Exhibit 10.32

 

SECURITY AND PLEDGE AGREEMENT

 

THIS SECURITY AND PLEDGE AGREEMENT (this “Agreement”) is entered into as of
November 3, 2016 among Vintage Stock Affiliated Holdings, LLC (the “Initial
Borrower” or “Holdings”), Vintage Stock, Inc. (the “Target Borrower” and
collectively with the Initial Borrower, the “Borrowers” and each a “Borrower”),
the other parties identified as “Grantors” on the signature pages hereto and
such other parties that may become Grantors hereunder after the date hereof
(together with the Borrowers, each individually a “Grantor”, and collectively,
the “Grantors”), and Wilmington Trust, National Association (“Administrative
Agent”) for the Secured Parties.

 

RECITALS

 

WHEREAS, pursuant to that certain Term Loan Agreement, dated as of the date
hereof (as amended, modified, extended, restated, renewed, replaced, or
supplemented from time to time, the “Loan Agreement”) among the Borrowers, the
Guarantors, the Lenders party thereto, the Administrative Agent and Capitala
Private Credit Fund V, L.P., in its capacity as Lead Arranger (the “Lead
Arranger”), the Lenders have agreed to make the Loan upon the terms and subject
to the conditions set forth therein; and

 

WHEREAS, each Grantor will derive substantial direct and indirect benefits from
the transactions contemplated by the Loan Agreement.

 

WHEREAS, it is a condition precedent to the making of the Loan by the Lenders
that each Grantor shall have executed and delivered this Agreement.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1.Definitions.

 

(a)                Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to such terms in the Loan Agreement and the rules of
construction set forth in Section 1.02 (Other Interpretive Provisions) of the
Loan Agreement shall apply to this Agreement.

 

(b)                The following terms shall have the meanings set forth in the
UCC: Accession, Account, Account Debtor, Adverse Claim, As-Extracted Collateral,
Certificated Security, Chattel Paper, Commercial Tort Claim, Consumer Goods,
Deposit Account, Document, Electronic Chattel Paper, Equipment, Farm Products,
Financial Asset, Fixtures, General Intangible, Goods, Instrument, Inventory,
Investment Company Security, Investment Property, Letter-of-Credit Right,
Manufactured Home, Payment Intangible, Proceeds, Securities Account, Securities
Entitlement, Securities Intermediary, Security, Software, Supporting Obligation
and Tangible Chattel Paper.

 

(c)                In addition, the following terms shall have the meanings set
forth below:

 

“Assignment of Claims Act” means the Assignment of Claims Act of 1940 (41 U.S.C.
Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727), including all
amendments thereto and regulations promulgated thereunder.

 

“Collateral” has the meaning provided in Section 2 hereof.

 

 

 

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“Control” means the manner in which “control” is achieved under the UCC with
respect to any Collateral for which the UCC specifies a method of achieving
“control”.

 

“Copyright License” means any agreement now or hereafter in existence, providing
for the grant by, or to, any rights (including, without limitation, the grant of
rights for a party to be designated as an author or owner and/or to enforce,
defend, use, display, copy, manufacture, distribute, exploit and sell, make
derivative works, and require joinder in suit and/or receive assistance from
another party) covered in whole or in part by a Copyright.

 

“Copyrights” means, collectively, all of the following of any Grantor: (i) all
copyrights (whether statutory or common law, whether registered or unregistered,
published or unpublished), copyright registrations and copyright applications
anywhere in the world and all tangible embodiments whether now owned or
hereafter created or acquired, (ii) all derivative works, counterparts,
extensions and renewals of any of the foregoing, (iii) all income, fees,
royalties, damages and payments now or hereafter due and/or payable under any of
the foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past, present and future infringements,
violations or misappropriations of any of the foregoing, (iv) all rights and
privileges with respect to the use of such copyrights, including the right to
sue for past, present and future infringements, violations or misappropriations
of any of the foregoing and (v) all rights corresponding to any of the foregoing
throughout the world.

 

“Excluded Property” means, with respect to any Loan Party,

 

(i)                                    any leasehold interests in real property;

 

(ii)                                all cars, trucks, trailers and other
vehicles or assets subject to certificates of title under the Laws of any state;

 

(iii)                             any assets with respect to which the Lead
Arranger determines, in its sole discretion, that the burden or costs of
creating and/or perfecting such a security interest therein is excessive in
relation to the benefit to the Lenders of the security to be afforded thereby;

 

(iv)                             Excluded Accounts;

 

(v)                                 any permit, lease, license, contract or
other Instrument of a Grantor to the extent the grant of a security interest in
such permit, lease, license, contract or other Instrument in the manner
contemplated by this Agreement, under the terms thereof or under applicable Law,
is prohibited and would result in the termination thereof or give the other
parties thereto the right to terminate, accelerate or otherwise alter such
Grantor’s rights, titles and interests thereunder (including upon the giving of
notice or the lapse of time or both); provided that any such limitation on the
security interests granted hereunder shall only apply to the extent that any
such prohibition or right to terminate or accelerate or alter the Grantor’s
rights could not be rendered ineffective pursuant to the UCC or any other
applicable Law (including Debtor Relief Laws) or principles of equity; provided,
further, that in the event of the termination or elimination of any such
prohibition or right or the requirement for any consent contained in any
applicable Law, permit, lease, license, contract or other Instrument, to the
extent sufficient to permit any such item to become Collateral hereunder, or
upon the granting of any such consent, or waiving or terminating any requirement
for such consent, a security interest in such permit, lease, license, contract
or other Instrument shall be automatically and simultaneously granted hereunder
and shall not be included as Excluded Property hereunder;

 

 

 

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(vi)                             any United States intent-to-use trademark
applications to the extent that, and solely during the period in which the grant
of a security interest therein would impair the validity or enforceability of or
render void or result in the cancellation of, any registration issued as a
result of such intent-to-use trademark applications under applicable Law;
provided that upon submission and acceptance by the USPTO of an amendment to
allege pursuant to 15 U.S.C. Section 1060(a) or any successor provision, such
intent-to-use trademark application shall be considered Collateral;

 

(vii)                         the Equity Interests of any Foreign Subsidiary of
any Grantor to the extent not required to be pledged to secured the Obligations
pursuant to the Collateral Documents (including, without limitation, any Equity
Interests excluded from the definition of Pledged Equity); or

 

(viii)                      margin stock;

 

provided, that the security interest granted to the Administrative Agent under
this Agreement shall attach immediately to any asset of any Grantor at such time
as such asset ceases to be “Excluded Property” described in any of the foregoing
clauses (i) through (ix) above; provided, further, Excluded Property shall not
include any Proceeds, products, substitutions or replacements of any Excluded
Property (unless such Proceeds, products, substitutions or replacements would
themselves otherwise constitute Excluded Property).

 

“Government Contract” means a contract between any Grantor and an agency,
department or instrumentality of the United States or any state, municipal or
local Governmental Authority located in the United States or all obligations of
any such Governmental Authority arising under any Account now or hereafter owing
by any such Governmental Authority, as Account Debtor, to any Grantor.

 

“Intellectual Property” means, collectively, all of the following of any
Grantor: (i) all systems software and applications software (including source
code and object code), all documentation for such software, including, without
limitation, user manuals, flowcharts, functional specifications, operations
manuals, and all formulas, processes, ideas and know-how embodied in any of the
foregoing, (ii) concepts, discoveries, improvements and ideas, know-how,
technology, reports, design information, trade secrets, practices,
specifications, test procedures, maintenance manuals, research and development,
inventions (whether or not patentable), blueprints, drawings, data, customer
lists, catalogs, and all physical embodiments of any of the foregoing, (iii)
Patents and Patent Licenses, Copyrights and Copyright Licenses, Trademarks and
Trademark Licenses and (iv) other agreements with respect to any rights in any
of the items described in the foregoing clauses (i), (ii), and (iii).

 

“Issuer” means the issuer of any Pledged Equity.

 

“Patent License” means any agreement, now or hereafter in existence, providing
for the grant by, or to, any Grantor of any rights (including, without
limitation, the right for a party to be designated as an owner and/or to
enforce, defend, make, have made, make improvements, manufacture, use, sell,
import, export, and require joinder in suit and/or receive assistance from
another party) covered in whole or in part by a Patent.

 

“Patents” means collectively, all of the following of any Grantor: (i) all
issued patents, all inventions and patent applications anywhere in the world,
(ii) all improvements, counterparts, reissues, divisional, re-examinations,
extensions, continuations (in whole or in part) and renewals of any of the
foregoing and improvements thereon, (iii) all income, fees, royalties, damages
or payments now or hereafter due and/or payable under any of the foregoing or
with respect to any of the foregoing, including, without limitation, damages or
payments for past, present or future infringements, violations or
misappropriations of any of the foregoing, (iv) all rights and privileges with
respect to the use of such patents, including the right to sue for past, present
and future infringements, violations or misappropriations of any of the
foregoing and (v) all rights corresponding to any of the foregoing throughout
the world.

 

 

 

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“Pledged Equity” means, with respect to each Grantor, (i) 100% of the issued and
outstanding Equity Interests of each Domestic Subsidiary (that is a Material
Subsidiary) of Holdings that is directly owned by such Grantor and (ii) 65% (or
such greater percentage that, due to a change in an applicable Law after the
date hereof, (A) would not reasonably be expected to cause the undistributed
earnings of such Foreign Subsidiary as determined for United States federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary’s United States parent and (B) would not reasonably be expected to
cause any material adverse tax consequences) of the issued and outstanding
Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests
not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
in each Foreign Subsidiary (that is a Material Subsidiary) of Holdings that is
directly owned by such Grantor, including the Equity Interests (but subject to
the limitations on Equity Interests of Foreign Subsidiaries set forth herein) of
the Subsidiaries owned by such Grantor as set forth on Schedule 5.21(f) to the
Loan Agreement (as updated from time to time in accordance with the Loan
Documents), in each case together with the certificates (or other agreements or
instruments), if any, representing such shares, and all options and other
rights, contractual or otherwise, with respect thereto, including, but not
limited to, the following:

 

(1)       all Equity Interests representing a dividend thereon, or representing
a distribution or return of capital upon or in respect thereof, or resulting
from a stock split, revision, reclassification or other exchange therefor, and
any subscriptions, warrants, rights or options issued to the holder thereof, or
otherwise in respect thereof; and

 

(2)       in the event of any consolidation or merger involving any Issuer and
in which such Issuer is not the surviving Person, all shares of each class of
the Equity Interests of the successor Person formed by or resulting from such
consolidation or merger, to the extent that such successor Person is a direct
Subsidiary of a Grantor;

 

(3)       all claims, rights, privileges, authority and powers of such Grantor
relating to such Equity Interests, and the certificates, instruments and
agreements representing such Equity Interests, including, without limitation,
the Equity Interests listed in Schedule 5.21(f) to the Loan Agreement, attached
as Schedule 1 hereof.

 

but in each case subject to the limitations on Equity Interests of Foreign
Subsidiaries set forth herein.

 

“Trademark License” means any agreement, now or hereafter in existence,
providing for the grant by, or to, any Grantor of any rights in (including,
without limitation, the right for a party to be designated as an owner and/or to
enforce, defend, use, mark, police, and require joinder in suit and/or receive
assistance from another party) covered in whole, or in part, by a Trademark.

 

 

 

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“Trademarks” means, collectively, all of the following of any Grantor: (i) all
trademarks, trade names, corporate names, internet domain names, trade styles,
service marks, logos, whether registered or unregistered, all registrations and
recordings thereof, and all applications in connection therewith (other than
each United States application to register any trademark or service mark prior
to the filing under applicable Law of a verified statement of use for such
trademark or service mark) anywhere in the world, (ii) all counterparts,
extensions and renewals of any of the foregoing, (iii) all income, fees,
royalties, damages and payments now or hereafter due and/or payable under any of
the foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past, present or future infringements,
violations, dilutions or misappropriations of any of the foregoing, (iv) all
rights and privileges with respect to the use of such Trademarks, including the
right to sue for past, present or future infringements, violations, dilutions or
misappropriations of any of the foregoing and (v) all rights corresponding to
any of the foregoing (including the goodwill) throughout the world.

 

“USPTO” means the United States Patent and Trademark Office.

 

2.Grant of Security Interest in the Collateral. To secure the prompt payment and
performance in full when due, whether by lapse of time, acceleration, mandatory
prepayment or otherwise, of the Obligations, each Grantor hereby pledges and
grants to the Administrative Agent, for the benefit of the Secured Parties, a
Lien on and a continuing security interest in, and a right to set off against,
any and all right, title and interest of such Grantor in and to all of the
following, wherever located and whether now owned or existing or owned,
acquired, or arising hereafter from time to time (collectively, the
“Collateral”): (a) all Accounts; (b) all cash, currency and Cash Equivalents;
(c) all Chattel Paper (including Electronic Chattel Paper and Tangible Chattel
Paper); (d) those certain Commercial Tort Claims set forth on Schedule 5.21(e)
to the Loan Agreement (as updated from time to time in accordance with the Loan
Agreement); (e) all Deposit Accounts; (f) all Documents; (g) all Equipment; (h)
all Fixtures; (i) all General Intangibles; (j) all Goods; (k) all Instruments;
(l) all Intellectual Property; (m) all Inventory; (n) all Investment Property;
(o) all Letter-of-Credit and Letter-of-Credit Rights; (p) all Payment
Intangibles; (q) all Pledged Equity; (r) all Securities Accounts; (s) all
Software; (t) all Supporting Obligations; (u) [reserved]; (v) all books and
records pertaining to the Collateral; (w) all Accessions and all Proceeds and
products of any and all of the foregoing; (x) Vintage Stock Acquisition
Agreement rights pursuant to the Collateral Assignment of Vintage Stock
Acquisition Agreement; (y) key-man life insurance policy rights pursuant to the
Key-Man Collateral Assignment Agreements; and (z) all other assets or personal
property of any kind or type whether tangible or intangible whatsoever now or
hereafter owned by such Grantor or as to which such Grantor now or hereafter has
the power to transfer interest therein.

 

Notwithstanding anything to the contrary contained herein, the security
interests and Liens granted under this Agreement shall not extend to, and the
term “Collateral” shall not include, any Excluded Property, and to the extent
that any Collateral later becomes Excluded Property, the Lien and security
interest granted hereunder will automatically be deemed to have been terminated
and released; provided further that, if and when any property shall cease to be
Excluded Property, a Lien on and security interest in such property shall
automatically be deemed granted therein.

 

The Grantors and the Administrative Agent, on behalf of the Secured Parties,
hereby acknowledge and agree that the security interest created hereby in the
Collateral (a) constitutes continuing collateral security for all of the
Obligations, whether now existing or hereafter arising and (b) is not to be
construed as an assignment of any Intellectual Property.

 

 

 

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3.Representations and Warranties. As of the date hereof, and with respect to any
Grantor who joins this Agreement following such date, as of the date such
Grantor joins this Agreement, each Grantor hereby represents and warrants to the
Administrative Agent, for the benefit of the Secured Parties, that:

 

(a)                Ownership. Each Grantor is the legal and beneficial owner of,
or has sufficient rights in, its Collateral, has good and marketable title to
all its Collateral and has the right to pledge, sell, assign or transfer the
same. There exists no Adverse Claim with respect to the Pledged Equity of such
Grantor, other than Permitted Liens or other Liens that will be terminated on
the date hereof.

 

(b)                Security Interest/Priority. This Agreement creates a valid
Lien and first priority security interest in favor of the Administrative Agent,
for the benefit of the Secured Parties, in the Collateral of such Grantor and,
when properly perfected by filing, shall constitute a valid and perfected, first
priority security interest in such Collateral, including all uncertificated
Pledged Equity consisting of partnership or limited liability company interests
that do not constitute Securities, to the extent such security interest can be
perfected by filing under the UCC (other than with respect to Fixtures that
require filings or other recordations with the local real estate records), free
and clear of all Liens except for Permitted Liens. No Grantor has authenticated
any agreement authorizing any secured party thereunder to file a financing
statement, except to perfect Permitted Liens. The taking possession by the
Administrative Agent of the certificated securities (if any) evidencing the
Pledged Equity and all other Instruments constituting Collateral will perfect
and establish the first priority of the Administrative Agent’s security interest
in all the Pledged Equity evidenced by such certificated securities and such
Instruments. With respect to any of the Pledged Equity that are uncertificated
securities, Grantors shall register the Administrative Agent as the registered
owner of any uncertificated securities (if any) and the Administrative Agent
will have a perfected first priority security interest in all such
uncertificated securities pledged by it. With respect to any Collateral
consisting of a Deposit Account, Securities Entitlement or held in a Securities
Account, upon execution and delivery by the applicable Grantor, the applicable
Securities Intermediary and the Administrative Agent of an agreement granting
control to the Administrative Agent over such Collateral, the Administrative
Agent shall have a valid and perfected, first priority security interest in such
Collateral.

 

(c)                Types of Collateral. None of the Collateral consists of, or
is the Proceeds of, (i) As-Extracted Collateral, (ii) Consumer Goods, (iii) Farm
Products, (iv) Manufactured Homes, (v) standing timber or (vi) any other
interest in or to any of the foregoing.

 

(d)                Accounts. No Account of a Grantor is evidenced by any
Instrument or Chattel Paper unless such Instrument or Chattel Paper, to the
extent requested by the Administrative Agent or the Lead Arranger, has been
endorsed over and delivered to, or submitted to the control of, the
Administrative Agent.

 

(e)                Equipment and Inventory. With respect to any Equipment and/or
Inventory of a Grantor, each such Grantor has exclusive possession and control
of such Equipment and Inventory of such Grantor except for (i) Equipment leased
by such Grantor as a lessee, (ii) Equipment or Inventory in transit with common
carriers or (iii) Equipment and/or Inventory in the possession or control of a
warehouseman, bailee or any agent or processor of such Grantor to the extent
such Grantor has complied with Section 4(e).

 

 

 

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(f)                 Authorization of Pledged Equity; Compliance. All Pledged
Equity (i) is duly authorized and validly issued, (ii) is fully paid and, to the
extent applicable, nonassessable and is not subject to the preemptive rights of
any Person, (iii) is beneficially owned as of record by a Grantor and (iv)
constitutes all the issued and outstanding shares of all classes of the equity
of such Issuer issued to such Grantor (except with respect to Pledged Equity of
any Foreign Subsidiaries, the issued and outstanding shares of which are pledged
in the amount required pursuant to clause (ii) of the definition of Pledged
Equity herein). The security interest in the Pledged Equity does not violate
Regulation T, U or X of the Board of Governors of the Federal Reserve System.

 

(g)                No Other Equity Interests, Instruments, Etc. As of the
Closing Date, (i) no Grantor owns any certificated Equity Interests in any
Subsidiary that has not been pledged and delivered to the Administrative Agent
hereunder, and (ii) no Grantor holds any Instruments, Documents or Tangible
Chattel Paper that have not been pledged and delivered to the Administrative
Agent pursuant to Section 4(c)(i) of this Agreement. All such certificated
securities, Instruments, Documents and Tangible Chattel Paper have been
delivered to the Administrative Agent to the extent (A) requested by the
Administrative Agent or the Lead Arranger or (B) as required by the terms of
this Agreement and the other Loan Documents.

 

(h)                Partnership and Limited Liability Company Interests. None of
the Collateral consisting of an interest in a partnership or a limited liability
company (i) is dealt in or traded on a securities exchange or in a securities
market, (ii) by its terms expressly provides that it is a Security governed by
Article 8 of the UCC, (iii) is an Investment Company Security, (iv) is held in a
Securities Account or (v) constitutes a Security or a Financial Asset.

 

(i)                 Contracts; Agreements; Licenses. Other than the Excluded
Property, no Grantor has any Material Contracts which are non-assignable by
their terms, or as a matter of Law, or which prevent the granting of a security
interest therein.

 

(j)                 Consents; Etc. No approval, consent, exemption,
authorization or other action by, notice to, or filing with, any Governmental
Authority or any other Person (including, without limitation, any stockholder,
member or creditor of such Grantor), is necessary or required for (i) the grant
by such Grantor of the security interest in the Collateral granted hereby or for
the execution, delivery or performance of this Agreement by such Grantor,
(ii) the perfection of such security interest (to the extent such security
interest can be perfected by filing under the UCC (other than with respect to
Fixtures that require filings or other recordations with the local real estate
records), the granting of control (to the extent required under Section 4(c)
hereof) or by filing an appropriate notice with the USPTO or the United States
Copyright Office) or (iii) the exercise by the Administrative Agent or the
Secured Parties of the rights and remedies provided for in this Agreement
(including, without limitation, as against any Issuer), except for (A) the
filing or recording of UCC financing statements or other filings under the
Assignment of Claims Act, (B) the filing of appropriate notices with the USPTO
and the United States Copyright Office, (C) obtaining control to perfect the
Liens created by this Agreement (to the extent required under Section 4(c)
hereof), (D) such actions as may be required by Laws affecting the offering and
sale of securities, (E) such actions as may be required by applicable foreign
Laws affecting the pledge of the Pledged Equity of Foreign Subsidiaries and
(F) consents, authorizations, filings or other actions which have been obtained
or made or that will be obtained contemporaneous with the Closing Date.

 

(k)                Commercial Tort Claims. As of the Closing Date, no Grantor
has any Commercial Tort Claims with a fair market value in excess of the
Threshold Amount, except as set forth on Schedule 5.21(e) of the Loan Agreement.

 

 

 

 

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(l)                 Copyrights, Patents and Trademarks.

 

(i)                 All material Intellectual Property of such Grantor is valid,
subsisting, unexpired, enforceable and has not been abandoned except as
permitted by the Loan Agreement.

 

(ii)               No holding, decision or judgment has been rendered by any
Governmental Authority that would limit, cancel or question the validity of any
Intellectual Property of any Grantor that is reasonably necessary for the
operation of such Grantor’s business.

 

(iii)             All applications pertaining to the Copyrights, Patents and
Trademarks of each Grantor that are reasonably necessary for the operation of
such Grantor’s business have been duly and properly filed, and all registrations
or letters pertaining to such Copyrights, Patents and Trademarks have been duly
and properly filed and issued.

 

(iv)              No Grantor has made any assignment or agreement in conflict
with the security interest in the material Intellectual Property of any Grantor
hereunder, except for Permitted Liens.

 

(v)                Each Grantor and each of its Subsidiaries, own, or possess
the right to use, all of the Intellectual Property that is reasonably necessary
for the operation of their respective businesses, without conflict with the
rights of any other Person.

 

(vi)              To the knowledge of each Grantor, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed by any Grantor or any of its
Subsidiaries infringes upon any rights held by any other Person.

 

(vii)            No proceeding, claim or litigation regarding any of the
foregoing is pending or, to the knowledge of such Grantor, threatened in
writing, which, either individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.

 

4.Covenants. Each Grantor covenants that until the Facility Termination Date,
such Grantor shall:

 

(a)                Maintenance of Perfected Security Interest; Further
Information.

 

(i)                 Maintain the security interest created by this Agreement as
a first priority perfected security interest (subject only to Permitted Liens)
and shall defend such security interest against the claims and demands of all
Persons whomsoever (other than the holders of Permitted Liens).

 

(ii)               From time to time furnish to the Administrative Agent upon
the Administrative Agent’s or any other Secured Party’s reasonable request,
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Administrative Agent or such Secured Party may reasonably request, all in
reasonable detail.

 

 

 

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(b)                Required Notifications. Promptly notify the Administrative
Agent (and the Administrative Agent will thereafter promptly notify the Lead
Arranger), in writing, of: (i) any Lien (other than Permitted Liens) on any of
the Collateral which would adversely affect the ability of the Administrative
Agent to exercise any of its remedies hereunder and (ii) the occurrence of any
other event which would reasonably be expected to have a material impairment on
the aggregate value of the Collateral or on the security interests created
hereby.

 

(c)                Perfection through Possession and Control.

 

(i)                 If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument or Tangible Chattel
Paper or Supporting Obligation, or if any property constituting Collateral shall
be stored or shipped subject to a Document, ensure that such Instrument,
Tangible Chattel Paper, Supporting Obligation or Document is either in the
possession of such Grantor at all times or, if requested by the Administrative
Agent or the Lead Arranger to perfect the Administrative Agent’s security
interest in such Collateral, is delivered to the Administrative Agent duly
endorsed in a manner reasonably satisfactory to the Lead Arranger. Such Grantor
shall ensure that any Collateral consisting of Tangible Chattel Paper is marked
with a legend reasonably acceptable to the Lead Arranger indicating the
Administrative Agent’s security interest in such Tangible Chattel Paper.

 

(ii)               Deliver to the Administrative Agent promptly upon the receipt
thereof by or on behalf of a Grantor, all certificates and instruments
constituting Certificated Securities or Pledged Equity. Prior to delivery to the
Administrative Agent, all such certificates constituting Pledged Equity shall be
held in trust by such Grantor for the benefit of the Administrative Agent
pursuant hereto. All such certificates representing Pledged Equity shall be
delivered in suitable form for transfer by delivery or shall be accompanied by
duly executed instruments of transfer or assignment in blank, substantially in
the form provided in Exhibit A hereto or other form reasonably acceptable to the
Lead Arranger.

 

(iii)             If any Collateral shall consist of Deposit Accounts,
Electronic Chattel Paper, Letter-of-Credit Rights, Securities Accounts or
uncertificated Investment Property, execute and deliver (and, with respect to
any Collateral consisting of a Securities Account or uncertificated Investment
Property, cause the Securities Intermediary or the Issuer, as applicable, with
respect to such Investment Property to execute and deliver) to the
Administrative Agent all control agreements, assignments, instruments or other
documents as reasonably requested by the Administrative Agent or the Lead
Arranger for the purposes of obtaining and maintaining Control of such
Collateral. If any Collateral shall consist of Deposit Accounts or Securities
Accounts, comply with Section 6.13(f) of the Loan Agreement.

 

 

 

 

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(d)                Filing of Financing Statements, Notices, etc. Execute and
deliver to the Administrative Agent and/or file such agreements, assignments or
instruments (including affidavits, notices, reaffirmations and amendments and
restatements of existing documents, as the Administrative Agent or the Lead
Arranger may reasonably request) and do all such other things as the
Administrative Agent (at the direction of the Required Lenders) or the Lead
Arranger may reasonably deem necessary or appropriate (i) to assure to the
Administrative Agent its security interests hereunder, including (A) such
instruments as the Administrative Agent or the Lead Arranger may from time to
time reasonably request in order to perfect and maintain the security interests
granted hereunder in accordance with the UCC, including, without limitation,
financing statements (including continuation statements), (B) with regard to
Copyrights, a Notice of Grant of Security Interest in Copyrights substantially
in the form of Exhibit B or other form reasonably acceptable to the Lead
Arranger, (C) with regard to Patents, a Notice of Grant of Security Interest in
Patents for filing with the USPTO substantially in the form of Exhibit C or
other form reasonably acceptable to the Lead Arranger and (D) with regard to
Trademarks, a Notice of Grant of Security Interest in Trademarks for filing with
the USPTO substantially in the form of Exhibit D or other form reasonably
acceptable to the Lead Arranger, (ii) to consummate the transactions
contemplated hereby and (iii) to otherwise protect and assure the Administrative
Agent of its rights and interests for the benefit of the Secured Parties
hereunder. Furthermore, each Grantor also hereby irrevocably makes, constitutes
and appoints the Administrative Agent, its nominee or any other person whom the
Administrative Agent may (at the direction of the Required Lenders) designate,
as such Grantor’s attorney in fact with full power and for the limited purpose
to prepare and file (and, to the extent applicable, sign) in the name of such
Grantor any financing statements, or amendments and supplements to financing
statements, renewal financing statements, notices or any similar documents which
in the Required Lenders’ or Lead Arranger’s reasonable discretion would be
necessary or appropriate in order to perfect and maintain perfection of the
security interests granted hereunder, such power, being coupled with an
interest, being and remaining irrevocable until the Facility Termination Date.
Each Grantor hereby agrees that a carbon, photographic or other reproduction of
this Agreement or any such financing statement is sufficient for filing as a
financing statement by the Administrative Agent without notice thereof to such
Grantor wherever the Administrative Agent (at the direction of the Required
Lenders) or the Lead Arranger may in the Required Lenders’ or Lead Arranger’s,
as applicable, reasonable discretion desire to file the same.

 

(e)                Collateral Held by Warehouseman, Bailee, etc.

 

(i)                 If any Collateral with a value in excess of the Threshold
Amount is at any time in the possession or control of a warehouseman, bailee or
any agent or processor of such Grantor shall (A) notify in writing the
Administrative Agent of such possession, (B) notify in writing such Person in
writing of the Administrative Agent’s security interest for the benefit of the
Secured Parties in such Collateral, (C) instruct such Person to hold all such
Collateral for the Administrative Agent’s account and subject to the
Administrative Agent’s instructions and (D) upon request by the Administrative
Agent or the Lead Arranger, obtain (1) a written acknowledgment from such Person
that it is holding such Collateral for the benefit of the Administrative Agent
and (2) such other documentation reasonably required by the Administrative Agent
or the Lead Arranger (including, without limitation, subordination and access
agreements).

 

(ii)               Perfect and protect such Grantor’s ownership interests in all
Inventory with a value in excess of the Threshold Amount stored with a consignee
against creditors of the consignee by filing and maintaining financing
statements against the consignee reflecting the consignment arrangement filed in
all appropriate filing offices, providing any written notices required by the
UCC to notify any prior creditors of the consignee of the consignment
arrangement, and taking such other actions as may be necessary to perfect and
protect such Grantor’s interests in such inventory under Section 2-326, Section
9-103, Section 9-324 and Section 9-505 of the UCC or otherwise, which such
financing statements filed pursuant to this Section shall be collaterally
assigned to the Administrative Agent, for the benefit of the Secured Parties.

 

 

 

 

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(f)                 Treatment of Accounts. Except as permitted by the Loan
Agreement, not grant or extend the time for payment of any Account, or
compromise or settle any Account for less than the full amount thereof, or
release any person or property, in whole or in part, from payment thereof, or
amend, supplement or modify any Account in any manner that would reasonably be
likely to adversely affect the value thereof, or allow any credit or discount
thereon, other than as normal and customary in the ordinary course of a
Grantor’s business. Each Grantor will deliver to the Administrative Agent a copy
of each material demand, notice or document received by it that questions or
calls into doubt the validity or enforceability of any Account.

 

(g)                Commercial Tort Claims. Execute and deliver such statements,
documents and notices and do and cause to be done all such things as may be
reasonably required by the Administrative Agent (at the direction of the
Required Lenders) or the Lead Arranger, or required by Law to create, preserve,
perfect and maintain the Administrative Agent’s security interest in any
Commercial Tort Claims initiated by or in favor of any Grantor.

 

(h)                Inventory. With respect to the Inventory of each Grantor:

 

(i)                 At all times maintain inventory records reasonably
satisfactory to the Lead Arranger, keeping correct and accurate records
itemizing and describing the kind, type, quality and quantity of Inventory and
such Grantor’s cost therefore and daily withdrawals therefrom and additions
thereto.

 

(ii)               Produce, use, store and maintain the Inventory with
reasonable care and caution, in accordance with applicable standards of any
insurance and in conformity with applicable Laws (including the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto).

 

(i)                 Books and Records. Mark its books and records (and shall
cause the Issuer of the Pledged Equity of such Grantor to mark its books and
records) to reflect the security interest granted pursuant to this Agreement.

 

(j)                 Nature of Collateral. At all times maintain the Collateral
as personal property and not affix any of the Collateral to any real property in
a manner that would change its nature from personal property to real property or
a Fixture to real property, unless the Administrative Agent shall have a
perfected Lien on such Fixture or real property.

 

(k)                Issuance or Acquisition of Equity Interests in Partnerships
or Limited Liability Companies.

 

(i)                 Not without executing and delivering, or causing to be
executed and delivered, to the Administrative Agent such agreements, documents
and instruments as the Administrative Agent (at the direction of the Required
Lenders) or the Lead Arranger may reasonably require in accordance with the Loan
Documents, issue or acquire any Pledged Equity consisting of an interest in a
partnership or a limited liability company that (A) is dealt in or traded on a
securities exchange or in a securities market, (B) by its terms expressly
provides that it is a Security governed by Article 8 of the UCC, (C) is an
investment company security, (D) is held in a Securities Account or (E)
constitutes a Security or a Financial Asset, except in each case, as otherwise
permitted by the provisions of the Loan Agreement.

 

 

 

 11 

 

 

(ii)               Without the prior written consent of the Lead Arranger, such
consent not to be unreasonably withheld, conditioned or delayed, no Grantor will
(A) vote to enable, or take any other action to permit, any applicable Issuer to
issue any Investment Property or Equity Interests constituting partnership or
limited liability company interests, except for those additional Investment
Property or Equity Interests constituting partnership or limited liability
company interests that will be subject to the security interest granted herein
in favor of the Secured Parties or otherwise permitted by the provisions of the
Loan Agreement, or (B) enter into any agreement or undertaking, except in
connection with a Disposition permitted under Section 7.05 of the Loan
Agreement, restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any Investment Property or
Pledged Equity or Proceeds thereof, except, as otherwise permitted by the
provisions of the Loan Agreement. The Grantors will defend the right, title and
interest of the Administrative Agent in and to any Investment Property and
Pledged Equity against the claims and demands of all Persons whomsoever.

 

(iii)             If any Grantor becomes entitled to receive or shall receive
(A) any certificated securities (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the
ownership interests of any Issuer, whether in addition to, in substitution of,
as a conversion of, or in exchange for, any Investment Property, or otherwise in
respect thereof, or (B) any sums paid upon or in respect of any Investment
Property upon the liquidation or dissolution of any Issuer, such Grantor shall
accept the same as the agent of the Secured Parties, hold the same in trust for
the Secured Parties, segregated from other funds of such Grantor, and promptly
deliver the same to the Administrative Agent, on behalf of the Secured Parties,
in accordance with the terms hereof.

 

(l)                 Intellectual Property.

 

(i)                 Except as permitted by the Loan Agreement, not do any act or
omit to do any act whereby any material Copyright may become invalidated and (A)
not do any act, or omit to do any act, whereby any material Copyright may become
injected into the public domain; (B) notify in writing the Administrative Agent
immediately if it knows that any material Copyright is reasonably likely to
become injected into the public domain or of any materially adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any court or tribunal in the United
States or any other country) regarding a Grantor’s ownership of any such
Copyright or its validity; (C) take all necessary steps as it shall deem
appropriate under the circumstances, to maintain and pursue each application
(and to obtain the relevant registration) of each material Copyright owned by a
Grantor and to maintain each registration of each material Copyright owned by a
Grantor including, without limitation, filing of applications for renewal where
necessary; and (D) promptly notify the Administrative Agent in writing of any
infringement, misappropriation, dilution or impairment of any material Copyright
of a Grantor of which it becomes aware and take such actions as it shall
reasonably deem appropriate under the circumstances to protect such Copyright,
including, where appropriate, the bringing of suit for infringement, dilution or
impairment or seeking injunctive relief and seeking to recover any and all
damages for such infringement, misappropriation, dilution or impairment.

 

(ii)               Not make any assignment or agreement in conflict with the
security interest in the Copyrights of each Grantor hereunder (except as
permitted by the Loan Agreement).

 

 

 

 

 12 

 

 

(iii)             Except as permitted by the Loan Agreement, (A) continue to use
each material Trademark on each and every trademark class of goods applicable to
its current line as used in the ordinary course of business in order to maintain
such Trademark in full force free from any claim of abandonment for non-use, (B)
maintain at least the same standards of quality of products and services offered
under such Trademark as are currently maintained, (C) employ such Trademark with
the appropriate notice of registration, if applicable, (D) not adopt or use any
mark that is confusingly similar or a colorable imitation of such Trademark
unless the Administrative Agent, for the benefit of the Secured Parties, shall
obtain a perfected security interest in such mark pursuant to this Agreement,
and (E) not (and not permit any licensee or sublicensee thereof to) do any act
or omit to do any act whereby any such Trademark may become invalidated.

 

(iv)              Except as permitted by the Loan Agreement, not do any act, or
omit to do any act, whereby any material Patent may become abandoned or
dedicated.

 

(v)                Notify in writing the Administrative Agent and the Secured
Parties promptly if it knows that any application or registration relating to
any material Patent or Trademark is reasonably likely to become abandoned or
dedicated, or of any materially adverse determination or development (including,
without limitation, the institution of, or any such determination or development
in, any proceeding in the USPTO or any court or tribunal in any country)
regarding such Grantor ownership of any material Patent or Trademark or its
right to register the same or to keep and maintain the same.

 

(vi)              Take all reasonable and necessary steps, including, without
limitation, in any proceeding before the USPTO, or any similar office or agency
in any other country or any political subdivision thereof, to maintain and
pursue each application (and to obtain the relevant registration) and to
maintain each registration of each Patent and Trademark, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.

 

(vii)            Promptly notify in writing the Administrative Agent and the
Secured Parties after it learns that any Patent or Trademark included in the
Collateral is infringed, misappropriated, diluted or impaired by a third party
and promptly sue for infringement, misappropriation, dilution or impairment, to
seek injunctive relief where appropriate and to recover any and all damages for
such infringement, misappropriation, dilution or impairment, or to take such
other actions as it shall reasonably deem appropriate under the circumstances to
protect such Patent or Trademark.

 

(viii)          Not make any assignment or agreement in conflict with the
security interest in the Patents or Trademarks of each Grantor hereunder (except
as permitted by the Loan Agreement).

 

(ix)              Upon the occurrence and during the continuance of an Event of
Default, grant to the Administrative Agent a royalty free license to use such
Grantor’s Intellectual Property solely in connection with the enforcement of the
Administrative Agent’s rights hereunder, but only to the extent any license or
agreement granting such Grantor rights in such Intellectual Property do not
prohibit such use by the Administrative Agent.

 

(m)              Equipment. Except as permitted by the Loan Agreement, maintain
each item of Equipment in good working order and condition (reasonable wear and
tear and obsolescence excepted).

 

 

 

 13 

 

 

(n)                Government Contracts. Promptly notify the Administrative
Agent in writing if it enters into any contract with a Governmental Authority
under which such Governmental Authority, as account debtor, owes a monetary
obligation to any Grantor under any Account.

 

(o)                [Reserved].

 

(p)                Further Assurances.

 

(i)                 Promptly upon the request of the Administrative Agent or the
Lead Arranger and at the sole expense of the Grantors, duly execute and deliver,
and have recorded, such further instruments and documents and take such further
actions as the Administrative Agent (at the direction of the Required Lenders)
or the Lead Arranger may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (A) the assignment of any
Material Contract, (B) with respect to Government Contracts, assignment
agreements and notices of assignment, in form and substance reasonably
satisfactory to the Lead Arranger, duly executed by any Grantors party to such
Government Contract in compliance with the Assignment of Claims Act (or
analogous state applicable Law), and (C) all applications, certificates,
instruments, registration statements, and all other documents and papers the
Administrative Agent (at the direction of the Required Lenders) or the Lead
Arranger may reasonably request and as may be required by Law in connection with
the obtaining of any consent, approval, registration, qualification, or
authorization of any Person deemed necessary or appropriate for the effective
exercise of any rights under this Agreement.

 

(ii)               From time to time upon the Administrative Agent’s or Lead
Arranger’s reasonable request, promptly furnish such updates to the information
disclosed pursuant to this Agreement and the Loan Agreement, including any
Schedules hereto or thereto, such that such updated information is true and
correct in all material respects as of the date so furnished.

 

5.Authorization to File Financing Statements. Each Grantor hereby authorizes the
Administrative Agent and the Lead Arranger to prepare and file such financing
statements (including continuation statements) or amendments thereof or
supplements thereto or other instruments as the Administrative Agent (at the
direction of the Required Lenders) or the Lead Arranger may from time to time
reasonably deem necessary or appropriate in order to perfect and maintain the
security interests granted hereunder in accordance with the UCC, which such
financing statements may describe the Collateral in the same manner as described
herein or may contain an indication or description of Collateral that describes
such property in any other manner as the Administrative Agent (at the direction
of the Required Lenders) or the Lead Arranger may determine, in its or their, as
applicable, reasonable discretion, is necessary, advisable or prudent to ensure
the perfection of the security interest in the Collateral granted herein,
including, without limitation, describing such property as “all assets, whether
now owned or hereafter acquired” or “all personal property, whether now owned or
hereafter acquired.”

 

 

 

 

 

 14 

 

 

6.Advances. Upon the occurrence and during the continuance of an Event of
Default, any Secured Party (individually or through the Administrative Agent)
may, at its sole option and in its sole discretion, perform the same and in so
doing may expend such sums as such Secured Party may reasonably deem advisable
in the performance thereof, including, without limitation, the payment of any
insurance premiums, the payment of any taxes, a payment to obtain a release of a
Lien or potential Lien, expenditures made in defending against any claim and all
other expenditures which such Secured Party may make for the protection of the
security hereof or which may be compelled to make by operation of Law. All such
sums and amounts (including reasonable and documented attorneys’ fees, legal
expenses and court costs actually incurred) so expended shall be repayable by
the Grantors on a joint and several basis promptly upon timely notice thereof
and demand therefor, shall constitute additional Obligations, and shall be
deemed to constitute principal of the Loan. No such performance of any covenant
or agreement by any Secured Party on behalf of any Grantor, and no such advance
or expenditure therefor, shall relieve the Grantors of any Default or Event of
Default. Any one or more Secured Parties (individually or through the
Administrative Agent) may make any payment hereby authorized in accordance with
any bill, statement or estimate procured from the appropriate public office or
holder of the claim to be discharged without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim except to the extent such payment is being
contested in good faith by a Grantor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.

 

7.Remedies.

 

(a)                General Remedies. Upon the occurrence of an Event of Default
and during continuation thereof, the Administrative Agent on behalf of the
Secured Parties shall have, in addition to the rights and remedies provided
herein, in the Loan Documents, in any other documents relating to the
Obligations, or by any applicable Law (including, but not limited to, levy of
attachment, garnishment and the rights and remedies set forth in the UCC of the
jurisdiction applicable to the affected Collateral), all the rights and remedies
of a secured party under the UCC (regardless of whether the UCC is the law of
the jurisdiction where the rights and remedies are asserted and regardless of
whether the UCC applies to the affected Collateral), and further, the
Administrative Agent may (but is not obligated to), with or without judicial
process or the aid and assistance of others, and shall (at the direction of the
Required Lenders) (i) dispose of any Collateral on any such premises in the
manner set forth herein, (ii) require the Grantors to assemble and make
available to the Administrative Agent at the expense of the Grantors any
Collateral at any place and time designated by the Administrative Agent (at the
direction of the Required Lenders) which is reasonably convenient to both
parties, (iii) remove any Collateral from any such premises for the purpose of
effecting sale or other disposition thereof, and/or (iv) without demand and
without advertisement, notice, hearing or process of law, all of which each of
the Grantors hereby waives to the fullest extent permitted by Law, at any place
and time or times, sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels any or all Collateral held
by or for it at public or private sale (which in the case of a private sale of
Pledged Equity, shall be to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such securities for their own
account, for investment and not with a view to the distribution or resale
thereof), at any exchange or broker’s board or elsewhere, by one or more
contracts, in one or more parcels, for money, upon credit or otherwise, at such
prices and upon such terms as the Administrative Agent (at the direction of the
Required Lenders) or the Lead Arranger deem commercially reasonable (subject to
any and all mandatory legal requirements). Each Grantor acknowledges that any
such private sale may be at prices and on terms less favorable to the seller
than the prices and other terms which might have been obtained at a public sale
and, notwithstanding the foregoing, agrees that such private sale shall be
deemed to have been made in a commercially reasonable manner and, in the case of
a sale of Pledged Equity, that the Administrative Agent shall have no obligation
to delay sale of any such securities for the period of time necessary to permit
the Issuer of such securities to register such securities for public sale under
the Securities Act of 1933.

 

 

 

 

 

 15 

 

 

 

The Administrative Agent or any other Secured Party shall have the right upon
any such public sale or sales, and, to the extent permitted by applicable Law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold. Neither the Administrative Agent’s compliance with
applicable Law nor its disclaimer of warranties relating to the Collateral shall
be considered to adversely affect the commercial reasonableness of any sale. To
the extent the rights of notice cannot be legally waived hereunder, each Grantor
agrees that any requirement of reasonable notice shall be met if such notice,
specifying the place of any public sale or the time after which any private sale
is to be made, is personally served on or mailed, postage prepaid, to Grantors
in accordance with the notice provisions of Section 11.02 of the Loan Agreement
at least 10 days before the time of sale or other event giving rise to the
requirement of such notice. Each Grantor further acknowledges and agrees that
any offer to sell any Pledged Equity that has been (A) publicly advertised on a
bona fide basis in a newspaper or other publication of general circulation in
the financial community of New York, New York (to the extent that such offer may
be advertised without prior registration under the Securities Act of 1933), or
(B) made privately in the manner described above shall be deemed to involve a
“public sale” under the UCC, notwithstanding that such sale may not constitute a
“public offering” under the Securities Act of 1933, and the Administrative Agent
may (but is not obligated to), in such event, bid for the purchase of such
securities. The Administrative Agent shall not be obligated to make any sale or
other disposition of the Collateral regardless of notice having been given. To
the extent permitted by applicable Law, any Secured Party may be a purchaser at
any such sale. To the extent permitted by applicable Law, each Grantor waives
all of its rights of redemption with respect to any such sale. Subject to the
provisions of applicable Law, the Administrative Agent may (but is not obligated
to) postpone or cause the postponement of the sale of all or any portion of the
Collateral by announcement at the time and place of such sale, and such sale
may, without further notice, to the extent permitted by Law, be made at the time
and place to which the sale was postponed, or the Administrative Agent may (but
is not obligated to)further postpone such sale by announcement made at such time
and place. To the extent permitted by applicable Law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Secured Party arising out of the exercise by them of any rights hereunder
except to the extent any such claims, damages or demands result solely from the
gross negligence or willful misconduct of the Administrative Agent or such
Secured Party, as applicable, as determined by a final non-appealable judgment
of a court of competent jurisdiction, in each case against whom such claim is
asserted. Each Grantor agrees that the internet shall constitute a “place” for
purposes of Section 9-610(b) of the UCC and that any sale of Collateral to a
licensor pursuant to the terms of a license agreement between such licensor and
a Grantor is sufficient to constitute a commercially reasonable sale (including
as to method, terms, manner, and time) within the meaning of Section 9-610 of
the UCC.

 

(b)                Remedies Relating to Accounts.

 

(i)                 Upon the occurrence and during the continuation of an Event
of Default, whether or not the Administrative Agent has exercised any or all of
its rights and remedies hereunder, (A) each Grantor shall notify in writing
(such notice to be in form and substance satisfactory to the Lead Arranger) its
Account Debtors and parties to the Material Contracts subject to a security
interest hereunder that such Accounts and the Material Contracts have been
assigned to the Administrative Agent, for the benefit of the Secured Parties and
promptly upon request of the Administrative Agent, instruct all account debtors
to remit all payments in respect of Accounts to a mailing location selected by
the Administrative Agent (at the direction of the Required Lenders) and (B) the
Administrative Agent shall have the right to enforce any Grantor’s rights
against its customers and account debtors, and the Administrative Agent or its
designee may (but is not obligated to) notify any Grantor’s customers and
account debtors that the Accounts of such Grantor have been assigned to the
Administrative Agent or of the Administrative Agent’s security interest therein,
and may (but is not obligated to) (either in its own name or in the name of a
Grantor or both) demand, collect (including without limitation by way of a
lockbox arrangement), receive, take receipt for, sell, sue for, compound,
settle, compromise and give acquittance for any and all amounts due or to become
due on any Account, and, in the Administrative Agent’s (at the direction of the
Required Lenders) or Lead Arranger’s reasonable discretion, file any claim or
take any other action or proceeding to protect and realize upon the security
interest of the Secured Parties in the Accounts.

 

 

 

 

 16 

 

 

(ii)               Each Grantor acknowledges and agrees that the Proceeds of its
Accounts remitted to or on behalf of the Administrative Agent in accordance with
the provisions hereof shall be solely for the Administrative Agent’s own
convenience and that such Grantor shall not have any right, title or interest in
such Accounts or in any such other amounts except as expressly provided herein
or in the Loan Agreement. Neither the Administrative Agent nor the Secured
Parties shall have any liability or responsibility to any Grantor for acceptance
of a check, draft or other order for payment of money bearing the legend
“payment in full” or words of similar import or any other restrictive legend or
endorsement or be responsible for determining the correctness of any remittance.

 

(iii)             Upon the occurrence and during the continuation of an Event of
Default, (A) the Administrative Agent shall have the right, but not the
obligation, to make test verifications of the Accounts in any manner and through
any medium that it or the Lead Arranger reasonably consider advisable, and the
Grantors shall furnish all such assistance and information as the Administrative
Agent or the Lead Arranger may reasonably require in connection with such test
verifications, (B) upon the Administrative Agent’s or Lead Arranger’s request
and at the expense of the Grantors, the Grantors shall cause independent public
accountants or others reasonably satisfactory to the Lead Arranger to furnish to
the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts and (C) the
Administrative Agent in its own name or in the name of others may communicate
with account debtors on the Accounts to verify with them to the Lead Arranger’s
satisfaction the existence, amount and terms of any Accounts.

 

(c)                Deposit Accounts/Securities Accounts. Upon the occurrence and
during the continuance of an Event of Default, the Administrative Agent (at the
written direction of the Required Lenders) shall prevent withdrawals or other
dispositions of funds in Deposit Accounts and Securities Accounts which are
subject to Qualifying Control Agreements or held with any Secured Party.

 

 

 

 

 

 

 17 

 

 

(d)                Investment Property/Pledged Equity. Upon the occurrence of an
Event of Default and during the continuation thereof, (i) the Administrative
Agent shall have the right to receive any and all cash dividends, payments or
distributions made in respect of any Investment Property or Pledged Equity or
other Proceeds paid in respect of any Investment Property and Pledged Equity,
(ii) any or all of any Investment Property or Pledged Equity may, at the option
of the Lead Arranger, be registered in the name of the Administrative Agent or
its nominee and (iii) the Administrative Agent or its nominee shall have (except
to the extent, if any, specifically waived in each instance by the Lead Arranger
in writing) the sole and exclusive right to exercise (with simultaneous notice
upon any Grantor) or refrain from exercising, but under no circumstances is the
Administrative Agent obligated by the terms of this Agreement or otherwise to
exercise, (A) all voting, corporate and other rights pertaining to such
Investment Property, or any such Pledged Equity at any meeting of shareholders,
partners or members of the relevant Issuers or otherwise and (B) any and all
rights of conversion, exchange and subscription and any other rights, privileges
or options pertaining to such Investment Property or Pledged Equity as if it
were the absolute owner thereof (including, without limitation, the right to
exchange at its reasonable discretion any and all of the Investment Property or
Pledged Equity upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate, partnership or limited liability
company structure of any Issuer or upon the exercise by any Grantor or the
Administrative Agent of any right, privilege or option pertaining to such
Investment Property or Pledged Equity, and in connection therewith, the right to
deposit and deliver any and all of the Investment Property or Pledged Equity
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Administrative Agent (at the
direction of the Required Lenders) may determine), all without liability except
to account for property actually received by it; but the Administrative Agent
shall have no duty to any Grantor to exercise any such right, privilege or
option and the Administrative Agent and the other Secured Parties shall not be
responsible for any failure to do so or delay in so doing. In furtherance
thereof, each Grantor hereby authorizes and instructs each Issuer with respect
to any Collateral consisting of Investment Property and/or Pledged Equity to (i)
comply with any instruction received by it from the Administrative Agent in
writing that (A) states that an Event of Default has occurred and is continuing
and (B) is otherwise in accordance with the terms of this Agreement, without any
other or further instructions from such Grantor, and each Grantor agrees that
each Issuer shall be fully protected in so complying following receipt of such
notice and prior to notice that such Event of Default is no longer continuing,
and (ii) except as otherwise expressly permitted hereby, pay any dividends,
distributions or other payments with respect to any Investment Property or
Pledged Equity directly to the Administrative Agent. Unless an Event of Default
shall have occurred and be continuing, each Grantor shall be permitted to
receive all cash dividends, payments or other distributions made in respect of
any Investment Property and any Pledged Equity to the extent permitted in the
Loan Agreement, and to exercise all voting and other corporate, company and
partnership rights with respect to any Investment Property and Pledged Equity to
the extent not inconsistent with the terms of this Agreement and the other Loan
Documents.

 

(e)                Material Contracts. Upon the occurrence of an Event of
Default and during the continuation thereof, the Administrative Agent or the
Lead Arranger shall be entitled to (but shall not be required to): (i) proceed
to perform any and all obligations of the applicable Grantor under any Material
Contract and exercise all rights of such Grantor thereunder as fully as such
Grantor itself could, (ii) do all other acts which the Administrative Agent (at
the direction of the Required Lenders) or the Lead Arranger may deem reasonably
necessary or proper to protect the Administrative Agent’s security interest
granted hereunder, provided such acts are not inconsistent with or in violation
of the terms of any of the Loan Agreement, of the other Loan Documents, such
Material Contract or applicable Law, and (iii) sell, assign or otherwise
transfer any Material Contract in accordance with the Loan Agreement, the other
Loan Documents and applicable Law, subject, however, to the prior approval of
each other party to such Material Contract, to the extent required under such
Material Contract.

 

(f)                 Access. In addition to the rights and remedies hereunder,
upon the occurrence of an Event of Default and during the continuance thereof,
the Administrative Agent shall have the right, subject to any consents expressly
required by or conditions set forth in any collateral access waivers, to enter
and remain upon the various premises of the Grantors without cost or charge to
the Administrative Agent, and use the same, together with materials, supplies,
books and records of the Grantors for the purpose of collecting and liquidating
the Collateral, or for preparing for sale and conducting the sale of the
Collateral, whether by foreclosure, auction or otherwise. In addition, the
Administrative Agent may (but is not obligated to)remove Collateral, or any part
thereof, from such premises and/or any records with respect thereto, in order to
effectively collect or liquidate such Collateral. If the Administrative Agent
exercises its right to take possession of the Collateral, each Grantor shall
also at its expense perform any and all other steps reasonably requested by the
Administrative Agent or the Lead Arranger to preserve and protect the security
interest hereby granted in the Collateral, such as placing and maintaining signs
indicating the security interest of the Administrative Agent, appointing
overseers for the Collateral and maintaining inventory records.

 

 

 

 

 18 

 

 

(g)                Nonexclusive Nature of Remedies. Failure by the
Administrative Agent or the Secured Parties to exercise any right, remedy or
option under this Agreement, any other Loan Document, any other document
relating to the Obligations, or as provided by Law, or any delay by the
Administrative Agent or the Secured Parties in exercising the same, shall not
operate as a waiver of any such right, remedy or option. No waiver hereunder
shall be effective unless it is in writing, signed by the party against whom
such waiver is sought to be enforced and then only to the extent specifically
stated, which in the case of the Administrative Agent or the Secured Parties
shall only be granted as provided herein. To the extent permitted by Law,
neither the Administrative Agent, the Secured Parties, nor any party acting as
attorney for the Administrative Agent or the Secured Parties, shall be liable
hereunder for any acts or omissions or for any error of judgment or mistake of
fact or Law other than their gross negligence or willful misconduct hereunder as
determined by a final non-appealable judgment of a court of competent
jurisdiction. The rights and remedies of the Administrative Agent and the
Secured Parties under this Agreement shall be cumulative and not exclusive of
any other right or remedy which the Administrative Agent or the Secured Parties
may have.

 

(h)                Retention of Collateral. In addition to the rights and
remedies hereunder, the Administrative Agent may (but is not obligated to), in
compliance with Sections 9-620 and 9-621 of the UCC or otherwise complying with
the requirements of applicable Law of the relevant jurisdiction, accept or
retain the Collateral in satisfaction of the Obligations. Unless and until the
Administrative Agent shall have provided such notices, however, the
Administrative Agent shall not be deemed to have retained any Collateral in
satisfaction of any Obligations for any reason.

 

(i)                 Waiver; Deficiency.

 

(i)                 Each Grantor hereby waives, to the extent permitted by
applicable Laws, all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable Laws in
order to prevent or delay the enforcement of this Agreement or the absolute sale
of the Collateral or any portion thereof. In the event that the Proceeds of any
sale, collection, realization or disposition of any Collateral are insufficient
to pay all amounts to which the Administrative Agent or the Secured Parties are
legally entitled, the Grantors shall be jointly and severally liable for the
deficiency, together with the reasonable costs of collection and the fees,
charges and disbursements of counsel. Any surplus remaining after the full
payment and satisfaction of the Obligations shall be returned to the Grantors or
to whomsoever a court of competent jurisdiction shall determine to be entitled
thereto.

 

(ii)               Each Grantor hereby waives demand, notice, protest, notice of
acceptance of this Agreement, notice of loans made, credit extended, Pledged
Collateral received or delivered or other action taken in reliance hereon. All
obligations of each Grantor hereunder shall be absolute and unconditional and
irrespective of (A) any change in the time, place or manner of payment of, or in
any other term of, the Obligations or any other obligation of any Loan Party
under any Loan Document, or any rescission, waiver, amendment or other
modification of any Loan Document or any other agreement, including any increase
in the Obligations; (B) any defense, set-off or counterclaim (other than a
defense of payment or performance) that may at any time be available to, or be
asserted by, A Loan Party against any Secured Party; (C) the failure of any
other Person to execute or deliver this Agreement or any other agreement or the
release or reduction of liability of any Grantor or other grantor or surety with
respect to the Obligations; (D) any other circumstance or manner of
administering the Loan that might vary the risk of any Grantor or otherwise
operate as a defense available to, or a legal or equitable discharge of, any
Loan Party or any other guarantor or surety.

 

 

 

 

 

 

 19 

 

 

8.Rights of the Administrative Agent.

 

(a)                Power of Attorney; Irrevocable Proxy. In addition to other
powers of attorney contained herein, each Grantor hereby designates and appoints
the Administrative Agent, on behalf of the Secured Parties, and each of its
designees or agents, as such Grantor’s true and lawful attorney-in-fact,
irrevocably and, with full power of substitution, and grants to the
Administrative Agent this IRREVOCABLE PROXY, with authority to take, or refuse
to take, any or all of the following actions, automatically upon the occurrence
and during the continuance of an Event of Default without further need of any
action taken by any Person, in each case in any manner the Administrative Agent
(at the direction of the Required Lenders) or the Lead Arranger deems advisable
in the Required Lenders’ or Lead Arranger’s, as applicable, sole discretion:

 

(i)                 to demand, collect, settle, compromise, adjust, give
discharges and releases, all as the Administrative Agent (at the direction of
the Required Lenders) or the Lead Arranger may reasonably determine;

 

(ii)               to commence and prosecute any actions at any court for the
purposes of collecting any Collateral and enforcing any other right in respect
thereof;

 

(iii)             to defend, settle or compromise any action brought and, in
connection therewith, give such discharge or release as the Administrative Agent
(at the direction of the Required Lenders) or the Lead Arranger may deem
reasonably appropriate;

 

(iv)              to receive, open and dispose of mail addressed to a Grantor
and endorse checks, notes, drafts, acceptances, money orders, bills of lading,
warehouse receipts or other instruments or documents evidencing payment,
shipment or storage of the goods giving rise to the Collateral of such Grantor
on behalf of and in the name of such Grantor, or securing, or relating to such
Collateral;

 

(v)                to sell, assign, transfer, make any agreement in respect of,
or otherwise deal with or exercise rights in respect of, any Collateral or the
goods or services which have given rise thereto, as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes;

 

(vi)              to adjust and settle claims under any insurance policy
relating thereto;

 

(vii)            to execute and deliver all assignments, conveyances,
statements, financing statements, continuation financing statements, security
agreements, affidavits, notices and other agreements, instruments and documents
that the Administrative Agent (at the direction of the Required Lenders) or the
Lead Arranger may determine necessary in order to perfect and maintain the
security interests and liens granted in this Agreement and in order to fully
consummate all of the transactions contemplated herein;

 

 

 

 

 

 

 20 

 

 

(viii)          to institute any foreclosure proceedings that the Administrative
Agent (at the direction of the Required Lenders) or the Lead Arranger may
reasonably deem appropriate;

 

(ix)              to sign and endorse any drafts, assignments, proxies, stock
powers, verifications, notices and other documents relating to the Collateral;

 

(x)                to exchange any of the Pledged Equity or other property upon
any merger, consolidation, reorganization, recapitalization or other
readjustment of the Issuer thereof and, in connection therewith, deposit any of
the Pledged Equity with any committee, depository, transfer agent, registrar or
other designated agency upon such terms as the Administrative Agent (at the
direction of the Required Lenders) or the Lead Arranger may reasonably deem
appropriate;

 

(xi)              to vote all or any part of the Pledged Equity and the other
Investment Property for or against any or all matters submitted, or which may be
submitted, to a vote of shareholders, partners or members, as the case may be,
and to exercise all other rights, powers, privileges and remedies to which any
such shareholders, partners or members would be entitled (including without
limitation, giving or withholding written consents and/or adopting resolutions
of the holders of the Equity Interests of any issuer, calling special meetings
of the holders of the Equity Interests of any issuer and voting at such
meetings), or to sign an instrument in writing, sanctioning the transfer of any
or all of the Pledged Equity into the name of the Administrative Agent or one or
more of the Secured Parties or into the name of any transferee to whom the
Pledged Equity or any part thereof may be sold pursuant to Section 7 hereof;

 

(xii)            to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened in writing against the
Collateral;

 

(xiii)          to direct any parties liable for any payment in connection with
any of the Collateral to make payment of any and all monies due and to become
due thereunder directly to the Administrative Agent or as the Administrative
Agent (at the direction of the Required Lenders) shall direct;

 

(xiv)          to receive payment of and receipt for any and all monies, claims,
and other amounts due and to become due at any time in respect of or arising out
of any Collateral;

 

(xv)            in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and papers as
the Administrative Agent (at the direction of the Required Lenders) or the Lead
Arranger may request to evidence the security interests created hereby in such
Intellectual Property and the goodwill and General Intangibles of such Grantor
relating thereto or represented thereby; and

 

(xvi)          do and perform all such other acts and things in any manner as
the Administrative Agent (at the direction of the Required Lenders) or the Lead
Arranger may reasonably deem to be necessary, proper or convenient in connection
with the Collateral.

 

 

 

 

 

 

 

 

 

 21 

 

 

This power of attorney is an irrevocable power coupled with an interest, and
shall survive the bankruptcy, dissolution or winding up of any relevant Grantor,
terminating only upon the Facility Termination Date. The Administrative Agent
shall be under no duty to exercise or withhold the exercise of any of the
rights, powers, privileges and options expressly granted to the Administrative
Agent in this Agreement, and shall not be liable for any failure to do so or any
delay in doing so. The Administrative Agent shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or Law in its
individual capacity or its capacity as attorney-in-fact except acts or omissions
resulting from its gross negligence or willful misconduct as determined by a
final non-appealable judgment of a court of competent jurisdiction. This power
of attorney is conferred on the Administrative Agent solely to protect, preserve
and realize upon its security interest in the Collateral and shall not impose
any duty upon the Administrative Agent or any other Secured Party to exercise
any such powers.

 

(b)                Assignment by the Administrative Agent. The Administrative
Agent may from time to time assign the Obligations to a successor Administrative
Agent appointed in accordance with the Loan Agreement, and such successor shall
be entitled to all of the rights and remedies of the Administrative Agent under
this Agreement in relation thereto.

 

(c)                The Administrative Agent’s Duty of Care. Other than the
exercise of reasonable care to assure the safe custody of the Collateral while
being held by the Administrative Agent hereunder, the Administrative Agent shall
have no duty or liability to preserve rights pertaining thereto, it being
understood and agreed that the Grantors shall be responsible for preservation of
all rights in the Collateral, and the Administrative Agent shall be relieved of
all responsibility for the Collateral upon surrendering it or tendering the
surrender of it to the Grantors. The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to
that which the Administrative Agent accords its own property, it being
understood that the Administrative Agent shall not have responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any of the Collateral. In the event of a public or private sale of Collateral
pursuant to Section 7 hereof, the Administrative Agent shall have no
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Collateral, whether or not the Administrative Agent has or is deemed to have
knowledge of such matters, or (ii) taking any steps to clean, repair or
otherwise prepare the Collateral for sale.

 

(d)                Liability with Respect to Accounts. Anything herein to the
contrary notwithstanding, each of the Grantors shall remain liable under each of
the Accounts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Account. Neither the Administrative Agent nor
any Secured Party shall have any obligation or liability under any Account (or
any agreement giving rise thereto) by reason of or arising out of this Agreement
or the receipt by the Administrative Agent or any Secured Party of any payment
relating to such Account pursuant hereto, nor shall the Administrative Agent or
any Secured Party be obligated in any manner to perform any of the obligations
of a Grantor under or pursuant to any Account (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Account (or any agreement giving rise
thereto), to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

 

 

 

 

 

 22 

 

 

9.Intercreditor Agreement

 

(a)                Notwithstanding anything herein to the contrary, the priority
of the Lien granted to the Administrative Agent, on behalf of the Secured
Parties, pursuant to or in connection with this Agreement, the terms of this
Agreement and the exercise of any right or remedy by the Administrative Agent
hereunder are subject to the provisions of the Intercreditor Agreement. In the
event of any conflict between the terms of the Intercreditor Agreement and this
Agreement with respect to the priority of any Liens or the exercise of any
rights or remedies, the terms of the Intercreditor Agreement shall control.

 

(b)                Notwithstanding anything herein to the contrary and to the
extent provided for in the Intercreditor Agreement, to the extent this Agreement
or any other Loan Document requires the delivery of, or control over, ABL
Facility Priority Collateral to be granted or provided to the Administrative
Agent at any time prior to the payment in full of the ABL Facility Indebtedness,
then the Grantors may deliver such ABL Facility Priority Collateral (or control
with respect thereto) and any related approval or consent rights to the ABL
Facility Agent in accordance with the ABL Facility Documents in full
satisfaction of any such requirement under this Agreement or any of the other
Loan Documents; provided that upon the Discharge of ABL Obligations (as such
term is defined in the Intercreditor Agreement) the Grantors shall deliver (or
cause to be delivered), or provide control over, as applicable, such ABL
Facility Priority Collateral within the same period of time from the date of the
Discharge of ABL Obligations (as such term is defined in the Intercreditor
Agreement) as would apply under the Loan Documents if such ABL Facility Priority
Collateral was acquired by such Grantor as of such date.

 

10.Application of Proceeds. After the exercise of remedies provided for in
Section 8.02 of the Loan Agreement (or after the Term Loans have automatically
become immediately due and payable), any payments in respect of the Obligations
and any Proceeds of the Collateral, when received by the Administrative Agent or
any Secured Party in cash or Cash Equivalents will be applied in reduction of
the Obligations in the order set forth in the Loan Agreement.

 

11.Continuing Agreement.

 

(a)                This Agreement shall remain in full force and effect until
the Facility Termination Date, at which time this Agreement shall be
automatically terminated (other than obligations under this Agreement which
expressly survive such termination) and the Administrative Agent shall, upon the
request and at the expense of the Grantors, forthwith release all of its liens
and security interests hereunder and shall execute and deliver all UCC
termination statements and/or other documents reasonably requested by the
Grantors evidencing such termination.

 

(b)                This Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Obligations is rescinded or must otherwise be restored
or returned by the Administrative Agent or any Secured Party as a preference,
fraudulent conveyance or otherwise under any Debtor Relief Law, all as though
such payment had not been made; provided that in the event payment of all or any
part of the Obligations is rescinded or must be restored or returned, all
reasonable and documented costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Administrative Agent or
any Secured Party in defending and enforcing such reinstatement shall be deemed
to be included as a part of the Obligations.

 

 

 

 

 

 

 23 

 

 

12.Amendments; Waivers; Modifications, etc. This Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated
except as set forth in Section 11.01 of the Loan Agreement.

 

13.Successors in Interest. This Agreement shall be binding upon each Grantor,
its successors and assigns and shall inure, together with the rights and
remedies of the Administrative Agent and the Secured Parties hereunder, to the
benefit of the Administrative Agent and the Secured Parties and their successors
and permitted assigns.

 

14.Notices. All notices required or permitted to be given under this Agreement
shall be in conformance with Section 11.02 of the Loan Agreement; provided that
notices and communications to the Grantors shall be directed to the Grantors, at
the address set forth on Schedule 1.01(a) of the Loan Agreement.

 

15.Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Agreement or any other Loan Document, or any certificate delivered thereunder,
by fax transmission or e-mail transmission (e.g. “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

16.Governing Law; Submission to Jurisdiction; Venue; WAIVER OF JURY TRIAL. The
terms of Sections 11.14 and 11.15 of the Loan Agreement with respect to
governing law, submission to jurisdiction, venue and waiver of jury trial are
incorporated herein by reference, mutatis mutandis, and the parties hereto agree
to such terms.

 

17.Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

18.Entirety. This Agreement, which shall constitute a Loan Document under the
Loan Agreement, the other Loan Documents and the other documents relating to the
Obligations represent the entire agreement of the parties hereto and thereto,
and supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Loan
Documents, any other documents relating to the Obligations, or the transactions
contemplated herein and therein.

 

19.Other Security. To the extent that any of the Obligations are now or
hereafter secured by property other than the Collateral (including, without
limitation, real property and securities owned by a Grantor), or by a guarantee,
endorsement or property of any other Person, then the Administrative Agent shall
have the right to proceed against such other property, guarantee or endorsement
upon the occurrence of any Event of Default, and the Administrative Agent shall
have the right, in the sole discretion of the Required Lenders or in the sole
discretion of the Lead Arranger, to determine which rights, security, liens,
security interests or remedies the Administrative Agent shall at any time
pursue, relinquish, subordinate, modify or take with respect thereto, without in
any way modifying or affecting any of them or the Obligations or any of the
rights of the Administrative Agent or the Secured Parties under this Agreement,
under any other of the Loan Documents or under any other document relating to
the Obligations.

 

 

 

 

 

 24 

 

 

20.Joinder. At any time after the date of this Agreement, one or more additional
Persons may become party hereto by executing and delivering to the
Administrative Agent a Joinder Agreement in the form of Exhibit D to the Loan
Agreement or such other form acceptable to the Lead Arranger. Immediately upon
such execution and delivery of such Joinder Agreement (and without any further
action), each such additional Person will become a party to this Agreement as an
“Grantor” and have all of the rights and obligations of a Grantor hereunder and
this Agreement and the schedules hereto shall be deemed amended by such Joinder
Agreement.

 

21.Consent of Issuers of Pledged Equity. Any Loan Party that is an Issuer hereby
acknowledges, consents and agrees to the grant of the security interests in such
Pledged Equity by the applicable Grantors pursuant to this Agreement, together
with all rights accompanying such security interest as provided by this
Agreement and applicable Law, notwithstanding any anti-assignment provisions in
any operating agreement, limited partnership agreement or similar organizational
or governance documents of such Issuer.

 

22.Joint and Several Obligations of Grantors.

 

(a)                Each of the Grantors is accepting joint and several liability
hereunder in consideration of the financial accommodations to be provided by the
Lenders under the Loan Agreement, for the mutual benefit, directly and
indirectly, of each of the Grantors and in consideration of the undertakings of
each of the Grantors to accept joint and several liability for the obligations
of each of them.

 

(b)                Each of the Grantors jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a primary
obligor, joint and several liability with the other Grantors with respect to the
payment and performance of all of the Obligations, it being the intention of the
parties hereto that (i) all the Obligations shall be the joint and several
obligations of each of the Grantors without preferences or distinction among
them and (ii) a separate action may be brought against each Grantor to enforce
this Agreement whether or not any Borrower, any other Grantor or any other
person or entity is joined as a party.

 

(c)                Notwithstanding any provision to the contrary contained
herein, in any other of the Loan Documents, to the extent the obligations of a
Grantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Grantor hereunder shall be limited to the maximum amount that is permissible
under applicable Law (whether federal or state and including, without
limitation, Debtor Relief Laws).

 

(d)                Each Grantor waives and shall not exercise any rights that it
may acquire by way of subrogation, contribution, reimbursement or
indemnification for payments made under this Agreement until the Facility
Termination Date.

 

23.Marshaling. The Administrative Agent shall not be required to marshal any
present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights and remedies, however existing or
arising. To the extent that it lawfully may, each Grantor hereby agrees that it
will not invoke any Law relating to the marshaling of collateral which might
cause delay in or impede the enforcement of the Administrative Agent’s rights
and remedies under this Agreement or under any other instrument creating or
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.

 

 

 

 

 25 

 

 

24.Injunctive Relief.

 

(a)                Each Grantor recognizes that, in the event such Grantor fails
to perform, observe or discharge any of its obligations or liabilities under
this Agreement or any other Loan Document, any remedy of Law may prove to be
inadequate relief to the Administrative Agent and the other Secured Parties.
Therefore, each Grantor agrees that the Administrative Agent and the other
Secured Parties, at the option of the Administrative Agent and the other Secured
Parties, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.

 

(b)                (b) The Administrative Agent, the other Secured Parties and
each Grantor hereby agree that no such Person shall have a remedy of punitive or
exemplary damages against any other party to a Loan Document and each such
Person hereby waives any right or claim to punitive or exemplary damages that
they may now have or may arise in the future in connection with any dispute
under this Agreement or any other Loan Document, whether such dispute is
resolved through arbitration or judicially.

 

25.Secured Parties. Each Secured Party that is not a party to the Loan Agreement
who obtains the benefit of this Agreement shall be deemed to have acknowledged
and accepted the appointment of the Administrative Agent pursuant to the terms
of the Loan Agreement, and with respect to the actions and omissions of the
Administrative Agent hereunder or otherwise relating hereto that do or may
affect such Secured Party, the Administrative Agent and each of its Affiliates
shall be entitled to all of the rights, benefits and immunities conferred under
Article IX of the Loan Agreement.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 26 

 

 

Each of the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.

 

VINTAGE STOCK AFFILIATED HOLDINGS

LLC, a Nevada limited liability company, as a Grantor

 

By: /s/ Jon Isaac                                            

Name: Jon Isaac

Title: President and Chief Executive Officer

 

 

Address:

325 E. Warm Springs Road. Suite 102

Las Vegas, NV 89119

 

 

 

 

VINTAGE STOCK, INC., a Missouri corporation, as a Grantor

 

By: /s/ Rodney Spriggs                              

Name: Rodney Spriggs

Title: President and Chief Executive Officer

 

 

Address:

202 E. 32nd Street

Joplin, MO 64804

 

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE TO SECURITY AND PLEDGE AGREEMENT

 

   

 

 

Accepted and agreed to as of the date first above written.

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Administrative Agent

 

 

By: ________________________________

Name: ______________________________

Title: _______________________________

 

 

Address:

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE TO SECURITY AND PLEDGE AGREEMENT

   

 

 

Schedule 1

 

Schedule 5.21(f) to the Loan Agreement - Pledged Equity Interests

 

Loan Party Issuing Entity Class Number of Shares Certificate No. Percentage
Interest of Outstanding Shares Vintage Stock Affiliated Holdings LLC Vintage
Stock, Inc.

Class A

(Voting)

282 18 100% Vintage Stock Affiliated Holdings LLC Vintage Stock, Inc.

Class B

(Nonvoting)

2,538 19 100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

EXHIBIT A

 

FORM OF

 

IRREVOCABLE STOCK POWER

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
__________________ the following Equity Interests of [___________], a
[_________] [corporation] [limited liability company]:

 

 

No. of Shares Certificate No.

 

 

and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such Equity Interests and to
take all necessary and appropriate actions to effect any such transfer. The
agent and attorney-in-fact may substitute and appoint one or more persons to act
for him.

 

IN WITNESS WHEREOF, the undersigned has caused this Stock Power to be duly
executed effective as of the _____ day of ____________, 20____.

 

 

 

[Holding]

 

By: _________________________

Name: _______________________

Title: ________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

EXHIBIT B

 

FORM OF

 

NOTICE

OF

GRANT OF SECURITY INTEREST

IN

COPYRIGHTS

 

United States Copyright Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Security and Pledge Agreement dated as of
November 3, 2016 (as amended, modified, extended, restated, renewed, replaced,
or supplemented from time to time, the “Agreement”) by and among the Grantors
party thereto (each an “Grantor” and collectively, the “Grantors”) and
Wilmington Trust, National Association, as administrative agent (in such
capacity, together with its successors and assigns in such capacity, the
“Administrative Agent”) for the Secured Parties referenced therein, the
undersigned Grantor has granted a continuing security interest in and continuing
lien upon the copyrights and copyright applications shown on Schedule 1 attached
hereto to the Administrative Agent for the ratable benefit of the Secured
Parties.

 

The undersigned Grantor and the Administrative Agent, on behalf of the Secured
Parties, hereby acknowledge and agree that the security interest in the
foregoing copyrights and copyright applications (a) may only be terminated in
accordance with the terms of the Agreement and (b) is not to be construed as an
assignment of any copyright or copyright application.

 

Grantor hereby authorizes and requests the Register of Copyrights to record this
Notice of Grant of Security Interest in Copyrights.

 

 

Very truly yours,

 

 

[GRANTOR]

 

 

By: ____________________________________

Name: __________________________________

Title: ___________________________________

 

 

Acknowledged and Accepted:

 

WILMINGTON TRUST, NATIONAL ASSOCIATION, as Administrative Agent

 

By: _____________________________

Name: ___________________________

Title: ____________________________

 

 

 

 

 

 

   

 

 

EXHIBIT C

 

FORM OF

 

NOTICE

OF

GRANT OF SECURITY INTEREST

IN

PATENTS

 

United States Patent and Trademark Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Security and Pledge Agreement dated as of
November 3, 2016 (as amended, modified, extended, restated, renewed, replaced,
or supplemented from time to time, the “Agreement”) by and among the Grantors
party thereto (each an “Grantor” and collectively, the “Grantors”) and
Wilmington Trust, National Association, as administrative agent (in such
capacity, together with its successors and assigns in such capacity, the
“Administrative Agent”) for the Secured Parties referenced therein, the
undersigned Grantor has granted a continuing security interest in and continuing
lien upon the patents and patent applications shown on Schedule 1 attached
hereto to the Administrative Agent for the ratable benefit of the Secured
Parties.

 

The undersigned Grantor and the Administrative Agent, on behalf of the Secured
Parties, hereby acknowledge and agree that the security interest in the
foregoing patents and patent applications (a) may only be terminated in
accordance with the terms of the Agreement and (b) is not to be construed as an
assignment of any patent or patent application.

 

Grantor hereby authorizes and requests the United States Patent and Trademark
Office to record this Notice of Grant of Security Interest in Patents.

 

Very truly yours,

 

[GRANTOR]

 

By: ____________________________

Name: __________________________

Title: ___________________________

 

 

 

Acknowledged and Accepted:

 

WILMINGTON TRUST, NATIONAL ASSOCIATION, as Administrative Agent

 

 

By: _________________________________

Name: _______________________________

Title: ________________________________

 

 

 

 

   

 

 

EXHIBIT D

 

FORM OF

 

NOTICE

OF

GRANT OF SECURITY INTEREST

IN

TRADEMARKS

 

United States Patent and Trademark Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Security and Pledge Agreement dated as of
November 3, 2016 (as amended, modified, extended, restated, renewed, replaced,
or supplemented from time to time, the “Agreement”) and among the Grantors party
thereto (each an “Grantor” and collectively, the “Grantors”) and Wilmington
Trust, National Association, as administrative agent (in such capacity, together
with its successors and assigns in such capacity, the “Administrative Agent”)
for the Secured Parties referenced therein, the undersigned Grantor has granted
a continuing security interest in and continuing lien upon the trademarks and
trademark applications shown on Schedule 1 attached hereto to the Administrative
Agent for the ratable benefit of the Secured Parties.

 

The undersigned Grantor and the Administrative Agent, on behalf of the Secured
Parties, hereby acknowledge and agree that the security interest in the
foregoing trademarks and trademark applications (a) may only be terminated in
accordance with the terms of the Agreement and (b) is not to be construed as an
assignment of any trademark or trademark application.

 

Grantor hereby authorizes and requests the United States Patent and Trademark
Office to record this Notice of Grant of Security Interest in Trademarks.

 

 

Very truly yours,

 

[GRANTOR]

 

By: ____________________________

Name: __________________________

Title: ___________________________

 

 

 

Acknowledged and Accepted:

 

WILMINGTON TRUST, NATIONAL ASSOCIATION, as Administrative Agent

 

 

By: _________________________________

Name: _______________________________

Title: ________________________________