Exhibit 10.2

Execution Version

 

 

GUARANTY AND COLLATERAL AGREEMENT

dated as of February 29, 2008

among

MULTI-COLOR CORPORATION

and

THE OTHER PARTIES HERETO,

as Grantors,

and

BANK OF AMERICA, N.A.,

as the Administrative Agent

 

 

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GUARANTY AND COLLATERAL AGREEMENT

THIS GUARANTY AND COLLATERAL AGREEMENT dated as of February 29, 2008 (this
“Agreement”) is entered into among MULTI-COLOR CORPORATION (the “Company”) and
each other Person signatory hereto as a Grantor (together with the Company and
any other Person that becomes a party hereto as provided herein, the “Grantors”)
in favor of BANK OF AMERICA, N.A., as the Administrative Agent (the
“Administrative Agent”) for itself, the Australian Administrative Agent and the
Lenders party to the Credit Agreement (as hereafter defined).

The Lenders have severally agreed to extend credit to the Borrowers pursuant to
the Credit Agreement. Each Borrower is affiliated with each other Grantor. The
proceeds of credit extended under the Credit Agreement will be used in part to
enable the Borrowers to make valuable transfers to the Grantors in connection
with the operation of their respective businesses. The Borrowers and the other
Grantors are engaged in interrelated businesses, and each Grantor will derive
substantial direct and indirect benefit from extensions of credit under the
Credit Agreement. It is a condition precedent to each Lender’s obligation to
extend credit under the Credit Agreement that the Grantors shall have executed
and delivered this Agreement to the Administrative Agent for the ratable benefit
of itself, the Australian Administrative Agent and all the Lenders.

In consideration of the premises and to induce the Administrative Agent, the
Australian Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to extend credit thereunder, each Grantor
hereby agrees with the Administrative Agent, for the ratable benefit of itself,
the Australian Administrative Agent and the Lenders, as follows:

SECTION 1 DEFINITIONS.

1.1 Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement, and
the following terms are used herein as defined in the UCC: Accounts,
Certificated Security, Commercial Tort Claims, Deposit Accounts, Documents,
Electronic Chattel Paper, Equipment, Farm Products, Goods, Health Care Insurance
Receivables, Instruments, Inventory, Leases, Letter-of-Credit Rights, Money,
Payment Intangibles, Supporting Obligations and Tangible Chattel Paper.

1.2 When used herein the following terms shall have the following meanings:

Agreement has the meaning set forth in the preamble hereto.

Assigned Agreements means any agreements relating to the Acquisition which are
now or hereafter collaterally assigned to the Administrative Agent for the
benefit of itself, the Australian Administrative Agent and the Lenders.

Australian Sub-facility Borrower means a Borrower incorporated in Australia.

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Australian Sub-facility Borrower Obligations means, collectively, all
Obligations of the Australian Sub-facility Borrowers.

Chattel Paper means all “chattel paper” as such term is defined in
Section 9-102(a)(11) of the UCC and, in any event, including with respect to any
Grantor, all Electronic Chattel Paper and Tangible Chattel Paper.

Collateral means (a) all of the personal property now owned or at any time
hereafter acquired by any Grantor or in which any Grantor now has or at any time
in the future may acquire any right, title or interest, including all of each
Grantor’s Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts,
Documents, Equipment, Fixtures, General Intangibles, Goods, Instruments,
Intellectual Property, Inventory, Investment Property, Leases, Letter-of-Credit
Rights, Money, Supporting Obligations and Identified Claims, (b) all books and
records pertaining to any of the foregoing, (c) all Proceeds and products of any
of the foregoing, and (d) all collateral security and guaranties given by any
Person with respect to any of the foregoing. Where the context requires, terms
relating to the Collateral or any part thereof, when used in relation to a
Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

Contract Rights means all of the Grantors’ rights and remedies with respect to
the Assigned Agreements.

Copyrights means all copyrights arising under the laws of the United States, any
other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished, including those listed on
Schedule 5, all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications
in the United States Copyright Office, and the right to obtain all renewals of
any of the foregoing.

Copyright Licenses means all written agreements naming any Grantor as licensor
or licensee, including those listed on Schedule 5, granting any right under any
Copyright, including the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.

Credit Agreement means the Credit Agreement of even date herewith among the
Company, the Australian Borrower, the Lenders, the Administrative Agent, and the
Australian Administrative Agent, as amended, supplemented, restated or otherwise
modified from time to time.

Fixtures means all of the following, whether now owned or hereafter acquired by
a Grantor: plant fixtures; business fixtures; other fixtures and storage
facilities, wherever located; and all additions and accessories thereto and
replacements therefor.

General Intangibles means all “general intangibles” as such term is defined in
Section 9-102(a)(42) of the UCC and, in any event, including with respect to any
Grantor, all Payment Intangibles, all contracts and Contract Rights (including
all Assigned Agreements and Seller Undertakings), agreements, instruments and
indentures in any form, and portions thereof, to which such Grantor is a party
or under which such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject, as the same from time to
time

 

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may be amended, supplemented or otherwise modified, including, without
limitation, (a) all rights of such Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (b) all rights of such Grantor
to damages arising thereunder and (c) all rights of such Grantor to perform and
to exercise all remedies thereunder; provided, that the foregoing limitation
shall not affect, limit, restrict or impair the grant by such Grantor of a
security interest pursuant to this Agreement in any Receivable or any money or
other amounts due or to become due under any such Payment Intangible, contract,
agreement, instrument or indenture.

Guarantor Obligations means, collectively, with respect to each Guarantor, all
Obligations of such Guarantor.

Guarantors means (i) with respect to the U.S. Sub-facility Borrower Obligations,
the collective reference to each Grantor other than the applicable U.S
Sub-facility Borrower, and (ii) with respect to the Australian Sub-facility
Borrower Obligations, the collective reference to each Grantor including the
Company other than the applicable U.S. Sub-facility Borrower.

Identified Claims means the Commercial Tort Claims described on Schedule 7 as
such schedule shall be supplemented from time to time.

Intellectual Property means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.

Intercompany Note means any promissory note evidencing loans made by any Grantor
to any other Grantor.

Investment Property means the collective reference to (a) all “investment
property” as such term is defined in Section 9-102(a)(49) of the UCC (other than
the equity interest of any Foreign Subsidiary excluded from the definition of
Pledged Equity), (b) all “financial assets” as such term is defined in
Section 8-102(a)(9) of the UCC, and (b) whether or not constituting “investment
property” as so defined, all Pledged Notes and all Pledged Equity.

Issuers means the collective reference to each issuer of any Investment
Property.

Paid in Full means (a) the payment in full in cash and performance of all
Secured Obligations, (b) the termination of all Commitments and (c) either
(i) the cancellation and return to the Administrative Agent of all Letters of
Credit or (ii) the cash collateralization of all Letters of Credit in accordance
with the Credit Agreement.

Patents means (a) all letters patent of the United States, any other country or
any political subdivision thereof, all reissues and extensions thereof and all
goodwill associated therewith, including any of the foregoing referred to in
Schedule 5, (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part
thereof, including any of the foregoing referred to in Schedule 5, and (c) all
rights to obtain any reissues or extensions of the foregoing.

 

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Patent Licenses means all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including any of the
foregoing referred to in Schedule 5.

Pledged Equity means the equity interests listed on Schedule 1, together with
any other equity interests, certificates, options or rights of any nature
whatsoever in respect of the equity interests of any Person that may be issued
or granted to, or held by, any Grantor while this Agreement is in effect;
provided that in no event shall (a) more than 66% of the total outstanding
equity interests of any directly owned Foreign Subsidiary, or (b) any equity
interest of any indirectly owned Foreign Subsidiary be required to be pledged
hereunder.

Pledged Notes means all promissory notes listed on Schedule 1, all Intercompany
Notes at any time issued to any Grantor and all other promissory notes issued to
or held by any Grantor (other than (a) promissory notes issued in connection
with extensions of trade credit by any Grantor in the ordinary course of
business and (b) any individual promissory note which is less than $1,000,000 in
principal amount, up to an aggregate of $1,000,000 for all such promissory notes
excluded under this clause (b)).

Permitted Liens means Liens permitted under Section 7.01 of the Credit
Agreement.

Proceeds means all “proceeds” as such term is defined in Section 9-102(a)(64) of
the UCC and, in any event, shall include all dividends or other income from the
Investment Property, collections thereon or distributions or payments with
respect thereto.

Receivable means any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including any
Accounts).

Secured Obligations means, collectively, the U.S. Sub-facility Borrower
Obligations, the Australian Sub-facility Borrower Obligations, and the Guarantor
Obligations.

Securities Act means the Securities Act of 1933, as amended.

Seller Undertakings means, collectively, all representations, warranties,
covenants and agreements in favor of any Grantor, and all indemnifications for
the benefit of any Grantor relating thereto, pursuant to the Assigned
Agreements.

Trademarks means (a) all trademarks, trade names, corporate names, the Company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
including any of the foregoing referred to in Schedule 5, and (b) the right to
obtain all renewals thereof.

 

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Trademark Licenses means, collectively, each agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark,
including any of the foregoing referred to in Schedule 5.

UCC means the Uniform Commercial Code as in effect on the date hereof and from
time to time in the State of New York, provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the security interests in any Collateral or the availability of any remedy
hereunder is governed by the Uniform Commercial Code as in effect on or after
the date hereof in any other jurisdiction, “UCC” means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or non-perfection or
availability of such remedy.

U.S Sub-facility Borrower means a Borrower organized under the Laws of the
United States.

U.S Sub-facility Borrower Obligations means, collectively, all Obligations of
the U.S. Sub-facility Borrowers.

SECTION 2 GUARANTY.

2.1 Guaranty. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, as a primary obligor and not only a surety,
guaranties to the Administrative Agent, for the ratable benefit of itself, the
Australian Administrative Agent and the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrowers when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations.

(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guarantied
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).

(c) Each Guarantor agrees that the Secured Obligations may at any time and from
time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guaranty contained in this Section 2 or affecting the
rights and remedies of the Administrative Agent, the Australian Administrative
Agent or any Lender hereunder.

(d) The guaranty contained in this Section 2 shall remain in full force and
effect until all of the Secured Obligations shall have been Paid in Full.

(e) No payment made by any Borrower, any of the Guarantors, any other guarantor
or any other Person or received or collected by the Administrative Agent, the
Australian Administrative Agent or any Lender from any Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or

 

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appropriation or application at any time or from time to time in reduction of or
in payment of the Secured Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Secured Obligations or any payment received or collected from
such Guarantor in respect of the Secured Obligations), remain liable for the
Secured Obligations up to the maximum liability of such Guarantor hereunder
until the Secured Obligations are Paid in Full.

2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that
a Guarantor shall have paid more than its proportionate share of any payment
made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent, the Australian Administrative Agent
and the Lenders, and each Guarantor shall remain liable to the Administrative
Agent, the Australian Administrative Agent and the Lenders for the full amount
guarantied by such Guarantor hereunder.

2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder
or any set-off or application of funds of any Guarantor by the Administrative
Agent, the Australian Administrative Agent or any Lender, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent, the
Australian Administrative Agent or any Lender against the Company or any other
Guarantor or any collateral security or guaranty or right of offset held by the
Administrative Agent, the Australian Administrative Agent or any Lender for the
payment of the Secured Obligations, nor shall any Guarantor seek or be entitled
to seek any contribution or reimbursement from the Company or any other
Guarantor in respect of payments made by such Guarantor hereunder, until all of
the Secured Obligations are Paid in Full, no Letter of Credit shall be
outstanding and the Commitments are terminated. If any amount shall be paid to
any Guarantor on account of such subrogation rights at any time when all of the
Secured Obligations shall not have been Paid in Full, such amount shall be held
by such Guarantor in trust for the Administrative Agent, the Australian
Administrative Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Administrative Agent, if required), to be
applied against the Secured Obligations, whether matured or unmatured, in the
order set forth in the Credit Agreement.

2.4 Amendments, etc. with respect to the Secured Obligations. Each Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Secured Obligations made by the
Administrative Agent, the Australian Administrative Agent or any Lender may be
rescinded by the Administrative Agent, the Australian Administrative Agent or
such Lender and any of the Secured Obligations continued, and the Secured
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guaranty therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated,

 

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compromised, waived, surrendered or released by the Administrative Agent, the
Australian Administrative Agent or any Lender, and the Credit Agreement and the
other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the Required Lenders or all
the Lenders, as the case may be) may deem advisable from time to time. Neither
the Administrative Agent, the Australian Administrative Agent nor any Lender
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Secured Obligations or for the guaranty
contained in this Section 2 or any property subject thereto.

The Administrative Agent, the Australian Administrative Agent or any Lender may,
from time to time, at its sole discretion and without notice to any Guarantor
(or any of them), take any or all of the following actions: (a) retain or obtain
a security interest in any personal property to secure any of the Secured
Obligations or any obligation hereunder, (b) retain or obtain the primary or
secondary obligation of any obligor or obligors, in addition to the undersigned,
with respect to any of the Secured Obligations, (c) extend or renew any of the
Secured Obligations for one or more periods (whether or not longer than the
original period), alter or exchange any of the Secured Obligations, or release
or compromise any obligation of any of the undersigned hereunder or any
obligation of any nature of any other obligor with respect to any of the Secured
Obligations, (d) release any guaranty or right of offset or its security
interest in, or surrender, release or permit any substitution or exchange for,
all or any part of any property securing any of the Secured Obligations or any
obligation hereunder, or extend or renew for one or more periods (whether or not
longer than the original period) or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such property, and
(e) resort to the undersigned (or any of them) for payment of any of the Secured
Obligations when due, whether or not the Administrative Agent, the Australian
Administrative Agent or such Lender shall have resorted to any property securing
any of the Secured Obligations or any obligation hereunder or shall have
proceeded against any other of the undersigned or any other obligor primarily or
secondarily obligated with respect to any of the Secured Obligations.

2.5 Waivers. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Secured Obligations and notice of or proof of
reliance by the Administrative Agent, the Australian Administrative Agent or any
Lender upon the guaranty contained in this Section 2 or acceptance of the
guaranty contained in this Section 2; the Secured Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guaranty contained in
this Section 2, and all dealings between the Company and any of the Guarantors,
on the one hand, and the Administrative Agent, the Australian Administrative
Agent and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guaranty contained
in this Section 2. Each Guarantor waives (a) diligence, presentment, protest,
demand for payment and notice of default, dishonor or nonpayment and all other
notices whatsoever to or upon the Company or any of the Guarantors with respect
to the Secured Obligations, (b) notice of the existence or creation or
non-payment of all or any of the Secured Obligations and (c) all diligence in
collection or protection of or realization upon any Secured Obligations or any
security for or guaranty of any Secured Obligations.

 

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2.6 Payments. Each Guarantor hereby guaranties that payments hereunder will be
paid to the Administrative Agent without set-off or counterclaim in Dollars at
the office of the Administrative Agent specified in the Credit Agreement.

SECTION 3 GRANT OF SECURITY INTEREST.

3.1 Grant. Each Grantor hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the ratable benefit of
itself, the Australian Administrative Agent and the Lenders and (to the extent
provided herein) their Affiliates, a continuing security interest in all of its
Collateral, as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the U.S Sub-facility Borrower Obligations, the Australian
Sub-facility Borrower Obligations or the Guarantor Obligations, as the case may
be.

3.2 Collateral Assignment of Rights under the Assigned Agreements. Each Grantor
hereby irrevocably authorizes and empowers the Administrative Agent or its
agents, in their sole discretion, to assert, either directly or on behalf of any
Grantor, at any time that an Event of Default is in existence, any claims any
Grantor may from time to time have against the sellers or any of their
affiliates with respect to any and all of the Contract Rights or with respect to
any and all payments or other obligations due from the sellers or any of their
affiliates to the Company under or pursuant to the Assigned Agreements
(“Payments”), and to receive and collect any damages, awards and other monies
resulting therefrom and to apply the same on account of the Secured Obligations.
After the occurrence of any Event of Default, the Administrative Agent may
provide notice to the sellers or any of their affiliates under any Assigned
Agreement that all Payments shall be made to or at the direction of the
Administrative Agent for so long as such Event of Default shall be continuing.
Following the delivery of any such notice, the Administrative Agent shall
promptly notify the sellers under the Assigned Agreement upon the termination or
waiver of any such Event of Default. Each Grantor hereby irrevocably makes,
constitutes and appoints the Administrative Agent (and all officers, employees,
or agents designated by the Administrative Agent) as such Grantor’s true and
lawful attorney (and agent-in-fact) for the purpose of enabling the
Administrative Agent or its agents to assert and collect such claims and to
apply such monies in the manner set forth hereinabove.

SECTION 4 REPRESENTATIONS AND WARRANTIES.

To induce the Agents and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Grantor jointly and severally hereby represents and
warrants to the Administrative Agent, the Australian Administrative Agent and
each Lender that:

4.1 Title; No Other Liens. Except for Permitted Liens, the Grantors own, lease
or license each item of the Collateral free and clear of any and all Liens or
claims of others. No financing statement or other public notice with respect to
all or any part of the Collateral is on file or of record in any public office,
except filings evidencing Permitted Liens and filings for which termination
statements have been delivered to the Administrative Agent.

 

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4.2 Perfected First Priority Liens. The security interests granted pursuant to
this Agreement (a) subject to Permitted Liens, as of the date hereof, upon
completion of the filings and other actions specified on Schedule 2 (which, in
the case of all filings and other documents referred to on Schedule 2, have been
delivered to the Administrative Agent in completed and duly executed form) will
constitute valid perfected security interests in all of the Collateral in favor
of the Administrative Agent, for the ratable benefit of itself, the Australian
Administrative Agent and the Lenders, as collateral security for each Grantor’s
Obligations, enforceable in accordance with the terms hereof against all
creditors of each Grantor and any Persons purporting to purchase any Collateral
from each Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for Permitted Liens for which priority is
accorded under applicable law. The filings and other actions specified on
Schedule 2 constitute all of the filings and other actions necessary to perfect
all security interests granted hereunder, as of the date hereof.

4.3 Grantor Information. On the date hereof, Schedule 3 sets forth (a) each
Grantor’s jurisdiction of organization, (b) the location of each Grantor’s chief
executive office, (c) each Grantor’s exact legal name as it appears on its
organizational documents and (d) each Grantor’s organizational identification
number (to the extent a Grantor is organized in a jurisdiction which assigns
such numbers) and federal employer identification number.

4.4 Collateral Locations. On the date hereof, Schedule 4 sets forth (a) each
place of business of each Grantor (including its chief executive office),
(b) all locations where all Inventory and the Equipment owned by each Grantor is
kept, except with respect to Inventory and Equipment with a fair market value of
less than $1,000,000 (in the aggregate for all Grantors) which may be located at
other locations and (c) whether each such Collateral location and place of
business (including each Grantor’s chief executive office) is owned or leased
(and if leased, specifies the complete name and notice address of each lessor).
Except as otherwise permitted by the preceding sentence, no Collateral is
located outside the United States or in the possession of any lessor, bailee,
warehouseman or consignee, except as indicated on Schedule 4.

4.5 Certain Property. None of the Collateral constitutes, or is the Proceeds of,
(a) Farm Products, (b) Health Care Insurance Receivables or (c) vessels,
aircraft or any other property subject to any certificate of title or other
registration statute of the United States, any State or other jurisdiction,
except for personal vehicles owned by the Grantors and used by employees of the
Grantors in the ordinary course of business with an aggregate fair market value
of less than $1,000,000 (in the aggregate for all Grantors).

4.6 Investment Property. (a) The Pledged Equity pledged by each Grantor
hereunder constitutes all the issued and outstanding equity interests of each
Issuer owned by such Grantor or, in the case of any Foreign Subsidiary, 66% of
all issued and outstanding equity interests of such Foreign Subsidiary.

(b) All of the Pledged Equity has been duly and validly issued and, except for
Pledged Equity constituting membership interests in a limited liability company,
is fully paid and nonassessable.

 

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(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms (subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing).

(d) Schedule 1 lists all Investment Property (other than Investments permitted
under Section 7.02(b) through Section 7.02(h), inclusive, of the Credit
Agreement) owned by each Grantor. Each Grantor is the record and beneficial
owner of, and has good and marketable title to, the Investment Property pledged
by it hereunder, free of any and all Liens or options in favor of, or claims of,
any other Person, except Permitted Liens.

4.7 Receivables. (a) No material amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which is required to be but has not been delivered to the Administrative Agent.

(b) Governmental authorities are not the obligors on a material amount of
Receivables in the aggregate.

(c) The amounts represented by such Grantor to the Lenders from time to time as
owing to such Grantor in respect of the Receivables (to the extent such
representations are required by any of the Loan Documents) will at all such
times be accurate in all material respects.

4.8 Intellectual Property. (a) Schedule 5 lists all Intellectual Property owned
by such Grantor in its own name on the date hereof; provided, however, that
Schedule 5 does not include Intellectual Property owned by a third party and
used by any Grantor pursuant to a license.

(b) On the date hereof, all material Intellectual Property owned by any
Guarantor is valid, subsisting, unexpired and enforceable and has not been
abandoned.

(c) Except as set forth in Schedule 5, none of the material Intellectual
Property is the subject of any licensing or franchise agreement pursuant to
which such Grantor is the licensor or franchisor.

(d) Each Grantor owns and possesses or has a license or other right to use all
Intellectual Property as is necessary for the conduct of the businesses of such
Grantor, without any infringement upon rights of others which could reasonably
be expected to have a Material Adverse Effect.

4.9 Depositary and Other Accounts. All depositary and other accounts maintained
by each Grantor as of the date hereof are described on Schedule 6 hereto, which
description includes for each such account the name of the Grantor maintaining
such account, the name and address of the financial institution at which such
account is maintained and the account number of such account.

 

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SECTION 5 COVENANTS.

Each Grantor covenants and agrees with the Administrative Agent, the Australian
Administrative Agent and the Lenders that, from and after the date of this
Agreement until the Secured Obligations shall have been Paid in Full:

5.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If any
amount payable under or in connection with any of the Collateral in excess of
$1,000,000 (in the aggregate for all Grantors) shall be or become evidenced by
any Instrument, Certificated Security or Chattel Paper, such Instrument,
Certificated Security or Chattel Paper shall be immediately delivered to the
Administrative Agent, duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement. In
the event that a Default or Event of Default shall have occurred and be
continuing, upon the request of the Administrative Agent, any Instrument,
Certificated Security or Chattel Paper not theretofore delivered to the
Administrative Agent and at such time being held by any Grantor shall be
immediately delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.

5.2 Maintenance of Perfected Security Interest; Further Documentation. (a) 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 against the claims and
demands of all Persons whomsoever other than Permitted Liens.

(b) Such Grantor will furnish to the Administrative Agent, the Australian
Administrative Agent and the Lenders from time to time statements and schedules
further identifying and describing the assets and property of such Grantor and
such other reports in connection therewith as the Administrative Agent may
reasonably request, all in reasonable detail.

(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including (i) filing any financing or continuation statements under the UCC (or
other similar laws) in effect in any jurisdiction with respect to the security
interests created hereby and (ii) in the case of Investment Property and any
other relevant Collateral, taking any actions necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the applicable
UCC) with respect thereto.

5.3 Changes in Locations, Name, etc. Such Grantor shall not, except upon 30
days’ prior written notice to the Administrative Agent and delivery to the
Administrative Agent of (a) all additional financing statements and other
documents reasonably requested by the Administrative Agent as to 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 location
at which Inventory or Equipment shall be kept:

(i) permit any of the Inventory or Equipment to be kept at a location other than
those listed on Schedule 4; provided, that up to $1,000,000 (in the aggregate
for all Grantors) in fair market value of any Inventory and Equipment may be
kept at other locations;

 

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(ii) change its jurisdiction of organization or the location of its chief
executive office from that specified on Schedule 3 or in any subsequent notice
delivered pursuant to this Section 5.3; or

(iii) change its name, identity or corporate structure.

5.4 Notices. Such Grantor will advise the Administrative Agent, the Australian
Administrative Agent and the Lenders promptly, in reasonable detail, of:

(a) any Lien (other than Permitted Liens) on any of the Collateral which would
adversely affect the ability of the Administrative Agent to exercise any of its
remedies hereunder; and

(b) the occurrence of any other event which could reasonably be expected to have
a Material Adverse Effect on the aggregate value of the Collateral or on the
Liens created hereby.

5.5 Investment Property. (a) If such Grantor shall become entitled to receive or
shall receive any certificate, option or rights in respect of the equity
interests of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any of the Pledged Equity, or otherwise in
respect thereof, such Grantor shall accept the same as the agent of the
Administrative Agent, the Australian Administrative Agent and the Lenders, hold
the same in trust for the Administrative Agent, the Australian Administrative
Agent and the Lenders and deliver the same forthwith to the Administrative Agent
in the exact form received, duly indorsed by such Grantor to the Administrative
Agent, if required, together with an undated instrument of transfer covering
such certificate duly executed in blank by such Grantor and with, if the
Administrative Agent so requests, signature guarantied, to be held by the
Administrative Agent, subject to the terms hereof, as additional Collateral for
the Secured Obligations. Upon the occurrence and during the continuance of an
Event of Default, (i) any sums paid upon or in respect of the Investment
Property upon the liquidation or dissolution of any Issuer shall be paid over to
the Administrative Agent to be held by it hereunder as additional Collateral for
the Secured Obligations, and (ii) in case any distribution of capital shall be
made on or in respect of the Investment Property or any property shall be
distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected Lien in favor of the Administrative Agent, be delivered
to the Administrative Agent to be held by it hereunder as additional Collateral
for the Secured Obligations. Upon the occurrence and during the continuance of
an Event of Default, if any sums of money or property so paid or distributed in
respect of the Investment Property shall be received by such Grantor, such
Grantor shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for itself, the
Australian Administrative Agent and the Lenders, segregated from other funds of
such Grantor, as additional Collateral for the Secured Obligations.

 

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(b) Without the prior written consent of the Administrative Agent, such Grantor
will not (i) vote to enable, or take any other action to permit, any Issuer to
issue any equity interests of any nature or to issue any other securities or
interests convertible into or granting the right to purchase or exchange for any
equity interests of any nature of any Issuer, except, in each case, as permitted
by the Credit Agreement, (ii) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Investment Property or
Proceeds thereof (except pursuant to a transaction expressly permitted by the
Credit Agreement) other than, with respect to Investment Property not
constituting Pledged Equity or Pledged Notes, any such action which is not
prohibited by the Credit Agreement, (iii) create, incur or permit to exist any
Lien or option in favor of, or any claim of any Person with respect to, any of
the Investment Property or Proceeds thereof, or any interest therein, except for
Permitted Liens, or (iv) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Investment Property or Proceeds thereof, except, with
respect to such Investment Property, shareholders’ agreements entered into by
such Grantor with respect to Persons in which such Grantor maintains an
ownership interest of 50% or less.

(c) In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.5(a) with
respect to the Investment Property issued by it and (iii) the terms of Sections
6.3(c) and 6.7 shall apply to such Grantor with respect to all actions that may
be required of it pursuant to Section 6.3(c) or 6.7 regarding the Investment
Property issued by it.

5.6 Receivables. (a) Other than in the ordinary course of business consistent
with its past practice and in amounts which are not material to such Grantor,
such Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise or settle any Receivable for less than the full
amount thereof, (iii) release, wholly or partially, any Person liable for the
payment of any Receivable, (iv) allow any credit or discount whatsoever on any
Receivable or (v) amend, supplement or modify any Receivable in any manner that
could adversely affect the value thereof.

(b) Such Grantor will deliver to the Administrative Agent a copy of each
material demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables for all Grantors.

5.7 Intellectual Property. (a) Such Grantor (either itself or through licensees)
will (i) continue to use each Trademark material to its business in order to
maintain such Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by applicable
law, (iv) not adopt or use any mark which is confusingly similar or a colorable

 

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imitation of such Trademark unless the Administrative Agent, for the ratable
benefit of itself, the Australian Administrative Agent and the Lenders, shall
obtain a perfected security interest in such mark pursuant to this Agreement,
and (v) not (and not permit any licensee or sublicensee thereof to) do any act
or knowingly omit to do any act whereby such Trademark may become invalidated or
impaired in any way.

(b) Such Grantor (either itself or through licensees) will not do any act, or
omit to do any act, whereby any Patent material to its business may become
forfeited, abandoned or dedicated to the public.

(c) Such Grantor (either itself or through licensees) (i) will employ each
Copyright material to its business and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of such Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of such Copyrights may fall into the
public domain.

(d) Such Grantor (either itself or through licensees) will not do any act that
knowingly uses any Intellectual Property material to its business to infringe
the intellectual property rights of any other Person.

(e) Such Grantor will notify the Administrative Agent, the Australian
Administrative Agent and the Lenders immediately if it knows, or has reason to
know, that any application or registration relating to any material Intellectual
Property may become forfeited, abandoned or dedicated to the public, or of any
adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding, such Grantor’s ownership of, or the validity of, any
material Intellectual Property or such Grantor’s right to register the same or
to own and maintain the same.

(f) Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent concurrently with the next delivery of
financial statements of the Company pursuant to Section 6.01 of the Credit
Agreement. Upon the request of the Administrative Agent, such Grantor shall
execute and deliver, and have recorded, any and all agreements, instruments,
documents, and papers as the Administrative Agent may request to evidence the
Administrative Agent’s, the Australian Administrative Agent’s and the Lenders’
security interest in any Copyright, Patent or Trademark and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby.

(g) Such Grantor will take all reasonable and necessary steps to maintain and
pursue each application (and to obtain the relevant registration) and to
maintain each registration of all material Intellectual Property owned by it.

 

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(h) In the event that any material Intellectual Property is infringed upon or
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and, to the extent, in its
reasonable judgment, such Grantor determines it appropriate under the
circumstances, sue for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution.

5.8 Seller Undertakings.

(a) Each Grantor shall keep the Administrative Agent informed of all
circumstances bearing upon any potential claim under or with respect to the
Assigned Agreements and the Seller Undertakings and such Grantor shall not,
without the prior written consent of the Administrative Agent, (i) waive any of
its rights or remedies under any Assigned Agreement with respect to any of the
Seller Undertakings in excess of $1,000,000, (ii) settle, compromise or offset
any amount payable by the sellers to such Grantor under any Assigned Agreement
in excess of $1,000,000 or (iii) amend or otherwise modify any Assigned
Agreement in any manner which is adverse to the interests of the Administrative
Agent, the Australian Administrative Agent or any Lender.

(b) To the extent that it is commercially reasonable to do so, each Grantor
shall perform and observe all the terms and conditions of each Assigned
Agreement to be performed by it, maintain each Assigned Agreement in full force
and effect, enforce each Assigned Agreement in accordance with its terms and
take all such action to such end as may from time to time be reasonably
requested by the Administrative Agent.

(c) Anything herein to the contrary notwithstanding, (i) each applicable Grantor
shall remain liable under each Assigned Agreement to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise by the
Administrative Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under any Assigned Agreement and
(iii) neither the Administrative Agent, the Australian Administrative Agent nor
any other Lender shall have any obligation or liability under any Assigned
Agreement by reason of this Agreement, nor shall the Administrative Agent, the
Australian Administrative Agent or any other Lender be obligated to perform any
of the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.

5.9 Depositary and Other Deposit Accounts. Each Grantor shall maintain all of
its principal deposit accounts with a Lender. No Grantor shall open any
depositary or other deposit accounts unless such Grantor shall have given the
Administrative Agent 10 days’ prior written notice of its intention to open any
such new deposit accounts. The Grantors shall deliver to the Administrative
Agent a revised version of Schedule 6 showing any changes thereto within 10 days
of any such change. Each Grantor hereby authorizes the financial institutions at
which such Grantor maintains a deposit account to provide the Administrative
Agent with such information with respect to such deposit account as the
Administrative Agent may from time to time reasonably request, and each Grantor
hereby consents to such information being provided to

 

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the Administrative Agent. Each Grantor will, upon the Administrative Agent’s
request, cause each financial institution at which such Grantor maintains a
depositary or other deposit account to enter into a bank agency or other similar
agreement with the Administrative Agent and such Grantor, in form and substance
satisfactory to the Administrative Agent, in order to give the Administrative
Agent “control” (as defined in the UCC) of such account.

5.10 Other Matters.

(a) Within 30 days after the Closing Date, each of the Grantors shall use
commercially reasonable efforts to deliver to the Administrative Agent a
Collateral Access Agreement with respect to (a) each bailee with which such
Grantor keeps Inventory or other assets as of the Closing Date with a fair
market value in excess of $1,000,000 and (b) each landlord which leases real
property (and the accompanying facilities) to any of the Grantors as of the
Closing Date. Such 30 day period may be extended or such requirement may be
waived at the option of the Administrative Agent. If any Grantor shall cause to
be delivered Inventory or other property in excess of $1,000,000 in fair market
value to any bailee after the Closing Date, such Grantor shall use commercially
reasonable efforts to cause such bailee to sign a Collateral Access Agreement.
Such requirement may be waived at the option of the Administrative Agent. If any
Grantor shall lease any real property or facilities and the value of property of
such Grantor located at such leased real property is in excess of $1,000,000 in
fair market value after the Closing Date, such Grantor shall use commercially
reasonable efforts to cause the landlord in respect of such leased property or
facilities to sign a Collateral Access Agreement. Such requirement may be waived
at the option of the Administrative Agent.

(b) Each Grantor authorizes the Administrative Agent to, at any time and from
time to time, file financing statements, continuation statements, and amendments
thereto that describe the Collateral as “all assets” of each Grantor, or words
of similar effect, and which contain any other information required pursuant to
the UCC for the sufficiency of filing office acceptance of any financing
statement, continuation statement, or amendment, and each Grantor agrees to
furnish any such information to the Administrative Agent promptly upon request.
Any such financing statement, continuation statement, or amendment may be signed
by the Administrative Agent on behalf of any Grantor and may be filed at any
time in any jurisdiction.

(c) Each Grantor shall, at any time and from time and to time, take such steps
as the Administrative Agent may reasonably request for the Administrative Agent
(i) to use commercially reasonable efforts to obtain an acknowledgement, in form
and substance reasonably satisfactory to the Administrative Agent, of any bailee
having possession of any of the Collateral with a fair market value in excess of
$1,000,000, stating that the bailee holds such Collateral for the Administrative
Agent, (ii) to obtain “control” of any letter-of-credit rights, or electronic
chattel paper (as such terms are defined by the UCC with corresponding
provisions thereof defining what constitutes “control” for such items of
Collateral), with any agreements establishing control to be in form and
substance reasonably satisfactory to the Administrative Agent, and
(iii) otherwise to insure the continued perfection and priority of the
Administrative Agent’s security interest in any of the Collateral and of the
preservation of its rights therein. If any Grantor shall at any time, acquire a
“commercial tort claim” (as such term is defined in the UCC) in excess of
$1,000,000, such Grantor shall promptly notify the Administrative Agent thereof
in writing and supplement Schedule 7, therein providing a reasonable description
and

 

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summary thereof, and upon delivery thereof to the Administrative Agent, such
Grantor shall be deemed to thereby grant to the Administrative Agent (and such
Grantor hereby grants to the Administrative Agent) a security interest and lien
in and to such commercial tort claim and all proceeds thereof, all upon the
terms of and governed by this Agreement.

(d) Without limiting the generality of the foregoing, if any Grantor at any time
has knowledge that it holds or acquires an interest in any electronic chattel
paper or any “transferable record”, as that term is defined in Section 201 of
the federal Electronic Signatures in Global and National Commerce Act, or in §16
of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify the Administrative Agent
thereof and, at the request of the Administrative Agent, shall take such action
as the Administrative Agent may reasonably request to vest in the Administrative
Agent “control” under Section 9-105 of the UCC of such electronic chattel paper
or control under Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, §16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such transferable
record. The Administrative Agent agrees with the Grantors that the
Administrative Agent will arrange, pursuant to procedures satisfactory to the
Administrative Agent and so long as such procedures will not result in the
Administrative Agent’s loss of control, for the Grantors to make alterations to
the electronic chattel paper or transferable record permitted under
Section 9-105 of the UCC or, as the case may be, Section 201 of the federal
Electronic Signatures in Global and National Commerce Act or §16 of the Uniform
Electronic Transactions Act for a party in control to make without loss of
control, unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by any Grantor with respect to such
electronic chattel paper or transferable record.

SECTION 6 REMEDIAL PROVISIONS.

6.1 Certain Matters Relating to Receivables. (a) At any time and from time to
time after the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
At any time and from time to time after the occurrence and during the
continuance of an Event of Default, upon the Administrative Agent’s request and
at the expense of the relevant Grantor, such Grantor shall cause independent
public accountants or others satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, agings and test
verifications of, and trial balances for, the Receivables.

(b) The Administrative Agent hereby authorizes each Grantor to collect such
Grantor’s Receivables, and the Administrative Agent may curtail or terminate
such authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (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 if required,
in a collateral account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
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Administrative Agent and the Lenders only as provided in Section 6.5, and
(ii) until so turned over, shall be held by such Grantor in trust for the
Administrative Agent, the Australian Administrative Agent and the Lenders,
segregated from other funds of such Grantor. Each such deposit of Proceeds of
Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.

(c) At any time and from time to time after the occurrence and during the
continuance of an Event of Default, at the Administrative Agent’s request, each
Grantor shall deliver to the Administrative Agent all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Receivables, including all original orders, invoices and
shipping receipts.

(d) Each Grantor hereby irrevocably authorizes and empowers the Administrative
Agent, in the Administrative Agent’s sole discretion, at any time after the
occurrence and during the continuance of an Event of Default, to assert, either
directly or on behalf of such Grantor, any claim such Grantor may from time to
time have against the sellers under or with respect to the Assigned Agreements
and to receive and collect any and all damages, awards and other monies
resulting therefrom and to apply the same to the Obligations. Each Grantor
hereby irrevocably makes, constitutes and appoints the Administrative Agent as
its true and lawful attorney in fact for the purpose of enabling the
Administrative Agent to assert and collect such claims and to apply such monies
in the manner set forth above, which appointment, being coupled with an
interest, is irrevocable.

6.2 Communications with Obligors; Grantors Remain Liable. (a) The Administrative
Agent in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Administrative Agent’s
satisfaction the existence, amount and terms of any Receivables.

(b) Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Administrative Agent for the ratable benefit of itself, the Australian
Administrative Agent and the Lenders and that payments in respect thereof shall
be made directly to the Administrative Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable in respect of each of the Receivables 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. Neither the
Administrative Agent, the Australian Administrative Agent nor any Lender shall
have any obligation or liability under any Receivable (or any agreement giving
rise thereto) by reason of or arising out of this Agreement or the receipt by
the Administrative Agent, the Australian Administrative Agent or any Lender of
any payment relating thereto, nor shall the Administrative Agent, the Australian
Administrative Agent or any Lender be obligated in any manner to perform any of
the obligations of any Grantor under or pursuant to any Receivable (or any
agreement giving rise thereto), to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.

 

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(d) For the purpose of enabling the Administrative Agent to exercise rights and
remedies under this Agreement, each Grantor hereby grants to the Administrative
Agent, for the benefit of the Administrative Agent, the Australian
Administrative Agent and the Lenders an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to such Grantor)
to use, license or sublicense, at any time in which an Event of Default has
occurred and is continuing, any Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof.

6.3 Investment Property. (a) Unless an Event of Default shall have occurred and
be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent’s intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends and distributions paid in respect of the Pledged
Equity and all payments made in respect of the Pledged Notes, to the extent
permitted in the Credit Agreement, and to exercise all voting and other rights
with respect to the Investment Property; provided, that no vote shall be cast or
other right exercised or action taken which could impair the Collateral or which
would be inconsistent with or result in any violation of any provision of the
Credit Agreement, this Agreement or any other Loan Document.

(b) If an Event of Default shall occur and be continuing and the Administrative
Agent shall give notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Administrative Agent shall have the right to
receive any and all cash dividends and distributions, payments or other Proceeds
paid in respect of the Investment Property and make application thereof to the
Obligations in such order as the Administrative Agent may determine, and
(ii) any or all of the Investment Property shall be registered in the name of
the Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (x) all voting and other rights pertaining to
such Investment Property at any meeting of holders of the equity interests of
the relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other structure
of any Issuer, or upon the exercise by any Grantor or the Administrative Agent
of any right, privilege or option pertaining to such Investment Property, and in
connection therewith, the right to deposit and deliver any and all of the
Investment Property with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Administrative
Agent may determine), all without liability except to account for property
actually received by it, but the Administrative Agent shall have no duty to any
Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.

 

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(c) Each Grantor hereby authorizes and instructs each Issuer of any Investment
Property pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Administrative Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying and (ii) unless otherwise expressly permitted
hereby, pay any dividends, distributions or other payments with respect to the
Investment Property directly to the Administrative Agent.

6.4 Proceeds to be Turned Over to Administrative Agent. In addition to the
rights of the Administrative Agent, the Australian Administrative Agent and the
Lenders specified in Section 6.1 with respect to payments of Receivables, if an
Event of Default shall occur and be continuing, all Proceeds received by any
Grantor consisting of cash, checks and other cash equivalent items shall be held
by such Grantor in trust for the Administrative Agent, the Australian
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a collateral account maintained under its sole dominion
and control. All Proceeds, while held by the Administrative Agent in any
collateral account (or by such Grantor in trust for the Administrative Agent,
the Australian Administrative Agent and the Lenders) established pursuant
hereto, shall continue to be held as collateral security for the Secured
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.

6.5 Application of Proceeds. The Administrative Agent shall apply all or any
part of Proceeds from the sale of, or other realization upon, all or any part of
the Collateral in payment of the Secured Obligations as set forth in
Section 8.03 of the Credit Agreement.

6.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of itself, the Australian
Administrative Agent and the Lenders, may exercise, in addition to all other
rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under the UCC or any
other applicable law. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent, the Australian Administrative Agent
or any Lender 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 with assumption of any credit risk. The Administrative Agent,
the Australian Administrative Agent or any Lender shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such

 

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private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each Grantor further agrees, at the
Administrative Agent’s request, to assemble the Collateral and make it available
to the Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at such Grantor’s premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Administrative Agent, the Australian Administrative Agent and
the Lenders hereunder, including attorney costs to the payment in whole or in
part of the Secured Obligations, in such order as the Administrative Agent may
elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law, need
the Administrative Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent, the Australian
Administrative Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.

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

(b) 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 all or any
portion of the Pledged Equity pursuant to this Section 6.7 valid and binding and
in compliance with applicable law. Each Grantor further agrees that a breach of
any of the covenants contained in this Section 6.7 will cause irreparable injury
to the Administrative Agent, the Australian Administrative Agent and the
Lenders, that the Administrative Agent, the Australian Administrative Agent and
the Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.

6.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert any rights
or privileges which it may acquire under Section 9-626 of the UCC. Each Grantor
shall

 

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remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Secured Obligations in
full and the fees and disbursements of any attorneys employed by the
Administrative Agent, the Australian Administrative Agent or any Lender to
collect such deficiency.

SECTION 7 THE ADMINISTRATIVE AGENT.

7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent 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 this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of and at the expense of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Receivable or with respect
to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys due
under any Receivable or with respect to any other Collateral whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent’s security
interest in such Intellectual Property and the goodwill and general intangibles
of such Grantor relating thereto or represented thereby;

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

(iv) execute, in connection with any sale provided for in Section 6.6 or 6.7,
any indorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and

(v) (1) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct; (2) ask or
demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (3) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other

 

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documents in connection with any of the Collateral; (4) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (5) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral;
(6) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark,
throughout the world for such term or terms, on such conditions, and in such
manner, as the Administrative Agent shall in its sole discretion determine;
(8) vote any right or interest with respect to any Investment Property;
(9) order good standing certificates and conduct lien searches in respect of
such jurisdictions or offices as the Administrative Agent may deem appropriate;
and (10) generally sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Administrative Agent were the absolute owner thereof for all purposes, and
do, at the Administrative Agent’s option and such Grantor’s expense, at any
time, or from time to time, all acts and things which the Administrative Agent
deems necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.

Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

(c) Each Grantor hereby ratifies all that such attorneys shall lawfully do or
cause to be done by virtue hereof. 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.

7.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither
the Administrative Agent, the Australian Administrative Agent or any Lender nor
any of their respective officers, directors, employees or agents shall be liable
for any failure to demand, collect or realize upon any of the Collateral or for
any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Administrative Agent, the Australian
Administrative Agent and the Lenders hereunder are solely to protect the
Administrative Agent’s, the Australian Administrative Agent and the Lenders’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent, the Australian Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent, the Australian
Administrative Agent and the Lenders shall be accountable only for amounts that
they

 

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actually receive as a result of the exercise of such powers, and neither they
nor any of their officers, directors, employees or agents shall be responsible
to any Grantor for any act or failure to act hereunder.

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, the Australian
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Australian Administrative Agent and the Lenders 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.

SECTION 8 MISCELLANEOUS.

8.1 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 10.01 of the Credit Agreement.

8.2 Notices. All notices, requests and demands to or upon the Administrative
Agent or any Grantor hereunder shall be addressed to the Company and effected in
the manner provided for in Section 10.02 of the Credit Agreement and each
Grantor hereby appoints the Company as its agent to receive notices hereunder.

8.3 Indemnification by Grantors. THE GRANTORS, JOINTLY AND SEVERALLY, HEREBY
AGREE TO INDEMNIFY, EXONERATE AND HOLD THE ADMINISTRATIVE AGENT, THE AUSTRALIAN
ADMINISTRATIVE AGENT AND EACH LENDER FREE AND HARMLESS FROM AND AGAINST ANY AND
ALL INDEMNIFIED LIABILITIES, INCURRED BY THE ADMINISTRATIVE AGENT, THE
AUSTRALIAN ADMINISTRATIVE AGENT AND THE LENDERS OR ANY OF THEM AS A RESULT OF,
OR ARISING OUT OF, OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF
EQUITY INTERESTS, PURCHASE OF ASSETS OR OTHER SIMILAR TRANSACTION FINANCED OR
PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE
PROCEEDS OF ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE, EMISSION,
DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS
SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY GRANTOR, (C) ANY VIOLATION OF
ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR
LEASED BY ANY GRANTOR OR THE OPERATIONS CONDUCTED THEREON, (D) THE
INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY LOAN
PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR
INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION, DELIVERY,
PERFORMANCE OR

 

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ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY ANY OF THE
ADMINISTRATIVE AGENT, THE AUSTRALIAN ADMINISTRATIVE AGENT AND THE LENDERS,
EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES ARISING ON ACCOUNT OF THE
ADMINISTRATIVE AGENT, THE AUSTRALIAN ADMINISTRATIVE AGENT OR THE APPLICABLE
LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A FINAL,
NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION. IF AND TO THE
EXTENT THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, EACH
GRANTOR HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND
SATISFACTION OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER
APPLICABLE LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 8.3 SHALL SURVIVE
REPAYMENT OF ALL (AND SHALL BE) SECURED OBLIGATIONS (AND TERMINATION OF ALL
COMMITMENTS UNDER THE CREDIT AGREEMENT), ANY FORECLOSURE UNDER, OR ANY
MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS
AND TERMINATION OF THIS AGREEMENT.

8.4 Enforcement Expenses. (a) Each Grantor agrees, on a joint and several basis,
to pay or reimburse on demand each Lender, the Australian Administrative Agent
and the Administrative Agent for all reasonable out-of-pocket costs and expenses
(including attorney costs) incurred in collecting against any Guarantor under
the guaranty contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents.

(b) Each Grantor agrees to pay, and to save the Administrative Agent, the
Australian Administrative Agent and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.

(c) The agreements in this Section 8.4 shall survive repayment of all (and shall
be) Secured Obligations (and termination of all commitments under the Credit
Agreement), any foreclosure under, or any modification, release or discharge of,
any or all of the Collateral Documents and termination of this Agreement.

8.5 Captions. Section captions used in this Agreement are for convenience only
and shall not affect the construction of this Agreement.

8.6 Nature of Remedies. All Secured Obligations of each Grantor and rights of
the Administrative Agent, the Australian Administrative Agent and the Lenders
expressed herein or in any other Loan Document shall be in addition to and not
in limitation of those provided by applicable law. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent, the Australian
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.

 

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8.7 Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Agreement. Receipt by telecopy of any
executed signature page to this Agreement or any other Loan Document shall
constitute effective delivery of such signature page.

8.8 Severability. The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in any way
affect or impair the legality or enforceability of the remaining provisions of
this Agreement or any instrument or agreement required hereunder.

8.9 Entire Agreement. This Agreement, together with the other Loan Documents,
embodies the entire agreement and understanding among the parties hereto and
supersedes all prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof
and any prior arrangements made with respect to the payment by any Grantor of
(or any indemnification for) any fees, costs or expenses payable to or incurred
(or to be incurred) by or on behalf of the Administrative Agent, the Australian
Administrative Agent or the Lenders.

8.10 Successors; Assigns. This Agreement shall be binding upon Grantors, the
Lenders, the Australian Administrative Agent and the Administrative Agent and
their respective successors and assigns, and shall inure to the benefit of
Grantors, Lenders, the Australian Administrative Agent and the Administrative
Agent and the successors and assigns of the Lenders, the Australian
Administrative Agent and the Administrative Agent. No other Person shall be a
direct or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the other Loan
Documents. No Grantor may assign or transfer any of its rights or Obligations
under this Agreement without the prior written consent of the Administrative
Agent.

8.11 Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

8.12 Forum Selection; Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE
ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION. EACH GRANTOR HEREBY EXPRESSLY

 

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AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH GRANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

8.13 Waiver of Jury Trial. EACH GRANTOR, THE ADMINISTRATIVE AGENT, THE
AUSTRALIAN ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

8.14 Set-off. Each Grantor agrees that the Administrative Agent, the Australian
Administrative Agent and each Lender have all rights of set-off and bankers’
lien provided by applicable law, and in addition thereto, each Grantor agrees
that at any time any Event of Default exists, the Administrative Agent, the
Australian Administrative Agent and each Lender may apply to the payment of any
Secured Obligations, whether or not then due, any and all balances, credits,
deposits, accounts or moneys of such Grantor then or thereafter with the
Administrative Agent, the Australian Administrative Agent or such Lender.

8.15 Acknowledgements. Each Grantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;

(b) neither the Administrative Agent, the Australian Administrative Agent nor
any Lender has any fiduciary relationship with or duty to any Grantor arising
out of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Grantors, on the one hand, and the
Administrative Agent, the Australian Administrative Agent and the Lenders, on
the other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.

8.16 Additional Grantors. Each Loan Party that is required to become a party to
this Agreement pursuant to Section 6.13 of the Credit Agreement shall become a
Grantor for all purposes of this Agreement upon execution and delivery by such
Loan Party of a joinder agreement in the form of Annex I hereto.

 

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8.17 Releases. (a) At such time as the Secured Obligations have been Paid in
Full, the Collateral shall be released from the Liens 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. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to the Grantors any Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantors such
documents as the Grantors shall reasonably request to evidence such termination.

(b) If any of the Collateral shall be sold, transferred or otherwise disposed of
by any Grantor in a transaction permitted by the Credit Agreement, then the
Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral. At the request and sole expense of the Company, a Guarantor shall be
released from its obligations hereunder in the event that all the equity
interests of such Guarantor shall be sold, transferred or otherwise disposed of
in a transaction permitted by the Credit Agreement; provided that the Company
shall have delivered to the Administrative Agent, with reasonable notice prior
to the date of the proposed release, a written request for release identifying
the relevant Guarantor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Company stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.

8.18 Obligations and Liens Absolute and Unconditional. Each Grantor understands
and agrees that the obligations of each Grantor under this Agreement shall be
construed as a continuing, absolute and unconditional without regard to (a) the
validity or enforceability of any Loan Document, any of the Secured Obligations
or any other collateral security therefor or guaranty or right of offset with
respect thereto at any time or from time to time held by the Administrative
Agent, the Australian Administrative Agent or any Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by any Grantor or any other
Person against the Administrative Agent, the Australian Administrative Agent or
any Lender, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of any Grantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of any Grantor for the Secured
Obligations, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Grantor, the Administrative Agent, the Australian Administrative Agent or any
Lender may, but shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as it may have against any other
Grantor or any other Person or against any collateral security or guaranty for
the Secured Obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent, the Australian Administrative Agent or any
Lender to make any such demand, to pursue such other rights or remedies or to
collect any payments from any other Grantor or any other Person or to realize
upon any such collateral security or guaranty or to

 

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exercise any such right of offset, or any release of any other Grantor or any
other Person or any such collateral security, guaranty or right of offset, shall
not relieve any Grantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent, the Australian Administrative
Agent or any Lender against any Grantor. For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.

8.19 Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against Grantor or
any Issuer for liquidation or reorganization, should Grantor or any Issuer
become insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of Grantor’s or
and Issuer’s assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a “voidable preference”, “fraudulent conveyance”, or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.

[signature pages follow]

 

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Each of the undersigned has caused this Guaranty and Collateral Agreement to be
duly executed and delivered as of the date first above written.

 

MULTI-COLOR CORPORATION By:  

/s/ Mary T. Fetch

Title:   Treasurer MCC-BATAVIA, LLC By:  

/s/ Mary T. Fetch

Title:   Treasurer MCC-TROY, LLC By:  

/s/ Mary T. Fetch

Title:   Treasurer LASER GRAPHIC SYSTEMS, INCORPORATED By:  

/s/ Mary T. Fetch

Title:   Treasurer MCC-DEC TECH, LLC By:  

/s/ Mary T. Fetch

Title:   Treasurer MCC-WISCONSIN, LLC By:  

/s/ Mary T. Fetch

Title:   Treasurer

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

MCC-NORWAY, INC. By:  

/s/ Mary T. Fetch

Title:   Treasurer MCC-UNIFLEX LLC By:  

/s/ Mary T. Fetch

Title:   Treasurer MCC-FINANCE LLC By:  

/s/ Mary T. Fetch

Title:   Treasurer COLLOTYPE LABELS USA INC. By:  

/s/ Mary T. Fetch

Title:   Treasurer BANK OF AMERICA, N.A., as Administrative Agent By:  

/s/ Carol G. Alm

Title:   Assistant Vice President

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

SCHEDULE 1

INVESTMENT PROPERTY

 

A. PLEDGED EQUITY

 

Grantor (owner of
Record of such
Pledged Equity)

  

Issuer

  

Pledged
Equity
Description

  

Percentage
of Issuer

  

Certificate
(Indicate
No.)

                                   

 

B. PLEDGED NOTES

 

Grantor (owner of Record

of such Pledged Notes)

  

Issuer

  

Pledged Notes
Description

                 

 

C. OTHER INVESTMENT PROPERTY

 

Grantor

  

Investment Property Description

        

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

SCHEDULE 2

FILINGS AND PERFECTION

 

GRANTOR

  

FILING REQUIREMENT

OR OTHER ACTION

  

FILING OFFICE

                                                                                
                                

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

SCHEDULE 3

GRANTOR INFORMATION

 

GRANTOR

(exact legal name)

  

STATE OF
ORGANIZATION

  

FEDERAL
EMPLOYER
IDENTIFICATION
NUMBER

  

CHIEF EXECUTIVE
OFFICE

                                                                                
                                                                                

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SCHEDULE 4

A. COLLATERAL LOCATIONS

 

GRANTOR

  

COLLATERAL

  

COLLATERAL

LOCATION

OR PLACE OF BUSINESS
(INCLUDING CHIEF

EXECUTIVE OFFICE)

  

OWNER/LESSOR

(IF LEASED)

                                                                       

B. COLLATERAL IN POSSESSION OF LESSOR, BAILEE, CONSIGNEE OR WAREHOUSEMAN

 

GRANTOR

  

COLLATERAL

  

LESSOR/BAILEE/CONSIGNEE/
WAREHOUSEMAN

                             

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SCHEDULE 5

INTELLECTUAL PROPERTY

Patents and Patent Licenses

 

Grantor

  

Patent
Number

  

Patent Application
Number

  

Date
Patent
Issued

  

Date
Patent
Applied

                                               

Trademarks and Trademark Licenses

 

Grantor

  

Trademark
Number

  

Trademark
Application
Number

  

Trademark
Registration
Number

  

Date of
Application

  

Date of
Registration

                                                                          

Copyrights

 

Grantor

  

Copyright
Title

  

Copyright
Application

  

Copyright
Registration

Number

  

Copyright

Application
Number

                                   

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SCHEDULE 6

DEPOSITARY AND OTHER DEPOSIT ACCOUNTS

 

GRANTOR

  

FINANCIAL
INSTITUTION

  

ACCOUNT
NUMBER

  

CONTACT
INFORMATION

                                                                       

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SCHEDULE 7

COMMERCIAL TORT CLAIMS

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ANNEX I

FORM OF JOINDER TO GUARANTY AND COLLATERAL AGREEMENT

This JOINDER AGREEMENT (this “Agreement”) dated as of [            ] is executed
by the undersigned for the benefit of Bank of America, N.A., as the
Administrative Agent (the “Administrative Agent”), in connection with that
certain Guaranty and Collateral Agreement dated as of February 29, 2008 among
the Grantors party thereto and the Administrative Agent (as amended, restated,
supplemented or modified from time to time, the “Guaranty and Collateral
Agreement”). Capitalized terms not otherwise defined herein are being used
herein as defined in the Guaranty and Collateral Agreement.

Each Person signatory hereto is required to execute this Agreement pursuant to
Section 8.16 of the Guaranty and Collateral Agreement.

In consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each signatory hereby
agrees as follows:

1. Each such Person assumes all the obligations of a Grantor and a Guarantor
under the Guaranty and Collateral Agreement and agrees that such person or
entity is a Grantor and a Guarantor and bound as a Grantor and a Guarantor under
the terms of the Guaranty and Collateral Agreement, as if it had been an
original signatory to such agreement. In furtherance of the foregoing, such
Person hereby assigns, pledges and grants to the Administrative Agent a security
interest in all of its right, title and interest in and to the Collateral owned
thereby to secure the Secured Obligations.

2. Schedules 1, 2, 3, 4, 5, 6, and 7 of the Guaranty and Collateral Agreement
are hereby amended to add the information relating to each such Person set out
on Schedules 1, 2, 3, 4, 5, 6, and 7 respectively, hereof. Each such Person
hereby makes to the Administrative Agent the representations and warranties set
forth in the Guaranty and Collateral Agreement applicable to such Person and the
applicable Collateral and confirms that such representations and warranties are
true and correct in all material respects after giving effect to such amendment
to such Schedules.

3. In furtherance of its obligations under Section 5.2 of the Guaranty and
Collateral Agreement, each such Person agrees to deliver to the Administrative
Agent appropriately complete UCC financing statements naming such person or
entity as debtor and the Administrative Agent as secured party, and describing
its Collateral and such other documentation as the Administrative Agent (or its
successors or assigns) may reasonably require to evidence, protect and perfect
the Liens created by the Guaranty and Collateral Agreement, as modified hereby.
Each such Person acknowledges the authorizations given to the Administrative
Agent under the Section 5.10(b) of the Guaranty and Collateral Agreement and
otherwise.

4. Each such Person’s address for notices under the Guaranty and Collateral
Agreement shall be the address of the Company set forth in the Credit Agreement
and each such Person hereby appoints the Company as its agent to receive notices
hereunder.

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5. This Agreement shall be deemed to be part of, and a modification to, the
Guaranty and Collateral Agreement and shall be governed by all the terms and
provisions of the Guaranty and Collateral Agreement, with respect to the
modifications intended to be made to such agreement, which terms are
incorporated herein by reference, are ratified and confirmed and shall continue
in full force and effect as valid and binding agreements of each such person or
entity enforceable against such person or entity. Each such Person hereby waives
notice of the Administrative Agent’s acceptance of this Agreement. Each such
Person will deliver an executed original of this Agreement to the Administrative
Agent.

6. This Agreement shall be a contract made under and governed by the internal
laws of the State of New York applicable to contracts made and to be performed
entirely within such State, without regard to conflicts of laws principles
(other than Section 5-1401 of the New York General Obligations Law).

7. This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement. Receipt by telecopy of any executed
signature page to this Agreement or any other Loan Document shall constitute
effective delivery of such signature page.

[add signature block for each new Grantor]