Company the “Issuers”),
and each of the subsidiaries of the Company party hereto from time to time,
whether as an original signatory hereto or as an Additional Grantor (as herein
defined) (each, a “Grantor”), and Lord Securities Corporation, as collateral
trustee for the Secured Parties (as herein defined) (in such capacity as
collateral trustee, together with its successors and permitted assigns, the
“Parity Lien Collateral Trustee”).

 

RECITALS:

 

WHEREAS, on the date hereof, the Issuers are issuing $425.0 million in aggregate
principal amount of Second Lien Senior Secured Notes due 2023 (the “Notes”)
under an indenture,  dated as of the date hereof (as it may be amended,
restated, supplemented or otherwise modified from time to time, the
“Indenture”), among the Issuers, the Grantors, Wilmington Trust, National
Association, as trustee (together with its successors and permitted assigns in
such capacity, the “Trustee”);

 

WHEREAS, in order to secure (i) the payment of all of the principal of and
interest and premium, if any, on the Notes and the payment and performance of
all other Parity Lien Obligations and (ii) all of the Grantors’ obligations and
liabilities hereunder and in connection herewith, each Grantor has agreed to
grant a continuing lien on the Collateral (as defined below);

 

WHEREAS, concurrently herewith, the Company, Foresight Energy LP, a Delaware
limited partnership (“Holdings”), Co-Issuer and the other Grantors are entering
into (a) that certain Credit and Guaranty Agreement, dated as of the date
hereof, by and among the Company, as borrower, Holdings, Co-Issuer and the other
Grantors, as guarantors, the various financial institutions and other Persons
party thereto from time to time, and The Huntington National Bank, as Facilities
Administrative Agent (in such capacity, together with its successors and
permitted assigns in such capacity, the “Priority Lien Administrative Agent”),
and Lord Securities Corporation, as Term Administrative Agent, and (b) that
certain Priority Lien Debt Pledge and Security Agreement, dated as of the date
hereof, by and among the Company, Co-Issuer and the other Grantors party thereto
from time to time and Lord Securities Corporation, as collateral trustee for the
benefit of the Priority Lien Secured Parties (in such capacity, together with
its successors and assigns, the “Priority Lien Collateral Trustee”).

 

WHEREAS, reference is made to that certain Collateral Trust Agreement dated the
date hereof (as amended, restated, supplemented or otherwise modified from time
to time, the “Collateral Trust Agreement”), by and among the Issuers, Holdings
and the other Grantors from time to time party thereto, the Priority Lien
Administrative Agent, the Trustee, Lord Securities Corporation, as collateral
trustee for the benefit of all Parity Lien Secured Parties and all Priority Lien
Secured Parties (as each such term is defined therein) (in such capacity,
together with its successors and permitted assigns in such capacity, the
“Collateral Trustee”), and the other parties from time to time party thereto;

 

WHEREAS, in addition to the obligations under the Indenture, the Grantors may
incur additional “Parity Lien Obligations” (as defined in the Collateral Trust
Agreement) and each Grantor has agreed to secure such Grantor’s Parity Lien
Obligations as set forth herein.

 

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NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, each Grantor hereby
agrees with the Parity Lien Collateral Trustee, for the benefit of the Secured
Parties, as follows:

 

SECTION 1.                         DEFINITIONS; GRANT OF SECURITY.

 

1.1                               General Definitions.  In this Agreement, the
following terms shall have the following meanings:

 

“Act of Required Secured Parties” shall have the meaning set forth in the
Collateral Trust Agreement.

 

“Additional Grantors” shall have the meaning assigned in Section 7.2.

 

“Agreement” shall have the meaning set forth in the preamble.

 

“Applicable Collateral Trustee” shall mean, (i) prior to the Discharge of the
Priority Lien Obligations, the Priority Lien Collateral Trustee, and (ii) after
the Discharge of the Priority Lien Obligations, the Parity Lien Collateral
Trustee; provided that the Applicable Collateral Trustee shall act as gratuitous
bailee or agent for the benefit of the Parity Lien Collateral Trustee for
perfection purposes pursuant to Section 7.4 of the Collateral Trust Agreement,
if the Applicable Collateral Trustee is not the Parity Lien Collateral Trustee.

 

“Bankruptcy Event of Default” shall mean an Event of Default under
Section 6.01(g) of the Indenture or any similar Event of Default under any other
Parity Lien Document.

 

“Cash Proceeds” shall have the meaning assigned in Section 9.7.

 

“Co-Issuer” shall have the meaning set forth in the preamble.

 

“Collateral” shall have the meaning assigned in Section 2.1.

 

“Collateral Questionnaire” means a certificate delivered on the Issue Date that
provides information with respect to the personal or mixed property of each
Grantor.

 

“Collateral Records” shall mean books, records, ledger cards, files,
correspondence, customer lists, supplier lists, blueprints, technical
specifications, manuals, computer software and related documentation, computer
printouts, tapes, disks and other electronic storage media and related data
processing software and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon.

 

“Collateral Support” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any security
agreement or other agreement granting a lien or security interest in such real
or personal property.

 

“Collateral Trust Agreement” shall have the meaning set forth in the recitals.

 

“Collateral Trustee” shall have the meaning set forth in the recitals.

 

“Company” shall have the meaning set forth in the preamble.

 

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“Contract” shall have the meaning set forth in Section 2.2(c).

 

“Control” shall mean:  (1) with respect to any Deposit Accounts, control within
the meaning of Section 9-104 of the UCC, (2) with respect to any Securities
Accounts, Security Entitlements, Commodity Contract or Commodity Account,
control within the meaning of Section 9-106 of the UCC, (3) with respect to any
Uncertificated Securities, control within the meaning of Section 8-106(c) of the
UCC, (4) with respect to any Certificated Security, control within the meaning
of Section 8-106(a) or (b) of the UCC, (5) with respect to any Electronic
Chattel Paper, control within the meaning of Section 9-105 of the UCC, (6) with
respect to Letter of Credit Rights, control within the meaning of Section 9-107
of the UCC and (7) with respect to 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), control within the meaning of
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
the jurisdiction relevant to such transferable record.

 

“Controlled Foreign Corporation” shall mean “controlled foreign corporation” as
defined in the Internal Revenue Code.

 

“Copyright Licenses” shall mean any and all agreements and licenses providing
for the granting of any right in or to any Copyright (whether such Grantor is
licensee or licensor thereunder).

 

“Copyrights” shall mean all United States copyrights, including but not limited
to copyrights in software and databases, and all Mask Works (as defined under 17
U.S.C. § 901 of the U.S. Copyright Act), whether registered or unregistered,
and, with respect to any and all of the foregoing: (i) all registrations and
applications therefor including, without limitation, the registrations and
applications referred to in Schedule 5.2(II) under the heading “Copyrights” (as
such schedule may be amended or supplemented from time to time), (ii) all
extensions and renewals thereof, (iii) all rights corresponding thereto,
(iv) all rights to sue for past, present and future infringements thereof, and
(v) all Proceeds of the foregoing, including, without limitation, royalties,
income, payments, claims, damages and proceeds of suit.

 

“Discharge of Parity Lien Obligations” shall have the meaning set forth in the
Collateral Trust Agreement.

 

“Discharge of Priority Lien Obligations” shall have the meaning set forth in the
Collateral Trust Agreement.

 

“Domestic Laws” shall mean the laws, rules or regulations of the United States
or any State thereof or the District of Columbia.

 

“Event of Default” shall have the meaning set forth in any Parity Lien Document
(including the Indenture).

 

“Excluded Account” shall mean (a) any deposit account used solely for:
(i) funding payroll or segregating payroll taxes or funding other employee wage
or benefit payments in the ordinary course of business, (ii) segregating
401(k) contributions or contributions to an employee stock purchase plan and
other health and benefit plan, in each case for payment in accordance with any
applicable laws or (iii) any zero-balance disbursement accounts, (b) any

 

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deposit account or securities account the funds in which consist solely of funds
held by the Company or any Subsidiary on behalf of or in trust for the benefit
of any third party that is not an Affiliate of the Company or any Subsidiary,
(c) any deposit account the funds in which consist solely of cash earnest money
deposits or funds deposited under escrow or similar arrangements in connection
with any letter of intent or purchase agreement for an acquisition or any other
transaction permitted under the indenture and (d) any account holding cash and
cash equivalents and such cash and cash equivalents that may be pledged to
secure Priority Lien Obligations consisting of reimbursement obligations in
respect of letters of credit and swing line loans (and/or any obligations of
lenders participating in the facilities under which such letters of credit are
issued and swing line loans made) pursuant to the Priority Lien Documents
without granting a Lien thereon to secure any other Priority Lien Obligations,
Parity Lien Obligations or any other Secured Obligations.

 

“Excluded Asset” shall mean any asset of any Grantor excluded from the security
interest hereunder by virtue of Section 2.2 hereof but only to the extent, and
for so long as, so excluded thereunder.

 

“Foreign Laws” shall mean any laws, rules or regulations other than Domestic
Laws.

 

“FSHCO” means any Domestic Subsidiary that has no material assets other than
Equity Interests of (x) a Foreign Subsidiary or (y) any other FSHCO.

 

“Grantor” shall have the meaning set forth in the preamble.

 

“Indenture” shall have the meaning set forth in the recitals.

 

“Insurance” shall mean all insurance policies covering any or all of the
Collateral (regardless of whether the Parity Lien Collateral Trustee is the loss
payee thereof).

 

“Intellectual Property” shall mean, the collective reference to all rights,
title and interest in intellectual property arising under the laws of the United
States, including without limitation, Copyrights, Patents, Trademarks and Trade
Secrets.

 

“Intellectual Property Security Agreement” shall mean each intellectual property
security agreement executed and delivered by the applicable Grantors,
substantially in the form set forth in Exhibit C, Exhibit D and Exhibit E, as
applicable.

 

“Intercompany Note” shall mean that certain Global Intercompany Demand
Promissory Note described on Part II to the Collateral Questionnaire.

 

“Investment Accounts” shall mean the Securities Accounts, Commodity Accounts and
Deposit Accounts.

 

“Investment Related Property” shall mean:  (i) all “investment property” (as
such term is defined in Article 9 of the UCC) and (ii) all of the following
(regardless of whether classified as investment property under the UCC): all
Pledged Equity Interests, Pledged Debt, the Investment Accounts and certificates
of deposit; in each case of the foregoing, excluding any Excluded Asset.

 

“Issuer” shall have the meaning set forth in the preamble.

 

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“Material Intellectual Property” shall mean any Intellectual Property included
in the Collateral that is material to the business of any Grantor.

 

“Parity Lien Collateral Trustee” shall have the meaning set forth in the
preamble.

 

“Parity Lien Documents” shall have the meaning set forth in the Collateral Trust
Agreement.

 

“Parity Lien Obligations” shall mean, without duplication, (i) all Parity Lien
Obligations (as defined in the Collateral Trust Agreement) and (ii) all
Obligations in respect of Notes, Note Guarantees and other Obligations under the
Indenture.

 

“Parity Lien Representative” shall have the meaning set forth in the Collateral
Trust Agreement.

 

“Parity Lien Secured Parties” shall have the meaning set forth in the Collateral
Trust Agreement.

 

“Patent Licenses” shall mean all agreements and licenses providing for the
granting of any right in or to any Patent (whether such Grantor is licensee or
licensor thereunder).

 

“Patents” shall mean all United States patents and certificates of invention, or
similar industrial property rights, and applications for any of the foregoing,
including, but not limited to: (i) each patent and patent application referred
to in Schedule 5.2(II) hereto under the heading “Patents” (as such schedule may
be amended or supplemented from time to time), (ii) all reissues, divisions,
continuations, continuations-in-part, extensions, renewals, and reexaminations
thereof, (iii) all rights corresponding thereto, (iv) all inventions and
improvements described therein, (v) all rights to sue for past, present and
future infringements thereof, (vi) all claims, damages, and proceeds of suit
arising therefrom, and (vii) all Proceeds of the foregoing, including, without
limitation, royalties, income, payments, claims, damages, and proceeds of suit.

 

“Permitted Lien” shall have the meaning assigned in the Indenture.

 

“Pledge Supplement” shall mean any supplement to this Agreement in substantially
the form of Exhibit A.

 

“Pledged Debt” shall mean all indebtedness for borrowed money owed to such
Grantor, whether or not evidenced by any Instrument, including, without
limitation, all indebtedness described on Schedule 5.2(I) under the heading
“Pledged Debt” (as such schedule may be amended or supplemented from time to
time), issued by the obligors named therein, the instruments, if any, evidencing
any of the foregoing, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the foregoing.

 

“Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests and any other participation or interests in any
equity or profits of any business entity including, without limitation, any
trust and all management rights relating to any entity whose equity interests
are included as Pledged Equity Interests, excluding, in each case, such
interests that constitute Excluded Assets.

 

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“Pledged LLC Interests” shall mean all interests in any limited liability
company and each series thereof including, without limitation, all limited
liability company interests listed on Schedule 5.2(I) under the heading “Pledged
LLC Interests” (as such schedule may be amended or supplemented from time to
time) and the certificates, if any, representing such limited liability company
interests and any interest of such Grantor on the books and records of such
limited liability company or on the books and records of any securities
intermediary pertaining to such interest and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability company
interests and all rights as a member of the related limited liability company,
excluding, in each case, such interests that constitute Excluded Assets.

 

“Pledged Partnership Interests” shall mean all interests in any general
partnership, limited partnership, limited liability partnership or other
partnership including, without limitation, all partnership interests listed on
Schedule 5.2(I) under the heading “Pledged Partnership Interests” (as such
schedule may be amended or supplemented from time to time) and the certificates,
if any, representing such partnership interests and any interest of such Grantor
on the books and records of such partnership or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such partnership
interests and all rights as a partner of the related partnership, excluding, in
each case, such interests that constitute Excluded Assets.

 

“Pledged Stock” shall mean all shares of capital stock owned by such Grantor,
including, without limitation, all shares of capital stock described on Schedule
5.2(I) under the heading “Pledged Stock” (as such schedule may be amended or
supplemented from time to time), and the certificates, if any, representing such
shares and any interest of such Grantor in the entries on the books of the
issuer of such shares or on the books of any securities intermediary pertaining
to such shares, and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares, excluding, in each case, such interests that
constitute Excluded Assets.

 

“Priority Lien Administrative Agent” shall have the meaning set forth in the
recitals.

 

“Priority Lien Collateral Trustee” shall have the meaning set forth in the
recitals.

 

“Receivables” shall mean all rights to payment, whether or not earned by
performance, for goods or other property sold, leased, licensed, assigned or
otherwise disposed of, or services rendered or to be rendered, including,
without limitation all such rights constituting or evidenced by any Account,
Chattel Paper, Instrument, General Intangible or Investment Related Property,
together with all of Grantor’s rights, if any, in any goods or other property
giving rise to such right to payment and all Collateral Support and Supporting
Obligations related thereto and all Receivables Records.

 

“Receivables Records” shall mean (i) all original copies of all documents,
instruments or other writings or electronic records or other Records evidencing
the Receivables, (ii) all books, correspondence, credit or other files, Records,
ledger sheets or cards, invoices, and

 

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other papers relating to Receivables, including, without limitation, all tapes,
cards, computer tapes, computer discs, computer runs, record keeping systems and
other papers and documents relating to the Receivables, whether in the
possession or under the control of Grantor or any computer bureau or agent from
time to time acting for Grantor or otherwise, (iii) all evidences of the filing
of financing statements and the registration of other instruments in connection
therewith, and amendments, supplements or other modifications thereto, notices
to other creditors, secured parties or agents thereof, and certificates,
acknowledgments, or other writings, including, without limitation, lien search
reports, from filing or other registration officers, (iv) all credit
information, reports and memoranda relating thereto and (v) all other written or
non-written forms of information related in any way to the foregoing or any
Receivable, in each case of clauses (i) - (v), to the extent not prohibited to
be pledged pursuant to any written agreement with any applicable Account Debtor.

 

“Secured Parties” shall mean each holder of Notes and each other holder of a
Parity Lien Obligation, the Trustee and each Parity Lien Representative, the
Collateral Trustee and each other Parity Lien Secured Party.

 

“Trademark Licenses” shall mean any and all agreements and licenses providing
for the granting of any right in or to Trademarks (whether such Grantor is
licensee or licensor thereunder).

 

“Trademarks” shall mean all United States trademarks, trade names, corporate
names, company names, business names, fictitious business names, Internet domain
names, service marks, certification marks, collective marks, logos, other source
or business identifiers, designs and general intangibles of a like nature, all
registrations and applications for any of the foregoing including, but not
limited to: (i) the registrations and applications referred to in Schedule
5.2(II) under the heading “Trademarks” (as such schedule may be amended or
supplemented from time to time), (ii) all extensions or renewals of any of the
foregoing, (iii) all of the goodwill of the business connected with the use of
and symbolized by the foregoing, (iv) the right to sue for past, present and
future infringement or dilution of any of the foregoing or for any injury to
goodwill, and (v) all Proceeds of the foregoing, including, without limitation,
royalties, income, payments, claims, damages, and proceeds of suit.

 

“Trade Secret Licenses” shall mean any and all agreements providing for the
granting of any right in or to Trade Secrets (whether such Grantor is licensee
or licensor thereunder).

 

“Trade Secrets” shall mean all trade secrets and all other confidential or
proprietary information and know-how whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all documents and things
embodying, incorporating, or referring in any way to such Trade Secret,
including but not limited to: (i) the right to sue for past, present and future
misappropriation or other violation of any Trade Secret, and (ii) all Proceeds
of the foregoing, including, without limitation, royalties, income, payments,
claims, damages, and proceeds of suit.

 

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that in the event that, by reason of
mandatory provisions of law, any or all of the perfection or priority of, or
remedies with respect to, 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 “UCC” shall mean the Uniform Commercial Code as

 

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enacted and in effect in such other jurisdiction solely for purposes of the
provisions hereof relating to such perfection, priority or remedies.

 

“United States” shall mean the United States of America.

 

1.2                               Definitions; Interpretation.

 

(a)                                 In this Agreement, the following capitalized
terms shall have the meaning given to them in the UCC (and, if defined in more
than one Article of the UCC, shall have the meaning given in Article 9 thereof):
Account, Account Debtor, As-Extracted Collateral, Bank, Certificate of Title,
Certificated Security, Chattel Paper, Commercial Tort Claims, Commodity Account,
Commodity Contract, Commodity Intermediary, Consignee, Consignment, Consignor,
Deposit Account, Document, Entitlement Order, Electronic Chattel Paper,
Equipment, Farm Products, General Intangibles, Goods, Health-Care-Insurance
Receivable, Instrument, Inventory, Letter of Credit Right, Manufactured Home,
Money, Payment Intangible, Proceeds, Record, Securities Account, Securities
Intermediary, Security Certificate, Security Entitlement, Supporting
Obligations, Tangible Chattel Paper and Uncertificated Security.

 

(b)                                 All other capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Indenture or the Collateral
Trust Agreement as applicable.  The incorporation by reference of terms defined
in the Indenture shall survive any termination of the Indenture until this
Agreement is terminated as provided in Section 11 hereof.  Any of the terms
defined herein may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference.  References herein to any
Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a
Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically
provided.  Unless the context requires otherwise, any definition of or reference
to any agreement, instrument or other document (including any Organizational
Document) shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein or in any other Note Document or other Parity Lien Document). 
The use herein of the word “include” or “including”, when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not non-limiting language (such
as “without limitation” or “but not limited to” or words of similar import) is
used with reference thereto, but rather shall be deemed to refer to all other
items or matters that fall within the broadest possible scope of such general
statement, term or matter.  The terms lease and license shall include sub-lease
and sub-license, as applicable.  If any conflict or inconsistency exists between
this Agreement and the Indenture, the Indenture shall govern.  All references
herein to provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC.

 

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SECTION 2.                         GRANT OF SECURITY.

 

2.1                               Grant of Security.  Each Grantor hereby grants
to the Parity Lien Collateral Trustee, for its benefit and for the benefit of
the Secured Parties, a security interest in and continuing lien on all of such
Grantor’s right, title and interest in, to and under all personal property of
such Grantor (subject to the limitations set forth in Section 2.2) including,
but not limited to the following, in each case whether now or hereafter existing
or in which any Grantor now has or hereafter acquires an interest and wherever
the same may be located (all of which being hereinafter collectively referred to
as the “Collateral”):

 

(a)                                 Accounts;

 

(b)                                 As-Extracted Collateral;

 

(c)                                  Chattel Paper;

 

(d)                                 Documents;

 

(e)                                  General Intangibles;

 

(f)                                   Goods (including, without
limitation, Inventory, which, for the avoidance of doubt, shall include coal
Inventory, and Equipment);

 

(g)                                  Instruments;

 

(h)                                 Insurance;

 

(i)                                     Intellectual Property, Copyright
Licenses, Patent Licenses, Trademark Licenses and Trade Secret Licenses;

 

(j)                                    Investment Related Property (including,
without limitation, Deposit Accounts);

 

(k)                                 Letter of Credit Rights;

 

(l)                                     Money;

 

(m)                             Receivables and Receivable Records;

 

(n)                                 Commercial Tort Claims now or hereafter
described on Schedule 5.2

 

(o)                                 to the extent not otherwise included above,
all other personal property of any kind and all Collateral Records, Collateral
Support and Supporting Obligations relating to any of the foregoing; and

 

(p)                                 to the extent not otherwise included above,
all Proceeds, products, accessions, rents and profits of or in respect of any of
the foregoing.

 

2.2                               Certain Limited Exclusions.  Notwithstanding
anything contained in this Agreement to the contrary, in no event shall the
Collateral include or the security interest granted under Section 2.1 hereof
attach to:

 

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(a)                                 motor vehicles and other assets subject to
certificates of title;

 

(b)                                 commercial tort claims where the amount of
the net proceeds claimed is less than $10,000,000;

 

(c)                                  (i) those assets over which the pledging or
granting of a security interest in such assets (x) would be prohibited by any
applicable law (other than any organizational document), rule or regulation
(except to the extent such prohibition is unenforceable after giving effect to
applicable anti-assignment provisions of the UCC, other than proceeds thereof,
the assignment of which is expressly deemed effective under the UCC
notwithstanding such prohibitions), (y) would be prohibited by, or cause a
default under or result in a breach, violation or invalidation of, any lease,
license or other written agreement or written obligation (each, a “Contract”) to
which such assets are subject, including the Longwall Financing Arrangements, or
would give another Person (other than the Company or any Controlled Subsidiary)
a right to terminate or accelerate the obligations under such Contract or to
obtain a Lien to secure obligations owing to such Person (other than the Company
or any Controlled Subsidiary) under such Contract (but only to the extent such
assets are subject to such Contract and such Contract is not entered into for
purposes of circumventing or avoiding the collateral requirements of the Parity
Lien Debt Documents), unless the Company or any Guarantor may unilaterally waive
it (in each case, except to the extent any such prohibition is unenforceable
after giving effect to applicable anti-assignment provisions of the UCC) or
(z) would require obtaining the consent, approval, license or authorization of
any Person (other than the Company or any Guarantor) or applicable Governmental
Authority, except to the extent that such consent, approval, license or
authorization has already been obtained, and (ii) any Contract or any property
or other asset subject to Liens securing permitted Acquired Debt (limited to the
acquired assets), a purchase money security interest, Capital Lease Obligation
or similar arrangement or sale and leaseback transaction to the extent that a
grant of a security interest therein requires the consent of any Person (other
than the Company or any Guarantor) as a condition to the creating of another
security interest, would violate or invalidate such Contract or purchase money,
capital lease or similar arrangement or create a right of termination in favor
of any other party thereto (other than the Company or a Guarantor) after giving
effect to the applicable anti-assignment provisions of the UCC), other than
proceeds and receivables thereof, the assignment of which is expressly deemed
effective under the UCC notwithstanding such prohibition;

 

(d)                                 those assets with respect to which in the
good faith judgment of the Company, (i) the costs or other consequences of
obtaining or perfecting such a security interest are excessive in relation to
the benefits to be obtained by the Secured Parties therefrom or (ii) obtaining
or perfecting a security interest would result in adverse tax consequences to
the Company or its Subsidiaries;

 

(e)                                  any Letter of Credit Rights (other than to
the extent a Lien thereon can be perfected by filing a customary financing
statement);

 

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(f)                                   any right, title or interest in
receivables assets sold, pledged or financed pursuant to a Permitted Receivables
Financing, and all of the Company’s and any Subsidiary’s rights, interests and
claims under a Permitted Receivables Financing, and any other assets subject to
a Permitted Receivables Financing;

 

(g)                                  any real property and leasehold rights and
interests in real property other than Material Real Property;

 

(h)                                 any “intent-to-use” application for
registration of a Trademark filed pursuant to Section 1(b) of the Lanham Act, 15
U.S.C. § 1051, prior to the filing and acceptance of a “Statement of Use”
pursuant to Section 1(d) of the Lanham Act or an “Amendment to Allege Use”
pursuant to Section 1(c) of the Lanham Act with respect thereto;

 

(i)                                     (i) any Equity Interest that is Voting
Stock of a first tier Foreign Subsidiary or FSHCO in excess of 65% of the Voting
Stock of such Subsidiary, (ii) any Equity Interests of captive insurance
subsidiaries and not for profit subsidiaries, (iii) any Equity Interests in, or
assets of, any Securitization Subsidiary, (iv) any Equity Interests in an
Unrestricted Subsidiary (other than Hillsboro or Patton), (v) margin stock, and
(vi) any Equity Interests in any Subsidiary that is not Wholly Owned by the
Company or any Restricted Subsidiary or in a Joint Venture, if the granting of a
security interest therein (A) would be prohibited by, cause a default under or
result in a breach of, or would give another Person (other than the Company or
any Controlled Subsidiary) a right to terminate, under any Organizational
Document, shareholders, joint venture or similar agreement applicable to such
Subsidiary or Joint Venture or (B) would require obtaining the consent of any
Person (other than the Company or any Controlled Subsidiary) (it being
understood and agreed that nothing herein shall prohibit or otherwise limit the
Lien on the Equity Interests in Hillsboro or Patton as security for the
Obligations of the Guarantors holding such Equity Interests under the Note
Guarantees, which shall be required and granted pursuant to the Parity Lien
Security Documents);

 

(j)                                    except as required pursuant to clause
(i)(i) above, any foreign collateral or credit support;

 

(k)                                 to the extent requiring the consent of one
or more third parties or prohibited by the terms of any applicable
organizational documents, joint venture agreement or shareholders’ agreement,
Equity Interests in any Person other than Wholly Owned Restricted Subsidiaries;

 

(l)                                     any governmental licenses or state or
local franchises, charters and authorizations, in each case, to the extent
security interests in such licenses, franchises, charters or authorizations are
prohibited or restricted thereby (in each case, except to the extent any such
prohibition is unenforceable after giving effect to the applicable
anti-assignment provisions of the UCC);

 

(m)                             deposits subject to Permitted Liens (other than
the Liens in favor of the Collateral Trustee); and

 

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(n)                                 Excluded Accounts;

 

provided that the Collateral shall include the replacements, substitutions and
proceeds of any of the foregoing unless such replacements, substitutions or
proceeds also constitute Excluded Assets.

 

2.3                               Collateral Trust Agreement.  Notwithstanding
anything herein to the contrary, the lien and security interest granted to the
Parity Lien Collateral Trustee pursuant to this Agreement and the exercise of
any right or remedy by the Parity Lien Collateral Trustee hereunder are subject
to the provisions of the Collateral Trust Agreement.  In the event of any
conflict between the terms of the Collateral Trust Agreement and this Agreement,
the terms of the Collateral Trust Agreement shall govern and control.

 

SECTION 3.                         SECURITY FOR PARITY LIEN OBLIGATIONS;
GRANTORS REMAIN LIABLE.

 

3.1                               Security for Parity Lien Obligations.  This
Agreement secures, and the Collateral is collateral security for, the prompt and
complete payment or performance in full when due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
the payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
§362(a) (and any successor provision thereof)), of all Parity Lien Obligations.

 

3.2                               Continuing Liability Under Collateral. 
Notwithstanding anything herein to the contrary, (i) each Grantor shall remain
liable for all obligations under the Collateral and nothing contained herein is
intended or shall be a delegation of duties to the Parity Lien Collateral
Trustee or any other Secured Party, (ii) each Grantor shall remain liable under
each of the agreements included in the Collateral, including, without
limitation, any agreements relating to Pledged Partnership Interests or Pledged
LLC Interests, to perform all of the obligations undertaken by it thereunder all
in accordance with and pursuant to the terms and provisions thereof and neither
the Parity Lien Collateral Trustee nor any Secured Party shall have any
obligation or liability under any of such agreements by reason of or arising out
of this Agreement or any other document related thereto nor shall the Parity
Lien Collateral Trustee nor any Secured Party have any obligation to make any
inquiry as to the nature or sufficiency of any payment received by it or have
any obligation to take any action to collect or enforce any rights under any
agreement included in the Collateral, including, without limitation, any
agreements relating to Pledged Partnership Interests or Pledged LLC Interests,
and (iii) the exercise by the Parity Lien Collateral Trustee of any of its
rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral.

 

SECTION 4.                         CERTAIN PERFECTION REQUIREMENTS

 

4.1                               Delivery Requirements.

 

(a)                                 With respect to any Certificated Securities
included in the Collateral, each Grantor shall deliver to the Applicable
Collateral Trustee the Security Certificates evidencing such Certificated
Securities duly indorsed by an effective indorsement (within the meaning of
Section 8-107 of the UCC), or accompanied by share transfer powers or other
instruments of transfer duly endorsed by such an effective endorsement, in each
case, to the Applicable Collateral Trustee or in blank.  In addition, each
Grantor shall cause any certificates

 

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evidencing any Pledged Equity Interests, including, without limitation, any
Pledged Partnership Interests or Pledged LLC Interests, to be similarly
delivered to the Applicable Collateral Trustee regardless of whether such
Pledged Equity Interests constitute Certificated Securities.

 

(b)                                 With respect to any Instruments or Tangible
Chattel Paper included in the Collateral, each Grantor shall deliver to the
Parity Lien Collateral Trustee all such Instruments or Tangible Chattel Paper
duly indorsed in blank; provided, however, that such delivery requirement shall
not apply to any Instruments or Tangible Chattel Paper (other than the
Intercompany Note) having a face amount of less than (i) $500,000 individually
and (ii) $5,000,000 in the aggregate.

 

4.2                               Control Requirements.

 

(a)                                 Subject to Section 6.18 of the Credit
Agreement (to the extent applicable), with respect to any Deposit Account,
Securities Account, Security Entitlement, Commodity Account or Commodity
Contract included in the Collateral, each Grantor shall ensure that the Parity
Lien Collateral Trustee has Control thereof; provided, however, that such
Control requirement shall not apply to Deposit Accounts as long as the aggregate
cash deposited in all such Deposit Accounts does not exceed $1,000,000.  With
respect to any Securities Accounts or Securities Entitlements, such Control
shall be accomplished by the Grantor causing the Securities Intermediary
maintaining such Securities Account or Security Entitlement to enter into an
agreement in form and substance reasonably satisfactory to the Parity Lien
Collateral Trustee pursuant to which the Securities Intermediary shall agree to
comply with the Parity Lien Collateral Trustee’s Entitlement Orders without
further consent by such Grantor.  With respect to any Deposit Account, each
Grantor shall cause the depositary institution maintaining such account to enter
into an agreement in form and substance reasonably satisfactory to the Parity
Lien Collateral Trustee, pursuant to which such depository institution shall
agree to comply with the Parity Lien Collateral Trustee’s instructions with
respect to disposition of funds in the Deposit Account without further consent
by such Grantor.  With respect to any Commodity Accounts or Commodity Contracts,
each Grantor shall cause Control in favor of the Parity Lien Collateral Trustee
in a manner reasonably acceptable to the Parity Lien Collateral Trustee.  With
respect to any Uncertificated Security included in the Collateral (other than
any Uncertificated Securities credited to a Securities Account), the applicable
Grantor shall promptly notify the Applicable Collateral Trustee of the
acquisition thereof and thereafter at the written request of the Applicable
Collateral Trustee, each Grantor shall cause (or, with respect to an issuer that
is not a Subsidiary or a controlled Affiliate of a Grantor, use commercially
reasonable efforts to cause), the issuer of such Uncertificated Security to
either (i) register the Applicable Collateral Trustee as the registered owner
thereof on the books and records of the issuer or (ii) execute an agreement
substantially in the form of Exhibit B hereto (or such other agreement in form
and substance reasonably satisfactory to the Applicable Collateral Trustee),
pursuant to which such issuer agrees to comply with the Applicable Collateral
Trustee’s instructions with respect to such Uncertificated Security without
further consent by such Grantor; provided that, with respect to an issuer that
is not a Subsidiary or a controlled Affiliate of a Grantor, if after the use of
commercially reasonable efforts such Grantor cannot

 

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satisfy such requirement with respect to such Uncertificated Security then such
Grantor shall not be required to take any further action with respect to such
Uncertificated Security to ensure that the Applicable  Collateral Trustee has
Control of such Uncertificated Security.  Notwithstanding anything herein to the
contrary, prior to the Discharge of Priority Lien Obligations, if the applicable
depositary institution, Securities Intermediary or commodities intermediary is
not willing to provide Control to both the Priority Lien Collateral Trustee and
the Parity Lien Collateral Trustee at the same time, the applicable Grantor
shall be in compliance with this Section 4.2 if the Priority Lien Collateral
Trustee has such Control (and the Priority Lien Collateral Trustee shall act as
gratuitous bailee or agent for the benefit of the Parity Lien Collateral Trustee
for perfection purposes pursuant to Section 7.4 of the Collateral Trust
Agreement).

 

(b)                                 With respect to any Letter of Credit Rights
having a value in excess of $1,000,000 individually or $3,000,000 in the
aggregate included in the Collateral (other than any Letter of Credit Rights
constituting a Supporting Obligation for a Receivable in which the Parity Lien
Collateral Trustee has a valid and perfected security interest), Grantor shall
use its commercially reasonable efforts to ensure that the Applicable Collateral
Trustee has Control thereof by obtaining the written consent of each issuer of
each related letter of credit to the assignment of the proceeds of such letter
of credit to the Applicable Collateral Trustee.

 

(c)                                  With respect to any Electronic Chattel
Paper or “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) included in the Collateral, Grantor shall ensure that the
Applicable Collateral Trustee has Control thereof; provided, however, that such
Control requirement shall not apply to any Electronic Chattel Paper or
transferable record having a face amount of less than $2,000,000 in the
aggregate.

 

4.3                               Intellectual Property Recording Requirements.

 

(a)                                 In the case of any Collateral (whether now
owned or hereafter acquired) consisting of U.S. federal issued Patents and
applications therefor, each Grantor shall execute and deliver to the Parity Lien
Collateral Trustee a Patent Security Agreement (Parity Lien) in substantially
the form of Exhibit D hereto (or a supplement thereto) covering all such Patents
for recordation with the U.S. Patent and Trademark Office with respect to the
security interest of the Parity Lien Collateral Trustee.

 

(b)                                 In the case of any Collateral (whether now
owned or hereafter acquired) consisting of U.S. federal registered Trademarks
and applications therefor, each Grantor shall execute and deliver to the Parity
Lien Collateral Trustee a Trademark Security Agreement (Parity Lien) in
substantially the form of Exhibit C hereto (or a supplement thereto) covering
all such Trademarks for recordation with the U.S. Patent and Trademark Office
with respect to the security interest of the Parity Lien Collateral Trustee.

 

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(c)                                  In the case of any Collateral (whether now
owned or hereafter acquired) consisting of U.S. federal registered Copyrights,
each Grantor shall execute and deliver to the Parity Lien Collateral Trustee a
Copyright Security Agreement (Parity Lien) in substantially the form of Exhibit
E hereto (or a supplement thereto) covering all such Copyrights for recordation
with the U.S. Copyright Office with respect to the security interest of the
Parity Lien Collateral Trustee.

 

4.4                               [Reserved.]

 

4.5                               Timing and Notice.  With respect to any
Collateral in existence on the Issue Date, except as otherwise expressly stated
above, each Grantor shall comply with the requirements of Section 4 on the date
hereof and, with respect to any Collateral hereafter owned or acquired, such
Grantor shall comply with such requirements within thirty (30) days (or such
longer period as the Applicable Collateral Trustee may agree to (which, if the
Applicable Collateral Trustee is the Parity Lien Collateral Trustee, shall be as
directed by the Controlling Representative) of such Grantor acquiring rights
therein; provided, that with respect to any Deposit Account, Securities Account,
Security Entitlement, Commodity Account or Commodity Contract that is acquired
after the Issue Date in connection with a Permitted Acquisition, if the
applicable Grantor cannot provide the Parity Lien Collateral Trustee with
Control thereof to the extent required under Section 4.2(a) within sixty (60)
days after the consummation of such Permitted Acquisition after using its
commercially reasonable efforts to do so, then (a) with respect to any Commodity
Account or Commodity Contract, such Grantor shall not be required to take any
further action with respect thereto to ensure that the Parity Lien Collateral
Trustee has Control thereof and (b) with respect to any Securities Account,
Security Entitlement or Deposit Account, the Grantor shall have an additional
ninety (90) days (or such longer period as the Applicable Collateral Trustee as
directed by the applicable Controlling Representative may agree to) to achieve
compliance with Section 4.2(a) with respect to such Deposit Account; provided
that, if the Priority Lien Collateral Trustee has such Control, the Priority
Lien Collateral Trustee shall act as gratuitous bailee or agent for the benefit
of the Parity Lien Collateral Trustee for perfection purposes pursuant to
Section 7.4 of the Collateral Trust Agreement. Each Grantor shall promptly
inform the Priority Lien Collateral Trustee in writing of its acquisition of any
Collateral for which any action is required by Section 4 hereof (including, for
the avoidance of doubt, the filing of any U.S. federal applications for, or the
issuance or registration of, any Patents, Copyrights or Trademarks).

 

SECTION 5.                         REPRESENTATIONS AND WARRANTIES.

 

Each Grantor hereby represents and warrants, that:

 

5.1                               Grantor Information and Status.

 

(a)                                 as of the Issue Date, Schedule 5.1(A) sets
forth under the appropriate headings: (1) the full legal name of such Grantor,
(2) the type of organization of such Grantor, (3) the jurisdiction of
organization of such Grantor, (4) its organizational identification number, if
any, and (5) the jurisdiction where the chief executive office or its sole place
of business (or the principal residence if such Grantor is a natural person) is
located;

 

(b)                                 [reserved];

 

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(c)                                  as of the Issue Date, except as provided on
Schedule 5.1(C), it has not changed its name, jurisdiction of organization,
chief executive office or sole place of business (or principal residence if such
Grantor is a natural person) or its corporate structure in any way (e.g., by
merger, consolidation, change in corporate form or otherwise), in each case,
within the past five (5) years;

 

(d)                                 as of the Issue Date, such Grantor has been
duly organized and is validly existing as an entity of the type as set forth
opposite such Grantor’s name on Schedule 5.1(A) solely under the laws of the
jurisdiction as set forth opposite such Grantor’s name on Schedule 5.1(A) and
remains duly existing as such.  Such Grantor has not filed any certificates of
dissolution or liquidation, any certificates of domestication, transfer or
continuance in any other jurisdiction; and

 

(e)                                  as of the Issue Date no Grantor is a
“transmitting utility” (as defined in Section 9-102(a)(80) of the UCC).

 

5.2                       Collateral Identification; Special Collateral.

 

(a)                                 as of the Issue Date, Schedule 5.2 sets
forth under the appropriate headings all of such Grantor’s: (1) Pledged Equity
Interests, (2) Pledged Debt, (3) Securities Accounts, (4) Deposit Accounts,
(5) Commodity Contracts and Commodity Accounts, (6) United States federal
registrations and issuances of and applications for Patents, Trademarks (other
than Internet domain names), and Copyrights owned by each Grantor,
(7) Commercial Tort Claims other than any Commercial Tort Claims that constitute
Excluded Assets pursuant to Section 2.2(b), (8) [reserved], and (9) [the name
and address of any warehouseman, bailee or other third party, other than with
any third party in connection with preparation for shipment or for
rehabilitation or refurbishment in possession of any Inventory, Equipment and
other tangible personal property other than any Inventory, Equipment or other
tangible personal property having a value less than  $3,000,000 individually or
$5,000,000 in the aggregate; and

 

(b)                                 as of the Issue Date, none of the material
Collateral constitutes, or is the Proceeds of, (1) Farm Products,
(2) Manufactured Homes, (3) Health-Care-Insurance Receivables, (4) timber to be
cut, or (5) aircraft, aircraft engines, satellites, ships or (except as set
forth on Schedule XVI to the Collateral Questionnaire) railroad rolling stock.

 

5.3                               Ownership of Collateral and Absence of Other
Liens.

 

(a)                                 (x) it owns the Collateral purported to be
owned by it or otherwise has the rights it purports to have in each item of
Collateral and, as to all Collateral whether now existing or hereafter acquired,
developed or created (including by way of lease or license), will continue to
own or have such rights in each item of the Collateral except where failure to
do so would not reasonably be expected to result in a Material Adverse Effect,
and (y) the Collateral is free and clear of any and all Liens other than any
Permitted Liens; and

 

(b)                                 other than any financing statements filed in
favor of the Parity Lien Collateral Trustee, no Grantor has filed or consented
to the filing of any effective financing statement, fixture filing or other
instrument similar in effect under any applicable law covering all or any part
of the Collateral which is on file in any filing or recording office, in each
case to the extent such filing effectuates a

 

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Lien other than a Permitted Lien, except for (x) any filings, notices or
recordations with respect to which the underlying Indebtedness has been paid off
or otherwise satisfied and (y) financing statements for which duly authorized
proper termination statements have been delivered to the Parity Lien Collateral
Trustee for filing.  Other than the Parity Lien Collateral Trustee, the Priority
Lien Collateral Trustee and any automatic control in favor of a depository
institution, Securities Intermediary or Commodity Intermediary maintaining a
Deposit Account, Securities Account or Commodity Contract, no Person is in
Control of any Collateral.

 

5.4                               Status of Security Interest.

 

(a)                                 upon the filing of financing statements
naming each Grantor as “debtor” and the Parity Lien Collateral Trustee as
“secured party” and describing the Collateral in the filing offices set forth
opposite such Grantor’s name on Schedule 5.4 hereof provided as of the Issue
Date, the security interest of the Parity Lien Collateral Trustee in all
Collateral that can be perfected by the filing of a financing statement under
the Uniform Commercial Code as in effect in any jurisdiction will constitute
valid, perfected, first priority Liens (if and to the extent perfection can be
achieved through the actions described in this Section 5.4(a)) subject in the
case of priority only, to any Permitted Liens with respect to Collateral.  Each
agreement purporting to give the Parity Lien Collateral Trustee (or the Priority
Lien Collateral Trustee, if acting as the agent of the Parity Lien Collateral
Trustee pursuant to Section 7.4 of the Collateral Trust Agreement) Control over
any Collateral is effective to establish the Parity Lien Collateral Trustee’s
(or the Priority Lien Collateral Trustee’s, as the case may be), Control of the
Collateral subject thereto;

 

(b)                                 to the extent perfection or priority of the
security interest therein is not subject to Article 9 of the UCC, upon
recordation of the security interests granted hereunder in Collateral consisting
of issued U.S. Patents and patent applications, U.S. federal registered
Trademarks and Trademark applications and U.S. registered Copyrights in the
United States Patent and Trademark Office and the United States Copyright
Office, the security interests granted to the Parity Lien Collateral Trustee
hereunder in such Patents Trademarks and Copyrights hereunder shall constitute
valid, perfected, first priority Liens in the United States (subject, in the
case of priority only, to Permitted Liens).  Notwithstanding the foregoing,
nothing in this Agreement or any other Note Documents or other Parity Lien
Documents shall require any Grantor to make any filings or take any other
actions to record or perfect the Parity Lien Collateral Trustee’s Lien on and
security interest in any Intellectual Property outside the United States or to
reimburse the Parity Lien Collateral Trustee for any costs or expenses incurred
in connection with making such filings or taking any other such action; and

 

(c)                                  no authorization, consent, approval or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body or any other Person is required for either (i) the pledge or
grant by any Grantor of the Liens purported to be created in favor of the Parity
Lien Collateral Trustee hereunder or (ii) the exercise by the Parity Lien
Collateral Trustee of any rights or remedies in accordance with the UCC in
respect of any Collateral (whether specifically granted or created hereunder or
created or provided for by applicable

 

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law), except (A) for the filings contemplated by clause (a) above and
continuation statements in respect thereof and clause (b) above, (B) the actions
described in Section 4.2 with respect to Collateral subject to Control
requirements, which actions have been taken and are in full force and effect,
and (C) as may be required, in connection with the disposition of any Investment
Related Property, by laws generally affecting the offering and sale of
Securities.

 

5.5                               Goods and Receivables.

 

(a)                                 [reserved];

 

(b)                                 except as set forth on Schedule 5.5(B), as
of the Issue Date, none of the Account Debtors in respect of any Receivable in
excess of $1,000,000 individually or $2,500,000 in the aggregate is the
government of the United States, any agency or instrumentality thereof, any
state or municipality or any foreign sovereign;

 

(c)                                  no material portion of Goods now or
hereafter produced by any Grantor and included in the Collateral have been or
will be produced in material violation of the requirements of the Fair Labor
Standards Act, as amended, or the rules and regulations promulgated thereunder;
and

 

(d)                                 other than any Inventory or Equipment in
transit, undergoing repairs, replacements loaned to employees, or kept on the
premises of customers or with any third party in connection with preparation for
shipment or for rehabilitation or refurbishment, as of the Issue Date, all of
the material Equipment and Inventory included in the Collateral is located only
at the locations specified in Schedule 5.5(D).

 

5.6                               Pledged Equity Interests; Investment Related
Property.

 

(a)                                 it is the record and beneficial owner of the
Pledged Equity Interests free of all Liens, rights or claims of other Persons
other than Permitted Liens and there are no outstanding warrants, options or
other rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or that
requires the issuance or sale of, any Pledged Equity Interests;

 

(b)                                 no consent of any Person including any other
general or limited partner, any other member of a limited liability company, any
other shareholder or any other trust beneficiary is necessary in connection with
the creation, perfection or second priority of the security interest of the
Parity Lien Collateral Trustee in any Pledged Equity Interests or, to the extent
the Pledged Equity Interests are issued by a wholly-owned Subsidiary of a
Grantor, the exercise by the Parity Lien Collateral Trustee of the voting or
other rights provided for in this Agreement or the exercise of remedies in
respect thereof except as contemplated by the Collateral Trust Agreement or as
have been obtained or waived; and

 

(c)                                  none of the Pledged LLC Interests and
Pledged Partnership Interests in Wholly Owned Subsidiaries are or represent
interests that by their

 

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terms provide that they are securities governed by the Uniform Commercial Code
of an applicable jurisdiction.

 

5.7                               Intellectual Property.

 

(a)                                 it is the sole and exclusive owner of the
entire right, title, and interest in and to all Intellectual Property listed on
Schedule 5.2(II) (as such schedule may be amended or supplemented from time to
time), and owns or has a license or other right to use all other Material
Intellectual Property, free and clear of all Liens (except for Permitted Liens)
and all claims (except such claims as would not reasonably be expected to have a
Material Adverse Effect);

 

(b)                                 as of the Issue Date, except to the extent
any such occurrence could not reasonably be expected to cause a Material Adverse
Effect, all Material Intellectual Property owned by such Grantor is subsisting
and has not been adjudged invalid or unenforceable, in whole or in part, and
each Grantor has performed all acts and has paid, when due, all material
renewal, maintenance, and other fees and taxes required to maintain each and
every material registration and application of Copyrights, Patents and
Trademarks owned by such Grantor in full force and effect, except to the extent
being actively contested by such Grantor in good faith and by appropriate
proceedings;

 

(c)                                  except to the extent any such occurrence
could not reasonably be expected to cause a Material Adverse Effect, no holding,
decision, or judgment has been rendered in any action or proceeding before any
court or administrative authority challenging the validity of such Grantor’s
right to register, or such Grantor’s rights to own or use, any Material
Intellectual Property (other than office actions issued in the ordinary course
of prosecution) and no such action or proceeding is pending or, to the best of
such Grantor’s knowledge, threatened;

 

(d)                                 all registrations and applications for
Copyrights, Patents and Trademarks owned by such Grantor and included in the
Material Intellectual Property are standing in the name of such Grantor;

 

(e)                                  except to the extent that the failure to do
so could not reasonably be expected to cause a Material Adverse Effect , such
Grantor has been using appropriate statutory notice of registration in
connection with its use of registered Trademarks owned by such Grantor, proper
marking practices in connection with its use of Patents owned by such Grantor,
and appropriate notice of copyright in connection with the publication of
Copyrights owned by such Grantor, in each case, to the extent constituting
Material Intellectual Property and necessary to maintain such items;

 

(f)                                   such Grantor has taken commercially
reasonable steps to protect the confidentiality of its Trade Secrets in
accordance with industry standards except as would not reasonably be expected to
have a Material Adverse Effect;

 

(g)                                  except to the extent any such occurrence
could not reasonably be expected to cause a Material Adverse Effect, (i) the
conduct of such Grantor’s business does not infringe upon or otherwise violate
any trademark,

 

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patent, copyright, trade secret or other intellectual property right owned or
controlled by a third party; and (ii) no written claim has been made against
such Grantor that the use of any Material Intellectual Property owned or used by
such Grantor (or any of its respective licensees) violates the asserted rights
of any third party, nor, to such Grantor’s knowledge, has any such claim been
threatened;

 

(h)                                 to the best of such Grantor’s knowledge, no
Person is infringing or otherwise violating any rights in any Material
Intellectual Property owned by such Grantor; and

 

(i)                                     no settlement or consents, covenants not
to sue, non-assertion assurances, or releases have been entered into by such
Grantor in a manner that could materially adversely affect such Grantor’s rights
to own or use any Material Intellectual Property.

 

SECTION 6.                         COVENANTS AND AGREEMENTS.

 

Each Grantor hereby covenants and agrees that:

 

6.1                               Agreement by Applicable Issuers and Applicable
Grantors.

 

.  Each of the issuers of the Pledged Equity Interests that are limited
liability companies and Grantors and each of such issuers that are not Grantors
but that join this Agreement from time to time in their capacity as such issuers
(each an “Applicable Issuer”) and each of the applicable Grantors that are
pledgors of such Pledged Equity Interests (each, an “Applicable Grantor”) hereby
consent and agree that:

 

(i) any member of such Applicable Issuer (a “Member”) may pledge its membership
interests (“Membership Interests”) to secure obligations arising pursuant to
loans or other financial accommodations made to such Member and/or one or more
of its affiliates from time to time, (ii) a pledgee of Membership Interests, or
such pledgee’s permitted successors or assigns, may, in connection with the
valid exercise of such pledgee’s or such permitted successor’s or assign’s
rights, sell, transfer or otherwise dispose of all or part of the Membership
Interests (including a sale, transfer or disposition in connection with any
foreclosure) without any further consent of any Member and (iii) a pledgee of
the Membership Interests, or such pledgee’s permitted successors or assigns, in
connection with the valid exercise of such pledgee’s or such permitted
successor’s or assign’s rights, or any purchaser of the Membership Interests
acquired the Membership Interests in connection with the valid exercise of such
rights (including in connection with any foreclosure), may acquire the
Membership Interests and become a Member or be substituted for a Member of such
Applicable Issuer without the consent of any Member.

 

6.2                               Collateral Identification; Special Collateral.

 

(a)                                 In the event that it hereafter acquires any
Collateral of a type described in Section 5.2(b) hereof excluding railroad
rolling stock, the value of which exceeds $5,000,000 in the aggregate since the
Issue Date, it shall promptly notify the Parity Lien Collateral Trustee thereof
in writing and take such actions and execute such documents and make such
filings all at Grantor’s expense as the Applicable Collateral Trustee may
reasonably request in order to ensure that the Parity Lien Collateral Trustee
has a valid, perfected, first priority security interest in such Collateral,
subject to any Permitted Liens.

 

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(b)                                 In the event that it hereafter acquires or
has any Commercial Tort Claim that does not constitute an Excluded Asset
pursuant to Section 2.2(b),  it shall deliver to the Parity Lien Collateral
Trustee a completed Pledge Supplement together with all Supplements to Schedules
thereto, identifying such new Commercial Tort Claims.

 

6.3                               Ownership of Collateral and Absence of Other
Liens.  Except for the security interest created by this Agreement, it shall not
create or suffer to exist any Lien upon or with respect to any of the
Collateral, except Permitted Liens, and such Grantor shall use its commercially
reasonable efforts in its business judgment to defend the Collateral against all
Persons at any time claiming any security interest therein.

 

6.4                               Status of Security Interest.

 

(a)                                 Subject to the limitations set forth in
subsection (b) of this Section 6.4, each Grantor shall maintain the security
interest of the Parity Lien Collateral Trustee hereunder in all Collateral as
valid, perfected, second priority Liens (subject to Permitted Liens ).

 

(b)                                 Notwithstanding the foregoing, no Grantor
shall be required to take any action to perfect any Collateral that can only be
perfected by Control except as and to the extent specified in Section 4 hereof.

 

6.5                               Goods and Receivables.

 

(a)                                 Other than as permitted pursuant to any
Permitted Lien, it shall not deliver any Document evidencing any Equipment and
Inventory constituting Collateral to any Person other than the issuer of such
Document to claim the Goods evidenced therefor or the Applicable Collateral
Trustee; and

 

(b)                                 subject to the terms of the Collateral Trust
Agreement, during the continuance of an Event of Default, the Parity Lien
Collateral Trustee shall have the right after notice to the applicable Grantor
to notify, or require any Grantor to notify, any Account Debtor of the Parity
Lien Collateral Trustee’s security interest in the Receivables and any
Supporting Obligation and, in addition, at any time following the occurrence and
during the continuation of an Event of Default, the Parity Lien Collateral
Trustee may:  (i) direct the Account Debtors under any Receivables to make
payment of all amounts due or to become due to such Grantor thereunder directly
to the Parity Lien Collateral Trustee; (ii) notify, or require any Grantor to
notify, each Person maintaining a lockbox or similar arrangement to which
Account Debtors under any Receivables have been directed to make payment to
remit all amounts representing collections on checks and other payment items
from time to time sent to or deposited in such lockbox or other arrangement
directly to the Parity Lien Collateral Trustee; (iii) direct the Account Debtors
under any Receivables subject to the Assignment of Claims Act of 1940, as
amended 31 U.S.C. Section 3727 and 41 U.S.C. Section 15, to execute and deliver
all documents necessary or appropriate to make payment of all amounts due or to
become due to such Grantor thereunder directly to the Parity Lien Collateral
Trustee; and (iv) enforce, at the expense of such Grantor, collection of any
such Receivables and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done;

 

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provided, in each case, that notwithstanding anything to the contrary herein, to
the extent any credit information, reports or memoranda constituting Receivables
Records is prohibited to be disclosed in accordance with any confidentiality
restriction in any agreement with any applicable Account Debtor, such credit
information, reports or memoranda shall not be required to be provided to the
Parity Lien Collateral Trustee.  If the Parity Lien Collateral Trustee notifies
any Grantor that it has elected to collect the Receivables in accordance with
the preceding sentence, any payments of Receivables received by such Grantor
shall be forthwith (and in any event within two (2) Business Days) deposited by
such Grantor in the exact form received, duly indorsed by such Grantor to the
Parity Lien Collateral Trustee if required, in a Deposit Account maintained
under the sole dominion and control of the Parity Lien Collateral Trustee, and
until so turned over, all amounts and proceeds (including checks and other
instruments) received by such Grantor in respect of the Receivables, any
Supporting Obligation or Collateral Support shall be received in trust for the
benefit of the Parity Lien Collateral Trustee hereunder and shall be segregated
from other funds of such Grantor and such Grantor shall not adjust, settle or
compromise the amount or payment of any Receivable, or release wholly or partly
any Account Debtor or obligor thereof, or allow any credit or discount thereon.

 

6.6                               Pledged Equity Interests, Investment Related
Property.

 

(a)                                 Except as provided in the next sentence, in
the event such Grantor receives any dividends, interest or distributions on any
Pledged Equity Interest or other Investment Related Property upon the merger,
consolidation, liquidation or dissolution of any issuer of any Pledged Equity
Interest or Investment Related Property, then (a) such dividends, interest or
distributions and securities or other property shall be included in the
definition of Collateral without further action and (b) such Grantor shall
promptly take all steps, if any, to the extent required hereunder with respect
to such Collateral, to ensure the validity, perfection, priority and, if
applicable, Control, subject to the priorities set forth in the Collateral Trust
Agreement of the Parity Lien Collateral Trustee over such Investment Related
Property (including, without limitation, delivery thereof to the Parity Lien
Collateral Trustee or the Priority Lien Collateral Trustee, as the case may be)
and pending any such action, to the extent an Event of Default is occurring or
continuing, such Grantor shall be deemed to hold such dividends, interest,
distributions, securities or other property in trust for the benefit of the
Parity Lien Collateral Trustee and shall segregate such dividends,
distributions, Securities or other property from all other property of such
Grantor.  Notwithstanding the foregoing, so long as the Applicable Collateral
Trustee (or if the Parity Lien Collateral Trustee is at that time permitted to
exercise remedies against the Collateral pursuant to Collateral Trust Agreement,
the Parity Lien Collateral Trustee) shall not have delivered written notice of
its intent to exercise its remedies hereunder at any time while an Event of
Default (other than any Bankruptcy Event of Default) shall have occurred and be
continuing and so long as no Bankruptcy Event of Default shall have occurred and
be continuing, the Parity Lien Collateral Trustee authorizes each Grantor to
retain all cash dividends and distributions paid and all payments of interest;

 

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(b)                                 Voting

 

(i)                                     Prior to receipt of a notice from the
Applicable Collateral Trustee (or if the Parity Lien Collateral Trustee is at
that time permitted to exercise remedies against the Collateral pursuant to
Collateral Trust Agreement, the Parity Lien Collateral Trustee) of its intent to
exercise its remedies hereunder at any time while an Event of Default (other
than any Bankruptcy Event of Default) shall have occurred and be continuing and
so long as no Bankruptcy Event of Default shall have occurred and be continuing,
except as otherwise provided under the covenants and agreements relating to
Investment Related Property in this Agreement or elsewhere herein or in the
Indenture, each Grantor shall be entitled to exercise or refrain from exercising
any and all voting and other consensual rights pertaining to the Investment
Related Property or any part thereof for any purpose not inconsistent with the
terms of this Agreement or the Indenture; and

 

(ii)                                  Upon delivery to the Grantors by the
Applicable Collateral Trustee (or if the Parity Lien Collateral Trustee is at
that time permitted to exercise remedies against the Collateral pursuant to
Collateral Trust Agreement, the Parity Lien Collateral Trustee) of written
notice of its intent to exercise remedies after the occurrence and during the
continuation of an Event of Default (other than any Bankruptcy Event of Default)
or automatically upon the occurrence and during the continuation of any
Bankruptcy Event of Default:

 

(1)                                 all rights of each Grantor to exercise or
refrain from exercising the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant hereto shall cease and all such
rights shall thereupon become vested in the Parity Lien Collateral Trustee who
shall thereupon have the sole right to exercise such voting and other consensual
rights; and

 

(2)                                 in order to permit the Parity Lien
Collateral Trustee to exercise the voting and other consensual rights which it
may be entitled to exercise pursuant hereto and to receive all dividends and
other distributions which it may be entitled to receive hereunder: (1) each
Grantor shall promptly execute and deliver (or cause to be executed and
delivered) to the Parity Lien Collateral Trustee all proxies, dividend payment
orders and other instruments as the Parity Lien Collateral Trustee may from time
to time reasonably request and (2) each Grantor acknowledges that the Parity
Lien Collateral Trustee may utilize the power of attorney set forth in
Section 8.1;

 

(c)                                  If any issuer of any Pledged Partnership
Interests or Pledged LLC Interests owned by a Grantor which are not securities
(for purposes of the UCC) elects or otherwise takes any action to cause such
Pledged Partnership Interests or Pledged LLC Interests to be treated as
securities for purposes of the UCC, such Grantor shall promptly notify the
Parity Lien Collateral Trustee in writing of any such election or action and, in
such event, shall, to the extent required hereunder, take all steps necessary or
advisable to establish the Parity Lien Collateral Trustee’s Control (or Control
of the Priority Lien Collateral, as bailee of the Parity Lien Collateral Trustee
for purposes of perfection in accordance with the Collateral Trust Agreement)
thereof;

 

(d)                                 Each Grantor consents to the grant by each
other Grantor of a Lien in all Investment Related Property to the Parity Lien
Collateral Trustee and without limiting the generality of the foregoing consents
to the transfer of any

 

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Pledged Partnership Interest and any Pledged LLC Interest to the Parity Lien
Collateral Trustee or its designee if an Event of Default has occurred and is
continuing and to the substitution of the Parity Lien Collateral Trustee or its
designee as a partner in any partnership or as a member in any limited liability
company with all the rights and powers related thereto; and

 

(e)                                  Without the prior written consent of the
Applicable Collateral Trustee, no Grantor will consent or otherwise agree to
certificate such Pledged Partnership Interests or Pledged LLC Interests such
that they constitute “certificated securities” within the meaning of
Section 8-102(4) of the UCC.

 

6.7                               Intellectual Property.

 

(a)                                 other than in the ordinary course of
business consistent with past practice, it shall not do any act or knowingly
omit to do any act whereby any of the Material Intellectual Property owned by
such Grantor may lapse, become abandoned, dedicated to the public (other than by
expiration in the ordinary course of business), or unenforceable, or which would
materially adversely affect the validity, grant, or enforceability of the
security interest granted therein;

 

(b)                                 other than in the ordinary course of
business consistent with past practice, it shall not, with respect to any
Trademarks owned by such Grantor constituting Material Intellectual Property,
cease the use of any of such Trademarks for a period of greater than one year or
fail to maintain the level of the quality of products sold and services rendered
under any of such Trademarks at a level at least substantially consistent (or
higher) with the quality of such products and services as of the date hereof,
and such Grantor shall take all commercially reasonable steps necessary to
insure that licensees of such Trademarks use such consistent standards of
quality;

 

(c)                                  except to the extent that the failure to do
so could not reasonably be expected to cause a Material Adverse Effect, it shall
take all commercially reasonable steps, including in any proceeding before the
United States Patent and Trademark Office, the United States Copyright Office or
any state registry to pursue any application and maintain any registration or
issuance of each Trademark, Patent, and Copyright owned by any Grantor and
constituting Material Intellectual Property, including, but not limited to,
those items on Schedule 5.2(II) (as such schedule may be amended or supplemented
from time to time);

 

(d)                                 it shall use commercially reasonable efforts
so as not to permit the inclusion in any contract to which it hereafter becomes
a party of any provision that could materially impair or prevent the creation of
a security interest in, or the assignment of, such Grantor’s rights and
interests in any property included within the definitions of any Material
Intellectual Property acquired under such contracts;

 

(e)                                  in the event that any Material Intellectual
Property owned by or exclusively licensed to any Grantor is infringed,
misappropriated, diluted or otherwise violated by a third party, such Grantor
shall promptly take all reasonable

 

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actions, in such Grantor’s reasonable business judgment, to stop such
infringement, misappropriation, dilution or other violation and protect its
rights in such Material Intellectual Property (with respect to exclusively
licensed Materially Intellectual Property, if and to the extent permitted by the
terms of any applicable agreements); and

 

(f)                                   except to the extent that the failure to
do so could not reasonably be expected to cause a Material Adverse Effect, it
shall use proper statutory notice in connection with its use of any of the
Patents, Trademarks and Copyrights that constitute Material Intellectual
Property owned by such Grantor to the extent necessary to protect such Material
Intellectual Property.

 

6.8                               Information Regarding Collateral.  Company
will furnish to the Trustee and the Parity Lien Collateral Trustee reasonable
prior written notice of any change (i) in any Grantor’s corporate name, (ii) in
any Grantor’s form of formation or incorporation, (iii) in any Grantor’s
jurisdiction of organization or (iv) in any Grantor’s Federal Taxpayer
Identification Number or state organizational identification number.  Company
also agrees promptly to notify the Parity Lien Collateral Trustee and each
Parity Lien Representative if any material portion of the Collateral is damaged
or destroyed.

 

SECTION 7.                         FURTHER ASSURANCES; ADDITIONAL GRANTORS.

 

7.1                               Further Assurances.

 

(a)                                 Each Grantor agrees that from time to time,
at the expense of such Grantor, that it shall promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary, or that the Parity Lien Collateral Trustee may reasonably request, in
order to create and/or maintain the validity, perfection or priority of (subject
to Permitted Liens) and protect any security interest granted or purported to be
granted hereby (subject to the limitations set forth in Section 2.2) or to
enable the Parity Lien Collateral Trustee to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Grantor shall:

 

(i)                                     file such financing or continuation
statements, or amendments thereto, record security interests in Intellectual
Property and execute and deliver such other agreements, instruments,
endorsements, powers of attorney or notices, as may be necessary, or as the
Parity Lien Collateral Trustee may reasonably request, in order to perfect and
preserve the security interests granted or purported to be granted hereby;

 

(ii)                                  take all actions necessary to ensure the
recordation of appropriate evidence of the liens and security interest granted
hereunder in any Intellectual Property registered or issued or in which an
application for registration or issuance is pending with the United States
Patent and Trademark Office or the United States Copyright Office;

 

(iii)                               upon reasonable notice and at such
reasonable times during normal business hours as reasonably requested by the
Parity Lien Collateral Trustee, allow inspection of the Collateral by the Parity
Lien Collateral Trustee, or persons designated by the Parity Lien Collateral
Trustee; provided that the costs of one such

 

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inspection per calendar year (or an unlimited number of inspections if an Event
of Default has occurred and is continuing) shall be the responsibility of the
Borrower;

 

(iv)                              at the Parity Lien Collateral Trustee’s
reasonable request, appear in and defend any action or proceeding that may
affect such Grantor’s title to or the Parity Lien Collateral Trustee’s security
interest in all or any material part of the Collateral; and

 

(v)                                 furnish the Parity Lien Collateral Trustee
with such information regarding the Collateral, including, without limitation,
the location thereof, as the Parity Lien Collateral Trustee may reasonably
request from time to time.

 

(b)                                 Each Grantor hereby authorizes the Parity
Lien Collateral Trustee (without implying that the Collateral Trustee shall have
any obligations to file) to file a Record or Records, including, without
limitation, financing or continuation statements, Intellectual Property Security
Agreements and amendments and supplements to any of the foregoing, in the United
States and with any filing offices in the United States as the Parity Lien
Collateral Trustee may determine, as directed by an Act of Required Secured
Parties, are necessary or advisable to perfect or otherwise protect the security
interest granted to the Parity Lien Collateral Trustee herein.  Such financing
statements may describe the Collateral in the same manner as described herein or
may contain an indication or description of collateral that describes such
property in any other manner as the Parity Lien Collateral Trustee may
determine, as directed by an Act of Required Secured Parties, to ensure the
perfection of the security interest in the Collateral granted to the Parity Lien
Collateral Trustee herein, including, without limitation, describing such
property as “all assets, whether now owned or hereafter acquired”, “all personal
property, whether now owned or hereafter acquired” or words of similar effect. 
Each Grantor shall furnish to the Parity Lien Collateral Trustee from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Parity Lien
Collateral Trustee may reasonably request, all in reasonable detail.

 

(c)                                  Each Grantor hereby authorizes the Parity
Lien Collateral Trustee to modify this Agreement after obtaining such Grantor’s
approval of or signature to such modification by amending Schedule 5.2 (as such
schedule may be amended or supplemented from time to time) to include reference
to any right, title or interest in any existing Intellectual Property or any
Intellectual Property acquired or developed by any Grantor after the execution
hereof or to delete any reference to any right, title or interest in any
Intellectual Property in which any Grantor no longer has or claims any right,
title or interest.

 

7.2                               Additional Grantors.  From time to time
subsequent to the date hereof, additional Persons may become parties hereto as
additional Grantors (each, an “Additional Grantor”), by executing a Pledge
Supplement.  Upon delivery of any such Pledge Supplement to the Parity Lien
Collateral Trustee, notice of which is hereby waived by the other Grantors, each
Additional Grantor shall be a Grantor and shall be as fully a party hereto as if
such Additional Grantor were an original signatory hereto.  Each Grantor
expressly agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by any
election of Parity Lien Collateral Trustee not to cause any Subsidiary of Issuer
to become an Additional Grantor hereunder.  This Agreement shall be fully

 

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effective as to any Grantor that is or becomes a party hereto regardless of
whether any other Person becomes or fails to become or ceases to be a Grantor
hereunder.

 

SECTION 8.                         PARITY LIEN COLLATERAL TRUSTEE APPOINTED
ATTORNEY-IN-FACT.

 

8.1                               Power of Attorney.  Each Grantor hereby
appoints the Parity Lien Collateral Trustee (such appointment being coupled with
an interest) as such Grantor’s attorney-in-fact (such appointment to cease upon
Discharge of Parity Lien Obligations), with full authority in the place and
stead of such Grantor and in the name of such Grantor, the Parity Lien
Collateral Trustee to take any action and to execute any instrument that the
Parity Lien Collateral Trustee may deem reasonably necessary or advisable as
directed by an Act of Required Secured Parties to accomplish the purposes of
this Agreement or any other Parity Lien Document, including, without limitation,
the following:

 

(a)                                 upon the occurrence and during the
continuance of any Event of Default, to obtain and adjust insurance required to
be maintained by such Grantor or paid to the Parity Lien Collateral Trustee
pursuant to the Indenture or any other Parity Lien Document;

 

(b)                                 upon the occurrence and during the
continuance of any Event of Default, to ask for, demand, collect, sue for,
recover, compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;

 

(c)                                  upon the occurrence and during the
continuance of any Event of Default, to receive, endorse and collect any drafts
or other instruments, documents and chattel paper in connection with clause
(b) above;

 

(d)                                 upon the occurrence and during the
continuance of any Event of Default, to file any claims or take any action or
institute any proceedings that the Parity Lien Collateral Trustee may deem
necessary or advisable for the collection of any of the Collateral or otherwise
to enforce the rights of the Parity Lien Collateral Trustee with respect to any
of the Collateral;

 

(e)                                  to prepare and file any UCC financing
statements against such Grantor as debtor;

 

(f)                                   to prepare, sign, and file for recordation
in any United States federal intellectual property registry, appropriate
evidence of the lien and security interest granted herein in the Intellectual
Property in the name of such Grantor as debtor;

 

(g)                                  to take or cause to be taken all actions
necessary to perform or comply or cause performance or compliance with the terms
of this Agreement, including, without limitation, access to pay or discharge
taxes or Liens (other than Permitted Liens) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same, any such payments made by the Parity Lien
Collateral Trustee to become obligations of such Grantor to the Parity Lien
Collateral Trustee, due and payable immediately without demand; and

 

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(h)                                 upon the occurrence and during the
continuation of an Event of Default, generally to sell, transfer, lease,
license, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though the Parity Lien Collateral
Trustee were the absolute owner thereof for all purposes, and to do, at the
Parity Lien Collateral Trustee’s option as directed by an Act of Required
Secured Parties and such Grantor’s expense, at any time or from time to time,
all acts and things that the Parity Lien Collateral Trustee deems reasonably
necessary as directed by an Act of Required Secured Parties to protect, preserve
or realize upon the Collateral and the Parity Lien Collateral Trustee’s security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as such Grantor might do.

 

8.2                               No Duty on the Part of Parity Lien Collateral
Trustee or Secured Parties.  The powers conferred on the Parity Lien Collateral
Trustee hereunder are solely to protect the interests of the Secured Parties in
the Collateral and shall not impose any duty upon the Parity Lien Collateral
Trustee or any other Secured Party to exercise any such powers.  The Parity Lien
Collateral Trustee and the other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of 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 willful misconduct as determined by a final,
non-appealable judgment of a court of competent jurisdiction.

 

8.3                               Appointment Pursuant to Indenture.  The Parity
Lien Collateral Trustee has been appointed as Collateral Trustee pursuant to the
Indenture and the Collateral Trust Agreement.  The rights, duties, privileges,
immunities and indemnities of the Parity Lien Collateral Trustee hereunder are
subject to the provisions of the Indenture, the Collateral Trust Agreement and
the other Parity Lien Documents.

 

SECTION 9.                         REMEDIES.

 

9.1                               Generally.

 

(a)                                 If any Event of Default shall have occurred
and be continuing, the Parity Lien Collateral Trustee may exercise in respect of
the Collateral, in addition to all other rights and remedies provided for herein
or otherwise available to it at law or in equity, all the rights and remedies of
the Parity Lien Collateral Trustee on default under the UCC (whether or not the
UCC applies to the affected Collateral) to collect, enforce or satisfy any
Parity Lien Obligations then owing, whether by acceleration or otherwise, and
also may pursue any of the following separately, successively or simultaneously:

 

(i)                                     require any Grantor to, and each Grantor
hereby agrees that it shall at its expense and promptly upon request of the
Parity Lien Collateral Trustee forthwith, assemble all or part of the Collateral
as directed by the Parity Lien Collateral Trustee and make it available to the
Parity Lien Collateral Trustee at a place to be designated by the Parity Lien
Collateral Trustee that is reasonably convenient to both parties;

 

(ii)                                  enter onto the property during normal
business hours where any Collateral is located and take possession thereof with
or without judicial process;

 

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(iii)                               prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent the Parity Lien
Collateral Trustee deems appropriate;

 

(iv)                              without notice except as specified below or
under the UCC, sell, assign, lease, license (on an exclusive or nonexclusive
basis) or otherwise dispose of the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Parity Lien Collateral
Trustee’s offices or elsewhere, for cash, on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as the
Parity Lien Collateral Trustee may deem commercially reasonable; and

 

(v)                                 visit and inspect any of the properties of
any Grantor or subsidiary of any Grantor, to inspect, copy and take extracts
from such Grantor’s financial and accounting records relating to the Collateral,
including the Accounts, at such times and during normal business hours as the
Parity Lien Collateral Trustee may reasonably request.

 

(b)                                 The Parity Lien Collateral Trustee or any
other Secured Party may be the purchaser of any or all of the Collateral at any
public or private (to the extent the portion of the Collateral being privately
sold is of a kind that is customarily sold on a recognized market or the subject
of widely distributed standard price quotations) sale in accordance with the UCC
and the Parity Lien Collateral Trustee, as collateral trustee for and
representative of the Secured Parties, shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such sale made in accordance with the UCC,
to use and apply any of the Parity Lien Obligations as a credit on account of
the purchase price for any Collateral payable by the Parity Lien Collateral
Trustee at such sale.  Each purchaser at any such sale 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 applicable law) all
rights of redemption, stay and/or appraisal which it now has or may at any time
in the future have under any rule of law or statute now existing or hereafter
enacted.  Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) days’ notice to such Grantor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification.  The Parity Lien Collateral Trustee
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given.  The Parity Lien Collateral Trustee 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.  Each Grantor agrees that it would not
be commercially unreasonable for the Parity Lien Collateral Trustee to dispose
of the Collateral or any portion thereof by using Internet sites that provide
for the auction of assets of the types included in the Collateral or that have
the reasonable capability of doing so, or that match buyers and sellers of
assets.  Each Grantor hereby waives any claims against the Parity Lien
Collateral Trustee arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Parity Lien
Collateral Trustee accepts the first offer received and does not offer such
Collateral to more than one offeree.  If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Parity Lien
Obligations, Grantors shall be

 

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liable for the deficiency and the reasonable fees of any attorneys employed by
the Parity Lien Collateral Trustee to collect such deficiency.  Each Grantor
further agrees that a breach of any of the covenants contained in this
Section will cause irreparable injury to the Parity Lien Collateral Trustee,
that the Parity Lien Collateral Trustee has no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in
this Section shall be specifically enforceable against such Grantor, and such
Grantor hereby waives to the extent permitted by applicable law and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no default has occurred giving rise to the
Parity Lien Obligations becoming due and payable prior to their stated
maturities.  Nothing in this Section shall in any way alter the rights of the
Parity Lien Collateral Trustee hereunder.

 

(c)                                  The Parity Lien Collateral Trustee may sell
the Collateral without giving any warranties as to the Collateral.  The Parity
Lien Collateral Trustee may specifically disclaim or modify any warranties of
title or the like.  This procedure will not be considered to adversely affect
the commercial reasonableness of any sale of the Collateral.

 

(d)                                 The Parity Lien Collateral Trustee shall
have no obligation to marshal any of the Collateral.

 

(e)                                  Any exercise of remedies provided in this
Section 9 shall be subject to the Collateral Trust Agreement and any applicable
intercreditor agreement.

 

9.2                               Application of Proceeds.  All proceeds
received by the Parity Lien Collateral Trustee in respect of any sale of, any
collection from, or other realization upon all or any part of the Collateral
shall be applied by the Parity Lien Collateral Trustee as provided in the
Collateral Trust Agreement.

 

9.3                               Sales on Credit.  If the Parity Lien
Collateral Trustee sells any of the Collateral upon credit, the Grantors will be
credited only with payments actually made by purchaser and received by Parity
Lien Collateral Trustee and applied to indebtedness of the purchaser.  In the
event the purchaser fails to pay for the Collateral, the Parity Lien Collateral
Trustee may resell the Collateral and the Grantors shall be credited with
proceeds of the sale.

 

9.4                               Investment Related Property.  Each Grantor
recognizes that, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws, the Parity Lien Collateral Trustee may
be compelled, with respect to any sale of all or any part of the Investment
Related Property conducted without prior registration or qualification of such
Investment Related Property under the Securities Act and/or such state
securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Investment Related Property for their own account, for
investment and not with a view to the distribution or resale thereof.  Each
Grantor acknowledges that any such private sale may be at prices and on terms
less favorable than those obtainable through a public sale without such
restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances,
each Grantor agrees that any such private sale shall be deemed to have been made
in a commercially reasonable manner and that the Parity Lien Collateral Trustee
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Investment Related Property for the period of time necessary to
permit the issuer thereof to register it for a

 

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form of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree to
so register it.  If the Parity Lien Collateral Trustee determines to exercise
its right to sell any or all of the Investment Related Property, upon written
request, each Grantor shall and shall cause each issuer of any Pledged Stock to
be sold hereunder, each partnership and each limited liability company from time
to time to furnish to the Parity Lien Collateral Trustee all such information as
the Parity Lien Collateral Trustee may request in order to determine the number
and nature of interest, shares or other instruments included in the Investment
Related Property which may be sold by the Parity Lien Collateral Trustee in
exempt transactions under the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder, as the same are from time to
time in effect.

 

9.5                               Grant of Intellectual Property License.  For
the purpose of enabling the Parity Lien Collateral Trustee, during the
continuance of an Event of Default, to exercise rights and remedies under
Section 9 hereof at such time and for so long as the Parity Lien Collateral
Trustee shall be lawfully entitled to exercise such rights and remedies, and for
no other purpose, each Grantor hereby grants to the Parity Lien Collateral
Trustee a non-exclusive license (exercisable without payment of royalty or other
compensation to such Grantor), subject, in the case of Trademarks, to sufficient
rights to quality control and inspection in favor of such Grantor to avoid the
risk of invalidation of such Trademarks, to use, assign, license or sublicense
any of the Intellectual Property now owned or hereafter acquired, developed or
created by such Grantor and included in the Collateral, wherever the same may be
located; provided, that such license shall be subject to those exclusive
licenses granted by such Grantor in effect on the date hereof and granted
hereafter, as permitted under the Loan Documents, to the extent conflicting. 
Such license shall include, to the extent permissible under applicable licenses,
access to all media in which any of the licensed items may be recorded or stored
and to all computer programs used for the compilation or printout hereof.

 

9.6                               Intellectual Property.

 

(a)                                 Anything contained herein to the contrary
notwithstanding, in addition to the other rights and remedies provided herein,
upon the occurrence and during the continuation of an Event of Default:

 

(i)                                     the Parity Lien Collateral Trustee shall
have the right (but not the obligation) to bring suit or otherwise commence any
action or proceeding in the name of any Grantor, the Parity Lien Collateral
Trustee or otherwise, to enforce any Intellectual Property rights of such
Grantor, in which event such Grantor shall, at the request of the Parity Lien
Collateral Trustee, do any and all lawful acts and execute any and all documents
required by the Parity Lien Collateral Trustee in aid of such enforcement, and
such Grantor shall promptly, upon demand, reimburse and indemnify the Parity
Lien Collateral Trustee as provided in Section 12 hereof in connection with the
exercise of its rights under this Section 9.6, and, to the extent that the
Parity Lien Collateral Trustee shall elect not to bring suit to enforce any
Intellectual Property rights as provided in this Section 9.6, each Grantor
agrees to use all reasonable measures, whether by action, suit, proceeding or
otherwise, to prevent the infringement, misappropriation, dilution or other
violation of any of such Grantor’s rights in the Intellectual Property by others
and for that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing, misappropriating, diluting or
otherwise violating as shall be necessary to prevent such infringement,
misappropriation, dilution or other violation;

 

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(ii)                                  upon written demand from the Parity Lien
Collateral Trustee, each Grantor shall grant, assign, convey or otherwise
transfer to the Parity Lien Collateral Trustee or such Parity Lien Collateral
Trustee’s designee all of such Grantor’s right, title and interest in and to any
Intellectual Property and shall execute and deliver to the Parity Lien
Collateral Trustee such documents as are necessary or appropriate to carry out
the intent and purposes of this Agreement;

 

(iii)                               each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Parity Lien Obligations
outstanding only to the extent that the Parity Lien Collateral Trustee (or any
other Secured Party) receives cash proceeds in respect of the sale of, or other
realization upon, any such Intellectual Property;

 

(iv)                              within five (5) Business Days after written
notice from the Parity Lien Collateral Trustee, each Grantor shall make
available to the Parity Lien Collateral Trustee, to the extent within such
Grantor’s power and authority, such personnel in such Grantor’s employ on the
date of such Event of Default as the Parity Lien Collateral Trustee may
reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell the
products and services sold or delivered by such Grantor under or in connection
with any Trademarks or Trademark Licenses, such persons to be available to
perform their prior functions on the Parity Lien Collateral Trustee’s behalf and
to be compensated by the Parity Lien Collateral Trustee at such Grantor’s
expense on a per diem, pro-rata basis consistent with the salary and benefit
structure applicable to each as of the date of such Event of Default; and

 

(v)                                 the Parity Lien Collateral Trustee shall
have the right to notify, or require each Grantor to notify, any obligors with
respect to amounts due or to become due to such Grantor in respect of any
Intellectual Property of such Grantor, of the existence of the security interest
created herein, to direct such obligors to make payment of all such amounts
directly to the Parity Lien Collateral Trustee, and, upon such notification and
at the expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done;

 

(1)                                 all amounts and proceeds (including checks
and other instruments) received by Grantor in respect of amounts due to such
Grantor in respect of the Collateral or any portion thereof shall be received in
trust for the benefit of the Parity Lien Collateral Trustee hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over or
delivered to the Parity Lien Collateral Trustee in the same form as so received
(with any necessary endorsement) to be held as cash Collateral and applied as
provided by Section 9.7 hereof; and

 

(2)                                 Grantor shall not adjust, settle or
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount thereon.

 

(b)                                 If (i) an Event of Default shall have
occurred and, by reason of cure, waiver, modification, amendment or otherwise,
no longer be continuing, (ii) no other Event of Default shall have occurred and
be continuing, (iii) an assignment or other transfer to the Parity Lien
Collateral Trustee of any rights, title and interests in and to any Intellectual
Property of such Grantor shall

 

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have been previously made and shall have become absolute and effective, and
(iv) the Parity Lien Obligations (or any part of them) shall not have become
immediately due and payable, upon the written request of any Grantor, the Parity
Lien Collateral Trustee shall promptly execute and deliver to such Grantor, at
such Grantor’s sole cost and expense, such assignments or other transfer as may
be necessary to reassign to such Grantor any such rights, title and interests as
may have been assigned to the Parity Lien Collateral Trustee as aforesaid,
subject to any disposition thereof that may have been made by the Parity Lien
Collateral Trustee; provided, after giving effect to such reassignment, the
Parity Lien Collateral Trustee’s security interest granted pursuant hereto, as
well as all other rights and remedies of the Parity Lien Collateral Trustee
granted hereunder, shall continue to be in full force and effect; and provided
further, the rights, title and interests so reassigned shall be free and clear
of any other Liens granted by or on behalf of the Parity Lien Collateral Trustee
and the Secured Parties.

 

9.7                               Cash Proceeds; Deposit Accounts.

 

(a)                                 If any Event of Default shall have occurred
and be continuing, in addition to the rights of the Parity Lien Collateral
Trustee specified in Section 6.5 with respect to payments of Receivables, all
proceeds of any Collateral received by any Grantor consisting of cash, checks
and other near-cash items (collectively, “Cash Proceeds”) shall, subject to the
terms of and the priorities set forth in the Collateral Trust Agreement and any
applicable intercreditor agreement, be held by such Grantor in trust for the
Parity Lien Collateral Trustee, segregated from other funds of such Grantor, and
shall, forthwith upon receipt by such Grantor, be turned over to the Parity Lien
Collateral Trustee in the exact form received by such Grantor (duly indorsed by
such Grantor to the Parity Lien Collateral Trustee, if required).  Any Cash
Proceeds received by the Parity Lien Collateral Trustee (whether from a Grantor
or otherwise) may, subject to the terms of and the priorities set forth in the
Collateral Trust Agreement and any applicable intercreditor agreement, (i) be
held by the Parity Lien Collateral Trustee for the ratable benefit of the
Secured Parties, as collateral security for the Parity Lien Obligations (whether
matured or unmatured) and/or (ii) then or at any time thereafter may be applied
by the Parity Lien Collateral Trustee against the Parity Lien Obligations then
due and owing in accordance with Section 9.2 hereof.

 

(b)                                 If any Event of Default shall have occurred
and be continuing, the Parity Lien Collateral Trustee may, subject to the terms
of and the priorities set forth in the Collateral Trust Agreement and any
applicable intercreditor agreement, apply the balance from any Deposit Account
or instruct the bank at with any Deposit Account is maintained to pay the
balance of any Deposit Account to or for the benefit of the Parity Lien
Collateral Trustee

 

SECTION 10.                  PARITY LIEN COLLATERAL TRUSTEE.

 

By acceptance of the benefits hereof, each Secured Party (whether or not a
signatory hereto) shall be deemed to consent to the appointment of the Parity
Lien Collateral Trustee to act as Parity Lien Collateral Trustee hereunder. The
Parity Lien Collateral Trustee shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of any Collateral), solely in
accordance with this Agreement, the

 

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Collateral Trust Agreement and any applicable intercreditor agreement; provided,
the Parity Lien Collateral Trustee shall exercise, or refrain from exercising,
any remedies provided for herein in accordance with the terms of the Collateral
Trust Agreement.  In furtherance of the foregoing provisions of this Section,
each Secured Party, by its acceptance of the benefits hereof, agrees that it
shall have no right individually to realize upon any of the Collateral
hereunder, it being understood and agreed by such Secured Party that all rights
and remedies hereunder may be exercised solely by the Parity Lien Collateral
Trustee for the benefit of Secured Parties in accordance with the terms of this
Section.  The rights, privileges, protections and immunities in the Collateral
Trust Agreement for the benefit of the Collateral Trustee and the other
provisions of the Collateral Trust Agreement relating to the Collateral Trustee
are hereby incorporated herein with respect to the Parity Lien Collateral
Trustee.

 

SECTION 11.                  CONTINUING SECURITY INTEREST; TRANSFER OF NOTES.

 

This Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the Discharge of Parity Lien
Obligations and shall be binding upon each Grantor, its successors and permitted
assigns, and inure, together with the rights and remedies of the Parity Lien
Collateral Trustee hereunder, to the benefit of the Parity Lien Collateral
Trustee and its successors, transferees and permitted assigns.  Without limiting
the generality of the foregoing, but subject to the terms of the Indenture and
any other applicable Parity Lien Document, any Secured Party may assign or
otherwise transfer any Parity Lien Obligations held by it to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Secured Parties herein or otherwise.  Upon the
Discharge of Parity Lien Obligations, the security interest granted hereby shall
automatically terminate hereunder and of record and all rights to the Collateral
shall revert to Grantors or to whomsoever may be lawfully entitled to receive
the same (in accordance with the Collateral Trust Agreement, any applicable
intercreditor agreement or otherwise).  Upon any such termination the Parity
Lien Collateral Trustee shall, at Grantors’ expense, execute and deliver to
Grantors or otherwise authorize the filing of such documents as Grantors shall
reasonably request, including financing statement amendments or terminations,
account control termination letters, and any other such documents to evidence
such termination.   All other releases of Collateral shall be made in accordance
with the terms of the Collateral Trust Agreement and any applicable
intercreditor agreement.

 

SECTION 12.                  STANDARD OF CARE; PARITY LIEN COLLATERAL TRUSTEE
MAY PERFORM.

 

The powers conferred on the Parity Lien Collateral Trustee hereunder are solely
to protect its interest in the Collateral and shall not impose any duty upon it
to exercise any such powers.  Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Parity Lien Collateral Trustee 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.  The Parity Lien Collateral Trustee shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Parity Lien Collateral Trustee accords its own property.  Neither the
Parity Lien Collateral Trustee nor any of its directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon all or any
part of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or otherwise.  If any Grantor fails to perform any agreement
contained herein, the Parity Lien Collateral Trustee may, but shall not be
required to,

 

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itself perform, or cause performance of, such agreement, and the expenses of the
Parity Lien Collateral Trustee incurred in connection therewith shall be payable
by each Grantor under the Collateral Trust Agreement.

 

SECTION 13.                  MISCELLANEOUS.

 

Any notice, request or demand required or permitted to be given under this
Agreement shall be given in accordance with the Collateral Trust Agreement.  No
failure or delay on the part of the Parity Lien Collateral Trustee in the
exercise of any power, right or privilege hereunder or under the Collateral
Trust Agreement shall impair such power, right or privilege or be construed to
be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege.  All rights and
remedies existing under this Agreement and the Collateral Trust Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.  In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.  This Agreement shall be binding upon and inure to the
benefit of the Parity Lien Collateral Trustee and Grantors and their respective
successors and permitted assigns.  No Grantor shall, without the prior written
consent of the Parity Lien Collateral Trustee given in accordance with the
Collateral Trust Agreement and any applicable intercreditor agreement, assign
any right, duty or obligation hereunder.  This Agreement, and the Collateral
Trust Agreement embody the entire agreement and understanding between Grantors
and the Parity Lien Collateral Trustee and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof.  Accordingly, the Collateral Trust Agreement may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the
parties.  There are no unwritten oral agreements between the parties.  This
Agreement may be executed in one or more counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.  Delivery of an executed
counterpart of a signature page of this Agreement by facsimile or other
electronic transmission (including .pdf or .tif format) shall be effective as
delivery of a manually executed counterpart of this Agreement.  This Agreement
may be amended or supplemented in accordance with the terms of the Collateral
Trust Agreement.

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
(INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW
ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE
APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN
ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND
THE EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

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THE PROVISIONS OF THE COLLATERAL TRUST AGREEMENT UNDER THE HEADINGS “CONSENT TO
JURISDICTION” AND “WAIVER OF JURY TRIAL” ARE INCORPORATED HEREIN BY THIS
REFERENCE AND SUCH INCORPORATION SHALL SURVIVE ANY TERMINATION OF THE COLLATERAL
TRUST AGREEMENT.

 

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IN WITNESS WHEREOF, each Grantor and the Parity Lien Collateral Trustee have
caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.

 

 

 

FORESIGHT ENERGY LLC

 

 

 

 

 

By:

/s/ Robert D. Moore

 

 

Name: Robert D. Moore

 

 

Title:   President and Chief Executive Officer

 

 

 

FORESIGHT ENERGY FINANCE CORPORATION

 

 

 

 

 

By:

/s/ Robert D. Moore

 

 

Name: Robert D. Moore

 

 

Title:   President and Chief Executive Officer

 

[Signature Page to Parity Lien Debt Pledge and Security Agreement]

 

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

 

 

ADENA RESOURCES, LLC

AKIN ENERGY LLC

AMERICAN CENTURY MINERAL LLC

AMERICAN CENTURY TRANSPORT LLC

COAL FIELD CONSTRUCTION COMPANY LLC

COAL FIELD REPAIR SERVICES LLC

FORESIGHT COAL SALES LLC

FORESIGHT ENERGY EMPLOYEE SERVICES CORPORATION

FORESIGHT ENERGY FINANCE CORPORATION

FORESIGHT ENERGY LABOR LLC

FORESIGHT ENERGY SERVICES LLC

HILLSBORO TRANSPORT LLC

LD LABOR COMPANY LLC

LOGAN MINING LLC

M-CLASS MINING, LLC

MACH MINING, LLC

MACOUPIN ENERGY LLC

MARYAN MINING LLC

OENEUS LLC d/b/a SAVATRAN LLC

SENECA REBUILD LLC

SITRAN LLC

SUGAR CAMP ENERGY, LLC

TANNER ENERGY LLC

VIKING MINING LLC

WILLIAMSON ENERGY, LLC

 

 

 

 

 

By:

/s/ Robert D. Moore

 

 

Name: Robert D. Moore

Title:    Authorized Signatory

 

[Signature Page to Parity Lien Debt Pledge and Security Agreement]

 

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

 

Each of the undersigned hereby joins this Priority Lien Debt Pledge and Security
Agreement solely for the purpose of evidencing such undersigned’s consent and
agreement to the terms and provisions of Section 6.1 thereof in its capacity as
“Applicable Issuer”:

 

 

HILLSBORO ENERGY LLC

PATTON MINING LLC

 

 

 

 

 

By:

/s/ Robert D. Moore

 

 

Name: Robert D. Moore

Title:   Authorized Signatory

 

[Signature Page to Parity Lien Debt Pledge and Security Agreement]

 

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

 

 

LORD SECURITIES CORPORATION,
as Parity Lien Collateral Trustee

 

 

 

 

 

By:

/s/ Albert J. Fioravanti

 

 

Name: Albert J. Fioravanti

 

 

Title: Director

 

[Signature Page to Parity Lien Debt Pledge and Security Agreement]

 

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

 

 

EXHIBIT A

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

PLEDGE SUPPLEMENT

 

This PLEDGE SUPPLEMENT, dated [mm/dd/yy], is delivered by [NAME OF GRANTOR] a
[NAME OF STATE OF INCORPORATION] [Corporation] (the “Grantor”) pursuant to the
Parity Lien Debt Pledge and Security Agreement, dated as of March 28, 2017 (as
it may be from time to time amended, restated, modified or supplemented, the
“Security Agreement”), among FORESIGHT ENERGY LLC, FORESIGHT ENERGY FINANCE
CORPORATION, the other Grantors named therein, and LORD SECURITIES CORPORATION,
as the Parity Lien Collateral Trustee.  Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the
Security Agreement.

 

Grantor hereby confirms the grant to the Parity Lien Collateral Trustee set
forth in the Security Agreement of, and does hereby grant to the Parity Lien
Collateral Trustee, a security interest in all of Grantor’s right, title and
interest in, to and under all Collateral to secure the Parity Lien Obligations,
in each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located.  Grantor
represents and warrants that the attached Supplements to Schedules accurately
and completely set forth all additional information required to be provided
pursuant to the Security Agreement and hereby agrees that such Supplements to
Schedules shall constitute part of the Schedules to the Security Agreement.

 

Notwithstanding anything herein to the contrary, the lien and security interest
granted to the Parity Lien Collateral Trustee pursuant to the Security Agreement
or this Agreement and the exercise of any right or remedy by the Parity Lien
Collateral Trustee under the Security Agreement are subject to the provisions of
the Collateral Trust Agreement or any applicable intercreditor agreement.  In
the event of any conflict between the terms of the Collateral Trust Agreement or
any applicable intercreditor agreement and this Agreement, the terms of the
Collateral Trust Agreement or applicable intercreditor agreement shall govern
and control.

 

THIS PLEDGE SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
(INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW
ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE
APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN
ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND
THE EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be duly
executed and delivered by its duly authorized officer as of [mm/dd/yy].

 

EXHIBIT A-1

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

 

 

[NAME OF GRANTOR]

 

 

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

EXHIBIT A-2

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

 

SUPPLEMENT TO SCHEDULE 5.1
TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

Additional Information:

 

GENERAL INFORMATION

 

(A)                               Full Legal Name, Type of Organization,
Jurisdiction of Organization, Chief Executive Office/Sole Place of Business (or
Residence if Grantor is a Natural Person) and Organizational Identification
Number of each Grantor:

 

Full Legal
Name

 

Type of
Organization

 

Jurisdiction of
Organization

 

Chief Executive
Office/Sole Place of
Business (or
Residence if Grantor
is a Natural Person)

 

Organization
I.D.#

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(C)                               Changes in Name, Jurisdiction of Organization,
Chief Executive Office or Sole Place of Business (or Principal Residence if
Grantor is a Natural Person) and Corporate Structure within past five (5) years:

 

Grantor

 

Date of Change

 

Description of Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SUPPLEMENT TO SCHEDULE 5.2
TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

COLLATERAL IDENTIFICATION

 

I.   INVESTMENT RELATED PROPERTY

 

(A)                                           Pledged Stock:

 

Grantor

 

Stock
Issuer

 

Class of
Stock

 

Certificated
(Y/N)

 

Stock
Certificate
No.

 

Par Value

 

No. of
Pledged
Stock

 

Percentage
of
Outstanding
Stock of
the Stock
Issuer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pledged LLC Interests:

 

Grantor

 

Limited
Liability
Company

 

Certificated
(Y/N)

 

Certificate No.
(if any)

 

No. of Pledged
Units

 

Percentage of
Outstanding
LLC Interests
of the Limited
Liability
Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pledged Partnership Interests:

 

Grantor

 

Partnership

 

Type of
Partnership
Interests (e.g.,
general or
limited)

 

Certificated
(Y/N)

 

Certificate No.
(if any)

 

Percentage of
Outstanding
Partnership
Interests of the
Partnership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pledged Trust Interests:

 

Grantor

 

Trust

 

Class of Trust
Interests

 

Certificated
(Y/N)

 

Certificate No.
(if any)

 

Percentage of
Outstanding
Trust Interests
of the Trust

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Pledged Debt:

 

Grantor

 

Issuer

 

Original
Principal
Amount

 

Outstanding
Principal
Balance

 

Issue Date

 

Maturity Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Account:

 

Grantor

 

Share of Securities
Intermediary

 

Account Number

 

Account Name

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit Accounts:

 

Grantor

 

Name of Depositary
Bank

 

Account Number

 

Account Name

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodities Accounts:

 

Grantor

 

Name of Commodities
Intermediary

 

Account Number

 

Account Name

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(B)

 

Grantor

 

Date of Acquisition

 

Description of Acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

II.  INTELLECTUAL PROPERTY

 

(A)                               U.S. Copyright Registrations

 

Grantor

 

Title of Work

 

Registration
Number (if any)

 

Registration Date (if
any)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(B)                               U.S. Issued Patents and Applications

 

Grantor

 

Title of Patent

 

Patent
Number/(Application
Number)

 

Issue Date/(Filing
Date)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(C)                               U.S. Federal Registered Trademarks and
Applications

 

Grantor

 

Trademark

 

Registration
Number/(Serial
Number)

 

Registration
Date/(Filing Date)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

III. COMMERCIAL TORT CLAIMS

 

Grantor

 

Commercial Tort Claims

 

 

 

 

 

 

 

 

 

 

IV. [RESERVED]

 

V.  WAREHOUSEMAN, BAILEES AND OTHER THIRD PARTIES IN POSSESSION OF COLLATERAL

 

Grantor

 

Description of Property

 

Name and Address of Third Party

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SUPPLEMENT TO SCHEDULE 5.4

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

Financing Statements:

 

Grantor

 

Filing Jurisdiction(s)

 

 

 

 

 

 

 

 

 

 

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

 

SUPPLEMENT TO SCHEDULE 5.5
TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

(B)

 

(1)           Any Account Debtor in respect of any Receivable in excess of
$1,000,000 individually or $2,500,000 in the aggregate that is the government of
the United States, any agency or instrumentality thereof, any state or
municipality or any foreign sovereign:

 

(D)          Locations of material Equipment and Inventory, other than any
Inventory or Equipment in transit, undergoing repairs, replacements loaned to
employees, or kept on the premises of customers or with any third party in
connection with preparation for shipment or for rehabilitation or refurbishment:

 

Grantor

 

Location of Equipment and Inventory

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT B

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

UNCERTIFICATED SECURITIES CONTROL AGREEMENT

 

This Uncertificated Securities Control Agreement (this “Agreement”) dated as of
[         ], 20[  ] among [                ] (the “Pledgor”), LORD SECURITIES
CORPORATION, as Parity Lien Collateral Trustee for the Secured Parties, (the
“Parity Lien Collateral Trustee”) and [            ], a [        ] [corporation]
(the “Issuer”).  Capitalized terms used but not defined herein shall have the
meaning assigned in that certain Parity Lien Debt Pledge and Security Agreement
dated as March 28, 2017, among the Pledgor, the other Grantors party thereto and
the Parity Lien Collateral Trustee (as it may be amended, restated, supplemented
or otherwise modified from time to time, the “Security Agreement”).  All
references herein to the “UCC” shall mean the Uniform Commercial Code as in
effect in the State of New York.

 

Section 1.  Registered Ownership of Shares.  The Issuer hereby confirms and
agrees that as of the date hereof the Pledgor is the registered owner of
[          ] shares of the Issuer’s [common] stock (the “Pledged Shares”).

 

Section 2.  Instructions.  If at any time the Issuer shall receive instructions
originated by the Parity Lien Collateral Trustee relating to the Pledged Shares,
the Issuer shall comply with such instructions without further consent by the
Pledgor or any other person.

 

Section 3.  Additional Representations and Warranties of the Issuer.  The Issuer
hereby represents and warrants to the Parity Lien Collateral Trustee:

 

(a)  It has not entered into, and until the termination of this agreement will
not enter into, any agreement with any other person relating the Pledged Shares
pursuant to which it has agreed to comply with instructions issued by such other
person; and

 

(b)  It has not entered into, and until the termination of this agreement will
not enter into, any agreement with the Pledgor or the Parity Lien Collateral
Trustee purporting to limit or condition the obligation of the Issuer to comply
with Instructions as set forth in Section 2 hereof.

 

(c)  This Uncertificated Securities Control Agreement is the valid and legally
binding obligation of the Issuer.

 

Section 4.  Choice of Law.  THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ANY
CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER
HEREOF) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN
THE LAW OF THE STATE OF NEW YORK.

 

Section 5.  Amendments.  No amendment or modification of this Agreement or
waiver of any right hereunder shall be binding on any party hereto unless it is
in writing and is signed by all of the parties hereto.

 

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

 

Section 6.  Voting Rights.  Until such time as the Parity Lien Collateral
Trustee shall otherwise instruct the Issuer in writing, the Pledgor shall have
the right to vote the Pledged Shares.

 

Section 7.  Successors; Assignment.  The terms of this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law.  The Parity Lien Collateral Trustee may
assign its rights hereunder only with the express written consent of the Issuer
and by sending written notice of such assignment to the Pledgor.

 

Section 8.  Indemnification of Issuer.  The Pledgor and the Parity Lien
Collateral Trustee hereby agree that (a) the Issuer is released from any and all
liabilities to the Pledgor and the Parity Lien Collateral Trustee arising from
the terms of this Agreement and the compliance of the Issuer with the terms
hereof, except to the extent that such liabilities arise from the Issuer’s
negligence and (b) the Pledgor, its successors and assigns shall at all times
indemnify and save harmless the Issuer from and against any and all claims,
actions and suits of others arising out of the terms of this Agreement or the
compliance of the Issuer with the terms hereof, except to the extent that such
arises from the Issuer’s negligence, and from and against any and all
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character arising by reason of the same, until the termination
of this Agreement.

 

Section 9.  Notices.  Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.

 

Pledgor:

[Name and Address of Pledgor]

 

Attention: [                       ]

 

Telecopier: [                      ]

 

 

Parity Lien Collateral Trustee:

[Name and Address of Parity Lien Collateral Trustee]

 

Attention: [                      ]

 

Telecopier: [                      ]

 

 

Issuer:

[Insert Name and Address of Issuer]

 

Attention: [                      ]

 

Telecopier: [                      ]

 

Any party may change its address for notices in the manner set forth above.

 

Section 10.  Termination.  The obligations of the Issuer to the Parity Lien
Collateral Trustee pursuant to this Control Agreement shall continue in effect
until the security interests of the Parity Lien Collateral Trustee in the
Pledged Shares have been terminated pursuant to the terms of the Security
Agreement, the Collateral Trust Agreement and the Parity Lien Collateral Trustee
has notified the Issuer of such termination in writing or the other release of
the security interests pursuant to the terms of the Collateral Trust Agreement
or Parity Lien Documents.  The Parity Lien Collateral Trustee agrees to provide
Notice of Termination in substantially the form of Exhibit A hereto to the
Issuer upon the request of the Pledgor on or after the termination of the Parity
Lien Collateral Trustee’s security interest in the Pledged Shares pursuant to
the terms of

 

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

 

the Security Agreement, the Collateral Trust Agreement and the Parity Lien
Documents.  The termination of this Control Agreement shall not by itself
terminate the Pledged Shares or alter the obligations of the Issuer to the
Pledgor pursuant to any other agreement with respect to the Pledged Shares.

 

Section 11.  Collateral Trust Agreement.  Notwithstanding anything herein to the
contrary, the lien and security interest granted to the Parity Lien Collateral
Trustee pursuant to this Control Agreement and the exercise of any right or
remedy by the Parity Lien Collateral Trustee hereunder are subject to the
provisions of the Collateral Trust Agreement.  In the event of any conflict
between the terms of the Collateral Trust Agreement and this Control Agreement,
the terms of such Collateral Trust Agreement shall govern and control.

 

Section 12.  Counterparts.  This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

 

 

[NAME OF PLEDGOR],

 

as Pledgor

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

LORD SECURITIES CORPORATION,

 

as Parity Lien Collateral Trustee

 

 

 

 

 

By:

 

 

 

Authorized Signatory

 

 

 

 

 

[NAME OF ISSUER],

 

as Issuer

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

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

 

Exhibit A

 

[Letterhead of Parity Lien Collateral Trustee]

 

[Date]

 

[Name and Address of Issuer]
Attention: [                                          ]

 

Re:  Termination of Control Agreement

 

You are hereby notified that the Uncertificated Securities Control Agreement
between you, [Name of Pledgor] (the “Pledgor”) and the undersigned (a copy of
which is attached) is terminated and you have no further obligations to the
undersigned pursuant to such Agreement.  Notwithstanding any previous
instructions to you, you are hereby instructed to accept all future directions
with respect to Pledged Shares (as defined in the Uncertificated Control
Agreement) from the Pledgor.  This notice terminates any obligations you may
have to the undersigned with respect to the Pledged Shares, however nothing
contained in this notice shall alter any obligations which you may otherwise owe
to the Pledgor pursuant to any other agreement.

 

You are instructed to deliver a copy of this notice by facsimile transmission to
the Pledgor.

 

 

Very truly yours,

 

LORD SECURITIES CORPORATION,

 

as Parity Lien Collateral Trustee

 

 

 

By:

 

 

 

Authorized Signatory

 

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

 

EXHIBIT C

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

FORM OF TRADEMARK SECURITY AGREEMENT (PARITY LIEN)

 

This TRADEMARK SECURITY AGREEMENT, dated as of [          ], 20[  ] (as it may
be amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”), is made by the entities identified as grantors on the signature
pages hereto (collectively, the “Grantors”) in favor of LORD SECURITIES
CORPORATION, as Parity Lien Collateral Trustee for the Secured Parties (in such
capacity, together with its successors and permitted assigns, the “Parity Lien
Collateral Trustee”).

 

WHEREAS, the Grantors are party to that certain Parity Lien Debt Pledge and
Security Agreement dated as of March 28, 2017 (as it may be amended, restated,
supplemented or otherwise modified from time to time, the “Pledge and Security
Agreement”) between each of the Grantors and the other grantors party thereto
and the Parity Lien Collateral Trustee pursuant to which the Grantors granted a
security interest to the Parity Lien Collateral Trustee in the Trademark
Collateral (as defined below) and are required to execute and deliver this
Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantors hereby agree with the Parity Lien Collateral Trustee
as follows:

 

SECTION 1.        Defined Terms

 

Unless otherwise defined herein, terms defined in the Pledge and Security
Agreement and used herein have the meaning given to them in the Pledge and
Security Agreement.

 

SECTION 2.        Grant of Security Interest in Trademark Collateral

 

SECTION 2.1      Grant of Security.  Each Grantor hereby grants to the Parity
Lien Collateral Trustee, for the benefit of the Secured Parties, a security
interest in and continuing lien on all of such Grantor’s right, title and
interest in, to and under the following, in each case whether now owned or
existing or hereafter acquired, developed, created or arising and wherever
located (collectively, the “Trademark Collateral”):

 

All of its United States trademarks, trade names, corporate names, company
names, business names, fictitious business names, Internet domain names, service
marks, certification marks, collective marks, logos, other source or business
identifiers, designs and general intangibles of a like nature, all registrations
and applications for any of the foregoing including, but not limited to: (i) the
registrations and applications listed in Schedule A attached hereto, (ii) all
extensions or renewals of any of the foregoing, (iii) all of the goodwill of the
business connected with the use of and symbolized by any of the foregoing,
(iv) the right to sue for past, present and future infringement or dilution of
any of the foregoing or for any injury to goodwill, and (v) all Proceeds of the
foregoing, including, without limitation, royalties, income, payments, claims,
damages, and proceeds of suit.

 

SECTION 2.2      Certain Limited Exclusions. Notwithstanding anything herein to
the contrary, in no event shall the Trademark Collateral include or the security
interest granted under

 

EXHIBIT C-1

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

 

Section 2.1 hereof attach to any intent-to-use United States Trademark
applications for which an amendment to allege use or statement of use has not
been filed under U.S. federal law or, if filed, has not been deemed in
conformance with U.S. federal law or examined or accepted by the U.S. Patent and
Trademark Office.

 

SECTION 3.        Security Agreement

 

The security interest granted pursuant to this Agreement is granted in
conjunction with the security interest granted to the Parity Lien Collateral
Trustee for the Secured Parties pursuant to the Pledge and Security Agreement,
and the Grantors hereby acknowledge and affirm that the rights and remedies of
the Parity Lien Collateral Trustee with respect to the security interest in the
Trademark Collateral made and granted hereby are more fully set forth in the
Pledge and Security Agreement.  In the event that any provision of this
Agreement is deemed to conflict with the Pledge and Security Agreement, the
provisions of the Pledge and Security Agreement shall control.

 

SECTION 4.        Governing Law

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
(INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW
ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE
APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN
ANY MANDATORY PROVISIONS OF LAW RELATING TO THE LAW GOVERNING PERFECTION AND THE
EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

SECTION 5.        Counterparts

 

This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.

 

[Remainder of page intentionally left blank]

 

EXHIBIT C-2

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

 

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first set forth above.

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

EXHIBIT C-3

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

 

Accepted and Agreed:

 

 

 

LORD SECURITIES CORPORATION,

 

as Parity Lien Collateral Trustee

 

 

 

 

 

By:

 

 

 

Authorized Signatory

 

 

EXHIBIT C-4

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

 

SCHEDULE A
to
TRADEMARK SECURITY AGREEMENT (PARITY LIEN)

 

U.S. FEDERAL TRADEMARK REGISTRATIONS AND APPLICATIONS

 

Mark

 

Serial No.

 

Filing Date

 

Registration No.

 

Registration
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT C-5

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

 

EXHIBIT D

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

FORM OF PATENT SECURITY AGREEMENT (PARITY LIEN)

 

This PATENT SECURITY AGREEMENT, dated as of [          ], 20[  ] (as it may be
amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”), is made by the entities identified as grantors on the signature
pages hereto (collectively, the “Grantors”) in favor of LORD SECURITIES
CORPORATION, as Parity Lien Collateral Trustee for the Secured Parties (in such
capacity, together with its successors and permitted assigns, the “Parity Lien
Collateral Trustee”).

 

WHEREAS, the Grantors are party to that certain Parity Lien Debt Pledge and
Security Agreement dated as of March 28, 2017 (as it may be amended, restated,
supplemented or otherwise modified from time to time, the “Pledge and Security
Agreement”) between each of the Grantors and the other grantors party thereto
and the Parity Lien Collateral Trustee pursuant to which the Grantors granted a
security interest to the Parity Lien Collateral Trustee in the Patent Collateral
(as defined below) and are required to execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantors hereby agree with the Parity Lien Collateral Trustee
as follows:

 

SECTION. 1.  Defined Terms

 

Unless otherwise defined herein, terms defined in the Pledge and Security
Agreement and used herein have the meaning given to them in the Pledge and
Security Agreement.

 

SECTION 2.  Grant of Security Interest

 

Each Grantor hereby grants to the Parity Lien Collateral Trustee, for the
benefit of the Secured Parties, a security interest in and continuing lien on
all of such Grantor’s right, title and interest in, to and under the following,
in each case whether now owned or existing or hereafter acquired, developed,
created or arising and wherever located (collectively, the “Patent Collateral”):

 

All of such Grantor United States patents and certificates of invention, or
similar industrial property rights, and applications for any of the foregoing,
including, but not limited to: (i) each patent and patent application listed in
Schedule A attached hereto (as such schedule may be amended or supplemented from
time to time), (ii) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals, and reexaminations thereof,
(iii) all rights corresponding thereto, (iv) all inventions and improvements
described therein, (v) all rights to sue for past, present and future
infringements thereof, (vi) all claims, damages, and proceeds of suit arising
therefrom, and (vii) all Proceeds of the foregoing, including, without
limitation, royalties, income, payments, claims, damages, and proceeds of suit.

 

SECTION 3.        Security Agreement

 

The security interest granted pursuant to this Agreement is granted in
conjunction with the security interest granted to the Parity Lien Collateral
Trustee for the Secured Parties pursuant

 

EXHIBIT D-1

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to the Pledge and Security Agreement, and the Grantors hereby acknowledge and
affirm that the rights and remedies of the Parity Lien Collateral Trustee with
respect to the security interest in the Patent Collateral made and granted
hereby are more fully set forth in the Pledge and Security Agreement.  In the
event that any provision of this Agreement is deemed to conflict with the Pledge
and Security Agreement, the provisions of the Pledge and Security Agreement
shall control.

 

SECTION 4.        Governing Law

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
(INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW
ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE
APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN
ANY MANDATORY PROVISIONS OF LAW RELATING TO THE LAW GOVERNING PERFECTION AND THE
EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

SECTION 5.        Counterparts

 

This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.

 

[Remainder of page intentionally left blank]

 

EXHIBIT D-2

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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first set forth above.

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

EXHIBIT D-3

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

 

Accepted and Agreed:

 

 

 

LORD SECURITIES CORPORATION,

 

as Parity Lien Collateral Trustee

 

 

 

 

 

By:

 

 

 

Authorized Signatory

 

 

EXHIBIT D-4

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

 

SCHEDULE A
to
PATENT SECURITY AGREEMENT (PARITY LIEN)

 

U.S. PATENTS AND PATENT APPLICATIONS

 

Title

 

Application No.

 

Filing Date

 

Patent No.

 

Issue Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT D-5

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

 

EXHIBIT E

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

FORM OF COPYRIGHT SECURITY AGREEMENT (PARITY LIEN)

 

This COPYRIGHT SECURITY AGREEMENT, dated as of [          ], 20[  ] (as it may
be amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”), is made by the entities identified as grantors on the signature
pages hereto (collectively, the “Grantors”) in favor of LORD SECURITIES
CORPORATION, as Parity Lien Collateral Trustee for the Secured Parties (in such
capacity, together with its successors and permitted assigns, the “Parity Lien
Collateral Trustee”).

 

WHEREAS, the Grantors are party to that certain Parity Lien Debt Pledge and
Security Agreement dated as of March 28, 2017 (as amended, restated,
supplemented or otherwise modified from time to time, the “Pledge and Security
Agreement”) between each of the Grantors and the other grantors party thereto
and the Parity Lien Collateral Trustee pursuant to which the Grantors granted a
security interest to the Parity Lien Collateral Trustee in the Copyright
Collateral (as defined below) and are required to execute and deliver this
Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Grantors hereby agree with the Parity Lien Collateral Trustee
as follows:

 

SECTION 1.        Defined Terms

 

Unless otherwise defined herein, terms defined in the Pledge and Security
Agreement and used herein have the meaning given to them in the Pledge and
Security Agreement.

 

SECTION 2.        Grant of Security Interest

 

Each Grantor hereby grants to the Parity Lien Collateral Trustee, for the
benefit of the Secured Parties, a security interest in and continuing lien on
all of such Grantor’s right, title and interest in, to and under the following,
in each case whether now owned or existing or hereafter acquired, developed,
created or arising and wherever located (collectively, the “Copyright
Collateral”):

 

All of its United States copyrights, including but not limited to copyrights in
software and databases, and all Mask Works (as defined under 17 U.S.C. § 901 of
the U.S. Copyright Act), whether registered or unregistered, and, with respect
to any and all of the foregoing: (i) all registrations and applications therefor
including, without limitation, the registrations and applications listed in
Schedule A attached hereto, (ii) all extensions and renewals thereof, (iii) all
rights corresponding thereto, (iv) all rights to sue for past, present and
future infringements thereof, and (v) all Proceeds of the foregoing, including,
without limitation, royalties, income, payments, claims, damages and proceeds of
suit.

 

SECTION 3.        Security Agreement

 

The security interest granted pursuant to this Agreement is granted in
conjunction with the security interest granted to the Parity Lien Collateral
Trustee for the Secured Parties pursuant to the Pledge and Security Agreement,
and the Grantors hereby acknowledge and affirm that the rights and remedies of
the Parity Lien Collateral Trustee with respect to the security interest in the

 

EXHIBIT E-1

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

 

Copyright Collateral made and granted hereby are more fully set forth in the
Pledge and Security Agreement.  In the event that any provision of this
Agreement is deemed to conflict with the Pledge and Security Agreement, the
provisions of the Pledge and Security Agreement shall control.

 

SECTION 4.        Governing Law

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
(INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW
ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE
APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN
ANY MANDATORY PROVISIONS OF LAW RELATING TO THE LAW GOVERNING PERFECTION AND THE
EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

SECTION 5.        Counterparts

 

This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.

 

[Remainder of page intentionally left blank]

 

EXHIBIT E-2

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

 

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first set forth above.

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

EXHIBIT E-3

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

 

Accepted and Agreed:

 

 

 

LORD SECURITIES CORPORATION,

 

as Parity Lien Collateral Trustee

 

 

 

 

 

By:

 

 

 

Authorized Signatory

 

 

EXHIBIT E-4

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

 

SCHEDULE A
to
COPYRIGHT SECURITY AGREEMENT (PARITY LIEN)

 

COPYRIGHT REGISTRATIONS AND APPLICATIONS

 

Title

 

Application No.

 

Filing Date

 

Registration No.

 

Registration
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT E-5

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