Exhibit 10.16
 
EXECUTION VERSION
 

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GUARANTEE AND COLLATERAL AGREEMENT
 
dated as of
 
April 28, 2009,
 
among
 
WOLVERINE TUBE, INC.,
 
THE SUBSIDIARIES OF WOLVERINE TUBE, INC.
IDENTIFIED HEREIN
 
and
 
U.S. BANK NATIONAL ASSOCIATION,
 
as Collateral Agent

 
 

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TABLE OF CONTENTS
 
ARTICLE I
   
Definitions
SECTION 1.01. Indenture
5
SECTION 1.02. Other Defined Terms
5
   
ARTICLE II
   
Guarantee
   
SECTION 2.01. Guarantee
10
SECTION 2.02. Guarantee of Payment
10
SECTION 2.03. No Limitations
10
SECTION 2.04. Reinstatement
11
SECTION 2.05. Agreement To Pay; Subrogation
11
SECTION 2.06. Information
12
   
ARTICLE III
   
Pledge of Securities
   
SECTION 3.01. Pledge
12
SECTION 3.02. Delivery of the Pledged Collateral
13
SECTION 3.03. Representations, Warranties and Covenants
13
SECTION 3.04. Certification of Limited Liability Company and Limited Partnership
Interests
14
SECTION 3.05. Registration in Nominee Name; Denominations
15
SECTION 3.06. Voting Rights; Dividends and Interest
15
   
ARTICLE IV
   
Security Interests in Personal Property
   
SECTION 4.01. Security Interest
17
SECTION 4.02. Representations and Warranties
18
SECTION 4.03. Covenants
20
SECTION 4.04. Other Actions
23
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral
26

 
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ARTICLE V
   
Remedies
   
SECTION 5.01. Remedies Upon Default
28
SECTION 5.02. Application of Proceeds
29
SECTION 5.03. Grant of License to Use Intellectual Property
30
SECTION 5.04. Securities Act
30
SECTION 5.05. Registration
31
ARTICLE VI
   
Indemnity, Subrogation and Subordination
 
SECTION 6.01. Indemnity and Subrogation
31
SECTION 6.02. Contribution and Subrogation
31
SECTION 6.03. Subordination
32
   
ARTICLE VII
   
Miscellaneous
   
SECTION 7.01. Notices
32
SECTION 7.02. Waivers; Amendment
32
SECTION 7.03. Collateral Agent’s Fees and Expenses; Indemnification
33
SECTION 7.04. Successors and Assigns
34
SECTION 7.05. Survival of Agreement
34
SECTION 7.06. Counterparts; Effectiveness; Several Agreement
34
SECTION 7.07. Severability
34
SECTION 7.08. Governing Law; Jurisdiction; Consent to Service of Process
35
SECTION 7.09. WAIVER OF JURY TRIAL
35
SECTION 7.10. Headings
36
SECTION 7.11. Security Interest Absolute
36
SECTION 7.12. Termination or Release
36
SECTION 7.13. Additional Subsidiaries
36
SECTION 7.14. Collateral Agent Appointed Attorney-in-Fact
37
SECTION 7.15. Entire Agreement
37

 
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SCHEDULES:
 
Schedule I
Subsidiary Parties
Schedule II
Pledged Stock; Debt Securities
Schedule III
Intellectual Property
Schedule IV
Insurance Requirements

EXHIBITS:
 
Exhibit I
ABA Model Form of Deposit Account Control Agreement
Exhibit II
Form of Supplement

 
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Schedule I to
the Guarantee and
Collateral Agreement
 
GUARANTEE AND COLLATERAL AGREEMENT (this “Agreement”), dated as of April 28,
2009, among WOLVERINE TUBE, INC., a Delaware corporation (the “Company”), the
subsidiaries of the Company identified herein (the “Subsidiaries” and, each, a
“Subsidiary”) and U.S. BANK NATIONAL ASSOCIATION (“U.S. Bank”), as Collateral
Agent (in such capacity, the “Collateral Agent”).
 
Reference is made to the Indenture, dated as of April __, 2009 (as amended,
supplemented or otherwise modified from time to time, the “Indenture”), among
the Company, the Subsidiaries and U.S. Bank as trustee and collateral
agent.  The Company has agreed to issue the Notes subject to the terms and
conditions set forth in the Indenture, including, among other things, the
execution and delivery of this Agreement.  The Subsidiary Parties (as defined
below) are affiliates of the Company, will derive substantial benefits from the
issuance of the Notes pursuant to the Indenture and are willing to execute and
deliver this Agreement in order to support the issuance of the
Notes.  Accordingly, the parties hereto agree as follows:
 
ARTICLE I
 
Definitions
 
SECTION 1.01.  Indenture.  (a)  Capitalized terms used in this Agreement and not
otherwise defined herein have the meanings specified in the Indenture.  All
terms defined in the New York UCC (as defined herein) and not defined in this
Agreement have the meanings specified therein.  The term “instrument” shall have
the meaning specified in Article 9 of the New York UCC.
 
(a)  The rules of construction specified in Section 1.04 of the Indenture also
apply to this Agreement.
 
SECTION 1.02.  Other Defined Terms.  As used in this Agreement, the following
terms have the meanings specified below:
 
“Account Debtor” means any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an account.
 
“Article 9 Collateral” has the meaning assigned to such term in Section 4.01.
 
“CFC Subsidiary” means any Subsidiary that is a “controlled foreign corporation”
within the meaning of Section 957 of the Internal Revenue Code of 1986, as
amended.
 
“CFC” means a controlled foreign corporation (as that term is defined in the
Internal Revenue Code of 1986, as amended).

 
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“Collateral” means Article 9 Collateral and Pledged Collateral.
“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter owned
by any Grantor or that such Grantor otherwise has the right to license, or
granting any right to any Grantor under any copyright now or hereafter owned by
any third party, and all rights of such Grantor under any such agreement.
 
“Copyrights” means all of the following now owned or hereafter acquired by any
Grantor:  (a) all copyright rights in any work subject to the copyright laws of
the United States or any other country, whether as author, assignee, transferee
or otherwise, and (b) all registrations and applications for registration of any
such copyright in the United States or any other country, including
registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office, including those listed
on Schedule III.
 
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
 
“Excluded Property” shall mean and include all of the following assets and
properties of any Indenture Party:
 
(i)           equipment that is subject to any “purchase money security
interests,” as such term is now or hereafter defined in the Uniform Commercial
Code, or a capital lease, which in either case (x) constitutes a Lien permitted
under the Indenture  and (y) prohibits the creation by such Indenture Party of a
junior security interest therein, unless the holder thereof has consented to the
creation of such junior security interest;
 
(ii)           any contract or instrument in which any Indenture Party has any
right, title or interest if and to the extent such contract or instrument
includes a provision containing a restriction on assignment such that the
creation of a security interest in the right, title or interest of such
Indenture Party therein would be prohibited and would, in and of itself, cause
or result in a default thereunder enabling another person party to such contract
or instrument to enforce any remedy with respect thereto; provided, however,
that the foregoing exclusion shall not apply if (i) such prohibition has been
waived or such other Person has otherwise consented to the creation hereunder of
a security interest in such contract or instrument, or (ii) such prohibition
would be rendered ineffective pursuant to Section 9-318(4) of the Uniform
Commercial Code or Sections 9-407(a) or 9-408(a) of the Uniform Commercial Code,
as applicable and as then in effect in any relevant jurisdiction, or any other
applicable law (including applicable bankruptcy and insolvency law) or
principles of equity; provided further that immediately upon the
ineffectiveness, lapse or termination of any such provision, the term
“Collateral” shall include, and each such Indenture Party shall be deemed to
have granted a security interest in, all its rights, title and interests in and
to such contract or instrument as if such provision had never been in effect;
and provided further that the foregoing exclusion shall in no way be construed
so as to limit, impair or otherwise affect the Collateral Agent’s unconditional
continuing security interest in and to all rights, title and interests of each
such Indenture Party in or to any payment obligations or other rights to receive
monies due or to become due under any such contract or instrument and in any
such monies and other proceeds of such contract or instrument;

 
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(iii)
the Equity Interests referred to in Section 3.01(a)(i) and (ii);

 
(iv)           Equity Interests of any CFC, solely to the extent that (y) such
Equity Interests represents more than 65% of the total outstanding Voting Stock
of any first tier Subsidiary of an Indenture Party that is a CFC or any of the
outstanding Equity Interests of any Subsidiary of such CFC and (z) hypothecating
more than 65% of the total outstanding Voting Stock of such CFC would result in
material adverse tax consequences;
 
(v)           any Equity Interests or assets of any Unrestricted Subsidiary;
 
(vi)          any assets with respect to which the burden or cost of obtaining
or perfecting a security interest or Lien sufficiently outweighs the benefit to
the Secured Parties, as set forth in an Officers’ Certificate delivered to the
Trustee in accordance with the terms of the Indenture;
 
(vii)         any application to register any trademark, service mark or other
mark prior to the filing under applicable law of a verified statement of use (or
the equivalent) for such trademark, service mark or other mark to the extent the
creation of a security interest therein or the grant of a mortgage thereon would
void or invalidate such trademark, service mark or other mark); or
 
(viii)        any deposit account maintained to fund taxes, payroll obligations
and/or employee benefit plans (including medical or insurance reimbursement
accounts) or any deposit account which has an average monthly balance of less
than $250,000.
 
“Federal Securities Laws” has the meaning assigned to such term in Section 5.04.
 
“General Intangibles” means all “General Intangibles” as defined in the New York
UCC, including all choses in action and causes of action and all other
intangible personal property of every kind and nature (other than accounts) now
owned or hereafter acquired by any Grantor, including all rights and interests
in partnerships, limited partnerships, limited liability companies and other
unincorporated entities,  corporate or other business records, indemnification
claims, contract rights (including rights under leases, whether entered into as
lessor or lessee, Interest Rate Agreements, Commodity Agreements, Natural Gas
Agreements, Currency Agreements and other agreements), Intellectual Property,
goodwill, registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the accounts.

 
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“Grantors” means the Company and the Subsidiary Parties.
 
“Guarantors” means the Subsidiary Parties.
 
“Indenture” has the meaning assigned to such term in the preliminary statement
of this Agreement.
 
“Indenture Documents” means the Indenture, the Notes and the Collateral
Agreements.
 
“Indenture Parties” means the Company and the Subsidiaries.
 
“Intellectual Property” means all intellectual and similar property of every
kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
 
“License” means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement to which any Grantor is a party, including
those listed on Schedule III.
 
“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.
 
“Obligations” means (a) the due and punctual payment by the Company of (i) the
principal of and interest (including interest accruing during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding) on the Notes, when and as
due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise and (ii) all other monetary obligations of the Company
to any of the Secured Parties under the Indenture and each of the other
Indenture Documents, including obligations to pay fees, expense reimbursement
obligations and indemnification obligations, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), (b)
the due and punctual performance of all other obligations of the Company under
or pursuant to the Indenture and each of the other Indenture Documents and (c)
the due and punctual payment and performance of all the obligations of each
Subsidiary under or pursuant to this Agreement and each of the other Indenture
Documents.

 
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“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
 
“Patents” means all of the following now owned or hereafter acquired by any
Grantor:  (a) all letters patent of the United States or the equivalent thereof
in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or any similar
offices in any other country, including those listed on Schedule III and (b) all
reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.
 
“Pledged Collateral” has the meaning assigned to such term in Section 3.01.
 
“Pledged Debt Securities” has the meaning assigned to such term in Section 3.01.
 
“Pledged Securities” means any promissory notes, stock certificates or other
securities now or hereafter included in the Pledged Collateral, including all
certificates, instruments or other documents representing or evidencing any
Pledged Collateral.
 
“Pledged Stock” has the meaning assigned to such term in Section 3.01.
 
“Proceeds” has the meaning specified in Section 9-102 of the New York UCC.
 
“Secured Parties” means (a) the Noteholders, (b) the Trustee, (c) the Collateral
Agent, (d) the beneficiaries of each indemnification obligation undertaken by
any Indenture Party under any Indenture Document, including without limitation
the Trustee, and (e) the permitted successors and assigns of each of the
foregoing.
 
“Security Interest” has the meaning assigned to such term in Section 4.01.
 
“Subsidiary Parties” means (a) the Subsidiaries identified on Schedule I and (b)
each other Subsidiary that becomes a party to this Agreement as a Subsidiary
Party after the date hereof.
 
“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by any Grantor or that any Grantor otherwise has the right to license, or
granting to any Grantor any right to use any trademark now or hereafter owned by
any third party, and all rights of any Grantor under any such agreement.

 
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“Trademarks” means all of the following now owned or hereafter acquired by any
Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
 
ARTICLE II
 
Guarantee
 
SECTION 2.01.  Guarantee.  Each Guarantor unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, the due and punctual payment and performance of the Obligations.  Each
of the Guarantors further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice to or further assent from it, and
that it will remain bound upon its guarantee notwithstanding any extension or
renewal of any Obligation.  Each of the Guarantors waives presentment to, demand
of payment from and protest to the Company or any other Indenture Party of any
of the Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment.
 
SECTION 2.02.  Guarantee of Payment.  Each of the Guarantors further agrees that
its guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any security held for the payment
of the Obligations or to any balance of any deposit account or credit on the
books of the Collateral Agent or any other Secured Party in favor of the Company
or any other Person.
 
SECTION 2.03.  No Limitations.  (a)  Except for termination of a Guarantor’s
obligations hereunder as expressly provided in Section 7.13, the obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise.  Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise
affected by (i) the failure of the Collateral Agent or any other Secured Party
to assert any claim or demand or to enforce any right or remedy under the
provisions of any Indenture Document or otherwise; (ii) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of, any Indenture Document or any other agreement, including with respect to any
other Guarantor under this Agreement; (iii) the release of any security held by
the Collateral Agent or any other Secured Party for the Obligations or any of
them; (iv) any default, failure or delay, willful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations).  Each
Guarantor expressly authorizes the Collateral Agent to take and hold security
for the payment and performance of the Obligations, to exchange, waive or
release any or all such security (with or without consideration), to enforce or
apply such security and direct the order and manner of any sale thereof in its
sole discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.

 
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(b)  To the fullest extent permitted by applicable law, each Guarantor waives
any defense based on or arising out of any defense of the Company or any
Indenture Party or the unenforceability of the Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Company
or any other Indenture Party, other than the indefeasible payment in full in
cash of all the Obligations.  The Collateral Agent and the other Secured Parties
may, at their election, foreclose on any security held by one or more of them by
one or more judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with the Company or any other
Indenture Party or exercise any other right or remedy available to them against
the Company or any other Indenture Party, without affecting or impairing in any
way the liability of any Guarantor hereunder, except to the extent the
Obligations have been fully and indefeasibly paid in full in cash.  To the
fullest extent permitted by applicable law, each Guarantor waives any defense
arising out of any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against the Company or
any other Indenture Party, as the case may be, or any security.
 
SECTION 2.04.  Reinstatement.  Each of the Guarantors agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored by the Collateral Agent or any other Secured Party
upon the bankruptcy or reorganization of the Company, any other Indenture Party
or otherwise.
 
SECTION 2.05.  Agreement To Pay; Subrogation.  In furtherance of the foregoing
and not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Company or any other Indenture Party to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
for distribution to the applicable Secured Parties in cash the amount of such
unpaid Obligation.  Upon payment by any Guarantor of any sums to the Collateral
Agent as provided above, all rights of such Guarantor against the Company or any
other Indenture Party arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subject to Article VI.

 
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SECTION 2.06.  Information.  Each Guarantor assumes all responsibility for being
and keeping itself informed of the Company’s and each other Indenture Party’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Collateral Agent or the other Secured Parties will have any duty to advise
such Guarantor of information known to it or any of them regarding such
circumstances or risks.
 
ARTICLE III
 
Pledge of Securities
 
SECTION 3.01.  Pledge.  As security for the payment or performance, as the case
may be, in full of the Obligations, each Grantor hereby assigns and pledges to
the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, and hereby grants to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, a security interest in,
all of such Grantor’s right, title and interest in, to and under (a) the shares
of capital stock and other Equity Interests owned by it, including but not
limited to those listed on Schedule II and any other Equity Interests obtained
in the future by such Grantor and the certificates, if any, representing all
such Equity Interests (the “Pledged Stock”); provided, that the Pledged Stock
shall not include (i) Equity Interests of Wolverine China Investments LLC, or
(ii) Equity Interests of any Person of which the Indenture Parties individually
or in the aggregate do not own in excess of 50% of the issued and outstanding
Equity Interests of such Person and the pledge or other Lien upon such Equity
Interest is prohibited pursuant to a bona fide agreement with any such Person;
(b)(i) the debt securities listed opposite the name of such Grantor on
Schedule II, (ii) any debt securities in the future issued to such Grantor and
(iii) the promissory notes and any other instruments evidencing such debt
securities (the “Pledged Debt Securities”); (c) all other property that may be
delivered to and held by the Collateral Agent pursuant to the terms of this
Section 3.01; (d) subject to Section 3.06, all payments of principal or
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in exchange for or
upon the conversion of, and all other Proceeds received in respect of, the
securities referred to in clauses (a) and (b) above; (e) subject to
Section 3.06, all rights and privileges of such Grantor with respect to the
securities and other property referred to in clauses (a), (b), (c) and (d)
above; and (f) all Proceeds of any of the foregoing (the items referred to in
clauses (a) through (f) above being collectively referred to as the “Pledged
Collateral”).
 
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth (including Section 7.13).

 
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SECTION 3.02.  Delivery of the Pledged Collateral.  (a)  Each Grantor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and all
certificated Pledged Securities.
 
(b)  Each Grantor will cause any Indebtedness for borrowed money owed to such
Grantor by any Person (other than any Subsidiary Parties) in an amount in excess
of $250,000 to be evidenced by a duly executed promissory note that is pledged
and delivered to the Collateral Agent pursuant to the terms hereof.
 
(c)  Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be
accompanied by stock powers duly executed in blank or other instruments of
transfer reasonably satisfactory to the Collateral Agent and by such other
instruments and documents as the Collateral Agent may reasonably request and
(ii) all other property comprising part of the Pledged Collateral shall be
accompanied by proper instruments of assignment duly executed by the applicable
Grantor and such other instruments or documents as the Collateral Agent may
reasonably request, including as reasonably requested by the Holders of a
majority in principal amount of the Notes.  Each delivery of Pledged Securities
shall be accompanied by a schedule describing the securities, which schedule
shall be attached hereto as Schedule II and made a part hereof; provided, that
failure to attach any such schedule hereto shall not affect the validity of such
pledge of such Pledged Securities.  Each schedule so delivered shall supplement
any prior schedules so delivered.
 
SECTION 3.03.  Representations, Warranties and Covenants.  The Grantors jointly
and severally represent, warrant and covenant to and with the Collateral Agent,
for the benefit of the Secured Parties, that:
 
(a)  Schedule II correctly sets forth the percentage of the issued and
outstanding units of each class of the Equity Interests of the issuer thereof
represented by such Pledged Stock;
 
(b)  the Pledged Stock and Pledged Debt Securities have been duly and validly
authorized and issued by the issuers thereof and (i) in the case of Pledged
Stock, are fully paid and nonassessable, and (ii) in the case of Pledged Debt
Securities, are legal, valid and binding obligations of the issuers thereof;
 
(c)  except for the security interests granted hereunder, each of the Grantors
(i) is and, subject to any transfers made in compliance with the Indenture, will
continue to be the direct owner, beneficially and of record, of the Pledged
Securities indicated on Schedule II as owned by such Grantor, (ii) holds the
same free and clear of all Liens, other than Liens created by this Agreement,
Liens permitted under the Indenture and transfers made in compliance with the
Indenture, (iii) will make no assignment, pledge, hypothecation or transfer of,
or create or permit to exist any security interest in or other Lien on, the
Pledged Collateral, other than Liens created by this Agreement, Liens permitted
under the Indenture and transfers made in compliance with the Indenture and
(iv) will defend its title or interest thereto or therein against any and all
Liens (other than the Lien created by this Agreement and Liens permitted under
the Indenture), however arising, of all Persons whomsoever;

 
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(d)  except for restrictions and limitations imposed by the Indenture Documents
or securities laws generally, the Pledged Collateral is and will continue to be
freely transferable and assignable, and none of the Pledged Collateral (other
than Pledged Collateral representing less than all of the Equity Interests of a
Person) is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any nature that might prohibit, impair, delay or otherwise affect the pledge
of such Pledged Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Collateral Agent of rights and remedies hereunder;
 
(e)  each of the Grantors has the requisite power and authority to pledge the
Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated;
 
(f)  no consent or approval of any Governmental Authority, any securities
exchange or any other Person was or is necessary to the validity of the pledge
of the Pledged Collateral effected hereby (other than such as have been obtained
and are in full force and effect and except with respect to Pledged Collateral
in the form of Equity Interests in joint ventures);
 
(g)  by virtue of the execution and delivery by the Grantors of this Agreement,
when any Pledged Securities are delivered to the Collateral Agent in accordance
with this Agreement, the Collateral Agent will obtain a legal, valid and
perfected first priority lien upon and security interest in such Pledged
Securities as security for the payment and performance of the Obligations;
 
(h)  the pledge effected hereby is effective to vest in the Collateral Agent,
for the benefit of the Secured Parties, the rights of the Collateral Agent in
the Pledged Collateral as set forth herein; and
 
(i)  each of the Grantors received adequate consideration in exchange for
entering into this Agreement.
 
SECTION 3.04.  Certification of Limited Liability Company and Limited
Partnership Interests.  On the date hereof, no Equity Interest in any limited
liability company or limited partnership controlled by any Grantor and pledged
hereunder (the “Existing LLC/Partnership Interests”) is represented by a
certificate.  Each Grantor agrees that (a) if any Existing LLC/Partnership
Interest controlled by such Grantor shall become represented by a certificate,
it shall cause such certificate to be promptly delivered to the Collateral Agent
and shall cause the applicable limited liability company or partnership
agreement to be amended so as to treat the Equity Interest represented by such
certificate as a “security” within the meaning of Article 8 of the UCC and to
provide that such security shall be governed by Article 8 of the UCC and (b)
each interest in any limited liability company or partnership acquired by such
Grantor after the date hereof shall be represented by a certificate (which shall
be promptly delivered to the Collateral Agent after such Grantor’s acquisition
thereof), shall be a “security” within the meaning of Article 8 of the UCC and
shall be governed by Article 8 of the UCC.

 
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SECTION 3.05.  Registration in Nominee Name; Denominations.  The Collateral
Agent, on behalf of the Secured Parties, shall hold the Pledged Securities in
the name of the applicable Grantor, endorsed or assigned in blank or in favor of
the Collateral Agent, but following the occurrence and during the continuance of
an Event of Default shall have the right (in its sole and absolute discretion)
to hold the Pledged Securities in its own name as pledgee, or in the name of its
nominee (as pledgee or as sub-agent).  Each Grantor will promptly give to the
Collateral Agent copies of any material notices or other communications received
by it with respect to Pledged Securities registered in the name of such
Grantor.  The Collateral Agent shall promptly deliver such material notices or
other communications to the Trustee, who shall mail such notices or
communications to each Holder within 90 days following the receipt of such
notice or communications.  The Collateral Agent shall at all times have the
right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any reasonable purpose
consistent with this Agreement.
 
SECTION 3.06.  Voting Rights; Dividends and Interest.  (a)  Unless and until an
Event of Default shall have occurred and be continuing and the Collateral Agent
shall have notified the Grantors that their rights under this Section 3.06 are
being suspended (which notice shall be deemed to have been given immediately
upon the occurrence of an Event of Default with respect to the Company under
Section 6.01(7) and Section 6.01(8) of the Indenture):
 
(i) Each Grantor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Securities or any
part thereof for any purpose consistent with the terms of this Agreement, the
Indenture and the other Indenture Documents; provided, that such rights and
powers shall not be exercised in any manner that could reasonably be expected to
materially and adversely affect the rights inuring to a holder of any Pledged
Securities or the rights and remedies of any of the Collateral Agent or the
other Secured Parties under this Agreement or the Indenture or any other
Indenture Documents or the ability of the Secured Parties to exercise the same.
 
(ii) The Collateral Agent shall promptly execute and deliver to each Grantor, or
cause to be executed and delivered to such Grantor, all such proxies, powers of
attorney and other instruments as such Grantor may reasonably request for the
purpose of enabling such Grantor to exercise the voting and/or consensual rights
and powers it is entitled to exercise pursuant to subparagraph (i) above.

 
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(iii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Securities to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Indenture, the other Indenture Documents and applicable laws; provided, that
any noncash dividends, interest, principal or other distributions that would
constitute Pledged Stock or Pledged Debt Securities, whether resulting from a
subdivision, combination or reclassification of the outstanding Equity Interests
of the issuer of any Pledged Securities or received in exchange for Pledged
Securities or any part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall not be commingled by such
Grantor with any of its other funds or property but shall be held separate and
apart therefrom, shall be held in trust for the benefit of the Collateral Agent
and shall be forthwith delivered to the Collateral Agent in the same form as so
received (with any necessary endorsement).
 
(b)  Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified (or shall be deemed to have
notified) the Grantors of the suspension of their rights under paragraph
(a)(iii) of this Section 3.06, then all rights of any Grantor to dividends,
interest, principal or other distributions that such Grantor is authorized to
receive pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and all
such rights shall thereupon become vested in the Collateral Agent, which shall
have the sole and exclusive right and authority to receive and retain such
dividends, interest, principal or other distributions.  All dividends, interest,
principal or other distributions received by any Grantor contrary to the
provisions of this Section 3.06 shall be held in trust for the benefit of the
Collateral Agent, shall be segregated from other property or funds of such
Grantor and shall be forthwith delivered to the Collateral Agent upon demand in
the same form as so received (with any necessary endorsement).  Any and all
money and other property paid over to or received by the Collateral Agent
pursuant to the provisions of this paragraph (b) shall be retained by the
Collateral Agent in an account to be established by the Collateral Agent upon
receipt of such money or other property and shall be applied in accordance with
the provisions of Section 5.02.  After all Events of Default have been cured or
waived and the Company has delivered to the Collateral Agent a certificate to
that effect, the Collateral Agent shall promptly repay to each Grantor (without
interest) all dividends, interest, principal or other distributions that such
Grantor would otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) of this Section 3.06 and that remain in such account.
 
(c)  Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified (or shall be deemed to have
notified) the Grantors of the suspension of their rights under paragraph (a)(i)
of this Section 3.06, then all rights of any Grantor to exercise the voting and
consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 3.06, and the obligations of the Collateral
Agent under paragraph (a)(ii) of this Section 3.06, shall cease, and all such
rights shall thereupon become vested in the Collateral Agent, which shall have
the sole and exclusive right and authority to exercise such voting and
consensual rights and powers; provided, that the Collateral Agent shall have the
right from time to time following and during the continuance of an Event of
Default to permit the Grantors to exercise such rights.

 
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(d)  Any notice given by the Collateral Agent to the Grantors suspending the
Grantors’ rights under paragraph (a) of this Section 3.06 (i) may be given by
telephone if promptly confirmed in writing, (ii) may be given to one or more of
the Grantors at the same or different times and (iii) may suspend the rights of
the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without
suspending all such rights (as specified by the Collateral Agent in its sole and
absolute discretion) and without waiving or otherwise affecting the Collateral
Agent’s rights to give additional notices from time to time suspending other
rights so long as an Event of Default has occurred and is continuing.
 
ARTICLE IV
 
Security Interests in Personal Property
 
SECTION 4.01.  Security Interest.  (a)  As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest (the “Security Interest”) in, all right, title or
interest in or to any and all of the following assets and properties now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the “Article 9 Collateral”):
 
(i)
  all accounts;

 
(ii)
  all chattel paper;

 
(iii)
  all cash and deposit accounts;

 
(iv)
  all documents;

 
(v)
  all equipment;

 
(vi)
  all General Intangibles;

 
(vii)
  all instruments;

 
(viii)
  all inventory;

 
(ix)
  all investment property;

 
(x)
  all letter-of-credit rights;

 
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(xi)
  all commercial tort claims;

 
(xii)
  all books and records pertaining to the Article 9 Collateral; and

 
(xiii)  to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing.
 
Notwithstanding the foregoing, the Article 9 Collateral shall not include the
Excluded Property.
 
(b)  Each Grantor hereby irrevocably authorizes the Collateral Agent at any time
and from time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) with respect to the Article 9 Collateral
or any part thereof and amendments thereto that (i) indicate the Collateral as
all assets of such Grantor or words of similar effect and (ii) contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (A) whether such Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor and (B) in
the case of a financing statement filed as a fixture filing, a sufficient
description of the real property to which such Article 9 Collateral
relates.  Each Grantor agrees to provide such information to the Collateral
Agent promptly upon request.
 
Each Grantor also ratifies its authorization for the Collateral Agent to file in
any relevant jurisdiction any initial financing statements or amendments thereto
if filed prior to the date hereof.
 
The Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) such documents as may be necessary
or advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor, without the signature
of any Grantor, and naming any Grantor or the Grantors as debtors and the
Collateral Agent as secured party.  The foregoing rights of the Collateral Agent
shall not be construed as a duty of the Collateral Agent, it being expressly
understood and agreed that the Grantors shall bear the responsibility of all
such filings.
 
(c)  The Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Grantor with respect to or arising out of the
Article 9 Collateral.
 
SECTION 4.02.  Representations and Warranties.  The Grantors jointly and
severally represent and warrant to the Collateral Agent and the Secured Parties,
subject to the last paragraph of this Section 4.02, that:

 
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(a)  Each Grantor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Collateral Agent the
Security Interest in such Article 9 Collateral pursuant hereto and to execute,
deliver and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any other Person other than any
consent or approval that has been obtained.
 
(b)  Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations containing
a description of the Article 9 Collateral prepared by the Collateral Agent based
upon the information provided to the Collateral Agent by the Indenture Parties
are all the filings, recordings and registrations (other than filings required
to be made in the United States Patent and Trademark Office and the United
States Copyright Office in order to perfect the Security Interest in Article 9
Collateral consisting of Patents, Trademarks and Copyrights) that are necessary
to publish notice of and protect the validity of and to establish a legal, valid
and perfected security interest in favor of the Collateral Agent (for the
ratable benefit of the Secured Parties) in respect of all Article 9 Collateral
in which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.  Each Grantor represents and warrants that a fully
executed agreement in the form hereof (or a fully executed short-form agreement
as reasonably determined by the Indenture Parties) and containing a description
of all Article 9 Collateral consisting of Intellectual Property with respect to
United States Patents (and Patents for which United States registration
applications are pending), United States registered Trademarks (and Trademarks
for which United States registration applications are pending) and United States
registered Copyrights (and all pending registrations therefor) has been
delivered to the Collateral Agent for recording by the United States Patent and
Trademark Office and the United States Copyright Office pursuant to
35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations
thereunder, as applicable, to protect the validity of and to establish a legal,
valid and perfected security interest in favor of the Collateral Agent (for the
ratable benefit of the Secured Parties) in respect of all Article 9 Collateral
consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Article 9 Collateral consisting of
Patents, Trademarks and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).

 
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(c)  The Security Interest constitutes (i) a legal and valid security interest
in all the Article 9 Collateral securing the payment and performance of the
Obligations, (ii) subject to the filings described in Section 4.02(b), a
perfected security interest in all Article 9 Collateral in which a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code and (iii) a security interest that shall be perfected in all
Article 9 Collateral in which a security interest may be perfected upon the
receipt and recording of this Agreement (or the short-form agreement referenced
in paragraph (b) above) with the United States Patent and Trademark Office and
the United States Copyright Office, as applicable, within the three-month period
(commencing as of the date hereof) pursuant to 35 U.S.C. § 261 or 15 U.S.C.
§ 1060 or the one month period (commencing as of the date hereof) pursuant to
17 U.S.C. § 205.  The Security Interest is and shall be prior to any other Lien
on any of the Article 9 Collateral, other than Liens expressly permitted to be
prior to the Security Interest pursuant to Section 6.02 of the Indenture.
 
(d)  The Article 9 Collateral is owned by the Grantors free and clear of any
Lien, except for Liens expressly permitted pursuant to Section 4.11 of the
Indenture.  None of the Grantors has filed or consented to the filing of (i) any
financing statement or analogous document under the Uniform Commercial Code or
any other applicable laws covering any Article 9 Collateral, (ii) any assignment
in which any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Article 9 Collateral with the United States Patent and
Trademark Office or the United States Copyright Office or (iii) any assignment
in which any Grantor assigns any Article 9 Collateral or any security agreement
or similar instrument covering any Article 9 Collateral with any foreign
governmental, municipal or other office, which financing statement or analogous
document, assignment, security agreement or similar instrument is still in
effect, except, in each case, for Liens expressly permitted pursuant to
Section 4.11 of the Indenture.
 
SECTION 4.03.  Covenants.  (a)   Each Grantor agrees promptly to notify the
Collateral Agent in writing of any change (i) in corporate name, (ii) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Article 9 Collateral
owned by it or any office or facility at which Article 9 Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in its identity or type of organization or corporate structure, (iv) in
its Federal Taxpayer Identification Number or organizational identification
number or (v) in its jurisdiction of organization.  Each Grantor agrees to
promptly provide the Collateral Agent with certified organizational documents
reflecting any of the changes described in the first sentence of this
paragraph.  Each Grantor agrees not to effect or permit any change referred to
in the preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Collateral Agent
to continue at all times following such change to have a valid, legal and
perfected first priority security interest in all the Article 9 Collateral to
the same extent as existed immediately prior to such change.
 
(b)  Each Grantor agrees to maintain, at its own cost and expense, such complete
and accurate records with respect to the Article 9 Collateral owned by it as is
prudent in the conduct of its business, but in any event to include complete
accounting records indicating all payments and proceeds received with respect to
the Article 9 Collateral, and, at such time or times as the Collateral Agent may
reasonably request, promptly to prepare and deliver to the Collateral Agent a
duly certified schedule or schedules in form and detail reasonably satisfactory
to the Collateral Agent showing the identity, amount and location of any and all
Article 9 Collateral.

 
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(c)  Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to Section 4.02 of the Indenture,
the Company shall deliver to the Collateral Agent a certificate executed by a
Financial Officer and the chief legal officer of the Company confirming that
there has been no material change in such information since the date of such
certificate or the date of the most recent certificate delivered pursuant to
this Section 4.03(c).  Each certificate delivered pursuant to this
Section 4.03(c) shall identify in the format of Schedule III all Intellectual
Property of any Grantor in existence on the date thereof and not then listed on
such Schedules or previously so identified to the Collateral Agent.
 
(d)  Each Grantor shall, at its own expense, take any and all commercially
reasonable actions necessary to defend title to all material portions of the
Article 9 Collateral against all Persons and to defend the Security Interest of
the Collateral Agent in all material portions of the Article 9 Collateral and
the priority thereof against any Lien not expressly permitted pursuant to
Section 4.11 of the Indenture.
 
(e)  Each Grantor agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions to better assure, preserve, protect and perfect the Security
Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of
this Agreement, the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith or therewith.  If any amount payable to any Grantor under or
in connection with any of the Article 9 Collateral shall be or become evidenced
by any promissory note or other instrument, such note or instrument shall be
promptly pledged and delivered to the Collateral Agent, duly endorsed in a
manner consistent with Section 3.02.
 
Without limiting the generality of the foregoing, each Grantor hereby authorizes
the Collateral Agent, with prompt notice thereof to the Grantors, to supplement
this Agreement by supplementing Schedule III or adding additional schedules
hereto to specifically identify any asset or item that may constitute
Copyrights, Licenses, Patents or Trademarks; provided, that any Grantor shall
have the right, exercisable within 10 days after it has been notified by the
Collateral Agent of the specific identification of such Collateral, to advise
the Collateral Agent in writing of any inaccuracy of the representations and
warranties made by such Grantor hereunder with respect to such Collateral.  Each
Grantor agrees that it will use its best efforts to take such action as shall be
reasonably necessary in order that all representations and warranties hereunder
shall be true and correct in all material respects with respect to such
Collateral within 30 days after the date it has been notified by the Collateral
Agent of the specific identification of such Collateral.

 
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(f)  The Collateral Agent and such Persons as the Collateral Agent may
reasonably designate shall have the right, upon reasonable prior written notice
and during normal business hours (but in no event more than once each fiscal
quarter unless a Default has occurred and is continuing), at the Grantors’ own
cost and expense, to inspect the Article 9 Collateral, all records related
thereto (and to make extracts and copies from such records) and the premises
upon which any of the Article 9 Collateral is located, to discuss the Grantors’
affairs with the officers of the Grantors and their independent accountants and
to verify under reasonable procedures the validity, amount, quality, quantity,
value, condition and status of, or any other matter relating to, the Article 9
Collateral, including, in the case of accounts or Article 9 Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such a
verification.  The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party.
 
(g)  At its option, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Article 9 Collateral and not expressly
permitted pursuant to Section 4.11 of the Indenture (and shall notify the
Company upon any such discharge), and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Grantor fails to do
so as required by the Indenture or this Agreement, and each Grantor jointly and
severally agrees to reimburse the Collateral Agent on demand for any payment
made or any reasonable expense incurred by the Collateral Agent pursuant to the
foregoing authorization; provided, that nothing in this paragraph shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Indenture Documents.
 
(h)  If at any time any Grantor shall take a security interest in any property
of an Account Debtor or any other Person to secure payment and performance of an
account in excess of $250,000, such Grantor shall promptly assign such security
interest to the Collateral Agent.  Such assignment need not be filed of public
record unless necessary to continue the perfected status of the security
interest against creditors of and transferees from the Account Debtor or other
Person granting the security interest.
 
(i)  As between each Grantor, the Collateral Agent and the Secured Parties, each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Article 9 Collateral, all in accordance with the
terms and conditions thereof, and each Grantor jointly and severally agrees to
indemnify and hold harmless the Collateral Agent and the Secured Parties from
and against any and all liability for such performance.

 
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(j)  None of the Grantors shall make or permit to be made an assignment, pledge
or hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral, except as permitted by the Indenture.  None
of the Grantors shall make or permit to be made any transfer of the Article 9
Collateral and each Grantor shall remain at all times in possession of the
Article 9 Collateral owned by it, except that unless and until the Collateral
Agent shall notify the Grantors that an Event of Default shall have occurred and
be continuing and that during the continuance thereof the Grantors shall not
sell, convey, lease, assign, transfer or otherwise dispose of any Article 9
Collateral (which notice may be given by telephone if promptly confirmed in
writing), the Grantors may use and dispose of the Article 9 Collateral in any
lawful manner not inconsistent with the provisions of this Agreement, the
Indenture or any other Indenture Document.
 
(k)  None of the Grantors will, without the Collateral Agent’s prior written
consent, which shall be directed by the Holders of a majority in outstanding
principal amount of the Notes, grant any extension of the time of payment of any
accounts included in the Article 9 Collateral, compromise, compound or settle
the same for less than the full amount thereof, release, wholly or partly, any
Person liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, compromises, settlements, releases, credits or
discounts granted or made in good faith in the prudent conduct of the business
of such Grantor.
 
(l)  The Grantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the inventory and
equipment in accordance with the requirements set forth in Schedule IV
hereto.  Each Grantor irrevocably makes, constitutes and appoints the Collateral
Agent (and all officers, employees or agents designated by the Collateral Agent)
as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose,
upon the occurrence and during the continuance of an Event of Default, of
making, settling and adjusting claims in respect of Article 9 Collateral under
policies of insurance, endorsing the name of such Grantor on any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect
thereto.  In the event that any Grantor at any time or times shall fail to
obtain or maintain any of the policies of insurance required hereby or under the
Indenture or to pay any premium in whole or part relating thereto, the
Collateral Agent may, without waiving or releasing any obligation or liability
of the Grantors hereunder or any Event of Default, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium and take any
other actions with respect thereto as the Collateral Agent deems advisable.  All
sums disbursed by the Collateral Agent in connection with this paragraph,
including reasonable attorneys’ fees, court costs, expenses and other charges
relating thereto, shall be payable, upon demand, by the Grantors to the
Collateral Agent and shall be additional Obligations secured hereby.
 
(m)  Each Grantor shall maintain, in form and manner reasonably satisfactory to
the Collateral Agent, records of its chattel paper and its books, records and
documents evidencing or pertaining thereto.
 
SECTION 4.04.  Other Actions.  In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest, each Grantor agrees, in each case at such Grantor’s own
expense, to take the following actions with respect to the following Article 9
Collateral:
 
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(a)  Instruments.  If any Grantor shall at any time hold or acquire any
instruments, such Grantor shall forthwith endorse, assign and deliver the same
to the Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time to time
reasonably request, other than instruments that do not individually or in the
aggregate exceed $250,000.
 
(b)  Pledged Stock.  Each Grantor shall, within five (5) Business Days of the
date hereof, deliver to the Collateral Agent any and all certificates
representing its Pledged Stock, subject to Section 3.01 and excluding any
Excluded Property.
 
(c)  Deposit Accounts.  Except for the Excluded Property, for each deposit
account that any Grantor at any time opens or maintains, such Grantor shall, on
or prior to September 30, 2009, either (i) cause the depositary bank to agree to
comply with instructions from the Collateral Agent to such depositary bank
directing the disposition of funds from time to time credited to such deposit
account, without further consent of such Grantor or any other Person, pursuant
to an agreement substantially in the form attached hereto as Exhibit I or as
otherwise reasonably determined by such Grantor, or (ii) arrange for the
Collateral Agent to become the customer of the depositary bank with respect to
such deposit account, with the Grantor being permitted, only with the reasonable
consent of the Collateral Agent, to exercise rights to withdraw funds from such
deposit account.  The Collateral Agent agrees with each Grantor that the
Collateral Agent shall not give any such instructions or withhold any withdrawal
rights from any Grantor unless an Event of Default has occurred and is
continuing, or, after giving effect to any withdrawal would occur.
 
(d)  Investment Property.  Except to the extent otherwise provided in
Article III, if any Grantor shall at any time hold or acquire any certificated
securities, such Grantor shall forthwith endorse, assign and deliver the same to
the Collateral Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Collateral Agent may from time to time
specify.  If any securities now or hereafter acquired by any Grantor are
“uncertificated securities” (as defined in Section 8-102(18) of the New York
UCC) and are issued to such Grantor or its nominee directly by the issuer
thereof, such Grantor shall promptly notify the Collateral Agent thereof and, at
the Collateral Agent’s request and option, either (i) use its best efforts to
cause the issuer to agree to comply with instructions from the Collateral Agent
as to such securities, without further consent of any Grantor or such nominee or
(ii) arrange for the Collateral Agent to become the registered owner of the
securities.  If any securities, whether certificated or uncertificated, or other
investment property now or hereafter acquired by any Grantor are held by such
Grantor or its nominee through a securities intermediary or commodity
intermediary, such Grantor shall promptly notify the Collateral Agent thereof
and, at the Collateral Agent’s request and option, either (i) use its best
efforts to cause such securities intermediary or (as the case may be) commodity
intermediary to agree to comply with entitlement orders or other instructions
from the Collateral Agent to such securities intermediary as to such security
entitlements, or (as the case may be) to apply any value distributed on account
of any commodity contract as directed by the Collateral Agent to such commodity
intermediary, in each case without further consent of any Grantor or such
nominee, or (ii) in the case of financial assets (as governed by Article 8 of
the New York UCC) or other investment property held through a securities
intermediary, arrange for the Collateral Agent to become the entitlement holder
with respect to such investment property, with the Grantor being permitted, only
with the consent of the Collateral Agent, to exercise rights to withdraw or
otherwise deal with such investment property.  The Collateral Agent agrees with
each of the Grantors that the Collateral Agent shall not give any such
entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its consent to
the exercise of any withdrawal or dealing rights by any Grantor, unless an Event
of Default has occurred and is continuing, or, after giving effect to any such
investment and withdrawal rights, would occur.  The provisions of this paragraph
shall not apply to any financial assets credited to a securities account for
which the Collateral Agent is the securities intermediary.

 
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(e)  Electronic Chattel Paper and Transferable Records.  If any Grantor at any
time holds or acquires an interest in any electronic chattel paper or any
“transferable record,” as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify the Collateral Agent thereof
and shall take such action as the Collateral Agent may reasonably request to
vest in the Collateral Agent control under New York UCC Section 9-105 of such
electronic chattel paper or control under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be,
Section 16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record.  The Collateral Agent agrees with
such Grantor that the Collateral Agent will arrange, pursuant to procedures
reasonably satisfactory to the Collateral Agent and so long as such procedures
will not result in the Collateral Agent’s loss of control, for the Grantor to
make alterations to the electronic chattel paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such Grantor
with respect to such electronic chattel paper or transferable record.
 
(f)  Letter-of-Credit Rights.  If any Grantor is at any time a beneficiary under
a letter of credit now or hereafter issued in favor of such Grantor, such
Grantor shall promptly notify the Collateral Agent thereof and either
(i) arrange for the issuer and any confirmer of such letter of credit to consent
to an assignment to the Collateral Agent of the proceeds of any drawing under
the letter of credit or (ii) arrange for the Collateral Agent to become the
transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be paid to the applicable Grantor unless an Event of Default has
occurred or is continuing.
 
(g)  Commercial Tort Claims.  If any Grantor shall at any time hold or acquire a
commercial tort claim in an amount reasonably estimated to exceed $1,000,000,
the Grantor shall promptly notify the Collateral Agent thereof in a writing
signed by such Grantor, including a summary description of such claim, and grant
to the Collateral Agent in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement.

 
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SECTION 4.05.  Covenants Regarding Patent, Trademark and Copyright
Collateral.  (a)  Each Grantor agrees that it will not do any act or omit to do
any act (and will exercise commercially reasonable efforts to prevent its
licensees from doing any act or omitting to do any act) whereby any Patent that
is material to the conduct of such Grantor’s business may become invalidated or
dedicated to the public, and agrees that it shall continue to mark any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.
 
(b)  Each Grantor (either itself or through its licensees or its sublicensees)
will, for each Trademark material to the conduct of such Grantor’s business,
(i) maintain such Trademark in full force free from any claim of abandonment or
invalidity for non-use, (ii) maintain the quality of products and services
offered under such Trademark, (iii) display such Trademark with notice of
Federal or foreign registration to the extent applicable and reasonably
necessary and sufficient to establish and preserve its maximum rights under
applicable law and (iv) not knowingly use or knowingly permit the use of such
Trademark in violation of any third party rights.
 
(c)  Each Grantor (either itself or through its licensees or sublicensees) will,
for each work covered by a Copyright material to the conduct of such Grantor’s
business, continue to publish, reproduce, display, adopt and distribute the work
with appropriate copyright notice as necessary and sufficient to establish and
preserve its maximum rights under applicable copyright laws.
 
(d)  Each Grantor shall notify the Collateral Agent promptly if it knows or
reasonably suspects that any Patent, Trademark or Copyright material to the
conduct of such Grantor’s business may become abandoned, lost or dedicated to
the public, or of any materially adverse determination or development (including
the institution of, or any determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor’s ownership
of any such Patent, Trademark or Copyright, its right to register the same, or
its right to keep and maintain the same.
 
(e)  In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly informs
the Collateral Agent, and executes and delivers any and all agreements,
instruments, documents and papers to evidence the Collateral Agent’s security
interest in such Patent, Trademark or Copyright, and each Grantor hereby
appoints the Collateral Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all lawful acts of such attorney being
hereby ratified and confirmed; such power, being coupled with an interest, is
irrevocable.

 
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(f)  Each Grantor will take all necessary steps that are consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, to maintain and pursue each material application relating
to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant
or registration) and to maintain each issued Patent and each registration of the
Trademarks and Copyrights that is material to the conduct of any Grantor’s
business, including timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with such Grantor’s reasonable business judgment, to initiate
opposition, interference and cancellation proceedings against third parties.
 
(g)  In the event that any Grantor knows or reasonably suspects that any
Article 9 Collateral consisting of a Patent, Trademark or Copyright material to
the conduct of any Grantor’s business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall, if
consistent with such Grantor’s reasonable business judgment, promptly sue for
infringement, misappropriation or dilution and to recover any and all damages
for such infringement, misappropriation or dilution, and take such other actions
as are appropriate under the circumstances to protect such Article 9 Collateral.
 
(h)  Upon the occurrence and during the continuance of an Event of Default, each
Grantor shall use its commercially reasonable efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all such Grantor’s right, title
and interest thereunder to the Collateral Agent or its designee.
 
(i)  Each Grantor shall file with the United States Patent and Trademark Office
or United States Copyright Office (or any successor office or any similar office
in any other country) such documents as may be necessary or advisable for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by each Grantor, naming any Grantor or the Grantors as
debtors and the Collateral Agent as secured party.  Each Grantor acknowledges
and agrees that the Collateral Agent shall have no duties with respect to making
any filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country).

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

 
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The Collateral Agent shall give the applicable Grantors 10 days’ written notice
(which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of
the Collateral Agent’s intention to make any sale of Collateral.  Such notice,
in the case of a public sale, shall state the time and place for such sale and,
in the case of a sale at a broker’s board or on a securities exchange, shall
state the board or exchange at which such sale is to be made and the day on
which the Collateral, or portion thereof, will first be offered for sale at such
board or exchange.  Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the Collateral
Agent may fix and state in the notice (if any) of such sale.  At any such sale,
the Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Collateral Agent may in its sole and
absolute discretion determine.  The Collateral Agent shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been given.  The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned.  In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice.  At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Agreement, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to such Secured Party from any Grantor as a credit against the purchase
price, and such Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to any
Grantor therefor.  For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled, subject to Section 5.02, to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Obligations paid in full.  As an
alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.  Any sale pursuant to
the provisions of this Section 5.01 shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-610(b) of the
New York UCC or its equivalent in other jurisdictions.
 
SECTION 5.02.  Application of Proceeds.  The Collateral Agent shall apply the
proceeds of any collection or sale of, or foreclosure or other realization upon,
any Collateral, including any Collateral consisting of cash, as follows:
 
FIRST, to the payment of all costs and expenses incurred by the Collateral Agent
in connection with such collection or sale or otherwise in connection with this
Agreement, any other Indenture Document or any of the Obligations, including all
court costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder or under any
other Indenture Document on behalf of any Grantor and any other costs or
expenses incurred in connection with the exercise of any right or remedy
hereunder or under any other Indenture Document;
 
SECOND, to the Trustee for any unpaid fees, expenses or indemnities;
 
THIRD, the payment in full of the Obligations (the amounts so applied to be
distributed among the Secured Parties pro rata in accordance with the amounts of
the Obligations owed to them on the date of any such distribution); and

 
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FOURTH, to the Grantors, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.
 
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement.  Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
 
SECTION 5.03.  Grant of License to Use Intellectual Property.  For the purpose
of enabling the Collateral Agent to exercise rights and remedies under this
Agreement at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sublicense any
of the Article 9 Collateral consisting of Intellectual Property now owned or
hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof.  The use of such license by the Collateral
Agent may be exercised, at the option of the Collateral Agent, only upon the
occurrence and during the continuation of an Event of Default; provided, that
any license, sublicense or other transaction entered into by the Collateral
Agent in accordance herewith shall be binding upon the Grantors notwithstanding
any subsequent cure of an Event of Default.
 
SECTION 5.04.  Securities Act.  In view of the position of the Grantors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as
amended, as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the “Federal Securities Laws”) with respect
to any disposition of the Pledged Collateral permitted hereunder.  Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same.  Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
“blue sky” or other state securities laws or similar laws analogous in purpose
or effect.  Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof.  Each Grantor acknowledges
and agrees that in light of such restrictions and limitations, the Collateral
Agent, in its sole and absolute discretion (a) may proceed to make such a sale
whether or not a registration statement for the purpose of registering such
Pledged Collateral or part thereof shall have been filed under the Federal
Securities Laws and (b) may approach and negotiate with a single potential
purchaser to effect such sale.  Each Grantor acknowledges and agrees that any
such sale might result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions.  In the event of
any such sale, the Collateral Agent shall incur no responsibility or liability
for selling all or any part of the Pledged Collateral at a price that the
Collateral Agent, in its sole and absolute discretion, may in good faith deem
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached.  The provisions of this Section 5.04 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.

 
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SECTION 5.05.  Registration.  Each Grantor agrees that, upon the occurrence and
during the continuance of an Event of Default, if for any reason the Collateral
Agent desires to sell any of the Pledged Collateral at a public sale, it will,
at any time and from time to time, upon the written request of the Collateral
Agent, use its best efforts to cooperate in any public sale effectuated by the
Collateral Agent to permit the public sale of such Pledged Collateral.  Each
Grantor will bear all costs and expenses of carrying out its obligations under
this Section 5.05.  Each Grantor acknowledges that there is no adequate remedy
at law for failure by it to comply with the provisions of this Section 5.05 and
that such failure would not be adequately compensable in damages, and therefore
agrees that its agreements contained in this Section 5.05 may be specifically
enforced.
 
ARTICLE VI
 
Indemnity, Subrogation and Subordination
 
SECTION 6.01.  Indemnity and Subrogation.  In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 6.03), the Company agrees that (a) in the event a payment
shall be made by any Guarantor under this Agreement, the Company shall indemnify
such Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the Person to whom such payment shall have been made
to the extent of such payment and (b) in the event any assets of any Grantor
shall be sold pursuant to this Agreement or any other Collateral Agreement to
satisfy in whole or in part an obligation owed to any Secured Party, the Company
shall indemnify such Grantor in an amount equal to the greater of the book value
or the fair market value of the assets so sold.
 
SECTION 6.02.  Contribution and Subrogation.  Each Guarantor and Grantor (a
“Contributing Party”) agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Guarantor hereunder in respect of any
Obligation or assets of any other Grantor shall be sold pursuant to any
Collateral Agreement to satisfy any Obligation owed to any Secured Party and
such other Guarantor or Grantor (the “Claiming Party”) shall not have been fully
indemnified by the Company as provided in Section 6.01, the Contributing Party
shall indemnify the Claiming Party in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as the case may be, in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Party on the date hereof
and the denominator shall be the aggregate net worth of all the Guarantors and
Grantors on the date hereof (or, in the case of any Guarantor or Grantor
becoming a party hereto pursuant to Section 7.14, the date of the supplement
hereto executed and delivered by such Guarantor or Grantor).  Any Contributing
Party making any payment to a Claiming Party pursuant to this Section 6.02 shall
be subrogated to the rights of such Claiming Party under Section 6.01 to the
extent of such payment.

 
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SECTION 6.03.  Subordination.  (a)  Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors and Grantors under
Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations.  No failure on the part
of the Company or any Guarantor or Grantor to make the payments required by
Sections 6.01 and 6.02 (or any other payments required under applicable law or
otherwise) shall in any respect limit the obligations and liabilities of any
Guarantor or Grantor with respect to its obligations hereunder, and each
Guarantor and Grantor shall remain liable for the full amount of the obligations
of such Guarantor or Grantor hereunder.
 
(b)  Each Guarantor and Grantor hereby agrees that all Indebtedness and other
monetary obligations owed by it to any other Guarantor, Grantor or any other
Subsidiary shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations.
 
ARTICLE VII
 
Miscellaneous
 
SECTION 7.01.  Notices.  All communications and notices hereunder shall (except
as otherwise expressly permitted herein) be in writing and given as provided in
Section 12.02 of the Indenture.  All communications and notices hereunder to any
Subsidiary Party shall be given to it in care of the Company as provided in
Section 12.02 of the Indenture.
 
SECTION 7.02.  Waivers; Amendment.  (a)  No failure or delay by the Collateral
Agent or any Noteholder in exercising any right or power hereunder or under any
other Indenture Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.  The
rights and remedies of the Collateral Agent and the Noteholders hereunder and
under the other Indenture Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have.  No waiver of any provision
of this Agreement or consent to any departure by any Indenture Party shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section 7.02, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  No notice or demand
on any Indenture Party in any case shall entitle any Indenture Party to any
other or further notice or demand in similar or other circumstances.
 
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(b)  Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent, the Indenture Party or Indenture Parties with respect
to which such waiver, amendment or modification is to apply, subject to any
consent required in accordance with Section 9.01 of the Indenture.
 
SECTION 7.03.  Collateral Agent’s Fees and Expenses; Indemnification.  (a)  The
parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 7.07 of
the Indenture.
 
(b)  Without limitation of its indemnification obligations under the other
Indenture Documents, each Grantor and each Guarantor jointly and severally
agrees to indemnify the Collateral Agent against, and hold the Collateral Agent
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the reasonable fees, charges and disbursements of counsel
for the Collateral Agent, incurred by or asserted against the Collateral Agent
arising out of, in connection with, or as a result of, the execution, delivery
or performance of this Agreement or any claim, litigation, investigation or
proceeding relating to any of the foregoing agreement or instrument contemplated
hereby, or to the Collateral, whether or not the Collateral Agent is a party
thereto; provided, that such indemnity shall not, as to the Collateral Agent, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the Collateral Agent.
 
(c)  Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Collateral Agreements.  The
provisions of this Section 7.03 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Indenture
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Indenture Document, or any
investigation made by or on behalf of the Collateral Agent or any other Secured
Party.  All amounts due under this Section 7.03 shall be payable on written
demand therefor.
 
(d)  The Collateral Agent shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement at the request or direction of
the Trustee (on behalf of Holders of a majority in principal amount of the
Notes) or the Holders of a majority in principal amount of the Notes, directly,
unless the Holders of a majority in principal amount of the Notes have offered
to the Collateral Agent security or indemnity satisfactory to the Collateral
Agent against the costs, expenses and liabilities that might be incurred by it
in compliance with such request or direction.
 
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SECTION 7.04.  Successors and Assigns.  Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor, Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.

SECTION 7.05.  Survival of Agreement.  All covenants, agreements,
representations and warranties made by the Indenture Parties in the Indenture
Documents and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Indenture Document
shall be considered to have been relied upon by the Noteholders and the other
Secured Parties at the time made and shall survive the execution and delivery of
the Indenture Documents, regardless of any investigation made by any Noteholder
or other Secured Party or on its behalf at the time of the issuance of the
Notes, and shall continue in full force and effect as long as the principal of
or any accrued interest on the Notes or any fee or any other amount payable
under any Indenture Document is outstanding and unpaid.
 
SECTION 7.06.  Counterparts; Effectiveness; Several Agreement.  This Agreement
may be executed in counterparts, each of which shall constitute an original but
all of which when taken together shall constitute a single contract.  Delivery
of an executed signature page to this Agreement by facsimile or pdf (portable
data format) transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.  This Agreement shall become effective as to any
Indenture Party when a counterpart hereof executed on behalf of such Indenture
Party shall have been delivered to the Collateral Agent and a counterpart hereof
shall have been executed on behalf of the Collateral Agent, and thereafter shall
be binding upon such Indenture Party and the Collateral Agent and their
respective permitted successors and assigns, and shall inure to the benefit of
such Indenture Party, the Collateral Agent and the other Secured Parties and
their respective successors and assigns, except that no Indenture Party shall
have the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void), except as expressly contemplated by this Agreement or the
Indenture.  This Agreement shall be construed as a separate agreement with
respect to each Indenture Party and may be amended, modified, supplemented,
waived or released with respect to any Indenture Party without the approval of
any Indenture Party and without affecting the obligations of any other Indenture
Party hereunder.
 
SECTION 7.07.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.  The parties shall endeavor in good faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
 
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SECTION 7.08.  Governing Law; Jurisdiction; Consent to Service of
Process.  (a)  This Agreement shall be construed in accordance with and governed
by the law of the State of New York.

(b)  Each of the Indenture Parties hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Indenture Document, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court.  Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Agreement or any other
Indenture Document shall affect any right that the Collateral Agent or any
Noteholder may otherwise have to bring any action or proceeding relating to this
Agreement or any other Indenture Document against any Grantor or Guarantor, or
its properties in the courts of any jurisdiction.
 
(c)  Each of the Indenture Parties hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Indenture Document in any court referred to in paragraph (b) of this Section
7.08.  Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
 
(d)  Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 7.01.  Nothing in this Agreement or
any other Indenture Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
 
SECTION 7.09.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER INDENTURE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.09.

 
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SECTION 7.10.  Headings.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
 
SECTION 7.11.  Security Interest Absolute.  All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor and Guarantor hereunder
shall be, subject to the last paragraph of clause (a) of Section 4.01, absolute
and unconditional irrespective of (a) any lack of validity or enforceability of
the Indenture, any other Indenture Document, any agreement with respect to any
of the Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Indenture, any other Indenture
Document or any other agreement or instrument, (c) any exchange, release or
nonperfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Grantor or Guarantor in respect of the Obligations or this Agreement.
 
SECTION 7.12.  Termination or Release.  (a)  This Agreement, the Guarantees made
herein, the Security Interest and all other security interests granted hereby
shall terminate as provided in the Indenture or when all the Obligations have
been indefeasibly paid in full.  In connection with any termination or release
pursuant to this paragraph, the Collateral Agent shall execute and deliver to
any Grantor, at such Grantor’s expense, all documents that such Grantor shall
reasonably request to evidence such termination or release.  Any execution and
delivery of documents pursuant to this Section 7.13 shall be without recourse to
or warranty by the Collateral Agent.
 
(b)  Release of any Subsidiary Party from its obligations hereunder and of the
Security Interest in any Collateral shall be governed by Section 10.06 of the
Indenture.
 
SECTION 7.13.  Additional Subsidiaries.  Each Subsidiary of a Indenture Party
that was not in existence or not a Subsidiary on the date of the Indenture and
is not a Foreign Subsidiary is, unless otherwise provided in the Indenture,
required to enter in this Agreement as a Subsidiary Party upon becoming such a
Subsidiary.  Upon execution and delivery by the Collateral Agent and a
Subsidiary of an instrument in the form of Exhibit II hereto, such Subsidiary
shall become a Subsidiary Party hereunder with the same force and effect as if
originally named as a Subsidiary Party herein.  The execution and delivery of
any such instrument shall not require the consent of any other Indenture Party
hereunder.  The rights and obligations of each Indenture Party hereunder shall
remain in full force and effect notwithstanding the addition of any new
Indenture Party as a party to this Agreement.

 
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SECTION 7.14.  Collateral Agent Appointed Attorney-in-Fact.  Each Grantor hereby
appoints the Collateral Agent the attorney-in-fact of such Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest.  Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent’s name or in the name of such Grantor (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof; (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral; (c) to sign the
name of any Grantor on any invoice or bill of lading relating to any of the
Collateral; (d) to send verifications of accounts receivable to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral; (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral;
(g) to notify, or to require any Grantor to notify, Account Debtors to make
payment directly to the Collateral Agent; and (h) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things necessary to carry
out the purposes of this Agreement, as fully and completely as though the
Collateral Agent were the absolute owner of the Collateral for all purposes;
provided, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby.  The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
 
SECTION 7.15.  Entire Agreement.  In the event that the terms and provisions of
this Agreement conflict with any term or provision contained in the Indenture
Documents, the terms and provisions of the Indenture Documents shall govern and
control.
 
[Signature Page Follows]

 
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
 
WOLVERINE TUBE, INC.
     
By:
/s/  Harold M. Karp  
Name:  Harold M. Karp
 
Title:  President and Chief
Operating Officer       
U.S. BANK NATIONAL
ASSOCIATION, as Collateral
Agent
     
By:
/s/  Paul L. Henderson   
Name: Paul L. Henderson
 
Title: Assistant Vice President
     
TF INVESTOR, INC.
     
By:
/s/  Harold M. Karp   
Name:  Harold M. Karp
 
Title:  President
     
TUBE FORMING, L.P.
By: Wolverine Tube, Inc. as General
Partner
       
By:
/s/  Harold M. Karp     
Name:  Harold M. Karp
   
Title:  President and Chief
Operating Officer      
TUBE FORMING HOLDINGS,
INC.
     
By:
/s/  Harold M. Karp     
Name: Harold M. Karp
   
Title: President

 
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WOLVERINE FINANCE, LLC
   
By:
/s/  Harold M. Karp   
Name:  Harold M. Karp
 
Title:  Chief Manager
   
WOLVERINE PA, LLC
   
By:
/s/  Harold M. Karp   
Name:  Harold M. Karp
 
Title:  President
   
WOLVERINE JOINING
TECHNOLOGIES, LLC
   
By:
/s/  Harold M. Karp   
Name:  Harold M. Karp
 
Title:  President

 
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Schedule I to
the Gaurantee and
Collateral Agreement
 
SUBSIDIARY PARTIES
 
1.
TF Investor, Inc.

2.
Tube Forming, L.P.

3.
Tube Forming Holdings, Inc.

4.
Wolverine Finance, LLC

5.
Wolverine PA, LLC

6.
Wolverine Joining Technologies, LLC

    
 
 

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Schedule II to
the Guarantee and
Collateral Agreement
 
EQUITY INTERESTS
 

 
 

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Schedule III to
the Guarantee and
Collateral Agreement
 
INTELLECTUAL PROPERTY
 
 
 

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Schedule IV to
the Guarantee and
Collateral Agreement

INSURANCE REQUIREMENTS
 
(a)  The Company will, and will cause each Subsidiary Party to, maintain (or
cause to be maintained on its behalf), with financially sound and reputable
insurance companies:
 
               (i)fire, boiler and machinery, and extended coverage insurance,
on a replacement cost basis, with respect to all personal property and
improvements to real property (in each case constituting Collateral), in such
amounts as are customarily maintained by companies in the same or similar
business operating in the same or similar locations;
 
               (ii)commercial general liability insurance against claims for
bodily injury, death or property damage occurring upon, about or in connection
with the use of any properties owned, occupied or controlled by it, providing
coverage on an occurrence basis with a combined single limit of not less than
$1,000,000 and including the broad form CGL endorsement;
 
               (iii)business interruption insurance, insuring against loss of
gross earnings for the agreed upon aggregate amount of not less than $50,000,000
arising from any risks or occurrences required to be covered by insurance
pursuant to clause (i) above; and
 
               (iv)such other insurance as may be required by law.
 
Deductibles or self-insured retention shall not exceed $250,000 for fire, boiler
and machinery and extended coverage policies, $250,000 for commercial general
liability policies or 2 times average daily value plus a 24-hour waiting period
for business interruption policies.
 
(b)  Fire, boiler and machinery and extended coverage policies maintained with
respect to any Collateral shall be endorsed or otherwise amended to include (i)
a Secured Party’s loss payable clause in favor of the Collateral Agent and
providing for losses thereunder to be payable to the Collateral Agent or its
designee, (ii) a provision to the effect that neither any Indenture Party, the
Collateral Agent nor any other party shall be a coinsurer and (iii) such other
provisions as the Collateral Agent may reasonably require from time to time to
protect the interests of the Secured Parties.  Commercial general liability
policies shall be endorsed to name the Collateral Agent as an additional
insured.  Business interruption policies shall name the Collateral Agent as loss
payee.  Each such policy referred to in this paragraph also shall provide that
it shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium except upon not less than 10 days’ prior written notice thereof by the
insurer to the Collateral Agent (giving the Collateral Agent the right to cure
defaults in the payment of premiums) or (ii) for any other reason except upon
not less than 30 days’ prior written notice thereof by the insurer to the
Collateral Agent.  The Company shall deliver to the Collateral Agent, prior to
the cancellation, modification or nonrenewal of any such policy of insurance,
evidence of the renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Collateral Agent) together with evidence
reasonably satisfactory to the Collateral Agent of payment of the premium
therefore at such time payment is made.

 
 

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Exhibit I to
the Guarantee and
Collateral Agreement
 
ABA MODEL FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT
 

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Exhibit II to the
Guarantee and
Collateral Agreement
 
SUPPLEMENT NO. __ dated as of [           ] (this “Supplement”), to the
Guarantee and Collateral Agreement, dated as of April 28, 2009, among WOLVERINE
TUBE, INC., a Delaware corporation (the “Company”), the subsidiaries of the
Company listed on Schedule I thereto (each such subsidiary individually a
“Subsidiary Guarantor” and collectively, the “Subsidiary Guarantors”; the
Subsidiary Guarantors and the Company are referred to collectively herein as the
“Grantors”), and U.S. BANK NATIONAL ASSOCIATION (“U.S. BANK”), as Collateral
Agent (in such capacity, the “Collateral Agent”).
 
A.  Reference is made to the Indenture, dated as of April __, 2009 (as amended,
supplemented or otherwise modified from time to time, the “Indenture”), among
the Company, the Subsidiaries and U.S. BANK, as trustee and collateral agent.
 
B.  Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Indenture and the Security Agreement
referred to therein.
 
C.  The Grantors have entered into the Security Agreement in order to support
the issuance of the Notes.  Section 7.13 of Security Agreement provides that
additional Subsidiaries may become Subsidiary Parties under the Security
Agreement by execution and delivery of an instrument in the form of this
Supplement.  The undersigned Subsidiary (the “New Subsidiary”) is executing this
Supplement in accordance with the requirements of the Indenture to become a
Subsidiary Party under the Security Agreement in order to support the issuance
of the Notes.
 
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
 
SECTION 1.  In accordance with Section 7.13 of the Security Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Party (and accordingly,
becomes a Guarantor and Grantor), Grantor and Guarantor under the Security
Agreement with the same force and effect as if originally named therein as a
Subsidiary Party and the New Subsidiary hereby (a) agrees to all the terms and
provisions of the Security Agreement applicable to it as a Subsidiary Party,
Grantor and Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Grantor and Guarantor thereunder
are true and correct in all material respects on and as of the date hereof.  In
furtherance of the foregoing, the New Subsidiary, as security for the payment
and performance in full of the Obligations (as defined in the Security
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, their successors and
assigns, a security interest in and lien on all of the New Subsidiary’s right,
title and interest in and to the Collateral (as defined in the Security
Agreement) of the New Subsidiary.  Each reference to a “Guarantor” or “Grantor”
in the Security Agreement shall be deemed to include the New Subsidiary.  The
Security Agreement is hereby incorporated herein by reference.

 
 

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SECTION 2.  The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
 
SECTION 3.  This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received a counterpart of this Supplement that bears the signature of the
New Subsidiary and the Collateral Agent has executed a counterpart
hereof.  Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
 
SECTION 4.  The New Subsidiary hereby represents and warrants that (a) set forth
on Schedule I attached hereto is a true and correct schedule of the location of
any and all Collateral of the New Subsidiary and (b) set forth under its
signature hereto, is the true and correct legal name of the New Subsidiary, its
jurisdiction of formation and the location of its chief executive office.
 
SECTION 5.  Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect.
 
SECTION 6.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 7.  In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
 
SECTION 8.  All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Security Agreement.
 
SECTION 9.  The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.
 
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.

 
2

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[NAME OF NEW SUBSIDIARY],
     
By:
     
Name:
   
Title:
         
Legal Name:
   
Jurisdiction of Formation:
   
Location of Chief Executive office:

 

 
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent
 
 
By:
     
Name:
   
Title:

 
3

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Schedule I
to the Supplement No. __ to the
Guarantee and
Collateral Agreement

LOCATION OF COLLATERAL
 
Description
 
Location
           

EQUITY INTERESTS
 
Issuer
 
Number of
Certificate
 
Registered
Owner
 
Number and
Class of
Equity Interests
 
Percentage
of Equity Interests
                                   

DEBT SECURITIES
 
Issuer
 
Principal
Amount
 
Date of Note
 
Maturity Date
                           

INTELLECTUAL PROPERTY

 
 

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