EXHIBIT 10.72
 
SECURITY AGREEMENT
by
HERBALIFE INTERNATIONAL, INC.,
HERBALIFE LTD.,
WH INTERMEDIATE HOLDINGS LTD.,
HBL LTD.,
WH LUXEMBOURG HOLDINGS S.à.R.L.,
HLF LUXEMBOURG HOLDINGS S.à R.L.,
WH CAPITAL CORPORATION,
WH LUXEMBOURG INTERMEDIATE HOLDINGS S.à.R.L.,
HERBALIFE INTERNATIONAL LUXEMBOURG S.à.R.L.,
HV HOLDINGS LTD.,
HERBALIFE DISTRIBUTION LTD.,
HERBALIFE LUXEMBOURG DISTRIBUTION S.à.R.L.,
THE SUBSIDIARY GUARANTORS PARTY HERETO,
as Pledgors
in favor of
MERRILL LYNCH CAPITAL CORPORATION,
as Collateral Agent
Dated as of July 21, 2006
 

 

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TABLE OF CONTENTS

         
ARTICLE I Definitions and Interpretation; Perfection Certificate
    2  
SECTION 1.01. Definitions
    2  
SECTION 1.02. Interpretation
    7  
SECTION 1.03. Perfection Certificate
    7  
 
       
ARTICLE II Grant of Security and Secured Obligations
    7  
SECTION 2.01. Pledge
    7  
SECTION 2.02. Certain Limited Exclusions
    9  
SECTION 2.03. Secured Obligations; Continuing Liability
    9  
 
       
ARTICLE III Perfection; Supplements; Further Assurances; Use of Security
Agreement Collateral
    10  
SECTION 3.01. Delivery of Certificated Securities Collateral
    10  
SECTION 3.02. Perfection of Uncertificated Securities Collateral
    10  
SECTION 3.03. Financing Statements and Other Filings
    10  
SECTION 3.04. Other Actions
    11  
SECTION 3.05. Supplements; Further Assurances
    14  
 
       
ARTICLE IV Representations, Warranties and Covenants
    15  
SECTION 4.01. Title
    15  
SECTION 4.02. Organization; Authority; Enforceability
    15  
SECTION 4.03. Authorizations and Approvals
    15  
SECTION 4.04. Reserved
    16  
SECTION 4.05. Limitation on Liens
    16  
SECTION 4.06. Other Financing Statements
    16  
SECTION 4.07. Chief Executive Office; Change of Name; Jurisdiction of
Organization
    16  
SECTION 4.08. Certain Provisions Concerning Securities Collateral
    17  
SECTION 4.09. Certain Provisions Concerning Intellectual Property
    18  
SECTION 4.10. Inspection and Verification
    20  
SECTION 4.11. Payment of Taxes; Contesting Liens; Claims
    21  
SECTION 4.12. Transfers and Other Liens
    21  
SECTION 4.13. Insurance
    21  
 
       
ARTICLE V Remedies
    21  
SECTION 5.01. Remedies
    21  
SECTION 5.02. Notice of Sale
    23  
SECTION 5.03. Waiver of Notice and Claims
    23  
SECTION 5.04. Certain Sales of Security Agreement Collateral
    24  
SECTION 5.05. No Waiver; Cumulative Remedies
    24  
 
       
ARTICLE VI Obligations Absolute; Waivers
    24  
SECTION 6.01. Liability of the Pledgors Absolute
    24  
SECTION 6.02. General Waivers
    26  
SECTION 6.03. California Waivers
    26  
 
       
ARTICLE VII Miscellaneous
    27  
SECTION 7.01. Concerning Collateral Agent
    27  
SECTION 7.02. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact
    28  

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SECTION 7.03. Expenses
    28  
SECTION 7.04. Indemnity
    29  
SECTION 7.05. Continuing Security Interest; Assignment
    29  
SECTION 7.06. Termination; Release
    30  
SECTION 7.07. Modification in Writing
    30  
SECTION 7.08. Notices
    30  
SECTION 7.09. Governing Law; Jurisdiction; Consent to Service of Process
    31  
SECTION 7.10. WAIVER OF JURY TRIAL
    31  
SECTION 7.11. Severability of Provisions
    32  
SECTION 7.12. Execution in Counterparts
    32  
SECTION 7.13. Business Days
    32  
SECTION 7.14. No Credit for Payment of Taxes or Imposition
    32  
SECTION 7.15. No Claims Against Collateral Agent
    32  
SECTION 7.16. No Release Under Agreements; No Liability of Collateral Agent or
Secured Parties
    32  
SECTION 7.17. Obligations Absolute
    33  
SECTION 7.18. Marshaling; Payments Set Aside
    33  
SECTION 7.19. Release of Pledgors
    33  
 
       
EXHIBITS
       
Exhibit A Form of Issuer Acknowledgment
       

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SECURITY AGREEMENT
          This SECURITY AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”), dated as of July 21,
2006, is made by HERBALIFE INTERNATIONAL, INC., a Nevada corporation
(“Borrower”); HERBALIFE LTD., a Cayman Islands exempted company with limited
liability (“Holdings”); WH INTERMEDIATE HOLDINGS LTD., a Cayman Islands exempted
company with limited liability and a direct wholly-owned subsidiary of Holdings
(“Parent”); HBL LTD., a Cayman Islands exempted company with limited liability
and a direct wholly-owned subsidiary of Parent (“Cayman III”); WH LUXEMBOURG
HOLDINGS S.à.R.L., a Luxembourg corporation and a direct wholly-owned subsidiary
of Parent (“Luxembourg Holdings”); HERBALIFE INTERNATIONAL LUXEMBOURG S.à.R.L.,
a Luxembourg corporation and a direct wholly-owned subsidiary of Luxembourg
Holdings (“HIL”); HLF LUXEMBOURG HOLDINGS, S.à.R.L., a Luxembourg corporation
and a direct wholly-owned subsidiary of Luxembourg Holdings (“New Lux”); WH
CAPITAL CORPORATION, a Nevada corporation and a direct wholly-owned subsidiary
of New Lux (“WH Capital”); WH LUXEMBOURG INTERMEDIATE HOLDINGS S.à.R.L., a
Luxembourg corporation and a direct wholly-owned subsidiary of WH Capital
(“Luxembourg Intermediate Holdings”); HV HOLDINGS LTD., a Cayman Islands
exempted company with limited liability and a direct wholly-owned subsidiary of
Parent ( “HV”); HERBALIFE DISTRIBUTION LTD., a Cayman Islands exempted company
with limited liability and a direct wholly-owned subsidiary of HV ( “Cayman
Distribution”); HERBALIFE LUXEMBOURG DISTRIBUTION S.à.R.L., a Luxembourg
corporation and a direct wholly-owned subsidiary of HIL (“Luxembourg
Distribution”); EACH OF THE SUBSIDIARY GUARANTORS LISTED ON THE SIGNATURE PAGES
HERETO OR FROM TIME TO TIME BECOMING A PARTY HERETO BY EXECUTION OF A JOINDER
AGREEMENT (together with Holdings, Parent, Cayman III, Luxembourg Holdings, HIL,
HIL Swiss, New Lux, WH Capital, Luxembourg Intermediate Holdings, HV, Cayman
Distribution, Luxembourg Distribution and each other Subsidiary Guarantor from
time to time executing a Guarantee (defined herein) as required hereunder, the
“Guarantors”), as pledgors and collateral assignors (Borrower, together with the
Guarantors, in such capacities and together with any successors in such
capacities, the “Pledgors”), in favor of MERRILL LYNCH CAPITAL CORPORATION
(“Merrill Lynch”), in its capacity as collateral agent for the lending
institutions from time to time party to the Credit Agreement (defined below)
(such lending institutions, collectively, the “Lenders”), as pledgee, collateral
assignee and secured party (in such capacities and together with any successors
in such capacities, “Collateral Agent”).
WITNESSETH:
          WHEREAS, simultaneously herewith, Borrower, certain of the Guarantors,
the Lenders and Merrill Lynch, as Administrative Agent, have entered into that
certain Credit Agreement, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
whereby the Lenders have agreed to make certain Loans and to issue certain
Credit Agreement L/Cs (defined below) to or for the account of Borrower;
          WHEREAS, in accordance with the Credit Agreement, it is contemplated
that one or more of the Pledgors may enter into one or more Hedging Agreements
with one or more of the Lenders or their respective Affiliates;

 

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           WHEREAS, in accordance with the Credit Agreement, each Guarantor has,
among other things, guaranteed the obligations of Borrower under the Credit
Agreement and the other Loan Documents (the “Guarantees”);
          WHEREAS, each Guarantor will receive substantial benefits from the
execution, delivery and performance of the Loan Documents and each is,
therefore, willing to enter into this Agreement;
          WHEREAS, each Pledgor is or will be the legal or beneficial owner of
the rights in the Security Agreement Collateral (defined below) to be pledged by
it hereunder;
          WHEREAS, it is a condition precedent to the obligations of the Lenders
to make Loans under the Credit Agreement or to enter into Hedging Agreements,
and of the Issuing Bank to issue Credit Agreement L/Cs thereunder, that each
Pledgor execute and deliver the applicable Loan Documents, including this
Agreement; and
          WHEREAS, this Agreement is given by each Pledgor in favor of
Collateral Agent for its benefit and the benefit of the Lenders and any of their
respective Affiliates party to any Hedging Agreement (collectively, the “Secured
Parties”) to secure the payment and performance of all of the Secured
Obligations (defined below).
          NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgors and Collateral Agent hereby agree as follows:
ARTICLE I
Definitions and Interpretation; Perfection Certificate
          SECTION 1.01. Definitions.
               (a) The following capitalized terms have the meanings assigned to
them in the UCC:
          “Account,” “Bank,” “Certificate of Title,” “Chattel Paper,”
“Commercial Tort Claim,” “Commodity Account,” “Commodity Contract,” “Commodity
Intermediary,” “Contract,” “Document,” “Electronic Chattel Paper,” “Entitlement
Holder,” “Entitlement Order,” “Equipment,” “Financial Asset,” “Fixtures,”
“General Intangible,” “Goods,” “Inventory,” “Investment Property,”
“Letter-of-Credit Right,” “Letter of Credit,” “Money,” “Proceeds,” “Record,”
“Securities Entitlement,” “Securities Intermediary,” “Supporting Obligation,”
and “Tangible Chattel Paper.”
               (b) Capitalized terms used in this Agreement (including the
preamble and recitals hereof) but not otherwise defined herein have the meanings
assigned to such terms in the Credit Agreement. In this Agreement:
          “Agreement” has the meaning assigned to such term in the preamble
hereof.
          “Borrower” has the meaning assigned to such term in the preamble
hereof.

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          “Charges” mean any and all property and other taxes, assessments and
special assessments, levies, fees and all governmental charges imposed on or
assessed against, and all claims (including landlords’, carriers’, mechanics’,
workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s
Liens and other claims arising by operation of law) against, all or any portion
of the Security Agreement Collateral.
          “Collateral Account” shall mean any account established and maintained
in accordance with Article IX of the Credit Agreement, and all funds from time
to time on deposit in such account, including all Cash Equivalents, and all
certificates and instruments from time to time representing or evidencing such
Cash Equivalents.
          “Collateral Agent” has the meaning assigned to such term in the
preamble hereof.
          “Collateral Records” means books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and related data processing
software and similar items that at any time evidence or contain information
relating to any of the Security Agreement Collateral or are otherwise necessary
or helpful in the collection thereof or realization thereupon.
          “Collateral Support” means all property (real or personal) assigned,
hypothecated or otherwise securing any Security Agreement Collateral, including
any security agreement or other agreement granting a lien or security interest
in such real or personal property.
          “Control Agreement” means an agreement in form and substance
satisfactory to Collateral Agent sufficient to establish control over any
applicable Investment Property (including any Securities Account or Commodity
Account) or Deposit Account.
          “Copyrights” mean, collectively, with respect to each Pledgor, all
copyrights (whether statutory or common law and whether established or
registered in the United States or any other country) now owned or hereafter
created or acquired by or assigned to such Pledgor, whether published or
unpublished, and all copyright registrations and applications made by such
Pledgor, including the copyrights, registrations and applications listed in
Section II.H of the Perfection Certificate, together with any and all (a) rights
and privileges arising under applicable law with respect to such Pledgor’s use
of any copyrights, (b) reissues, renewals, continuations and extensions thereof,
(c) income, fees, royalties, damages, claims and payments now or hereafter due
or payable with respect thereto, including damages and payments for past,
present or future infringements thereof, (d) rights corresponding thereto
throughout the world and (e) rights to sue for past, present or future
infringements thereof.
          “Credit Agreement” has the meaning assigned to such term in the
recitals hereof.
          “Credit Agreement L/C” has the meaning assigned to the term “Letter of
Credit” in the Credit Agreement.
          “Deposit Account” means, collectively, with respect to each Pledgor,
(a) all “deposit accounts” as such term is defined in the UCC and in any event
shall include the L/C Sub-Account and all accounts and sub-accounts relating to
any of the foregoing accounts, and (b) all cash, funds, checks, notes and any
instruments from time to time on deposit in any of the accounts or sub-accounts
described in clause (a) of this definition.

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          “Distributions” mean, collectively, with respect to each Pledgor, all
dividends, cash, options, warrants, rights, instruments, distributions, returns
of capital or principal, income, interest, profits and other property, interests
(debt or equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Equity Interests, from time
to time received, receivable or otherwise distributed to such Pledgor in respect
of or in exchange for any or all of the Pledged Equity Interests or Pledged
Intercompany Debt.
          “Documents Evidencing Goods” means all Documents evidencing,
representing or issued in connection with Goods.
          “Guarantee” has the meaning assigned to such term in the recitals
hereof.
          “Guarantor” has the meaning assigned to such term in the preamble
hereof.
          “Indemnified Liabilities” has the meaning assigned to such term in
Section 7.04(a).
          “Indemnitees” has the meaning assigned to such term in
Section 7.04(a).
          “Instruments” mean, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in Article 9, rather than Article 3, of
the UCC to the extent such instruments evidence any amounts payable under or in
connection with any item of Security Agreement Collateral or such instruments
constitute Proceeds of any item of Security Agreement Collateral, and in any
event shall include all promissory notes, drafts, bills of exchange or
acceptances.
          “Insurance” means all insurance policies covering any or all of the
Security Agreement Collateral (regardless of whether Collateral Agent is the
loss payee thereof), and all key-man life insurance policies.
          “Intellectual Property” means, collectively, with respect to each
Pledgor, (a) all Patents, (b) all Trademarks, (c) all Copyrights, (d) all
Licenses and (e) the goodwill connected with such Pledgor’s business including
(i) all goodwill connected with the use of and symbolized by any of the
Intellectual Property in which such Pledgor has any interest and (ii) all
know-how, trade secrets, customer and supplier lists, proprietary information,
inventions, methods, procedures, formulae, descriptions, compositions, technical
data, drawings, specifications, name plates, catalogs, confidential information
and the right to limit the use or disclosure thereof by any person or entity,
pricing and cost information, business and marketing plans and proposals,
consulting agreements, engineering contracts and such other assets that relate
to such goodwill.
          “Intercompany Indebtedness” means Indebtedness (whether or not
evidenced by a writing) of any Company (including any Pledgor) payable to a
Pledgor.
          “Issuer” means any issuer of any Pledged Equity Interests.
          “Lenders” has the meaning assigned to such term in the preamble
hereof.
          “Licenses” mean, collectively, with respect to each Pledgor, all
license and distribution agreements, covenants not to sue or any other agreement
with any other party with respect to any Patent, Trademark or Copyright, whether
such Pledgor is a licensor or licensee, distributor or distributee under any
such license or distribution agreement, together with any and

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all (a) renewals, extensions, supplements and continuations thereof; (b) income,
fees, royalties, damages, claims and payments now and hereafter due or payable
thereunder and with respect thereto, including damages and payments for past,
present or future infringements or violations thereof; (c) rights to sue for
past, present and future infringements or violations thereof; and (d) any other
rights to use, exploit or practice any or all of the Patents, Trademarks or
Copyrights.
          “Material Contract” means any Contract or other arrangement that any
Pledgor is a party to and for which breach, nonperformance, cancellation or
failure to renew could reasonably be expected to have a Material Adverse Effect.
Notwithstanding the foregoing, each agreement set forth in Schedule 3.08 of the
Credit Agreement shall constitute a Material Contract.
          “Non-payment Contract” means any Contract or agreement to which any
Pledgor is a party other than a contract whereby the account debtor’s principal
obligation is a monetary obligation; provided that, Non-payment Contracts shall
not include Receivables.
          “Operative Agreement” means (a) in the case of any limited liability
company or partnership or other noncorporate entity, any membership or
partnership agreement or other organizational agreement or document thereof and
(b) in the case of any corporation, any charter or certificate of incorporation
and bylaws thereof.
          “Patents” mean, collectively, with respect to each Pledgor, all
patents issued or assigned to and all patent applications made by such Pledgor
(whether established or registered or recorded in the United States or any other
country), including the patents, patent applications and recordings listed in
Section II.H of the Perfection Certificate, together with any and all (a) rights
and privileges arising under applicable law with respect to such Pledgor’s use
of any patents; (b) inventions and improvements described and claimed therein;
(c) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof; (d) income, fees, royalties, damages, claims and
payments now or hereafter due or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements
thereof; (e) rights corresponding thereto throughout the world; and (f) rights
to sue for past, present or future infringements thereof.
          “Pledged Equity Interests” mean, collectively, with respect to each
Pledgor, (a) the issued and outstanding Equity Interests of each person; and
(b) all rights, privileges, authority and powers of such Pledgor in and to each
such person or under the Operative Agreements of each such person, and the
certificates, instruments and agreements representing the Pledged Equity
Interests and any and all interest of such Pledgor in the entries on the books
of any financial intermediary pertaining to the Pledged Equity Interests, it
being understood that, subject to Section 5.11 of the Credit Agreement, Pledged
Equity Interests do not include any Equity Interests in excess of 66.0% of the
Equity Interests of any Non-Guarantor Subsidiary, provided that, such
Non-Guarantor Subsidiary is also a Foreign Subsidiary.
          “Pledged Intercompany Debt” means, with respect to each Pledgor, all
Intercompany Indebtedness payable to such Pledgor by any Company (and each other
intercompany note hereafter acquired by such Pledgor) and all Intercompany
Notes, certificates, Instruments or agreements evidencing such Intercompany
Indebtedness, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof.
          “Pledgor” has the meaning assigned to such term in the preamble
hereof.

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          “Receivables” means all rights to payment, whether or not earned by
performance, for Goods or other property sold, leased, licensed, assigned or
otherwise disposed of, or services rendered or to be rendered, including all
such rights constituting or evidenced by any Account, Chattel Paper, Instrument,
General Intangible or Investment Related Property, together with all rights, if
any, in any Goods or other property giving rise to such right to payment and all
Collateral Support and Supporting Obligations related thereto and all Accounts,
Chattel Paper, General Intangibles, Instruments and Receivables Records.
          “Receivables Records” means (a) all original copies of all documents,
instruments or other writings or electronic records or other Records evidencing
the Receivables; (b) all books, correspondence, credit or other files, Records,
ledger sheets or cards, invoices, and other papers relating to Receivables,
including all tapes, cards, computer tapes, computer discs, computer runs,
record keeping systems and other papers and documents relating to the
Receivables, whether in the possession or under the control of the Company or
any computer bureau or agent from time to time acting for the Company or
otherwise; (c) all evidences of the filing of financing statements and the
registration of other instruments in connection therewith, and amendments,
supplements or other modifications thereto, notices to other creditors or
secured parties, and certificates, acknowledgments, or other writings, including
lien-search reports, from filing or other registration officers; (d) all credit
information, reports and memoranda relating thereto; and (e) all other written
or nonwritten forms of information related in any way to the foregoing.
          “Secured Obligations” mean all obligations (whether or not
constituting future advances, obligatory or otherwise) of Borrower and all of
the Guarantors from time to time arising under or in respect of this Agreement,
the Credit Agreement, the Notes (if any), the Guarantee, the Credit Agreement
L/Cs, the other Loan Documents and all Hedging Agreements entered into with any
Lender (including the obligations to pay principal, interest and all other
charges, fees, expenses, commissions, reimbursements, premiums, indemnities and
other payments related to or in respect of the obligations contained in this
Agreement, the Credit Agreement, the Notes (if any), the Guarantee, the Credit
Agreement L/Cs, the other Loan Documents and all Hedging Agreements entered into
with any Lender), in each case whether (a) such obligations are direct or
indirect, secured or unsecured, joint or several, absolute or contingent,
reduced to judgment or not, liquidated or unliquidated, disputed or undisputed,
legal or equitable, due or to become due whether at stated maturity, by
acceleration or otherwise; (b) arising in the regular course of business or
otherwise; (c) for payment or performance; (d) discharged, stayed or otherwise
affected by any bankruptcy, insolvency, reorganization or similar proceeding
with respect to any Loan Party or any other person; or (e) now existing or
hereafter arising (including interest and other obligations arising or accruing
after the commencement of any bankruptcy, insolvency, reorganization or similar
proceeding with respect to any Loan Party or any other person, or that would
have arisen or accrued but for the commencement of such proceeding, even if such
obligation or the claim therefor is not enforceable or allowable in such
proceeding).
          “Secured Parties” has the meaning assigned to such term in the
recitals hereof.
          “Securities Account” has the meaning assigned to such term in the UCC;
provided that, the Collateral Account shall be treated as a Securities Account.
          “Securities Collateral” means, collectively, the Pledged Equity
Interests, the Pledged Intercompany Debt and the Distributions.

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          “Security Agreement Collateral” has the meaning assigned to such term
in Section 2.01.
          “Software Embedded in Goods” means, with respect to any Goods, any
computer program embedded in such Goods and any supporting information provided
in connection with a transaction relating to such program if (a) the program is
customarily considered part of such Goods or (b) by becoming the owner of such
Goods a person acquires a right to use such program in connection therewith.
          “Trademarks” mean, collectively, with respect to each Pledgor, all
trademarks (including service marks), slogans, logos, certification marks,
domain names, trade dress, corporate names and trade names, whether registered
or unregistered, owned by or assigned to such Pledgor and all registrations and
applications for the foregoing (whether statutory or common law and whether
established or registered in the United States or any other country) including
the registrations and applications listed in Section II.H of the Perfection
Certificate, together with any and all (a) rights and privileges arising under
applicable law with respect to such Pledgor’s use of any trademarks;
(b) reissues, continuations, extensions and renewals thereof; (c) income, fees,
royalties, damages and payments now and hereafter due or payable thereunder and
with respect thereto, including damages, claims and payments for past, present
or future infringements thereof; (d) rights corresponding thereto throughout the
world; and (e) rights to sue for past, present and future infringements thereof.
          “UCC” means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that, if by reason of mandatory provisions of
law, the perfection or the effect of perfection or nonperfection of the security
interest in any item or portion of the Security Agreement Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of New York, “UCC” also means the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or nonperfection.
          SECTION 1.02. Interpretation. The rules of interpretation specified in
the Credit Agreement, including Sections 1.03 and 11.11 thereof, shall be
applicable to this Agreement. If any conflict or inconsistency exists between
this Agreement and the Credit Agreement, the Credit Agreement shall govern.
          SECTION 1.03. Perfection Certificate. Collateral Agent and each Loan
Party agree that the Perfection Certificate and all descriptions of Security
Agreement Collateral, schedules, amendments and supplements thereto are and
shall at all times remain a part of this Agreement.
ARTICLE II
Grant of Security and Secured Obligations
          SECTION 2.01. Pledge. As collateral security for the payment and
performance in full of all the Secured Obligations, each Pledgor hereby grants
to Collateral Agent, for its benefit and for the benefit of the Secured Parties,
a security interest in and continuing lien on all personal property of such
Pledgor, including all of such Pledgor’s right, title and interest in, to and
under all of the following property, wherever located, whether now

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owned or existing, or hereafter arising or acquired from time to time
(collectively, the “Security Agreement Collateral”):
                    (i) all Accounts;
                    (ii) all Chattel Paper;
                    (iii) all Commercial Tort Claims;
                    (iv) all Deposit Accounts;
                    (v) all Documents;
                    (vi) all General Intangibles;
                    (vii) all Goods (including, in any event, Equipment,
Fixtures, Inventory, Documents Evidencing Goods and Software Embedded in Goods);
                    (viii) all Instruments;
                    (ix) all Insurance;
                    (x) all Intellectual Property;
                    (xi) all Investment Property and Financial Assets;
                    (xii) all Letters of Credit and Letter-of-Credit Rights;
                    (xiii) all Material Contracts and Non-payment Contracts;
                    (xiv) all Money; (xv) all Receivables; (xvi) all Securities
Collateral;
                    (xvii) all books and Records relating to any and/or all of
the foregoing;
                    (xviii) to the extent not otherwise included above, all
Collateral Records, Collateral Support and Supporting Obligations relating to
any and/or all of the foregoing; and
                    (xix) to the extent not otherwise included above, all other
personal property and all Proceeds and products of, accessions and additions to,
profits and rents from, and replacements for or in respect of any of the
foregoing;
it being understood that, subject to the other provisions hereof and of the
Credit Agreement, the foregoing grant of a security interest shall not diminish
any Pledgor’s

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exclusive right and license to use, or grant to other persons license or
sublicenses in, the Intellectual Property.
          SECTION 2.02. Certain Limited Exclusions. Notwithstanding anything
herein to the contrary, in no event shall the security interest granted under
Section 2.01(a) attach to, and the Security Agreement Collateral shall not
include:
               (a) any agreement to which any Pledgor is a party to the extent
that the collateral assignment thereof or the creation of a security interest
therein would constitute a breach of the terms of such agreement, or would
permit any party to such agreement to terminate such agreement, in each case as
entered into by the applicable Pledgor; provided that, any of the agreements
excluded in accordance with the foregoing shall cease to be so excluded (x) to
the extent such term is, or would be (in the case of after-acquired property or
changes to applicable law), rendered ineffective under Sections 9-406, 9-407,
9-408 or 9-409 of the UCC of any relevant jurisdiction (or any successor
provision) or any other applicable law (including the Bankruptcy Code) or
principles of equity; or (y) if the applicable Pledgor has obtained all of the
consents of the other parties to such agreement necessary for the collateral
assignment of, or creation of a security interest in, such agreement;
               (b) any property or asset hereafter acquired by any Pledgor that
is subject to a Lien permitted to be incurred pursuant to Sections 6.02(g), (h),
(i) and (k) of the Credit Agreement, solely to the extent that the documents
evidencing such Lien prohibit the grant of a security interest in or Lien on
such property or asset; provided that, upon such property or asset no longer
being subject to such Lien or prohibition, such property or asset shall (without
any act or delivery by any person) constitute Security Agreement Collateral
hereunder;
               (c) subject to Section 5.11 of the Credit Agreement, no more than
66.0% of the Equity Interests of Parent, Cayman III, Luxembourg Holdings, HIL,
HV or any Non-Guarantor Subsidiary, provided that, such Non-Guarantor Subsidiary
is also a Foreign Subsidiary; or
               (d) the Equity Interests of the Designated Subsidiaries.
Collateral Agent agrees that, at any Pledgor’s reasonable request and expense,
it will provide such Pledgor confirmation that the assets described in this
Section 2.02 are in fact excluded from the Security Agreement Collateral.
          SECTION 2.03. Secured Obligations; Continuing Liability.
               (a) Security for Obligations. This Agreement secures, and the
Security Agreement Collateral is collateral security for, the payment and
performance in full when due of all the Secured Obligations.
               (b) Continuing Liability under Security Agreement Collateral.
Notwithstanding anything herein to the contrary, (i) each Pledgor shall remain
liable under each of the obligations and agreements included in the Security
Agreement Collateral, including any obligations or agreements relating to any
Pledged Equity Interests, to perform all of the obligations undertaken by it
thereunder, all in accordance with the terms and provisions thereof, and neither
Collateral Agent nor any Secured Party shall have any obligation or liability
(x) under any of such agreements by reason of this Agreement or any other
document relating hereto, or (y) to make any inquiry regarding the nature or
sufficiency of any payment received by it, or have

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any obligation to take any action to collect or enforce any rights under any
agreement included in the Security Agreement Collateral, including any
agreements relating to any Pledged Equity Interests; (ii) the exercise by
Collateral Agent of any of its rights hereunder shall not release any Pledgor
from any of its duties or obligations under the contracts and agreements
included in the Security Agreement Collateral; and (iii) nothing herein is
intended to or shall be a delegation of duties to Collateral Agent or any other
Secured Party.
ARTICLE III
Perfection; Supplements; Further Assurances; Use of Security Agreement
Collateral
          SECTION 3.01. Delivery of Certificated Securities Collateral. All
certificates, agreements or instruments representing or evidencing the
Securities Collateral, to the extent not previously delivered to Collateral
Agent, shall promptly upon receipt thereof by any Pledgor be delivered to and
held by or on behalf of Collateral Agent pursuant hereto. All certificated
Securities Collateral shall be in suitable form for transfer by delivery or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Collateral Agent. Collateral
Agent shall have the right, at any time upon the occurrence and during the
continuance of any Event of Default, to endorse, assign or otherwise transfer to
or to register in the name of Collateral Agent or any of its nominees or endorse
for negotiation any or all of the Securities Collateral, without any indication
that such Securities Collateral is subject to the security interest hereunder.
In addition, Collateral Agent shall have the right, at any time upon the
occurrence and during the continuance of any Event of Default, to exchange
certificates representing or evidencing Securities Collateral for certificates
of smaller or larger denominations.
          SECTION 3.02. Perfection of Uncertificated Securities Collateral. If
any Issuer of Pledged Equity Interests is organized in a jurisdiction that does
not permit the use of certificates to evidence equity ownership, or if any of
the Pledged Equity Interests are at any time not evidenced by certificates of
ownership, then each applicable Pledgor shall, to the extent permitted by
applicable law, record such pledge on the equityholder register or the books of
the Issuer, cause the Issuer to execute and deliver to Collateral Agent an
acknowledgment of the pledge of such Pledged Equity Interests substantially in
the form of Exhibit A annexed hereto and, upon Collateral Agent’s request
therefor, execute any customary pledge forms or other documents necessary or
appropriate to complete the pledge and give Collateral Agent the right to
transfer such Pledged Equity Interests under the terms hereof and provide to
Collateral Agent an opinion of counsel, in form and substance satisfactory to
Collateral Agent, confirming such pledge and perfection thereof; provided that
there shall be no obligation to deliver, or cause to be delivered, any such
documentation (other than an acknowledgment of the pledge) to the extent the
Issuer is organized in a jurisdiction other than the United States, Cayman
Islands, Luxembourg, England and Wales, Japan, Mexico, Switzerland or any
political subdivision of any thereof).
          SECTION 3.03. Financing Statements and Other Filings. Each Pledgor
agrees that at any time and from time to time, at the sole cost and expense of
the Pledgors, it will execute and file and refile (in accordance with
Section 3.04), or permit Collateral Agent to file and refile, such financing
statements, continuation statements and other documents (including this
Agreement), in form acceptable to Collateral Agent, in such offices (including
the United States Patent and Trademark Office and the United States Copyright
Office) as Collateral Agent may deem necessary or appropriate, wherever required
by law to perfect, continue and

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maintain a valid, enforceable, first-priority security interest in the Security
Agreement Collateral as provided herein and to preserve the other rights and
interests granted to Collateral Agent hereunder, as against third parties, with
respect to any Security Agreement Collateral.
          SECTION 3.04. Other Actions. To further ensure the attachment,
perfection and priority of, and the ability of Collateral Agent to enforce,
Collateral Agent’s security interest in the Security Agreement Collateral, each
Pledgor acknowledges and agrees as follows:
               (a) UCC Financing Statements. Each Pledgor hereby irrevocably
authorizes Collateral Agent at any time and from time to time to file in any
relevant jurisdiction any financing statements (including fixture filings),
continuation statements, and amendments thereto that contain the information
required by Article 9 of the UCC of each applicable jurisdiction for the filing
of any financing statement or amendment, including (i) whether the Pledgor is an
organization, the type of organization and any organizational identification
number issued to such Pledgor and (ii) in the case of a financing statement
filed as a fixture filing, a sufficient description of the real property to
which such Security Agreement Collateral relates. The Pledgor agrees to provide
such information to Collateral Agent promptly upon request. Such financing
statements or amendments may describe the Security Agreement Collateral as “all
assets” or “all personal property, whether now owned or hereafter acquired,” or
in any other manner that Collateral Agent, in its sole discretion, deems
necessary, advisable or prudent to ensure the perfection of the security
interests granted hereunder. Each Pledgor hereby ratifies its authorization for
Collateral Agent to file in any relevant jurisdiction any financing statements
or amendments thereto if filed prior to the date hereof.
               (b) Intellectual Property Filings. Each Pledgor hereby
irrevocably authorizes Collateral Agent to file documents with the United States
Patent and Trademark Office or United States Copyright Office (or any successor
office or any similar office in any other country) for the purpose of
perfecting, confirming, continuing, enforcing or protecting the security
interest granted by each Pledgor hereunder and naming any Pledgor or the
Pledgors as debtors and Collateral Agent for its benefit and the benefit of the
Lenders as secured party.
               (c) Instruments and Tangible Chattel Paper. If any amount payable
under or in connection with any of the Security Agreement Collateral shall be
evidenced by any Instrument or Tangible Chattel Paper, the Pledgor acquiring
such Instrument or Tangible Chattel Paper shall contemporaneously with the
delivery of financial statements in accordance with Section 5.01(a) or (b) of
the Credit Agreement endorse, assign and deliver the same to Collateral Agent,
accompanied by such instruments of transfer or assignment duly executed in blank
as Collateral Agent may from time to time specify.
               (d) Deposit Accounts. Each Pledgor shall notify Collateral Agent
of any new Deposit Account such Pledgor has opened contemporaneously with the
delivery of financial statements in accordance with Section 5.01(a) or (b) of
the Credit Agreement and solely in the case of Deposit Accounts maintained in
the United States of America (unless waived in writing by Collateral Agent in
its sole discretion) either (i) pursuant to a Control Agreement cause the
depository Bank to agree to comply at any time with instructions from Collateral
Agent to such depository Bank directing the disposition of funds from time to
time credited to such Deposit Account, without further consent of such Pledgor
or any other person, or (ii) arrange for Collateral Agent to become the customer
of the Bank with respect to the Deposit Account, with the Pledgor being
permitted, so long as no Default or Event of Default exists and is continuing,
to exercise rights to withdraw funds from such Deposit Account pursuant to an
agreement in form

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and substance satisfactory to Collateral Agent. The preceding sentence shall not
apply to Deposit Accounts for which Collateral Agent is the depository. Each
Pledgor represents and warrants to Collateral Agent that, as of the date hereof,
it maintains no Deposit Accounts other than (i) those set forth in the
Perfection Certificate or (ii) those for which the applicable Pledgor has
provided notice thereof to Collateral Agent pursuant to the preceding sentence.
               (e) Investment Property.
                    (i) If any Pledgor shall at any time hold or acquire any
certificated securities constituting Investment Property, such Pledgor shall
contemporaneously with the delivery of financial statements in accordance with
Section 5.01(a) or (b) of the Credit Agreement endorse, assign and deliver the
same to Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank, all in form and substance satisfactory to
Collateral Agent. If any securities now or hereafter acquired by any Pledgor
constituting Investment Property are uncertificated and are issued to such
Pledgor or its nominee directly by the issuer thereof, such Pledgor shall
contemporaneously with the delivery of financial statements in accordance with
Section 5.01(a) or (b) of the Credit Agreement notify Collateral Agent thereof
and such Pledgor shall either (A) pursuant to a Control Agreement cause the
issuer to agree to comply with instructions from Collateral Agent as to such
securities, without further consent of any Pledgor, such nominee or any other
person, or (B) arrange for Collateral Agent to become the registered owner of
the securities. If any securities constituting Investment Property, whether
certificated or uncertificated, or other Investment Property now or hereafter
acquired by any Pledgor is held by such Pledgor or its nominee through a
Securities Intermediary or Commodity Intermediary, such Pledgor shall
contemporaneously with the delivery of financial statements in accordance with
Section 5.01(a) or (b) of the Credit Agreement notify Collateral Agent thereof
and, unless waived in writing by Collateral Agent in its sole discretion, either
(A) pursuant to a Control Agreement cause such Securities Intermediary or
Commodity Intermediary, as the case may be, to agree to comply with Entitlement
Orders or other instructions from Collateral Agent to such Securities
Intermediary as to such securities or other Investment Property, or to apply any
value distributed on account of any Commodity Contract as directed by Collateral
Agent to such Commodity Intermediary, as the case may be, in each case without
further consent of any Pledgor, such nominee or any other person, or (B) in the
case of Financial Assets constituting Investment Property or other Investment
Property held through a Securities Intermediary, arrange for Collateral Agent to
become the Entitlement Holder with respect to such Investment Property, with the
Pledgor being permitted, so long as no Default or Event of Default has occurred
and is continuing, to exercise rights to withdraw or otherwise deal with such
Investment Property pursuant to an agreement in form and substance satisfactory
to Collateral Agent. The preceding sentence shall not apply to any Financial
Assets credited to a Securities Account for which Collateral Agent is the
Securities Intermediary. Each Pledgor represents and warrants to Collateral
Agent that, as of the date hereof, such Pledgor maintains no Securities Accounts
or Commodity Accounts with any Securities Intermediary or Commodity Intermediary
other than (i) as set forth in Section II.E of the Perfection Certificate or
(ii) those for which the applicable Pledgor has provided notice thereof to
Collateral Agent pursuant to the preceding sentence.

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                    (ii) As between Collateral Agent and the Pledgors, the
Pledgors shall bear the investment risk with respect to the Investment Property,
and the risk of loss of, damage to, or the destruction of the Investment
Property, whether in the possession of, or maintained as a Security Entitlement
by, or subject to the control of, Collateral Agent, a Securities Intermediary,
Commodities Intermediary, the Pledgor or any other person; provided that,
nothing contained in this Section 3.04(e)(ii) shall release or relieve any
Securities Intermediary or Commodities Intermediary of its duties and
obligations to the Pledgors or any other person under any Control Agreement or
under applicable law. Each Pledgor shall promptly pay all Charges and fees of
whatever kind or nature with respect to the Investment Property pledged by it or
this Agreement. In the event any Pledgor shall fail to make such payment
contemplated in the immediately preceding sentence, Collateral Agent may do so
for the account of such Pledgor and the Pledgors shall promptly reimburse and
indemnify Collateral Agent from all costs and expenses incurred by Collateral
Agent under this Section 3.04(e)(ii) in accordance with Section 7.03.
               (f) Electronic Chattel Paper and Transferable Records. If any
amount payable under or in connection with any of the Security Agreement
Collateral shall be evidenced by any Electronic Chattel Paper or any
“transferable record,” as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, the Pledgor acquiring such Electronic Chattel Paper or
transferable record shall promptly notify Collateral Agent thereof and, at the
request of Collateral Agent, shall take such action as Collateral Agent may
request to vest in Collateral Agent control under UCC Section 9-105 of such
Electronic Chattel Paper or control under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be,
Section 16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. Collateral Agent agrees with such
Pledgor that Collateral Agent will arrange, pursuant to procedures satisfactory
to Collateral Agent and so long as such procedures will not result in Collateral
Agent’s loss of control, for the Pledgor to make alterations to the Electronic
Chattel Paper or transferable record permitted under UCC Section 9-105 or, as
the case may be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act of Section 16 of the Uniform Electronic Transactions Act
for a party in control to allow without loss of control, unless an Event of
Default has occurred and is continuing or would occur after taking into account
any action by such Pledgor with respect to such Electronic Chattel Paper or
transferable record.
               (g) Letter-of-Credit Rights. If any Pledgor is at any time a
beneficiary under a Letter of Credit in excess of $1.0 million now or hereafter
issued in favor of such Pledgor, such Pledgor shall contemporaneously with the
delivery of financial statements in accordance with Section 5.01(a) or (b) of
the Credit Agreement notify Collateral Agent thereof and, at the request of
Collateral Agent, such Pledgor shall, pursuant to an agreement in form and
substance satisfactory to Collateral Agent, either (i) arrange for the issuer
and any confirmer of such Letter of Credit to consent to an assignment to
Collateral Agent of the proceeds of any drawing under the Letter of Credit or
(ii) arrange for Collateral Agent to become the transferee beneficiary of the
Letter of Credit.
               (h) Commercial Tort Claims. If any Pledgor shall at any time hold
or acquire a Commercial Tort Claim relating to any of the Security Agreement
Collateral and such Pledgor, in the exercise of its reasonable business
judgment, elects to pursue such commercial tort claim, such Pledgor shall
contemporaneously with the delivery of financial

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statements in accordance with Section 5.01(a) or (b) of the Credit Agreement
notify Collateral Agent in writing signed by such Pledgor of the brief details
thereof and grant to Collateral Agent in such writing a security interest
therein and in the Proceeds thereof, all in accordance with this Agreement, with
such writing to be in form and substance satisfactory to Collateral Agent.
          SECTION 3.05. Supplements; Further Assurances.
               (a) The Pledgors shall cause each person that, from time to time
after the date hereof, shall be required to pledge any assets to Collateral
Agent for the benefit of the Secured Parties pursuant to the provisions of the
Credit Agreement, to execute and deliver to Collateral Agent a Joinder Agreement
and, upon such execution and delivery, such person shall constitute a
“Guarantor” and a “Pledgor” for all purposes hereunder with the same force and
effect as if originally named as a Guarantor and Pledgor herein. The execution
and delivery of such Joinder Agreement shall not require the consent of any
Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall
remain in full force and effect notwithstanding the addition of any new
Guarantor and Pledgor as a party to this Agreement.
               (b) Upon obtaining any Pledged Equity Interests or Pledged
Intercompany Debt of any person, each Pledgor shall accept the same in trust for
the benefit of Collateral Agent and contemporaneously with the delivery of
financial statements in accordance with Section 5.01(a) or (b) of the Credit
Agreement deliver to Collateral Agent the certificates and other documents
required under this Article III in respect of the additional Pledged Equity
Interests, Pledged Intercompany Debt or other possessory Security Agreement
Collateral that is to be pledged pursuant to this Agreement, and confirming the
attachment of the Lien hereby created on and in respect of such additional
Pledged Equity Interests or Pledged Intercompany Debt.
               (c) Each Pledgor agrees to take such further actions, and to
execute and deliver to Collateral Agent such additional assignments, agreements,
supplements, powers and instruments, as Collateral Agent may in its reasonable
judgment deem necessary or appropriate, to perfect, preserve and protect the
security interest in the Security Agreement Collateral as provided herein and
the rights and interests granted to Collateral Agent hereunder, to carry into
effect the purposes hereof or to better assure and confirm unto Collateral Agent
or permit Collateral Agent to exercise and enforce its rights, powers and
remedies hereunder with respect to any Security Agreement Collateral. By way of
example, such actions may include appearing in and defending any action or
proceeding, at Collateral Agent’s request, that may affect such Pledgor’s title
to or Collateral Agent’s security interest in all or any part of the Security
Agreement Collateral. Upon the reasonable request of Collateral Agent, each
Pledgor shall further make, execute, endorse, acknowledge, file or refile or
deliver to Collateral Agent from time to time such lists, descriptions and
designations of the Security Agreement Collateral, copies of warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, supplements,
additional security agreements, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments. If an Event of Default has occurred and is continuing, Collateral
Agent may institute and maintain, in its own name or in the name of any Pledgor,
such suits and proceedings as Collateral Agent deems necessary or expedient to
prevent any impairment of the security interest in or the perfection thereof in
the Security Agreement Collateral. All of the foregoing shall be at the sole
cost and expense of the Pledgors.
               (d) For the avoidance of doubt, the Pledgors and Collateral Agent
acknowledge that this Agreement is intended to grant to Collateral Agent, for
the benefit of the

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Secured Parties, a security interest in and continuing Lien on the Security
Agreement Collateral, and does not constitute a present assignment of ownership
rights, a transfer of ownership or title to any Security Agreement Collateral,
except as otherwise provided herein following the occurrence and during the
continuance of an Event of Default. Unless an Event of Default shall have
occurred and be continuing, Collateral Agent agrees from time to time to
deliver, upon written request of any Pledgor and at such Pledgor’s sole cost and
expense (including reasonable expenses of counsel to, among other things, review
the effect thereof on Collateral Agent’s security interest granted hereunder),
any and all instruments, certificates or other documents, in a form reasonably
requested by such Pledgor, necessary or appropriate in the reasonable judgment
of such Pledgor to enable such Pledgor to continue to exploit, license, use and
protect the Security Agreement Collateral in accordance with the terms hereof
and of the Credit Agreement.
ARTICLE IV
Representations, Warranties and Covenants
          Each Pledgor represents, warrants and covenants as follows:
          SECTION 4.01. Title. Except for the security interest granted to
Collateral Agent for its benefit and for the benefit of the Secured Parties
pursuant to this Agreement and Permitted Liens, such Pledgor owns the rights in
each item of Security Agreement Collateral pledged by it hereunder, and with
regard to each item of Security Agreement Collateral now existing or hereafter
acquired, will continue to own or have such rights, in each case free and clear
of any and all Liens or claims of others. No effective financing statement or
other public notice with respect to all or any part of the Security Agreement
Collateral is on file or of record in any public office, except such as have
been filed in favor of Collateral Agent pursuant to this Agreement, are
permitted by the Credit Agreement, or for which proper termination statements or
other release documentation have been (or, in the case of financing statements
or other public notices filed in connection with the Existing Credit Agreement,
will be) delivered to Collateral Agent for filing. No person other than
Collateral Agent has control or possession of all or any part of the Security
Agreement Collateral, except as permitted hereby or by the Credit Agreement.
          SECTION 4.02. Organization; Authority; Enforceability. Such Pledgor
(a) is duly organized or incorporated and validly existing under the laws of the
jurisdiction of its organization or incorporation, (b) has all requisite power
and authority enter into this Agreement and to carry out the obligations
hereunder, and (c) has duly executed and delivered this Agreement. This
Agreement and each other document, statement, or instrument relating hereto,
when executed and delivered by such Pledgor, will constitute, a legal, valid and
binding obligation of such Pledgor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
          SECTION 4.03. Authorizations and Approvals. No authorization, approval
or other action by, and no notice to or filing with, any Governmental Authority
is required for either (i) the pledge or grant by such Pledgor of the Liens
purported to be created in favor of Collateral Agent hereunder, or (ii) the
exercise by Collateral Agent of any rights or remedies in respect of any
Security Agreement Collateral, in each case except for the filings and
registrations contemplated under the Security Documents and as may be required
in connection

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with the disposition of any Securities Collateral (by laws generally affecting
the offering and sale of securities) or by laws pertaining to Intellectual
Property.
          SECTION 4.04. Reserved.
          SECTION 4.05. Limitation on Liens. Such Pledgor shall, at its own cost
and expense, defend title to the Security Agreement Collateral pledged by it
hereunder and the security interest therein and Lien thereon granted to
Collateral Agent and the priority thereof against all claims and demands of all
persons, at its own cost and expense, at any time claiming (except to the extent
related to a Permitted Lien) any interest therein adverse to Collateral Agent or
any other Secured Party.
          SECTION 4.06. Other Financing Statements. So long as any of the
Secured Obligations remain unpaid, or the Commitments of the Lenders to make any
Loan or to issue any Credit Agreement L/Cs shall not have expired or been sooner
terminated, such Pledgor shall not execute, authorize or permit to be filed in
any public office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to any
Security Agreement Collateral, except, in each case, financing statements filed
or to be filed in respect of and covering the security interests granted by such
Pledgor to the holder of Permitted Liens.
          SECTION 4.07. Chief Executive Office; Change of Name; Jurisdiction of
Organization.
               (a) Such Pledgor’s exact legal name, type and jurisdiction of
organization or incorporation, federal taxpayer and organizational
identification numbers of such Pledgor (if applicable) is set forth in the
Perfection Certificate, and its chief executive office is set forth in the
Perfection Certificate. Such Pledgor shall not (a) change its corporate name,
(b) change its identity or type of organization or corporate structure, or
(c) change its federal taxpayer identification number or organizational
identification number (including by merging with or into any other entity,
reorganizing, dissolving, liquidating, reincorporating or incorporating in any
other jurisdiction) unless (A) it shall have given Collateral Agent not less
than 30 days’ prior written notice of its intention so to do, clearly describing
such change and providing such other information in connection therewith as
Collateral Agent may request, and (B) with respect to such change, such Pledgor
shall have taken all action that Collateral Agent deems necessary or desirable
to maintain the perfection and priority of the security interest of Collateral
Agent for the benefit of the Secured Parties in the Security Agreement
Collateral intended to be granted hereby. Each Pledgor agrees to promptly
provide Collateral Agent with certified organizational documents reflecting any
of the changes described in the preceding sentence.
               (b) Such Pledgor agrees to maintain, at its own cost and expense,
such complete and accurate records with respect to the Security Agreement
Collateral owned by it as is consistent with its current practices and in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Pledgor is engaged, but in any
event to include complete accounting records as required by the Credit
Agreement, and, at such time or times as Collateral Agent may request, promptly
to prepare and deliver to Collateral Agent a duly certified schedule or
schedules in form and detail satisfactory to Collateral Agent showing in summary
form the identity, amount and location of any and all Security Agreement
Collateral (except Security Agreement Collateral in the possession or control of
Collateral Agent).

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               (c) Contemporaneously with the delivery of financial statements
in accordance with Section 5.01(a) or (b) of the Credit Agreement, the Pledgors
shall notify Collateral Agent in writing (certified by an officer of the
applicable Pledgor) of each location where Security Agreement Collateral is
maintained, which notification may take the form of supplementing or restating
prior notifications.
          SECTION 4.08. Certain Provisions Concerning Securities Collateral.
               (a) Such Pledgor has delivered to Collateral Agent true, correct
and complete copies of the Operative Agreements, which are in full force and
effect and have not as of the date hereof been amended or modified except as
permitted by the Credit Agreement. Such Pledgor shall deliver to Collateral
Agent a copy of any notice of default given or received by it under any
Operative Agreement within ten days after such Pledgor gives or receives such
notice.
               (b) Such Pledgor is not in default in the payment of any portion
of any mandatory capital contribution, if any, required to be made under any
agreement to which such Pledgor is a party relating to the Pledged Equity
Interests pledged by it, and such Pledgor is not in violation of any other
provisions of any such agreement to which such Pledgor is a party, or otherwise
in default or violation thereunder, except where such default or noncompliance,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. No Securities Collateral pledged by such Pledgor is
subject to any defense, offset or counterclaim, nor have any of the foregoing
been asserted or alleged against such Pledgor by any person with respect
thereto, and as of the date hereof, there are no certificates, instruments,
documents or other writings (other than the Operative Agreements and
certificates, if any, delivered to Collateral Agent) that evidence any Pledged
Equity Interests of such Pledgor.
               (c) So long as no Event of Default shall have occurred and be
continuing (and Borrower or such Pledgor has not received written notice
relating to such Event of Default from Collateral Agent):
                    (i) Such Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Securities Collateral or
any part thereof for any purpose not inconsistent with the terms or purposes
hereof, the Credit Agreement, or any other Loan Document evidencing the Secured
Obligations; provided that, such Pledgor shall not in any event exercise such
rights in any manner that would reasonably be expected to have a material
adverse effect on the value of the Security Agreement Collateral or the Lien and
security interest intended to be granted to Collateral Agent hereunder;
                    (ii) Such Pledgor shall be entitled to receive and retain,
and to utilize free and clear of the Lien hereof, any and all Distributions, but
only if and to the extent made in accordance with the provisions of the Credit
Agreement; provided that, any and all such Distributions consisting of rights or
interests in the form of certificated securities shall be delivered to
Collateral Agent to hold as Security Agreement Collateral and shall, if received
by such Pledgor, be received in trust for the benefit of Collateral Agent, be
segregated from the other property or funds of such Pledgor and be delivered to
Collateral Agent as Security Agreement Collateral in the same form as so
received (with any necessary endorsement), in each case as and when required
pursuant to Article III hereof; and

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                    (iii) Without further action or formality, Collateral Agent
shall be deemed to have granted to such Pledgor all necessary consents relating
to voting rights and shall, if necessary, upon written request of such Pledgor
and at the sole cost and expense of the Pledgors, from time to time execute and
deliver (or cause to be executed and delivered) to such Pledgor all such
instruments as such Pledgor may reasonably request to permit such Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to
Section 4.08(c)(i) and to receive the Distributions that it is authorized to
receive and retain pursuant to Section 4.08(c)(ii).
               (d) Upon the occurrence and during the continuance of any Event
of Default (and once Borrower or any Pledgor has received written notice
relating to such Event of Default from Collateral Agent):
                    (i) All rights of such Pledgor to exercise the voting and
other consensual rights it would otherwise be entitled to exercise pursuant to
Section 4.08(c)(i) without any action or the giving of any notice shall cease,
and all such rights shall thereupon become vested in Collateral Agent, which
shall thereupon have the sole right to exercise such voting and other consensual
rights; and
                    (ii) All rights of such Pledgor to receive Distributions
that it would otherwise be authorized to receive and retain pursuant to Section
4.08(c)(ii) shall cease and all such rights shall thereupon become vested in
Collateral Agent, who shall thereupon have the sole right to receive and hold as
Security Agreement Collateral such Distributions;
provided that, the rights described in clauses (i) and (ii) above shall revert
back to such Pledgor following the cure or waiver of such Event of Default.
               (e) Such Pledgor shall, at its sole cost and expense, from time
to time execute and deliver to Collateral Agent appropriate instruments as
Collateral Agent may request to permit Collateral Agent to exercise the voting
and other rights that it may be entitled to exercise pursuant to Section
4.08(d)(i) and to receive all Distributions that it may be entitled to receive
under Section 4.08(d)(ii).
               (f) All Distributions that are received by such Pledgor contrary
to the provisions of Section 4.08(d)(ii) shall be received in trust for the
benefit of Collateral Agent, shall be segregated from other funds of such
Pledgor and shall promptly be paid over to Collateral Agent as Security
Agreement Collateral in the same form as so received (with any necessary
endorsement).
          SECTION 4.09. Certain Provisions Concerning Intellectual Property.
               (a) Such Pledgor agrees that it will not, nor will it knowingly
permit or authorize any of its licensees to, do any act, or omit to do any act,
whereby any issued Patent may become invalidated, dedicated to the public, or
unenforceable, and agrees that it shall continue to mark any products covered by
a Patent with the relevant Patent Number or indication that such product is
subject to a pending Patent application as necessary and sufficient to establish
and preserve its maximum rights under applicable patent laws, except where the
failure to so mark would not be reasonably likely to result in a Material
Adverse Effect.

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               (b) Such Pledgor (either itself or through its licensees or its
sublicensees) will, for each material Trademark, (i) maintain such Trademark in
full force free from any claim of abandonment or invalidity for nonuse, (ii) not
materially diminish the value of such Trademark or the goodwill associated
therewith, (iii) display such Trademark with notice of federal or foreign
registration to the extent necessary and sufficient to establish and preserve
its maximum rights under applicable law, except where the failure to display
with such notice would not be reasonably likely to result in a Material Adverse
Effect, and (iv) not knowingly use or knowingly permit the use of such Trademark
in violation of any third party rights.
               (c) Such Pledgor (either itself or through licensees) will, for
each work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws, except where the failure to include notice would not
be reasonably likely to result in a Material Adverse Effect.
               (d) Such Pledgor shall notify Collateral Agent promptly if it
knows or has reason to know that any Intellectual Property material to such
Pledgor’s business (whether individually or in the aggregate) may become, or
knows of circumstances that would cause any such Intellectual Property to
become: (i) abandoned, lost or dedicated to the public; (ii) invalid or
unenforceable; or (iii) subject to any adverse determination or development
regarding such Pledgor’s ownership of any Intellectual Property, its right to
register the same, or to keep and maintain the same.
               (e) Such Pledgor will take all reasonable steps in the United
States Patent and Trademark Office, United States Copyright Office or any office
or agency in any political subdivision of the United States, Canada or in any
other country, to maintain and pursue each application relating to the
Intellectual Property (and to obtain the relevant grant or registration) and to
maintain each issued Patent and each registration of the Trademarks and
Copyrights, including timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and to
initiate opposition, interference and cancellation proceedings against third
parties, in each case where necessary for the operation of such Pledgor’s
business as presently conducted and as contemplated by the Credit Agreement.
               (f) In the event that such Pledgor knows that any Security
Agreement Collateral consisting of Intellectual Property material to the conduct
of such Pledgor’s business has been or is about to be infringed, misappropriated
or diluted by a third party, such Pledgor promptly shall notify Collateral Agent
and shall promptly sue for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution,
or take such other actions as are appropriate under the circumstances to protect
such Security Agreement Collateral, except where the failure to so notify or
take such actions would not be reasonably likely to result in a Material Adverse
Effect.
               (g) Upon the occurrence and during the continuance of an Event of
Default, such Pledgor shall use its commercially reasonable efforts to obtain
all requisite consents or approvals by the licensor of each License to effect
the assignment of all of such Pledgor’s right, title and interest thereunder to
the Security Agreement Collateral Agent or its designee.
               (h) Solely for the purpose of enabling Collateral Agent to
exercise its rights and remedies upon the occurrence of an Event of Default,
such Pledgor hereby grants to Collateral Agent, to the extent assignable, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to such Pledgor) to use, license or sublicense

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any of the Intellectual Property now owned or hereafter acquired by such
Pledgor, wherever the same may be located, including in such license access to
all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout thereof.
               (i) It shall contemporaneously with the delivery of financial
statements in accordance with Section 5.01(a) or (b) of the Credit Agreement
report to Collateral Agent (i) the filing of any application to register any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office, or any state registry or foreign counterpart of
the foregoing (whether such application is filed by such Pledgor or through any
agent, employee, licensee, or designee thereof); and (ii) the registration of
any Intellectual Property by any such office.
               (j) It shall, promptly upon the reasonable request of Collateral
Agent, execute and deliver to Collateral Agent any document required to
acknowledge, confirm, register, record, or perfect Collateral Agent’s security
interest granted hereunder in any part of the Intellectual Property, whether now
owned or hereafter acquired.
               (k) Except with the prior consent of Collateral Agent or as
permitted under the Credit Agreement, such Pledgor shall not execute any
financing statement or other document or instrument, and there will not be on
file in any public office any effective financing statement or other document or
instruments, except financing statements or other documents or instruments filed
or to be filed in favor of Collateral Agent or in respect of Permitted Liens,
and such Pledgor shall not sell, assign, transfer, license, grant any option in,
or create any Lien, claim, security interest or other encumbrance on or with
respect to the Intellectual Property, or suffer to exist any effective Lien,
claim, security interest or other encumbrance on or with respect to the
Intellectual Property, except for the security interest created by and under
this Security Agreement and Permitted Liens as otherwise permitted by the Credit
Agreement.
               (l) It shall hereafter use commercially reasonable efforts so as
not to permit the inclusion in any contract to which it hereafter becomes a
party of any provision that would materially impair or prevent the creation of a
security interest in, or the assignment of, such Pledgor’s rights and interests
in any property included within the definitions of any Intellectual Property
acquired under such contracts.
          SECTION 4.10. Inspection and Verification. Collateral Agent or any
representative designated by Collateral Agent shall have the same access and
inspection rights as granted to the Administrative Agent by the Companies
pursuant to Section 5.07 of the Credit Agreement; provided that, upon the
occurrence and during the continuance of an Event of Default, Collateral Agent
and its representatives shall at all times have the right to enter any premises
of such Pledgor and inspect any property of such Pledgor where any of the
Security Agreement Collateral of such Pledgor is located for the purpose of
inspecting the same, observing its use, protecting its interests therein, or
otherwise exercising the remedies provided under Article V. For the avoidance of
doubt, in respect of Accounts or Security Agreement Collateral in the possession
of any third person, upon the occurrence and during the continuance of an Event
of Default, Collateral Agent or any designated representative shall have the
right to contact such account debtors or third persons in possession of such
Security Agreement Collateral for verification purposes. Collateral Agent shall
have the absolute right to share any information it gains from such inspection
or verification with any other Secured Party.

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          SECTION 4.11. Payment of Taxes; Contesting Liens; Claims. Such Pledgor
represents and warrants that all Charges imposed on or assessed against the
Security Agreement Collateral have been paid and discharged except to the extent
such Charges (a) constitute a Permitted Lien or a Lien not yet due and payable
or (b) are being contested in good faith by appropriate proceedings and for
which such Pledgor shall have set aside on its books adequate reserves in
accordance with GAAP. Notwithstanding the foregoing, such Pledgor may at its own
expense contest the validity, amount or applicability of any Charges so long as
the contest thereof shall satisfy the Contested Collateral Lien Conditions.
Notwithstanding the foregoing provisions of this Section 4.11, no contest of any
such obligation may be pursued by such Pledgor if such contest would expose
Collateral Agent or any other Secured Party to any possible criminal liability.
          SECTION 4.12. Transfers and Other Liens. Such Pledgor shall not sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Security Agreement Collateral pledged by it hereunder except as permitted
by the Credit Agreement. Such Pledgor shall not make or permit to be made an
assignment for security, pledge or hypothecation of the Security Agreement
Collateral or shall grant any other Lien in respect of the Security Agreement
Collateral, except as permitted by Section 6.02 of the Credit Agreement.
          SECTION 4.13. Insurance. Such Pledgor, at its own expense, shall
maintain or cause to be maintained, insurance covering physical loss or damage
to the Inventory and Equipment in accordance with Section 5.04 of the Credit
Agreement. Such Pledgor irrevocably makes, constitutes and appoints Collateral
Agent (and all officers, employees or agents designated by Collateral Agent) as
such Pledgor’s true and lawful agent (and attorney-in-fact) for the purposes,
during the continuance of an Event of Default, of making, settling and adjusting
claims in respect of Security Agreement Collateral under policies of insurance,
endorsing the name of such Pledgor on any check, draft, instrument or other item
of payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto. In the event that such
Pledgor at any time or times fails to obtain or maintain any of the policies of
insurance required hereby or to pay any premium in whole or in part relating
thereto, Collateral Agent may, without waiving or releasing any obligation or
liability of any Pledgor hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as Collateral Agent deems
advisable. All sums disbursed by Collateral Agent in connection with this
Section 4.13, including reasonable attorneys’ fees, court costs, expenses and
other charges relating thereto, shall be payable, upon demand, by the Pledgors
to Collateral Agent and shall be additional Secured Obligations.
ARTICLE V
Remedies
          SECTION 5.01. Remedies. Upon the occurrence and during the continuance
of any Event of Default, Collateral Agent may from time to time exercise in
respect of the Security Agreement Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it:
               (a) Personally, or by agents or attorneys, immediately take
possession of the Security Agreement Collateral or any part thereof, from any
Pledgor or any other person who then has possession of any part thereof with or
without notice or process of law, and for that

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purpose may enter on any Pledgor’s premises where any of the Security Agreement
Collateral is located, remove such Security Agreement Collateral, remain present
at such premises to receive copies of all communications and remittances
relating to the Security Agreement Collateral and use in connection with such
removal and possession any and all services, supplies, aids and other facilities
of any Pledgor;
               (b) Demand, sue for, collect or receive any money or property at
any time payable or receivable in respect of the Security Agreement Collateral
including instructing the obligor or obligors on any agreement, instrument or
other obligation constituting part of the Security Agreement Collateral to make
any payment required by the terms of such agreement, instrument or other
obligation directly to Collateral Agent, and in connection with any of the
foregoing, compromise, settle, extend the time for payment and make other
modifications with respect thereto; provided that, in the event that any such
payments are made directly to any Pledgor, prior to receipt by any such obligor
of such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of Collateral Agent and shall promptly (but in
no event later than one Business Day after receipt thereof) pay such amounts
into the Collateral Account;
               (c) Sell, assign, grant a license to use or otherwise liquidate,
or direct any Pledgor to sell, assign, grant a license to use or otherwise
liquidate, any and all investments made in whole or in part with the Security
Agreement Collateral or any part thereof, and take possession of the proceeds of
any such sale, assignment, license or liquidation;
               (d) Take possession of the Security Agreement Collateral or any
part thereof by directing any Pledgor in writing to deliver the same to
Collateral Agent at any place or places so designated by Collateral Agent, in
which event such Pledgor shall at its own expense: (i) forthwith cause the same
to be moved to the place or places designated by Collateral Agent and there
delivered to Collateral Agent, (ii) store and keep any Security Agreement
Collateral so delivered to Collateral Agent at such place or places pending
further action by Collateral Agent and (iii) while the Security Agreement
Collateral shall be so stored and kept, provide such security and maintenance
services as shall be necessary to protect the same and to preserve and maintain
them in good condition. Each Pledgor’s obligation to deliver the Security
Agreement Collateral as contemplated in this Section 5.01(d) is of the essence
hereof. Upon application to a court of equity having jurisdiction, Collateral
Agent shall be entitled to a decree requiring specific performance by any
Pledgor of such obligation;
               (e) Withdraw all moneys, instruments, securities and other
property in any bank, financial securities, deposit or other account of any
Pledgor constituting Security Agreement Collateral for application to the
Secured Obligations as provided in Article IX of the Credit Agreement;
               (f) Retain and apply the Distributions to the Secured Obligations
as provided in the Credit Agreement;
               (g) Exercise any and all rights as beneficial and legal owner of
the Security Agreement Collateral, including perfecting assignment of and
exercising any and all voting, consensual and other rights and powers with
respect to any Security Agreement Collateral; and
               (h) All the rights and remedies of a secured party on default
under the UCC, and Collateral Agent may also in its sole discretion, without
notice except as specified in

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Section 5.02, sell, assign or grant a license to use the Security Agreement
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange, broker’s board or at any of Collateral Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and on such other terms as Collateral Agent deems commercially
reasonable. Collateral Agent or any other Secured Party or any of their
respective Affiliates may be the purchaser, licensee, assignee or recipient of
any or all of the Security Agreement Collateral at any such sale and shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Security Agreement Collateral sold,
assigned or licensed at such sale, to use and apply any of the Secured
Obligations owed to such person as a credit on account of the purchase price of
any Security Agreement Collateral payable by such person at such sale. Each
purchaser, assignee, licensee or recipient at any such sale shall acquire the
property sold, assigned or licensed absolutely free from any claim or right on
the part of any Pledgor, and each Pledgor hereby waives, to the fullest extent
permitted by law, all rights of redemption, stay and appraisal that it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Collateral Agent shall not be obligated to make
any sale of Security Agreement Collateral regardless of notice of sale having
been given. Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Pledgor hereby waives, to the fullest extent permitted by law,
any claims against Collateral Agent arising by reason of the fact that the price
at which any Security Agreement Collateral may have been sold, assigned or
licensed at such a private sale was less than the price that might have been
obtained at a public sale, even if Collateral Agent accepts the first offer
received and does not offer such Security Agreement Collateral to more than one
offeree.
               (i) Upon the written demand of Collateral Agent, each Pledgor
shall execute and deliver to Collateral Agent an assignment or assignments of
the registered Intellectual Property and such other documents as are necessary
or appropriate to carry out the intent and purposes hereof.
          SECTION 5.02. Notice of Sale. Each Pledgor acknowledges and agrees
that, to the extent notice of sale shall be required by law, ten days’ notice to
such Pledgor of the time and place of any public sale or of the time after which
any private sale or other intended disposition is to take place shall be
commercially reasonable notification of such matters. No notification need be
given to any Pledgor if it has signed, during the occurrence of an Event of
Default, a statement renouncing or modifying any right to notification of sale
or other intended disposition.
          SECTION 5.03. Waiver of Notice and Claims. Each Pledgor hereby waives,
to the fullest extent permitted by applicable law, notice or judicial hearing in
connection with Collateral Agent’s taking possession or Collateral Agent’s
disposition of any of the Security Agreement Collateral, including any and all
prior notice and hearing for any prejudgment remedy or remedies and any such
right that such Pledgor would otherwise have under law, and each Pledgor hereby
further waives, to the fullest extent permitted by applicable law: (a) all
damages occasioned by such taking of possession, (b) all other requirements as
to the time, place and terms of sale or other requirements with respect to the
enforcement of Collateral Agent’s rights hereunder and (c) all rights of
redemption, appraisal, valuation, stay, extension and moratorium now or
hereafter in force under any applicable law. Collateral Agent shall not be
liable for any incorrect or improper payment made pursuant to this Article V in
the absence of gross negligence or willful misconduct. Any sale of, or the grant
of options to purchase, or any other realization on, any Security Agreement
Collateral shall operate to divest all right, title, interest, claim and

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demand, either at law or in equity, of the applicable Pledgor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Pledgor and against any and all persons claiming or attempting to claim the
Security Agreement Collateral so sold, optioned or realized on, or any part
thereof, from, through or under such Pledgor.
          SECTION 5.04. Certain Sales of Security Agreement Collateral. Each
Pledgor recognizes that, by reason of certain prohibitions contained in the
Securities Act, and applicable state securities laws, Collateral Agent may be
compelled, with respect to any sale of all or any part of the Securities
Collateral, to limit purchasers to persons who will agree, among other things,
to acquire such Securities Collateral for their own account, for investment and
not with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to
Collateral Agent than those obtainable through a public sale without such
restrictions (including a public offering made pursuant to a registration
statement under the Securities Act), and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Securities Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would agree to do so.
          SECTION 5.05. No Waiver; Cumulative Remedies.
               (a) No failure on the part of Collateral Agent to exercise, no
course of dealing with respect to, and no delay on the part of Collateral Agent
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy; nor shall Collateral Agent be required to
look first to, enforce or exhaust any other security, collateral or guarantees.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law.
               (b) In the event that Collateral Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Collateral Agent, then and in every such case, the Pledgors, Collateral Agent
and each other Secured Party shall be restored to their respective former
positions and rights hereunder with respect to the Security Agreement
Collateral, and all rights, remedies and powers of Collateral Agent and the
other Secured Parties shall continue as if no such proceeding had been
instituted.
ARTICLE VI
Obligations Absolute; Waivers
          SECTION 6.01. Liability of the Pledgors Absolute. Each Pledgor agrees
that its obligations hereunder are irrevocable, absolute, independent,
unconditional, and shall not be affected by any circumstance that constitutes a
legal or equitable discharge of a pledgor or surety, except for payment in full
of the Secured Obligations. In furtherance of the foregoing and without limiting
the generality thereof, each Pledgor agrees as follows:

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               (a) the obligations of each Pledgor hereunder are independent of
the obligations of each other Pledgor and each guarantor of the obligations of
the Loan Parties, and separate actions may be brought and prosecuted against
such Pledgor whether or not any action is brought against any other Pledgor or
guarantor, and whether or not such other Pledgor or guarantor is joined in any
such actions;
               (b) payment by any Loan Party of a portion of the Secured
Obligations shall in no way limit, affect, modify or abridge such Pledgor’s
grant hereunder securing any portion of the Secured Obligations that has not
been paid. By way of example and without limiting the generality of the
foregoing, if Collateral Agent is awarded a judgment in any suit brought to
enforce any Loan Party’s covenant to pay a portion of the Secured Obligations,
such judgment shall not be deemed to release such Pledgor from its grant
hereunder securing the portion of the Secured Obligations that is not the
subject of such suit, and such judgment shall not, except to the extent
satisfied by such Pledgor, limit, affect, modify or abridge any other Pledgor’s
grant hereunder securing the Secured Obligations;
               (c) upon such terms as Collateral Agent deems appropriate,
without obligation to give notice or demand, without affecting the validity or
enforceability hereof, and without giving rise to any reduction, limitation,
impairment, discharge or termination of the security interests granted hereunder
or such Pledgor’s liability hereunder, Collateral Agent may, from time to time,
(i) renew, extend, accelerate, increase the rate of interest on, or otherwise
change the time, place and manner or terms of payment of any of the Secured
Obligations in accordance with the terms of the other Loan Documents;
(ii) settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, any of the Secured
Obligations or any agreement relating thereto, or subordinate the payment of the
same to the payment of any other obligations; (iii) request and accept other
pledges as security for any of the Secured Obligations, and take and hold
security for the payment hereof or any of the Secured Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment
of any of the Secured Obligations, any guarantees of any of the Secured
Obligations, or any other obligation of any person (including any other Pledgor)
with respect to any of the Secured Obligations; (v) enforce and apply any
security now or hereafter held by it in respect hereof or any of the Secured
Obligations, and direct the order or manner of sale thereof, or exercise any
other right or remedy that it may have against any such security, including
foreclosure on any such security in accordance with one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is economically
reasonable, and even though such action operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of any Pledgor
against any other Loan Party, or any security for any of the Secured
Obligations; and (vi) exercise any other rights available to it under the Loan
Documents; and
               (d) this Agreement and such Pledgor’s obligations hereunder shall
be valid and enforceable, and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of all the Secured Obligations), including the occurrence of any of the
following (whether or not such Pledgor shall have had notice or knowledge of any
of them): (i) any failure or omission to assert or enforce, any agreement or
election not to assert or enforce, or any stay or enjoining by order of any
court, by operation of law or otherwise, of the exercise or enforcement of any
claim or demand, or any right, power or remedy (whether arising under the Loan
Documents, at law, in equity, or otherwise) with respect to the Secured
Obligations or any agreement related thereto, or with respect to any other
guarantee of or security for the payment of the Secured Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to departure
from, any of the

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terms or provisions (including provisions relating to events of default) hereof,
any of the other Loan Documents, any agreement or instrument executed pursuant
thereto, or any guarantee or other security for the Secured Obligations or any
agreement relating thereto at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received form any
source (other than payments received pursuant to the other Loan Documents or
from the proceeds of any security for the Secured Obligations, except to the
extent such security also serves as collateral for Indebtedness other than the
Secured Obligations); (v) consent of Collateral Agent or any other Secured Party
to the change, reorganization or termination of the corporate structure or
existence of any Loan Party or any Subsidiary thereof, and to any corresponding
restructuring of the Secured Obligations; (vi) any failure to perfect or
continue perfection of a security interest in any collateral that secures any of
the Secured Obligations; (vii) any defenses, set-offs or counterclaims that any
Loan Party may allege or assert against Collateral Agent or any other Secured
Party in respect of the Secured Obligations, including failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations, accord
and satisfaction, and usury; and (viii) any other act, thing or omission, or
delay to do any other act or thing, that in any manner and to any extent may
vary such Pledgor’s risk as a grantor of security securing the Secured
Obligations.
          SECTION 6.02. General Waivers. Each Pledgor hereby waives, for the
benefit of Collateral Agent and the Secured Parties: (a) all rights to require
Collateral Agent or any other Secured Party, as a condition to exercising
Collateral Agent’s rights hereunder against the Security Agreement Collateral,
to (i) proceed against any other Loan Party, any other pledgor (including any
other Pledgor) of security securing any of the Secured Obligations, or any other
person, (ii) proceed against or exhaust any security held from any other Loan
Party, any such other pledgor or any other person, (iii) proceed against or have
resort to any balance of any Deposit Account or credit on the books of
Collateral Agent or any other Secured Party in favor of any other Loan Party or
any other person, or (iv) pursue any other remedy whatsoever in the capacity of
secured party; (b) any defense arising by reason of incapacity, lack of
authority, or any disability or other defenses of any other Loan Party,
including any defense based on or arising from the lack of validity or
enforceability of any of the Secured Obligations or any agreement or instrument
relating thereto, or by reason of the cessation of the liability of any other
Loan Party from any cause other than the payment in full of all the Secured
Obligations; (c) any defense based on any statute or rule of law that provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; (d) any defense based on
errors or omissions by Collateral Agent or any other Secured Party in the
administration of any of the Secured Obligations, except behavior that amounts
to bad faith, gross negligence or willful misconduct; (e) any principles or
provisions of law, statutory or otherwise, that are or may be in conflict with
the terms hereof, and any legal or equitable discharge of such Pledgor’s
obligations hereunder; (f) the benefit of any statute of limitations affecting
such Pledgor’s counterclaims; (g) promptness, diligence and any requirement that
Collateral Agent or any other Secured Party protect, secure, perfect or insure
any security interest or Lien or any property subject thereto; (h) notices,
demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance hereof, notices of
default hereunder, notices of any renewal, extension or modification of any of
the Secured Obligations or any agreement related thereto, notices of any
extension of credit to any other Loan party and notices of any of the matters
referred to in Section 6.01, and any right to consent to any thereof; and
(i) any defenses or benefits that may be derived from or afforded by law that
limit the liability of or exonerate pledgors or sureties, or that may conflict
with the terms hereof.
          SECTION 6.03. California Waivers. For purposes of this Section 6.03
only, references to the “principal” include each Loan Party and references to
the “creditor”

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include each Secured Party. In accordance with Section 2856 of the California
Civil Code, each Pledgor waives all rights and defenses (i) available to such
Pledgor by reason of Sections 2787 through 2855, 2899, and 3433 of the
California Civil Code, including all rights or defenses such Pledgor may have by
reason of protection afforded to the principal with respect to any of the
Secured Obligations, or to any other person liable for any of the Secured
Obligations, in either case in accordance with the antideficiency or other laws
of the State of California limiting or discharging the principal’s Indebtedness
or such person’s obligations, including Sections 580a, 580b, 580d and 726 of the
California Code of Civil Procedure; and (ii) arising out of an election of
remedies by the creditor, even though such election, such as a nonjudicial
foreclosure with respect to security for any Secured Obligation (or any
obligation of any other person of any of the Secured Obligations), has destroyed
such Pledgor’s right of subrogation and reimbursement against the principal (or
such other person), by operation of Section 580d of the California Code of Civil
Procedure or otherwise. No other provision of this Agreement shall be construed
as limiting the generality of any of the covenants and waivers set forth in this
Section 6.03. As provided below, this Agreement shall be governed by, and shall
be construed and enforced in accordance with the laws of the State of New York.
This Section 6.03 is included solely out of an abundance of caution, and shall
not be construed to mean that any of the above-referenced provisions of
California law are in any way applicable to this Agreement or to any of the
Secured Obligations.
ARTICLE VII
Miscellaneous
          SECTION 7.01. Concerning Collateral Agent.
               (a) Collateral Agent has been appointed as Collateral Agent
pursuant to Article X of the Credit Agreement. The actions of Collateral Agent
hereunder are subject to the provisions of the Credit Agreement. Collateral
Agent shall have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain from
taking action (including the release or substitution of the Security Agreement
Collateral), in accordance with this Agreement and the Credit Agreement.
Collateral Agent may employ agents and attorneys-in-fact in connection herewith.
Collateral Agent may resign and a successor Collateral Agent may be appointed in
the manner provided in the Credit Agreement. Upon the acceptance of any
appointment as Collateral Agent by a successor Collateral Agent, that successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent under
this Agreement, and the retiring Collateral Agent shall thereupon be discharged
from its duties and obligations under this Agreement. After any retiring
Collateral Agent’s resignation, the provisions hereof shall inure to its benefit
as to any actions taken or omitted to be taken by it under this Agreement while
it was Collateral Agent.
               (b) Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Security Agreement Collateral in its
possession if such Security Agreement Collateral is accorded treatment
substantially equivalent to that which Collateral Agent, in its individual
capacity, accords its own property consisting of similar instruments or
interests, it being understood that neither Collateral Agent nor any of the
Secured Parties shall have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Securities Collateral, whether or not Collateral Agent
or any other Secured Party has or is deemed to have knowledge

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of such matters, or (ii) taking any necessary steps to preserve rights against
any person with respect to any Security Agreement Collateral.
               (c) Collateral Agent shall be entitled to rely on any written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, on advice of counsel selected by it.
               (d) With respect to any of its rights and obligations as a
Lender, Collateral Agent shall have and may exercise the same rights and powers
hereunder. The term “Lenders,” “Lender” or any similar terms shall, unless the
context clearly otherwise indicates, include Collateral Agent in its individual
capacity as a Lender. Collateral Agent may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with such
Pledgor or any Affiliate of such Pledgor to the same extent as if Collateral
Agent were not acting as Collateral Agent.
               (e) If any item of Security Agreement Collateral also constitutes
collateral granted to Collateral Agent under any other security agreement,
pledge or instrument of any type, in the event of any conflict between the
provisions hereof and the provisions of such other deed of trust, mortgage,
security agreement, pledge or instrument of any type in respect of such
collateral, Collateral Agent, in its sole discretion, shall select which
provision or provisions shall control.
          SECTION 7.02. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact. If an Event of Default shall have occurred and be continuing,
Collateral Agent may (but shall not be obligated to) remedy or cause to be
remedied any such breach, and may expend funds for such purpose; provided that,
Collateral Agent shall in no event be bound to inquire into the validity of any
tax, lien, imposition or other obligation that such Pledgor fails to pay or
perform as and when required hereby and that such Pledgor does not contest in
accordance with the provision of Section 6.02 of the Credit Agreement. Any and
all amounts so expended by Collateral Agent shall be paid by the Pledgors in
accordance with the provisions of Section 7.03. Neither the provisions of this
Section 7.02 nor any action taken by Collateral Agent pursuant to the provisions
of this Section 7.02 shall prevent any such failure by any Pledgor to observe
any covenant contained in this Agreement nor any breach of warranty from
constituting an Event of Default. Each Pledgor hereby appoints Collateral Agent
its attorney-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor, or otherwise, from time to time during the
continuance of an Event of Default in Collateral Agent’s discretion to take any
action and to execute any instrument consistent with the terms hereof and the
other Loan Documents that Collateral Agent may deem necessary or advisable to
accomplish the purposes hereof. The foregoing grant of authority is an
irrevocable power of attorney coupled with an interest and such appointment
shall be irrevocable for the term hereof. Each Pledgor hereby ratifies all that
such attorney shall lawfully do or cause to be done by virtue hereof.
          SECTION 7.03. Expenses. Each Pledgor will promptly pay to Collateral
Agent the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and the fees and expenses of any experts and
agents, that Collateral Agent may incur in connection with this Agreement,
including all costs and expenses relating to (a) any and all filings and other
actions taken to ensure the attachment, perfection and priority of, and the
ability of Collateral Agent to enforce, Collateral Agent’s security interest in
the Security

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Agreement Collateral; (b) any action, suit or other proceeding affecting the
Security Agreement Collateral or any part thereof commenced, in which action,
suit or proceeding Collateral Agent is made a party or participates or in which
the right to use the Security Agreement Collateral or any part thereof is
threatened, or in which it becomes necessary in the judgment of Collateral Agent
to defend or uphold the Lien hereof (including any action, suit or proceeding to
establish or uphold the compliance of the Security Agreement Collateral with any
requirements of any Governmental Authority or law); (c) the collection of the
Secured Obligations; (d) the enforcement and administration hereof; (e) the
custody or preservation of, or the sale of, collection from, or other
realization on, any of the Security Agreement Collateral; (f) the exercise or
enforcement of any of the rights of Collateral Agent or any Secured Party
hereunder; or (g) the failure by any Pledgor to perform or observe any of the
provisions hereof. All amounts expended by Collateral Agent and payable by any
Pledgor under this Section 7.03 shall be due upon demand therefor (together with
interest thereon accruing at the default rate during the period from and
including the date on which such funds were so expended to the date of
repayment) and shall be part of the Secured Obligations. Each Pledgor’s
obligations under this Section 7.03 shall survive the termination hereof and the
discharge of such Pledgor’s other obligations under this Agreement, the Credit
Agreement and the other Loan Documents.
          SECTION 7.04. Indemnity.
               (a) Indemnity. Each Pledgor agrees to indemnify, defend and hold
harmless Collateral Agent and each of the other Secured Parties, and the
officers, directors, employees, agents and Affiliates of Collateral Agent and
each of the other Secured Parties (collectively, the “Indemnitees”) from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs (including settlement costs), expenses
or disbursements of any kind or nature whatsoever (including the fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto) that may be
imposed on, incurred by, or asserted against that Indemnitee, in any manner
relating to or arising out of this Agreement or any other Loan Document
(including any misrepresentation by any Pledgor in this Agreement or any other
Loan Document) (the “Indemnified Liabilities”); provided that, no Pledgor shall
have any obligation to an Indemnitee hereunder with respect to Indemnified
Liabilities if it has been determined by a final decision of a court of
competent jurisdiction that such Indemnified Liabilities arose from the gross
negligence or willful misconduct of that Indemnitee. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, each Pledgor shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.
               (b) Survival. The obligations of the Pledgors contained in this
Section 7.04 shall survive the termination hereof and the discharge of the
Pledgors’ other obligations under this Agreement, any Hedging Agreement and
under the other Loan Documents.
               (c) Reimbursement. Any amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Security Agreement Collateral.
          SECTION 7.05. Continuing Security Interest; Assignment. This Agreement
shall create a continuing security interest in the Security Agreement Collateral
and shall (a) remain in full force and effect until the payment in full of all
Secured Obligations, (b) be

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binding on the Pledgors, their respective successors and assigns, and (b) inure,
together with the rights and remedies of the Lender hereunder, to the benefit of
Collateral Agent and the other Secured Parties and each of their respective
permitted successors, transferees and assigns. No other persons (including any
other creditor of any Pledgor) shall have any interest herein or any right or
benefit with respect hereto. Without limiting the generality of the foregoing
clause (b), any Secured Party may assign or otherwise transfer any Indebtedness
held by it that is secured by this Agreement to any other person, and such other
person shall thereupon become vested with all the benefits in respect thereof
granted to such Secured Party, herein or otherwise, subject however, to the
provisions of the other Loan Documents and any Hedging Agreement to which such
Secured Party is a party.
          SECTION 7.06. Termination; Release. Upon payment in full of all the
Secured Obligations, or upon any partial release of Security Agreement
Collateral in accordance with the other Loan Documents, the security interests
granted hereby shall terminate hereunder and of record, and all rights to the
Security Agreement Collateral shall revert to the Pledgors, it being understood
that in the case any such partial release, the security interests granted hereby
shall terminate hereunder and of record only with respect to such Security
Agreement Collateral subject to such partial release. Upon any such termination,
Collateral Agent shall, at the Pledgors’ expense, execute and deliver to the
Pledgors such documents, and take such other actions, as the Pledgors reasonably
request to evidence such termination.
Notwithstanding anything to the contrary contained herein, the Collateral Agent
and the other Secured Parties agree to cooperate with each Pledgor with respect
to any sale of Security Agreement Collateral permitted by Section 6.04 of the
Credit Agreement and promptly take such action and execute and deliver such
instruments and documents necessary to release the Liens and security interests
created hereby relating to any of the assets or property affected by any sale of
Security Agreement Collateral permitted by Section 6.04 of the Credit Agreement
(including, without limitation, any necessary Uniform Commercial Code amendment,
termination or partial termination statement).
          SECTION 7.07. Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by any Pledgor therefrom, shall be effective unless the same shall
be made in accordance with the terms of the Credit Agreement and unless in
writing and signed by Collateral Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision
hereof shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement or any other document evidencing the Secured Obligations, no
notice to or demand on any Pledgor in any case shall entitle any Pledgor to any
other or further notice or demand in similar or other circumstances.
          SECTION 7.08. Notices. Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, if to any Pledgor, addressed to it at the address of
Borrower set forth in the Credit Agreement, and if to Collateral Agent,
addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 7.08.

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          SECTION 7.09. Governing Law; Jurisdiction; Consent to Service of
Process.
               (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND
5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE
EXTENT, IN ACCORDANCE WITH CHOICE-OF-LAW PRINCIPLES, THAT THE PERFECTION OF THE
SECURITY INTERESTS GRANTED HEREUNDER, OR REMEDIES HEREUNDER IN RESPECT OF ANY
ITEM OR TYPE OF SECURITY AGREEMENT COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
               (b) Each Pledgor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby 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 or, to the extent permitted by 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 any other Loan Document shall affect any right that
Collateral Agent or any other Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan Document
against any Pledgor or its properties in the courts of any jurisdiction.
               (c) Each Pledgor hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in Section 7.09(b). Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
               (d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 7.08. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
          SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 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 THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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 BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.

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          SECTION 7.11. Severability of Provisions. Any provision hereof that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
          SECTION 7.12. Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
          SECTION 7.13. Business Days. In the event any time period or any date
provided in this Agreement ends or falls on a day other than a Business Day,
then such time period shall be deemed to end and such date shall be deemed to
fall on the next succeeding Business Day, and performance herein may be made on
such Business Day, with the same force and effect as if made on such other day.
          SECTION 7.14. No Credit for Payment of Taxes or Imposition. Each
Pledgor shall not be entitled to any credit against the principal, premium (if
any), or interest payable under the Credit Agreement, and such Pledgor shall not
be entitled to any credit against any other sums that may become payable under
the terms thereof or hereof, by reason of the payment of any Tax on the Security
Agreement Collateral or any part thereof.
          SECTION 7.15. No Claims Against Collateral Agent. Nothing contained in
this Agreement shall constitute any consent or request by Collateral Agent,
express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Security
Agreement Collateral or any part thereof, nor as giving any Pledgor any right,
power or authority to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion as
would permit the making of any claim against Collateral Agent in respect thereof
or any claim that any Lien based on the performance of such labor or services or
the furnishing of any such materials or other property is prior to the Lien
hereof.
          SECTION 7.16. No Release Under Agreements; No Liability of Collateral
Agent or Secured Parties. Nothing set forth in this Agreement shall relieve the
Pledgor from the performance of any term, covenant, condition or agreement on
the Pledgor’s part to be performed or observed under or in respect of any of the
Security Agreement Collateral, or from any liability to any person under or in
respect of any of the Security Agreement Collateral, or shall impose any
obligation on Collateral Agent or any other Secured Party to perform or observe
any such term, covenant, condition or agreement on the Pledgor’s part to be so
performed or observed, or shall impose any liability on Collateral Agent or any
other Secured Party for any act or omission on the part of the Pledgor relating
thereto or for any breach of any Hedging Agreement, any representation or
warranty on the part of the Pledgor contained in this Agreement, Credit
Agreement or the other Security Documents, or under or in respect of the
Security Agreement Collateral or made in connection herewith or therewith. The
obligations of the Pledgor contained in this Section 7.16 shall survive the
termination hereof and the discharge of the Pledgor’s other obligations under
this Agreement, the Credit Agreement, any Hedging Agreement and the other
Security Documents.

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          SECTION 7.17. Obligations Absolute. Subject to Section 7.09 of the
Credit Agreement, all obligations of each Pledgor hereunder shall be absolute
and unconditional irrespective of:
               (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Pledgor or any other
Loan Party;
               (b) any lack of validity or enforceability of the Credit
Agreement, any Hedging Agreement or any other Loan Document, or any other
agreement or instrument relating thereto;
               (c) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other amendment
or waiver of or any consent to any departure from the Credit Agreement, any
other Loan Document, any Hedging Agreement or any other agreement or instrument
relating thereto;
               (d) any pledge, exchange, release or nonperfection of any other
collateral, or any release or amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Secured Obligations, except to the
extent that any such amendment, waiver or consent expressly relieves such
Pledgor of any obligations;
               (e) any exercise, nonexercise or waiver of any right, remedy,
power or privilege under or in respect hereof, the Credit Agreement, any Hedging
Agreement or any other Loan Document except as specifically set forth in a
waiver granted pursuant to the provisions of Section 5.03; or
               (f) any other circumstances that might otherwise constitute a
defense available to, or a discharge of, any Pledgor.
          SECTION 7.18. Marshaling; Payments Set Aside. Collateral Agent shall
not be under any obligation to marshal any assets in favor of any Pledgor or any
other person or against or in payment of ay or all of the Secured Obligations.
          SECTION 7.19. Release of Pledgors. If any Pledgor is released from its
Guarantee in accordance with the provisions of the Credit Agreement, then
Collateral Agent shall (at the expense of Borrower) take all action necessary to
release its security interest in that portion of the Security Agreement
Collateral owned by such Pledgor, and shall release such Pledgor from its
obligations hereunder (other than obligations intended to survive the
termination hereof), in each case subject to and in accordance with Section 7.09
of the Credit Agreement.
[Signature Pages Follow]

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

            HERBALIFE INTERNATIONAL, INC.,
a Nevada corporation, as a Pledgor
      By:           Name:           Title:           WH CAPITAL CORPORATION,
a Nevada corporation, as a Pledgor
      By:           Name:           Title:           HERBALIFE INTERNATIONAL OF
AMERICA, INC.,
a Nevada corporation, as a Pledgor
      By:           Name:           Title:           HERBALIFE INTERNATIONAL OF
EUROPE, INC.,
a California corporation, as a Pledgor
      By:           Name:           Title:           HERBALIFE INTERNATIONAL
COMMUNICATIONS, INC.,
a California corporation, as a Pledgor
      By:           Name:           Title:        

Security Agreement

 

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            HERBALIFE INTERNATIONAL DISTRIBUTION, INC.,
a California corporation, as a Pledgor
      By:           Name:           Title:           HERBALIFE TAIWAN, INC.,
a California corporation, as a Pledgor
      By:           Name:           Title:           HERBALIFE INTERNATIONAL
(THAILAND), LTD.,
a California corporation, as a Pledgor
      By:           Name:           Title:           HERBALIFE INTERNATIONAL DO
BRASIL LTDA.,
a corporation dually organized in Brazil and Delaware,
as a Pledgor
      By:           Name:           Title:        

Security Agreement

 

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            HERBALIFE LTD.,
a Cayman Islands exempted company with limited liability,
as a Pledgor
      By:           Name:           Title:           WH INTERMEDIATE HOLDINGS
LTD.,
a Cayman Islands exempted company with limited liability,
as a Pledgor
      By:           Name:           Title:           HBL LTD.,
a Cayman Islands exempted company with limited liability,
as a Pledgor
      By:           Name:           Title:           HV HOLDINGS LTD.,
a Cayman Islands exempted company with limited liability,
as a Pledgor
      By:           Name:           Title:           HERBALIFE DISTRIBUTION
LTD.,
a Cayman Islands exempted company with limited liability,
as a Pledgor
      By:           Name:           Title:        

Security Agreement

 

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            WH LUXEMBOURG HOLDINGS S.à.R.L.,
a Luxembourg corporation, as a Pledgor
      By:           Name:           Title:           HLF LUXEMBOURG HOLDINGS S.à
R.L.,
a Luxembourg corporation, as a Pledgor
      By:           Name:           Title:           WH LUXEMBOURG INTERMEDIATE
HOLDINGS S.à.R.L.,
a Luxembourg corporation, as a Pledgor
      By:           Name:           Title:           HERBALIFE INTERNATIONAL
LUXEMBOURG S.À.R.L.,
a Luxembourg corporation, as a Pledgor
      By:           Name:           Title:           HERBALIFE LUXEMBOURG
DISTRIBUTION S.à.R.L.,
a Luxembourg corporation, as a Pledgor
      By:           Name:           Title:        

Security Agreement

 

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            MERRILL LYNCH CAPITAL CORPORATION,
as Collateral Agent
      By:           Name:           Title:        

Security Agreement

 

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EXHIBIT A
Form of
ISSUER ACKNOWLEDGMENT
          The undersigned hereby (a) acknowledges receipt of a copy of that
certain security agreement (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Security Agreement”; capitalized
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the Security Agreement), dated as of July 21, 2006, among
Herbalife International, Inc., a Nevada corporation (“Borrower”), the Guarantors
(defined therein), and Merrill Lynch Capital Corporation, as collateral agent
(in such capacity and together with any successors in such capacity, “Collateral
Agent”); (b) agrees promptly to note on its books the security interests granted
to Collateral Agent and confirmed under the Security Agreement; (c) agrees that
it will comply with Collateral Agent’s instructions with respect to the
applicable Securities Collateral without further consent by the applicable
Pledgor; (d) agrees to notify Collateral Agent upon obtaining knowledge of any
interest in favor of any person in the applicable Securities Collateral that is
adverse to the interest of Collateral Agent therein; and (e) waives any right or
requirement at any time hereafter to receive a copy of the Security Agreement in
connection with the registration of any Securities Collateral thereunder in the
name of Collateral Agent or its nominee or the exercise of voting rights by
Collateral Agent or its nominee.

            [NAME OF ISSUER]
      By:           Name:           Title:        

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