Exhibit 10.2

EXECUTION VERSION

DEBTOR-IN-POSSESSION

GUARANTY AND SECURITY AGREEMENT

dated as of July 7, 2010

among

MEDICAL STAFFING NETWORK, INC. ,

EACH GRANTOR

FROM TIME TO TIME PARTY HERETO

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Administrative Agent and Collateral Agent

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TABLE OF CONTENTS

 

     Page

ARTICLE I DEFINED TERMS

   2

Section 1.1

 

Definitions

   2

Section 1.2

 

Certain Other Terms

   4

ARTICLE II GUARANTY

   4

Section 2.1

 

Guaranty

   4

Section 2.2

 

Limitation of Guaranty

   5

Section 2.3

 

Contribution

   5

Section 2.4

 

Authorization; Other Agreements

   5

Section 2.5

 

Guaranty Absolute and Unconditional

   6

Section 2.6

 

Waivers

   7

Section 2.7

 

Reliance

   7

ARTICLE III GRANT OF SECURITY INTEREST

   7

Section 3.1

 

Collateral

   7

Section 3.2

 

Grant of Security Interest in Collateral

   8

ARTICLE IV REPRESENTATIONS AND WARRANTIES

   8

Section 4.1

 

Title; No Other Liens

   8

Section 4.2

 

Perfection and Priority

   9

Section 4.3

 

Jurisdiction of Organization; Chief Executive Office

   9

Section 4.4

 

Locations of Inventory, Equipment and Books and Records

   10

Section 4.5

 

Pledged Collateral

   10

Section 4.6

 

Instruments and Tangible Chattel Paper Formerly Accounts

   10

Section 4.7

 

Intellectual Property

   10

Section 4.8

 

Commercial Tort Claims

   11

Section 4.9

 

Specific Collateral

   11

Section 4.10

 

Enforcement

   11

Section 4.11

 

Representations and Warranties of the Credit Agreement

   11

ARTICLE V COVENANTS

   11

Section 5.1

 

Maintenance of Perfected Security Interest; Further Documentation and Consents

   11

Section 5.2

 

Changes in Locations, Name, Etc.

   12

Section 5.3

 

Pledged Collateral

   13

Section 5.4

 

Accounts

   13

Section 5.5

 

Commodity Contracts

   14

 

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Section 5.6

 

Delivery of Instruments and Tangible Chattel Paper and Control of Investment
Property, Letter-of-Credit Rights and Electronic Chattel Paper

   14

Section 5.7

 

Intellectual Property

   14

Section 5.8

 

Notices

   15

Section 5.9

 

Notice of Commercial Tort Claims

   16

Section 5.10

 

Compliance with Credit Agreement

   16

ARTICLE VI REMEDIAL PROVISIONS

   16

Section 6.1

 

Code and Other Remedies

   16

Section 6.2

 

Accounts and Payments in Respect of General Intangibles

   19

Section 6.3

 

Pledged Collateral

   20

Section 6.4

 

Proceeds to be Turned over to and Held by Administrative Agent

   21

Section 6.5

 

Registration Rights

   21

Section 6.6

 

Deficiency

   22

ARTICLE VII THE ADMINISTRATIVE AGENT

   22

Section 7.1

 

Administrative Agent’s Appointment as Attorney-in-Fact

   22

Section 7.2

 

Authorization to File Financing Statements

   24

Section 7.3

 

Authority of Administrative Agent

   24

Section 7.4

 

Duty; Obligations and Liabilities

   25

ARTICLE VIII MISCELLANEOUS

   25

Section 8.1

 

Reinstatement

   25

Section 8.2

 

Release of Collateral

   26

Section 8.3

 

Independent Obligations

   26

Section 8.4

 

No Waiver by Course of Conduct

   26

Section 8.5

 

Amendments in Writing

   27

Section 8.6

 

Additional Grantors; Additional Pledged Collateral

   27

Section 8.7

 

Notices

   27

Section 8.8

 

Successors and Assigns

   27

Section 8.9

 

Counterparts

   27

Section 8.10

 

Severability

   28

Section 8.11

 

Governing Law

   28

Section 8.12

 

WAIVER OF JURY TRIAL

   28

 

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ANNEXES AND SCHEDULES

 

Annex 1    Form of Pledge Amendment Annex 2    Form of Joinder Agreement Annex 3
   Form of Intellectual Property Security Agreement Schedule 1    Commercial
Tort Claims Schedule 2    Filings Schedule 3    Jurisdiction of Organization;
Chief Executive Office Schedule 4    Location of Inventory and Equipment
Schedule 5    Pledged Collateral Schedule 6    Intellectual Property

 

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DEBTOR-IN-POSSESSION GUARANTY AND SECURITY AGREEMENT, dated as of July 7, 2010,
by Medical Staffing Network, Inc. (the “Borrower”) and each of the other
entities listed on the signature pages hereof or that becomes a party hereto
pursuant to Section 8.6 (together with the Borrower, the “Grantors”), in favor
of General Electric Capital Corporation (“GE Capital”), as administrative agent
and collateral agent (in such capacity, together with its successors and
permitted assigns, the “Administrative Agent”) for the Lenders and each other
Secured Party (each as defined in the Credit Agreement referred to below).

W I T N E S S E T H:

WHEREAS, on July 2, 2010 (the “Petition Date”), the Borrower, Medical Staffing
Holdings, LLC, a Delaware limited liability company, and Medical Staffing
Network Holdings, Inc., a Delaware corporation (collectively, “Holdings”) and
each other Grantor (each a “Debtor” and collectively, the “Debtors”), commenced
Chapter 11 Case Nos. 10-29101 through 10-29112, administratively consolidated as
Case No. 10-29101-EPK (each a “Case” and collectively, the “Cases”) under the
Bankruptcy Code (as defined below) with the United States Bankruptcy Court for
the Southern District of Florida, Palm Beach Division (the “Bankruptcy Court”);

WHEREAS, in connection with and during the pendency of the Cases and pursuant to
the Senior Secured Priming and Superpriority Debtor-in-Possession Credit
Agreement dated as of July 7, 2010 (as the same may be modified from time to
time, the “Credit Agreement”) among the Borrower, Holdings, the Lenders from
time to time party thereto and GE Capital, as administrative agent and
collateral agent for the Lenders, the Lenders have severally agreed to make
extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;

WHEREAS, each Grantor (other than the Borrower) has agreed to guaranty the
Obligations of the Borrower, and each Grantor has agreed, subject to entry of
the Interim Order and the Final Order, to secure such Grantor’s obligations
under the Loan Documents pursuant to Sections 364(c) and 364(d) of the
Bankruptcy Code;

WHEREAS, each Grantor will derive substantial direct and indirect benefits from
the making of the extensions of credit under the Credit Agreement;

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective extensions of credit to the Borrower under the Credit Agreement
that the Grantors shall have executed and delivered this Agreement to the
Administrative Agent;

WHEREAS, the Interim Order and the Final Order will authorize the execution,
delivery and performance of this Agreement and the grant of a security interest,
pledge and Lien on all of the Collateral (as hereinafter defined) of the
Grantors and the proceeds thereof to secure the Secured Obligations (as
hereinafter defined) pursuant to Sections 364(c)(2), 364(c)(3) and 364(d)(1) of
the Bankruptcy Code;

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WHEREAS, from and after entry of the Final Order, the Secured Obligations will
constitute allowed administrative expense claims in the Cases having priority
over all administrative expense claims and unsecured claims against the Grantors
now existing or hereafter arising, of any kind whatsoever, including without
limitation, all administrative expense claims of the kind specified in Sections
105, 326, 330, 331, 503(b), 506(c), 507(a), 507(b), 546(c), 726, 1114, or any
other provision of the Bankruptcy Code or otherwise, as provided under section
364(c)(1) of the Bankruptcy Code, subject, as to priority only, to the
Carve-Out; and

WHEREAS, to supplement the Interim Order and the Final Order without in any way
diminishing or limiting the effect of either the Interim Order or the Final
Order or the respective security interests, pledges and Liens granted
thereunder, the parties hereto desire to more fully set forth their respective
rights in connection with such security interests, pledges and Liens;

NOW, THEREFORE, in consideration of the premises and to induce the Lenders and
the Administrative Agent to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent as follows:

ARTICLE I

DEFINED TERMS

Section 1.1 Definitions. (a) Capital terms used herein without definition are
used as defined in the Credit Agreement.

(b) The following terms have the meanings given to them in the UCC and terms
used herein without definition that are defined in the UCC have the meanings
given to them in the UCC (such meanings to be equally applicable to both the
singular and plural forms of the terms defined): “account”, “account debtor”,
“as-extracted collateral”, “certificated security”, “chattel paper”, “commercial
tort claim”, “commodity contract”, “deposit account”, “electronic chattel
paper”, “equipment”, “farm products”, “fixture”, “general intangible”, “goods”,
“healthcare-insurance receivable”, “instruments”, “inventory”, “investment
property”, “letter-of-credit right”, “proceeds”, “record”, “securities account”,
“security”, “supporting obligation” and “tangible chattel paper”.

(c) The following terms shall have the following meanings:

“Agreement” means this Debtor-in-Possession Guaranty and Security Agreement.

“Applicable IP Office” means the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency within or outside
the United States.

“Avoidance Actions” means any claims, demands, actions or causes of action
available to the Debtors or their bankruptcy estates through the exercise of the
powers granted pursuant to Chapter 5 of the Bankruptcy Code.

“Avoidance Action Proceeds” means the proceeds of Avoidance Actions, including
the proceeds received through demand, settlement or trial of Avoidance Actions.

 

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“Collateral” has the meaning specified in Section 3.1.

“Excluded Equity” means any voting stock in excess of 66% of the outstanding
voting stock of any Excluded Foreign Subsidiary. For the purposes of this
definition, “voting stock” means, with respect to any issuer, the issued and
outstanding shares of each class of Stock of such issuer entitled to vote
(within the meaning of Treasury Regulations § 1.956-2(c)(2)).

“Excluded Property” means, except as otherwise provided by the Interim Order or
the Final Order, Avoidance Actions and Avoidance Action Proceeds.

“Guaranteed Obligations” has the meaning set forth in Section 2.1.

“Guarantor” means each Grantor other than the Borrower.

“Guaranty” means the guaranty of the Guaranteed Obligations made by the
Guarantors as set forth in this Agreement.

“Material Intellectual Property” means Intellectual Property that is owned by or
licensed to a Grantor and material to the conduct of any Grantor’s business.

“Pledged Certificated Stock” means all certificated securities and any other
Stock or Stock Equivalent of any Person evidenced by a certificate, instrument
or other similar document (as defined in the UCC), in each case owned by any
Grantor, and any distribution of property made on, in respect of or in exchange
for the foregoing from time to time, exceeding $250,000 in the aggregate
including all Stock and Stock Equivalents listed on Schedule 5. Pledged
Certificated Stock excludes any Excluded Property and any Cash Equivalents that
are not held in Controlled Securities Accounts to the extent permitted by
Section 7.11 of the Credit Agreement.

“Pledged Collateral” means, collectively, the Pledged Stock and the Pledged Debt
Instruments.

“Pledged Debt Instruments” means all right, title and interest of any Grantor in
instruments evidencing any Indebtedness owed to such Grantor or other
obligations, and any distribution of property made on, in respect of or in
exchange for the foregoing from time to time, exceeding $250,000 in the
aggregate including all Indebtedness described on Schedule 5, issued by the
obligors named therein. Pledged Debt Instruments excludes any Cash Equivalents
that are not held in Controlled Securities Accounts to the extent permitted by
Section 7.11 of the Credit Agreement.

“Pledged Investment Property” means any investment property of any Grantor, and
any distribution of property made on, in respect of or in exchange for the
foregoing from time to time, exceeding $250,000 in the aggregate other than any
Pledged Stock or Pledged Debt Instruments. Pledged Investment Property excludes
any Cash Equivalents that are not held in Controlled Securities Accounts to the
extent permitted by Section 7.11 of the Credit Agreement.

“Pledged Stock” means all Pledged Certificated Stock and all Pledged
Uncertificated Stock.

 

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“Pledged Uncertificated Stock” means any Stock or Stock Equivalent of any Person
that is not Pledged Certificated Stock, including all right, title and interest
of any Grantor as a limited or general partner in any partnership not
constituting Pledged Certificated Stock or as a member of any limited liability
company, all right, title and interest of any Grantor in, to and under any
Constituent Document of any partnership or limited liability company to which it
is a party, and any distribution of property made on, in respect of or in
exchange for the foregoing from time to time, exceeding $250,000 in the
aggregate including in each case those interests set forth on Schedule 5, to the
extent such interests are not certificated. Pledged Uncertificated Stock
excludes any Excluded Property and any Cash Equivalents that are not held in
Controlled Securities Accounts to the extent permitted by Section 7.11 of the
Credit Agreement.

“Software” means (a) all computer programs, including source code and object
code versions, (b) all data, databases and compilations of data, whether machine
readable or otherwise, and (c) all documentation, training materials and
configurations related to any of the foregoing.

“Subsidiary Guarantor” means any Guarantor that is a Subsidiary of the Borrower.

“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York; provided, however, that, in the event that, by reason of
mandatory provisions of any applicable Requirements of Law, any of the
attachment, perfection or priority of the Administrative Agent’s or any other
Secured Party’s security interest in any Collateral is governed by the Uniform
Commercial Code of a jurisdiction other than the State of New York, “UCC” shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of the definitions related to or otherwise used in
such provisions.

“Vehicles” means all vehicles covered by a certificate of title law of any
state.

Section 1.2 Certain Other Terms. (a) The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.
The terms “herein”, “hereof” and similar terms refer to this Agreement as a
whole and not to any particular Article, Section or clause in this Agreement.
References herein to an Annex, Schedule, Article, Section or clause refer to the
appropriate Annex or Schedule to, or Article, Section or clause in this
Agreement. Where the context requires, provisions relating to any Collateral
when used in relation to a Grantor shall refer to such Grantor’s Collateral or
any relevant part thereof.

(b) Section 1.5 (Interpretation) of the Credit Agreement is applicable to this
Agreement as and to the extent set forth therein.

ARTICLE II

GUARANTY

Section 2.1 Guaranty. To induce the Lenders to make the Loans, each Guarantor
hereby, jointly and severally, absolutely, unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, the full and punctual
payment when due, whether at stated maturity or earlier, by reason of
acceleration, mandatory prepayment or otherwise in accordance with any Loan
Document, of all the Obligations of the Borrower whether existing on the date
hereof or hereinafter incurred or created (the “Guaranteed Obligations”). This
Guaranty by each Guarantor hereunder constitutes a guaranty of payment and not
of collection.

 

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Section 2.2 Limitation of Guaranty. Any term or provision of this Guaranty or
any other Loan Document to the contrary notwithstanding, the maximum aggregate
amount for which any Subsidiary Guarantor shall be liable hereunder shall not
exceed the maximum amount for which such Subsidiary Guarantor can be liable
without rendering this Guaranty or any other Loan Document, as it relates to
such Subsidiary Guarantor, subject to avoidance under applicable Requirements of
Law relating to fraudulent conveyance or fraudulent transfer (including the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and
Section 548 of title 11 of the United States Code or any applicable provisions
of comparable Requirements of Law) (collectively, “Fraudulent Transfer Laws”).
Any analysis of the provisions of this Guaranty for purposes of Fraudulent
Transfer Laws shall take into account the right of contribution established in
Section 2.3 and, for purposes of such analysis, give effect to any discharge of
intercompany debt as a result of any payment made under the Guaranty.

Section 2.3 Contribution. To the extent that any Subsidiary Guarantor shall be
required hereunder to pay any portion of any Guaranteed Obligation exceeding the
greater of (a) the amount of the economic benefit actually received by such
Subsidiary Guarantor from the Loans and other Obligations and (b) the amount
such Subsidiary Guarantor would otherwise have paid if such Subsidiary Guarantor
had paid the aggregate amount of the Guaranteed Obligations (excluding the
amount thereof repaid by the Borrower and Holdings) in the same proportion as
such Subsidiary Guarantor’s net worth on the date enforcement is sought
hereunder bears to the aggregate net worth of all the Subsidiary Guarantors on
such date, then such Guarantor shall be reimbursed by such other Subsidiary
Guarantors for the amount of such excess, pro rata, based on the respective net
worth of such other Subsidiary Guarantors on such date.

Section 2.4 Authorization; Other Agreements. The Secured Parties are hereby
authorized, without notice to or demand upon any Guarantor and without
discharging or otherwise affecting the obligations of any Guarantor hereunder
and without incurring any liability hereunder, from time to time, to do each of
the following:

(a) (i) modify, amend, supplement or otherwise change, (ii) accelerate or
otherwise change the time of payment of or (iii) waive or otherwise consent to
noncompliance with, any Guaranteed Obligation or any Loan Document pursuant to
the terms thereof;

(b) apply to the Guaranteed Obligations any sums by whomever paid or however
realized to any Guaranteed Obligation in such order as provided in the Loan
Documents;

(c) refund at any time any payment received by any Secured Party in respect of
any Guaranteed Obligation;

 

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(d) (i) Sell, exchange, enforce, waive, substitute, liquidate, terminate,
release, abandon, fail to perfect, subordinate, accept, substitute, surrender,
exchange, affect, impair or otherwise alter or release any Collateral for any
Guaranteed Obligation or any other guaranty therefor in any manner,
(ii) receive, take and hold additional Collateral to secure any Guaranteed
Obligation, (iii) add, release or substitute any one or more other Guarantors,
makers or endorsers of any Guaranteed Obligation or any part thereof and
(iv) otherwise deal in any manner with the Borrower and any other Guarantor,
maker or endorser of any Guaranteed Obligation or any part thereof; and

(e) settle, release, compromise, collect or otherwise liquidate the Guaranteed
Obligations.

Section 2.5 Guaranty Absolute and Unconditional. Each Guarantor hereby waives
and agrees not to assert any defense, whether arising in connection with or in
respect of any of the following or otherwise, and hereby agrees that its
obligations under this Guaranty are irrevocable, absolute and unconditional and
shall not be discharged as a result of or otherwise affected by any of the
following (which may not be pleaded and evidence of which may not be introduced
in any proceeding with respect to this Guaranty, in each case except as
otherwise agreed in writing by the Administrative Agent):

(a) the invalidity or unenforceability of any obligation of the Borrower or any
other Guarantor under any Loan Document or any other agreement or instrument
relating thereto (including any amendment, consent or waiver thereto), or any
security for, or other guaranty of, any Guaranteed Obligation or any part
thereof, or the lack of perfection or continuing perfection or failure of
priority of any security for the Guaranteed Obligations or any part thereof;

(b) the absence of (i) any attempt to collect any Guaranteed Obligation or any
part thereof from the Borrower or any other Guarantor or other action to enforce
the same or (ii) any action to enforce any Loan Document or any Lien thereunder;

(c) the failure by any Person to take any steps to perfect and maintain any Lien
on, or to preserve any rights with respect to, any Collateral;

(d) any workout, insolvency, bankruptcy proceeding, reorganization, arrangement,
liquidation or dissolution by or against the Borrower, any other Guarantor or
any of the Borrower’s other Subsidiaries or any procedure, agreement, order,
stipulation, election, action or omission thereunder, including any discharge or
disallowance of, or bar or stay against collecting, any Guaranteed Obligation
(or any interest thereon) in or as a result of any such proceeding;

(e) any foreclosure, whether or not through judicial sale, and any other Sale of
any Collateral or any election following the occurrence of an Event of Default
by any Secured Party to proceed separately against any Collateral in accordance
with such Secured Party’s rights under any applicable Requirements of Law; or

(f) any other defense, setoff, counterclaim or any other circumstance that might
otherwise constitute a legal or equitable discharge of the Borrower, any other
Guarantor or any of the Borrower’s other Subsidiaries, in each case other than
the payment in full of the Guaranteed Obligations.

 

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Section 2.6 Waivers. Each Guarantor hereby unconditionally and irrevocably
waives and agrees not to assert any claim, defense, setoff or counterclaim based
on diligence, promptness, presentment, requirements for any demand or notice
hereunder including any of the following: (a) any demand for payment or
performance and protest and notice of protest, (b) any notice of acceptance,
(c) any presentment, demand, protest or further notice or other requirements of
any kind with respect to any Guaranteed Obligation (including any accrued but
unpaid interest thereon) becoming immediately due and payable and (d) any other
notice in respect of any Guaranteed Obligation or any part thereof, and any
defense arising by reason of any disability or other defense of the Borrower or
any other Guarantor. Except as provided hereunder, each Guarantor further
unconditionally and irrevocably agrees not to (x) enforce or otherwise exercise
any right of subrogation or any right of reimbursement or contribution or
similar right against the Borrower or any other Guarantor by reason of any Loan
Document or any payment made thereunder or (y) assert any claim, defense, setoff
or counterclaim it may have against any other Loan Party or set off any of its
obligations to such other Loan Party against obligations of such Loan Party to
such Guarantor. No obligation of any Guarantor hereunder shall be discharged
other than by complete performance.

Section 2.7 Reliance. Each Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of the Borrower, each other Guarantor
and any other guarantor, maker or endorser of any Guaranteed Obligation or any
part thereof, and of all other circumstances bearing upon the risk of nonpayment
of any Guaranteed Obligation or any part thereof that diligent inquiry would
reveal, and each Guarantor hereby agrees that no Secured Party shall have any
duty to advise any Guarantor of information known to it regarding such condition
or any such circumstances. In the event any Secured Party, in its sole
discretion, undertakes at any time or from time to time to provide any such
information to any Guarantor, such Secured Party shall be under no obligation to
(a) undertake any investigation not a part of its regular business routine,
(b) disclose any information that such Secured Party, pursuant to accepted or
reasonable commercial finance or banking practices, wishes to maintain
confidential or (c) make any future disclosures of such information or any other
information to any Guarantor.

ARTICLE III

GRANT OF SECURITY INTEREST

Section 3.1 Collateral. For the purposes of this Agreement, all of the following
property now owned or at any time hereafter acquired by a Grantor or in which a
Grantor now has or at any time in the future may acquire any right, title or
interest is collectively referred to as the “Collateral”:

(a) all accounts, chattel paper, deposit accounts, documents (as defined in the
UCC), equipment, general intangibles, instruments, inventory, investment
property and any supporting obligations related thereto;

 

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(b) the commercial tort claims described on Schedule 1 and on any supplement
thereto received by the Administrative Agent pursuant to Section 5.9;

(c) all books and records pertaining to the other property described in this
Section 3.1;

(d) all property of such Grantor held by any Secured Party, including all
property of every description, in the custody of or in transit to such Secured
Party for any purpose, including safekeeping, collection or pledge, for the
account of such Grantor or as to which such Grantor may have any right or power,
including but not limited to cash;

(e) all other goods (including but not limited to fixtures) and personal
property of such Grantor, whether tangible or intangible and wherever located;
and

(f) to the extent not otherwise included, all proceeds of the foregoing;

provided, however, that “Collateral” shall not include any Excluded Property;
and provided, further, that if and when any property shall cease to be Excluded
Property, such property shall be deemed at all times from and after the date
hereof to constitute Collateral.

Section 3.2 Grant of Security Interest in Collateral. Each Grantor, as
collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations of
such Grantor (the “Secured Obligations”), hereby mortgages, pledges and
hypothecates to the Administrative Agent for the benefit of the Secured Parties,
and grants to the Administrative Agent for the benefit of the Secured Parties a
Lien on and security interest in, all of its right, title and interest in, to
and under the Collateral of such Grantor.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Lenders and the Administrative Agent to enter into the Loan
Documents, each Grantor hereby represents and warrants each of the following to
the Administrative Agent, the Lenders and the other Secured Parties:

Section 4.1 Title; No Other Liens. Except for the Lien granted to the
Administrative Agent pursuant to this Agreement and other Permitted Liens
(except for those Permitted Liens not permitted to exist on any Collateral)
under any Loan Document (including Section 4.2), such Grantor owns each item of
the Collateral free and clear of any and all Liens or claims of others. Such
Grantor (a) is the record and beneficial owner of the Collateral pledged by it
hereunder constituting instruments or certificates and (b) has rights in or the
power to transfer each other item of Collateral in which a Lien is granted by it
hereunder, free and clear of any other Lien.

 

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Section 4.2 Perfection and Priority. (a) The security interest granted pursuant
to this Agreement constitutes a valid and continuing perfected security interest
in favor of the Administrative Agent in all Collateral subject, for the
following Collateral, to the occurrence of the following: (i) in the case of all
Collateral in which a security interest may be perfected by filing a financing
statement under the UCC, the completion of the filings and other actions
specified on Schedule 2 (which, in the case of all filings and other documents
referred to on such schedule, have been delivered to the Administrative Agent in
completed and duly authorized form), (ii) with respect to any deposit account,
the execution of Control Agreements, (iii) in the case of all Copyrights,
Trademarks and Patents for which UCC filings are insufficient, all appropriate
filings having been made with the United States Copyright Office or the United
States Patent and Trademark Office, as applicable, (iv) in the case of
letter-of-credit rights that are not supporting obligations of Collateral, the
execution of a Contractual Obligation granting control to the Administrative
Agent over such letter-of-credit rights, (v) in the case of electronic chattel
paper, the completion of all steps necessary to grant control to the
Administrative Agent over such electronic chattel paper and (vi) in the case of
Vehicles, the actions required under Section 5.1(e). Such security interest
shall be prior to all other Liens on the Collateral except for Customary
Permitted Liens having priority over the Administrative Agent’s Lien by
operation of law or unless otherwise permitted by any Loan Document upon (i) in
the case of all Pledged Certificated Stock, Pledged Debt Instruments and Pledged
Investment Property, the delivery thereof to the Administrative Agent of such
Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment
Property consisting of instruments and certificates, in each case properly
endorsed for transfer to the Administrative Agent or in blank, (ii) in the case
of all Pledged Investment Property not in certificated form, the execution of
Control Agreements with respect to such investment property and (iii) in the
case of all other instruments and tangible chattel paper that are not Pledged
Certificated Stock, Pledged Debt Instruments or Pledged Investment Property, the
delivery thereof to the Administrative Agent of such instruments and tangible
chattel paper. Except as set forth in this Section 4.2, all actions by such
Grantor necessary or desirable to perfect the Lien granted hereunder on the
Collateral have been duly taken.

(b) The provisions of this Agreement, the Interim Order and the Final Order are
effective to create in favor of the Administrative Agent, for the benefit of the
Secured Parties, legal, valid and perfected Liens on and security interests
(having the priority provided for herein, in the Interim Order and in the Final
Order) in all right, title and interest in the Collateral, enforceable against
each Grantor. Pursuant to clause (c) of Section 364 of the Bankruptcy Code, the
Interim Order and the Final Order, all Obligations of Grantors under this
Agreement and the Credit Agreement and each other Loan Document at all times
shall constitute allowed super-priority administrative expense claims in each of
the Cases having priority over all administrative expenses of the kinds
specified in, or ordered pursuant to, Sections 105, 326, 328, 330, 331, 503(b),
506(c), 507(a), 507(b), 546(c), 726, 1114 or any other provision of the
Bankruptcy Code or otherwise, and shall at all times be senior to the rights of
Loan Parties, the estates of Loan Parties, and any successor trustee or estate
representative in the Cases or any subsequent proceeding or case under the
Bankruptcy Code, subject only to amounts then outstanding pursuant to the
Carve-Out and the Pre-Petition Protective Advances.

Section 4.3 Jurisdiction of Organization; Chief Executive Office. Such Grantor’s
jurisdiction of organization, legal name and organizational identification
number, if any, and the location of such Grantor’s chief executive office or
sole place of business, in each case as of the date hereof, are specified on
Schedule 3 and such Schedule 3 also lists all jurisdictions of incorporation,
legal names and locations of such Grantor’s chief executive office or sole place
of business for the five years preceding the date hereof.

 

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Section 4.4 Locations of Inventory, Equipment and Books and Records. On the date
hereof, such Grantor’s inventory and equipment (other than inventory or
equipment in transit) and books and records concerning the Collateral are kept
at the locations listed on Schedule 4 and such Schedule 4 also lists the
locations of such inventory, equipment and books and records for the five years
preceding the date hereof.

Section 4.5 Pledged Collateral. (a) The Pledged Stock pledged by such Grantor
hereunder (a) is listed on Schedule 5 and constitutes that percentage of the
issued and outstanding equity of all classes of each issuer thereof as set forth
on Schedule 5, (b) has been duly authorized and validly issued and is fully paid
and nonassessable (other than Pledged Stock in limited liability companies and
partnerships) and (c) constitutes the legal, valid and binding obligation of the
obligor with respect thereto, enforceable in accordance with its terms.

(b) As of the Closing Date, all Pledged Collateral (other than Pledged
Uncertificated Stock) and all Pledged Investment Property consisting of
instruments and certificates has been delivered to the Administrative Agent in
accordance with Section 5.3(a).

(c) Upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall be entitled to exercise all of the rights of the
Grantor granting the security interest in any Pledged Stock, and a transferee or
assignee of such Pledged Stock shall become a holder of such Pledged Stock to
the same extent as such Grantor and be entitled to participate in the management
of the issuer of such Pledged Stock to the same extent as such Grantor and, upon
the transfer of the entire interest of such Grantor, such Grantor shall, by
operation of law, cease to be a holder of such Pledged Stock.

Section 4.6 Instruments and Tangible Chattel Paper Formerly Accounts. No amount
payable to such Grantor under or in connection with any account is evidenced by
any instrument or tangible chattel paper that has not been delivered to the
Administrative Agent, properly endorsed for transfer, to the extent delivery is
required by Section 5.6(a).

Section 4.7 Intellectual Property. (a) Schedule 6 sets forth a true and complete
list of the following Intellectual Property such Grantor owns, licenses or
otherwise has the right to use: (i) Intellectual Property that is registered or
subject to applications for registration, (ii) Internet Domain Names and
(iii) Material Intellectual Property and material Software, separately
identifying that owned and licensed to such Grantor and including for each of
the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which
such item has been registered or otherwise arises or in which an application for
registration has been filed, (4) as applicable, the registration or application
number and registration or application date and (5) any IP Licenses or other
rights (including franchises) granted by the Grantor with respect thereto.

(b) To such Grantor’s knowledge, on the Closing Date, all Material Intellectual
Property owned by such Grantor is valid, in full force and effect, subsisting,
unexpired and enforceable, and no Material Intellectual Property has been
abandoned. No breach or default of any material IP License shall be caused by,
and the ownership, use, validity or enforceability of, or any rights of such
Grantor in, any Material Intellectual Property shall not be limited or impaired
by, the consummation of the transactions contemplated by any Loan Document.
There are no pending (or, to the knowledge of such Grantor, threatened) actions,
investigations, suits, proceedings, audits, claims, demands, orders or disputes
challenging the ownership, use, validity, enforceability of, or such Grantor’s
rights in, any Material Intellectual Property of such Grantor. To such Grantor’s
knowledge, no Person has been or is infringing, misappropriating, diluting,
violating or otherwise impairing any Material Intellectual Property of such
Grantor. Such Grantor, and to such Grantor’s knowledge each other party thereto,
is not in material breach or default of any material IP License.

 

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Section 4.8 Commercial Tort Claims. The only commercial tort claims of any
Grantor existing on the date hereof (regardless of whether the amount, defendant
or other material facts can be determined and regardless of whether such
commercial tort claim has been asserted, threatened or has otherwise been made
known to the obligee thereof or whether litigation has been commenced for such
claims) are those listed on Schedule 1, which sets forth such information
separately for each Grantor.

Section 4.9 Specific Collateral. None of the Collateral is or is proceeds or
products of farm products, as-extracted collateral, health-care-insurance
receivables or timber to be cut.

Section 4.10 Enforcement. Subject to Section 4.2, no Permit, notice to or filing
with any Governmental Authority or any other Person or any consent from any
Person and, subject to entry of the Interim Order and the Final Order, no
further order of the Bankruptcy Court is required for the exercise by the
Administrative Agent of its rights (including voting rights) provided for in
this Agreement or the enforcement of remedies in respect of the Collateral
pursuant to this Agreement, including the transfer of any Collateral, except as
may be required in connection with the disposition of any portion of the Pledged
Collateral by laws affecting the offering and sale of securities generally or
any approvals that may be required to be obtained from any bailees or landlords
to collect the Collateral.

Section 4.11 Representations and Warranties of the Credit Agreement. The
representations and warranties as to such Grantor and its Subsidiaries made by
the Borrower in Article IV (Representations and Warranties) of the Credit
Agreement are true and correct on each date as required by Section 3.2(b) of the
Credit Agreement.

ARTICLE V

COVENANTS

Each Grantor agrees with the Administrative Agent to the following, as long as
any Obligation or Commitment remains outstanding and, in each case, unless the
Required Lenders otherwise consent in writing:

Section 5.1 Maintenance of Perfected Security Interest; Further Documentation
and Consents. (a) Generally. Such Grantor shall (i) not use or permit any
Collateral to be used unlawfully or in violation of any provision of any Loan
Document, any Requirements of Law or any policy of insurance covering the
Collateral and (ii) not enter into any Contractual Obligation or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
Sell any Collateral if such restriction would have a Material Adverse Effect.

 

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(b) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.2 and shall defend such security interest and such priority against
the claims and demands of all Persons.

(c) Such Grantor shall furnish to the Administrative Agent such documents in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail and in form and substance satisfactory to the
Administrative Agent.

(d) At any time and from time to time, upon the written request of the
Administrative Agent, such Grantor shall, for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, (i) promptly and duly execute and deliver, and have recorded,
such further documents, including an authorization to file (or, as applicable,
the filing) of any financing statement or amendment under the UCC (or other
filings under similar Requirements of Law) in effect in any jurisdiction with
respect to the security interest created hereby and (ii) take such further
action as the Administrative Agent may reasonably request, including (A) using
commercially reasonable efforts to secure all approvals necessary or appropriate
for the assignment to or for the benefit of the Administrative Agent of any
Contractual Obligation, including any IP License, held by such Grantor and to
enforce the security interests granted hereunder and (B) executing and
delivering any Control Agreements with respect to deposit accounts and
securities accounts.

(e) If requested by the Administrative Agent, the Grantor shall arrange for the
Administrative Agent’s security interest to be noted on the certificate of title
of each Vehicle and shall file any other necessary documentation in each
jurisdiction that the Administrative Agent shall deem advisable to perfect its
security interests in any Vehicle.

(f) To ensure that any of the Excluded Property set forth in clause (ii) of the
definition of “Excluded Property” becomes part of the Collateral, such Grantor
shall use commercially reasonable efforts to obtain any required consents from
any Person other than the Borrower and its Affiliates with respect to any permit
or license or any Contractual Obligation with such Person entered into by such
Grantor that requires such consent as a condition to the creation by such
Grantor of a Lien on any right, title or interest in such permit, license or
Contractual Obligation or any Stock or Stock Equivalent related thereto.

Section 5.2 Changes in Locations, Name, Etc. Except upon 30 days’ prior written
notice to the Administrative Agent and delivery to the Administrative Agent of
(a) all documents reasonably requested by the Administrative Agent to maintain
the validity, perfection and priority of the security interests provided for
herein and (b) if applicable, a written supplement to Schedule 4 showing any
additional locations at which inventory or equipment shall be kept, such Grantor
shall not do any of the following:

(i) permit any inventory or equipment to be kept at a location other than those
listed on Schedule 4, except for inventory or equipment in transit;

(ii) change its jurisdiction of organization or the location of its chief
executive office, in each case from that referred to in Section 4.3; or

 

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(iii) change its legal name or organizational identification number, if any, or
corporate, limited liability company, partnership or other organizational
structure to such an extent that any financing statement filed in connection
with this Agreement would become misleading.

Section 5.3 Pledged Collateral. (a) Delivery of Pledged Collateral. Such Grantor
shall (i) deliver to the Administrative Agent, in suitable form for transfer and
in form and substance satisfactory to the Administrative Agent, (A) all Pledged
Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates
and instruments evidencing Pledged Investment Property and (ii) maintain all
other Pledged Investment Property in a Controlled Securities Account.

(b) Event of Default. During the continuance of an Event of Default, the
Administrative Agent shall have the right, at any time in its discretion and
without notice to the Grantor, to (i) transfer to or to register in its name or
in the name of its nominees any Pledged Collateral or any Pledged Investment
Property and (ii) exchange any certificate or instrument representing or
evidencing any Pledged Collateral or any Pledged Investment Property for
certificates or instruments of smaller or larger denominations.

(c) Cash Distributions with respect to Pledged Collateral. Except as provided in
Article VI, such Grantor shall be entitled to receive all cash distributions
paid in respect of the Pledged Collateral.

(d) Voting Rights. Except as provided in Article VI, such Grantor shall be
entitled to exercise all voting, consent and corporate, partnership, limited
liability company and similar rights with respect to the Pledged Collateral;
provided, however, that no vote shall be cast, consent given or right exercised
or other action taken by such Grantor that would impair the Collateral or be
inconsistent with or result in any violation of any provision of any Loan
Document.

Section 5.4 Accounts. (a) Such Grantor shall not, other than in the ordinary
course of business, (i) grant any extension of the time of payment of any
account, (ii) compromise or settle any account for less than the full amount
thereof, (iii) release, wholly or partially, any Person liable for the payment
of any account, (iv) allow any credit or discount on any account or (v) amend,
supplement or modify any account in any manner that could adversely affect the
value thereof.

(b) The Administrative Agent shall have the right to make test verifications of
the Accounts in any manner and through any medium that it reasonably considers
advisable, and such Grantor shall furnish all such assistance and information as
the Administrative Agent may reasonably require in connection therewith. At any
time and from time to time, upon the Administrative Agent’s request, such
Grantor shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
accounts; provided, however, that unless a Default shall be continuing, the
Administrative Agent shall request no more than one such report during any
calendar year.

 

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Section 5.5 Commodity Contracts. Such Grantor shall not have any commodity
contract other than with a Person approved by the Administrative Agent and
subject to a Control Agreement.

Section 5.6 Delivery of Instruments and Tangible Chattel Paper and Control of
Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper.
(a) If any amount in excess of $250,000 payable under or in connection with any
Collateral owned by such Grantor shall be or become evidenced by an instrument
or tangible chattel paper other than such instrument delivered in accordance
with Section 5.3(a) and in the possession of the Administrative Agent, such
Grantor shall mark all such instruments and tangible chattel paper with the
following legend: “This writing and the obligations evidenced or secured hereby
are subject to the security interest of General Electric Capital Corporation, as
Administrative Agent” and, at the request of the Administrative Agent, shall
promptly deliver such instrument or tangible chattel paper to the Administrative
Agent, duly indorsed in a manner satisfactory to the Administrative Agent.

(b) Such Grantor shall not grant “control” (within the meaning of such term
under Article 9-106 of the UCC) over any investment property to any Person other
than the Administrative Agent.

(c) If such Grantor is or becomes the beneficiary of a letter of credit that is
(i) not a supporting obligation of any Collateral and (ii) in excess of
$250,000, such Grantor shall promptly, and in any event within 2 Business Days
after becoming a beneficiary, notify the Administrative Agent thereof and enter
into a Contractual Obligation with the Administrative Agent, the issuer of such
letter of credit or any nominated person with respect to the letter-of-credit
rights under such letter of credit. Such Contractual Obligation shall assign
such letter-of-credit rights to the Administrative Agent and such assignment
shall be sufficient to grant control for the purposes of Section 9-107 of the
UCC (or any similar section under any equivalent UCC). Such Contractual
Obligation shall also direct all payments thereunder to a Cash Collateral
Account. The provisions of the Contractual Obligation shall be in form and
substance reasonably satisfactory to the Administrative Agent.

(d) If any amount in excess of $250,000 payable under or in connection with any
Collateral owned by such Grantor shall be or become evidenced by electronic
chattel paper, such Grantor shall take all steps necessary to grant the
Administrative Agent control of all such electronic chattel paper for the
purposes of Section 9-105 of the UCC (or any similar section under any
equivalent UCC) and all “transferable records” as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global and National
Commerce Act.

Section 5.7 Intellectual Property. (a) Within 30 days after any change to
Schedule 6 for such Grantor, such Grantor shall provide the Administrative Agent
notification thereof and the short-form intellectual property agreements and
assignments as described in this Section 5.7 and other documents that the
Administrative Agent reasonably requests with respect thereto.

 

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(b) Such Grantor shall (and shall cause all its licensees to) (i) (1) continue
to use each Trademark included in the Material Intellectual Property in order to
maintain such Trademark in full force and effect with respect to each class of
goods for which such Trademark is currently used, free from any claim of
abandonment for non-use, (2) maintain at least the same standards of quality of
products and services offered under such Trademark as are currently maintained,
(3) use such Trademark with the appropriate notice of registration and all other
notices and legends required by applicable Requirements of Law and (4) not adopt
or use any other Trademark that is confusingly similar or a colorable imitation
of such Trademark unless the Administrative Agent shall obtain a perfected
security interest in such other Trademark pursuant to this Agreement and
(ii) not do any act or omit to do any act whereby (w) such Trademark (or any
goodwill associated therewith) may become destroyed, invalidated, impaired or
harmed in any material way, (x) any Patent included in the Material Intellectual
Property may become forfeited, misused, unenforceable, abandoned or dedicated to
the public, (y) any portion of the Copyrights included in the Material
Intellectual Property may become invalidated, otherwise impaired or fall into
the public domain or (z) any Trade Secret included in the Material Intellectual
Property may become publicly available or otherwise unprotectable.

(c) Such Grantor shall notify the Administrative Agent promptly if it knows that
any application or registration relating to any Material Intellectual Property
may become forfeited, misused, unenforceable, abandoned or dedicated to the
public, or of any adverse determination regarding the validity or enforceability
or such Grantor’s ownership of, interest in, right to use, register, own or
maintain any Material Intellectual Property (including the institution of, or
any such determination or development in, any proceeding relating to the
foregoing in any Applicable IP Office). Such Grantor shall take all actions that
are necessary or reasonably requested by the Administrative Agent to maintain
and pursue each application (and to obtain the relevant registration or
recordation) and to maintain each registration and recordation included in the
Material Intellectual Property.

(d) Such Grantor shall not knowingly do any act or omit to do any act to
infringe, misappropriate, dilute, violate or otherwise impair the Intellectual
Property of any other Person. In the event that any Material Intellectual
Property of such Grantor is or has been infringed, misappropriated, violated,
diluted or otherwise impaired by a third party, upon having knowledge thereof,
such Grantor shall take such action as it reasonably deems appropriate under the
circumstances in response thereto, such as promptly bringing suit and recovering
all damages therefor.

(e) Such Grantor shall execute and deliver to the Administrative Agent in form
and substance reasonably acceptable to the Administrative Agent and suitable for
(i) filing in the Applicable IP Office the short-form intellectual property
security agreements in the form attached hereto as Annex 3 for all Copyrights,
Trademarks, Patents and IP Licenses of such Grantor and (ii) recording with the
appropriate Internet domain name registrar, a duly executed form of assignment
for all Internet Domain Names of such Grantor (together with appropriate
supporting documentation as may be requested by the Administrative Agent).

Section 5.8 Notices. Such Grantor shall promptly notify the Administrative Agent
in writing of its acquisition of any interest hereafter in property that is of a
type where a security interest or lien must be or may be registered, recorded or
filed under, or notice thereof given under, any federal statute or regulation.

 

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Section 5.9 Notice of Commercial Tort Claims. Such Grantor agrees that, if it
shall acquire any interest in any commercial tort claim (whether from another
Person or because such commercial tort claim shall have come into existence),
(i) such Grantor shall, promptly upon such acquisition, deliver to the
Administrative Agent, in each case in form and substance satisfactory to the
Administrative Agent, a notice of the existence and nature of such commercial
tort claim and a supplement to Schedule 1 containing a specific description of
such commercial tort claim, (ii) Section 3.1 shall apply to such commercial tort
claim and (iii) such Grantor shall execute and deliver to the Administrative
Agent, in each case in form and substance satisfactory to the Administrative
Agent, any document, and take all other action, deemed by the Administrative
Agent to be reasonably necessary or appropriate for the Administrative Agent to
obtain, on behalf of the Lenders, a perfected security interest having at least
the priority set forth in Section 4.2 in all such commercial tort claims. Any
supplement to Schedule 1 delivered pursuant to this Section 5.9 shall, after the
receipt thereof by the Administrative Agent, become part of Schedule 1 for all
purposes hereunder other than in respect of representations and warranties made
prior to the date of such receipt.

Section 5.10 Compliance with Credit Agreement. Such Grantor agrees to comply
with all covenants and other provisions applicable to it under the Credit
Agreement, including Sections 2.17 (Taxes), 11.4 (Costs and Expenses) and 11.5
(Indemnities) of the Credit Agreement and agrees to the same submission to
jurisdiction as that agreed to by the Borrower in the Credit Agreement.

ARTICLE VI

REMEDIAL PROVISIONS

Section 6.1 Code and Other Remedies. (a) UCC Remedies. During the continuance of
an Event of Default, subject to the Interim Order and the Final Order, and
without further order from the Bankruptcy Court except as otherwise provided by
the Interim Order or the Final Order, the Administrative Agent may exercise, in
addition to all other rights and remedies granted to it in this Agreement and in
any other instrument or agreement securing, evidencing or relating to any
Secured Obligation, all rights and remedies of a secured party under the UCC or
any other applicable law.

(b) Disposition of Collateral. Without limiting the generality of the foregoing,
the Administrative Agent may, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), during the continuance of any Event of Default (personally or through
its agents or attorneys), subject to the terms of the Interim Order and the
Final Order, (i) enter upon the premises where any Collateral is located,
without any obligation to pay rent, through self-help, without judicial process,
without first obtaining a final judgment or giving any Grantor or any other
Person notice or opportunity for a hearing on the Administrative Agent’s claim
or action, (ii) collect, receive, appropriate and realize upon any Collateral
and (iii) Sell, grant option or options to purchase and deliver any Collateral
(or enter into Contractual Obligations to do any of the foregoing), in one or
more parcels at public or private sale or sales, at any exchange, broker’s board
or office of any Secured Party or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. The Administrative
Agent shall have the right, upon any such public sale or sales and, to the
extent permitted by the UCC and other applicable Requirements of Law, upon any
such private sale, to purchase the whole or any part of the Collateral so sold,
free of any right or equity of redemption of any Grantor, which right or equity
is hereby waived and released.

 

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(c) Management of the Collateral. Each Grantor further agrees, that, during the
continuance of any Event of Default, (i) at the Administrative Agent’s request,
it shall assemble the Collateral and make it available to the Administrative
Agent at places that the Administrative Agent shall reasonably select, whether
at such Grantor’s premises or elsewhere, (ii) without limiting the foregoing,
the Administrative Agent also has the right to require that each Grantor store
and keep any Collateral pending further action by the Administrative Agent and,
while any such Collateral is so stored or kept, provide such guards and
maintenance services as shall be necessary to protect the same and to preserve
and maintain such Collateral in good condition, (iii) until the Administrative
Agent is able to Sell any Collateral, the Administrative Agent shall have the
right to hold or use such Collateral to the extent that it deems appropriate for
the purpose of preserving the Collateral or its value or for any other purpose
deemed appropriate by the Administrative Agent and (iv) the Administrative Agent
may, if it so elects, seek the appointment of a receiver or keeper to take
possession of any Collateral and to enforce any of the Administrative Agent’s
remedies (for the benefit of the Secured Parties), with respect to such
appointment without prior notice or hearing as to such appointment. The
Administrative Agent shall not have any obligation to any Grantor to maintain or
preserve the rights of any Grantor as against third parties with respect to any
Collateral while such Collateral is in the possession of the Administrative
Agent.

(d) Application of Proceeds. The Administrative Agent shall apply the cash
proceeds of any action taken by it pursuant to this Section 6.1, after deducting
all reasonable costs and expenses of every kind incurred in connection therewith
or incidental to the care or safekeeping of any Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and any
other Secured Party hereunder, including reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Secured Obligations, as
set forth in the Credit Agreement, and only after such application and after the
payment by the Administrative Agent of any other amount required by any
Requirements of Law, need the Administrative Agent account for the surplus, if
any, to any Grantor.

(e) Direct Obligation. Neither the Administrative Agent nor any other Secured
Party shall be required to make any demand upon, or pursue or exhaust any right
or remedy against, any Grantor, any other Loan Party or any other Person with
respect to the payment of the Obligations or to pursue or exhaust any right or
remedy with respect to any Collateral therefor or any direct or indirect
guaranty thereof. All of the rights and remedies of the Administrative Agent and
any other Secured Party under any Loan Document shall be cumulative, may be
exercised individually or concurrently and not exclusively of any other rights
or remedies provided by any Requirements of Law. To the extent it may lawfully
do so, each Grantor absolutely and irrevocably waives and relinquishes the
benefit and advantage of, and covenants not to assert against the Administrative
Agent or any Lender, any valuation, stay, appraisement, extension, redemption or
similar laws and any and all rights or defenses it may have as a surety, now or
hereafter existing, arising out of the exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of any Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.

 

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(f) Commercially Reasonable. To the extent that applicable Requirements of Law
impose duties on the Administrative Agent to exercise remedies in a commercially
reasonable manner, each Grantor acknowledges and agrees that it is not
commercially unreasonable for the Administrative Agent to do any of the
following:

(i) fail to incur significant costs, expenses or other Liabilities reasonably
deemed as such by the Administrative Agent to prepare any Collateral for
disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition;

(ii) fail to obtain Permits, or other consents, for access to any Collateral to
Sell or for the collection or Sale of any Collateral, or, if not required by
other Requirements of Law, fail to obtain Permits or other consents for the
collection or disposition of any Collateral;

(iii) fail to exercise remedies against account debtors or other Persons
obligated on any Collateral or to remove Liens on any Collateral or to remove
any adverse claims against any Collateral;

(iv) advertise dispositions of any Collateral through publications or media of
general circulation, whether or not such Collateral is of a specialized nature
or to contact other Persons, whether or not in the same business as any Grantor,
for expressions of interest in acquiring any such Collateral;

(v) exercise collection remedies against account debtors and other Persons
obligated on any Collateral, directly or through the use of collection agencies
or other collection specialists, hire one or more professional auctioneers to
assist in the disposition of any Collateral, whether or not such Collateral is
of a specialized nature or, to the extent deemed appropriate by the
Administrative Agent, obtain the services of other brokers, investment bankers,
consultants and other professionals to assist the Administrative Agent in the
collection or disposition of any Collateral, or utilize Internet sites that
provide for the auction of assets of the types included in the Collateral or
that have the reasonable capacity of doing so, or that match buyers and sellers
of assets to dispose of any Collateral;

(vi) dispose of assets in wholesale rather than retail markets;

(vii) disclaim disposition warranties, such as title, possession or quiet
enjoyment; or

(viii) purchase insurance or credit enhancements to insure the Administrative
Agent against risks of loss, collection or disposition of any Collateral or to
provide to the Administrative Agent a guaranteed return from the collection or
disposition of any Collateral.

 

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Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a
non-exhaustive list of actions or omissions that are commercially reasonable
when exercising remedies against any Collateral and that other actions or
omissions by the Secured Parties shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section 6.1. Without limitation
upon the foregoing, nothing contained in this Section 6.1 shall be construed to
grant any rights to any Grantor or to impose any duties on the Administrative
Agent that would not have been granted or imposed by this Agreement or by
applicable Requirements of Law in the absence of this Section 6.1.

(g) IP Licenses. For the purpose of enabling the Administrative Agent to
exercise rights and remedies under this Section 6.1 (including in order to take
possession of, collect, receive, assemble, process, appropriate, remove, realize
upon, Sell or grant options to purchase any Collateral) at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Administrative Agent, for the
benefit of the Secured Parties, (i) an irrevocable, nonexclusive, worldwide
license (exercisable without payment of royalty or other compensation to such
Grantor), including in such license the right to sublicense, use and practice
any Intellectual Property now owned or hereafter acquired by such Grantor and
access to all media in which any of the licensed items may be recorded or stored
and to all Software and programs used for the compilation or printout thereof
and (ii) an irrevocable license (without payment of rent or other compensation
to such Grantor) to use, operate and occupy all real property owned, operated,
leased, subleased or otherwise occupied by such Grantor.

Section 6.2 Accounts and Payments in Respect of General Intangibles. (a) In
addition to, and not in substitution for, any similar requirement in the Credit
Agreement, if required by the Administrative Agent at any time during the
continuance of an Event of Default, any payment of accounts or payment in
respect of general intangibles, when collected by any Grantor, shall be promptly
(and, in any event, within 2 Business Days) deposited by such Grantor in the
exact form received, duly indorsed by such Grantor to the Administrative Agent,
in a Cash Collateral Account, subject to withdrawal by the Administrative Agent
as provided in Section 6.4. Until so turned over, such payment shall be held by
such Grantor in trust for the Administrative Agent, segregated from other funds
of such Grantor. Each such deposit of proceeds of accounts and payments in
respect of general intangibles shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.

(b) At any time during the continuance of an Event of Default:

(i) each Grantor shall, upon the Administrative Agent’s request, deliver to the
Administrative Agent all original and other documents evidencing, and relating
to, the Contractual Obligations and transactions that gave rise to any account
or any payment in respect of general intangibles, including all original orders,
invoices and shipping receipts and notify account debtors that the accounts or
general intangibles have been collaterally assigned to the Administrative Agent
and that payments in respect thereof shall be made directly to the
Administrative Agent;

 

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(ii) the Administrative Agent may, without notice, at any time during the
continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its accounts or amounts due under general intangibles or any
thereof and, in its own name or in the name of others, communicate with account
debtors to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of any account or amounts due under any general
intangible. In addition, the Administrative Agent may at any time enforce such
Grantor’s rights against such account debtors and obligors of general
intangibles; and

(iii) each Grantor shall take all actions, deliver all documents and provide all
information necessary or reasonably requested by the Administrative Agent to
ensure any Internet Domain Name is registered.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each account and each payment in respect of general intangibles to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. No Secured Party shall have any obligation or liability
under any agreement giving rise to an account or a payment in respect of a
general intangible by reason of or arising out of any Loan Document or the
receipt by any Secured Party of any payment relating thereto, nor shall any
Secured Party be obligated in any manner to perform any obligation of any
Grantor under or pursuant to any agreement giving rise to an account or a
payment in respect of a general intangible, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts that may have been assigned to it or to which it may be
entitled at any time or times.

Section 6.3 Pledged Collateral. (a) Voting Rights. During the continuance of an
Event of Default, upon notice by the Administrative Agent to the relevant
Grantor or Grantors, the Administrative Agent or its nominee may exercise
(A) any voting, consent, corporate and other right pertaining to the Pledged
Collateral at any meeting of shareholders, partners or members, as the case may
be, of the relevant issuer or issuers of Pledged Collateral or otherwise and
(B) any right of conversion, exchange and subscription and any other right,
privilege or option pertaining to the Pledged Collateral as if it were the
absolute owner thereof (including the right to exchange at its discretion any
Pledged Collateral upon the merger, amalgamation, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or equivalent
structure of any issuer of Pledged Stock, the right to deposit and deliver any
Pledged Collateral with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Administrative
Agent may determine), all without liability except to account for property
actually received by it; provided, however, that the Administrative Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.

 

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(b) Proxies. In order to permit the Administrative Agent to exercise the voting
and other consensual rights that it may be entitled to exercise pursuant hereto
and to receive all dividends and other distributions that it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Administrative Agent all such proxies,
dividend payment orders and other instruments as the Administrative Agent may
from time to time reasonably request and (ii) without limiting the effect of
clause (i) above, such Grantor hereby grants to the Administrative Agent an
irrevocable proxy to vote all or any part of the Pledged Collateral and to
exercise all other rights, powers, privileges and remedies to which a holder of
the Pledged Collateral would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case may
be, and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any Pledged
Collateral on the record books of the issuer thereof) by any other person
(including the issuer of such Pledged Collateral or any officer or agent
thereof) during the continuance of an Event of Default and which proxy shall
only terminate upon the payment in full of the Secured Obligations.

(c) Authorization of Issuers. Each Grantor hereby expressly irrevocably
authorizes and instructs, without any further instructions from such Grantor,
each issuer of any Pledged Collateral pledged hereunder by such Grantor to
(i) comply with any instruction received by it from the Administrative Agent in
writing that states that an Event of Default is continuing and is otherwise in
accordance with the terms of this Agreement and each Grantor agrees that such
issuer shall be fully protected from Liabilities to such Grantor in so complying
and (ii) upon receipt of such instruction, unless otherwise expressly permitted
hereby, pay any dividend or make any other payment with respect to the Pledged
Collateral directly to the Administrative Agent.

Section 6.4 Proceeds to be Turned over to and Held by Administrative Agent.
Except as otherwise provided by the Interim Order or the Final Order and unless
otherwise expressly provided in the Credit Agreement or this Security Agreement,
all proceeds of any Collateral received by any Grantor hereunder in cash or Cash
Equivalents shall be held by such Grantor in trust for the Administrative Agent
and the other Secured Parties, segregated from other funds of such Grantor, and
shall, promptly upon receipt by any Grantor, be turned over to the
Administrative Agent in the exact form received (with any necessary
endorsement). All such proceeds of Collateral and any other proceeds of any
Collateral received by the Administrative Agent in cash or Cash Equivalents
shall be held by the Administrative Agent in a Cash Collateral Account. All
proceeds being held by the Administrative Agent in a Cash Collateral Account (or
by such Grantor in trust for the Administrative Agent) shall continue to be held
as collateral security for the Secured Obligations and shall not constitute
payment thereof until applied as provided in the Credit Agreement.

Section 6.5 Registration Rights. (a) If, in the opinion of the Administrative
Agent, it is necessary or advisable to Sell any portion of the Pledged
Collateral by registering such Pledged Collateral under the provisions of the
Securities Act of 1933 (the “Securities Act”), except as otherwise provided by
the Interim Order or the Final Order, each relevant Grantor shall cause the
issuer thereof to do or cause to be done all acts as may be, in the opinion of
the Administrative Agent, necessary or advisable to register such Pledged
Collateral or that portion thereof to be Sold under the provisions of the
Securities Act, all as directed by the Administrative Agent in conformity with
the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto and in compliance with the
securities or “Blue Sky” laws of any jurisdiction that the Administrative Agent
shall designate.

 

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(b) Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any Pledged Collateral by reason of certain prohibitions
contained in the Securities Act and applicable state or foreign securities laws
or otherwise or may determine that a public sale is impracticable, not desirable
or not commercially reasonable and, accordingly, may resort to one or more
private sales thereof to a restricted group of purchasers that shall be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any Pledged Collateral for
the period of time necessary to permit the issuer thereof to register such
securities for public sale under the Securities Act or under applicable state
securities laws even if such issuer would agree to do so.

(c) Except as otherwise provided by the Interim Order or the Final Order, each
Grantor agrees to use its best efforts to do or cause to be done all such other
acts as may be necessary to make such sale or sales of any portion of the
Pledged Collateral pursuant to this Section 6.5 valid and binding and in
compliance with all applicable Requirements of Law. Each Grantor further agrees
that a breach of any covenant contained in this Section 6.5 will cause
irreparable injury to the Administrative Agent and other Secured Parties, that
the Administrative Agent and the other Secured Parties have no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 6.5 shall be specifically enforceable against
such Grantor, and such Grantor hereby waives and agrees not to assert any
defense against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred under the Credit Agreement.

Section 6.6 Deficiency. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of any Collateral are insufficient
to pay the Secured Obligations and the fees and disbursements of any attorney
employed by the Administrative Agent or any other Secured Party to collect such
deficiency.

 

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ARTICLE VII

THE ADMINISTRATIVE AGENT

Section 7.1 Administrative Agent’s Appointment as Attorney-in-Fact. (a) Except
as may be limited by the Interim Order or the Final Order, each Grantor hereby
irrevocably constitutes and appoints the Administrative Agent and any Related
Person thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of the Loan Documents, to take any
appropriate action and to execute any document or instrument that may be
necessary or desirable to accomplish the purposes of the Loan Documents, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent and its Related Persons the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any of the
following when an Event of Default shall be continuing:

(i) in the name of such Grantor, in its own name or otherwise, take possession
of and indorse and collect any check, draft, note, acceptance or other
instrument for the payment of moneys due under any account or general intangible
or with respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any such
moneys due under any account or general intangible or with respect to any other
Collateral whenever payable;

(ii) in the case of any Intellectual Property owned by or licensed to the
Grantors, execute, deliver and have recorded any document that the
Administrative Agent may request to evidence, effect, publicize or record the
Administrative Agent’s security interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby;

(iii) pay or discharge taxes and Liens levied or placed on or threatened against
any Collateral, effect any repair or pay any insurance called for by the terms
of the Credit Agreement (including all or any part of the premiums therefor and
the costs thereof);

(iv) execute, in connection with any sale provided for in Section 6.1 or
Section 6.5, any document to effect or otherwise necessary or appropriate in
relation to evidence the Sale of any Collateral; or

(v)(A) direct any party liable for any payment under any Collateral to make
payment of any moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct, (B) ask or
demand for, and collect and receive payment of and receipt for, any moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral, (C) sign and indorse any invoice, freight or
express bill, bill of lading, storage or warehouse receipt, draft against
debtors, assignment, verification, notice and other document in connection with
any Collateral, (D) commence and prosecute any suit, action or proceeding at law
or in equity in any court of competent jurisdiction to collect any Collateral
and to enforce any other right in respect of any Collateral, (E) defend any
actions, suits, proceedings, audits, claims, demands, orders or disputes brought
against such Grantor with respect to any Collateral, (F) settle, compromise or
adjust any such actions, suits, proceedings, audits, claims, demands, orders or
disputes and, in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate, (G) assign any Intellectual Property
owned by the Grantors or any IP Licenses of the Grantors throughout the world on
such terms and conditions and in such manner as the Administrative Agent shall
in its sole discretion determine, including the execution and filing of any
document necessary to effectuate or record such assignment and (H) generally,
Sell, grant a Lien on, make any Contractual Obligation with respect to and
otherwise deal with, any Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes and do, at
the Administrative Agent’s option, at any time or from time to time, all acts
and things that the Administrative Agent deems necessary to protect, preserve or
realize upon any Collateral and the Secured Parties’ security interests therein
and to effect the intent of the Loan Documents, all as fully and effectively as
such Grantor might do.

 

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(b) If any Grantor fails to perform or comply with any Contractual Obligation
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may (except as otherwise provided by the Interim Order or
the Final Order) perform or comply, or otherwise cause performance or
compliance, with such Contractual Obligation.

(c) Except as otherwise provided by the Interim Order or the Final Order, the
expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate set forth in Section 2.9 (Interest) of the Credit Agreement, from the date
of payment by the Administrative Agent to the date reimbursed by the relevant
Grantor, shall be payable by such Grantor to the Administrative Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue of this Section 7.1. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.

Section 7.2 Authorization to File Financing Statements. Each Grantor authorizes
the Administrative Agent and its Related Persons, at any time and from time to
time, to file or record financing statements, amendments thereto, and other
filing or recording documents or instruments with respect to any Collateral in
such form and in such offices as the Administrative Agent reasonably determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement, and such financing statements and amendments may describe the
Collateral covered thereby as “all assets of the debtor”. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction. Such Grantor also hereby ratifies its
authorization for the Administrative Agent to have filed any initial financing
statement or amendment thereto under the UCC (or other similar laws) in effect
in any jurisdiction if filed prior to the date hereof.

Section 7.3 Authority of Administrative Agent. Each Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the other
Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Secured Parties
with full and valid authority so to act or refrain from acting, and no Grantor
shall be under any obligation or entitlement to make any inquiry respecting such
authority.

 

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Section 7.4 Duty; Obligations and Liabilities. (a) Duty of Administrative Agent.
The Administrative Agent’s sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession shall be to deal
with it in the same manner as the Administrative Agent deals with similar
property for its own account. The powers conferred on the Administrative Agent
hereunder are solely to protect the Administrative Agent’s interest in the
Collateral and shall not impose any duty upon the Administrative Agent to
exercise any such powers. The Administrative Agent shall be accountable only for
amounts that it receives as a result of the exercise of such powers, and neither
it nor any of its Related Persons shall be responsible to any Grantor for any
act or failure to act hereunder, except for their own gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
In addition, the Administrative Agent shall not be liable or responsible for any
loss or damage to any Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehousemen, carrier, forwarding agency,
consignee or other bailee if such Person has been selected by the Administrative
Agent in good faith.

(b) Obligations and Liabilities with respect to Collateral. No Secured Party and
no Related Person thereof shall be liable for failure to demand, collect or
realize upon any Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to any Collateral, except for their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. The
powers conferred on the Administrative Agent hereunder shall not impose any duty
upon any other Secured Party to exercise any such powers. The other Secured
Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
respective officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Reinstatement. Each Grantor agrees that, if any payment made by any
Loan Party or other Person and applied to the Secured Obligations is at any time
annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, or the proceeds
of any Collateral are required to be returned by any Secured Party to such Loan
Party, its estate, trustee, receiver or any other party, including any Grantor,
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, any Lien or other Collateral
securing such liability shall be and remain in full force and effect, as fully
as if such payment had never been made. If, prior to any of the foregoing,
(a) any Lien or other Collateral securing such Grantor’s liability hereunder
shall have been released or terminated by virtue of the foregoing or (b) any
provision of the Guaranty hereunder shall have been terminated, cancelled or
surrendered, such Lien, other Collateral or provision shall be reinstated in
full force and effect and such prior release, termination, cancellation or
surrender shall not diminish, release, discharge, impair or otherwise affect the
obligations of any such Grantor in respect of any Lien or other Collateral
securing such obligation or the amount of such payment.

 

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Section 8.2 Release of Collateral. (a) At the time provided in clause (b)(iii)
of Section 10.10 (Release of Collateral or Guarantors) of the Credit Agreement,
the Collateral shall be released from the Lien created hereby and this Agreement
and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. Each
Grantor is hereby authorized to file UCC amendments at such time evidencing the
termination of the Liens so released. At the request of any Grantor following
any such termination, the Administrative Agent shall deliver to such Grantor any
Collateral of such Grantor held by the Administrative Agent hereunder and
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.

(b) If the Administrative Agent shall be directed or permitted pursuant to
clause (i) or (ii) of Section 10.10(b) of the Credit Agreement to release any
Lien or any Collateral, such Collateral shall be released from the Lien created
hereby to the extent provided under, and subject to the terms and conditions set
forth in, such clauses (i) and (ii). In connection therewith, the Administrative
Agent, at the request of any Grantor, shall execute and deliver to such Grantor
such documents as such Grantor shall reasonably request to evidence such
release.

(c) At the time provided in Section 10.10(a) of the Credit Agreement and at the
request of the Borrower, a Grantor shall be released from its obligations
hereunder in the event that all the Securities of such Grantor shall be Sold to
any Person that is not an Affiliate of Holdings, the Borrower and the
Subsidiaries of the Borrower in a transaction permitted by the Loan Documents.

Section 8.3 Independent Obligations. The obligations of each Grantor hereunder
are independent of and separate from the Secured Obligations and the Guaranteed
Obligations. Upon any Event of Default, except as otherwise provided by the
Interim Order or the Final Order, the Administrative Agent may, at its sole
election, proceed directly and at once, without notice, against any Grantor and
any Collateral to collect and recover the full amount of any Secured Obligation
or Guaranteed Obligation then due, without first proceeding against any other
Grantor, any other Loan Party or any other Collateral and without first joining
any other Grantor or any other Loan Party in any proceeding.

Section 8.4 No Waiver by Course of Conduct. No Secured Party shall by any act
(except by a written instrument pursuant to Section 8.6), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of any Secured Party, any right, power
or privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by any Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that such
Secured Party would otherwise have on any future occasion.

 

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Section 8.5 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 11.1 of the Credit Agreement; provided, however, that
annexes to this Agreement may be supplemented (but no existing provisions may be
modified and no Collateral may be released) through Pledge Amendments and
Joinder Agreements, in substantially the form of Annex 1 and Annex 2,
respectively, in each case duly executed by the Administrative Agent and each
Grantor directly affected thereby.

Section 8.6 Additional Grantors; Additional Pledged Collateral. (a) Joinder
Agreements. If, at the option of the Borrower or as required pursuant to
Section 7.10 of the Credit Agreement, the Borrower shall cause any Subsidiary
that is not a Grantor to become a Grantor hereunder, such Subsidiary shall
execute and deliver to the Administrative Agent a Joinder Agreement
substantially in the form of Annex 2 and shall thereafter for all purposes be a
party hereto and have the same rights, benefits and obligations as a Grantor
party hereto on the Closing Date.

(b) Pledge Amendments. To the extent any Pledged Collateral has not been
delivered as of the Closing Date, such Grantor shall deliver a pledge amendment
duly executed by the Grantor in substantially the form of Annex 1 (each, a
“Pledge Amendment”). Such Grantor authorizes the Administrative Agent to attach
each Pledge Amendment to this Agreement.

Section 8.7 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 11.12 of the Credit Agreement; provided, however, that
any such notice, request or demand to or upon any Grantor shall be addressed to
the Borrower’s notice address set forth in such Section 11.12.

Section 8.8 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of each
Secured Party and their successors and assigns; provided, however, that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.

Section 8.9 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart. Delivery of an executed signature page of this Agreement by
facsimile transmission or by Electronic Transmission shall be as effective as
delivery of a manually executed counterpart hereof.

 

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Section 8.10 Severability. Any provision of this Agreement being held illegal,
invalid or unenforceable in any jurisdiction shall not affect any part of such
provision not held illegal, invalid or unenforceable, any other provision of
this Agreement or any part of such provision in any other jurisdiction.

Section 8.11 Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York and the Bankruptcy Code.

Section 8.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
OTHER PARTY AND NO RELATED PERSON 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 THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.13.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Debtor-in-Possession
Guaranty and Security Agreement to be duly executed and delivered as of the date
first above written.

 

MEDICAL STAFFING NETWORK, INC., as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   President

MEDICAL STAFFING HOLDINGS, LLC, AS HOLDINGS

By:  

MEDICAL STAFFING NETWORK HOLDINGS, INC., its Sole Member

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   President

MEDICAL STAFFING NETWORK HOLDINGS, INC., as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   President

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

MSN-ILLINOIS HOLDINGS, INC., as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   Treasurer

MEDICAL STAFFING NETWORK OF ILLINOIS, LLC, as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   Manager

MEDICAL STAFFING NETWORKS ASSETS, LLC, as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   Manager

INTELISTAF HOLDINGS, INC., as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   Treasurer

 

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INTELISTAF GROUP, INC., as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   President

INTELISTAF HEALTHCARE, INC., as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   President

INTELISTAF PARTNERS NO. 1, LLC, as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   President

INTELISTAF PARTNERS NO. 2, LLC, as Grantor

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   President

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

INTELISTAF HEALTHCARE MANAGEMENT, L.P., as Grantor

By:  

INTELISTAF PARTNERS NO. 1, LLC, its General Partner

By:  

/s/ Kevin Little

Name:   Kevin Little Title:   President

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ACCEPTED AND AGREED

as of the date first above written:

GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent

By:  

/s/ Jennifer Aghazadeh

Name:   Jennifer Aghazadeh Title:   Duly Authorized Signatory