Exhibit 10.2

 

EXECUTION VERSION

 

 

 

TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

NCI BUILDING SYSTEMS, INC.,

 

and certain Domestic Subsidiaries of the Borrower,

 

in favor of

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

 

as Collateral Agent and Administrative Agent

 

dated as of February 8, 2018

 

 

 

 

 

 

 

Section 1 Defined Terms 2       1.1 Definitions 2 1.2 Other Definitional
Provisions 12       Section 2 Guarantee 13       2.1 Guarantee 13 2.2 Right of
Contribution 14 2.3 No Subrogation 14 2.4 Amendments, etc. 15 2.5 Guarantee
Absolute and Unconditional 15 2.6 Reinstatement 16 2.7 Payments 16       Section
3 Grant of Security Interest 17       3.1 Grant 17 3.2 Pledged Collateral 18 3.3
Certain Limited Exceptions 18 3.4 Intercreditor Relations 22       Section 4
Representations and Warranties 23       4.1 Representations and Warranties of
Each Guarantor 23 4.2 Representations and Warranties of Each Grantor 23 4.3
Representations and Warranties of Each Pledgor 26       Section 5 Covenants 28  
    5.1 Covenants of Each Guarantor 28 5.2 Covenants of Each Grantor 28 5.3
Covenants of Each Pledgor 33       Section 6 Remedial Provisions 35       6.1
Certain Matters Relating to Accounts 35 6.2 Communications with Obligors;
Grantors Remain Liable 36 6.3 Pledged Stock 37 6.4 Proceeds to Be Turned Over to
the Collateral Agent 38 6.5 Application of Proceeds 38 6.6 Code and Other
Remedies 39 6.7 Registration Rights 39 6.8 Waiver; Deficiency 40

 

 i 

 

 

Section 7 The Collateral Agent 41       7.1 Collateral Agent’s Appointment as
Attorney-in-Fact, etc. 41 7.2 Duty of Collateral Agent 42 7.3 Financing
Statements 43 7.4 Authority of Collateral Agent 43 7.5 Right of Inspection 43  
    Section 8 Non-Lender Secured Parties 44       8.1 Rights to Collateral 44
8.2 Appointment of Agent 45 8.3 Waiver of Claims 45 8.4 Designation of
Non-Lender Secured Parties 46       Section 9 Miscellaneous 46       9.1
Amendments in Writing 46 9.2 Notices 46 9.3 No Waiver by Course of Conduct;
Cumulative Remedies 47 9.4 Enforcement Expenses; Indemnification 47 9.5
Successors and Assigns 47 9.6 Set-Off 48 9.7 Counterparts 48 9.8 Severability 48
9.9 Section Headings 48 9.10 Integration 48 9.11 GOVERNING LAW 49 9.12
Submission to Jurisdiction; Waivers 49 9.13 Acknowledgments 50 9.14 WAIVER OF
JURY TRIAL 50 9.15 Additional Granting Parties 50 9.16 Releases 51 9.17 Judgment
52 9.18 Transfer Tax Acknowledgment 53

 

SCHEDULES

 

Schedule 1 — Notice Addresses of Granting Parties Schedule 2 — Pledged
Securities Schedule 3 — Perfection Matters Schedule 4A — Financing Statements
Schedule 4B — Jurisdiction of Organization Schedule 5 — Intellectual Property
Schedule 6 — Commercial Tort Claims Schedule 7 — Letter-of-Credit Rights

 

 ii 

 

 

ANNEXES

 

Annex 1 — Acknowledgement and Consent of Issuers who are not Granting Parties
Annex 2 — Assumption Agreement Annex 3 — Supplemental Agreement

 

 iii 

 

 

TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT

 

TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT, dated as of February 8, 2018, made
by NCI BUILDING SYSTEMS, INC., a Delaware corporation (as further defined in the
Credit Agreement, the “Borrower”), and certain Domestic Subsidiaries of the
Borrower from time to time party hereto, in favor of CREDIT SUISSE AG, CAYMAN
ISLANDS BRANCH, as collateral agent (in such capacity, and together with its
successors and assigns in such capacity, the “Collateral Agent”) for the Secured
Parties (as defined below) and administrative agent (in such capacity, and
together with its successors and assigns in such capacity, the “Administrative
Agent”) for the banks and other financial institutions (collectively, the
“Lenders”; individually, a “Lender”) from time to time parties to the Credit
Agreement described below.

 

WITNESSETH:

 

WHEREAS, pursuant to that certain Term Loan Credit Agreement, dated as of the
date hereof (as amended, amended and restated, waived, supplemented or otherwise
modified from time to time, together with any agreement extending the maturity
of, or restructuring, refunding, refinancing or increasing the Indebtedness
under such agreement or successor agreements, the “Credit Agreement”), among the
Borrower, the Collateral Agent, the Administrative Agent, and the other parties
from time to time party thereto, the Lenders have severally agreed to make
extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;

 

WHEREAS, the Borrower is a member of an affiliated group of companies that
includes the other Granting Parties (as defined below);

 

WHEREAS, the Borrower and the other Granting Parties are engaged in related
businesses, and each such Granting Party will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement;

 

WHEREAS, it is a condition to the obligation of the Lenders to make their
respective extensions of credit under the Credit Agreement that the Granting
Parties shall execute and deliver this Agreement to the Collateral Agent and
Administrative Agent for the benefit of the Secured Parties;

 

WHEREAS, pursuant to the Senior ABL Agreement, the lenders party thereto have
severally agreed to make extensions of credit to the Borrowers (as defined
therein) upon the terms and subject to the conditions set forth therein;

 

WHEREAS, pursuant to that certain ABL Guarantee and Collateral Agreement, dated
as of the date hereof (as amended, amended and restated, waived, supplemented or
otherwise modified from time to time, the “ABL Collateral Agreement”), among the
Borrowers (as defined in the Senior ABL Agreement), the Subsidiary Guarantors
(as defined in the Senior ABL Agreement) (collectively, the “ABL Granting
Parties”) and the ABL Agent, the ABL Granting Parties have granted a first
priority (as defined in the Senior ABL Agreement) Lien to the ABL Agent for the
benefit of the ABL Secured Parties (as defined herein) on the ABL Priority
Collateral (as defined herein) and a second priority Lien for the benefit of the
ABL Secured Parties on the Term Loan Priority Collateral (as defined herein)
(subject in each case to Permitted Liens);

 

 

 

 

WHEREAS, the Collateral Agent and the ABL Agent have entered into the ABL/Term
Loan Intercreditor Agreement, acknowledged by the Borrower and the other
Granting Parties; and

 

WHEREAS, the Collateral Agent and/or one or more Additional Agents may in the
future enter into a Junior Lien Intercreditor Agreement, acknowledged by the
Borrower and the other Granting Parties, and one or more Other Intercreditor
Agreements or Intercreditor Agreement Supplements.

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Granting Party hereby agrees with the Administrative Agent and
the Collateral Agent, for the benefit of the Secured Parties, as follows:

 

Section 1

 

Defined Terms

 

1.1         Definitions. (a) Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms that are defined in the Code (as
defined below and in effect on the date hereof) are used herein as so defined:
Cash Proceeds, Chattel Paper, Commercial Tort Claims, Documents, Electronic
Chattel Paper, Equipment, Farm Products, Fixtures, General Intangibles, Goods,
Letter-of-Credit Rights, Money, Promissory Notes, Records, Securities,
Securities Accounts and Supporting Obligations.

 

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

 

“ABL Collateral Agreement”: as defined in the recitals hereto.

 

“ABL Granting Parties”: as defined in the recitals hereto.

 

“ABL Obligations”: as defined in the ABL/Term Loan Intercreditor Agreement.

 

“ABL Priority Collateral”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“ABL Secured Parties”: the “Secured Parties” as defined in the ABL Collateral
Agreement.

 

“Accounts”: all accounts (as defined in the Code) of each Grantor, whether now
existing or existing in the future, including all (a) Accounts Receivable of
such Grantor, (b) all unpaid rights of such Grantor (including rescission,
replevin, reclamation and stopping in transit) relating to the foregoing or
arising therefrom, (c) all rights to any goods represented by any of the
foregoing, including returned or repossessed goods, (d) all reserves and credit
balances held by such Grantor with respect to any such accounts receivable of
any Obligors, (e) all letters of credit, guarantees or collateral for any of the
foregoing and (f) all insurance policies or rights relating to any of the
foregoing.

 

 2 

 

 

“Accounts Receivable”: any right to payment, whether or not earned by
performance, for goods sold, leased, licensed, assigned or otherwise disposed,
or for services rendered or to be rendered, which is not evidenced by an
instrument (as defined in the Code) or Chattel Paper.

 

“Additional ABL Agent”: as defined in the ABL/Term Loan Intercreditor Agreement.

 

“Additional ABL Collateral Documents”: as defined in the ABL/Term Loan
Intercreditor Agreement.

 

“Additional ABL Credit Facility”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Additional ABL Obligations”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Additional Agent”: as defined in the ABL/Term Loan Intercreditor Agreement.

 

“Additional Credit Facility”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Additional Secured Parties”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Additional Term Agent”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Additional Term Collateral Documents”: as defined in the ABL/Term Loan
Intercreditor Agreement.

 

“Additional Term Obligations”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Additional Term Secured Parties”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Additional Term Credit Facility”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Adjusted Net Worth”: of any Guarantor at any time, the greater of (x) $0 and
(y) the amount by which the fair saleable value of such Guarantor’s assets on
the date of the respective payment hereunder exceeds its debts and other
liabilities (including contingent liabilities, but without giving effect to any
of its obligations under this Agreement or any other Loan Document, or pursuant
to its guarantee with respect to any Indebtedness then outstanding under the
Senior ABL Agreement, any Additional Credit Facility or any Assumed
Indebtedness) on such date.

 

 3 

 

 

“Administrative Agent”: as defined in the preamble hereto.

 

“Agreement”: this Term Loan Guarantee and Collateral Agreement, as the same may
be amended, restated, supplemented, waived or otherwise modified from time to
time.

 

“Applicable Law”: as defined in Subsection 9.8.

 

“Bank Products Agreement”: any agreement pursuant to which a bank or other
financial institution or other Person agrees to provide (a) treasury services,
(b) credit card, debit card, merchant card, purchasing card, stored value card,
non-card electronic payable or other similar services (including, without
limitation, the processing of payments and other administrative services with
respect thereto), (c) cash management or related services (including, without
limitation, controlled disbursements, automated clearinghouse transactions,
return items, netting, overdrafts, depository, lockbox, stop payment, electronic
funds transfer, information reporting, wire transfer and interstate depository
network services) and (d) other banking, financial or treasury products or
services as may be requested by any Grantor (other than letters of credit and
other than loans and advances except indebtedness arising from services
described in clauses (a) through (c) of this definition), including, for the
avoidance of doubt, bank guarantees.

 

“Bank Products Provider”: shall mean any Person that has entered into a Bank
Products Agreement with a Grantor with the obligations of such Grantor
thereunder being secured by one or more Loan Documents, as designated by the
Borrower in accordance with Subsection 8.4 (provided that no Person shall, with
respect to any Bank Products Agreement, be at any time a Bank Products Provider
with respect to more than one Credit Facility).

 

“Bankruptcy Case”: (i) The Borrower or any of its Subsidiaries commencing any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries making a general assignment
for the benefit of its creditors; or (ii) there being commenced against the
Borrower or any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days.

 

“Blocked Account”: as defined in the Senior ABL Agreement.

 

“Borrower”: as defined in the preamble hereto.

 

 4 

 

 

“Borrower Obligations”: with respect to the Borrower, the collective reference
to all obligations and liabilities of the Borrower in respect of the unpaid
principal of and interest on (including, without limitation, interest and fees
accruing after the maturity of the Loans and interest and fees accruing after
(or that would accrue but for) the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
or fees is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Secured Parties, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Credit
Agreement, the Loans, this Agreement, the other Loan Documents, any Hedging
Agreement entered into with any Hedging Provider, any Bank Products Agreement
entered into with any Bank Products Provider, any Guarantee Obligation of the
Borrower or any of its respective Subsidiaries as to which any Secured Party is
a beneficiary (including any Management Guarantee entered into with any
Management Credit Provider) or any other document made, delivered or given in
connection therewith, in each case whether on account of principal, interest,
reimbursement obligations, amounts payable in connection with any such Bank
Products Agreement or a termination of any transaction entered into pursuant to
any such Hedging Agreement, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all reasonable fees, expenses and disbursements
of counsel to the Administrative Agent or any other Secured Party that are
required to be paid by the Borrower pursuant to the terms of the Credit
Agreement or any other Loan Document). With respect to any Guarantor, if and to
the extent, under the Commodity Exchange Act or any rule, regulation or order of
the CFTC (or the application or official interpretation of any thereof), all or
a portion of the guarantee of such Guarantor of, or the grant by such Guarantor
of a security interest for, the obligation (the “Excluded Borrower Obligation”)
to pay or perform under any agreement, contract or transaction that constitutes
a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act (or
the analogous term or section in any amended or successor statute) is or becomes
illegal, the Borrower Obligations guaranteed by such Guarantor shall not include
any such Excluded Borrower Obligation.

 

“CFTC”: the Commodity Futures Trading Commission or any successor to the
Commodity Futures Trading Commission.

 

“Code”: the Uniform Commercial Code as from time to time in effect in the State
of New York.

 

“Collateral”: as defined in Section 3; provided that, for purposes of Section 8,
“Collateral” shall have the meaning assigned to such term in the Credit
Agreement.

 

“Collateral Account Bank”: a bank which at all times is the Collateral Agent or
a Lender or an affiliate thereof as selected by the relevant Grantor and
consented to in writing by the Collateral Agent (such consent not to be
unreasonably withheld or delayed).

 

“Collateral Agent”: as defined in the preamble hereto.

 

“Collateral Proceeds Account”: a non-interest bearing cash collateral account
established and maintained by the relevant Grantor at an office of the
Collateral Account Bank in the name, and in the sole dominion and control of,
the Collateral Agent for the benefit of the Secured Parties.

 

 5 

 

 

“Collateral Representative”: (i) if the ABL/Term Loan Intercreditor Agreement is
then in effect, the ABL Collateral Representative (as defined therein) and the
Term Loan Collateral Representative (as defined therein), (ii) if any Junior
Lien Intercreditor Agreement is then in effect, the Senior Priority
Representative (as defined therein) and (iii) if any Other Intercreditor
Agreement is then in effect, the Person acting as representative for the
Collateral Agent and the Secured Parties thereunder for the applicable purpose
contemplated by this Agreement and the Credit Agreement.

 

“Commercial Tort Action”: any action, other than an action primarily seeking
declaratory or injunctive relief with respect to claims asserted or expected to
be asserted by Persons other than the Grantors, that is commenced by a Grantor
in the courts of the United States of America, any state or territory thereof or
any political subdivision of any such state or territory, in which any Grantor
seeks damages arising out of torts committed against it that would reasonably be
expected to result in a damage award to it exceeding $10,000,000.

 

“Commodity Exchange Act”: the Commodity Exchange Act, as in effect from time to
time, or any successor statute.

 

“Concentration Account”: as defined in the Senior ABL Agreement.

 

“Contracts”: with respect to any Grantor, all contracts, agreements, instruments
and indentures in any form and portions thereof, to which such Grantor is a
party or under which such Grantor or any property of such Grantor is subject, as
the same may from time to time be amended, supplemented, waived or otherwise
modified, and all rights of such Grantor thereunder, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of such Grantor
to damages arising thereunder and (iii) all rights of such Grantor to perform
and to exercise all remedies thereunder.

 

“Copyright Licenses”: with respect to any Grantor, all United States written
license agreements of such Grantor providing for the grant by or to such Grantor
of any right under any United States copyright of such Grantor, other than
agreements with any Person who is an Affiliate or a Subsidiary of the Borrower
or such Grantor, including, without limitation, any such license agreements that
are material to the business of the Borrower and its Restricted Subsidiaries,
taken as a whole, and are listed on Schedule 5, subject, in each case, to the
terms of such license agreements, and the right to prepare for sale, sell and
advertise for sale, all Inventory now or hereafter covered by such licenses.

 

“Copyrights”: with respect to any Grantor, all of such Grantor’s right, title
and interest in and to all United States copyrights, whether or not the
underlying works of authorship have been published or registered, all United
States copyright registrations and copyright applications, including, without
limitation, any copyright registrations and copyright applications listed on
Schedule 5, and (i) all renewals thereof, (ii) all income, royalties, damages
and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past or future infringements
thereof and (iii) the right to sue or otherwise recover for past, present and
future infringements and misappropriations thereof.

 

 6 

 

 

“Core Concentration Account”: as defined in the Senior ABL Agreement.

 

“Credit Agreement”: as defined in the recitals hereto.

 

“Credit Facility”: as defined in the ABL/Term Loan Intercreditor Agreement.

 

“DDA”: as defined in the Senior ABL Agreement.

 

“Discharge of ABL Obligations”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Discharge of Additional ABL Obligations”: as defined in the ABL/Term Loan
Intercreditor Agreement.

 

“Domestic Subsidiary”: as defined in the Credit Agreement.

 

“Excluded Assets”: as defined in Subsection 3.3.

 

“first priority”: as defined in the Credit Agreement.

 

“Foreign Intellectual Property”: any right, title or interest in or to any
copyrights, copyright licenses, patents, patent applications, patent licenses,
trade secrets, trade secret licenses, trademarks, service marks, trademark and
service mark applications, trade names, trade dress, trademark licenses,
technology, know-how and processes or any other intellectual property governed
by or arising or existing under, pursuant to or by virtue of the laws of any
jurisdiction other than the United States of America or any state thereof.

 

“General Fund Account”: the general fund account of the relevant Grantor
established at the same office of the Collateral Account Bank as the Collateral
Proceeds Account.

 

“Granting Parties”: (x) the Borrower and (y) the Subsidiary Guarantors.

 

“Grantor”: (x) the Borrower and (y) the Subsidiary Guarantors.

 

 7 

 

 

“Guarantor Obligations”: with respect to any Guarantor, the collective reference
to (i) the Borrower Obligations guaranteed by such Guarantor pursuant to Section
2 and (ii) all obligations and liabilities of such Guarantor that may arise
under or in connection with this Agreement or any other Loan Document to which
such Guarantor is a party, any Hedging Agreement with any Hedging Provider, any
Bank Products Agreement with any Bank Products Provider, any Guarantee
Obligation of the Borrower or any of its Subsidiaries as to which any Secured
Party is a beneficiary (including any Management Guarantee entered into with any
Management Credit Provider) or any other document made, delivered or given in
connection therewith, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all reasonable fees and disbursements of counsel
to the Administrative Agent or to any other Secured Party that are required to
be paid by such Guarantor pursuant to the terms of this Agreement or any other
Loan Document and interest and fees accruing after (or that would accrue but
for) the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such Guarantor,
whether or not a claim for post-filing or post-petition interest or fees is
allowed in such proceeding). With respect to any Guarantor, if and to the
extent, under the Commodity Exchange Act or any rule, regulation or order of the
CFTC (or the application or official interpretation of any thereof), all or a
portion of the guarantee of such Guarantor of, or the grant by such Guarantor of
a security interest for, the obligation (together with the Excluded Borrower
Obligation, the “Excluded Obligation”) to pay or perform under any agreement,
contract or transaction that constitutes a “swap” within the meaning of Section
1a(47) of the Commodity Exchange Act (or the analogous term or section in any
amended or successor statute) is or becomes illegal, the Guarantor Obligations
of such Guarantor shall not include any such Excluded Obligation.

 

“Guarantors”: the collective reference to each Granting Party, other than the
Borrower.

 

“Hedging Agreement”: any Interest Rate Agreement, Commodities Agreement,
Currency Agreement or any other credit or equity swap, collar, cap, floor or
forward rate agreement, or other agreement or arrangement designed to protect
against fluctuations in interest rates or currency, commodity, credit or equity
values or creditworthiness (including, without limitation, any option with
respect to any of the foregoing and any combination of the foregoing agreements
or arrangements), and any confirmation executed in connection with any such
agreement or arrangement.

 

“Hedging Provider”: any Person that has entered into a Hedging Agreement with a
Grantor with the obligations of such Grantor thereunder being secured by one or
more Loan Documents, as designated by the Borrower in accordance with Subsection
8.4 (provided that no Person shall, with respect to any Hedging Agreement, be at
any time a Hedging Provider with respect to more than one Credit Facility).

 

“Instruments”: as defined in Article 9 of the Code but excluding Pledged
Securities.

 

“Intellectual Property”: with respect to any Grantor, the collective reference
to such Grantor’s Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trade Secrets, Trade Secret Licenses, Trademarks and Trademark Licenses.

 

“Intercompany Note”: with respect to any Grantor, any promissory note in a
principal amount in excess of $10,000,000 evidencing loans made by such Grantor
to the Borrower or any of its Restricted Subsidiaries.

 

“Intercreditor Agreements”: (a) the ABL/Term Loan Intercreditor Agreement, (b)
the Junior Lien Intercreditor Agreement and (c) any Other Intercreditor
Agreement that may be entered into in the future by the Collateral Agent and one
or more Additional Agents and acknowledged by the Borrower and the other
Granting Parties (each such Intercreditor Agreement as amended, amended and
restated, waived, supplemented or otherwise modified from time to time (subject
to Subsection 9.1)) (in each case, upon and during the effectiveness thereof).

 

 8 

 

 

“Inventory”: with respect to any Grantor, all inventory (as defined in the Code)
of such Grantor, including, without limitation, all Inventory (as defined in the
Credit Agreement) of such Grantor.

 

“Investment Property”: the collective reference to (i) all “investment property”
as such term is defined in Section 9-102(a)(49) of the Code (as in effect on the
date hereof) (other than (a) Capital Stock (including for these purposes any
investment deemed to be Capital Stock for United States tax purposes) of any
Foreign Subsidiary in excess of 65% of any series of such Capital Stock and (b)
any Capital Stock excluded from the definition of “Pledged Stock”) and (ii)
whether or not constituting “investment property” as so defined, all Pledged
Securities.

 

“Issuers”: the collective reference to issuers of Pledged Stock, including (as
of the Closing Date) the Persons identified on Schedule 2 as the issuers of
Pledged Stock.

 

“Junior Lien Intercreditor Agreement”: as defined in the recitals hereto.

 

“Lender”: as defined in the preamble hereto.

 

“Management Credit Provider”: any Person that is a beneficiary of a Management
Guarantee, with the obligations of the applicable Grantor thereunder being
secured by one or more Loan Documents as designated by the Borrower in
accordance with Subsection 8.4 (provided that no Person shall, with respect to
any Management Guarantee, be at any time a Management Credit Provider with
respect to more than one Credit Facility).

 

“Non-Lender Secured Parties”: the collective reference to all Bank Products
Providers, Hedging Providers, Management Credit Providers and their respective
successors, assigns and transferees.

 

“Obligations”: (i) in the case of the Borrower, its Borrower Obligations and
(ii) in the case of each Guarantor, its Guarantor Obligations.

 

“Patent Licenses”: with respect to any Grantor, all United States written
license agreements of such Grantor providing for the grant by or to such Grantor
of any right under any United States patent, patent application, or patentable
invention other than agreements with any Person who is an Affiliate or a
Subsidiary of the Borrower or such Grantor, including, without limitation, any
such license agreements that are material to the business of Borrower and its
Restricted Subsidiaries, taken as a whole, and are listed on Schedule 5,
subject, in each case, to the terms of such license agreements, and the right to
prepare for sale, sell and advertise for sale, all Inventory now or hereafter
covered by such licenses.

 

 9 

 

 

“Patents”: with respect to any Grantor, all of such Grantor’s right, title and
interest in and to all United States patents, patent applications and patentable
inventions and all reissues and extensions thereof, including, without
limitation, all patents and patent applications identified in Schedule 5, and
including, without limitation, (i) all inventions and improvements described and
claimed therein, (ii) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations thereof, (iii) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for
past, present or future infringements thereof), and (iv) all other rights
corresponding thereto in the United States and all reissues, divisions,
continuations, continuations-in-part, substitutes, renewals, and extensions
thereof, all improvements thereon, and all other rights of any kind whatsoever
of such Grantor accruing thereunder or pertaining thereto.

 

“Pledged Collateral”: as to any Pledgor, the Pledged Securities and the Pledged
Stock now owned or at any time hereafter acquired by such Pledgor, and any
Proceeds thereof.

 

“Pledged Notes”: with respect to any Pledgor, all Intercompany Notes at any time
issued to, or held or owned by, such Pledgor.

 

“Pledged Securities”: the collective reference to the Pledged Notes and the
Pledged Stock.

 

“Pledged Stock”: with respect to any Pledgor, the shares of Capital Stock listed
on Schedule 2 as held by such Pledgor, together with any other shares of Capital
Stock of any Subsidiary of such Pledgor required to be pledged by such Pledgor
pursuant to Subsection 7.9 of the Credit Agreement, as well as any other shares,
stock certificates, options or rights of any nature whatsoever in respect of any
Capital Stock of any Issuer that may be issued or granted to, or held by, such
Pledgor while this Agreement is in effect; provided that in no event shall there
be pledged, nor shall any Pledgor be required to pledge, directly or indirectly,
(i) more than 65% of any series of the outstanding Capital Stock (including for
these purposes any investment deemed to be Capital Stock for U.S. tax purposes)
of any Foreign Subsidiary, (ii) any Capital Stock of a Subsidiary of any Foreign
Subsidiary, (iii) de minimis shares of a Foreign Subsidiary held by any Pledgor
as a nominee or in a similar capacity, (iv) any Capital Stock of any
not-for-profit Subsidiary, (v) any Capital Stock of any Excluded Subsidiary
(other than, but without limiting clause (i) above, a Subsidiary described in
clause (d) of the definition thereof) and (vi) without duplication, any Excluded
Assets.

 

“Pledgor”: (x) the Borrower (with respect to Pledged Securities held by the
Borrower and all other Pledged Collateral of the Borrower) and (y) each other
Granting Party (with respect to Pledged Securities held by such Granting Party
and all other Pledged Collateral of such Granting Party).

 

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the Code (as in effect on the date hereof) and, in any event, Proceeds of
Pledged Securities shall include, without limitation, all dividends or other
income from the Pledged Securities, collections thereon or distributions or
payments with respect thereto.

 

“Restrictive Agreements”: as defined in Subsection 3.3(a).

 

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“Sale and Leaseback Transaction”: as defined in the definition of “Exempt Sale
and Leaseback Transaction” in the Credit Agreement.

 

“Secured Parties”: the collective reference to (i) the Administrative Agent, the
Collateral Agent and each Other Representative, (ii) the Lenders, (iii) the
Non-Lender Secured Parties and (iv) the respective successors and assigns and
the permitted transferees and endorsees of each of the foregoing.

 

“Security Collateral”: with respect to any Granting Party, collectively, the
Collateral (if any) and the Pledged Collateral (if any) of such Granting Party.

 

“Specified Asset”: as defined in Subsection 4.2.2.

 

“Term Loan Priority Collateral”: as defined in the ABL/Term Loan Intercreditor
Agreement.

 

“Trade Secret Licenses”: with respect to any Grantor, all United States written
license agreements of such Grantor providing for the grant by or to such Grantor
of any right under any United States trade secrets, including, without
limitation, know-how, processes, formulae, compositions, designs, and
confidential business and technical information, and all rights of any kind
whatsoever accruing thereunder or pertaining thereto, other than agreements with
any Person who is an Affiliate or a Subsidiary of the Borrower or such Grantor,
subject, in each case, to the terms of such license agreements, and the right to
prepare for sale, sell and advertise for sale, all Inventory now or hereafter
covered by such licenses.

 

“Trade Secrets”: with respect to any Grantor, all of such Grantor’s right, title
and interest in and to all United States trade secrets, including, without
limitation, know-how, processes, formulae, compositions, designs, and
confidential business and technical information, and all rights of any kind
whatsoever accruing thereunder or pertaining thereto, including, without
limitation, (i) all income, royalties, damages and payments now and hereafter
due and/or payable with respect thereto, including, without limitation, payments
under all licenses, non-disclosure agreements and memoranda of understanding
entered into in connection therewith, and damages and payments for past or
future misappropriations thereof, and (ii) the right to sue or otherwise recover
for past, present or future misappropriations thereof.

 

“Trademark Licenses”: with respect to any Grantor, all United States written
license agreements of such Grantor providing for the grant by or to such Grantor
of any right under any United States trademarks, service marks, trade names,
trade dress or other indicia of trade origin or business identifiers, other than
agreements with any Person who is an Affiliate or a Subsidiary of the Borrower
or such Grantor, including, without limitation, any such license agreements that
are material to the business of the Borrower and its Restricted Subsidiaries,
taken as a whole, and are listed on Schedule 5, subject, in each case, to the
terms of such license agreements, and the right to prepare for sale, sell and
advertise for sale, all Inventory now or hereafter covered by such licenses.

 

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“Trademarks”: with respect to any Grantor, all of such Grantor’s right, title
and interest in and to all United States trademarks, service marks, trade names,
trade dress or other indicia of trade origin or business identifiers, trademark
and service mark registrations, and applications for trademark or service mark
registrations (except for “intent to use” applications for trademark or service
mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. §
1051, unless and until an Amendment to Allege Use or a Statement of Use under
Sections 1(c) and 1(d) of said Act has been filed and accepted, it being
understood and agreed that the carve out in this parenthetical shall be
applicable only if and for so long as a grant or enforcement of a security
interest in such intent to use application would invalidate or otherwise
jeopardize Grantor’s rights therein or in the resulting registration), and any
renewals thereof, including, without limitation, each registration and
application identified in Schedule 5, and including, without limitation, (i) the
right to sue or otherwise recover for any and all past, present and future
infringements or dilutions thereof, (ii) all income, royalties, damages and
other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past or future infringements
thereof), and (iii) all other rights corresponding thereto and all other rights
of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto
in the United States, together in each case with the goodwill of the business
connected with the use of, and symbolized by, each such trademark, service mark,
trade name, trade dress or other indicia of trade origin or business
identifiers.

 

“Vehicles”: all cars, trucks, trailers, construction and earth moving equipment
and other vehicles covered by a certificate of title law of any state and all
tires and other appurtenances to any of the foregoing.

 

1.2         Other Definitional Provisions. (a) The words “hereof”, “herein”,
“hereto” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section, Schedule and Annex references are to this Agreement
unless otherwise specified. The words “include”, “includes”, and “including”
shall be deemed to be followed by the phrase “without limitation”.

 

(b)         The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

 

(c)         Where the context requires, terms relating to the Collateral,
Pledged Collateral or Security Collateral, or any part thereof, when used in
relation to a Granting Party shall refer to such Granting Party’s Collateral,
Pledged Collateral or Security Collateral or the relevant part thereof.

 

(d)         All references in this Agreement to any of the property described in
the definition of the term “Collateral” or “Pledged Collateral”, or to any
Proceeds thereof, shall be deemed to be references thereto only to the extent
the same constitute Collateral or Pledged Collateral, respectively.

 

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Section 2

 

Guarantee

 

2.1         Guarantee. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
benefit of the Secured Parties, the prompt and complete payment and performance
by the Borrower when due and payable (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations owed to the Secured
Parties.

 

(b)         Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount that can be guaranteed
by such Guarantor under applicable law, including applicable federal and state
laws relating to the insolvency of debtors; provided that, to the maximum extent
permitted under applicable law, it is the intent of the parties hereto that the
rights of contribution of each Guarantor provided in Subsection 2.2 be included
as an asset of the respective Guarantor in determining the maximum liability of
such Guarantor hereunder.

 

(c)         Each Guarantor agrees that the Borrower Obligations guaranteed by it
hereunder may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guarantee contained
in this Section 2 or affecting the rights and remedies of the Administrative
Agent or any other Secured Party hereunder.

 

(d)         The guarantee contained in this Section 2 shall remain in full force
and effect until the earliest to occur of (i) the first date on which all of the
Loans and all other Borrower Obligations then due and owing, and the obligations
of each Guarantor under the guarantee contained in this Section 2 then due and
owing shall have been satisfied by payment in full in cash and the Commitments
shall be terminated, notwithstanding that from time to time during the term of
the Credit Agreement the Borrower may be free from any Borrower Obligations,
(ii) as to any Guarantor, a sale or other disposition of all the Capital Stock
of such Guarantor (other than to the Borrower or a Subsidiary Guarantor), or any
other transaction or occurrence as a result of which such Guarantor ceases to be
a Restricted Subsidiary of the Borrower, in each case that is permitted under
the Credit Agreement and (iii) as to any Guarantor, such Guarantor being or
becoming an Excluded Subsidiary.

 

(e)         No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any other Secured Party from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of any of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of any of the Borrower
Obligations), remain liable for the Borrower Obligations guaranteed by it
hereunder up to the maximum liability of such Guarantor hereunder until the
earliest to occur of (i) the first date on which all the Loans and all other
Borrower Obligations then due and owing are paid in full in cash and the
Commitments are terminated, (ii) as to any Guarantor, a sale or other
disposition of all of the Capital Stock of such Guarantor (other than to the
Borrower or a Subsidiary Guarantor), or any other transaction or occurrence as a
result of which such Guarantor ceases to be a Restricted Subsidiary of the
Borrower, in each case that is permitted under the Credit Agreement and (iii) as
to any Guarantor, such Guarantor being or becoming an Excluded Subsidiary.

 

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2.2         Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share
(based, to the maximum extent permitted by law, on the respective Adjusted Net
Worth of each Guarantor on the date the respective payment is made) of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder that has not paid
its proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Subsection 2.3. The provisions
of this Subsection 2.2 shall in no respect limit the obligations and liabilities
of any Guarantor to the Administrative Agent and the other Secured Parties, and
each Guarantor shall remain liable to the Administrative Agent and the other
Secured Parties for the full amount guaranteed by such Guarantor hereunder.

 

2.3         No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any other Secured Party, no Guarantor shall be entitled
to be subrogated to any of the rights of the Administrative Agent or any other
Secured Party against the Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Administrative Agent or any
other Secured Party for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Borrower or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Administrative Agent and the other
Secured Parties by the Borrower on account of the Borrower Obligations are paid
in full in cash and the Commitments are terminated. If any amount shall be paid
to any Guarantor on account of such subrogation rights at any time when all of
the Borrower Obligations shall not have been paid in full in cash or any of the
Commitments shall remain in effect, such amount shall be held by such Guarantor
in trust for the Administrative Agent and the other Secured Parties, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent,
if required), to be held as collateral security for all of the Borrower
Obligations (whether matured or unmatured) guaranteed by such Guarantor and/or
then or at any time thereafter may be applied against any Borrower Obligations,
whether matured or unmatured, in such order as the Administrative Agent may
determine.

 

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2.4         Amendments, etc. with Respect to the Obligations. To the maximum
extent permitted by law, each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against any Guarantor
and without notice to or further assent by any Guarantor, any demand for payment
of any of the Borrower Obligations made by the Collateral Agent, the
Administrative Agent or any other Secured Party may be rescinded by the
Collateral Agent, the Administrative Agent or such other Secured Party and any
of the Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, waived,
modified, accelerated, compromised, subordinated, waived, surrendered or
released by the Collateral Agent, the Administrative Agent or any other Secured
Party, and the Credit Agreement and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended, waived,
modified, supplemented or terminated, in whole or in part, as the Collateral
Agent or the Administrative Agent (or the Required Lenders or the applicable
Lender(s), as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Collateral Agent, the Administrative Agent or any other Secured Party for the
payment of any of the Borrower Obligations may be sold, exchanged, waived,
surrendered or released. None of the Collateral Agent, the Administrative Agent
and each other Secured Party shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for any of the
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto, except to the extent required by applicable law.

 

2.5         Guarantee Absolute and Unconditional. Each Guarantor waives, to the
maximum extent permitted by applicable law, any and all notice of the creation,
renewal, extension or accrual of any of the Borrower Obligations and notice of
or proof of reliance by the Collateral Agent, the Administrative Agent or any
other Secured Party upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; each of the Borrower Obligations,
and any obligation contained therein, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Collateral Agent, the Administrative Agent and the other Secured Parties, on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives, to the maximum extent permitted by applicable law, diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the other Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees, to the extent permitted by
law, that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment and not of
collection. Each Guarantor hereby waives, to the maximum extent permitted by
applicable law, any and all defenses (other than any claim alleging breach of a
contractual provision of any of the Loan Documents) that it may have arising out
of or in connection with any and all of the following: (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, the Borrower
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the
Collateral Agent, the Administrative Agent or any other Secured Party, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) that may at any time be available to or be asserted by the Borrower
against the Collateral Agent, the Administrative Agent or any other Secured
Party, (c) any change in the time, place, manner or place of payment, amendment,
or waiver or increase in any of the Obligations, (d) any exchange,
non-perfection, taking, or release of Security Collateral, (e) any change in the
structure or existence of the Borrower, (f) any application of Security
Collateral to any of the Obligations, (g) any law, regulation or order of any
jurisdiction, or any other event, affecting any term of any Obligation or the
rights of the Collateral Agent, the Administrative Agent or any other Secured
Party with respect thereto, including, without limitation: (i) the application
of any such law, regulation, decree or order, including any prior approval,
which would prevent the exchange of any currency (other than Dollars) for
Dollars or the remittance of funds outside of such jurisdiction or the
unavailability of Dollars in any legal exchange market in such jurisdiction in
accordance with normal commercial practice, (ii) a declaration of banking
moratorium or any suspension of payments by banks in such jurisdiction or the
imposition by such jurisdiction or any Governmental Authority thereof of any
moratorium on, the required rescheduling or restructuring of, or required
approval of payments on, any indebtedness in such jurisdiction, (iii) any
expropriation, confiscation, nationalization or requisition by such country or
any Governmental Authority that directly or indirectly deprives the Borrower of
any assets or their use, or of the ability to operate its business or a material
part thereof, or (iv) any war (whether or not declared), insurrection,
revolution, hostile act, civil strife or similar events occurring in such
jurisdiction which has the same effect as the events described in clause (i),
(ii) or (iii) above (in each of the cases contemplated in clauses (i) through
(iv) above, to the extent occurring or existing on or at any time after the date
of this Agreement), or (h) any other circumstance whatsoever (other than payment
in full in cash of the Borrower Obligations guaranteed by it hereunder) (with or
without notice to or knowledge of the Borrower or such Guarantor) or any
existence of or reliance on any representation by the Secured Parties that
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Collateral Agent, the
Administrative Agent and any other Secured Party may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or against any collateral security or guarantee for the Borrower
Obligations guaranteed by such Guarantor hereunder or any right of offset with
respect thereto, and any failure by the Collateral Agent, the Administrative
Agent or any other Secured Party to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Collateral Agent, the Administrative Agent or any other Secured Party against
any Guarantor. For the purposes hereof “demand” shall include the commencement
and continuance of any legal proceedings.

 

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2.6         Reinstatement. The guarantee of any Guarantor contained in this
Section 2 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Borrower Obligations
guaranteed by such Guarantor hereunder is rescinded or must otherwise be
restored or returned by the Collateral Agent, the Administrative Agent or any
other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.

 

2.7         Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim, in
Dollars (or in the case of any amount required to be paid in any other currency
pursuant to the requirements of the Credit Agreement or other agreement relating
to the respective Obligations, such other currency), at the Administrative
Agent’s office specified in Subsection 11.2 of the Credit Agreement or such
other address as may be designated in writing by the Administrative Agent to
such Guarantor from time to time in accordance with Subsection 11.2 of the
Credit Agreement.

 

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Section 3

 

Grant of Security Interest

 

3.1         Grant. Each Grantor hereby grants to the Collateral Agent, for the
benefit of the Secured Parties, a security interest in all of the Collateral of
such Grantor, as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations of such Grantor, except as provided in Subsection
3.3. The term “Collateral”, as to any Grantor, means the following property
(wherever located) now owned or at any time hereafter acquired by such Grantor
or in which such Grantor now has or at any time in the future may acquire any
right, title or interest, except as provided in Subsection 3.3:

 

(a)         all Accounts;

 

(b)         all Money (including all cash);

 

(c)         all Cash Equivalents;

 

(d)         all Chattel Paper;

 

(e)         all Contracts;

 

(f)          all Deposit Accounts;

 

(g)         all Documents;

 

(h)         all Equipment;

 

(i)         all General Intangibles;

 

(j)         all Instruments;

 

(k)         all Intellectual Property;

 

(l)          all Inventory;

 

(m)         all Investment Property;

 

(n)          all Letter-of-Credit Rights;

 

(o)          all Fixtures;

 

 17 

 

 

(p)         all Supporting Obligations;

 

(q)         all Commercial Tort Claims constituting Commercial Tort Actions
described in Schedule 6 (together with any Commercial Tort Actions subject to a
further writing provided in accordance with Subsection 5.2.12);

 

(r)          all books and records relating to the foregoing;

 

(s)         the Collateral Proceeds Account; and

 

(t)          to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and guarantees given by
any Person with respect to any of the foregoing;

 

provided that, Collateral shall not include any Pledged Collateral, or any
property or assets described in the proviso to the definition of Pledged Stock.

 

3.2         Pledged Collateral. Each Granting Party that is a Pledgor, hereby
grants to the Collateral Agent, for the benefit of the Secured Parties, a
security interest in all of the Pledged Collateral of such Pledgor now owned or
at any time hereafter acquired by such Pledgor, including any Proceeds thereof,
as collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations of such Pledgor, except as provided in Subsection 3.3.

 

3.3         Certain Limited Exceptions. No security interest is or will be
granted pursuant to this Agreement or any other Security Document in any right,
title or interest of any Granting Party under or in, and “Collateral” and
“Pledged Collateral” shall not include the following (collectively, the
“Excluded Assets”):

 

(a)         any Instruments, Contracts, Chattel Paper, General Intangibles,
Copyright Licenses, Patent Licenses, Trademark Licenses, Trade Secret Licenses
or other contracts or agreements with or issued by Persons other than the
Borrower, a Subsidiary of the Borrower, or an Affiliate of any of the foregoing
(collectively, “Restrictive Agreements”) that would otherwise be included in the
Security Collateral (and such Restrictive Agreements shall not be deemed to
constitute a part of the Security Collateral) for so long as, and to the extent
that, the granting of such a security interest pursuant hereto would result in a
breach, default or termination of such Restrictive Agreements (in each case,
except to the extent that, pursuant to the Code and any other applicable law,
the granting of security interests therein can be made without resulting in a
breach, default or termination of such Restrictive Agreements);

 

 18 

 

 

(b)         any Equipment or other property that would otherwise be included in
the Security Collateral (and such Equipment or other property shall not be
deemed to constitute a part of the Security Collateral) if such Equipment or
other property (x) (A) is subject to a Lien described in Subsection 8.14(d) or
8.14(e) (with respect to a Lien described in Subsection 8.14(d)) of the Senior
ABL Agreement (or any corresponding provision of any Additional ABL Credit
Facility; provided that such provision in any Additional ABL Credit Facility is
not materially less favorable to the Lenders than the corresponding provision in
the Senior ABL Agreement (as determined by the Borrower in good faith, which
determination shall be conclusive)) or (B) is subject to a Lien described in
clause (h) (with respect to Purchase Money Obligations or Financing Lease
Obligations) or (o) (with respect to such Liens described in such clause (h)) of
the definition of “Permitted Liens” in the Credit Agreement (or any
corresponding provision of any Additional Credit Facility; provided that such
provision in any Additional Credit Facility is not materially less favorable to
the Lenders than the corresponding provision in the Credit Agreement (as
determined by the Borrower in good faith, which determination shall be
conclusive)) or (y) (A) is subject to any Lien described in Subsection 8.14(q)
of the Senior ABL Agreement (or any corresponding provision of any Additional
ABL Credit Facility; provided that such provision in any Additional ABL Credit
Facility is not materially less favorable to the Lenders than the corresponding
provision in the Senior ABL Agreement (as determined by the Borrower in good
faith, which determination shall be conclusive)) or (B) is subject to any Lien
in respect of Hedging Obligations permitted by Subsection 8.6 of the Credit
Agreement as a “Permitted Lien” pursuant to clause (h) of the definition thereof
in the Credit Agreement (or any corresponding provision of any Additional Credit
Facility; provided that such provision in any Additional Credit Facility is not
materially less favorable to the Lenders than the corresponding provision in the
Credit Agreement (as determined by the Borrower in good faith, which
determination shall be conclusive) (but in each case only for so long as such
Liens are in place)), and, in the case of such other property, such other
property consists solely of (i) cash, Cash Equivalents or Temporary Cash
Investments, together with proceeds, dividends and distributions in respect
thereof, (ii) any assets relating to any assets, proceeds, dividends or
distributions, or to such Hedging Obligations, and/or (iii) any other assets
consisting of, relating to or arising under or in connection with (1) any
Hedging Obligations or (2) any other agreements, instruments or documents
related to any Hedging Obligations or to any of the assets referred to in any of
subclauses (i) through (iii) of this subclause (b)(y);

 

(c)         any property (and/or related rights and/or assets) that (A) would
otherwise be included in the Security Collateral (and such property (and/or
related rights and/or assets) shall not be deemed to constitute a part of the
Security Collateral) if such property has been sold or otherwise transferred in
connection with a Sale and Leaseback Transaction permitted under Subsection 8.5
of the Senior ABL Agreement (or any corresponding provision of any Additional
ABL Credit Facility; provided that such provision in any Additional ABL Credit
Facility is not materially less favorable to the Lenders than the corresponding
provision in the Senior ABL Agreement (as determined by the Borrower in good
faith, which determination shall be conclusive)) or clause (x) or (xix) of the
definition of “Asset Disposition” in the Credit Agreement (or any corresponding
provision of any Additional Credit Facility; provided that such provision in any
Additional Credit Facility is not materially less favorable to the Lenders than
the corresponding provision in the Credit Agreement (as determined by the
Borrower in good faith, which determination shall be conclusive)), or (B) is
subject to any Liens permitted under Subsection 8.14 of the Senior ABL Agreement
(or any corresponding provision of any Additional ABL Credit Facility; provided
that such provision in any Additional ABL Credit Facility is not materially less
favorable to the Lenders than the corresponding provision in the Senior ABL
Agreement (as determined by the Borrower in good faith, which determination
shall be conclusive)) or Subsection 8.6 of the Credit Agreement (or any
corresponding provision of any Additional Credit Facility; provided that such
provision in any Additional Credit Facility is not materially less favorable to
the Lenders than the corresponding provision in the Credit Agreement in any
material respect (as determined by the Borrower in good faith, which
determination shall be conclusive)) that relate to property subject to any such
Sale and Leaseback Transaction or general intangibles related thereto (but only
for so long as such Liens are in place); provided that, notwithstanding the
foregoing, a security interest of the Collateral Agent shall attach to any
money, securities or other consideration received by any Grantor as
consideration for the sale or other disposition of such property as and to the
extent such consideration would otherwise constitute Security Collateral;

 

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(d)         Capital Stock (including for these purposes any investment deemed to
be Capital Stock for United States tax purposes) which is described in the
proviso to the definition of Pledged Stock;

 

(e)         any Money, cash, checks, other negotiable instruments, funds and
other evidence of payment held in any Deposit Account of the Borrower or any of
its Subsidiaries in the nature of a security deposit with respect to obligations
for the benefit of the Borrower or any of its Subsidiaries, which must be held
for or returned to the applicable counterparty under applicable law or pursuant
to Contractual Obligations;

 

(f)          [reserved];

 

(g)         any interest in leased real property (including Fixtures related
thereto) (and there shall be no requirement to deliver landlord lien waivers,
estoppels or collateral access letters);

 

(h)         any fee interest in owned real property (including Fixtures related
thereto) if (A) the Fair Market Value of such fee interest at the time of the
acquisition of such fee interest is less than $5,000,000 individually, or (B)
such real property is located in an area identified as a special flood hazard
area by the Federal Emergency Management Agency or other applicable agency;

 

(i)          any Vehicles and any assets subject to certificate of title;

 

(j)          Letter-of-Credit Rights and Commercial Tort Claims individually
with a value of less than $10,000,000;

 

(k)         assets to the extent the granting or perfecting of a security
interest in such assets would result in costs or other consequences to the
Borrower or any of its Subsidiaries as reasonably determined in writing by the
Borrower, the Administrative Agent and, to the extent such assets would
otherwise constitute Term Loan Priority Collateral, the Collateral Agent in good
faith (which determination shall be conclusive), that are excessive in view of
the benefits that would be obtained by the Secured Parties;

 

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(l)          those assets over which the granting of security interests in such
assets would be prohibited by contract permitted under the Credit Agreement,
applicable law or regulation or the organizational or joint venture documents of
any non-wholly owned Subsidiary (including permitted liens, leases and licenses)
(in each case, after giving effect to the applicable anti-assignment provisions
of the Code, other than proceeds and receivables thereof to the extent that
their assignment is expressly deemed effective under the Code notwithstanding
such prohibitions), or to the extent that such security interests would result
in adverse tax consequences to the Borrower or any of its Subsidiaries (as
determined by the Borrower in good faith, which determination shall be
conclusive) (it being understood that the Lenders shall not require the Borrower
or any of its Subsidiaries to enter into any security agreements or pledge
agreements governed by foreign law);

 

(m)         any assets specifically requiring perfection through control
(including cash, cash equivalents, deposit accounts or other bank or securities
accounts), (i) to the extent the security interest in such asset is not
automatically perfected by filings under the Uniform Commercial Code of any
applicable jurisdiction, (ii) other than in the case of Pledged Stock, or
Pledged Notes, to the extent not perfected by being held by the Collateral Agent
or an Additional Agent as agent for the Collateral Agent, (iii) other than DDAs,
Concentration Accounts, the Core Concentration Account and Blocked Accounts (in
each case only to the extent required pursuant to Subsection 4.16 of the Senior
ABL Agreement (or any corresponding provision of any Additional ABL Credit
Facility)), and (iv) other than the Collateral Proceeds Account (to the extent
required pursuant to this Agreement), and any Collateral Proceeds Account under
and as defined in the ABL Collateral Agreement (to the extent required pursuant
to the ABL Collateral Agreement);

 

(n)         Foreign Intellectual Property;

 

(o)         any aircraft, airframes, aircraft engines, helicopters, vessels or
rolling stock, or any Equipment or other assets constituting a part thereof;

 

(p)         prior to the Discharge of ABL Obligations, any property that would
otherwise constitute ABL Priority Collateral but is an Excluded Asset (as such
term is defined in the ABL Collateral Agreement);

 

(q)         any Capital Stock and other securities of (i) a Subsidiary of the
Borrower to the extent that the pledge of or grant of any other Lien on such
Capital Stock and other securities for the benefit of any holders of securities
results in the Borrower or any of its Restricted Subsidiaries being required to
file separate financial statements for such Subsidiary with the Securities and
Exchange Commission (or any other governmental authority) pursuant to either
Rule 3-10 or 3-16 of Regulation S-X under the Securities Act, or any other law,
rule or regulation as in effect from time to time, but only to the extent
necessary to not be subject to such requirement and/or (ii) any Subsidiary of
the Borrower that is an Unrestricted Subsidiary or an Excluded Subsidiary, other
than a Foreign Subsidiary (which pledge of the Capital Stock of a Foreign
Subsidiary shall be limited to 65% of each series of its Capital Stock);

 

(r)          [reserved]; and

 

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(s)         any Goods in which a security interest is not perfected by filing a
financing statement in the applicable Grantor’s jurisdiction of organization.

 

3.4         Intercreditor Relations. Notwithstanding anything herein to the
contrary, it is the understanding of the parties that the Liens granted pursuant
to Subsections 3.1 and 3.2 shall (a) with respect to all Security Collateral
constituting ABL Priority Collateral (x) prior to the Discharge of ABL
Obligations, be subject and subordinate to the Liens granted to the ABL Agent
for the benefit of the ABL Secured Parties to secure the ABL Obligations
pursuant to the ABL Collateral Agreement and (y) prior to the Discharge of
Additional ABL Obligations, be subject and subordinate to the Liens granted to
any Additional ABL Agent for the benefit of the holders of the Additional ABL
Obligations to secure the Additional ABL Obligations pursuant to any Additional
ABL Collateral Documents as and to the extent provided for therein, and (b) with
respect to all Security Collateral, prior to the Discharge of Additional Term
Obligations, be pari passu and equal in priority to the Liens granted to any
Additional Term Agent for the benefit of the holders of the applicable
Additional Term Obligations to secure such Additional Term Obligations pursuant
to the applicable Additional Term Collateral Documents (except, in the case of
this clause (b), as may be separately otherwise agreed between the Collateral
Agent, on behalf of itself and the Secured Parties, and any Additional Term
Agent, on behalf of itself and the Additional Term Secured Parties represented
thereby). Each of the Collateral Agent and the Administrative Agent acknowledges
and agrees that the relative priority of the Liens granted to the Collateral
Agent, the ABL Agent and any Additional Agent shall be determined solely
pursuant to the applicable Intercreditor Agreements, and not by priority as a
matter of law or otherwise. Notwithstanding anything herein to the contrary, the
Liens and security interest granted to the Collateral Agent pursuant to this
Agreement and the exercise of any right or remedy by the Collateral Agent
hereunder are subject to the provisions of the applicable Intercreditor
Agreements. In the event of any conflict between the terms of any Intercreditor
Agreement and this Agreement, the terms of such Intercreditor Agreement shall
govern and control as among (i) the Collateral Agent, the ABL Agent and any
Additional Agent, in the case of the ABL/Term Loan Intercreditor Agreement, (ii)
the Collateral Agent and Additional Term Agent, in the case of the Junior Lien
Intercreditor Agreement, and (iii) the Collateral Agent and any other secured
creditor (or agent therefor) party thereto, in the case of any Other
Intercreditor Agreement. In the event of any such conflict, each Grantor may act
(or omit to act) in accordance with such Intercreditor Agreement, and shall not
be in breach, violation or default of its obligations hereunder by reason of
doing so. Notwithstanding any other provision hereof, (x) for so long as ABL
Obligations or any Additional ABL Obligations remain outstanding, any obligation
hereunder to deliver to the Collateral Agent any Security Collateral
constituting ABL Priority Collateral shall be satisfied by causing such ABL
Priority Collateral to be delivered to the ABL Agent or the applicable ABL
Collateral Representative (as defined in the ABL/Term Loan Intercreditor
Agreement) to be held in accordance with the ABL/Term Loan Intercreditor
Agreement and (y) for so long as any Additional Term Obligations remain
outstanding, any obligation hereunder to deliver to the Collateral Agent any
Security Collateral shall be satisfied by causing such Security Collateral to be
delivered to the applicable Collateral Representative or any Additional Term
Agent to be held in accordance with the applicable Intercreditor Agreement.

 

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Section 4

 

Representations and Warranties

 

4.1         Representations and Warranties of Each Guarantor. To induce the
Administrative Agent, the Collateral Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Guarantor hereby represents and
warrants to the Collateral Agent and each other Secured Party that the
representations and warranties set forth in Section 5 of the Credit Agreement as
they relate to such Guarantor or to the Loan Documents to which such Guarantor
is a party, each of which representations and warranties is hereby incorporated
herein by reference, are true and correct in all material respects, and the
Collateral Agent and each other Secured Party shall be entitled to rely on each
of such representations and warranties as if fully set forth herein; provided
that each reference in each such representation and warranty to the Borrower’s
knowledge shall, for the purposes of this Subsection 4.1, be deemed to be a
reference to such Guarantor’s knowledge.

 

4.2         Representations and Warranties of Each Grantor. To induce the
Administrative Agent, the Collateral Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Collateral Agent and each other Secured Party that, in each case
after giving effect to the Transactions:

 

4.2.1       Title; No Other Liens. Except for the security interests granted to
the Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement and the other Liens permitted to exist on such Grantor’s Collateral by
the Credit Agreement (including, without limitation, Subsection 8.6 thereof),
such Grantor owns each item of such Grantor’s Collateral free and clear of any
and all Liens securing Indebtedness. As of the Closing Date, except as set forth
on Schedule 3, to the knowledge of such Grantor (x) in the case of the Term Loan
Priority Collateral, no currently effective financing statement or other similar
public notice with respect to any Lien securing Indebtedness on all or any part
of such Grantor’s Term Loan Priority Collateral is on file or of record in any
public office in the United States of America, any state, territory or
dependency thereof or the District of Columbia and (y) in the case of the ABL
Priority Collateral, no currently effective financing statement or other similar
public notice with respect to any Lien securing Indebtedness on all or any part
of such Grantor’s ABL Priority Collateral is on file or of record in any public
office in the United States of America, any state, territory or dependency
thereof or the District of Columbia, except, in each case, such as have been
filed in favor of the Collateral Agent for the benefit of the Secured Parties
pursuant to this Agreement or as are permitted by the Credit Agreement
(including, without limitation, Subsection 8.6 thereof) or any other Loan
Document or for which termination statements will be delivered on the Closing
Date.

 

4.2.2       Perfected First Priority Liens. (a) This Agreement is effective to
create, as collateral security for the Obligations of such Grantor, valid and
enforceable Liens on such Grantor’s Security Collateral in favor of the
Collateral Agent for the benefit of the Secured Parties, except as to
enforcement, as may be limited by applicable domestic or foreign bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

 

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(b)         Except with regard to (i) Liens (if any) on Specified Assets and
(ii) any rights in favor of the United States government as required by law (if
any), upon the completion of the Filings and, with respect to Instruments,
Chattel Paper and Documents upon the earlier of such Filing or the delivery to
and continuing possession by the Collateral Agent, the ABL Agent, the applicable
Collateral Representative or any Additional Agent, as applicable, in accordance
with any applicable Intercreditor Agreement, of all Instruments, Chattel Paper
and Documents a security interest in which is perfected by possession, and upon
the obtaining and maintenance of “control” (as described in the Code) by the
Collateral Agent, the ABL Agent, the Administrative Agent, the applicable
Collateral Representative or any Additional Agent, as applicable (or their
respective agents appointed for purposes of perfection), in accordance with any
applicable Intercreditor Agreement of all Deposit Accounts, all Blocked
Accounts, the Collateral Proceeds Account, all Electronic Chattel Paper and all
Letter-of-Credit Rights a security interest in which is perfected by “control”
(in the case of Deposit Accounts and Blocked Accounts to the extent required
under Subsection 4.16 of the Senior ABL Agreement (or any corresponding
provision of any Additional ABL Credit Facility)) and in the case of Commercial
Tort Actions (other than such Commercial Tort Actions listed on Schedule 6 on
the date of this Agreement), upon the taking of the actions required by
Subsection 5.2.12, the Liens created pursuant to this Agreement will constitute
valid Liens on and (to the extent provided herein) perfected security interests
in such Grantor’s Collateral in favor of the Collateral Agent for the benefit of
the Secured Parties, and will be prior to all other Liens of all other Persons
securing Indebtedness, in each case other than Liens permitted by the Credit
Agreement (including Permitted Liens) (and subject to any applicable
Intercreditor Agreement), and enforceable as such as against all other Persons
other than Ordinary Course Transferees, except to the extent that the recording
of an assignment or other transfer of title to the Collateral Agent, the
Administrative Agent, the ABL Agent, the applicable Collateral Representative or
any Additional Agent (in accordance with the applicable Intercreditor Agreement)
or the recording of other applicable documents in the United States Patent and
Trademark Office or United States Copyright Office may be necessary for
perfection or enforceability, and except as to enforcement, as may be limited by
applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing. As used in this Subsection 4.2.2(b), the following terms shall have the
following meanings:

 

“Filings”: the filing or recording of (i) the Financing Statements as set forth
in Schedule 3, (ii) this Agreement or a notice thereof with respect to
Intellectual Property as set forth in Schedule 3, and (iii) any filings after
the Closing Date in any other jurisdiction as may be necessary under any
Requirement of Law.

 

“Financing Statements”: the financing statements attached hereto on Schedule 4A
for filing in the jurisdictions listed in Schedule 4B.

 

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“Ordinary Course Transferees”: (i) with respect to goods only, buyers in the
ordinary course of business and lessees in the ordinary course of business to
the extent provided in Section 9-320(a) and 9-321 of the Uniform Commercial Code
as in effect from time to time in the relevant jurisdiction, (ii) with respect
to general intangibles only, licensees in the ordinary course of business to the
extent provided in Section 9-321 of the Uniform Commercial Code as in effect
from time to time in the relevant jurisdiction and (iii) any other Person who is
entitled to take free of the Lien pursuant to the Uniform Commercial Code as in
effect from time to time in the relevant jurisdiction.

 

“Specified Assets”: the following property and assets of such Grantor:

 

(1)         Patents, Patent Licenses, Trademarks and Trademark Licenses to the
extent that (a) Liens thereon cannot be perfected by the filing of financing
statements under the Uniform Commercial Code as in effect from time to time in
the relevant jurisdiction or by the filing and acceptance of intellectual
property security agreements in the United States Patent and Trademark Office or
(b) such Patents, Patent Licenses, Trademarks and Trademark Licenses are not,
individually or in the aggregate, material to the business of the Borrower and
its Subsidiaries taken as a whole;

 

(2)         Copyrights and Copyright Licenses with respect thereto and Accounts
or receivables arising therefrom to the extent that (a) Liens thereon cannot be
perfected by filing and acceptance of intellectual property security agreements
in the United States Copyright Office or (b) the Uniform Commercial Code as in
effect from time to time in the relevant jurisdiction is not applicable to the
creation or perfection of Liens thereon;

 

(3)         Collateral for which the perfection of Liens thereon requires
filings in or other actions under the laws of jurisdictions outside of the
United States of America, any State, territory or dependency thereof or the
District of Columbia;

 

(4)         goods included in Collateral received by any Person from any Grantor
for “sale or return” within the meaning of Section 2-326(1)(b) of the Uniform
Commercial Code as in effect from time to time in the relevant jurisdiction, to
the extent of claims of creditors of such Person;

 

(5)         Fixtures, Vehicles, any other assets subject to certificates of
title, and Money and Cash Equivalents (other than Cash Equivalents constituting
Investment Property to the extent a security interest therein is perfected by
the filing of a financing statement under the Uniform Commercial Code as in
effect from time to time in the relevant jurisdiction);

 

(6)         Proceeds of Accounts or Inventory which do not themselves constitute
Collateral or which do not constitute identifiable Cash Proceeds or which have
not yet been transferred to or deposited in the Collateral Proceeds Account (if
any);

 

(7)         Contracts, Accounts or receivables subject to the Assignment of
Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq.);

 

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(8)         uncertificated securities, to the extent Liens thereon cannot be
perfected by the filing of a financing statement under the Uniform Commercial
Code as in effect from time to time in the relevant jurisdiction; and

 

(9)         securities held with an intermediary (as such phrase is defined in
the Convention on the Law Applicable to Certain Rights in Respect of Securities
held with an Intermediary as in effect in the United States) to the extent that
the Uniform Commercial Code as in effect from time to time in the relevant
jurisdiction is not applicable to the perfection of Liens thereon.

 

4.2.3       Jurisdiction of Organization. On the date hereof, such Grantor’s
jurisdiction of organization is specified on Schedule 4B.

 

4.2.4       [Reserved].

 

4.2.5       Accounts Receivable. The amounts represented by such Grantor to the
Administrative Agent or the other Secured Parties from time to time as owing by
each account debtor or by all account debtors in respect of such Grantor’s
Accounts Receivable constituting Term Loan Priority Collateral will at such time
be the correct amount, in all material respects, actually owing by such account
debtor or debtors thereunder, except to the extent that appropriate reserves
therefor have been established on the books of such Grantor in accordance with
GAAP. Unless otherwise indicated in writing to the Administrative Agent, each
Account Receivable of such Grantor arises out of a bona fide sale and delivery
of goods or rendition of services by such Grantor. Such Grantor has not given
any account debtor any deduction in respect of the amount due under any such
Account, except in the ordinary course of business or as such Grantor may
otherwise advise the Administrative Agent in writing.

 

4.2.6       Patents, Copyrights and Trademarks. Schedule 5 lists all Trademarks,
Copyrights and Patents, in each case, material to the business of the Borrower
and its Restricted Subsidiaries, taken as a whole, and registered in the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, and owned by such Grantor in its own name as of the date hereof, and
all Trademark Licenses, all Copyright Licenses and all Patent Licenses, in each
case, material to the business of the Borrower and its Restricted Subsidiaries,
taken as a whole (including, without limitation, Trademark Licenses for
registered Trademarks, Copyright Licenses for registered Copyrights and Patent
Licenses for registered Patents, in each case, material to the business of the
Borrower and its Restricted Subsidiaries, taken as a whole, but excluding
licenses to commercially available “off-the-shelf” software), owned by such
Grantor in its own name as of the date hereof, in each case, that is solely
United States Intellectual Property.

 

4.3         Representations and Warranties of Each Pledgor. To induce the
Administrative Agent, the Collateral Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Pledgor hereby represents and
warrants to the Collateral Agent and each other Secured Party that:

 

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4.3.1       Except as provided in Subsection 3.3, the shares of Pledged Stock
pledged by such Pledgor hereunder constitute (i) in the case of shares of a
Domestic Subsidiary, all the issued and outstanding shares of all classes of the
Capital Stock of such Domestic Subsidiary owned by such Pledgor and (ii) in the
case of any Pledged Stock constituting Capital Stock of any Foreign Subsidiary,
as of the Closing Date such percentage (not more than 65%) as is specified on
Schedule 2 of all the issued and outstanding shares of all classes of the
Capital Stock of each such Foreign Subsidiary owned by such Pledgor.

 

4.3.2       [Reserved].

 

4.3.3       Such Pledgor is the record and beneficial owner of, and has good
title to, the Pledged Securities pledged by it hereunder, free of any and all
Liens securing Indebtedness owing to any other Person, except the security
interest created by this Agreement and Liens permitted by the Credit Agreement
(including Permitted Liens).

 

4.3.4       Upon the delivery to the Collateral Agent, the ABL Agent, the
applicable Collateral Representative or any Additional Agent, as applicable, in
accordance with any applicable Intercreditor Agreement, of the certificates
evidencing the Pledged Securities held by such Pledgor together with executed
undated stock powers or other instruments of transfer, the security interest
created by this Agreement in such Pledged Securities constituting certificated
securities, assuming the continuing possession of such Pledged Securities by the
Collateral Agent, the ABL Agent, the applicable Collateral Representative or any
Additional Agent, as applicable, in accordance with the applicable Intercreditor
Agreement, will constitute a valid, perfected first priority (subject, in terms
of priority only, to the priority of the Liens of the ABL Agent, the applicable
Collateral Representative and any Additional Agent) security interest in such
Pledged Securities to the extent provided in and governed by the Code,
enforceable in accordance with its terms against all creditors of such Pledgor
and any Persons purporting to purchase such Pledged Securities from such Pledgor
to the extent provided in and governed by the Code, in each case subject to
Liens permitted by the Credit Agreement (including Permitted Liens) (and any
applicable Intercreditor Agreement), and except as to enforcement, as may be
limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

 

4.3.5       Upon the earlier of (x) (to the extent a security interest in
uncertificated securities may be perfected by the filing of a financing
statement) the filing of the Financing Statements or of financing statements
delivered pursuant to Subsection 7.9 of the Credit Agreement in the relevant
jurisdiction and (y) (to the extent a security interest in uncertificated
securities may be perfected by the obtaining and maintenance of “control” (as
described in the Code)) the obtaining and maintenance of “control” (as described
in the Code) by the Collateral Agent, the ABL Agent, the applicable Collateral
Representative or any Additional Agent (or their respective agents appointed for
purposes of perfection), as applicable, in accordance with the applicable
Intercreditor Agreement, of all Pledged Securities that constitute
uncertificated securities, the security interest created by this Agreement in
such Pledged Securities that constitute uncertificated securities, will
constitute a valid, perfected first priority (subject, in terms of priority
only, to the priority of the Liens of the ABL Agent, the applicable Collateral
Representative and any Additional Agent) security interest in such Pledged
Securities constituting uncertificated securities to the extent provided in and
governed by the Code, enforceable in accordance with its terms against all
creditors of such Pledgor and any persons purporting to purchase such Pledged
Securities from such Pledgor, to the extent provided in and governed by the
Code, in each case subject to Liens permitted by the Credit Agreement (including
Permitted Liens) (and any applicable Intercreditor Agreement), and except as to
enforcement, as may be limited by applicable domestic or foreign bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

 

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4.3.6       Letter-of-Credit Rights. Schedule 7 lists all Letter-of-Credit
Rights not constituting Excluded Assets owned by any Grantor on the date hereof.

 

Section 5

 

Covenants

 

5.1         Covenants of Each Guarantor. Each Guarantor covenants and agrees
with the Collateral Agent and the other Secured Parties that, from and after the
date of this Agreement until the earliest to occur of (i) the date upon which
the Loans and all other Obligations then due and owing, shall have been paid in
full in cash and the Commitments shall have terminated, (ii) as to any such
Guarantor, a sale or other disposition of all the Capital Stock of such
Guarantor (other than to the Borrower or a Subsidiary Guarantor), or any other
transaction or occurrence as a result of which such Guarantor ceases to be a
Restricted Subsidiary of the Borrower, in each case that is permitted under the
Credit Agreement or (iii) as to any such Guarantor, such Guarantor being or
becoming an Excluded Subsidiary, such Guarantor shall take, or shall refrain
from taking, as the case may be, each action that is necessary to be taken or
not taken, as the case may be, so that no Default or Event of Default is caused
by the failure to take such action or to refrain from taking such action by such
Guarantor or any of its Restricted Subsidiaries.

 

5.2         Covenants of Each Grantor. Each Grantor covenants and agrees with
the Collateral Agent and the other Secured Parties that, from and after the date
of this Agreement until the earliest to occur of (i) the date upon which the
Loans and all other Obligations then due and owing shall have been paid in full
in cash and the Commitments shall have terminated, (ii) as to any such Grantor a
sale or other disposition of all the Capital Stock of such Grantor (other than
to the Borrower or a Subsidiary Guarantor), or any other transaction or
occurrence as a result of which such Grantor ceases to be a Restricted
Subsidiary of the Borrower, in each case that is permitted under the Credit
Agreement or (iii) as to any Grantor, such Grantor being or becoming an Excluded
Subsidiary:

 

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5.2.1       Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of such Grantor’s Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Grantor shall (except as
provided in the following sentence) be entitled to retain possession of all
Collateral of such Grantor evidenced by any Instrument or Chattel Paper, and
shall hold all such Collateral in trust for the Collateral Agent, for the
benefit of the Secured Parties. In the event that an Event of Default shall have
occurred and be continuing, upon the request of the Collateral Agent, the ABL
Agent, the applicable Collateral Representative or any Additional Agent, as
applicable, in accordance with any applicable Intercreditor Agreement, such
Instrument or Chattel Paper shall be promptly delivered to the Collateral Agent,
the ABL Agent, the applicable Collateral Representative or any Additional Agent,
as applicable, in accordance with the applicable Intercreditor Agreement, duly
indorsed in a manner reasonably satisfactory to the Collateral Agent, the ABL
Agent, the applicable Collateral Representative or any Additional Agent, as
applicable, in accordance with the applicable Intercreditor Agreement, to be
held as Collateral pursuant to this Agreement. Such Grantor shall not permit any
other Person to possess any such Collateral at any time other than in connection
with any sale or other disposition of such Collateral in a transaction permitted
by the Credit Agreement or as contemplated by the Intercreditor Agreements.

 

5.2.2       [Reserved].

 

5.2.3       Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all material taxes, assessments and governmental charges or levies
imposed upon such Grantor’s Collateral or in respect of income or profits
therefrom, as well as all material claims of any kind (including, without
limitation, material claims for labor, materials and supplies) against or with
respect to such Grantor’s Collateral, except that no such tax, assessment,
charge, levy or claim need be paid, discharged or satisfied if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and except to the extent that the failure
to do so, in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.

 

5.2.4       Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall use commercially reasonable efforts to maintain the
security interest created by this Agreement in such Grantor’s Collateral as a
perfected security interest as and to the extent described in Subsection 4.2.2
and to defend the security interest created by this Agreement in such Grantor’s
Collateral against the claims and demands of all Persons whomsoever (subject to
the other provisions hereof).

 

(b)         Such Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing such Grantor’s Term
Loan Priority Collateral (and, after the Discharge of ABL Obligations, such
Grantor’s Collateral) and such other reports in connection with such Grantor’s
Term Loan Priority Collateral (and, after the Discharge of ABL Obligations and
the Discharge of Additional ABL Obligations, such Grantor’s Collateral) as the
Collateral Agent may reasonably request in writing, all in reasonable detail.

 

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(c)         At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Collateral Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted by such Grantor, including, without
limitation, the filing of any financing or continuation statements under the
Uniform Commercial Code (or other similar laws) as in effect from time to time
in any United States jurisdiction with respect to the security interests created
hereby; provided that, notwithstanding any other provision of this Agreement or
any other Loan Document, neither the Borrower nor any Grantor will be required
to (v) take any action in any jurisdiction other than the United States of
America, or required by the laws of any such non-U.S. jurisdiction, or enter
into any security agreement or pledge agreement governed by the laws of any such
non-U.S. jurisdiction, in order to create any security interests (or other
Liens) in assets located or titled outside of the United States of America or to
perfect any security interests (or other Liens) in any Collateral, (w) deliver
control agreements with respect to, or confer perfection by “control” over, any
deposit accounts, bank or securities account or other Collateral, except (A) so
long as the Senior ABL Agreement (or any Additional ABL Credit Facility) is in
effect, as required by Subsection 4.16 of the Senior ABL Agreement (or any
corresponding provision of any Additional ABL Credit Facility) and (B) in the
case of Security Collateral that constitutes Capital Stock or Pledged Notes in
certificated form, delivering such Capital Stock or Pledged Notes to the
Collateral Agent (or another Person as required under any applicable
Intercreditor Agreement), (x) take any action in order to perfect any security
interests in any assets specifically requiring perfection through control
(including cash, cash equivalents, deposit accounts or securities accounts)
(except, in each case (A) so long as the Senior ABL Agreement (or any Additional
ABL Credit Facility) is in effect, as required by Subsection 4.16 of the Senior
ABL Agreement (or any corresponding provision of any Additional ABL Credit
Facility) and (B) to the extent consisting of proceeds perfected automatically
or by the filing of a financing statement under the Uniform Commercial Code of
any applicable jurisdiction or, in the case of Pledged Stock or Pledged Notes,
by being held by the Collateral Agent or any Additional Agent as agent for the
Collateral Agent), (y) deliver landlord lien waivers, estoppels or collateral
access letters or (z) file any fixture filing with respect to any security
interest in Fixtures affixed to or attached to any real property constituting
Excluded Assets.

 

(d)         The Collateral Agent may grant extensions of time for the creation
and perfection of security interests in, or obtaining a delivery of documents or
other deliverables with respect to, particular assets of any Grantor where it
determines that such action cannot be accomplished without undue effort or
expense by the time or times at which it would otherwise be required to be
accomplished by this Agreement or any other Security Documents.

 

5.2.5       Changes in Name, Jurisdiction of Organization, etc. Such Grantor
will give prompt written notice to the Collateral Agent of any change in its
name, legal form or jurisdiction of organization (whether by merger or
otherwise) (and in any event within thirty (30) days of such change); provided
that, promptly thereafter such Grantor shall deliver to the Collateral Agent all
additional financing statements and other documents reasonably necessary to
maintain the validity, perfection and priority of the security interests created
hereunder and other documents reasonably requested by the Collateral Agent to
maintain the validity, perfection and priority of the security interests as and
to the extent provided for herein and upon receipt of such additional financing
statements the Collateral Agent shall either promptly file such additional
financing statements or approve the filing of such additional financing
statements by such Grantor. Upon any such approval such Grantor shall proceed
with the filing of the additional financing statements and deliver copies (or
other evidence of filing) of the additional filed financing statements to the
Collateral Agent.

 

5.2.6       [Reserved].

 

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5.2.7       Pledged Stock. In the case of each Grantor that is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Stock issued by it and will comply with such terms insofar as
such terms are applicable to it, (ii) it will notify the Collateral Agent
promptly in writing of the occurrence of any of the events described in
Subsection 5.3.1 with respect to the Pledged Stock issued by it and (iii) the
terms of Subsections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Subsection 6.3(c)
or 6.7 with respect to the Pledged Stock issued by it.

 

5.2.8       Accounts Receivable. (a) With respect to Accounts Receivable
constituting Collateral, any time after the Discharge of ABL Obligations and the
Discharge of Additional ABL Obligations, such Grantor will not, other than in
the ordinary course of business or as permitted by the Loan Documents, (i) grant
any extension of the time of payment of any of such Grantor’s Accounts
Receivable, (ii) compromise or settle any such Accounts Receivable for less than
the full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any such Accounts Receivable, (iv) allow any credit or
discount whatsoever on any such Accounts Receivable, or (v) amend, supplement or
modify any such Accounts Receivable, unless such extensions, compromises,
settlements, releases, credits, discounts, amendments, supplements or
modifications would not reasonably be expected to materially adversely affect
the value of the Accounts Receivable constituting Collateral taken as a whole.

 

(b)         After the Discharge of ABL Obligations and the Discharge of
Additional ABL Obligations, such Grantor will deliver to the Collateral Agent a
copy of each material demand, notice or document received by it from any obligor
under the Accounts Receivable constituting Collateral that disputes the validity
or enforceability of more than 5% of the aggregate amount of the then
outstanding Accounts Receivable constituting Collateral.

 

5.2.9       Maintenance of Records. Such Grantor will keep and maintain at its
own cost and expense reasonably satisfactory and complete records in all
material respects of its Collateral, including, without limitation, a record of
all payments received and all credits granted with respect to such Collateral;
provided that with respect to the ABL Priority Collateral, the satisfactory
maintenance of such records shall be determined in good faith by such Grantor or
the Borrower.

 

5.2.10     Acquisition of Intellectual Property. Concurrently with the delivery
of the annual Compliance Certificate pursuant to Subsection 7.2(a) of the Credit
Agreement, the Borrower will notify the Collateral Agent of any acquisition by
the Grantors of (i) any registration of any United States Copyright, Patent or
Trademark, in each case, material to the business of the Borrower and its
Restricted Subsidiaries, taken as a whole, or (ii) any exclusive rights under a
United States Copyright License, Patent License or Trademark License, in each
case, material to the business of the Borrower and its Restricted Subsidiaries,
taken as a whole, constituting Collateral, and each applicable Grantor shall
take such actions as may be reasonably requested by the Collateral Agent (but
only to the extent such actions are within such Grantor’s control) to perfect
the security interest granted to the Collateral Agent and the other Secured
Parties therein, to the extent provided herein in respect of any United States
Copyright, Patent or Trademark constituting Collateral, by (x) the execution and
delivery of an amendment or supplement to this Agreement (or amendments to any
such agreement previously executed or delivered by such Grantor) and/or (y) the
making of appropriate filings (I) of financing statements under the Uniform
Commercial Code as in effect from time to time in any applicable jurisdiction
and/or (II) in the United States Patent and Trademark Office, or with respect to
Copyrights and Copyright Licenses, the United States Copyright Office.

 

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5.2.11     [Reserved].

 

5.2.12     Commercial Tort Actions. All Commercial Tort Actions of each Grantor
in existence on the date of this Agreement, known to such Grantor on the date
hereof, are described in Schedule 6 hereto. Concurrently with the delivery of
the annual Compliance Certificate pursuant to Subsection 7.2(a) of the Credit
Agreement, the Borrower will notify the Collateral Agent of any acquisition by
the Grantors of any Commercial Tort Action and describe the details thereof, and
each applicable Grantor shall take such actions as may be reasonably requested
by the Collateral Agent to grant to the Collateral Agent a security interest in
such Commercial Tort Action and in the proceeds thereof, all upon and subject to
the terms of this Agreement.

 

5.2.13     [Reserved].

 

5.2.14     Protection of Trademarks. Such Grantor shall, with respect to any
Trademarks that are material to the business of the Borrower and its Restricted
Subsidiaries, taken as a whole, use commercially reasonable efforts not to cease
the use of any of such Trademarks or fail to maintain the level of the quality
of products sold and services rendered under any of such Trademarks at a level
at least substantially consistent with the quality of such products and services
as of the date hereof, and shall use commercially reasonable efforts to take all
steps reasonably necessary to ensure that licensees of such Trademarks use such
consistent standards of quality, in each case, except as would not reasonably be
expected to have a Material Adverse Effect.

 

5.2.15     Protection of Intellectual Property. Subject to and except as
permitted by the Credit Agreement, such Grantor shall use commercially
reasonable efforts not to do any act or omit to do any act whereby any of the
Intellectual Property that is material to the business of the Borrower and its
Restricted Subsidiaries, taken as a whole, may lapse, expire, or become
abandoned, or unenforceable, in each case, except as would not reasonably be
expected to have a Material Adverse Effect.

 

5.2.16    Assignment of Letter-of-Credit Rights. In the case of any
Letter-of-Credit Rights of any Grantor not constituting Excluded Assets acquired
following the Closing Date and constituting Term Loan Priority Collateral, such
Grantor shall use its commercially reasonable efforts to promptly obtain the
consent of the issuer thereof and any nominated person thereon to the assignment
of the proceeds of the related letter of credit in accordance with Section
5-114(c) of the Code.

 

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5.3         Covenants of Each Pledgor. Each Pledgor covenants and agrees with
the Collateral Agent and the other Secured Parties that, from and after the date
of this Agreement until the earlier to occur of (i) the Loans and all other
Obligations then due and owing shall have been paid in full in cash and the
Commitments shall have terminated, (ii) as to any Pledgor, a sale or other
disposition of all the Capital Stock of such Pledgor (other than to the Borrower
or a Subsidiary Guarantor), or any other transaction or occurrence as a result
of which such Pledgor ceases to be a Restricted Subsidiary of the Borrower, in
each case that is permitted under the Credit Agreement or (iii) as to any
Pledgor (other than the Borrower), such Pledgor being or becoming an Excluded
Subsidiary.

 

5.3.1      Additional Shares. If such Pledgor shall, as a result of its
ownership of its Pledged Stock, become entitled to receive or shall receive any
stock certificate (including, without limitation, any stock certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), stock option or similar rights in respect
of the Capital Stock of any Issuer, whether in addition to, in substitution of,
as a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Pledgor shall accept the same as the agent of
the Collateral Agent and the other Secured Parties, hold the same in trust for
the Collateral Agent and the other Secured Parties and deliver the same
forthwith to the Collateral Agent (who will hold the same on behalf of the
Secured Parties) or the ABL Agent, any applicable Collateral Representative or
any Additional Agent, as applicable, in accordance with the applicable
Intercreditor Agreement, in the exact form received, duly indorsed by such
Pledgor to the Collateral Agent, the ABL Agent, any applicable Collateral
Representative or any Additional Agent, as applicable, in accordance with the
applicable Intercreditor Agreement, if required, together with an undated stock
power covering such certificate duly executed in blank by such Grantor, to be
held by the Collateral Agent, the ABL Agent, any applicable Collateral
Representative or any Additional Agent, as applicable, in accordance with the
applicable Intercreditor Agreement, subject to the terms hereof, as additional
collateral security for the Obligations (subject to Subsection 3.3 and provided
that in no event shall there be pledged, nor shall any Pledgor be required to
pledge, more than 65% of any series of outstanding Capital Stock (including for
these purposes any investment deemed to be Capital Stock for United States tax
purposes) of any Foreign Subsidiary pursuant to this Agreement). If an Event of
Default shall have occurred and be continuing, any sums paid upon or in respect
of the Pledged Stock upon the liquidation or dissolution of any Issuer (except
any liquidation or dissolution of any Subsidiary of the Borrower in accordance
with the Credit Agreement) shall be paid over to the Collateral Agent, the ABL
Agent, any applicable Collateral Representative or any Additional Agent, as
applicable, in accordance with the applicable Intercreditor Agreement to be held
by the Collateral Agent, the ABL Agent, any applicable Collateral Representative
or any Additional Agent, as applicable, in accordance with the applicable
Intercreditor Agreement subject to the terms hereof as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Stock or any property shall be distributed
upon or with respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Collateral Agent, be delivered to
the Collateral Agent, the ABL Agent, the applicable Collateral Representative or
any Additional Agent, as applicable, in accordance with the applicable
Intercreditor Agreement, to be held by the Collateral Agent, the ABL Agent, the
applicable Collateral Representative or any Additional Agent, as applicable, in
accordance with the applicable Intercreditor Agreement, subject to the terms
hereof, as additional collateral security for the Obligations, in each case
except as otherwise provided by the applicable Intercreditor Agreement. If any
sums of money or property so paid or distributed in respect of the Pledged Stock
shall be received by such Pledgor, such Pledgor shall, until such money or
property is paid or delivered to the Collateral Agent, the ABL Agent, the
applicable Collateral Representative or any Additional Agent, as applicable, in
accordance with the applicable Intercreditor Agreement hold such money or
property in trust for the Secured Parties, segregated from other funds of such
Pledgor, as additional collateral security for the Obligations.

 

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5.3.2       [Reserved].

 

5.3.3       Pledged Notes. Each Pledgor shall, on the date of this Agreement (or
on such later date upon which it becomes a party hereto after the Closing Date
pursuant to Subsection 9.15) deliver to the Collateral Agent, the ABL Agent, the
applicable Collateral Representative or any Additional Agent, as applicable, in
accordance with each applicable Intercreditor Agreement, all Pledged Notes then
held by such Pledgor, endorsed in blank or, at the request of the Collateral
Agent, endorsed to the Collateral Agent, the ABL Agent, the applicable
Collateral Representative or any Additional Agent, as applicable, in accordance
with each applicable Intercreditor Agreement. Furthermore, within ten (10)
Business Days (or such longer period as may be agreed by the Collateral Agent in
its sole discretion) after any Pledgor obtains a Pledged Note, such Pledgor
shall cause such Pledged Note to be delivered to the Collateral Agent, the ABL
Agent, the applicable Collateral Representative or any Additional Agent, as
applicable, in accordance with any applicable Intercreditor Agreement, endorsed
in blank or, at the request of the Collateral Agent, the ABL Agent, any
applicable Collateral Representative or any Additional Agent, as applicable, in
accordance with the applicable Intercreditor Agreement, endorsed to the
Collateral Agent, the ABL Agent, any applicable Collateral Representative or any
Additional Agent, as applicable, in accordance with the applicable Intercreditor
Agreement.

 

5.3.4       Maintenance of Security Interest. (a) Such Pledgor shall use
commercially reasonable efforts to defend the security interest created by this
Agreement in such Pledgor’s Pledged Collateral against the claims and demands of
all Persons whomsoever. At any time and from time to time, upon the written
request of the Collateral Agent and at the sole expense of such Pledgor, such
Pledgor will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Collateral Agent may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted by such Pledgor; provided
that notwithstanding any other provision of this Agreement or any other Loan
Documents, neither the Borrower nor any other Pledgor will be required to (v)
take any action in any jurisdiction other than the United States of America, or
required by the laws of any such non-U.S. jurisdiction or enter into any
security agreement or pledge agreement governed by the laws of any such non-U.S.
jurisdiction, in order to create any security interests (or other Liens) in
assets located or titled outside of the United States of America or to perfect
any security interests (or other Liens) in any Collateral, (w) deliver control
agreements with respect to, or confer perfection by “control” over, any deposit
accounts, bank or securities account or other Collateral, except (A) as required
by Subsection 4.16 of the Senior ABL Agreement (or any corresponding provision
of any Additional ABL Credit Facility), so long as the Senior ABL Agreement (or
any Additional ABL Credit Facility) is in effect, and (B) in the case of
Security Collateral that constitutes Capital Stock or Pledged Notes in
certificated form, delivering such Capital Stock or Pledged Notes to the
Collateral Agent (or another Person as required under any Intercreditor
Agreement), (x) take any action in order to perfect any security interests in
any assets specifically requiring perfection through control (including cash,
cash equivalents, deposit accounts or securities accounts) (except (A) as
required by Subsection 4.16 of the Senior ABL Agreement (or any corresponding
provision of any Additional ABL Credit Facility), so long as the Senior ABL
Agreement (or any Additional ABL Credit Facility) is in effect, and (B) in each
case, to the extent consisting of proceeds perfected automatically or by the
filing of a financing statement under the Code or, in the case of Pledged Stock
or Pledged Notes, by being held by the Collateral Agent or an Additional Agent
as agent for the Collateral Agent), (y) deliver landlord lien waivers, estoppels
or collateral access letters or (z) file any fixture filing with respect to any
security interest in Fixtures affixed to or attached to any real property
constituting Excluded Assets.

 

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(b)         The Collateral Agent may grant extensions of time for the creation
and perfection of security interests in, or obtaining or delivery of documents
or other deliverables with respect to, particular assets of any Pledgor where it
determines that such action cannot be accomplished without undue effort or
expense by the time or times at which it would otherwise be required to be
accomplished by this Agreement or any other Security Documents.

 

Section 6

 

Remedial Provisions

 

6.1         Certain Matters Relating to Accounts. (a) At any time and from time
to time after the occurrence and during the continuance of an Event of Default,
if the Discharge of ABL Obligations and the Discharge of Additional ABL
Obligations has occurred (and subject to any applicable Intercreditor
Agreement), the Collateral Agent shall have the right to make test verifications
of the Accounts Receivable constituting Collateral in any reasonable manner and
through any reasonable medium that it reasonably considers advisable, and the
relevant Grantor shall furnish all such assistance and information as the
Collateral Agent may reasonably require in connection with such test
verifications. At any time and from time to time after the occurrence and during
the continuance of an Event of Default, if the Discharge of ABL Obligations and
the Discharge of Additional ABL Obligations has occurred (and subject to any
applicable Intercreditor Agreement), upon the Collateral Agent’s reasonable
request and at the expense of the relevant Grantor, such Grantor shall cause
independent public accountants or others reasonably satisfactory to the
Collateral Agent to furnish to the Collateral Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Accounts Receivable constituting Collateral.

 

(b)         [Reserved].

 

(c)         At any time and from time to time after the occurrence and during
the continuance of an Event of Default specified in Subsection 9.1(a) of the
Credit Agreement if the Discharge of ABL Obligations and the Discharge of
Additional ABL Obligations has occurred, subject to each applicable
Intercreditor Agreement, at the Collateral Agent’s request, each Grantor shall
deliver to the Collateral Agent copies or, if required by the Collateral Agent
for the enforcement thereof or foreclosure thereon, originals of all documents
held by such Grantor evidencing, and relating to, the agreements and
transactions which gave rise to such Grantor’s Accounts Receivable constituting
Collateral, including, without limitation, all statements relating to such
Grantor’s Accounts Receivable constituting Collateral and all orders, invoices
and shipping receipts.

 

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(d)         So long as no Event of Default has occurred and is continuing,
subject to each applicable Intercreditor Agreement, the Collateral Agent shall
instruct the Collateral Account Bank to promptly remit any funds on deposit in
each Grantor’s Collateral Proceeds Account to such Grantor’s General Fund
Account or any other account designated by such Grantor. In the event that an
Event of Default has occurred and is continuing, if the Discharge of ABL
Obligations and the Discharge of Additional ABL Obligations has occurred (and
subject to each applicable Intercreditor Agreement), the Collateral Agent at its
option may require that each Collateral Proceeds Account and the General Fund
Account of each Grantor be established at the Collateral Agent or at another
institution reasonably acceptable to the Collateral Agent. Each Grantor shall
have the right, at any time and from time to time, to withdraw such of its own
funds from its own General Fund Account, and to maintain such balances in its
General Fund Account, as it shall deem to be necessary or desirable.

 

6.2         Communications with Obligors; Grantors Remain Liable. (a) The
Collateral Agent in its own name or in the name of others, may at any time and
from time to time after the occurrence and during the continuance of an Event of
Default specified in Subsection 9.1(a) of the Credit Agreement, if the Discharge
of ABL Obligations and the Discharge of Additional ABL Obligations has occurred
(and subject to each applicable Intercreditor Agreement), communicate with
obligors under the Accounts Receivable constituting Collateral and parties to
the Contracts (in each case, to the extent constituting Collateral) to verify
with them to the Collateral Agent’s satisfaction the existence, amount and terms
of any Accounts Receivable or Contracts.

 

(b)         Upon the request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default specified in
Subsection 9.1(a) of the Credit Agreement, if the Discharge of ABL Obligations
and the Discharge of Additional ABL Obligations has occurred (and subject to
each applicable Intercreditor Agreement), each Grantor shall notify obligors on
such Grantor’s Accounts Receivable and parties to such Grantor’s Contracts (in
each case, to the extent constituting Collateral) that such Accounts Receivable
and such Contracts have been assigned to the Collateral Agent, for the benefit
of the Secured Parties, and that payments in respect thereof shall be made
directly to the Collateral Agent.

 

(c)         Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of such Grantor’s Accounts Receivable to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. None of the Collateral Agent, the Administrative Agent or any other
Secured Party shall have any obligation or liability under any Accounts
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Collateral Agent or any other Secured Party
of any payment relating thereto, nor shall the Collateral Agent or any other
Secured Party be obligated in any manner to perform any of the obligations of
any Grantor under or pursuant to any Accounts Receivable (or any agreement
giving rise thereto) to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts that
may have been assigned to it or to which it may be entitled at any time or
times.

 

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6.3         Pledged Stock. (a) Unless an Event of Default shall have occurred
and be continuing and the Collateral Agent shall have given notice to the
relevant Pledgor of the Collateral Agent’s intent to exercise its corresponding
rights pursuant to Subsection 6.3(b), each Pledgor shall be permitted to receive
all cash dividends and distributions paid in respect of the Pledged Stock and
all payments made in respect of the Pledged Notes, and to exercise all voting
and corporate rights with respect to the Pledged Stock.

 

(b)         Subject to each applicable Intercreditor Agreement, if an Event of
Default shall occur and be continuing and the Collateral Agent shall give
written notice of its intent to exercise such rights to the relevant Pledgor or
Pledgors (i) the Collateral Agent shall have the right to receive any and all
cash dividends, payments or other Proceeds paid in respect of the Pledged Stock
and make application thereof to the Obligations of the relevant Pledgor as
provided in the Credit Agreement consistent with Subsection 6.5, and (ii) any or
all of the Pledged Stock shall be registered in the name of the Collateral Agent
or its nominee, may thereafter exercise (x) all voting, corporate and other
rights pertaining to such Pledged Stock at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options
pertaining to such Pledged Stock as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by the relevant Pledgor or the Collateral Agent, of
any right, privilege or option pertaining to such Pledged Stock, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Stock with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Collateral Agent may
reasonably determine), all without liability to the maximum extent permitted by
applicable law (other than for its gross negligence or willful misconduct)
except to account for property actually received by it, but the Collateral Agent
shall have no duty, to any Pledgor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing, provided that the Collateral Agent shall not exercise any voting or other
consensual rights pertaining to the Pledged Stock in any way that would
constitute an exercise of the remedies described in Subsection 6.6 other than in
accordance with Subsection 6.6.

 

(c)         Each Pledgor hereby authorizes and instructs each Issuer or maker of
any Pledged Securities pledged by such Pledgor hereunder to, subject to each
applicable Intercreditor Agreement, (i) comply with any instruction received by
it from the Collateral Agent in writing with respect to Capital Stock in such
Issuer that (x) states that an Event of Default has occurred and is continuing
and (y) is otherwise in accordance with the terms of this Agreement, without any
other or further instructions from such Pledgor, and each Pledgor agrees that
each Issuer or maker shall be fully protected in so complying, and (ii) unless
otherwise expressly permitted hereby, pay any dividends or other payments with
respect to the Pledged Securities directly to the Collateral Agent.

 

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6.4         Proceeds to Be Turned Over to the Collateral Agent. In addition to
the rights of the Collateral Agent specified in Subsection 6.1 with respect to
payments of Accounts Receivable constituting Collateral, subject to each
applicable Intercreditor Agreement, if an Event of Default shall occur and be
continuing, and the Collateral Agent shall have instructed any Grantor to do so,
all Proceeds of Security Collateral received by such Grantor consisting of cash,
checks and other Cash Equivalent items shall be held by such Grantor in trust
for the Collateral Agent and the other Secured Parties hereto, or the ABL Agent
and the other ABL Secured Parties or any Additional Agent and the other
applicable Additional Secured Parties (as defined in the applicable
Intercreditor Agreement), or the applicable Collateral Representative, as
applicable, or any Additional Agent, as applicable, in accordance with the terms
of each applicable Intercreditor Agreement, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Collateral Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Collateral Agent, the ABL Agent, the applicable
Collateral Representative or any Additional Agent, as applicable, in accordance
with the terms of the applicable Intercreditor Agreement, if required). All
Proceeds of Security Collateral received by the Collateral Agent hereunder shall
be held by the Collateral Agent in the relevant Collateral Proceeds Account
maintained under its sole dominion and control, subject to each applicable
Intercreditor Agreement. All Proceeds of Security Collateral while held by the
Collateral Agent in such Collateral Proceeds Account (or by the relevant Grantor
in trust for the Collateral Agent and the other Secured Parties) shall continue
to be held as collateral security for all the Obligations of such Grantor and
shall not constitute payment thereof until applied as provided in Subsection 6.5
and each applicable Intercreditor Agreement.

 

6.5         Application of Proceeds. It is agreed that if an Event of Default
shall occur and be continuing, any and all Proceeds of the relevant Granting
Party’s Security Collateral received by the Collateral Agent (whether from the
relevant Granting Party or otherwise) shall be held by the Collateral Agent for
the benefit of the Secured Parties as collateral security for the Obligations of
the relevant Granting Party (whether matured or unmatured), and/or then or at
any time thereafter may, in the sole discretion of the Collateral Agent, subject
to each applicable Intercreditor Agreement, be applied by the Collateral Agent
against the Obligations of the relevant Granting Party then due and owing in the
order of priority set forth in Subsection 10.14 of the Credit Agreement.

 

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6.6         Code and Other Remedies. Subject to each applicable Intercreditor
Agreement, if an Event of Default shall occur and be continuing, the Collateral
Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations to
the extent permitted by applicable law, all rights and remedies of a secured
party under the Code and under any other applicable law and in equity. Without
limiting the generality of the foregoing, to the extent permitted by applicable
law and subject to each applicable Intercreditor Agreement, the Collateral
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Granting Party or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances, forthwith collect, receive, appropriate and realize upon the
Security Collateral, or any part thereof, and/or may forthwith, subject to any
existing reserved rights or licenses, sell, lease, assign, give option or
options to purchase, or otherwise dispose of and deliver the Security Collateral
or any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange, broker’s board or
office of the Collateral Agent or any other Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. To the extent permitted by law and subject to each applicable
Intercreditor Agreement, the Collateral Agent or any other Secured Party shall
have the right, upon any such sale or sales, to purchase the whole or any part
of the Security Collateral so sold, free of any right or equity of redemption in
such Granting Party, which right or equity is hereby waived and released. Each
Granting Party further agrees, at the Collateral Agent’s request (subject to
each applicable Intercreditor Agreement), to assemble the Security Collateral
and make it available to the Collateral Agent at places which the Collateral
Agent shall reasonably select, whether at such Granting Party’s premises or
elsewhere. The Collateral Agent shall apply the net proceeds of any action taken
by it pursuant to this Subsection 6.6, after deducting all reasonable costs and
expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Security Collateral or in any way relating to
the Security Collateral or the rights of the Collateral Agent and the other
Secured Parties hereunder, including, without limitation, reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Obligations of
the relevant Granting Party then due and owing, in the order of priority
specified in Subsection 6.5, and only after such application and after the
payment by the Collateral Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615(a)(3) of the Code, need the
Collateral Agent account for the surplus, if any, to such Granting Party. To the
extent permitted by applicable law, (i) such Granting Party waives all claims,
damages and demands it may acquire against the Collateral Agent or any other
Secured Party arising out of the repossession, retention or sale of the Security
Collateral, other than any such claims, damages and demands that may arise from
the gross negligence or willful misconduct of any of the Collateral Agent or
such other Secured Party, and (ii) if any notice of a proposed sale or other
disposition of Security Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such sale or
other disposition.

 

6.7         Registration Rights. (a) Subject to each applicable Intercreditor
Agreement, if the Collateral Agent shall determine to exercise its right to sell
any or all of the Pledged Stock pursuant to Subsection 6.6, and if in the
reasonable opinion of the Collateral Agent it is necessary or reasonably
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Pledgor will
use its reasonable best efforts to cause the Issuer thereof to (i) execute and
deliver, and use its reasonable best efforts to cause the directors and officers
of such Issuer to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts as may be, in the reasonable opinion
of the Collateral Agent, necessary or advisable to register such Pledged Stock,
or that portion thereof to be sold, under the provisions of the Securities Act,
(ii) use its reasonable best efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of not
more than one year from the date of the first public offering of such Pledged
Stock, or that portion thereof to be sold, and (iii) make all amendments thereto
and/or to the related prospectus which, in the reasonable opinion of the
Collateral Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Such Pledgor agrees to
use its reasonable best efforts to cause such Issuer to comply with the
provisions of the securities or “Blue Sky” laws of any and all states and the
District of Columbia that the Collateral Agent shall reasonably designate and to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) that will satisfy the provisions of
Section 11(a) of the Securities Act.

 

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(b)         Such Pledgor recognizes that the Collateral Agent may be unable to
effect a public sale of any or all such Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Such
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, to the extent permitted by applicable law,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Collateral Agent shall not be under any
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.

 

(c)         Such Pledgor agrees to use its reasonable best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of such Pledged Stock pursuant to this Subsection
6.7 valid and binding and in compliance with any and all other applicable
Requirements of Law. Such Pledgor further agrees that a breach of any of the
covenants contained in this Subsection 6.7 will cause irreparable injury to the
Collateral Agent and the Lenders, that the Collateral Agent and the Lenders have
no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Subsection 6.7 shall be specifically
enforceable against such Pledgor, and to the extent permitted by applicable law,
such Pledgor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants (except for a defense that no
Event of Default has occurred or is continuing under the Credit Agreement).

 

6.8         Waiver; Deficiency. Each Granting Party shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Security
Collateral are insufficient to pay in full, the Loans and, to the extent then
due and owing, all other Obligations of such Granting Party and the reasonable
fees and disbursements of any attorneys employed by the Collateral Agent or any
other Secured Party to collect such deficiency.

 

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Section 7

 

The Collateral Agent

 

7.1         Collateral Agent’s Appointment as Attorney-in-Fact, etc. (a) Each
Granting Party hereby irrevocably constitutes and appoints the Collateral Agent
and any authorized officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of such Granting Party and in the name of such Granting
Party or in its own name, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments that may be reasonably necessary or desirable to
accomplish the purposes of this Agreement to the extent permitted by applicable
law, provided that the Collateral Agent agrees not to exercise such power except
upon the occurrence and during the continuance of any Event of Default, and in
accordance with and subject to each applicable Intercreditor Agreement. Without
limiting the generality of the foregoing, at any time when an Event of Default
has occurred and is continuing (in each case to the extent permitted by
applicable law and subject to each applicable Intercreditor Agreement), (x) each
Pledgor hereby gives the Collateral Agent the power and right, on behalf of such
Pledgor, without notice or assent by such Pledgor, to execute, in connection
with any sale provided for in Subsection 6.6 or 6.7, any endorsements,
assessments or other instruments of conveyance or transfer with respect to such
Pledgor’s Pledged Collateral, and (y) each Grantor hereby gives the Collateral
Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:

 

(i)           in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any Accounts Receivable of
such Grantor that constitutes Collateral or with respect to any other Collateral
of such Grantor and file any claim or take any other action or institute any
proceeding in any court of law or equity or otherwise deemed appropriate by the
Collateral Agent for the purpose of collecting any and all such moneys due under
any Accounts Receivable of such Grantor that constitutes Collateral or with
respect to any other Collateral of such Grantor whenever payable;

 

(ii)          in the case of any Copyright, Patent, or Trademark constituting
Collateral of such Grantor, execute and deliver any and all agreements,
instruments, documents and papers as the Collateral Agent may reasonably request
to such Grantor to evidence the Collateral Agent’s and the Lenders’ security
interest in such Copyright, Patent, or Trademark and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby, and such
Grantor hereby consents to the non-exclusive royalty free use by the Collateral
Agent of any Copyright, Patent or Trademark owned by such Grantor included in
the Collateral for the purposes of disposing of any Term Loan Priority
Collateral;

 

(iii)         pay or discharge taxes and Liens, other than Liens permitted under
this Agreement or the other Loan Documents, levied or placed on the Collateral
of such Grantor, effect any repairs or any insurance called for by the terms of
this Agreement and pay all or any part of the premiums therefor and the costs
thereof; and

 

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(iv)         (A) direct any party liable for any payment under any of the
Collateral of such Grantor to make payment of any and all moneys due or to
become due thereunder directly to the Collateral Agent or as the Collateral
Agent shall direct; (B) ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become due
at any time in respect of or arising out of any Collateral of such Grantor; (C)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral of such Grantor; (D) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral of such Grantor or any portion thereof and to enforce any
other right in respect of any Collateral of such Grantor; (E) defend any suit,
action or proceeding brought against such Grantor with respect to any Collateral
of such Grantor; (F) settle, compromise or adjust any such suit, action or
proceeding described in clause (E) above and, in connection therewith, to give
such discharges or releases as the Collateral Agent may deem appropriate; (G)
subject to any existing reserved rights or licenses, assign any Copyright,
Patent or Trademark constituting Collateral of such Grantor (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), for such term or terms, on such conditions, and in such manner, as
the Collateral Agent shall in its sole discretion determine; and (H) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral of such Grantor as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and do, at
the Collateral Agent’s option and such Grantor’s expense, at any time, or from
time to time, all acts and things which the Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral of such Grantor and the
Collateral Agent’s and the other Secured Parties’ security interests therein and
to effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.

 

(b)         The reasonable expenses of the Collateral Agent incurred in
connection with actions undertaken as provided in this Subsection 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due ABR Loans under the Credit Agreement,
from the date of payment by the Collateral Agent to the date reimbursed by the
relevant Granting Party, shall be payable by such Granting Party to the
Collateral Agent on demand.

 

(c)         Each Granting Party hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable as to the relevant Granting Party until this Agreement is terminated
as to such Granting Party, and the security interests in the Security Collateral
of such Granting Party created hereby are released.

 

7.2         Duty of Collateral Agent. The Collateral Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Security
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Collateral Agent deals with
similar property for its own account. None of the Collateral Agent or any other
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Security Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Security Collateral upon the
request of any Granting Party or any other Person or, except as otherwise
provided herein, to take any other action whatsoever with regard to the Security
Collateral or any part thereof. The powers conferred on the Collateral Agent and
the other Secured Parties hereunder are solely to protect the Collateral Agent’s
and the other Secured Parties’ interests in the Security Collateral and shall
not impose any duty upon the Collateral Agent or any other Secured Party to
exercise any such powers. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and to the maximum extent permitted by applicable
law, neither they nor any of their officers, directors, employees or agents
shall be responsible to any Granting Party for any act or failure to act
hereunder, except as otherwise provided herein or for their own gross negligence
or willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).

 

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7.3         Financing Statements. Pursuant to any applicable law, each Granting
Party authorizes the Collateral Agent to file or record financing statements and
other filing or recording documents or instruments with respect to such Granting
Party’s Security Collateral without the signature of such Granting Party in such
form and in such filing offices as the Collateral Agent reasonably determines
appropriate to perfect the security interests of the Collateral Agent under this
Agreement. Each Granting Party authorizes the Collateral Agent to use any
collateral description reasonably determined by the Collateral Agent, including,
without limitation, the collateral description “all personal property” or “all
assets” or words of similar meaning in any such financing statements. The
Collateral Agent agrees to use its commercially reasonable efforts to notify the
relevant Granting Party of any financing or continuation statement filed by it,
provided that any failure to give such notice shall not affect the validity or
effectiveness of any such filing.

 

7.4         Authority of Collateral Agent. Each Granting Party acknowledges that
the rights and responsibilities of the Collateral Agent under this Agreement
with respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement or any amendment, supplement or other modification of this
Agreement shall, as between the Collateral Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Granting Parties, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Granting Party
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.

 

7.5         Right of Inspection. Upon reasonable written advance notice to any
Grantor and as often as may reasonably be desired, or at any time and from time
to time after the occurrence and during the continuation of an Event of Default,
the Collateral Agent shall have reasonable access during normal business hours
to all the books, correspondence and records of such Grantor, and the Collateral
Agent and its representatives may examine the same, and to the extent reasonable
take extracts therefrom and make photocopies thereof, and such Grantor agrees to
render to the Collateral Agent at such Grantor’s reasonable cost and expense,
such clerical and other assistance as may be reasonably requested with regard
thereto. The Collateral Agent and its representatives shall also have the right,
upon reasonable advance written notice to such Grantor subject to any lease
restrictions, to enter during normal business hours into and upon any premises
owned, leased or operated by such Grantor where any of such Grantor’s Inventory
or Equipment is located for the purpose of inspecting the same, observing its
use or otherwise protecting its interests therein to the extent not inconsistent
with the provisions of the Credit Agreement and the other Loan Documents (and
subject to each applicable Intercreditor Agreement). Notwithstanding anything to
the contrary in this Subsection 7.5, no Grantor will be required to disclose or
permit the inspection or discussion of any document, information or other matter
(i) that constitutes non-financial trade secrets or non-financial proprietary
information, (ii) in respect of which disclosure to the Collateral Agent or any
other Secured Party (or their respective representatives) is prohibited by any
Requirement of Law or any binding agreement or (iii) that is subject to attorney
client or similar privilege or constitutes attorney work product.

 

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Section 8

 

Non-Lender Secured Parties

 

8.1         Rights to Collateral. (a) The Non-Lender Secured Parties shall not
have any right whatsoever to do any of the following: (i) exercise any rights or
remedies with respect to the Collateral (such term, as used in this Section 8,
having the meaning assigned to it in the Credit Agreement) or to direct the
Collateral Agent to do the same, including, without limitation, the right to (A)
enforce any Liens or sell or otherwise foreclose on any portion of the
Collateral, (B) request any action, institute any proceedings, exercise any
voting rights, give any instructions, make any election, notify account debtors
or make collections with respect to all or any portion of the Collateral or (C)
release any Granting Party under this Agreement or release any Collateral from
the Liens of any Security Document or consent to or otherwise approve any such
release; (ii) demand, accept or obtain any Lien on any Collateral (except for
Liens arising under, and subject to the terms of, this Agreement); (iii) vote in
any Bankruptcy Case or similar proceeding in respect of the Borrower or any of
its Subsidiaries (any such proceeding, for purposes of this clause (a), a
“Bankruptcy”) with respect to, or take any other actions concerning the
Collateral; (iv) receive any proceeds from any sale, transfer or other
disposition of any of the Collateral (except in accordance with this Agreement);
(v) oppose any sale, transfer or other disposition of the Collateral; (vi)
object to any debtor-in-possession financing in any Bankruptcy which is provided
by one or more Lenders among others (including on a priming basis under Section
364(d) of the Bankruptcy Code); (vii) object to the use of cash collateral in
respect of the Collateral in any Bankruptcy; or (viii) seek, or object to the
Lenders or Agents seeking on an equal and ratable basis, any adequate protection
or relief from the automatic stay with respect to the Collateral in any
Bankruptcy.

 

(b)         Each Non-Lender Secured Party, by its acceptance of the benefits of
this Agreement and the other Security Documents, agrees that in exercising
rights and remedies with respect to the Collateral, the Collateral Agent and the
Lenders, with the consent of the Collateral Agent, may enforce the provisions of
the Security Documents and exercise remedies thereunder and under any other Loan
Documents (or refrain from enforcing rights and exercising remedies), all in
such order and in such manner as they may determine in the exercise of their
sole business judgment. Such exercise and enforcement shall include, without
limitation, the rights to collect, sell, dispose of or otherwise realize upon
all or any part of the Collateral, to incur expenses in connection with such
collection, sale, disposition or other realization and to exercise all the
rights and remedies of a secured lender under the Uniform Commercial Code as in
effect from time to time in any applicable jurisdiction. The Non-Lender Secured
Parties by their acceptance of the benefits of this Agreement and the other
Security Documents hereby agree not to contest or otherwise challenge any such
collection, sale, disposition or other realization of or upon all or any of the
Collateral. Whether or not a Bankruptcy Case has been commenced, the Non-Lender
Secured Parties shall be deemed to have consented to any sale or other
disposition of any property, business or assets of the Borrower or any of its
Subsidiaries and the release of any or all of the Collateral from the Liens of
any Security Document in connection therewith.

 

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(c)          Notwithstanding any provision of this Subsection 8.1, the
Non-Lender Secured Parties shall be entitled subject to each applicable
Intercreditor Agreement to file any necessary responsive or defensive pleadings
in opposition to any motion, claim, adversary proceeding or other pleadings (A)
in order to prevent any Person from seeking to foreclose on the Collateral or
supersede the Non-Lender Secured Parties’ claim thereto or (B) in opposition to
any motion, claim, adversary proceeding or other pleading made by any Person
objecting to or otherwise seeking the disallowance of the claims of the
Non-Lender Secured Parties. Each Non-Lender Secured Party, by its acceptance of
the benefits of this Agreement, agrees to be bound by and to comply with each
applicable Intercreditor Agreement and authorizes the Collateral Agent to enter
into the Intercreditor Agreements on its behalf.

 

(d)          Each Non-Lender Secured Party, by its acceptance of the benefits of
this Agreement, agrees that the Collateral Agent and the Lenders may deal with
the Collateral, including any exchange, taking or release of Collateral, may
change or increase the amount of the Borrower Obligations and/or the Guarantor
Obligations, and may release any Granting Party from its Obligations hereunder,
all without any liability or obligation (except as may be otherwise expressly
provided herein) to the Non-Lender Secured Parties.

 

8.2         Appointment of Agent. Each Non-Lender Secured Party, by its
acceptance of the benefits of this Agreement and the other Security Documents,
shall be deemed irrevocably to make, constitute and appoint the Collateral
Agent, as agent under the Credit Agreement (and all officers, employees or
agents designated by the Collateral Agent) as such Person’s true and lawful
agent and attorney-in-fact, and in such capacity, the Collateral Agent shall
have the right, with power of substitution for the Non-Lender Secured Parties
and in each such Person’s name or otherwise, to effectuate any sale, transfer or
other disposition of the Collateral. It is understood and agreed that the
appointment of the Collateral Agent as the agent and attorney-in-fact of the
Non-Lender Secured Parties for the purposes set forth herein is coupled with an
interest and is irrevocable. It is understood and agreed that the Collateral
Agent has appointed the Administrative Agent as its agent for purposes of
perfecting certain of the security interests created hereunder and for otherwise
carrying out certain of its obligations hereunder.

 

8.3         Waiver of Claims. To the maximum extent permitted by law, each
Non-Lender Secured Party waives any claim it might have against the Collateral
Agent or the Lenders with respect to, or arising out of, any action or failure
to act or any error of judgment, negligence, or mistake or oversight whatsoever
on the part of the Collateral Agent or the Lenders or their respective
directors, officers, employees or agents with respect to any exercise of rights
or remedies under the Loan Documents or any transaction relating to the
Collateral (including, without limitation, any such exercise described in
Subsection 8.1(b)), except for any such action or failure to act that
constitutes willful misconduct or gross negligence of such Person. To the
maximum extent permitted by applicable law, none of the Collateral Agent or any
Lender or any of their respective directors, officers, employees or agents shall
be liable for failure to demand, collect or realize upon any of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Borrower, any
Subsidiary of the Borrower, any Non-Lender Secured Party or any other Person or
to take any other action or forbear from doing so whatsoever with regard to the
Collateral or any part thereof, except for any such action or failure to act
that constitutes willful misconduct or gross negligence of such Person.

 

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8.4         Designation of Non-Lender Secured Parties. The Borrower may from
time to time designate a Person as a “Bank Products Provider,” a “Hedging
Provider” or a “Management Credit Provider” hereunder by written notice to the
Collateral Agent. Upon being so designated by the Borrower, such Bank Products
Provider, Hedging Provider, Management Credit Provider (as the case may be)
shall be a Non-Lender Secured Party for the purposes of this Agreement for as
long as so designated by the Borrower; provided that, at the time of the
Borrower’s designation of such Non-Lender Secured Party, the obligations of the
relevant Grantor under the applicable Hedging Agreement, Bank Products Agreement
or Management Guarantee (as the case may be) have not been designated as ABL
Obligations, Additional ABL Obligations or Additional Term Obligations.

 

Section 9

 

Miscellaneous

 

9.1         Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by each affected Granting Party and the Collateral
Agent, provided that (a) any provision of this Agreement imposing obligations on
any Granting Party may be waived by the Collateral Agent in a written instrument
executed by the Collateral Agent and (b) if separately agreed in writing between
the Borrower and any Non-Lender Secured Party (and such Non-Lender Secured Party
has been designated in writing by the Borrower to the Collateral Agent for
purposes of this sentence, for so long as so designated), no such waiver,
amendment, supplement or modification shall amend, modify or waive Subsection
6.5 (or the definition of “Non-Lender Secured Party” or “Secured Party” to the
extent relating thereto) if such waiver, amendment, supplement or modification
would directly and adversely affect a Non-Lender Secured Party without the
written consent of such affected Non-Lender Secured Party. For the avoidance of
doubt, it is understood and agreed that any amendment, amendment and
restatement, waiver, supplement or other modification of or to any Intercreditor
Agreement that would have the effect, directly or indirectly, through any
reference herein to any Intercreditor Agreement or otherwise, of waiving,
amending, supplementing or otherwise modifying this Agreement, or any term or
provision hereof, or any right or obligation of any Granting Party hereunder or
in respect hereof, shall not be given such effect except pursuant to a written
instrument executed by each affected Granting Party and the Collateral Agent in
accordance with this Subsection 9.1.

 

9.2         Notices. All notices, requests and demands to or upon the
Administrative Agent, the Collateral Agent or any Granting Party hereunder shall
be effected in the manner provided for in Subsection 11.2 of the Credit
Agreement; provided that any such notice, request or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set forth
on Schedule 1, unless and until such Guarantor shall change such address by
notice to the Collateral Agent and the Administrative Agent given in accordance
with Subsection 11.2 of the Credit Agreement.

 

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9.3         No Waiver by Course of Conduct; Cumulative Remedies. None of the
Collateral Agent or any other Secured Party shall by any act (except by a
written instrument pursuant to Subsection 9.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Collateral Agent or any other Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Collateral Agent or any
other Secured Party of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy that the Collateral Agent or
such other Secured Party would otherwise have on any future occasion. The rights
and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by
law.

 

9.4         Enforcement Expenses; Indemnification. (a) Each Guarantor jointly
and severally agrees to pay or reimburse each Secured Party and the Collateral
Agent for all their respective reasonable costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement against such
Guarantor and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the reasonable fees and disbursements of counsel
to the Collateral Agent and the Administrative Agent, in each case, to the
extent the Borrower would be required to do so pursuant to Subsection 11.5 of
the Credit Agreement.

 

(b)         Each Grantor jointly and severally agrees to pay, and to save the
Collateral Agent, the Administrative Agent and the other Secured Parties
harmless from, (x) any and all liabilities with respect to, or resulting from
any delay in paying, any and all stamp, excise, sales or other similar taxes
which may be payable or determined to be payable with respect to any of the
Security Collateral or in connection with any of the transactions contemplated
by this Agreement and (y) any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement (collectively, the “indemnified
liabilities”), in each case to the extent the Borrower would be required to do
so pursuant to Subsection 11.5 of the Credit Agreement, and in any event
excluding any taxes or other indemnified liabilities arising from gross
negligence, bad faith or willful misconduct of the Collateral Agent, the
Administrative Agent or any other Secured Party as determined by a court of
competent jurisdiction in a final and nonappealable decision.

 

(c)         The agreements in this Subsection 9.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.

 

9.5         Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Granting Parties, the Collateral Agent and the
Secured Parties and their respective successors and assigns permitted by the
Credit Agreement.

 

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9.6         Set-Off. Each Guarantor hereby irrevocably authorizes each of the
Administrative Agent and the Collateral Agent and each other Secured Party at
any time and from time to time without notice to such Guarantor or any other
Granting Party, any such notice being expressly waived by each Granting Party,
to the extent permitted by applicable law, upon the occurrence and during the
continuance of an Event of Default under Subsection 9.1(a) of the Credit
Agreement so long as any amount remains unpaid after it becomes due and payable
by such Guarantor hereunder, to set-off and appropriate and apply against any
such amount any and all deposits (general or special, time or demand,
provisional or final) (other than the Collateral Proceeds Account), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Collateral Agent, the Administrative
Agent or such other Secured Party to or for the credit or the account of such
Guarantor, or any part thereof in such amounts as the Collateral Agent, the
Administrative Agent or such other Secured Party may elect. The Collateral
Agent, the Administrative Agent and each other Secured Party shall notify such
Guarantor promptly of any such set-off and the application made by the
Collateral Agent, the Administrative Agent or such other Secured Party of the
proceeds thereof; provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Collateral
Agent, the Administrative Agent and each other Secured Party under this
Subsection 9.6 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Collateral Agent, the
Administrative Agent or such other Secured Party may have.

 

9.7         Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile and other electronic transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

 

9.8         Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction; provided that, with respect to any Pledged Stock issued by a
Foreign Subsidiary, all rights, powers and remedies provided in this Agreement
may be exercised only to the extent that they do not violate any provision of
any law, rule or regulation of any Governmental Authority applicable to any such
Pledged Stock or affecting the legality, validity or enforceability of any of
the provisions of this Agreement against the Pledgor (such laws, rules or
regulations, “Applicable Law”) and are intended to be limited to the extent
necessary so that they will not render this Agreement invalid, unenforceable or
not entitled to be recorded, registered or filed under the provisions of any
Applicable Law.

 

9.9         Section Headings. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

 

9.10        Integration. This Agreement and the other Loan Documents represent
the entire agreement of the Granting Parties, the Collateral Agent and the other
Secured Parties with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Granting Parties,
the Collateral Agent or any other Secured Party relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.

 

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9.11        GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS
TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE
AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

9.12        Submission to Jurisdiction; Waivers. Each party hereto hereby
irrevocably and unconditionally:

 

(a)          submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party to the exclusive general jurisdiction of the Supreme Court of the
State of New York for the County of New York (the “New York Supreme Court”), and
the United States District Court for the Southern District of New York (the
“Federal District Court,” and together with the New York Supreme Court, the “New
York Courts”) and appellate courts from either of them; provided that nothing in
this Agreement shall be deemed or operate to preclude (i) the Collateral Agent
from bringing suit or taking other legal action in any other jurisdiction to
realize on the Collateral or any other security for the Obligations (in which
case any party shall be entitled to assert any claim or defense, including any
claim or defense that this Subsection 9.12 would otherwise require to be
asserted in a legal action or proceeding in a New York Court), or to enforce a
judgment or other court order in favor of the Administrative Agent or the
Collateral Agent, (ii) any party from bringing any legal action or proceeding in
any jurisdiction for the recognition and enforcement of any judgment, (iii) if
all such New York Courts decline jurisdiction over any Person, or decline (or in
the case of the Federal District Court, lack) jurisdiction over any subject
matter of such action or proceeding, a legal action or proceeding may be brought
with respect thereto in another court having jurisdiction and (iv) in the event
a legal action or proceeding is brought against any party hereto or involving
any of its assets or property in another court (without any collusive assistance
by such party or any of its Subsidiaries or Affiliates), such party from
asserting a claim or defense (including any claim or defense that this
Subsection 9.12(a) would otherwise require to be asserted in a legal proceeding
in a New York Court) in any such action or proceeding;

 

(b)         consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient forum and agrees not to plead or claim
the same;

 

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(c)         agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to any party at its
address referred to in Subsection 9.2 or at such other address of which the
Collateral Agent and the Administrative Agent (in the case of any other party
hereto) and the Borrower (in the case of the Collateral Agent and the
Administrative Agent) shall have been notified pursuant thereto;

 

(d)         agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or (subject to clause (a) above)
shall limit the right to sue in any other jurisdiction; and

 

(e)         waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Subsection 9.12 any consequential or punitive damages.

 

9.13       Acknowledgments. Each Granting Party hereby acknowledges that:

 

(a)          it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;

 

(b)         none of the Collateral Agent, the Administrative Agent or any other
Secured Party has any fiduciary relationship with or duty to any Granting Party
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Granting Party, on the one hand, and
the Collateral Agent, the Administrative Agent and the other Secured Parties, on
the other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

 

(c)          no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Granting Party and the Secured Parties.

 

9.14       WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

9.15       Additional Granting Parties. Each new Domestic Subsidiary of the
Borrower that is required to become a party to this Agreement pursuant to
Subsection 7.9(b) of the Credit Agreement shall become a Granting Party for all
purposes of this Agreement upon execution and delivery by such Domestic
Subsidiary of an Assumption Agreement substantially in the form of Annex 2
hereto. Each existing Granting Party that is required to become a Pledgor with
respect to Capital Stock of any new Subsidiary of the Borrower pursuant to
Subsection 7.9(b) or (c)(i) of the Credit Agreement shall become a Pledgor with
respect thereto upon execution and delivery by such Granting Party of a
Supplemental Agreement substantially in the form of Annex 3 hereto.

 

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9.16       Releases. (a) At such time as the Loans and the other Obligations
(other than any Obligations owing to a Non-Lender Secured Party) then due and
owing shall have been paid in full, the Commitments have been terminated, all
Security Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Collateral Agent, the Administrative Agent and each Granting
Party hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Security Collateral
shall revert to the Granting Parties. At the request and sole expense of any
Granting Party following any such termination, the Collateral Agent and the
Administrative Agent shall deliver to such Granting Party (subject to Subsection
7.2, without recourse and without representation or warranty) any Security
Collateral held by the Collateral Agent hereunder, and execute, acknowledge and
deliver to such Granting Party such releases, instruments or other documents
(including without limitation UCC termination statements), and do or cause to be
done all other acts, as any Granting Party shall reasonably request to evidence
such termination.

 

(b)         Upon any sale or other disposition of Security Collateral permitted
by the Credit Agreement (other than any sale or disposition to another Grantor),
the Lien pursuant to this Agreement on such sold or disposed of Security
Collateral shall be automatically released. In connection with a sale or other
disposition of all the Capital Stock of any Granting Party (other than to
another Grantor) or any other transaction or occurrence as a result of which any
Granting Party ceases to be a Restricted Subsidiary of the Borrower, or a sale
or other disposition of Security Collateral (other than a sale or disposition to
another Grantor) permitted under the Credit Agreement, the Administrative Agent
and the Collateral Agent shall, upon receipt from the Borrower of a written
request for the release of such Granting Party from its Guarantee or the release
of the Security Collateral subject to such sale, disposition or other
transaction, identifying such Granting Party or the relevant Security
Collateral, together with a certification by the Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents, execute and deliver to the Borrower or the relevant Granting Party
(subject to Subsection 7.2, without recourse and without representation or
warranty), at the sole cost and expense of such Granting Party, any Security
Collateral of such relevant Granting Party held by the Collateral Agent, or the
Security Collateral subject to such sale or disposition (as applicable), and, at
the sole cost and expense of such Granting Party, execute, acknowledge and
deliver to such Granting Party such releases, instruments or other documents
(including without limitation UCC termination statements), and do or cause to be
done all other acts, as the Borrower or such Granting Party shall reasonably
request (x) to evidence or effect the release of such Granting Party from its
Guarantee (if any) and of the Liens created hereby (if any) on such Granting
Party’s Security Collateral or (y) to evidence the release of the Security
Collateral subject to such sale or disposition.

 

(c)         Upon any transaction or occurrence as a result of which any Granting
Party (other than the Borrower) ceases to be a Restricted Subsidiary of the
Borrower that is permitted under the Credit Agreement, or any such Granting
Party being or becoming an Excluded Subsidiary, the Lien pursuant to this
Agreement on all Security Collateral of such Granting Party (if any) shall be
automatically released, and the Guarantee (if any) of such Granting Party, and
all obligations of such Granting Party hereunder, shall terminate, all without
delivery of any instrument or performance of any act by any party, and the
Administrative Agent and the Collateral Agent shall, upon the request of the
Borrower or such Granting Party, deliver to the Borrower or such Granting Party
(subject to Subsection 7.2, without recourse and without representation or
warranty) any Security Collateral of such Granting Party held by the Collateral
Agent hereunder and the Collateral Agent and the Administrative Agent shall
execute, acknowledge and deliver to the Borrower or such Granting Party (at the
sole cost and expense of the Borrower or such Granting Party) all releases,
instruments or other documents (including without limitation UCC termination
statements), and do or cause to be done all other acts, necessary or reasonably
desirable for the release of such Granting Party from its Guarantee (if any) or
the Liens created hereby (if any) on such Granting Party’s Security Collateral,
as applicable, as the Borrower or such Granting Party may reasonably request.

 

 51 

 

 

(d)         Upon (i) any Security Collateral being or becoming an Excluded Asset
or (ii) any other release of Security Collateral approved, authorized or
ratified by the Lenders pursuant to Subsection 10.8(b)(A)(iv) of the Credit
Agreement, the Lien pursuant to this Agreement on such Security Collateral shall
be automatically released. At the request and sole expense of any Granting
Party, the Collateral Agent shall deliver such Security Collateral (if held by
the Collateral Agent) to such Granting Party and the Collateral Agent and the
Administrative Agent shall execute, acknowledge and deliver to such Granting
Party such releases, instruments or other documents (including without
limitation UCC termination statements), and do or cause to be done all other
acts, as such Granting Party shall reasonably request to evidence such release.

 

(e)        So long as no Event of Default has occurred and is continuing, the
Collateral Agent and the Administrative Agent shall at the direction of any
applicable Granting Party return to such Granting Party any proceeds or other
property received by it during any Event of Default pursuant to either
Subsection 5.3.1 or 6.4 and not otherwise applied in accordance with Subsection
6.5.

 

(f)          The Collateral Agent shall have no liability whatsoever to any
other Secured Party as the result of any release of Security Collateral by it in
accordance with (or which the Collateral Agent in good faith believes to be in
accordance with) this Subsection 9.16.

 

9.17       Judgment. (a) If for the purpose of obtaining judgment in any court
it is necessary to convert a sum due hereunder in one currency into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent or the
Collateral Agent could purchase the first currency with such other currency on
the Business Day preceding the day on which final judgment is given.

 

(b)         The obligations of any Granting Party in respect of this Agreement
to the Administrative Agent and the Collateral Agent, for the benefit of each
holder of Obligations, shall, notwithstanding any judgment in a currency (the
“judgment currency”) other than the currency in which the sum originally due to
such holder is denominated (the “original currency”), be discharged only to the
extent that on the Business Day following receipt by the Administrative Agent
and the Collateral Agent of any sum adjudged to be so due in the judgment
currency, the Administrative Agent and the Collateral Agent may in accordance
with normal banking procedures purchase the original currency with the judgment
currency; if the amount of the original currency so purchased is less than the
sum originally due to such holder in the original currency, such Granting Party
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent and the Collateral Agent for the benefit of
such holder, against such loss, and if the amount of the original currency so
purchased exceeds the sum originally due to the Administrative Agent and the
Collateral Agent, the Administrative Agent and the Collateral Agent agree to
remit to the Borrower, such excess. This covenant shall survive the termination
of this Agreement and payment of the Obligations and all other amounts payable
hereunder.

 

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9.18       Transfer Tax Acknowledgment. Each party hereto acknowledges that the
shares delivered hereunder are being transferred to and deposited with the
Collateral Agent (or other Person in accordance with any applicable
Intercreditor Agreement) as security for the Obligations and that this
Subsection 9.18 is intended to be the certificate of exemption from New York
stock transfer taxes for the purposes of complying with Section 270.5(b) of the
Tax Law of the State of New York.

 

[Remainder of page left blank intentionally; Signature pages to follow.]

 

 53 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the date first written above.

 

  BORROWER:       NCI BUILDING SYSTEMS, INC.         By: /s/ Mark E. Johnson  
Name: Mark E. Johnson   Title: Executive Vice President, Chief     Financial
Officer and Treasurer         GUARANTORS:       NCI GROUP, INC.       By: /s/
Mark E. Johnson   Name: Mark E. Johnson   Title: Executive Vice President, Chief
    Financial Officer and Treasurer         ROBERTSON-CECO II CORPORATION      
  By: /s/ Mark E. Johnson   Name: Mark E. Johnson   Title: Executive Vice
President, Chief     Financial Officer and Treasurer         STEELBUILDING.COM,
LLC         By: /s/ Mark E. Johnson   Name: Mark E. Johnson   Title: Executive
Vice President, Chief     Financial Officer and Treasurer         CENTRIA      
  By: /s/ Mark E. Johnson   Name: Mark E. Johnson   Title: Executive Vice
President, Chief     Financial Officer and Treasurer

 

[Signature Pages to NCI Term Loan Guarantee and Collateral Agreement]

 

 

 

 

  CENTRIA, INC.         By: /s/ Mark E. Johnson   Name: Mark E. Johnson   Title:
Executive Vice President, Chief     Financial Officer and Treasurer        
CENTRIA SERVICES GROUP, LLC         By: /s/ Mark E. Johnson   Name: Mark E.
Johnson   Title: Executive Vice President, Chief     Financial Officer and
Treasurer

 

[Signature Pages to NCI Term Loan Guarantee and Collateral Agreement]

 

 

 

 

  Acknowledged and Agreed to as of the date hereof by:       CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH, as Collateral Agent and Administrative Agent         By:
/s/ John D. Toronto   Name: John D. Toronto   Title:    Authorized Signatory    
    By: /s/ Shyam Kapadia   Name: Shyam Kapadia   Title:    Authorized Signatory

 

[Signature Pages to NCI Term Loan Guarantee and Collateral Agreement]

 

 

 

 

ANNEX 1

 

ACKNOWLEDGEMENT AND CONSENT*

 

The undersigned hereby acknowledges receipt of a copy of the Term Loan Guarantee
and Collateral Agreement, dated as of February 8, 2018 (the “Agreement”;
capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Agreement or the Credit Agreement referred to therein,
as the case may be), made by and among NCI BUILDING SYSTEMS, INC. and the other
Granting Parties party thereto in favor of CREDIT SUISSE AG, CAYMAN ISLANDS
BRANCH, as Collateral Agent and Administrative Agent. The undersigned agrees for
the benefit of the Collateral Agent, the Administrative Agent and the Lenders as
follows:

 

The undersigned will be bound by the terms of the Agreement applicable to it as
an Issuer (as defined in the Agreement) and will comply with such terms insofar
as such terms are applicable to the undersigned as an Issuer.

 

The undersigned will notify the Collateral Agent promptly in writing of the
occurrence of any of the events described in Subsection 5.3.1 of the Agreement.

 

The terms of Subsections 6.3(c) and 6.7 of the Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Subsection 6.3(c) or 6.7 of the Agreement.

 

  [NAME OF ISSUER]       By:       Name:   [__________________]     Title:
[_______________]             Address for Notices:          
[__________________]

 

 

*This consent is necessary only with respect to any Issuer that is not also a
Granting Party.

 

 

 

 

ANNEX 2

 

ASSUMPTION AGREEMENT

 

ASSUMPTION AGREEMENT, dated as of [_______ __], 20[_], made by
[______________________________], a [______________] corporation ([each an][the]
“Additional Granting Party”), in favor of CREDIT SUISSE AG, CAYMAN ISLANDS
BRANCH, as collateral agent (in such capacity, the “Collateral Agent”) and as
administrative agent (in such capacity, the “Administrative Agent”) for the
banks and other financial institutions from time to time parties to the Credit
Agreement referred to below and the other Secured Parties (as defined in the
Guarantee and Collateral Agreement referred to below). All capitalized terms not
defined herein shall have the meaning ascribed to them in the Guarantee and
Collateral Agreement, or if not defined therein, in the Credit Agreement.

 

WITNESSETH:

 

WHEREAS, NCI BUILDING SYSTEMS, INC., a Delaware corporation (together with its
successors and assigns, the “Borrower”), the several banks and other financial
institutions from time to time party thereto (the “Lenders”), the Administrative
Agent, the Collateral Agent and the other parties party thereto are parties to a
Term Loan Credit Agreement, dated as of February 8, 2018 (as amended,
supplemented, waived or otherwise modified from time to time, the “Credit
Agreement”);

 

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
the Borrower’s Domestic Subsidiaries, are, or are to become, parties to the Term
Loan Guarantee and Collateral Agreement, dated as of February 8, 2018 (as
amended, supplemented, waived or otherwise modified from time to time, the
“Guarantee and Collateral Agreement”), in favor of the Administrative Agent and
the Collateral Agent, for the benefit of the Secured Parties;

 

WHEREAS, [the][each] Additional Granting Party is a member of an affiliated
group of companies that includes the Borrower and each other Granting Party; the
proceeds of the extensions of credit under the Credit Agreement will be used in
part to enable the Borrower to make valuable transfers to one or more of the
other Granting Parties (including such Additional Granting Party) in connection
with the operation of their respective businesses; and the Borrower and the
other Granting Parties (including such Additional Granting Party) are engaged in
related businesses, and each such Granting Party (including [each] such
Additional Granting Party) will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement;

 

WHEREAS, the Credit Agreement requires [the][each] Additional Granting Party to
become a party to the Guarantee and Collateral Agreement; and

 

WHEREAS, [the][each] Additional Granting Party has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guarantee and
Collateral Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

 

 

 

Annex 2
Page 2

 

1.          Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, [the][each] Additional Granting Party, as provided in
Subsection 9.15 of the Guarantee and Collateral Agreement, hereby becomes a
party to the Guarantee and Collateral Agreement as a Granting Party thereunder
with the same force and effect as if originally named therein as a [Guarantor]
[, Grantor and Pledgor] [and Grantor] [and Pledgor]2 and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a [Guarantor] [, Grantor and Pledgor] [and Grantor] [and
Pledgor]3 thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedules [____________] to the Guarantee
and Collateral Agreement, and such Schedules are hereby amended and modified to
include such information. [The][Each] Additional Granting Party hereby
represents and warrants that each of the representations and warranties of such
Additional Granting Party, in its capacities as a Guarantor [, Grantor and
Pledgor] [and Grantor] [and Pledgor],4 contained in Section 4 of the Guarantee
and Collateral Agreement is true and correct in all material respects on and as
the date hereof (after giving effect to this Assumption Agreement) as if made on
and as of such date. Each Additional Granting Party hereby grants, as and to the
same extent as provided in the Guarantee and Collateral Agreement, to the
Collateral Agent, for the benefit of the Secured Parties, a continuing security
interest in the [Collateral (as such term is defined in Subsection 3.1 of the
Guarantee and Collateral Agreement) of such Additional Granting Party] [and]
[the Pledged Collateral (as such term is defined in the Guarantee and Collateral
Agreement) of such Additional Granting Party, except as provided in Subsection
3.3 of the Guarantee and Collateral Agreement].

 

2.           GOVERNING LAW. THIS ASSUMPTION AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING
HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR
RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT
MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.

 

 

2Indicate the capacities in which the Additional Granting Party is becoming a
Grantor.

3Indicate the capacities in which the Additional Granting Party is becoming a
Grantor.

4Indicate the capacities in which the Additional Granting Party is becoming a
Grantor.

 

 

 

 

Annex 2
Page 3

 

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

  [ADDITIONAL GRANTING PARTY]       By:       Name:       Title:          
Acknowledged and Agreed to as of the date hereof by:         CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH, as Collateral Agent and Administrative Agent         By:
      Name:       Title:             By:       Name:       Title:  

 

 

 

 

ANNEX 3

 

SUPPLEMENTAL AGREEMENT

 

SUPPLEMENTAL AGREEMENT, dated as of [_________ __], 20[   ], made by
[______________________________], a [______________] corporation (the
“Additional Pledgor”), in favor of CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as
collateral agent (in such capacity, the “Collateral Agent”) and as
administrative agent (in such capacity, the “Administrative Agent”) for the
banks and other financial institutions from time to time parties to the Credit
Agreement referred to below and the other Secured Parties (as defined in the
Guarantee and Collateral Agreement referred to below). All capitalized terms not
defined herein shall have the meaning ascribed to them in the Guarantee and
Collateral Agreement, or if not defined therein, in the Credit Agreement.

 

WITNESSETH:

 

WHEREAS, NCI BUILDING SYSTEMS, INC., a Delaware corporation (together with its
successors and assigns, the “Borrower”), the several banks and other financial
institutions from time to time party thereto (the “Lenders”), and the
Administrative Agent, the Collateral Agent and the other parties party thereto
are parties to a Term Loan Credit Agreement, dated as of February 8, 2018 (as
amended, supplemented, waived or otherwise modified from time to time, the
“Credit Agreement”);

 

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
the Borrower’s Domestic Subsidiaries, are, or are to become, parties to the Term
Loan Guarantee and Collateral Agreement, dated as of February 8, 2018 (as
amended, supplemented, waived or otherwise modified from time to time, the
“Guarantee and Collateral Agreement”), in favor of the Administrative Agent and
the Collateral Agent, for the benefit of the Secured Parties;

 

WHEREAS, the Credit Agreement requires the Additional Pledgor to become a
Pledgor under the Guarantee and Collateral Agreement with respect to Capital
Stock of certain new Subsidiaries of the Additional Pledgor; and

 

WHEREAS, the Additional Pledgor has agreed to execute and deliver this
Supplemental Agreement in order to become such a Pledgor under the Guarantee and
Collateral Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

 

 

 

1.          Guarantee and Collateral Agreement. By executing and delivering this
Supplemental Agreement, the Additional Pledgor, as provided in Subsection 9.15
of the Guarantee and Collateral Agreement, hereby becomes a Pledgor under the
Guarantee and Collateral Agreement with respect to the shares of Capital Stock
of the Subsidiary of the Additional Pledgor listed in Annex 1 hereto and will be
bound by all terms, conditions and duties applicable to a Pledgor under the
Guarantee and Collateral Agreement, as a Pledgor thereunder. The information set
forth in Annex 1 hereto is hereby added to the information set forth in Schedule
2 to the Guarantee and Collateral Agreement, and such Schedule 2 is hereby
amended and modified to include such information. The Additional Pledgor hereby
represents and warrants that each of the representations and warranties of such
Additional Pledgor, in its capacity as a Pledgor, contained in Subsection 4.3 of
the Guarantee and Collateral Agreement is true and correct in all material
respects on and as the date hereof (after giving effect to this Supplemental
Agreement) as if made on and as of such date. The Additional Pledgor hereby
undertakes each of the covenants, in its capacity as a Pledgor, contained in
Subsection 5.3 of the Guarantee and Collateral Agreement. The Additional Pledgor
hereby grants, as and to the same extent as provided in the Guarantee and
Collateral Agreement, to the Collateral Agent, for the benefit of the Secured
Parties, a continuing security interest in all of the Pledged Collateral of such
Additional Pledgor now owned or at any time hereafter acquired by such Pledgor,
and any Proceeds thereof, except as provided in Subsection 3.3 of the Guarantee
and Collateral Agreement. The Additional Pledgor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplemental Agreement
has been duly authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms.

 

2.          GOVERNING LAW. THIS SUPPLEMENTAL AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING
HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR
RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT
MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.

 

 

 

 

IN WITNESS WHEREOF, the undersigned has caused this Supplemental Agreement to be
duly executed and delivered as of the date first above written.

 

  [ADDITIONAL PLEDGOR]       By:       Name:       Title:            
Acknowledged and Agreed to as of the date hereof by:       CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH, as Collateral Agent and Administrative Agent          
By:       Name:       Title:             By:       Name:       Title: