Exhibit 10.2

 

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

Dated as of September 15, 2015,

made by

MONOTYPE IMAGING INC.,

MONOTYPE IMAGING HOLDINGS INC.

and the other Grantors referred to herein,

in favor of

SILICON VALLEY BANK,

as Administrative Agent

 

 

 

 

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TABLE OF CONTENTS

 

          Page  

SECTION 1.

   DEFINED TERMS      1   

1.1

   Definitions      1   

1.2

   Other Definitional Provisions      5   

SECTION 2.

   GUARANTEE      5   

2.1

   Guarantee      5   

2.2

   Right of Contribution      7   

2.3

   No Subrogation      7   

2.4

   Amendments, etc      7   

2.5

   Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents
     7   

2.6

   Reinstatement      9   

2.7

   Payments      10   

SECTION 3.

   GRANT OF SECURITY INTEREST      10   

3.1

   Grant of Security Interests      10   

3.2

   Grantors Remains Liable      11   

3.3

   Perfection and Priority      12   

SECTION 4.

   REPRESENTATIONS AND WARRANTIES      13   

4.1

   Title; No Other Liens      13   

4.2

   Perfected Liens      13   

4.3

   Jurisdiction of Organization; Chief Executive Office and Locations of Books
     14   

4.4

   Inventory and Equipment      14   

4.5

   Farm Products      14   

4.6

   Pledged Collateral      14   

4.7

   Investment Accounts      14   

4.8

   Receivables      15   

4.9

   Intellectual Property      15   

4.10

   Instruments      17   

4.11

   Letter of Credit Rights      17   

4.12

   Commercial Tort Claims      17   

SECTION 5.

   COVENANTS      17   

5.1

   Delivery of Instruments, Certificated Securities and Chattel Paper      17   

5.2

   Maintenance of Insurance      17   

5.3

   Maintenance of Perfected Security Interest; Further Documentation      17   

5.4

   Changes in Locations, Name, Etc      18   

5.5

   Notices      18   

5.6

   Instruments; Investment Property      18   

5.7

   Securities Accounts; Deposit Accounts      19   

5.8

   Intellectual Property      20   

5.9

   Receivables      23   

5.10

   Defense of Collateral      23   

5.11

   Preservation of Collateral      23   

5.12

   Compliance with Laws, Etc      23   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

5.13

   Location of Books and Chief Executive Office      23   

5.14

   Location of Collateral      23   

5.15

   Maintenance of Records      24   

5.16

   Disposition of Collateral      24   

5.17

   Liens      24   

5.18

   Expenses      24   

5.19

   Leased Premises; Collateral Held by Warehouseman, Bailee, Etc      24   

5.20

   Chattel Paper      24   

5.21

   Commercial Tort Claims      24   

5.22

   Letter-of-Credit Rights      24   

5.23

   Shareholder Agreements and Other Agreements      24   

SECTION 6.

   REMEDIAL PROVISIONS      25   

6.1

   Certain Matters Relating to Receivables      25   

6.2

   Communications with Obligors; Grantors Remain Liable      25   

6.3

   Investment Property      26   

6.4

   Proceeds to be Turned Over To Administrative Agent      27   

6.5

   Application of Proceeds      27   

6.6

   Code and Other Remedies      27   

6.7

   Registration Rights      28   

6.8

   Intellectual Property License      29   

6.9

   Deficiency      29   

SECTION 7.

   THE ADMINISTRATIVE AGENT      29   

7.1

   Administrative Agent’s Appointment as Attorney-in-Fact, etc      29   

7.2

   Duty of Administrative Agent      31   

7.3

   Authority of Administrative Agent      31   

SECTION 8.

   MISCELLANEOUS      31   

8.1

   Amendments in Writing      31   

8.2

   Notices      31   

8.3

   No Waiver by Course of Conduct; Cumulative Remedies      31   

8.4

   Enforcement Expenses; Indemnification      32   

8.5

   Successors and Assigns      32   

8.6

   Set Off      32   

8.7

   Counterparts      33   

8.8

   Severability      33   

8.9

   Section Headings      33   

8.10

   Integration      33   

8.11

   GOVERNING LAW      33   

8.12

   Submission To Jurisdiction; Waivers      33   

8.13

   Acknowledgements      34   

8.14

   Additional Grantors      34   

8.15

   Releases      34   

8.16

   WAIVER OF JURY TRIAL      34   

 

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TABLE OF CONTENTS

(continued)

 

SCHEDULES

 

Schedule 1    Notice Addresses Schedule 2    Investment Property Schedule 3   
Perfection Matters Schedule 4    Jurisdictions of Organization and Chief
Executive Offices, etc. Schedule 5    Equipment and Inventory Locations Schedule
6    Intellectual Property Schedule 7    Letter of Credit Rights Schedule 8   
Commercial Tort Claims

ANNEXES

 

Annex 1    Form of Assumption Agreement Annex 2    Form of Pledge Supplement

 

Guarantee & Collateral Agreement          iii   

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GUARANTEE AND COLLATERAL AGREEMENT

This GUARANTEE AND COLLATERAL AGREEMENT (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time, this
“Agreement”), dated as of September 15, 2015, is made by each of the signatories
hereto (together with any other entity that may become a party hereto as
provided herein, each a “Grantor” and, collectively, the “Grantors”), in favor
of SILICON VALLEY BANK, as administrative agent (together with its successors,
in such capacity, the “Administrative Agent”) for the banks and other financial
institutions or entities (each a “Lender” and, collectively, the “Lenders”) from
time to time parties to that certain Credit Agreement, dated as of the date
hereof (as amended, amended and restated, supplemented, restructured or
otherwise modified, renewed or replaced from time to time, the “Credit
Agreement”), among Monotype Imaging Inc., a Delaware corporation (“Borrower”),
Monotype Imaging Holdings Inc., a Delaware corporation (“Holdings”), the Lenders
party thereto and the Administrative Agent.

INTRODUCTORY STATEMENTS

WHEREAS, Holdings and the Borrower are members of an affiliated group of
companies that includes each other Grantor;

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the Borrower to make valuable transfers to one or
more of the other Grantors in connection with the operation of their respective
business;

WHEREAS, certain of the Qualified Counterparties may enter into Specified Swap
Agreements with the Borrower;

WHEREAS, Holdings, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor derives substantial direct and indirect benefit
from the extensions of credit under the Credit Agreement and from the Specified
Swap Agreements; and

WHEREAS, it is a condition precedent to the Closing Date that the Grantors shall
have executed and executed and delivered this Agreement in favor of the
Administrative Agent for the ratable benefit of the Secured Parties.

NOW, THEREFORE, in consideration of the above premises, the parties hereto
hereby agree as follows:

SECTION 1.    Defined Terms.

1.1 Definitions.

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the respective meanings given to such terms in the Credit
Agreement, and the following terms are used herein as defined in the UCC:
Account, Certificated Security, Chattel Paper, Commercial Tort Claim, Commodity
Account, Document, Electronic Chattel Paper, Equipment, Farm Products, Fixtures,
General Intangible, Goods, Instrument, Inventory, Letter-of-Credit Rights,
Money, Securities Account and Supporting Obligation.

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

“Agreement”: as defined in the preamble hereto.

 

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“Books”: all books, records and other written, electronic or other documentation
in whatever form maintained now or hereafter by or for any Grantor in connection
with the ownership of its assets or the conduct of its business or evidencing or
containing information relating to the Collateral, including: (a) ledgers;
(b) records indicating, summarizing, or evidencing such Grantor’s assets
(including Inventory and Rights to Payment), business operations or financial
condition; (c) computer programs and software; (d) computer discs, tapes, files,
manuals, spreadsheets; (e) computer printouts and output of whatever kind;
(f) any other computer prepared or electronically stored, collected or reported
information of any kind; and (g) any and all other rights now or hereafter
arising out of any contract or agreement between such Grantor and any service
bureau, computer or data processing company or other Person charged with
preparing or maintaining any of such Grantor’s books or records or with credit
reporting, including with regard to any of such Grantor’s Accounts.

“Borrower”: as defined in the preamble hereto.

“Collateral”: as defined in Section 3.1.

“Collateral Account”: any collateral account established by the Administrative
Agent as provided in Section 6.1 or 6.4.

“Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as
amended from time to time, and any successor statute.

“Copyright License”: any written agreement which (a) names a Grantor as licensor
or licensee (including those listed on Schedule 6), or (b) grants any right
under any Copyright to a Grantor, including any rights to manufacture,
distribute, exploit and sell materials derived from any Copyright (other than
with respect to commercial off-the-shelf software).

“Copyrights”: (a) all copyrights arising under the laws of the United States,
any other country or any political subdivision thereof, together with the
underlying works of authorship (including titles), whether registered or
unregistered and whether published or unpublished (including those listed on
Schedule 6), all computer programs, computer databases, computer program flow
diagrams, source codes, object codes and all tangible property embodying or
incorporating any copyrights, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, all
registrations, recordings and applications in the USCRO, and (b) the right to
obtain any renewals thereof.

“Deposit Account”: as defined in the Uniform Commercial Code of any applicable
jurisdiction and, in any event, including any demand, time, savings, passbook or
like account maintained with a depositary institution.

“Discharge of Obligations”: as defined in the Credit Agreement.

“Domestic Foreign Holding Subsidiary”: any Subsidiary that (a) is incorporated
or organized under the laws of the United States or of any State thereof
(including the District of Columbia) solely for the purpose of owning the
Capital Stock or other ownership interests of one or more Foreign Subsidiaries,
(b) has no substantial assets other than the Capital Stock or other ownership
interests of such Foreign Subsidiaries, and (c) has no direct or indirect
Subsidiaries other than Foreign Subsidiaries.

“Excluded Accounts”: collectively, (a) payroll accounts, escrow accounts,
fiduciary accounts, trust accounts and other accounts held exclusively for the
benefit of an unaffiliated third party, including tax escrow accounts, and
employee benefits accounts maintained in the ordinary course of business,
(b) any other Deposit Account, Securities Account or Commodities Account of any
Grantor that is not otherwise described in clause (a) of this definition which,
individually or collectively with any other Deposit Account, Securities Account
or Commodities Account included in this clause (b), has an balance at any time
of not greater than $1,000,000 in the aggregate.

 

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“Excluded Assets”: collectively,

(a) Equipment owned by any Grantor on the date hereof or hereafter acquired that
is subject to a Lien securing a purchase money obligation or Capital Lease
Obligation not prohibited by the terms of the Credit Agreement if the contract
or other agreement pursuant to which such Lien is granted (or the documentation
providing for such purchase money obligation or Capital Lease Obligation)
validly prohibits the creation of any other Lien on such Equipment and proceeds
of such Equipment;

(b) any Collateral with respect to which the Administrative Agent has
determined, in consultation with the Borrower, that the costs of obtaining a
security interest in such Collateral are excessive in relation to the benefits
provided to the Secured Parties by such security interest;

(c) any leasehold interests of any Grantor;

(d) margin stock (within the meaning of Regulation U issued by the Board) to the
extent the creation of a security interest therein in favor of the
Administrative Agent (for the ratable benefit of the Secured Parties) will
result in a violation of Regulation U issued by the Board;

(e) any Excluded Account;

(f) motor vehicles and other equipment covered by certificates of title; and

(g) any asset of, or capital stock of, any direct or indirect Foreign Subsidiary
or a Domestic Foreign Holding Subsidiary, other than Capital Stock representing
up to 65% of the total outstanding voting Capital Stock of any First-Tier
Foreign Subsidiary, provided, that immediately upon the amendment of the Code to
allow for the pledge of a greater percentage of voting Capital Stock in such
Subsidiary without the possibility of any adverse tax consequences, such pledge
shall include such greater percentage of capital Stock of such Subsidiary from
that time forward); provided, however, that the Grantors agree and acknowledge
that the pledge of 65% of the voting Capital Stock and 100% of the non-voting
Capital Stock of the German Subsidiary and the UK Subsidiary shall be governed
by the German Security Documents and the UK Security Documents, respectively;

and provided, further, that any Proceeds, substitutions or replacements of any
Excluded Assets shall not be Excluded Assets (unless such Proceeds,
substitutions or replacements are otherwise, in and of themselves, Excluded
Assets).

“Grantor”: as defined in the preamble hereto.

“Guarantor”: as defined in Section 2.1(a).

“Intellectual Property Licenses”: with respect to any Grantor, collectively,
Copyright Licenses, Trademark Licenses and Patent Licenses of such Grantor.

“Investment Account”: any of a Securities Account, a Commodity Account or a
Deposit Account.

“Investment Property”: the collective reference to (a) all “investment property”
as such term is defined in Section 9-102(a)(49) of the UCC (other than any
Excluded Assets), and (b) whether or not constituting “investment property” as
so defined, all Pledged Notes and all Pledged Collateral.

 

Guarantee & Collateral Agreement    3   

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“Issuer”: with respect to any Investment Property, the issuer of such Investment
Property.

“Minor Release”: any new version or release of a software program that consists
of only minor functionality updates, bug fixes, patches or defect corrections,
or any “a.0.x” releases.

“Patent License”: any written agreement which (a) names a Grantor as licensor or
licensee and (b) grants to such Grantor any right under a Patent, including the
right to manufacture, use or sell any invention covered in whole or in part by
such Patent, including any such agreements referred to on Schedule 6.

“Patents”: (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, without limitation, any of the
foregoing referred to on Schedule 6, (b) all applications for letters patent of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to on Schedule 6, and (c) all rights to obtain any reissues
or extensions of the foregoing.

“Pledged Collateral”: (a) any and all Pledged Stock; (b) all other Investment
Property of any Grantor; (c) all warrants, options or other rights entitling any
Grantor to acquire any interest in Capital Stock or other securities of the
direct or indirect Subsidiaries of such Grantor or of any other Person; (d) all
Instruments; (e) all securities, property, interest, dividends and other
payments and distributions issued as an addition to, in redemption of, in
renewal or exchange for, in substitution or upon conversion of, or otherwise on
account of, any of the foregoing; (f) all certificates and instruments now or
hereafter representing or evidencing any of the foregoing; (g) all rights,
interests and claims with respect to the foregoing, including under any and all
related agreements, instruments and other documents, and (h) all cash and
non-cash proceeds of any of the foregoing, in each case whether presently
existing or owned or hereafter arising or acquired and wherever located, and as
from time to time received or receivable by, or otherwise paid or distributed to
or acquired by, any Grantor.

“Pledged Collateral Agreements”: as defined in Section 5.23.

“Pledged Notes”: all promissory notes listed on Schedule 2 and all other
promissory notes issued to or held by any Grantor.

“Pledged Stock”: all of the Capital Stock, whether issued or outstanding,
certificated or uncertificated, of any Grantor’s direct Subsidiaries now or
hereafter owned by any such Grantor and including the Capital Stock listed on
Schedule 2 hereof (as amended or supplemented from time to time); provided that
the Pledged Stock shall not include any Excluded Assets.

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the UCC and, in any event, shall include, without limitation, all dividends or
other income from any Investment Property constituting Collateral and all
collections thereon or distributions or payments with respect thereto.

“Qualified ECP Guarantor”: in respect of any Specified Swap Obligation, each
Guarantor that has total assets exceeding $10,000,000 at the time the relevant
guaranty or grant of the relevant Lien becomes effective with respect to such
Specified Swap Obligation or constitutes an “eligible contract participant”
under the Commodity Exchange Act or any regulations promulgated thereunder and
can cause another person to qualify as an “eligible contract participant” at
such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

 

Guarantee & Collateral Agreement    4   

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“Receivable”: 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
Account).

“Required Library”: as of any date of determination, the Copyrights owned by any
of the Grantors that are based on or derived from each of those software
programs or other technology of any of the Grantors (other than custom software
programs that are sold for a one-time fee or customized for a single customer)
that in the aggregate, and on such date of determination, account for at least
(i) 50% of the total amount of the net product, subscription and royalty
revenues of the Loan Parties, and (ii) 90% of the total amount of revenues of
the “printer imaging business” of the Loan Parties, in each case for the fiscal
quarter period immediately preceding such date of determination.

“Rights to Payment”: any and all of any Grantor’s Accounts and any and all of
any Grantor’s rights and claims to the payment or receipt of money or other
forms of consideration of any kind in, to and under or with respect to its
Chattel Paper, Documents, General Intangibles, Instruments, Investment Property,
Letter-of-Credit Rights, Proceeds and Supporting Obligations.

“Secured Obligations”: collectively, the “Obligations”, as such term is defined
in the Credit Agreement; provided, however, that “Secured Obligations” shall not
include any Excluded Swap Obligation.

“Source Code Escrow Agreement”: a Source Code Escrow Agreement (including the
escrow deposit statement of work describing verification services to be
performed) executed and delivered by Agent, certain of the Grantors, and an
escrow agent reasonably satisfactory to Agent, in form and substance reasonably
satisfactory to Agent.

“Source Code Escrow Termination”: as defined in Section 5.8(m).

“Trademark License”: any written agreement which (a) names a Grantor as licensor
or licensee and (b) grants to such Grantor any right to use any Trademark, any
such agreement referred to on Schedule 6.

“Trademarks”: (a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos,
Internet domain names 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 USPTO 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,
without limitation, any of the foregoing referred to on Schedule 6, and (b) the
right to obtain all renewals thereof.

1.2 Other Definitional Provisions. The rules of interpretation set forth in
Section 1.2 of the Credit Agreement are by this reference incorporated herein,
mutatis mutandis, as if set forth herein in full.

SECTION 2.     Guarantee.

2.1 Guarantee.

(a) Each Grantor that has executed this Agreement as of the date hereof,
together with each Subsidiary of any Grantor who accedes to this Agreement as a
Grantor after the date hereof pursuant to Section 6.12 of the Credit Agreement
(each a “Guarantor” and, collectively, the “Guarantors”), hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the

 

Guarantee & Collateral Agreement    5   

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Administrative Agent, for the ratable benefit of the Secured Parties and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower and the other Loan Parties when
due (whether at the stated maturity, by acceleration or otherwise) of the
Secured Obligations. In furtherance of the foregoing, and without limiting the
generality thereof, each Guarantor agrees as follows (provided that no Foreign
Subsidiary and no Domestic Foreign Holding Subsidiary shall be required to be a
Guarantor):

(i) each Guarantor’s liability hereunder shall be the immediate, direct, and
primary obligation of such Guarantor and shall not be contingent upon the
Administrative Agent’s or any Secured Party’s exercise or enforcement of any
remedy it or they may have against the Borrower, any other Guarantor, any other
Person, or all or any portion of the Collateral; and

(ii) the Administrative Agent may enforce this guaranty notwithstanding the
existence of any dispute between any of the Secured Parties and the Borrower or
any other Guarantor with respect to the existence of any Event of Default.

(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 guaranteed
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 guarantee contained in this Section 2 or affecting the
rights and remedies of the Administrative Agent or any other Secured Party
hereunder.

(d) The guarantee contained in this Section 2 shall remain in full force and
effect until the Discharge of Obligations, notwithstanding that from time to
time during the term of the Credit Agreement the outstanding amount of the
Secured Obligations may be zero.

(e) No payment made by the Borrower, any Guarantor, any other guarantor or any
other Person or received or collected by the Administrative Agent or any other
Secured Party from the Borrower, any Guarantor, any other guarantor or any other
Person by virtue of any action or proceeding or any setoff or 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 Discharge of
Obligations.

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

 

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2.2 Right of Contribution. If in connection with any payment made by any
Guarantor hereunder any rights of contribution arise in favor of such Guarantor
against one or more other Guarantors, such rights 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 and the other Secured Parties, and each
Guarantor shall remain liable to the Administrative Agent and the other Secured
Parties for the full amount guaranteed by such Guarantor hereunder.

2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder
or any setoff or application of funds of any Guarantor by the Administrative
Agent or any other Secured Party, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any other Secured
Party against the Borrower or any other Guarantor or any Collateral or guarantee
or right of offset held by the Administrative Agent or any other Secured Party
for the payment of the Secured Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, in each
case, until the Discharge of Obligations. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time prior to the
Discharge of Obligations, such amount shall be held by such Guarantor in trust
for the Administrative Agent and the other Secured Parties, shall be 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 in such order as set forth in Section 6.5 hereof
irrespective of the occurrence or the continuance of any Event of Default.

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 or any other Secured Party may be rescinded by the
Administrative Agent or such Secured Party 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 guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any other Secured Party,
and the Credit Agreement, the other Loan Documents, the Specified Swap
Agreements 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 of the
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any other Secured Party for the payment of the Secured
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any other Secured Party 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 guarantee contained in this Section 2 or
any property subject thereto.

2.5 Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents.
Each Guarantor waives, to the fullest extent permitted by applicable law, 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 or any other Secured Party upon the guarantee contained in this Section 2
or acceptance of the guarantee 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 guarantee contained in this Section 2; and all dealings between the
Borrower and any of the Guarantors on the one hand, and the Administrative Agent
and the other Secured Parties, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Section 2. Each Guarantor further waives, to the fullest
extent permitted by applicable law:

 

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(a) diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the other Guarantors with respect
to the Secured Obligations;

(b) any right to require any Secured Party to marshal assets in favor of the
Borrower, such Guarantor, any other Guarantor or any other Person, to proceed
against the Borrower, any other Guarantor or any other Person, to proceed
against or exhaust any of the Collateral, to give notice of the terms, time and
place of any public or private sale of personal property security constituting
the Collateral or other collateral for the Secured Obligations or to comply with
any other provisions of Section 9-611 of the UCC (or any equivalent provision of
any other applicable law) or to pursue any other right, remedy, power or
privilege of any Secured Party whatsoever;

(c) the defense of the statute of limitations in any action hereunder or for the
collection or performance of the Secured Obligations;

(d) any defense arising by reason of any lack of corporate or other authority or
any other defense of the Borrower, such Guarantor or any other Person;

(e) any defense based upon the Administrative Agent’s or any Secured Party’s
errors or omissions in the administration of the Secured Obligations;

(f) any rights to set-offs and counterclaims;

(g) any defense based upon an election of remedies (including, if available, an
election to proceed by nonjudicial foreclosure) which destroys or impairs the
subrogation rights of such Guarantor or the right of such Guarantor to proceed
against the Borrower or any other obligor of the Secured Obligations for
reimbursement; and

(h) without limiting the generality of the foregoing, to the fullest extent
permitted by law, any defenses or benefits (other than defense of payment or
performance) that may be derived from or afforded by applicable law that limit
the liability of or exonerate guarantors or sureties, or which may conflict with
the terms of this Agreement.

Each Guarantor understands and agrees that the guarantee contained in this
Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (i) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Secured Obligations or
any other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Administrative
Agent or any other Secured Party, (ii) any defense, setoff or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower or any other Person against the
Administrative Agent or any other Secured Party, (iii) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or such
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower and the Guarantors for the Secured
Obligations, or of such Guarantor under the guarantee contained in this
Section 2, in bankruptcy or in any other instance, (iv) any Insolvency
Proceeding with respect to the Borrower, any Guarantor or any other Person,
(v) any merger, acquisition, consolidation or change in structure of the
Borrower, any Guarantor or any other Person, or any sale, lease, transfer or
other disposition of any or all of the assets or Voting Stock of the Borrower,
any Guarantor or any other Person, (vi) any assignment or other transfer, in
whole or in part, of any Secured Party’s interests in and rights under this
Agreement or the other Loan Documents, including any Secured Party’s right to
receive payment of the Secured Obligations, or any assignment or other transfer,

 

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in whole or in part, of any Secured Party’s interests in and to any of the
Collateral, (vi) any Secured Party’s vote, claim, distribution, election,
acceptance, action or inaction in any Insolvency Proceeding related to any of
the Secured Obligations, and (vii) any other guaranty, whether by such Guarantor
or any other Person, of all or any part of the Secured Obligations or any other
indebtedness, obligations or liabilities of any Guarantor to any Secured Party.

When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent or any other Secured
Party 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 the Borrower,
any other Guarantor or any other Person or against any collateral security or
guarantee for the Secured Obligations or any right of offset with respect
thereto. Any failure by the Administrative Agent or any other Secured Party to
make any such demand, to pursue such other rights or remedies or to collect any
payments from the Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor 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 or any other Secured
Party against any Guarantor. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.

Each Guarantor further unconditionally consents and agrees that, without notice
to or further assent from any Guarantor: (a) the principal amount of the Secured
Obligations may be increased or decreased and additional indebtedness or
obligations of the Borrower or any other Persons under the Loan Documents may be
incurred, by one or more amendments, modifications, renewals or extensions of
any Loan Document or otherwise; (b) the time, manner, place or terms of any
payment under any Loan Document may be extended or changed, including by an
increase or decrease in the interest rate on any Secured Obligation or any fee
or other amount payable under such Loan Document, by an amendment, modification
or renewal of any Loan Document or otherwise; (c) the time for the Borrower’s
(or any other Loan Party’s) performance of or compliance with any term, covenant
or agreement on its part to be performed or observed under any Loan Document may
be extended, or such performance or compliance waived, or failure in or
departure from such performance or compliance consented to, all in such manner
and upon such terms as the Administrative Agent may deem proper; (d) in addition
to the Collateral, the Secured Parties may take and hold other security (legal
or equitable) of any kind, at any time, as collateral for the Secured
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such security and may permit or consent to any such action or the result of any
such action, and may apply such security and direct the order or manner of sale
thereof; (e) any Secured Party may discharge or release, in whole or in part,
any other Guarantor or any other Loan Party or other Person liable for the
payment and performance of all or any part of the Secured Obligations, and may
permit or consent to any such action or any result of such action, and shall not
be obligated to demand or enforce payment upon any of the Collateral, nor shall
any Secured Party be liable to any Guarantor for any failure to collect or
enforce payment or performance of the Secured Obligations from any Person or to
realize upon the Collateral, and (f) the Secured Parties may request and accept
other guaranties of the Secured Obligations and any other indebtedness,
obligations or liabilities of the Borrower or any other Loan Party to any
Secured Party and may, from time to time, in whole or in part, surrender,
release, subordinate, modify, waive, rescind, compromise or extend any such
guaranty and may permit or consent to any such action or the result of any such
action; in each case (a) through (f), as the Secured Parties may deem advisable,
and without impairing, abridging, releasing or affecting this Agreement.

2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Secured

 

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Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any other Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or any such Guarantor or any
substantial part of its respective property, or otherwise, all as though such
payments had not been made.

2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Administrative Agent without setoff or counterclaim in Dollars at
the Funding Office.

2.8 Keepwell. Each Qualified ECP Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Loan Party to
honor all of its obligations under this Agreement in respect of Secured
Obligations under Specified Swap Agreements (provided that, each Qualified ECP
Guarantor shall only be liable under this Section 2.8 for the maximum amount of
such liability that can be hereby incurred without rendering its obligations
under this Section 2.8 or otherwise under this Agreement, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount). The obligations of each Qualified ECP Guarantor under
this Section 2.8 shall remain in full force and effect until the Discharge of
Obligations. Each Qualified ECP Guarantor intends that this Section 2.8
constitute, and this Section 2.8 shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of each other Loan Party for all
purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.”

SECTION 3.    GRANT OF SECURITY INTEREST

3.1 Grant of Security Interests. Each Grantor hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in all of the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest and wherever located
(collectively, the “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 Secured Obligations:

(a) all Accounts;

(b) all Chattel Paper;

(c) all Commercial Tort Claims referenced in Schedule 8 (as amended or
supplemented from time to time);

(d) all Deposit Accounts;

(e) all Documents;

(f) all Equipment;

(g) all Fixtures;

(h) all General Intangibles;

(i) all Goods;

(j) all Instruments;

 

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(k) all Intellectual Property;

(l) all Inventory;

(m) all Investment Property (including all Pledged Collateral);

(n) all Letter-of-Credit Rights;

(o) all Money;

(p) all Books and records pertaining to the Collateral

(q) all other property not otherwise described above; and

(r) to the extent not otherwise included, all Proceeds, Supporting Obligations
and products of any and all of the foregoing; provided, however, that
notwithstanding anything to the contrary contained in clauses (a) through
(q) above, the security interests created by this Agreement shall not extend to,
and the term “Collateral” (including all of the individual items comprising
Collateral) shall not include, any Excluded Assets.

Notwithstanding any of the other provisions set forth in this Section 3, this
Agreement shall not constitute a grant of a security interest in any property to
the extent that such grant of a security interest is prohibited by any
Requirement of Law or a Governmental Authority or constitutes a breach or
default under or results in the termination of or requires any consent not
obtained under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property, except (i) to the extent that the
terms in such contract, license, instrument or other document providing for such
prohibition, breach, default or termination, or requiring such consent are not
permitted under the terms and conditions of the Credit Agreement or (ii) to the
extent that such Requirement of Law or the term in such contract, license,
agreement, instrument or other document providing for such prohibition, breach,
default or termination or requiring such consent is ineffective under
Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including
the Bankruptcy Code) or principles of equity; provided, however, that such
security interest shall attach immediately at such time as such Requirement of
Law is not effective or applicable, or such prohibition, breach, default or
termination is no longer applicable or is waived, and to the extent severable,
shall attach immediately to any portion of the Collateral that does not result
in such consequences; and provided, further, that no United States intent-to-use
trademark or service mark application shall be included in the Collateral to the
extent that, and solely during the period in which, the grant of a security
interest therein would impair the validity or enforceability of such
intent-to-use trademark or service mark application under Federal law. After
such period, each Grantor acknowledges that such interest in such trademark or
service mark application shall be subject to a security interest in favor of the
Administrative Agent and shall be included in the Collateral.

3.2 Grantors Remains Liable. Anything herein to the contrary notwithstanding,
(a) each Grantor shall remain liable under any contracts, agreements and other
documents included in the Collateral, 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, (b) the exercise by the Administrative
Agent of any of the rights granted to the Administrative Agent hereunder shall
not release any Grantor from any of its duties or obligations under any such
contracts, agreements and other documents included in the Collateral, and
(c) neither the Administrative Agent nor any other Secured Party shall have any
obligation or liability under any such contracts, agreements and other documents
included in the Collateral by reason of this Agreement, nor shall the
Administrative Agent or any other Secured Party be obligated to perform any of
the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any such contract, agreement or other document included in
the Collateral hereunder.

 

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3.3 Perfection and Priority.

(a) Financing Statements. Pursuant to any applicable law, each Grantor
authorizes the Administrative Agent (and its counsel and its agents) to file or
record at any time and from time to time any financing statements and other
filing or recording documents or instruments with respect to the Collateral and
each Grantor shall execute and deliver to the Administrative Agent and each
Grantor hereby authorizes the Administrative Agent (and its counsel and its
agents) to file (with or without the signature of such Grantor) at any time and
from time to time, all amendments to financing statements, continuation
financing statements, termination statements, security agreements relating to
the Intellectual Property, assignments, fixture filings, affidavits, reports
notices and all other documents and instruments, in such form and in such
offices as the Administrative Agent or the Required Lenders determine reasonably
necessary to perfect and continue perfected, maintain the priority of or provide
notice of the Administrative Agent’s security interest in the Collateral under
and to accomplish the purposes of this Agreement. Each Grantor authorizes the
Administrative Agent to use the collateral description “all personal property,
whether now owned or hereafter acquired” or any other similar collateral
description in any such financing statements. Each Grantor hereby ratifies and
authorizes the filing by the Administrative Agent (and its counsel and its
agents) of any financing statement with respect to the Collateral made prior to
the date hereof.

(b) Filing of Financing Statements. Each Grantor shall deliver to the
Administrative Agent, from time to time, such completed UCC-1 financing
statements for filing or recording in the appropriate filing offices as may be
reasonably requested by the Administrative Agent.

(c) Transfer of Security Interest Other Than by Delivery. If for any reason
Pledged Collateral cannot be delivered to or for the account of the
Administrative Agent as provided in Section 5.6(b), each applicable Grantor
shall promptly take such other steps as may be necessary or as shall be
reasonably requested from time to time by the Administrative Agent to grant a
perfected first priority security interest (subject to Liens permitted pursuant
to Section 7.3 of the Credit Agreement) in and pledge of the Pledged Collateral
to the Administrative Agent for itself and on behalf of and for the ratable
benefit of the other Secured Parties pursuant to the UCC. To the extent
practicable, each such Grantor shall thereafter deliver the Pledged Collateral
to or for the account of the Administrative Agent as provided in Section 5.6(b).

(d) Intellectual Property.

(i) Each Grantor shall, in addition to executing and delivering this Agreement,
take such other action as may be necessary, or as the Administrative Agent may
reasonably request, to perfect the Administrative Agent’s security interest in
the Intellectual Property.

(ii) Upon the delivery of each IP Reporting Certificate following the creation
or other acquisition of any Intellectual Property by any Grantor after the date
hereof which is registered or becomes registered or the subject of an
application for registration with the USCRO or the USPTO, as applicable, such
Grantor shall modify this Agreement by supplementing Schedule 6 to include any
Intellectual Property which becomes part of the Collateral and which was not
included on Schedule 6 as of the date hereof and, if requested by the
Administrative Agent, execute an Intellectual Property Security Agreement, and
take such other action as may be necessary, or as the Administrative Agent or
the Required Lenders may reasonably request, to perfect the Administrative
Agent’s security interest in such Intellectual Property.

 

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(e) Control. Each Grantor will use commercially reasonable efforts to cooperate
with the Administrative Agent in obtaining control (as defined in the UCC) of
Collateral consisting of any Deposit Accounts (other than any Excluded
Accounts), Electronic Chattel Paper, Investment Property or Letter-of-Credit
Rights, in each case to the extent constituting Collateral, including delivery
of control agreements, as the Administrative Agent may reasonably request, to
perfect and continue perfected, maintain the priority of or provide notice of
the Administrative Agent’s security interest in such Collateral.

(f) Additional Subsidiaries. In the event that any Grantor acquires rights in
any Subsidiary (other than (i) a Foreign Subsidiary that is not a First-Tier
Foreign Subsidiary, (ii) a Domestic Foreign Holding Subsidiary and (iii) the
German Subsidiary and the UK Subsidiary which are governed by the German
Security Documents and the UK Security Documents, respectively) after the date
hereof, it shall deliver to the Administrative Agent a completed pledge
supplement, substantially in the form of Annex 2 (the “Pledge Supplement”),
together with all schedules thereto, reflecting the pledge of the Capital Stock
of such new Subsidiary (except to the extent such Capital Stock consists of
Excluded Assets). Notwithstanding the foregoing, it is understood and agreed
that the security interest of the Administrative Agent shall attach to the
Pledged Collateral related to such Subsidiary immediately upon any Grantor’s
acquisition of rights therein and shall not be affected by the failure of any
Grantor to deliver a Pledge Supplement.

SECTION 4.    REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Administrative Agent and each other Secured Party that:

4.1 Title; No Other Liens. Except for the Liens permitted to exist on the
Collateral by Section 7.3 of the Credit Agreement, such Grantor owns each item
of the Collateral in which a Lien is granted by it free and clear of any and all
Liens and other claims of others. No financing statement, fixture filing or
other public notice with respect to all or any part of the Collateral is on file
or of record or will be filed in any public office, except with respect to Liens
permitted under Section 7.3 of the Credit Agreement. For the avoidance of doubt,
it is understood and agreed that, to the extent permitted by the Credit
Agreement, each Grantor may, as part of its business, grant licenses to third
parties to use Intellectual Property owned or developed by such Grantor. The
Administrative Agent and each other Secured Party understands that any such
licenses may limit the ability of the Administrative Agent to utilize, sell,
lease or transfer the related Intellectual Property or otherwise realize value
from such Intellectual Property pursuant hereto.

4.2 Perfected Liens. The security interests granted to the Administrative Agent
pursuant to this Agreement (a) (i) upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly (if applicable) executed form) with
respect to the type of Collateral in which a security interest may be perfected
by filing a financing statement under the Uniform Commercial Code as enacted in
any relevant jurisdiction or by a filing of a Patent Security Agreement,
Trademark Security Agreement or Copyright Security Agreement in the United
States Patent and Trademark Office or in the United States Copyright Office, as
applicable, (ii) upon the possession of the Collateral in which a security
interest may be perfected by possession, and (iii) upon the “control” (as
defined in the Uniform Commercial Code as in effect in the applicable
jurisdiction) over the type of Collateral in which a security interest may be
perfected by “control” will constitute valid perfected

 

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security interests in all of the Collateral in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, as collateral security
for the Secured Obligations, enforceable in accordance with the terms hereof
against any creditors of any Grantor and any Persons purporting to purchase any
Collateral from any Grantor, and (b) are prior to all other Liens on the
Collateral except for Liens permitted by the Credit Agreement which have
priority over the Liens of the Administrative Agent on the Collateral (for the
ratable benefit of the Secured Parties) by operation of law, and in the case of
Collateral other than Pledged Collateral, Liens permitted by Section 7.3 of the
Credit Agreement which are non-consensual permitted Liens, permitted purchase
money Liens, or the interests of lessors under capital leases).

4.3 Jurisdiction of Organization; Chief Executive Office and Locations of Books.
On the date hereof, such Grantor’s jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor’s chief executive office or sole place of business, as the case may be,
are specified on Schedule 4. On the date hereof, all locations where Books
pertaining to the Rights to Payment of such Grantor are kept are set forth in
Schedule 4.

4.4 Inventory and Equipment. On the date hereof (a) the Inventory and (b) the
Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.

4.5 Farm Products. None of the Collateral constitutes, or is the Proceeds of,
Farm Products.

4.6 Pledged Collateral. (a) All of the Pledged Stock held by such Grantor has
been duly and validly issued, and is fully paid and non-assessable, subject in
the case of Pledged Stock constituting partnership interests or limited
liability company membership interests to future assessments required under
applicable law and any applicable partnership or operating agreement, (b) such
Grantor is or, in the case of any such additional Pledged Collateral will be,
the legal and beneficial owner thereof, (c) in the case of Pledged Stock of a
Subsidiary of such Grantor or Pledged Collateral of such Grantor constituting
Instruments issued by a Subsidiary of such Grantor, there are no restrictions on
the transferability of such Pledged Collateral or such additional Pledged
Collateral to the Administrative Agent or with respect to the foreclosure,
transfer or disposition thereof by the Administrative Agent, except as provided
under applicable securities or “Blue Sky” laws, (d) the Pledged Stock pledged by
such Grantor constitute all of the issued and outstanding shares of Capital
Stock of each Issuer owned by such Grantor (except for Excluded Assets), and
such Grantor owns no securities convertible into or exchangeable for any shares
of Capital Stock of any such Issuer that do not constitute Pledged Stock
hereunder, (e) any and all Pledged Collateral Agreements which affect or relate
to the voting or giving of written consents with respect to any of the Pledged
Stock pledged by such Grantor have been disclosed to the Administrative Agent,
and (f) as to each such Pledged Collateral Agreement relating to the Pledged
Stock pledged by such Grantor, (i) to the best knowledge of such Grantor, such
Pledged Collateral Agreement contains the entire agreement between the parties
thereto with respect to the subject matter thereof and is in full force and
effect in accordance with its terms, (ii) to the best knowledge of such Grantor
party thereto, there exists no material violation or material default under any
such Pledged Collateral Agreement by such Grantor or the other parties thereto,
(iii) such Grantor has not knowingly waived or released any of its material
rights under or otherwise consented to a material departure from the terms and
provisions of any such Pledged Collateral Agreement, and (iv) no Pledged
Collateral Agreement will be breached or violated as a result of entering into
any stock pledge or share pledge.

4.7 Investment Accounts. Schedule 2 (as it may be updated from time to time by
the delivery of a written notice to the Administrative Agent) sets forth under
the headings “Securities Accounts” and “Commodity Accounts”, respectively, all
of the Securities Accounts and Commodity Accounts in which such Grantor has an
interest. Except as disclosed to the Administrative Agent, such Grantor is the
sole entitlement holder of each such Securities Account and Commodity Account,
and such Grantor has not consented to, and is not otherwise aware of, any Person
(other than the Administrative Agent) having “control” (within the meanings of
Sections 8-106 and 9-106 of the UCC) over, or any other interest in, any such
Securities Account or Commodity Account or any securities or other property
credited thereto;

 

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(a) Schedule 2 (as it may be updated from time to time by delivery of a written
notice to the Administrative Agent) sets forth under the heading “Deposit
Accounts” all of the Deposit Accounts in which such Grantor has an interest and,
except as otherwise disclosed to the Administrative Agent, such Grantor is the
sole account holder of each such Deposit Account and such Grantor has not
consented to, and is not otherwise aware of, any Person (other than the
Administrative Agent) having either sole dominion and control (within the
meaning of common law) or “control” (within the meaning of Section 9-104 of the
UCC) over, or any other interest in, any such Deposit Account or any money or
other property deposited therein; and

(b) In each case to the extent requested by the Administrative Agent, such
Grantor has taken all actions necessary or desirable to: (i) establish the
Administrative Agent’s “control” (within the meanings of Sections 8-106 and
9-106 of the UCC) over any Certificated Securities (as defined in Section 9-102
of the UCC); (ii) establish the Administrative Agent’s “control” (within the
meanings of Sections 8-106 and 9-106 of the UCC) over any portion of the
Investment Accounts constituting Securities Accounts, Commodity Accounts,
Securities Entitlements or Uncertificated Securities (each as defined in
Section 9-102 of the UCC); (iii) establish the Administrative Agent’s “control”
(within the meaning of Section 9-104 of the UCC) over all Deposit Accounts; and
(iv) deliver all Instruments (as defined in Section 9-102 of the UCC) to the
Administrative Agent to the extent required hereunder; provided that the
foregoing shall not require the delivery of a “control agreement” with respect
to any with respect to any Excluded Accounts.

4.8 Receivables. No amount payable to such Grantor under or in connection with
any Receivable or other Right to Payment is evidenced by any Instrument (other
than checks, drafts or other Instruments that will be promptly deposited in an
Investment Account) or Chattel Paper which has not been delivered to the
Administrative Agent. None of the account debtors or other obligors in respect
of any Receivable in excess of $1,000,000 in the aggregate is the government of
the United States or any agency or instrumentality thereof.

4.9 Intellectual Property.

(a) As of the Closing Date: (i) Schedule 6(a) provides a complete and correct
list of all registered Copyrights owned by any Grantor, all applications for
registration of Copyrights owned by any Grantor, and all other Copyrights owned
by any Grantor and material to the conduct of the business of any Grantor;
(ii) Schedule 6(b) provides a complete and correct list of all Intellectual
Property Licenses entered into by any Grantor pursuant to which (A) any Grantor
has provided any license or other rights in Intellectual Property owned or
controlled by such Grantor to any other Person other than non-exclusive software
licenses granted in the ordinary course of business or (B) any Person has
granted to any Grantor any license or other rights in Intellectual Property
owned or controlled by such Person that constitutes a part of the Required
Library or that is incorporated into any software programs that are part of the
Required Library; (iii) Schedule 6(c) provides a complete and correct list of
all Patents owned by any Grantor and all applications for Patents owned by any
Grantor; and (iv) Schedule 6(d) provides a complete and correct list of all
registered Trademarks owned by any Grantor, all applications for registration of
Trademarks owned by any Grantor, and all other Trademarks owned by any Grantor
and material to the conduct of the business of any Grantor, except to the extent
that such registered Trademarks, applications for registration of Trademarks and
other Trademarks are listed on Schedule 6(e).

(b) (i) (A) each Grantor owns exclusively (other than the Trademarks listed on
Schedule 6(e)) or holds licenses in all Intellectual Property that (1) is
necessary to the conduct of its

 

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business, or (2) constitutes a part of the Required Library, (B) all employees
and contractors of each Grantor who were involved in the creation or development
of (1) any Intellectual Property for such Grantor that is necessary to the
conduct of the business of such Grantor have signed agreements containing
assignment of Intellectual Property rights to such Grantor and obligations of
confidentiality and (2) any Intellectual Property for such Grantor that is a
part of the Required Library have signed agreements containing assignment of
Intellectual Property rights to such Grantor and obligations of confidentiality,
and (C) no past or present employee or contractor of Grantor owns any interest
or other right in or to any Intellectual Property Rights that are material to
the conduct of any such Grantor’s business;

(c) to each Grantor’s knowledge, no Person has infringed or misappropriated or
is currently infringing or misappropriating any Intellectual Property rights
owned by such Grantor, in each case, that either individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect;

(d) (A) to each Grantor’s knowledge, (1) such Grantor has never infringed or
misappropriated and is not currently infringing or misappropriating any
Intellectual Property rights of any Person, and (2) no product manufactured,
used, distributed, licensed, or sold by or service provided by such Grantor has
ever infringed or misappropriated or is currently infringing or misappropriating
any Intellectual Property rights of any Person, in each case, except where such
infringement or misappropriation either individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect, and (B) there are
no pending, or to any Grantor’s knowledge, threatened infringement or
misappropriation claims or proceedings pending against any Grantor, and no
Grantor has received any notice or other communication of any actual or alleged
infringement or misappropriation by any Grantor of any Intellectual Property
rights of any Person, in each case, except where such infringement or
misappropriation either individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect;

(e) to each Grantor’s knowledge, (A) all registered Copyrights, registered
Trademarks (other than the registered Trademarks listed on Schedule 6(e)), and
issued Patents that are owned by such Grantor and necessary to the conduct of
its business are valid, subsisting and enforceable and in compliance with all
legal requirements, filings, and payments and other actions that are required to
maintain such Intellectual Property in full force and effect, and (B) all
registered Copyrights of such Grantor that are a part of the Required Library
are valid, subsisting and enforceable and in compliance with all legal
requirements, filings, and payments and other actions that are required to
maintain such Intellectual Property in full force and effect; and

(f) each Grantor has taken reasonable steps to maintain the confidentiality of
and otherwise protect and enforce its rights in all trade secrets owned by such
Grantor that are necessary to the conduct of the business of such Grantor, and
in particular, no portion of the source code for the Required Library has been
disclosed or licensed to any Person, other than to customers of the Loan Parties
in the ordinary course of business consistent with past practice or to escrow
agents pursuant to such Grantor’s standard form of escrow agreement;

(g) none of the Required Library that is licensed or distributed by any Grantor
is subject to any “copyleft” or other obligation or condition (including any
obligation or condition under any “open source” license such as the GNU Public
License, Lesser GNU Public License, or Mozilla Public License) that would
require, or condition the use or distribution of such software, on the
disclosure, licensing or distribution of any source code for any portion of the
Required Library that is licensed or distributed by any Grantor; and

 

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(h) no Intellectual Property License of any Grantor that (A) is necessary to the
conduct of such Grantor’s business, or (B) relates to any Copyright that
constitutes a part of the Required Library requires any consent of any other
Person in order for such Grantor to grant the security interest granted
hereunder in such Grantor’s right, title or interest in or to such license.

4.10 [Reserved].

4.11 Letter of Credit Rights. Such Grantor does not have any Letter-of-Credit
Rights having a potential value in excess of $1,000,000 except as set forth in
Schedule 7 or as have been notified to the Administrative Agent in accordance
with Section 5.22.

4.12 Commercial Tort Claims. Such Grantor does not have any Commercial Tort
Claims having a potential value in excess of $1,000,000 except as set forth in
Schedule 8 or as have been notified to the Administrative Agent in accordance
with Section 5.21.

SECTION 5.    COVENANTS

Each Grantor covenants and agrees with the Administrative Agent and the other
Secured Parties that, from and after the date of this Agreement until the
Discharge of Obligations:

5.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument (other than checks, drafts or other
Instruments that will be promptly deposited in an Investment Account),
Certificated Security or Chattel Paper evidencing an amount in excess of
$1,000,000, such Instrument, Certificated Security or Chattel Paper shall be
promptly delivered to the Administrative Agent, duly indorsed in a manner
reasonably satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement.

5.2 Maintenance of Insurance.

(a) Such Grantor will maintain, with financially sound and reputable companies,
insurance policies as required by Section 6.7 of the Credit Agreement, such
policies to be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Administrative Agent and the other Secured
Parties.

(b) All such insurance shall (i) provide or be endorsed to provide that the
insurer will endeavor to provide the Administrative Agent with at least ten
(10) days prior written notice of cancellation for non-payment of premiums and
at least thirty (30) days prior written notice of cancellation for any other
reason and (ii) name or be endorsed to name the Administrative Agent as an
additional insured party or loss payee.

5.3 Maintenance of Perfected Security Interest; Further Documentation.

(a) Subject to the terms and limitations set forth herein, such Grantor shall
maintain the security interests of the Administrative Agent (for the benefit of
the Secured Parties) created by this Agreement as perfected security interests
having at least the priority described in Section 4.2 and shall defend such
security interests against the claims and demands of all Persons whomsoever,
subject to the rights of such Grantor under the Loan Documents to dispose of the
Collateral.

(b) Upon reasonable request of the Administrative Agent, such Grantor will
furnish to the Administrative Agent 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.

 

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(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, but in any event
subject to the terms and limitations set forth herein, 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, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (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, Investment Accounts, Letter-of-Credit
Rights and any other relevant Collateral, taking any actions necessary to enable
the Administrative Agent to obtain “control” (within the meaning of the UCC)
with respect thereto to the extent required hereunder.

5.4 Changes in Locations, Name, Etc. Such Grantor will not, except upon 15 days’
(or such shorter period as may be agreed to by the Administrative Agent) prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of (a) all additional executed financing statements and other documents
reasonably requested by the Administrative Agent to maintain the validity,
perfection and priority of the security interests provided for herein, and
(b) if applicable, a written supplement to Schedule 4 showing the relevant new
jurisdiction of organization, location of chief executive office or sole place
of business, as appropriate:

(i) change its jurisdiction of organization, identification number from the
jurisdiction of organization (if any) or the location of its chief executive
office or sole place of business, as appropriate, from that referred to in
Section 4.3; or

(ii) change its name.

5.5 Notices. Such Grantor will advise the Administrative Agent promptly, in
reasonable detail, of any Lien (other than Liens permitted under Section 7.3 of
the Credit Agreement) on any of the Collateral.

5.6 Instruments; Investment Property.

(a) Upon the request of the Administrative Agent, such Grantor will (i) promptly
deliver to the Administrative Agent, or an agent designated by it, appropriately
endorsed or accompanied by appropriate instruments of transfer or assignment,
all Instruments, Documents, Chattel Paper and certificated securities with
respect to any Investment Property held by such Grantor, all letters of credit
of such Grantor, and all other Rights to Payment held by such Grantor at any
time evidenced by promissory notes, trade acceptances or other instruments, and
(ii) provide such notice, obtain such acknowledgments and take all such other
action, with respect to any Chattel Paper, Documents and Letter-of-Credit Rights
held by such Grantor, as the Administrative Agent shall reasonably specify.

(b) If such Grantor shall become entitled to receive or shall receive any
certificate (including any certificate representing a dividend or a distribution
in connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any Pledged Collateral,
or otherwise in respect thereof, such Grantor shall accept the same as the agent
of the Administrative Agent and the other Secured Parties, hold the same in
trust for the Administrative Agent and the other Secured Parties and deliver the
same forthwith to the Administrative Agent in the exact form received, duly
indorsed by such Grantor to the Administrative

 

Guarantee & Collateral Agreement    18   

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Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by such Grantor and with, if the
Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Secured Obligations; provided that in no event shall this
Section 5.6(b) apply to any Excluded Assets. Unless otherwise permitted by the
Credit Agreement, any sums paid upon or in respect of the Investment Property
upon the liquidation or dissolution of any Issuer shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be paid over to the Administrative Agent to be held by it hereunder as
additional collateral security for the Secured Obligations, and 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 security interest in
favor of the Administrative Agent, be delivered to the Administrative Agent to
be held by it hereunder as additional collateral security for the Secured
Obligations. If any sums of money or property so paid or distributed in respect
of such Investment Property shall be received by such Grantor, such Grantor
shall, until such money or property is paid or delivered to the Administrative
Agent, unless otherwise subject to a perfected security interest in favor of the
Administrative Agent, hold such money or property in trust for the
Administrative Agent and the other Secured Parties, segregated from other funds
of such Grantor, as additional collateral security for the Secured Obligations;
provided, that in no event shall any Excluded Assets be required to be pledged
hereunder.

(c) In the case of any Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Capital
Stock 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 5.6(a) and
(b) with respect to the Pledged Collateral issued by it and (iii) the terms of
Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Capital Stock issued by it.

5.7 Securities Accounts; Deposit Accounts.

(a) With respect to any Securities Account (other than any Excluded Account),
such Grantor shall cause any applicable securities intermediary maintaining such
Securities Account to show on its books that the Administrative Agent is the
entitlement holder with respect to such Securities Account, and, if requested by
the Administrative Agent, cause such securities intermediary to enter into an
agreement in form and substance reasonably satisfactory to the Administrative
Agent with respect to such Securities Account pursuant to which such securities
intermediary shall agree to comply with the Administrative Agent’s “entitlement
orders” without further consent by such Grantor, as requested by the
Administrative Agent; and

(b) with respect to any Deposit Account (other than any Excluded Account), such
Grantor shall enter into and shall cause the depositary institution maintaining
such account to enter into an agreement in form and substance reasonably
satisfactory to the Administrative Agent pursuant to which the Administrative
Agent shall be granted “control” (within the meaning of Section 9-104 of the
UCC) over such Deposit Account.

(c) The Administrative Agent agrees that it will only communicate “entitlement
orders” with respect to the Deposit Accounts and Securities Accounts (other than
Excluded Accounts) of the Grantors after the occurrence and during the
continuance of an Event of Default.

 

Guarantee & Collateral Agreement    19   

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(d) Such Grantor shall give the Administrative Agent prompt notice of the
establishment of any new Deposit Account and of any new Securities Account
established by such Grantor with respect to any Investment Property held by such
Grantor.

5.8 Intellectual Property.

(a) Upon the request of the Administrative Agent, in order to facilitate filings
with the USPTO and the USCRO, each Grantor shall execute and deliver to the
Administrative Agent one or more Copyright Security Agreements, Trademark
Security Agreements, or Patent Security Agreements to further evidence the
Administrative Agent’s Lien on such Grantor’s Patents, Trademarks, or
Copyrights, and the General Intangibles of such Grantor relating thereto or
represented thereby.

(b) Each Grantor shall have the duty, with respect to Intellectual Property that
is (1) in such Grantor’s reasonable business judgment, necessary in the conduct
of such Grantor’s business or (2) a part of the Required Library, to protect and
diligently enforce and defend at such Grantor’s expense its Intellectual
Property, including (A) to diligently enforce and defend, including promptly
suing for infringement, misappropriation, or dilution and to recover any and all
damages for such infringement, misappropriation, or dilution, and filing for
opposition, interference, and cancellation against conflicting Intellectual
Property rights of any Person, (B) to prosecute diligently any trademark
application or service mark application that is part of the Trademarks filed by
such Grantor and pending as of the date hereof or hereafter until the
termination of this Agreement, (C) to prosecute diligently any patent
application that is part of the Patents filed by such Grantor and pending as of
the date hereof or hereafter until the termination of this Agreement, (D) to
take all reasonable and necessary action to preserve and maintain all of such
Grantor’s Trademarks, Patents, Copyrights, Intellectual Property Licenses, and
its rights therein, including paying all maintenance fees and filing of
applications for renewal, affidavits of use, and affidavits of
noncontestability, and (E) to require all employees, consultants, and
contractors of each Grantor who were involved in the creation or development of
such Intellectual Property to sign agreements containing assignment of
Intellectual Property rights and obligations of confidentiality. Each Grantor
further agrees not to abandon any Intellectual Property or Intellectual Property
License that (I) in such Grantor’s reasonable business judgment, is necessary in
the conduct of such Grantor’s business, or (II) is part of the Required Library
without the prior written consent of the Administrative Agent. Each Grantor
hereby agrees to take the steps described in this Section 5.8(b) with respect to
all new or acquired Intellectual Property to which it or any of its Subsidiaries
is now or later becomes entitled that is part of the Required Library, or is
necessary in the conduct of such Grantor’s business.

(c) Grantors acknowledge and agree that the Secured Parties shall have no duties
with respect to any Intellectual Property or Intellectual Property Licenses of
any Grantor, except as otherwise set forth in this Agreement. Without limiting
the generality of this Section 5.8(c), Grantors acknowledge and agree that none
of the Secured Parties shall be under any obligation to take any steps necessary
to preserve rights in the Collateral consisting of Intellectual Property or
Intellectual Property Licenses against any other Person, but the Administrative
Agent on behalf of the Secured Parties may do so at its option, and shall do so
at the instruction of the Required Lenders, from and after the occurrence and
during the continuance of an Event of Default, and all out-of-pocket expenses
incurred in connection therewith (including reasonable fees and expenses of
attorneys and other professionals) shall be for the sole account of Borrower and
shall be chargeable to the Borrower’s accounts with the Administrative Agent.

(d) Each Grantor shall promptly file an application with the USCRO for any
Copyright that has not been registered with the USCRO if such Copyright is part
of the Required Library or in such Grantor’s reasonable business judgment is
necessary in connection with the conduct of such Grantor’s business. Any
expenses incurred in connection with the foregoing shall be borne by the
Grantors.

 

Guarantee & Collateral Agreement    20   

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(e) On each date of the delivery of an IP Reporting Certificate in respect of a
fiscal quarter pursuant to Section 6.2 of the Credit Agreement and as a part
thereof, each Grantor shall deliver to the Administrative Agent a list in form
satisfactory to the Administrative Agent, certified by an officer of such
Grantor, identifying the Copyrights, whether created or acquired before, on, or
after the Closing Date, comprising the Required Library (including any
supporting documentation reasonably requested by the Administrative Agent
relating to the determination of the composition of the Required Library). No
more than fifteen (15) Business Days following each such date of delivery, each
Grantor shall file applications and take any and all other actions necessary to
register or record a transfer of ownership, as applicable, to such Grantor on an
expedited basis (if expedited processing is available in accordance with the
applicable regulations and procedures of the USCRO and any similar office of any
other jurisdiction in which Copyrights are used) each such Copyright comprising
the Required Library which on the applicable date of delivery is not already the
subject of a valid registration or an application therefor with the USCRO (or
any similar office of any other jurisdiction in which Copyrights are used)
identifying such Grantor as the sole claimant thereof in a manner sufficient to
claim in the public record (or as a co-claimant thereof, if such is the case)
such Grantor’s ownership or co-ownership thereof. The applicable Grantor shall
promptly notify the Administrative Agent of the registration of or recordation
of transfer of ownership, as applicable, to such Grantor of such Copyrights and,
upon the Administrative Agent’s request, cause to be prepared, executed, and
delivered to the Administrative Agent, with sufficient time to permit the
Administrative Agent to record no later than ten (10) days following the date of
registration of or recordation of transfer of ownership, as applicable, to the
applicable Grantor of such Copyrights, (1) a Copyright Security Agreement or
supplemental schedules to the Copyright Security Agreement reflecting the
security interest of the Administrative Agent in such Copyrights, which
supplemental schedules shall be in form and content suitable for recordation
with the USCRO (or any similar office of any other jurisdiction in which
Copyrights are used) and (2) any other documentation as the Administrative Agent
reasonably deems necessary and requests in order to perfect and continue
perfected the Administrative Agent’s Liens on such Copyrights following such
recordation. Anything to the contrary contained herein notwithstanding, no
Grantor shall be required to take any action under this Section 5.8(e) with
respect to any release or new version of software that constitutes solely a
Minor Release.

(f) On each date on which an IP Reporting Certificate is delivered by Holdings
and Borrower pursuant to Section 6.2 of the Credit Agreement, each Grantor shall
provide the Administrative Agent with a written report of all new Patents,
Trademarks or Intellectual Property Licenses that (A) are registered or the
subject of pending applications for registrations or (B) constitutes a part of
the Required Library or that is incorporated into any software programs that are
part of the Required Library, in each case, which were acquired, registered, or
for which applications for registration were filed by any Grantor during the
prior period and any statement of use or amendment to allege use with respect to
intent-to-use trademark applications. In the case of such registrations or
applications therefor, which were acquired by any Grantor, each such Grantor
shall file the necessary documents with the appropriate Governmental Authority
identifying the applicable Grantor as the owner (or as a co-owner thereof, if
such is the case) of such Intellectual Property. In each of the foregoing cases,
the applicable Grantor hereby authorizes the Administrative Agent to affix the
Schedules to the IP Reporting Certificate as supplemental schedules to the
applicable Loan Documents to identify such Patent and Trademark registrations
and applications therefor (with the exception of Trademark applications filed on
an intent-to-use basis for which no statement of use or amendment to allege use
has been filed) and Intellectual Property Licenses as being subject to the
security interests created thereunder;

(g) Subject to Section 5.8(h) below, in no event shall any Grantor, either
itself or through any agent, employee, licensee, or designee, file an
application for the registration of any Copyright with the USCRO or any similar
office or agency in another country without giving the Administrative Agent
written notice thereof at least ten (10) days prior to such filing and complying
with Section 5.8(a). Upon receipt from the USCRO of notice of registration of
any Copyright, each Grantor

 

Guarantee & Collateral Agreement    21   

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shall promptly (but in no event later than ten (10) days following such receipt)
notify (but without duplication of any notice required by Section 5.8(g) or
Section 5.8(h)) the Administrative Agent of such registration by delivering, or
causing to be delivered, to the Administrative Agent, documentation sufficient
for the Administrative Agent to perfect the Administrative Agent’s Liens on such
Copyright. If any Grantor acquires from any Person any Copyright registered with
the USCRO or an application to register any Copyright with the USCRO, such
Grantor shall promptly (but in no event later than ten (10) days following such
acquisition) notify the Administrative Agent of such acquisition and deliver, or
cause to be delivered, to the Administrative Agent, documentation sufficient for
the Administrative Agent to perfect the Administrative Agent’s Liens on such
Copyright. In the case of such Copyright registrations or applications therefor
which were acquired by any Grantor, each such Grantor shall promptly (but in no
event later than ten (10) days following such acquisition) file the necessary
documents with the appropriate Governmental Authority identifying the applicable
Grantor as the owner (or as a co-owner thereof, if such is the case) of such
Copyrights;

(h) So long as no Event of Default has occurred and is continuing, the Grantors
shall not be subject to the requirements of Section 5.8(g) with respect to any
applications for registration of Copyrights or registrations of Copyrights, in
each case with respect to Copyrights that would not be included in the Required
Library; provided, however, that each Grantor shall (y) notify the
Administrative Agent of any such applications for registration of Copyrights or
registrations of Copyrights and (z) deliver, or cause to be delivered, to the
Administrative Agent, documentation sufficient for the Administrative Agent to
perfect the Administrative Agent’s Liens on such Copyrights on the next date on
which an IP Reporting Certificate is delivered by Holdings and Borrower pursuant
to Section 6.2 of the Credit Agreement.

(i) Upon the occurrence and during the continuance of an Event of Default, each
Grantor shall deliver to the Administrative Agent a complete and correct list of
all Intellectual Property Licenses that are material to the business of such
Grantor or that are incorporated into any technology of any of the Grantors.

(j) Each Grantor shall take reasonable steps to maintain the confidentiality of
the Intellectual Property that is a part of the Required Library or is necessary
in the conduct of such Grantor’s business, including, as applicable:
(A) protecting the secrecy and confidentiality of its confidential information
and trade secrets by having and enforcing a policy requiring all current
employees, consultants, licensees, vendors and contractors with access to such
information to execute appropriate confidentiality agreements; (B) taking
actions reasonably necessary to ensure that no trade secret falls into the
public domain; and (C) protecting the secrecy and confidentiality of the source
code of all software programs and applications of which it is the owner or
licensee by having and enforcing a policy requiring any licensees (or
sublicensees) of such source code to enter into license agreements with
commercially reasonable use and non-disclosure restrictions.

(k) No Grantor shall incorporate into any of the Required Library that is
licensed or distributed by any Grantor any third-party code that is licensed
pursuant to any open source license such as the GNU Public License, Lesser GNU
Public License, or Mozilla Public License, in a manner that would require or
condition the use or distribution of such software on, the disclosing,
licensing, or distribution of any source code for any portion of the Required
Library that is licensed or distributed by any Grantor.

(l) No Grantor shall enter into any Intellectual Property License to receive any
license or rights in any Intellectual Property of any other Person unless such
Grantor has used commercially reasonable efforts to permit the assignment of or
grant of a security interest in such Intellectual Property License (and all
rights of Grantor thereunder) to the Administrative Agent (and any transferees
of the Administrative Agent).

 

Guarantee & Collateral Agreement    22   

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(m) Each Grantor shall deposit with the escrow agent designated under the Source
Code Escrow Agreement the source code for each version or versions of each item
of software programs of such Grantor constituting the Required Library (other
than Minor Releases) and any updates thereto, together with any certificates or
information as required under the Source Code Escrow Agreement on or before the
20th Business Day following the date of the delivery of an IP Reporting
Certificate in respect of a fiscal quarter pursuant to Section 6.2 of the Credit
Agreement and in accordance with all other terms and conditions of the Source
Code Escrow Agreement. If an escrow agent terminates the Source Code Escrow
Agreement for any reason (“Source Code Escrow Termination”), the Grantors shall
promptly (but in no event later than thirty (30) days following such Source Code
Escrow Termination (or such later time as may be agreed upon in writing by the
Administrative Agent)) (A) enter into a new Source Code Escrow Agreement with an
escrow agent reasonably satisfactory to the Administrative Agent and (B) deposit
with such escrow agent all materials that were required to be deposited with the
escrow agent that terminated the applicable Source Code Escrow Agreement,
including the source code for each version or versions of each item of software
programs of each Grantor constituting the Required Library (other than Minor
Releases).

(n) Each Grantor shall ensure that each of the representations and warranties
contained in Sections 4.9(b)(i)(C) and 4.9(g) remain true and correct at all
times.

5.9 Receivables. Other than in the ordinary course of business consistent with
its past practice, such Grantor will not (a) grant any extension of the time of
payment of any Receivable, (b) compromise or settle any Receivable for less than
the full amount thereof, (c) release, wholly or partially, any Person liable for
the payment of any Receivable, (d) allow any credit or discount whatsoever on
any Receivable or (e) amend, supplement or modify any Receivable in any manner
that could adversely affect the value thereof.

5.10 Defense of Collateral. Grantors will use commercially reasonable efforts to
appear in and defend any action, suit or proceeding which may affect to a
material extent its title to, or right or interest in, the Administrative
Agent’s right or interest in, any material portion of the Collateral.

5.11 Preservation of Collateral. Grantors will do and perform all reasonable
acts that may be necessary and appropriate to maintain, preserve and protect the
Collateral.

5.12 Compliance with Laws, Etc. Such Grantor will comply in all material
respects with all laws, regulations and ordinances applicable to it, and all
relevant policies of insurance, relating in a material way to the possession,
operation, maintenance and control of the Collateral.

5.13 Location of Books and Chief Executive Office. Such Grantor will: (a) keep
all Books pertaining to the Rights to Payment of such Grantor at the locations
set forth in Schedule 4; and (b) give at least 15 days’ prior written notice (or
such shorter period as the Administrative Agent shall agree in its sole
discretion) to the Administrative Agent of any changes in any location where
Books pertaining to the Rights to Payment of such Grantor are kept.

5.14 Location of Collateral. Such Grantor will: (a) keep the Collateral held by
such Grantor at the locations set forth in Schedule 5 or at such other locations
as may be disclosed in writing to the Administrative Agent pursuant to
clause (b) and will not remove any such Collateral from such locations (other
than in connection with sales of Inventory in the ordinary course of such
Grantor’s business, the movement of Collateral as part of such Grantor’s supply
chain and in the ordinary course of such Grantor’s business, other dispositions
permitted by Section 7.5 of the Credit Agreement and movements of Collateral
from one disclosed location to another disclosed location within the United
States and mobile equipment in the possession of a Grantor’s employees or
agents), except upon at least 15 days’ prior written notice (or such shorter
period as the Administrative Agent shall agree in its sole discretion) of any
removal to the Administrative Agent; and (b) give the Administrative Agent at
least 15 days’ prior written notice of any change in the locations set forth in
Schedule 5.

 

Guarantee & Collateral Agreement    23   

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5.15 [Reserved].

5.16 Disposition of Collateral. Such Grantor will not surrender or lose
possession of (other than to the Administrative Agent), sell, lease, rent, or
otherwise dispose of or transfer any of the Collateral held by such Grantor or
any right or interest therein, except to the extent permitted by the Loan
Documents.

5.17 Liens. Such Grantor will keep the Collateral held by such Grantor free of
all Liens except Liens permitted under Section 7.3 of the Credit Agreement.

5.18 Expenses. Such Grantor will pay all expenses of protecting, storing,
warehousing, insuring, handling and shipping the Collateral held by such
Grantor, to the extent the failure to pay any such expenses could reasonably be
expected to materially and adversely affect the value of the Collateral.

5.19 Leased Premises; Collateral Held by Warehouseman, Bailee, Etc. With respect
to each location where in excess of $1,000,000 of Collateral is stored or
located, at the Administrative Agent’s request, such Grantor will use
commercially reasonable efforts to obtain from each Person from whom such
Grantor leases any premises, and from each other Person at whose premises any
Collateral held by such Grantor is at any time present (including any bailee,
warehouseman or similar Person), any such collateral access, subordination,
landlord waiver, bailment, consent and estoppel agreements as the Administrative
Agent may require, in form and substance satisfactory to the Administrative
Agent.

5.20 Chattel Paper. Such Grantor will not create any Chattel Paper without
placing a legend on such Chattel Paper reasonably acceptable to the
Administrative Agent indicating that the Administrative Agent has a security
interest in such Chattel Paper. Such Grantor will give the Administrative Agent
prompt notice if such Grantor at any time holds or acquires an interest in any
Chattel Paper evidencing an amount in excess of $1,000,000, including any
Electronic Chattel Paper and shall comply, in all respects, with the provisions
of Section 5.1 hereof.

5.21 Commercial Tort Claims. Such Grantor will give the Administrative Agent
prompt notice if such Grantor shall at any time hold or acquire any Commercial
Tort Claim with a potential value in excess of $1,000,000.

5.22 Letter-of-Credit Rights. Such Grantor will give the Administrative Agent
prompt notice if such Grantor shall at any time hold or acquire any
Letter-of-Credit Rights with a potential value in excess of $1,000,000.

5.23 Shareholder Agreements and Other Agreements.

(a) Such Grantor shall comply in all material respects with all of its
obligations under any shareholders agreement, operating agreement, partnership
agreement, voting trust, proxy agreement or other agreement or understanding
relating to any Pledged Collateral (collectively, the “Pledged Collateral
Agreements”) to which it is a party and shall enforce all of its rights
thereunder, except, with respect to any such Pledged Collateral Agreement
relating to any Pledged Collateral issued by a Person other than a Subsidiary of
a Grantor, to the extent the failure to enforce any such rights could reasonably
be expected to materially and adversely affect the value of the Pledged
Collateral to which any such Pledged Collateral Agreement relates.

 

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(b) Such Grantor agrees that no Pledged Stock of a Subsidiary of such Grantor
(i) shall be dealt in or traded on any securities exchange or in any securities
market, (ii) shall constitute an investment company security, or (iii) shall be
held by such Grantor in a Securities Account.

(c) Subject to the terms and conditions of the Credit Agreement, including
Sections 7.3 and 7.5 thereof, such Grantor shall not vote to enable or take any
other action to: (i) amend or terminate, or waive compliance with any of the
terms of, any such Pledged Collateral Agreement, certificate or articles of
incorporation, bylaws or other organizational documents in any way that
materially and adversely affects the validity, perfection or priority of the
Administrative Agent’s security interest therein.

SECTION 6.    REMEDIAL PROVISIONS

Each Grantor covenants and agrees with the Administrative Agent and the other
Secured Parties that, from and after the date of this Agreement until the
Discharge of Obligations:

6.1 Certain Matters Relating to Receivables.

(a) The Administrative Agent hereby authorizes each Grantor to collect such
Grantor’s Receivables, and the Administrative Agent may curtail or terminate
said 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 two 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 over which the Administrative Agent has control, subject
to withdrawal by the Administrative Agent for the account of the Secured Parties
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 and the other Secured
Parties, segregated from other funds of such Grantor. If required by the
Administrative Agent, after the occurrence and during the continuance of an
Event of Default, 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.

(b) At the Administrative Agent’s request, after the occurrence and during the
continuance of an Event of Default, 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, without limitation, all original orders, invoices and shipping
receipts.

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 the Secured Parties 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 under 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.

 

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Neither the Administrative Agent nor any other Secured Party 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 or any Lender of any payment relating thereto, nor shall
the Administrative Agent nor any other Secured Party 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.

6.3 Investment Property.

(a) Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given written 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
paid in respect of the Pledged Collateral and all payments made in respect of
the Pledged Notes to the extent not prohibited by the Credit Agreement, and to
exercise all voting and corporate or other organizational rights with respect to
the Investment Property of such Grantor; provided, however, that no vote shall
be cast or corporate or other organizational right exercised or other action
taken which, in the Administrative Agent’s reasonable discretion, would
materially 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 (A) to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Investment Property (including the Pledged Collateral) of any or all of
the Grantors and make application thereof to the Secured Obligations in the
order set forth in Section 6.5, and (B) to exchange uncertificated Pledged
Collateral for certificated Pledged Collateral and to exchange certificated
Pledged Collateral for certificates of larger or smaller denominations, for any
purpose consistent with this Agreement (in each case to the extent such
exchanges are permitted under the applicable Pledged Collateral Agreements or
otherwise agreed upon by the Issuer of such Pledged Collateral), and (ii) any
and all of such 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, corporate and other rights pertaining to
such Investment Property at any meeting of shareholders 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, without
limitation, the right to exchange at its discretion any and all of any such
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational 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 such 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.

(c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged
Collateral or Pledged Notes 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

 

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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 or other payments with
respect to the Pledged Collateral or, as applicable, the Pledged Notes directly
to the Administrative Agent.

(d) If an Event of Default shall have occurred and be continuing, the
Administrative Agent shall have the right to apply the balance from any Deposit
Account or instruct the bank at which any Deposit Account is maintained to pay
the balance of any Deposit Account to or for the benefit of the Administrative
Agent.

6.4 Proceeds to be Turned Over To Administrative Agent. In addition to the
rights of the Administrative Agent and the other Secured Parties 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, Cash Equivalents and other near-cash items shall be held by
such Grantor in trust for the Administrative Agent and the other Secured
Parties, segregated from other funds of such Grantor, and shall, 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 over which it maintains control, within the meaning of the UCC. All
Proceeds while held by the Administrative Agent in a Collateral Account (or by
such Grantor in trust for the Administrative Agent and the other Secured
Parties) shall continue to be held as collateral security for all the Secured
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.

6.5 Application of Proceeds. If an Event of Default shall have occurred and be
continuing, at any time at the Administrative Agent’s election, the
Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, in payment of the
Secured Obligations in accordance with Section 8.3 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 the Secured Parties, 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) 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 option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or any other Secured Party or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any other Secured
Party shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such 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 which are reasonably convenient
to Administrative Agent and such Grantor, 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, in accordance with the provisions of
Section 6.5, only after deducting all reasonable documented out-of-pocket costs
and

 

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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 and the other Secured
Parties hereunder, including, without limitation, reasonable documented
out-of-pocket attorneys’ fees and disbursements, to the payment in whole or in
part of the Secured Obligations, in such order as is contemplated by Section 8.3
of the Credit Agreement, and only after such application and after the payment
by the Administrative Agent of any other amount required by any provision of
law, including Section 9-615(a)(3) of the UCC, but only to the extent of the
surplus, if any, owing 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 or any other Secured Party arising out of the exercise
by any of them of any rights hereunder, except to the extent caused by the gross
negligence or willful misconduct of the Administrative Agent or such Secured
Party or their respective agents or resulting from a claim brought by any
Grantor against Administrative Agent of any other Secured Party for breach in
bad faith of such party’s obligations hereunder, if such Grantor has obtained a
final and nonappealable judgment in its favor as determined by a court of
competent jurisdiction. 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 Registration Rights.

(a) If the Administrative Agent shall determine to exercise its right to sell
any or all of the Pledged Stock pursuant to Section 6.6, and if in the opinion
of the Administrative Agent it is necessary or advisable to have the Pledged
Stock, or that portion thereof to be sold, registered under the provisions of
the Securities Act, the relevant Grantor will cause the Issuer thereof to
(i) execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof to
be sold, under the provisions of the Securities Act, (ii) use its best efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of one year from the date of the first public
offering of the Pledged Stock, or that portion thereof to be sold, and
(iii) make all amendments thereto and/or to the related prospectus which, in the
opinion of the Administrative Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause such Issuer to comply with the provisions of the
securities or “Blue Sky” laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.

(b) Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Stock, 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. Subject to its
compliance with state securities laws applicable to private sales. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.

 

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(c) Each Grantor agrees to use commercially reasonable 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 Stock pursuant to this Section 6.7 valid and
binding and in compliance with any applicable Requirement of 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 and the
other Secured Parties, that the Administrative Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.7 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 Intellectual Property License. Solely for the purpose of enabling the
Administrative Agent to exercise rights and remedies under this Section 6 after
the occurrence and during the continuance of an Event of Default and at such
time as the Administrative Agent shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to the Administrative Agent, for
the benefit of the Secured Parties, an irrevocable, non-exclusive, worldwide
license (exercisable without payment of royalty or other compensation to such
Grantor), subject, in the case of Trademarks, to sufficient rights to quality
control and inspection in favor of such Grantor to avoid the risk of
invalidation of said Trademarks, to use, operate under, license, or sublicense
any Intellectual Property now owned or hereafter acquired by the Grantors.

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

SECTION 7.    THE ADMINISTRATIVE AGENT

Each Grantor covenants and agrees with the Administrative Agent and the other
Secured Parties that:

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, after the
occurrence and during the continuance of an Event of Default, each Grantor
hereby gives the Administrative Agent the power and right, on behalf of such
Grantor (except as otherwise explicitly provided herein or required by law),
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;

 

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(ii) in the case of any Intellectual Property in which Grantor has any right,
title or interest, 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 and the other Secured Parties’
security interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;

(iii) pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral, effect any repairs or any 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 endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and

(v) (A) 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; (B) 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; (C) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral; (D) 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; (E) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (F) 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;
(G) assign any Copyright, Patent or Trademark owned by such Grantor (along with
the goodwill of the business to which any such Copyright, Patent or Trademark
pertains), 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; and (H) 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 and the other Secured Parties’
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 and such failure results in an Event of Default that is then
continuing, 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) The expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate per annum equal to the highest rate per annum at which interest would then
be payable on any category of past due ABR Loans under the Credit Agreement,
from the date of payment by the Administrative Agent to the date reimbursed by
the relevant Grantor, shall be payable by such Grantor to the Administrative
Agent on demand.

 

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(d) Each Grantor hereby ratifies all that said 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, under Section 9-207 of the UCC or otherwise, 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, any other
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for 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
and the other Secured Parties hereunder are solely to protect the Administrative
Agent’s and the other Secured Parties’ interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any other Secured Party to
exercise any such powers. The Administrative Agent and the other Secured Parties
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct or resulting from a claim brought by any Grantor against
Administrative Agent and the other Secured Parties for breach in bad faith of
such party’s obligations hereunder, if such Grantor has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.

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

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 10.1 of the Credit Agreement.

8.2 Notices. All notices, requests and demands to or upon the Administrative
Agent or any Grantor hereunder shall be effected in the manner provided for in
Section 10.2 of the Credit Agreement; provided that any such notice, request or
demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 1.

8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any other Secured Party shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default, as applicable. No failure to
exercise, nor any delay in exercising, on the part of the Administrative Agent
or any other Secured Party, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right,

 

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power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any other Secured Party of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
the Administrative Agent or such other Secured Party would otherwise have on any
future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

8.4 Enforcement Expenses; Indemnification.

(a) Each Guarantor agrees to pay or reimburse the Administrative Agent and each
other Secured Party for all its reasonable and documented out-of-pocket costs
and expenses incurred in collecting against such Guarantor under the guaranty
contained in Section 2 of this Agreement or otherwise enforcing or preserving
any rights under this Agreement and the other Loan Documents to which such
Guarantor is a party, including the reasonable and documented out-of-pocket fees
and disbursements of counsel.

(b) Each Guarantor agrees to pay, and to save the Administrative Agent and each
other Secured Party 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) Each Guarantor agrees to pay, and to save the Administrative Agent and each
other Secured Party harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrower would be required to do so pursuant to the Credit Agreement.

(d) The agreements in this Section 8.4 shall survive repayment of the Secured
Obligations and any other amounts payable under the Credit Agreement and the
other Loan Documents.

8.5 Successors and Assigns. This Agreement shall be binding upon the successors
and assigns of each Grantor and shall inure to the benefit of the Administrative
Agent and each other Secured Party and their respective successors and assigns
permitted pursuant to Section 10.6 of the Credit Agreement; provided that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.

8.6 Set Off. Each Grantor hereby irrevocably authorizes the Administrative Agent
and each other Secured Party and any Affiliate thereof at any time and from time
to time after the occurrence and during the continuance of an Event of Default,
without notice to such Grantor or any other Grantor, any such notice being
expressly waived by each Grantor, to setoff and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such Secured
Party or such Affiliate to or for the credit or the account of such Grantor, or
any part thereof in such amounts as the Administrative Agent or such Secured
Party may elect, against and on account of the Secured Obligations and
liabilities of such Grantor to the Administrative Agent or such Secured Party
hereunder and under the other Loan Documents and claims of every nature and
description of the Administrative Agent or such Secured Party against such
Grantor, in any currency, whether arising hereunder, under the Credit Agreement,
any other Loan Document or otherwise, as the Administrative Agent or such
Secured Party may elect, whether or not the Administrative Agent or any other
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or

 

Guarantee & Collateral Agreement    32   

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

unmatured. The rights of the Administrative Agent and each other Secured Party
under this Section 8.6 are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which the Administrative Agent or
such other Secured Party may have.

8.7 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
and/or electronic mail), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

8.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

8.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

8.10 Integration. This Agreement and the other Loan Documents represent the
agreement of the Grantors, the Administrative Agent and the other Secured
Parties with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any other Secured Party relative to subject matter hereof and thereof
not expressly set forth or referred to herein or in the other Loan Documents.

8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8.12 Submission to Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the Southern District of the
State of New York in the Borough of Manhattan, and appellate courts from any
thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section 8.12 any special, exemplary, punitive or consequential damages.

 

Guarantee & Collateral Agreement    33   

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

8.13 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 nor any other Secured Party 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
and the other Secured Parties, 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 any of
the Secured Parties or among the Grantors and any of the Secured Parties.

8.14 Additional Grantors. Each Subsidiary of a Grantor that is required to
become a party to this Agreement pursuant to Section 6.12 of the Credit
Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.

8.15 Releases.

(a) Upon the Discharge of Obligations, the Collateral shall be released from the
Liens in favor of the Administrative Agent and the other Secured Parties created
hereby, this Agreement shall terminate with respect to the Administrative Agent
and the other Secured Parties, and all obligations (other than those expressly
stated to survive such termination) of each Grantor to the Administrative Agent
or any other Secured Party hereunder shall terminate, all without delivery of
any instrument or performance of any act by any party. At the sole expense of
any Grantor following any such termination, the Administrative Agent shall
deliver such documents as such Grantor 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 Section 7 of the Credit Agreement,
then the Liens on such Collateral created hereunder shall be deemed
automatically terminated and the Administrative Agent, at the request and sole
expense of such Grantor, shall promptly 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, as applicable. At the request and
sole expense of the Borrower, a Guarantor shall be released from its obligations
hereunder in the event that all the Capital Stock of such Guarantor shall be
sold, transferred or otherwise disposed of to a Person other than a Grantor in a
transaction permitted by Section 7 of the Credit Agreement; provided that the
Borrower shall have delivered to the Administrative Agent, at least ten days, or
such shorter period as the Administrative Agent may agree, 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 Borrower stating that such transaction is in
compliance with terms and provisions of the Credit Agreement and the other Loan
Documents.

8.16 WAIVER OF JURY TRIAL. EACH GRANTOR AND THE ADMINISTRATIVE AGENT EACH HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

[remainder of page intentionally left blank]

 

Guarantee & Collateral Agreement    34   

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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

GRANTORS: MONOTYPE IMAGING INC. By:  

/s/ Douglas J. Shaw

Name:  

Douglas J. Shaw

Title:  

President & CEO

MONOTYPE IMAGING HOLDINGS INC. By:  

/s/ Douglas J. Shaw

Name:  

Douglas J. Shaw

Title:  

President & CEO

MYFONTS INC. By:  

/s/ Douglas J. Shaw

Name:  

Douglas J. Shaw

Title:  

President & CEO

IMAGING HOLDINGS CORP. By:  

/s/ Douglas J. Shaw

Name:  

Douglas J. Shaw

Title:  

President & CEO

Signature Page 1 to Guarantee and Collateral Agreement

 

Guarantee & Collateral Agreement

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

MONOTYPE ITC INC. By:  

/s/ Douglas J. Shaw

Name:  

Douglas J. Shaw

Title:  

President & CEO

SWYFT MEDIA INC. By:  

/s/ Douglas J. Shaw

Name:  

Douglas J. Shaw

Title:  

President & CEO

Signature Page to Guarantee and Collateral Agreement

 

Guarantee & Collateral Agreement

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

ADMINISTRATIVE AGENT: SILICON VALLEY BANK By:  

/s/ Michael Shuhy

Name:  

Michael Shuhy

Title:  

Director

Signature Page 2 to Guarantee and Collateral Agreement

 

Guarantee & Collateral Agreement

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

SCHEDULE 1

NOTICE ADDRESSES OF GUARANTORS

 

Guarantor

   Notice Address   

 

Schedule 1

Guarantee & Collateral Agreement

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

SCHEDULE 2

DESCRIPTION OF INVESTMENT PROPERTY

Pledged Stock:

 

Grantor

  

Issuer

  

Class of Capital Stock

  

Certificate No.

  

No. of Shares / Units

           

Pledged Notes:

 

Grantor

  

Issuer

  

Date of Issuance

  

Payee

  

Principal Amount

           

Securities Accounts:

 

Grantor

  

Securities Intermediary

  

Address

  

Account Number(s)

        

Commodity Accounts:

 

Grantor

  

Commodities Intermediary

  

Address

  

Account Number(s)

        

Deposit Accounts:

 

Grantor

  

Depositary Bank

  

Address

  

Account Number(s)

        

 

Schedule 2

Guarantee & Collateral Agreement

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

SCHEDULE 3

FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS

Uniform Commercial Code Filings

 

1. UCC Financing Statement naming Monotype Imaging Inc., as “debtor” and the
Administrative Agent as “secured party” to be filed with the Secretary of State
of the State of Delaware.

 

2. UCC Financing Statement naming Monotype Imaging Holdings Inc., as “debtor”
and the Administrative Agent as “secured party” to be filed with the Secretary
of State of the State of Delaware.

 

3. UCC Financing Statement naming Imaging Holdings Corp. as “debtor” and the
Administrative Agent as “secured party” to be filed with the Secretary of State
of the State of Delaware.

 

4. UCC Financing Statement naming MyFonts Inc. as “debtor” and the
Administrative Agent as “secured party” to be filed with the Secretary of State
of the State of Delaware.

 

5. UCC Financing Statement naming Swyft Media Inc. as “debtor” and the
Administrative Agent as “secured party” to be filed with the Secretary of State
of the State of Delaware.

 

6. UCC Financing Statement naming Monotype ITC Inc. as “debtor” and the
Administrative Agent as “secured party” to be filed with the Secretary of State
of the State of Delaware.

 

7. UCC-3 Termination Statement to be filed with the Secretary of State of the
State of Delaware for the purpose of terminating UCC-1 Financing Statement No.
20121394552 filed by Wells Fargo Capital Finance, LLC, as Agent, against MyFonts
Inc.

 

8. UCC-3 Termination Statement to be filed with the Secretary of State of the
State of Delaware for the purpose of terminating UCC-1 Financing Statement No.
20112701004 filed by Wells Fargo Capital Finance, LLC, as Agent, against Imaging
Holdings Corp.

 

9. UCC-3 Termination Statement to be filed with the Secretary of State of the
State of New York for the purpose of terminating UCC-1 Financing Statement No.
201107140378576 filed by Wells Fargo Capital Finance, LLC, as Agent, against
Monotype ITC Inc.

 

10. UCC-3 Termination Statement to be filed with the Secretary of State of the
State of Delaware for the purpose of terminating UCC-1 Financing Statement No.
20112701038 filed by Wells Fargo Capital Finance, LLC, as Agent, against
Monotype Imaging Inc.

 

11. UCC-3 Termination Statement to be filed with the Secretary of State of the
State of Delaware for the purpose of terminating UCC-1 Financing Statement No.
20112701046 filed by Wells Fargo Capital Finance, LLC, as Agent, against
Monotype Imaging Inc.

 

12. UCC-3 Termination Statement to be filed with the Secretary of State of the
State of Delaware for the purpose of terminating UCC-1 Financing Statement No.
20121394552 filed by Wells Fargo Capital Finance, LLC, as Agent, against MyFonts
Inc.

 

Schedule 3

Guarantee & Collateral Agreement

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

13. UCC-3 Termination Statement to be filed with the Secretary of State of the
State of Delaware for the purpose of terminating UCC-1 Financing Statement
No. 2015095397 filed by Wells Fargo Capital Finance, LLC, as Agent, against
Swyft Media Inc.

Copyright, Patent and Trademark Filings

[                    ]

Other Actions

[                    ]

 

Schedule 3

Guarantee & Collateral Agreement

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

SCHEDULE 4

LOCATION OF JURISDICTION OF ORGANIZATION,

CHIEF EXECUTIVE OFFICE AND LOCATION OF BOOKS

 

Grantor

  

Jurisdiction of

Organization

  

Organizational

Identification

Number

  

Location of Chief

Executive Office

  

Location of Books

           

 

Schedule 4

Guarantee & Collateral Agreement

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

SCHEDULE 5

LOCATIONS OF EQUIPMENT AND INVENTORY

 

Grantor

   Address Location   

 

Schedule 5

Guarantee & Collateral Agreement

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

SCHEDULE 6(A)

RIGHTS OF THE GRANTORS RELATING TO COPYRIGHTS

Issued Copyrights of [NAME OF GRANTOR]

 

Jurisdiction

  

Patent No.

  

Issue Date

  

Inventor

  

Title

           

Pending Copyright Applications of [NAME OF GRANTOR]

 

Jurisdiction

  

Serial No.

  

Filing Date

  

Inventor

  

Title

           

 

Schedule 6(A)

Guarantee & Collateral Agreement

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

SCHEDULE 6(B)

RIGHTS OF THE GRANTORS RELATING TO LICENSED INTELLECTUAL PROPERTY

Issued Patents and Pending Patent Applications Licensed to [NAME OF GRANTOR]

[                    ]

Issued Copyrights and Pending Copyright Applications Licensed to [NAME OF
GRANTOR]

[                    ]

Issued Trademarks and Pending Trademark Applications Licensed to [NAME OF
GRANTOR]

[                    ]

 

Schedule 6(B)

Guarantee & Collateral Agreement

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

SCHEDULE 6(C)

RIGHTS OF THE GRANTORS RELATING TO PATENTS

Registered Patents of [NAME OF GRANTOR]

 

Jurisdiction

  

Registration No.

  

Registration Date

  

Work of Authorship

        

Pending Patent Applications of [NAME OF GRANTOR]

 

Jurisdiction

  

Application No.

  

Application Date

  

Work of Authorship

        

 

Schedule 6(C)

Guarantee & Collateral Agreement

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

SCHEDULE 6(D)

RIGHTS OF THE GRANTORS RELATING TO TRADEMARKS

Registered Trademarks of [NAME OF GRANTOR]

 

Jurisdiction

  

Registration No.

  

Registration Date

  

Work of Authorship

        

Pending Trademark Applications of [NAME OF GRANTOR]

 

Jurisdiction

  

Application No.

  

Application Date

  

Work of Authorship

        

 

Schedule 6(D)

Guarantee & Collateral Agreement

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

SCHEDULE 6(D)

OTHER TRADEMARK APPLICATIONS

Pending Trademark Applications of [NAME OF GRANTOR]

 

Jurisdiction

  

Registration No.

  

Registration Date

  

Work of Authorship

        

 

Schedule 6(D)

Guarantee & Collateral Agreement

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

SCHEDULE 7

LETTER OF CREDIT RIGHTS

 

Schedule 7

Guarantee & Collateral Agreement

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

SCHEDULE 8

COMMERCIAL TORT CLAIMS

 

Schedule 8

Guarantee & Collateral Agreement

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

ANNEX 1 TO

GUARANTEE AND COLLATERAL AGREEMENT

FORM OF

ASSUMPTION AGREEMENT

This ASSUMPTION AGREEMENT, dated as of [                ], is executed and
delivered by [                                ] (the “Additional Grantor”), in
favor of SILICON VALLEY BANK, as administrative agent (in such capacity, the
“Administrative Agent”) for the banks and other financial institutions or
entities (the “Lenders”) from time to time parties to that certain Credit
Agreement, dated as of September 15, 2015 (as amended, amended and restated,
supplemented, restructured or otherwise modified, renewed or replaced from time
to time, the “Credit Agreement”), among Monotype Imaging Inc., a Delaware
corporation (“Borrower”), Monotype Imaging Holdings Inc., a Delaware corporation
(“Holdings”), the Lenders party thereto and the Administrative Agent. All
capitalized terms not defined herein shall have the respective meanings ascribed
to such terms in such Credit Agreement.

W I T N E S S E T H:

WHEREAS, in connection with the Credit Agreement, Holdings, the Borrower and
certain of their Affiliates (other than the Additional Grantor) have entered
into that certain Guarantee and Collateral Agreement, dated as of September 15,
2015, in favor of the Administrative Agent for the benefit of the Secured
Parties defined therein (the “Guarantee and Collateral Agreement”);

WHEREAS, the Borrower is required, pursuant to Section 6.12 of the Credit
Agreement to cause the Additional Grantor to become a party to the Guarantee and
Collateral Agreement in order to grant in favor of the Administrative Agent (for
the ratable benefit of the Lenders) the Liens and security interests therein
specified and provide its guarantee of the Obligations as therein contemplated;
and

WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;

NOW, THEREFORE, IT IS AGREED:

1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the
Guarantee and Collateral Agreement, (a) hereby becomes a party to the Guarantee
and Collateral Agreement as both a “Grantor” and a “Guarantor” thereunder with
the same force and effect as if originally named therein as a Grantor and a
Guarantor and, without limiting the generality of the foregoing, hereby
expressly assumes all obligations and liabilities of a Grantor and a Guarantor
thereunder, and (b) hereby grants to the Administrative Agent, for the benefit
of the Secured Parties, as security for the Secured Obligations, a security
interest in all of the Additional Grantor’s right, title and interest in any and
to all Collateral of the Additional Grantor, in each case whether now owned or
hereafter acquired or in which the Additional Grantor now has or hereafter
acquires an interest and wherever the same may be located, but subject in all
respects to the terms, conditions and exclusions set forth in the Guarantee and
Collateral Agreement. The information set forth in Schedule 1 hereto is hereby
added to the information set forth in the Schedules to the Guarantee and
Collateral Agreement. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Section 4 of the
Guarantee and Collateral Agreement (x) that is qualified by materiality is true
and correct, and (y) that is not qualified by materiality, is true and correct
in all material respects, in each case, on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date (except
to the extent any such representation and warranty expressly relates to an
earlier date, in which case such representation and warranty was true and
correct in all material respects as of such earlier date).

 

Annex 1

Guarantee & Collateral Agreement

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

2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

3. Loan Document. This Assumption Agreement shall constitute a Loan Document
under the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

[ADDITIONAL GRANTOR]

By:

 

 

 

Name:

 

Title:

 

Annex 1

Guarantee & Collateral Agreement

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

Schedule to

Assumption Agreement

Supplement to Schedule 1

Supplement to Schedule 2

Supplement to Schedule 3

Supplement to Schedule 4

Supplement to Schedule 5

Supplement to Schedule 6

Supplement to Schedule 7

Supplement to Schedule 8

 

Annex 1

Guarantee & Collateral Agreement

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

ANNEX 2 TO

GUARANTEE AND COLLATERAL AGREEMENT

FORM OF

PLEDGE SUPPLEMENT

 

To: Silicon Valley Bank, as Administrative Agent

 

Re: Monotype Imaging Inc. [Borrower]

 

Date:                 

Ladies and Gentlemen:

This Pledge Supplement (this “Pledge Supplement”) is made and delivered pursuant
to Section 3.3(g) of that certain Guarantee and Collateral Agreement, dated as
of September 15, 2015 (as amended, modified, renewed or extended from time to
time, the “Guarantee and Collateral Agreement”), among each Grantor party
thereto (each a “Grantor” and collectively, the “Grantors”), and Silicon Valley
Bank (the “Administrative Agent”). All capitalized terms used in this Pledge
Supplement and not otherwise defined herein shall have the meanings assigned to
them in either the Guarantee and Collateral Agreement or the Credit Agreement
(as defined in the Guarantee and Collateral Agreement), as the context may
require.

The undersigned,                                  [insert name of Grantor], a
                                 [corporation, partnership, limited liability
company, etc.], confirms and agrees that all Pledged Collateral of the
undersigned, including the property described on the supplemental schedule
attached hereto, shall be and become part of the Pledged Collateral and shall
secure all Secured Obligations.

Schedule 2 to the Guarantee and Collateral Agreement is hereby amended by adding
to such Schedule 2 the information set forth in the supplement attached hereto.

This Pledge Supplement shall constitute a Loan Document under the Credit
Agreement.

THIS PLEDGE SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the undersigned has executed this Pledge Supplement, as of
the date first above written.

 

[NAME OF APPLICABLE GRANTOR]

By:

 

 

Name:

 

 

Title:

 

 

 

Annex 2

Guarantee & Collateral Agreement

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

SUPPLEMENT TO ANNEX 2

TO THE SECURITY AGREEMENT

 

Name of Subsidiary

   Number of Units/Shares
Owned    Certificate(s) Numbers    Date Issued    Class or Type of Units
or Shares    Percentage of
Subsidiary’s
Total Equity
Interests Owned               

 

Annex 2

Guarantee & Collateral Agreement