Exhibit 10.10

EXECUTION VERSION

AMENDED AND RESTATED

GUARANTEE AND COLLATERAL AGREEMENT

Dated as of August 12, 2016,

Effective as of September 20, 2016,

among

CLAIRE’S INC.,

CLAIRE’S STORES, INC.,

as Borrower,

each Subsidiary Loan Party,

and

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as Administrative Agent

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TABLE OF CONTENTS

 

         Page   ARTICLE I    DEFINITIONS   

Section 1.01.

 

Credit Agreement

     1   

Section 1.02.

 

Other Defined Terms

     1    ARTICLE II    GUARANTEE   

Section 2.01.

 

Guarantee

     4   

Section 2.02.

 

Guarantee of Payment

     5   

Section 2.03.

 

No Limitations, Etc

     5   

Section 2.04.

 

Reinstatement

     6   

Section 2.05.

 

Agreement To Pay; Contribution; Subrogation

     6   

Section 2.06.

 

Information

     7   

Section 2.07.

 

Maximum Liability

     7   

Section 2.08.

 

Payment Free and Clear of Taxes

     7    ARTICLE III    PLEDGE OF SECURITIES   

Section 3.01.

 

Pledge

     8   

Section 3.02.

 

Delivery of the Pledged Collateral

     8   

Section 3.03.

 

Representations, Warranties and Covenants

     10   

Section 3.04.

 

Registration in Nominee Name; Denominations

     11   

Section 3.05.

 

Voting Rights; Dividends and Interest, Etc

     12    ARTICLE IV    SECURITY INTERESTS IN OTHER PERSONAL PROPERTY   

Section 4.01.

 

Security Interest

     13   

Section 4.02.

 

Representations and Warranties

     15   

Section 4.03.

 

Covenants

     18   

Section 4.04.

 

Other Actions

     21   

Section 4.05.

 

Covenants Regarding Patent, Trademark and Copyright Collateral

     21    ARTICLE V    REMEDIES   

Section 5.01.

 

Remedies Upon Default

     23   

Section 5.02.

 

Application of Proceeds

     24   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

Section 5.03.

 

Securities Act, Etc

     25    ARTICLE VI    INDEMNITY, SUBROGATION AND SUBORDINATION   

Section 6.01.

 

Indemnity

     26   

Section 6.02.

 

Contribution and Subrogation

     26   

Section 6.03.

 

Subordination; Subrogation

     27    ARTICLE VII    MISCELLANEOUS   

Section 7.01.

 

Notices

     29   

Section 7.02.

 

Security Interest Absolute

     29   

Section 7.03.

 

Limitation By Law

     29   

Section 7.04.

 

Binding Effect; Several Agreement

     29   

Section 7.05.

 

Successors and Assigns

     30   

Section 7.06.

 

Administrative Agent’s Fees and Expenses; Indemnification

     30   

Section 7.07.

 

Administrative Agent Appointed Attorney-in-Fact

     31   

Section 7.08.

 

GOVERNING LAW

     31   

Section 7.09.

 

Waivers; Amendment

     31   

Section 7.10.

 

WAIVER OF JURY TRIAL

     32   

Section 7.11.

 

Severability

     32   

Section 7.12.

 

Counterparts

     32   

Section 7.13.

 

Headings

     32   

Section 7.14.

 

Jurisdiction; Consent to Service of Process

     32   

Section 7.15.

 

Termination or Release

     33   

Section 7.16.

 

Additional Subsidiaries

     34   

Section 7.17.

 

Right of Set-off

     34   

Section 7.18.

  Intercreditor Agreements      34   

 

 

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AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT dated as of August 12,
2016, and effective as of September 20, 2016 (this “Agreement”), among CLAIRE’S
INC., a Delaware corporation (“Holdings”), CLAIRE’S STORES, INC., a Florida
corporation (the “Borrower”), each Subsidiary Loan Party and CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH, as administrative agent and collateral agent (in such
capacities, the “Administrative Agent”) for the Secured Parties (as defined
below).

Reference is made to the Second Amended and Restated Credit Agreement dated as
of August 12, 2016, and effective as of September 20, 2016 (as amended,
restated, amended and restated, supplemented, waived or otherwise modified from
time to time, the “Credit Agreement”), among Holdings, the Borrower, the Lenders
party thereto from time to time and the Administrative Agent.

The Lenders have agreed to extend credit to the Borrower subject to the terms
and conditions set forth in the Credit Agreement. The obligations of the Lenders
to extend such credit are conditioned upon, among other things, the execution
and delivery of this Agreement. Holdings and the Subsidiary Loan Parties are
affiliates of the Borrower, will derive substantial benefits from the extension
of credit to the Borrower pursuant to the Credit Agreement and are willing to
execute and deliver this Agreement in order to induce the Lenders to extend such
credit. Accordingly, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01.    Credit Agreement. (a) Capitalized terms used in this Agreement
and not otherwise defined herein have the respective meanings assigned thereto
in the Credit Agreement. All capitalized terms defined in the New York UCC (as
defined herein) and not defined in this Agreement have the meanings specified
therein. The term “instrument” shall have the meaning specified in Article 9 of
the New York UCC.

(b)    The rules of construction specified in Section 1.02 of the Credit
Agreement also apply to this Agreement.

Section 1.02.    Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“ABL Intercreditor Agreement” has the meaning assigned to such term in the
Credit Agreement.

“Account Debtor” means any person who is or who may become obligated to any
Pledgor under, with respect to or on account of an Account, Chattel Paper,
General Intangibles, Instruments or Investment Property.

“Article 9 Collateral” has the meaning assigned to such term in Section 4.01.

“Collateral” means the collective reference to Article 9 Collateral and Pledged
Collateral.

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“Copyright License” means any written agreement, now or hereafter in effect, any
right granting any right to any Pledgor under any Copyright now or hereafter
owned by any third party, and all rights of any Pledgor under any such agreement
(including, without limitation, any such rights that such Pledgor has the right
to license).

“Copyrights” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all copyright rights in any work subject to the copyright laws of
the United States or any other country, whether as author, assignee, transferee
or otherwise, (b) all registrations and applications for registration of any
such Copyright in the United States or any other country, including
registrations, supplemental registrations and pending applications for
registration in the United States Copyright Office and the right to obtain all
renewals thereof, including those listed on Schedule II, (c) all claims for, and
rights to sue for, past or future infringements of any of the foregoing and (d)
all income, royalties, damages and payments now or hereafter due and payable
with respect to any of the foregoing, including damages and payments for past or
future infringement thereof.

“Credit Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

“Federal Securities Laws” has the meaning assigned to such term in Section 5.03.

“General Intangibles” means all “General Intangibles” as defined in the New York
UCC, including all choses in action and causes of action and all other
intangible personal property of any Pledgor of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Pledgor, including corporate or
other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, Swap Agreements
and other agreements), Intellectual Property (but excluding “intent-to-use”
applications for trademark or service mark registrations filed pursuant to
Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment
to Allege Use or a Statement of Use under Sections 1(e) and 1(d) of the Lanham
Act has been filed, to the extent that, and solely during the period for which,
any assignment of an “intent-to-use” application prior to such filing would
violate the Lanham Act), goodwill, registrations, franchises, tax refund claims
and any guarantee, claim, security interest or other security held by or granted
to any Pledgor to secure payment by an Account Debtor of any of the Accounts.

“Guarantors” means Holdings (prior to a Borrower Qualified IPO), and the
Subsidiary Loan Parties.

“Intellectual Property” means all intellectual property of every kind and nature
now owned or hereafter acquired by any Pledgor, including inventions, designs,
Patents, Copyrights, Trademarks, Patent Licenses, Copyright Licenses, Trademark
Licenses, trade secrets, domain names, confidential or proprietary technical and
business information, know-how, show-how or other data or information and all
related documentation.

“Intellectual Property Security Agreement” means a security agreement in the
form hereof or a short form hereof, in each case, which form shall be reasonably
acceptable to the Administrative Agent.

 

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“IP Agreements” means all material Copyright Licenses, Patent Licenses,
Trademark Licenses, and all other agreements, permits, consents, orders and
franchises relating to the license, development, use or disclosure of any
material Intellectual Property to which a Pledgor, now or hereafter, is a party
or a beneficiary, including, without limitation, the agreements set forth on
Schedule II hereto.

“Loan Document Obligations” has the meaning assigned to such term in the Credit
Agreement.

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

“Obligations” has the meaning assigned to such term in the Credit Agreement.

“Patent License” means any written agreement, now or hereafter in effect,
granting to any Pledgor any right to make, use or sell any invention covered by
a Patent, now or hereafter owned by any third party (including, without
limitation, any such rights that such Pledgor has the right to license).

“Patents” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all letters patent of the United States or the equivalent thereof
in any other country or jurisdiction, including those listed on Schedule II, and
all applications for letters patent of the United States or the equivalent
thereof in any other country or jurisdiction, including those listed on Schedule
II, (b) all provisionals, reissues, extensions, continuations, divisions,
continuations-in- part, reexaminations or revisions thereof, and the inventions
disclosed or claimed therein, including the right to make, use, import and/or
sell the inventions disclosed or claimed therein, (c) all claims for, and rights
to sue for, past or future infringements of any of the foregoing and (d) all
income, royalties, damages and payments now or hereafter due and payable with
respect to any of the foregoing, including damages and payments for past or
future infringement thereof.

“Permitted Liens” means any Lien permitted by Section 6.02 of the Credit
Agreement.

“Pledged Collateral” has the meaning assigned to such term in Section 3.01.

“Pledged Debt Securities” has the meaning assigned to such term in Section 3.01.

“Pledged Securities” means any promissory notes, stock certificates or other
certificated securities now or hereafter included in the Pledged Collateral,
including all certificates, instruments or other documents representing or
evidencing any Pledged Collateral.

“Pledged Stock” has the meaning assigned to such term in Section 3.01.

“Pledgor” shall mean the Borrower and each Guarantor.

 

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“Secured Parties” means (a) the Lenders (and any Affiliate of a Lender
designated by the Borrower as a provider of cash management services to which
any obligation referred to in clause (c) of the definition of the term
Obligations is owed), (b) the Administrative Agent, (c) each Issuing Bank, (d)
each counterparty to any Swap Agreement entered into with a Loan Party or any
Affiliate of a Loan Party, the obligations under which constitute Obligations,
(e) the beneficiaries of each indemnification obligation undertaken by any Loan
Party under any Loan Document and (f) the successors and permitted assigns of
each of the foregoing.

“Security Interest” has the meaning assigned to such term in Section 4.01.

“Subsidiary Loan Party” means any Subsidiary that is a party hereto or any
Subsidiary that becomes a party hereto pursuant to Section 7.16.

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any Pledgor any right to use any Trademark now or hereafter owned by
any third party (including, without limitation, any such rights that such
Pledgor has the right to license).

“Trademarks” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all trademarks, service marks, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos,
other source or business identifiers, designs and general intangibles of like
nature, now existing or hereafter adopted or acquired, all registrations thereof
(if any), and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the United
States Patent and Trademark Office or any similar offices in any State of the
United States or any other country or any political subdivision thereof (except
for “intent-to-use” applications for trademark or service mark registrations
filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and
until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and
1(d) of the Lanham Act has been filed, to the extent that any assignment of an
“intent-to-use” application prior to such filing would violate the Lanham Act),
and all renewals thereof, including those listed on Schedule II, (b) all
goodwill associated therewith or symbolized thereby, (c) all claims for, and
rights to sue for, past or future infringements of any of the foregoing and (d)
all income, royalties damages and payments now or hereafter due and payable with
respect to any of the foregoing, including damages and payments for past or
future infringement thereof.

ARTICLE II

GUARANTEE

Section 2.01.    Guarantee. Each Guarantor unconditionally guarantees, jointly
with the other Guarantors and severally, to the Administrative Agent, for the
ratable benefit of the Secured Parties, as a primary obligor and not merely as a
surety, the due and punctual payment and performance of the Obligations. Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Obligation. Each Guarantor waives presentment to, demand or payment from and
protest to the Borrower or any other Loan Party of any of the Obligations, and
also waives notice of acceptance of its guarantee and notice of protest for
nonpayment.

 

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Section 2.02.    Guarantee of Payment. Each Guarantor further agrees that its
guarantee hereunder constitutes a guarantee of payment when due (whether at the
stated maturity, by acceleration or otherwise) and not of collection, and waives
any right to require that any resort be had by the Administrative Agent or any
other Secured Party to any security held for the payment of the Obligations or
to any balance of any deposit account or credit on the books of the
Administrative Agent or any other Secured Party in favor of the Borrower or any
other person.

Section 2.03.    No Limitations, Etc. (a) Except for termination of a
Guarantor’s obligations hereunder as expressly provided for in Section 7.15 and
except as provided in Section 2.07, the obligations of each Guarantor hereunder
shall not be subject to any reduction, limitation, impairment or termination for
any reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise (other than defense of payment
or performance). Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder, to the fullest extent permitted by
applicable law, shall not be discharged or impaired or otherwise affected by,
and each Guarantor hereby waives any defense to the enforcement hereof by reason
of:

(i)    the failure of the Administrative Agent or any other Secured Party to
assert any claim or demand or to exercise or enforce any right or remedy under
the provisions of any Loan Document or otherwise;

(ii)    any rescission, waiver, amendment or modification of, increase in the
Obligations with respect to, or any release from any of the terms or provisions
of, any Loan Document or any other agreement, including with respect to any
other Guarantor under this Agreement;

(iii)    the failure to perfect any security interest in, or the exchange,
substitution, release or any impairment of, any security held by the
Administrative Agent or any other Secured Party for the Obligations;

(iv)    any default, failure or delay, willful or otherwise, in the performance
of the Obligations;

(v)    any other act or omission that may or might in any manner or to any
extent vary the risk of any Guarantor or otherwise operate as a discharge of any
Guarantor as a matter of law or equity (other than the payment in full in cash
or immediately available funds of all the Obligations);

(vi)    any illegality, lack of validity or enforceability of any Obligation;

(vii)    any change in the corporate existence, structure or ownership of any
Loan Party, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any Loan Party or its assets or any resulting release or
discharge of any Obligation;

 

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(viii)    the existence of any claim, set-off or other rights that the
Guarantors may have at any time against the Borrower, the Administrative Agent,
any other Secured Party or any other person, whether in connection herewith or
any unrelated transactions; provided that nothing herein will prevent the
assertion of any such claim by separate suit or compulsory counterclaim;

(ix)    any action permitted or authorized hereunder; or

(x)    any other circumstance (including without limitation, any statute of
limitations) or any existence of or reliance on any representation by the
Administrative Agent or any other Secured Party that might otherwise constitute
a defense to, or a legal or equitable discharge of, the Borrower or any
Guarantor or any other guarantor or surety.

Each Guarantor expressly authorizes the Secured Parties to take and hold
security for the payment and performance of the Obligations, to exchange, waive
or release any or all such security (with or without consideration), to enforce
or apply such security and direct the order and manner of any sale thereof in
their sole discretion or to release or substitute any one or more other
guarantors or obligors upon or in respect of the Obligations, all without
affecting the obligations of any Guarantor hereunder.

(b)    To the fullest extent permitted by applicable law, each Guarantor waives
any defense based on or arising out of any defense of any other Loan Party or
the unenforceability of the Obligations or any part thereof from any cause, or
the cessation from any cause of the liability of any other Loan Party, other
than the payment in full in cash or immediately available funds of all the
Obligations (other than contingent or unliquidated obligations or
liabilities). The Administrative Agent and the other Secured Parties may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the Obligations, make any
other accommodation with any other Loan Party or exercise any other right or
remedy available to them against any other Loan Party, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Obligations (other than contingent or unliquidated obligations or
liabilities) have been paid in full in cash or immediately available funds. To
the fullest extent permitted by applicable law, each Guarantor waives any
defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
any other Loan Party, as the case may be, or any security.

Section 2.04.    Reinstatement. Each Guarantor agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored by the Administrative Agent or any other Secured
Party upon the bankruptcy or reorganization of the Borrower or any other Loan
Party or otherwise.

Section 2.05.    Agreement To Pay; Contribution; Subrogation. In furtherance of
the foregoing and not in limitation of any other right that the Administrative
Agent or any other Secured Party has at law or in equity against any Guarantor
by virtue hereof, upon the failure of

 

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the Borrower to pay any Obligation when and as the same shall become due,
whether at maturity, by acceleration, after notice of prepayment or otherwise,
each Guarantor hereby promises to and will forthwith pay, or cause to be paid,
to the Administrative Agent for distribution to the applicable Secured Parties
in cash or immediately available funds the amount of such unpaid
Obligation. Each Guarantor hereby unconditionally and irrevocably agrees that in
the event any payment shall be required to be made to any Secured Party under
this guarantee or any other guarantee, such Guarantor will contribute, to the
maximum extent permitted by law, such amounts to each other Guarantor and each
other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents. Upon payment by any Guarantor
of any sums to the Administrative Agent as provided above, all rights of such
Guarantor against the Borrower, or other Loan Party or any other Guarantor
arising as a result thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be subject to
Article VI.

Section 2.06.    Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the financial condition and assets of the
Borrower and each other, Loan Party, and of all other circumstances bearing upon
the risk of nonpayment of the Obligations and the nature, scope and extent of
the risks that such Guarantor assumes and incurs hereunder, and agrees that none
of the Administrative Agent or the other Secured Parties will have any duty to
advise such Guarantor of information known to it or any of them regarding such
circumstances or risks.

Section 2.07.    Maximum Liability. Each Guarantor, and by its acceptance of
this guarantee, the Administrative Agent and each Secured Party hereby confirms
that it is the intention of all such Persons that this guarantee and the
Obligations of each Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of the U.S. Bankruptcy Code or any other federal, state
or foreign bankruptcy, insolvency, receivership or similar law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law to the extent applicable to this guarantee and the
Obligations of each Guarantor hereunder. To effectuate the foregoing intention,
the Administrative Agent, the Secured Parties and the Guarantors hereby
irrevocably agree that the Obligations of each Guarantor under this guarantee at
any time shall be limited to the maximum amount as will result in the
Obligations of such Guarantor under this guarantee not constituting a fraudulent
transfer or conveyance.

Section 2.08.    Payment Free and Clear of Taxes. Any and all payments by or on
account of any obligation of any Guarantor hereunder or under any other Loan
Document shall be made free and clear of, and without deduction for, any
Indemnified Taxes or Other Taxes on the same terms and to the same extent that
payments by any Loan Party are required to be made pursuant to the terms of
Section 2.17 of the Credit Agreement. The provisions of Section 2.17 of the
Credit Agreement shall apply to each Guarantor mutatis mutandis.

 

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ARTICLE III

PLEDGE OF SECURITIES

Section 3.01.    Pledge. As security for the payment or performance, as the case
may be, in full of its Obligations, each Pledgor hereby assigns and pledges to
the Administrative Agent, its successors and permitted assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Administrative Agent,
its successors and permitted assigns, for the ratable benefit of the Secured
Parties, a security interest in all of such Pledgor’s right, title and interest
in, to and under (a) the Equity Interests directly owned by it (including those
listed on Schedule I) and any other Equity Interests obtained in the future by
such Pledgor and any certificates representing all such Equity Interests (the
“Pledged Stock”); provided that the Pledged Stock shall not include (i)(A) more
than 65% of the issued and outstanding voting Equity Interests of any “first
tier” Foreign Subsidiary directly owned by such Pledgor, (B) more than 65% of
the issued and outstanding voting Equity Interests of any “first tier” Qualified
CFC Holding Company directly owned by such Pledgor, (C) any issued and
outstanding Equity Interest of any Foreign Subsidiary that is not a first tier
Foreign Subsidiary, or (D) any issued and outstanding Equity Interests of any
Qualified CFC Holding Company that is not a “first tier” Qualified CFC Holding
Company, (ii) to the extent applicable law requires that a Subsidiary of such
Pledgor issue directors’ qualifying shares or similar shares, such shares or
nominee or other similar shares, (iii) any Equity Interests with respect to
which a grant of security is not required by reason of Section 5.10(g) of the
Credit Agreement, or (iv) any Equity Interests of a Subsidiary (which Subsidiary
is set forth on Schedule 1.01A to the Credit Agreement) to the extent that, as
of the Second Restatement Effective Date, and for so long as, such a pledge of
such Equity Interests would violate applicable law or an enforceable contractual
obligation binding on or relating to such Equity Interests; (b)(i) the debt
obligations listed opposite the name of such Pledgor on Schedule I, (ii) any
debt securities in the future issued to such Pledgor and (iii) the certificates,
promissory notes and any other instruments, if any, evidencing such debt
securities (the “Pledged Debt Securities”); (c) subject to Section 3.05 hereof,
all payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of, in exchange for or upon the conversion of, and all other proceeds
received in respect of, the property referred to in clauses (a) and (b) above;
(d) subject to Section 3.05 hereof, all rights and privileges of such Pledgor
with respect to the securities and other property referred to in clauses (a),
(b) and (c) above; and (e) all proceeds of any of the foregoing (the items
referred to in clauses (a) through (e) above being collectively referred to as
the “Pledged Collateral”).

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Administrative Agent, its successors and permitted assigns, for the
ratable benefit of the Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.

Section 3.02.    Delivery of the Pledged Collateral. (a) Each Pledger agrees
promptly to deliver or cause to be delivered to the Administrative Agent, for
the ratable benefit of the Secured Parties, any and all Pledged Securities to
the extent such Pledged Securities are either (i) Equity Interests or (ii)
promissory notes or other instruments evidencing Indebtedness required to be
delivered pursuant to paragraph (b) of this Section 3.02. If any Pledged Stock
that

 

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is uncertificated on the Second Restatement Effective shall hereafter become
certificated, the applicable Pledgor shall promptly cause the certificate or
certificates representing Pledged Stock to be delivered to the Administrative
Agent, as agent for the Secured Parties, together with the accompanying stock
powers or other documentation required by Section 3.02(c). None of the Pledgors
shall permit any other party to “control” (for purposes of Section 8-106 of the
New York UCC (or any analogous provision of the Uniform Commercial Code in
effect in the jurisdiction whose law applies)) any uncertificated securities
that constitute Pledged Collateral other than the Administrative Agent, as agent
for the Secured Parties.

(b)    Each Pledgor will cause any Indebtedness for borrowed money having an
aggregate principal amount in excess of $5.0 million (other than (i)
intercompany current liabilities incurred in the ordinary course of business in
connection with the cash management operations of Holdings, the Borrower and its
Subsidiaries or (ii) to the extent that a pledge of such promissory note or
instrument would violate applicable law) owed to such Pledgor by any person to
be evidenced by a duly executed promissory note that is pledged and delivered to
the Administrative Agent, for the ratable benefit of the Secured Parties,
pursuant to the terms hereof. To the extent any such promissory note is a demand
note, each Pledgor party thereto agrees, if requested by the Administrative
Agent, to immediately demand payment thereunder upon an Event of Default
specified under Section 7.01(b), (c), (f), (h) or (i) of the Credit Agreement
unless such demand would not be commercially reasonable or would otherwise
expose such Pledgor to liability to the maker.

(c)    Upon delivery to the Administrative Agent, (i) any Pledged Securities
required to be delivered pursuant to the foregoing paragraphs (a) and (b) of
this Section 3.02 shall be accompanied by stock powers or note powers, as
applicable, duly executed in blank or other instruments of transfer reasonably
satisfactory to the Administrative Agent and by such other instruments and
documents as the Administrative Agent may reasonably request and (ii) all other
property comprising part of the Pledged Collateral delivered pursuant to the
terms of this Agreement shall be accompanied to the extent necessary to perfect
the security interest in or allow realization on the Pledged Collateral by
proper instruments of assignment duly executed by the applicable Pledgor and
such other instruments or documents (including issuer acknowledgments in respect
of uncertificated securities) as the Administrative Agent may reasonably
request. Each delivery of Pledged Securities shall be accompanied by a schedule
describing the securities, which schedule shall be attached hereto as Schedule I
(or a supplement to Schedule I, as applicable) and made a part hereof; provided
that failure to attach any such schedule hereto shall not affect the validity of
such pledge of such Pledged Securities. Each schedule so delivered shall
supplement any prior schedules so delivered.

(d)    In the event any Pledged Securities constitute uncertificated securities
and the issuer thereof is not a party hereto, the applicable Pledgor shall,
pursuant to an agreement in form and substance reasonably satisfactory to the
Administrative Agent, either (i) cause such issuer to agree to comply with
instructions from the Administrative Agent without further consent of any
Pledgor or (ii) cause such issuer to register the Administrative Agent as the
registered owner of such uncertificated security.

 

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Section 3.03.    Representations, Warranties and Covenants. The Pledgors,
jointly and severally, represent, warrant and covenant to and with the
Administrative Agent, for the ratable benefit of the Secured Parties, that:

(a)    Schedule I correctly sets forth the percentage of the issued and
outstanding shares of each class of the Equity Interests of the issuer thereof
represented by such Pledged Stock and includes all Equity Interests, debt
securities and promissory notes or instruments evidencing Indebtedness required
to be (i) pledged in order to satisfy the Collateral and Guarantee Requirement,
or (ii) delivered pursuant to Section 3.02(b);

(b)    the Pledged Stock and Pledged Debt Securities (solely with respect to
Pledged Debt Securities issued by a person that is not a Subsidiary of Holdings
or an Affiliate of any such subsidiary, to the best of each Pledgor’s knowledge)
have been duly and validly authorized and issued by the issuers thereof and (i)
in the case of Pledged Stock, are fully paid and nonassessable (other than with
respect to Pledged Stock consisting of membership interests of limited liability
companies to the extent provided in Sections 18-502 and 18-607 of the Delaware
Limited Liability Company Act) and (ii) in the case of Pledged Debt Securities
(solely with respect to Pledged Debt Securities issued by a person that is not a
Subsidiary of Holdings or an Affiliate of any such subsidiary, to the best of
each Pledgor’s knowledge) are legal, valid and binding obligations of the
issuers thereof, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding at law or in equity) and an implied covenant of good
faith and fair dealing;

(c)    except for the security interests granted hereunder, each Pledgor (i) is
and, subject to any transfers made in compliance with the Credit Agreement, will
continue to be the direct owner, beneficially and of record, of the Pledged
Securities indicated on Schedule I as owned by such Pledgor, (ii) holds the same
free and clear of all Liens, other than Permitted Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist
any security interest in or other Lien on, the Pledged Collateral, other than
pursuant to a transaction permitted by the Credit Agreement and other than
Permitted Liens and (iv) subject to the rights of such Pledgor under the Loan
Documents to dispose of Pledged Collateral, will use commercially reasonable
efforts to defend its title or interest hereto or therein against any and all
Liens (other than Permitted Liens), however arising, of all persons;

(d)    other than as set forth in the Credit Agreement or the schedules thereto,
and except for restrictions and limitations imposed by the Loan Documents or
securities laws generally or otherwise permitted to exist pursuant to the terms
of the Credit Agreement, the Pledged Stock (other than partnership interests) is
and will continue to be freely transferable and assignable, and none of the
Pledged Stock is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any nature that might prohibit, impair, delay or otherwise affect the pledge
of such Pledged Stock hereunder, the sale or disposition thereof pursuant hereto
or the exercise by the Administrative Agent of rights and remedies hereunder;

(e)    each Pledgor has the power and authority to pledge the Pledged Collateral
pledged by it hereunder in the manner hereby done or contemplated;

 

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(f)    other than as set forth in the Credit Agreement or the schedules thereto,
no consent or approval of any Governmental Authority, any securities exchange or
any other person was or is necessary to the validity of the pledge effected
hereby (other than such as have been obtained and are in full force and effect);

(g)    by virtue of the execution and delivery by the Pledgors of this
Agreement, when any Pledged Securities (including Pledged Stock of any Domestic
Subsidiary, or any Qualified CFC Holding Company) are delivered to the
Administrative Agent, for the ratable benefit of the Secured Parties, in
accordance with this Agreement and a financing statement covering such Pledged
Securities is filed in the appropriate filing office, the Administrative Agent
will obtain, for the ratable benefit of the Secured Parties, a legal, valid and
perfected lien upon and security interest in such Pledged Securities under the
New York UCC, subject only to Permitted Liens, as security for the payment and
performance of the Obligations;

(h)    each Pledgor that is an issuer of the Pledged Collateral confirms that it
has received notice of the security interest granted hereunder and consents to
such security interest and agrees to transfer record ownership of the securities
issued by it in connection with any request by the Administrative Agent; and

(i)    the Pledgors shall not amend, or permit to be amended, the limited
liability company agreement (or operating agreement or similar agreement) or
partnership agreement of any Subsidiary of any Loan Party whose Equity Interests
are, or are required to be, Collateral in a manner to cause such Equity
Interests to not constitute a security under Section 8-103 of the New York UCC
or the corresponding code or statute of any other applicable jurisdiction unless
such Loan Party shall have first delivered 30 days written notice to the
Administrative Agent and shall have taken all actions contemplated hereby and as
otherwise reasonably required by the Administrative Agent to maintain the
security interest of the Administrative Agent therein as a valid, perfected,
first priority security interest (subject to Permitted Liens).

Section 3.04.    Registration in Nominee Name; Denominations. The Administrative
Agent, on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Securities in the name of the
applicable Pledgor, endorsed or assigned in blank or in favor of the
Administrative Agent or, if an Event of Default shall have occurred and be
continuing, in its own name as pledgee or the name of its nominee (as pledgee or
as sub-agent). Each Pledgor will promptly give to the Administrative Agent
copies of any notices or other communications received by it with respect to
Pledged Securities registered in the name of such Pledgor. If an Event of
Default shall have occurred and be continuing, the Administrative Agent shall
have the right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with
this Agreement. Each Pledgor shall use its commercially reasonable efforts to
cause any Loan Party that is not a party to this Agreement to comply with a
request by the Administrative Agent, pursuant to this Section 3.04, to exchange
certificates representing Pledged Securities of such Loan Party for certificates
of smaller or larger denominations.

 

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Section 3.05.    Voting Rights; Dividends and Interest, Etc. (a) Unless and
until an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the relevant Pledgors of the
Administrative Agent’s intention to exercise its rights hereunder:

(i)    Each Pledgor shall be entitled to exercise any and all voting and/or
other consensual rights and powers inuring to an owner of Pledged Collateral or
any part thereof for any purpose consistent with the terms of this Agreement,
the Credit Agreement and the other Loan Documents; provided that, except as
permitted under the Credit Agreement, such rights and powers shall not be
exercised in any manner that could materially and adversely affect the rights
inuring to a holder of any Pledged Collateral, the rights and remedies of any of
the Administrative Agent or the other Secured Parties under this Agreement, the
Credit Agreement or any other Loan Document or the ability of the Secured
Parties to exercise the same.

(ii)    The Administrative Agent shall promptly execute and deliver to each
Pledgor, or cause to be executed and delivered to such Pledgor, all such
proxies, powers of attorney and other instruments as such Pledgor may reasonably
request for the purpose of enabling such Pledgor to exercise the voting and/or
consensual rights and powers it is entitled to exercise pursuant to subparagraph
(i) above.

(iii)    Each Pledgor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Collateral to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable laws; provided
that (A) any noncash dividends, interest, principal or other distributions,
payments or other consideration in respect thereof, including any rights to
receive the same to the extent not so distributed or paid, that would constitute
Pledged Securities, whether resulting from a subdivision, combination or
reclassification of the outstanding Equity Interests of the issuer of any
Pledged Securities, received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise and (B) any non-cash dividends and other distributions paid or payable
in respect of any Pledged Securities that would constitute Pledged Securities in
.connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid in surplus, shall be and
become part of the Pledged Collateral, and, if received by any Pledgor, shall
not be commingled by such Pledgor with any of its other funds or property but
shall be held separate and apart therefrom, shall be held in trust for the
benefit of the Administrative Agent, for the ratable benefit of the Secured
Parties, and shall be forthwith delivered to the Administrative Agent, for the
ratable benefit of the Secured Parties, in the same form as so received
(endorsed in a manner reasonably satisfactory to the Administrative Agent).

(b)    Upon the occurrence and during the continuance of an Event of Default and
after notice by the Administrative Agent to the Borrower of the Administrative
Agent’s intention to exercise its rights hereunder, all rights of any Pledgor to
dividends, interest, principal or other distributions that such Pledgor is
authorized to receive pursuant to paragraph (a)(iii) of this Section 3.05 shall
cease, and all such rights shall thereupon become vested, for the ratable

 

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benefit of the Secured Parties, in the Administrative Agent which shall have the
sole and exclusive right and authority to receive and retain such dividends,
interest, principal or other distributions; provided, however, that even after
the occurrence of an Event of Default, any Pledgor may continue to exercise
dividend and distribution rights solely to the extent permitted under subclause
(i), subclause (iii) and subclause (v) of Section 6.06(b) of the Credit
Agreement. All dividends, interest, principal or other distributions received by
any Pledgor contrary to the provisions of this Section 3.05 shall not be
commingled by such Pledgor with any of its other funds or property but shall be
held separate and apart therefrom, shall be held in trust for the benefit of the
Administrative Agent, for the ratable benefit of the Secured Parties, and shall
be forthwith delivered to the Administrative Agent, for the ratable benefit of
the Secured Parties in the same form as so received (endorsed in a manner
reasonably satisfactory to the Administrative Agent). Any and all money and
other property paid over to or received by the Administrative Agent pursuant to
the provisions of this paragraph (b) shall be retained by the Administrative
Agent in an account to be established by the Administrative Agent upon receipt
of such money or other property and shall be applied in accordance with the
provisions of Section 5.02 hereof. After all Events of Default have been cured
or waived and the Borrower has delivered to the Administrative Agent a
certificate to that effect, the Administrative Agent shall promptly repay to
each Pledgor (without interest) all dividends, interest, principal or other
distributions that such Pledgor would otherwise be permitted to retain pursuant
to the terms of paragraph (a)(iii) of this Section 3.05 and that remain in such
account.

(c)    Upon the occurrence and during the continuance of an Event of Default and
after notice by the Administrative Agent to the Borrower of the Administrative
Agent’s intention to exercise its rights hereunder, all rights of any Pledgor to
exercise the voting and/or consensual rights and powers it is entitled to
exercise pursuant to paragraph (a)(i) of this Section 3.05, and the obligations
of the Administrative Agent under paragraph (a)(ii) of this Section 3.05, shall
cease, and all such rights shall thereupon become vested in the Administrative
Agent, for the ratable benefit of the Secured Parties, which shall have the sole
and exclusive right and authority to exercise such voting and consensual rights
and powers; provided that, unless otherwise directed by the Required Lenders,
the Administrative Agent shall have the right from time to time following and
during the continuance of an Event of Default to permit the Pledgors to exercise
such rights. After all Events of Default have been cured or waived and the
Borrower has delivered to the Administrative Agent a certificate to that effect,
each Pledgor shall have the right to exercise the voting and/or consensual
rights and powers that such Pledgor would otherwise be entitled to exercise
pursuant to the terms of paragraph (a)(i) above.

ARTICLE IV

SECURITY INTERESTS IN OTHER PERSONAL PROPERTY

Section 4.01.    Security Interest. (a) As security for the payment or
performance when due (whether at the stated maturity, by acceleration or
otherwise), as the case may be, in full of the Obligations, each Pledgor hereby
assigns and pledges to the Administrative Agent, its successors and permitted
assigns, for the ratable benefit of the Secured Parties, and hereby grants to
the Administrative Agent, its successors and permitted assigns, for the ratable
benefit of the Secured Parties, a security interest (the “Security Interest”) in
all right, title and interest in or to any and all of the following assets and
properties now owned or at any time hereafter acquired

 

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by such Pledgor or in which such Pledgor now has or at any time in the future
may acquire any right, title or interest (collectively, the “Article 9
Collateral”):

(i)    all Accounts;

(ii)    all Chattel Paper;

(iii)    all cash and Deposit Accounts;

(iv)    all Documents;

(v)    all Equipment;

(vi)    all General Intangibles;

(vii)    all Instruments;

(viii)    all Inventory;

(ix)    all Investment Property;

(x)    all Letter of Credit Rights;

(xi)    all Commercial Tort Claims;

(xii)    all other personal property not otherwise described above (except for
property specifically excluded from any defined term used in any of the
foregoing clauses);

(xiii)    all books and records pertaining to the Article 9 Collateral; and

(xiv)    to the extent not otherwise included, all proceeds, Supporting
Obligations and products of any and all of the foregoing and all collateral
security and guarantees given by any person with respect to any of the
foregoing.

Notwithstanding anything to the contrary in this Agreement, this Agreement shall
not constitute a grant of a security interest in, and the definitions of
“Security Interest” and “Article 9 Collateral” shall not include, (a) any
vehicle covered by a certificate of title or ownership, whether now owned or
hereafter acquired, (b) any assets (including Equity Interests), whether now
owned or hereafter acquired, with respect to which the Collateral and Guarantee
Requirement or the other paragraphs of Section 5.10 of the Credit Agreement
would not be required to be satisfied by reason of Section 5.10(g) of the Credit
Agreement if hereafter acquired, (c) any property excluded from the definition
of Pledged Collateral by virtue of the proviso to Section 3.01 hereof, (d) any
Letter of Credit Rights to the extent any Pledgor is required by applicable law
to apply the proceeds of a drawing of such Letter of Credit for a specified
purpose, (e) any Pledgor’s right, title or interest in any license, contract or
agreement to which such Pledgor is a party or any of its right, title or
interest thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement,

 

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result in a breach of the terms of, or constitute a default under, or result in
the abandonment, invalidation or unenforceability of, any license, contract or
agreement to which such Pledgor is a party (other than to the extent that any
such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408
or 9-409 of the New York UCC or any other applicable law (including, without
limitation, Title 11 of the United States Code) or principles of equity);
provided that immediately upon the ineffectiveness, lapse or termination of any
such provision, the Collateral shall include, and such Pledgor shall be deemed
to have granted a security interest in, all such rights and interests as if such
provision had never been in effect, or (f) any Equipment owned by any Pledgor
that is subject to a purchase money lien or a Capital Lease Obligation if the
contract or other agreement in which such Lien is granted (or the documentation
providing for such Capital Lease Obligation) prohibits or requires the consent
of any person other than the Pledgors as a condition to the creation of any
other security interest on such Equipment.

(b)    Each Pledgor hereby irrevocably authorizes the Administrative Agent at
any time and from time to time to file in any relevant jurisdiction any initial
financing statements (including fixture filings) with respect to the Article 9
Collateral or any part thereof and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (i) whether such Pledger is an organization, the type of organization
and any organizational identification number issued to such Pledgor, (ii) in the
case of a financing statement filed as a fixture filing, a sufficient
description of the real property to which such Article 9 Collateral relates and
(iii) a description of collateral that describes such property in any other
manner as the Administrative Agent may reasonably determine is necessary or
advisable to ensure the perfection of the security interest in the Article 9
Collateral granted under this Agreement, including describing such property as
“all assets” or “all property”. Each Pledgor agrees to provide such information
to the Administrative Agent promptly upon request.

The Administrative Agent is further authorized to file with the United States
Patent and Trademark Office or United States Copyright Office (or any successor
office) such documents as may be reasonably necessary or advisable for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by each Pledgor’ without the signature of such
Pledgor, and naming such Pledgor or the Pledgors as debtors and the
Administrative Agent as secured party. Notwithstanding anything to the contrary
herein, no Pledgor shall be required to take any action under the laws of any
jurisdiction other than the United States (or any political subdivision thereof)
and its territories and possessions for the purpose of perfecting the Security
Interest in any Article 9 Collateral of such Pledgor constituting Patents,
Trademarks or Copyrights unless required by the Administrative Agent, in its
reasonable discretion.

(c)    The Security Interest is granted as security only and shall not subject
the Administrative Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Pledgor with respect to or arising
out of the Article 9 Collateral.

Section 4.02.    Representations and Warranties. The Pledgors jointly and
severally represent and warrant to the Administrative Agent and the Secured
Parties that:

 

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(a)    Each Pledgor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Administrative Agent
the Security Interest in such Article 9 Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person other than
any consent or approval that has been obtained and is in full force and effect
or has otherwise been disclosed herein or in the Credit Agreement.

(b)    The information set forth in the schedules attached hereto is correct and
complete, in all material respects, as of the Second Restatement Effective
Date. The Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Article 9 Collateral that have
been prepared by the Administrative Agent for filing in each governmental,
municipal or other office specified in Schedule III (or specified by notice from
the Borrower to the Administrative Agent after the Second Restatement Effective
Date in the case of filings, recordings or registrations required by Section
5.10 of the Credit Agreement) constitute all the filings, recordings and
registrations (except to the extent that filings are required to be made in the
United States Patent and Trademark Office and the United States Copyright
Office, or any similar office in any other jurisdiction, in order to perfect the
Security Interest in Article 9 Collateral consisting of United States Patents,
United States registered Trademarks and United States registered Copyrights)
that are necessary to publish notice of and protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Administrative Agent (for the ratable benefit of the Secured Parties) in respect
of all Article 9 Collateral in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements or
amendments. Each Pledgor represents and warrants that a fully executed
Intellectual Property Security Agreement containing a description of all Article
9 Collateral consisting of Intellectual Property with respect to United States
Patents (and Patents for which United States applications are pending), United
States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered Copyrights
(and Copyrights for which United States registration applications are pending)
has been delivered to the Administrative Agent for recording with the United
States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the
regulations thereunder, as applicable, and reasonably requested by the
Administrative Agent, to protect the validity of and to establish a legal, valid
and perfected security interest in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, in respect of all Article 9 Collateral
consisting of such Intellectual Property in which a security interest may be
perfected by recording with the United States Patent and Trademark Office and
the United States Copyright Office, and no further or subsequent filing,
refiling, recording, rerecording, registration or reregistration is necessary
(other than the Uniform Commercial Code financings statements referred to above,
and other than such actions as are necessary to perfect the Security Interest
with respect to any Article 9 Collateral consisting of United States Patents,
Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the Second Restatement Effective Date).

 

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(c)    The Security Interest constitutes (i) a legal and valid security interest
in all the Article 9 Collateral securing the payment and performance of the
Obligations, (ii) subject to the filings described in Section 4.02(b), a
perfected security interest in all Article 9 Collateral in which a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of the
Intellectual Property Security Agreement with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable. The
Security Interest is and shall be prior to any other Lien on any of the Article
9 Collateral other than Permitted Liens.

(d)    The Article 9 Collateral is owned by the Pledgors free and clear of any
Lien, other than Permitted Liens. None of the Pledgors has filed or consented to
the filing of (i) any financing statement or analogous document under the
Uniform Commercial Code or any other applicable laws covering any Article 9
Collateral, (ii) any assignment in which any Pledgor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article
9 Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (iii) any assignment in which any Pledgor assigns any
Article 9 Collateral or any security agreement or similar instrument covering
any Article 9 Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Permitted Liens.

(e)    None of the Pledgors holds any Commercial Tort Claim individually in
excess of $5.0 million as of the Second Restatement Effective Date except as
indicated on Schedule IV.

(f)    Except as set forth in Schedule V, as of the Second Restatement Effective
Date, all Accounts have been originated by the Pledgors and all Inventory has
been produced or acquired by the Pledgors in the ordinary course of business.

(g)    As to itself and its Article 9 Collateral consisting of Intellectual
Property (the “Intellectual Property Collateral”), to the best of each Pledgor’s
knowledge:

(i)    The Intellectual Property Collateral set forth on Schedule II includes
all of the material Patents (and Patents for which United States applications
are pending), domain names, registered Trademarks, (and Trademarks for which
United States registration applications are pending), registered Copyrights (and
Copyrights for which United States registration applications are pending) and
material IP Agreements owned by such Pledgor as of the Second Restatement
Effective Date.

(ii)    The Intellectual Property Collateral is subsisting and has not been
adjudged invalid or unenforceable in whole or part (except for office actions
issued in the ordinary course by the United States Patent and Trademark Office
or any similar office in any foreign jurisdiction), and, to the best of such
Pledgor’s knowledge, is valid and enforceable, except as would not reasonably be
expected to have a Material Adverse Effect.

 

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(iii)    Such Pledgor has made or performed all commercially reasonable acts,
including without limitation filings, recordings and payment of all required
fees and taxes, required to maintain and protect its interest in each and every
item of Intellectual Property Collateral in full force and effect in the United
States and such Pledgor has used proper statutory notice in connection with its
use of each Patent, Trademark and Copyright in the Intellectual Property
Collateral, in each case, except to the extent that the failure to do so would
not reasonably be expected to have a Material Adverse Effect.

(iv)    With respect to each IP Agreement, the absence, termination or violation
of which would reasonably be expected to have a Material Adverse Effect: (A)
such Pledgor has not received any notice of termination or cancellation under
such IP Agreement; (B) such Pledgor has not received any notice of a breach or
default under such IP Agreement, which breach or default has not been cured or
waived; and (C) neither such Pledgor nor any other party to such IP Agreement is
in breach or default thereof in any material respect, and no event has occurred
that, with notice or lapse of time or both, would constitute such a breach or
default or permit termination, modification or acceleration under such IP
Agreement.

(v)    Except as would not reasonably be expected to have a Material Adverse
Effect, no Pledgor or Intellectual Property Collateral is subject to any
outstanding consent, settlement, decree, order, injunction, judgment or ruling
restricting the use of any Intellectual Property Collateral or that would impair
the validity or enforceability of such Intellectual Property Collateral.

Section 4.03.    Covenants. (a) Each Pledgor agrees to provide at least 10 days’
prior written notice to the Administrative Agent of any change (i) in its
corporate or organization name, (ii) in its identity or type of organization or
corporate structure, (iii) in its Federal Taxpayer Identification Number or
organizational identification number or (iv) in its “location” (determined as
provided in UCC Section 9-307). Each Pledgor agrees promptly to provide the
Administrative Agent with certified organizational documents reflecting any of
the changes described in the immediately preceding sentence. Each Pledgor agrees
not to effect or permit any change referred to in the first sentence of this
paragraph (a) unless all filings have been made, or will have been made within
any applicable statutory period, under the Uniform Commercial Code or otherwise
that are required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected first priority
security interest in all the Article 9 Collateral (subject only to Permitted
Liens), for the ratable benefit of the Secured Parties. Each Pledgor agrees
promptly to notify the Administrative Agent if any material portion of the
Article 9 Collateral owned or held by such Pledgor is damaged or destroyed.

(b)    Subject to the rights of such Pledgor under the Loan Documents to dispose
of Collateral, each Pledgor shall, at its own expense, use commercially
reasonable efforts to defend title to the Article 9 Collateral against all
persons and to defend the Security Interest of the Administrative Agent, for the
ratable benefit of the Secured Parties, in the Article 9 Collateral and the
priority thereof against any Lien that is not a Permitted Lien.

 

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(c)    Each Pledgor agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions as the Administrative Agent may from time to time reasonably
request to better assure, preserve, protect and perfect the Security Interest
and the rights and remedies created hereby, including the payment of any fees
and taxes required in connection with the execution and delivery of this
Agreement and the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith or therewith. If any amount payable under or in connection
with any of the Article 9 Collateral that is in excess of $5.0 million shall be
or become evidenced by any promissory note or other instrument, such note or
instrument shall be promptly pledged and delivered to the Administrative Agent,
for the ratable benefit of the Secured Parties, duly endorsed in a manner
reasonably satisfactory to the Administrative Agent.

Without limiting the generality of the foregoing, each Pledgor hereby authorizes
the Administrative Agent, with prompt notice thereof to the Pledgors, to
supplement this Agreement by supplementing Schedule II or adding additional
schedules hereto to specifically identify any asset or item that may constitute
material Copyrights, Patents, Trademarks, or IP Agreements; provided that any
Pledgor shall have the right, exercisable within 30 days after the Borrower has
been notified by the Administrative Agent of the specific identification of such
Article 9 Collateral, to advise the Administrative Agent in writing of any
inaccuracy of the representations and warranties made by such Pledgor hereunder
with respect to such Article 9 Collateral. Each Pledgor agrees that it will use
its commercially reasonable efforts to take such action as shall be necessary in
order that all representations and warranties hereunder shall be true and
correct with respect to such Article 9 Collateral within 30 days after the date
it has been notified by the Administrative Agent of the specific identification
of such Article 9 Collateral.

(d)    After the occurrence of an Event of Default and during the continuance
thereof, the Administrative Agent shall have the right to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of, or any other matter relating to, the Article 9 Collateral,
including, in the case of Accounts or Article 9 Collateral in the possession of
any third person, by contacting Account Debtors or the third person possessing
such Article 9 Collateral for the purpose of making such a verification. The
Administrative Agent shall have the right to share any information it gains from
such inspection or verification with any Secured Party.

(e)    At its option, the Administrative Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Article 9 Collateral and not a Permitted Lien,
and may pay for the maintenance and preservation of the Article 9 Collateral to
the extent any Pledgor fails to do so as required by the Credit Agreement or
this Agreement, and each Pledgor jointly and severally agrees to reimburse the
Administrative Agent on demand for any reasonable payment made or any reasonable
expense incurred by the Administrative Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 4.03(e) shall be
interpreted as excusing any Pledgor from the performance of, or imposing any
obligation on the Administrative Agent or any Secured

 

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Party to cure or perform, any covenants or other promises of any Pledgor with
respect to taxes, assessments, charges, fees, Liens, security interests or other
encumbrances and maintenance as set forth herein or in the other Loan Documents.

(f)    Each Pledgor (rather than the Administrative Agent or any Secured Party)
shall remain liable for the observance and performance of all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Article 9 Collateral and each Pledgor jointly and
severally agrees to indemnify and hold harmless the Administrative Agent and the
Secured Parties from and against any and all liability for such performance.

(g)    None of the Pledgors shall make or permit to be made an assignment,
pledge or hypothecation of the Article 9 Collateral or shall grant any other
Lien in respect of the Article 9 Collateral, except as permitted by the Credit
Agreement and the other provisions hereof. None of the Pledgors shall make or
permit to be made any transfer of the Article 9 Collateral and each Pledgor
shall remain at all times in possession of the Article 9 Collateral owned by it,
except as permitted by the Credit Agreement and the other provisions hereof.

(h)    None of the Pledgors will, without the Administrative Agent’s prior
written consent (which consent shall not be unreasonably withheld), grant any
extension of the time of payment of any Accounts included in the Article 9
Collateral, compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any person liable for the payment
thereof or allow any credit or discount whatsoever thereon, other than
extensions, credits, discounts, compromises or settlements granted or made in
the ordinary course of business and consistent with prudent business practices
or as otherwise permitted under the Credit Agreement.

(i)    Each Pledgor irrevocably makes, constitutes and appoints the
Administrative Agent (and all officers, employees or agents designated by the
Administrative Agent) as such Pledgor’s true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Pledgor on
any check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto. In the event that any Pledgor at any time or times shall fail
to obtain or maintain any of the policies of insurance required hereby or under
the Credit Agreement or to pay any premium in whole or part relating thereto,
the Administrative Agent may, without waiving or releasing any obligation or
liability of the Pledgors hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Administrative Agent
reasonably deems advisable. All sums disbursed by the Administrative Agent in
connection with this Section 4.03(i), including reasonable attorneys’ fees,
court costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Pledgors to the Administrative Agent and shall be additional
Obligations secured hereby.

 

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Section 4.04.    Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Administrative Agent to
enforce, for the ratable benefit of the Secured Parties, the Administrative
Agent’s security interest in the Article 9 Collateral, each Pledgor agrees, in
each case at such Pledgor’s own expense, to take the following actions with
respect to the following Article 9 Collateral:

(a)    Instruments and Tangible Chattel Paper. If any Pledgor shall at any time
hold or acquire any Instruments (other than checks received and processed in the
ordinary course of business) or Tangible Chattel Paper evidencing an amount in
excess of $5.0 million, such Pledgor shall forthwith endorse, assign and deliver
the same to the Administrative Agent, accompanied by such instruments of
transfer or assignment duly executed in blank as the Administrative Agent may
from time to time reasonably request.

(b)    Investment Property. Except to the extent otherwise provided in Article
III, if any Pledgor shall at any time hold or acquire any Certificated Security,
such Pledgor shall forthwith endorse, assign and deliver the same to the
Administrative Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Administrative Agent may from time to time
reasonably specify. If any security of a domestic issuer now owned or hereafter
acquired by any Pledgor is uncertificated and is issued to such Pledgor or its
nominee directly by the issuer thereof, such Pledgor shall promptly notify the
Administrative Agent of such uncertificated securities and (i) upon the
Administrative Agent’s reasonable request or (ii) upon the occurrence and during
the continuance of an Event of Default, such Pledgor shall pursuant to an
agreement in form and substance reasonably satisfactory to the Administrative
Agent, either (x) cause the issuer to agree to comply with instructions from the
Administrative Agent as to such security, without further consent of any Pledgor
or such nominee, or (y) cause the issuer to register the Administrative Agent as
the registered owner of such security.

(c)    Commercial Tort Claims. If any Pledgor shall at any time hold or acquire
a Commercial Tort Claim in an amount reasonably estimated to exceed $5.0
million, such Pledgor shall promptly notify the Administrative Agent thereof in
a writing signed by such. Pledgor, including a summary description of such
claim, and grant to the Administrative Agent in writing a security interest
therein and in the proceeds thereof, all under the terms and provisions of this
Agreement, with such writing to be in form and substance reasonably satisfactory
to the Administrative Agent.

Section 4.05.    Covenants Regarding Patent, Trademark and Copyright
Collateral. Except as permitted by the Credit Agreement: (a) Each Pledgor agrees
that it will not knowingly do any act or omit to do any act (and will exercise
commercially reasonable efforts to prevent its licensees from doing any act or
omitting to do any act) whereby any Patent that is material to the normal
conduct of such Pledgor’s business may become prematurely invalidated,
abandoned, lapsed or dedicated to the public, and agrees that it shall take
commercially reasonable steps with respect to any material products covered by
any such Patent as necessary and sufficient to establish and preserve its rights
under applicable patent laws.

(b)    Each Pledgor will, and will use its commercially reasonable efforts to
cause its licensees or its sublicensees to, for each material Trademark
necessary to the normal conduct of such Pledgor’s business, (i) maintain such
Trademark in full force free from any adjudication of abandonment or invalidity
for non-use, (ii) maintain the quality of products and services offered under
such Trademark and (iii) not knowingly use or knowingly permit its licensees’
use of such Trademark in violation of any third-party rights.

 

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(c)    Each Pledgor will, and will use its commercially reasonable efforts to
cause its licensees or its sublicensees to, for each work covered by a material
Copyright necessary to the normal conduct of such Pledgor’s business that it
publishes, displays and distributes, use a copyright notice as necessary and
sufficient to establish and preserve its rights under applicable copyright laws.

(d)    Each Pledgor shall notify the Administrative Agent promptly if it knows
that any Patent, Trademark or Copyright material to the normal conduct of such
Pledgor’s business may imminently become abandoned, lapsed or dedicated to the
public, or of any materially adverse determination or development, excluding
office actions and similar determinations or developments in the United States
Patent and Trademark Office, United States Copyright Office, any court or any
similar office of any country, regarding such Pledgor’s ownership of any such
material Patent, Trademark or Copyright or its right to register or to maintain
the same.

(e)    Each Pledgor, either itself or through any agent, employee, licensee or
designee, shall (i) inform the Administrative Agent on an annual basis of each
application filed by itself, or through any agent, affiliate, employee, licensee
or designee, for any Patent with the United States Patent and Trademark Office
and each application filed by itself, or through any agent, employee, affiliate,
licensee or designee, for registration of any Trademark or Copyright with the
United States Patent and Trademark Office, the United States Copyright Office or
any comparable office or agency in any other country filed during the preceding
twelve-month period, and (ii) upon the reasonable request of the Administrative
Agent, execute and deliver any and all agreements, instruments, documents and
papers as the Administrative Agent may reasonably request to evidence the
Administrative Agent’s security interest in such Patent, Trademark or Copyright.

(f)    Each Pledgor shall exercise its reasonable business judgment consistent
with past practice in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any comparable office or
agency in any other country with respect to maintaining and pursuing each
application relating to any Patent, Trademark and/or Copyright (and obtaining
the relevant grant or registration) material to the normal conduct of such
Pledgor’s business and to maintain (i) each issued Patent and (ii) the
registrations of each Trademark and each Copyright that is material to the
normal conduct of such Pledgor’s business, including, when applicable and
necessary in such Pledgor’s reasonable business judgment, timely filings of
applications for renewal, affidavits of use, affidavits of incontestability and
payment of maintenance fees, and, if any Pledgor believes necessary in its
reasonable business judgment, to initiate opposition, interference and
cancellation proceedings against third parties.

(g)    In the event that any Pledgor knows or has reason to know that any
Article 9 Collateral consisting of a Patent, Trademark or Copyright material to
the normal conduct of its business has been or is about to be materially
infringed, misappropriated or diluted by a third party, such Pledgor shall
promptly notify the Administrative Agent and shall, if such Pledgor deems it
necessary in its reasonable business judgment, promptly sue and recover any and
all damages, and take such other actions as are reasonably appropriate under the
circumstances.

 

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ARTICLE V

REMEDIES

Section 5.01.    Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Pledgor agrees to deliver each item of
Collateral to the Administrative Agent on demand, and it is agreed that the
Administrative Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Pledgors to the Administrative Agent or
to license or sublicense, whether general, special or otherwise, and whether on
an exclusive or a nonexclusive basis, any such Article 9 Collateral throughout
the world on such terms and conditions and in such manner as the Administrative
Agent shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers thereunder cannot be obtained with the
use of commercially reasonable efforts, which each Pledgor hereby agrees to use)
and (b) with or without legal process and with or without prior notice or demand
for performance, to take possession of the Article 9 Collateral and without
liability for trespass to the applicable Pledgor to enter any premises where the
Article 9 Collateral may be located for the purpose of taking possession of or
removing the Article 9 Collateral and, generally, to exercise any and all rights
afforded to a secured party under the applicable Uniform Commercial Code or
other applicable law. Without limiting the generality of the foregoing, each
Pledgor agrees that the Administrative Agent shall have the right, subject to
the mandatory requirements of applicable law, to sell or otherwise dispose of
all or any part of the Collateral at a public or private sale or at any broker’s
board or on any securities exchange, for cash, upon credit or for future
delivery as the Administrative Agent shall deem appropriate. The Administrative
Agent shall be authorized in connection with any sale of a security (if it deems
it advisable to do so) pursuant to the foregoing to restrict the prospective
bidders or purchasers to persons who represent and agree that they are
purchasing such security for their own account, for investment, and not with a
view to the distribution or sale thereof upon consummation of any such sale of
Collateral pursuant to this Section 5.01, the Administrative Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives and releases (to the extent permitted by
law) all rights of redemption, stay, valuation and appraisal that such Pledgor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.

The Administrative Agent shall give the applicable Pledgors 10 Business Days’
written notice (which each Pledgor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Administrative Agent’s intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker’s board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Administrative Agent may fix and state in the notice (if any) of such
sale. At any such sale, the Collateral, or the portion thereof, to be sold may
be sold

 

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in one lot as an entirety or in separate parcels, as the Administrative Agent
may (in its sole and absolute discretion) determine. The Administrative Agent
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Administrative Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In the case of any sale of all or any part
of the Collateral made on credit or for future delivery, the Collateral so sold
may be retained by the Administrative Agent until the sale price is paid by the
purchaser or purchasers thereof, but the Administrative Agent shall not incur
any liability in the event that any such purchaser or purchasers shall fail to
take up and pay for the Collateral so sold and, in the case of any such failure,
such Collateral may be sold again upon notice given in accordance with
provisions above. At any public (or, to the extent permitted by law, private)
sale made pursuant to this Section 5.01, any Secured Party may bid for or
purchase in cash, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Pledgor (all such
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Pledgor as a credit against the purchase price, and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Pledgor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such
property in accordance with Section 5.02 hereof without further accountability
to any Pledgor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Administrative Agent shall be free to carry out such sale pursuant to such
agreement and no Pledgor shall be entitled to the return of the Collateral or
any portion thereof subject thereto, notwithstanding the fact that after the
Administrative Agent shall have entered into such an agreement all Events of
Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Administrative Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale
pursuant to the provisions of this Section 5.01 shall be deemed to conform to
the commercially reasonable standards as provided in Section 9-610(b) of the New
York UCC or its equivalent in other jurisdictions.

Section 5.02.    Application of Proceeds. The Administrative Agent shall
promptly apply the proceeds, moneys or balances of any collection or sale of
Collateral, as well as any Collateral consisting of cash, as follows: FIRST, to
the payment of all costs and expenses incurred by the Administrative Agent in
connection with such collection or sale or otherwise in connection with this
Agreement, any other Loan Document or any of the Obligations, including without
limitation all court costs and the fees and expenses of its agents and legal
counsel, the repayment of all advances made by the Administrative Agent
hereunder or under any other Loan Document on behalf of any Pledgor, any other
costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Loan Document, and all other fees,
indemnities and other amounts owing or reimbursable to the Administrative Agent
under any Loan Document in its capacity as such; SECOND, to payment of all fees,
indemnities and other amounts (other than principal and interest) payable to the
Issuing Bank in capacity as such and of

 

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any amount required to be paid to the Issuing Bank by any Revolving Facility
Lender pursuant to Section 2.05(e) and (h) of the Credit Agreement and not paid
by such Revolving Facility Lender (which shall be payable to the Administrative
Agent if the Administrative Agent advanced such payment to the Issuing Bank in
anticipation of such payment by such Revolving Facility Lender and otherwise, to
the Issuing Bank); THIRD, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in accordance
with the respective amounts of the Obligations owed to them on the date of any
such distribution, which in the case of Letters of Credit, shall be paid by
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an
amount in cash in U.S. Dollars equal to the aggregate Revolving L/C Exposure as
of such date plus any accrued and unpaid interest thereon); and FOURTH, to the
Borrower, its successors or assigns, or as a court of competent jurisdiction may
otherwise direct.

The Administrative Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Administrative Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by the Administrative Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Administrative Agent or such officer or be answerable in any way for the
misapplication thereof.

If, after receipt of any payment which is applied to the payment of all or any
part of any Obligations, the Administrative Agent or any Lender is for any
reason compelled to surrender such payment or proceeds to any person because
such payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible set-off,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent or such Lender and the Borrower shall
be liable to pay to the Administrative Agent and the Lenders, and shall
indemnify the Administrative Agent and the Lenders and holds the Administrative
Agent and the Lenders harmless for the amount of such payment or proceeds
surrendered. The provisions of this paragraph shall be and remain effective
notwithstanding any contrary action which may have been taken by the
Administrative Agent or any Lender in reliance upon such payment or application
of proceeds, and any such contrary action so taken shall be without prejudice to
the Administrative Agent’s and the Lenders’ rights under this Agreement and
shall be deemed to have been conditioned upon such payment or application of
proceeds having become final and irrevocable. The provisions of this paragraph
shall survive the termination of this Agreement.

Section 5.03.    Securities Act, Etc. In view of the position of the Pledgors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar federal statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the “Federal Securities Laws”) with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
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the Administrative Agent if the Administrative Agent were to attempt to dispose
of all or any part of the Pledged Collateral, and might also limit the extent to
which or the manner in which any subsequent transferee of any Pledged Collateral
could dispose of the same. Similarly, there may be other legal restrictions or
limitations affecting the Administrative Agent in any attempt to dispose of all
or part of the Pledged Collateral under applicable Blue Sky or other state
securities laws or similar laws analogous in purpose or effect. Each Pledgor
acknowledges and agrees that in light of such restrictions and limitations, the
Administrative Agent, in its sole and absolute discretion, (a) may proceed to
make such a sale whether or not a registration statement for the purpose of
registering such Pledged Collateral or part thereof shall have been filed under
the Federal Securities Laws or, to the extent applicable, Blue Sky or other
state securities laws and (b) may approach and negotiate with a single potential
purchaser to effect such sale. Each Pledgor acknowledges and agrees that any
such sale might result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions. In the event of
any such sale, the Administrative Agent shall incur no responsibility or
liability for selling all or any part of the Pledged Collateral at a price that
the Administrative Agent, in its sole and absolute discretion, may in good faith
deem reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 5.03 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Administrative Agent
sells.

Section 5.04.    License. For the purpose of enabling the Administrative Agent
to exercise its rights and remedies under this Article V or otherwise in
connection with this Agreement, each Grantor hereby grants to the Administrative
Agent an irrevocable, non-exclusive and assignable license (exercisable without
payment or royalty or other compensation to any Grantor) to use, license or
sublicense any Intellectual Property Collateral.

ARTICLE VI

INDEMNITY, SUBROGATION AND SUBORDINATION

Section 6.01.    Indemnity. In addition to all such rights of indemnity and
subrogation as the Guarantors may have under applicable law (but subject to
Section 6.03 hereof), the Borrower agrees that (a) in the event a payment shall
be made by any Guarantor under this Agreement in respect of any Obligation of
the Borrower, the Borrower shall indemnify such Guarantor for the full amount of
such payment and such Guarantor shall be subrogated to the rights of the person
to whom such payment shall have been made to the extent of such payment and (b)
in the event any assets of any Guarantor shall be sold pursuant to this
Agreement or any other Security Document to satisfy in whole or in part an
Obligation of the Borrower, the Borrower shall indemnify such Guarantor in an
amount equal to the greater of the book value or the fair market value of the
assets so sold.

Section 6.02.    Contribution and Subrogation. Each Guarantor (other than
Holdings) (a “Contributing Guarantor”) agrees (subject to Section 6.03 hereof)
that, in the event a payment shall be made by any other Guarantor (other than
Holdings) hereunder in respect of any Obligation or assets of any other
Guarantor (other than Holdings and the Borrower) shall be

 

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sold pursuant to any Security Document to satisfy any Obligation owed to any
Secured Party and such other Guarantor (the “Claiming Guarantor”) shall not have
been fully indemnified by the Borrower as provided in Section 6.01 hereof, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal
to the amount of such payment or the greater of the book value or the fair
market value of such assets, as applicable, in each case multiplied by a
fraction of which the numerator shall be the net worth of such Contributing
Guarantor on the Second Restatement Effective Date and the denominator shall be
the aggregate net worth of all the Guarantors on the Second Restatement
Effective Date (or in the case of any Guarantor becoming a party hereto pursuant
to Section 7.16 hereof, the date of the supplement hereto executed and delivered
by such Guarantor). Any Contributing Guarantor making any payment to a Claiming
Guarantor pursuant to this Section 6.02 shall be subrogated to the rights of
such Claiming Guarantor under Section 6.01 hereof to the extent of such payment.

Section 6.03.    Subordination; Subrogation. (a) Each Guarantor hereby
subordinates any and all debts, liabilities, receivables, advances and other
Obligations owed to such Guarantor by each other Loan Party of whatever nature
at any time outstanding (the “Subordinated Obligations”) to the Obligations to
the extent and in the manner hereinafter set forth in this Section 6.03:

(i)    Prohibited Payments, Etc. Except during the continuance of an Event of
Default, each Guarantor may receive payments, receivables or advances from any
other Loan Party on account of the Subordinated Obligations. After the
occurrence and during the continuance of any Event of Default, however, unless
the Required Lenders otherwise agree, no Guarantor shall demand, accept or take
any action to collect any payment on account of the Subordinated Obligations
until the Obligations have been paid in full in cash or immediately available
funds.

(ii)    Prior Payment of Guaranteed Obligations. In any proceeding under the
U.S. Bankruptcy Code or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law relating to any other Loan Party, each
Guarantor agrees that the Secured Parties shall be entitled to receive payment
in full in cash or immediately available funds of all Obligations (including all
interest and expenses accruing after the commencement of a proceeding under any
U.S. Bankruptcy Code or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law, whether or not constituting an allowed
claim in such proceeding (Post-Petition Interest)) before such Guarantor
receives payment of any Subordinated Obligations.

(iii)    Turn-Over. After the occurrence and during the continuance of any Event
of Default, each Guarantor shall, if the Administrative Agent so requests,
collect, enforce and receive payments on account of the Subordinated Obligations
as trustee for the Secured Parties and deliver such payments to the
Administrative Agent on account of the Obligations (including all Post-Petition
Interest), together with any necessary endorsements or other instruments of
transfer, but without reducing or affecting in any manner the liability of such
Guarantor under the other provisions of this Agreement.

 

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(iv)    Administrative Agent Authorization. After the occurrence and during the
continuance of any Event of Default, the Administrative Agent is authorized and
empowered (but without any obligation to so do), in its discretion, (i) in the
name of each Guarantor, to collect and enforce, and to submit claims in respect
of, the Subordinated Obligations and to apply any amounts received thereon to
the Obligations (including any and all Post-Petition Interest), and (ii) to
require each Guarantor (A) to collect and enforce, and to submit claims in
respect of, the Subordinated Obligations and (B) to pay any amounts received on
such obligations to the Administrative Agent for application to the Guaranteed
Obligations (including any and all Post-Petition Interest).

(b)    Each Guarantor hereby unconditionally and irrevocably agrees not to
exercise any rights that it may now have or hereafter acquire against the
Borrower, any other Loan Party or any other insider guarantor that arise from
the existence, payment, performance or enforcement of such Guarantor’s
Obligations under or in respect of the guarantee set forth in Article II or any
other Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrower,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Obligations and all other amounts payable under the guarantee set
forth in Article II shall have been paid in full in cash or immediately
available funds, all Letters of Credit and all Swap Agreements secured hereunder
shall have expired or been terminated or cash collateralized (pursuant to
arrangements reasonably satisfactory to the Administrative Agent and the Issuing
Bank) and the Commitments shall have expired, terminated or shall have been cash
collateralized (pursuant to arrangements reasonably satisfactory to the
Administrative Agent and the Issuing Bank). If any amount shall be paid to any
Guarantor in violation of the immediately preceding sentence at any time prior
to the latest of (a) the payment in full in cash or immediately available funds
of the Obligations and all other amounts payable under the guarantee set forth
in Article II and (b) the latest date of expiration or termination or cash
collateralization of all Letters of Credit and all Swap Agreements secured
hereunder and termination or expiration of all Commitments, such amount shall be
received and held in trust for the ratable benefit of the Secured Parties, shall
be segregated from other property and funds of such Guarantor and shall
forthwith be paid or delivered to the Administrative Agent in the same form as
so received (with any necessary endorsement or assignment) to be credited and
applied to the Obligations and all other amounts payable under the guarantee set
forth in Article II, whether matured or unmatured, in accordance with the terms
of the Loan Documents, or to be held as Collateral for any Obligations or other
amounts payable under such guarantee thereafter arising. If (i) any Guarantor
shall make payment to any Secured Party of all or any part of the Obligations,
(ii) all of the Obligations and all other amounts payable under the guarantee
set forth in Article II shall have been paid in full in cash or immediately
available funds, (iii) the Revolving Facility Maturity Date shall have occurred
and (iv) all Letters of Credit and all Swap Agreements secured hereunder shall
have expired or been terminated, the Administrative Agent will, at such
Guarantor’s request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Obligations resulting from such payment made by such Guarantor
pursuant to such guarantee.

 

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ARTICLE VII

MISCELLANEOUS

Section 7.01.    Notices. All communications and notices hereunder shall (except
as otherwise permitted herein) be in writing and given as provided in Section
9.01 of the Credit Agreement. All communications and notices hereunder to any
Subsidiary Loan Party shall be given to it in care of the Borrower, with such
notice to be given as provided in Section 9.01 of the Credit Agreement.

Section 7.02.    Security Interest Absolute. All rights of the Administrative
Agent hereunder, the Security Interest in the Article 9 Collateral, the security
interest in the Pledged Collateral and all obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or instrument, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Pledgor in respect of the Obligations or this Agreement (other
than a defense of payment or performance).

Section 7.03.    Limitation By Law. All rights, remedies and powers provided in
this Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
law that may be controlling and to be limited to the extent necessary so that
they shall not render this Agreement invalid, unenforceable, in whole or in
part, or not entitled to be recorded, registered or filed under the provisions
of any applicable law.

Section 7.04.    Binding Effect; Several Agreement. This Agreement shall become
effective as to any party to this Agreement when a counterpart hereof executed
on behalf of such party shall have been delivered to the Administrative Agent
and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon such party and the
Administrative Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such party, the Administrative Agent and the other
Secured Parties and their respective permitted successors and assigns, except
that no party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly contemplated by this
Agreement or the Credit Agreement. This Agreement shall be construed as a
separate agreement with respect to each party and may be amended, modified,
supplemented, waived or released with respect to any party without the approval
of any other party and without affecting the obligations of any other party
hereunder.

 

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Section 7.05.    Successors and Assigns. Whenever in this Agreement any of the
.parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Pledgor or the Administrative Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective permitted successors and assigns; provided that no Pledgor may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Administrative Agent. The
Administrative Agent hereunder shall at all times be the same person that is the
Administrative Agent under the Credit Agreement. Written notice of resignation
by the Administrative Agent pursuant to the Credit Agreement shall also
constitute notice of resignation as the Administrative Agent under this
Agreement. Upon the acceptance of any appointment as the Administrative Agent
under the Credit Agreement by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent
pursuant hereto.

Section 7.06.    Administrative Agent’s Fees and Expenses;
Indemnification. (a) The parties hereto agree that the Administrative Agent
shall be entitled to reimbursement of its expenses incurred hereunder as
provided in Section 9.05 of the Credit Agreement.

(b)    Without limitation of its indemnification obligations under the other
Loan Documents, each Pledgor jointly and severally agrees to indemnify the
Administrative Agent and the other Indemnitees (as defined in Section 9.05 of
the Credit Agreement) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of,
(i) the execution, delivery or performance of this Agreement or any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto and thereto of their respective obligations
thereunder or the consummation of the Transactions and other transactions
contemplated hereby, (ii) the use of proceeds of the Loans or the use of any
Letter of Credit or (iii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, or to the Collateral, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

(c)    Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Administrative Agent or any other Secured Party. All amounts due
under this Section 7.06 shall be payable on written demand therefor.

 

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Section 7.07.    Administrative Agent Appointed Attorney-in-Fact. Each Pledgor
hereby appoints the Administrative Agent the attorney-in-fact of such Pledgor
for the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Administrative Agent may deem
necessary or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest. The Administrative Agent shall have
the right, upon the occurrence and during the continuance of an Event of
Default, with full power of substitution either in the Administrative Agent’s
name or in the name of such Pledgor, (a) to receive, endorse, assign or deliver
any and all notes, acceptances, checks, drafts, money orders or other evidences
of payment relating to the Collateral or any part thereof, (b) to demand,
collect, receive payment of, give receipt for and give discharges and releases
of all or any of the Collateral, (c) to ask for, demand, sue for, collect,
receive and give acquittance for any and all moneys due or to become due under
and by virtue of any Collateral, (d) to sign the name of any Pledgor on any
invoice or bill of lading relating to any of the Collateral, (e) to send
verifications of Accounts to any Account Debtor, (f) to commence and prosecute
any and all suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any Collateral, (g) to settle,
compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral and (h) to-use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Administrative
Agent were the absolute owner of the Collateral for all purposes; provided that
nothing herein contained shall be construed as requiring or obligating the
Administrative Agent to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by the Administrative Agent, or to
present or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Administrative Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.

Section 7.08.    GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

Section 7.09.    Waivers; Amendment. (a) No failure or delay by the
Administrative Agent, any Issuing Bank or any Lender in exercising any right,
power or remedy hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy, or any abandonment or discontinuance of steps to enforce such a
right, power or remedy, preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The rights, powers and remedies of
the Administrative Agent, any Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights,
powers or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by any Loan Party therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section 7.09, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without

 

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limiting the generality of the foregoing, the making of a Loan or the issuance
of a Letter of Credit shall not be construed as a waiver of any Default or Event
of Default, regardless of whether the Administrative Agent, any Lender or any
Issuing Bank may have had notice or knowledge of such Default or Event of
Default at the time. No notice or demand on any Loan Party in any case shall
entitle any Loan Party to any other or further notice or demand in similar or
other circumstances.

(b)    Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Administrative Agent and the Loan Party or Loan Parties with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.08 of the Credit Agreement.

Section 7.10.    WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.10.

Section 7.11.    Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

Section 7.12.    Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 7.04 hereof. Delivery of an executed counterpart to this
Agreement by facsimile transmission or electronic transmission shall be as
effective as delivery of a manually signed original.

Section 7.13.    Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

Section 7.14.    Jurisdiction; Consent to Service of Process. (a) Each party to
this Agreement hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of

 

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America sitting in New York City, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or any
other Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the Administrative
Agent, any Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Pledgor, or its properties, in the courts of any jurisdiction.

(b)    Each party to this Agreement hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

Section 7.15.    Termination or Release. (a) This Agreement, the guarantees made
herein, the pledges made herein, the Security Interest and all other security
interests granted hereby shall terminate when all the Loan Document Obligations
(other than contingent or unliquidated obligations or liabilities not then due)
have been paid in full in cash or immediately available funds and the Lenders
have no further commitment to lend under the Credit Agreement, the Revolving L/C
Exposure has been reduced to zero (or cash collateralized or supported by
back-to-back letter of credit in form and substance and from an issuing bank
satisfactory to the Administrative Agent and the Issuing Bank) and each Issuing
Bank has no further obligations to issue Letters of Credit under the Credit
Agreement.

(b)    A Subsidiary Loan Party shall automatically be released from its
obligations hereunder and the security interests in the Collateral of such
Subsidiary Loan Party shall be automatically released upon the consummation of
any transaction permitted by the Credit Agreement as a result of which such
Subsidiary Loan Party ceases to be a Subsidiary of the Borrower or otherwise
ceases to be a Guarantor; provided that such portion of the Lenders as shall be
required by the terms of the Credit Agreement to have consented to such
transaction (to the extent such consent is required by the Credit Agreement)
shall have consented thereto and the terms of such consent did not provide
otherwise.

(c)    Upon any sale or other transfer by any Pledgor of any Collateral that is
permitted under the Credit Agreement to any person that is not a Pledgor, or
upon the effectiveness of any written consent to the release of the security
interest granted hereby in any Collateral pursuant to Section 9.08 of the Credit
Agreement, the security interest in such Collateral shall be automatically
released.

(d)    Upon the transfer by any Loan Party of Equity Interests in a “first tier
Foreign Subsidiary or “first tier” Qualified CFC Holding Company to a “first
tier” Foreign Subsidiary or “first tier” Qualified CFC Holding Company in
accordance with Section 6.05(d) of the Credit Agreement, the pledge of Equity
Interests so transferred shall be automatically released.

 

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(e)    In connection with any termination or release pursuant to paragraph (a),
(b), (c) and (d) of this Section 7.15, the Administrative Agent shall execute
and deliver to any Pledgor, at such Pledgor’s expense, all documents that such
Pledgor shall reasonably request to evidence such termination or release
(including, without limitation, UCC termination statements) and will duly assign
and transfer to such Pledgor such of the Pledged Collateral that may be in the
possession of the Administrative Agent and has not theretofore been sold or
otherwise applied or released pursuant to this Agreement; provided that the
Administrative Agent shall not be required to take any action under this Section
7.15(e) unless such Pledgor shall have delivered to the Administrative Agent
together with such request, which may be incorporated into such request, (i) a
reasonably detailed description of the Collateral, which in any event shall be
sufficient to effect the appropriate termination or release without affecting
any other Collateral, and (ii) a certificate of a Responsible Officer of the
Borrower or such Pledgor certifying that the transaction giving rise to such
termination or release is permitted by the Credit Agreement and was consummated
in compliance with the Loan Documents. Any execution and delivery of documents
pursuant to this Section 7.15 shall be without recourse to or warranty by the
Administrative Agent.

Section 7.16.    Additional Subsidiaries. Upon execution and delivery by the
Administrative Agent and any Subsidiary that is required to become a party
hereto by Section 5.10 of the Credit Agreement of an instrument in the form of
Exhibit I hereto, such Subsidiary shall become a Subsidiary Loan Party hereunder
with the same force and effect as if originally named as a Subsidiary Loan Party
herein. The execution and delivery of any such instrument shall not require the
consent of any other party to this Agreement. The rights and obligations of each
party to this Agreement shall remain in full force and effect notwithstanding
the addition of any new party to this Agreement.

Section 7.17.    Right of Set-off. If an Event of Default shall have occurred
and be continuing, each Lender and each Issuing Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set-off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or such Issuing Bank to or for the credit or the account of any party to
this Agreement against any of and all the obligations of such party now or
hereafter existing under this Agreement owed to such Lender or such Issuing
Bank, irrespective of whether or not such Lender or such Issuing Bank shall have
made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section 7.17 are in addition to
other rights and remedies (including other rights of set-off) that such Lender
or such issuing Bank may have.

Section 7.18.    Intercreditor Agreements.

(a)    Anything herein to the contrary notwithstanding, the Liens and Security
Interest granted to the Administrative Agent pursuant to this Agreement and the
exercise of any right or remedy by the Administrative Agent hereunder, are
subject to the provisions of the Intercreditor Agreement and the ABL
Intercreditor Agreement. In the event of any conflict

 

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between the terms of the Intercreditor Agreement or the ABL Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement or the
ABL Intercreditor Agreement, as applicable, shall govern and control and no
right, power, or remedy granted to the Administrative Agent hereunder or under
any other Loan Document shall be exercised by the Administrative Agent, and no
direction shall be given by the Administrative Agent, in each case in
contravention of the Intercreditor Agreement or the ABL Intercreditor Agreement.

(b)    So long as the Collateral Agent under the Credit Agreement is acting as
bailee and as agent for perfection on behalf of the Administrative Agent
pursuant to the terms of the Intercreditor Agreement or the ABL Intercreditor
Agreement, any obligation of any Loan Party in this Agreement that requires
delivery of Collateral to, or the possession or control of Collateral by, the
Administrative Agent shall be deemed to be complied with and satisfied if such
delivery of Collateral is made to, or such possession or control of Collateral
is by, the Collateral Agent under the Credit Agreement.

(c)    Any reference in this Agreement or any other Loan Document to a “first
priority security interest” or words of similar effect in describing the Liens
created hereunder or under any other Loan Document shall be understood to refer
to such priority as set forth in the Intercreditor Agreement and the ABL
Intercreditor Agreement.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

CLAIRE’S INC. By:  

/s/ Stephen Sernett

Name:   Stephen Sernett Title:   Secretary CLAIRE’S STORES, INC. By:  

/s/ Stephen Sernett

Name:   Stephen Sernett Title:   Secretary CLAIRE’S PUERTO RICO CORP. By:  

/s/ Stephen Sernett

Name:   Stephen Sernett Title:   Secretary CBI DISTRIBUTING CORP. By:  

/s/ Stephen Sernett

Name:   Stephen Sernett Title:   Secretary

[Amended and Restated Guarantee and Collateral Agreement]

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

CSI CANADA LLC By:  

/s/ Stephen Sernett

Name:   Stephen Sernett Title:   Secretary CLAIRE’S BOUTIQUES, INC. By:  

/s/ Stephen Sernett

Name:   Stephen Sernett Title:   Secretary CLAIRE’S CANADA CORP. By:  

/s/ Stephen Sernett

Name:   Stephen Sernett Title:   Secretary BMS DISTRIBUTING CORP. By:  

/s/ Stephen Sernett

Name:   Stephen Sernett Title:   Secretary

[Amended and Restated Guarantee and Collateral Agreement]

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

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH as Administrative Agent By:  

/s/ Bryan J. Matthews

Name:   Bryan J. Matthews Title:   Authorized Signatory By:  

/s/ Jeremy Roberts Stern

Name:   Jeremy Roberts Stern Title:   Authorized Signatory

[Amended and Restated Guarantee and Collateral Agreement]

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EXHIBIT I

FORM OF JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this “Agreement”), dated as of [    ], 2016 is entered
into among                     , a                      (the “New Subsidiary”),
and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, in its capacity as administrative
agent (the “Administrative Agent”) under that certain Second Amended and
Restated Credit Agreement dated as of August 12, 2016, and effective as of
September 20, 2016 (as the same may be amended, modified, extended, restated or
amended and restated from time to time, the “Credit Agreement”) among Claire’s
Stores, Inc., a Florida corporation, Claire’s Inc., a Delaware corporation, the
Lenders party thereto, and the Administrative Agent.

Reference is also made to the Amended and Restated Guarantee and Collateral
Agreement (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Guarantee and Collateral Agreement ”), dated as
of August 12, 2016, and effective as of September 20, 2016, by and among
Claire’s Inc., Claire’s Stores, Inc., the Administrative Agent and each
Subsidiary Loan Party which becomes a party to the Guarantee and Collateral
Agreement from time to time, including, without limitation, those that become
party thereto by executing a Joinder Agreement in substantially the form hereof
in favor of the Administrative Agent for the Secured Parties under the Credit
Agreement. All capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Credit Agreement and the Guarantee and
Collateral Agreement, as applicable.

The New Subsidiary and the Administrative Agent, for the benefit of the Secured
Parties, hereby agree as follows:

1.    The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, such New Subsidiary will be deemed to be a
Subsidiary Loan Party under the Credit Agreement for all purposes of the Credit
Agreement and shall have all of the obligations of a Loan Party as if it had
executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Credit Agreement, including without limitation (a)
all of the representations and warranties of the Loan Parties set forth in
Article III of the Credit Agreement, (b) all of the covenants set forth in
Articles V and VI of the Credit Agreement and (c) all of the guaranty
obligations set forth in Article II of the Guarantee and Collateral
Agreement. Without limiting the generality of the foregoing terms of this
paragraph 1, the New Subsidiary, subject to the limitations set forth in
Sections 2.07 of the Guarantee and Collateral Agreement, hereby unconditionally
guarantees, jointly and severally with the other Guarantors, to the
Administrative Agent and the Lenders, as provided in Article II of the Guarantee
and Collateral Agreement, the prompt payment and performance of the Obligations
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof and
agrees that if any of the Obligations are not paid or performed in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise), such New Subsidiary will, jointly and severally together with the
other Guarantors, promptly pay and perform the same, without any demand or
notice whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Obligations, the same will be promptly paid in full when
due (whether at extended maturity, as a mandatory prepayment, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.

2.    The New Subsidiary agrees to become, and does hereby become, a Subsidiary
Loan Party and Guarantor under the Guarantee and Collateral Agreement and agrees
to have all of the obligations of a Subsidiary Loan Party and Guarantor and be
bound by such Guarantee and Collateral Agreement as if originally a party
thereto. The New Subsidiary hereby pledges, assigns and grants to the
Administrative

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Agent, its successors and assigns, on behalf of and for the ratable benefit of
the Secured Parties, a security interest in all of the New Subsidiary’s right,
title and interest in and to the Collateral, whether now owned or hereafter
acquired, to secure the prompt and complete payment and performance of the
Obligations.

3.    By its execution below, the New Subsidiary represents and warrants as to
itself that all of the representations and warranties contained in the Guarantee
and Collateral Agreement are true and correct in all respects as of the date
hereof. The New Subsidiary represents and warrants that the supplements to the
Schedules to the Guarantee and Collateral Agreement attached hereto are, as to
the New Subsidiary, true and correct in all respects and such supplements set
forth all information required to be scheduled under the Guarantee and
Collateral Agreement as to the New Subsidiary. The New Subsidiary shall, subject
to the provisions of the Guarantee and Collateral Agreement, take all steps
necessary to perfect, in favor of the Administrative Agent, a first priority
security interest in and lien against the New Subsidiary’s Collateral,
including, without limitation, delivering all certificated Pledged Collateral to
the Administrative Agent (and all other Collateral required to be delivered
under the Guarantee and Collateral Agreement), and taking all steps necessary to
properly perfect the Administrative Agent’s interest in any uncertificated
Pledged Collateral.

4.    If required, the New Subsidiary is, simultaneously with the execution of
this Agreement, executing and delivering such Security Documents (and such other
documents and instruments) as requested by the Administrative Agent in
accordance with the Credit Agreement.

5.    The address of the New Subsidiary for purposes of Section 9.01 of the
Credit Agreement is as follows:

[    ]

Attention:

Email:

6.    The New Subsidiary hereby waives acceptance by the Administrative Agent
and the Lenders of the guaranty by the New Subsidiary upon the execution of this
Agreement by the New Subsidiary.

7.    This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart to this Agreement by facsimile transmission (or other electronic
transmission pursuant to procedures approved by the Administrative Agent) shall
be as effective as delivery of a manually signed original.

8.    THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Administrative Agent, for the
ratable benefit of the Secured Parties, has caused the same to be accepted by
its authorized officer, as of the day and year first above written.

[Signatures on following page.]

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

[INSERT NEW SUBSIDIARY ENTITY NAME] By:  

 

Name:   Title:  

Acknowledged and accepted:    

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Administrative Agent    

 

By:  

 

Name:  

 

Title:  

 

Signature Page to Joinder Agreement

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

SCHEDULE I

 

A. Equity Interests

 

Name of Owner

  

Name of Issuer

  

Certificate
Number

  

Class of

Stock

  

Number of
Shares or Other
Interests

Claire’s Stores, Inc.    Claire’s Puerto Rico Corp.    001    Common    10
Claire’s Stores, Inc.    CBI Distributing Corp.    1    Common    100 Claire’s
Boutiques, Inc.    CBI Distributing Corp.    2    Common    80 Claire’s Stores,
Inc.    Claire’s Boutiques, Inc.    1    Common    100 Claire’s Stores, Inc.   
Claire’s Canada Corp.    R-1    Common    100 Claire’s Stores, Inc.    Claire’s
Canada Corp.    R-2    Common    1 Claire’s Canada Corp.    Claire’s Stores
Canada Corp.    C-4    Common    6,500,065 Claire’s Canada Corp.    Claire’s
Stores Canada Corp.    C-6    Common    3,250,000 CBI Distributing Corp.    BMS
Distributing Corp.    01    Common    1,000 Claire’s Canada Corp.    CSI Canada
LLC    1    Membership Interests    1 Membership Unit Claire’s Stores, Inc.   
Claire’s Swiss Holdings LLC    1    Membership Interests    65 Membership
Interests Claire’s Inc.    Claire’s Stores, Inc.    1    Common    100

 

A. Debt Obligations

Name of Issuer - Claire’s Stores Canada Corp.

Principal Amount - $63,000,000 CAD

Date of Note - January 31, 2010

Maturity Date - January 31, 2020

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

SCHEDULE II

Intellectual Property Collateral

 

A. Patents

None.

 

B. Domain Names

arbeitenmitclaires.de

bijouxone.ch

clair.es

clair.eu

claires.ae

claires.at

claires.be

claires.bg

claires.ch

claires.cl

claires.cn

claires.co.id

claires.co.nz

claires.co.uk

claires.com.ar

claires.com.au

claires.com.br

claires.com.cn

claires.com.gr

claires.com.gt

claires.com.mt

claires.com.my

claires.com.ph

claires.com.pt

claires.com.sg

claires.com.tr

claires.com.ua

claires.com.vn

claires.de

claires.dk

claires.es

claires.au

claires.fi

claires.fr

claires.hk

claires.ie

claires.in

 

2

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

claires.it

claires.jp

claires.kr

claires.lu

claires.ly

claires.ma

claires.my

claires.nl

claires.pe

claires.ph

claires.pr

claires.pt

claires.quebec

claires.ro

claires.se

claires.sg

claires.tw

claires.ua

claires.vn

clairesaccessories.be

clairesaccessories.bg

clairesaccessories.cn

clairesaccessories.com.cn

clairesaccessories.com.pt

clairesaccessories.es

clairesaccessories.eu

clairesaccessories.it

clairesaccessories.nl

clairesaccessories.pt

clairesaccessoriesuk.co.uk

clairesaccessoriesuk.org.uk

clairesboutique.cn

claires.boutique.com.cn

clairesboutique.it

clairesboutiques.be

clairesboutiques.cn

clairesboutiques.com.cn

clairesboutiques.com.pt

clairesboutiques.es

clairesboutiques.eu

clairesboutiques.it

clairesboutiques.nl

clairesboutiques.pt

clairescanada.ca

clairescareers.co.uk

clairescareers.eu

 

3

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

clairesclub.at

clairesclub.be

clairesclub.ch

clairesclub.co.uk

clairesclub.com.pt

clairesclub.cz

clairesclub.de

clairesclub.es

clairesclub.eu

clairesclub.fr

clairesclub.hu

clairesclub.ie

clairesclub.it

clairesclub.lu

clairesclub.nl

clairesclub.pl

clairesclub.pt

clairesoffers.co.uk

clairesonline.co.uk

clairesonline.eu

clairessa.co.za

clairesstores.ae

clairesstores.cl

clairesstores.cn

clairesstores.co.id

clairesstores.co.nz

clairesstores.co.za

clairesstores.com.ar

clairesstores.com.au

clairesstores.com.br

clairesstores.com.gr

clairesstores.com.gt

clairesstores.com.mt

clairesstores.com.mx

clairesstores.com.ph

clairesstores.com.pl

clairesstores.com.sg

clairesstores.com.ua

clairesstores.com.vn

clairesstores.cz

clairesstores.dk

clairesstores.eu

clairesstores.gr

clairesstores.hu

clairesstores.ly

clairesstores.ma

 

4

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clairesstores.mx

clairesstores.ph

clairesstores.pt

clairesstores.ru

clairesstores.sg

clairesstores.sk

clairesstores.vn

icing.cn

icing.com.mx

icing.com.pt

icing.es

icing.eu

icing.hu

icing.ie

icing.lu

icing.mx

icing.pt

icing.quebec

icingbyclaires.be

icingbyclaires.com.pt

icingbyclaires.es

icingbyclaires.eu

icingbyclaires.nl

icingbyclaires.pt

icingcanada.ca

icingcosmetics.co.uk

icingice.co.uk

icings.at

icings.be

icings.ch

icings.com.pt

icings.cz

icings.de

icings.es

icings.eu

icings.fr

icings.hu

icings.ie

icings.lu

icings.nl

icings.pl

icings.pt

rsi.com.hk

theicing.com.pt

trabajarenclaires.es

werkenbijclaires.nl

 

5

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

C. Trademarks

 

  1. US Claire’s Marks

 

Country

  

Owners1

   Ownership
Percentage   Mark   

Classes

   Status    Reg. No.

United States of America

  

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  IT’S AT
CLAIRE’S    35    Registered    3817929   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    14    Registered    1925359   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    3    Registered    3319826   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    9    Registered    2908857   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    16    Registered    2908859   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    25    Registered    1891172   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    42    Registered    1890335   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    20    Registered    2967212   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    35    Registered    2974652   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    5    Registered    1929317   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    16    Registered    2978984   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    35    Registered    3190839   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    24    Registered    2900024   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    14    Registered    2996103   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    25    Registered    2925470

 

1 

The US Claire’s Marks, including the federal registrations set forth on Schedule
III, are jointly owned by CBI Distributing Corp. and CLSIP LLC, with CBI
Distributing Corp. owning undivided 82.50% ownership interest in and to the US
Claire’s Marks as the majority and controlling owner of the US Claire’s Marks,
and CLSIP LLC owning an undivided 17.50% ownership interest in and to the US
Claire’s Marks as the minority owner of the US Claire’s Marks. CBI Distributing
Corp. is pledging its undivided 82.50% ownership interest in and to the US
Claire’s Marks, including the federal registrations set forth on Schedule III.
Nothing in the Agreement acts to grant the Collateral Agent or the Secured
Parties a security interest in and to the undivided 17.50% ownership interest in
and to the US Claire’s Marks owned by CLSIP LLC.

 

6

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

Country

  

Owners1

   Ownership
Percentage   Mark   

Classes

   Status    Reg. No.   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    26    Registered    2908861   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S    3    Registered    2951866   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
ACCESSORIES    42    Registered    1956047   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
ACCESSORIES    42    Registered    1946557   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
ACCESSORIES
and design    35    Registered    2294937   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
BOUTIQUES
and design    42    Registered    1514045   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
CLUB    35    Registered    3343775   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
CLUB    25    Registered    2908868   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
CLUB    14    Registered    2908865   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
CLUB    26    Registered    2908191   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
CLUB    3    Registered    2908862   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
CLUB    18    Registered    2908866   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
CLUB    9    Registered    2908863   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S ETC.    42    Registered    2065959   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S ETC.    42    Registered    2064149   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S Logo    35    Registered    3602239   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
Stylized

with @ logo

   35    Registered    2623039

 

7

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

Country

  

Owners1

   Ownership
Percentage   Mark   

Classes

   Status    Reg. No.   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  SECRET
SANTA
CIRCLE    35    Registered    4005371   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  SENSITIVE
SOLUTIONS    14    Registered    1951435   

CBI Distributing Corp.

CLSIP LLC

   82.50%

17.50%

  CLAIRE’S
OUTLET    35    Registered    4610591   

CBI Distributing Corp.

CLSIP LLC

   82.50%
17.50%   ICING BY
CLAIRE’S    35    Registered    3050863

 

  2. Non-US Claire’s Marks

 

Argentina

   CBI Distributing Corp.    100%   CLAIRE’S    14    Registered    2672763   
CBI Distributing Corp.    100%   CLAIRE’S    18    Registered    2780180    CBI
Distributing Corp.    100%   CLAIRE’S    25    Registered    2780181    CBI
Distributing Corp.    100%   CLAIRE’S    26    Registered    2672764    CBI
Distributing Corp.    100%   CLAIRE’S    35    Registered    2780182 Armenia   
CBI Distributing Corp.    100%   CLAIRE’S    14, 25, 26, 35    Registered   
872750 Australia    CBI Distributing Corp.    100%   CLAIRE’S    14, 25, 26, 35
   Registered    872750 Bahrain    CBI Distributing Corp.    100%   CLAIRE’S   
35    Registered    45255 Belarus    CBI Distributing Corp.    100%   CLAIRE’S
   14, 25, 26, 35    Registered    872750 Belize    CBI Distributing Corp.   
100%   CLAIRE’S    35    Registered    4849.07 Botswana    CBI Distributing
Corp.    100%   CLAIRE’S    26    Pending    Brazil    CBI Distributing Corp.   
100%   CLAIRE’S    35    Registered    819044059    CBI Distributing Corp.   
100%   CLAIRE’S    14    Registered    840527373    CBI Distributing Corp.   
100%   CLAIRE’S    25    Registered    840527403    CBI Distributing Corp.   
100%   CLAIRE’S    26    Registered    840527438 Bulgaria    CBI Distributing
Corp.    100%   CLAIRE’S    14, 25, 26, 35    Registered    872750

 

8

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

Canada    CBI Distributing Corp.    100%   BEE WHO
YOU

WANNA BE

      Registered    TMA657373    CBI Distributing Corp.    100%   C SWIRL      
Registered    TMA765561    CBI Distributing Corp.    100%   CLAIRE’S      
Registered    TMA446820    CBI Distributing Corp.    100%   CLAIRE’S      
Registered    TMA481401    CBI Distributing Corp.    100%   CLAIRE’S
ACCESSORIES       Registered    TMA450271    CBI Distributing Corp.    100%  
CLAIRE’S
ACCESSORIES       Registered    TMA537106    CBI Distributing Corp.    100%  
CLAIRE’S
ACCESSORIES       Registered    TMA552904    CBI Distributing Corp.    100%  
CLAIRE’S
BOUTIQUES
& DESIGN       Registered    TMA432178    CBI Distributing Corp.    100%  
CLAIRE’S
CLUB       Registered    TMA667768    CBI Distributing Corp.    100%   ICING   
   Registered    TMA711637    CBI Distributing Corp.    100%   ICING BY
CLAIRE’S       Registered    TMA678667    CBI Distributing Corp.    100%  
PRINCIE       Registered    TMA574732    CBI Distributing Corp.    100%  
REFLEXIONS       Registered    TMA332968    CBI Distributing Corp.    100%   THE
ICING       Registered    TMA404349 Chile    CBI Distributing Corp.    100%  
CLAIRE’S    35    Registered    947879 China (People’s Republic)    CBI
Distributing Corp.    100%   CLAIRE’S    16    Registered    10608651           
         CBI Distributing Corp.    100%   CLAIRE’S    14, 26    Registered   
872750                     CBI Distributing Corp.    100%   CLAIRE’S    35   
Registered    6711303                     CBI Distributing Corp.    100%  
CLAIRE’S    35    Registered    8662114                     CBI Distributing
Corp.    100%   CLAIRE’S    3    Registered    10608653                     CBI
Distributing Corp.    100%   CLAIRE’S    9    Pending                        CBI
Distributing Corp.    100%   CLAIRE’S    18    Registered    10608650           
         CBI Distributing Corp.    100%   CLAIRE’S    21    Registered   
10608649                     CBI Distributing Corp.    100%   CLAIRE’S    25   
Published   

 

9

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

   CBI Distributing Corp.    100%   CLAIRE’S    28    Registered    10608647   
CBI Distributing Corp.    100%   ICING    14    Registered    6538116    CBI
Distributing Corp.    100%   ICING    35    Registered    6538117    CBI
Distributing Corp.    100%   ICING    18    Registered    11358777    CBI
Distributing Corp.    100%   ICING    3    Registered    11358778    CBI
Distributing Corp.    100%   ICING    25    Registered    5278540    CBI
Distributing Corp.    100%   ICING    26    Registered    10715963    CBI
Distributing Corp.    100%   KE LAI ER SI (CLAIRE’S in Chinese)    3   
Registered    11231746    CBI Distributing Corp.    100%   KE LAI ER SI
(CLAIRE’S in Chinese)    9    Registered    11231745    CBI Distributing Corp.
   100%   KE LAI ER SI (CLAIRE’S in Chinese)    14    Registered    11231744   
CBI Distributing Corp.    100%   KE LAI ER SI (CLAIRE’S in Chinese)    16   
Registered    11231743    CBI Distributing Corp.    100%   KE LAI ER SI
(CLAIRE’S in Chinese)    18    Registered    11231742    CBI Distributing Corp.
   100%   KE LAI ER SI (CLAIRE’S in Chinese)    21    Registered    11231741   
CBI Distributing Corp.    100%   KE LAI ER SI (CLAIRE’S in Chinese)    25   
Registered    11231740    CBI Distributing Corp.    100%   KE LAI ER SI
(CLAIRE’S in Chinese)    26    Registered    11231739    CBI Distributing Corp.
   100%   KE LAI ER SI (CLAIRE’S in Chinese)    28    Registered    11231738   
CBI Distributing Corp.    100%   KE LAI ER SI (CLAIRE’S in Chinese)    35   
Registered    11231737

 

10

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

Colombia

   CBI Distributing Corp.      100 %    CLAIRE’S    42    Registered    192406
   CBI Distributing Corp.      100 %    CLAIRE’S       Registered    330360   
CBI Distributing Corp.      100 %    CLAIRE’S    26    Registered    459364   
CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    462741   
CBI Distributing Corp.      100 %    CLAIRE’S    25    Registered    461450

Costa Rica

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    178034
   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    223.014
   CBI Distributing Corp.      100 %    CLAIRE’S    25    Registered    223.016
   CBI Distributing Corp.      100 %    CLAIRE’S    26    Registered    223.017

Dominican Republic

   CBI Distributing Corp.      100 %    CLAIRE’S    25    Registered    211884
   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26    Registered   
203520

Ecuador

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    282311
   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    6714-12
   CBI Distributing Corp.      100 %    CLAIRE’S    18    Registered    5292-12
   CBI Distributing Corp.      100 %    CLAIRE’S    25    Registered    5294-12
   CBI Distributing Corp.      100 %    CLAIRE’S    26    Registered    5295-12

Egypt

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    198659
   CBI Distributing Corp.      100 %    ICING    14, 25, 26, 35    Pending   

El Salvador

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered   
207Book101

EU (CTM)

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 18, 26    Registered   
6584221    CBI Distributing Corp.      100 %    CLAIRE’S    3, 4, 9, 12, 21, 35
   Registered    2846087    CBI Distributing Corp.      100 %    CLAIRE’S    14,
25    Registered    76265    CBI Distributing Corp.      100 %    CLAIRE’S   
35, 42    Registered    1862200

 

11

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

   CBI Distributing Corp.      100 %    CLAIRE’S
BOUTIQUES    14, 25, 35, 42    Registered    235333    CBI Distributing Corp.   
  100 %    CLAIRE’S
ACCESSORIES    14, 25, 35, 42    Registered    235374    CBI Distributing Corp.
     100 %    CLAIRE’S
ACCESSORIES    14, 25, 35    Registered    428417    CBI Distributing Corp.     
100 %    CLAIRE’S
CLUB    3, 4, 9, 11, 14, 16, 20, 21, 22, 24, 25, 26    Registered    3140878   
CBI Distributing Corp.      100 %    CLAIRE’S
COLLECTION    3, 14, 25, 26    Registered    76166    CBI Distributing Corp.   
  100 %    CLAIRE’S
ETC.    14, 25, 35, 42    Registered    235291    CBI Distributing Corp.     
100 %    ICING    3, 42    Registered    2789154    CBI Distributing Corp.     
100 %    ICING    3, 9, 14, 16, 18, 21, 25, 26, 28, 35    Registered   
012599891    CBI Distributing Corp.      100 %    ICING BY
CLAIRE’S    35    Registered    6282859    CBI Distributing Corp.      100 %   
ICINGS    14, 25, 35    Registered    426312    CBI Distributing Corp.      100
%    THE ICING
ACCESSORIES
& DESIGN    14, 25, 35    Registered    426270

Georgia

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   872750

Ghana

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Pending   

Guatemala

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    156393

Honduras

   CBI Distributing Corp.      100 %    CLAIRE’S       Registered    11492

Hong Kong

   CBI Distributing Corp.      100 %    CLAIRE’S    9, 14, 18, 20, 21, 24, 25,
26, 28    Registered    301369701    CBI Distributing Corp.      100 %   
CLAIRE’S    35    Registered    300246276

 

12

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

Iceland

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   872750

India

   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    1579528
   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    1375799
   CBI Distributing Corp.      100 %    CLAIRE’S    26    Registered    2273273
   CBI Distributing Corp.      100 %    CLAIRE’S    28    Registered    2273274
   CBI Distributing Corp.      100 %    CLAIRE’S    21    Registered    2273271
   CBI Distributing Corp.      100 %    CLAIRE’S    3, 18, 25    Pending      
CBI Distributing Corp.      100 %    CLAIRE’S    18, 26    Published       CBI
Distributing Corp.      100 %    CLAIRE’S    9    Registered    2273269

Indonesia

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 26    Registered   
IDM000269734    CBI Distributing Corp.      100 %    CLAIRE’S    35   
Registered    IDM000403561

Int’l – Madrid Protocol

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   1263860    CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 42   
Registered    872750

Israel

   Claire’s Boutiques, Inc.      100 %    Claire’s &
@ logo    35    Registered    142605

Jamaica

   CBI Distributing Corp.      100 %    CLAIRE’S       Registered    57734

Japan

   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    4173259
   CBI Distributing Corp.      100 %    CLAIRE’S    25    Registered    4225283
   CBI Distributing Corp.      100 %    Claire’s &
@ logo    14    Registered    4316622    CBI Distributing Corp.      100 %   
CLAIRE’S
&
Japanese
characters    18    Registered    4173261    CBI Distributing Corp.      100 % 
  CLAIRE’S
&
Japanese
characters    26    Registered    4227498    CBI Distributing Corp.      100 % 
  CLAIRE’S
&
Japanese
characters    14    Registered    4173260    CBI Distributing Corp.      100 % 
  CLAIRE’S
&
Japanese
characters    35    Registered    4068474

 

13

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

   CBI Distributing Corp.      100 %    CLAIRE’S &
Japanese
characters    35    Registered    5254831    CBI Distributing Corp.      100 % 
  CLAIRE’S
ACCESSORIES    9, 14, 18, 25    Registered    4384017    CBI Distributing Corp.
     100 %    CLAIRE’S in
Japanese
characters    6, 8, 14, 18, 21, 25, 26    Registered    2661230    CBI
Distributing Corp.      100 %    CLAIRE’S
stylized    35    Registered    5255217    CBI Distributing Corp.      100 %   
CLAIRE’S
stylized    3, 8, 10, 14, 18, 21, 25, 26    Registered    4077459    CBI
Distributing Corp.      100 %    ICING    35    Registered    140055

Lebanon

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    95458

Lesotho

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Pending   

Liechtenstein

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   872750

Malaysia

   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    09000349
   CBI Distributing Corp.      100 %    CLAIRE’S    26    Registered    09000350
   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    09000351
   CBI Distributing Corp.      100 %    CLAIRE’S    25    Registered   
20122014317

Mexico

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    970492
   CBI Distributing Corp.      100 %    CLAIRE’S    42    Registered    521186
   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    1457103
   CBI Distributing Corp.      100 %    CLAIRE’S    25    Registered    1349996
   CBI Distributing Corp.      100 %    CLAIRE’S    26    Registered    1295890

Monaco

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   872750

Namibia

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Pending   

New Zealand

   CBI Distributing Corp.      100 %    Claire’s & “@”
logo    14, 35    Registered    806327

Nicaragua

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    0802817

 

14

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

Nigeria

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Pending   

Norway

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   872750    CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered
   233273

Oman

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Pending   

Pakistan

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Pending   

Panama

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    165604
   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    211198
   CBI Distributing Corp.      100 %    CLAIRE’S    25    Registered    211197
   CBI Distributing Corp.      100 %    CLAIRE’S    26    Registered    211200

Paraguay

   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    375410
   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    385020

Peru

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    66528

Philippines

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 26, 35    Registered   
4-2012-008328    CBI Distributing Corp.      100 %    CLAIRE’S    25   
Registered    4-2012-210172

Poland

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    204878

Qatar

   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    48479   
CBI Distributing Corp.      100 %    ICING    14, 25, 26, 35    Pending   

Romania

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   872750

Russian Federation

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 26    Registered   
872750    CBI Distributing Corp.      100 %    ICING    14    Registered   
1436016141    CBI Distributing Corp.      100 %    ICING    26    Registered   
1436016143    CBI Distributing Corp.      100 %    ICING    35    Registered   
1436016144

Serbia

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   67601

Singapore

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   872750

 

15

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

South Africa

   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered   
2009/05885    CBI Distributing Corp.      100 %    CLAIRE’S    26    Registered
   2009/08556    CBI Distributing Corp.      100 %    CLAIRE’S    35   
Registered    2004/09338    CBI Distributing Corp.      100 %    CLAIRE’S    25
   Published   

Swaziland

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Published
  

Switzerland

   CBI Distributing Corp.      100 %    Claire’s @ logo       Registered   
517937    CBI Distributing Corp.      100 %    CLAIRE’S    3, 14, 25, 35   
Registered    507253    CBI Distributing Corp.      100 %    CLAIRE’S & @ logo
   3, 14, 25, 35    Registered    507888    CBI Distributing Corp.      100 %   
CLAIRE’S ACCESSORIES    3, 14, 25, 35    Registered    507908

Taiwan

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 26, 35    Registered   
1383039    CBI Distributing Corp.      CLAIRE’S    3, 9, 14, 16, 18, 21, 25, 26,
28, 35    Registered    1636275

Thailand

   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    TM319893
   CBI Distributing Corp.      100 %    CLAIRE’S    26    Registered    TM320726
   CBI Distributing Corp.      100 %    CLAIRE’S    35    Registered    SM68822

Turkey

   CBI Distributing Corp.      100 %    CLAIRE’S    3, 14, 16, 25, 26, 35   
Registered    200331890    CBI Distributing Corp.      100 %    CLAIRE’S    14,
25, 26, 35    Pending   

Ukraine

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Registered
   872750    CBI Distributing Corp.      100 %    ICING    14    Registered   
191737    CBI Distributing Corp.      100 %    ICING    25    Registered   
191738    CBI Distributing Corp.      100 %    ICING    26    Registered   
191739    CBI Distributing Corp.      100 %    ICING    35    Registered   
191740

United Kingdom

   CBI Distributing Corp.      100 %    ICING    3, 8, 21    Registered   
2284683

Uruguay

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 35    Registered   
432942

 

16

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

Venezuela

   CBI Distributing Corp.      100 %    CLAIRE’S    14    Registered    P-347986
   CBI Distributing Corp.      100 %    CLAIRE’S    18    Published       CBI
Distributing Corp.      100 %    CLAIRE’S    26    Published       CBI
Distributing Corp.      100 %    CLAIRE’S    35    Registered    S-061612

Vietnam

   CBI Distributing Corp.      100 %    CLAIRE’S    3, 14, 26, 35    Registered
   163209    CBI Distributing Corp.      100 %    CLAIRE’S    25    Registered
   216702

Zambia

   CBI Distributing Corp.      100 %    CLAIRE’S    14, 25, 26, 35    Pending   

 

D. Copyrights

 

 

Country

  

Claimant

  

Title

   Reg No. United States of America    CBI Distributing Corporation    Claire’s
product development: Jan. 2003    VAu000584057    CBI Distributing Corporation
   Claire’s gifts to go : 2003 accessory product    VAu000581995    CBI
Distributing Corporation    Claire’s Club (aka Kids Club gifts to go
program 2003)    VAu000593275    CBI Distributing Corporation    Slam book &
Sports slam book    VAu000592144    CBI Distributing Corporation    Claire’s
product development 2004    VAu000616999    CBI Distributing Corporation   
Claire’s Club : gifts to go 2004 (aka Claire’s product development 2004)   
VAu000634258

 

E. IP Licenses

Intellectual Property Agreement, dated as of the date hereof, by and among CLSIP
LLC and CBI Distributing Corp.

 

17

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SCHEDULE III

Filing Jurisdictions

 

GRANTOR

  

JURISDICTION

Claire’s Stores, Inc.    Florida Claire’s Inc.    Delaware Claire’s Puerto Rico
Corp.    Delaware CBI Distributing Corp.    Delaware Claire’s Boutiques, Inc.   
Colorado Claire’s Canada Corp.    Delaware BMS Distributing Corp.    Delaware
CSI Canada LLC    Delaware

 

18

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

SCHEDULE IV

Commercial Tort Claims

None.

 

19

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

SCHEDULE V

Accounts and Inventory Not in the Ordinary Course of Business

None.

 

20