Exhibit 10.5

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT, dated as of November 16, 2011 (this
“Agreement”), is made by and among Great Lakes Aviation, Ltd., an Iowa
corporation (“Great Lakes”), and each subsidiary that, after the date hereof,
executes an addendum hereto substantially in the form of Exhibit F (a “Pledgor
Addendum”) (each, a “Pledgor” and together with Great Lakes collectively, the
“Pledgors”), in favor of GB Merchant Partners, LLC, as collateral agent for the
lenders (collectively, the “Lenders”) party to the Credit Agreement referred to
below (in such capacity, together with its successors or assigns, the
“Collateral Agent”), for the benefit of the Secured Parties (as hereinafter
defined). Capitalized terms used herein without definition shall have the
meanings given to them in the Credit Agreement referred to below.

RECITALS

Whereas Great Lakes, the Lenders, the Collateral Agent, and Crystal Financial
LLC, in its capacity as administrative agent for the Lenders (the
“Administrative Agent”) are parties to that certain Credit Agreement dated as of
November 16, 2011 (as amended, modified, restated or supplemented from time to
time, the “Credit Agreement”), providing for the availability of certain credit
facilities to Great Lakes upon the terms and subject to the conditions set forth
therein.

Whereas, it is a condition to the extension of credit to Great Lakes under the
Credit Agreement that Great Lakes shall have agreed, by executing and delivering
this Agreement, to secure the payment in full of its obligations under the
Credit Agreement and the other Loan Documents. The Secured Parties are relying
on this Agreement in their decision to extend credit to Great Lakes under the
Credit Agreement, and would not enter into the Credit Agreement without the
execution and delivery of this Agreement by Great Lakes.

ARTICLE I

DEFINITIONS

1.1 Defined Terms. Defined terms used but not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement. In addition to
the terms defined elsewhere herein, the following terms shall have the meanings
set forth below:

“Collateral” shall have the meaning given to such term in Section 2.1.

“Collateral Accounts” shall have the meaning given to such term in Section 6.3.

“Commercial Tort Claim” shall have the meaning ascribed thereto in the Uniform
Commercial Code and whether now owned or existing or hereafter acquired or
arising.

“Consumer Goods” shall have the meaning ascribed thereto in the Uniform
Commercial Code and whether now owned or existing or hereafter acquired or
arising.

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“Contracts” shall mean, collectively, all rights of each Pledgor under all
leases, contracts and agreements to which such Pledgor is now or hereafter a
party, including, without limitation, any and all extensions, modifications,
amendments and renewals of such leases, contracts and agreements and all rights
of such Pledgor to receive moneys due or to become due thereunder or pursuant
thereto and to amend, modify, terminate or exercise rights under such leases,
contracts and agreements, but excluding the Excluded Assets.

“Copyright Collateral” shall mean, collectively, all Copyrights and Copyright
Licenses to which any Pledgor is or hereafter becomes a party and all other
General Intangibles embodying, incorporating, evidencing or otherwise relating
or pertaining to any Copyright or Copyright License, in each case whether now
owned or existing or hereafter acquired or arising.

“Domain Name” shall mean the combination of words and abbreviations that
represents a uniquely identifiable internet protocol address of a World Wide Web
internet location.

“Equity Interest” shall mean, collectively, all of the issued and outstanding
shares, interests or other equivalents of capital stock of any corporation at
any time now or hereafter owned by any Pledgor (including, without limitation,
any corporation that hereafter becomes a subsidiary of such Pledgor), whether
voting or non-voting and whether common or preferred, all partnership, joint
venture, limited liability company or other equity interests in any person not a
corporation at any time now or hereafter owned by any Pledgor (including,
without limitation, any such person that is or hereafter becomes a subsidiary of
such Pledgor), all options, warrants and other rights to acquire, and all
securities convertible into, any of the foregoing, all rights to receive
interest, income, dividends, distributions, returns of capital and other amounts
(whether in cash, securities, property, or a combination thereof), and all
additional stock, warrants, options, securities, interests and other property,
from time to time paid or payable or distributed or distributable in respect of
any of the foregoing (but subject to the provisions of Section 5.3), including,
without limitation, all rights of such Pledgor to receive amounts due and to
become due under or in respect of any Investment Agreement or upon the
termination thereof, all rights of access to the books and records of any such
person, and all other rights, powers, privileges, interests, claims and other
property in any manner arising out of or relating to any of the foregoing, of
whatever kind or character (including any tangible or intangible property or
interests therein), and whether provided by contract or granted or available
under applicable law in connection therewith, including, without limitation,
such Pledgor’s right to vote and to manage and administer the business of any
such person pursuant to any applicable Investment Agreement, together with all
certificates, instruments and entries upon the books of securities
intermediaries at any time evidencing any of the foregoing, in each case whether
now owned or existing or hereafter acquired or arising.

“Excluded Assets” shall have the meaning given to such term in Section 2.1.

“Investment Agreement” shall mean any articles or certificate of incorporation,
partnership agreement, joint venture agreement, limited liability company
operating agreement, stockholders agreement or other agreement creating,
governing or evidencing any Equity Interests and to which any Pledgor is now or
hereafter becomes a party, as any such agreement may be amended, modified,
supplemented, restated or replaced from time to time.

 

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“Partner Obligations” shall have the meaning given to such term in Section 6.6.

“Patent Collateral” shall mean, collectively, all Patents and all Patent
Licenses to which any Pledgor is or hereafter becomes a party and all other
General Intangibles embodying, incorporating, evidencing or otherwise relating
or pertaining to any Patent or Patent License, in each case whether now owned or
existing or hereafter acquired or arising.

“Proceeds” shall have the meaning given to such term in Section 2.1.

“Records” shall mean all of each Pledgor’s present and future books of account
of every kind or nature, purchase and sale agreements, invoices, ledger cards,
bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other date relating to the Collateral or any account
debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of any Pledgor with respect to the
foregoing maintained with or by any other Person).

“Secured Obligations” shall have the meaning given to such term in Section 2.2.

“Secured Parties” shall mean, collectively, the Lenders, the Administrative
Agent and the Collateral Agent.

“Securities Act” shall have the meaning given to such term in Section 6.5.

“Termination Requirements” shall have the meaning given to such term in
Section 8.3.

“Trademark Collateral” shall mean, collectively, all Trademarks and Trademark
Licenses to which any Pledgor is or hereafter becomes a party and all other
General Intangibles embodying, incorporating, evidencing or otherwise relating
or pertaining to any Trademark or Trademark License, in each case whether now
owned or existing or hereafter acquired or arising.

“Uniform Commercial Code” and “Code” shall mean the Uniform Commercial Code as
the same may be in effect from time to time in the State of New York; provided
that if, by reason of applicable law, the validity or perfection or the effect
of perfection or non-perfection or the priority of any security interest in any
Collateral granted under this Agreement is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, then as to the validity
or perfection or the effect of perfection or non-perfection or the priority, as
the case may be, of such security interest, “Uniform Commercial Code” and “Code”
shall mean the Uniform Commercial Code as in effect in such other jurisdiction.

1.2 Other Terms. All terms in this Agreement that are not capitalized shall have
the meanings provided by the Uniform Commercial Code to the extent the same are
used or defined therein.

 

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ARTICLE II

CREATION OF SECURITY INTEREST

2.1 Pledge and Grant of Security Interest. Each Pledgor hereby pledges and
assigns to the Collateral Agent, for the ratable benefit of the Secured Parties,
and grants to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, a Lien upon and security interest in, all of
such Pledgor’s right, title and interest in and to the following, in each case
whether now owned or existing or hereafter acquired or arising or in which such
Pledgor now has or at any time in the future may acquire any right, title or
interest (collectively, the “Collateral”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Commercial Tort Claims;

(iv) all Contracts;

(v) all Copyright Collateral;

(vi) all Deposit Accounts (all cash, and all other property from time to time
deposited therein or credited thereto and the monies and properties of
Collateral Agent or any Lender or any Affiliate, representative, agent or
correspondent of Collateral Agent or any Lenders);

(vii) all Documents and Records;

(viii) all Domain Names;

(ix) all Equipment;

(x) all Equity Interests; provided, however, that no Equity Interests of any
issuer incorporated or formed, as applicable, in a jurisdiction outside of the
United States of America shall be included hereunder to the extent that (A) the
aggregate amount of Equity Interests of such issuer pledged hereunder would
exceed 65% of such issuer’s Equity Interests and (B) a percentage of such Equity
Interests pledged hereunder exceeding 65% would result in adverse tax
consequences to Great Lakes;

(xi) all Fixtures;

(xii) all General Intangibles;

(xiii) all Instruments;

(xiv) all Inventory;

 

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(xv) all Investment Property;

(xvi) all Patent Collateral;

(xvii) all Trademark Collateral;

(xviii) to the extent not covered or not specifically excluded by clauses
(i) through (xvi) above, or the definitions of the terms included therein, all
of such Pledgor’s other personal property, including, without limitation, all
goods, supporting obligations and letter-of-credit rights, whether now owned or
existing or hereafter arising or acquired; and

(xix) any and all proceeds, as such term is defined in the Uniform Commercial
Code, products, rents and profits of or from any and all of the foregoing and,
to the extent not otherwise included in the foregoing, (w) all payments under
any insurance (whether or not the Collateral Agent is the loss payee
thereunder), indemnity, warranty or guaranty with respect to any of the
foregoing Collateral, (x) all payments in connection with any requisition,
condemnation, seizure or forfeiture with respect to any of the foregoing
Collateral, (y) all claims and rights to recover for any past, present or future
infringement or dilution of or injury to any Copyright Collateral, Patent
Collateral or Trademark Collateral, and (z) all other amounts from time to time
paid or payable under or with respect to any of the foregoing Collateral
(collectively, “Proceeds”). Each Pledgor authorizes the Collateral Agent to file
financing statements under the Uniform Commercial Code describing the
Collateral.

Notwithstanding the foregoing, the Collateral shall not include, and no security
interest shall be deemed granted hereunder in, (a) any permit, license,
contract, lease, agreement or other general intangible that is now or hereafter
held by any Pledgor, but only to the extent that such permit, license, contract,
lease, agreement or other general intangible (or any other agreement evidencing
such item of general intangibles) contains a term or is subject to a rule of
law, statute or regulation that restricts, prohibits, or requires a consent
(that has not been obtained or waived) of a person or entity (other than
Pledgor) to, the creation, attachment or perfection of the security interest
granted herein, and any such term, restriction, prohibition and/or requirement
of consent is effective and enforceable under applicable law and is not rendered
ineffective by applicable law (including, without limitation, pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the Code) or principles of equity, and
(b) any Collateral, or portion thereof, the granting of a security interest in
which would be void or illegal under any applicable law or would result in the
termination, invalidation, cancellation, unenforceability, loss or abandonment
of such Collateral ((a) and (b), collectively, the “Excluded Assets”); provided,
however, “Excluded Assets” shall not include any proceeds, products,
substitutions or replacements of Excluded Assets (unless such proceeds,
products, substitutions or replacements would otherwise constitute Excluded
Assets). In addition, immediately upon the ineffectiveness, lapse or termination
of the provisions of such agreements or laws which prohibit or require the
consent of any person or entity as a condition to the creation by Pledgor of a
security interest thereon or that would be breached as a result thereof, Pledgor
shall be deemed to have granted a security interest in, and all of its rights,
titles and interests in and to, such Excluded Assets.

 

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2.2 Security for Secured Obligations. This Agreement and the Collateral of each
Pledgor secures the full and prompt payment, at any time and from time to time
as and when due (whether at the stated maturity, by acceleration or otherwise),
of all liabilities and obligations of such Pledgor to the Lenders, whether now
existing or hereafter incurred, created or arising and whether direct or
indirect, absolute or contingent, due or to become due, including, without
limitation, all obligations in respect of overdrafts and related liabilities
owed to the Collateral Agent or any of its Affiliates and arising from treasury,
depository and cash management services in connection with any automated
clearing house transfer of funds, under, arising out of or in connection with
the Credit Agreement, this Agreement, or any of the other Loan Documents to
which it is or hereafter becomes a party, including, without limitation in the
case of Great Lakes, all principal of and interest on the Loans, all fees,
expenses, indemnities and other amounts payable by Great Lakes under the Credit
Agreement or any other Loan Document (including interest accruing after the
filing of a petition or commencement of a case by or with respect to Great Lakes
seeking relief under any applicable federal and state laws pertaining to
bankruptcy, reorganization, arrangement, moratorium, readjustment of debts,
dissolution, liquidation or other debtor relief, specifically including, without
limitation, the Bankruptcy Code and any fraudulent transfer and fraudulent
conveyance laws, whether or not the claim for such interest is allowed in such
proceeding), and all such liabilities and obligations that, but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
would become due, and all fees, costs and expenses payable by such Pledgor under
Section 8.1 (the liabilities and obligations of the Pledgors described in this
Section 2.2, collectively, the “Secured Obligations”).

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Pledgor represents and warrants as follows:

3.1 Defaults. Each Pledgor acknowledges that any default in the due observance
or performance by it of any covenant, condition or agreement contained herein
shall constitute an Event of Default to the extent provided in Article VII of
the Credit Agreement.

3.2 Ownership of Collateral. Each Pledgor owns, or has valid rights as a lessee
or licensee, or the power to transfer or pledge with respect to, all Collateral
purported to be pledged by it hereunder, free and clear of any Liens, except for
the Liens granted to the Collateral Agent for the benefit of the Secured Parties
pursuant to this Agreement and except for Permitted Encumbrances. No security
agreement, financing statement or other public notice with respect to all or any
part of the Collateral is on file or of record in any government or public
office, and no Pledgor has filed or consented to the filing of any such
statement or notice, except (i) Uniform Commercial Code financing statements
naming the Collateral Agent as secured party, Uniform Commercial Code financing
statements which have been terminated and Uniform Commercial Code financing
statements filed in connection with Permitted Encumbrances, (ii) security
instruments filed in the United States Copyright Office or the United States
Patent and Trademark Office naming the Collateral Agent as secured party and
(iii) as may be otherwise permitted by the Credit Agreement.

 

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3.3 Security Interests; Filings. This Agreement, together with (i) the filing of
duly completed and authorized Uniform Commercial Code financing statements
(A) naming each Pledgor as debtor, (B) naming the Collateral Agent as secured
party, and (C) describing the Collateral, in the jurisdictions set forth with
respect to such Pledgor on Annex B hereto, (ii) the filing of duly completed and
executed assignments in the forms set forth as Exhibits B, C and D with the
United States Copyright Office or the United States Patent and Trademark Office,
and Exhibit E with any entity administering any domain name registrations
affected by this Agreement and which accepts notices recognizing the interests
of a secured party, as appropriate, with regard to federally registered
Copyright Collateral, Patent Collateral, Trademark Collateral and Domain Names
of each Pledgor, as the case may be, (iii) the registration of transfer thereof
to the Collateral Agent on the issuer’s books or the execution by the issuer of
a control agreement satisfying the requirements of Section 8-106 (or its
successor provision) of the Uniform Commercial Code with regard to
uncertificated securities and Investment Property (other than certificated
securities) included in the Collateral, and (iv) the delivery to the Collateral
Agent of all certificated securities and Instruments included in the Collateral
together with undated stock powers or instruments of transfer duly executed in
blank, creates, and at all times shall constitute, a valid and perfected
security interest in and Lien upon the Collateral in favor of the Collateral
Agent, for the benefit of the Secured Parties, to the extent that Articles 8 and
9 of the Uniform Commercial Code are applicable thereto, superior and prior to
the rights of all other persons therein (except for Permitted Encumbrances), and
no other or additional filings, registrations, recordings or actions are or
shall be necessary or appropriate in order to perfect or maintain the perfection
and priority of such Lien and security interest, other than actions required
with respect to Collateral of the types excluded from Articles 8 or 9 of the
Uniform Commercial Code or from the filing requirements under Article 9 of the
Uniform Commercial Code by reason of Sections 9-309, 9-310, 9-311 and 9-312 of
the Uniform Commercial Code and other than continuation statements required
under the Uniform Commercial Code (it being specifically noted that the
Collateral Agent may at its option, but shall not be required to, require
subject to the limitations set forth in Sections 3.12 and 4.13 hereof that any
bank or other depository institution at which a Deposit Account is maintained
enter into a written agreement in form satisfactory to the Collateral Agent or
take such other action as may be necessary to perfect the security interest of
the Collateral Agent in such Deposit Account and the funds therein.)

3.4 Locations. Annex C lists, as to each Pledgor, (i) the addresses of its chief
executive office, each other place of business and for any Pledgor which is
organized under the laws of any state, its state of registration and
registration I.D. number, (ii) the address of each location where all original
invoices, ledgers, Chattel Paper, Instruments and other Records or information
evidencing or relating to the Collateral of such Pledgor are maintained, and
(iii) the address of each location at which any Fixtures, Equipment or Inventory
owned by such Pledgor is kept or maintained, in each instance except for any new
locations established in accordance with the provisions of Section 4.2. Except
as may be otherwise noted therein, all locations identified in Annex C are
leased by the applicable Pledgor. No Pledgor presently conducts business under
any prior or other corporate or company name or under any trade or fictitious

 

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names, except as indicated beneath its name on Annex C, no Pledgor during the
one-year period preceding the date it became a party to this Agreement merged or
consolidated with any other Person or had any Person liquidate or transfer all
or substantially all of its assets to such Pledgor, and no Pledgor has entered
into any contract or granted any Lien within the past five years under any name
other than its legal name or a trade or fictitious name indicated on Annex C.
Each trade or fictitious name is a trade name and style (and not the name of an
independent corporation or other legal entity) by which a Pledgor may identify
and sell certain of its goods or services and conduct a portion of its business;
all related Accounts are owned solely by the applicable Pledgors and are subject
to the Liens and other terms of this Agreement; and any dispute which may arise
with Customers with respect to the products invoiced under the name of any trade
or fictitious name are subject to the terms of this Agreement as though such
trade or fictitious name did not exist.

3.5 Authorization; Consent. No authorization, consent or approval of, or
declaration or filing with, any Governmental Authority is required for the valid
execution, delivery and performance by any Pledgor of this Agreement, the grant
by it of the Lien and security interest in favor of the Collateral Agent
provided for herein, or the exercise by the Collateral Agent of its rights and
remedies hereunder, except for (i) the filings and actions described in
Section 3.3, (ii) in the case of Accounts owing from any federal governmental
agency or authority, the filing by the Collateral Agent of a notice of
assignment in accordance with the federal Assignment of Claims Act of 1940, as
amended, and (iii) in the case of Equity Interests, such filings and approvals
as may be required in connection with a disposition of any such Collateral by
laws affecting the offering and sale of securities generally.

3.6 No Restrictions. There are no statutory or regulatory restrictions,
prohibitions or limitations on any Pledgor’s ability to grant to the Collateral
Agent a Lien upon and security interest in the Collateral pursuant to this
Agreement or (except for the provisions of the federal Assignment of Claims Act
of 1940, as amended) on the exercise by the Collateral Agent of its rights and
remedies hereunder (including any foreclosure upon or collection of the
Collateral), and there are no contractual restrictions on any Pledgor’s ability
so to grant such Lien and security interest.

3.7 Accounts. (i) All Accounts owned by the Pledgors on the Closing Date
constitute bona fide receivables arising in the ordinary course of business, the
amount of which is actually owing and payable to the Pledgors in the ordinary
course of business. All such Accounts, net of a bad debt reserve determined in
accordance with generally accepted accounting principles, are collectible in
accordance with their terms.

(ii) Each Account arising after the Closing Date shall be on the date of its
creation a good and valid account representing an undisputed bona fide
indebtedness incurred or an amount indisputably owed by the Customer therein
named, for a fixed sum, to the extent, set forth in the invoice relating
thereto, with respect to an absolute sale and delivery upon the specified terms
of goods sold by such Pledgor, or work, labor and/or services theretofore
rendered by such Pledgor; no such Account is or shall at any time be subject to
any defense, offset, counterclaim, discount or allowance except as may be stated
in the invoice relating thereto or discounts and allowances as may be customary
in such

 

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Pledgor’s business, and such Pledgor has no reason to believe such Account will
not be paid when due; none of the transactions underlying or giving rise to any
such Account shall violate any applicable state or federal laws or regulations,
and all documents relating to any such Account shall, to Pledgor’s knowledge, be
legally sufficient under such laws or regulations and are legally enforceable in
accordance with their terms; to the best knowledge of such Pledgor, each
customer, guarantor or endorser is solvent and will continue to be fully able to
pay such Account on which it is obligated in full when due; no agreement under
which any deduction or offset of any kind, other than normal trade discounts and
discounts granted by a Pledgor in the ordinary course of its business in
accordance with its historical practices, have been granted by such Pledgor, at
or before the time such Account was created; all documents and agreements
relating to such Account shall be true and correct and in all material respects
what they purport to be; to the best of such Pledgor’s knowledge, all signatures
and endorsements that appear on all documents and agreements relating to such
Account are genuine and all signatories and endorsers shall have full capacity
to contract; and such Account is not evidenced by Chattel Paper or an
Instrument, or if so, such Chattel Paper or Instrument shall be duly endorsed to
the order of the Collateral Agent and delivered to the Collateral Agent to be
held as Collateral hereunder, subject to Section 4.5 hereof.

3.8 Equity Interests. As of the date hereof, the Equity Interests required to be
pledged hereunder by each Pledgor that owns any Equity Interests consist of the
number and type of shares of capital stock (in the case of issuers that are
corporations) or the percentage and type of other Equity Interests (in the case
of issuers other than corporation) as described beneath such Pledgor’s name in
Annex A. All of the Equity Interests have been duly and validly issued and are
fully paid and nonassessable (or, in the case of partnership, limited liability
company or similar Equity Interests, not subject to any capital call or other
additional capital requirement) and not subject to any preemptive rights,
warrants, options or similar rights or restrictions in favor of third parties or
any contractual or other restrictions upon transfer other than as may be
permitted under the Credit Agreement.

3.9 Specified Contracts. As to each (i) Investment Agreement, and (ii) each
Material Contract to which any Pledgor is now or hereafter becomes a party,
(a) such Pledgor is not in default in any material respect under such Investment
Agreement or Material Contract, and to the knowledge of such Pledgor, none of
the other parties to such Investment Agreement or Material Contract is in
default in any material respect thereunder (except as shall have been disclosed
in writing to the Collateral Agent), (b) such Investment Agreement or Material
Contract is, or at the time of execution will, with regard to any Pledgor (and
to such Pledgor’s knowledge with respect to any other party thereof), be the
legal, valid and binding obligations of all parties thereto, enforceable against
such parties in accordance with the respective terms thereof, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally, and no defense, offset, deduction or
counterclaim will exist thereunder in favor of any such party, (c) the
performance by such Pledgor of its obligations under such Investment Agreement
or Material Contract in accordance with its terms will not contravene such
Investment Agreement and any statute, law, treaty, rule, regulation, order,
decree, injunction or determination of any arbitrator or Governmental Authority
applicable to or

 

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binding on such Pledgor or any contractual restriction binding on or affecting
such Pledgor or any of its properties, and will not result in or require the
creation of any Lien upon or with respect to any of its properties, except for
Permitted Encumbrances and (d) such Pledgor has (or promptly upon the execution
thereof will have) furnished the Collateral Agent with a correct and complete
copy of each Investment Agreement (certified by the appropriate state official
to the extent such Agreement is registered with a state.

3.10 Intellectual Property. Annexes D, E, F and G correctly set forth all
registered Copyrights, Patents, Trademarks and Domain Names owned by any Pledgor
as of the date hereof and used or proposed to be used in its business. Each such
Pledgor owns or possesses the valid right to use all Copyrights, Patents,
Trademarks and Domain Names; all registrations therefor have been validly issued
under applicable law and are in full force and effect; all applicable material
maintenance fees, affidavits and other filings or payments are current and shall
remain current throughout the duration of this Agreement; no claim has been made
in writing or, to the knowledge of such Pledgor, orally, that any of such
Copyrights, Patents, Trademarks and Domain Names is invalid or unenforceable or
violates or infringes the rights of any other person, and there is no such
violation or infringement in existence; and to the knowledge of such Pledgor, no
other person is presently infringing upon the rights of such Pledgor with regard
to any such Copyrights, Patents, Trademarks and Domain Names.

3.11 Documents of Title. No material bill of lading, warehouse receipt or other
document or instrument of title is outstanding with respect to any Collateral
other than Inventory in transit in the ordinary course of business to a location
set forth on Annex C or to a customer of a Pledgor.

3.12 Deposit Accounts. Annex H correctly sets forth all Deposit Accounts of each
Pledgor as of the date hereof. Each Deposit Account (other than any payroll
account, any payroll tax and/or similar trust fund accounts and any accounts
excepted by the Credit Agreement) is covered by an account control agreement, in
form and substance reasonably satisfactory to the Collateral Agent, except as
otherwise permitted by the Credit Agreement.

3.13 Reserved.

3.14 Inventory. Subject to such exceptions as in the aggregate are not material
to the business of Great Lakes, all Inventory is of good and merchantable
quality, free from any defects, and such Inventory is not subject to any
licensing, patent, trademark, trade name or copyright agreement with any Person
that restricts any Pledgor’s ability to manufacture and/or sell the Inventory.
None of the Inventory of any Pledgor has been or will be produced by a Pledgor
in violation of any provision of the Fair Labor Standards Act of 1938, as
amended.

3.15 Equipment. All Equipment used by Great Lakes in its business (other than
obsolete or worn-out Equipment) is in good repair, working order and condition
(normal wear and tear and immaterial impairments of value and damage by the
elements excepted).

 

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3.16 Information. All information heretofore, herein or hereafter supplied to
Collateral Agent by or on behalf of any Grantor with respect to the Collateral
is and will be accurate and complete in all material respects.

ARTICLE IV

COVENANTS

4.1 Reserved.

4.2 Change of Name, Locations, etc. No Pledgor will (i) change its name, its
type of organization or, if applicable, the state in which it is registered, or
its organizational identification number (if any), (ii) change its chief
executive office from the location thereof listed on Annex C, or (iii) remove
any Collateral (other than goods in transit or Collateral sold in the ordinary
course or otherwise permitted under the Loan Documents), or any books, records
or other information relating to Collateral, from the applicable location
thereof listed on Annex C, or keep or maintain any Collateral at a location not
listed on Annex C, unless in each case such Pledgor has (A) given thirty
(30) days’ prior written notice to the Collateral Agent of its intention to do
so, together with information regarding any such new location and such other
information in connection with such proposed action as the Collateral Agent may
reasonably request, and (B) delivered to the Collateral Agent thirty (30) days’
prior to any such change or removal of such documents, instruments and financing
statements as may be required by the Collateral Agent, all in form and substance
satisfactory to the Collateral Agent, paid all necessary filing and recording
fees and taxes, and taken all other actions reasonably requested by the
Collateral Agent in order to perfect and maintain the Lien upon and security
interest in the Collateral provided for herein in accordance with the provisions
of Section 3.3.

4.3 Records; Inspection.

(a) Each Pledgor will keep and maintain at its own cost and expense satisfactory
and complete records of the Accounts and all other Collateral, including,
without limitation, records of all payments received, all credits granted
thereon, all merchandise returned and all other documentation relating thereto,
and will furnish to the Collateral Agent from time to time such statements,
schedules and reports (including, without limitation, accounts receivable aging
schedules) with regard to the Collateral as the Collateral Agent may reasonably
request.

(b) In addition to the rights of inspection under Section 2.3 of the Credit
Agreement, each Pledgor shall, from time to time at such times as may be
reasonably requested and upon reasonable notice, to the extent permitted under
Section 2.3 of the Credit Agreement, make available to the Collateral Agent, the
Administrative Agent and any Lender for inspection and review at such Pledgor’s
offices copies of all invoices and other documents and information relating to
the Collateral (including, without limitation, itemized schedules of all
collections of Accounts, showing the name of each account debtor, the amount of
each payment and such other information as the Collateral Agent shall reasonably
request). At the request of the Collateral Agent following the occurrence and
during the continuance of a Default or an Event of Default, each Pledgor will
legend, in form and manner reasonably satisfactory to the

 

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Collateral Agent, the books, records and materials evidencing or relating to the
Collateral with an appropriate reference to the fact that the Collateral has
been collaterally assigned to the Collateral Agent and that the Collateral Agent
has a security interest therein. The Collateral Agent shall have the right to
make test verifications of Accounts in any reasonable manner and through any
reasonable medium, and each Pledgor agrees to furnish all such reasonable,
assistance and information as the Collateral Agent may require in connection
therewith, provided, that, so long as no Event of Default shall have occurred
and be continuing, any such verification shall be conducted in the name of the
Pledgor or in such other manner so as not to disclose the Collateral Agent’s
identity or interest in the Collateral.

4.4 Accounts. Unless notified otherwise by the Collateral Agent in accordance
with the terms hereof, each Pledgor shall endeavor to collect its Accounts and
all amounts owing to it thereunder in the ordinary course of its business
consistent with past practices and shall apply forthwith upon receipt thereof
all such amounts as are so collected to the outstanding balances thereof, and in
connection therewith, upon the occurrence and continuance of an Event of
Default, shall, at the request of the Collateral Agent, take such action as the
Collateral Agent may deem reasonably necessary or advisable (within applicable
laws) to enforce such collection. No Pledgor shall, except to the extent done in
the ordinary course of its business consistent with past practices or in
accordance with sound business judgment, (i) grant any extension of the time for
payment of any Account, (ii) compromise or settle any Account for less than the
full amount thereof, (iii) release, in whole or in part, any person or property
liable for the payment of any Account, or (iv) allow any credit or discount on
any Account. Each Pledgor shall promptly inform the Collateral Agent of any
material disputes with any account debtor or obligor and of any claimed offset
and counterclaim that may be asserted with respect thereto, where such Pledgor
reasonably believes that the likelihood of payment by such account debtor is
materially impaired, indicating in detail the reason for the dispute, all claims
relating thereto and the amount in controversy. Notwithstanding any of the
foregoing, Collateral Agent shall have the right at any time upon the occurrence
and continuance of an Event of Default, to notify the Account obligors under any
Accounts of the assignment of such Account to Collateral Agent and to direct
such payment of all amounts to Collateral Agent.

4.5 Instruments and Chattel Paper. Each Pledgor agrees that if any Accounts or
other Collateral shall at any time be evidenced by a promissory note, Chattel
Paper or other Instrument (other than checks or other Instruments for deposit in
the ordinary course of business), and the aggregate amount of all such Chattel
Paper or other Instruments exceeds $250,000, the same shall promptly be duly
endorsed to the order of the Collateral Agent and delivered to the Collateral
Agent to be held as Collateral hereunder. At Collateral Agent’s option, each
Pledgor shall, or Collateral Agent may at any time on behalf of any Pledgor,
cause the original of any such promissory note, Instrument or Chattel Paper to
be conspicuously marked in a form and manner acceptable to Collateral Agent with
the following legend referring to Chattel Paper or Instruments as applicable:
“This [Chattel Paper] [Instrument] is subject to the security interest of GB
Merchant Partners, LLC, as Collateral Agent, and any sale, transfer, assignment
or encumbrance of this [Chattel Paper] [Instrument] violates the rights of such
secured party.” In the event that any Pledgor shall at any time hold or acquire
an interest in any electronic chattel Paper or any “transferable record” (as
such term is defined in Section 201 of the Federal

 

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Electronic Signatures in Global and National Commerce Act or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction), such Pledgor shall promptly notify Collateral Agent thereof in
writing. Promptly upon Collateral Agent’s request, such Pledgor shall take, or
cause to be taken, such actions as Collateral Agent may reasonably request to
give Collateral Agent “control” (as contemplated by Section 9-314 (or its
successor provision) of the Uniform Commercial Code) of such electronic Chattel
Paper under the Uniform Commercial Code and control of such transferable record
under Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as in effect in such jurisdiction.

4.6 Equipment. Each Pledgor will, in accordance with sound business practices,
maintain all Equipment used by it in its business (other than obsolete or
worn-out Equipment and Equipment sold in the ordinary course in accordance with
the Loan Documents) in good repair, working order and condition (normal wear and
tear and immaterial impairments of value and damage by the elements excepted)
and make all appropriate repairs, replacements, and improvements thereof
consistent with industry practice. Each Pledgor shall use commercially
reasonable efforts to preclude any Equipment from becoming a fixture to any real
property (other than real property the fee interest in which is subject to a
deed of trust or mortgage in favor of the Collateral Agent).

4.7 Inventory. Each Pledgor will, in accordance with sound business practices,
maintain all Inventory held by it or on its behalf in good saleable or useable
condition. Prior to the occurrence and continuance of an Event of Default, each
Pledgor may, in any lawful manner not inconsistent with the provisions of this
Agreement and the other Loan Documents, process, use and, in the ordinary course
of business and as permitted under the Credit Agreement, but not otherwise, sell
its Inventory. Without limiting the generality of the foregoing, each Pledgor
agrees that it shall not permit any Inventory to be in the possession of any
bailee, warehouseman, agent or processor at any time unless such bailee,
warehouseman, agent or processor shall have been notified of the security
interest created by this Agreement and such Pledgor shall have obtained, at such
Pledgor’s sole cost and expense, a written agreement by such person to hold such
Inventory subject to the security interest created by this Agreement and the
instructions of the Collateral Agent and to waive and release any Lien (whether
arising by operation of law or otherwise) such person may have with respect to
such Inventory, such agreement to be in form and substance reasonably
satisfactory to the Collateral Agent. Each Pledgor further agrees that Inventory
produced by Pledgor will be produced in compliance with the applicable
requirements of the Fair Labor Standards Act, as amended.

4.8 Contracts. Other than with respect to the Material Contracts that exist on
the Closing Date, no Pledgor will enter into any Material Contract (including
leases and Licenses) that by its terms prohibits the assignment of such
Pledgor’s rights and interest thereunder in the manner contemplated by this
Agreement, other than as may be entered into in the ordinary course of business
of such Pledgor in accordance with past practices or for a valid economic reason
benefiting such Pledgor. Other than with respect to the Material Contracts that
exist on the Closing Date, each Pledgor further covenants and agrees to use its
commercially reasonable efforts to obtain any required consent to the collateral
assignment and grant of security interest in

 

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any Material Contract (including personal property leases and Licenses), in form
and substance reasonably satisfactory to the Collateral Agent, upon the request
of the Collateral Agent, and will deliver copies thereof to the Collateral Agent
promptly upon execution and delivery thereof.

4.9 Reserved.

4.10 Insurance.

(a) Each Pledgor will maintain and pay for, or cause to be maintained and paid
for, with financially sound and reputable insurance companies, insurance with
respect to its assets, properties and business, against such hazards and
liabilities, of such types and in such amounts, as is required pursuant to
Section 2.2 of the Credit Agreement.

(b) Each Pledgor hereby irrevocably makes, constitutes and appoints the
Collateral Agent at all times during the continuance of an Event of Default, its
true and lawful attorney (and agent-in-fact) for the purpose of making, settling
and adjusting claims under such policies of insurance, endorsing its name on any
check, draft, instrument or other item or payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect to such policies of insurance.

(c) If any Pledgor fails to obtain and maintain any of the policies of insurance
required to be maintained hereunder or to pay any premium in whole or in part,
the Collateral Agent may, without waiving or releasing any obligation or
Default, at such Pledgor’s expense, but without any obligation to do so, procure
such policies or pay such premiums. All sums so disbursed by the Collateral
Agent, including reasonable attorneys’ fees, court costs, expenses and other
charges related thereto, shall be payable by the Pledgors to the Collateral
Agent on demand and shall be additional Secured Obligations hereunder, secured
by the Collateral.

(d) Each Pledgor will deliver to the Collateral Agent, promptly as rendered,
true copies of all material claims and reports made in any reporting forms to
insurance companies. Not less than thirty (30) days’ prior to the expiration
date of the insurance policies required to be maintained by any Pledgor
hereunder, such Pledgor will deliver to the Collateral Agent one or more
certificates of insurance evidencing renewal of the insurance coverage required
hereunder plus such other evidence of payment of premiums therefor as the
Collateral Agent may reasonably request. Upon the reasonable request of the
Collateral Agent from time to time, each Pledgor will deliver to the Collateral
Agent evidence that the insurance required to be maintained pursuant to this
Section is in effect.

4.11 Intellectual Property. (a) Each Pledgor will, at its own expense, execute
and deliver on the Closing Date, a fully completed Copyright Security Agreement,
Patent Security Agreement or Trademark Security Agreement in the respective
forms of Exhibits B, C and D, as applicable, with regard to any Copyright,
Patent or Trademark, as the case may be of such Pledgor, described in Annexes D,
E and F hereto. In the event that after the date hereof any Pledgor shall
acquire any registered Copyright, Patent or Trademark or effect any registration
of any such Copyright, Patent or Trademark, whether within the United States or
any other country or jurisdiction, such Pledgor shall promptly furnish written
notice thereof to the Collateral Agent

 

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together with information sufficient to permit the Collateral Agent, upon its
receipt of such notice, to (and each Pledgor hereby authorizes the Collateral
Agent to) modify this Agreement, as appropriate, by amending Annex D, E or F
hereto or to add additional exhibits hereto to include any Copyright, Patent or
Trademark that becomes part of the Collateral under this Agreement, and such
Pledgor shall additionally, at its own expense, execute and deliver, as promptly
as possible (but in any event within ten (10) Business Days) after the date of
such notice, with regard to United States Copyrights, Patents and Trademarks,
fully completed Copyright Security Agreements, Patent Security Agreements or
Trademark Security Agreements in the forms of Exhibits B, C and D, as
applicable, together in all instances with any other agreements, instruments and
documents that the Collateral Agent may reasonably request from time to time to
further effect and confirm the security interest created by this Agreement in
such Copyrights, Patents and Trademarks, and each Pledgor hereby appoints the
Collateral Agent its attorney-in-fact, upon the occurrence and the continuance
of an Event of Default, to execute, deliver and record any and all such
agreements, instruments and documents for the foregoing purposes, all acts of
such attorney being hereby ratified and confirmed and such power, being coupled
with an interest, being irrevocable for so long as this Agreement shall be in
effect with respect to such Pledgor. Upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent may request, and each
Pledgor shall cause, at its own expense, the execution and delivery of fully
completed assignments in the form of Exhibit E with respect to any Domain Name
described in Annex G hereto. If after the date hereof, any Pledgor shall
register any Domain Name, such Pledgor shall promptly notify the Collateral
Agent of such registration and the Collateral Agent is hereby authorized to
amend Annex G hereto to reflect such additional registration.

(b) Each Pledgor (either itself or through its licensees or its sublicensees)
will, for each material Trademark used in the conduct of its business, use its
commercially reasonable efforts to (i) maintain such Trademark in full force and
effect, free from any claim of abandonment or invalidity for non-use,
(ii) maintain the quality of products and services offered under such Trademark,
(iii) display such Trademark with notice of federal registration to the extent
required by applicable law, (iv) take appropriate and reasonable steps to police
and defend such Trademark and prevent or arrest infringement, dilution or other
harm to such Trademark and (v) not knowingly use or knowingly permit the use of
such Trademark in violation of any third-party rights.

(c) Each Pledgor (either itself or through its licensees or sublicensees) will
refrain from committing any act, or omitting any act, whereby any material
Patent used in the conduct of such Pledgor’s business may become invalidated or
dedicated to the public, and shall continue to mark any products covered by a
material Patent with the relevant patent number as required by applicable patent
laws.

(d) Each Pledgor (either itself or through its licensees or sublicensees) will,
for each work covered by a material Copyright used in the conduct of its
business, continue to publish, reproduce, display, adopt and distribute the work
with appropriate copyright notice as required under applicable copyright laws.

 

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(e) Each Pledgor shall notify the Collateral Agent immediately if it knows or
has reason to know that any material Patent, Trademark or Copyright used in the
conduct of its business may become abandoned or dedicated to the public, or of
any adverse determination or development (including the institution of, or any
such determination or development in, any proceeding in the United States Patent
and Trademark Office, United States Copyright Office or any court) regarding,
such Pledgor’s ownership of any material Patent, Trademark or Copyright, its
right to register the same, or to keep and maintain the same.

(f) Each Pledgor will take all necessary steps that are consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, to maintain and pursue each application relating to any
material Patents, Trademarks or Copyrights (and to obtain the relevant grant or
registration) and to maintain each registration of any Patents, Trademarks and
Copyrights used in the conduct of such Pledgor’s business, including the filing
of applications for renewal, affidavits of use, affidavits of incontestability
and maintenance fees, and, if consistent with sound business judgment, to
initiate opposition, interference and cancellation proceedings against third
parties.

(g) In the event that any Collateral consisting of a material Patent, Trademark
or Copyright used in the conduct of any Pledgor’s business is believed
infringed, misappropriated or diluted by a third party, such Pledgor shall
notify the Collateral Agent promptly after it learns thereof and shall, if
consistent with sound business judgment, promptly sue for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and take such other actions as are
appropriate under the circumstances to protect such Collateral.

(h) Upon the occurrence and during the continuance of any Event of Default, each
Pledgor shall use its commercially reasonable efforts to obtain all requisite
consents or approvals from the licensor of each License included within the
Copyright Collateral, Patent Collateral or Trademarks Collateral to effect the
assignment of all of such Pledgor’s right, title and interest thereunder to the
Collateral Agent or its designee.

4.12 Delivery of Collateral. All certificates or instruments representing or
evidencing any material Account, Equity Interest or other Collateral delivered
to the Collateral Agent pursuant hereto, shall be in form suitable for transfer
by delivery and shall be delivered together with undated stock powers duly
executed in blank, appropriate endorsements or other necessary instruments of
registration, transfer or assignment, duly executed and in form and substance
satisfactory to the Collateral Agent, and in each case such other instruments or
documents as the Collateral Agent may reasonably request.

4.13 Reserved.

4.14 Control of Investment Property and Other Collateral. If any Investment
Property (whether now owned or hereafter acquired) is included in the
Collateral, each applicable Pledgor will notify the Collateral Agent thereof and
will, upon request, promptly take and cause to be taken all actions required
under Articles 8 and 9 of the Uniform Commercial Code and any other

 

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applicable law to enable the Collateral Agent to acquire “control” (within the
meaning of such term under Section 8-106 (or its successor provision) of the
Uniform Commercial Code) of such Investment Property and as may be otherwise
necessary or deemed appropriate by the Collateral Agent to perfect the security
interest of the Collateral Agent therein. In that connection, each applicable
Pledgor shall execute, and cause to be executed, the control agreement in the
form provided by the Collateral Agent. In the event that any Pledgor shall be
entitled to or shall receive any right to payment under any letter of credit,
banker’s acceptance or any similar instrument, whether as beneficiary thereof or
otherwise after the date hereof, such Pledgor shall promptly notify Collateral
Agent thereof in writing. Such Pledgor shall promptly, as Collateral Agent may
specify, either (i) deliver, or cause to be delivered to Collateral Agent, with
respect to any such letter of credit, banker’s acceptance or similar instrument,
the written agreement of the issuer and any other nominated person obligated to
make any payment in respect thereof (including any confirming or negotiating
bank), in form and substance reasonably satisfactory to Collateral Agent,
consenting to the assignment of the proceeds of the letter of credit to
Collateral Agent by Pledgor and agreeing to make all payments thereon directly
to Collateral Agent or as Collateral Agent may otherwise direct or (ii) cause
Collateral Agent to become, at such Pledgor’s expense, the transferee
beneficiary of the letter of credit, banker’s acceptance or similar instrument
(as the case may be). In the event that any Pledgor shall at any time after the
date hereof have any Commercial Tort Claims in excess of $100,000 prior to the
occurrence and continuance of an Event of Default, and any Commercial Tort Claim
after the occurrence and continuance of an Event of Default, such Pledgor shall
promptly notify Collateral Agent thereof in writing, which notice shall (i) set
forth in reasonable detail the basis for and nature of such Commercial Tort
Claim and (ii) include the express grant by such Pledgor to Collateral Agent of
a security interest in such Commercial Tort Claim (and the proceeds thereof). In
the event that such notice does not include such grant of a security interest,
the sending thereof by such Pledgor to Collateral Agent shall be deemed to
constitute such grant to Collateral Agent. Upon the sending of such notice, any
Commercial Tort Claim described therein shall constitute part of the Collateral
and shall be deemed included therein. Without limiting the authorization of
Collateral Agent provided for in this Agreement to file financing statements,
Collateral Agent is hereby irrevocably authorized from time to time and at any
time to file financing statements naming Collateral Agent or its designee as
secured party and any such Pledgor as debtor, or any amendments to any financing
statements, covering any such Commercial Tort Claim.

4.15 Protection of Security Interest. Each Pledgor agrees that it will, at its
own cost and expense, take any and all actions as the Collateral Agent may
reasonably request necessary to (i) perfect and protect the security interest
created hereby; (ii) enable Collateral Agent to exercise and enforce its rights
and remedies hereunder in respect of the Collateral; (iii) warrant and defend
the right, title and interest of the Collateral Agent and the Secured Parties,
or (iv) otherwise effect the purposes of this Agreement.

 

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ARTICLE V

CERTAIN PROVISIONS RELATING TO EQUITY INTERESTS

5.1 Ownership; After-Acquired Equity Interests.

(a) Except to the extent otherwise expressly permitted by or pursuant to the
Credit Agreement, each Pledgor will cause the Equity Interests pledged by it
hereunder to constitute at all times 100% of the capital stock or other Equity
Interests in each issuer held by such Pledgor thereof, such that the issuer
thereof shall be a wholly owned subsidiary of such Pledgor, and unless the
Collateral Agent shall have given its prior written consent, no Pledgor will
cause or permit any such issuer to issue or sell any new capital stock, any
warrants, options or rights to acquire the same, or other Equity Interests of
any nature to any person other than such Pledgor, or cause, permit or consent to
the admission of any other person as a stockholder, partner or member of any
such issuer.

(b) If any Pledgor shall, at any time and from time to time after the date
hereof, acquire any additional capital stock or other Equity Interests in any
Person of the types described in the definition of the term “Equity Interests,”
the same shall be automatically deemed to be Equity Interests, and to be pledged
to the Collateral Agent pursuant to Section 2.1, and such Pledgor will forthwith
pledge and deposit the same with the Collateral Agent and deliver to the
Collateral Agent any certificates or instruments therefor, together with the
endorsement of such Pledgor (in the case of any promissory notes or other
Instruments), undated stock powers (in the case of Equity Interests evidenced by
certificates) or other necessary instruments of transfer or assignment, duly
executed in blank and in form and substance reasonably satisfactory to the
Collateral Agent, together with such other certificates and instruments as the
Collateral Agent may reasonably request (including Uniform Commercial Code
financing statements or appropriate amendments thereto), and will promptly
thereafter deliver to the Collateral Agent a fully completed and duly executed
amendment to this Agreement in the form of Exhibit A (each, a “Pledge
Amendment”) in respect thereof. Each Pledgor hereby authorizes the Collateral
Agent to attach each such Pledge Amendment to this Agreement, and agrees that
all such Collateral listed on any Pledge Amendment shall for all purposes be
deemed Collateral hereunder and shall be subject to the provisions hereof;
provided that the failure of any Pledgor to execute and deliver any Pledge
amendment with respect to any such additional Collateral as required hereinabove
shall not impair the security interest of the Collateral Agent in such
Collateral or otherwise adversely, affect the rights and remedies of the
Collateral Agent hereunder with respect thereto.

(c) If any Equity Interests (whether now owned or hereafter acquired) included
in the Collateral are “uncertificated securities” within the meaning of the
Uniform Commercial Code or are otherwise not evidenced by any certificate or
instrument, each applicable Pledgor will promptly notify the Collateral Agent
thereof and will promptly take and cause to be taken, and will (if the issuer of
such uncertificated securities is a person other than a Subsidiary of any Great
Lakes) use its commercially reasonable efforts to cause the issuer to take, all
actions required under Articles 8 and 9 of the Uniform Commercial Code and any
other applicable law, to enable the Collateral Agent to acquire “control”
(within the meaning of such term under Section 8-106 (or its successor
provision) of the Uniform Commercial Code) of such uncertificated securities and
as may be otherwise necessary or deemed appropriate by the Collateral Agent to
perfect the security interest of the Collateral Agent therein.

 

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5.2 Voting Rights. Each Pledgor shall be entitled to exercise all voting and
other consensual rights pertaining to its Equity Interests (subject to its
obligations under Section 5.1), and for that purpose the Collateral Agent will
execute and deliver or cause to be executed and delivered to each applicable
Pledgor all such proxies and other instruments as such Pledgor may reasonably
request in writing to enable the Pledgor to exercise such voting and other
consensual rights; provided, however, that immediately upon the occurrence and
continuance of an Event of Default such voting rights shall cease to exist (and
at such time all voting rights shall be vested solely with the Collateral
Agent); and provided further that no Pledgor will cast any vote, give any
consent, waiver or ratification, or take or fail to take any action, in any
manner that would, or could reasonably be expected to, violate or be
inconsistent with any of the terms of this Agreement, the Credit Agreement or
any other Loan Document, or have the effect of impairing the position or
interests of the Collateral Agent or any other Secured Party.

5.3 Dividends and Other Distributions. Except as provided otherwise herein, all
interest, income, dividends, distributions and other amounts payable in cash in
respect of the Equity Interests may be paid to and retained by the Pledgors;
provided, however, that all such interest, income, dividends, distributions and
other amounts shall immediately, following the occurrence and during the
continuance of an Event of Default, be paid to the Collateral Agent and retained
by the Collateral Agent as part of the Collateral (except to the extent applied
upon receipt to the repayment of the Secured Obligations). The Collateral Agent
shall also be entitled at all times, following the occurrence and during the
continuance of an Event of Default, to receive directly, and to retain as part
of the Collateral, (i) all interest, income, dividends, distributions or other
amounts paid or payable in cash or other property in respect of any Equity
Interests in connection with the dissolution, liquidation, recapitalization or
reclassification of the capital of the applicable issuer to the extent
representing an extraordinary, liquidating or other distribution in return of
capital, (ii) all additional Equity Interests or other securities or property
(other than cash) paid or payable or distributed or distributable in respect of
any Equity Interests in connection with any noncash dividend, distribution,
return of capital, spin-off, stock split, split-up, reclassification,
combination of shares or interests or similar rearrangement, and (iii) without
affecting any restrictions against such actions contained in the Credit
Agreement, all additional Equity Interests or other securities or property
(including cash) paid or payable or distributed or distributable in respect of
any Equity Interests in connection with any consolidation, merger, exchange of
securities, liquidation or other reorganization. All interest, income,
dividends, distributions or other amounts that are received by any Pledgor in
violation of the provisions of this Section shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other property or
funds of such Pledgor and shall be forthwith delivered to the Collateral Agent
as Collateral in the same form as so received (with any necessary endorsements).

 

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ARTICLE VI

REMEDIES

6.1 Remedies. If an Event of Default shall have occurred and be continuing, the
Collateral Agent shall be entitled to exercise in respect of the Collateral all
of its rights, powers and remedies provided for herein or otherwise available to
it under any other Loan Document, by law, in equity or otherwise, including all
rights and remedies of a secured party under the Uniform Commercial Code, and
shall be entitled in particular, but without limitation of the foregoing, to
exercise the following rights, which each Pledgor agrees to be commercially
reasonable:

(a) to notify any or all account debtors or obligors under any Accounts,
Contracts or other Collateral of the security interest in favor of the
Collateral Agent created hereby and to direct all such persons to make payments
of all amounts due thereon or thereunder directly to the Collateral Agent or to
an account designated by the Collateral Agent; and in such instance and from and
after such notice, all amounts and Proceeds (including wire transfers, checks
and other instruments) received by any Pledgor in respect of any Accounts,
Contracts or other Collateral shall be received in trust for the benefit of the
Collateral Agent hereunder, shall be segregated from the other funds of such
Pledgor and shall be forthwith deposited into such account or paid over or
delivered to the Collateral Agent in the same form as so received (with any
necessary endorsements or assignments), to be held as Collateral and applied to
the Secured Obligations as provided herein; and by this provision, each Pledgor
irrevocably authorizes and directs each Person who is or shall be a party to or
liable for the performance of any Contract, upon receipt of notice from the
Collateral Agent to the effect that an Event of Default has occurred and is
continuing, to attorn to or otherwise recognize the Collateral Agent as owner
under such Contract and to pay, observe and otherwise perform the obligations
under such Contract to or for the Collateral Agent or the Collateral Agent’s
designee as though the Collateral Agent or such designee were such Pledgor named
therein, and to do so until otherwise notified by the Collateral Agent;

(b) to take possession of, receive, endorse, assign and deliver, in its own name
or in the name of any Pledgor, all checks, notes, drafts and other instruments
relating to any Collateral, including receiving, opening and properly disposing
of all mail addressed to any Pledgor concerning Accounts and other Collateral
and to notify the appropriate postal authority to change the mailing or delivery
address of such mail; to verify with account debtors or other contract parties
the validity, amount or any other matter relating to any Accounts or other
Collateral, in its own name or in the name of any Pledgor; to accelerate any
indebtedness or other obligation constituting Collateral that may be accelerated
in accordance with its terms; to take or bring all actions and suits deemed
necessary or appropriate to effect collections and to enforce payment of any
Accounts or other Collateral; to settle, compromise or release in whole or in
part any amounts owing on Accounts or other Collateral; and to extend the time
of payment of any and all Accounts or other amounts owing under any Collateral
and to make allowances and adjustments with respect thereto, all in the same
manner and to the same extent as any Pledgor might have done;

(c) to notify any or all depository institutions with which any Deposit Accounts
are maintained to remit and transfer all monies, securities and other property
on deposit in such Deposit Accounts or deposited or received for deposit
thereafter to the Collateral Agent, for deposit in a Collateral Account or such
other accounts as may be designated by the Collateral Agent, for application to
the Secured Obligations as provided herein;

 

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(d) To transfer to or register in its name or the name of any of its agents or
nominees all or any part of the Collateral, without notice to any Pledgor and
with or without disclosing that such Collateral is subject to the security
interest created hereunder;

(e) to require any Pledgor to, and each Pledgor hereby agrees that it will at
its expense and upon request of the Collateral Agent forthwith, assemble all or
any part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place designated by the Collateral Agent
(it being understood that such obligations to deliver the Collateral is of the
essence of this Agreement and that, accordingly, upon application of a court of
equity having jurisdiction, the Collateral Agent shall be entitled to a decree
requiring specific performance of such obligation) and each Pledgor further
agrees that the Collateral Agent shall have no obligation to clean-up or
otherwise prepare the Collateral for sale, except where failure to clean-up or
otherwise prepare the Collateral for sale would be in violation of Section 9-610
of the Uniform Commercial Code;

(f) to enter and remain upon the premises of any Pledgor and take possession of
all or any part of the Collateral, with or without judicial process; to use the
materials, services, books and records of any Pledgor for the purpose of
liquidating or collecting the Collateral, whether by foreclosure, auction or
otherwise; and to remove the same to the premises of the Collateral Agent or any
designated agent for such time as the Collateral Agent may desire, in order to
effectively collect or liquidate the Collateral;

(g) to exercise, to the extent permitted by applicable law, (i) all voting,
consensual and other rights and powers pertaining to the Equity Interests
(whether or not transferred into the name of the Collateral Agent), at any
meeting of shareholders, partners, members or otherwise, and (ii) any and all
rights of conversion, exchange, subscription and any other rights, privileges or
options pertaining to the Equity Interests as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its Permitted
Discretion any and all of the Equity Interests upon the merger, consolidation,
reorganization, reclassification, combination of shares or interests, similar
rearrangement or other similar fundamental change in the structure of the
applicable issuer, or upon the exercise by any Pledgor or the Collateral Agent
of any right, privilege or option pertaining to such Equity Interests), and in
connection therewith, the right to deposit and deliver any and all of the Equity
Interests with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Collateral Agent may
determine, and give all consents, waivers and ratifications in respect of the
Equity Interests, all without liability except to account for any property
actually received by it, but the Collateral Agent shall have no duty to exercise
any such right, privilege or option or give any such consent, waiver or
ratification and shall not be responsible for any failure to do so or delay in
so doing; and for the foregoing purposes each Pledgor will promptly execute and
deliver or cause to be executed and delivered to the Collateral Agent, upon
request, all such proxies and other instruments as the Collateral Agent may
reasonably request to enable the Collateral Agent to exercise such rights and
powers; AND IN FURTHERANCE OF THE FOREGOING AND WITHOUT LIMITATION THEREOF, EACH
PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE COLLATERAL AGENT AS THE
TRUE AND LAWFUL PROXY AND ATTORNEY-IN-FACT OF SUCH PLEDGOR, WITH FULL

 

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POWER OF SUBSTITUTION IN THE PREMISES, TO, FOLLOWING THE OCCURRENCE AND DURING
THE CONTINUANCE OF AN EVENT OF DEFAULT, EXERCISE ALL SUCH VOTING, CONSENSUAL AND
OTHER RIGHTS AND POWERS TO WHICH ANY HOLDER OF ANY EQUITY INTERESTS WOULD BE
ENTITLED BY VIRTUE OF HOLDING THE SAME, WHICH PROXY AND POWER OF ATTORNEY, BEING
COUPLED WITH AN INTEREST, IS IRREVOCABLE AND SHALL BE EFFECTIVE FOR SO LONG AS
THIS AGREEMENT SHALL BE IN EFFECT;

(h) to sell, resell, assign and deliver, in its Permitted Discretion, all or any
of the Collateral, in one or more parcels, on any securities exchange on which
any Equity Interests may be listed, at public or private sale, at any of the
Collateral Agent’s offices or elsewhere, for cash, upon credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as the Collateral Agent may deem satisfactory. If any of the Collateral is
sold by the Collateral Agent upon credit or for future delivery, the Collateral
Agent shall not be liable for the failure of the purchaser to purchase or pay
for the same and, in the event of any such failure, the Collateral Agent may
resell such Collateral. In no event shall any Pledgor be credited with any part
of the Proceeds of sale of any Collateral until and to the extent cash payment
in respect thereof has actually been received by the Collateral Agent. Each
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right of whatsoever kind, including any equity or right of
redemption of any Pledgor, and each Pledgor hereby expressly waives, to the
fullest extent permitted under applicable law, all rights of redemption, stay or
appraisal, and all rights to require the Collateral Agent to marshal any assets
in favor of such Pledgor or any other party or against or in payment of any or
all of the Secured Obligations, that it has or may have under any rule of law or
statute now existing or hereafter adopted. No demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law, as
referred to below), all of which are hereby expressly waived by each Pledgor,
shall be required in connection with any sale or other disposition of any part
of the Collateral. If any notice of a proposed sale or other disposition of any
part of the Collateral shall be required under applicable law, the Collateral
Agent shall give the applicable Pledgor at least ten (10) days’ prior notice of
the time and place of any public sale and of the time after which any private
sale or other disposition is to be made, which notice each Pledgor agrees is
commercially reasonable. The Collateral Agent shall not be obligated to make any
sale of Collateral if it shall determine not to do so, regardless of the fact
that notice of sale may have been given. The Collateral Agent may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. Upon each public sale and, to the extent
permitted by applicable law, upon each private sale, the Collateral Agent may
purchase all or any of the Collateral being sold, free from any equity, right of
redemption or other claim or demand, and may make payment therefor by
endorsement and application (without recourse) of the Secured Obligations in
lieu of cash as a credit on account of the purchase price for such Collateral.
The Collateral Agent may comply with any applicable state or federal law
requirements in connection with the sale or other disposition of the Collateral
and each Pledgor agrees that such compliance is commercially reasonable. The
Collateral Agent may sell or otherwise dispose of the Collateral without giving
any warranties, specifically disclaiming any warranties of title or the like and
each Pledgor agrees that such disclaimer is commercially reasonable; and

 

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(i) to transfer or register in its name or in the names of any of its agents or
nominees, all or any part of the Domain Names, with or without disclosing that
such Collateral is subject to the security interest created hereunder, by using
the Registrant Name Change Agreement, attached as Annex A to the Grant of
Security Interest in Domain Name Registrations delivered by the applicable
Pledgor to the Collateral Agent pursuant to Section 4.11(a).

6.2 Application of Proceeds. (a) All Proceeds collected by the Collateral Agent
upon any sale, other disposition of or realization upon any of the Collateral,
together with all other moneys received by the Collateral Agent hereunder, shall
be applied in accordance with Section 1.4(b) of the Credit Agreement.

(b) Each Pledgor shall remain liable to the extent of any deficiency between the
amount of all Proceeds realized upon a commercially reasonable sale, other
disposition or collection of the Collateral, and monies held as Collateral
pursuant to this Agreement and the aggregate amount of Secured Obligations. Upon
any sale of any Collateral hereunder by the Collateral Agent (whether by virtue
of the power of sale herein granted, pursuant to judicial proceeding, or
otherwise), the receipt by the Collateral Agent or the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral
so sold, and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.

6.3 Collateral Accounts. Upon the occurrence and during the continuance of an
Event of Default, the Collateral Agent shall have the right to cause to be
established and maintained, at its principal office or such other location or
locations as it may establish from time to time in its Permitted Discretion, one
or more accounts (collectively, “Collateral Accounts”) for the collection of
cash Proceeds of the Collateral. Such Proceeds, when deposited, shall continue
to constitute Collateral for the Secured Obligations and shall not constitute
payment thereof until applied as herein provided. The Collateral Agent shall
have sole dominion and control over all funds deposited in any Collateral
Account, and such funds may be withdrawn therefrom only by the Collateral Agent.
Upon the occurrence and during the continuance of an Event of Default, the
Collateral Agent shall have the right to (and, if directed by the Administrative
Agent and/or the Requisite Lenders as required pursuant to the Credit Agreement,
shall) apply amounts held in the Collateral Accounts in payment of the Secured
Obligations in the manner provided for in Section 6.2.

6.4 Grant of License. Each Pledgor hereby grants to the Collateral Agent an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to any Pledgor) to use, license or sublicense any Patent
Collateral, Trademark Collateral or Copyright Collateral now owned or licensed
or hereafter acquired or licensed by such Pledgor, wherever the same may be
located throughout the world, for such term or terms, on such conditions and in
such manner as the Collateral Agent shall determine, whether general, special or
otherwise, and whether on an exclusive or nonexclusive basis, and including in
such

 

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license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license or sublicense by the
Collateral Agent shall be exercised, at the option of the Collateral Agent, and
only upon the occurrence and during the continuation of an Event of Default;
provided that any license, sublicense or other transaction entered into by the
Collateral Agent in accordance herewith shall be binding upon each applicable
Pledgor notwithstanding any subsequent cure of an Event of Default.

6.5 Registration; Private Sales. (a) If, at any time after the occurrence and
during the continuance of an Event of Default, any Pledgor shall have received
from the Collateral Agent a written request or requests that such Pledgor cause
any registration, qualification or compliance under any federal or state
securities law or laws to be effected with respect to all or any part of the
Equity Interests, such Pledgor will, as soon as practicable and at its expense,
use its best efforts to cause such registration to be effected and be kept
effective and will use its best efforts to cause such qualification and
compliance to be effected and be kept effective as may be so requested and as
would permit or facilitate the sale and distribution of such Equity Interests,
including, without limitation, registration under the Securities Act of 1933, as
amended (the “Securities Act”), appropriate qualifications under applicable blue
sky or other state securities laws and appropriate compliance with any other
applicable requirements of Governmental Authorities; provided, that the
Collateral Agent shall furnish to such Pledgor such information regarding the
Collateral Agent as such Pledgor may reasonably request in writing and as shall
be required in connection with any such registration, qualification or
compliance. Such Pledgor will cause the Collateral Agent to be kept reasonably
advised in writing as to the progress of each such registration, qualification
or compliance and as to the completion thereof, will furnish to the Collateral
Agent such number of prospectuses, offering circulars or other documents
incident thereto as the Collateral Agent from time to time may reasonably
request, and will indemnify the Collateral Agent and all others participating in
the distribution of such Equity Interests against all claims, losses, damages
and liabilities caused by any untrue statement (or alleged untrue statement) of
a material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to such
Pledgor by the Collateral Agent or any other Secured Party expressly for use
therein.

(b) Each Pledgor recognizes that, by reason of certain prohibitions contained in
the Securities Act and applicable state securities laws as in effect from time
to time, the Collateral Agent may be compelled, with respect to any sale of all
or any part of the Equity Interests conducted without registration or
qualification under the Securities Act and such state securities laws, to limit
purchasers to any one or more persons who will represent and agree, among other
things, to acquire such Equity Interests for their own account, for investment
and not with a view to the distribution or resale thereof. Each Pledgor
acknowledges that any such private sales may be made in such manner and under
such circumstances as the Collateral Agent may deem necessary or advisable in
its Permitted Discretion, including at prices and on terms less

 

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favorable than those obtainable through a public sale without such restrictions
(including, without limitation, a public offering made pursuant to a
registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and agrees that the Collateral Agent
shall have no obligation to conduct any public sales and no obligation to delay
the sale of any Equity Interests for the period of time necessary to permit its
registration for public sale under the Securities Act and applicable state
securities laws, and shall not have any responsibility or liability as a result
of its election so not to conduct any such public sales or delay the sale of any
Equity Interests, notwithstanding the possibility that a substantially higher
price might be realized if the sale were deferred until after such registration.
Each Pledgor hereby waives any claims against the Collateral Agent or any other
Secured Party arising by reason of the fact that the price at which any Equity
Interests may have been sold at any private sale was less than the price that
might have been obtained at a public sale or was less than the aggregate amount
of the Secured Obligations, even if the Collateral Agent accepts the first offer
received and does not offer such Equity Interests to more than one offeree.

(c) Each Pledgor agrees that a breach of any of the covenants contained in this
Section will cause irreparable injury to the Collateral Agent and the other
Secured Parties, that the Collateral Agent and the other Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against the Pledgors.

6.6 The Pledgors Remain Liable. Notwithstanding anything herein to the contrary,
(i) each Pledgor shall remain liable under all Contracts to which it is a party
included within the Collateral (including, without limitation, all Investment
Agreements) to perform all of its obligations thereunder to the same extent as
if this Agreement had not been executed, (ii) the exercise by the Collateral
Agent of any of its rights or remedies hereunder shall not release any Pledgor
from any of its obligations under any of such Contracts, and (iii) except as
specifically provided for below, neither the Collateral Agent nor any other
Secured Party shall have any obligation or liability by reason of this Agreement
under any of such Contracts, nor shall the Collateral Agent or any Lender be
obligated to perform any of the obligations or duties of any Pledgor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder. This Agreement shall not in any way be deemed to obligate the
Collateral Agent, any other Secured Party or any purchaser at a foreclosure sale
under this Agreement to assume any of a Pledgor’s obligations, duties or
liabilities under any Investment Agreement, including, without limitation, any
Pledgor’s obligations, if any, to manage the business and affairs of the
applicable partnership, joint venture, limited liability company, limited
liability partnership or other issuer (collectively, the “Partner Obligations”),
unless the Collateral Agent or such other Secured Party or purchaser otherwise
agrees in writing to assume any or all of such Partner Obligations. In the event
of foreclosure by the Collateral Agent hereunder, then except as provided in the
preceding sentence, each applicable Pledgor shall remain bound and obligated to
perform its Partner Obligations and neither the Collateral Agent nor any other
Secured Party shall be deemed to have assumed any Partner Obligations. In the
event the Collateral Agent, any other Secured Party or any purchaser at a
foreclosure sale elects to become a substitute partner or member in place of a
Pledgor, the party making such election shall adopt in writing such Investment

 

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Agreement and agree to be bound by the terms and provisions thereof; and subject
to the execution of such written agreement, each Pledgor hereby irrevocably
consents in advance to the admission of the Collateral Agent, any other Secured
Party or any such purchaser as a substitute partner or member to the extent of
the Equity Interests acquired pursuant to such sale, and agrees to execute any
documents or instruments and take any other action as may be necessary or as may
be reasonably requested in connection therewith. The powers, rights and remedies
conferred on the Collateral Agent hereunder are solely to protect its interest
and privilege in such Contracts, as Collateral, and shall not impose any duty
upon it to exercise any such powers, rights or remedies.

6.7 Waivers. Each Pledgor, to the greatest extent not prohibited by applicable
law, hereby (i) agrees that it will not invoke, claim or assert the benefit of
any rule of law or statute now or hereafter in effect (including, without
limitation, any right to prior notice or judicial hearing in connection with the
Collateral Agent’s possession, custody or disposition of any Collateral or any
appraisal, valuation, stay, extension, moratorium or redemption law), or take or
omit to take any other action, that would or could reasonably be expected to
have the effect of delaying, impeding or preventing the exercise of any rights
and remedies in respect of the Collateral, the absolute sale of any of the
Collateral or the possession thereof by any purchaser at any sale thereof, and
waives the benefit of all such laws and further agrees that it will not hinder,
delay or impede the execution of any power granted hereunder to the Collateral
Agent, but that it will permit the execution of every such power as though no
such laws were in effect, (ii) waives all rights that it has or may have under
any rule of law or statute now existing or hereafter adopted to require the
Collateral Agent to marshal any Collateral or other assets in favor of such
Pledgor or any other party or against or in payment of any or all of the Secured
Obligations, and (iii) waives all rights that it has or may have under any rule
of law or statute now existing or hereafter adopted to demand, presentment,
protest, advertisement or notice of any kind (except notices expressly provided
for herein or in the other Loan Documents) or to require the Collateral Agent to
pursue any third party for any of the Secured Obligations.

ARTICLE VII

THE COLLATERAL AGENT

7.1 The Collateral Agent; Standard of Care. The Collateral Agent will hold all
items of the Collateral at any time received under this Agreement in accordance
with the provisions hereof and the other Loan Documents. The obligations of the
Collateral Agent as holder of the Collateral and interests therein and with
respect to the disposition thereof, and otherwise under this Agreement and the
other Loan Documents, are only those expressly set forth in this Agreement and
the other Loan Documents. The Collateral Agent, to the extent required under the
Credit Agreement, shall act hereunder at the direction, or with the consent, of
the Administrative Agent, Requisite Lenders or all Lenders, as applicable, on
the terms and conditions set forth in the Credit Agreement. The powers conferred
on the Collateral Agent hereunder are solely to protect its interest, on behalf
of the Secured Parties, in the Collateral, and shall not impose any duty upon it
to exercise any such powers. Except for treatment of the Collateral in its
possession in the same manner as that which the Collateral Agent, in its

 

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individual capacity, accords its own property of a similar nature for its own
account, and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to the Collateral. Neither the Collateral Agent nor any other Secured
Party shall be liable to any Pledgor (i) for any loss or damage sustained by
such Pledgor, or (ii) for any loss, damage, depreciation or other diminution in
the value of any of the Collateral that may occur as a result of or in
connection with or that is in any way related to any exercise by the Collateral
Agent or any other Secured Party of any right or remedy under this Agreement,
any failure to demand, collect or realize upon any of the Collateral or any
delay in doing so, or any other act or failure to act on the part of the
Collateral Agent or any other Secured Party, except to the extent that the same
is caused by its own gross negligence or willful misconduct.

7.2 Further Assurances; Attorney-in-Fact. (a) Each Pledgor hereby authorizes the
Collateral Agent to sign and file financing statements and amendments thereto
relating to all or any part of the Collateral (including, without limitation,
information required by part 5 of Article 9 of the Uniform Commercial Code and
which may describe the Collateral as “all personal property” of such Pledgor or
“all assets” of such Pledgor or words of similar effect) without the signature
of such Pledgor, and agrees to do such further acts and things (including,
without limitation, making any notice filings with state tax or revenue
authorities required to be made by account creditors in order to enforce any
Accounts in such state) and to execute and deliver to the Collateral Agent such
additional conveyances, assignments, agreements and instruments as the
Collateral Agent may reasonably require or deem advisable to perfect, establish,
confirm and maintain the security interest and Lien provided for herein, to
carry out the purposes of this Agreement or to further assure and confirm unto
the Collateral Agent its rights, powers and remedies hereunder. Each Pledgor
hereby ratifies and approves all financing statements naming Collateral Agent or
its designee as secured party and any Pledgor as debtor with respect to the
Collateral (and any amendments with respect to such financing statements) filed
by or on behalf of Collateral Agent prior to the date hereof and ratifies and
confirms the authorization of Collateral Agent to file such financing statements
(and amendments, if any). Each Pledgor hereby authorizes Collateral Agent to
adopt on behalf of the Pledgors any symbol required for authenticating any
electronic filing. In no event shall Pledgors at any time file, or permit or
cause to be filed, any correction statement or termination statement with
respect to any financing statement (or amendment or continuation with respect
thereto) naming Collateral Agent or its designee as secured party and any
Pledgor as debtor.

(b) Each Pledgor hereby irrevocably appoints the Collateral Agent its lawful
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, the Collateral Agent or otherwise, and with full
power of substitution in the premises (which power of attorney, being coupled
with an interest, is irrevocable for so long as this Agreement shall be in
effect), from time to time in the Collateral Agent’s Permitted Discretion after
the occurrence and during the continuance of an Event of Default to take any
action and to execute any instruments that the Collateral Agent may deem
necessary or advisable to accomplish the purpose of this Agreement, including,
without limitation:

 

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(i) to ask, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;

(ii) to receive, endorse and collect any checks, drafts, instruments, chattel
paper and other orders for the payment of money made payable to such Pledgor
representing any interest, income, dividend, distribution or other amount
payable in respect of any of the Collateral and to give full discharge for the
same;

(iii) to obtain, maintain and adjust any property or casualty insurance required
to be maintained by such Pledgor under Section 4.10 and direct the payment of
proceeds thereof to the Collateral Agent;

(iv) to pay or discharge taxes, Liens or other encumbrances levied or placed on
or threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by the Collateral Agent
in its Permitted Discretion, any such payments made by the Collateral Agent to
become Secured Obligations of the Pledgors to the Collateral Agent, due and
payable immediately and without demand;

(v) to file any claims or take any action or institute any proceedings that the
Collateral Agent may deem necessary or advisable for the collection of any of
the Collateral or otherwise to enforce the rights of the Collateral Agent with
respect to any of the Collateral; and

(vi) to use, sell, assign, transfer, pledge, make any agreement with respect to
or otherwise deal with any and all of the Collateral as fully and completely as
though the Collateral Agent were the absolute owner of the Collateral for all
purposes, and to do from time to time, at the Collateral Agent’s option and the
Pledgors’ expense, all other acts and things deemed necessary by the Collateral
Agent to protect, preserve or realize upon the Collateral and to more completely
carry out the purposes of this Agreement.

(c) If any Pledgor fails to perform any covenant or agreement contained in this
Agreement after written request to do so by the Collateral Agent (provided that
no such request shall be necessary at any time after the occurrence and during
the continuance of an Event of Default), the Collateral Agent may itself
perform, or cause the performance of, such covenant or agreement and may take
any other action that it deems necessary and appropriate for the maintenance and
preservation of the Collateral or its security interest therein, and the
reasonable expenses so incurred in connection therewith shall be payable by the
Pledgors under Section 8.1.

 

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ARTICLE VIII

MISCELLANEOUS

8.1 Indemnity and Expenses. The Pledgors agree jointly and severally:

(a) to indemnify and hold harmless the Collateral Agent, each other Secured
Party and each of their respective directors, officers, employees, agents and
affiliates from and against any and all claims, damages, demands, losses,
obligations, judgments and liabilities (including, without limitation,
reasonable attorneys’ fees and expenses) in any way arising out of or in
connection with this Agreement, except to the extent the same shall arise as a
result of the gross negligence or willful misconduct of the party seeking to be
indemnified; and

(b) to pay and reimburse the Collateral Agent upon demand for all reasonable
costs and expenses (including, without limitation, reasonable attorneys’ fees
and expenses) that the Collateral Agent may incur in connection with (i) the
custody, use or preservation of, or the sale of, collection from or other
realization upon, any of the Collateral, including the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or otherwise disposing
of or realizing on the Collateral, (ii) the exercise or enforcement of any
rights or remedies granted hereunder (including, without limitation, under
Article VI), under any of the other Loan Documents or otherwise available to it
(whether at law, in equity or otherwise), or (iii) the failure by any Pledgor to
perform or observe any of the provisions hereof. The provisions of this Section
shall survive the execution and delivery of this Agreement, the repayment of any
of the Secured Obligations, the termination of the Commitments under the Credit
Agreement and the termination of this Agreement or any other Loan Document.

8.2 No Waiver. The rights and remedies of the Secured Parties expressly set
forth in this Agreement and the other Loan Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of any Secured
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Default or
Event of Default. No course of dealing between the Pledgors and the Secured
Parties or their agents or employees shall be effective to amend, modify or
discharge any provision of this Agreement or any other Loan Document or to
constitute a waiver of any Default or Event of Default. No notice to or demand
upon any Pledgor in any case shall entitle such Pledgor or any other Pledgor to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of any Secured Party to exercise any right or
remedy or take any other or further action in any circumstances without notice
or demand.

8.3 Pledgors’ Obligations Absolute. Each Pledgor agrees that its obligations
hereunder, and the security interest granted to and all rights, remedies and
powers of the Collateral Agent hereunder, are irrevocable, absolute and
unconditional and shall not be discharged, limited or otherwise affected by
reason of any of the following, whether or not such Pledgor has knowledge
thereof:

(i) any change in the time, manner or place of payment of, or in any other term
of, any Secured Obligations, or any amendment, modification or supplement to,
restatement of, or consent to any rescission or waiver of or departure from, any
provisions of the Credit Agreement, any other Loan Document or any agreement or
instrument delivered pursuant to any of the foregoing;

 

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(ii) the invalidity or unenforceability of any Secured Obligations or any
provisions of the Credit Agreement, any other Loan Document or any agreement or
instrument delivered pursuant to any of the foregoing;

(iii) the addition or release of Pledgors hereunder or the taking, acceptance or
release of any Secured Obligations or additional Collateral or other security
therefor;

(iv) any sale, exchange, release, substitution, compromise, non-perfection or
other action or inaction in respect of any Collateral or other direct or
indirect security for any Secured Obligations, or any discharge, modification,
settlement, compromise or other action or inaction in respect of any Secured
Obligations;

(v) any agreement not to pursue or enforce or any failure to pursue or enforce
(whether voluntarily or involuntarily as a result of operation of law, court
order or otherwise) any right or remedy in respect of any Secured Obligations or
any Collateral or other security therefor, or any failure to create, protect,
perfect, secure, insure, continue or maintain any Liens in any such Collateral
or other security;

(vi) the exercise of any right or remedy available under the Loan Documents, at
law, in equity or otherwise in respect of any Collateral or other security for
any Secured Obligations, in any order and by any manner thereby permitted,
including, without limitation, foreclosure on any such Collateral or other
security by any manner of sale thereby permitted, whether or not every aspect of
such sale is commercially reasonable;

(vii) any bankruptcy, reorganization, arrangement, liquidation, insolvency,
dissolution, termination, reorganization or like change in the corporate
structure or existence of Great Lakes, any other Pledgor or any other person
directly or indirectly liable for any Secured Obligations;

(viii) any manner of application of any payments by or amounts received or
collected from any person, by whomsoever paid and howsoever realized, whether in
reduction of any Secured Obligations or any other obligations of Great Lakes or
any other person directly or indirectly liable for any Secured Obligations,
regardless of what Secured Obligations may remain unpaid after any such
application; or

(ix) any other circumstance that might otherwise constitute a legal or equitable
discharge of, or a defense, set-off or counterclaim available to, Great Lakes,
any Pledgor or a surety or guarantor generally, other than the occurrence of all
of the following: (x) the payment in full of the Secured Obligations (other than
indemnification obligations for which no claim has been asserted) and (y) the
termination of the Commitments under the Credit Agreement (the events in clauses
(x) and (y) above, collectively, the “Termination Requirements”).

8.4 Enforcement. By its acceptance of the benefits of this Agreement, each
Secured Party agrees that this Agreement may be enforced only by the Collateral
Agent, acting upon the instructions or with the consent of the Administrative
Agent and the Lenders to the extent

 

30

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provided for in the Credit Agreement, and that no Secured Party shall have any
right individually to enforce or seek to enforce this Agreement or to realize
upon any Collateral or other security given to secure the payment and
performance of the Secured Obligations.

8.5 Amendments, Waivers, etc. No amendment, modification, waiver, discharge or
termination of, or consent to any departure by any Pledgor from, any provision
of this Agreement, shall be effective unless in a writing executed and delivered
in accordance with Section 9.2 of the Credit Agreement, and then the same shall
be effective only in the specific instance and for the specific purpose for
which given.

8.6 Continuing Security Interest; Term; Successors and Assigns; Assignment;
Termination and Release; Survival. This Agreement shall create a continuing
security interest in the Collateral and shall secure the payment and performance
of all of the Secured Obligations as the same may arise and be outstanding at
any time and from time to time from and after the date hereof, and shall
(i) remain in full force and effect until the occurrence of the Termination
Requirements, (ii) be binding upon and enforceable against each Pledgor and its
successors and assigns (provided, however, that no Pledgor may sell, assign or
transfer any of its rights, interests, duties or obligations hereunder without
the prior written consent of the Administrative Agent and/or the Lenders as
provided for in the Credit Agreement) and (iii) inure to the benefit of and be
enforceable by each Secured Party and its successors and assigns. Upon any sale
or other disposition by any Pledgor of any Collateral in a transaction expressly
permitted hereunder or under or pursuant to the Credit Agreement or any other
applicable Loan Document, or any amendment or waiver hereunder or thereunder,
the Lien and security interest created by this Agreement in and upon such
Collateral shall be automatically released and upon the satisfaction of all of
the Termination Requirements, this Agreement and the Lien and security interest
created hereby shall terminate (subject, however, to the provisions of
Section 8.15 hereof); and in connection with any such release or termination,
the Collateral Agent, at the request and expense of the applicable Pledgor, will
execute and deliver to such Pledgor such documents and instruments evidencing
such release or termination as such Pledgor may reasonably request and will
assign, transfer and deliver to such Pledgor, without recourse and without
representation or warranty, such of the Collateral as may then be in the
possession of the Collateral Agent (or, in the case of any partial release of
Collateral, such of the Collateral so being released as may be in its
possession). All representations, warranties, covenants and agreements herein
shall survive the execution and delivery of this Agreement and any Pledge
Amendment or Pledgor Addendum.

8.7 Additional Pledgors. Each Pledgor recognizes that the provisions of the
Credit Agreement require persons that become Subsidiaries of a Great Lakes, and
that are not already parties hereto, to execute and deliver a Pledgor Addendum,
whereupon each such Person shall become a Pledgor hereunder with the same force
and effect as if originally a Pledgor hereunder on the date hereof, and agrees
that its obligations hereunder shall not be discharged, limited or otherwise
affected by reason of the same, or by reason of the Collateral Agent’s actions
in effecting the same or in releasing any Pledgor hereunder, in each case
without the necessity of giving notice to or obtaining the consent of such
Pledgor or any other Pledgor.

 

31

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8.8 Notices. All notices and other communications provided for hereunder shall
be given to the parties in the manner and subject to the other notice provisions
set forth in the Credit Agreement.

8.9 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

8.10 Severability. To the extent any provision of this Agreement is prohibited
by or invalid under the applicable law of any jurisdiction, such provision shall
be ineffective only to the extent of such prohibition or invalidity and only in
such jurisdiction, without prohibiting or invalidating such provision in any
other jurisdiction or the remaining provisions of this Agreement in any
jurisdiction.

8.11 Construction. The headings of the various sections and subsections of this
Agreement have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.

8.12 Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute but
one contract, and shall become effective when copies hereof which, when taken
together, bear the signatures of each of the parties hereto shall be delivered
to the Collateral Agent. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier, .pdf or other electronic means shall be
effective as delivery of a manually executed signature page hereto.

8.13 Submission to Jurisdiction. EACH PLEDGOR HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK COUNTY, STATE
OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO COLLATERAL AGENT AND
ADMINSITRATIVE AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN
SUCH COURTS. PLEDGORS EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF THE
AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. PLEDGORS HEREBY
WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON PLEDGORS BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO GREAT LAKES REPRESENTATIVE, AT THE ADDRESS SET
FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS
AFTER THE SAME HAS BEEN POSTED.

8.14 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. EACH PARTY

 

32

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ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT
AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE
DEALINGS. EACH PARTY WARRANTS AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY
OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

8.15 Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Pledgor
for liquidation or reorganization, should any Pledgor become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver
or trustee be appointed for all or any significant part of any Pledgor’s assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Secured Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Obligations,
whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, restored or returned.

 

33

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the date first above written.

 

GREAT LAKES AVIATION, LTD. By:   /s/ Michael Matthews Name:   Michael Matthews
Title:   Chief Financial Officer

 

34

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Accepted and agreed to:

 

GB MERCHANT PARTNERS, LLC, as Collateral Agent By:   /s/ Lawrence E. Klaff Name:
  Lawrence E. Klaff Title:   Managing Director

 

35

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Exhibit A to

Pledge and Security Agreement

PLEDGE AMENDMENT

THIS PLEDGE AMENDMENT, dated as of ____________, 201_, is delivered by [NAME OF
PLEDGOR] (the “Pledgor”) pursuant to Section 5.1 of the Security Agreement
referred to below. The Pledgor hereby agrees that this Pledge Amendment may be
attached to the Pledge and Security Agreement, dated as of November 16, 2011,
made by the Pledgor and certain other pledgors named therein in favor of GB
Merchant Partners, LLC, as Collateral Agent (as amended, modified or
supplemented from time to time, the “Security Agreement,” capitalized terms
defined therein being used herein as therein defined), and that the Equity
Interests listed on Annex A to this Pledge Agreement shall be deemed to be part
of the Equity Interests within the meaning of the Security Agreement and shall
become part of the Collateral and shall secure all of the Secured Obligations as
provided in the Security Agreement. This Pledge Agreement and its attachments
are hereby incorporated into the Security Agreement and made a part thereof.

 

[NAME OF PLEDGOR] By:     Title:    

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

Annex A

Equity Interests

 

Name of Issuer

 

Type of Interests

 

Certificate No.

(if applicable)

 

No. of

Shares/Units
(if applicable)

 

Percentage of

Outstanding

Interests in Issuer

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

Exhibit B to

Pledge and Security Agreement

SECURITY AGREEMENT

(COPYRIGHTS)

WHEREAS, [    ], a [    ] (herein referred to as “Grantor”), has adopted, used
and is using the copyrights listed on the annexed Schedule 1 annexed hereto as
part hereof, which copyrights are registered in the United States Copyright
Office (the “Copyrights”);

WHEREAS, Grantor is obligated to GB Merchant Partners, LLC, as collateral agent
(referred to herein as the “Grantee”) and the other Secured Parties, as defined
in the Pledge and Security Agreement dated as of November 16. 2011 (the
“Security Agreement”) among Grantor, the other Pledgors named therein and the
Grantee for the payment and performance of the Secured Obligations (as defined
in the Security Agreement); and

WHEREAS, pursuant to the Security Agreement, Grantor has granted to Grantee a
security interest in all right, title and interest of Grantor in and to the
Copyrights, all extensions and renewals thereof, and all proceeds thereof,
including, without limitation, any and all causes of action which may now or
hereafter exist by reason of infringement thereof (the “Collateral”), to secure
the payment, performance and observance of the Secured Obligations, as defined
in the Security Agreement.

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, Grantor does hereby further grant to Grantee a security interest
in the Collateral to secure the prompt payment, performance and observance of
the Secured Obligations.

Grantor does hereby further acknowledge and affirm that the rights and remedies
of Grantee with respect to the security interest in the Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are hereby incorporated herein by reference as if fully set
forth herein.

Grantee’s address is 101 Huntington Avenue, 10th Floor, Boston, Massachusetts
02199.

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

IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be duly
executed by its officer thereunto duly authorized as of the ____ day of
_________, 201_.

 

[    ] By:       Name:     Title:  

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SCHEDULE 1 TO SECURITY AGREEMENT

COPYRIGHTS

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

Exhibit C to

Pledge and Security Agreement

SECURITY AGREEMENT1

(PATENTS)

WHEREAS, [ ], a [ ] (herein referred to as “Grantor”), owns the letters patent,
and/or applications for letters patent, of the United States, more particularly
described on Schedule 1 annexed hereto as part hereof (the “Patents”);

WHEREAS, Grantor is obligated to GB Merchant Partners, LLC., as collateral agent
(referred to herein as the “Grantee”) and the other Secured Parties as defined
in the Pledge and Security Agreement dated as of November 16, 2011 (the
“Security Agreement”) among Grantor, the other Pledgors named therein and the
Grantee for the payment and performance of the Secured Obligations (as defined
in the Security Agreement); and

WHEREAS, pursuant to the Security Agreement, Grantor has granted to Grantee a
security interest in all right, title and interest of Grantor in and to the
Patents, together with any reissue, continuation, continuation-in-part or
extension thereof, and all proceeds thereof, including, without limitation, any
and all causes of action which may exist by reason of infringement thereof for
the full term of the Patents (the “Collateral”), to secure the prompt payment,
performance and observance of the Secured Obligations;

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, Grantor does hereby further grant to Grantee a security interest
in the Collateral to secure the prompt payment, performance and observance of
the Secured Obligations.

Grantor does hereby further acknowledge and affirm that the rights and remedies
of Grantee with respect to the security interest in the Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are hereby incorporated herein by reference as if fully set
forth herein.

 

 

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Grantee’s address is 101 Huntington Avenue, 10th Floor, Boston, Massachusetts,
02199. IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be duly
executed by its officer thereunto duly authorized as of the ____ day of
_________, 201_.

 

[    ] By:       Name:     Title:  

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

SCHEDULE 1 TO SECURITY AGREEMENT

PATENTS

 

Title

 

Date Issued

 

Patent No.

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

Exhibit D to

Pledge and Security Agreement

SECURITY AGREEMENT1

(TRADEMARKS)

WHEREAS, [ ], a [ ] (herein referred to as “Grantor”), has adopted, used and is
using the trademarks listed on the annexed Schedule 1 annexed hereto as part
hereof, which trademarks are registered in the United States Patent and
Trademark Office (the “Trademarks”);

WHEREAS, Grantor is obligated to GB MERCHANT PARTNERS, LLC, as administrative
and collateral agent (referred to herein as the “Grantee”) and the other Secured
Parties as defined in the Pledge and Security Agreement dated as of November 16,
2011 (the “Security Agreement”) among Grantor, the other Pledgors named therein
and the Grantee for the payment and performance of the Secured Obligations (as
defined in the Security Agreement); and

WHEREAS, pursuant to the Security Agreement, Grantor has granted to Grantee a
security interest in all right, title and interest of Grantor in and to the
Trademarks, together with the goodwill of the business symbolized by the
Trademarks and the applications and registrations thereof, and all proceeds
thereof, including, without limitation, any and all causes of action which may
exist by reason of infringement thereof (the “Collateral”), to secure the
payment, performance and observance of the Secured Obligations;

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, Grantor does hereby further grant to Grantee a security interest
in the Collateral to secure the prompt payment, performance and observance of
the Secured Obligations.

Grantor does hereby further acknowledge and affirm that the rights and remedies
of Grantee with respect to the security interest in the Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are hereby incorporated herein by reference as if fully set
forth herein.

Grantee’s address is 101 Huntington Avenue, 10th Floor, Boston, Massachusetts
02199.

 

 

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

IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be duly
executed by its officer thereunto duly authorized as of the ____ day of
_________, 201_.

 

[    ] By:       Name:     Title:  

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SCHEDULE l TO SECURITY AGREEMENT

TRADEMARKS

 

Trademark

 

Reg. Date

 

Reg. No.

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

Exhibit E to

Pledge and Security Agreement

GRANT OF SECURITY INTEREST IN DOMAIN NAME REGISTRATIONS

WHEREAS, [NAME OF PLEDGOR] (the “Pledgor”) has entered into various domain name
registration agreements with ____________________, providing for the
registration and use of certain domain names, and for each such domain name
subject to a domain name registration agreement has executed a Registrant Name
Change Agreement in the form of Annex A attached hereto (all such domain name
registrations agreements, collectively, the “Domain Names”); and

WHEREAS, the Pledgor has entered into a Pledge and Security Agreement (as
amended, modified, restated or supplemented from time to time, the “Security
Agreement”), dated as of November 16, 2011, in which the Pledgor has agreed with
GB Merchant Partners, LLC, as collateral agent (in such capacity, together with
its successors or assigns, the “Collateral Agent”), with offices at 101
Huntington Avenue, 10th Floor, Boston, Massachusetts 02199, to execute this
Grant of Security Interest.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, as security for the payment and performance of
the Secured Obligations (as defined in the Security Agreement), the Pledgor does
hereby assign and grant to the Collateral Agent a security interest in all of
its right, title and interest in and to the Domain Names, and the use thereof,
together with all proceeds and products thereof and the goodwill of the
businesses symbolized by the Domain Names. This Grant has been given in
conjunction with the assignment and security interest granted to the Collateral
Agent under the Security Agreement, and the provisions of this Grant are without
prejudice to and in addition to the provisions of the Security Agreement, which
are incorporated herein by this reference.

 

[NAME OF PLEDGOR] By:     Title:    

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Annex A

Registrant Name Change Agreements

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Exhibit F to

Pledge and Security Agreement

FORM OF

PLEDGOR ADDENDUM

THIS PLEDGOR ADDENDUM (this “Addendum”), dated as of ____________, 201_, is
executed and delivered by ____________________, a _______________ (the
“Company”), in favor of GB Merchant Partners, LLC, in its capacity as collateral
agent under the Credit Agreement referred to below (in such capacity, in such
capacity, together with its successors or assigns, the “Collateral Agent”),
pursuant to the Pledge and Security Agreement referred to below.

Reference is made to the Credit Agreement, dated as of November __, 2011, among
Great Lakes Aviation, Ltd., an Iowa corporation (“Great Lakes”), the lenders
party thereto, GB Merchant Partners, LLC as Collateral Agent, and Crystal
Financial LLC, as Administrative Agent (as amended, modified or supplemented
from time to time, the “Credit Agreement”). In connection with and as a
condition to the initial and continued extensions of credit under the Credit
Agreement, Great Lakes has executed and delivered a Pledge and Security
Agreement, dated as of November 16, 2011 (as amended, modified or supplemented
from time to time, the “Security Agreement”), pursuant to which it has granted
in favor of the Collateral Agent a security interest in and Lien upon the
Collateral as security for the Secured Obligations. Capitalized terms used
herein without definition shall have the meanings given to them in the Security
Agreement.

Great Lakes has agreed to cause such of its future subsidiaries to become a
party to the Security Agreement as a Pledgor thereunder in accordance with the
terms thereof. The Company is a subsidiary of Great Lakes and will obtain
benefits as a result of the continued extension of credit to Great Lakes under
the Credit Agreement, which benefits are hereby acknowledged, and, accordingly,
desire to execute and deliver this Addendum. Therefore, in consideration of the
foregoing and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and to induce the lenders to continue to
extend credit to Great Lakes under the Credit Agreement, the Company hereby
agrees as follows:

1. The Company hereby joins in and agrees to be bound by each and all of the
provisions of the Security Agreement as a Pledgor thereunder. In furtherance
(and without limitation) of the foregoing, pursuant to Section 2.1 of the
Security Agreement, and as security for all of the Secured Obligations, the
Company hereby pledges, assigns and delivers to the Collateral Agent, for the
ratable benefit of the Secured Parties, and grants to the Collateral Agent, for
the ratable benefit of the Secured Parties, a Lien upon and security interest
in, all of its right, title and interest in and to the Collateral as set forth
in Section 2.1 of the Security Agreement, all on the terms and subject to the
conditions set forth in the Security Agreement.

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

2. The Company hereby represents and warrants that (i) Schedule 1 hereby sets
forth all information required to be listed on Annexes A, B, C, D, E, F, G, and
H to the Security Agreement in order to make each representation and warranty
contained in Article III of the Security Agreement true and correct with respect
to the Company as of the date hereof and after giving effect to this Addendum
and (ii) after giving effect to this Addendum and to the incorporation into such
Annexes, as applicable, of the information set forth in Schedule 1, each
representation and warranty contained in Article III of the Security Agreement
is true and correct with respect to the Company as of the date hereof, as if
such representations and warranties were set forth at length herein.

3. This Addendum shall be a Loan Document, shall be binding upon and enforceable
against the Company and its successors and assigns, and shall inure to the
benefit of and be enforceable by such Secured Party and its successors and
assigns. This Addendum and its attachments are hereby incorporated into the
Security Agreement and made a part thereof.

IN WITNESS WHEREOF, the Company has caused this Addendum to be executed by its
duly authorized officer as of the date first above written.

 

[NAME OF COMPANY] By:     Title:    

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Schedule 1

Information to be added to Annex B of the Security Agreement:

FILING LOCATIONS

Information to be added to Annex C of the Security Agreement:

LOCATIONS OF CHIEF EXECUTIVE OFFICES, RECORDS

RELATING TO COLLATERAL AND EQUIPMENT AND INVENTORY

 

1.

   Chief Executive Office:    Tax I.D. # __________________   

 

     

 

     

 

  

2.

   Records relating to Collateral:      

 

     

 

     

 

  

3.

   Equipment or Inventory:      

 

     

 

     

 

  

4.

   Other Places of Business:      

 

     

 

     

 

  

5.

   Trade/Fictitious or Prior Corporate Names (last five years):      

 

     

 

     

 

  

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6.

   State of Registration, if applicable:      

 

     

 

     

 

  

Information to be added to [Annexes A/D/E/F/G/H] of the Security Agreement: