EXHIBIT 10.2
Execution Version
 
COLLATERAL AGREEMENT
dated as of July 28, 2008
by and among
DYNCORP INTERNATIONAL INC.,
as Holdings,
DYNCORP INTERNATIONAL LLC,
as Borrower,
and certain of their respective Subsidiaries,
as Grantors,
in favor of
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
 

 

 

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Table of Contents

              Page    
ARTICLE I DEFINED TERMS
    1  
SECTION 1.1 Terms Defined in the Uniform Commercial Code
    1  
SECTION 1.2 Definitions
    2  
SECTION 1.3 Other Definitional Provisions
    5  
 
       
ARTICLE II SECURITY INTEREST
    5  
SECTION 2.1 Grant of Security Interest
    5  
SECTION 2.2 Intentionally Omitted
    7  
SECTION 2.3 Grantors Remain Liable
    7  
SECTION 2.4 Authorization to File Financing Statements
    7  
 
       
ARTICLE III REPRESENTATIONS AND WARRANTIES
    8  
SECTION 3.1 Perfected First Priority Liens
    8  
SECTION 3.2 Title; No Other Liens
    8  
SECTION 3.3 State of Organization; Location of Inventory, Equipment and
Fixtures; other Information
    8  
SECTION 3.4 Accounts
    9  
SECTION 3.5 Chattel Paper
    9  
SECTION 3.6 Commercial Tort Claims
    9  
SECTION 3.7 Deposit Accounts and Securities Accounts
    9  
SECTION 3.8 Intellectual Property
    9  
SECTION 3.9 Inventory
    9  
SECTION 3.10 Investment Property; Partnership/LLC Interests
    10  
SECTION 3.11 Instruments
    10  
SECTION 3.12 Government Contracts
    10  
 
       
ARTICLE IV COVENANTS
    10  
SECTION 4.1 Maintenance of Perfected Security Interest; Further Information
    10  
SECTION 4.2 Changes in Locations; Changes in Name or Structure
    11  
SECTION 4.3 Required Notifications
    11  
SECTION 4.4 Delivery Covenants
    11  
SECTION 4.5 Control Covenants
    12  
SECTION 4.6 Accounts
    12  
SECTION 4.7 Intellectual Property
    12  
SECTION 4.8 Investment Property; Partnership/LLC Interests
    13  
SECTION 4.9 Equipment
    14  
SECTION 4.10 Vehicles
    14  
SECTION 4.11 Government Contracts
    14  
SECTION 4.12 Further Assurances
    15  
 
       
ARTICLE V REMEDIAL PROVISIONS
    15  
SECTION 5.1 General Remedies
    15  
SECTION 5.2 Specific Remedies
    16  
SECTION 5.3 Registration Rights
    17  
SECTION 5.4 Application of Proceeds
    18  
SECTION 5.5 Waiver, Deficiency
    18  

 

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              Page  
 
       
ARTICLE VI THE ADMINISTRATIVE AGENT
    19  
SECTION 6.1 Appointment of Administrative Agent as Attorney-In-Fact
    19  
SECTION 6.2 Duty of Administrative Agent
    20  
SECTION 6.3 Authority of Administrative Agent
    20  
 
       
ARTICLE VII MISCELLANEOUS
    21  
SECTION 7.1 Notices
    21  
SECTION 7.2 Amendments, Waivers and Consents
    21  
SECTION 7.3 Expenses, Indemnification, Waiver of Consequential Damages, etc
    21  
SECTION 7.4 Governing Law; Jurisdiction; Venue; Service of Process
    21  
SECTION 7.5 Waiver of Jury Trial
    22  
SECTION 7.6 Injunctive Relief; Punitive Damages
    22  
SECTION 7.7 No Waiver by Course of Conduct; Cumulative Remedies
    23  
SECTION 7.8 Successors and Assigns
    23  
SECTION 7.9 Survival of Indemnities
    23  
SECTION 7.10 Titles and Captions
    23  
SECTION 7.11 Severability
    23  
SECTION 7.12 Counterparts; Integration; Effectiveness
    23  
SECTION 7.13 Advice of Counsel; No Strict Construction
    24  
SECTION 7.14 Acknowledgements
    24  
SECTION 7.15 Releases
    24  
SECTION 7.16 Additional Grantors
    25  
SECTION 7.17 All Powers Coupled With Interest
    25  
SECTION 7.18 Secured Parties
    25  

 

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SCHEDULES:
   
 
   
Schedule 3.3
  Exact Legal Name; Jurisdiction of Organization; Taxpayer Identification
Number; Registered Organization Number; Mailing Address; Chief Executive Office
and other Locations
Schedule 3.6
  Commercial Tort Claims
Schedule 3.7
  Deposit Accounts
Schedule 3.8
  Intellectual Property
Schedule 3.10
  Investment Property and Partnership/LLC Interests
Schedule 3.11
  Instruments
Schedule 3.12
  Government Contracts

 

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COLLATERAL AGREEMENT (this “Agreement”), dated as of July 28, 2008, by and among
DYNCORP INTERNATIONAL INC., a Delaware corporation (“Holdings”), DYNCORP
INTERNATIONAL LLC, a Delaware limited liability company (the “Borrower”),
certain of Holdings’ Subsidiaries as identified on the signature pages hereto
and any Additional Grantor (as defined below) who may become party to this
Agreement (such Subsidiaries and Additional Grantors, collectively, with
Holdings and the Borrower, the “Grantors”), in favor of WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent (in such capacity, the “Administrative
Agent”) for the ratable benefit of the Secured Parties.
STATEMENT OF PURPOSE
Pursuant to the Credit Agreement of even date herewith by and among Holdings,
the Borrower, the Lenders from time to time party thereto and the Administrative
Agent (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), the Lenders have agreed to make Extensions of
Credit to the Borrower upon the terms and subject to the conditions set forth
therein.
Pursuant to the terms of the Guaranty Agreements, Holdings and certain
Subsidiaries of Holdings who are parties hereto have guaranteed the payment and
performance of the Obligations.
It is a condition precedent to the obligation of the Lenders to make their
respective Extensions of Credit to the Borrower under the Credit Agreement that
the Grantors shall have executed and delivered this Agreement to the
Administrative Agent, for the ratable benefit of the Secured Parties.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Extensions of Credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Secured Parties, as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 Terms Defined in the Uniform Commercial Code.
(a) The following terms when used in this Agreement shall have the meanings
assigned to them in the UCC (as defined in the Credit Agreement) as in effect
from time to time: “Accession”, “Account”, “Account Debtor”, “Authenticate”,
“Certificated Security”, “Chattel Paper”; “Commercial Tort Claim”, “Deposit
Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”, “Farm Products”
“Fixture”, “General Intangible”, “Goods”, “Instrument”, “Inventory”, “Investment
Company Security”, “Investment Property”, “Letter of Credit Rights”, “Proceeds”,
“Record”, “Registered Organization”, “Securities Account”, “Securities
Entitlement”, “Securities Intermediary”, “Security”, “Supporting Obligation”,
“Tangible Chattel Paper” and “Uncertificated Security”.
(b) Terms defined in the UCC and not otherwise defined herein or in the Credit
Agreement shall have the meaning assigned in the UCC as in effect from time to
time.

 

 

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SECTION 1.2 Definitions. The following terms when used in this Agreement shall
have the meanings assigned to them below:
“Additional Grantor” means each Subsidiary of Holdings which hereafter becomes a
Grantor pursuant to Section 7.16 (as required pursuant to Section 9.11 of the
Credit Agreement).
“Administrative Agent” has the meaning set forth in the Preamble to this
Agreement.
“Agreement” means this Collateral Agreement, as amended, restated, supplemented
or otherwise modified from time to time.
“Applicable Insolvency Laws” means all Applicable Laws governing bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Sections 547, 548 and 550 and
other “avoidance” provisions of Title 11 of the United States Code, as amended
or supplemented).
“Assignment of Claims Act” means the Assignment of Claims Act of 1940 (41 U.S.C.
Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727), including all
amendments thereto and regulations promulgated thereunder.
“Assignment Documents” means, collectively, the assignments and notices of
assignment executed by each Grantor pursuant to the Assignment of Claims Act and
Federal Acquisition Regulation Subpart 32.8 with respect to any Government
Contract to which such Grantor is a party, each of which shall be in form and
substance satisfactory to the Administrative Agent; provided, that the
applicable contracting government officer (or the equivalent responsible person,
as applicable) shall not be required to execute any Assignment Document until
such Assignment Document is required to be filed with the applicable Government
Authority in accordance with Section 5.2(a)(vi).
“Bank of America Securities Account” means that certain Securities Account
(Account Number 24901078) of the Borrower with Banc of America Securities LLC,
which account holds only amounts necessary to cash collateralize the Bank of
America Letters of Credit, and all Investment Property held in such Securities
Account.
“Borrower” has the meaning set forth in the Preamble to this Agreement.
“Collateral” has the meaning assigned thereto in Section 2.1.
“Collateral Account” has the meaning assigned thereto in Section 5.2.
“Control” means the manner in which “control” is achieved under the UCC, with
respect to any Collateral for which the UCC specifies a method of achieving
“control”.
“Controlled Depository” has the meaning assigned thereto in Section 4.5.
“Controlled Intermediary” has the meaning assigned thereto in Section 4.5.
“Copyrights” means, collectively, all of the following of any Grantor: (a) all
copyrights, rights and interests in copyrights, works protectable by copyright,
copyright registrations and copyright applications anywhere in the world,
including, without limitation, those listed on Schedule 3.8 hereto, (b) all
renewals of any of the foregoing, (c) all income, royalties, damages and
payments now or hereafter due and/or payable under any of the foregoing or with
respect to any of the foregoing, including, without limitation, damages or
payments for past, present or future infringements of any of the foregoing,
(d) the right to sue for past, present or future infringements of any of the
foregoing and (e) all rights corresponding to any of the foregoing throughout
the world.

 

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“Copyright Licenses” means any written agreement now or hereafter in existence
naming any Grantor as licensor or licensee, including, without limitation, those
listed in Schedule 3.8, expressly granting any right under any Copyright
(excluding agreements concerning off-the-shelf computer software), including,
without limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
“Effective Endorsement and Assignment” means, with respect to any specific type
of Collateral, all such endorsements, assignments and other instruments of
transfer reasonably requested by the Administrative Agent with respect to the
Security Interest granted in such Collateral, and in each case, in form and
substance satisfactory to the Administrative Agent.
“Excluded Deposit Account” means, collectively, (a) Deposit Accounts established
solely for the purpose of funding payroll, payroll taxes and other compensation
and benefits to employees and (b) so long as no Event of Default has occurred
and is continuing, Deposit Accounts with amounts on deposit that, when
aggregated with the amounts on deposit in all other Deposit Accounts for which
control agreements have not been obtained (other than those specified in clause
(a)), do not exceed $10,000,000 at any time.
“Government Contract” means a contract between any Grantor and an agency,
department or instrumentality of the United States or any state, municipal or
local Governmental Authority located in the United States or all obligations of
any such Governmental Authority arising under any Account now or hereafter owing
by any such Governmental Authority, as account debtor, to any Grantor.
“Grantors” has the meaning set forth in the Preamble of this Agreement.
“Holdings” has the meaning set forth in the preamble to this Agreement.
“Intellectual Property” means, collectively, all of the following of any
Grantor: (a) all systems software and applications software, all documentation
for such software, including, without limitation, user manuals, flowcharts,
functional specifications, operations manuals, and all formulas, processes, and
know-how embodied in any of the foregoing, (b) discoveries, improvements,
know-how, technology, reports, design information, trade secrets, practices,
specifications, test procedures, maintenance manuals, research and development,
(c) Patents and Patent Licenses, Copyrights and Copyright Licenses, Trademarks
and Trademark Licenses, and (d) other licenses to use any of the items described
in the foregoing clauses (a), (b), and (c).
“Issuer” means any issuer of any Investment Property or Partnership/LLC
Interests (including, without limitation, any Issuer as defined in the UCC).
“Obligations” means with respect to the Borrower, the meaning assigned thereto
in the Credit Agreement, and with respect to each Guarantor, the obligations of
such Guarantor under the Guaranty Agreement executed by such Guarantor and with
respect to all Grantors, all liabilities and obligations of the Grantors
hereunder.
“Material Government Contract” has the meaning assigned thereto in Section 3.12.
“Non-Assignable Contract” means any Material Contract or any Material Government
Contract to which any Grantor is a party that by its terms purports to restrict
or prevent the assignment or granting of a security interest therein (either by
its terms or by any federal or state statutory prohibition or otherwise
irrespective of whether such prohibition or restriction is enforceable under
Section 9-406 through 409 of the UCC).

 

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“Partnership/LLC Interests” means, with respect to any Grantor, the entire
partnership, membership interest or limited liability company interest, as
applicable, of such Grantor in each partnership, limited partnership or limited
liability company owned thereby, including, without limitation, such Grantor’s
capital account, its interest as a partner or member, as applicable, in the net
cash flow, net profit and net loss, and items of income, gain, loss, deduction
and credit of any such partnership, limited partnership or limited liability
company, as applicable, such Grantor’s interest in all distributions made or to
be made by any such partnership, limited partnership or limited liability
company, as applicable, to such Grantor and all of the other economic rights,
titles and interests of such Grantor as a partner or member, as applicable, of
any such partnership, limited partnership or limited liability company, as
applicable, whether set forth in the partnership agreement or membership
agreement, as applicable, of such partnership, limited partnership or limited
liability company, as applicable, by separate agreement or otherwise.
“Patents” means collectively, all of the following of any Grantor: (a) all
patents, rights and interests in patents, all inventions and patent applications
anywhere in the world, including, without limitation, those listed on
Schedule 3.8, (b) all reissues, extensions, continuations (in whole or in part)
and renewals of any of the foregoing, (c) all income, royalties, damages or
payments now or hereafter due and/or payable under any of the foregoing or with
respect to any of the foregoing, including, without limitation, damages or
payments for past, present or future infringements of any of the foregoing,
(d) the right to sue for past, present or future infringements of any of the
foregoing and (e) all rights corresponding to any of the foregoing throughout
the world.
“Patent License” means all written agreements now or hereafter in existence
providing for the express grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a Patent,
including, without limitation, any of the foregoing referred to in Schedule 3.8.
“Restricted Securities Collateral” has the meaning assigned thereto in Section
5.3.
“Securities Act” means the Securities Act of 1933, including all amendments
thereto and regulations promulgated thereunder.
“Security Interests” means the security interests granted pursuant to Article
II, as well as all other security interests created or assigned as additional
security for the Obligations pursuant to the provisions of any Loan Document.
“Trademarks” means, collectively, all of the following of any Grantor: (a) all
trademarks, rights and interests in trademarks, trade names, corporate names,
company names, business names, fictitious business names, internet domain names,
trade styles, service marks, logos, other business identifiers, whether
registered or unregistered, all registrations and recordings thereof, and all
applications in connection therewith (other than each application to register
any trademark or service mark prior to the filing under Applicable Law of a
verified statement of use for such trademark or service mark) anywhere in the
world, including, without limitation, those listed on Schedule 3.8, (b) all
renewals of any of the foregoing, (c) all income, royalties, damages and
payments now or hereafter due and/or payable under any of the foregoing or with
respect to any of the foregoing, including, without limitation, damages or
payments for past, present or future infringements of any of the foregoing,
(d) the right to sue for past, present or future infringements of any of the
foregoing and (e) all rights corresponding to any of the foregoing (including
the goodwill) throughout the world.
“Trademark License” means any written agreement now or hereafter in existence
providing for the express grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred to in
Schedule 3.8.

 

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“Vehicles” means all cars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title under the laws of
any state, all tires and all other appurtenances to any of the foregoing.
SECTION 1.3 Other Definitional Provisions. Terms defined in the Credit Agreement
and not otherwise defined herein shall have the meaning assigned thereto in the
Credit Agreement. With reference to this Agreement and each other Loan Document,
unless otherwise specified herein or in such other Loan Document: (a) the
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined, (b) whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms, (c) the words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”, (d) the word “will” shall be construed to have the
same meaning and effect as the word “shall”, (e) any definition of or reference
to any agreement, instrument or other document herein shall be construed as
referring to such agreement, instrument or other document, as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (f) any reference
herein to any Person shall be construed to include such Person’s permitted
successors and assigns, (g) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (h) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement, (i) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights, (j) the
term “documents” includes any and all instruments, documents, agreements,
certificates, notices, reports, financial statements and other writings, however
evidenced, whether in physical or electronic form, (k) in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including;” the words “to” and “until” each mean “to but
excluding;” and the word “through” means “to and including”, (l) Section
headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document and (m) where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor’s Collateral or the relevant part thereof.
ARTICLE II
SECURITY INTEREST
SECTION 2.1 Grant of Security Interest. Each Grantor hereby grants and pledges
to the Administrative Agent, for the ratable benefit of the Secured Parties, a
security interest in, all of such Grantor’s right, title and interest in the
following property, now owned or at any time hereafter acquired by such Grantor
or in which such Grantor now has or at any time in the future may acquire any
right, title or interest, and wherever located or deemed located (collectively,
the “Collateral”), as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations:
(a) all Accounts;
(b) all cash and currency;
(c) all Chattel Paper;
(d) all Commercial Tort Claims identified on Schedule 3.6;

 

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(e) all Deposit Accounts;
(f) all Documents;
(g) all Equipment;
(h) all Fixtures;
(i) all General Intangibles;
(j) all Instruments;
(k) all Intellectual Property;
(l) all Inventory;
(m) all Investment Property;
(n) all Letter of Credit Rights;
(o) all Vehicles;
(p) all other personal property and Goods not otherwise described above;
(q) all books and records pertaining to the Collateral; and
(r) to the extent not otherwise included, all Proceeds and products of any and
all of the foregoing, all Accessions to any of the foregoing and all collateral
security and Supporting Obligations (as now or hereafter defined in the UCC)
given by any Person with respect to any of the foregoing;
provided, that (i) any Security Interest on any Capital Stock or other ownership
interests issued by any Foreign Subsidiary shall be limited to 65% of all issued
and outstanding shares of all classes of voting Capital Stock of each first-tier
Foreign Subsidiary and 100% of all issued and outstanding shares of all classes
of non-voting Capital Stock of such first-tier Foreign Subsidiary, (ii) the
Security Interests granted herein shall not extend to, and the term “Collateral”
shall not include, (A) any obligation or property of any kind due from, owed by
or belonging to any Sanctioned Person, other than any Sanctioned Person with
whom such Credit Party has a License described in Section 7.1(y) of the Credit
Agreement, (B) any ownership interest in a joint venture that is not a
Subsidiary to the extent that the granting of a security interest therein would,
under the express terms of any contract or agreement governing such joint
venture, be prohibited without the consent of any applicable third party (unless
such prohibition is not enforceable or is otherwise ineffective under Applicable
Law) and such consent shall not have been obtained by such Grantor,
(C) applications filed in the United States Patent and Trademark Office to
register trademarks or service marks on the basis of any Grantor’s “intent to
use” such trademarks or service marks unless and until the filing of a
“Statement of Use” or “Amendment to Allege Use” has been filed and accepted,
whereupon such applications shall automatically be subject to the Lien granted
herein and deemed included in the Collateral as and to the extent provided
herein, (D) the Bank of America Securities Account or (E) any rights under any
lease, instrument, contract or agreement (including, without limitation, domain
name registration agreements) of any Grantor to the extent that the granting of
a security interest therein would, under the express terms of such lease,
instrument, contract or agreement, (1) be prohibited or restricted or (2) result
in a breach of the terms of, constitute a default under or result in a
termination of any such lease, instrument, contract or agreement governing such
right, unless (x) such prohibition or restriction is not enforceable or is
otherwise ineffective under Applicable Law or (y) consent to

 

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such security interest has been obtained from any applicable third party.
Notwithstanding any of the foregoing, (1) the foregoing proviso shall not
affect, limit, restrict or impair the grant by any Grantor of a security
interest in any Account or any money or other amounts due and payable to any
Grantor or to become due and payable to any Grantor under any such lease,
instrument, contract or agreement unless such security interest in such Account,
money or other amount due and payable is also specifically prohibited or
restricted by the terms of such lease, instrument, contract or other agreement
or such security interest in such Account, money or other amount due and payable
would expressly constitute a default under or would expressly grant a party a
termination right under any such lease, instrument, contract or agreement
governing such right unless, in each case, (x) such prohibition or restriction
is not enforceable or is otherwise ineffective under Applicable Law or
(y) consent to such security interest has been obtained from any applicable
third party; and (2) the Security Interests granted herein shall immediately and
automatically attach to and the term “Collateral” shall immediately and
automatically include the rights under any such lease, instrument, contract or
agreement and in such Account, money, or other amounts due and payable to any
Grantor at such time as such prohibition, restriction, event of default or
termination right shall terminate or shall be waived or consent to such Security
Interest has been obtained from any applicable third party.
Notwithstanding any of the foregoing, the payment and performance of the
Obligations shall not be secured by any Hedge Agreement between any Grantor and
any Secured Party.
SECTION 2.2 Intentionally Omitted.
SECTION 2.3 Grantors Remain Liable. Anything herein to the contrary
notwithstanding: (a) each Grantor shall remain liable to perform all of its
duties and obligations under the contracts and agreements included in the
Collateral to the same extent as if this Agreement had not been executed,
(b) the exercise by the Administrative Agent or any Secured Party of any of the
rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral,
(c) neither the Administrative Agent nor any Secured Party shall have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall the Administrative Agent nor
any Secured Party be obligated to perform any of the obligations or duties of
any Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder and (d) neither the Administrative Agent nor any
Secured Party shall have any liability in contract or tort for any Grantor’s
acts or omissions.
SECTION 2.4 Authorization to File Financing Statements. Pursuant to
Section 9-509 of the UCC and any other Applicable Law, each Grantor authorizes
the Administrative Agent to file or record financing statements and other filing
or recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Administrative
Agent determines appropriate to perfect the Security Interests of the
Administrative Agent under this Agreement. Such financing statements may
describe the Collateral in the same manner as described herein or may contain an
indication or description of Collateral that describes such property in any
other manner as the Administrative Agent may determine, in its sole discretion,
is necessary, advisable or prudent to ensure the perfection of the Security
Interest in the Collateral granted herein, including, without limitation,
describing such property as “all assets” or “all personal property.” Further, a
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction. Each Grantor hereby authorizes,
ratifies and confirms all financing statements and other filing or recording
documents or instruments filed by the Administrative Agent prior to the date of
this Agreement.

 

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ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective Extensions of
Credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Administrative Agent and each Secured Party that:
SECTION 3.1 Perfected First Priority Liens.
(a) The Security Interests granted pursuant to this Agreement constitute valid
and enforceable security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, as
collateral security for the Obligations.
(b) When (i) UCC financing statements containing an adequate description of the
Collateral shall have been filed in the offices specified in Schedule 3.3 and
(ii) certificates evidencing the Capital Stock pledged pursuant to the Security
Documents (together with an undated power for each such certificate duly
executed in blank by the registered owner thereof), are delivered to the
Administrative Agent, the Security Interests will constitute first priority
perfected security interests in all right, title and interest of such Grantor in
the Collateral to the extent that a security interest therein may be perfected
by filing pursuant to the UCC or delivery of certificates, prior to all other
Liens and rights of others therein except for Permitted Liens.
(c) When each Copyright security agreement has been filed with the United States
Copyright Office, the Security Interests will constitute first priority
perfected security interests in all right, title and interest of such Grantor in
the Intellectual Property therein described, prior to all other Liens and rights
of others therein except for Permitted Liens.
(d) When each control agreement has been executed and delivered to the
Administrative Agent (or to the extent the Administrative Agent is a depositary
bank with respect to the Deposit Accounts), the Security Interests will
constitute first priority perfected security interests in all right, title and
interest of such Grantor in such Deposit Accounts and Securities Accounts, as
applicable, subject thereto, prior to all other Liens and rights of others
therein and subject to no adverse claims except for Permitted Liens.
SECTION 3.2 Title; No Other Liens. Each Grantor owns each item of the Collateral
free and clear of any and all Liens or claims other than Permitted Liens. No
Grantor has authenticated any agreement authorizing any secured party thereunder
to file a financing statement, except to perfect Permitted Liens.
SECTION 3.3 State of Organization; Location of Inventory, Equipment and
Fixtures; other Information.
(a) The exact legal name of each Grantor is set forth on Schedule 3.3.
(b) Each Grantor is a Registered Organization organized under the laws of the
state identified on Schedule 3.3 under such Grantor’s name. The taxpayer
identification number and, to the extent applicable, Registered Organization
number of each Grantor is set forth on Schedule 3.3 under such Grantor’s name.

 

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(c) As of the date hereof, (i) the mailing address, chief place of business,
chief executive office and office where each Grantor keeps its books and records
relating to the Accounts, Documents, General Intangibles, Instruments and
Investment Property in which it has any interest is located at the locations
specified on Schedule 3.3 under such Grantor’s name and (ii) no Grantor has any
other places of business except those separately set forth on Schedule 3.3 under
such Grantor’s name.
SECTION 3.4 Accounts. To the knowledge of the Grantors, no Account Debtor has
any defense, set-off, claim or counterclaim against any Grantor that can be
asserted against the Administrative Agent, whether in any proceeding to enforce
the Administrative Agent’s rights in the Collateral or otherwise except
defenses, setoffs, claims or counterclaims that are not, in the aggregate,
material to the value of the Accounts, taken as a whole. None of the Accounts
is, nor will any hereafter arising Account be, evidenced by a promissory note or
other Instrument (other than a check) with a value of more than $100,000 that
has not been pledged to the Administrative Agent in accordance with the terms
hereof.
SECTION 3.5 Chattel Paper. As of the date hereof, no Grantor holds any material
Chattel Paper in the ordinary course of its business.
SECTION 3.6 Commercial Tort Claims. As of the date hereof, each Commercial Tort
Claim involving a claim in excess of $200,000 individually or $1,000,000 in the
aggregate owned by any Grantor is listed on Schedule 3.6.
SECTION 3.7 Deposit Accounts and Securities Accounts. As of the date hereof, all
Deposit Accounts of any Grantor (including, without limitation, cash management
accounts that are Deposit Accounts and all Excluded Deposit Accounts),
Securities Accounts of any Grantor (including, without limitation, cash
management accounts that are Securities Accounts) and lockboxes of any Grantor
are listed on Schedule 3.7 and Schedule 3.7 includes the following with respect
to each such Deposit Account, Securities Account or lockbox: (a) the owner of
such account, (b) the name and address of the financial institution or
securities broker where such account is located, (c) account numbers and (d) the
purpose or use of such account.
SECTION 3.8 Intellectual Property.
(a) As of the date hereof, all Copyright registrations, Copyright applications,
issued Patents, Patent applications, Trademark registrations and Trademark
applications owned by any Grantor in its own name are listed on Schedule 3.8.
(b) Except as set forth in Schedule 3.8 on the date hereof, none of the
Intellectual Property owned by any Grantor is the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor, except as could not reasonably be expected to have a Material
Adverse Effect.
SECTION 3.9 Inventory. Except as could not reasonably be expected to have a
Material Adverse Effect, Collateral consisting of Inventory is of good and
merchantable quality, free from any material defects. To the knowledge of each
Grantor, except as could not reasonably be expected to have a Material Adverse
Effect, none of such Inventory is subject to any Intellectual Property rights of
any Person that restricts any Grantor’s ability to manufacture and/or sell such
Inventory. To the knowledge of each Grantor, the completion of the manufacturing
process of such Inventory by a Person other than the applicable Grantor would be
permitted under any contract to which such Grantor is a party or to which the
Inventory is subject.

 

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SECTION 3.10 Investment Property; Partnership/LLC Interests.
(a) As of the date hereof, all Investment Property (including, without
limitation, Securities Accounts and cash management accounts that are Investment
Property) and all Partnership/LLC Interests owned by any Grantor are listed on
Schedule 3.10.
(b) All Investment Property and all Partnership/LLC Interests issued by any
Issuer to any Grantor (i) have been duly and validly issued and, if applicable,
are fully paid and nonassessable, (ii) are beneficially owned as of record by
such Grantor and (iii) constitute all the issued and outstanding shares of all
classes of the Capital Stock or Partnership/LLC Interests of such Issuer issued
to such Grantor.
(c) None of the Partnership/LLC Interests (i) are dealt in or traded on a
Securities exchange or in Securities markets, (ii) are Investment Company
Securities or (iii) are held in a Securities Account.
(d) Except as otherwise set forth on Schedule 3.10, all of the Partnership/LLC
Interests by their terms expressly provide that they are Securities governed by
Article 8 of the UCC.
SECTION 3.11 Instruments. As of the date hereof, each Instrument in an aggregate
principal amount in excess of $200,000 owned by any Grantor and all promissory
notes or other evidence of indebtedness payable to any Grantor are listed on
Schedule 3.11.
SECTION 3.12 Material Government Contracts and Material Contracts.
(a) Material Government Contracts. As of the date hereof, each Government
Contract described in the Borrower’s Form 10-K for the Fiscal Year ended
March 28, 2008 and each other Government Contract with remaining payments of at
least $10,000,000 (collectively, the “Material Government Contracts”) are set
forth on Schedule 3.12. No Material Government Contract prohibits assignment or
requires consent of or notice to any Person in connection with the grant of a
security interest in such Material Government Contract or the assignment of such
Material Government Contract, in each case, to the Administrative Agent
hereunder, except as provided by Federal Acquisition Regulation Subpart 32.8 (or
other applicable law or regulation), to the extent applicable, or as has been
given or made or is currently sought pursuant to Section 4.11.
(b) Material Contracts. No Material Contract prohibits assignment or requires
consent of or notice to any Person in connection with the grant of a security
interest in such Material Contract or the assignment of such Material Contract,
in each case, to the Administrative Agent hereunder, except as has been given or
made or is currently sought pursuant to Section 4.11.
ARTICLE IV
COVENANTS
Until the Obligations (other than (a) contingent indemnification obligations not
yet due and (b) the Specified Obligations) shall have been paid in full and the
Revolving Credit Commitments terminated, each Grantor covenants and agrees that:
SECTION 4.1 Maintenance of Perfected Security Interest; Further Information.
(a) Each Grantor shall maintain the Security Interest created by this Agreement
as a first priority perfected Security Interest (subject only to Permitted
Liens) and shall defend such Security Interest against the claims and demands of
all Persons whomsoever (other than the holders of Permitted Liens).

 

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(b) Each Grantor will from time to time furnish to the Administrative Agent upon
the Administrative Agent’s reasonable request statements and schedules further
identifying and describing the assets and property of such Grantor and such
other reports in connection therewith as the Administrative Agent may reasonably
request, all in reasonable detail.
SECTION 4.2 Changes in Locations; Changes in Name or Structure. No Grantor will,
except upon ten (10) days’ prior written notice to the Administrative Agent
(which time period may be reduced by the Administrative Agent in its sole
discretion) and delivery to the Administrative Agent of (a) all additional
financing statements and other instruments and documents reasonably requested by
the Administrative Agent to maintain the validity, perfection and priority of
the Security Interests and (b) if applicable, a written supplement to the
Schedules of this Agreement:
(i) permit any Deposit Account (other than Excluded Deposit Accounts) described
on Schedule 3.7 to be closed or maintained with any depositary bank other than
the depositary bank set forth on Schedule 3.7 hereto with respect to such
Deposit Account;
(ii) permit any Investment Property (other than (A) Certificated Securities
delivered to the Administrative Agent pursuant to Section 4.4 and (B) Investment
Property contained in the Bank of America Securities Account) to be held by a
Securities Intermediary other than the Securities Intermediary that held such
Investment Property as of the date hereof as set forth on Schedule 3.10;
(iii) change its jurisdiction of organization or the location of its chief
executive office (or the location where any Grantor maintains its books and
records relating to Accounts, Documents, General Intangibles, Instruments and
Investment Property in which it has any interest) from that identified on
Schedule 3.3; or
(iv) change its name, identity or corporate or organizational structure to such
an extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading under the UCC.
SECTION 4.3 Required Notifications. Each Grantor shall promptly notify the
Administrative Agent, in writing, of the acquisition or ownership by such
Grantor of any (a) Commercial Tort Claim having a value in excess of $200,000
individually or $1,000,000 in the aggregate, (b) Deposit Account (other than
Excluded Deposit Accounts) or (c) Investment Property after the date hereof.
SECTION 4.4 Delivery Covenants. To the extent required under the Credit
Agreement, each Grantor will deliver and pledge to the Administrative Agent, for
the ratable benefit of the Secured Parties, to the extent constituting
Collateral (a) all Certificated Securities, (b) all Partnership/LLC Interests
evidenced by a certificate and (c) all negotiable Documents, Instruments and
Tangible Chattel Paper having a value in excess of $200,000 individually or
$1,000,000 in the aggregate, in each case, owned or held by such Grantor and
together with an Effective Endorsement and Assignment and all Supporting
Obligations, as applicable, unless such delivery and pledge has been waived in
writing by the Administrative Agent.

 

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SECTION 4.5 Control Covenants.
(a) Each Grantor shall instruct and otherwise use its commercially reasonable
efforts to cause (i) each depositary bank holding a Deposit Account (other than
Excluded Deposit Accounts) owned by such Grantor and (ii) each Securities
Intermediary holding any Investment Property (other than the Bank of America
Securities Account) owned by such Grantor, to execute and deliver a control
agreement, sufficient to provide the Administrative Agent with Control of such
Deposit Account or Investment Property and otherwise in form and substance
reasonably satisfactory to the Administrative Agent (any such depositary bank
executing and delivering any such control agreement, a “Controlled Depositary”,
and any such Securities Intermediary executing and delivering any such control
agreement, a “Controlled Intermediary”). In the event any such depositary bank
or Securities Intermediary refuses to execute and deliver such control
agreement, the Administrative Agent, in its sole discretion, may require the
applicable Deposit Account and Investment Property to be transferred to the
Administrative Agent or a Controlled Depositary or Controlled Intermediary, as
applicable. After the date hereof, all Deposit Accounts (other than Excluded
Deposit Accounts) and all Investment Property (other than the Bank of America
Securities Account) will be maintained with the Administrative Agent or with a
Controlled Depository or a Controlled Intermediary, as applicable.
(b) Upon the request of the Administrative Agent, each Grantor will take
commercially reasonable actions and deliver all such agreements as are
reasonably requested by the Administrative Agent to provide the Administrative
Agent with Control of all Letter of Credit Rights and all Electronic Chattel
Paper, in each case, in excess of $200,000 individually or $750,000 in the
aggregate and owned or held by such Grantor, including, without limitation, with
respect to any such Electronic Chattel Paper, by having the Administrative Agent
identified as the assignee of the Record(s) pertaining to the single
authoritative copy thereof.
(c) If any Collateral (other than Collateral specifically subject to the
provisions of Section 4.5(a) and Section 4.5(b)) exceeding in value $100,000 in
the aggregate is at any time in the possession or control of any single
consignee, warehouseman, bailee (other than a carrier transporting Inventory in
the ordinary course of business), processor, or any other third party, such
Grantor shall notify in writing such Person of the Security Interests created
hereby, shall use its commercially reasonable efforts to obtain such Person’s
acknowledgment in writing to hold all such Collateral for the benefit of the
Administrative Agent subject to the Administrative Agent’s instructions, and
shall use commercially reasonable efforts to cause such Person to issue and
deliver to the Administrative Agent warehouse receipts, bills of lading or any
similar documents relating to such Collateral, together with an Effective
Endorsement and Assignment.
SECTION 4.6 Accounts. Other than in the ordinary course of business or as could
not reasonably be expected to have a Material Adverse Effect or as otherwise
permitted by the Credit Agreement, no Grantor will (i) grant any extension of
the time of payment of any Account, (ii) compromise or settle any Account for
less than the full amount thereof, (iii) release, wholly or partially, any
Account Debtor, (iv) allow any credit or discount whatsoever on any Account or
(v) amend, supplement or modify any Account in any manner that could reasonably
be likely to adversely affect the value thereof.
SECTION 4.7 Intellectual Property.
(a) Except as could not reasonably be expected to have a Material Adverse
Effect, each Grantor (either itself or through licensees) (i) will use each
registered Trademark (owned by such Grantor) and Trademark for which an
application (owned by such Grantor) is pending, to the extent reasonably
necessary to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) will maintain products and services offered under
such Trademark at a level substantially consistent with the quality of such
products and services as of the date hereof, (iii) will not (and will not permit
any licensee or sublicensee thereof to) do any act or knowingly omit to do any
act whereby such Trademark could reasonably be expected to become invalidated or
impaired in any way that would affect the value or scope of the Trademark,
(iv) will not (and will not permit any licensee or sublicensee thereof to) do
any act, or knowingly omit to do any act, whereby any issued Patent owned by
such Grantor would reasonably be expected to become forfeited, abandoned or
dedicated to the public, (v) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
registered Copyright owned by such Grantor or Copyright for which an application
is pending (owned by such Grantor) could reasonably be expected to become
invalidated or impaired in any way that would affect the value of the Copyright
and (vi) will not (and will not permit any licensee or sublicense thereof to) do
any act whereby any material portion of such Copyrights may fall into the public
domain.

 

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(b) Each Grantor will notify the Administrative Agent and the Secured Parties
promptly if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property owned by such
Grantor is reasonably likely to become forfeited, abandoned or dedicated to the
public, or of any adverse institution of, adverse determination in or adverse
development in any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court or tribunal in any country)
regarding such Grantor’s ownership of, or the validity of, any material
Intellectual Property owned by such Grantor or such Grantor’s right to register
the same or to own and maintain the same.
(c) Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within thirty (30) days (which time period
may be extended by the Administrative Agent in its sole discretion) after the
day on which such filing occurs. Upon request of the Administrative Agent, such
Grantor shall execute and deliver any and all agreements, instruments,
documents, and papers as the Administrative Agent may reasonably request to
evidence the security interest of the Secured Parties in any material Copyright,
Patent or Trademark and the goodwill and General Intangibles of such Grantor
relating thereto or represented thereby.
(d) Each Grantor will take reasonable and necessary steps, and to the extent
determined by such Grantor in its reasonable business judgment to be necessary
or advisable to the operation of its business, at such Grantor’s sole cost and
expense, including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof (each, a “Proceeding”), to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
(e) In the event that any material Intellectual Property owned by a Grantor is
infringed, misappropriated or diluted by a third party, the applicable Grantor
shall (i) at such Grantor’s sole cost and expense, take such actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect
such Intellectual Property and (ii) if such Intellectual Property is of material
economic value, promptly notify the Administrative Agent after it learns of such
infringement, misappropriation or dilution.
SECTION 4.8 Investment Property; Partnership/LLC Interests
(a) Without the prior written consent of the Administrative Agent (which consent
shall not be unreasonably withheld, conditioned or delayed), no Grantor will
(i) vote to enable, or take any other action to permit, any applicable Issuer to
issue any Investment Property or Partnership/LLC Interests, except for such
Investment Property or Partnership/LLC Interests that will be subject to the
Security Interest granted herein in favor of the Secured Parties, or (ii) enter
into any agreement or undertaking restricting the right or ability of such
Grantor or the Administrative Agent to sell, assign or transfer any Investment
Property or Partnership/LLC Interests or Proceeds thereof.

 

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(b) If any Grantor shall become entitled to receive or shall receive (i) any
Certificated Securities (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), options or rights in respect of the
ownership interests of any Issuer, in each case, which Certificated Securities,
options or rights constitute Collateral, whether in addition to, in substitution
of, as a conversion of, or in exchange for, any Investment Property, or
otherwise in respect thereof, or (ii) any sums paid upon or in respect of any
Investment Property constituting Collateral upon the liquidation or dissolution
of any Issuer, such Grantor shall accept the same as the agent of the Secured
Parties, hold the same in trust for the Secured Parties, segregated from other
funds of such Grantor, and promptly deliver the same to the Administrative
Agent, on behalf of the Secured Parties, in accordance with the terms hereof.
Notwithstanding the foregoing, so long as no Event of Default has occurred and
is continuing, each Grantor shall be permitted to retain all cash dividends and
distributions paid by the Issuer thereof.
(c) All Partnership/LLC Interests constituting Collateral issued after the
Closing Date (i) shall by their terms provide that they are Securities governed
by Article 8 of the UCC, (ii) shall be certificated, (iii) the Grantor thereof
shall cause the Issuer to promptly issue and deliver such certificate thereto
and (iv) upon receipt by a Grantor of any such certificate(s), such Grantor
shall promptly deliver such certificate(s) to the Administrative Agent, for the
ratable benefit of the Secured Parties (provided, that prior to such delivery to
the Administrative Agent, the applicable Grantor shall accept the same as the
agent of the Secured Parties, hold the same in trust for the Secured Parties).
SECTION 4.9 Equipment. Each Grantor will maintain each material item of
Equipment in good working order and condition (reasonable wear and tear and
obsolescence excepted).
SECTION 4.10 Vehicles. With respect to any Vehicle located in the United States,
upon the request of the Administrative Agent upon the occurrence and during the
continuance of an Event of Default, all applications for certificates of title
or ownership indicating the Administrative Agent’s first priority Lien on the
Vehicle (subject to any Permitted Liens) covered by such certificate, and any
other necessary documentation, shall be filed in each office in each
jurisdiction which the Administrative Agent shall deem reasonably advisable to
perfect its Liens on the Vehicles.
SECTION 4.11 Material Government Contracts and Non-Assignable Contracts.
(a) Material Government Contracts.
(i) On or prior to the Closing Date, each Grantor shall have delivered to the
Administrative Agent duly completed Assignment Documents for each Material
Government Contract of such Grantor.
(ii) From and after the Closing Date, each Grantor shall (i) promptly notify the
Administrative Agent in writing if it enters into a Material Government Contract
or amends or otherwise modifies a Material Government Contract of such Grantor
existing on the Closing Date if such amendment or modification could reasonably
be expected to have a Material Adverse Effect and (ii) update each Assignment
Document delivered hereunder to the extent required by Applicable Law and
provide additional Assignment Documents with respect to any additional Material
Government Contracts.

 

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(b) Non-Assignable Contracts. Each Grantor shall (i) within thirty (30) days
after the Closing Date with respect to any Non-Assignable Contract in effect on
the Closing Date and within thirty (30) days after entering into any
Non-Assignable Contract after the Closing Date, request in writing the consent
of the counterparty or counterparties to the Non-Assignable Contract pursuant to
the terms of such Non-Assignable Contract and Applicable Law to the assignment
or granting of a security interest in such Non-Assignable Contract to the
Administrative Agent for the ratable benefit of the Secured Parties and (ii) use
its commercially reasonable efforts to obtain such consent as soon as
practicable thereafter.
SECTION 4.12 Further Assurances. Upon the request of the Administrative Agent
and at the sole expense of the Grantors, each Grantor will promptly and duly
execute and deliver, and have recorded, such further instruments and documents
and take such further actions as the Administrative Agent may reasonably request
for the purpose of obtaining or preserving the full benefits of this Agreement
and of the rights and powers granted herein.
ARTICLE V
REMEDIAL PROVISIONS
SECTION 5.1 General Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the UCC or any other Applicable Law. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by Applicable Law referred to below) to or upon any Grantor or
any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker’s board or office of the Administrative Agent or
any Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent
may disclaim any warranties in connection with any sale or other disposition of
the Collateral, including, without limitation, any warranties of title,
possession, quiet enjoyment and the like. The Administrative Agent or any
Secured Party shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold. Each Grantor further agrees, at
the Administrative Agent’s request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Grantor’s premises or elsewhere. To the
extent permitted by Applicable Law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Secured Party
arising out of the exercise by them of any rights hereunder except to the extent
any such claims, damages, or demands result solely from the gross negligence or
willful misconduct of the Administrative Agent or any Secured Party, in each
case against whom such claim is asserted. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least ten (10) days before such sale or
other disposition.

 

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SECTION 5.2 Specific Remedies.
(a) In addition to the remedies set forth in Section 5.1, upon the occurrence
and during the continuance of an Event of Default:
(i) the Administrative Agent may communicate with Account Debtors of any Account
subject to a Security Interest and upon the request of the Administrative Agent,
each Grantor shall notify (such notice to be in form and substance satisfactory
to the Administrative Agent) its Account Debtors and parties to the Material
Contracts subject to a Security Interest that such Accounts and the Material
Contracts have been assigned to the Administrative Agent, for the ratable
benefit of the Secured Parties;
(ii) upon the request of the Administrative Agent, each Grantor shall forward to
the Administrative Agent, on the last Business Day of each week, deposit slips
related to all cash, money, checks or any other similar items of payment
received by the Grantor during such week, and, if requested by the
Administrative Agent, copies of such checks or any other similar items of
payment, together with a statement showing the application of all payments on
the Collateral during such week and a collection report with regard thereto, in
form and substance satisfactory to the Administrative Agent;
(iii) the Administrative Agent may deliver such notices and instructions in
accordance with control agreements covering Deposit Accounts and Securities
Accounts; and
(iv) whenever any Grantor shall receive any cash, money, checks or any other
similar items of payment relating to any Collateral, subject to the terms of any
Permitted Liens, such Grantor agrees that it will, within one (1) Business Day
of such receipt, deposit all such items of payment into a cash collateral
account at the Administrative Agent (the “Collateral Account”) or in a Deposit
Account (other than an Excluded Deposit Account) at a Controlled Depositary, and
until such Grantor shall deposit such cash, money, checks or any other similar
items of payment in the Collateral Account or in a Deposit Account (other than
an Excluded Deposit Account) at a Controlled Depositary, such Grantor shall hold
such cash, money, checks or any other similar items of payment in trust for the
Administrative Agent and the Secured Parties and as property of the
Administrative Agent and the Secured Parties, separate from the other funds of
such Grantor, and the Administrative Agent shall have the right to transfer or
direct the transfer of the balance of each Deposit Account to the Collateral
Account. All such Collateral received by the Administrative Agent hereunder
shall be held by the Administrative Agent in the Collateral Account as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 5.4;
(v) the Administrative Agent shall have the right to receive any and all cash
dividends, payments or distributions made in respect of any Investment Property
or Partnership/LLC Interests or other Proceeds paid in respect of any Investment
Property or Partnership/LLC Interests, and any or all of any Investment Property
or Partnership/LLC Interests may, at the option of the Administrative Agent and
the Secured Parties, be registered in the name of the Administrative Agent or
its nominee, and the Administrative Agent or its nominee may thereafter exercise
(A) all voting, corporate and other rights pertaining to such Investment
Property or Partnership/LLC Interests at any meeting of shareholders, partners
or members of the relevant Issuers and (B) any and all rights of conversion,
exchange and subscription and any other rights, privileges or options pertaining
to such Investment Property or Partnership/LLC Interests as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Investment Property or Partnership/LLC
Interests upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate, partnership or limited liability
company structure of any Issuer or upon the exercise by any Grantor or the
Administrative Agent of any right, privilege or option pertaining to such
Investment Property or Partnership/LLC Interests, and in connection therewith,
the right to deposit and deliver any and all of the Investment Property or
Partnership/LLC Interests with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to account for
property actually received by it; but the Administrative Agent shall have no
duty to any Grantor to exercise any such right, privilege or option and the
Administrative Agent and the Secured Parties shall not be responsible for any
failure to do so or delay in so doing. In furtherance thereof, each Grantor
hereby authorizes and instructs each Issuer with respect to any Collateral
consisting of Investment Property and Partnership/LLC Interests, except as
otherwise expressly permitted hereby, pay any dividends, distributions or other
payments with respect to any Investment Property or Partnership/LLC Interests
directly to the Administrative Agent;

 

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(vi) the Administrative Agent may, and at the request of the Required Lenders
shall, file with the applicable Governmental Authority Assignment Documents
delivered pursuant hereto with respect to any or all of the Material Government
Contracts of the Grantors. After any such filing, the Grantors shall take all
action legally necessary to maintain such filings and to make filings with
respect to any additional Material Government Contracts; provided, that no
Assignment Documents shall be filed except in accordance with this clause (vi);
(vii) the Administrative Agent shall have the right to make test verifications
of the Accounts in any manner and through any medium that it reasonably
considers advisable, and each Grantor shall furnish all such assistance and
information as the Administrative Agent may require in connection with such test
verifications and upon the Administrative Agent’s request and at the expense of
the relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Administrative Agent to furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Accounts; and
(viii) the Administrative Agent shall be entitled to do all acts which the
Administrative Agent may deem necessary or proper to protect its Security
Interest granted hereunder, provided such acts are not inconsistent with or in
violation of the terms of any of the Credit Agreement, of the other Loan
Documents or Applicable Law.
(b) Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the relevant Grantor of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to
Section 5.2(a), each Grantor shall be permitted to receive all cash dividends,
payments or other distributions made in respect of any Investment Property and
any Partnership/LLC Interests, in each case paid in the normal course of
business of the relevant Issuer and consistent with past practice, to the extent
permitted in the Credit Agreement, and to exercise all voting and other
corporate, company and partnership rights with respect to any Investment
Property and Partnership/LLC Interests.
SECTION 5.3 Registration Rights.
(a) If the Administrative Agent shall determine that in order to exercise its
right to sell any or all of the Collateral it is necessary or advisable to have
such Collateral registered under the provisions of the Securities Act (any such
Collateral, the “Restricted Securities Collateral”), the relevant Grantor will
use commercially reasonable efforts to cause each applicable Issuer (and the
officers and directors thereof) to (i) execute and deliver all such instruments
and documents, and do or cause to be done all such other acts as may be, in the
opinion of the Administrative Agent, necessary or advisable to register such
Restricted Securities Collateral, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) cause the registration statement relating
thereto to become effective and to remain effective for a period of one year
from the date of the first public offering of such Restricted Securities
Collateral, or that portion thereof to be sold, and (iii) make all amendments
thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
use commercially reasonable efforts to cause each applicable Issuer (and the
officers and directors thereof) to comply with the provisions of the securities
or “Blue Sky” laws of any and all jurisdictions which the Administrative Agent
shall designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of the Securities Act.

 

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(b) Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Restricted Securities Collateral, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Restricted Securities Collateral for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree
to do so.
(c) Each Grantor agrees to use its commercially reasonable efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Restricted Securities Collateral valid and
binding and in compliance with any and all other Applicable Laws. Each Grantor
further agrees that a breach of any of the covenants contained in this
Section 5.3 will cause irreparable injury to the Administrative Agent and the
Secured Parties, that the Administrative Agent and the 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 5.3 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
SECTION 5.4 Application of Proceeds. Any amounts received by the Administrative
Agent from the exercise of remedies against the Collateral pursuant to
Section 5.1 or 5.2 shall be applied in payment of the Obligations (after
deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral or
in any way relating to the Collateral or the rights of the Administrative Agent
and the Secured Parties hereunder, including, without limitation, reasonable
attorneys’ fees and disbursements) in accordance with Section 12.4 of the Credit
Agreement. Only after (a) the payment by the Administrative Agent of any other
amount required by any provision of Applicable Law, including, without
limitation, Section 9-610 and Section 9-615 of the UCC and (b) the payment in
full of the Obligations and the termination of the Revolving Credit Commitments,
shall the Administrative Agent account for the surplus, if any, to any Grantor,
or to whomever may be lawfully entitled to receive the same (if such Person is
not a Grantor).
SECTION 5.5 Waiver, Deficiency. Each Grantor hereby waives, to the extent
permitted by Applicable Law, all rights of redemption, appraisement, valuation,
stay, extension or moratorium now or hereafter in force under any Applicable Law
in order to prevent or delay the enforcement of this Agreement or the absolute
sale of the Collateral or any portion thereof. Each Grantor shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay its Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any
Secured Party to collect such deficiency.

 

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ARTICLE VI
THE ADMINISTRATIVE AGENT
SECTION 6.1 Appointment of Administrative Agent as Attorney-In-Fact.
(a) Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution,
effective upon the occurrence of an Event of Default, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following upon the
occurrence and during the continuation of an Event of Default:
(i) in the name of such Grantor or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Account or Material Contract
subject to a Security Interest or with respect to any other Collateral and file
any claim or take any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Account or Material Contract
subject to a Security Interest or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent’s and the
Secured Parties’ security interest in such Intellectual Property and the
goodwill and General Intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral, effect any repairs or any insurance called for by the terms of
this Agreement and pay all or any part of the premiums therefor and the costs
thereof;
(iv) execute, in connection with any sale provided for in this Agreement, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and
(v) (A) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct; (B) ask or
demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral; (D) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (E) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (F) settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Administrative Agent may deem appropriate;
(G) license or assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), for such term or terms, on such conditions, and in such manner, as
the Administrative Agent shall in its sole discretion determine; and
(H) generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Administrative Agent was the absolute owner thereof for all purposes, and do, at
the Administrative Agent’s option and such Grantor’s expense, at any time, or
from time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the Security
Interests of the Secured Parties therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.

 

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(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement in accordance with the provisions of
Section 6.1(a).
(c) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof in accordance with Section 6.1(a). All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the Security
Interests created hereby are released.
SECTION 6.2 Duty of Administrative Agent. The Administrative Agent’s sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent, any
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Secured Parties hereunder are solely to protect the interests of the
Administrative Agent and the Secured Parties in the Collateral and shall not
impose any duty upon the Administrative Agent or any Secured Party to exercise
any such powers. The Administrative Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
SECTION 6.3 Authority of Administrative Agent. Each Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement to make any inquiry respecting such
authority.

 

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ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Notices. All notices and communications hereunder shall be given to
the addresses and otherwise made in accordance with Section 14.1 of the Credit
Agreement; provided that notices and communications to the Grantors shall be
directed to the Grantors, at the address of the Borrower set forth in
Section 14.1 of the Credit Agreement.
SECTION 7.2 Amendments, Waivers and Consents. None of the terms, covenants,
agreements or conditions of this Agreement may be amended, supplemented or
otherwise modified nor may they be waived or any consent be given, except in
accordance with Section 14.2 of the Credit Agreement.
SECTION 7.3 Expenses, Indemnification, Waiver of Consequential Damages, etc.
(a) The Grantors, jointly and severally, shall pay all out-of-pocket expenses
incurred by the Administrative Agent and each Secured Party to the extent the
Borrower would be required to do so pursuant to Section 14.3 of the Credit
Agreement.
(b) The Grantors, jointly and severally, shall pay and shall indemnify each
Indemnitee (which for purposes of this Agreement shall include, without
limitation, all Secured Parties) against Indemnified Taxes and Other Taxes to
the extent the Borrower would be required to do so pursuant to Section 5.11 of
the Credit Agreement.
(c) The Grantors, jointly and severally, shall indemnify each Indemnitee to the
extent the Borrower would be required to do so pursuant to Section 14.3 of the
Credit Agreement.
(d) Notwithstanding anything to the contrary contained in this Agreement, to the
fullest extent permitted by Applicable Law, no Grantor shall assert, and each
Grantor hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document, or any agreement or instrument
contemplated hereby or the transactions contemplated hereby or thereby, any
Extension of Credit or the use of the proceeds thereof.
(e) No Indemnitee referred to in this Section 7.3 shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement, or the
other Loan Documents or the transactions contemplated hereby or thereby.
(f) All amounts due under this Section 7.3 shall be payable promptly after
demand therefor.

 

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SECTION 7.4 Governing Law; Jurisdiction; Venue; Service of Process.
(a) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) Submission to Jurisdiction. Each Grantor irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
state and federal courts of the State of New York sitting in the Borough of
Manhattan, City of New York and of the United States District Court for the
Southern District of New York, and any appellate court thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such New York
State court or, to the fullest extent permitted by Applicable Law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or in any other Loan Document shall affect any right
that the Administrative Agent or any Secured Party may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against any Grantor or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. Each Grantor irrevocably and unconditionally waives, to the
fullest extent permitted by Applicable Law, any objection that it may now or
hereafter have to the laying of venue of any action or proceeding arising out of
or relating to this Agreement or any other Loan Document in any court referred
to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by Applicable Law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Service of Process. Each party hereto irrevocably consents to service of
process in the manner provided for notices in Section 14.1 of the Credit
Agreement. Nothing in this Agreement will affect the right of any party hereto
to serve process in any other manner permitted by Applicable Law.
(e) Appointment of the Borrower as Agent for the Grantors. Each Grantor hereby
irrevocably appoints and authorizes the Borrower to act as its agent for service
of process and notices required to be delivered under this Agreement or under
the other Loan Documents, it being understood and agreed that receipt by the
Borrower of any summons, notice or other similar item shall be deemed effective
receipt by each Grantor and its Subsidiaries.
SECTION 7.5 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 7.6 Injunctive Relief; Punitive Damages.
(a) Each Grantor recognizes that, in the event such Grantor fails to perform,
observe or discharge any of its obligations or liabilities under this Agreement
or any other Loan Document, any remedy of law may prove to be inadequate relief
to the Administrative Agent and the Secured Parties. Therefore, each Grantor
agrees that the Administrative Agent and the Secured Parties, at the option of
the Administrative Agent and the Secured Parties, shall be entitled to temporary
and permanent injunctive relief in any such case without the necessity of
proving actual damages.
(b) The Administrative Agent, the Secured Parties and each Grantor hereby agree
that no such Person shall have a remedy of punitive or exemplary damages against
any other party to a Loan Document and each such Person hereby waives any right
or claim to punitive or exemplary damages that they may now have or may arise in
the future in connection with any dispute, whether such dispute is resolved
through arbitration or judicially.

 

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SECTION 7.7 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 7.2), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No delay or failure to take action on the part of
the Administrative Agent or any Secured Party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Administrative Agent or any Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Administrative Agent or such Secured Party would
otherwise have on any future occasion. The enumeration of the rights and
remedies of the Administrative Agent and the Secured Parties set forth in this
Agreement is not intended to be exhaustive and the exercise by the
Administrative Agent and the Secured Parties of any right or remedy shall not
preclude the exercise of any other rights or remedies, all of which shall be
cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise.
SECTION 7.8 Successors and Assigns. The provisions of this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, that no Grantor may
assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of the Administrative Agent and the
Lenders (except as otherwise provided by the Credit Agreement).
SECTION 7.9 Survival of Indemnities. Notwithstanding any termination of this
Agreement, the indemnities to which the Administrative Agent and the Secured
Parties are entitled under the provisions of Section 7.3 and any other provision
of this Agreement and the other Loan Documents shall continue in full force and
effect and shall protect the Administrative Agent and the Secured Parties
against events arising after such termination as well as before.
SECTION 7.10 Titles and Captions. Titles and captions of Articles, Sections and
subsections in, and the table of contents of, this Agreement are for convenience
only, and neither limit nor amplify the provisions of this Agreement.
SECTION 7.11 Severability. Any provision of this Agreement or any other Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 7.12 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

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SECTION 7.13 Advice of Counsel; No Strict Construction. Each of the parties
represents to each other party hereto that it has discussed this Agreement with
its counsel. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
SECTION 7.14 Acknowledgements. Each Grantor hereby acknowledges that (i) it has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party, (ii) it has
received a copy of the Credit Agreement and has reviewed and understands same,
(iii) neither the Administrative Agent nor any Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent and the Secured
Parties, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and (iv) no joint venture is created hereby or by the
other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby or thereby among the Secured Parties or among the Grantors
and the Secured Parties.
SECTION 7.15 Releases.
(a) At such time as the Obligations (other than (a) contingent indemnification
obligations not yet due and (b) the Specified Obligations) shall have been paid
in full in cash and the Revolving Credit Commitments have been terminated,
(i) the Collateral shall be released from the Liens created hereby, and
(ii) this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Grantor hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the Grantors.
At the request and sole expense of any Grantor following any such termination,
the Administrative Agent shall deliver to such Grantor any Collateral held by
the Administrative Agent hereunder, and execute and deliver to such Grantor all
releases or other documents reasonably necessary or desirable to evidence the
release of the Liens created hereby on such Collateral.
(b) (i) Upon the designation of GLS as the Unrestricted Subsidiary pursuant to
Section 9.19 of the Credit Agreement or (ii) if any of the Collateral shall be
sold, transferred or otherwise disposed of by any Grantor in a transaction
permitted by the Credit Agreement, subject to the proviso set forth below, such
Collateral owned by GLS prior to such designation or such other Collateral
subject to such sale, transfer or other disposition shall, in each case, be
automatically released from the Liens created hereby and the Administrative
Agent, at the request and sole expense of such Grantor, shall execute and
deliver to such Grantor all releases or other documents reasonably necessary or
desirable to evidence the release of the Liens created hereby on such
Collateral. In the event that all the Capital Stock of any Grantor that is a
Subsidiary of the Borrower shall be sold, transferred or otherwise disposed of
in a transaction permitted by the Credit Agreement, then, at the request of the
Borrower and at the expense of the Grantors, such Grantor shall be released from
its obligations hereunder; provided that the Borrower shall have delivered to
the Administrative Agent, at least ten (10) Business Days prior to the date of
the proposed release (or such shorter time as may be agreeable to the
Administrative Agent), a written request for release identifying the relevant
Grantor and a description of the sale or other disposition in reasonable detail,
together with a certification by the Borrower stating that such transaction is
in compliance with the Credit Agreement and the other Loan Documents.

 

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SECTION 7.16 Additional Grantors. Each Subsidiary of Holdings that is required
to become a party to this Agreement pursuant to Section 9.11 of the Credit
Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of a joinder agreement in form and
substance reasonably satisfactory to the Administrative Agent.
SECTION 7.17 All Powers Coupled With Interest. All powers of attorney and other
authorizations granted to the Secured Parties, the Administrative Agent and any
Persons designated by the Administrative Agent or any Secured Party pursuant to
any provisions of this Agreement or any of the other Loan Documents shall be
deemed coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied, any of the Revolving Credit
Commitments remain in effect or the Credit Facility has not been terminated.
SECTION 7.18 Secured Parties. Each Secured Party not a party to the Credit
Agreement who obtains the benefit of this Agreement shall be deemed to have
acknowledged and accepted the appointment of the Administrative Agent pursuant
to the terms of the Credit Agreement, and that with respect to the actions and
omissions of the Administrative Agent hereunder or otherwise relating hereto
that do or may affect such Secured Party, the Administrative Agent and each of
its Affiliates shall be entitled to all the rights, benefits and immunities
conferred under Article XIII of the Credit Agreement.
[Signature Pages to Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal by their duly authorized officers, all as of the day and year first
written above.

            DYNCORP INTERNATIONAL INC.,
as Grantor
      By:   /s/ Michael J. Thorne         Name:   Michael J. Thorne       
Title:   Senior Vice President & Chief Financial Officer        DYNCORP
INTERNATIONAL LLC,
as Grantor
      By:   /s/ Michael J. Thorne         Name:   Michael J. Thorne       
Title:   Senior Vice President & Chief Financial Officer        DIV CAPITAL
CORPORATION,
as Grantor
      By:   /s/ Robert A. Krause         Name:   Robert A. Krause       
Title:   Vice President & Treasurer        DYNCORP AEROSPACE OPERATIONS LLC,
as Grantor
      By:   /s/ Robert A. Krause         Name:   Robert A. Krause       
Title:   Vice President & Treasurer        DTS AVIATION SERVICES LLC,
as Grantor
      By:   /s/ Robert A. Krause         Name:   Robert A. Krause       
Title:   Vice President & Treasurer   

[Collateral Agreement — DynCorp]

 

 

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            DYN MARINE SERVICES LLC,
as Grantor
      By:   /s/ Robert A. Krause         Name:   Robert A. Krause       
Title:   Vice President & Treasurer        DYN MARINE SERVICES OF VIRGINIA LLC,
as Grantor
      By:   /s/ Robert A. Krause         Name:   Robert A. Krause       
Title:   Vice President & Treasurer        DYNCORP INTERNATIONAL SERVICES LLC,
as Grantor
      By:   /s/ Robert A. Krause         Name:   Robert A. Krause       
Title:   Vice President & Treasurer        SERVICES INTERNATIONAL LLC,
as Grantor
      By:   /s/ Robert A. Krause         Name:   Robert A. Krause       
Title:   Vice President & Treasurer        WORLDWIDE HUMANITARIAN SERVICES LLC,
as Grantor
      By:   /s/ Robert A. Krause         Name:   Robert A. Krause       
Title:   Vice President & Treasurer   

[Collateral Agreement — DynCorp]

 

 

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

 

            WORLDWIDE RECRUITING AND STAFFING SERVICES LLC,
as Grantor
      By:   /s/ Robert A. Krause         Name:   Robert A. Krause       
Title:   Vice President & Treasurer        GLOBAL LINGUIST SOLUTIONS LLC, as
Grantor
      By:   /s/ Curtis L. Schehr         Name:   Curtis L. Schehr       
Title:   Secretary        WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
      By:   /s/ Robert Sevin         Name:   Robert Sevin        Title:  
Director     

[Collateral Agreement — DynCorp]