Exhibit 10.2

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (this “Agreement”), dated as of September 14, 2011,
among the Persons listed on the signature pages hereof as “Grantors” and those
additional entities that hereafter become parties hereto by executing the form
of Joinder attached hereto as Annex 1 (each, a “Grantor” and collectively, the
“Grantors”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability
company (“WFCF”), in its capacity as agent for the Lender Group and the Bank
Product Providers (in such capacity, together with its successors and assigns in
such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Credit Agreement”) by and among Supreme Industries, Inc., as parent (“Parent”),
Supreme Indiana Operations, Inc. and certain of its Subsidiaries party thereto
as “Borrowers,” as borrowers (each a “Borrower” and collectively, the
“Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and

 

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

 

WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement
and the other Loan Documents, to induce the Bank Product Providers to enter into
the Bank Product Agreements, and to induce the Lender Group and the Bank Product
Providers to make financial accommodations to Borrowers as provided for in the
Credit Agreement, the other Loan Documents and the Bank Product Agreements,
Grantors have agreed to grant a continuing security interest in and to the
Collateral in order to secure the prompt and complete payment, observance and
performance of, among other things, the Secured Obligations.

 

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

 

1.             Defined Terms. All initially capitalized terms used herein
(including in the preamble and recitals hereof) without definition shall have
the meanings ascribed thereto in the Credit Agreement (including Schedule 1.1
thereto).  Any terms (whether capitalized or lower case) used in this Agreement
that are defined in the Code shall be construed and defined as set forth in the
Code unless otherwise defined herein or in the Credit Agreement; provided,
however, that to the extent that the Code is used to define any term used herein
and if such term is defined differently in different Articles of the Code, the
definition of such term contained in Article 9 of the Code shall govern. In
addition to those terms defined elsewhere in this Agreement, as used in this
Agreement, the following terms shall have the following meanings:

 

(a)         “Account” means an account (as that term is defined in Article 9 of
the Code).

 

(b)         “Account Debtor” means an account debtor (as that term is defined in
the Code).

 

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(c)         “Agent” has the meaning specified therefor in the preamble to this
Agreement.

 

(d)         “Agent’s Lien” has the meaning specified therefor in the Credit
Agreement.

 

(e)         “Agreement” has the meaning specified therefor in the preamble to
this Agreement.

 

(f)          “Bank Product Obligations” has the meaning specified therefor in
the Credit Agreement.

 

(g)         “Bank Product Provider” has the meaning specified therefor in the
Credit Agreement.

 

(h)         “Books” means books and records (including each Grantor’s Records
indicating, summarizing, or evidencing such Grantor’s assets (including the
Collateral) or liabilities, each Grantor’s Records relating to such Grantor’s
business operations or financial condition, and each Grantor’s goods or General
Intangibles related to such information).

 

(i)          “Borrower” and “Borrowers” have the respective meanings specified
therefor in the recitals to this Agreement.

 

(j)          “Cash Equivalents” has the meaning specified therefor in the Credit
Agreement.

 

(k)         “Chattel Paper” means chattel paper (as that term is defined in the
Code), and includes tangible chattel paper and electronic chattel paper.

 

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

 

(m)        “Collateral” has the meaning specified therefor in Section 2.1.

 

(n)         “Collections” has the meaning specified therefor in the Credit
Agreement.

 

(o)         “Commercial Tort Claims” means commercial tort claims (as that term
is defined in the Code), and includes those commercial tort claims listed on
Schedule 1.

 

(p)         “Copyrights” means any and all rights in any works of authorship,
including (i) copyrights and moral rights, (ii) copyright registrations and
recordings thereof and all applications in connection therewith including those
listed on Schedule 2, (iii) income, license fees, royalties, damages, and
payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and
damages and payments for past, present, or future infringements thereof,
(iv) the right to sue for past, present, and future infringements thereof, and
(v) all of each Grantor’s rights corresponding thereto throughout the world.

 

(q)         “Copyright Security Agreement” means each Copyright Security
Agreement executed and delivered by Grantors, or any of them, and Agent, in
substantially the form of Exhibit A.

 

(r)          “Credit Agreement” has the meaning specified therefor in the
recitals to this Agreement.

 

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

 

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

 

(u)         “Event of Default” has the meaning specified therefor in the Credit
Agreement.

 

(v)         “Fixtures” means fixtures (as that term is defined in the Code).

 

(w)        “General Intangibles” means general intangibles (as that term is
defined in the Code), and includes payment intangibles, contract rights, rights
to payment, rights under Hedge Agreements (including the right to receive
payment on account of the termination (voluntarily or involuntarily) of any such
Hedge Agreements), rights arising under common law, statutes, or regulations,
choses or things in action, goodwill, Intellectual Property, Intellectual
Property Licenses, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, including Intellectual Property Licenses,
infringement claims, pension plan refunds, pension plan refund claims, insurance
premium rebates, tax refunds, and tax refund claims, interests in a partnership
or limited liability company which do not constitute a security under Article 8
of the Code, and any other personal property other than Commercial Tort Claims,
money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related
Property, Negotiable Collateral, and oil, gas, or other minerals before
extraction.

 

(x)          “Grantor” and “Grantors” have the respective meanings specified
therefor in the preamble to this Agreement.

 

(y)         “Guaranty” has the meaning specified therefor in the Credit
Agreement.

 

(z)          “Insolvency Proceeding” has the meaning specified therefor in the
Credit Agreement.

 

(aa)       “Intellectual Property” means any and all Patents, Copyrights,
Trademarks, trade secrets, know-how, inventions (whether or not patentable),
algorithms, software programs (including source code and object code),
processes, product designs, industrial designs, blueprints, drawings, data,
customer lists, URLs and domain names, specifications, documentations, reports,
catalogs, literature, and any other forms of technology or proprietary
information of any kind, including all rights therein and all applications for
registration or registrations thereof.

 

(bb)       “Intellectual Property Licenses” means, with respect to any Person
(the “Specified Party”), (i) any licenses or other similar rights provided to
the Specified Party in or with respect to Intellectual Property owned or
controlled by any other Person, and (ii) any licenses or other similar rights
provided to any other Person in or with respect to Intellectual Property owned
or controlled by the Specified Party, in each case, including (A) any software
license agreements (other than license agreements for commercially available
off-the-shelf software that is generally available to the public which have been
licensed to a Grantor pursuant to end-user licenses), (B) the license agreements
listed on Schedule 3, and (C) the right to use any of the licenses or other
similar rights described in this definition in connection with the enforcement
of the Lender Group’s rights under the Loan Documents.

 

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

 

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

 

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(ee)       “Joinder” means each Joinder to this Agreement executed and delivered
by Agent and each of the other parties listed on the signature pages thereto, in
substantially the form of Annex 1.

 

(ff)         “Lender Group” has the meaning specified therefor in the Credit
Agreement.

 

(gg)       “Lender” and “Lenders” have the respective meanings specified
therefor in the recitals to this Agreement.

 

(hh)       “Loan Document” has the meaning specified therefor in the Credit
Agreement.

 

(ii)         “Negotiable Collateral” means letters of credit, letter-of-credit
rights, instruments, promissory notes, drafts and documents (as each such term
is defined in the Code).

 

(jj)         “Obligations” has the meaning specified therefor in the Credit
Agreement.

 

(kk)       “Parent” has the meaning specified therefor in the recitals to this
Agreement.

 

(ll)         “Patents” means patents and patent applications, including (i) the
patents and patent applications listed on Schedule 4, (ii) all continuations,
divisionals, continuations-in-part, re-examinations, reissues, and renewals
thereof and improvements thereon, (iii) all income, royalties, damages and
payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and
damages and payments for past, present, or future infringements thereof,
(iv) the right to sue for past, present, and future infringements thereof, and
(v) all of each Grantor’s rights corresponding thereto throughout the world.

 

(mm)     “Patent Security Agreement” means each Patent Security Agreement
executed and delivered by Grantors, or any of them, and Agent, in substantially
the form of Exhibit B.

 

(nn)       “Permitted Liens” has the meaning specified therefor in the Credit
Agreement.

 

(oo)       “Person” has the meaning specified therefor in the Credit Agreement.

 

(pp)       “Pledged Companies” means each Person listed on Schedule 6 as a
“Pledged Company”, together with each other Person, all or a portion of whose
Stock is acquired or otherwise owned by a Grantor after the Closing Date (other
than any Person whose Stock is expressly exempt from being pledged pursuant to
Section 2.2 hereof).

 

(qq)       “Pledged Interests” means all of each Grantor’s right, title and
interest in and to all of the Stock now owned or hereafter acquired by such
Grantor (other than Stock expressly exempt from being pledged pursuant to
Section 2.2 hereof), regardless of class or designation, including in each of
the Pledged Companies, and all substitutions therefor and replacements thereof,
all proceeds thereof and all rights relating thereto, also including any
certificates representing the Stock, the right to receive any certificates
representing any of the Stock, all warrants, options, share appreciation rights
and other rights, contractual or otherwise, in respect thereof and the right to
receive all dividends, distributions of income, profits, surplus, or other
compensation by way of income or liquidating distributions, in cash or in kind,
and all cash, instruments, and other property from time to time received,
receivable, or otherwise distributed in respect of or in addition to, in
substitution of, on account of, or in exchange for any or all of the foregoing.

 

(rr)         “Pledged Interests Addendum” means a Pledged Interests Addendum
substantially in the form of Exhibit C.

 

(ss)       “Pledged Notes” has the meaning specified therefor in Section 5(h).

 

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

 

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

 

(vv)       “Proceeds” has the meaning specified therefor in Section 2.1(m).

 

(ww)     “PTO” means the United States Patent and Trademark Office.

 

(xx)        “Real Property” means any estates or interests in real property now
owned or hereafter acquired by any Grantor or any Subsidiary of any Grantor and
the improvements thereto.

 

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

 

(zz)        “Secured Obligations” means each and all of the following: (a) all
of the present and future obligations of each of the Grantors arising from, or
owing under or pursuant to, this Agreement, the Credit Agreement, or any of the
other Loan Documents (including any Guaranty), (b) all Bank Product Obligations,
and (c) all other Obligations of Borrowers (including, in the case of each of
clauses (a), (b) and (c), reasonable attorneys fees and expenses and any
interest, fees, or expenses that accrue after the filing of an Insolvency
Proceeding, regardless of whether allowed or allowable in whole or in part as a
claim in any Insolvency Proceeding).

 

(aaa)     “Securities Account” means a securities account (as that term is
defined in the Code).

 

(bbb)    “Security Interest” has the meaning specified therefor in Section 2.1.

 

(ccc)     “Stock” has the meaning specified therefor in the Credit Agreement.

 

(ddd)    “Supporting Obligations” means supporting obligations (as such term is
defined in the Code), and includes letters of credit and guaranties issued in
support of Accounts, Chattel Paper, documents, General Intangibles, instruments
or Investment Related Property.

 

(eee)     “Trademarks” means any and all trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks and
service mark applications, including (i) the trade names, registered trademarks,
trademark applications, registered service marks and service mark applications
listed on Schedule 5, (ii) all renewals thereof, (iii) all income, royalties,
damages and payments now and hereafter due or payable under and with respect
thereto, including payments under all licenses entered into in connection
therewith and damages and payments for past or future infringements or dilutions
thereof, (iv) the right to sue for past, present and future infringements and
dilutions thereof, (v) the goodwill of each Grantor’s business symbolized by the
foregoing or connected therewith, and (vi) all of each Grantor’s rights
corresponding thereto throughout the world.

 

(fff)       “Trademark Security Agreement” means each Trademark Security
Agreement executed and delivered by Grantors, or any of them, and Agent, in
substantially the form of Exhibit D.

 

(ggg)    “URL” means “uniform resource locator,” an internet web address.

 

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2.             Grant of Security.

 

2.1.  Grant. Each Grantor hereby unconditionally grants, assigns, and pledges to
Agent, for the benefit of each member of the Lender Group and each of the Bank
Product Providers, to secure the Secured Obligations, a continuing security
interest (hereinafter referred to as the “Security Interest”) in all of such
Grantor’s right, title, and interest in and to the following, whether now owned
or hereafter acquired or arising and wherever located (the “Collateral”):

 

(a)         all of such Grantor’s Accounts;

 

(b)         all of such Grantor’s Books;

 

(c)         all of such Grantor’s Chattel Paper;

 

(d)         all of such Grantor’s Deposit Accounts;

 

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

 

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

 

(g)         all of such Grantor’s Inventory;

 

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

 

(i)          all of such Grantor’s Negotiable Collateral;

 

(j)          all of such Grantor’s Supporting Obligations;

 

(k)         all of such Grantor’s Commercial Tort Claims;

 

(l)          all of such Grantor’s money, Cash Equivalents, or other assets of
such Grantor that now or hereafter come into the possession, custody, or control
of Agent (or its agent or designee) or any other member of the Lender Group; and

 

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

 

2.2   Exclusions. Notwithstanding anything contained in this Agreement to the
contrary, the term “Collateral” shall not include: (a) voting Stock of any CFC,
solely to the extent that (i) such Stock represents more than 65% of the
outstanding voting Stock of such CFC, and (ii) pledging or hypothecating more
than 65% of the total outstanding voting Stock of such CFC would result in
material adverse tax consequences; or

 

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(b) any rights or interest in any contract, lease, permit, license, or license
agreement covering real or personal property of any Grantor if under the terms
of such contract, lease, permit, license, or license agreement, or applicable
law with respect thereto, the grant of a security interest or lien therein is
prohibited as a matter of law or under the terms of such contract, lease,
permit, license, or license agreement and such prohibition or restriction has
not been waived or the consent of the other party to such contract, lease,
permit, license, or license agreement has not been obtained (provided, that,
(i) the foregoing exclusions of this clause (b) shall in no way be construed
(A) to apply to the extent that any described prohibition or restriction is
unenforceable under Section 9-406, 9-407, 9-408, or 9-409 of the Code or other
applicable law, or (B) to apply to the extent that any consent or waiver has
been obtained that would permit Agent’s security interest or lien
notwithstanding the prohibition or restriction on the pledge of such contract,
lease, permit, license, or license agreement and (ii) the foregoing exclusions
of clauses (a) and (b) shall in no way be construed to limit, impair, or
otherwise affect any of Agent’s, any other member of the Lender Group’s or any
Bank Product Provider’s continuing security interests in and liens upon any
rights or interests of any Grantor in or to (A) monies due or to become due
under or in connection with any described contract, lease, permit, license,
license agreement, or Stock (including any Accounts or Stock), or (B) any
proceeds from the sale, license, lease, or other dispositions of any such
contract, lease, permit, license, license agreement, or Stock); or (c) any
United States intent-to-use trademark applications to the extent that, and
solely during the period in which, the grant of a security interest therein
would impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law, provided that upon submission and
acceptance by the PTO of an amendment to allege use pursuant to 15 U.S.C.
Section 1060(a) (or any successor provision), such intent-to-use trademark
application shall be considered Collateral.

 

3.             Security for Secured Obligations.  The Security Interest created
hereby secures the payment and performance of the Secured Obligations, whether
now existing or arising hereafter.  Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Agent, the Lender Group, the Bank Product Providers or any of them, but for
the fact that they are unenforceable or not allowable (in whole or in part) as a
claim in an Insolvency Proceeding involving any Grantor due to the existence of
such Insolvency Proceeding.

 

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

 

5.             Representations and Warranties.  Each Grantor hereby represents
and warrants to Agent, for the benefit of the Lender Group and the Bank Product
Providers, which representations and warranties shall be true, correct, and
complete, in all material respects (except that such materiality qualifier shall
not be

 

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applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the Closing Date, and shall
be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the date of the making of each Advance (or other extension of
credit) made thereafter, as though made on and as of the date of such Advance
(or other extension of credit) (except to the extent that such representations
and warranties relate solely to an earlier date, in which case such
representations and warranties shall be true, correct and complete in all
material respects as of such earlier date) and such representations and
warranties shall survive the execution and delivery of this Agreement:

 

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

 

(b)         Schedule 7 sets forth all Real Property owned by such Grantor as of
the Closing Date.

 

(c)         As of the Closing Date: (i) Schedule 2 provides a complete and
correct list of all registered Copyrights owned by such Grantor, all
applications for registration of Copyrights owned by such Grantor, and all other
Copyrights owned by such Grantor and material to the conduct of the business of
such Grantor; (ii) Schedule 3 provides a complete and correct list of all
Intellectual Property Licenses entered into by such Grantor pursuant to which
(A) such Grantor has provided any license or other rights in Intellectual
Property owned or controlled by such Grantor to any other Person other than
non-exclusive software licenses granted in the ordinary course of business or
(B) any Person has granted to such Grantor any license or other rights in
Intellectual Property owned or controlled by such Person that is material to the
business of such Grantor, including any Intellectual Property that is
incorporated in any Inventory, software, or other product marketed, sold,
licensed, or distributed by such Grantor; (iii) Schedule 4 provides a complete
and correct list of all Patents owned by such Grantor and all applications for
Patents owned by such Grantor; and (iv) Schedule 5 provides a complete and
correct list of all registered Trademarks owned by such Grantor, all
applications for registration of Trademarks owned by such Grantor, and all other
Trademarks owned by such Grantor and material to the conduct of the business of
such Grantor.

 

(d)         With respect to Intellectual Property:

 

(i)              (A) such Grantor owns exclusively or holds licenses in all
Intellectual Property that is necessary to the conduct of its business, and
(B) all employees and contractors of such Grantor who were involved in the
creation or development of any Intellectual Property for such Grantor that is
necessary to the business of such Grantor have signed agreements containing
assignment of Intellectual Property rights to such Grantor and obligations of
confidentiality;

 

(ii)             to such Grantor’s knowledge, no Person has infringed or
misappropriated or is currently infringing or misappropriating any Intellectual
Property rights owned by such Grantor, in each case, that either individually or
in the aggregate could reasonably be expected to result in a Material Adverse
Change;

 

(iii)            (A) to such Grantor’s knowledge, (1) such Grantor has never
infringed or misappropriated and is not currently infringing or misappropriating
any Intellectual Property rights of any Person, and (2) no product manufactured,
used, distributed, licensed, or sold by or service provided by such Grantor has
ever infringed or misappropriated or is currently infringing or misappropriating
any Intellectual Property rights of any Person, in each case, except where such
infringement either individually or in the aggregate could not reasonably be
expected to result in a Material Adverse Change, and (B) there are no pending,
or to such Grantor’s knowledge, threatened infringement or misappropriation
claims or proceedings pending against such Grantor, and such Grantor has not
received any notice or other communication of any actual or alleged infringement
or misappropriation of any Intellectual Property rights of any Person, in each

 

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case, except where such infringement either individually or in the aggregate
could not reasonably be expected to result in a Material Adverse Change;

 

(iv)            to such Grantor’s knowledge, all registered Copyrights,
registered Trademarks, and issued Patents that are owned by such Grantor and
necessary in to the conduct of its business are valid, subsisting and
enforceable and in compliance with all legal requirements, filings, and payments
and other actions that are required to maintain such Intellectual Property in
full force and effect; and

 

(v)             such Grantor has taken reasonable steps to maintain the
confidentiality of and otherwise protect and enforce its rights in all trade
secrets owned by such Grantor that are necessary in the business of such
Grantor.

 

(e)         This Agreement creates a valid security interest in the Collateral
of such Grantor, to the extent a security interest therein can be created under
the Code, securing the payment of the Secured Obligations.  Except to the extent
a security interest in the Collateral cannot be perfected by the filing of a
financing statement under the Code, all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or
will have been taken upon the filing of financing statements listing each
applicable Grantor, as a debtor, and Agent, as secured party, in the
jurisdictions listed next to such Grantor’s name on Schedule 8.  Upon the making
of such filings, Agent shall have a first priority perfected security interest
in the Collateral of such Grantor to the extent such security interest can be
perfected by the filing of a financing statement.  Upon filing of the Copyright
Security Agreement with the United States Copyright Office, filing of the Patent
Security Agreement and the Trademark Security Agreement with the PTO, and the
filing of appropriate financing statements in the jurisdictions listed on
Schedule 8, all action necessary or desirable to protect and perfect the
Security Interest in and to such Grantor’s Patents, Trademarks, or Copyrights
has been taken and such perfected Security Interest is enforceable as such as
against any and all creditors of and purchasers from such Grantor.  All action
by such Grantor necessary to protect and perfect such security interest on each
item of Collateral has been duly taken.

 

(f)          With respect to Investment Related Property: (i) except for the
Security Interest created hereby, such Grantor is and will at all times be the
sole holder of record and the legal and beneficial owner, free and clear of all
Liens other than Permitted Liens, of the Pledged Interests indicated on Schedule
6 as being owned by such Grantor and, when acquired by such Grantor, any Pledged
Interests acquired after the Closing Date; (ii) all of the Pledged Interests are
duly authorized, validly issued, fully paid and nonassessable and the Pledged
Interests constitute or will constitute the percentage of the issued and
outstanding Stock of the Pledged Companies of such Grantor identified on
Schedule 6 as supplemented or modified by any Pledged Interests Addendum or any
Joinder to this Agreement; (iii) such Grantor has the right and requisite
authority to pledge, the Investment Related Property pledged by such Grantor to
Agent as provided herein; (iv) all actions necessary or desirable to perfect and
establish the first priority of, or otherwise protect, Agent’s Liens in the
Investment Related Property, and the proceeds thereof, have been duly taken,
upon (A) the execution and delivery of this Agreement; (B) the taking of
possession by Agent (or its agent or designee) of any certificates representing
the Pledged Interests, together with undated powers (or other documents of
transfer acceptable to Agent) endorsed in blank by the applicable Grantor;
(C) the filing of financing statements in the applicable jurisdiction set forth
on Schedule 8 for such Grantor with respect to the Pledged Interests of such
Grantor that are not represented by certificates, and (D) with respect to any
Securities Accounts, the delivery of Control Agreements with respect thereto;
and (v) such Grantor has delivered to and deposited with Agent all certificates
representing the Pledged Interests owned by such Grantor to the extent such
Pledged Interests are represented by certificates, and undated powers (or other
documents of transfer acceptable to Agent) endorsed in blank with respect to
such certificates. None of the Pledged Interests owned or held by such Grantor
has been issued or transferred in violation of any securities registration,
securities disclosure, or similar laws of any jurisdiction to which such
issuance or transfer may be subject.

 

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(g)         No consent, approval, authorization, or other order or other action
by, and no notice to or filing with, any Governmental Authority or any other
Person is required (i) for the grant of a Security Interest by such Grantor in
and to the Collateral pursuant to this Agreement or for the execution, delivery,
or performance of this Agreement by such Grantor, or (ii) for the exercise by
Agent of the voting or other rights provided for in this Agreement with respect
to the Investment Related Property or the remedies in respect of the Collateral
pursuant to this Agreement, except as may be required in connection with such
disposition of Investment Related Property by laws affecting the offering and
sale of securities generally.  No Intellectual Property License of such Grantor
that is necessary to the conduct of such Grantor’s business requires any consent
of any other Person in order for such Grantor to grant the security interest
granted hereunder in such Grantor’s right, title or interest in or to such
Intellectual Property License.

 

(h)         There is no default, breach, violation, or event of acceleration
existing under any promissory note (as defined in the Code) constituting
Collateral and pledged hereunder (each a “Pledged Note”) and no event has
occurred or circumstance exists which, with the passage of time or the giving of
notice, or both, would constitute a default, breach, violation, or event of
acceleration under any Pledged Note.  To the extent such Grantor is an obligee
under a Pledged Note, such Grantor has not waived any default, breach,
violation, or event of acceleration under such Pledged Note.

 

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

 

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

 

(a)         Possession of Collateral.  In the event that any Collateral,
including Proceeds, is evidenced by or consists of Negotiable
Collateral, Investment Related Property, or Chattel Paper, in each case, having
an aggregate value or face amount of $250,000 or more for all such Negotiable
Collateral, Investment Related Property, or Chattel Paper, the Grantors shall
promptly (and in any event within five (5) Business Days after receipt thereof),
notify Agent thereof, and if and to the extent that perfection or priority of
Agent’s Security Interest is dependent on or enhanced by possession, the
applicable Grantor, promptly (and in any event within five (5) Business Days)
after request by Agent, shall execute such other documents and instruments as
shall be reasonably requested by Agent or, if applicable, endorse and deliver
physical possession of such Negotiable Collateral, Investment Related Property,
or Chattel Paper to Agent, together with such undated powers (or other relevant
document of transfer acceptable to Agent) endorsed in blank as shall be
reasonably requested by Agent, and shall do such other acts or things deemed
necessary or desirable by Agent to protect Agent’s Security Interest therein;

 

(b)         Chattel Paper.

 

(i)              Promptly (and in any event within five (5) Business Days) after
request by Agent, each Grantor shall take all steps reasonably necessary to
grant Agent control of all electronic Chattel Paper in accordance with the Code
and all “transferable records” as that term is defined in Section 16 of the
Uniform Electronic Transaction Act and Section 201 of the federal Electronic
Signatures in Global and National Commerce Act as in effect in any relevant
jurisdiction, to the extent that the aggregate value or face amount of such
electronic Chattel Paper equals or exceeds $250,000;

 

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

 

(c)         Control Agreements.

 

(i)              Except to the extent otherwise excused by the Credit Agreement,
each Grantor shall obtain an authenticated Control Agreement (which may include
a Blocked Account Agreement), from each bank maintaining a Deposit Account for
such Grantor;

 

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

 

(iii)            Except to the extent otherwise excused by the Credit Agreement,
each Grantor shall obtain an authenticated Control Agreement with respect to all
of such Grantor’s investment property;

 

(d)         Letter-of-Credit Rights.  If the Grantors (or any of them) are or
become the beneficiary of letters of credit having a face amount or value of
$250,000 or more in the aggregate, then the applicable Grantor or Grantors shall
promptly (and in any event within five (5) Business Days after becoming a
beneficiary), notify Agent thereof and, promptly (and in any event within five
(5) Business Days) after request by Agent, enter into a tri-party agreement with
Agent and the issuer or confirming bank with respect to letter-of-credit rights
assigning such letter-of-credit rights to Agent and directing all payments
thereunder to Agent’s Account, all in form and substance reasonably satisfactory
to Agent;

 

(e)         Commercial Tort Claims.  If the Grantors (or any of them) obtain
Commercial Tort Claims having a value, or involving an asserted claim, in the
amount of $250,000 or more in the aggregate for all Commercial Tort Claims, then
the  applicable Grantor or Grantors shall promptly (and in any event within
five (5) Business Days of obtaining such Commercial Tort Claim), notify Agent
upon incurring or otherwise obtaining such Commercial Tort Claims and, promptly
(and in any event within five (5) Business Days) after request by Agent, amend
Schedule 1 to describe such Commercial Tort Claims in a manner that reasonably
identifies such Commercial Tort Claims and which is otherwise reasonably
satisfactory to Agent, and hereby authorizes the filing of additional financing
statements or amendments to existing financing statements describing such
Commercial Tort Claims, and agrees to do such other acts or things deemed
necessary or desirable by Agent to give Agent a first priority, perfected
security interest in any such Commercial Tort Claim;

 

(f)          [Intentionally Omitted];

 

(g)         Intellectual Property.

 

(i)              Upon the request of Agent, in order to facilitate filings with
the United States Patent and Trademark Office and the United States Copyright
Office, each Grantor that holds Patents, Trademarks, or Copyrights shall execute
and deliver to Agent one or more Copyright Security Agreements, Trademark
Security Agreements, or Patent Security Agreements, as applicable, to further
evidence Agent’s Lien on such Grantor’s Patents, Trademarks, or Copyrights, and
the General Intangibles of such Grantor relating thereto or represented thereby;

 

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(ii)             Each Grantor shall have the duty, with respect to Intellectual
Property that is necessary in the conduct of such Grantor’s business, to protect
and diligently enforce and defend at such Grantor’s expense its Intellectual
Property, including (A) to diligently enforce and defend, including promptly
suing for infringement, misappropriation, or dilution and to recover any and all
damages for such infringement, misappropriation, or dilution, and filing for
opposition, interference, and cancellation against conflicting Intellectual
Property rights of any Person, (B) to prosecute diligently any trademark
application or service mark application that is part of the Trademarks pending
as of the date hereof or hereafter until the termination of this Agreement,
(C) to prosecute diligently any patent application that is part of the Patents
pending as of the date hereof or hereafter until the termination of this
Agreement, (D) to take all reasonable and necessary action to preserve and
maintain all of such Grantor’s Trademarks, Patents, Copyrights, Intellectual
Property Licenses, and its rights therein, including paying all maintenance fees
and filing of applications for renewal, affidavits of use, and affidavits of
noncontestability, and (E) to require all employees, consultants, and
contractors of each Grantor who were involved in the creation or development of
such Intellectual Property to sign agreements containing assignment of
Intellectual Property rights and obligations of confidentiality.  Each Grantor
further agrees not to abandon any Intellectual Property or Intellectual Property
License that is necessary in the conduct of such Grantor’s business.  Each
Grantor hereby agrees to take the steps described in this Section 6(g)(ii) with
respect to all new or acquired Intellectual Property to which it or any of its
Subsidiaries is now or later becomes entitled that is necessary in the conduct
of such Grantor’s business;

 

(iii)            Each Grantor acknowledges and agrees that the Lender Group
shall have no duties with respect to any Intellectual Property or Intellectual
Property Licenses of any Grantor.  Without limiting the generality of this
Section 6(g)(iii), each Grantor acknowledges and agrees that no member of the
Lender Group shall be under any obligation to take any steps necessary to
preserve rights in the Collateral consisting of Intellectual Property or
Intellectual Property Licenses against any other Person, but any member of the
Lender Group may do so at its option from and after the occurrence and during
the continuance of an Event of Default, and all expenses incurred in connection
therewith (including reasonable fees and expenses of attorneys and other
professionals) shall be for the sole account of Borrowers and shall be
chargeable to the Loan Account;

 

(iv)            Each Grantor that holds Patents, Trademarks, or Copyrights shall
promptly file an application with the United States Copyright Office for any
Copyright that has not been registered with the United States Copyright Office
if such Copyright is necessary in connection with the conduct of such Grantor’s
business.  Any expenses incurred in connection with the foregoing shall be borne
by the Grantors;

 

(v)             On each monthly reporting date (no later than the 15th day of
each month) pursuant to Section 5.2 of the Credit Agreement, each Grantor shall
provide Agent with a written report of all new Copyrights, Patents or Trademarks
that are registered or the subject of pending applications for registrations,
and of all Intellectual Property Licenses that are material to the conduct of
such Grantor’s business, in each case, which were acquired, registered, or for
which applications for registration were filed by any Grantor during the prior
period and any statement of use or amendment to allege use with respect to
intent-to-use trademark applications.  In the case of such registrations or
applications therefor, which were acquired by any Grantor, each such Grantor
shall file the necessary documents with the appropriate Governmental Authority
identifying the applicable Grantor as the owner (or as a co-owner thereof, if
such is the case) of such Intellectual Property.  In each of the foregoing
cases, the applicable Grantor shall promptly cause to be prepared, executed, and
delivered to Agent supplemental schedules to the applicable Loan Documents to
identify such Copyright, Patent and Trademark registrations and applications
therefor (with the exception of Trademark applications filed on an intent-to-use
basis for which no statement of use or amendment to allege use has been filed)
and Intellectual Property Licenses as being subject to the security interests
created thereunder;

 

(vi)            [Intentionally Omitted];

 

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(vii)           Each Grantor shall take reasonable steps to maintain the
confidentiality of, and otherwise protect and enforce its rights in, the
Intellectual Property that is necessary in the conduct of such Grantor’s
business, including, as applicable (A) protecting the secrecy and
confidentiality of its confidential information and trade secrets by having and
enforcing a policy requiring all current employees, consultants, licensees,
vendors and contractors with access to such information to execute appropriate
confidentiality agreements; (B) taking actions reasonably necessary to ensure
that no trade secret falls into the public domain; and (C) protecting the
secrecy and confidentiality of the source code of all software programs and
applications of which it is the owner or licensee by having and enforcing a
policy requiring any licensees (or sublicensees) of such source code to enter
into license agreements with commercially reasonable use and non-disclosure
restrictions; and

 

(viii)          No Grantor shall enter into any Intellectual Property License to
receive any license or rights in any Intellectual Property of any other Person
unless such Grantor has used commercially reasonable efforts to permit the
assignment of or grant of a security interest in such Intellectual Property
License (and all rights of Grantor thereunder) to Agent (and any transferees of
Agent);

 

(h)         Investment Related Property.

 

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

 

(ii)             Upon the occurrence and during the continuance of an Event of
Default, following the request of Agent, all sums of money and property paid or
distributed in respect of the Investment Related Property that are received by
any Grantor shall be held by the Grantors in trust for the benefit of Agent
segregated from such Grantor’s other property, and such Grantor shall deliver it
forthwith to Agent in the exact form received;

 

(iii)            Each Grantor shall promptly deliver to Agent a copy of each
material notice or other material communication received by it in respect of any
Pledged Interests;

 

(iv)            No Grantor shall make or consent to any amendment or other
modification or waiver with respect to any Pledged Interests, Pledged Operating
Agreement, or Pledged Partnership Agreement, or enter into any agreement or
permit to exist any restriction with respect to any Pledged Interests if the
same is prohibited pursuant to the Loan Documents;

 

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

 

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

 

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(i)          Real Property; Fixtures.  Each Grantor covenants and agrees that
upon the acquisition of any fee interest in Real Property it will promptly (and
in any event within five (5) Business Days of acquisition) notify Agent of the
acquisition of such Real Property and will grant to Agent, for the benefit of
the Lender Group and the Bank Product Providers, a first priority Mortgage on
each fee interest in Real Property now or hereafter owned by such Grantor and
shall deliver such Additional Documents as Agent may reasonably request
(including Mortgage Policies, other title insurance, appraisals, a phase-I
environmental report and a real estate survey, financing statements, fixture
filings, one or more opinions of counsel and any other Additional Documents),
all in form and substance reasonably satisfactory to Agent, in connection with
the grant of each such Mortgage as Agent shall request in its Permitted
Discretion, and such Grantor shall pay all recording costs, intangible taxes and
other fees and costs (including reasonable attorneys fees and expenses) incurred
in connection therewith.  Each Grantor acknowledges and agrees that, to the
extent permitted by applicable law, all of the Collateral shall remain personal
property regardless of the manner of its attachment or affixation to any Real
Property;

 

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

 

(k)         Blocked Accounts.  Each Grantor shall comply with Section 5.18 of
the Credit Agreement as though fully set forth in this Agreement, mutatis
mutandis; and

 

(l)          Pledged Notes.  Grantors (i) without the prior written consent of
Agent, will not (A) waive or release any obligation of any Person that is
obligated under any of the Pledged Notes, (B) take or omit to take any action or
knowingly suffer or permit any action to be omitted or taken, the taking or
omission of which would result in any right of offset against sums payable under
the Pledged Notes, or (C) other than Permitted Dispositions, assign or surrender
their rights and interests under any of the Pledged Notes or terminate, cancel,
modify, change, supplement or amend the Pledged Notes, and (ii) shall provide to
Agent copies of all material written notices (including notices of default)
given or received with respect to the Pledged Notes promptly after giving or
receiving such notice.

 

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

 

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

 

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

 

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8.             Further Assurances.

 

(a)         Each Grantor agrees that from time to time, at its own expense, such
Grantor will promptly execute and deliver all further instruments and documents,
and take all further action, that Agent may reasonably request, in order to
perfect and protect the Security Interest granted hereby, to create, perfect or
protect the Security Interest purported to be granted hereby or to enable Agent
to exercise and enforce its rights and remedies hereunder with respect to any of
the Collateral.

 

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

 

(c)         Each Grantor authorizes Agent at any time and from time to time to
file, transmit, or communicate, as applicable, financing statements and
amendments (i) describing the Collateral as “all personal property of debtor” or
“all assets of debtor” or words of similar effect, (ii) describing the
Collateral as being of equal or lesser scope or with greater detail, or
(iii) that contain any information required by part 5 of Article 9 of the Code
for the sufficiency or filing office acceptance.  Each Grantor also hereby
ratifies any and all financing statements or amendments previously filed by
Agent in any jurisdiction.

 

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

 

9.             Agent’s Right to Perform Contracts, Exercise Rights, etc.  Upon
the occurrence and during the continuance of an Event of Default, Agent (or its
designee) (a) may proceed to perform any and all of the obligations of any
Grantor contained in any contract, lease, or other agreement and exercise any
and all rights of any Grantor therein contained as fully as such Grantor itself
could, (b) shall have the right to use any Grantor’s rights under Intellectual
Property Licenses in connection with the enforcement of Agent’s rights
hereunder, including the right to prepare for sale and sell any and all
Inventory and Equipment now or hereafter owned by any Grantor and now or
hereafter covered by such licenses, and (c) shall have the right to request that
any Stock that is pledged hereunder be registered in the name of Agent or any of
its nominees.

 

10.           Agent Appointed Attorney-in-Fact.

 

(a)         Each Grantor hereby irrevocably appoints Agent its attorney-in-fact,
with full authority in the place and stead of such Grantor and in the name of
such Grantor or otherwise, at such time as an Event of Default has occurred and
is continuing under the Credit Agreement, to take any action and to execute any
instrument which Agent may reasonably deem necessary or advisable to accomplish
the purposes of this Agreement, including:

 

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

 

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

 

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

 

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

 

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

 

(vi)            to use any Intellectual Property or Intellectual Property
Licenses of such Grantor, including but not limited to any labels, Patents,
Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, or
advertising matter, in preparing for sale, advertising for sale, or selling
Inventory or other Collateral and to collect any amounts due under Accounts,
contracts or Negotiable Collateral of such Grantor; and

 

(vii)           Agent, on behalf of the Lender Group or the Bank Product
Providers, shall have the right, but shall not be obligated, to bring suit in
its own name to enforce the Intellectual Property and Intellectual Property
Licenses and, if Agent shall commence any such suit, the appropriate Grantor
shall, at the request of Agent, do any and all lawful acts and execute any and
all proper documents reasonably required by Agent in aid of such enforcement.

 

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

 

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

 

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

 

13.           Collection of Accounts, General Intangibles and Negotiable
Collateral.  At any time upon the occurrence and during the continuance of an
Event of Default, Agent or Agent’s designee may (a) notify Account Debtors of
any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable
Collateral of such Grantor have been assigned to Agent, for the benefit of the
Lender Group and the Bank Product Providers, or that Agent has a security
interest therein, and (b) collect the Accounts, General Intangibles and
Negotiable Collateral of any Grantor directly, and any collection costs and
expenses shall constitute part of such Grantor’s Secured Obligations under the
Loan Documents.

 

14.           Disposition of Pledged Interests by Agent.  None of the Pledged
Interests existing as of the date of this Agreement are, and none of the Pledged
Interests hereafter acquired on the date of acquisition thereof will be,
registered or qualified under the various federal or state securities laws of
the United States and disposition thereof after an Event of Default may be
restricted to one or more private (instead of public) sales in view of the lack
of such registration.  Each Grantor understands that in connection with such
disposition, Agent may approach only a restricted number of potential purchasers
and further understands that a sale under such circumstances may yield a lower
price for the Pledged Interests than if the Pledged Interests were registered
and qualified pursuant to federal and state securities laws and sold on the open
market.  Each

 

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Grantor, therefore, agrees that:  (a) if Agent shall, pursuant to the terms of
this Agreement, sell or cause the Pledged Interests or any portion thereof to be
sold at a private sale, Agent shall have the right to rely upon the advice and
opinion of any nationally recognized brokerage or investment firm (but shall not
be obligated to seek such advice and the failure to do so shall not be
considered in determining the commercial reasonableness of such action) as to
the best manner in which to offer the Pledged Interest or any portion thereof
for sale and as to the best price reasonably obtainable at the private sale
thereof; and (b) such reliance shall be conclusive evidence that Agent has
handled the disposition in a commercially reasonable manner.

 

15.           Voting and Other Rights in Respect of Pledged Interests.

 

(a)         Upon the occurrence and during the continuation of an Event of
Default, (i) Agent may, at its option, and with two (2) Business Days prior
notice to any Grantor, and in addition to all rights and remedies available to
Agent under any other agreement, at law, in equity, or otherwise, exercise all
voting rights, or any other ownership or consensual rights (including any
dividend or distribution rights) in respect of the Pledged Interests owned by
such Grantor, but under no circumstances is Agent obligated by the terms of this
Agreement to exercise such rights, and (ii) if Agent duly exercises its right to
vote any of such Pledged Interests, each Grantor hereby appoints Agent, such
Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such
Pledged Interests in any manner Agent deems advisable for or against all matters
submitted or which may be submitted to a vote of shareholders, partners or
members, as the case may be.  The power-of-attorney and proxy granted hereby is
coupled with an interest and shall be irrevocable.

 

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

 

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

 

(a)         Agent may, and, at the instruction of the Required Lenders, shall
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein, in the other Loan Documents, or otherwise available to it,
all the rights and remedies of a secured party on default under the Code or any
other applicable law.  Without limiting the generality of the foregoing, each
Grantor expressly agrees that, in any such event, Agent without demand of
performance or other demand, advertisement or notice of any kind (except a
notice specified below of time and place of public or private sale) to or upon
any Grantor or any other Person (all and each of which demands, advertisements
and notices are hereby expressly waived to the maximum extent permitted by the
Code or any other applicable law), may take immediate possession of all or any
portion of the Collateral and (i) require Grantors to, and each Grantor hereby
agrees that it will at its own expense and upon request of Agent forthwith,
assemble all or part of the Collateral as directed by Agent and make it
available to Agent at one or more locations where such Grantor regularly
maintains Inventory, and (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Agent’s offices or elsewhere, for cash, on credit, and upon such other
terms as Agent may deem commercially reasonable.  Each Grantor agrees that, to
the extent notice of sale shall be required by law, at least ten (10) days
notice to the applicable Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification and specifically such notice shall constitute a reasonable
“authenticated notification of disposition” within the meaning of Section 9-611
of the Code.  Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given.  Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.  Each Grantor agrees that the internet shall
constitute a “place” for purposes of Section 9-610(b) of the Code.  Each Grantor
agrees that any sale of Collateral to a licensor pursuant to the terms of a
license

 

17

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agreement between such licensor and a Grantor is sufficient to constitute a
commercially reasonable sale (including as to method, terms, manner, and time)
within the meaning of Section 9-610 of the Code.

 

(b)         Agent is hereby granted a license or other right to use, without
liability for royalties or any other charge, each Grantor’s Intellectual
Property, including but not limited to, any labels, Patents, Trademarks, trade
names, URLs, domain names, industrial designs, Copyrights, and advertising
matter, whether owned by any Grantor or with respect to which any Grantor has
rights under license, sublicense, or other agreements (including any
Intellectual Property License), as it pertains to the Collateral, in preparing
for sale, advertising for sale and selling any Collateral, and each Grantor’s
rights under all licenses and all franchise agreements shall inure to the
benefit of Agent.

 

(c)           Agent may, in addition to other rights and remedies provided for
herein, in the other Loan Documents, or otherwise available to it under
applicable law and without the requirement of notice to or upon any Grantor or
any other Person (which notice is hereby expressly waived to the maximum extent
permitted by the Code or any other applicable law), (i) with respect to any
Grantor’s Deposit Accounts in which Agent’s Liens are perfected by control under
Section 9-104 of the Code, instruct the bank maintaining such Deposit Account
for the applicable Grantor to pay the balance of such Deposit Account to or for
the benefit of Agent, and (ii) with respect to any Grantor’s Securities Accounts
in which Agent’s Liens are perfected by control under Section 9-106 of the Code,
instruct the securities intermediary maintaining such Securities Account for the
applicable Grantor to (A) transfer any cash in such Securities Account to or for
the benefit of Agent, or (B) liquidate any financial assets in such Securities
Account that are customarily sold on a recognized market and transfer the cash
proceeds thereof to or for the benefit of Agent.

 

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

 

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

 

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

 

18.           Marshaling. Agent  shall not be required to marshal any present or
future collateral security (including but not limited to the Collateral) for, or
other assurances of payment of, the Secured Obligations or any of them or to
resort to such collateral security or other assurances of payment in any
particular order, and all of its rights and remedies hereunder and in respect of
such collateral security and other assurances of payment shall be cumulative and
in addition to all other rights and remedies, however existing or arising.  To
the extent that it lawfully may, each Grantor hereby agrees that it will not
invoke any law relating to the

 

18

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

 

marshaling of collateral which might cause delay in or impede the enforcement of
Agent’s rights and remedies under this Agreement or under any other instrument
creating or evidencing any of the Secured Obligations or under which any of the
Secured Obligations is outstanding or by which any of the Secured Obligations is
secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, each Grantor hereby irrevocably waives the benefits of all such
laws.

 

19.           Indemnity and Expenses.

 

(a)         Each Grantor agrees to indemnify Agent and the other members of the
Lender Group from and against all claims, lawsuits and liabilities (including
reasonable attorneys fees) growing out of or resulting from this Agreement
(including enforcement of this Agreement) or any other Loan Document to which
such Grantor is a party, except claims, losses or liabilities resulting from the
gross negligence or willful misconduct of the party seeking indemnification as
determined by a final non-appealable order of a court of competent
jurisdiction.  This provision shall survive the termination of this Agreement
and the Credit Agreement and the repayment of the Secured Obligations.

 

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

 

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

 

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

 

22.           Continuing Security Interest: Assignments under Credit Agreement. 
This Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the Obligations have been paid
in full in accordance with the provisions of the Credit Agreement and the
Revolver Commitments have expired or have been terminated, (b) be binding upon
each Grantor, and their respective successors and assigns, and (c) inure to the
benefit of, and be enforceable by, Agent, and its successors, transferees and
assigns.  Without limiting the generality of the foregoing clause (c), any
Lender may, in accordance with the provisions of the Credit Agreement, assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise.  Upon payment in full of the Secured Obligations in
accordance with the provisions of the Credit Agreement and the expiration or
termination of the Revolver Commitments, the Security Interest granted hereby
shall terminate and all rights to the Collateral shall revert to Grantors or any
other Person entitled thereto.  At such time, Agent will authorize the filing of
appropriate termination statements to terminate such Security Interests.  No
transfer

 

19

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

 

or renewal, extension, assignment, or termination of this Agreement or of the
Credit Agreement, any other Loan Document, or any other instrument or document
executed and delivered by any Grantor to Agent nor any additional Advances or
other loans made by any Lender to any Borrower, nor the taking of further
security, nor the retaking or re-delivery of the Collateral to Grantors, or any
of them, by Agent, nor any other act of the Lender Group or the Bank Product
Providers, or any of them, shall release any Grantor from any obligation, except
a release or discharge executed in writing by Agent in accordance with the
provisions of the Credit Agreement.  Agent shall not by any act, delay, omission
or otherwise, be deemed to have waived any of its rights or remedies hereunder,
unless such waiver is in writing and signed by Agent and then only to the extent
therein set forth.  A waiver by Agent of any right or remedy on any occasion
shall not be construed as a bar to the exercise of any such right or remedy
which Agent would otherwise have had on any other occasion.

 

23.           Governing Law.

 

(a)         THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

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

 

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

 

24.           New Subsidiaries.  Pursuant to Section 5.11 of the Credit
Agreement, certain Subsidiaries (whether by acquisition or creation) of any
Grantor are required to enter into this Agreement by executing and delivering in
favor of Agent a Joinder to this Agreement in substantially the form of Annex
1.  Upon the execution and delivery of Annex 1 by any such new Subsidiary, such
Subsidiary shall become a Grantor hereunder with the same force and effect as if
originally named as a Grantor herein.  The execution and delivery of any
instrument adding an additional Grantor as a party to this Agreement shall not
require the consent of any Grantor hereunder.  The rights and obligations of
each Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor hereunder.

 

20

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

 

26.           Miscellaneous.

 

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

 

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

 

(c)         Headings and numbers have been set forth herein for convenience
only.  Unless the contrary is compelled by the context, everything contained in
each section applies equally to this entire Agreement.

 

(d)         Neither this Agreement nor any uncertainty or ambiguity herein shall
be construed against any member of the Lender Group or any Grantor, whether
under any rule of construction or otherwise.  This Agreement has been reviewed
by all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to accomplish fairly the purposes and intentions
of all parties hereto.

 

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

 

(f)          Unless the context of this Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and  “including” are not limiting, and
the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or”.  The words “hereof”, “herein”, “hereby”,
“hereunder”, and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement.  Section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified.  Any reference in this Agreement to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein).  The words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts, and contract
rights.  Any reference herein to the satisfaction, repayment, or payment in full
of the Secured Obligations shall mean the repayment in full in cash or
immediately available funds (or, (a) in the case of contingent reimbursement
obligations with respect to Letters of Credit, providing Letter of Credit
Collateralization, and (b) in the case of obligations with respect to Bank
Products (other than Hedge Obligations), providing Bank Product
Collateralization) of all of the Secured Obligations (including the payment of
any termination amount then applicable (or which would or could become
applicable as a result of the repayment of the other Secured

 

21

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

 

Obligations) under Hedge Agreements provided by Hedge Providers) other than
(i) unasserted contingent indemnification Secured Obligations, (ii) any Bank
Product Obligations (other than Hedge Obligations) that, at such time, are
allowed by the applicable Bank Product Provider to remain outstanding without
being required to be repaid or cash collateralized, and (iii) any Hedge
Obligations that, at such time, are allowed by the applicable Hedge Provider to
remain outstanding without being required to be repaid.  Any reference herein to
any Person shall be construed to include such Person’s successors and assigns. 
Any requirement of a writing contained herein shall be satisfied by the
transmission of a Record.

 

(g)         All of the annexes, schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.

 

[signature pages follow]

 

22

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

 

IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to
be executed and delivered as of the day and year first above written.

 

 

GRANTORS:

SUPREME INDUSTRIES, INC.,

 

a Delaware corporation, as a Grantor

 

 

 

 

 

By:

/s/ Kim Korth

 

 

Name: Kim Korth

 

 

Title: President and CEO

 

 

 

 

 

SUPREME INDIANA OPERATIONS, INC.,

 

a Delaware corporation, as a Grantor

 

 

 

 

 

By:

/s/ Kim Korth

 

 

Name: Kim Korth

 

 

Title: President and CEO

 

 

 

 

 

SUPREME CORPORATION OF TEXAS,

 

a Texas corporation, as a Grantor

 

 

 

 

 

By:

/s/ Kim Korth

 

 

Name: Kim Korth

 

 

Title: President and CEO

 

 

 

 

 

SUPREME MID-ATLANTIC CORPORATION,

 

a Texas corporation, as a Grantor

 

 

 

 

 

By:

/s/ Kim Korth

 

 

Name: Kim Korth

 

 

Title: President and CEO

 

 

 

 

 

SUPREME TRUCK BODIES OF CALIFORNIA, INC.,

 

a California corporation, as a Grantor

 

 

 

 

 

By:

/s/ Kim Korth

 

 

Name: Kim Korth

 

 

Title: President and CEO

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

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

 

 

SUPREME NORTHWEST, L.L.C.,

 

a Texas limited liability company, as a Grantor

 

 

 

 

 

By:

/s/ Kim Korth

 

 

Name: Kim Korth

 

 

Title: President and CEO

 

 

 

 

 

SUPREME\MURPHY TRUCK BODIES, INC.,

 

a North Carolina corporation, as a Grantor

 

 

 

 

 

By:

/s/ Kim Korth

 

 

Name: Kim Korth

 

 

Title: President and CEO

 

 

 

 

 

SC TOWER STRUCTURAL LAMINATING, INC.,

 

a Texas corporation, as a Grantor

 

 

 

 

 

By:

/s/ Kim Korth

 

 

Name: Kim Korth

 

 

Title: President and CEO

 

 

 

 

 

SILVER CROWN, LLC,

 

a Delaware limited liability company, as a Grantor

 

 

 

 

 

By:

/s/ Kim Korth

 

 

Name: Kim Korth

 

 

Title: President and CEO

 

 

 

 

 

SUPREME STB, LLC,

 

a California limited liability company, as a Grantor

 

 

 

 

 

By:

/s/ Herbert M. Gardner

 

 

Name: Herbert M. Gardner

 

 

Title: Chairman of the Board, President and CEO

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

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

 

AGENT:

WELLS FARGO CAPITAL FINANCE, LLC,

 

a Delaware limited liability company, as Agent

 

 

 

 

 

By:

/s/ Sean Mullaney

 

 

Name: Sean Mullaney

 

 

Title: Vice President

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

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

 

SCHEDULE 1

 

COMMERCIAL TORT CLAIMS

 

[Note: Include specific case caption or descriptions per Official Code Comment 5
to Section 9-108 of the Code.]

 

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

 

SCHEDULE 2

 

COPYRIGHTS

 

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

 

SCHEDULE 3

 

INTELLECTUAL PROPERTY LICENSES

 

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

 

SCHEDULE 4

 

PATENTS

 

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

 

SCHEDULE 5

 

TRADEMARKS

 

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

 

SCHEDULE 6

 

PLEDGED COMPANIES(1)

 

Name of Grantor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Class of
Interests

 

Percentage of
Class Owned

 

Certificate
Nos.

Supreme Industries, Inc.

 

Supreme Indiana Operations, Inc.

 

 

 

 

 

 

 

 

Supreme Indiana Operations, Inc.

 

Supreme Mid-Atlantic Corporation

 

 

 

 

 

 

 

 

Supreme Indiana Operations, Inc.

 

Supreme Truck Bodies of California, Inc.

 

 

 

 

 

 

 

 

Supreme Indiana Operations, Inc.

 

Supreme Corporation of Texas

 

 

 

 

 

 

 

 

Supreme Indiana Operations, Inc.

 

Supreme Northwest, L.L.C.

 

 

 

 

 

 

 

 

Supreme Indiana Operations, Inc.

 

Silver Crown, LLC

 

 

 

 

 

 

 

 

Supreme Indiana Operations, Inc.

 

Supreme\Murphy Truck Bodies, Inc.

 

 

 

 

 

 

 

 

Supreme Indiana Operations, Inc.

 

SC Tower Structural Laminating, Inc.

 

 

 

 

 

 

 

 

Supreme Truck Bodies of California, Inc.

 

Supreme STB, LLC

 

 

 

 

 

 

 

 

Supreme Indiana Operations, Inc.

 

Supreme Indiana Management, Inc.

 

 

 

 

 

 

 

 

[Supreme Industries, Inc.] [Supreme Indiana Operations, Inc.]

 

Supreme Insurance Company, Inc.

 

 

 

 

 

 

 

 

 

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

(1)  Supreme to furnish Schedule information.

 

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

 

SCHEDULE 7

 

OWNED REAL PROPERTY

 

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

 

SCHEDULE 8

 

LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS

 

Grantor

 

Jurisdictions

Supreme Industries, Inc.

 

Delaware

Supreme Indiana Operations, Inc.

 

Delaware

Supreme Mid-Atlantic Corporation

 

Texas

Supreme Truck Bodies of California, Inc.

 

California

Supreme Corporation of Texas

 

Texas

Supreme Northwest, L.L.C.

 

Texas

Supreme\Murphy Truck Bodies, Inc.

 

North Carolina

SC Tower Structural Laminating, Inc.

 

Texas

Silver Crown, LLC

 

Delaware

Supreme STB, LLC

 

California

 

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

 

ANNEX 1 TO SECURITY AGREEMENT
FORM OF JOINDER

 

Joinder No.      (this “Joinder”), dated as of                , to the Security
Agreement, dated as of September 14, 2011 (as amended, restated, supplemented,
or otherwise modified from time to time, the “Security Agreement”), by and among
each of the parties listed on the signature pages thereto and those additional
entities that thereafter become parties thereto (collectively, jointly and
severally, “Grantors” and each, individually, a “Grantor”) and WELLS FARGO
CAPITAL FINANCE, LLC, a Delaware limited liability company (“WFCF”), in its
capacity as agent for the Lender Group and the Bank Product Providers (in such
capacity, together with its successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated as of September 14,
2011 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”) by and among Supreme Industries, Inc., as parent
(“Parent”), Supreme Indiana Operations, Inc. and certain of its Subsidiaries
party thereto as “Borrowers,” as borrowers (each a “Borrower” and collectively,
the “Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and

 

WHEREAS, initially capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Security Agreement
or, if not defined therein, in the Credit Agreement; and

 

WHEREAS, Grantors have entered into the Security Agreement in order to induce
the Lender Group to make certain financial accommodations to Borrowers; and

 

WHEREAS, pursuant to Section 5.11 of the Credit Agreement and Section 24 of the
Security Agreement, certain Subsidiaries of the Loan Parties, must execute and
deliver certain Loan Documents, including the Security Agreement, and the
joinder to the Security Agreement by the undersigned new Grantor or Grantors
(collectively, the “New Grantors”) may be accomplished by the execution of this
Joinder in favor of Agent, for the benefit of the Lender Group and the Bank
Product Providers; and

 

WHEREAS, each New Grantor (a) is a Subsidiary of a Borrower and, as such, will
benefit by virtue of the financial accommodations extended to Borrowers by the
Lender Group or the Bank Product Providers and (b) by becoming a Loan Party will
benefit from certain rights granted to the Loan Parties pursuant to the terms of
the Loan Documents and the Bank Product Agreements.

 

NOW, THEREFORE, for and in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each New Grantor hereby agrees as follows:

 

1.                                       In accordance with Section 24 of the
Security Agreement, each New Grantor, by its signature below, becomes a
“Grantor” under the Security Agreement with the same force and effect as if
originally named therein as a “Grantor” and each New Grantor hereby (a) agrees
to all of the terms and provisions of the Security Agreement applicable to it as
a “Grantor” thereunder and (b) represents and warrants that the representations
and warranties made by it as a “Grantor” thereunder are true and correct in all
material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that are already qualified or
modified by materiality in the text thereof) on and as of the date hereof.  In
furtherance of the foregoing, each New Grantor does hereby unconditionally
grant, assign, and pledge to Agent, for the benefit of the Lender Group and the
Bank Product Providers, to secure the Secured Obligations, a continuing security
interest in and to all of such New Grantor’s right, title and interest in and to
the Collateral.  Schedule 1, “Commercial Tort Claims”, Schedule 2, “Copyrights”,
Schedule 3, “Intellectual Property Licenses”, Schedule 4, “Patents”, Schedule 5,
“Trademarks”, Schedule

 

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

 

6, “Pledged Companies”, Schedule 7, “Owned Real Property”, and Schedule 8, “List
of Uniform Commercial Code Filing Jurisdictions” attached hereto supplement
Schedule 1, Schedule 2, Schedule 3, Schedule 4, Schedule 5, Schedule 6, Schedule
7, and Schedule 8, respectively, to the Security Agreement and shall be deemed a
part thereof for all purposes of the Security Agreement.  Each reference to a
“Grantor” in the Security Agreement shall be deemed to include each New
Grantor.  The Security Agreement is incorporated herein by reference.   Each New
Grantor authorizes Agent at any time and from time to time to file, transmit, or
communicate, as applicable, financing statements and amendments thereto (i)
describing the Collateral as “all personal property of debtor” or “all assets of
debtor” or words of similar effect, (ii) describing the Collateral as being of
equal or lesser scope or with greater detail, or (iii) that contain any
information required by part 5 of Article 9 of the Code for the sufficiency or
filing office acceptance.  Each New Grantor also hereby ratifies any and all
financing statements or amendments previously filed by Agent in any jurisdiction
in connection with the Loan Documents.

 

2.                                       Each New Grantor represents and
warrants to Agent, the Lender Group and the Bank Product Providers that this
Joinder has been duly executed and delivered by such New Grantor and constitutes
its legal, valid, and binding obligation, enforceable against it in accordance
with its terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium, or other similar
laws affecting creditors’ rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law
or in equity).

 

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

 

4.                                       The Security Agreement, as supplemented
hereby, shall remain in full force and effect.

 

5.                                       THE VALIDITY OF THIS JOINDER, THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE
PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

 

6.                                       THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS JOINDER SHALL BE TRIED AND LITIGATED
ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS
LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS
TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. 
AGENT AND EACH NEW GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW,
ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO
OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 6.

 

7.                                       TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, AGENT AND EACH NEW GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS JOINDER OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.  AGENT AND EACH NEW GRANTOR REPRESENT THAT EACH HAS

 

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

 

REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A
COPY OF THIS JOINDER MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Joinder No.      to the
Security Agreement to be executed and delivered as of the day and year first
above written.

 

 

NEW GRANTORS:

[NAME OF NEW GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[NAME OF NEW GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

AGENT:

WELLS FARGO CAPITAL FINANCE, LLC, a
Delaware limited liability company, as Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO JOINDER NO.      TO SECURITY AGREEMENT]

 

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

 

EXHIBIT A

 

COPYRIGHT SECURITY AGREEMENT

 

This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is made
this     day of            , 20  , by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware
limited liability company (“WFCF”), in its capacity as agent for the Lender
Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated as of September 14,
2011 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”) by and among Supreme Industries, Inc., as parent
(“Parent”), Supreme Indiana Operations, Inc. and certain of its Subsidiaries
party thereto as “Borrowers,” as borrowers (each a “Borrower” and collectively,
the “Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and

 

WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Security Agreement, dated as of September 14, 2011
(including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and

 

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of the Lender Group and the Bank Product
Providers, this Copyright Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

1.                                       DEFINED TERMS.  All initially
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Security Agreement or, if not defined therein, in the Credit
Agreement.

 

2.                                       GRANT OF SECURITY INTEREST IN COPYRIGHT
COLLATERAL.  Each Grantor hereby unconditionally grants, assigns, and pledges to
Agent, for the benefit each member of the Lender Group and each of the Bank
Product Providers, to secure the Secured Obligations, a continuing security
interest (referred to in this Copyright Security Agreement as the “Security
Interest”) in all of such Grantor’s right, title and interest in and to the
following, whether now owned or hereafter acquired or arising (collectively, the
“Copyright Collateral”):

 

(a)                            all of such Grantor’s Copyrights and Copyright
Intellectual Property Licenses to which it is a party including those referred
to on Schedule I;

 

(b)                           all renewals or extensions of the foregoing; and

 

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

 

(c)                            all products and proceeds (as that term is
defined in the Code) of the foregoing, including any claim by such Grantor
against third parties for past, present or future infringement of any Copyright
or any Copyright exclusively licensed under any Intellectual Property License,
including the right to receive damages, or the right to receive license fees,
royalties, and other compensation under any Copyright Intellectual Property
License.

 

3.                                       SECURITY FOR SECURED OBLIGATIONS.  This
Copyright Security Agreement and the Security Interest created hereby secures
the payment and performance of the Secured Obligations, whether now existing or
arising hereafter.  Without limiting the generality of the foregoing, this
Copyright Security Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Agent, the Lender Group, the Bank Product Providers or any of them, whether
or not they are unenforceable or not allowable due to the existence of an
Insolvency Proceeding involving any Grantor.

 

4.                                       SECURITY AGREEMENT.  The Security
Interest granted pursuant to this Copyright Security Agreement is granted in
conjunction with the security interests granted to Agent, for the benefit of the
Lender Group and the Bank Product Providers, pursuant to the Security
Agreement.  Each Grantor hereby acknowledges and affirms that the rights and
remedies of Agent with respect to the Security Interest in the Copyright
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.  To the extent there is any inconsistency
between this Copyright Security Agreement and the Security Agreement, the
Security Agreement shall control.

 

5.                                       AUTHORIZATION TO SUPPLEMENT.  If any
Grantor shall obtain rights to any new copyrights, the provisions of this
Copyright Security Agreement shall automatically apply thereto.  Grantors shall
give prompt notice in writing to Agent with respect to any such new copyrights
or renewal or extension of any copyright registration.  Without limiting
Grantors’ obligations under this section, Grantors hereby authorize Agent
unilaterally to modify this Copyright Security Agreement by amending Schedule I
to include any such new copyright rights of each Grantor.  Notwithstanding the
foregoing, no failure to so modify this Copyright Security Agreement or amend
Schedule I shall in any way affect, invalidate or detract from Agent’s
continuing security interest in all Collateral, whether or not listed on
Schedule I.

 

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

 

7.                                       CONSTRUCTION.  This Copyright Security
Agreement is a Loan Document.  Unless the context of this Copyright Security
Agreement clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or”.  The words
“hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Copyright
Security Agreement refer to this Copyright Security Agreement as a whole and not
to any particular provision of this Copyright Security Agreement.  Section,
subsection, clause, schedule, and exhibit references herein are to this
Copyright Security Agreement unless otherwise specified.  Any reference in this
Copyright Security Agreement to any agreement, instrument, or document shall
include all alterations, amendments, changes,

 

3

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

 

extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  The
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts, and contract rights.  Any
reference herein to the satisfaction, repayment, or payment in full of the
Secured Obligations shall mean the repayment in full in cash or immediately
available funds (or, (a) in the case of contingent reimbursement obligations
with respect to Letters of Credit, providing Letter of Credit Collateralization,
and (b) in the case of obligations with respect to Bank Products (other than
Hedge Obligations), providing Bank Product Collateralization) of all of the
Secured Obligations (including the payment of any termination amount then
applicable (or which would or could become applicable as a result of the
repayment of the other Secured Obligations) under Hedge Agreements provided by
Hedge Providers) other than (i) unasserted contingent indemnification Secured
Obligations, (ii) any Bank Product Obligations (other than Hedge Obligations)
that, at such time, are allowed by the applicable Bank Product Provider to
remain outstanding without being required to be repaid or cash collateralized,
and (iii) any Hedge Obligations that, at such time, are allowed by the
applicable Hedge Provider to remain outstanding without being required to be
repaid.  Any reference herein to any Person shall be construed to include such
Person’s successors and permitted assigns.  Any requirement of a writing
contained herein shall be satisfied by the transmission of a Record.

 

8.                                       THE VALIDITY OF THIS COPYRIGHT SECURITY
AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE
RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

9.                                       THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS COPYRIGHT SECURITY AGREEMENT SHALL
BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  AGENT AND EACH GRANTOR WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.

 

10.                                 TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, AGENT AND EACH GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
COPYRIGHT SECURITY AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS.  AGENT AND EACH GRANTOR REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A
COPY OF THIS COPYRIGHT SECURITY AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

 

[SIGNATURE PAGE FOLLOWS]

 

4

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Copyright Security
Agreement to be executed and delivered as of the day and year first above
written.

 

 

GRANTORS:

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

AGENT:

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO COPYRIGHT SECURITY AGREEMENT]

 

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

 

SCHEDULE I
TO
COPYRIGHT SECURITY AGREEMENT

 

COPYRIGHT REGISTRATIONS

 

Grantor

 

Country

 

Copyright

 

Registration No.

 

Registration Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Copyright Licenses

 

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

 

EXHIBIT B

 

PATENT SECURITY AGREEMENT

 

This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this
    day of            , 20  , by and among the Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware
limited liability company (“WFCF”), in its capacity as agent for the Lender
Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated as of September 14,
2011 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”) by and among Supreme Industries, Inc., as parent
(“Parent”), Supreme Indiana Operations, Inc. and certain of its Subsidiaries
party thereto as “Borrowers,” as borrowers (each a “Borrower” and collectively,
the “Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and

 

WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that the Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Security Agreement, dated as of September 14, 2011
(including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and

 

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of the Lender Group and the Bank Product
Providers, this Patent Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

1.                                       DEFINED TERMS.  All initially
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Security Agreement or, if not defined therein, in the Credit
Agreement.

 

2.                                       GRANT OF SECURITY INTEREST IN PATENT
COLLATERAL. Each Grantor hereby unconditionally grants, assigns, and pledges to
Agent, for the benefit each member of the Lender Group and each of the Bank
Product Providers, to secure the Secured Obligations, a continuing security
interest (referred to in this Patent Security Agreement as the “Security
Interest”) in all of such Grantor’s right, title and interest in and to the
following, whether now owned or hereafter acquired or arising (collectively, the
“Patent Collateral”):

 

(a)                                  all of such Grantor’s Patents and Patent
Intellectual Property Licenses to which it is a party including those referred
to on Schedule I;

 

(b)                                 all divisionals, continuations,
continuations-in-part, reissues, reexaminations, or extensions of the foregoing;
and

 

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

 

(c)                                  all products and proceeds (as that term is
defined in the Code) of the foregoing, including any claim by such Grantor
against third parties for past, present or future infringement of any Patent or
any Patent exclusively licensed under any Intellectual Property License,
including the right to receive damages, or the right to receive license fees,
royalties, and other compensation under any Patent Intellectual Property
License.

 

3.                                       SECURITY FOR SECURED OBLIGATIONS.  This
Patent Security Agreement and the Security Interest created hereby secures the
payment and performance of the Secured Obligations, whether now existing or
arising hereafter.  Without limiting the generality of the foregoing, this
Patent Security Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Agent, the Lender Group, the Bank Product Providers or any of them, whether
or not they are unenforceable or not allowable due to the existence of an
Insolvency Proceeding involving any Grantor.

 

4.                                       SECURITY AGREEMENT.  The Security
Interest granted pursuant to this Patent Security Agreement is granted in
conjunction with the security interests granted to Agent, for the benefit of the
Lender Group and the Bank Product Providers, pursuant to the Security
Agreement.  Each Grantor hereby acknowledges and affirms that the rights and
remedies of Agent with respect to the Security Interest in the Patent Collateral
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.  To the extent there is any inconsistency between this Patent
Security Agreement and the Security Agreement, the Security Agreement shall
control.

 

5.                                       AUTHORIZATION TO SUPPLEMENT.  If any
Grantor shall obtain rights to any new patent application or issued patent or
become entitled to the benefit of any patent application or patent for any
divisional, continuation, continuation-in-part, reissue, or reexamination of any
existing patent or patent application, the provisions of this Patent Security
Agreement shall automatically apply thereto. Grantors shall give prompt notice
in writing to Agent with respect to any such new patent rights.  Without
limiting Grantors’ obligations under this section, Grantors hereby authorize
Agent unilaterally to modify this Patent Security Agreement by amending Schedule
I to include any such new patent rights of each Grantor.  Notwithstanding the
foregoing, no failure to so modify this Patent Security Agreement or amend
Schedule I shall in any way affect, invalidate or detract from Agent’s
continuing security interest in all Collateral, whether or not listed on
Schedule I.

 

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

 

7.                                       CONSTRUCTION.  This Patent Security
Agreement is a Loan Document.  Unless the context of this Patent Security
Agreement clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or”.  The words
“hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Patent
Security Agreement refer to this Patent Security Agreement as a whole and not to
any particular provision of this Patent Security Agreement.  Section,
subsection, clause, schedule, and exhibit references herein are to this Patent
Security Agreement unless otherwise specified.  Any reference in this Patent
Security Agreement to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions,

 

3

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

 

modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  The
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts, and contract rights.  Any
reference herein to the satisfaction, repayment, or payment in full of the
Secured Obligations shall mean the repayment in full in cash or immediately
available funds (or, (a) in the case of contingent reimbursement obligations
with respect to Letters of Credit, providing Letter of Credit Collateralization,
and (b) in the case of obligations with respect to Bank Products (other than
Hedge Obligations), providing Bank Product Collateralization) of all of the
Secured Obligations (including the payment of any termination amount then
applicable (or which would or could become applicable as a result of the
repayment of the other Secured Obligations) under Hedge Agreements provided by
Hedge Providers) other than (i) unasserted contingent indemnification Secured
Obligations, (ii) any Bank Product Obligations (other than Hedge Obligations)
that, at such time, are allowed by the applicable Bank Product Provider to
remain outstanding without being required to be repaid or cash collateralized,
and (iii) any Hedge Obligations that, at such time, are allowed by the
applicable Hedge Provider to remain outstanding without being required to be
repaid.  Any reference herein to any Person shall be construed to include such
Person’s successors and permitted assigns.  Any requirement of a writing
contained herein shall be satisfied by the transmission of a Record.

 

8.                                       THE VALIDITY OF THIS PATENT SECURITY
AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE
RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

9.                                       THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS PATENT SECURITY AGREEMENT SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND.  AGENT AND EACH GRANTOR WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 9.

 

10.                                 TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, AGENT AND EACH GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
PATENT SECURITY AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS.  AGENT AND EACH GRANTOR REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF
LITIGATION, A COPY OF THIS PATENT SECURITY AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

 

[SIGNATURE PAGE FOLLOWS]

 

4

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IN WITNESS WHEREOF, the parties hereto have caused this Patent Security
Agreement to be executed and delivered as of the day and year first above
written.

 

 

GRANTORS:

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

AGENT:

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

 

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SCHEDULE I
to
PATENT SECURITY AGREEMENT

 

Patents

 

 

Grantor

 

Country

 

Patent

 

Application/
Patent No.

 

Filing Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patent Licenses

 

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EXHIBIT C

 

PLEDGED INTERESTS ADDENDUM

 

This Pledged Interests Addendum, dated as of             , 20    (this “Pledged
Interests Addendum”), is delivered pursuant to Section 6(h)(i) of the Security
Agreement referred to below.  The undersigned hereby agrees that this Pledged
Interests Addendum may be attached to that certain Security Agreement, dated as
of September 14, 2011, (as amended, restated, supplemented, or otherwise
modified from time to time, the “Security Agreement”), made by the undersigned,
together with the other Grantors named therein, to WELLS FARGO CAPITAL FINANCE,
LLC, a Delaware limited liability company, as Agent.  Initially capitalized
terms used but not defined herein shall have the meaning ascribed to such terms
in the Security Agreement or, if not defined therein, in the Credit Agreement. 
The undersigned hereby agrees that the additional interests listed on Schedule I
shall be and become part of the Pledged Interests pledged by the undersigned to
Agent in the Security Agreement and any pledged company set forth on Schedule I
shall be and become a “Pledged Company” under the Security Agreement, each with
the same force and effect as if originally named therein.

 

This Pledged interests Addendum is a Loan Document.  Delivery of an executed
counterpart of this Pledged Interests Addendum by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Pledged Interests Addendum.  If the
undersigned delivers an executed counterpart of this Pledged Interests Addendum
by telefacsimile or other electronic method of transmission, the undersigned
shall also deliver an original executed counterpart of this Pledged Interests
Addendum but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Pledged
Interests Addendum.

 

The undersigned hereby certifies that the representations and warranties set
forth in Section 5 of the Security Agreement of the undersigned are true and
correct as to the Pledged Interests listed herein on and as of the date hereof.

 

THE VALIDITY OF THIS PLEDGED INTERESTS ADDENDUM, THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE
PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

 

THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS PLEDGED INTERESTS ADDENDUM SHALL BE TRIED AND LITIGATED ONLY IN THE STATE,
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  AGENT AND EACH
GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS PARAGRAPH.

 

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS PLEDGED INTERESTS ADDENDUM OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS,

 

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

 

TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS.  AGENT AND EACH GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS
PLEDGED INTERESTS ADDENDUM MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

 

[SIGNATURE PAGE FOLLOWS]

 

3

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

 

IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum
to be executed and delivered as of the day and year first above written.

 

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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SCHEDULE I
TO
PLEDGED INTERESTS ADDENDUM

 

Pledged Interests

 

Name of Grantor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Class of
Interests

 

Percentage of
Class Owned

 

Certificate
Nos.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

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EXHIBIT D

 

TRADEMARK SECURITY AGREEMENT

 

This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made
this     day of            , 20  , by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware
limited liability company (“WFCF”), in its capacity as agent for the Lender
Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated as of September 14,
2011 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”) by and among Supreme Industries, Inc., as parent
(“Parent”), Supreme Indiana Operations, Inc. and certain of its Subsidiaries
party thereto as “Borrowers,” as borrowers (each a “Borrower” and collectively,
the “Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and

 

WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Security Agreement, dated as of September 14, 2011
(including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and

 

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of the Lender Group and the Bank Product
Providers, this Trademark Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

1.                                       DEFINED TERMS.  All initially
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Security Agreement or, if not defined therein, in the Credit
Agreement.

 

2.                                       GRANT OF SECURITY INTEREST IN TRADEMARK
COLLATERAL.  Each Grantor hereby unconditionally grants, assigns, and pledges to
Agent, for the benefit each member of the Lender Group and each of the Bank
Product Providers, to secure the Secured Obligations, a continuing security
interest (referred to in this Trademark Security Agreement as the “Security
Interest”) in all of such Grantor’s right, title and interest in and to the
following, whether now owned or hereafter acquired or arising (collectively, the
“Trademark Collateral”):

 

(a)                            all of such Grantor’s Trademarks and Trademark
Intellectual Property Licenses to which it is a party including those referred
to on Schedule I;

 

(b)                           all goodwill of the business connected with the
use of, and symbolized by, each Trademark and each Trademark Intellectual
Property License; and

 

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

 

(c)                            all products and proceeds (as that term is
defined in the Code) of the foregoing, including any claim by such Grantor
against third parties for past, present or future (i) infringement or dilution
of any Trademark or any Trademarks exclusively licensed under any Intellectual
Property License, including the right to receive any damages, (ii) injury to the
goodwill associated with any Trademark, or (iii) infringement of the right to
receive license fees, royalties, and other compensation under any Trademark
Intellectual Property License.

 

3.                                       SECURITY FOR SECURED OBLIGATIONS.  This
Trademark Security Agreement and the Security Interest created hereby secures
the payment and performance of the Secured Obligations, whether now existing or
arising hereafter.  Without limiting the generality of the foregoing, this
Trademark Security Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Agent, the Lender Group, the Bank Product Providers or any of them, whether
or not they are unenforceable or not allowable due to the existence of an
Insolvency Proceeding involving any Grantor.

 

4.                                       SECURITY AGREEMENT.  The Security
Interest granted pursuant to this Trademark Security Agreement is granted in
conjunction with the security interests granted to Agent, for the benefit of the
Lender Group and the Bank Product Providers, pursuant to the Security
Agreement.  Each Grantor hereby acknowledges and affirms that the rights and
remedies of Agent with respect to the Security Interest in the Trademark
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.  To the extent there is any inconsistency
between this Trademark Security Agreement and the Security Agreement, the
Security Agreement shall control.

 

5.                                       AUTHORIZATION TO SUPPLEMENT.  If any
Grantor shall obtain rights to any new trademarks, the provisions of this
Trademark Security Agreement shall automatically apply thereto. Grantors shall
give prompt notice in writing to Agent with respect to any such new trademarks
or renewal or extension of any trademark registration.  Without limiting
Grantors’ obligations under this section, Grantors hereby authorize Agent
unilaterally to modify this Trademark Security Agreement by amending Schedule I
to include any such new trademark rights of each Grantor.  Notwithstanding the
foregoing, no failure to so modify this Trademark Security Agreement or amend
Schedule I shall in any way affect, invalidate or detract from Agent’s
continuing security interest in all Collateral, whether or not listed on
Schedule I.

 

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

 

7.                                       CONSTRUCTION.  This Trademark Security
Agreement is a Loan Document.  Unless the context of this Trademark Security
Agreement clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or”.  The words
“hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Trademark
Security Agreement refer to this Trademark Security Agreement as a whole and not
to any particular provision of this Trademark Security Agreement.  Section,
subsection, clause, schedule, and exhibit references herein are to this
Trademark Security Agreement unless otherwise specified.  Any reference in this
Trademark Security

 

4

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Agreement to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein).  The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts, and contract rights.  Any reference herein to the satisfaction,
repayment, or payment in full of the Secured Obligations shall mean the
repayment in full in cash or immediately available funds (or, (a) in the case of
contingent reimbursement obligations with respect to Letters of Credit,
providing Letter of Credit Collateralization, and (b) in the case of obligations
with respect to Bank Products (other than Hedge Obligations), providing Bank
Product Collateralization) of all of the Secured Obligations (including the
payment of any termination amount then applicable (or which would or could
become applicable as a result of the repayment of the other Secured Obligations)
under Hedge Agreements provided by Hedge Providers) other than (i) unasserted
contingent indemnification Secured Obligations, (ii) any Bank Product
Obligations (other than Hedge Obligations) that, at such time, are allowed by
the applicable Bank Product Provider to remain outstanding without being
required to be repaid or cash collateralized, and (iii) any Hedge Obligations
that, at such time, are allowed by the applicable Hedge Provider to remain
outstanding without being required to be repaid.  Any reference herein to any
Person shall be construed to include such Person’s successors and permitted
assigns.  Any requirement of a writing contained herein shall be satisfied by
the transmission of a Record.

 

8.                                       THE VALIDITY OF THIS TRADEMARK SECURITY
AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE
RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

9.                                       THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS TRADEMARK SECURITY AGREEMENT SHALL
BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  AGENT AND EACH GRANTOR WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.

 

10.                                 TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, AGENT AND EACH GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
TRADEMARK SECURITY AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS.  AGENT AND EACH GRANTOR REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF
LITIGATION, A COPY OF THIS TRADEMARK SECURITY AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

[SIGNATURE PAGE FOLLOWS]

 

5

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security
Agreement to be executed and delivered as of the day and year first above
written.

 

GRANTORS:

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

AGENT:

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]

 

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

 

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT

 

Trademark Registrations/Applications

 

Grantor

 

Country

 

Mark

 

Application/
Registration No.

 

App/Reg Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade Names

 

Common Law Trademarks

 

Trademarks Not Currently In Use

 

Trademark Licenses

 

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