[EXECUTION]
SECURITY AGREEMENT
This SECURITY AGREEMENT (this “Agreement”), dated as of March 1, 2011, among the
Grantors listed on the signature pages hereof and those additional entities that
hereafter become parties hereto by executing the form of Joinder attached hereto
as Annex 1 (each, a “Grantor”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware
limited liability company (“WFCF”), in its capacity as agent for the Lender
Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Credit Agreement”), by and among Audiovox Corporation, a Delaware corporation
(“Parent”), Audiovox Accessories Corp., a Delaware corporation (“ACC”), Audiovox
Electronics Corporation, a Delaware corporation (“AEC”), Audiovox Consumer
Electronics, Inc., a Delaware corporation (“ACEI”), American Radio Corp., a
Georgia corporation (“ARC”), Code Systems, Inc., a Delaware corporation (“CSI”),
Invision Automotive Systems, Inc., a Delaware corporation (“IAS”), Klipsch
Group, Inc., an Indiana corporation (“Klipsch”) and Batteries.com, LLC, an
Indiana limited liability company (“Batteries” and together with each of ACC,
AEC, ACEI, ARC, CSI, IAS and Klipsch, each, individually, a “Borrower” and,
collectively, “Borrowers”), the lenders party thereto as “Lenders” (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a “Lender” and, collectively, the “Lenders”) and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and
WHEREAS, Agent has agreed to act as agent for the benefit of the Lender Group
and the Bank Product Providers in connection with the transactions contemplated
by the Credit Agreement and this Agreement; and
WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement
and the other Loan Documents and to induce the Lender Group to make financial
accommodations to Borrowers as provided for in the Credit Agreement, Grantors
have agreed to grant a continuing security interest in and to the Collateral in
order to secure the prompt and complete payment, observance and performance of,
among other things, the Secured Obligations.
NOW, THEREFORE, for and in consideration of the recitals made above and other
good and valuable consideration, the receipt, sufficiency and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
1.Defined Terms. All initially capitalized terms used herein (including in the
preamble and recitals hereof) without definition shall have the meanings
ascribed thereto in the Credit Agreement. Any terms (whether capitalized or
lower case) used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein
or in the Credit Agreement; provided, however, that to the extent that the Code
is used to define any term used herein and if such term is defined differently
in different Articles of the Code, the definition of such term contained in
Article 9 of the Code shall govern. In addition to those terms defined elsewhere
in this Agreement, as used in this Agreement, the following terms shall have the
following meanings:
(a)“Account” means an account (as that term is defined in Article 9 of the
Code).
(b)“Account Debtor” means an account debtor (as that term is defined in the
Code).
(c)“Activation Instruction” has the meaning specified therefor in Section 6(k).
(d)“Agent” has the meaning specified therefor in the preamble to this Agreement.
(e)“Agent's Lien” has the meaning specified therefor in the Credit Agreement.
(f)“Agreement” has the meaning specified therefor in the preamble to this
Agreement.
(g)“Bank Product Obligations” has the meaning specified therefor in the Credit
Agreement.
(h)“Bank Product Provider” has the meaning specified therefor in the Credit
Agreement.

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(i)“Books” means books and records (including each Grantor's Records indicating,
summarizing, or evidencing such Grantor's assets (including the Collateral) or
liabilities, each Grantor's Records relating to such Grantor's business
operations or financial condition, and each Grantor's goods or General
Intangibles related to such information).
(j)“Borrowers” has the meaning specified therefor in the recitals to this
Agreement.
(k)“Cash Dominion Event” has the meaning specified therefor in the Credit
Agreement.
(l)“Cash Equivalents” has the meaning specified therefor in the Credit
Agreement.
(m)“Chattel Paper” means chattel paper (as that term is defined in the Code),
and includes tangible chattel paper and electronic chattel paper.
(n)“Code” means the New York Uniform Commercial Code, as in effect from time to
time; provided, however, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, priority, or
remedies with respect to Agent's Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term “Code” shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority, or
remedies.
(o)“Collateral” has the meaning specified therefor in Section 2.
(p)“Collections” has the meaning specified therefor in the Credit Agreement.
(q)“Commercial Tort Claims” means commercial tort claims (as that term is
defined in the Code), and includes those commercial tort claims listed on
Schedule 1.
(r)“Controlled Account” has the meaning specified therefor in Section 6(k).
(s)“Controlled Account Agreements” means those certain cash management
agreements, in form and substance reasonably satisfactory to Agent, each of
which is executed and delivered by a Grantor, Agent, and one of the Controlled
Account Banks.
(t)“Controlled Account Bank” has the meaning specified therefor in Section 6(k).
(u)“Copyrights” means any and all rights in any works of authorship, including
(i) copyrights and moral rights, (ii) copyright registrations and recordings
thereof and all applications in connection therewith including those listed on
Schedule 2, (iii) income, license fees, royalties, damages, and payments now and
hereafter due or payable under and with respect thereto, including payments
under all licenses entered into in connection therewith and damages and payments
for past, present, or future infringements thereof, (iv) the right to sue for
past, present, and future infringements thereof, and (v) all of each Grantor's
rights corresponding thereto throughout the world.
(v)“Copyright Security Agreement” means each Copyright Security Agreement
executed and delivered by Grantors, or any of them, and Agent, in substantially
the form of Exhibit A.
(w)“Credit Agreement” has the meaning specified therefor in the recitals to this
Agreement.
(x)“Deposit Account” means a deposit account (as that term is defined in the
Code).
(y)“Equipment” means equipment (as that term is defined in the Code).
(z)“Event of Default” has the meaning specified therefor in the Credit
Agreement.
(aa)“Fixtures” means fixtures (as that term is defined in the Code).
(ab)“General Intangibles” means general intangibles (as that term is defined in
the Code), and includes payment intangibles, contract rights, rights to payment,
rights arising under common law, statutes, or regulations, choses or things in
action, goodwill, Intellectual Property, Intellectual Property Licenses,
purchase orders, customer lists, monies due or recoverable from pension funds,
route lists, rights to payment and other rights under any royalty or licensing
agreements, including Intellectual Property Licenses, infringement claims,
pension plan refunds, pension plan refund claims, insurance premium rebates, tax
refunds, and tax refund claims, interests in a partnership or limited liability
company which do not constitute a security under Article 8 of the Code, and any
other personal

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property other than Commercial Tort Claims, money, Accounts, Chattel Paper,
Deposit Accounts, goods, Investment Related Property, Negotiable Collateral, and
oil, gas, or other minerals before extraction.
(ac)“Grantor” and “Grantors” have the respective meanings specified therefor in
the preamble to this Agreement.
(ad) “Guaranty” has the meaning specified therefor in the Credit Agreement.
(ae)“Insolvency Proceeding” has the meaning specified therefor in the Credit
Agreement.
(af) “Intellectual Property” means any and all Patents, Copyrights, Trademarks,
trade secrets, know-how, inventions (whether or not patentable), algorithms,
software programs (including source code and object code), processes, product
designs, industrial designs, blueprints, drawings, data, customer lists, URLs
and domain names, specifications, documentations, reports, catalogs, literature,
and any other forms of technology or proprietary information of any kind,
including all rights therein and all applications for registration or
registrations thereof.
(ag) “Intellectual Property Licenses” means, with respect to any Person (the
“Specified Party”), (i) any licenses or other similar rights provided to the
Specified Party in or with respect to Intellectual Property owned or controlled
by any other Person, and (ii) any licenses or other similar rights provided to
any other Person in or with respect to Intellectual Property owned or controlled
by the Specified Party, in each case, including (A) any software license
agreements (other than license agreements for commercially available
off-the-shelf software that is generally available to the public which have been
licensed to a Grantor pursuant to end-user licenses), (B) the license agreements
listed on Schedule 3, and (C) the right to use any of the licenses or other
similar rights described in this definition in connection with the enforcement
of the Lender Group's rights under the Loan Documents.
(ah)“Inventory” means inventory (as that term is defined in the Code).
(ai)“Investment Related Property” means (i) any and all investment property (as
that term is defined in the Code), and (ii) any and all of the following
(regardless of whether classified as investment property under the Code): all
Pledged Interests, Pledged Operating Agreements, and Pledged Partnership
Agreements.
(aj)“Joinder” means each Joinder to this Agreement executed and delivered by
Agent and each of the other parties listed on the signature pages thereto, in
substantially the form of Annex 1.
(ak)“Lender Group” has the meaning specified therefor in the Credit Agreement.
(al)“Lender” and “Lenders” have the respective meanings specified therefor in
the recitals to this Agreement.
(am)“Loan Document” has the meaning specified therefor in the Credit Agreement.
(an) “Negotiable Collateral” means letters of credit, letter-of-credit rights,
instruments, promissory notes, drafts and documents (as each such term is
defined in the Code).
(ao)“Obligations” has the meaning specified therefor in the Credit Agreement.
(ap)“Parent” has the meaning specified therefor in the recitals to this
Agreement.
(aq)“Patents” means patents and patent applications, including (i) the patents
and patent applications listed on Schedule 4, (ii) all continuations,
divisionals, continuations-in-part, re-examinations, reissues, and renewals
thereof and improvements thereon, (iii) all income, royalties, damages and
payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and
damages and payments for past, present, or future infringements thereof, (iv)
the right to sue for past, present, and future infringements thereof, and (v)
all of each Grantor's rights corresponding thereto throughout the world.
(ar)“Patent Security Agreement” means each Patent Security Agreement executed
and delivered by Grantors, or any of them, and Agent, in substantially the form
of Exhibit B.
(as)“Permitted Liens” has the meaning specified therefor in the Credit
Agreement.
(at)“Person” has the meaning specified therefor in the Credit Agreement.

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(au)“Pledged Companies” means each Person listed on Schedule 6 as a “Pledged
Company”, together with each other Person, all or a portion of whose Stock is
acquired or otherwise owned by a Grantor after the Closing Date.
(av)“Pledged Interests” means all of each Grantor's right, title and interest in
and to all of the Stock now owned or hereafter acquired by such Grantor,
regardless of class or designation, including in each of the Pledged Companies,
and all substitutions therefor and replacements thereof, all proceeds thereof
and all rights relating thereto, also including any certificates representing
the Stock, the right to receive any certificates representing any of the Stock,
all warrants, options, share appreciation rights and other rights, contractual
or otherwise, in respect thereof and the right to receive all dividends,
distributions of income, profits, surplus, or other compensation by way of
income or liquidating distributions, in cash or in kind, and all cash,
instruments, and other property from time to time received, receivable, or
otherwise distributed in respect of or in addition to, in substitution of, on
account of, or in exchange for any or all of the foregoing.
(aw)“Pledged Interests Addendum” means a Pledged Interests Addendum
substantially in the form of Exhibit C.
(ax) “Pledged Operating Agreements” means all of each Grantor's rights, powers,
and remedies under the limited liability company operating agreements of each of
the Pledged Companies that are limited liability companies.
(ay)“Pledged Partnership Agreements” means all of each Grantor's rights, powers,
and remedies under the partnership agreements of each of the Pledged Companies
that are partnerships.
(az)“Proceeds” has the meaning specified therefor in Section 2.
(ba)“PTO” means the United States Patent and Trademark Office.
(bb)“Real Property” means any estates or interests in real property now owned or
hereafter acquired by any Grantor or any Subsidiary of any Grantor and the
improvements thereto.
(bc)“Records” means information that is inscribed on a tangible medium or which
is stored in an electronic or other medium and is retrievable in perceivable
form.
(bd) “Rescission” has the meaning specified therefor in Section 6(k).
(be)“Secured Obligations” means each and all of the following: (a) all of the
present and future obligations of each of the Grantors arising from, or owing
under or pursuant to, this Agreement, the Credit Agreement, or any of the other
Loan Documents (including any Guaranty), (b) all Bank Product Obligations, and
(c) all Obligations of Grantors (including, in the case of each of clauses (a),
(b) and (c), reasonable attorneys fees and expenses and any interest, fees, or
expenses that accrue after the filing of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any Insolvency
Proceeding).
(bf)“Securities Account” means a securities account (as that term is defined in
the Code).
(bg)“Security Interest” has the meaning specified therefor in Section 2.
(bh) “Stock” has the meaning specified therefor in the Credit Agreement.
(bi)“Supporting Obligations” means supporting obligations (as such term is
defined in the Code), and includes letters of credit and guaranties issued in
support of Accounts, Chattel Paper, documents, General Intangibles, instruments
or Investment Related Property.
(bj)“Trademarks” means any and all trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks and
service mark applications, including (i) the trade names, registered trademarks,
trademark applications, registered service marks and service mark applications
listed on Schedule 5, (ii) all renewals thereof, (iii) all income, royalties,
damages and payments now and hereafter due or payable under and with respect
thereto, including payments under all licenses entered into in connection
therewith and damages and payments for past or future infringements or dilutions
thereof, (iv) the right to sue for past, present and future infringements and
dilutions thereof, (v) the goodwill of each Grantor's business symbolized by the
foregoing or connected therewith, and (vi) all of each Grantor's rights
corresponding thereto throughout the world.

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(bk)“Trademark Security Agreement” means each Trademark Security Agreement
executed and delivered by Grantors, or any of them, and Agent, in substantially
the form of Exhibit D.
(bl)“URL” means “uniform resource locator,” an internet web address.
2.Grant of Security. Each Grantor hereby unconditionally grants, assigns, and
pledges to Agent, for the benefit of each member of the Lender Group and each of
the Bank Product Providers, to secure the Secured Obligations, a continuing
security interest (hereinafter referred to as the “Security Interest”) in all of
such Grantor's right, title, and interest in and to the following, whether now
owned or hereafter acquired or arising and wherever located (the “Collateral”):
(a)all of such Grantor's Accounts;
(b)all of such Grantor's Books;
(c)all of such Grantor's Chattel Paper;
(d)all of such Grantor's Deposit Accounts (but not deposit accounts exclusively
used for payroll, payroll taxes and other employee wage and benefit payments to
or for the benefit of any Grantor's employees);
(e)all of such Grantor's Equipment and Fixtures;
(f)all of such Grantor's General Intangibles;
(g)all of such Grantor's Inventory;
(h)all of such Grantor's Investment Related Property;
(i)all of such Grantor's Negotiable Collateral;
(j)all of such Grantor's Supporting Obligations;
(k)all of such Grantor's Commercial Tort Claims;
(l)all of such Grantor's money, Cash Equivalents, or other assets of such
Grantor that now or hereafter come into the possession, custody, or control of
Agent (or its agent or designee) or any other member of the Lender Group; and
(m)all of the proceeds (as such term is defined in the Code) and products,
whether tangible or intangible, of any of the foregoing, including proceeds of
insurance or Commercial Tort Claims covering or relating to any or all of the
foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts,
Equipment, Fixtures, General Intangibles, Inventory, Investment Related
Property, Negotiable Collateral, Supporting Obligations, money, or other
tangible or intangible property resulting from the sale, lease, license,
exchange, collection, or other disposition of any of the foregoing, the proceeds
of any award in condemnation with respect to any of the foregoing, any rebates
or refunds, whether for taxes or otherwise, and all proceeds of any such
proceeds, or any portion thereof or interest therein, and the proceeds thereof,
and all proceeds of any loss of, damage to, or destruction of the above, whether
insured or not insured, and, to the extent not otherwise included, any
indemnity, warranty, or guaranty payable by reason of loss or damage to, or
otherwise with respect to any of the foregoing (the “Proceeds”). Without
limiting the generality of the foregoing, the term “Proceeds” includes whatever
is receivable or received when Investment Related Property or proceeds are sold,
exchanged, collected, or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes proceeds of any indemnity or guaranty
payable to any Grantor or Agent from time to time with respect to any of the
Investment Related Property.
Notwithstanding anything contained in this Agreement to the contrary, the term
“Collateral” shall not include: (i) Stock of any Subsidiary that is a Controlled
Foreign Corporation in excess of sixty-five (65%) percent of all of the issued
and outstanding shares of Stock of such Subsidiary entitled to vote (within the
meaning of Treasury Regulation Section 1.956-2) if a pledge of a greater
percentage would result in material adverse tax consequences to Parent or the
assets of such Controlled Foreign Corporation if it would result in material
adverse tax consequences to Parent; or (ii) any rights or interest in any
contract, lease, permit, license, or license agreement covering real or personal
property of any Grantor if under the terms of such contract, lease, permit,
license, or license agreement, or applicable law with respect thereto, the grant
of a security interest or lien therein is prohibited as a matter of law or under
the terms of such contract, lease, permit, license, or license agreement and
such

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prohibition or restriction has not been waived or the consent of the other party
to such contract, lease, permit, license, or license agreement has not been
obtained (provided, that, (A) the foregoing exclusions of this clause (ii) shall
in no way be construed (1) to apply to the extent that any described prohibition
or restriction is unenforceable under Section 9-406, 9-407, 9-408, or 9-409 of
the Code or other applicable law, or (2) to apply to the extent that any consent
or waiver has been obtained that would permit Agent's security interest or lien
notwithstanding the prohibition or restriction on the pledge of such contract,
lease, permit, license, or license agreement and (B) the foregoing exclusions of
clauses (i) and (ii) shall in no way be construed to limit, impair, or otherwise
affect any of Agent's, any other member of the Lender Group's or any Bank
Product Provider's continuing security interests in and liens upon any rights or
interests of any Grantor in or to (1) monies due or to become due under or in
connection with any described contract, lease, permit, license, license
agreement, or Stock (including any Accounts or Stock), or (2) any proceeds from
the sale, license, lease, or other dispositions of any such contract, lease,
permit, license, license agreement, or Stock); or (iii) any United States
intent-to-use trademark applications to the extent that, and solely during the
period in which, the grant of a security interest therein would impair the
validity or enforceability of such intent-to-use trademark applications under
applicable federal law, provided that upon submission and acceptance by the PTO
of an amendment to allege use pursuant to 15 U.S.C. Section 1060(a) (or any
successor provision), such intent-to-use trademark application shall be
considered Collateral.
3.Security for Secured Obligations. The Security Interest created hereby secures
the payment and performance of the Secured Obligations, whether now existing or
arising hereafter. Without limiting the generality of the foregoing, this
Agreement secures the payment of all amounts which constitute part of the
Secured Obligations and would be owed by Grantors, or any of them, to Agent, the
Lender Group, the Bank Product Providers or any of them, but for the fact that
they are unenforceable or not allowable (in whole or in part) as a claim in an
Insolvency Proceeding involving any Grantor due to the existence of such
Insolvency Proceeding.
4.Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a)
each of the Grantors shall remain liable under the contracts and agreements
included in the Collateral, including the Pledged Operating Agreements and the
Pledged Partnership Agreements, to perform all of the duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b)
the exercise by Agent or any other member of the Lender Group of any of the
rights hereunder shall not release any Grantor from any of its duties or
obligations under such contracts and agreements included in the Collateral, and
(c) none of the members of the Lender Group shall have any obligation or
liability under such contracts and agreements included in the Collateral by
reason of this Agreement, nor shall any of the members of the Lender Group be
obligated to perform any of the obligations or duties of any Grantors thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder. Until an Event of Default shall occur and be continuing, except as
otherwise provided in, and subject to the terms of, this Agreement, the Credit
Agreement, or any other Loan Document, Grantors shall have the right to
possession and enjoyment of the Collateral for the purpose of conducting the
ordinary course of their respective businesses. Without limiting the generality
of the foregoing, it is the intention of the parties hereto that record and
beneficial ownership of the Pledged Interests, including all voting, consensual,
dividend, and distribution rights, shall remain in the applicable Grantor until
(i) the occurrence and continuance of an Event of Default and (ii) Agent has
notified the applicable Grantor of Agent's election to exercise such rights with
respect to the Pledged Interests pursuant to Section 15.
5.Representations and Warranties. Each Grantor hereby represents and warrants to
Agent, for the benefit of the Lender Group and the Bank Product Providers, which
representations and warranties shall be true, correct, and complete, in all
material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the Closing Date, and shall
be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the date of the making of each Advance (or other extension of
credit) made thereafter, as though made on and as of the date of such Advance
(or other extension of credit) (except to the extent that such representations
and warranties relate solely to an earlier date, in which case such
representations and warranties shall be true, correct and complete in all
material respects as of such earlier date) and such representations and
warranties shall survive the execution and delivery of this Agreement:
(a)The exact legal name of each of the Grantors is set forth on the signature
pages of this Agreement

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or a written notice provided to Agent pursuant to Section 6.5 of the Credit
Agreement.
(b)Schedule 7 sets forth all Real Property owned by any of the Grantors as of
the Closing Date.
(c)As of the Closing Date: (i) Schedule 2 provides a complete and correct list
of all registered Copyrights owned by any Grantor, all applications for
registration of Copyrights owned by any Grantor, and all other Copyrights owned
by any Grantor and material to the conduct of the business of any Grantor; (ii)
Schedule 3 provides a complete and correct list of all Intellectual Property
Licenses entered into by any Grantor pursuant to which (A) any Grantor has
provided any license or other rights in Intellectual Property owned or
controlled by such Grantor to any other Person other than non-exclusive software
licenses granted in the ordinary course of business or (B) any Person has
granted to any Grantor any license or other rights in Intellectual Property
owned or controlled by such Person that is material to the business of such
Grantor, including any Intellectual Property that is incorporated in any
Inventory, software, or other product marketed, sold, licensed, or distributed
by such Grantor; (iii) Schedule 4 provides a complete and correct list of all
Patents owned by any Grantor and all applications for Patents owned by any
Grantor; and (iv) Schedule 5 provides a complete and correct list of all
registered Trademarks owned by any Grantor, all applications for registration of
Trademarks owned by any Grantor, and all other Trademarks owned by any Grantor
and material to the conduct of the business of any Grantor.
(d)(i) (A) each Grantor, to its knowledge, owns exclusively or holds licenses in
all Intellectual Property that is necessary to the conduct of its business, and
(B) all contractors of each Grantor who were involved in the creation or
development of any Intellectual Property for such Grantor that is necessary to
the business of such Grantor have signed agreements containing assignment of
Intellectual Property rights to such Grantor and obligations of confidentiality;
(ii)to each Grantor's knowledge after reasonable inquiry, no Person has
infringed or misappropriated or is currently infringing or misappropriating any
Intellectual Property rights owned by such Grantor, in each case, that either
individually or in the aggregate could reasonably be expected to result in a
Material Adverse Change;
(iii)(A) to each Grantor's knowledge after reasonable inquiry, (1) such Grantor
is not currently infringing or misappropriating any Intellectual Property rights
of any Person, and (2) no product manufactured, used, distributed, licensed, or
sold by or service provided by such Grantor is currently infringing or
misappropriating any Intellectual Property rights of any Person, in each case,
except where such infringement either individually or in the aggregate could not
reasonably be expected to result in a Material Adverse Change, and (A) there are
no pending, or to any Grantor's knowledge after reasonable inquiry, threatened,
infringement or misappropriation claims or proceedings pending against any
Grantor, and no Grantor has received any notice or other communication of any
actual or alleged infringement or misappropriation of any Intellectual Property
rights of any Person, in each case, except where such infringement either
individually or in the aggregate could not reasonably be expected to result in a
Material Adverse Change;
(iv)to each Grantor's knowledge after reasonable inquiry, (A) all registered
Copyrights, registered Trademarks, and issued Patents that are owned by such
Grantor and necessary in to the conduct of its business are valid, subsisting
and enforceable and in compliance with all legal requirements, filings, and
payments and other actions that are required to maintain such Intellectual
Property in full force and effect; and
(v)each Grantor has taken reasonable steps to maintain the confidentiality of
and otherwise protect and enforce its rights in all trade secrets owned by such
Grantor that are necessary in the business of such Grantor;
(e)This Agreement creates a valid security interest in the Collateral of each
Grantor, to the extent a security interest therein can be created under the
Code, securing the payment of the Secured Obligations. Except to the extent a
security interest in the Collateral cannot be perfected by the filing of a
financing statement under the Code, all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or
will have been taken upon the filing of financing statements listing each
applicable Grantor, as a debtor, and Agent, as secured party, in the
jurisdictions listed next to such Grantor's name on Schedule 8. Upon the making
of such filings, Agent shall have a first priority perfected security interest
in the Collateral of each Grantor to the extent such security interest can be
perfected by the filing of a financing statement. Upon filing of the Copyright
Security Agreement with the United States Copyright Office, filing of the Patent
Security Agreement and the

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Trademark Security Agreement with the PTO, and the filing of appropriate
financing statements in the jurisdictions listed on Schedule 8, all action
necessary or desirable to protect and perfect the Security Interest in and to on
each Grantor's Patents, Trademarks, or Copyrights has been taken and such
perfected Security Interest is enforceable as such as against any and all
creditors of and purchasers from any Grantor. All action by any Grantor
necessary to protect and perfect such security interest on each item of
Collateral has been duly taken.
(f)(i) Except for the Security Interest created hereby, each Grantor is and will
at all times be the sole holder of record and the legal and beneficial owner,
free and clear of all Liens other than Permitted Liens, of the Pledged Interests
indicated on Schedule 6 as being owned by such Grantor and, when acquired by
such Grantor, any Pledged Interests acquired after the Closing Date; (ii) all of
the Pledged Interests are duly authorized, validly issued, fully paid and
nonassessable and the Pledged Interests constitute or will constitute the
percentage of the issued and outstanding Stock of the Pledged Companies of such
Grantor identified on Schedule 6 as supplemented or modified by any Pledged
Interests Addendum or any Joinder to this Agreement; (iii) such Grantor has the
right and requisite authority to pledge, the Investment Related Property pledged
by such Grantor to Agent as provided herein; (iv) all actions necessary or
desirable to perfect and establish the first priority of, or otherwise protect,
Agent's Liens in the Investment Related Property, and the proceeds thereof, have
been duly taken, upon (A) the execution and delivery of this Agreement; (B) the
taking of possession by Agent (or its agent or designee) of any certificates
representing the Pledged Interests, together with undated powers (or other
documents of transfer acceptable to Agent) endorsed in blank by the applicable
Grantor; (C) the filing of financing statements in the applicable jurisdiction
set forth on Schedule 8 for such Grantor with respect to the Pledged Interests
of such Grantor that are not represented by certificates, and (D) with respect
to any Securities Accounts, the delivery of Control Agreements with respect
thereto; and (v) each Grantor has delivered to and deposited with Agent all
certificates representing the Pledged Interests owned by such Grantor to the
extent such Pledged Interests are represented by certificates, and undated
powers (or other documents of transfer acceptable to Agent) endorsed in blank
with respect to such certificates. None of the Pledged Interests owned or held
by such Grantor has been issued or transferred in violation of any securities
registration, securities disclosure, or similar laws of any jurisdiction to
which such issuance or transfer may be subject.
(g)No consent, approval, authorization, or other order or other action by, and
no notice to or filing with, any Governmental Authority or any other Person is
required (i) for the grant of a Security Interest by such Grantor in and to the
Collateral pursuant to this Agreement or for the execution, delivery, or
performance of this Agreement by such Grantor, or (ii) for the exercise by Agent
of the voting or other rights provided for in this Agreement with respect to the
Investment Related Property or the remedies in respect of the Collateral
pursuant to this Agreement, except as may be required in connection with such
disposition of Investment Related Property by laws affecting the offering and
sale of securities generally. No Intellectual Property License of any Grantor
that is necessary to the conduct of such Grantor's business requires any consent
of any other Person in order for such Grantor to grant the security interest
granted hereunder in such Grantor's right, title or interest in or to such
Intellectual Property License.
(h)As to all limited liability company or partnership interests, issued under
any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor
hereby represents and warrants that the Pledged Interests issued pursuant to
such agreement (A) are not dealt in or traded on securities exchanges or in
securities markets, (B) do not constitute investment company securities, and (C)
are not held by such Grantor in a securities account. In addition, none of the
Pledged Operating Agreements, the Pledged Partnership Agreements, or any other
agreements governing any of the Pledged Interests issued under any Pledged
Operating Agreement or Pledged Partnership Agreement, provide that such Pledged
Interests are securities governed by Article 8 of the Uniform Commercial Code as
in effect in any relevant jurisdiction.
6.Covenants. Each Grantor, jointly and severally, covenants and agrees with
Agent that from and after the date of this Agreement and until the date of
termination of this Agreement in accordance with Section 22:
(a)Possession of Collateral. In the event that any Collateral, including
Proceeds, is evidenced by or consists of Negotiable Collateral, Investment
Related Property, or Chattel Paper, in each case, having an aggregate value or
face amount of $500,000 or more for all such Negotiable Collateral, Investment
Related Property, or Chattel Paper, the Grantors shall promptly (and in any
event within five (5) Business Days after receipt thereof), notify Agent
thereof, and if and to the extent that perfection or priority of Agent's
Security Interest is dependent on

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or enhanced by possession, the applicable Grantor, promptly (and in any event
within three (3) Business Days) after request by Agent, shall execute such other
documents and instruments as shall be requested by Agent or, if applicable,
endorse and deliver physical possession of such Negotiable Collateral,
Investment Related Property, or Chattel Paper to Agent, together with such
undated powers (or other relevant document of transfer acceptable to Agent)
endorsed in blank as shall be reasonably requested by Agent, and shall do such
other acts or things reasonably deemed necessary or desirable by Agent to
protect Agent's Security Interest therein;
(b)Chattel Paper.
i.Promptly (and in any event within five (5) Business Days) after request by
Agent, each Grantor shall take all steps reasonably necessary to grant Agent
control of all electronic Chattel Paper in accordance with the Code and all
“transferable records” as that term is defined in Section 16 of the Uniform
Electronic Transaction Act and Section 201 of the federal Electronic Signatures
in Global and National Commerce Act as in effect in any relevant jurisdiction,
to the extent that the aggregate value or face amount of such electronic Chattel
Paper equals or exceeds $500,000;
ii.If any Grantor retains possession of any Chattel Paper or instruments (which
retention of possession shall be subject to the extent permitted hereby and by
the Credit Agreement), promptly upon the request of Agent, such Chattel Paper
and instruments shall be marked with the following legend: “This writing and the
obligations evidenced or secured hereby are subject to the Security Interest of
Wells Fargo Capital Finance, LLC, as Agent for the benefit of the Lender Group
and the Bank Product Providers”;
(c)Control Agreements.
i.Except to the extent otherwise excused by the Credit Agreement, each Grantor
shall obtain an authenticated Control Agreement (which may include a Controlled
Account Agreement), from each bank maintaining a Deposit Account for such
Grantor;
ii.Except to the extent otherwise excused by the Credit Agreement, each Grantor
shall obtain an authenticated Control Agreement, from each issuer of
uncertificated securities, securities intermediary, or commodities intermediary
issuing or holding any financial assets or commodities to or for any Grantor;
iii.Except to the extent otherwise excused by the Credit Agreement, each Grantor
shall obtain an authenticated Control Agreement with respect to all of such
Grantor's investment property;
(d)Letter-of-Credit Rights. If the Grantors (or any of them) are or become the
beneficiary of letters of credit having a face amount or value of $500,000 or
more in the aggregate, then the applicable Grantor or Grantors shall promptly
(and in any event within five (5) Business Days after becoming a beneficiary),
notify Agent thereof and, promptly (and in any event within three (3) Business
Days) after request by Agent, enter into a tri-party agreement with Agent and
the issuer or confirming bank with respect to letter-of-credit rights assigning
such letter-of-credit rights to Agent and directing all payments thereunder to
Agent's Account, all in form and substance reasonably satisfactory to Agent;
(e)Commercial Tort Claims. If the Grantors (or any of them) obtain Commercial
Tort Claims having a value, or involving an asserted claim, in the amount of
$500,000 or more in the aggregate for all Commercial Tort Claims, then the
applicable Grantor or Grantors shall promptly (and in any event within five (5)
Business Days of obtaining such Commercial Tort Claim), notify Agent upon
incurring or otherwise obtaining such Commercial Tort Claims and, promptly (and
in any event within three (3) Business Days) after request by Agent, amend
Schedule 1 to describe such Commercial Tort Claims in a manner that reasonably
identifies such Commercial Tort Claims and which is otherwise reasonably
satisfactory to Agent, and hereby authorizes the filing of additional financing
statements or amendments to existing financing statements describing such
Commercial Tort Claims, and agrees to do such other acts or things reasonably
deemed necessary or desirable by Agent to give Agent a first priority, perfected
security interest in any such Commercial Tort Claim;
(f)Government Contracts. Other than Accounts and Chattel Paper the aggregate
value of which does not at any one time exceed $500,000, if any Account or
Chattel Paper arises out of a contract or contracts with the United States of
America or any department, agency, or instrumentality thereof, Grantors shall
promptly (and in any event within five (5) Business Days of the creation
thereof) notify Agent thereof and, promptly (and in any event within three (3)
Business Days) after request by Agent, execute any instruments or take any steps
reasonably

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required by Agent in order that all moneys due or to become due under such
contract or contracts shall be assigned to Agent, for the benefit of the Lender
Group and the Bank Product Providers, and shall provide written notice thereof
under the Assignment of Claims Act or other applicable law;
(g)Intellectual Property.
i.Upon the request of Agent, in order to facilitate filings with the United
States Patent and Trademark Office and the United States Copyright Office, each
Grantor shall execute and deliver to Agent one or more Copyright Security
Agreements, Trademark Security Agreements, or Patent Security Agreements to
further evidence Agent's Lien on such Grantor's Patents, Trademarks, or
Copyrights, and the General Intangibles of such Grantor relating thereto or
represented thereby;
ii.Each Grantor shall have the duty, with respect to Intellectual Property that
is necessary in the conduct of such Grantor's business, to protect and
diligently enforce and defend at such Grantor's expense its Intellectual
Property, including (A) with respect to Trademarks and Copyrights (and Patents,
to the extent commercially reasonable to do so) to diligently enforce and
defend, including promptly suing for infringement, misappropriation, or dilution
and to recover any and all damages for such infringement, misappropriation, or
dilution, and filing for opposition, interference, and cancellation against
conflicting Intellectual Property rights of any Person, (B) to prosecute
diligently any trademark application or service mark application that is part of
the Trademarks pending as of the date hereof or hereafter until the termination
of this Agreement, unless the Patent and Trademark Office has issued a final
refusal to register the Trademark which is the subject of such trademark
application or service mark application, (C) to prosecute diligently any patent
application that is part of the Patents pending as of the date hereof or
hereafter until the termination of this Agreement, unless the Patent and
Trademark Office has issued a final refusal to issue the Patent which is the
subject of such patent application, (D) to take all reasonable and necessary
action to preserve and maintain all of such Grantor's Trademarks, Patents,
Copyrights, Intellectual Property Licenses, and its rights therein, including
paying all maintenance fees and filing of applications for renewal, affidavits
of use, and affidavits of noncontestability, provided, that, a Grantor may
abandon, cancel, not renew or otherwise not maintain a Trademark so long as (1)
such Trademark is no longer used or useful in the business of such Grantor or
any other Loan Party, (2) such Trademark has not been used in the business of
such Grantor or any other Loan Party for a period of three (3) consecutive
months, (3) such Trademark is not otherwise material to the business of such
Grantor or any other Loan Party, and (4) no Default or Event of Default shall
have occurred as of such time, and (E) to require all consultants, and
contractors of each Grantor who were involved in the creation or development of
such Intellectual Property to sign agreements containing assignment of
Intellectual Property rights and obligations of confidentiality. Each Grantor
further agrees not to abandon any Intellectual Property or Intellectual Property
License that is necessary in the conduct of such Grantor's business. Each
Grantor hereby agrees to take the steps described in this Section 6(g)(ii) with
respect to all new or acquired Intellectual Property to which it is now or later
becomes entitled that is necessary in the conduct of such Grantor's business;
iii.Grantors acknowledge and agree that the Lender Group shall have no duties
with respect to any Intellectual Property or Intellectual Property Licenses of
any Grantor. Without limiting the generality of this Section 6(g)(iii), Grantors
acknowledge and agree that no member of the Lender Group shall be under any
obligation to take any steps necessary to preserve rights in the Collateral
consisting of Intellectual Property or Intellectual Property Licenses against
any other Person, but any member of the Lender Group may do so at its option
from and after the occurrence and during the continuance of an Event of Default,
and all expenses incurred in connection therewith (including reasonable fees and
expenses of attorneys and other professionals) shall be for the sole account of
Borrower and shall be chargeable to the Loan Account;
iv.Each Grantor shall promptly file an application with the United States
Copyright Office for any Copyright owned by such Grantor that has not been
registered with the United States Copyright Office if such Copyright is
necessary in connection with the conduct of such Grantor's business. Any
expenses incurred in connection with the foregoing shall be borne by the
Grantors;
v.On each date on which an IP Reporting Certificate is delivered by Borrowers
pursuant to Section 5.2 of the Credit Agreement, each Grantor shall provide
Agent with a written report of all new Patents or Trademarks that are registered
or the subject of pending applications for registrations, and of all
Intellectual Property License Agreements that are material to the conduct of
such Grantor's business, in each case, which were

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acquired, registered, or for which applications for registration were filed by
any Grantor during the prior period and any statement of use or amendment to
allege use with respect to intent-to-use trademark applications. In the case of
such registrations or applications therefor, which were acquired by any Grantor,
each such Grantor shall file the necessary documents with the appropriate
Governmental Authority identifying the applicable Grantor as the owner (or as a
co-owner thereof, if such is the case) of such Intellectual Property. In each of
the foregoing cases, the applicable Grantor shall promptly cause to be prepared,
executed, and delivered to Agent supplemental schedules to the applicable Loan
Documents to identify such Patent and Trademark registrations and applications
therefor (with the exception of Trademark applications filed on an intent-to-use
basis for which no statement of use or amendment to allege use has been filed)
and Intellectual Property Licenses as being subject to the security interests
created thereunder;
vi.Anything to the contrary in this Agreement notwithstanding, in no event shall
any Grantor, either itself or through any agent, employee, licensee, or
designee, file an application for the registration of any Copyright with the
United States Copyright Office or any similar office or agency in another
country without giving Agent written notice thereof at least three (3) Business
Days prior to such filing and complying with Section 6(g)(i). Upon receipt from
the United States Copyright Office of notice of registration of any Copyright,
each Grantor shall promptly (but in no event later than three (3) Business Days
following such receipt) notify (but without duplication of any notice required
by Section 6(g)(vi)) Agent of such registration by delivering, or causing to be
delivered, to Agent, documentation sufficient for Agent to perfect Agent's Liens
on such Copyright. If any Grantor acquires from any Person any Copyright
registered with the United States Copyright Office or an application to register
any Copyright with the United States Copyright Office, such Grantor shall
promptly (but in no event later than seven (7) Business Days following such
acquisition) notify Agent of such acquisition and deliver, or cause to be
delivered, to Agent, documentation sufficient for Agent to perfect Agent's Liens
on such Copyright. In the case of such Copyright registrations or applications
therefor which were acquired by any Grantor, each such Grantor shall promptly
(but in no event later than three (3) Business Days following such acquisition)
file the necessary documents with the appropriate Governmental Authority
identifying the applicable Grantor as the owner (or as a co-owner thereof, if
such is the case) of such Copyrights;
vii.Each Grantor shall take reasonable steps to maintain the confidentiality of,
and otherwise protect and enforce its rights in, the Intellectual Property that
is necessary in the conduct of such Grantor's business, including, as applicable
(A) protecting the secrecy and confidentiality of its confidential information
and trade secrets by having and enforcing a policy requiring all current
employees, consultants, licensees, vendors and contractors with access to such
information to execute appropriate confidentiality agreements; (B) taking
actions reasonably necessary to ensure that no trade secret falls into the
public domain; and (C) protecting the secrecy and confidentiality of the source
code of all software programs and applications of which it is the owner or
licensee by having and enforcing a policy requiring any licensees (or
sublicensees) of such source code to enter into license agreements with
commercially reasonable use and non-disclosure restrictions; and
viii.No Grantor shall enter into any Intellectual Property License to receive
any license or rights in any Intellectual Property of any other Person unless
such Grantor has used commercially reasonable efforts to permit the assignment
of or grant of a security interest in such Intellectual Property License (and
all rights of Grantor thereunder) to the (and any transferees of Agent);
(h)Investment Related Property.
i.If any Grantor shall acquire, obtain, receive or become entitled to receive
any Pledged Interests after the Closing Date, it shall promptly (and in any
event within ten (10) Business Days of acquiring or obtaining such Collateral)
deliver to Agent a duly executed Pledged Interests Addendum identifying such
Pledged Interests; provided, that, only sixty-five (65%) percent of the total
outstanding voting Stock of any Subsidiary of any Grantor that is a controlled
foreign corporation (and none of the Stock of any Subsidiary of such controlled
foreign corporation) shall be required to be pledged if pledging a greater
amount would result in adverse tax consequences or the costs to the Grantors of
providing such pledge or perfecting the security interests created thereby are
unreasonably excessive (as determined by Agent in consultation with Grantors) in
relation to the benefits of Agent and the Lenders of the security or guarantee
afforded thereby (which pledge, if reasonably requested by Agent, shall be
governed by the laws of the jurisdiction of such Subsidiary);
ii.Upon the occurrence and during the continuance of an Event of Default,
following the

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request of Agent, all sums of money and property paid or distributed in respect
of the Investment Related Property that are received by any Grantor shall be
held by the Grantors in trust for the benefit of Agent segregated from such
Grantor's other property, and such Grantor shall deliver it forthwith to Agent
in the exact form received;
iii.Each Grantor shall promptly deliver to Agent a copy of each material notice
or other material communication received by it in respect of any Pledged
Interests;
iv.No Grantor shall make or consent to any amendment or other modification or
waiver with respect to any Pledged Interests, Pledged Operating Agreement, or
Pledged Partnership Agreement, or enter into any agreement or permit to exist
any restriction with respect to any Pledged Interests if the same is prohibited
pursuant to the Loan Documents;
v.Each Grantor agrees that it will cooperate with Agent in obtaining all
necessary approvals and making all necessary filings under federal, state,
local, or foreign law to effect the perfection of the Security Interest on the
Investment Related Property or to effect any sale or transfer thereof;
vi.As to all limited liability company or partnership interests, issued under
any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor
hereby covenants that the Pledged Interests issued pursuant to such agreement
(A) are not and shall not be dealt in or traded on securities exchanges or in
securities markets, (B) do not and will not constitute investment company
securities, and (C) are not and will not be held by such Grantor in a securities
account. In addition, none of the Pledged Operating Agreements, the Pledged
Partnership Agreements, or any other agreements governing any of the Pledged
Interests issued under any Pledged Operating Agreement or Pledged Partnership
Agreement, provide or shall provide that such Pledged Interests are securities
governed by Article 8 of the Uniform Commercial Code as in effect in any
relevant jurisdiction.
(i)Real Property; Fixtures. Each Grantor covenants and agrees that upon the
acquisition of any fee interest in Real Property with a fair market value in
excess of $2,500,000, it will promptly (and in any event within five (5)
Business Days of acquisition) notify Agent of the acquisition of such Real
Property and will grant to Agent, for the benefit of the Lender Group and the
Bank Product Providers, a first priority Mortgage on each fee interest in Real
Property now or hereafter owned by such Grantor and shall deliver such other
documentation and opinions, in form and substance reasonably satisfactory to
Agent, in connection with the grant of such Mortgage as Agent shall request in
its Permitted Discretion, including title insurance policies, financing
statements, fixture filings and environmental audits and such Grantor shall pay
all recording costs, intangible taxes and other fees and costs (including
reasonable attorneys fees and expenses) incurred in connection therewith. Each
Grantor acknowledges and agrees that, to the extent permitted by applicable law,
all of the Collateral shall remain personal property regardless of the manner of
its attachment or affixation to real property;
(j)Transfers and Other Liens. Grantors shall not (i) sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, any of the Collateral, except as expressly permitted by the Credit
Agreement, or (ii) create or permit to exist any Lien upon or with respect to
any of the Collateral of any Grantor, except for Permitted Liens. The inclusion
of Proceeds in the Collateral shall not be deemed to constitute Agent's consent
to any sale or other disposition of any of the Collateral except as expressly
permitted in this Agreement or the other Loan Documents; and
(k)Controlled Accounts.
i.Each Grantor shall (A) establish (within ninety (90) days after the Closing
Date with respect to Wells Fargo Bank) and maintain cash management services of
a type and on terms reasonably satisfactory to Agent at one or more of the banks
set forth on Schedule 6(k) (each a “Controlled Account Bank”), and shall take
reasonable steps to ensure that all of its and its Subsidiaries' Account Debtors
forward payment of the amounts owed by them directly to such Controlled Account
Bank, and (B) deposit or cause to be deposited promptly, and in any event no
later than the second Business Day after the date of receipt thereof, all of
their Collections (including those sent directly by their Account Debtors to a
Grantor) into a bank account of such Grantor (each, a “Controlled Account”) at
one of the Controlled Account Banks.
ii.Each Grantor shall establish and maintain Controlled Account Agreements with
Agent and the applicable Controlled Account Bank, in form and substance
reasonably acceptable to Agent. Each such Controlled Account Agreement shall
provide, among other things, that (A) the Controlled Account Bank will

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comply with any instructions originated by Agent directing the disposition of
the funds in such Controlled Account without further consent by the applicable
Grantor, (B) the Controlled Account Bank waives, subordinates, or agrees not to
exercise any rights of setoff or recoupment or any other claim against the
applicable Controlled Account other than for payment of its service fees and
other charges directly related to the administration of such Controlled Account
and for returned checks or other items of payment, and (C) upon the instruction
of Agent (an “Activation Instruction”), the Controlled Account Bank will forward
by daily sweep all available amounts in the applicable Controlled Account to the
Agent's Account. Agent agrees not to issue an Activation Instruction with
respect to the Controlled Accounts unless a Cash Dominion Event has occurred and
is continuing at the time such Activation Instruction is issued. Agent agrees to
promptly rescind an Activation Instruction (the “Rescission”) if: (1) the Cash
Dominion Event upon which such Activation Instruction was issued has been waived
in writing in accordance with the terms of the Credit Agreement or no longer
exists in accordance with the terms of the definition of Cash Dominion Event,
and (2) no additional Cash Dominion Event has occurred and is continuing prior
to the date of the Rescission.
iii.So long as no Default or Event of Default has occurred and is continuing,
Borrowers may amend Schedule 6(k) to add or replace a Controlled Account Bank or
Controlled Account; provided, however, that (A) such prospective Controlled
Account Bank shall be reasonably satisfactory to Agent, and (B) prior to the
time of the opening of such Controlled Account, the applicable Grantor and such
prospective Controlled Account Bank shall have executed and delivered to Agent a
Controlled Account Agreement. Each Grantor shall close any of its Controlled
Accounts (and establish replacement Controlled Account accounts in accordance
with the foregoing sentence) as promptly as practicable and in any event within
forty-five (45) days of notice from Agent that the operating performance, funds
transfer, or availability procedures or performance of the Controlled Account
Bank with respect to Controlled Account Accounts or Agent's liability under any
Controlled Account Agreement with such Controlled Account Bank is no longer
acceptable in Agent's reasonable judgment.
7.Relation to Other Security Documents. The provisions of this Agreement shall
be read and construed with the other Loan Documents referred to below in the
manner so indicated.
(a)Credit Agreement. In the event of any conflict between any provision in this
Agreement and a provision in the Credit Agreement, such provision of the Credit
Agreement shall control.
(b)Patent, Trademark, Copyright Security Agreements. The provisions of the
Copyright Security Agreements, Trademark Security Agreements, and Patent
Security Agreements are supplemental to the provisions of this Agreement, and
nothing contained in the Copyright Security Agreements, Trademark Security
Agreements, or the Patent Security Agreements shall limit any of the rights or
remedies of Agent hereunder. In the event of any conflict between any provision
in this Agreement and a provision in a Copyright Security Agreement, Trademark
Security Agreement or Patent Security Agreement, such provision of this
Agreement shall control.
8.Further Assurances.
(a)Each Grantor agrees that from time to time, at its own expense, such Grantor
will promptly execute and deliver all further instruments and documents, and
take all further action, that Agent may reasonably request, in order to perfect
and protect the Security Interest granted hereby, to create, perfect or protect
the Security Interest purported to be granted hereby or to enable Agent to
exercise and enforce its rights and remedies hereunder with respect to any of
the Collateral.
(b)Each Grantor authorizes the filing by Agent of financing or continuation
statements, or amendments thereto, and such Grantor will execute and deliver to
Agent such other instruments or notices, as Agent may reasonably request, in
order to perfect and preserve the Security Interest granted or purported to be
granted hereby.
(c)Each Grantor authorizes Agent at any time and from time to time to file,
transmit, or communicate, as applicable, financing statements and amendments (i)
describing the Collateral as “all personal property of debtor” or “all assets of
debtor” or words of similar effect, (ii) describing the Collateral as being of
equal or lesser scope or with greater detail, or (iii) that contain any
information required by part 5 of Article 9 of the Code for the sufficiency or
filing office acceptance. Each Grantor also hereby ratifies any and all
financing statements or amendments previously filed by Agent in any
jurisdiction.
(d)Each Grantor acknowledges that it is not authorized to file any financing
statement or amendment

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or termination statement with respect to any financing statement filed in
connection with this Agreement without the prior written consent of Agent,
subject to such Grantor's rights under Section 9-509(d)(2) of the Code.
9.Agent's Right to Perform Contracts, Exercise Rights, etc. Upon the occurrence
and during the continuance of an Event of Default, Agent (or its designee) (a)
may proceed to perform any and all of the obligations of any Grantor contained
in any contract, lease, or other agreement and exercise any and all rights of
any Grantor therein contained as fully as such Grantor itself could, (b) shall
have the right to use any Grantor's rights under Intellectual Property Licenses
in connection with the enforcement of Agent's rights hereunder, including the
right to prepare for sale and sell any and all Inventory and Equipment now or
hereafter owned by any Grantor and now or hereafter covered by such licenses,
and (c) shall have the right to request that any Stock that is pledged hereunder
be registered in the name of Agent or any of its nominees.
10.Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints
Agent its attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor or otherwise, at such time as an Event
of Default has occurred and is continuing under the Credit Agreement, to take
any action and to execute any instrument which Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including:
(a)to ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in connection
with the Accounts or any other Collateral of such Grantor;
(b)to receive and open all mail addressed to such Grantor and to notify postal
authorities to change the address for the delivery of mail to such Grantor to
that of Agent;
(c)to receive, indorse, and collect any drafts or other instruments, documents,
Negotiable Collateral or Chattel Paper;
(d)to file any claims or take any action or institute any proceedings which
Agent may deem necessary or desirable for the collection of any of the
Collateral of such Grantor or otherwise to enforce the rights of Agent with
respect to any of the Collateral;
(e)to repair, alter, or supply goods, if any, necessary to fulfill in whole or
in part the purchase order of any Person obligated to such Grantor in respect of
any Account of such Grantor;
(f)to use any Intellectual Property or Intellectual Property Licenses of such
Grantor, including but not limited to any labels, Patents, Trademarks, trade
names, URLs, domain names, industrial designs, Copyrights, or advertising
matter, in preparing for sale, advertising for sale, or selling Inventory or
other Collateral and to collect any amounts due under Accounts, contracts or
Negotiable Collateral of such Grantor; and
(g)Agent, on behalf of the Lender Group or the Bank Product Providers, shall
have the right, but shall not be obligated, to bring suit in its own name to
enforce the Intellectual Property and Intellectual Property Licenses and, if
Agent shall commence any such suit, the appropriate Grantor shall, at the
request of Agent, do any and all lawful acts and execute any and all proper
documents reasonably required by Agent in aid of such enforcement.
To the extent permitted by law, each Grantor hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and shall be irrevocable until
this Agreement is terminated.
11.Agent May Perform. If any Grantor fails to perform any agreement contained
herein, Agent may itself perform, or cause performance of, such agreement, and
the reasonable expenses of Agent incurred in connection therewith shall be
payable, jointly and severally, by Grantors.
12.Agent's Duties. The powers conferred on Agent hereunder are solely to protect
Agent's interest in the Collateral, for the benefit of the Lender Group and the
Bank Product Providers, and shall not impose any duty upon Agent to exercise any
such powers. Except for the safe custody of any Collateral in its actual
possession and the accounting for moneys actually received by it hereunder,
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral. Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any Collateral in its actual possession
if such Collateral is accorded treatment substantially equal to that which Agent
accords its own property.

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13.Collection of Accounts, General Intangibles and Negotiable Collateral. At any
time upon the occurrence and during the continuance of an Event of Default (but
at no other time), Agent or Agent's designee may (a) notify Account Debtors of
any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable
Collateral of such Grantor have been assigned to Agent, for the benefit of the
Lender Group and the Bank Product Providers, or that Agent has a security
interest therein, and (b) collect the Accounts, General Intangibles and
Negotiable Collateral of any Grantor directly, and any collection costs and
expenses shall constitute part of such Grantor's Secured Obligations under the
Loan Documents.
14.Disposition of Pledged Interests by Agent. None of the Pledged Interests
existing as of the date of this Agreement are, and none of the Pledged Interests
hereafter acquired on the date of acquisition thereof will be, registered or
qualified under the various federal or state securities laws of the United
States and disposition thereof after an Event of Default and during the
continuance thereof may be restricted to one or more private (instead of public)
sales in view of the lack of such registration. Each Grantor understands that in
connection with such disposition, Agent may approach only a restricted number of
potential purchasers and further understands that a sale under such
circumstances may yield a lower price for the Pledged Interests than if the
Pledged Interests were registered and qualified pursuant to federal and state
securities laws and sold on the open market. Each Grantor, therefore, agrees
that: (a) if Agent shall, pursuant to the terms of this Agreement, sell or cause
the Pledged Interests or any portion thereof to be sold at a private sale, Agent
shall have the right to rely upon the advice and opinion of any nationally
recognized brokerage or investment firm (but shall not be obligated to seek such
advice and the failure to do so shall not be considered in determining the
commercial reasonableness of such action) as to the best manner in which to
offer the Pledged Interest or any portion thereof for sale and as to the best
price reasonably obtainable at the private sale thereof; and (b) such reliance
shall be conclusive evidence that Agent has handled the disposition in a
commercially reasonable manner.
15.Voting and Other Rights in Respect of Pledged Interests.
(a)Upon the occurrence and during the continuation of an Event of Default, (i)
Agent may, at its option, and with two (2) Business Days prior notice to any
Grantor, and in addition to all rights and remedies available to Agent under any
other agreement, at law, in equity, or otherwise, exercise all voting rights, or
any other ownership or consensual rights (including any dividend or distribution
rights) in respect of the Pledged Interests owned by such Grantor, but under no
circumstances is Agent obligated by the terms of this Agreement to exercise such
rights, and (ii) if Agent duly exercises its right to vote any of such Pledged
Interests, each Grantor hereby appoints Agent, such Grantor's true and lawful
attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in any
manner Agent deems advisable for or against all matters submitted or which may
be submitted to a vote of shareholders, partners or members, as the case may be.
The power-of-attorney and proxy granted hereby is coupled with an interest and
shall be irrevocable prior to the payment in full of the Secured Obligations in
accordance with the provisions of the Credit Agreement and the expiration or
termination of the Commitments.
(b)For so long as any Grantor shall have the right to vote the Pledged Interests
owned by it, such Grantor covenants and agrees that it will not, without the
prior written consent of Agent, vote or take any consensual action with respect
to such Pledged Interests which would materially adversely affect the rights of
Agent, the other members of the Lender Group, or the Bank Product Providers, or
the value of the Pledged Interests.
16.Remedies. Upon the occurrence and during the continuance of an Event of
Default:
(a)Agent may, and, at the instruction of the Required Lenders, shall exercise in
respect of the Collateral, in addition to other rights and remedies provided for
herein, in the other Loan Documents, or otherwise available to it, all the
rights and remedies of a secured party on default under the Code or any other
applicable law. Without limiting the generality of the foregoing, each Grantor
expressly agrees that, in any such event, Agent without demand of performance or
other demand, advertisement or notice of any kind (except a notice specified
below of time and place of public or private sale) to or upon any Grantor or any
other Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the Code or any other
applicable law), may take immediate possession of all or any portion of the
Collateral and (i) require Grantors to, and each Grantor hereby agrees that it
will at its own expense and upon request of Agent forthwith, assemble all or
part of the Collateral as directed by Agent and make it available to Agent at
one or more locations where such Grantor regularly maintains Inventory, and (ii)
without notice except as specified below, sell the

15

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Collateral or any part thereof in one or more parcels at public or private sale,
at any of Agent's offices or elsewhere, for cash, on credit, and upon such other
terms as Agent may, in good faith, deem commercially reasonable. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) days notice to the applicable Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification and specifically such notice shall constitute a
reasonable “authenticated notification of disposition” within the meaning of
Section 9-611 of the Code. Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Each Grantor agrees that the internet
shall constitute a “place” for purposes of Section 9-610(b) of the Code. Each
Grantor agrees that any sale of Collateral to a licensor pursuant to the terms
of a license agreement between such licensor and a Grantor is sufficient to
constitute a commercially reasonable sale (including as to method, terms,
manner, and time) within the meaning of Section 9-610 of the Code.
(b)Agent is hereby granted a license or other right to use, without liability
for royalties or any other charge, each Grantor's Intellectual Property,
including but not limited to, any labels, Patents, Trademarks, trade names,
URLs, domain names, industrial designs, Copyrights, and advertising matter,
whether owned by any Grantor or with respect to which any Grantor has rights
under license, sublicense, or other agreements (including any Intellectual
Property License), as it pertains to the Collateral, in preparing for sale,
advertising for sale and selling any Collateral, and each Grantor's rights under
all licenses and all franchise agreements shall inure to the benefit of Agent.
(c)Agent may, in addition to other rights and remedies provided for herein, in
the other Loan Documents, or otherwise available to it under applicable law and
without the requirement of notice to or upon any Grantor or any other Person
(which notice is hereby expressly waived to the maximum extent permitted by the
Code or any other applicable law), (i) with respect to any Grantor's Deposit
Accounts in which Agent's Liens are perfected by control under Section 9-104 of
the Code, instruct the bank maintaining such Deposit Account for the applicable
Grantor to pay the balance of such Deposit Account to or for the benefit of
Agent, and (ii) with respect to any Grantor's Securities Accounts in which
Agent's Liens are perfected by control under Section 9-106 of the Code, instruct
the securities intermediary maintaining such Securities Account for the
applicable Grantor to (A) transfer any cash in such Securities Account to or for
the benefit of Agent, or (B) liquidate any financial assets in such Securities
Account that are customarily sold on a recognized market and transfer the cash
proceeds thereof to or for the benefit of Agent.
(d)Any cash held by Agent as Collateral and all cash proceeds received by Agent
in respect of any sale of, collection from, or other realization upon all or any
part of the Collateral shall be applied against the Secured Obligations in the
order set forth in the Credit Agreement. In the event the proceeds of Collateral
are insufficient to satisfy all of the Secured Obligations in full, each Grantor
shall remain jointly and severally liable for any such deficiency.
(e)Each Grantor hereby acknowledges that the Secured Obligations arise out of a
commercial transaction, and agrees that if an Event of Default shall occur and
be continuing, Agent shall have the right to an immediate writ of possession
without notice of a hearing. Agent shall have the right to the appointment of a
receiver for the properties and assets of each Grantor, and each Grantor hereby
consents to such rights and such appointment and hereby waives any objection
such Grantor may have thereto or the right to have a bond or other security
posted by Agent.
17.Remedies Cumulative. Each right, power, and remedy of Agent as provided for
in this Agreement or in the other Loan Documents or now or hereafter existing at
law or in equity or by statute or otherwise shall be cumulative and concurrent
and shall be in addition to every other right, power, or remedy provided for in
this Agreement or in the other Loan Documents or now or hereafter existing at
law or in equity or by statute or otherwise, and the exercise or beginning of
the exercise by Agent, of any one or more of such rights, powers, or remedies
shall not preclude the simultaneous or later exercise by Agent of any or all
such other rights, powers, or remedies.
18.Marshaling. Agent shall not be required to marshal any present or future
collateral security (including but not limited to the Collateral) for, or other
assurances of payment of, the Secured Obligations or any

16

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of them or to resort to such collateral security or other assurances of payment
in any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights and remedies, however existing or
arising. To the extent that it lawfully may, each Grantor hereby agrees that it
will not invoke any law relating to the marshaling of collateral which might
cause delay in or impede the enforcement of Agent's rights and remedies under
this Agreement or under any other instrument creating or evidencing any of the
Secured Obligations or under which any of the Secured Obligations is outstanding
or by which any of the Secured Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.
19.Indemnity and Expenses.
(a)Each Grantor agrees to indemnify Agent and the other members of the Lender
Group from and against all claims, lawsuits and liabilities (including
reasonable attorneys fees) growing out of or resulting from this Agreement
(including enforcement of this Agreement) or any other Loan Document to which
such Grantor is a party, except claims, losses or liabilities resulting from the
gross negligence or willful misconduct of the party seeking indemnification as
determined by a final non-appealable order of a court of competent jurisdiction.
This provision shall survive the termination of this Agreement and the Credit
Agreement and the repayment of the Secured Obligations.
(b)Grantors, jointly and severally, shall, upon demand, pay to Agent (or Agent,
may charge to the Loan Account) all the Lender Group Expenses which Agent may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or, upon an Event of Default, the
sale of, collection from, or other realization upon, any of the Collateral in
accordance with this Agreement and the other Loan Documents, (iii) the exercise
or enforcement of any of the rights of Agent hereunder or (iv) the failure by
any Grantor to perform or observe any of the provisions hereof.
20.Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver
of any provision of this Agreement, and no consent to any departure by any
Grantor herefrom, shall in any event be effective unless the same shall be in
writing and signed by Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
amendment of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by Agent and each Grantor to which such amendment
applies.
21.Addresses for Notices. All notices and other communications provided for
hereunder shall be given in the form and manner and delivered to Agent at its
address specified in the Credit Agreement, and to any of the Grantors at their
respective addresses specified in the Credit Agreement or Guaranty, as
applicable, or, as to any party, at such other address as shall be designated by
such party in a written notice to the other party.
22.Continuing Security Interest: Assignments under Credit Agreement. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the Obligations have been paid
in full in accordance with the provisions of the Credit Agreement and the
Commitments have expired or have been terminated, (b) be binding upon each
Grantor, and their respective successors and assigns, and (c) inure to the
benefit of, and be enforceable by, Agent, and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any Lender
may, in accordance with the provisions of the Credit Agreement, assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise. Upon payment in full of the Secured Obligations in
accordance with the provisions of the Credit Agreement and the expiration or
termination of the Commitments, the Security Interest granted hereby shall
terminate and all rights to the Collateral shall revert to Grantors or any other
Person entitled thereto. At such time, Agent will immediately authorize the
filing of appropriate termination statements to terminate such Security
Interests. No transfer or renewal, extension, assignment, or termination of this
Agreement or of the Credit Agreement, any other Loan Document, or any other
instrument or document executed and delivered by any Grantor to Agent nor any
additional Advances or other loans made by any Lender to Borrowers, nor the
taking of further

17

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security, nor the retaking or re-delivery of the Collateral to Grantors, or any
of them, by Agent, nor any other act of the Lender Group or the Bank Product
Providers, or any of them, shall release any Grantor from any obligation that
exists, except a release or discharge executed in writing by Agent in accordance
with the provisions of the Credit Agreement. Agent shall not by any act, delay,
omission or otherwise, be deemed to have waived any of its rights or remedies
hereunder, unless such waiver is in writing and signed by Agent and then only to
the extent therein set forth. A waiver by Agent of any right or remedy on any
occasion shall not be construed as a bar to the exercise of any such right or
remedy which Agent would otherwise have had on any other occasion.
23.Governing Law.
(a)THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b)THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, FEDERAL COURTS, LOCATED IN THE COUNTY OF NEW YORK,
STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND EACH GRANTOR WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 23(b).
(c)TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT AND EACH GRANTOR
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
24.New Subsidiaries. Pursuant to Section 5.11 of the Credit Agreement, certain
Subsidiaries (whether by acquisition or creation) of any Grantor are required to
enter into this Agreement by executing and delivering in favor of Agent a
Joinder to this Agreement in substantially the form of Annex 1. Upon the
execution and delivery of Annex 1 by any such new Subsidiary, such Subsidiary
shall become a Grantor hereunder with the same force and effect as if originally
named as a Grantor herein. The execution and delivery of any instrument adding
an additional Grantor as a party to this Agreement shall not require the consent
of any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Grantor hereunder.
25.Agent. Each reference herein to any right granted to, benefit conferred upon
or power exercisable by the “Agent” shall be a reference to Agent, for the
benefit of each member of the Lender Group and each of the Bank Product
Providers.
26.Miscellaneous.
(a)This Agreement is a Loan Document. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering

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an executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this Agreement.
The foregoing shall apply to each other Loan Document mutatis mutandis.
(b)Any provision of this Agreement which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting
the validity or enforceability of such provision in any other jurisdiction. Each
provision of this Agreement shall be severable from every other provision of
this Agreement for the purpose of determining the legal enforceability of any
specific provision.
(c)Headings and numbers have been set forth herein for convenience only. Unless
the contrary is compelled by the context, everything contained in each Section
applies equally to this entire Agreement.
(d)Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed against any member of the Lender Group or any Grantor, whether under
any rule of construction or otherwise. This Agreement has been reviewed by all
parties and shall be construed and interpreted according to the ordinary meaning
of the words used so as to accomplish fairly the purposes and intentions of all
parties hereto.
(e)The pronouns used herein shall include, when appropriate, either gender and
both singular and plural, and the grammatical construction of sentences shall
conform thereto.
(f)Unless the context of this Agreement clearly requires otherwise, references
to the plural include the singular, references to the singular include the
plural, the terms “includes” and “including” are not limiting, and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). The
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts, and contract rights. Any
reference herein to the satisfaction, repayment, or payment in full of the
Secured Obligations shall mean the repayment in full in cash (or, in the case of
Letters of Credit or Bank Products, providing Letter of Credit Collateralization
or Bank Product Collateralization, as applicable) of all Secured Obligations
other than unasserted contingent indemnification Secured Obligations and other
than any Bank Product Obligations that, at such time, are allowed by the
applicable Bank Product Provider to remain outstanding and that are not required
by the provisions of the Credit Agreement to be repaid or cash collateralized.
Any reference herein to any Person shall be construed to include such Person's
successors and assigns. Any requirement of a writing contained herein shall be
satisfied by the transmission of a Record.
(g)All of the annexes, schedules and exhibits attached to this Agreement shall
be deemed incorporated herein by reference.
[signature pages follow]

19

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[SIGNATURE PAGE TO SECURITY AGREEMENT]
 
IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to
be executed and delivered as of the day and year first above written.
GRANTORS:
AUDIOVOX CORPORATION
By: s/Charles M. Stoehr
Name: Charles M. Stoehr
Title: Sr. Vice President
 
AUDIOVOX ACCESSORIES CORP.
By:s/Loriann Shelton
Name: Loriann Shelton
Title: CFO/Secretary/Treasurer
 
AUDIOVOX ELECTRONICS CORPORATION
By:s/Loriann Shelton
Name: Loriann Shelton
Title: CFO/Secretary/Treasurer
 
AUDIOVOX CONSUMER ELECTRONICS, INC.
By:s/Loriann Shelton
Name: Loriann Shelton
Title: CFO/Secretary/Treasurer
 
AMERICAN RADIO CORP.,
By:s/Charles M. Stoehr
Name: Charles M. Stoehr
Title: Vice President
 
CODE SYSTEMS, INC.
By:  s/Charles M. Stoehr 
Name: Charles M. Stoehr
Title: CFO
 
INVISION AUTOMOTIVE SYSTEMS, INC.
By: s/Charles M. Stoehr
Name: Charles M. Stoehr
Title: Vice President

 

20

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[SIGNATURES CONTINUED ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
 
 
KLIPSCH GROUP, INC.
By: s/Frederick L. Farrar
Name: Frederick L. Farrar
Title: Executive Vice President/CFO/ Treasurer/Assistant Secretary
 
BATTERIES.COM, LLC
By: s/Loriann Shelton 
Name: Loriann Shelton
Title: Secretary
 
SOUNDTECH LLC
By:  s/Charles M. Stoehr 
Name: Charles M. Stoehr
Title: Vice President/Treasurer
 
AUDIOVOX WEBSALES LLC
By: s/Charles M. Stoehr 
Name: Charles M Stoehr
Title: Vice President
 
CARIBBEAN TECHNICAL EXPORT, INC.
By: s/Charles M. Stoehr
Name: Charles M. Stoehr
Title: President
 
LATIN AMERICA EXPORTS CORP.
By: s/Charles M. Stoehr
Name: Charles M. Stoehr
Title: Treasurer
 
OMEGA RESEARCH AND DEVELOPMENT TECHNOLOGY LLC
By: s/Charles M. Stoehr 
Name: Charles M. Stoehr
Title: Treasurer

 

21

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TECHNUITY, INC.
By: s/Loriann Shelton
Name: Loriann Shelton
Title: Secretary
 
ELECTRONICS TRADEMARK HOLDING COMPANY, LLC
By:s/Charles M. Stoehr 
Name: Charles M. Stoehr
Title: Secretary

 

22

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KLIPSCH GROUP EUROPE - DENMARK
By:s/Frederick L. Farrar 
Name: Frederick L. Farrar
Title: Manager
 
 
KLIPSCH GROUP EUROPE - FRANCE
By:s/Frederick L. Farrar
Name: Frederick L. Farrar
Title: Co-Manager
 
 
 
 
 
AUDIOVOX MEXICO S. DE R.L. DE C.V.
By:s/Charles M. Stoehr
Name: Charles M. Stoehr
Title: Manager
 
 
AUDIOVOX VENEZUELA C.A.
By:s/Charles M. Stoehr 
Name: Charles M. Stoehr
Title: Vice President
KLIPSCH GROUP EUROPE, B.V.
By:s/Frederick L. Farrar
Name: Frederick L. Farrar
Title: Managing Director
 
 
 
 

 

23

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AGENT:
WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company
By: s/Richard K. Schultz
Name: Richard K. Schultz
Title: Director

 

24

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SCHEDULE 1
 
COMMERCIAL TORT CLAIMS
[include specific case caption or descriptions per Official Code Comment 5 to
Section 9-108 of the Code]
 

25

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

 

 
 
SCHEDULE 2
 
COPYRIGHTS
 

26

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SCHEDULE 3
 
INTELLECTUAL PROPERTY LICENSES
 

27

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SCHEDULE 4
 
PATENTS
 

28

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SCHEDULE 5
 
TRADEMARKS
 
 

29

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SCHEDULE 6
PLEDGED COMPANIES
Name of Grantor
Name of Pledged Company
Number of Shares/Units
Class of Interests
Percentage of Class Owned
Certificate Nos.
Audiovox Corporation
Audiovox Accessories Corporation
10
NPV
100%
1
Audiovox Corporation
Audiovox Consumer Electronics, Inc.
10
NPV
100%
1
Audiovox Corporation
Audiovox Electronics Corporation
100
NPV
100%
1
Audiovox Corporation
American Radio Corp.
10
NPV
100%
1
Audiovox Corporation
Soundtech LLC
1
 
100%
1
Audiovox Corporation
Latin America Exports Corp.
10
NPV
100%
1
Audiovox Corporation
Electronics Trademark Holding Company, LLC
2
 
100%
4
Soundtech LLC
Klipsch Group, Inc.
1,719,834.70
Non-Voting Common
 
NV-53
Soundtech LLC
Klipsch Group, Inc.
187,315.30
Voting Common
 
V-44
Soundtech LLC
Klipsch Group, Inc.
1,450,557
Series A Preferred
 
A-16
Audiovox Electronics Corporation
Invision Automotive Systems Inc.
10
NPV
100%
1
Audiovox Electronics Corporation
Code Systems, Inc.
4,005
NPV
100%
1
Audiovox Electronics Corporation
Audiovox Websales LLC
100%
 
100%
1
Audiovox Electronics Corporation
Omega Research and Development Technology LLC
100
 
100%
1
Audiovox Accessories Corporation
Batteries.com, LLC
1
 
100%
1
Audiovox Accessories Corporation
Technuity, Inc.
10
NPV
100%
1
Audiovox Corporation
Audiovox Canada Limited
1,000
NPV
100%
COM-1
Klipsch Group, Inc.
Audio Products International Corp.
1,000
 
100%
C-1
Klipsch Group, Inc.
Klipsch Group Europe, B.V.
 
 
100%
 
Klipsch Group Europe, B.V.
Klipsch Group Europe - France
 
 
100%
 
Klipsch Group Europe, B.V.
Klipsch Group Europe - Denmark
 
 
100%
 

30

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SCHEDULE 6(k)
 
CONTROLLED ACCOUNT BANKS
 
 
 

31

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SCHEDULE 7
 
OWNED REAL PROPERTY
 
 
 

32

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SCHEDULE 8
 
LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS
 
Grantor
Jurisdictions
Audiovox Corporation
Delaware
Audiovox Accessories Corporation
Delaware
Audiovox Consumer Electronics, Inc.
Delaware
Audiovox Electronics Corporation
Delaware
American Radio Corp.
Georgia
Code Systems, Inc.
Delaware
Invision Automotive Systems Inc.
Delaware
Klipsch Group, Inc.
Indiana
Batteries.Com, LLC
Indiana
Soundtech LLC
Delaware
Audiovox Websales LLC
Delaware
Omega Research and Development Technology LLC
Delaware
Latin America Exports Corp.
Delaware
Technuity, Inc.
Indiana
Carribean Technical Export, Inc.
Delaware
Electronics Trademark Holding Company, LLC
Delaware
Audiovox Venezuela C.A.
District of Columbia
Audiovox Mexico, S. de R.L. de C.V.
District of Columbia
Klipsch Group Europe - Denmark
District of Columbia
Klipsch Group Europe - France Sarl
District of Columbia

 
 
 
 

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ANNEX 1 TO SECURITY AGREEMENT
FORM OF JOINDER
Joinder No. ____ (this “Joinder”), dated as of _______________, to the Security
Agreement, dated as of ___________ __, 20__ (as amended, restated, supplemented,
or otherwise modified from time to time, the “Security Agreement”), by and among
each of the parties listed on the signature pages thereto and those additional
entities that thereafter become parties thereto (collectively, jointly and
severally, “Grantors” and each, individually, a “Grantor”) and WELLS FARGO
CAPITAL FINANCE, LLC, a Delaware limited liability company (“WFCF”), in its
capacity as agent for the Lender Group and the Bank Product Providers (in such
capacity, together with its successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated __________, 2011 (as amended,
restated, supplemented, or otherwise modified from time to time, the “Credit
Agreement”), by and among Audiovox Corporation, a Delaware corporation
(“Parent”), Audiovox Accessories Corp., a Delaware corporation (“ACC”), Audiovox
Electronics Corporation, a Delaware corporation (“AEC”), Audiovox Consumer
Electronics, Inc., a Delaware corporation (“ACEI”), American Radio Corp., a
Delaware corporation (“ARC”), Code Systems, Inc., a Delaware corporation
(“CSI”), Invision Automotive Systems, Inc., a Delaware corporation (“IAS”),
Batteries.com, LLC, an Indiana limited liability company (“Batteries”) and
Klipsch Group, Inc. (“Klipsch” and together with each of ACC, AEC, ACEI, ARC,
CSI, IAS and Batteries, each, individually, a “Borrower” and, collectively,
“Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”) and Agent, the Lender
Group has agreed to make certain financial accommodations available to Borrowers
from time to time pursuant to the terms and conditions thereof; and
WHEREAS, initially capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Security Agreement
or, if not defined therein, in the Credit Agreement; and
WHEREAS, Grantors have entered into the Security Agreement in order to induce
the Lender Group to make certain financial accommodations to Borrower; and
WHEREAS, pursuant to Section 5.11 of the Credit Agreement and Section 24 of the
Security Agreement, certain Subsidiaries of the Loan Parties, must execute and
deliver certain Loan Documents, including the Security Agreement, and the
joinder to the Security Agreement by the undersigned new Grantor or Grantors
(collectively, the “New Grantors”) may be accomplished by the execution of this
Joinder in favor of Agent, for the benefit of the Lender Group and the Bank
Product Providers; and
WHEREAS, each New Grantor (a) is [an Affiliate] [a Subsidiary] of [Parent]
[Borrowers] and, as such, will benefit by virtue of the financial accommodations
extended to Borrowers by the Lender Group and (b) by becoming a Loan Party will
benefit from certain rights granted to the Loan Parties pursuant to the terms of
the Loan Documents;
NOW, THEREFORE, for and in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each New Grantor hereby agrees as follows:
1.In accordance with Section 24 of the Security Agreement, each New Grantor, by
its signature below, becomes a “Grantor” under the Security Agreement with the
same force and effect as if originally named therein as a “Grantor” and each New
Grantor hereby (a) agrees to all of the terms and provisions of the Security
Agreement applicable to it as a “Grantor” thereunder and (b) represents and
warrants that the representations and warranties made by it as a “Grantor”
thereunder are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that are already qualified or modified by materiality in the text
thereof) on and as of the date hereof. In furtherance of the foregoing, each New
Grantor does hereby unconditionally grant, assign, and pledge to Agent, for the
benefit of the Lender Group and the Bank Product Providers, to secure the
Secured Obligations, a continuing security interest in and to all of such New
Grantor's right, title and interest in and to the Collateral. Schedule 1,
“Commercial Tort Claims”, Schedule 2, “Copyrights”, Schedule 3, “Intellectual
Property Licenses”, Schedule 4, “Patents”, Schedule 5, “Trademarks”, Schedule 6,
“Pledged Companies”, Schedule 6(k), “Controlled Account Banks”, Schedule 7,
“Owned Real

34

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

 

Property”, and Schedule 8, “List of Uniform Commercial Code Filing
Jurisdictions” attached hereto supplement Schedule 1, Schedule 2, Schedule 3,
Schedule 4, Schedule 5, Schedule 6, Schedule 6(k), Schedule 7, and Schedule 8,
respectively, to the Security Agreement and shall be deemed a part thereof for
all purposes of the Security Agreement. Each reference to a “Grantor” in the
Security Agreement shall be deemed to include each New Grantor. The Security
Agreement is incorporated herein by reference. Each New Grantor authorizes Agent
at any time and from time to time to file, transmit, or communicate, as
applicable, financing statements and amendments thereto (i) describing the
Collateral as “all personal property of debtor” or “all assets of debtor” or
words of similar effect, (ii) describing the Collateral as being of equal or
lesser scope or with greater detail, or (iii) that contain any information
required by part 5 of Article 9 of the Code for the sufficiency or filing office
acceptance. Each New Grantor also hereby ratifies any and all financing
statements or amendments previously filed by Agent in any jurisdiction in
connection with the Loan Documents.
2.Each New Grantor represents and warrants to Agent, the Lender Group and the
Bank Product Providers that this Joinder has been duly executed and delivered by
such New Grantor and constitutes its legal, valid, and binding obligation,
enforceable against it in accordance with its terms, except as enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium, or other similar laws affecting creditors' rights
generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity).
3.This Joinder is a Loan Document. This Joinder may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Joinder.
Delivery of an executed counterpart of this Joinder by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Joinder. Any party delivering an
executed counterpart of this Joinder by telefacsimile or other electronic method
of transmission also shall deliver an original executed counterpart of this
Joinder but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Joinder.
4.The Security Agreement, as supplemented hereby, shall remain in full force and
effect.
5.THE VALIDITY OF THIS JOINDER, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
6.THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS JOINDER SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK,
STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND EACH NEW GRANTOR WAIVE, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 6.
7.TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH NEW GRANTOR
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS JOINDER OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT AND EACH NEW GRANTOR
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS JOINDER MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL BY THE COURT.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

35

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

 

 
 
[SIGNATURE PAGE TO JOINDER NO. ___ TO SECURITY AGREEMENT]
 
 
IN WITNESS WHEREOF, the parties hereto have caused this Joinder to the Security
Agreement to be executed and delivered as of the day and year first above
written.
NEW GRANTORS:
[NAME OF NEW GRANTOR]
By:___________________________
Name:
Title:
 
[NAME OF NEW GRANTOR]
By:___________________________
Name:
Title:
AGENT:
WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company
By:___________________________
Name:
Title:

 
    
 
 
 

36

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

 

EXHIBIT A
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is made
this ___ day of ___________, 2011, by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware
limited liability company (“WFCF”), in its capacity as agent for the Lender
Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Credit Agreement”), by and among Audiovox Corporation, a Delaware corporation
(“Parent”), Audiovox Accessories Corp., a Delaware corporation (“ACC”), Audiovox
Electronics Corporation, a Delaware corporation (“AEC”), Audiovox Consumer
Electronics, Inc., a Delaware corporation (“ACEI”), American Radio Corp., a
Delaware corporation (“ARC”), Code Systems, Inc., a Delaware corporation
(“CSI”), Invision Automotive Systems, Inc., a Delaware corporation (“IAS”),
Batteries.com, LLC, an Indiana limited liability company (“Batteries”) and
Klipsch Group, Inc. (“Klipsch” and together with each of ACC, AEC, ACEI, ARC,
CSI, IAS and Batteries, each, individually, a “Borrower” and, collectively,
“Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”) and Agent, the Lender
Group has agreed to make certain financial accommodations available to Borrowers
from time to time pursuant to the terms and conditions thereof; and
WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, the Security Agreement, dated of even date herewith (including all
annexes, exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the “Security Agreement”); and
WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of the Lender Group and the Bank Product
Providers, this Copyright Security Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as follows:
1.DEFINED TERMS. All initially capitalized terms used but not otherwise defined
herein have the meanings given to them in the Security Agreement or, if not
defined therein, in the Credit Agreement.
2.GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL. Each Grantor hereby
unconditionally grants, assigns, and pledges to Agent, for the benefit each
member of the Lender Group and each of the Bank Product Providers, to secure the
Secured Obligations, a continuing security interest (referred to in this
Copyright Security Agreement as the “Security Interest”) in all of such
Grantor's right, title and interest in and to the following, whether now owned
or hereafter acquired or arising (collectively, the “Copyright Collateral”):
a.all of such Grantor's Copyrights and Copyright Intellectual Property Licenses
to which it is a party including those referred to on Schedule I;
b.all renewals or extensions of the foregoing; and
c.all products and proceeds of the foregoing, including any claim by such
Grantor against third parties for past, present or future infringement of any
Copyright or any Copyright exclusively licensed under any Intellectual Property
License, including the right to receive damages, or the right to receive license
fees, royalties, and other compensation under any Copyright Intellectual
Property License.
3.SECURITY FOR SECURED OBLIGATIONS. This Copyright Security Agreement and the
Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or arising hereafter. Without limiting
the generality of the foregoing, this Copyright Security Agreement

37

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

 

secures the payment of all amounts which constitute part of the Secured
Obligations and would be owed by Grantors, or any of them, to Agent, the Lender
Group, the Bank Product Providers or any of them, whether or not they are
unenforceable or not allowable due to the existence of an Insolvency Proceeding
involving any Grantor.
4.SECURITY AGREEMENT. The Security Interest granted pursuant to this Copyright
Security Agreement is granted in conjunction with the security interests granted
to Agent, for the benefit of the Lender Group and the Bank Product Providers,
pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms
that the rights and remedies of Agent with respect to the Security Interest in
the Copyright Collateral made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. To the extent there is any
inconsistency between this Copyright Security Agreement and the Security
Agreement, the Security Agreement shall control.
5.AUTHORIZATION TO SUPPLEMENT. Grantors shall give Agent prior written notice of
no less than three (3) Business Days before filing any additional application
for registration of any copyright and prompt notice in writing of any additional
copyright registrations granted therefor after the date hereof. Without limiting
Grantors' obligations under this Section, Grantors hereby authorize Agent
unilaterally to modify this Copyright Security Agreement by amending Schedule I
to include any future United States registered copyrights or applications
therefor of each Grantor. Notwithstanding the foregoing, no failure to so modify
this Copyright Security Agreement or amend Schedule I shall in any way affect,
invalidate or detract from Agent's continuing security interest in all
Collateral, whether or not listed on Schedule I.
6.COUNTERPARTS. This Copyright Security Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the same Copyright
Security Agreement. Delivery of an executed counterpart of this Copyright
Security Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Copyright Security Agreement. Any party delivering an executed counterpart
of this Copyright Security Agreement by telefacsimile or other electronic method
of transmission also shall deliver an original executed counterpart of this
Copyright Security Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Copyright Security Agreement.
7.CONSTRUCTION. This Copyright Security Agreement is a Loan Document. Unless the
context of this Copyright Security Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and “including” are not limiting, and
the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”,
“hereunder”, and similar terms in this Copyright Security Agreement refer to
this Copyright Security Agreement as a whole and not to any particular provision
of this Copyright Security Agreement. Section, subsection, clause, schedule, and
exhibit references herein are to this Copyright Security Agreement unless
otherwise specified. Any reference in this Copyright Security Agreement to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). The words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts, and contract
rights. Any reference herein to the satisfaction, repayment, or payment in full
of the Secured Obligations shall mean the repayment in full in cash (or, in the
case of Letters of Credit or Bank Products, providing Letter of Credit
Collateralization or Bank Product Collateralization, as applicable) of all
Secured Obligations other than unasserted contingent indemnification Secured
Obligations and other than any Bank Product Obligations that, at such time, are
allowed by the applicable Bank Product Provider to remain outstanding and that
are not required by the provisions of the Credit Agreement to be repaid or cash
collateralized. Any reference herein to any Person shall be construed to include
such Person's successors and assigns. Any requirement of a writing contained
herein shall be satisfied by the transmission of a Record.
8.THE VALIDITY OF THIS COPYRIGHT SECURITY AGREEMENT, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED

38

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

 

HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
9.THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS COPYRIGHT SECURITY AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND EACH
GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.
10.TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT AND EACH GRANTOR
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS COPYRIGHT SECURITY AGREEMENT MAY BE FILED AS
A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[SIGNATURE PAGE FOLLOWS]
 

39

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Copyright Security
Agreement to be executed and delivered as of the day and year first above
written.
 
NEW GRANTORS:
______________________________
By:___________________________
Name:
Title:
 
______________________________
By:___________________________
Name:
Title:
AGENT:
ACCEPTED AND ACKNOWLEDGED BY:
WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company
By:___________________________
Name:
Title:

 
 
 
 
 

40

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SCHEDULE I
TO
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS
Grantor
Country
Copyright
Registration No.
Registration Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Copyright Licenses
 
 
 

41

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EXHIBIT B
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this
___ day of ___________, 2011, by and among the Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware
limited liability company (“WFCF”), in its capacity as agent for the Lender
Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Credit Agreement”), by and among Audiovox Corporation, a Delaware corporation
(“Parent”), Audiovox Accessories Corp., a Delaware corporation (“ACC”), Audiovox
Electronics Corporation, a Delaware corporation (“AEC”), Audiovox Consumer
Electronics, Inc., a Delaware corporation (“ACEI”), American Radio Corp., a
Delaware corporation (“ARC”), Code Systems, Inc., a Delaware corporation
(“CSI”), Invision Automotive Systems, Inc., a Delaware corporation (“IAS”),
Batteries.com, LLC, an Indiana limited liability company (“Batteries”) and
Klipsch Group, Inc. (“Klipsch” and together with each of ACC, AEC, ACEI, ARC,
CSI, IAS and Batteries, each, individually, a “Borrower” and, collectively,
“Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”) and Agent, the Lender
Group has agreed to make certain financial accommodations available to Borrowers
from time to time pursuant to the terms and conditions thereof; and
WHEREAS, the members of Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that the Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, the Security Agreement, dated of even date herewith (including all
annexes, exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the “Security Agreement”); and
WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of the Lender Group and the Bank Product
Providers, this Patent Security Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:
1.DEFINED TERMS. All initially capitalized terms used but not otherwise defined
herein have the meanings given to them in the Security Agreement or, if not
defined therein, in the Credit Agreement.
2.GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor hereby
unconditionally grants, assigns, and pledges to Agent, for the benefit each
member of the Lender Group and each of the Bank Product Providers, to secure the
Secured Obligations, a continuing security interest (referred to in this Patent
Security Agreement as the “Security Interest”) in all of such Grantor's right,
title and interest in and to the following, whether now owned or hereafter
acquired or arising (collectively, the “Patent Collateral”):
a.all of its Patents and Patent Intellectual Property Licenses to which it is a
party including those referred to on Schedule I;
b.all divisionals, continuations, continuations-in-part, reissues,
reexaminations, or extensions of the foregoing; and
c.all products and proceeds of the foregoing, including any claim by such
Grantor against third parties for past, present or future infringement of any
Patent or any Patent exclusively licensed under any Intellectual Property
License, including the right to receive damages, or right to receive license
fees, royalties, and other compensation under any Patent Intellectual Property
License.
3.SECURITY FOR SECURED OBLIGATIONS. This Patent Security Agreement and the
Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or

42

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arising hereafter. Without limiting the generality of the foregoing, this Patent
Security Agreement secures the payment of all amounts which constitute part of
the Secured Obligations and would be owed by Grantors, or any of them, to Agent,
the Lender Group, the Bank Product Providers or any of them, whether or not they
are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any Grantor.
4.SECURITY AGREEMENT. The Security Interest granted pursuant to this Patent
Security Agreement is granted in conjunction with the security interests granted
to Agent, for the benefit of the Lender Group and the Bank Product Providers,
pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms
that the rights and remedies of Agent with respect to the Security Interest in
the Patent Collateral made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. To the extent there is any
inconsistency between this Patent Security Agreement and the Security Agreement,
the Security Agreement shall control.
5.AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new
patent application or issued patent or become entitled to the benefit of any
patent application or patent for any divisional, continuation,
continuation-in-part, reissue, or reexamination of any existing patent or patent
application, the provisions of this Patent Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Agent with respect to any such new patent rights. Without limiting Grantors'
obligations under this Section, Grantors hereby authorize Agent unilaterally to
modify this Patent Security Agreement by amending Schedule I to include any such
new patent rights of each Grantor. Notwithstanding the foregoing, no failure to
so modify this Patent Security Agreement or amend Schedule I shall in any way
affect, invalidate or detract from Agent's continuing security interest in all
Collateral, whether or not listed on Schedule I.
6.COUNTERPARTS. This Patent Security Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Patent
Security Agreement. Delivery of an executed counterpart of this Patent Security
Agreement by telefacsimile or other electronic method of transmission shall be
equally as effective as delivery of an original executed counterpart of this
Patent Security Agreement. Any party delivering an executed counterpart of this
Patent Security Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this Patent
Security Agreement but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Patent
Security Agreement.
7.CONSTRUCTION. This Patent Security Agreement is a Loan Document. Unless the
context of this Patent Security Agreement clearly requires otherwise, references
to the plural include the singular, references to the singular include the
plural, the terms “includes” and “including” are not limiting, and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or”. The words “hereof”, “herein”, “hereby”, “hereunder”, and
similar terms in this Patent Security Agreement refer to this Patent Security
Agreement as a whole and not to any particular provision of this Patent Security
Agreement. Section, subsection, clause, schedule, and exhibit references herein
are to this Patent Security Agreement unless otherwise specified. Any reference
in this Patent Security Agreement to any agreement, instrument, or document
shall include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto and
thereof, as applicable (subject to any restrictions on such alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements set forth herein). The words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts, and contract rights. Any reference herein to the
satisfaction, repayment, or payment in full of the Secured Obligations shall
mean the repayment in full in cash (or, in the case of Letters of Credit or Bank
Products, providing Letter of Credit Collateralization or Bank Product
Collateralization, as applicable) of all Secured Obligations other than
unasserted contingent indemnification Secured Obligations and other than any
Bank Product Obligations that, at such time, are allowed by the applicable Bank
Product Provider to remain outstanding and that are not required by the
provisions of this Patent Security Agreement to be repaid or cash
collateralized. Any reference herein to any Person shall be construed to include
such Person's successors and assigns. Any requirement of a writing contained
herein shall be satisfied by the transmission of a Record.
8.THE VALIDITY OF THIS PATENT SECURITY AGREEMENT, THE CONSTRUCTION,

43

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INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
9.THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS PATENT SECURITY AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND EACH
GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.
10.TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT AND EACH GRANTOR
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS PATENT SECURITY AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
[SIGNATURE PAGE FOLLOWS]

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[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]
 
 
IN WITNESS WHEREOF, the parties hereto have caused this Patent Security
Agreement to be executed and delivered as of the day and year first above
written.
GRANTORS:
______________________________
By:___________________________
Name:
Title:
 
______________________________
By:___________________________
Name:
Title:
AGENT:
ACCEPTED AND ACKNOWLEDGED BY:
WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company
By:___________________________
Name:
Title:

 
 
 
 

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SCHEDULE I
to
PATENT SECURITY AGREEMENT
Patents
Grantor
Country
Patent
Application/ Patent No.
Filing Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Patent Licenses
 

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EXHIBIT C
PLEDGED INTERESTS ADDENDUM
This Pledged Interests Addendum, dated as of _________ ___, 20___ (this “Pledged
Interests Addendum”), is delivered pursuant to Section 6 of the Security
Agreement referred to below. The undersigned hereby agrees that this Pledged
Interests Addendum may be attached to the Security Agreement, dated as of
_________, 2011, (as amended, restated, supplemented, or otherwise modified from
time to time, the “Security Agreement”), made by the undersigned, together with
the other Grantors named therein, to WELLS FARGO CAPITAL FINANCE, LLC, a
Delaware limited liability company, as Agent. Initially capitalized terms used
but not defined herein shall have the meaning ascribed to such terms in the
Security Agreement or, if not defined therein, in the Credit Agreement. The
undersigned hereby agrees that the additional interests listed on Schedule I
shall be and become part of the Pledged Interests pledged by the undersigned to
Agent in the Security Agreement and any pledged company set forth on Schedule I
shall be and become a “Pledged Company” under the Security Agreement, each with
the same force and effect as if originally named therein.
This Pledged interests Addendum is a Loan Document. Delivery of an executed
counterpart of this Pledged Interests Addendum by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Pledged Interests Addendum. If the
undersigned delivers an executed counterpart of this Pledged Interests Addendum
by telefacsimile or other electronic method of transmission, the undersigned
shall also deliver an original executed counterpart of this Pledged Interests
Addendum but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Pledged
Interests Addendum.
The undersigned hereby certifies that the representations and warranties set
forth in Section 5 of the Security Agreement of the undersigned are true and
correct as to the Pledged Interests listed herein on and as of the date hereof.
THE VALIDITY OF THIS PLEDGED INTERESTS ADDENDUM, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS PLEDGED INTERESTS ADDENDUM SHALL BE TRIED AND LITIGATED ONLY IN THE STATE,
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND EACH
GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS PARAGRAPH.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS PLEDGED INTERESTS ADDENDUM OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT AND EACH
GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS PLEDGED INTERESTS ADDENDUM
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[SIGNATURE PAGE FOLLOWS]

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[SIGNATURE PAGE TO PLEDGED INTERESTS ADDENDUM]
 
 
IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum
to be executed and delivered as of the day and year first above written.
 
[______________________________]
By:___________________________
Name:
Title:

 
 
 
1,787,854.4
 
 

 
SCHEDULE I
TO
PLEDGED INTERESTS ADDENDUM
Pledged Interests
Name of Grantor
Name of Pledged Company
Number of Shares/Units
Class of Interests
Percentage of Class Owned
Certificate Nos.
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 

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EXHIBIT D
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made
this ___ day of ___________, 20__, by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware
limited liability company (“WFCF”), in its capacity as agent for the Lender
Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Credit Agreement”), by and among Audiovox Corporation, a Delaware corporation
(“Parent”), Audiovox Accessories Corp., a Delaware corporation (“ACC”), Audiovox
Electronics Corporation, a Delaware corporation (“AEC”), Audiovox Consumer
Electronics, Inc., a Delaware corporation (“ACEI”), American Radio Corp., a
Delaware corporation (“ARC”), Code Systems, Inc., a Delaware corporation
(“CSI”), Invision Automotive Systems, Inc., a Delaware corporation (“IAS”),
Batteries.com, LLC, an Indiana limited liability company (“Batteries”) and
Klipsch Group, Inc. (“Klipsch” and together with each of ACC, AEC, ACEI, ARC,
CSI, IAS and Batteries, each, individually, a “Borrower” and, collectively,
“Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together
with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and
WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of Lender Group and the Bank Product
Providers, that certain Security Agreement, dated as of even date herewith
(including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and
WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of Lender Group and the Bank Product
Providers, this Trademark Security Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:
1.DEFINED TERMS. All initially capitalized terms used but not otherwise defined
herein have the meanings given to them in the Security Agreement or, if not
defined therein, in the Credit Agreement.
2.GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL. Each Grantor hereby
unconditionally grants, assigns, and pledges to Agent, for the benefit each
member of the Lender Group and each of the Bank Product Providers, to secure the
Secured Obligations, a continuing security interest (referred to in this
Trademark Security Agreement as the “Security Interest”) in all of such
Grantor's right, title and interest in and to the following, whether now owned
or hereafter acquired or arising (collectively, the “Trademark Collateral”):
a.all of its Trademarks and Trademark Intellectual Property Licenses to which it
is a party including those referred to on Schedule I;
b.all goodwill of the business connected with the use of, and symbolized by,
each Trademark and each Trademark Intellectual Property License; and
c.all products and proceeds (as that term is defined in the Code) of the
foregoing, including any claim by such Grantor against third parties for past,
present or future (i) infringement or dilution of any Trademark or any
Trademarks exclusively licensed under any Intellectual Property License,
including right to receive any damages, (ii) injury to the goodwill associated
with any Trademark, or (iii) right to receive license fees, royalties, and other
compensation under any Trademark Intellectual Property License.
3.SECURITY FOR SECURED OBLIGATIONS. This Trademark Security Agreement and the

49

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Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or arising hereafter. Without limiting
the generality of the foregoing, this Trademark Security Agreement secures the
payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Agent, the Lender Group, the Bank
Product Providers or any of them, whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.
4.SECURITY AGREEMENT. The Security Interest granted pursuant to this Trademark
Security Agreement is granted in conjunction with the security interests granted
to Agent, for the benefit of the Lender Group and the Bank Product Providers,
pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms
that the rights and remedies of Agent with respect to the Security Interest in
the Trademark Collateral made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. To the extent there is any
inconsistency between this Trademark Security Agreement and the Security
Agreement, the Security Agreement shall control.
5.AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new
trademarks, the provisions of this Trademark Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Agent with respect to any such new trademarks or renewal or extension of any
trademark registration. Without limiting Grantors' obligations under this
Section, Grantors hereby authorize Agent unilaterally to modify this Trademark
Security Agreement by amending Schedule I to include any such new trademark
rights of each Grantor. Notwithstanding the foregoing, no failure to so modify
this Trademark Security Agreement or amend Schedule I shall in any way affect,
invalidate or detract from Agent's continuing security interest in all
Collateral, whether or not listed on Schedule I.
6.COUNTERPARTS. This Trademark Security Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the same Trademark
Security Agreement. Delivery of an executed counterpart of this Trademark
Security Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Trademark Security Agreement. Any party delivering an executed counterpart
of this Trademark Security Agreement by telefacsimile or other electronic method
of transmission also shall deliver an original executed counterpart of this
Trademark Security Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Trademark Security Agreement.
7.CONSTRUCTION. This Trademark Security Agreement is a Loan Document. Unless the
context of this Trademark Security Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and “including” are not limiting, and
the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”,
“hereunder”, and similar terms in this Trademark Security Agreement refer to
this Trademark Security Agreement as a whole and not to any particular provision
of this Trademark Security Agreement. Section, subsection, clause, schedule, and
exhibit references herein are to this Agreement unless otherwise specified. Any
reference in this Trademark Security Agreement to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). The
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts, and contract rights. Any
reference herein to the satisfaction, repayment, or payment in full of the
Secured Obligations shall mean the repayment in full in cash (or, in the case of
Letters of Credit or Bank Products, providing Letter of Credit Collateralization
or Bank Product Collateralization, as applicable) of all Secured Obligations
other than unasserted contingent indemnification Secured Obligations and other
than any Bank Product Obligations that, at such time, are allowed by the
applicable Bank Product Provider to remain outstanding and that are not required
by the provisions of this Trademark Security Agreement to be repaid or cash
collateralized. Any reference herein to any Person shall be construed to include
such Person's successors and assigns. Any requirement of a writing contained
herein or in any other Loan Document shall be satisfied by the transmission of a
Record.
8.THE VALIDITY OF THIS TRADEMARK SECURITY AGREEMENT, THE

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CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE
PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
9.THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS TRADEMARK SECURITY AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND EACH
GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.
10.TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT AND EACH GRANTOR
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS TRADEMARK SECURITY AGREEMENT MAY BE FILED AS
A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[SIGNATURE PAGE FOLLOWS]

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[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]
 
 
IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security
Agreement to be executed and delivered as of the day and year first above
written.
GRANTORS:
______________________________
By:___________________________
Name:
Title:
 
______________________________
By:___________________________
Name:
Title:
AGENT:
ACCEPTED AND ACKNOWLEDGED BY:
WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company
By:___________________________
Name:
Title:

 
 
 
 

52

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SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
Trademark Registrations/Applications
Grantor
Country
Mark
Application/ Registration No.
App/Reg Date
 
 
 
 
 

 
Trade Names
Common Law Trademarks
Trademarks Not Currently In Use
Trademark Licenses
 
 
 
 

53