Exhibit 10.3

 

EXECUTION COPY

 

 

 

 

 

 

 

AMENDED AND RESTATED SECURITY AGREEMENT

 

 

By

 

 

SPORTSMAN’S WAREHOUSE, INC.

as Lead Borrower

 

and

 

THE OTHER BORROWERS AND GUARANTORS PARTY HERETO
FROM TIME TO TIME

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Collateral Agent

 

Dated as of May 23, 2018

 

 

 

 

 

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TABLE OF CONTENTS

 

 

 

 

 

 

Page

 

 

 

PREAMBLE

 

1

 

 

 

RECITALS

 

1

 

 

 

AGREEMENT

 

2

 

 

 

 

ARTICLE I

 

 

 

 

 

DEFINITIONS AND INTERPRETATION

 

 

 

 

SECTION 1.1.

Definitions

2

SECTION 1.2.

Interpretation

9

SECTION 1.3.

Perfection Certificate.

9

 

 

 

 

ARTICLE II

 

 

 

 

 

GRANT OF SECURITY AND SECURED OBLIGATIONS

 

 

 

 

SECTION 2.1.

Pledge

9

SECTION 2.2.

Security Interest

10

 

 

 

 

ARTICLE III

 

 

 

 

 

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF COLLATERAL

 

 

 

 

SECTION 3.1.

Delivery of Certificated Securities Collateral

11

SECTION 3.2.

Perfection of Uncertificated Securities Collateral

12

SECTION 3.3.

Financing Statements and Other Filings; Maintenance of Perfected Security
Interest

12

SECTION 3.4.

Other Actions

13

SECTION 3.5.

Joinder of Additional Pledgors

17

SECTION 3.6.

Supplements; Further Assurances

17

 

 

 

 

ARTICLE IV

 

 

 

 

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

 

 

 

SECTION 4.1.

Title

18

 

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Page

 

 

 

SECTION 4.2.

Limitation on Liens; Defense of Claims; Transferability of Collateral

18

SECTION 4.3.

Chief Executive Office; Change of Name; Jurisdiction of Organization

19

SECTION 4.4.

Location of Inventory and Equipment.

19

SECTION 4.5.

Condition and Maintenance of Equipment

20

SECTION 4.6.

Due Authorization and Issuance

20

SECTION 4.7.

No Claims

20

SECTION 4.8.

No Conflicts, Consents, etc.

20

SECTION 4.9.

Collateral

21

SECTION 4.10.

Insurance

21

SECTION  4.11.

Payment of Taxes; Compliance with Laws; Contested Liens; Claims

21

SECTION 4.12.

Access to Collateral, Books and Records; Other Information

22

SECTION 4.13.

Third Party Consents

22

 

 

 

 

ARTICLE V

 

 

 

 

 

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

 

 

 

 

SECTION 5.1.

Pledge of Additional Securities Collateral

22

SECTION 5.2.

Voting Rights; Distributions

22

SECTION 5.3.

Organization Documents

24

SECTION 5.4.

Defaults, etc

24

SECTION 5.5.

Certain Agreements of Pledgors As Issuers and Holders of Equity Interests

25

 

 

 

 

ARTICLE VI

 

 

 

 

 

CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL

 

 

 

 

SECTION 6.1.

Grant of License

25

SECTION 6.2.

Representations and Warranties with respect to Intellectual Property

25

SECTION 6.3.

[Reserved.]

27

SECTION 6.4.

Protection of Collateral Agent’s Security

27

SECTION 6.5.

After-Acquired Property

29

SECTION 6.6.

Modifications

29

SECTION 6.7.

Litigation

30

 

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Page

 

 

 

 

ARTICLE VII

 

 

 

 

 

CERTAIN PROVISIONS CONCERNING CREDIT CARD RECEIVABLES

 

 

 

 

SECTION 7.1.

Special Representations and Warranties

30

SECTION 7.2.

Maintenance of Records

30

SECTION 7.3.

Legend

31

SECTION 7.4.

Modification of Terms, etc

31

SECTION 7.5.

Collection

31

 

 

 

 

ARTICLE VIII

 

 

 

 

 

TRANSFERS AND OTHER LIENS

 

 

 

 

SECTION 8.1.

Transfers of and other Liens on Collateral

32

 

 

 

 

ARTICLE IX

 

 

 

 

 

REMEDIES

 

 

 

 

SECTION 9.1.

Remedies

32

SECTION 9.2.

Notice of Sale

35

SECTION 9.3.

Waiver of Notice and Claims

35

SECTION 9.4.

Certain Sales of Collateral

35

SECTION 9.5.

No Waiver; Cumulative Remedies

36

SECTION 9.6.

Certain Additional Actions Regarding Intellectual Property

37

 

 

 

 

ARTICLE X

 

 

 

 

 

APPLICATION OF PROCEEDS OF CASUALTY EVENTS AND COLLATERAL
DISPOSITIONS

 

 

 

 

SECTION 10.1.

Application of Proceeds

37

 

 

 

 

ARTICLE XI

 

 

 

 

 

MISCELLANEOUS

 

 

 

 

SECTION 11.1.

Concerning Collateral Agent

37

SECTION 11.2.

Collateral Agent May Perform; Collateral Agent Appointed Attorney-in-Fact

38

SECTION 11.3.

Expenses; Indemnity

39

SECTION 11.4.

Continuing Security Interest; Assignment

40

 

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Page

 

 

 

SECTION 11.5.

Termination; Release

41

SECTION 11.6.

Modification in Writing

42

SECTION 11.7.

Notices

42

SECTION 11.8.

GOVERNING LAW

42

SECTION 11.9.

CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL

42

SECTION 11.10.

Severability of Provisions

44

SECTION 11.11.

Execution in Counterparts

44

SECTION 11.12.

No Credit for Payment of Taxes or Imposition

44

SECTION 11.13.

No Claims Against Collateral Agent

44

SECTION 11.14.

No Release

44

SECTION 11.15.

Obligations Absolute

45

SECTION 11.16.

Additional Pledgor Waivers

45

SECTION 11.17.

Existing Security Agreement Amended and Restated

47

 

 

SIGNATURES

 

 

 

 

 

SCHEDULE I

Intercompany Notes

SCHEDULE II

Filings, Registrations and Recordings

SCHEDULE III

Initial Pledged Interests

SCHEDULE IV

Licenses

SCHEDULE V

Tangible Chattel Paper

SCHEDULE VI

Commodity Accounts

SCHEDULE VII

Electronic Chattel Paper

 

 

EXHIBIT 1

Form of Securities Pledge Amendment

 

 

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AMENDED AND RESTATED SECURITY AGREEMENT

 

AMENDED AND RESTATED SECURITY AGREEMENT dated as of May 23, 2018 (as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, the “Agreement”) made by: (i) SPORTSMAN’S
WAREHOUSE, INC., a Utah corporation, as lead borrower for itself and the other
Borrowers (the “Lead Borrower”), (ii) the other Borrowers listed on the
signature pages hereto (together with the Lead Borrower, the “Original
Borrowers”) or from time to time party hereto by execution of a Joinder
Agreement (the “Additional Borrowers,” and together with the Original Borrowers,
the “Borrowers”), and (iii) the Guarantors listed on the signature pages hereto
(the “Original Guarantors”) and the other Guarantors from time to time party
hereto by execution of a Joinder Agreement (the “Additional Guarantors,” and
together with the Original Guarantors, the “Guarantors”), as pledgors, assignors
and debtors (the Borrowers, together with the Guarantor, in such capacities and
together with any successors in such capacities, the “Pledgors”, and each, a
“Pledgor”), in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association having an office at One Boston Place, 18th Floor, Boston
Massachusetts 02108, in its capacity as collateral agent for the Credit Parties
(as defined in the Credit Agreement defined below) pursuant to the Credit
Agreement (as hereinafter defined), as pledgee, assignee and secured party (in
such capacities and together with any successors in such capacities, the
“Collateral Agent”).

 

R E C I T A L S  :

 

A.        The Borrowers, the Guarantor, Wells Fargo Bank, National Association
(as successor by merger to Wells Fargo Retail Finance, LLC), as Administrative
Agent, Collateral Agent and Swing Line Lender, and the Lenders party thereto,
among others, have, in connection with the execution and delivery of this
Agreement, entered into that certain Credit Agreement of May 28, 2010 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Existing Credit Agreement”).

 

B.         Prior to the date of this Agreement, the Pledgors, on the one hand,
and the Lender on the other hand, entered into that certain Security Agreement
dated as of May 28, 2010 (as amended and in effect immediately prior to the
effectiveness of this Agreement, the “Existing Security Agreement”), pursuant to
which the Pledgors granted a security interest in the Collateral (as defined in
the Existing Security Agreement) to the Collateral Agent, for the ratable
benefit of the Credit Parties, to secure the Secured Obligations (as defined in
the Existing Security Agreement).

 

C.         The Guarantors have, pursuant to that certain Facility Guaranty dated
as May 28, 2010 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Facility  Guaranty”),  among  other  things,
unconditionally guaranteed the

 

 

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obligations of the Borrowers under the Existing Credit Agreement and the other
Loan Documents (as defined in the Credit Agreement) (the “Guaranteed
Obligations”).

 

D.        Contemporaneously herewith, the Existing Credit Agreement is being
amended and restated pursuant to that certain Amended and Restated Credit
Agreement, dated as of even date (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”) by, among
others, the Pledgors, the Administrative Agent, the Collateral Agent, and the
Lenders party thereto.

 

E.         Each Pledgor will receive substantial benefits from the execution,
delivery and performance of the obligations under the Credit Agreement, the
Facility Guaranty and the other Loan Documents and each is, therefore, willing
to enter into this Agreement.

 

F.         Each Pledgor is or, as to Collateral (as hereinafter defined)
acquired by such Pledgor after the date hereof, will be, the legal and/or
beneficial owner of the Collateral pledged by it hereunder.

 

G.        This Agreement is given by each Pledgor in favor of the Collateral
Agent for the benefit of the Credit Parties to secure the payment and
performance of all of the Secured Obligations (as hereinafter defined).

 

H.        It is a condition to the effectiveness of the Credit Agreement, to the
obligations of the Lenders to make the Loans under the Credit Agreement, and to
the obligation of the L/C Issuer to issue Letters of Credit under the Credit
Agreement that each Pledgor execute and deliver the applicable Loan Documents,
including this Agreement.

 

A G R E E M E N T  :

 

NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Collateral Agent hereby agree that the
Existing Security Agreement is amended and restated as follows:

 

ARTICLE  I

 

DEFINITIONS AND INTERPRETATION

 

SECTION 1.1.     Definitions.

 

(a)        Unless otherwise defined herein or in the Credit Agreement,
capitalized terms used herein that are defined in the UCC shall have the
meanings assigned to them in the UCC.

 

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(b)        Capitalized terms used but not otherwise defined herein that are
defined in the Credit Agreement shall have the meanings given to them in the
Credit Agreement.

 

(c)        The following terms shall have the following meanings:

 

“Additional Pledged Interests” shall mean, collectively, with respect to each
Pledgor, (i) all Equity Interests of whatever class of any issuer of Initial
Pledged Interests, together with all rights, privileges, authority and powers of
such Pledgor relating to such Equity Interests, and the certificates,
instruments and agreements representing such Equity Interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such Equity Interests from time to time acquired by
such Pledgor in any manner, (ii)  all Equity Interests, as applicable, of each
corporation, limited liability company, partnership or other entity hereafter
acquired or formed by such Pledgor and all Equity Interests of whatever class of
such limited liability company, partnership or other entity, and (iii) all
options, warrants, rights, agreements, additional shares of capital stock of
whatever class of any issuer of such Equity Interests, together, in each case,
with all rights, privileges, authority and powers of such Pledgor relating to
such interests, and the certificates, instruments and agreements representing
such Equity Interests and any and all interest of such Pledgor in the entries on
the books of any financial intermediary pertaining to such Equity Interests,
from time to time acquired by such Pledgor in any manner.

 

“Agreement” shall have the meaning assigned to such in the Preamble hereof.

 

“Borrower” shall have the meaning assigned to such term in the Preamble hereof.

 

“Claims” shall mean any and all property taxes and other taxes, assessments
and special assessments, levies, fees and all governmental charges imposed upon
or assessed against, and all claims (including, without limitation, landlords’,
carriers’, mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s,
suppliers’ and warehousemen’s Liens and other claims arising by operation of
law) against, all or any portion of the Collateral.

 

“Collateral” shall have the meaning assigned to such term in SECTION 2.1 hereof.

 

“Collateral Agent” shall have the meaning assigned to such term in the Preamble
hereof.

 

“Contracts”
shall mean, collectively, with respect to each Pledgor, all sale, service,
performance, equipment or property lease contracts, agreements and grants and
all other contracts, agreements or grants (in each case, whether written or
oral, or third party or intercompany), between such Pledgor and third parties,
and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof.

 

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“Control” shall mean (i) in the case of each DDA, “control,” as such term is
defined in Section 9-104 of the UCC, (ii) in the case of any Security
Entitlement, “control,” as such term is defined in Section 8-106 of the UCC,
(iii) in the case of any Securities Account, “control” as described in Section
9-106(c) of the UCC, and (iv) in the case of any Commodity Contract, “control,”
as such term is defined in Section 9-106 of the UCC.

 

“Copyrights” shall mean, collectively, with respect to each Pledgor, all
copyrights (whether statutory or common law, whether established or registered
in the United States or any other country or any political subdivision thereof
whether registered or unregistered and whether published or unpublished) and all
copyright registrations and applications made by such Pledgor, in each case,
whether now owned or hereafter created or acquired by or assigned to such
Pledgor, including, without limitation, the registrations and applications
listed in the  Perfection Certificate, together with any and all (i) rights and
privileges arising under applicable Law with respect to such Pledgor’s use of
such copyrights, (ii) reissues, renewals, continuations and extensions thereof,
(iii) income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present or future infringements thereof.

 

“Credit Agreement” shall have the meaning assigned to such term in Recital
A hereof.

 

“Distributions” shall mean, collectively, with respect to each Pledgor, all dividends,
cash, options, warrants, rights, instruments, distributions, returns of capital
or principal, income, interest, profits and other property, interests (debt or
equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Securities Collateral, from time to
time received, receivable or otherwise distributed to such Pledgor in respect of
or in exchange for any or all of the Collateral.

 

“Excluded Property” shall mean (a) any fee-owned real property that is not
Material Real Property and any leasehold interests in real property, (b) motor
vehicles and other assets subject to certificates of title or ownership, (c)
letter of credit rights, except to the extent that the filing of UCC financing
statements is sufficient for perfection of security interests in  such letter of
credit rights, subject to all other clauses of this definition, (d) Equity
Interests in  any Person (other than any wholly-owned Subsidiaries) to the
extent the pledge thereof is not permitted by the terms of such Person’s
existing organizational or joint venture documents (without giving effect to any
amendment or modification thereto made in contemplation of or in connection with
such pledge or the transactions contemplated by the Loan Documents), (e) any
lease, license or other agreement with any Person (but not any proceeds or
receivables thereof)  if, to the extent and for so long as, the grant of a Lien
thereon to secure the Obligations constitutes a breach of or a default under, or
creates a right of termination in favor of any party (other than the Parent or
any of its Subsidiaries) with respect to, such lease, license or other agreement
(but only to the extent any of the foregoing is not rendered ineffective by, or
is

 

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otherwise unenforceable under, the Uniform Commercial Code or any applicable
Law, including any Debtor Relief Law), (f) any asset if, to the extent and for
so long as the grant of a Lien thereon to secure the Obligations is prohibited
by any applicable Law (other than to the extent that any such prohibition would
be rendered ineffective pursuant to the Uniform Commercial Code or any other
applicable Law), (g) those assets as to which the Collateral Agent (in
consultation with the Lead Borrower) reasonably determines that the costs
(including any  adverse tax consequences or other liabilities reasonably
expected to be incurred by the Parent,  the Lead Borrower or any Subsidiary) of
obtaining, perfecting or maintaining a Lien on such assets exceed the fair
market value thereof or the practical benefit to the Credit Parties afforded
thereby, (h) any governmental licenses or state or local franchises, charters
and authorizations, to the extent security interests in such licenses,
franchises, charters or authorizations are prohibited or restricted by the terms
thereof, and (i) any “intent-to-use” application for registration of a Trademark
filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. §1051, prior to the
filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an
“Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with
respect thereto, but only if and to the extent that the granting of a security
interest in such application would result in the invalidation of such
application or any resulting registration; provided that all Proceeds,
substitutions or replacements of any “Excluded Property” described in clauses
(a) through (i) (unless such Proceeds, substitutions or replacements would
constitute “Excluded Property”) shall constitute Collateral hereunder.

 

“General Intangibles” shall mean, collectively, with respect to each Pledgor,
all “general intangibles,” as such term is defined in the UCC, of such Pledgor
and, in any event, shall include, without limitation, (i) all of such Pledgor’s
rights, title and interest in, to and under all insurance policies and
Contracts, (ii) all know-how and warranties relating to any of the Collateral,
(iii) any and all other rights, claims, choses-in-action and causes of action of
such Pledgor against any other Person and the benefits of any and all collateral
or other security given by any other Person in connection therewith, (iv) all
guarantees, endorsements and indemnifications on, or of, any of the Collateral,
(v) all lists, books, records, correspondence, ledgers, print-outs, files
(whether in printed form or stored electronically), tapes and other papers or
materials containing information relating to any of the Collateral, including,
without limitation, all customer or tenant lists, identification of suppliers,
data, plans, blueprints, specifications, designs, drawings, appraisals, recorded
knowledge, surveys, studies, engineering reports, test reports, manuals,
standards, processing standards, performance standards, catalogs, research data,
computer and automatic machinery software and programs and the like, field
repair data, accounting information pertaining to such Pledgor’s operations or
any of the Collateral and all media in which or on which any of the information
or knowledge or data or records may be recorded or stored and all computer
programs used for the compilation or printout of such information, knowledge,
records or data, (vi) all licenses, consents, permits, variances,
certifications, authorizations and approvals, however characterized, of any
Governmental Authority (or any Person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Pledgor pertaining to
operations now or hereafter conducted by such Pledgor or any of the Collateral
including, without limitation, building permits,

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certificates of occupancy, environmental certificates, industrial permits or
licenses and certificates of operation (vii) all Payment Intangibles, (viii) all
Intellectual Property, and (ix) all rights to reserves, deferred payments,
deposits, refunds, indemnification of claims to the extent the foregoing relate
to any Collateral, including, without limitation, Permitted Acquisitions, and
claims for tax or other refunds against any Governmental Authority relating to
any Collateral.

 

“Goodwill” shall mean, collectively, with respect to each Pledgor, the goodwill
connected with such Pledgor’s business including, without limitation, (i) all
goodwill connected with the use of and symbolized by any of the Intellectual
Property in which such Pledgor has any interest, (ii) all know-how, trade
secrets, customer and supplier lists, proprietary information, inventions,
methods, procedures, formulae, descriptions, compositions, technical data,
drawings, specifications, name plates, catalogs, confidential information and
the right to limit the use or disclosure thereof by any Person, pricing and cost
information, business and marketing plans and proposals, consulting agreements,
engineering contracts and such other assets which relate to such goodwill and
(iii) all product lines of such Pledgor’s business.

 

“Guarantor” shall have the meaning assigned to such term in the Preamble hereof.

 

“Initial Pledged Interests” shall mean, with respect to each Pledgor, all
Equity Interests of each issuer described in Schedule III annexed hereto,
together with all rights, privileges, authority and powers of such Pledgor in
and to each such issuer, the certificates, instruments and agreements
representing such Equity Interests, all options, warrants, rights, and other
agreements of any issuer, and any and all interest of such Pledgor in the
entries on the books of any financial intermediary pertaining to such Equity
Interests.

 

“Instruments” shall mean, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in Article 9 of the UCC, and shall
include, without limitation, all promissory notes, drafts, bills of exchange or
acceptances.

 

“Intellectual Property” shall mean, collectively, the Patents, Trademarks,
Copyrights, Licenses and Goodwill.

 

“Intercompany Notes” shall mean, with respect to each Pledgor, all intercompany
notes described on Schedule I hereto and each intercompany note hereafter
acquired by such Pledgor and all certificates, instruments or agreements
evidencing such intercompany notes, and all assignments, amendments,
restatements, supplements, extensions, renewals, replacements or modifications
thereof to the extent permitted pursuant to the terms hereof.

 

“Investment Property” shall mean, collectively, with respect to each Pledgor,
all “investment property,” as such term is defined in the UCC, of such Pledgor
and, in any event, shall include, without limitation, a security, whether
certificated or uncertificated, security entitlement, securities account,
commodity contract or commodity account, excluding, however, the Securities
Collateral.

 

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“Lead Borrower” shall have the meaning assigned to such term in the
Preamble hereof.

 

“Licenses” shall mean, collectively, with respect to each Pledgor, all license
and distribution agreements with, and covenants not to sue, any other party with
respect to any  Patent, Trademark or Copyright or any other patent, trademark or
copyright, whether such Pledgor is a licensor or licensee, distributor or
distributee under any such license or distribution agreement, including, without
limitation, the license and distribution agreements listed in Schedule IV
annexed hereto, together with any and all (i) renewals, extensions, supplements
and continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including, without limitation, damages and payments for past, present or
future infringements or violations thereof, (iii) rights to sue for past,
present and future infringements or violations thereof and (iv) other rights to
use, exploit or practice any or all of the Patents, Trademarks or Copyrights or
any other patent, trademark or copyright.

 

“Material Real Property” shall mean any real property (including fixtures) that,
individually, has a fair market value greater than or equal to $1,000,000.

 

“Original Borrowers” shall have the meaning assigned to such term in the
Preamble hereof.

 

“Original Guarantors” shall have the meaning assigned to such term in the
Preamble hereof.

 

“Paid in Full” shall have the meaning assigned to such term in Section 1.02(d)
of the Credit Agreement.  The term “Payment in Full” shall have a correlative
meaning.

 

“Patents” shall mean, collectively, with respect to each Pledgor, all letters
patent and patents issued or assigned to and all letters patent and patent
applications made by such Pledgor (whether established or registered or recorded
in the United States or any other country or any political subdivision thereof),
including, without limitation, those patents, patent applications listed in the
Perfection Certificate, together with any and all (i) rights and privileges
arising under applicable Law with respect to such Pledgor’s use of any patents,
(ii) inventions and improvements described and claimed therein, (iii) reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof, (iv) income, fees, royalties, damages, claims and payments now or
hereafter due and/or payable thereunder and with respect thereto including,
without limitation, damages and payments for past, present or future
infringements thereof, (v) rights corresponding thereto throughout the world and
(vi) rights to sue for past, present or future infringements thereof.

 

“Perfection Certificate” shall mean those certain perfection certificates dated
as of the Restatement Date, executed and delivered by each Pledgor in favor of
the Collateral Agent for the benefit of the Credit Parties, and each other
Perfection Certificate (which shall be in form

 

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and substance reasonably acceptable to the Collateral Agent) executed and
delivered by the Guarantor in favor of the Collateral Agent for the benefit of
the Credit Parties contemporaneously with the execution and delivery of each
Joinder Agreement executed in accordance with SECTION 3.5.

 

“Pledged Interests” shall mean, collectively, the Initial Pledged Interests and
the Additional Pledged Interests; provided, however, that to the extent
applicable, Pledged Interests shall not include any interest possessing more
than 66% of the voting power or control of all classes of interests entitled to
vote of any foreign Subsidiary which is a first-tier CFC to the extent such
pledge would result in an adverse tax consequence to the Pledgors taken as a
whole.

 

“Pledged Securities” shall mean, collectively, the Pledged Interests and the
Successor Interests.

 

“Pledgor” shall have the meaning assigned to such term in the Preamble hereof.

 

“Secured Obligations” shall mean, collectively, the Obligations (as defined in
the Credit Agreement) and the Guaranteed Obligations (as defined in the Facility
Guaranty). Notwithstanding the foregoing, with respect to any Guarantor, the
term “Secured Obligations” shall exclude any Excluded Swap Obligations with
respect to such Guarantor.

 

“Securities Account Control Agreement” shall mean an agreement in form and
substance satisfactory to the Collateral Agent with respect to any Securities
Account of a Pledgor.

 

“Securities Collateral” shall mean, collectively, the Pledged Securities, the
Intercompany Notes and the Distributions.

 

“Successor Interests” shall mean, collectively, with respect to each Pledgor,
all shares of each class of the capital stock of the successor corporation or
interests or certificates of the successor limited liability company,
partnership or other entity owned by such Pledgor formed by or resulting from
any consolidation or merger in which any Person listed in the Perfection
Certificate is not the surviving entity; provided, however, that Successor
Interests  shall not include shares or interests possessing more than 66% of the
voting power or control of all classes of capital stock or interests entitled to
vote of any Subsidiary which is a first-tier CFC to the extent such pledge would
result in an adverse tax consequence to the Pledgors taken as a whole.

 

“Trademarks” shall mean, collectively, with respect to each Pledgor, all
trademarks (including service marks), slogans, logos, certification marks, trade
dress, uniform resource locations (URL’s), domain names, corporate names and
trade names, whether registered or unregistered, owned by or assigned to such
Pledgor and all registrations and applications for the foregoing (whether
statutory or common law and whether established or registered in the United
States or any other country or any political subdivision thereof), including,
without

 

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limitation, the registrations and applications listed in the Perfection
Certificate, together with any and all (i) rights and privileges arising under
applicable Law with respect to such Pledgor’s use  of any trademarks, (ii)
reissues, continuations, extensions and renewals thereof, (iii) income, fees,
royalties, damages and payments now and hereafter due and/or payable thereunder
and with respect thereto, including, without limitation, damages, claims and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and  (v) rights to sue for past,
present and future infringements thereof.

 

SECTION 1.2. Interpretation. The rules of interpretation specified in the Credit
Agreement shall be applicable to this Agreement. In the event of any direct
conflict between the terms of this Agreement and the terms of the Credit
Agreement, the terms of the Credit Agreement shall control.

 

SECTION 1.3. Perfection Certificate. The Collateral Agent and each Pledgor agree
that the Perfection Certificate and all descriptions of Collateral, schedules,
amendments and supplements thereto are and shall at all times remain a part of
this Agreement.

 

ARTICLE II

 

GRANT OF SECURITY AND SECURED OBLIGATIONS

 

SECTION 2.1.   Pledge.  As collateral security for the payment and performance
in full of all the Secured Obligations, each Pledgor hereby pledges and grants
to the Collateral Agent for its benefit and for the benefit of the Credit
Parties, a lien on and security interest in and to all of the right, title and
interest of such Pledgor in, to and under all personal property and interests in
property, wherever located, and whether now existing or hereafter arising or
acquired from time to time (collectively, the “Collateral”), including, without
limitation:

 

(i)      all Accounts;

 

(ii)      all Goods, including Equipment, Inventory and Fixtures;

 

(iii)      all Documents (including, if applicable, electronic Documents),
Instruments and Chattel Paper (whether tangible or electronic);

 

(iv)      all Letters of Credit and Letter-of-Credit Rights;

 

(v)      all Securities Collateral;

 

(vi)      all Investment Property;

 

(vii)      [Reserved.];

 

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(viii)     the Commercial Tort Claims described in the Perfection Certificate;

 

(ix)       all General Intangibles (including, without limitation, all
Intellectual Property);

 

(x)        all cash and all Deposit Accounts (including all DDAs) and
Securities Accounts;

 

(xi)       all Supporting Obligations;

 

(xii)      all books and records relating to the Collateral; and

 

(xiii)     to the extent not covered by clauses (i) through (xii) of this
sentence, all other personal property of such Pledgor, whether tangible or
intangible and all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of, each of the foregoing, any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to such Pledgor from time to time with
respect to any of the foregoing.

 

Notwithstanding anything to the contrary contained in clauses (i) through
(xiii) above, the security interest created by this Agreement shall not extend
to, and the term “Collateral” shall not include, any Excluded Property and (i)
the Pledgors shall from time to time at the request of the Collateral Agent give
written notice to the Collateral Agent identifying in reasonable detail the
“Excluded Property” and shall provide to the Collateral Agent such other
information regarding the Excluded Property as the Collateral Agent may
reasonably request and (ii)  from and after the Restatement Date, no Pledgor
shall permit to become effective in any document creating, governing or
providing for any permit, lease or license, a  provision that would prohibit the
creation of a Lien on such permit, lease or license in favor of the Collateral
Agent.

 

SECTION 2.2.     Security Interest.

 

(a)      Each Pledgor hereby irrevocably authorizes the Collateral Agent at any
time and from time to time to authenticate and file in any relevant jurisdiction
any financing statements (including fixture filings) and amendments thereto that
contain the information required by Article 9 of the Uniform Commercial Code of
each applicable jurisdiction for the filing of any financing statement or
amendment relating to the Collateral, including, without limitation, (i) whether
such Pledgor is an organization, the type of organization and any organizational
identification number issued to such Pledgor, (ii) any financing or continuation
statements or other documents without the signature of such Pledgor where
permitted by law, including, without limitation, the filing of a financing
statement describing the Collateral as “all assets of the Pledgor, whether now
owned or hereafter acquired” and (iii) in the case of a financing statement
filed as a fixture filing or covering Collateral constituting minerals or the

 

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like to be extracted or timber to be cut, a sufficient description of the real
property to which such Collateral relates. Each Pledgor agrees to provide all
information described in the immediately preceding sentence to the Collateral
Agent promptly upon request.

 

(b)        Each Pledgor hereby further authorizes the Collateral Agent to file
filings with the United States Patent and Trademark Office and United States
Copyright Office (or any successor office or any similar office in any other
country) or other necessary documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the security interest granted by such
Pledgor hereunder in any Intellectual Property, without the signature of such
Pledgor, and naming such Pledgor, as debtor, and the Collateral Agent, as Credit
Party.

 

(c)        Each Pledgor hereby ratifies its authorization for the Collateral
Agent to file in any relevant jurisdiction any initial financing statements or
amendments thereto, or any filings with the United States Patent and Trademark
Office and United States Copyright Office (or any successor office or any
similar office in any other country) if filed prior to the Restatement Date.

 

ARTICLE III

 

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF COLLATERAL

 

SECTION 3.1. Delivery of Certificated Securities Collateral. Each Pledgor
represents and warrants that all certificates, agreements or instruments
representing or evidencing the Securities Collateral in existence on the date
hereof have been delivered to the Agent in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or assignment
in blank and that the Collateral Agent has a perfected first priority security
interest therein. Each Pledgor hereby agrees that all certificates, agreements
or instruments representing or evidencing Securities Collateral acquired by such
Pledgor after the date hereof, shall promptly (and in any event within three (3)
Business Days) upon receipt thereof by such Pledgor be delivered to and held by
or on behalf of the Collateral Agent pursuant hereto. All certificated
Securities Collateral shall be in suitable form for transfer by delivery or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance reasonably satisfactory to the Collateral
Agent. The Collateral Agent shall have the right, at any time upon the
occurrence and during the continuance of any Event of Default, to endorse,
assign or otherwise transfer to or to register in the name of the Collateral
Agent or any of its nominees or endorse for negotiation any or all of the
Securities Collateral, without any indication that such Securities Collateral is
subject to the security interest hereunder. In addition, the Collateral Agent
shall have the right with written notice to exchange certificates representing
or evidencing Securities Collateral for certificates of smaller or larger
denominations, accompanied by instruments of transfer or assignment and letters
of direction duly executed in blank

 

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SECTION 3.2. Perfection of Uncertificated Securities Collateral. Each Pledgor
represents and warrants that the Collateral Agent has a perfected first priority
security interest in all uncertificated Pledged Interests pledged by it
hereunder that is in existence on the date hereof and that the applicable
Organization Documents do not require the consent of the other shareholders,
members, partners or other Persons to permit the Collateral Agent or its
designees to be substituted for the applicable Pledgor as a shareholder, member,
partner or other equity owner, as applicable, thereto. Each Pledgor hereby
agrees that if any of the Pledged Interests are at any time not evidenced by
certificates of ownership, then each applicable Pledgor shall, to the extent
permitted by applicable Law and upon the request of the Collateral Agent, cause
such pledge to be recorded on the equityholder register or the books of the
issuer, execute customary pledge forms or other documents necessary or
reasonably requested to complete the pledge, and shall otherwise comply with the
provisions of Section 5.1 hereof, and give the Collateral Agent the right to
transfer such Pledged Interests under the terms hereof and provide to the
Collateral Agent an opinion of counsel, in form and substance reasonably
satisfactory to the Collateral Agent, confirming such pledge and perfection
thereof. Each Pledgor hereby represents and warrants that no uncertificated
Pledged Interests is a “security” for purposes of Article 8 of the UCC of the
jurisdiction of organization of the issuer of such Pledged Interests. Each
Pledgor agrees that it shall not opt to have any uncertificated Pledged
Interests be treated as a “security” for purposes of Article 8 of the UCC of the
jurisdiction of organization of the issuer of such Pledged Interests, except in
accordance with Section 3.4.

 

SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected
Security Interest.

 

(a)        Each Pledgor represents and warrants that all filings, registrations
and recordings described on Schedule II hereto have been delivered to the
Collateral Agent in completed (and, to the extent necessary or appropriate, duly
executed) form for filing in each governmental, municipal or other office
specified in Schedule II and have been filed in accordance with a letter
agreement previously executed by the Pledgors, authorizing such pre-filing, or
shall be filed, registered and recorded immediately after the date thereof. The
filings, registrations and recordings described on Schedule II are all of the
filings, recordings and registrations that are necessary to publish notice and
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Collateral Agent (for the ratable benefit of the Credit
Parties) in respect of all Collateral  in which a security interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable Law with respect to the filing of continuation statements. Each
Pledgor represents and warrants that a fully executed short form hereof and/or a
fully executed short form grant of security interest in Intellectual Property in
form and substance reasonably satisfactory to the Collateral Agent, and
containing a description of all Collateral consisting of Patents and United
States registered Trademarks (and Trademarks and Patents for which a United

 

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States registration is pending or otherwise applied for) and United States
registered Copyrights (and Copyrights for which a United States registration is
pending or otherwise applied for) has been delivered to the Collateral Agent for
recording by the United States Patent and Trademark  Office  and the  United
States  Copyright  Office  pursuant  to   35 U.S.C. §261, 15 U.S.C. §1060 or 17
U.S.C. §205 and the regulations thereunder, as applicable, to protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Collateral Agent (for the ratable benefit of the Credit Parties) in
respect of all Collateral consisting of Patents, Trademarks and Copyrights in
which a security interest may be perfected by filing, recording or registration
in the United States (or any political subdivision thereof) and its territories
and possessions, and other than the UCC financing statements described in the
immediately prior sentence of this SECTION 3.3, no further or subsequent filing,
refiling, recording, rerecording, registration or reregistration is necessary
(other than such actions as are necessary to perfect the security interest in
favor of the Collateral Agent with respect to any Collateral consisting of
Patents, Trademarks and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).

 

(b)        Each Pledgor agrees that at the sole cost and expense of the
Pledgors, (i) such Pledgor will maintain the security interest created by this
Agreement in the Collateral and shall defend such security interest against the
claims and demands of all Persons (other than with respect to Permitted
Encumbrances), (ii) such Pledgor shall furnish to the Collateral Agent from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Collateral Agent may reasonably request, all in reasonable detail and (iii)  at
any time and from time to time, upon the written request of the Collateral
Agent, such Pledgor shall promptly and duly execute and deliver, and file and
have recorded, such further instruments and documents and take such further
action as the Collateral Agent may deem reasonably necessary for the purpose of
obtaining or preserving the full benefits of this Agreement and the rights and
powers herein granted, including the filing of any financing statements,
continuation statements and other documents (including the Agreement) under the
UCC (or other applicable Laws) in effect in any jurisdiction with respect to the
security interest created hereby and the execution and delivery of Blocked
Account Agreements, all in form reasonably satisfactory to the Collateral Agent
and in such offices (including, without limitation, the United States Patent and
Trademark Office) wherever required by law to perfect, continue and maintain a
valid, enforceable, first priority security interest in the Collateral as
provided herein and to preserve the other rights and interests granted to the
Collateral Agent hereunder, as against third parties (other than with respect to
Permitted Encumbrances), with respect to the Collateral.

 

SECTION 3.4. Other Actions. In order to further insure
the attachment, perfection and priority of, and the ability of the Collateral
Agent to enforce, the Collateral Agent’s security interest in the Collateral,
each Pledgor represents, warrants and agrees, in each case at such Pledgor’s own
expense, with respect to the following Collateral that:

 

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(a)        Instruments and Tangible Chattel Paper. As of the date hereof (i) no
amount payable under or in connection with any of the Collateral is evidenced by
any Instrument or Tangible Chattel Paper other than such Instruments and
Tangible Chattel Paper listed in the Perfection Certificate and (ii) each
Instrument and each item of Tangible Chattel Paper listed in Schedule V annexed
hereto, to the extent requested by the Collateral Agent, has been properly
endorsed, assigned and delivered to the Collateral Agent, accompanied by
instruments of transfer or assignment duly executed in blank. If any amount
payable under or in connection with any of the Collateral shall be evidenced by
any Instrument or Tangible Chattel Paper, the Pledgor acquiring such Instrument
or Tangible Chattel Paper shall forthwith endorse, assign and deliver the same
to the Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may reasonably request
from time to time.

 

(b)        Deposit Accounts. As of the date hereof it has neither opened nor
maintains any Deposit Accounts other than the accounts listed in the Perfection
Certificate. No Pledgor shall grant Control of any Deposit Account or any
Blocked Account to any Person other than the Collateral Agent. The Pledgors
shall at all times comply with the cash receipt provisions set forth in Section
6.13 of the Credit Agreement.

 

(c)        Investment Property. (i) As of the date hereof (a) it has no
Securities Accounts other than those listed in the Perfection Certificate or
Commodity Accounts other than those listed on Schedule VI annexed hereto, (b) it
does not hold, own or have any interest in any certificated securities or
uncertificated securities other than those constituting Securities Collateral
and those maintained in Securities Accounts listed in  the Perfection
Certificate and (c) it has entered into a duly authorized, executed and
delivered Securities Account Control Agreement with respect to each Securities
Account listed in the Perfection Certificate, as applicable.

 

(ii)         (A)      If any Pledgor shall at any time hold or
acquire  any  certificated securities constituting Investment Property, other
than any securities of foreign Subsidiaries not required to be pledged
hereunder, such interest shall constitute Additional Pledged Shares, and such
Pledgor shall promptly (a) endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or assignment duly
executed in blank, all in form and substance reasonably satisfactory to the
Collateral Agent or (b) deliver such securities into a Securities Account with
respect to which a Securities Account Control Agreement is in effect in favor of
the Collateral Agent.

 

(B)       Each interest in any limited liability company or limited partnership
which is a Subsidiary of Parent (including, without limitation, the Lead
Borrower) and pledged hereunder is not certificated or treated as a security
pursuant to Section 8-103 of the UCC and each Pledgor covenants and agrees that
it shall not take any action that causes or otherwise permits an interest in a
limited liability company or

 

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limited partnership which is pledged hereunder to be certificated or treated as
a security pursuant to Section 8-103 of the UCC; provided, that if any Pledgor
takes any action in violation of the foregoing provisions of this Section
3.04(c)(ii)(B), such Pledgor shall promptly notify the Collateral Agent in
writing of such action and, in such event, shall take all actions required by
Section 5.1 and requested by the Collateral Agent with  respect to such limited
liability company or limited partnership interests. If any securities now or
hereafter acquired by any Pledgor constituting Investment Property, other than
any securities of foreign Subsidiaries not required to be pledged hereunder, are
uncertificated and are issued to such Pledgor or its nominee directly by the
issuer thereof, such Pledgor shall promptly notify the Collateral Agent thereof
and pursuant to an agreement in form and substance reasonably satisfactory to
the Collateral Agent, either (a) cause the issuer to execute and deliver to the
Collateral Agent an acknowledgment of the pledge of such securities and agree to
comply with instructions from the Collateral Agent as to such securities,
without further consent of any Pledgor or such nominee, (b) cause a Security
Entitlement with respect to such uncertificated security to be held in a
Securities Account with respect to which the Collateral Agent has Control or (c)
arrange for the Collateral Agent to become the registered owner of the
securities. No Pledgor  shall hereafter establish and maintain any Securities
Account or Commodity Account with any Securities Intermediary or Commodity
Intermediary unless (1) the applicable Pledgor shall have given the Collateral
Agent ten (10) Business Days’ prior written  notice of its intention to
establish such new Securities Account or Commodity Account with such Securities
Intermediary or Commodity Intermediary, (2) such Securities Intermediary or
Commodity Intermediary shall be reasonably acceptable to the Collateral Agent
and (3) such Securities Intermediary or Commodity Intermediary, as the case may
be, and such Pledgor shall have duly executed and delivered a Control Agreement
with respect to such Securities Account or Commodity Account, as the case may
be.

 

(C)       Each Pledgor shall accept any cash and Investment Property which are
proceeds of the Pledged Interests in trust for the benefit of the Collateral
Agent and within five (5) Business Days of actual receipt thereof, deposit any
cash or Investment Property and any new securities, instruments, documents or
other property by reason of ownership of the Investment Property received by it
into an account in which the Collateral Agent has Control. The Collateral Agent
agrees with each Pledgor that the Collateral Agent shall not give any
entitlement orders or instructions or directions to any issuer of uncertificated
securities, Securities Intermediary or Commodity Intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing rights by such
Pledgor, unless a Cash Dominion Event has occurred and is continuing. No Pledgor
shall grant control over any Investment Property to any Person other than the
Collateral Agent.

 

(iii)          As between the Collateral Agent and the Pledgors, the Pledgors
shall bear the investment risk with respect to the Investment Property and
Securities
Collateral, and the risk of loss of, damage to, or the destruction of the
Investment

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Property and Securities Collateral, whether in the possession of, or maintained
as a security entitlement or deposit by, or subject to the control of, the
Collateral Agent, a Securities Intermediary, Commodity Intermediary, any Pledgor
or any other Person; provided,  however, that nothing contained in this SECTION
3.4(c) shall release or relieve any Securities Intermediary or Commodity
Intermediary of its duties and obligations to the Pledgors or any other Person
under any Control Agreement or under applicable Law. Each Pledgor shall promptly
pay all Claims and fees of whatever kind or nature with respect to the
Investment Property and Securities Collateral pledged by it under this
Agreement.  In the event any Pledgor shall fail to make such payment
contemplated in the immediately preceding sentence, the Collateral Agent may do
so for the account of such Pledgor and the Pledgors shall promptly reimburse and
indemnify the Collateral Agent for all costs and expenses incurred by the
Collateral Agent under this SECTION 3.4(c) in accordance with Section 11.3 of
this Agreement.

 

(d)        Electronic Chattel Paper and Transferable Records. Except as set
forth on Schedule VII hereto, as of the date hereof no amount payable under or
in connection with any of the Collateral is evidenced by any Electronic Chattel
Paper or any “transferable record” (as that term is defined in Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction).  If any amount payable under  or in connection with any
of the Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Pledgor acquiring such Electronic Chattel Paper or
transferable record shall promptly notify the Collateral Agent thereof and shall
take such action as the Collateral Agent may reasonably request to vest in the
Collateral Agent control under UCC Section 9-105 of such Electronic Chattel
Paper or control under Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The Collateral Agent agrees with such Pledgor that the
Collateral Agent will arrange, pursuant to procedures reasonably satisfactory to
the Collateral Agent and so long as such procedures will not result in the
Collateral Agent’s loss of control, for the Pledgor to make alterations to the
Electronic Chattel Paper or transferable record permitted under UCC Section
9-105 or, as the case may be, Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act of Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of control, unless
an Event of Default has occurred and is continuing or would occur after taking
into account any action by such Pledgor with respect to such Electronic Chattel
Paper or transferable record.

 

(e)        Letter-of-Credit Rights. If such Pledgor is at any time a beneficiary
under a Letter of Credit now or hereafter issued in favor of such Pledgor, other
than a Letter of Credit issued pursuant to the Credit Agreement, such Pledgor
shall promptly notify the Collateral Agent thereof and such Pledgor shall, at
the request of the Collateral Agent, pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral

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Agent, either (i) arrange for the issuer and any confirmer of such Letter of
Credit to consent to an assignment to the Collateral Agent of the proceeds of
any drawing under the Letter of Credit or (ii) arrange for the Collateral Agent
to become the transferee beneficiary of such Letter of Credit, with the
Collateral Agent agreeing, in each case, that the proceeds of any drawing under
the Letter of Credit are to be applied as provided in the Credit Agreement.

 

(f)         Commercial Tort Claims. As of the date hereof it holds no Commercial
Tort Claims other than those listed in the Perfection Certificate. If any
Pledgor shall at any time hold or acquire a Commercial Tort Claim, such Pledgor
shall immediately notify the Collateral Agent in writing signed by such Pledgor
of the brief details thereof and grant to the Collateral Agent in such writing a
security interest therein and in the Proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance reasonably
satisfactory to the Collateral Agent.

 

SECTION 3.5. Joinder of Additional Pledgors. The Pledgors shall cause each
direct or indirect Subsidiary of any Loan Party which, from time to time, after
the date hereof shall be required to pledge any assets to the Collateral Agent
for the benefit of the Credit Parties pursuant to the provisions of the Credit
Agreement, to execute and deliver to the Collateral  Agent a Perfection
Certificate and a Joinder Agreement, in each case, within the time period
required pursuant to Section 6.12 of the Credit Agreement and, upon such
execution and  delivery, such Subsidiary shall constitute a “Borrower” or
“Guarantor” (as provided in such Joinder Agreement) and a “Pledgor” for all
purposes hereunder with the same force and effect as if originally named as a
Borrower or Guarantor and Pledgor herein, including, but limited to, granting
the Collateral Agent a security interest in all Securities Collateral of such
Subsidiary. The rights and obligations of each Pledgor hereunder shall remain in
full force and effect notwithstanding the addition of any new Borrower or
Guarantor and Pledgor as a party to this Agreement.

 

SECTION 3.6. Supplements; Further Assurances. Each Pledgor shall take such
further actions, and execute and deliver to the Collateral Agent such Collateral
Access Agreements or additional assignments, agreements, supplements, powers and
instruments, as the Collateral Agent may in its reasonable judgment deem
necessary or appropriate, wherever required by law, in order to perfect,
preserve and protect the security interest in the Collateral as provided herein
and the rights and interests granted to the Collateral Agent hereunder, to carry
into effect the purposes hereof or better to assure and confirm unto the
Collateral Agent or permit the Collateral Agent to exercise and enforce its
rights, powers and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, each Pledgor shall make, execute,
endorse, acknowledge, file or refile and/or deliver to the Collateral Agent from
time to time upon reasonable request of the Collateral Agent such lists,
descriptions and designations of the Collateral, copies of warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, supplements,
additional security agreements, conveyances, financing statements,

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transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments. If an Event of Default has occurred and is
continuing, the Collateral Agent may institute and maintain, in its own name or
in the name of any Pledgor, such suits and proceedings as the Collateral Agent
may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or the perfection thereof in the
Collateral. All of the foregoing shall be at the sole cost and expense of the
Pledgors. The Pledgors and the Collateral Agent acknowledge that this Agreement
is intended to grant to the Collateral Agent for the benefit of the Credit
Parties a security interest in and Lien upon the Collateral and shall not
constitute or create a present assignment of any of the Collateral.

 

ARTICLE IV

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Each Pledgor represents, warrants and covenants as follows:

 

SECTION 4.1. Title. To the Knowledge of Lead Borrower’s Senior Executive
Officers, no financing statement or other public notice with respect to all or
any part of the Collateral is on file or of record in any public office, except
such as have been filed in favor of the Collateral Agent pursuant to this
Agreement or as are permitted by the Credit Agreement.   No Person other than
the Collateral Agent has control or possession of all or any part of the
Collateral, except as permitted by the Credit Agreement. No Pledgor has filed or
consented to the filing of (i) any financing statement or analogous document
under the UCC or any other applicable laws covering any Collateral, (ii) any
assignment or any security agreement or similar instrument covering any
Collateral with the United States Patent and Trademark Office or the United
States Copyright Office, (iii) any notice under the Assignment of Claims Act of
1940, 31 U.S.C.  § 3727(c), as now and hereafter in effect, or any successor
statute, or (iv) any assignment or any security agreement or similar instrument
covering any Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Permitted Encumbrances.

 

SECTION 4.2. Limitation on Liens; Defense of Claims; Transferability of
Collateral. Each Pledgor is as of the date hereof, and, as to Collateral
acquired by it from time to time after the date hereof, such Pledgor will be,
the sole direct and beneficial owner of all Collateral pledged by it hereunder
free from any Lien or other right, title or interest of any Person other than
the Liens and security interest created by this Agreement and Permitted
Encumbrances. Each Pledgor shall, at its own cost and expense, defend title to
the Collateral pledged by it hereunder and the security interest therein and
Lien thereon granted to the Collateral Agent and the priority thereof against
all claims and demands of all Persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Collateral Agent or any
other Credit Party other than Permitted Encumbrances. As of the date hereof, except as

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permitted by the Credit Agreement, there is no agreement, and, after the date
hereof, no Pledgor shall enter into any agreement or take any other action, that
would restrict the transferability of any of the Collateral or otherwise impair
or conflict with such Pledgors’ obligations or the rights of the Collateral
Agent hereunder.

 

SECTION 4.3.     Chief
Executive Office; Change of Name; Jurisdiction of Organization.

 

(a)        The exact legal name, type of organization, jurisdiction of
organization, Federal Taxpayer Identification Number, organizational
identification number and chief executive office of such Pledgor is indicated in
the Perfection Certificate. Such Pledgor shall furnish to the Collateral Agent
prompt written notice of any change in (i) its corporate name, (ii) the location
of its chief executive office, its principal place of business, any office in
which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) its identity or type of
organization or corporate structure, (iv) its Federal Taxpayer Identification
Number or organizational identification number or (v) its jurisdiction of
organization or formation (in each case, including, without limitation, by
merging with or into any other entity, reorganizing, dissolving, liquidating,
reincorporating or incorporating in any other jurisdiction). Such Pledgor agrees
(A) not to effect or permit any such change unless all filings have been made
under the UCC or otherwise that are required in order for the Collateral Agent
to continue at all times following such change to have a valid, legal and
perfected first priority security interest in all the Collateral (subject to
Permitted Encumbrances) and (B) to take all action reasonably satisfactory to
the Collateral Agent to maintain the perfection and priority  of the security
interest of the Collateral Agent for the benefit of the Credit Parties in the
Collateral intended to be granted hereunder. Each Pledgor agrees to promptly
provide the Collateral Agent with certified organizational documents reflecting
any of the changes described in the preceding sentence.

 

(b)        The Collateral Agent may rely on opinions of counsel as to whether
any or all UCC financing statements of the Pledgors need to be amended as a
result of any of the changes described in SECTION 4.3(a). If any Pledgor fails
to provide information to the Collateral Agent about such changes on a timely
basis, the Collateral Agent shall not be liable or responsible to any party for
any failure to maintain a perfected security interest in such Pledgor’s property
constituting Collateral, for which the Collateral Agent needed to have
information relating to such changes. The Collateral Agent shall have no duty to
inquire about such changes if any Pledgor does not inform the Collateral Agent
of such changes, the parties acknowledging and agreeing that it would not be
feasible or practical for the Collateral Agent to search for information on such
changes if such information is not provided by any Pledgor.

 

SECTION 4.4. Location of Inventory and Equipment. As of the Restatement Date,
all Equipment and Inventory of such Pledgor is located at the chief executive
office or such other location listed in the Perfection Certificate.

 

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SECTION 4.5. Condition and Maintenance of Equipment.  The Equipment of such
Pledgor is in good working order and condition, ordinary wear and tear excepted.
Each Pledgor shall cause the Equipment to be maintained and preserved in good
working order and condition, ordinary wear and tear excepted, and shall as
quickly as commercially reasonable make or cause to be made all repairs,
replacements and other improvements which are necessary in the conduct of such
Pledgor’s business except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

SECTION 4.6. Due Authorization and Issuance. All of the Initial Pledged
Interests have been, and to the extent any Pledged Interests are hereafter
issued, such shares will be, upon such issuance, duly authorized, validly issued
and, to the extent applicable, fully paid and non-assessable. All of the Initial
Pledged Interests have been fully paid for, and there is no amount or other
obligation owing by any Pledgor to any issuer of the Initial Pledged Interests
in exchange for or in connection with the issuance of the Initial Pledged
Interests or any Pledgor’s status as a partner or a member of any issuer of the
Initial Pledged Interests, nor shall there be in the future to the extent any
Pledged Interests are hereafter issued.

 

SECTION 4.7. No Claims. Each Pledgor owns or has rights to use all of the
Collateral pledged by it hereunder and all rights with respect to any of the
foregoing used in, necessary for or material to such Pledgor’s business as
currently conducted. The use by such Pledgor of such Collateral and all such
rights with respect to the foregoing do not infringe on the rights of any Person
other than such infringement which would not, individually or in the aggregate,
result in a Material Adverse Effect. No claim has been made and remains
outstanding that such Pledgor’s use of any Collateral does or may violate the
rights of any third Person that would individually, or in the aggregate, have a
Material Adverse Effect.

 

SECTION 4.8.  No Conflicts, Consents, etc.  No consent of any party
(includ-  ing, without limitation, equity holders or creditors of such Pledgor)
and no consent,  authorization, approval, license or other action by, and no
notice to or filing with, any Governmental Authority or regulatory body or other
Person is required (A) for the pledge by  such Pledgor of the Collateral pledged
by it pursuant to this Agreement or for the execution, delivery or performance
hereof by such Pledgor, (B) for the exercise by the Collateral Agent of the
voting or other rights provided for in this Agreement or (C) for the exercise by
the Collateral Agent of the remedies in respect of the Collateral pursuant to
this Agreement. Following the occurrence and during the continuation of an Event
of Default, if the Collateral Agent desires to exercise any remedies, voting or
consensual rights or attorney-in-fact powers set forth in this Agreement and
determines it necessary to obtain any approvals or consents of any Governmental
Authority or any other Person therefor, then, upon the reasonable request of the
Collateral Agent, such Pledgor agrees to use commercially reasonable efforts to
assist and aid the Collateral Agent to obtain as soon as commercially
practicable any necessary approvals or consents for the exercise of any such
remedies, rights and powers.

 

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SECTION 4.9. Collateral. All information set forth herein, including the
schedules annexed hereto, and all information contained in any documents,
schedules and lists heretofore delivered to any Credit Party in connection with
this Agreement, in each case, relating to the Collateral, is accurate and
complete in all material respects. The Collateral described on the schedules
annexed hereto and as set forth in the Perfection Certificate (to the extent
required to be described herein) constitutes all of the property of such type of
Collateral owned or held by the Pledgors.  Pledgor shall provide prompt notice
of any changes to the information disclosed on all schedules to this Agreement
(specifying the specific schedule that is being revised).

 

SECTION 4.10. Insurance. Each Pledgor shall (i) maintain or shall cause to be
maintained such insurance as is required pursuant to Section 6.07 of the Credit
Agreement; (ii) maintain such other insurance as may be required by applicable
Law; and (ii) furnish to the Collateral Agent, upon written request, full
information as to the insurance carried.  Each Pledgor hereby irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Pledgor’s true and lawful
agent (and attorney-in-fact), exercisable only after the occurrence and during
the continuance of an Event of Default, for the purpose of making, settling and
adjusting claims in respect of the Collateral under policies of insurance,
endorsing the name of such Pledgor on any check, draft, instrument or other item
of payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto. In the event that any Pledgor
at  any time or times shall fail to obtain or maintain any of the policies of
insurance required hereby or to pay any premium in whole or in part relating
thereto, the Collateral Agent may, without waiving or releasing any obligation
or liability of the Pledgors hereunder or any Default or Event of Default, in
its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent
deems advisable in accordance with Section 11.2 of this Agreement. All sums
disbursed by the Collateral Agent in connection with this SECTION 4.10,
including reasonable attorneys’ fees, court costs, expenses and other charges
relating thereto, shall be payable, upon demand, by the Pledgors to the
Collateral Agent and shall be additional Secured Obligations secured hereby.

 

SECTION 4.11. Payment of Taxes; Compliance with Laws; Contested Liens; Claims.
Each Pledgor represents and warrants that all Claims imposed upon or assessed
against the Collateral have been paid and discharged except to the extent such
Claims constitute (i) a Lien not yet due and payable, (ii) a Permitted
Encumbrance, or (iii) are being contested by the Pledgor as set forth in Section
6.04 of the Credit Agreement. Each Pledgor shall comply with all applicable Law
relating to the Collateral, unless the failure to comply could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Each Pledgor may at its own expense contest the validity, amount or
applicability of any Claims so long as the contest thereof shall be conducted in
accordance with, and permitted pursuant to the provisions of, the Credit
Agreement. Notwithstanding the foregoing provisions of this SECTION 4.11, no
contest of any such obligation may be pursued by such Pledgor if such contest
would expose the Collateral Agent or any other Credit Party to (i) any possible
criminal liability or (ii) any additional civil liability for failure to comply
with such obligations unless such Pledgor shall

 

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have furnished a bond or other security therefor satisfactory to the Collateral
Agent, or such Credit Party, as the case may be.

 

SECTION 4.12.  Access to Collateral, Books and Records; Other Information.  The
Collateral Agent and its representatives may examine the Collateral in
accordance with Section 6.10 of the Credit Agreement.

 

SECTION 4.13. Third Party Consents. Each Pledgor shall use reasonable commercial
efforts to obtain the consent of third parties to the extent such consent is
necessary or desirable to create a valid, perfected security interest in favor
of the Collateral Agent in any Collateral.

 

ARTICLE V

 

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

 

SECTION 5.1. Pledge of Additional Securities Collateral. Each Pledgor shall,
upon obtaining any Securities Collateral of any Person required to be pledged
hereunder, accept the same in trust for the benefit of the Collateral Agent and
forthwith deliver to the Collateral Agent a pledge amendment, duly executed by
such Pledgor, in substantially the form of Exhibit  1 annexed hereto (each, a
“Pledge Amendment”), and the certificates and other documents required under
SECTION 3.1 and SECTION 3.2 hereof in respect of the additional Securities
Collateral which are to be pledged pursuant to this Agreement, and confirming
the attachment of the Lien hereby created on and in respect of such additional
Securities Collateral. Each Pledgor hereby authorizes the Collateral Agent to
attach each Pledge Amendment to this Agreement and agrees that all Securities
Collateral listed on any Pledge Amendment delivered to the Collateral Agent
shall for all purposes hereunder be considered Collateral.

 

SECTION 5.2.     Voting Rights; Distributions; etc..

 

(i)        So long as no Event of Default shall have occurred and be continuing,
each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Securities Collateral or any part thereof
for any purpose not inconsistent with the terms or purposes hereof, the Credit
Agreement or any other Loan Document evidencing the Secured Obligations.  The
Collateral Agent shall be deemed without further action or formality  to have
granted to each Pledgor all necessary consents relating to voting rights and
shall, if necessary, upon written request of any Pledgor and at the sole cost
and expense of the Pledgors, from time to time execute and deliver (or cause to
be executed and delivered) to such Pledgor all such instruments as such Pledgor
may reasonably request in order to permit such Pledgor to exercise the voting
and other rights which it is entitled to exercise pursuant to this SECTION
5.2(i).

 

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(ii)        Upon the occurrence and during the continuance of any Event of
Default, all rights of each Pledgor to exercise the voting and other consensual
rights it would otherwise be entitled to exercise pursuant to SECTION 5.2(i)
hereof without any action, other than, in the case of any Securities Collateral,
or the giving of any notice shall immediately cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall thereupon have
the  sole right to exercise such voting and other consensual rights; provided
that the Collateral Agent shall have the right, in its sole discretion, from
time to time following the occurrence and continuance of an Event of Default to
permit such Pledgor to exercise such rights under SECTION 5.2(i). After such
Event of Default is no longer continuing, each Pledgor shall have the right to
exercise the voting, managerial and other consensual rights and powers that it
would otherwise be entitled to pursuant to SECTION 5.2(i) hereof.

 

(iii)        So long as no Cash Dominion Event shall have occurred and be
continuing, each Pledgor shall be entitled to receive and retain, and to utilize
free and clear of the Lien hereof, any and all Distributions, but only if and to
the extent made in accordance with, and to the extent permitted by, the
provisions of the Credit Agreement; provided, however, that any and all such
Distributions consisting of rights or interests in the form of securities shall
be forthwith delivered to the Collateral Agent to hold as Collateral and shall,
if received by any Pledgor, be received in trust for the benefit of the
Collateral Agent, be segregated from the other property or funds of such Pledgor
and be forthwith delivered to the Collateral Agent as Collateral in the same
form as so received (with any necessary endorsement). The Collateral Agent
shall, if necessary, upon written request of any Pledgor and at the sole cost
and expense of the Pledgors, from time to time execute and deliver (or cause to
be executed and delivered) to such Pledgor all such instruments as such Pledgor
may reasonably request in order to permit such Pledgor to receive the
Distributions which it is authorized to receive and retain pursuant to this
SECTION 5.2(iii).

 

(iv)        Upon the occurrence and during the continuance of any Cash Dominion
Event, all rights of each Pledgor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to SECTION 5.2(iii)
hereof shall cease and all such rights shall thereupon become vested in the
Collateral Agent, which shall thereupon have the sole right to receive and hold
as Collateral such Distributions. After such Cash Dominion Event is no longer
continuing, each Pledgor shall have the right to receive the Distributions which
it would be authorized to receive and retain pursuant to SECTION 5.2(iii).

 

(v)        Each Pledgor shall, at its sole cost and expense, from time to time
execute and deliver to the Collateral Agent appropriate instruments as the
Collateral Agent may reasonably request in order to permit the Collateral Agent
to exercise the voting and other rights which it may be entitled to exercise
pursuant to SECTION 5.2(ii) hereof and to receive all Distributions which it may
be entitled to receive under SECTION 5.2(iii) hereof.

 

(vi)        All Distributions which are received by any Pledgor contrary to the
provisions of SECTION 5.2(iii) hereof shall be received in trust for the benefit
of the Collateral

 

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Agent, shall be segregated from other funds of such Pledgor and shall
immediately be paid over to the Collateral Agent as Collateral in the same form
as so received (with any necessary endorsement).

 

(vii)        Each Pledgor hereby authorizes and instructs each issuer of any
Securities Collateral pledged by such Pledgor hereunder to comply with any
instruction regarding Collateral Agent’s rights under this Section 5.2 without
any other or further instructions from such Pledgor, and each Pledgor agrees
that each issuer shall be fully protected in so complying and shall have no duty
or right to inquire as to the Collateral Agent’s authority to give such
instruction, including the payment of any dividends or other payments with
respect to the Securities Collateral directly to the Collateral Agent.

 

(viii)        Each Pledgor hereby grants to Collateral Agent or its nominee, on
behalf of Secured Parties, an irrevocable proxy until such time as all
Obligations are Paid in Full, in cash, to exercise all voting and membership
rights relating to the Securities Collateral in any instance, which proxy shall
be coupled with an interest and only be exercisable upon the occurrence and
during the continuance of an Event of Default. Each Pledgor covenants and agrees
that prior to the expiration of such irrevocable proxy pursuant to applicable
law, such Pledgor will reaffirm such irrevocable proxy in a manner reasonably
satisfactory to the Collateral Agent. Upon the reasonable request of Collateral
Agent, such Pledgor agrees to deliver to Collateral Agent, on behalf of
Collateral Agent and the other Secured Parties, such further evidence of such
irrevocable proxy or such further irrevocable proxies to vote the Securities
Collateral as Collateral Agent may reasonably request.

 

SECTION 5.3. Organization Documents. Each Pledgor has delivered to the
Collateral Agent true, correct and complete copies of its Organization
Documents. The Organization Documents are in full force and effect and have not
as of the date hereof been amended or modified except as disclosed to the
Collateral Agent. Except as otherwise permitted under Sections 7.04 of the
Credit Agreement, no Pledgor will terminate or agree to terminate any
Organization Documents or make any amendment or modification to any Organization
Documents, including electing to treat any Pledged Interests of such Pledgor as
a security under Section 8-103 of the UCC.

 

SECTION 5.4.  Defaults, etc.  Such Pledgor is not in default in the payment of
any portion of any mandatory capital contribution, if any, required to be made
under any agreement to which such Pledgor is a party relating to the Securities
Collateral pledged by it, and such Pledgor is not in violation of any other
provisions of any such agreement to which such Pledgor is a party, or otherwise
in default or violation thereunder. No Securities Collateral pledged by such
Pledgor is subject to any defense, offset or counterclaim, nor have any of the
foregoing been asserted or alleged against such Pledgor by any Person with
respect thereto, and as of the date hereof, there are no certificates,
instruments, documents or other writings (other than the Organization Documents
and certificates, if any, delivered to the Collateral Agent) which evidence any
Securities Collateral of such Pledgor.

 

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SECTION 5.5.     Certain Agreements of Pledgors As Issuers and Holders of Equity
Interests.

 

(i)        In the case of each Pledgor which is an issuer of Securities
Collateral, such Pledgor agrees to be bound by the terms of this Agreement
relating to the Securities Collateral issued by it and will comply with such
terms insofar as such terms are applicable to it.

 

(ii)        In the case of each Pledgor which is a partner in a partnership,
limited liability company or other entity, such Pledgor hereby consents to the
extent required by the applicable Organization Documents to the pledge by each
other Pledgor, pursuant to the terms hereof, of the Pledged Interests in such
partnership, limited liability company or other entity and, upon the occurrence
and during the continuance of an Event of Default, to the transfer of such
Pledged Interests to the Collateral Agent or its nominee and to the substitution
of the Collateral Agent or its nominee as a substituted partner or member in
such partnership, limited liability company or other entity with all the rights,
powers and duties of a general partner or a limited partner or member, as the
case may be.

 

ARTICLE VI

 

CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL

 

SECTION 6.1. Grant of License. Without  limiting  the  rights  of  Collateral
Agent as the holder of a Lien on the Intellectual Property, for the purpose of
enabling the Collateral Agent, during the continuance of an Event of Default, to
exercise rights and remedies under Article IX hereof at such time as the
Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Pledgor hereby grants to the Collateral
Agent, to the extent assignable, an irrevocable, non-exclusive license
(exercisable without payment of royalty, rent or other compensation to such
Pledgor) to use, assign, license or sublicense any of the Intellectual Property
now owned or hereafter acquired by such Pledgor, wherever the same may be
located, including in such license access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for
the compilation or printout hereof.

 

SECTION 6.2.     Representations and Warranties with respect to
Intellectual Property.

 

(i)        Except pursuant to licenses and other user agreements entered into by
any Pledgor in the ordinary course of business and licenses that are listed in
Schedule IV, (i) each Pledgor owns and possesses the right to use, and has done
nothing to authorize or enable any other Person to use, any material Copyright,
Patent or Trademark listed in the Perfection Certificate, and (ii) all material
Intellectual Property owned by such Pledgor is valid, subsisting

 

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and, to the best of such Pledgor’s knowledge, enforceable by and in the name of
such Pledgor, and has not been abandoned, or allowed to lapse, expire or become
dedicated to the public.

 

(ii)        Each Pledgor is the sole and exclusive beneficial and record owner
of the entire right, title, and interest in and to all Intellectual Property
listed as owned by such Pledgor as of the Restatement Date in the Perfection
Certificate (and, with respect to the Perfection Certificate as it may be
amended or supplemented from time to time in accordance with the  terms of the
Loan Documents, as of the date of delivery of the most recent Compliance
Certificate pursuant to Section 6.02(c) of the Credit Agreement). Such Pledgor
has performed all necessary acts and has paid all registration, renewal and
maintenance fees required to maintain each and every registration and
application of material Intellectual Property owned by such Pledgor in full
force and effect.

 

(iii)        Except as could not reasonably be expected to, individually or in
the aggregate, impair or interfere in any material respect with the operation of
the business conducted by all of the Pledgors, taken as a whole, to the best of
each Pledgor’s knowledge, the use of the Intellectual Property owned by each
Pledgor and the conduct of such Pledgor’s business does not infringe on the
Intellectual Property rights of any Person. No written claim has been asserted
and is pending or, to the best of such Pledgor’s knowledge, has been threatened,
by any Person challenging any Pledgor’s use of any Intellectual Property, nor
does any Pledgor know of any valid basis for any such claim, except as could not
reasonably be expected to, individually or in the aggregate, impair or interfere
in any material respect with the operation of the business conducted by all of
the Pledgors, taken as a whole.

 

(iv)        Except as set forth on Schedule IV, on the Restatement Date, (a)
none of the Intellectual Property owned by any Pledgor is the subject of any
material licensing agreement pursuant to which such Pledgor is the licensor
(other than any Intellectual Property license agreements entered into by such
Pledgor in the ordinary course of business that are not material to such
Pledgor’s business) and (b) no settlement or consents, covenants not to sue,
nonassertion assurances, or releases have been entered into by such Pledgor or
to which such Pledgor is bound adversely affect such Pledgor’s rights to own or
use any material Intellectual Property, and such Pledgor has not made a previous
assignment, sale, transfer or agreement constituting or contemplating a present
or future assignment, sale or transfer of any material Intellectual Property
owned by such Pledgor that has not been terminated or released.

 

(v)        No holding, decision or judgment has been rendered by any
Governmental Authority which limits the validity of (other than office actions
issued in the ordinary course of prosecution of any pending applications for
Patents or applications for registration of other Intellectual Property), or any
Pledgor’s ownership or rights to use, any Intellectual Property, except, in each
case, as could not, individually or in the aggregate, reasonably be expected to
impair or interfere in any material respect with the operation of the business
conducted by all of the Pledgors, taken as a whole.

 

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No action or proceeding is pending, or, to the knowledge of each Pledgor,
threatened, against  any Pledgor on the Restatement Date seeking to limit the
validity of any Intellectual Property owned by any Pledgor or any Pledgor’s
ownership interest therein or right to register the same (other than office
actions issued in the ordinary course of prosecution of any
pending  applications for Patents or applications for registration of other
Intellectual Property), which, if adversely determined, could reasonably be
expected to impair or interfere in any material respect with the operation of
the business conducted by all of the Pledgors, taken as a whole, or result in a
Material Adverse Effect. To each Pledgor’s knowledge, on and as of the
Restatement Date, there is no material violation by others of any right of such
Pledgor with respect to any Copyright, Patent or Trademark listed in the
Perfection Certificate, respectively, pledged by it under the name of such
Pledgor.

 

SECTION 6.3.     [Reserved.].

 

SECTION 6.4.     Protection of Collateral Agent’s Security.

 

(i)        On a continuing basis, each Pledgor shall, at its sole cost and
expense, (a) promptly following its becoming aware thereof, notify the
Collateral Agent of (x) any materially adverse determination in any proceeding
in the United States Patent and Trademark Office or the United States Copyright
Office with respect to any material Patent, Trademark or Copyright or (y) the
institution of any proceeding or any adverse determination in any Federal, state
or local court or administrative body regarding such Pledgor’s claim of
ownership in or right to use any of the Intellectual Property material to the
use and operation of the Collateral, its right to register such Intellectual
Property or its right to keep and maintain such registration in full force and
effect, (b) maintain and protect the Intellectual Property material to the use
and operation of the Collateral as presently used and operated and as
contemplated by the Credit Agreement, and,  with respect to each Trademark that
is owned by such Pledgor and material to the conduct of  such Pledgor’s
Business, (x) maintain the quality of products and services offered under each
Trademark in substantially the same manner as in effect as of the Restatement
Date, (y) display such Trademark with notice of Federal or foreign registration
to the extent necessary  and required to preserve its rights under applicable
law, and (z) not knowingly use such Trademark in violation of any third party
rights, (c) continue to mark any products covered by a Patent with the relevant
patent number as necessary or advisable to preserve its rights under applicable
patent laws, in accordance with such prudent and standard practice used in
industries that are the same as or similar to those in which such Patent is
engaged, (d) for each work covered by a material registered Copyright that is
owned by such Pledgor, continue to publish, reproduce, display, adopt and
distribute the work with copyright notices as necessary or advisable to preserve
its rights under applicable copyright laws, (e) not permit to lapse or become
abandoned any Intellectual Property material to the use and operation of the
Collateral as presently used and operated and as contemplated by the Credit
Agreement, and not settle or compromise any pending or future litigation or
administrative proceeding with respect to such Intellectual Property, in each
case except as shall be consistent with commercially reasonable business
judgment and, if any Event of Default has occurred and is continuing, with the
prior approval of

 

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the Collateral Agent (such approval not to be unreasonably withheld), (f) upon
such Pledgor obtaining knowledge thereof, promptly notify the Collateral Agent
in writing of (x) the abandonment, expiration, lapse, loss or dedication to the
public of any Patent, Trademark or Copyright material to the conduct of such
Pledgor’s business and owned by such Pledgor (other than as a result of
abandonment or other disposition that is, in the reasonable judgment of such
Pledgor, no longer economically practicable to maintain or material in the
conduct of the business of all of the Pledgors, taken as a whole), or of any
materially adverse determination or development (including the institution of
any proceeding in the United States Patent and Trademark Office, United States
Copyright Office or any court or similar office of any country) regarding such
Pledgor’s ownership of any Patent, Trademark or Copyright, its right to register
the same, or its right to keep and maintain the same, and (y) any other event
which may be reasonably expected to materially and adversely affect the value or
utility of the Intellectual Property or any portion thereof material to the use
and operation of the Collateral, the ability of such Pledgor or the Collateral
Agent to dispose of the Intellectual Property or any portion thereof or the
rights and remedies of the Collateral Agent in relation thereto including,
without limitation, a levy or threat of levy or any legal process against the
Intellectual Property or any portion thereof, (g) not license the Intellectual
Property other than licenses entered into by such Pledgor in, or incidental to,
the ordinary course of business, or amend or permit the amendment of any of the
material licenses in a manner that materially and adversely affects the right to
receive payments thereunder, or in any manner that would materially impair the
value of the Intellectual Property or the Lien on and security interest in the
Intellectual Property intended to be granted to the Collateral Agent for the
benefit of the Credit Parties, without the consent of the Collateral Agent, (h)
until the Collateral Agent exercises its rights to make collection, diligently
keep adequate records respecting the Intellectual Property and (i) furnish to
the Collateral Agent from time to time upon the Collateral Agent’s reasonable
request therefor detailed statements  and amended schedules further identifying
and describing the Intellectual Property and such  other materials evidencing or
reports pertaining to the Intellectual Property as the Collateral Agent may from
time to time request. Notwithstanding the foregoing, nothing herein shall
prevent any Pledgor from selling, disposing of or otherwise using any
Intellectual Property as permitted under the Credit Agreement.

 

(ii)        Each Pledgor will take such steps that are, in the good business
judgment of such Pledgor, consistent with its past practice in any proceeding
before the United States Patent and Trademark Office, United States Copyright
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, to maintain and
pursue each material application relating to the Patents, Trademarks and/or
Copyrights (and to obtain the relevant grant or registration) and to maintain
each issued Patent and each registration of the Trademarks and Copyrights that
is material to the conduct of any Pledgor’s business, including timely filings
of applications for renewal, affidavits of use, affidavits of incontestability
and payment of maintenance fees, and, if consistent with such Pledgor’s good
business judgment, to initiate opposition, interference and cancellation
proceedings against third parties unless such Pledgor shall have previously
determined that such use  or  the
pursuit  or  maintenance  of  such  Patent,  Trademark  and/or  Copyright  is no
longer

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necessary or advisable in the conduct of such Pledgor’s business and that the
loss thereof could not reasonably be expected to impair or interfere in any
material respect with the operation of the business conducted by all of the
Pledgors, taken as a whole, in which case such Pledgor will give prompt notice
of any such abandonment to the Collateral Agent.

 

(iii)        In the event that any Pledgor knows or has reason to believe that
any Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Pledgor’s business has been infringed, misappropriated, diluted
or otherwise violated by a third person, such Pledgor promptly shall notify the
Collateral Agent and shall, if consistent with such Pledgor’s good business
judgment, take such actions as such Pledgor deems reasonable and appropriate
under the circumstances to protect or enforce such Collateral including, without
limitation, to sue for infringement, misappropriation, dilution or other
violation, to seek an injunction against such infringement, misappropriation,
dilution or other violation, and to recover any and all damages for such
infringement, misappropriation, dilution or other violation.

 

(iv)        Upon the occurrence and during the continuance of an Event of
Default, each Pledgor shall use its best efforts to obtain all requisite
consents or approvals by the licensor of each material License, to effect the
assignment of all such Pledgor’s right, title and interest thereunder to the
Collateral Agent, for the ratable benefit of the Credit Parties, or its
designee; provided that, notwithstanding anything to the contrary herein, no
Pledgor shall be required to make any payments to secure such consent or
approval.

 

SECTION 6.5. After-Acquired Property. If any Pledgor shall, at any time before
the Payment in Full of the Obligations, (i) obtain any rights to any additional
Intellectual Property or (ii) become entitled to the benefit of any additional
Intellectual Property or any renewal or extension thereof, including any
reissue, division, continuation, or continuation-in- part of any Intellectual
Property, or any improvement on any Intellectual Property, the provisions hereof
shall automatically apply thereto and any such item enumerated in clause (i) or
(ii) of this SECTION 6.5 with respect to such Pledgor shall automatically
constitute Intellectual Property if such would have constituted Intellectual
Property at the time of execution hereof and be subject to the Lien and security
interest created by this Agreement without further action by any party. With
respect to any federally registered Intellectual Property, each Pledgor shall promptly (i) provide
to the Collateral Agent written notice of any of the foregoing and (ii) confirm
the attachment of the Lien and security interest created by this Agreement to
any rights described in clauses (i) and (ii) of the immediately preceding
sentence of this SECTION 6.5 by execution of an instrument in form reasonably
acceptable to the Collateral Agent.

 

SECTION 6.6. Modifications. Each Pledgor authorizes the Collateral Agent to
modify this Agreement by (i) amending the Perfection Certificate to include any
Intellectual Property acquired or arising after the date hereof of such Pledgor
including, without limitation, any of the items listed in SECTION 6.5 hereof,
and (ii) taking all such further actions in accordance with Section 2.3 herein
or any other section herein as necessary to perfect Collateral Agent’s security
interest.

 

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SECTION 6.7. Litigation. Unless there shall occur and be continuing any Event of
Default, each Pledgor shall have the right to commence and prosecute in its own
name, as the party in interest, for its own benefit and at the sole cost and
expense of the Pledgors, such applications for protection of the Intellectual
Property and suits, proceedings or other actions to prevent the infringement,
counterfeiting, unfair competition, dilution, diminution in value or other
damage as are necessary to protect the Intellectual Property. Upon the
occurrence and during the continuance of any Event of Default, the Collateral
Agent shall have the right but shall in no way be obligated to file applications
for protection of the Intellectual Property and/or bring suit in the name of any
Pledgor, the Collateral Agent or the Credit Parties to enforce the Intellectual
Property and any license thereunder. In the event of such suit, each Pledgor
shall, at the reasonable request of the Collateral Agent, do any and all lawful
acts and execute any and all documents requested by the Collateral Agent in aid
of such enforcement and the Pledgors shall promptly reimburse and indemnify the
Collateral Agent, as the case may be, for all costs and expenses incurred by the
Collateral Agent in the exercise of its rights under this SECTION 6.7 in
accordance with SECTION 11.3 hereof. In the event that the Collateral Agent
shall elect not to bring suit to enforce the Intellectual Property, each Pledgor
agrees, at the reasonable request of the Collateral Agent, to take all
commercially reasonable actions necessary, whether by suit, proceeding or other
action, to prevent the infringement, counterfeiting, unfair competition,
dilution, diminution in value of or other damage to any of the Intellectual
Property by others and for that purpose agrees to diligently maintain any suit,
proceeding or other action against any Person so infringing necessary to prevent
such infringement.

 

ARTICLE VII

 

CERTAIN PROVISIONS CONCERNING CREDIT CARD RECEIVABLES

 

SECTION 7.1. Special Representations and Warranties. All Credit Card Receivables
and all records, papers and documents relating thereto (i) are genuine and
correct and in all material respects what they purport to be, (ii) represent the
legal, valid and binding obligation of the account debtor, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability, evidencing indebtedness
unpaid and owed by such account debtor, arising out of the performance of labor
or services or the sale, lease, license, assignment or other disposition and
delivery of the goods or other property listed therein or out of an advance or a
loan, (iii) are in all material respects in compliance and conform with all
applicable material Federal, state and local laws and applicable Laws of any
relevant foreign jurisdiction.

 

SECTION 7.2.   Maintenance of Records.  Each Pledgor shall keep and maintain at
its own cost and expense materially complete records of each Credit Card
Receivable, in a manner consistent with prudent business practice, including,
without limitation, records of all payments received, all credits granted
thereon, all merchandise returned and all other

 

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documentation relating thereto. Each Pledgor shall, at such Pledgor’s sole cost
and expense,  upon the Collateral Agent’s demand made at any time after the
occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Credit Card Receivables, including, without limitation, all
documents evidencing Credit Card Receivables and any books and records relating
thereto to the Collateral Agent or to its representatives (copies of which
evidence and books and records may be retained by such Pledgor). Upon the
occurrence and during the continuance of any Event of Default, the Collateral
Agent may transfer a full and complete copy of any Pledgor’s books, records,
credit information, reports, memoranda and all other writings relating to the
Credit Card Receivables to and for the use by any Person that has acquired or is
contemplating acquisition of an interest in the Credit Card Receivables or the
Collateral Agent’s security interest therein without the consent of any Pledgor.

 

SECTION 7.3. Legend. Each Pledgor shall legend, at the request
of  the  Collateral Agent made at any time after the occurrence and during the
continuance of any Event of Default and in form and manner reasonably
satisfactory to the Collateral Agent, the Credit Card Receivables and the other
books, records and documents of such Pledgor evidencing or pertaining to the
Credit Card Receivables with an appropriate reference to the fact that the
Credit Card Receivables have been assigned to the Collateral Agent for the
benefit of the Credit Parties and that the Collateral Agent has a security
interest therein.

 

SECTION 7.4. Modification of Terms, etc.  No Pledgor shall rescind or cancel any
indebtedness evidenced by any Credit Card Receivable or modify any term thereof
or make any adjustment with respect thereto, extend or renew any such
indebtedness, compromise or settle any dispute, claim, suit or legal proceeding
relating thereto, or sell any Credit Card Receivable or interest therein,
except, in each such case, in the ordinary course of business consistent with
prudent business practice, without the prior written consent of the Collateral
Agent.

 

SECTION 7.5. Collection. Each Pledgor shall cause to be collected from the
account debtor of each of the Credit Card Receivables, as and when due in the
ordinary course of business consistent with prudent business practice
(including, without limitation, Credit Card Receivables that are delinquent,
such Credit Card Receivables to be collected in accordance with generally
accepted commercial collection procedures), any and all Credit Card Receivables
owing under or on account of such Credit Card Receivable, and apply forthwith
upon receipt thereof all such amounts as are so collected to the outstanding
balance of such Credit Card Receivable. The costs and expenses (including,
without limitation, attorneys’ fees) of collection, in any case, whether
incurred by any Pledgor, the Collateral Agent or any Credit Party in accordance
with the terms of the Loan Documents, shall be paid by the Pledgors.

 

ARTICLE VIII

 

TRANSFERS AND OTHER LIENS

 

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SECTION 8.1.  Transfers of and other Liens on Collateral.  No Pledgor
shall   sell, convey, assign or otherwise dispose of, or grant any option with
respect to, any of the Collateral pledged by it hereunder except with respect to
Permitted Dispositions. Each Pledgor shall remain at all times in possession or
otherwise in control of the Collateral, except as permitted by the Credit
Agreement.

 

ARTICLE IX

 

REMEDIES

 

SECTION 9.1.   Remedies.  (a)  Upon the occurrence and during the continuance of
any Event of Default, the Collateral Agent may, or at the request of the
Required Lenders, shall, from time to time in respect of the Collateral, in
addition to the other rights and remedies provided for herein, in the other Loan
Documents, under applicable Law or otherwise available to it:

 

(i)        Personally, or by agents or attorneys, immediately take possession of
the Collateral or any part thereof, from any Pledgor or any other Person who
then has possession of any part thereof with or without notice or process of
law, and for that purpose may enter upon any Pledgor’s premises where any of the
Collateral is located, remove such Collateral, remain present at such premises
to receive copies of all communications and remittances relating to the
Collateral and use in connection with such removal and possession any and all
services, supplies, aids and other facilities of any Pledgor;

 

(ii)        Demand, sue for, collect or receive any money or property at any
time payable or receivable in respect of the Collateral including, without
limitation, instructing the obligor or obligors on any agreement, instrument or
other obligation constituting part of the Collateral to make any payment
required by the terms of such agreement, instrument or other obligation directly
to the Collateral Agent, and in connection with any of the foregoing,
compromise, settle, extend the time for payment and make other modifications
with respect thereto; provided,  however, that in the event that any such
payments are made directly to any Pledgor, prior to receipt by any such obligor
of such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Collateral Agent and shall promptly pay
such amounts to the Collateral Agent;

 

(iii)        Sell, assign, grant a license to use or otherwise liquidate, or
direct any Pledgor to sell, assign, grant a license to use or otherwise
liquidate, any and all investments made in whole or in part with the Collateral
or any part thereof, and take possession of the proceeds of any such sale,
assignment, license or liquidation;

 

(iv)        Take possession of the Collateral or any part thereof, by directing
any Pledgor in writing to assemble the collateral in any place or places so
designated by the

 

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Collateral Agent in accordance with Section 9-609 of the UCC, in which event
such Pledgor shall at its own expense: (A) forthwith cause the same to be moved
to the place or places designated by the Collateral Agent and there delivered to
the Collateral Agent, (B) store and  keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by the
Collateral Agent and (C) while the Collateral shall be so stored and kept,
provide such security and maintenance services as shall be necessary to protect
the same and to preserve and maintain them in good condition. Time is of the
essence regarding each Pledgor’s obligation to deliver the Collateral as
contemplated in this SECTION 9.1(a)(iv).  Upon application to a court of equity
having jurisdiction, the Collateral Agent shall be entitled to a decree
requiring specific performance by any Pledgor of such obligation;

 

(v)        Withdraw all moneys, instruments, securities and other property in
any bank, financial securities, deposit or other account of any Pledgor
constituting Collateral for application to the Secured Obligations as provided
in Article X hereof;

 

(vi)        Retain and apply the Distributions to the Secured Obligations as
provided in Article X hereof;

 

(vii)        Exercise any and all rights as beneficial and legal owner of the
Collateral, including, without limitation, perfecting assignment of and
exercising any and all voting, consensual and other rights and powers with
respect to any Collateral; and

 

(viii)        Subject to the valid and enforceable terms of (x) any lease, or
(y) any other restriction against such premises, the Agent shall have the right
to conduct such sales on any Pledgor’s premises and shall have the right to use
any Pledgor’s premises without charge for such sales for such time or times as
the Agent may see fit.

 

(ix)        With respect to any Collateral consisting of Inventory, Goods, and
Equipment, the Collateral Agent may conduct one or more going out of business
sales in the name of the Pledgors, or in the Collateral Agent’s own right, or by
one or more agents and contractors. Such sale(s) may be conducted upon any
premises owned, leased, or occupied by any Pledgor, without charge for such
sales for such time or times as the Collateral Agent may see fit. The Collateral
Agent and any such agent or contractor, in conjunction with any such sale, may
augment the Inventory with other goods (all of which other goods shall remain
the sole property of the Collateral Agent or such agent or contractor).  Any
amounts realized from the sale of such goods which constitute augmentations to
the Inventory (net of an allocable share of the costs and expenses incurred in
their disposition) shall be the sole property of the Collateral Agent or such
agent or contractor and neither any Pledgor nor any Person claiming under or in
right of any Pledgor shall have any interest therein. Each purchaser at any such
going out of business sale shall hold the property sold absolutely, free from
any claim or right on the part of any Pledgor.

 

(x)        with respect to any Collateral consisting of Intellectual Property,
on demand, cause the Lien in favor of the Collateral Agent to become an
assignment, transfer and

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conveyance of any of or all such Collateral by the applicable Pledgor to the
Collateral Agent or its designee, or to become a license or sublicense, whether
general, special or otherwise, and whether on an exclusive or nonexclusive
basis, of any such Collateral throughout the world on such terms and conditions
and in such manner as the Collateral Agent shall determine (other than in
violation of any then-existing licensing arrangements to the extent the waivers
cannot be obtained).

 

(xi)        Exercise all the rights and remedies of a Credit Party under the
UCC, and the Collateral Agent may also in its sole discretion, without notice
except as specified in SECTION 9.2 hereof, sell, assign or grant a license to
use the Collateral or any part thereof in  one or more parcels at public or
private sale, at any exchange, broker’s board or at any of the Collateral
Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Collateral Agent or any other Credit Party or any
of their respective Affiliates may be the purchaser, licensee, assignee or
recipient of any or all of the Collateral at any such sale and shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold, assigned or
licensed at such sale, to use and apply any of the Secured Obligations owed to
such Person as a credit on account of the purchase price of any Collateral
payable by such Person at such sale. Each purchaser, assignee, licensee or
recipient at any such sale shall acquire the property sold, assigned or licensed
absolutely free from any claim or right on the part of any Pledgor, and each
Pledgor hereby waives, to the fullest extent permitted by law, all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter
enacted.  In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral 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 Pledgor hereby
waives, to the fullest extent permitted by law, any claims against the
Collateral Agent and the other Credit Parties arising by reason of the fact that
the price at which any Collateral may have been sold, assigned or licensed at
such a private sale was less than the price which might have been obtained at a
public sale, even if the Collateral Agent accepts the first offer received and
does not offer such Collateral to more than one offeree. For purposes hereof, a
written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Collateral Agent shall be free to carry out such
sale pursuant to such agreement and no Pledgor shall be entitled to the return
of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Collateral Agent shall have entered into such an agreement
all Events of Default shall have been remedied and the Obligations Paid in Full.
As an alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may

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proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver. Any sale pursuant to the provisions of this
SECTION 9.1 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the UCC.

 

SECTION 9.2.  Notice of Sale.  Each Pledgor acknowledges and agrees that, to the
extent notice of sale or other disposition of Collateral shall be required by
law and unless the Collateral is perishable or threatens to decline speedily in
value, or is of a type customarily sold on a recognized market (in which event
the Collateral Agent shall provide such Pledgor such advance notice as may be
practicable under the circumstances), ten (10) days’ prior notice to  such
Pledgor of the time and place of any public sale or of the time after which any
private sale  or other intended disposition is to take place shall be
commercially reasonable notification of such matters. No notification need be
given to any Pledgor if it has signed, after the occurrence of an Event of
Default, a statement renouncing or modifying (as permitted under law) any right
to notification of sale or other intended disposition.

 

SECTION 9.3.  Waiver of Notice and Claims.  Each Pledgor hereby waives, to  the
fullest extent permitted by applicable Law, notice or judicial hearing in
connection with the Collateral Agent’s taking possession or the Collateral
Agent’s disposition of any of the Collateral, including, without limitation, any
and all prior notice and hearing for  any prejudgment remedy or remedies and any
such right which such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable Law: (i)
all damages occasioned by such taking of possession, (ii) all other requirements
as to  the time, place and terms of sale or other requirements with respect to
the enforcement of the Collateral Agent’s rights hereunder and (iii) all rights
of redemption, appraisal, valuation, stay, extension or moratorium now or
hereafter in force under any applicable Law. The Collateral Agent shall not be
liable for any incorrect or improper payment made pursuant to this Article IX in
the absence of gross negligence or willful misconduct. Any sale of, or the grant
of options to purchase, or any other realization upon, any Collateral shall
operate to divest all right, title, interest, claim and demand, either at law or
in equity, of the applicable Pledgor therein and thereto, and shall be a
perpetual bar both at law and in equity against such Pledgor and against any and
all Persons claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, from, through or under such Pledgor.

 

SECTION 9.4.     Certain Sales of Collateral.

 

(i)        Each Pledgor recognizes that, by reason of certain prohibitions
contained in law, rules, regulations or orders of any Governmental Authority or
Securities Laws, the Collateral Agent may be compelled, with respect to any sale
of all or any part of the Collateral (including Securities Collateral and
Investment Property), to limit purchasers to those who meet the requirements of
such Governmental Authority, or, with respect to such Securities Collateral and
Investment Property, to those Persons who will agree, among other things, to
acquire such

 

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Securities Collateral or Investment Property for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such sales may be at prices and on terms less
favorable to the Collateral Agent than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under Securities Laws), and,
notwithstanding such circumstances, agrees that: (a) any such sale shall be
deemed to have been made in a commercially reasonable manner and that, except as
may be required by applicable Law, the Collateral Agent shall have no obligation
to engage in public sales, and (b) that the Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Securities Collateral or Investment Property for the period of time necessary to
permit the issuer thereof to register it for a form of public sale requiring
registration under Securities Laws or under applicable state securities laws,
even if such issuer would agree to do so.

 

(ii)        If the Collateral Agent determines to exercise its right to sell any
or all of the Securities Collateral or Investment Property, upon written
request, the applicable Pledgor shall from time to time furnish to the
Collateral Agent all such information as the Collateral Agent may reasonably
request in order to determine the number of securities included in the
Securities Collateral or Investment Property which may be sold by the Collateral
Agent as exempt transactions under Securities Laws and the rules of the SEC
thereunder, as the same are from time to time in effect.

 

(iii)        Each Pledgor further agrees that a breach of any of the covenants
contained in this SECTION 9.4 will cause irreparable injury to the Collateral
Agent and other Credit Parties, that the Collateral Agent and the other Credit
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this SECTION 9.4 shall be
specifically enforceable against such Pledgor, and such Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing.

 

SECTION 9.5.     No Waiver; Cumulative Remedies.

 

(i)        No failure on the part of the Collateral Agent to exercise, no course
of dealing with respect to, and no delay on the part of the Collateral Agent in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy; nor shall the Collateral Agent be required
to look first to, enforce or exhaust any other security, collateral or
guaranties. The remedies herein provided are cumulative and are not exclusive of
any remedies provided by law.

 

(ii)        In the event that the Collateral Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned under Debtor Relief Laws, or for any other reason or
shall have been determined adversely to the Collateral Agent, then and in every
such case, the Pledgors, the Collateral Agent and each other Credit Party shall

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be restored to their respective former positions and rights hereunder with
respect to the Collateral, and all rights, remedies and powers of the Collateral
Agent and the other Credit Parties shall continue as if no such proceeding had
been instituted.

 

SECTION 9.6. Certain Additional Actions Regarding Intellectual Property.  If any
Event of Default shall have occurred and be continuing, upon the written demand
of Collateral Agent, each Pledgor shall execute and deliver to Collateral Agent
an assignment or assignments of the registered Patents, Trademarks and/or
Copyrights and such other documents as are necessary or appropriate to carry out
the intent and purposes hereof to the extent such assignment does not result in
any loss of rights therein under applicable Law. Within five (5) Business Days
of written notice thereafter from the Collateral Agent, each Pledgor shall make
available to the Collateral Agent, to the extent within such Pledgor’s power and
authority, such personnel in such Pledgor’s employ on the date of the Event of
Default as the Collateral Agent may reasonably designate to permit such Pledgor
to continue, directly or indirectly, to produce, advertise and sell the products
and services sold by such Pledgor under the registered Patents, Trademarks
and/or Copyrights, and such Persons shall be available to perform their prior
functions on the Collateral Agent’s behalf.

 

ARTICLE X

 

APPLICATION OF PROCEEDS OF CASUALTY EVENTS AND COLLATERAL
DISPOSITIONS

 

SECTION 10.1. Application of Proceeds. The proceeds received by  the Collateral
Agent in respect of any sale of, collection from or other realization upon all
or any part of the Collateral pursuant to the exercise by the Collateral Agent
of its remedies shall be applied, together with any other sums then held by the
Collateral Agent pursuant to this Agreement, in accordance with and as set forth
in Section 8.03 of the Credit Agreement.

 

ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.1. Concerning Collateral Agent. Without, in any way, limiting the
rights of the Collateral Agent under the Credit Agreement or other Loan
Documents:

 

(i)        The Collateral Agent has been appointed as collateral agent pursuant
to the Credit Agreement. The actions of the Collateral Agent hereunder are
subject to the provisions of the Credit Agreement. The Collateral Agent shall
have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including, without limitation, the release or substitution of the Collateral),
in

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accordance with this Agreement and the Credit Agreement. The Collateral Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
liable for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith. The Collateral Agent may resign and a successor
Collateral Agent may be appointed in the manner provided in the Credit
Agreement. Upon the acceptance of any appointment as the Collateral Agent by a
successor Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent under this Agreement, and the retiring
Collateral Agent shall thereupon be discharged from its duties and obligations
under this Agreement. After any retiring Collateral Agent’s resignation, the
provisions hereof shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Agreement while it was the Collateral Agent.

 

(ii)        The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if such
Collateral is accorded treatment substantially equivalent to that which the
Collateral Agent, in its individual capacity, accords its own property
consisting of similar instruments or interests, it being understood that neither
the Collateral Agent nor any of the Credit Parties shall have responsibility for
(i) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Securities Collateral,
whether or not the Collateral Agent or any other Credit Party has or is deemed
to have knowledge of such matters or (ii) taking any necessary steps to preserve
rights against any Person with respect to any Collateral.

 

(iii)        The Collateral Agent shall be entitled to rely upon any written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon advice of counsel selected by it.

 

(iv)        If any item of Collateral also constitutes collateral granted to
Collateral Agent under any other deed of trust, mortgage, security agreement,
pledge or instrument of any type, in the event of any conflict between the
provisions hereof and the provisions of such other deed of trust, mortgage,
security agreement, pledge or instrument of any type in respect of such
collateral, Collateral Agent, in its sole discretion, shall select which
provision or provisions shall control.

 

SECTION 11.2. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained
in this Agreement or in the Credit Agreement (including, without limitation,
such Pledgor’s covenants to (i) pay the premiums in respect of all required
insurance policies hereunder, (ii) pay Claims, (iii) make repairs, (iv)
discharge Liens or (v) pay or perform any obligations of such Pledgor under any
Collateral) or if any warranty on the part of any Pledgor contained herein shall
be breached, the Collateral Agent may (but shall not be obligated to) do the
same or cause it to be done or remedy any such breach, and may expend funds for
such purpose; provided,  however,

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that Collateral Agent shall in no event be bound to inquire into the validity of
any tax, lien, imposition or other obligation which such Pledgor fails to pay or
perform as and when required hereby and which such Pledgor does not contest in
accordance with the provisions of the Credit Agreement. Any and all amounts so
expended by the Collateral Agent shall be paid by the Pledgors in accordance
with the provisions of SECTION 11.3 hereof. Neither the provisions of this
SECTION 11.2 nor any action taken by Collateral Agent pursuant to the provisions
of this SECTION 11.2 shall prevent any such failure to observe any covenant
contained in this Agreement nor any breach of warranty form constituting an
Event of Default. Each Pledgor hereby appoints the Collateral Agent its
attorney-in-fact, with full authority in the place and  stead of such Pledgor
and in the name of such Pledgor, or otherwise, from time to time after the
occurrence and during the continuation of an Event of Default in the Collateral
Agent’s discretion to take any action and to execute any instrument consistent
with the terms of the  Credit Agreement and the other Security Documents which
the Collateral Agent may deem necessary to accomplish the purposes hereof. The
foregoing grant of authority is a power of attorney coupled with an interest and
such appointment shall be irrevocable for the term hereof. Each Pledgor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof.

 

SECTION 11.3. Expenses; Indemnity. Without limiting the provisions of Section
10.04 of the Credit Agreement or other Loan Documents:

 

(a)        Each Pledgor will upon demand pay to the Collateral Agent the amount
of any and all reasonable costs and expenses, including the fees and expenses of
its counsel and the fees and expenses of any experts and agents which the
Collateral Agent may incur in connection with (i) any action, suit or other
proceeding affecting the Collateral or any part thereof commenced, in which
action, suit or proceeding the Collateral Agent is made a party or participates
or in which the right to use the Collateral or any part thereof is threatened,
or in which it becomes necessary in the judgment of the Collateral Agent to
defend or uphold the Lien hereof (including, without limitation, any action,
suit or proceeding to establish or uphold the compliance of the Collateral with
any requirements of any Governmental Authority or law), (ii) the collection of
the Secured Obligations, (iii) the enforcement and administration hereof, (iv)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (v) the exercise or enforcement of any
of the rights of the Collateral Agent or any Credit Party hereunder or (vi) the
failure by any Pledgor to perform or observe any of the provisions hereof. All
amounts expended by the Collateral Agent and payable by any Pledgor under this
SECTION 11.3 shall be due upon demand therefor (together with interest thereon
accruing at the highest rate then in effect under the Credit Agreement during
the period from and including twenty (20) days from the date on which Collateral
Agent makes demand for payment therefor to the date of repayment) and shall be
part of the Secured Obligations.

 

(b)        The Pledgors agree, jointly and severally, to indemnify the
Collateral Agent (and any sub-agent thereof), each other Credit Party, and each
Subsidiary and Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against,

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and to hold each Indemnitee harmless (on a after tax-basis) from, any and all
losses, claims, damages, actions, causes of action, damages, liabilities,
settlement payments, obligations, costs, and related expenses (including the
fees, charges, expenses and disbursements of any counsel for any Indemnitee),
incurred, suffered, sustained or required to be paid by any Indemnitee or
asserted against any Indemnitee by any third party or by any Pledgor or any
other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, the Credit Agreement or any other Loan
Document or any other agreement or instrument contemplated hereby, the
performance by the Pledgors of their respective obligations thereunder, or the
consummation of the transactions contemplated by the Credit Agreement and the
other Loan Documents or any other transactions contemplated hereby or thereby,
(ii) any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the L/C Issuer to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), (iii)
any actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by any Loan Party or any of its Subsidiaries, or any
Environmental Liability related in any way to any Loan Party or any of its
Subsidiaries, (iv) any claims of, or amounts paid by any Credit Party to, a
Blocked Account Bank or other Person which has entered into a control agreement
with any Credit Party hereunder, or (v) any actual or prospective claim,
litigation, investigation or proceeding relating to or arising from any of the
foregoing, whether based on contract, tort or any other theory and regardless of
whether any Indemnitee is a party thereto; provided,  however, that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are (x) determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
any Affiliate of such Indemnitee, or (y) result from a claim brought by a
Pledgor or any other Loan Party against an Indemnitee for breach of bad faith of
such Indemnitee’s obligations hereunder or under any other Loan Document, if the
Pledgor  or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction. In
connection with any indemnified claim hereunder, the Indemnitee shall be
entitled to select its own counsel and the Pledgors shall promptly pay the
reasonable fees and expenses of such counsel.

 

(c)        The provisions of this SECTION 11.3 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the repayment of any of the Loans, the expiration of the Commitments,
the expiration of any Letter of Credit, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Agents or any other Credit Party. All
amounts due under this SECTION 11.3 shall be payable promptly (but in any event
no more than 10 Business Days following) upon written demand therefor
accompanied by reasonable documentation with respect to any reimbursement,
indemnification or other amount requested.

 

SECTION 11.4. Continuing Security Interest; Assignment. This Agreement shall
create a continuing security interest in the Collateral and shall (i) be binding
upon the Pledgors, their respective successors and assigns and (ii) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent and the other

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Credit Parties and each of their permitted respective successors, transferees
and assigns. No other Persons (including, without limitation, any other creditor
of any Pledgor) shall have any interest herein or any right or benefit with
respect hereto. Without limiting the generality of the foregoing clause (ii),
any Credit Party may assign or otherwise transfer any indebtedness held by it
secured by this Agreement to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Credit Party, herein or otherwise, subject however, to the provisions of the
Credit Agreement.

 

SECTION 11.5.   Termination; Release.

 

(i)     This Agreement, the Lien in favor of the Collateral Agent (for the
benefit   of itself and the other Credit Parties) and all other security
interests granted hereby shall terminate with respect to all Secured Obligations
when Payment in Full of the Secured Obligations has occurred. Notwithstanding
the foregoing, (A) this Agreement, the Lien in favor of the Collateral Agent
(for the benefit of the Credit Parties) and all other security interests granted
hereby shall be reinstated if at any time payment, or any part thereof, of any
Secured Obligation is rescinded or must otherwise be restored by any Credit
Party or any Pledgor upon the bankruptcy or reorganization of any Pledgor or
otherwise, and (B) in connection with the termination of this Agreement, the
Collateral Agent may require such indemnities and collateral security as it
shall reasonably deem necessary or appropriate to protect the Credit Parties
against (x)   loss on account of credits previously applied to the Secured
Obligations that may subsequently be reversed or revoked, (y) any obligations
that may thereafter arise with respect to the Other Liabilities, and (z) any
Secured Obligations that may thereafter arise under Section 10.04 of the Credit
Agreement.

 

(ii)        The Collateral shall be released from the Lien of this Agreement in
accordance with the provisions of this Agreement and the Credit Agreement. Upon
termination hereof or any release of Collateral in accordance with the
provisions of this Agreement and the Credit Agreement, the Collateral Agent
shall, upon the request and at the sole cost and expense  of the Pledgors,
assign, transfer and deliver to the Pledgors, against receipt and without
recourse to or warranty by the Collateral Agent, such of the Collateral to be
released (in the case of a release) as may be in possession of the Collateral
Agent and as shall not have been sold or otherwise applied pursuant to the terms
hereof, and, with respect to any other Collateral, proper documents and
instruments (including UCC 3 termination statements or releases) acknowledging
the termination hereof or the release of such Collateral, as the case may be.

 

(iii)        At any time that the respective Pledgor desires that the Agent take
any action described in clause (ii) of this SECTION 11.5, such Pledgor shall,
upon request of the Collateral Agent, deliver to the Collateral Agent an
officer’s certificate certifying that the release of the respective Collateral
is permitted pursuant to clause (i) or (ii) of this SECTION 11.5. The Collateral
Agent shall have no liability whatsoever to any other Credit Party as the result
of any release of Collateral by it as permitted (or which the Collateral Agent
in good faith believes to be permitted) by this SECTION 11.5.

 

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SECTION 11.6. Modification in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any
departure by any Pledgor therefrom, shall be effective unless the same shall be
made in accordance with the terms of the Credit Agreement and unless in writing
and signed by the Collateral Agent. Any amendment, modification or supplement of
or to any provision hereof, any waiver of any provision hereof and any consent
to any departure by any Pledgor from the terms of any provision hereof shall be
effective only in the specific instance and for the specific purpose for which
made or given. Except where notice is specifically required by this Agreement or
any other document evidencing the Secured Obligations, no notice to or demand on
any Pledgor in any case shall entitle any Pledgor to any other or further notice
or demand in similar or other circumstances.

 

SECTION 11.7. Notices. Unless otherwise provided herein or in the Credit
Agreement, any notice or other communication herein required or permitted to be
given shall be given in the manner and become effective as set forth in the
Credit Agreement, as to  any Pledgor, addressed to it at the address of the
Borrower set forth in the Credit Agreement and as  to the Collateral Agent,
addressed to it at the address set forth in the Credit Agreement, or in  each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
SECTION 11.7.

 

SECTION 11.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

SECTION 11.9. CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY
TRIAL.

 

(a)        EACH PLEDGOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PLEDGORS IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PLEDGORS AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW.   NOTHING IN THIS AGREEMENT

 

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OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY CREDIT PARTY MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST ANY PLEDGOR OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

 

(b)        EACH PLEDGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO
IN PARAGRAPH (A) OF THIS SECTION. EACH OF THE PLEDGORS HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

 

(c)        EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 10.02 OF THE CREDIT AGREEMENT. NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

(d)        EACH PLEDGOR AGREES THAT ANY ACTION COMMENCED BY ANY PLEDGOR
ASSERTING ANY CLAIM OR COUNTERCLAIM ARISING UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT SOLELY IN A COURT OF THE
STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR ANY FEDERAL COURT SITTING
THEREIN AS THE ADMINISTRATIVE AGENT MAY ELECT IN ITS SOLE DISCRETION AND
CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS WITH RESPECT TO ANY SUCH
ACTION.

 

(e)        EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER

 

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PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

SECTION 11.10. Severability of Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement shall not be
affected or impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

SECTION 11.11. Execution in Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy, pdf or other
electronic transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.

 

SECTION 11.12. No Credit for Payment of Taxes or Imposition. No Pledgor shall be
entitled to any credit against the principal, premium, if any, or interest
payable under the Credit Agreement, and such Pledgor shall not be entitled to
any credit against any other sums which may become payable under the terms
thereof or hereof, by reason of the payment of any Tax on the Collateral or any
part thereof.

 

SECTION 11.13. No Claims Against Collateral Agent. Nothing contained in this
Agreement shall constitute any consent or request by the Collateral Agent,
express or implied,  for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Collateral or
any part thereof, nor as giving any Pledgor any right, power or authority to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against the Collateral Agent in respect thereof or any
claim that any Lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the  Lien hereof.

 

SECTION 11.14. No Release. Nothing set forth in this Agreement shall relieve any
Pledgor from the performance of any term, covenant, condition or agreement on
such Pledgor’s part to be performed or observed under or in respect of any of
the Collateral or from any liability to any Person under or in respect of any of
the Collateral or shall impose any obligation on the Collateral Agent or any
other Credit Party to perform or observe any such term, covenant, condition or
agreement on such Pledgor’s part to be so performed or observed or shall

 

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impose any liability on the Collateral Agent or any other Credit Party for any
act or omission on the part of such Pledgor relating thereto or for any breach
of any representation or warranty on the part of such Pledgor contained in this
Agreement, the Credit Agreement or the other Loan Documents, or under or in
respect of the Collateral or made in connection herewith or therewith. The
obligations of each Pledgor contained in this SECTION 11.14 shall survive the
termination hereof and the discharge of such Pledgor’s other obligations under
this Agreement, the Credit Agreement and the other Loan Documents.

 

SECTION 11.15. Obligations Absolute. All obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of:

 

(i)      any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any Pledgor or other matters related to
Debtor Relief Laws;

 

(ii)     any lack of validity or enforceability of the Credit Agreement or any
other Loan Document, or any other agreement or instrument relating thereto;

 

(iii)     any change in the time, manner or place of payment of, or in any other
term of, all or any of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement or any other Loan
Document or any other agreement or instrument relating thereto;

 

(iv)     any pledge, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Secured Obligations;

 

(v)     any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect hereof, the Credit Agreement or any other Loan
Document except as specifically set forth in a waiver granted pursuant to the
provisions of SECTION 11.6 hereof; or

 

(vi)     any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any Pledgor (other than Payment in Full of the
Secured Obligations).

 

SECTION 11.16. Additional Pledgor Waivers. Although the parties hereto fully
intend that this Agreement is to be governed in accordance with Section 11.8 of
this Agreement, the Pledgors hereby irrevocably waive and agree to the fullest
extent permitted by law and to the extent applicable to the Collateral, as
follows:

 

(i)       The Pledgors expressly waive any and all benefits which might
otherwise be available to the Pledgors under California Civil Code Sections 2787
to 2855, inclusive;

 

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(ii)      The Pledgors waive any and all defenses, including but not limited to
Pledgors’ defense of estoppel discussed in Union Bank v. Gradsky, 265 Cal.App.2d
40 (1968), based upon a foreclosure against all or any part of the real property
security for the Secured Obligations or the Obligations pursuant to the power of
sale contained in any Deed of Trust or any Leasehold Deed of Trust executed by
any Pledgor (the “Deed of Trust”) or any of the other Security Documents as
opposed to proceeding by way of judicial foreclosure. The Pledgors waive all
rights and defenses arising out of an election of remedies by the Collateral
Agent, even though that election of remedies, such as a nonjudicial foreclosure
with respect to security for a guaranteed obligation, has destroyed the
Pledgor’s rights of subrogation and reimbursement by the operation of Section
580d of the California Code of Civil Procedure (“CCP”) or otherwise;

 

(iii)      The Pledgors waive all rights and defenses that any Pledgor may have
because any of the Borrower's debt or the Secured Obligations are secured by
real property. This means, among other things: (i) the Collateral Agent may
collect from the Pledgors without first foreclosing on any real or personal
property collateral pledged by the Borrower or any other Loan Party, and (ii) if
the Collateral Agent forecloses on any real property collateral pledged by any
Pledgor, the Borrower or any one or more of the Loan Parties: (a) the amount of
debt may be reduced only by the price for which the collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price, and
(b) the Collateral Agent may collect from the Pledgors even if the Collateral
Agent, by foreclosing on the real property collateral, have destroyed any right
such Pledgor may have to collect from the Borrower or any other Loan Party. This
is an unconditional and irrevocable waiver of any rights and defenses the
Pledgors may have because Borrower’s debt or the Secured Obligations are secured
by real property. These rights and defenses include, but are not limited to, any
rights or defenses based upon Section 580a, 580b, 580d, or 726 of the CCP;

 

(iv)       In the case of a power of sale foreclosure under the Deed of Trust,
the fair market value of the real property collateral shall be conclusively
deemed to be the amount of the successful bid at the foreclosure sale. The
Pledgors waive any rights or benefits they may now or hereafter have to a fair
value hearing under Section 580a of the CCP. The Collateral Agent shall have
absolutely no obligation to make a bid at any foreclosure sale, but rather may
make no bid or bid any amount which the Collateral Agent, its sole discretion,
deems appropriate;

 

(v)      The Pledgors hereby irrevocably authorize the Collateral Agent to apply
any and all amounts received by the Secured Parties in repayment of the
Obligations first to amounts which are secured pursuant to the terms of the Deed
of Trust and then to amounts which are not secured pursuant to the terms of the
Deed of Trust, if any. Each Pledgor hereby waive any and all rights that it has
or may hereafter have under Section 2822 of the California Civil Code which
provides that if a guarantor is “liable upon only

 

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a portion of an obligation and the principal provides partial satisfaction of
the obligation, the principal may designate the portion of the obligation that
is to be satisfied.”

 

(vi)       Each Pledgor warrants and represents to the Collateral Agent that (i)
it now has or will continue to have full and complete access to any and all
information concerning the transactions contemplated by the Loan Documents
referred to therein, the value of the assets owned or to be acquired by the
Borrower or any Loan Party under the Loan Documents, their financial status and
their respective ability to pay and perform their respective obligations under
the Loan Documents; and (ii) the Pledgors have reviewed and approved copies of
the Loan Documents and are fully informed of the remedies the Collateral Agent
may pursue, with or without notice to the Pledgors, in the event of default
under the Loan Documents. The Pledgors shall keep fully informed as to all
aspects of the financial condition of the Borrower and other Loan Parties and
the performance of their respective obligations under the Loan Documents; and

 

(vii)       The Pledgors agree that the Collateral Agent may exercise any right
or remedy hereunder or under any of the Loan Documents without the necessity of
resorting to or exhausting any security or collateral for the Secured
Obligations or the Obligations. Each Pledgor hereby waives any right it may now
or hereafter have to require the Collateral Agent to proceed against the
Borrower, to proceed against any other Loan Party or any other guarantor of any
of the Obligations, to foreclose any lien on any real or personal property
collateral conveyed or assigned to the Collateral Agent by the Pledgors, the
Borrower or any other Loan Party, to exercise any right or remedy under the Loan
Documents, to draw upon any letter of credit issued in connection with any of
the Obligations, or to pursue any other remedy or to enforce any other right
under the Loan Documents.

 

SECTION 11.17. Existing Security Agreement Amended and Restated. This Agreement
is an amendment and restatement of the Existing Security Agreement. This
Agreement is in no way intended to constitute a novation of the Existing
Security Agreement or the Secured Obligations (as defined in the Existing
Security Agreement). With respect to (i) any date or time period occurring and
ending prior to the Restatement Date, the Existing Security Agreement and the
other Loan Documents shall govern the respective rights and obligations of any
party or parties hereto also party thereto and shall for such purposes remain in
full force and effect; and (ii) any date or time period occurring or ending on
or after the Restatement Date, the rights and obligations of the parties hereto
shall be governed by this Agreement (including, without limitation, the
schedules hereto) and the other Loan Documents (as defined in the Credit
Agreement).  From and after the Restatement Date, the provisions of this
Agreement shall prevail in the event of any conflict or inconsistency between
such provisions and those of the Existing Security Agreement. Any security
granted pursuant to or in connection with the Existing Security Agreement shall
continue to secure the obligations of the Pledgors arising pursuant to or in
connection with the Credit Agreement (including all such obligations arising

 

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initially pursuant to or in connection with the Credit Agreement and the other
Loan Documents (each as in effect immediately prior to the Restatement Date)).

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

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IN WI1NESS WHEREOF, the Pledgors and the Collateral Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.

 

 

 

 

SPORTSMAN’S WAREHOUSE, INC., a Utah corporation, a Lead Borrower and as a
Borrower and as a Pledgor

 

 

 

By:

/s/ Kevan P. Talbot

 

Name:

Kevan P. Talbot

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

SPORTSMAN’S WAREHOUSE SOUTHWEST, INC., a California corporation, as a Borrower
and as a Pledgor

 

 

 

 

By:

/s/ Kevan P. Talbot

 

Name:

Kevan P. Talbot

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

MINNESOTA  MERCHANDISING CORP., a Minnesota corporation, as a Borrower and as a
Pledgor

 

 

 

 

 

 

By:

/s/ Kevan P. Talbot

 

Name:

Kevan P. Talbot

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

PACIFIC FLYWAY WHOLESALE, LLC, a Delaware limited liability company, as a
Borrower and as a Pledgor

 

 

 

 

 

 

 

By:

Sportsman’s Warehouse, Inc., its Sole Member

 

 

 

 

By:

/s/ Kevan P. Talbot

 

Name:

Kevan P. Talbot

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

SPORTSMAN’S WAREHOUSE DEVELOPMENT I, LLC, a Delaware limited liability company,
as a Borrower and as a Pledgor

 

 

 

 

By:

Sportsman’s Warehouse, Inc., its Sole Member

 

 

 

 

By:

/s/ Kevan P. Talbot

 

Name:

Kevan P. Talbot

 

Title:

Chief Financial Officer

 

Signature Page to Amended and Restated Security Agreement

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

 

 

 

 

 

 

 

SPORTSMAN’S WAREHOUSE DEVELOPMENT II, LLC, a Delaware limited liability company,
as a Borrower and as a Pledgor

 

 

 

 

By:

Sportsman’s Warehouse, Inc., its Sole Member

 

 

 

 

By:

/s/ Kevan P. Talbot

 

Name:

Kevan P. Talbot

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

SPORTSMAN’S WAREHOUSE HOLDINGS, INC., a Delaware corporation, as a Guarantor and
as a Pledgor

 

 

 

 

By:

Sportsman’s Warehouse, Inc., its Sole Member

 

 

 

 

 

 

 

By:

/s/ Kevan P. Talbot

 

Name:

Kevan P. Talbot

 

Title:

Chief Financial Officer

 

Signature Page to Amended and Restated Security Agreement

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

 

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Agent

 

 

 

 

By:

/s/ Peter A. Foley

 

Name:

Peter A. Foley

 

Title:

Duly Authorized Signatory

 

 

 

Signature Page to Amended and Restated Security Agreement

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

 

EXHIBIT 1

 

 

 

[Form of]

 

SECURITIES PLEDGE AMENDMENT

 

This  Security Pledge Amendment,  dated as  of               ,  is  delivered
pursuant to SECTION 5.1 of that certain Amended and Restated Security Agreement
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Security Agreement;” capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of May 23, 2018, made (i) SPORTSMAN’S WAREHOUSE, INC., as
lead borrower for itself and the other  Borrowers (the “Lead Borrower”), (ii)
the Borrowers party thereto from time to time (together with the Lead Borrower,
the “Borrowers”, and (iii) the Guarantors party thereto from time to time (the
“Guarantors”), as pledgors, assignors and debtors (the Borrowers, together with
the Guarantors, in such capacities and together with any successors in such
capacities, the “Pledgors,” and each, a “Pledgor”), WELLS FARGO BANK, NATIONAL
ASSOCIATION, as collateral agent for the Credit Parties (in such capacity and
together with any successors in such capacity, the “Collateral Agent”). The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Security Agreement and that the Securities Collateral listed on this Pledge
Amendment shall be deemed to be and shall become part of the Collateral and
shall secure all Obligations.

 

PLEDGED SECURITIES

 

ISSUER

    

CLASS

OF STOCK

OR

INTERESTS

    

PAR
VALUE

    

CERTIFICATE

NO(S).

    

NUMBER OF

SHARES

OR INTERESTS

    

PERCENTAGE OF

ALL ISSUED CAPITAL

OR OTHER EQUITY

INTERESTS OF ISSUER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Exhibit 1]

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

 

INTERCOMPANY NOTES

 

 

 

 

 

 

 

 

 

 

ISSUER

    

PRINCIPAL
AMOUNT

    

DATE OF
ISSUANCE

    

INTEREST
RATE

    

MATURITY
DATE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[___________________________________________],

 

as Pledgor

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

AGREED TO AND ACCEPTED:

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Collateral Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

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

 

 

Schedule I

INTERCOMPANY NOTES

 

None.

 

 

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

 

 

Schedule II

 

FILINGS, REGISTRATIONS AND RECORDINGS

 

All asset UCC-1 Financing Statement naming Sportsman’s Warehouse, Inc. as Debtor
and Wells Fargo Bank, National Association as Secured Party filed with the Utah
Department of Commerce.

 

All asset UCC-1 Financing Statement naming Sportsman’s Warehouse Holdings, Inc.
as Debtor and Wells Fargo Bank, National Association as Secured Party filed with
the Delaware Secretary of State.

 

All asset UCC-1 Financing Statement naming Sportsman’s Warehouse Southwest, Inc.
as Debtor and Wells Fargo Bank, National Association as Secured Party filed with
the California Secretary of State.

 

All asset UCC-1 Financing Statement naming Minnesota Merchandising Corp. as
Debtor and Wells Fargo Bank, National Association as Secured Party filed with
the Minnesota Secretary of State.

 

All asset UCC-1 Financing Statement naming Pacific Flyway Wholesale, LLC as
Debtor and Wells Fargo Bank, National Association as Secured Party filed with
the Delaware Secretary of State.

 

All asset UCC-1 Financing Statement naming Sportsman’s Warehouse Development I,
LLC as Debtor and Wells Fargo Bank, National Association as Secured Party filed
with the Delaware Secretary of State.

 

All asset UCC-1 Financing Statement naming Sportsman’s Warehouse Development II,
LLC as Debtor and Wells Fargo Bank, National Association as Secured Party filed
with the Delaware Secretary of State.

 

Grant of Security Interest in United States Trademarks naming Sportsman’s
Warehouse, Inc. as Grantor and Wells Fargo Bank, National Association as Grantee
filed with the United States Patent and Trademark Office.

 

 

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

 

 

Schedule III

 

INITIAL PLEDGED INTERESTS

 

 

 

 

 

 

 

 

 

Name of Loan

Party

Name of Issuer

Type of

Organization

Class of

Capital Stock

Certificate

No.(s)

Number of

Shares or

Equity

Interests

Percentage of

Outstanding

Shares or

Equity

Interests

Par Value

Sportsman’s Warehouse Holdings, Inc.

Sportsman’s Warehouse, Inc.

Corporation

Common Stock

1

100 shares

100%

$0.01

par value

Sportsman’s Warehouse Holdings, Inc.

Minnesota Merchandising Corp.

Corporation

Common Stock

1

100 shares

100%

$0.01

par value

Sportsman’s Warehouse, Inc.

Sportsman’s Warehouse Southwest, Inc.

Corporation

Common Stock

1

100 shares

100%

$0.01

par value

Sportsman’s Warehouse, Inc.

Pacific Flyway Wholesale, LLC

Limited liability company

Percentage interests

N/A

100% of percentage interests

100%

N/A

Sportsman’s Warehouse, Inc.

Sportsman’s Warehouse Development I, LLC

Limited Liability Company

Percentage interest

N/A

100% of percentage interests

100%

N/A

Sportsman’s Warehouse, Inc.

Sportsman’s Warehouse Development II, LLC

Limited Liability Company

Percentage interest

N/A

100% of percentage interests

100%

N/A

 

 

 

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

 

 

Schedule IV

 

LICENSES

 

None.

 

 

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

 

 

Schedule V

 

TANGIBLE CHATTEL PAPER

 

None.

 

 

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

 

 

Schedule VI

 

COMMODITY ACCOUNTS

 

None.

 

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

 

 

 

Schedule VII

 

ELECTRONIC CHATTEL PAPER

 

None.

 

 

 

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

 

 

[Exhibit 1]

 

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