Exhibit 10.4

 

 

SECURITY AGREEMENT

 

By

 

D 56, INC., DEPARTMENT 56 RETAIL, INC.,

 

TIME TO CELEBRATE, INC. and LENOX, INCORPORATED,

 

as Borrowers,

 

DEPARTMENT 56, INC.,

 

and

 

THE OTHER GUARANTORS PARTY HERETO,

 

as Guarantors

 

and

 

UBS AG, STAMFORD BRANCH,

 

as Administrative Agent

 

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

 

Dated as of September 1, 2005

 

 

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

 

TABLE OF CONTENTS

 

PREAMBLE

 

 

 

 

 

RECITALS:

 

 

 

 

 

AGREEMENT:

 

 

 

 

 

ARTICLE I. DEFINITIONS AND INTERPRETATION

 

 

 

 

Section 1.1

Definitions

 

Section 1.2

Interpretation

 

Section 1.3

Resolution of Drafting Ambiguities

 

Section 1.4

Perfection Certificate

 

 

 

 

ARTICLE II. GRANT OF SECURITY AND SECURED OBLIGATIONS

 

 

 

 

Section 2.1

Pledge

 

Section 2.2

Secured Obligations

 

Section 2.3

Security Interest

 

 

 

 

ARTICLE III. PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED
COLLATERAL

 

 

 

 

Section 3.1

Delivery of Certificated Securities Collateral

 

Section 3.2

Perfection of Uncertificated Securities Collateral

 

Section 3.3

Financing Statements and Other Filings; Maintenance of Perfected Security
Interest

 

Section 3.4

Other Actions

 

Section 3.5

Joinder of Additional Pledgors

 

Section 3.6

Supplements; Further Assurances

 

 

 

 

ARTICLE IV. REPRESENTATIONS, WARRANTIES AND COVENANTS

 

 

 

 

Section 4.1

Title

 

Section 4.2

Limitation on Liens; Defense of Claims; Transferability of Pledged Collateral

 

Section 4.3

Chief Executive Office; Change of Name; Jurisdiction of Organization

 

Section 4.4

Location of Collateral

 

Section 4.5

Condition and Maintenance of Equipment

 

Section 4.6

Corporate Names; Prior Transactions

 

Section 4.7

Due Authorization and Issuance

 

Section 4.8

No Claims

 

Section 4.9

No Conflicts, Consents, etc.

 

 

i

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

 

Section 4.10

Pledged Collateral

 

Section 4.11

Insurance

 

Section 4.12

Payment of Taxes; Compliance with Laws; Contested Liens; Claims

 

Section 4.13

Access to Pledged Collateral, Books and Records; Other Information

 

Section 4.14 [a05-15805_1ex10d4.htm#Section4_14_110727]

Third Party Consents Relating to Intellectual Property Collateral
[a05-15805_1ex10d4.htm#Section4_14_110727]

 

 

 

 

ARTICLE V. CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
[a05-15805_1ex10d4.htm#Articlev__104105]

 

 

 

 

Section 5.1 [a05-15805_1ex10d4.htm#Section5_1_110729]

Pledge of Additional Securities Collateral
[a05-15805_1ex10d4.htm#Section5_1_110729]

 

Section 5.2 [a05-15805_1ex10d4.htm#Section5_2_110730]

Voting Rights; Distributions; etc. [a05-15805_1ex10d4.htm#Section5_2_110730]

 

Section 5.3 [a05-15805_1ex10d4.htm#Section5_3_110736]

Operative Agreements [a05-15805_1ex10d4.htm#Section5_3_110736]

 

Section 5.4 [a05-15805_1ex10d4.htm#Section5_4_110741]

Defaults, etc. [a05-15805_1ex10d4.htm#Section5_4_110741]

 

Section 5.5 [a05-15805_1ex10d3.htm#Section5_5_090824]

Certain Agreements of Pledgors As Issuers and Holders of Equity Interests
[a05-15805_1ex10d3.htm#Section5_5_090824]

 

 

 

 

ARTICLE VI. CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL
[a05-15805_1ex10d4.htm#Articlevi__110744]

 

 

 

 

Section 6.1 [a05-15805_1ex10d4.htm#Section6_1_110748]

Grant of License [a05-15805_1ex10d4.htm#Section6_1_110748]

 

Section 6.2 [a05-15805_1ex10d4.htm#Section6_2_110752]

Registrations [a05-15805_1ex10d4.htm#Section6_2_110752]

 

Section 6.3 [a05-15805_1ex10d4.htm#Section6_3_110755]

No Violations or Proceedings [a05-15805_1ex10d4.htm#Section6_3_110755]

 

Section 6.4 [a05-15805_1ex10d4.htm#Section6_4_110757]

Protection of Administrative Agent’s Security
[a05-15805_1ex10d4.htm#Section6_4_110757]

 

Section 6.5 [a05-15805_1ex10d4.htm#Section6_5_110804]

After-Acquired Property [a05-15805_1ex10d4.htm#Section6_5_110804]

 

Section 6.6 [a05-15805_1ex10d4.htm#Section6_6_110808]

Modifications [a05-15805_1ex10d4.htm#Section6_6_110808]

 

Section 6.7 [a05-15805_1ex10d4.htm#Section6_7_110810]

Litigation [a05-15805_1ex10d4.htm#Section6_7_110810]

 

Section 6.8 [a05-15805_1ex10d4.htm#Section6_8_110815]

U.S. Intent-to-Use Trademark Applications
[a05-15805_1ex10d4.htm#Section6_8_110815]

 

 

 

 

ARTICLE VII. CERTAIN PROVISIONS CONCERNING ACCOUNTS
[a05-15805_1ex10d4.htm#Articlevii__104422]

 

 

 

 

Section 7.1 [a05-15805_1ex10d4.htm#Section7_1_110819]

Special Representations and Warranties [a05-15805_1ex10d4.htm#Section7_1_110819]

 

Section 7.2 [a05-15805_1ex10d4.htm#Section7_2_110823]

Maintenance of Records [a05-15805_1ex10d4.htm#Section7_2_110823]

 

Section 7.3 [a05-15805_1ex10d4.htm#Section7_3_110827]

Legend [a05-15805_1ex10d4.htm#Section7_3_110827]

 

Section 7.4 [a05-15805_1ex10d4.htm#Section7_4_110830]

Modification of Terms, etc. [a05-15805_1ex10d4.htm#Section7_4_110830]

 

Section 7.5 [a05-15805_1ex10d4.htm#Section7_5_110834]

Collection [a05-15805_1ex10d4.htm#Section7_5_110834]

 

 

 

 

ARTICLE VIII. TRANSFERS AND OTHER LIENS
[a05-15805_1ex10d4.htm#Articleviii__104453]

 

 

 

 

Section 8.1 [a05-15805_1ex10d4.htm#Section8_1_110838]

Transfers of and other Liens on Pledged Collateral
[a05-15805_1ex10d4.htm#Section8_1_110838]

 

 

 

 

ARTICLE IX. REMEDIES [a05-15805_1ex10d4.htm#Articleix__104503]

 

 

 

 

Section 9.1 [a05-15805_1ex10d4.htm#Section9_1_110842]

Remedies [a05-15805_1ex10d4.htm#Section9_1_110842]

 

Section 9.2 [a05-15805_1ex10d4.htm#Section9_2_110851]

Notice of Sale [a05-15805_1ex10d4.htm#Section9_2_110851]

 

Section 9.3 [a05-15805_1ex10d4.htm#Section9_3_110855]

Waiver of Notice and Claims [a05-15805_1ex10d4.htm#Section9_3_110855]

 

Section 9.4 [a05-15805_1ex10d4.htm#Section9_4_110905]

Certain Sales of Pledged Collateral [a05-15805_1ex10d4.htm#Section9_4_110905]

 

 

ii

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

 

Section 9.5 [a05-15805_1ex10d4.htm#Section9_5_110909]

No Waiver; Cumulative Remedies [a05-15805_1ex10d4.htm#Section9_5_110909]

 

Section 9.6 [a05-15805_1ex10d4.htm#Section9_6_110912]

Certain Additional Actions Regarding Intellectual Property
[a05-15805_1ex10d4.htm#Section9_6_110912]

 

 

 

 

ARTICLE X. PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS/APPLICATION
OF PROCEEDS [a05-15805_1ex10d4.htm#Articlex__104604]

 

 

 

 

Section 10.1 [a05-15805_1ex10d4.htm#Section10_1_110914]

Proceeds of Casualty Events and Collateral Dispositions
[a05-15805_1ex10d4.htm#Section10_1_110914]

 

Section 10.2 [a05-15805_1ex10d4.htm#Section10_2_110916]

Application of Proceeds [a05-15805_1ex10d4.htm#Section10_2_110916]

 

 

 

 

ARTICLE XI. MISCELLANEOUS [a05-15805_1ex10d4.htm#Articlexi__104615]

 

 

 

 

Section 11.1 [a05-15805_1ex10d4.htm#Section11_1_110919]

Concerning Administrative Agent [a05-15805_1ex10d4.htm#Section11_1_110919]

 

Section 11.2 [a05-15805_1ex10d4.htm#Section11_2_110923]

Administrative Agent May Perform; Administrative Agent Appointed
Attorney-in-Fact [a05-15805_1ex10d4.htm#Section11_2_110923]

 

Section 11.3 [a05-15805_1ex10d4.htm#Section11_3_110925]

Expenses [a05-15805_1ex10d4.htm#Section11_3_110925]

 

Section 11.4 [a05-15805_1ex10d4.htm#Section11_4_110928]

Continuing Security Interest; Assignment
[a05-15805_1ex10d4.htm#Section11_4_110928]

 

Section 11.5 [a05-15805_1ex10d4.htm#Section11_5_110929]

Termination; Release [a05-15805_1ex10d4.htm#Section11_5_110929]

 

Section 11.6 [a05-15805_1ex10d4.htm#Section11_6_110932]

Modification in Writing [a05-15805_1ex10d4.htm#Section11_6_110932]

 

Section 11.7 [a05-15805_1ex10d4.htm#Section11_7_110933]

Notices [a05-15805_1ex10d4.htm#Section11_7_110933]

 

Section 11.8 [a05-15805_1ex10d4.htm#Section11_8_110935]

GOVERNING LAW [a05-15805_1ex10d4.htm#Section11_8_110935]

 

Section 11.9 [a05-15805_1ex10d4.htm#Section11_9_110936]

CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL
[a05-15805_1ex10d4.htm#Section11_9_110936]

 

Section 11.10 [a05-15805_1ex10d4.htm#Section11_10_110941]

Severability of Provisions [a05-15805_1ex10d4.htm#Section11_10_110941]

 

Section 11.11 [a05-15805_1ex10d4.htm#Section11_11_110942]

Execution in Counterparts [a05-15805_1ex10d4.htm#Section11_11_110942]

 

Section 11.12 [a05-15805_1ex10d4.htm#Section11_12_110945]

Business Days [a05-15805_1ex10d4.htm#Section11_12_110945]

 

Section 11.13 [a05-15805_1ex10d4.htm#Section11_13_110955]

No Credit for Payment of Taxes or Imposition
[a05-15805_1ex10d4.htm#Section11_13_110955]

 

Section 11.14 [a05-15805_1ex10d4.htm#Section11_14_110959]

No Claims Against Administrative Agent
[a05-15805_1ex10d4.htm#Section11_14_110959]

 

Section 11.15 [a05-15805_1ex10d4.htm#Section11_15_111001]

No Release [a05-15805_1ex10d4.htm#Section11_15_111001]

 

Section 11.16 [a05-15805_1ex10d4.htm#Section11_16_111003]

Obligations Absolute [a05-15805_1ex10d4.htm#Section11_16_111003]

 

 

 

 

EXHIBIT 1 [a05-15805_1ex10d4.htm#Exhibit1_111009]

Form of Issuers Acknowledgment [a05-15805_1ex10d4.htm#Exhibit1_111009]

EXHIBIT 2 [a05-15805_1ex10d4.htm#Exhibit2_111011]

Form of Securities Pledge Amendment [a05-15805_1ex10d4.htm#Exhibit2_111011]

EXHIBIT 3 [a05-15805_1ex10d4.htm#Exhibit3_124105]

Form of Joinder Agreement [a05-15805_1ex10d4.htm#Exhibit3_124105]

EXHIBIT 4 [a05-15805_1ex10d4.htm#Exhibit4_124122]

Form of Securities Account Control Agreement
[a05-15805_1ex10d4.htm#Exhibit4_124122]

EXHIBIT 5 [a05-15805_1ex10d4.htm#Exhibit5_124115]

Form of Deposit Account Control Agreement
[a05-15805_1ex10d4.htm#Exhibit5_124115]

 

iii

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

 

SECURITY AGREEMENT

 

SECURITY AGREEMENT dated as of September 1, 2005 (as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the provisions hereof, the “Agreement”) made among D 56, INC., a Minnesota
corporation (“D 56”), DEPARTMENT 56 RETAIL, INC., a Minnesota corporation (“D 56
Retail”), TIME TO CELEBRATE, INC., a Minnesota corporation (“TTC”), LENOX,
INCORPORATED, a New Jersey corporation (“Lenox” and, together with D 56, D 56
Retail and TTC, “Borrowers” and each individually, a “Borrower”), DEPARTMENT 56,
INC., a Delaware corporation (“Holdings”), THE SUBSIDIARY GUARANTORS PARTY TO
THE CREDIT AGREEMENT (and together with Holdings, the “Guarantors”) ANY
ADDITIONAL BORROWERS OR GUARANTORS FROM TIME TO TIME PARTY HERETO BY EXECUTION
OF A JOINDER AGREEMENT (the “Additional Pledgors,”), as pledgors, assignors and
debtors (the Borrowers, together with the Guarantors and the Additional
Pledgors, in such capacities and together with any successors in such
capacities, the “Pledgors,” and each, a “Pledgor”), in favor of UBS AG, STAMFORD
BRANCH, having an office at 677 Washington Boulevard, Stamford, Connecticut 
06901, in its capacity as administrative agent pursuant to the Credit Agreement
(as hereinafter defined), as pledgee, assignee and secured party (in such
capacities and together with any successors in such capacities, the
“Administrative Agent”).

 

R E C I T A L S:

 

A.                                   The Pledgors, the Administrative Agent, UBS
Securities LLC, as Syndication Agent and Arranger, UBS AG, Stamford Branch, as
Collateral Agent, and the lending institutions listed therein (the “Lenders”)
have, in connection with the execution and delivery of this Agreement, entered
into that certain Term Loan Credit Agreement, dated as of even date herewith (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”).

 

B.                                     Each Guarantor has, pursuant to the
Credit Agreement, among other things, unconditionally guaranteed the obligations
of the Borrowers under the Credit Agreement and the other Loan Documents (as
hereinafter defined).

 

C.                                     The Borrowers and each Guarantor will
receive substantial benefits from the execution, delivery and performance of the
obligations under the Credit Agreement and the other Loan Documents and each is,
therefore, willing to enter into this Agreement.

 

D.                                    It is contemplated that one or more of the
Pledgors may enter (or may have entered) into one or more Lender Hedging
Agreements with one or more of the Lenders or their respective Affiliates.

 

E.                                      Each Pledgor is or, as to Pledged
Collateral (as hereinafter defined) acquired by such Pledgor after the date
hereof will be, the legal and/or beneficial owner of the Pledged Collateral
pledged by it hereunder.

 

F.                                      This Agreement is given by each Pledgor
in favor of the Administrative Agent for the benefit of the Secured Parties to
secure the payment and performance of all of the Obligations.

 

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

 

G.                                     It is a condition to the obligations of
the Lenders to make the Loans under the Credit Agreement or entering into any
Lender Hedging Agreement that each Pledgor execute and deliver the applicable
Loan Documents, including this Agreement.

 

A G R E E M E N T:

 

NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Administrative Agent hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS AND INTERPRETATION

 

Section 1.1                                      Definitions.

 

(A)                                                                                 
UNLESS OTHERWISE DEFINED HEREIN, TERMS USED HEREIN THAT ARE DEFINED IN THE UCC
SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN THE UCC.

 

(B)                                                                                
CAPITALIZED TERMS USED BUT NOT OTHERWISE DEFINED HEREIN THAT ARE DEFINED IN THE
CREDIT AGREEMENT SHALL HAVE THE MEANINGS GIVEN TO THEM IN THE CREDIT AGREEMENT.

 

(C)                                                                                 
THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:

 

“Acquisition Document Rights” shall mean, with respect to each Pledgor,
collectively, all of such Pledgor’s rights, title and interest in, to and under
the Acquisition Documents including, without limitation (i) all rights and
remedies relating to monetary damages, including indemnification rights and
remedies, and claims for damages or other relief pursuant to or in respect of
the Acquisition Documents, (ii) all rights and remedies relating to monetary
damages, including indemnification rights and remedies, and claims for monetary
damages under or in respect of the agreements, documents and instruments
referred to in the Acquisition Documents or related thereto and (iii) all
proceeds, collections, recoveries and rights of subrogation with respect to the
foregoing.

 

“Acquisition Agreement” shall mean the stock purchase agreement, dated as of
July 21, 2005 by and between Holdings and Brown-Forman Corporation (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof and of the Credit Agreement).

 

“Acquisition Documents” shall mean the collective reference to the Acquisition
Agreement together with any and all documents, agreements and other instruments
then or at any time thereafter executed and/or delivered in connection therewith
or related thereto, in each case, as amended, amended and restated,
supplemented, extended, renewed, replaced or otherwise modified from time to
time.

 

“Additional Pledged Interests” shall mean, collectively, with respect to each
Pledgor, (i) all options, warrants, rights, agreements, additional membership,
partnership or other equity interests of whatever class of any issuer of Initial
Pledged Interests or any interest in any

 

2

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

 

such issuer, together with all rights, privileges, authority and powers of such
Pledgor relating to such interests in each issuer or under the Operative
Agreement of any such issuer, and the certificates, instruments and agreements
representing such membership, partnership or other interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other equity
interests from time to time acquired by such Pledgor in any manner and (ii) to
the extent required to be pledged by the terms of the Credit Agreement, all
membership, partnership or other equity interests, as applicable, of each
limited liability company, partnership or other entity (other than a
corporation) hereafter acquired or formed by such Pledgor and all options,
warrants, rights, agreements, additional membership, partnership or other equity
interests of whatever class of such limited liability company, partnership or
other entity together with all rights, privileges, authority and powers of such
Pledgor relating to such interests or under the Operative Agreement of any such
issuer, and the certificates, instruments and agreements representing such
membership, partnership or other equity interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such membership, partnership or other interests, from time to time
acquired by such Pledgor in any manner.

 

“Additional Pledged Shares” shall mean, collectively, with respect to each
Pledgor, (i) all options, warrants, rights, agreements, additional shares of
capital stock of whatever class of any issuer of the Initial Pledged Shares or
any other equity interest in any such issuer, together with all rights,
privileges, authority and powers of such Pledgor relating to such interests
issued by any such issuer under the Operative Agreement of any such issuer, and
the certificates, instruments and agreements representing such interests and any
and all interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such interests, from time to time acquired by such
Pledgor in any manner and (ii) to the extent required to be pledged by the terms
of the Credit Agreement, all the issued and outstanding shares of capital stock
of each corporation hereafter acquired or formed by such Pledgor and all
options, warrants, rights, agreements or additional shares of capital stock of
whatever class of such corporation together with all rights, privileges,
authority and powers of such Pledgor relating to such shares or under the
Operative Agreement of such corporation and the certificates, instruments and
agreements representing such shares and any and all interest of such Pledgor in
the entries on the books of any financial intermediary pertaining to such
shares, from time to time acquired by such Pledgor in any manner.

 

“Additional Pledgors” shall have the meaning assigned to such term in the
Preamble hereof.

 

“Administrative Agent” shall have the meaning assigned to such term in the
Preamble hereof.

 

“Agreement” shall have the meaning assigned to such in the Preamble hereof.

 

“Borrower” and “Borrowers” each shall have the meaning assigned to such term in
the Preamble hereof.

 

“Claims” shall mean any and all property taxes and other taxes, assessments and
special assessments, levies, fees and all governmental charges imposed upon or
assessed against,

 

3

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

 

and all claims (including, without limitation, landlords’, carriers’,
mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and
warehousemen’s Liens and other claims arising by operation of law) against, all
or any portion of the Pledged Collateral.

 

“Collateral Account” shall mean a collateral account or sub-account established
and maintained by the Administrative Agent (or a Lender that agrees to be an
administrative sub-agent for the Administrative Agent) in its name as
Administrative Agent for the Secured Parties and all funds from time to time on
deposit in the Collateral Account including, without limitation, all Cash
Equivalents and all certificates and instruments from time to time representing
or evidencing such investments; all notes, certificates of deposit, checks and
other instruments from time to time hereafter delivered to or otherwise
possessed by the Administrative Agent for or on behalf of any Pledgor in
substitution for, or in addition to, any or all of the Pledged Collateral; and
all interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the items constituting Pledged Collateral.

 

“Contracts” shall mean, collectively, with respect to each Pledgor, all sale,
service, performance, equipment or property lease contracts, agreements and
grants and all other contracts, agreements or grants (in each case, whether
written or oral, or third party or intercompany), between such Pledgor and third
parties, and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof.

 

“Control” shall mean (i) in the case of each Deposit Account, “control,” as such
term is defined in Section 9-104 of the UCC, (ii) in the case of any Security
Entitlement, “control,” as such term is defined in Section 8-106 of the UCC and
(iii) in the case of any Commodity Contract, “control,” as such term is defined
in Section 9-106 of the UCC.

 

“Control Agreements” shall mean, collectively, the Deposit Account Control
Agreements and the Securities Account Control Agreements.

 

“Copyrights” shall mean, collectively, with respect to each Pledgor, all
copyrights (whether statutory or common law, whether established or registered
in the United States or any other country or any political subdivision thereof
whether registered or unregistered and whether published or unpublished) and all
copyright registrations and applications made by such Pledgor, in each case,
whether now owned or hereafter created or acquired by or assigned to such
Pledgor, including, without limitation, the copyrights, registrations and
applications listed in Schedule 13(b) annexed to the Perfection Certificate,
together with any and all (i) rights and privileges arising under applicable law
with respect to such Pledgor’s use of such copyrights, (ii) reissues, renewals,
continuations and extensions thereof, (iii) income, fees, royalties, damages,
claims and payments now or hereafter due and/or payable with respect thereto,
including, without limitation, damages and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto throughout the world
and (v) rights to sue for past, present or future infringements thereof.

 

“Credit Agreement” shall have the meaning assigned to such term in Recital A
hereof.

 

4

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

 

“Deposit Account Control Agreement” shall mean an agreement substantially in the
form annexed hereto as Exhibit 5.

 

“Deposit Accounts” shall mean, collectively, with respect to each Pledgor,
(i) all “deposit accounts” as such term is defined in the UCC and in any event
shall include, without limitation, all accounts and sub-accounts relating to any
of the foregoing accounts and (ii) all cash, funds, checks, notes and
instruments from time to time on deposit in any of the accounts or sub-accounts
described in clause (i) of this definition.

 

“Distributions” shall mean, collectively, with respect to each Pledgor, all
dividends, cash, options, warrants, rights, instruments, distributions, returns
of capital or principal, income, interest, profits and other property, interests
(debt or equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Securities, from time to
time received, receivable or otherwise distributed to such Pledgor in respect of
or in exchange for any or all of the Pledged Securities or Pledged Notes.

 

“General Intangibles” shall mean, collectively, with respect to each Pledgor,
all “general intangibles,” as such term is defined in the UCC, of such Pledgor
and, in any event, shall include, without limitation, (i) all of such Pledgor’s
rights, title and interest in, to and under all insurance policies and
Contracts, (ii) all know-how and warranties relating to any of the Pledged
Collateral or the Mortgaged Property, (iii) any and all other rights, claims,
choses-in-action and causes of action of such Pledgor against any other Person
and the benefits of any and all collateral or other security given by any other
Person in connection therewith, (iv) all guarantees, endorsements and
indemnifications on, or of, any of the Pledged Collateral or any of the
Mortgaged Property, (v) all lists, books, records, correspondence, ledgers,
print-outs, files (whether in printed form or stored electronically), tapes and
other papers or materials containing information relating to any of the Pledged
Collateral or any of the Mortgaged Property, including, without limitation, all
customer or tenant lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, appraisals, recorded knowledge, surveys,
studies, engineering reports, test reports, manuals, standards, processing
standards, performance standards, catalogs, research data, computer and
automatic machinery software and programs and the like, field repair data,
accounting information pertaining to such Pledgor’s operations or any of the
Pledged Collateral or any of the Mortgaged Property and all media in which or on
which any of the information or knowledge or data or records may be recorded or
stored and all computer programs used for the compilation or printout of such
information, knowledge, records or data, (vi) all licenses, consents, permits,
variances, certifications, authorizations and approvals, however characterized,
of any Governmental Authority (or any Person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Pledgor pertaining to
operations now or hereafter conducted by such Pledgor or any of the Pledged
Collateral or any of the Mortgaged Property including, without limitation,
building permits, certificates of occupancy, environmental certificates,
industrial permits or licenses and certificates of operation and (vii) all
rights to reserves, deferred payments, deposits, refunds, indemnification of
claims to the extent the foregoing relate to any Pledged Collateral or Mortgaged
Property and claims for tax or other refunds against any Governmental Authority
relating to any Pledged Collateral or any of the Mortgaged Property.

 

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“Goodwill” shall mean, collectively, with respect to each Pledgor, the goodwill
connected with such Pledgor’s business including, without limitation, (i) all
goodwill connected with the use of and symbolized by any of the Intellectual
Property Collateral in which such Pledgor has any interest, (ii) all know-how,
trade secrets, customer and supplier lists, proprietary information, inventions,
methods, procedures, formulae, descriptions, compositions, technical data,
drawings, specifications, name plates, catalogs, confidential information and
the right to limit the use or disclosure thereof by any Person, pricing and cost
information, business and marketing plans and proposals, consulting agreements,
engineering contracts and such other assets which relate to such goodwill and
(iii) all product lines of such Pledgor’s business.

 

“Guarantors” shall have the meaning assigned to such term in the Preamble
hereof.

 

“Indemnitees” shall have the meaning assigned to such term in
Section 11.3(a) hereof.

 

“Initial Pledged Interests” shall mean, with respect to each Pledgor, all
membership, partnership or other equity interests (other than in a corporation),
as applicable, of each issuer owned by such Pledgor as described in Schedule 10
annexed to the Perfection Certificate, together with all rights, privileges,
authority and powers of such Pledgor in and to each such issuer or under the
Operative Agreement of each such issuer, and the certificates, instruments and
agreements representing such membership, partnership or other interests and any
and all interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other interests.

 

“Initial Pledged Shares” shall mean, collectively, with respect to each Pledgor,
the issued and outstanding shares of capital stock of each issuer owned by such
Pledgor as described in Schedule 10 annexed to the Perfection Certificate
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under the Operative Agreement
of each such issuer, and the certificates, instruments and agreements
representing such shares of capital stock and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
the Initial Pledged Shares.

 

“Instruments” shall mean, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in Article 9 of the UCC and shall
include, without limitation, all promissory notes, drafts, bills of exchange or
acceptances.

 

“Intellectual Property Collateral” shall mean, collectively, the Patents,
Trademarks, Copyrights, Licenses and Goodwill.

 

“Intercompany Notes” shall mean, with respect to each Pledgor, all intercompany
notes described in Schedule 11 annexed to the Perfection Certificate and each
intercompany note hereafter acquired by such Pledgor and all certificates,
instruments or agreements evidencing such intercompany notes, and all
assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.

 

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“Investment Property” shall mean a security, whether certificated or
uncertificated, security entitlement, securities account, commodity contract or
commodity account, excluding, however, the Securities Collateral.

 

“Joinder Agreement” shall mean an agreement substantially in the form annexed
hereto as Exhibit 3.

 

“Lenders” shall have the meaning assigned to such term in Recital A hereof.

 

“Licenses” shall mean, collectively, with respect to each Pledgor, all license
and distribution agreements with, and covenants not to sue, any other party with
respect to any Patent, Trademark or Copyright or any other patent, trademark or
copyright, whether such Pledgor is a licensor or licensee, distributor or
distributee under any such license or distribution agreement, including, without
limitation, the license and distribution agreements listed in Schedule 13(a) and
13(b) annexed to the Perfection Certificate, together with any and all
(i) renewals, extensions, supplements and continuations thereof, (ii) income,
fees, royalties, damages, claims and payments now and hereafter due and/or
payable thereunder and with respect thereto including, without limitation,
damages and payments for past, present or future infringements or violations
thereof, (iii) rights to sue for past, present and future infringements or
violations thereof and (iv) other rights to use, exploit or practice any or all
of the Patents, Trademarks or Copyrights or any other patent, trademark or
copyright.

 

“Mortgaged Property” shall have the meaning assigned to such term in the
Mortgages.

 

“Operative Agreement” shall mean (i) in the case of any limited liability
company or partnership or other non-corporate entity, any membership or
partnership agreement or other organizational agreement or document thereof and
(ii) in the case of any corporation, any charter or certificate of incorporation
and by-laws thereof.

 

“Patents” shall mean, collectively, with respect to each Pledgor, all patents
issued or assigned to and all patent applications and registrations made by such
Pledgor (whether established or registered or recorded in the United States or
any other country or any political subdivision thereof), including, without
limitation, those listed in Schedule 13(a) annexed to the Perfection
Certificate, together with any and all (i) rights and privileges arising under
applicable law with respect to such Pledgor’s use of any patents,
(ii) inventions and improvements described and claimed therein, (iii) reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof, (iv) income, fees, royalties, damages, claims and payments now or
hereafter due and/or payable thereunder and with respect thereto including,
without limitation, damages and payments for past, present or future
infringements thereof, (v) rights corresponding thereto throughout the world and
(vi) rights to sue for past, present or future infringements thereof.

 

“Perfection Certificate” shall mean that certain perfection certificate dated as
of the date hereof, executed and delivered by Borrowers or Guarantors, as
applicable, on behalf of each Pledgor in favor of the Administrative Agent for
the benefit of the Secured Parties, and each other Perfection Certificate (which
shall be in form and substance reasonably acceptable to

 

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the Administrative Agent) executed and delivered by any Additional Pledgor in
favor of the Administrative Agent for the benefit of the Secured Parties
contemporaneously with the execution and delivery of each Joinder Agreement
executed in accordance with Section 3.5 hereof, in each case, as the same may be
supplemented by each Perfection Certificate Supplement delivered in accordance
with the Credit Agreement.

 

“Pledge Amendment” shall have the meaning assigned to such term in Section 5.1
hereof.

 

“Pledged Collateral” shall have the meaning assigned to such term in Section 2.1
hereof.

 

“Pledged Notes” shall mean, collectively, the Intercompany Notes and each
additional note or Instrument hereafter acquired by any Pledgor that is required
to be pledged hereunder and all certificates or agreements evidencing such notes
or Instruments, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof to the extent
permitted pursuant to the terms hereof.

 

“Pledged Interests” shall mean, collectively, the Initial Pledged Interests and
the Additional Pledged Interests; provided, however, that to the extent
applicable, Pledged Interests shall not include any interest possessing more
than 66% of the voting power or control of all classes of interests entitled to
vote of any foreign Subsidiary which is a first-tier controlled foreign
corporation (as defined in Section 957(a) of the Code) to the extent such pledge
would result in an adverse tax consequence to the Pledgor and, in any event,
shall not include the interests of any Subsidiary otherwise required to be
pledged pursuant to this Agreement to the extent that such pledge would
constitute an investment of earnings in United States property under Section 956
(or a successor provision) of the Code, to the extent such pledge would trigger
a material  increase in the gross income of a United States shareholder of such
Subsidiary pursuant to Section 951 (or a successor provision) of the Code.

 

“Pledged Securities” shall mean, collectively, the Pledged Interests, the
Pledged Shares and the Successor Interests.

 

“Pledged Shares” shall mean, collectively, the Initial Pledged Shares and the
Additional Pledged Shares; provided, however, that Pledged Shares shall not
include shares possessing more than 66% of the voting power of all classes of
capital stock entitled to vote of any Subsidiary which is a first tier
controlled foreign corporation (as defined in Section 957(a) of the Code) to the
extent such pledge would result in an adverse tax consequence to the Pledgor
and, in any event, shall not include the shares of stock of any foreign
Subsidiary otherwise required to be pledged pursuant to this Agreement to the
extent that such pledge would constitute an investment of earnings in United
States property under Section 956 (or a successor provision) of the Code, to the
extent such pledge would trigger a material increase in the gross income of a
United States shareholder of such Subsidiary pursuant to Section 951 (or a
successor provision) of the Code.

 

“Pledgor” shall have the meaning assigned to such term in the Preamble hereof.

 

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“Securities Account Control Agreement” shall mean an agreement substantially in
the form annexed hereto as Exhibit 4.

 

“Securities Collateral” shall mean, collectively, the Pledged Securities, the
Pledged Notes and the Distributions.

 

“Successor Interests” shall mean, collectively, with respect to each Pledgor,
all shares of each class of the capital stock of the successor corporation or
interests or certificates of the successor limited liability company,
partnership or other entity owned by such Pledgor (unless such successor is such
Pledgor itself) formed by or resulting from any consolidation or merger in which
any issuer of Pledged Interests or Pledged Shares is not the surviving entity;
provided, however, that Successor Interest shall not include shares or interests
possessing more than 66% of the voting power or control of all classes of
capital stock or interests entitled to vote of any Subsidiary which is a
first-tier controlled foreign corporation (as defined in Section 957(a) of the
Code) to the extent such pledge would result in an adverse tax consequence to
the Pledgor and, in any event, shall not include shares of stock or interests of
any foreign Subsidiary otherwise required to be pledged pursuant to this
Agreement to the extent that such pledge would constitute an investment of
earnings in United States property under Section 956 (or a successor provision)
of the Code, to the extent such pledge would trigger a material increase in the
gross income of a United States shareholder of such Pledgor pursuant to
Section 951 (or a successor provision) of the Code.

 

“Trademarks” shall mean, collectively, with respect to each Pledgor, all
trademarks (including service marks), slogans, logos, certification marks, trade
dress, uniform resource locations (URL’s), domain names, corporate names and
trade names, whether registered or unregistered, owned by or assigned to such
Pledgor and all registrations and applications for the foregoing (whether
statutory or common law and whether established or registered in the United
States or any other country or any political subdivision thereof), including,
without limitation, the registrations and applications listed in
Schedule 13(a) annexed to the Perfection Certificate, together with any and all
(i) rights and privileges arising under applicable law with respect to such
Pledgor’s use of any trademarks, (ii) reissues, continuations, extensions and
renewals thereof, (iii) income, fees, royalties, damages and payments now and
hereafter due and/or payable thereunder and with respect thereto, including,
without limitation, damages, claims and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto throughout the world
and (v) rights to sue for past, present and future infringements thereof.

 

“UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in
the State of New York; provided, however, that if by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of the
Administrative Agent’s and the Secured Parties’ security interest in any item or
portion of the Pledged Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, the term “UCC”
shall mean the Uniform Commercial Code as in effect on the date hereof in such
other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions relating to
such provisions.

 

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Section 1.2                                      Interpretation.  The rules of
interpretation specified in the Credit Agreement shall be applicable to this
Agreement.  If any conflict or inconsistency exists between this Agreement and
the Credit Agreement, the Credit Agreement shall govern.

 

Section 1.3                                      Resolution of Drafting
Ambiguities.  Each Pledgor acknowledges and agrees that it was represented by
counsel in connection with the execution and delivery hereof, that it and its
counsel reviewed and participated in the preparation and negotiation hereof and
that any rule of construction to the effect that ambiguities are to be resolved
against the drafting party (i.e., the Administrative Agent) shall not be
employed in the interpretation hereof.

 

Section 1.4                                      Perfection Certificate.  The
Administrative Agent and each Secured Party agree that the Perfection
Certificate and all descriptions of Pledged Collateral, schedules, amendments
and supplements thereto are and shall at all times remain a part of this
Agreement.

 

ARTICLE II.

 

GRANT OF SECURITY AND SECURED OBLIGATIONS

 

Section 2.1                                      Pledge.  As collateral security
for the payment and performance in full of all the Obligations, each Pledgor
hereby pledges and grants to the Administrative Agent for its benefit and for
the benefit of the Secured Parties, a lien on and security interest in and to
all of the right, title and interest of such Pledgor in, to and under all
personal property and interests in personal property, wherever located, whether
now existing or hereafter arising or acquired from time to time (collectively,
the “Pledged Collateral”), including, without limitation:

 

(I)                                                                                    
ALL ACCOUNTS;

 

(II)                                                                                 
ALL EQUIPMENT, GOODS, INVENTORY AND FIXTURES;

 

(III)                                                                              
ALL DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER;

 

(IV)                                                                             
ALL LETTERS OF CREDIT AND LETTER-OF-CREDIT RIGHTS;

 

(V)                                                                                
ALL SECURITIES COLLATERAL;

 

(VI)                                                                             
ALL COLLATERAL ACCOUNTS;

 

(VII)                                                                          
ALL INVESTMENT PROPERTY;

 

(VIII)                                                                       
ALL INTELLECTUAL PROPERTY COLLATERAL;

 

(IX)                                                                               
THE COMMERCIAL TORT CLAIMS DESCRIBED ON SCHEDULE 14 TO THE PERFECTION
CERTIFICATE;

 

(X)                                                                                  
ALL GENERAL INTANGIBLES;

 

(XI)                                                                               
ALL DEPOSIT ACCOUNTS;

 

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(XII)                                                                            
ALL ACQUISITION DOCUMENTS AND ACQUISITION DOCUMENT RIGHTS;

 

(XIII)                                                                         
ALL SUPPORTING OBLIGATIONS;

 

(XIV)                                                                        
ALL BOOKS AND RECORDS RELATING TO THE PLEDGED  COLLATERAL; AND

 

(XV)                                                                           
TO THE EXTENT NOT COVERED BY CLAUSES (I) THROUGH (XIV) OF THIS SENTENCE, ALL
OTHER PERSONAL PROPERTY OF SUCH PLEDGOR, WHETHER TANGIBLE OR INTANGIBLE AND ALL
PROCEEDS AND PRODUCTS OF EACH OF THE FOREGOING AND ALL ACCESSIONS TO,
SUBSTITUTIONS AND REPLACEMENTS FOR, AND RENTS, PROFITS AND PRODUCTS OF, EACH OF
THE FOREGOING, ANY AND ALL PROCEEDS OF ANY INSURANCE, INDEMNITY, WARRANTY OR
GUARANTY PAYABLE TO SUCH PLEDGOR FROM TIME TO TIME WITH RESPECT TO ANY OF THE
FOREGOING.

 

Notwithstanding anything to the contrary contained in clauses (i) through (xv)
above, the security interest created by this Agreement shall not extend to, and
the term “Pledged Collateral” shall not include, (A) any License to which any
Pledgor is a party to the extent, and solely to the extent, and for so long as,
and solely for so long as, the terms of such License or any Requirement of Law
applicable thereto validly prohibit the creation by such Pledgor of a security
interest in such License in favor of the Administrative Agent, after giving
effect to Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any
successor provision or provisions) or any other applicable law or principles of
equity; provided, however, that Proceeds of any License described in this
sentence shall not be excluded from “Pledged Collateral” and (B) certain
Inventory to the extent, and solely to the extent, that such Inventory bears a
trademark subject to a license agreement listed on Annex A hereto that prohibits
the granting of a Lien on any Inventory bearing such trademark unless the
licensor under the applicable license agreement shall have consented in writing
to the granting of a Lien on such Inventory hereunder.

 

Section 2.2                                      Secured Obligations.  This
Agreement secures, and the Pledged Collateral is collateral security for, the
payment and performance in full when due of the Obligations.

 

Section 2.3                                      Security Interest.  (a)  Each
Pledgor hereby irrevocably authorizes the Administrative Agent at any time and
from time to time to authenticate and file in any relevant jurisdiction any
initial financing statements (including fixture filings) and amendments thereto
that contain the information required by Article 9 of the Uniform Commercial
Code of each applicable jurisdiction for the filing of any financing statement
or amendment relating to the Pledged Collateral, including, without limitation,
(i) whether such Pledgor is an organization, the type of organization and any
organizational identification number issued to such Pledgor, (ii) any financing
or continuation statements or other documents without the signature of such
Pledgor where permitted by law, including, without limitation, the filing of a
financing statement describing the Pledged Collateral as “all assets” or “all
assets in which the Pledgor now owns or hereafter acquires rights” or words to
that effect and (iii) in the case of a financing statement filed as a fixture
filing or covering Pledged Collateral constituting minerals or the like to be
extracted or timber to be cut, a sufficient description of the real property to
which such Pledged Collateral relates.  Each Pledgor agrees to provide all
information described in the immediately preceding sentence to the
Administrative Agent promptly upon request.

 

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(B)                                                                                
EACH PLEDGOR HEREBY RATIFIES ITS AUTHORIZATION FOR THE ADMINISTRATIVE AGENT TO
FILE IN ANY RELEVANT JURISDICTION ANY INITIAL FINANCING STATEMENTS OR AMENDMENTS
THERETO RELATING TO THE PLEDGED COLLATERAL IF FILED PRIOR TO THE DATE HEREOF.

 

(C)                                                                                 
EACH PLEDGOR HEREBY FURTHER AUTHORIZES THE ADMINISTRATIVE AGENT TO FILE FILINGS
WITH THE UNITED STATES PATENT AND TRADEMARK OFFICE AND UNITED STATES COPYRIGHT
OFFICE (OR ANY SUCCESSOR OFFICE OR ANY SIMILAR OFFICE IN ANY OTHER COUNTRY) OR
OTHER DOCUMENTS FOR THE PURPOSE OF PERFECTING, CONFIRMING, CONTINUING, ENFORCING
OR PROTECTING THE SECURITY INTEREST GRANTED BY SUCH PLEDGOR HEREUNDER, WITHOUT
THE SIGNATURE OF SUCH PLEDGOR, AND NAMING SUCH PLEDGOR, AS DEBTOR, AND THE
ADMINISTRATIVE AGENT, AS SECURED PARTY.

 

ARTICLE III.

 

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL

 

Section 3.1                                      Delivery of Certificated
Securities Collateral.  Each Pledgor represents and warrants that all
certificates, agreements or instruments representing or evidencing the
Securities Collateral in existence on the date hereof have been or
contemporaneously herewith will be delivered to the Revolving Credit Agent in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank and that the Administrative Agent
has or contemporaneously herewith shall have a perfected second priority
security interest therein.  Each Pledgor hereby agrees that all certificates,
agreements or instruments representing or evidencing Securities Collateral
acquired by such Pledgor at any time after the payment in full of the Revolving
Credit Indebtedness and the termination of the Revolving Credit Documents,
shall, within the time periods required by the Credit Agreement, be delivered to
and held by or on behalf of the Administrative Agent pursuant hereto.  All such
certificated Securities Collateral acquired by such Pledgor at any time after
the payment in full of the Revolving Credit Indebtedness and the termination of
the Revolving Credit Documents shall be in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to the
Administrative Agent.  The Administrative Agent shall have the right, at any
time upon the occurrence and during the continuance of any Event of Default
after the payment in full of the Revolving Credit Indebtedness and the
termination of the Revolving Credit Documents, to endorse, assign or otherwise
transfer to or to register in the name of the Administrative Agent or any of its
nominees or endorse for negotiation any or all of the Securities Collateral,
without any indication that such Securities Collateral is subject to the
security interest hereunder.  In addition, the Administrative Agent shall have
the right at any time after the payment in full of the Revolving Credit
Indebtedness and the termination of the Revolving Credit Documents to exchange
certificates representing or evidencing Securities Collateral for certificates
of smaller or larger denominations.

 

Section 3.2                                      Perfection of Uncertificated
Securities Collateral.  Each Pledgor represents and warrants that the
Administrative Agent has a perfected second priority security interest in all
uncertificated Pledged Securities pledged by it hereunder that are in existence
on the date hereof and that the applicable partnership agreement, operating
agreement or other organizational documents do not require the consent of the
other shareholders, members, partners

 

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or other Person to permit the Administrative Agent or its designee to be
substituted for the applicable Pledgor as a shareholder, member, partner or
other equity owner, as applicable, thereto.  Each Pledgor hereby agrees that if
any of the Pledged Securities are, at any time after the payment in full of the
Revolving Credit Indebtedness and the termination of the Revolving Credit
Documents, not evidenced by certificates of ownership, then each applicable
Pledgor shall, to the extent permitted by applicable law, cause such pledge to
be recorded on the equityholder register or the books of the issuer, cause the
issuer to execute and deliver to the Administrative Agent an acknowledgment of
the pledge of such Pledged Securities substantially in the form of Exhibit 1
annexed hereto, execute customary pledge forms or other documents necessary or
appropriate to complete the pledge and give the Administrative Agent the right
to transfer such Pledged Securities under the terms hereof and provide to the
Administrative Agent an opinion of counsel, in form and substance satisfactory
to the Administrative Agent, confirming such pledge and perfection thereof.

 

Section 3.3                                      Financing Statements and Other
Filings; Maintenance of Perfected Security Interest.  Each Pledgor represents
and warrants that the only filings, registrations and recordings necessary and
appropriate to create, preserve, protect, publish notice of and perfect the
security interest granted by each Pledgor to the Administrative Agent (for the
benefit of the Secured Parties) pursuant to this Agreement in respect of the
Pledged Collateral are listed in Schedule 5 annexed to the Perfection
Certificate.  Each Pledgor represents and warrants that all such filings,
registrations and recordings have been delivered to the Administrative Agent in
completed and, to the extent necessary or appropriate, duly executed form for
filing in each governmental, municipal or other office specified in Schedule 6
annexed to the Perfection Certificate and shall be filed, registered and
recorded immediately after the date thereof.  Each Pledgor agrees that at the
sole cost and expense of the Pledgors, (i) such Pledgor will maintain the
security interest created by this Agreement in the Pledged Collateral as a
perfected first priority security interest and shall defend such security
interest against the claims and demands of all Persons, provided, however, that,
prior to the payment in full of the Revolving Credit Indebtedness and the
termination of the Revolving Credit Documents, the security interest created by
this Agreement in that portion of the Pledged Collateral constituting Revolving
Credit Priority Collateral shall be maintained as a perfected second priority
security interest junior to the security interest of the Revolving Credit Agent,
(ii) such Pledgor shall furnish to the Administrative Agent from time to time
statements and schedules further identifying and describing the Pledged
Collateral and such other reports in connection with the Pledged Collateral as
the Administrative Agent may deem reasonably necessary, all in reasonable detail
and (iii) at any time and from time to time, upon the written request of the
Administrative Agent, such Pledgor shall promptly and duly execute and deliver,
and file and have recorded, such further instruments and documents and take such
further action as the Administrative Agent may deem reasonably necessary for the
purpose of obtaining or preserving the full benefits of this Agreement and the
rights and powers herein granted, including the filing of any financing
statements, continuation statements and other documents (including the
Agreement) under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interest created hereby and the
execution and delivery of Control Agreements, all in form reasonably
satisfactory to the Administrative Agent and in such offices (including, without
limitation, the United States Patent and Trademark Office) wherever required by
law to perfect, continue and maintain a valid, enforceable, first priority
security interest in the Pledged Collateral, as provided herein, and to preserve
the other rights and interests granted to the

 

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Administrative Agent hereunder, as against third parties, with respect to the
Pledged Collateral; provided, however, that, prior to the payment in full of the
Revolving Credit Indebtedness and the termination of the Revolving Credit
Documents, the security interest created by this Agreement in that portion of
the Pledged Collateral constituting Revolving Credit Priority Collateral shall
be maintained as a perfected second priority security interest junior to the
security interest of the Revolving Credit Agent.  Each Pledgor hereby authorizes
the Administrative Agent to file any such financing or continuation statement or
other document without the signature of such Pledgor where permitted by law,
including, without limitation, the filing of a financing statement describing
the Pledged Collateral as “all assets” or “all assets in which the Pledgor now
owns or hereafter acquires rights” or words to that effect.

 

Section 3.4                                      Other Actions.  In order to
further insure the attachment, perfection and priority of, and the ability of
the Administrative Agent to enforce, the Administrative Agent’s security
interest in the Pledged Collateral, each Pledgor represents, warrants and
agrees, in each case at such Pledgor’s own expense, with respect to the
following Pledged Collateral that:

 

(A)                                                                                 
INSTRUMENTS AND TANGIBLE CHATTEL PAPER.  AS OF THE DATE HEREOF (I) NO AMOUNT
INDIVIDUALLY OR IN THE AGGREGATE IN EXCESS OF $100,000 PAYABLE UNDER OR IN
CONNECTION WITH ANY OF THE PLEDGED COLLATERAL IS EVIDENCED BY ANY INSTRUMENT OR
TANGIBLE CHATTEL PAPER OTHER THAN SUCH INSTRUMENTS AND TANGIBLE CHATTEL PAPER
LISTED IN SCHEDULE 11 ANNEXED TO THE PERFECTION CERTIFICATE AND (II) EACH
INSTRUMENT AND EACH ITEM OF TANGIBLE CHATTEL PAPER LISTED IN SCHEDULE 11 ANNEXED
TO THE PERFECTION CERTIFICATE HAS BEEN PROPERLY ENDORSED, ASSIGNED AND DELIVERED
TO THE REVOLVING CREDIT AGENT, ACCOMPANIED BY INSTRUMENTS OF TRANSFER OR
ASSIGNMENT DULY EXECUTED IN BLANK.  IF ANY AMOUNT INDIVIDUALLY OR IN THE
AGGREGATE IN EXCESS OF $100,000 PAYABLE UNDER OR IN CONNECTION WITH ANY OF THE
PLEDGED COLLATERAL SHALL, AT ANY TIME AFTER THE PAYMENT IN FULL OF THE REVOLVING
CREDIT INDEBTEDNESS AND THE TERMINATION OF THE REVOLVING CREDIT DOCUMENTS, BE
EVIDENCED BY ANY INSTRUMENT OR TANGIBLE CHATTEL PAPER, THE PLEDGOR ACQUIRING
SUCH INSTRUMENT OR TANGIBLE CHATTEL PAPER SHALL FORTHWITH ENDORSE, ASSIGN AND
DELIVER THE SAME TO THE ADMINISTRATIVE AGENT, ACCOMPANIED BY SUCH INSTRUMENTS OF
TRANSFER OR ASSIGNMENT DULY EXECUTED IN BLANK AS THE ADMINISTRATIVE AGENT MAY
FROM TIME TO TIME SPECIFY.

 

(B)                                                                                
DEPOSIT ACCOUNTS.  AS OF THE DATE HEREOF (I) IT DOES NOT MAINTAIN ANY DEPOSIT
ACCOUNTS OTHER THAN THE ACCOUNTS LISTED IN SCHEDULE 15 ANNEXED TO THE PERFECTION
CERTIFICATE AND (II) WITH RESPECT TO EACH DEPOSIT ACCOUNT IN WHICH THE REVOLVING
CREDIT AGENT HAS, OR UPON EXECUTION AND DELIVERY OF A DEPOSIT ACCOUNT CONTROL
AGREEMENT BY THE PLEDGOR OF THE DEPOSIT ACCOUNT AND THE FINANCIAL INSTITUTION
HOLDING SUCH DEPOSIT ACCOUNT, WILL HAVE A PERFECTED FIRST PRIORITY SECURITY
INTEREST BY CONTROL, THE ADMINISTRATIVE AGENT HAS OR WILL HAVE A PERFECTED
SECOND PRIORITY SECURITY INTEREST BY CONTROL.  AFTER THE PAYMENT IN FULL OF THE
REVOLVING CREDIT INDEBTEDNESS AND THE TERMINATION OF THE REVOLVING CREDIT
DOCUMENTS, NO PLEDGOR SHALL ESTABLISH AND MAINTAIN ANY DEPOSIT ACCOUNT UNLESS
(1) THE APPLICABLE PLEDGOR SHALL HAVE GIVEN THE ADMINISTRATIVE AGENT 30 DAYS’
PRIOR WRITTEN NOTICE OF ITS INTENTION TO ESTABLISH SUCH NEW DEPOSIT ACCOUNT WITH
A BANK, (2) SUCH BANK SHALL BE REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT
AND (3) TO THE EXTENT REQUIRED BY THE CREDIT AGREEMENT, SUCH BANK AND SUCH
PLEDGOR SHALL HAVE DULY EXECUTED AND DELIVERED TO THE ADMINISTRATIVE AGENT A
DEPOSIT ACCOUNT CONTROL AGREEMENT WITH RESPECT TO SUCH DEPOSIT ACCOUNT
SUBSTANTIALLY IN THE FORM OF EXHIBIT 5 ANNEXED HERETO OR SUCH OTHER FORM
ACCEPTABLE TO THE ADMINISTRATIVE AGENT.  NO PLEDGOR SHALL GRANT CONTROL OF ANY
DEPOSIT ACCOUNT TO ANY PERSON OTHER THAN THE ADMINISTRATIVE AGENT OR

 

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THE REVOLVING CREDIT AGENT.  WITH RESPECT TO ANY DEPOSIT ACCOUNT FOR WHICH THE
APPLICABLE DEPOSIT ACCOUNT CONTROL AGREEMENT PROVIDES THAT THE DEPOSITORY
INSTITUTION MAY ACCEPT INSTRUCTIONS FROM THE APPLICABLE PLEDGOR UNLESS AND UNTIL
THE ADMINISTRATIVE AGENT OTHERWISE NOTIFIES THE DEPOSITORY INSTITUTION, THE
ADMINISTRATIVE AGENT AGREES THAT IT SHALL DELIVER SUCH NOTICE ONLY IF A DEFAULT
OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND THAT IT SHALL NOT GIVE
ANY INSTRUCTIONS DIRECTING THE DISPOSITION OF FUNDS FROM TIME TO TIME CREDITED
TO ANY SUCH DEPOSIT ACCOUNT UNLESS A DEFAULT OR EVENT OF DEFAULT HAS OCCURRED
AND IS CONTINUING.

 

(C)                                                                                 
INVESTMENT PROPERTY.  (I)  AS OF THE DATE HEREOF (1) IT HAS NO SECURITIES
ACCOUNTS OR COMMODITY ACCOUNTS OTHER THAN THOSE LISTED IN SCHEDULE 15 ANNEXED TO
THE PERFECTION CERTIFICATE AND, WITH RESPECT TO EACH SECURITIES ACCOUNT OR
COMMODITY ACCOUNT IN WHICH THE REVOLVING CREDIT AGENT HAS A PERFECTED FIRST
PRIORITY SECURITY INTEREST BY CONTROL, THE ADMINISTRATIVE AGENT HAS A PERFECTED
SECOND PRIORITY SECURITY INTEREST BY CONTROL AND (2) IT DOES NOT HOLD, OWN OR
HAVE ANY INTEREST IN ANY CERTIFICATED SECURITIES OR UNCERTIFICATED SECURITIES
OTHER THAN THOSE CONSTITUTING PLEDGED SECURITIES AND THOSE MAINTAINED IN
SECURITIES ACCOUNTS OR COMMODITY ACCOUNTS LISTED IN SCHEDULE 15 ANNEXED TO THE
PERFECTION CERTIFICATE.

 

(II)                                  IF ANY PLEDGOR SHALL, AT ANY TIME AFTER
THE PAYMENT IN FULL OF THE REVOLVING CREDIT INDEBTEDNESS AND THE TERMINATION OF
THE REVOLVING CREDIT DOCUMENTS, HOLD OR ACQUIRE ANY CERTIFICATED SECURITIES
CONSTITUTING INVESTMENT PROPERTY, OTHER THAN ANY SECURITIES OF FOREIGN
SUBSIDIARIES NOT REQUIRED TO BE PLEDGED HEREUNDER, SUCH PLEDGOR SHALL (A) WITHIN
THE TIME PERIODS REQUIRED BY THE CREDIT AGREEMENT, ENDORSE, ASSIGN AND DELIVER
THE SAME TO THE ADMINISTRATIVE AGENT, ACCOMPANIED BY SUCH INSTRUMENTS OF
TRANSFER OR ASSIGNMENT DULY EXECUTED IN BLANK, ALL IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT OR (B) DELIVER SUCH
SECURITIES INTO A SECURITIES ACCOUNT WITH RESPECT TO WHICH A SECURITIES ACCOUNT
CONTROL AGREEMENT IS IN EFFECT IN FAVOR OF THE ADMINISTRATIVE AGENT.  IF ANY
SECURITIES ACQUIRED BY ANY PLEDGOR, AT ANY TIME AFTER THE PAYMENT IN FULL OF THE
REVOLVING CREDIT INDEBTEDNESS AND THE TERMINATION OF THE REVOLVING CREDIT
DOCUMENTS, CONSTITUTING INVESTMENT PROPERTY, OTHER THAN ANY SECURITIES OF
FOREIGN SUBSIDIARIES NOT REQUIRED TO BE PLEDGED HEREUNDER, ARE UNCERTIFICATED
AND ARE ISSUED TO SUCH PLEDGOR OR ITS NOMINEE DIRECTLY BY THE ISSUER THEREOF,
SUCH PLEDGOR SHALL, WITHIN THE TIME PERIODS REQUIRED BY THE CREDIT AGREEMENT,
NOTIFY THE ADMINISTRATIVE AGENT THEREOF AND PURSUANT TO AN AGREEMENT IN FORM AND
SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT, EITHER (A) CAUSE THE ISSUER
TO AGREE TO COMPLY WITH INSTRUCTIONS FROM THE ADMINISTRATIVE AGENT AS TO SUCH
SECURITIES, WITHOUT FURTHER CONSENT OF ANY PLEDGOR OR SUCH NOMINEE, (B) CAUSE A
SECURITY ENTITLEMENT WITH RESPECT TO SUCH UNCERTIFICATED SECURITY TO BE HELD IN
A SECURITIES ACCOUNT WITH RESPECT TO WHICH THE ADMINISTRATIVE AGENT HAS CONTROL
OR (C) ARRANGE FOR THE ADMINISTRATIVE AGENT TO BECOME THE REGISTERED OWNER OF
THE SECURITIES.  AFTER THE PAYMENT IN FULL OF THE REVOLVING CREDIT INDEBTEDNESS
AND THE TERMINATION OF THE REVOLVING CREDIT DOCUMENTS, PLEDGOR SHALL NOT
ESTABLISH AND MAINTAIN ANY SECURITIES ACCOUNT OR COMMODITY ACCOUNT WITH ANY
SECURITIES INTERMEDIARY OR COMMODITY INTERMEDIARY UNLESS (1) THE APPLICABLE
PLEDGOR SHALL HAVE GIVEN THE ADMINISTRATIVE AGENT 30 DAYS’ PRIOR WRITTEN NOTICE
OF ITS INTENTION TO ESTABLISH SUCH NEW SECURITIES ACCOUNT OR COMMODITY ACCOUNT
WITH SUCH SECURITIES INTERMEDIARY OR COMMODITY INTERMEDIARY, (2) SUCH SECURITIES
INTERMEDIARY OR COMMODITY INTERMEDIARY SHALL BE REASONABLY ACCEPTABLE TO THE
ADMINISTRATIVE AGENT AND (3) SUCH SECURITIES INTERMEDIARY OR COMMODITY
INTERMEDIARY, AS THE CASE MAY BE, AND SUCH PLEDGOR SHALL HAVE DULY EXECUTED AND
DELIVERED A CONTROL AGREEMENT WITH RESPECT TO SUCH SECURITIES ACCOUNT OR
COMMODITY ACCOUNT, AS THE CASE MAY BE.  AFTER THE PAYMENT IN FULL OF THE
REVOLVING CREDIT INDEBTEDNESS AND THE TERMINATION OF

 

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THE REVOLVING CREDIT DOCUMENTS, EACH PLEDGOR SHALL ACCEPT ANY CASH AND
INVESTMENT PROPERTY WHICH ARE PROCEEDS OF THE PLEDGED INTERESTS IN TRUST FOR THE
BENEFIT OF THE ADMINISTRATIVE AGENT AND, WITHIN THE TIME PERIODS REQUIRED BY THE
CREDIT AGREEMENT, DEPOSIT ANY CASH OR INVESTMENT PROPERTY AND ANY NEW
SECURITIES, INSTRUMENTS, DOCUMENTS OR OTHER PROPERTY BY REASON OF OWNERSHIP OF
THE INVESTMENT PROPERTY RECEIVED BY IT INTO AN ACCOUNT IN WHICH THE
ADMINISTRATIVE AGENT HAS CONTROL.  THE ADMINISTRATIVE AGENT AGREES WITH EACH
PLEDGOR THAT THE ADMINISTRATIVE AGENT SHALL NOT GIVE ANY ENTITLEMENT ORDERS OR
INSTRUCTIONS OR DIRECTIONS TO ANY ISSUER OF UNCERTIFICATED SECURITIES,
SECURITIES INTERMEDIARY OR COMMODITY INTERMEDIARY, AND SHALL NOT WITHHOLD ITS
CONSENT TO THE EXERCISE OF ANY WITHDRAWAL OR DEALING RIGHTS BY SUCH PLEDGOR,
UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, OR, AFTER GIVING
EFFECT TO ANY SUCH INVESTMENT AND WITHDRAWAL RIGHTS, WOULD OCCUR.  THE
PROVISIONS OF THIS SECTION 3.4(C) SHALL NOT APPLY TO ANY FINANCIAL ASSETS
CREDITED TO A SECURITIES ACCOUNT FOR WHICH THE ADMINISTRATIVE AGENT IS THE
SECURITIES INTERMEDIARY.  NO PLEDGOR SHALL GRANT CONTROL OVER ANY INVESTMENT
PROPERTY TO ANY PERSON OTHER THAN THE ADMINISTRATIVE AGENT OR THE REVOLVING
CREDIT AGENT.

 

(III)                               AS BETWEEN THE ADMINISTRATIVE AGENT AND THE
PLEDGORS, THE PLEDGORS SHALL BEAR THE INVESTMENT RISK WITH RESPECT TO THE
INVESTMENT PROPERTY AND PLEDGED SECURITIES, AND THE RISK OF LOSS OF, DAMAGE TO,
OR THE DESTRUCTION OF THE INVESTMENT PROPERTY AND PLEDGED SECURITIES, WHETHER IN
THE POSSESSION OF, OR MAINTAINED AS A SECURITY ENTITLEMENT OR DEPOSIT BY, OR
SUBJECT TO THE CONTROL OF, THE ADMINISTRATIVE AGENT, A SECURITIES INTERMEDIARY,
COMMODITY INTERMEDIARY, ANY PLEDGOR OR ANY OTHER PERSON; PROVIDED, HOWEVER, THAT
NOTHING CONTAINED IN THIS SECTION 3.4(C) SHALL RELEASE OR RELIEVE ANY SECURITIES
INTERMEDIARY OR COMMODITY INTERMEDIARY OF ITS DUTIES AND OBLIGATIONS TO THE
PLEDGORS OR ANY OTHER PERSON UNDER ANY CONTROL AGREEMENT OR UNDER APPLICABLE
LAW.  SUBJECT TO SECTION 4.12, EACH PLEDGOR SHALL PROMPTLY PAY ALL CLAIMS AND
FEES OF WHATEVER KIND OR NATURE WITH RESPECT TO THE INVESTMENT PROPERTY AND
PLEDGED SECURITIES PLEDGED BY IT UNDER THIS AGREEMENT.  IN THE EVENT ANY PLEDGOR
SHALL FAIL TO MAKE SUCH PAYMENT CONTEMPLATED IN THE IMMEDIATELY PRECEDING
SENTENCE, THE ADMINISTRATIVE AGENT MAY DO SO FOR THE ACCOUNT OF SUCH PLEDGOR AND
THE PLEDGORS SHALL PROMPTLY REIMBURSE AND INDEMNIFY THE ADMINISTRATIVE AGENT FOR
ALL COSTS AND EXPENSES INCURRED BY THE ADMINISTRATIVE AGENT UNDER THIS
SECTION 3.4(C) IN ACCORDANCE WITH SECTION 11.3 HEREOF.

 

(D)                                                                                
ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS.  AS OF THE DATE HEREOF NO
AMOUNT INDIVIDUALLY OR IN THE AGGREGATE IN EXCESS OF $100,000 PAYABLE UNDER OR
IN CONNECTION WITH ANY OF THE PLEDGED COLLATERAL IS EVIDENCED BY ANY ELECTRONIC
CHATTEL PAPER OR ANY “TRANSFERABLE RECORD,” AS THAT TERM IS DEFINED IN
SECTION 201 OF THE FEDERAL ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE
ACT, OR IN SECTION 16 OF THE UNIFORM ELECTRONIC TRANSACTIONS ACT AS IN EFFECT IN
ANY RELEVANT JURISDICTION OTHER THAN SUCH ELECTRONIC CHATTEL PAPER AND
TRANSFERABLE RECORDS LISTED IN SCHEDULE 11 ANNEXED TO THE PERFECTION
CERTIFICATE.  IF AT ANY TIME AFTER THE PAYMENT IN FULL OF THE REVOLVING CREDIT
INDEBTEDNESS AND THE TERMINATION OF THE REVOLVING CREDIT DOCUMENTS, ANY AMOUNT
INDIVIDUALLY OR IN THE AGGREGATE IN EXCESS OF $100,000 PAYABLE UNDER OR IN
CONNECTION WITH ANY OF THE PLEDGED COLLATERAL SHALL BE EVIDENCED BY ANY
ELECTRONIC CHATTEL PAPER OR ANY TRANSFERABLE RECORD, THE PLEDGOR ACQUIRING SUCH
ELECTRONIC CHATTEL PAPER OR TRANSFERABLE RECORD SHALL PROMPTLY NOTIFY THE
ADMINISTRATIVE AGENT THEREOF AND SHALL TAKE SUCH ACTION AS THE ADMINISTRATIVE
AGENT MAY REASONABLY REQUEST TO VEST IN THE ADMINISTRATIVE AGENT CONTROL UNDER
UCC SECTION 9-105 OF SUCH ELECTRONIC CHATTEL PAPER OR CONTROL UNDER SECTION 201
OF THE FEDERAL ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT OR, AS
THE CASE MAY BE, SECTION 16 OF THE UNIFORM ELECTRONIC TRANSACTIONS ACT, AS

 

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SO IN EFFECT IN SUCH JURISDICTION, OF SUCH TRANSFERABLE RECORD.  AFTER THE
PAYMENT IN FULL OF THE REVOLVING CREDIT INDEBTEDNESS AND THE TERMINATION OF THE
REVOLVING CREDIT DOCUMENTS, THE ADMINISTRATIVE AGENT AGREES WITH SUCH PLEDGOR
THAT THE ADMINISTRATIVE AGENT WILL ARRANGE, PURSUANT TO PROCEDURES SATISFACTORY
TO THE ADMINISTRATIVE AGENT AND SO LONG AS SUCH PROCEDURES WILL NOT RESULT IN
THE ADMINISTRATIVE AGENT’S LOSS OF CONTROL, FOR THE PLEDGOR TO MAKE ALTERATIONS
TO THE ELECTRONIC CHATTEL PAPER OR TRANSFERABLE RECORD PERMITTED UNDER UCC
SECTION 9-105 OR, AS THE CASE MAY BE, SECTION 201 OF THE FEDERAL ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT OF SECTION 16 OF THE UNIFORM
ELECTRONIC TRANSACTIONS ACT FOR A PARTY IN CONTROL TO ALLOW WITHOUT LOSS OF
CONTROL, UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD
OCCUR AFTER TAKING INTO ACCOUNT ANY ACTION BY SUCH PLEDGOR WITH RESPECT TO SUCH
ELECTRONIC CHATTEL PAPER OR TRANSFERABLE RECORD.

 

(E)                                                                                 
LETTER-OF-CREDIT RIGHTS.  IF SUCH PLEDGOR IS AT ANY TIME AFTER THE PAYMENT IN
FULL OF THE REVOLVING CREDIT INDEBTEDNESS AND THE TERMINATION OF THE REVOLVING
CREDIT DOCUMENTS, A BENEFICIARY UNDER A LETTER OF CREDIT NOW OR HEREAFTER ISSUED
IN FAVOR OF SUCH PLEDGOR IN AN AMOUNT INDIVIDUALLY OR IN THE AGGREGATE IN EXCESS
OF $100,000, SUCH PLEDGOR SHALL PROMPTLY NOTIFY THE ADMINISTRATIVE AGENT 
THEREOF AND SUCH PLEDGOR SHALL, PURSUANT TO AN AGREEMENT IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT, EITHER (I) ARRANGE FOR THE ISSUER AND
ANY CONFIRMER OF SUCH LETTER OF CREDIT TO CONSENT TO AN ASSIGNMENT TO THE
ADMINISTRATIVE AGENT OF THE PROCEEDS OF ANY DRAWING UNDER THE LETTER OF CREDIT
OR (II) ARRANGE FOR THE ADMINISTRATIVE AGENT TO BECOME THE TRANSFEREE
BENEFICIARY OF SUCH LETTER OF CREDIT, WITH THE ADMINISTRATIVE AGENT AGREEING, IN
EACH CASE, THAT THE PROCEEDS OF ANY DRAWING UNDER THE LETTER OF CREDIT ARE TO BE
APPLIED AS PROVIDED IN THE CREDIT AGREEMENT.

 

(F)                                                                                   
COMMERCIAL TORT CLAIMS.  AS OF THE DATE HEREOF IT HOLDS NO COMMERCIAL TORT
CLAIMS OTHER THAN THOSE LISTED IN SCHEDULE 14 ANNEXED TO THE PERFECTION
CERTIFICATE.  IF ANY PLEDGOR SHALL AT ANY TIME HOLD OR ACQUIRE A COMMERCIAL TORT
CLAIM HAVING A VALUE INDIVIDUALLY OR IN THE AGGREGATE IN EXCESS OF $100,000,
SUCH PLEDGOR SHALL IMMEDIATELY NOTIFY THE ADMINISTRATIVE AGENT IN WRITING SIGNED
BY SUCH PLEDGOR OF THE BRIEF DETAILS THEREOF AND GRANT TO THE ADMINISTRATIVE
AGENT IN SUCH WRITING A SECURITY INTEREST THEREIN AND IN THE PROCEEDS THEREOF,
ALL UPON THE TERMS OF THIS AGREEMENT, WITH SUCH WRITING TO BE IN FORM AND
SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(G)                                                                                
LANDLORD LIEN WAIVERS/BAILEE LETTERS/PROCESSOR AGREEMENTS.  AFTER THE PAYMENT IN
FULL OF THE REVOLVING CREDIT INDEBTEDNESS AND THE TERMINATION OF THE REVOLVING
CREDIT DOCUMENTS, TO THE EXTENT REQUIRED UNDER THE CREDIT AGREEMENT, SUCH
PLEDGOR SHALL OBTAIN A WAIVER OF BAILEE’S, LANDLORD’S OR OTHER APPLICABLE
POSSESSORY LIEN AND OBTAIN A BAILEE LETTER, LANDLORD LIEN WAIVER OR PROCESSOR
AGREEMENT, AS APPLICABLE AND IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ADMINISTRATIVE AGENT, FROM EACH BAILEE, LANDLORD AND THIRD PARTY PROCESSOR
WHO FROM TIME TO TIME HAS POSSESSION OF PLEDGED COLLATERAL OR WHO LEASES OR
SUB-LEASES PREMISES TO SUCH PLEDGOR AT WHICH PLEDGED COLLATERAL IS LOCATED.

 

Section 3.5                                      Joinder of Additional
Pledgors.  The Pledgors shall cause each Subsidiary of the Borrowers which, from
time to time, after the date hereof shall be required to pledge any assets to
the Administrative Agent for the benefit of the Secured Parties pursuant to the
provisions of the Credit Agreement, to execute and deliver to the Administrative
Agent (i) a Joinder Agreement substantially in the form of Exhibit 3 annexed
hereto within five (5) Business

 

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Days on which it was acquired or created and (ii) a Perfection Certificate, in
each case, within five (5) Business Days of the date on which it was acquired or
created and, upon such execution and delivery, such Subsidiary shall constitute
a “Borrower” or “Guarantor”, as applicable, and a “Pledgor” for all purposes
hereunder with the same force and effect as if originally named as a Borrower or
Guarantor, as applicable, and Pledgor herein.  The execution and delivery of
such Joinder Agreement shall not require the consent of any Pledgor hereunder. 
The rights and obligations of each Pledgor hereunder shall remain in full force
and effect notwithstanding the addition of any new Borrower, Guarantor and
Pledgor as a party to this Agreement.

 

Section 3.6                                      Supplements; Further
Assurances.  Each Pledgor shall take such further actions, and execute and
deliver to the Administrative Agent such additional assignments, agreements,
supplements, powers and instruments, as the Administrative Agent may in its
reasonable judgment deem necessary or appropriate, wherever required by law, in
order to perfect, preserve and protect the security interest in the Pledged
Collateral as provided herein and the rights and interests granted to the
Administrative Agent hereunder, to carry into effect the purposes hereof or
better to assure and confirm unto the Administrative Agent or permit the
Administrative Agent to exercise and enforce its rights, powers and remedies
hereunder with respect to any Pledged Collateral.  Without limiting the
generality of the foregoing, each Pledgor shall make, execute, endorse,
acknowledge, file or refile and/or deliver to the Administrative Agent from time
to time upon reasonable request such lists, descriptions and designations of the
Pledged Collateral, copies of warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, supplements, additional security
agreements, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments.  If an
Event of Default has occurred and is continuing, the Administrative Agent may
institute and maintain, in its own name or in the name of any Pledgor, such
suits and proceedings as the Administrative Agent may be advised by counsel
shall be necessary or expedient to prevent any impairment of the security
interest in or the perfection thereof in the Pledged Collateral.  All of the
foregoing shall be at the sole cost and expense of the Pledgors.  The Pledgors
and the Administrative Agent acknowledge that this Agreement is intended to
grant to the Administrative Agent for the benefit of the Secured Parties a
security interest in and Lien upon the Pledged Collateral and shall not
constitute or create a present assignment of any of the Pledged Collateral.

 

ARTICLE IV.

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Each Pledgor represents, warrants and covenants as follows:

 

Section 4.1                                      Title.  No financing statement
or other public notice with respect to all or any part of the Pledged Collateral
is on file or of record in any public office, except such as have been filed in
favor of the Administrative Agent pursuant to this Agreement or as are permitted
by the Credit Agreement.  No Person other than the Administrative Agent has
control or possession of all or any part of the Pledged Collateral, except as
permitted by the Credit Agreement.

 

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Section 4.2                                      Limitation on Liens; Defense of
Claims; Transferability of Pledged Collateral.  Each Pledgor is as of the date
hereof, and, as to Pledged Collateral acquired by it from time to time after the
date hereof, such Pledgor will be, the sole direct and beneficial owner of all
Pledged Collateral pledged by it hereunder free from any Lien or other right,
title or interest of any Person other than the Permitted Liens.  Each Pledgor
shall, at its own cost and expense, defend title to the Pledged Collateral
pledged by it hereunder and the security interest therein and Lien thereon
granted to the Administrative Agent and the priority thereof against all claims
and demands of all Persons, at its own cost and expense, at any time claiming
any interest therein adverse to the Administrative Agent or any other Secured
Party other than Permitted Liens.  There is no agreement, and no Pledgor shall
enter into any agreement or take any other action, that would restrict the
transferability of any of the Pledged Collateral or otherwise impair or conflict
with such Pledgors’ obligations or the rights of the Administrative Agent
hereunder.

 

Section 4.3                                      Chief Executive Office; Change
of Name; Jurisdiction of Organization.  (a)  The exact legal name, type of
organization, jurisdiction of organization, Federal Taxpayer Identification
Number, organizational identification number (if any) and chief executive office
of such Pledgor is indicated set forth in Schedules 1(a) and 2(a) annexed to the
Perfection Certificate.  Such Pledgor shall not change (i) its corporate name,
(ii) the location of its chief executive office, its principal place of
business, any office in which it maintains books or records relating to Pledged
Collateral owned by it or any office or facility at which Pledged Collateral
owned by it is located (including the establishment of any such new office or
facility), (iii) its identity or type of organization or corporate structure,
(iv) its Federal Taxpayer Identification Number or organizational identification
number or (v) its jurisdiction of organization (in each case, including, without
limitation, by merging with or into any other entity, reorganizing, dissolving,
liquidating, reincorporating or incorporating in any other jurisdiction), except
in accordance with Section 5.13 of the Credit Agreement.  Each Pledgor agrees to
promptly provide the Administrative Agent with certified organizational
documents reflecting any of the changes described in the preceding sentence.

 

(B)                                                                                
TO THE EXTENT THAT UCC FINANCING STATEMENTS OF THE PLEDGORS NEED TO BE AMENDED
AS A RESULT OF ANY OF THE CHANGES DESCRIBED IN SECTION 4.3(A), IF ANY PLEDGOR
FAILS TO PROVIDE INFORMATION TO THE ADMINISTRATIVE AGENT ABOUT SUCH CHANGES ON A
TIMELY BASIS, THE ADMINISTRATIVE AGENT SHALL NOT BE LIABLE OR RESPONSIBLE TO ANY
PARTY FOR ANY FAILURE TO MAINTAIN A PERFECTED SECURITY INTEREST IN SUCH
PLEDGOR’S PROPERTY CONSTITUTING PLEDGED COLLATERAL, FOR WHICH THE ADMINISTRATIVE
AGENT NEEDED TO HAVE INFORMATION RELATING TO SUCH CHANGES.  THE ADMINISTRATIVE
AGENT SHALL HAVE NO DUTY TO INQUIRE ABOUT SUCH CHANGES IF ANY PLEDGOR DOES NOT
INFORM THE ADMINISTRATIVE AGENT OF SUCH CHANGES, THE PARTIES ACKNOWLEDGING AND
AGREEING THAT IT WOULD NOT BE FEASIBLE OR PRACTICAL FOR THE ADMINISTRATIVE AGENT
TO SEARCH FOR INFORMATION ON SUCH CHANGES IF SUCH INFORMATION IS NOT PROVIDED BY
ANY PLEDGOR.

 

Section 4.4                                      Location of Collateral..  All
Collateral of such Pledgor is located at the locations listed in Schedules
2(a) through 2(e) annexed to the Perfection Certificate.  Except as expressly
permitted herein or in the Credit Agreement, such Pledgor shall not move any
Collateral to any location other than one within the continental United States
that is listed in such Schedules of the Perfection Certificate unless and until
(i) it shall have given the Administrative Agent not less than 30 days’ prior
written notice (in the form of an officers’ certificate) of its intention so to
do, clearly describing such new location within the continental United States
and

 

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providing such other information in connection therewith as the Administrative
Agent may request and (ii) with respect to such new location, such Pledgor shall
have taken all action reasonably satisfactory to the Administrative Agent to
maintain the perfection and priority of the security interest of the
Administrative Agent for the benefit of the Secured Parties in the Pledged
Collateral intended to be granted hereby, including, without limitation,
complying with the provisions of Section 3.4(g) to obtain a waiver of any
bailee’s, landlord’s or other applicable possessory lien and obtain a bailee
letter, landlord lien waiver or processor agreement, as applicable.

 

Section 4.5                                      Condition and Maintenance of
Equipment.  The Equipment of such Pledgor is in good repair, working order and
condition, reasonable wear and tear excepted.  Each Pledgor shall cause the
Equipment to be maintained and preserved in good repair, working order and
condition, reasonable wear and tear excepted, and shall as quickly as
commercially practicable make or cause to be made all repairs, replacements and
other improvements which are necessary or appropriate in the conduct of such
Pledgor’s business.

 

Section 4.6                                      Corporate Names; Prior
Transactions.  Such Pledgor has not, during the past five years, been known by
or used any other corporate or fictitious name or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property or assets out of the ordinary course of
business, except as set forth in Schedules 1(b), 1(c) and 3 annexed to the
Perfection Certificate.

 

Section 4.7                                      Due Authorization and
Issuance.  All of the Initial Pledged Shares have been, and to the extent any
Pledged Shares are hereafter issued, such shares will be, upon such issuance,
duly authorized, validly issued and fully paid and non-assessable.  All of the
Initial Pledged Interests have been fully paid for, and there is no amount or
other obligation owing by any Pledgor to any issuer of the Initial Pledged
Interests in exchange for or in connection with the issuance of the Initial
Pledged Interests or any Pledgor’s status as a partner or a member of any issuer
of the Initial Pledged Interests.

 

Section 4.8                                      No Claims.  Such Pledgor owns
or has rights to use all of the Pledged Collateral pledged by it hereunder and
all rights with respect to any of the foregoing used in, necessary for or
material to such Pledgor’s business as currently conducted.  The use by such
Pledgor of such Pledged Collateral and all such rights with respect to the
foregoing do not infringe on the rights of any Person other than such
infringement which would not, individually or in the aggregate, result in a
Material Adverse Effect.  No claim has been made and remains outstanding that
such Pledgor’s use of any Pledged Collateral does or may violate the rights of
any third Person that would individually, or in the aggregate, have a Material
Adverse Effect.

 

Section 4.9                                      No Conflicts, Consents, etc. 
Other than the filing, registrations and recordings described in Section 3.3, no
consent of any party (including, without limitation, equity holders or creditors
of such Pledgor) and no consent, authorization, approval, license or other
action by, and no notice to or filing with, any Governmental Authority or
regulatory body or other Person is required (A) for the pledge by such Pledgor
of the Pledged Collateral pledged by it pursuant to this Agreement or for the
execution, delivery or performance hereof by such Pledgor, (B) for the exercise
by the Administrative Agent of the voting or other rights provided for in this
Agreement or (C) for the exercise by the Administrative Agent of the remedies in

 

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respect of the Pledged Collateral pursuant to this Agreement.  In the event that
the Administrative Agent desires to exercise any remedies, voting or consensual
rights or attorney-in-fact powers set forth in this Agreement and determines it
necessary to obtain any approvals or consents of any Governmental Authority or
any other Person therefor, then, upon the reasonable request of the
Administrative Agent, such Pledgor agrees to use its best efforts to assist and
aid the Administrative Agent to obtain as soon as practicable any necessary
approvals or consents for the exercise of any such remedies, rights and powers.

 

Section 4.10                                Pledged Collateral.  All information
set forth herein and all information contained in any documents, schedules and
lists heretofore delivered to any Secured Party in connection with this
Agreement, in each case, relating to the Pledged Collateral (including all
information set forth on the schedules annexed to the Perfection Certificate),
is accurate and complete in all material respects.  Pledgors shall deliver to
the Administrative Agent a Perfection Certificate Supplement on an annual basis
as required under the Credit Agreement.

 

Section 4.11                                Insurance.  In the event that the
proceeds of any insurance claim are paid after the Administrative Agent has
exercised its right to foreclose after an Event of Default such Net Cash
Proceeds shall be paid to the Administrative Agent to be applied in accordance
with the provisions of Section 8.02 of the Credit Agreement.  The Administrative
Agent shall retain its interest in the insurance policies required to be
maintained pursuant to the Credit Agreement during any redemption period.

 

Section 4.12                                Payment of Taxes; Compliance with
Laws; Contested Liens; Claims.  Each Pledgor represents and warrants that all
Claims imposed upon or assessed against the Pledged Collateral have been paid
and discharged except to the extent such Claims are permitted to exist or be
contested under the Credit Agreement.  Each Pledgor shall comply with all
Requirements of Law applicable to the Pledged Collateral the failure with which
to comply would, individually or in the aggregate, have a Material Adverse
Effect.  Each Pledgor may at its own expense contest the validity, amount or
applicability of any Claims so long as the contest thereof shall be conducted in
accordance with, and permitted pursuant to the provisions of, the Credit
Agreement.  Notwithstanding the foregoing provisions of this Section 4.12, no
contest of any such obligation may be pursued by such Pledgor if such contest
would expose the Administrative Agent or any other Secured Party to (i) any
possible criminal liability or (ii) any additional civil liability for failure
to comply with such obligations unless such Pledgor shall have furnished a bond
or other security therefor satisfactory to the Administrative Agent, or such
Secured Party, as the case may be.

 

Section 4.13                                Access to Pledged Collateral, Books
and Records; Other Information.  Upon reasonable prior notice to each Pledgor,
the Administrative Agent, its agents, accountants and attorneys shall have full
and free access to visit and inspect, as applicable, during normal business
hours and such other reasonable times as may be requested by the Administrative
Agent, all of the Pledged Collateral and Mortgaged Property including, without
limitation, all of the books, correspondence and records of such Pledgor
relating thereto.  The Administrative Agent and its representatives may examine
the same, take extracts therefrom and make photocopies thereof, and such Pledgor
agrees to render to the Administrative Agent, at such Pledgor’s cost and
expense, such clerical and other assistance as may be reasonably

 

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requested by the Administrative Agent with regard thereto.  Such Pledgor shall,
at any and all times, within a reasonable time after written request by the
Administrative Agent, furnish or cause to be furnished to the Administrative
Agent, in such manner and in such detail as may be reasonably requested by the
Administrative Agent, additional information with respect to the Pledged
Collateral.

 

Section 4.14                                Third Party Consents Relating to
Intellectual Property Collateral.  Each Pledgor shall use reasonable commercial
efforts to obtain the consent of third parties to the extent such consent is
necessary or desirable to create a valid, perfected security interest in favor
of the Administrative Agent in any Intellectual Property Collateral, including,
without limitation, intent-to-use trademark applications.

 

ARTICLE V.

 

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

 

Section 5.1                                      Pledge of Additional Securities
Collateral.  Each Pledgor shall, upon obtaining any additional Securities
Collateral, accept the same in trust for the benefit of the Administrative Agent
and forthwith deliver to the Administrative Agent a pledge amendment, duly
executed by such Pledgor, in substantially the form of Exhibit 2 annexed hereto
(each, a “Pledge Amendment”), and the certificates and other documents to the
extent required under Section 3.1 and Section 3.2 hereof in respect of the
additional Pledged Securities or under Section 3.4(a) in respect of additional
Pledged Notes which are to be pledged pursuant to this Agreement, and confirming
the attachment of the Lien hereby created on and in respect of such additional
Pledged Securities or Pledged Notes.  Each Pledgor hereby authorizes the
Administrative Agent to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Securities or Pledged Notes listed on any Pledge
Amendment delivered to the Administrative Agent or the Revolving Credit Agent
shall for all purposes hereunder be considered Pledged Collateral.

 

Section 5.2                                      Voting Rights; Distributions;
etc.

 

(a)                                                                                 
So long as no Event of Default shall have occurred and be continuing:

 

(I)                                     EACH PLEDGOR SHALL BE ENTITLED TO
EXERCISE ANY AND ALL VOTING AND OTHER CONSENSUAL RIGHTS PERTAINING TO THE
SECURITIES COLLATERAL OR ANY PART THEREOF FOR ANY PURPOSE NOT INCONSISTENT WITH
THE TERMS OR PURPOSES HEREOF, THE CREDIT AGREEMENT OR ANY OTHER DOCUMENT
EVIDENCING THE OBLIGATIONS.

 

(II)                                  EACH PLEDGOR SHALL BE ENTITLED TO RECEIVE
AND RETAIN ANY AND ALL DISTRIBUTIONS, BUT ONLY IF AND TO THE EXTENT MADE IN
ACCORDANCE WITH THE PROVISIONS OF THE CREDIT AGREEMENT; PROVIDED, HOWEVER, THAT
ANY AND ALL SUCH DISTRIBUTIONS MADE AT ANY TIME AFTER THE PAYMENT IN FULL OF THE
REVOLVING CREDIT INDEBTEDNESS AND THE TERMINATION OF THE REVOLVING CREDIT
DOCUMENTS AND CONSISTING OF RIGHTS OR INTERESTS IN THE FORM OF SECURITIES SHALL
BE FORTHWITH DELIVERED TO THE ADMINISTRATIVE AGENT TO HOLD AS PLEDGED COLLATERAL
AND SHALL, IF RECEIVED BY ANY PLEDGOR, BE RECEIVED IN TRUST FOR THE BENEFIT OF
THE ADMINISTRATIVE AGENT, BE SEGREGATED FROM THE

 

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OTHER PROPERTY OR FUNDS OF SUCH PLEDGOR AND BE FORTHWITH DELIVERED TO THE
ADMINISTRATIVE AGENT AS PLEDGED COLLATERAL IN THE SAME FORM AS SO RECEIVED (WITH
ANY NECESSARY ENDORSEMENT).

 

(III)                               THE ADMINISTRATIVE AGENT SHALL BE DEEMED
WITHOUT FURTHER ACTION OR FORMALITY TO HAVE GRANTED TO EACH PLEDGOR ALL
NECESSARY CONSENTS RELATING TO VOTING RIGHTS AND SHALL, IF NECESSARY, UPON
WRITTEN REQUEST OF ANY PLEDGOR AND AT THE SOLE COST AND EXPENSE OF THE PLEDGORS,
FROM TIME TO TIME EXECUTE AND DELIVER (OR CAUSE TO BE EXECUTED AND DELIVERED) TO
SUCH PLEDGOR ALL SUCH INSTRUMENTS AS SUCH PLEDGOR MAY REASONABLY REQUEST IN
ORDER TO PERMIT SUCH PLEDGOR TO EXERCISE THE VOTING AND OTHER RIGHTS WHICH IT IS
ENTITLED TO EXERCISE PURSUANT TO SECTION 5.2(A)(I) HEREOF AND TO RECEIVE THE
DISTRIBUTIONS WHICH IT IS AUTHORIZED TO RECEIVE AND RETAIN PURSUANT TO
SECTION 5.2(A)(II) HEREOF.

 

(B)                                                                                
UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT AT ANY
TIME AFTER THE PAYMENT IN FULL OF THE REVOLVING CREDIT INDEBTEDNESS AND THE
TERMINATION OF THE REVOLVING CREDIT DOCUMENTS:

 

(I)                                     ALL RIGHTS OF EACH PLEDGOR TO EXERCISE
THE VOTING AND OTHER CONSENSUAL RIGHTS IT WOULD OTHERWISE BE ENTITLED TO
EXERCISE PURSUANT TO SECTION 5.2(A)(I) HEREOF SHALL CEASE, AND ALL SUCH RIGHTS
SHALL THEREUPON BECOME VESTED IN THE ADMINISTRATIVE AGENT, WHICH SHALL THEREUPON
HAVE THE SOLE RIGHT TO EXERCISE SUCH VOTING AND OTHER CONSENSUAL RIGHTS.

 

(II)                                  ALL RIGHTS OF EACH PLEDGOR TO RECEIVE
DISTRIBUTIONS WHICH IT WOULD OTHERWISE BE AUTHORIZED TO RECEIVE AND RETAIN
PURSUANT TO SECTION 5.2(A)(II) HEREOF SHALL CEASE AND ALL SUCH RIGHTS SHALL
THEREUPON BECOME VESTED IN THE ADMINISTRATIVE AGENT, WHICH SHALL THEREUPON HAVE
THE SOLE RIGHT TO RECEIVE AND HOLD AS PLEDGED COLLATERAL SUCH DISTRIBUTIONS;

 

provided, that, upon a waiver or cure, if any, of such Event of Default, the
rights of the Pledgor under such Sections 5.2(a)(i) and 5.2 (a)(ii) shall revert
to such Pledgor.

 

(C)                                                                                 
EACH PLEDGOR SHALL, AT ITS SOLE COST AND EXPENSE, FROM TIME TO TIME EXECUTE AND
DELIVER TO THE ADMINISTRATIVE AGENT APPROPRIATE INSTRUMENTS AS THE
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST IN ORDER TO PERMIT THE
ADMINISTRATIVE AGENT TO EXERCISE THE VOTING AND OTHER RIGHTS WHICH IT MAY BE
ENTITLED TO EXERCISE PURSUANT TO SECTION 5.2(B)(I) HEREOF AND TO RECEIVE ALL
DISTRIBUTIONS WHICH IT MAY BE ENTITLED TO RECEIVE UNDER
SECTION 5.2(B)(II) HEREOF.

 

(D)                                                                                
ALL DISTRIBUTIONS WHICH ARE RECEIVED BY ANY PLEDGOR CONTRARY TO THE PROVISIONS
OF SECTION 5.2(A)(II) OR SECTION 5.2(B)(II) HEREOF SHALL BE RECEIVED IN TRUST
FOR THE BENEFIT OF THE ADMINISTRATIVE AGENT, SHALL BE SEGREGATED FROM OTHER
FUNDS OF SUCH PLEDGOR AND SHALL IMMEDIATELY BE PAID OVER TO THE ADMINISTRATIVE
AGENT AS PLEDGED COLLATERAL IN THE SAME FORM AS SO RECEIVED (WITH ANY NECESSARY
ENDORSEMENT).

 

Section 5.3                                      Operative Agreements.  Each
Pledgor has delivered to the Administrative Agent true, correct and complete
copies of the Operative Agreements.  The Operative Agreements are in full force
and effect, have not as of the date hereof been amended or modified except as
disclosed to the Administrative Agent, and there is no existing default by any
party thereunder or any event which, with the giving of notice or passage of
time or both, would constitute a default by any party thereunder.  Each Pledgor
shall deliver to the Administrative Agent a copy of any notice of default given
or received by it under any Operative

 

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Agreement within ten (10) days after such Pledgor gives or receives such
notice.  No Pledgor will terminate or agree to terminate any Operative Agreement
or make any amendment or modification to any Operative Agreement except as
expressly permitted by the terms of the Credit Agreement.

 

Section 5.4                                      Defaults, etc.  Such Pledgor is
not in default in the payment of any portion of any mandatory capital
contribution, if any, required to be made under any agreement to which such
Pledgor is a party relating to the Pledged Securities pledged by it, and such
Pledgor is not in violation of any other provisions of any such agreement to
which such Pledgor is a party, or otherwise in default or violation thereunder. 
No Securities Collateral pledged by such Pledgor is subject to any defense,
offset or counterclaim, nor have any of the foregoing been asserted or alleged
against such Pledgor by any Person with respect thereto, and as of the date
hereof, there are no certificates, instruments, documents or other writings
(other than the Operative Agreements and certificates, if any, delivered to the
Revolving Credit Agent) which evidence any Pledged Securities of such Pledgor.

 

Section 5.5                                      Certain Agreements of Pledgors
As Issuers and Holders of Equity Interests.

 

(I)                                     IN THE CASE OF EACH PLEDGOR WHICH IS AN
ISSUER OF SECURITIES COLLATERAL, SUCH PLEDGOR AGREES TO BE BOUND BY THE TERMS OF
THIS AGREEMENT RELATING TO THE SECURITIES COLLATERAL ISSUED BY IT AND WILL
COMPLY WITH SUCH TERMS INSOFAR AS SUCH TERMS ARE APPLICABLE TO IT.

 

(II)                                  IN THE CASE OF EACH PLEDGOR WHICH IS A
PARTNER OR MEMBER IN A PARTNERSHIP, LIMITED LIABILITY COMPANY OR OTHER ENTITY,
SUCH PLEDGOR HEREBY CONSENTS TO THE EXTENT REQUIRED BY THE APPLICABLE OPERATIVE
AGREEMENT TO THE PLEDGE BY EACH OTHER PLEDGOR, PURSUANT TO THE TERMS HEREOF, OF
THE PLEDGED INTERESTS IN SUCH PARTNERSHIP, LIMITED LIABILITY COMPANY OR OTHER
ENTITY AND, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, TO THE TRANSFER OF SUCH PLEDGED INTERESTS TO THE ADMINISTRATIVE AGENT
OR ITS NOMINEE AND TO THE SUBSTITUTION OF THE ADMINISTRATIVE AGENT OR ITS
NOMINEE AS A SUBSTITUTED PARTNER OR MEMBER IN SUCH PARTNERSHIP, LIMITED
LIABILITY COMPANY OR OTHER ENTITY WITH ALL THE RIGHTS, POWERS AND DUTIES OF A
GENERAL PARTNER OR A LIMITED PARTNER OR MEMBER, AS THE CASE MAY BE.

 

ARTICLE VI.

 

CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL

 

Section 6.1                                      Grant of License.  For the
purpose of enabling the Administrative Agent, during the continuance of an Event
of Default, to exercise rights and remedies under Article IX hereof at such time
as the Administrative Agent shall be lawfully entitled to exercise such rights
and remedies, and for no other purpose, each Pledgor hereby grants to the
Administrative Agent, to the extent assignable, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to such
Pledgor) to use, assign, license or sublicense any of the Intellectual Property
Collateral now owned or hereafter acquired by such Pledgor, wherever the same
may be located, including in such license access to all media in

 

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which any of the licensed items may be recorded or stored and to all computer
programs used for the compilation or printout hereof.

 

Section 6.2                                      Registrations.  Except pursuant
to Licenses that are listed in Schedules 13(a) and 13(b) annexed to the
Perfection Certificate, and except as permitted by the Credit Agreement, on and
as of the date hereof (i) one Pledgor owns or at least one Pledgor possesses the
right to use any Copyright, Patent or Trademark listed in Schedules 13(a) and
13(b) annexed to the Perfection Certificate, (ii) no Pledgor has granted
permission to enable any other Person to use, any Copyright, Patent or Trademark
listed in Schedules 13(a) and 13(b) annexed to the Perfection Certificate, and
(iii) all registrations listed in Schedules 13(a) and 13(b) annexed to the
Perfection Certificate are valid and in full force and effect.

 

Section 6.3                                      No Violations or Proceedings. 
To each Pledgor’s knowledge, on and as of the date hereof, there is no material
violation by others of any right of such Pledgor with respect to any Copyright,
Patent or Trademark listed in Schedules 13(a) and 13(b) annexed to the
Perfection Certificate, respectively, pledged by it under the name of such
Pledgor.

 

Section 6.4                                      Protection of Administrative
Agent’s Security.  On a continuing basis, each Pledgor shall, at its sole cost
and expense, (a) promptly following its becoming aware thereof, notify the
Administrative Agent of (i) any materially adverse determination in any
proceeding in the United States Patent and Trademark Office or the United States
Copyright Office with respect to any material Patent, Trademark or Copyright or
(ii) the institution of any proceeding or any adverse determination in any
Federal, state or local court or administrative body regarding such Pledgor’s
claim of ownership in or right to use any of the Intellectual Property
Collateral material to the use and operation of the Pledged Collateral or
Mortgaged Property, its right to register such Intellectual Property Collateral
or its right to keep and maintain such registration in full force and effect,
(b) maintain and protect the Intellectual Property Collateral material to the
use and operation of the Pledged Collateral or Mortgaged Property as presently
used and operated and as contemplated by the Credit Agreement, (c) not permit to
lapse or become abandoned any Intellectual Property Collateral material to the
use and operation of the Pledged Collateral or Mortgaged Property as presently
used and operated and as contemplated by the Credit Agreement, and not settle or
compromise any pending or future litigation or administrative proceeding with
respect to such Intellectual Property Collateral, in each case except as shall
be consistent with commercially reasonable business judgment, (d) upon such
Pledgor obtaining knowledge thereof, promptly notify the Administrative Agent in
writing of any event which may be reasonably expected to materially and
adversely affect the value or utility of the Intellectual Property Collateral or
any portion thereof material to the use and operation of the Pledged Collateral
or Mortgaged Property, the ability of such Pledgor or the Administrative Agent
to dispose of the Intellectual Property Collateral or any portion thereof or the
rights and remedies of the Administrative Agent in relation thereto including,
without limitation, a levy or threat of levy or any legal process against the
Intellectual Property Collateral or any portion thereof, (e) not license the
Intellectual Property Collateral other than licenses entered into by such
Pledgor in, or incidental to, the ordinary course of business, or amend or
permit the amendment of any of the licenses in a manner that materially and
adversely affects the right to receive payments thereunder, or in any manner
that would materially impair the value of the Intellectual Property Collateral
or the Lien on and security interest in the Intellectual Property Collateral
intended to be granted to the Administrative Agent for the benefit of the
Secured

 

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Parties, without the consent of the Administrative Agent, (f) until the
Administrative Agent exercises its rights to make collection, diligently keep
adequate records respecting the Intellectual Property Collateral and (g) furnish
to the Administrative Agent from time to time upon the Administrative Agent’s
reasonable request therefor detailed statements and amended schedules further
identifying and describing the Intellectual Property Collateral and such other
materials evidencing or reports pertaining to the Intellectual Property
Collateral as the Administrative Agent may from time to time reasonably
request.  Notwithstanding the foregoing nothing herein shall prevent any Pledgor
from selling, disposing of or otherwise using any Intellectual Property
Collateral as permitted under the Credit Agreement.

 

Section 6.5                                      After-Acquired Property.  If
any Pledgor shall, at any time before the Obligations have been paid in full in
cash, (a) obtain any rights to any additional Intellectual Property Collateral
or (b) become entitled to the benefit of any additional Intellectual Property
Collateral or any renewal or extension thereof, including any reissue, division,
continuation, or continuation-in-part of any Intellectual Property Collateral,
or any improvement on any Intellectual Property Collateral, the provisions
hereof shall automatically apply thereto and any such item enumerated in clause
(a) or (b) of this Section 6.5 with respect to such Pledgor shall automatically
constitute Intellectual Property Collateral if such would have constituted
Intellectual Property Collateral at the time of execution hereof and be subject
to the Lien and security interest created by this Agreement without further
action by any party.  Each Pledgor shall promptly (i) provide to the
Administrative Agent written notice of any of the foregoing and (ii) confirm the
attachment of the Lien and security interest created by this Agreement to any
rights described in clauses (a) and (b) of the immediately preceding sentence of
this Section 6.5 by execution of an instrument in form reasonably acceptable to
the Administrative Agent.

 

Section 6.6                                      Modifications.  Each Pledgor
authorizes the Administrative Agent to modify this Agreement by amending
Schedules 13(a) and 13(b) annexed to the Perfection Certificate to include any
Intellectual Property Collateral acquired or arising after the date hereof of
such Pledgor including, without limitation, any of the items listed in
Section 6.5 hereof.

 

Section 6.7                                      Litigation.  Unless there shall
occur and be continuing any Event of Default, each Pledgor shall have the right
to commence and prosecute in its own name, as the party in interest, for its own
benefit and at the sole cost and expense of the Pledgors, such applications for
protection of the Intellectual Property Collateral and suits, proceedings or
other actions to prevent the infringement, counterfeiting, unfair competition,
dilution, diminution in value or other damage as are necessary to protect the
Intellectual Property Collateral.  Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent shall have the
right but shall in no way be obligated to file applications for protection of
the Intellectual Property Collateral in the name of the appropriate Pledgor
and/or bring suit in the name of any Pledgor, the Administrative Agent or the
Secured Parties to enforce the Intellectual Property Collateral and any license
thereunder.  In the event of such suit, each Pledgor shall, at the reasonable
request of the Administrative Agent, do any and all lawful acts and execute any
and all documents reasonably requested by the Administrative Agent in aid of
such enforcement and the Pledgors shall promptly reimburse and indemnify the
Administrative Agent, as the case may be, for all costs and expenses reasonably
incurred by the Administrative Agent in the exercise of its rights under this
Section 6.7 in accordance with Section 11.3 hereof.  In the event that the
Administrative Agent shall elect not to bring suit to enforce the Intellectual
Property

 

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Collateral, each Pledgor agrees, at the reasonable request of the Administrative
Agent, to take all commercially reasonable actions necessary, whether by suit,
proceeding or other action, to prevent the infringement, counterfeiting, unfair
competition, dilution, diminution in value of or other damage to any of the
Intellectual Property Collateral by others and for that purpose agrees to
diligently maintain any suit, proceeding or other action against any Person so
infringing necessary to prevent such infringement.

 

Section 6.8                                      U.S. Intent-to-Use Trademark
Applications.  Notwithstanding the provisions of Section 2.1, Article VI and
Section 9.6, the Administrative Agent acquires no security interest or other
rights in the United States for any Trademark that is the subject of an
intent-to-use application before the U.S. Patent and Trademark Office until such
time as a verified amendment to allege use or verified statement of use is filed
with the U.S. Patent and Trademark Office for such application or the
Administrative Agent arranges for an assignment of such Trademarks from the
Administrative Agent to a purchaser that would satisfy the requirements of
Section 10 of the Lanham Act, 15 U.S.C. Section 1060.  At the time the
Administrative Agent seeks to transfer all other Trademarks pursuant to
Section 6.1, it may also transfer any U.S. intent-to-use applications provided
that such applications satisfy the conditions of the preceding sentence.  In
Schedule 13(a) and 13(b) annexed to the Perfection Certificate and in any
reports produced under this Article VI, each Pledgor shall clearly identify each
U.S. intent-to-use trademark application for which a verified amendment to
allege use or statement of use has not been filed.

 

ARTICLE VII.

 

CERTAIN PROVISIONS CONCERNING ACCOUNTS

 

Section 7.1                                      Special Representations and
Warranties.  As of the time when each of its Accounts arises, each Pledgor shall
be deemed to have represented and warranted that such Account and all records,
papers and documents relating thereto (a) are genuine and correct and in all
material respects what they purport to be, (b) represent the legal, valid and
binding obligation of the account debtor, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability, evidencing indebtedness unpaid and owed by such
account debtor, arising out of the performance of labor or services or the sale,
lease, license, assignment or other disposition and delivery of the goods or
other property listed therein or out of an advance or a loan, (c) are in all
material respects in compliance and conform with all applicable Federal, state
and local laws and applicable laws of any relevant foreign jurisdiction.

 

Section 7.2                                      Maintenance of Records.  Each
Pledgor shall keep and maintain at its own cost and expense complete records of
each Account, in a manner consistent with prudent business practice, including,
without limitation, records of all payments received, all credits granted
thereon, all merchandise returned and all other documentation relating thereto. 
Each Pledgor shall, at such Pledgor’s sole cost and expense, upon the
Administrative Agent’s demand made at any time after the occurrence and during
the continuance of any Event of Default at any time after the payment in full of
the Revolving Credit Indebtedness and the termination of the Revolving Credit
Documents, deliver all tangible evidence of Accounts, including, without
limitation, all documents evidencing Accounts and any books and records relating
thereto to the

 

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Administrative Agent or to its representatives (copies of which evidence and
books and records may be retained by such Pledgor).  Upon the occurrence and
during the continuance of any Event of Default at any time after the payment in
full of the Revolving Credit Indebtedness and the termination of the Revolving
Credit Documents, the Administrative Agent may transfer a full and complete copy
of any Pledgor’s books, records, credit information, reports, memoranda and all
other writings relating to the Accounts to and for the use by any person that
has acquired or is contemplating acquisition of an interest in the Accounts or
the Administrative Agent’s security interest therein without the consent of any
Pledgor.

 

Section 7.3                                      Legend.  Each Pledgor shall
legend, at the request of the Administrative Agent, made at any time after the
occurrence of any Event of Default at any time after the payment in full of the
Revolving Credit Indebtedness and the termination of the Revolving Credit
Documents and in form and manner satisfactory to the Administrative Agent, the
Accounts and the other books, records and documents of such Pledgor evidencing
or pertaining to the Accounts with an appropriate reference to the fact that the
Accounts have been assigned to the Administrative Agent for the benefit of the
Secured Parties and that the Administrative Agent has a security interest
therein.

 

Section 7.4                                      Modification of Terms, etc.  No
Pledgor shall rescind or cancel any indebtedness evidenced by any Account or
modify any term thereof or make any adjustment with respect thereto except in
the ordinary course of business consistent with prudent business practice, or
extend or renew any such indebtedness except in the ordinary course of business
consistent with prudent business practice or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto or sell any Account or interest
therein except in the ordinary course of business consistent with prudent
business practice without the prior written consent of the Administrative
Agent.  Each Pledgor shall timely fulfill all obligations on its part to be
fulfilled under or in connection with the Accounts.

 

Section 7.5                                      Collection.  Each Pledgor shall
cause to be collected from the account debtor of each of the Accounts, as and
when due in the ordinary course of business consistent with prudent business
practice (including, without limitation, Accounts that are delinquent, such
Accounts to be collected in accordance with generally accepted commercial
collection procedures), any and all amounts owing under or on account of such
Account, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Account, except that any Pledgor
may, with respect to an Account, allow in the ordinary course of business (i) a
refund or credit due as a result of returned or damaged or defective merchandise
and (ii) such extensions of time to pay amounts due in respect of Accounts and
such other modifications of payment terms or settlements in respect of Accounts
as shall be commercially reasonable in the circumstances, all in accordance with
such Pledgor’s ordinary course of business consistent with its collection
practices as in effect from time to time.  The costs and expenses (including,
without limitation, attorneys’ fees) of collection, in any case, whether
incurred by any Pledgor, the Administrative Agent or any Secured Party, shall be
paid by the Pledgors.

 

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ARTICLE VIII.

 

TRANSFERS AND OTHER LIENS

 

Section 8.1                                      Transfers of and other Liens on
Pledged Collateral.  No Pledgor shall (i) sell, convey, assign or otherwise
dispose of, or grant any option with respect to, or (ii) grant, convey or permit
to exist any Lien on, any of the Pledged Collateral pledged by it hereunder
except, in each case, as permitted by the Credit Agreement.

 

ARTICLE IX.

REMEDIES

 

Section 9.1                                      Remedies.  (a)  Upon the
occurrence and during the continuance of any Event of Default the Administrative
Agent may from time to time exercise the following rights and remedies
(alternatively, successively or concurrently on any one or more occasions) in
respect of the Pledged Collateral, in addition to the other rights and remedies
provided for herein or otherwise available to it:

 

(I)                                     PERSONALLY, OR BY AGENTS OR ATTORNEYS,
IMMEDIATELY TAKE POSSESSION OF THE PLEDGED COLLATERAL OR ANY PART THEREOF, FROM
ANY PLEDGOR OR ANY OTHER PERSON WHO THEN HAS POSSESSION OF ANY PART THEREOF WITH
OR WITHOUT NOTICE OR PROCESS OF LAW, AND FOR THAT PURPOSE MAY ENTER UPON ANY
PLEDGOR’S PREMISES WHERE ANY OF THE PLEDGED COLLATERAL IS LOCATED, REMOVE SUCH
PLEDGED COLLATERAL, REMAIN PRESENT AT SUCH PREMISES TO RECEIVE COPIES OF ALL
COMMUNICATIONS AND REMITTANCES RELATING TO THE PLEDGED COLLATERAL AND USE IN
CONNECTION WITH SUCH REMOVAL AND POSSESSION ANY AND ALL SERVICES, SUPPLIES, AIDS
AND OTHER FACILITIES OF ANY PLEDGOR;

 

(II)                                  DEMAND, SUE FOR, COLLECT OR RECEIVE ANY
MONEY OR PROPERTY AT ANY TIME PAYABLE OR RECEIVABLE IN RESPECT OF THE PLEDGED
COLLATERAL INCLUDING, WITHOUT LIMITATION, INSTRUCTING THE OBLIGOR OR OBLIGORS ON
ANY AGREEMENT, INSTRUMENT OR OTHER OBLIGATION CONSTITUTING PART OF THE PLEDGED
COLLATERAL TO MAKE ANY PAYMENT REQUIRED BY THE TERMS OF SUCH AGREEMENT,
INSTRUMENT OR OTHER OBLIGATION DIRECTLY TO THE ADMINISTRATIVE AGENT, AND IN
CONNECTION WITH ANY OF THE FOREGOING, COMPROMISE, SETTLE, EXTEND THE TIME FOR
PAYMENT AND MAKE OTHER MODIFICATIONS WITH RESPECT THERETO; PROVIDED, HOWEVER,
THAT IN THE EVENT THAT ANY SUCH PAYMENTS ARE MADE DIRECTLY TO ANY PLEDGOR, PRIOR
TO RECEIPT BY ANY SUCH OBLIGOR OF SUCH INSTRUCTION, SUCH PLEDGOR SHALL SEGREGATE
ALL AMOUNTS RECEIVED PURSUANT THERETO IN TRUST FOR THE BENEFIT OF THE
ADMINISTRATIVE AGENT AND SHALL PROMPTLY (BUT IN NO EVENT LATER THAN ONE
(1) BUSINESS DAY AFTER RECEIPT THEREOF) PAY SUCH AMOUNTS TO THE ADMINISTRATIVE
AGENT;

 

(III)                               SELL, ASSIGN, GRANT A LICENSE TO USE OR
OTHERWISE LIQUIDATE, OR DIRECT ANY PLEDGOR TO SELL, ASSIGN, GRANT A LICENSE TO
USE OR OTHERWISE LIQUIDATE, ANY AND ALL INVESTMENTS MADE IN WHOLE OR IN PART
WITH THE PLEDGED COLLATERAL OR ANY PART THEREOF, AND TAKE POSSESSION OF THE
PROCEEDS OF ANY SUCH SALE, ASSIGNMENT, LICENSE OR LIQUIDATION;

 

(IV)                              TAKE POSSESSION OF THE PLEDGED COLLATERAL OR
ANY PART THEREOF, BY DIRECTING ANY PLEDGOR IN WRITING TO DELIVER THE SAME TO THE
ADMINISTRATIVE AGENT AT ANY PLACE OR PLACES SO DESIGNATED BY THE ADMINISTRATIVE
AGENT, IN WHICH EVENT SUCH PLEDGOR SHALL AT ITS OWN EXPENSE:  (A) FORTHWITH
CAUSE THE SAME TO BE MOVED TO THE PLACE OR PLACES DESIGNATED BY THE

 

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ADMINISTRATIVE AGENT AND THERE DELIVERED TO THE ADMINISTRATIVE AGENT, (B) STORE
AND KEEP ANY PLEDGED COLLATERAL SO DELIVERED TO THE ADMINISTRATIVE AGENT AT SUCH
PLACE OR PLACES PENDING FURTHER ACTION BY THE ADMINISTRATIVE AGENT AND (C) WHILE
THE PLEDGED COLLATERAL SHALL BE SO STORED AND KEPT, PROVIDE SUCH SECURITY AND
MAINTENANCE SERVICES AS SHALL BE NECESSARY TO PROTECT THE SAME AND TO PRESERVE
AND MAINTAIN THEM IN GOOD CONDITION.  EACH PLEDGOR’S OBLIGATION TO DELIVER THE
PLEDGED COLLATERAL AS CONTEMPLATED IN THIS SECTION 9.1(A)(IV) IS OF THE ESSENCE
HEREOF.  UPON APPLICATION TO A COURT OF EQUITY HAVING JURISDICTION, THE
ADMINISTRATIVE AGENT SHALL BE ENTITLED TO A DECREE REQUIRING SPECIFIC
PERFORMANCE BY ANY PLEDGOR OF SUCH OBLIGATION;

 

(V)                                 WITHDRAW ALL MONEYS, INSTRUMENTS, SECURITIES
AND OTHER PROPERTY IN ANY BANK, FINANCIAL SECURITIES, DEPOSIT OR OTHER ACCOUNT
OF ANY PLEDGOR CONSTITUTING PLEDGED COLLATERAL FOR APPLICATION TO THE
OBLIGATIONS AS PROVIDED IN ARTICLE X HEREOF;

 

(VI)                              RETAIN AND APPLY THE DISTRIBUTIONS TO THE
OBLIGATIONS AS PROVIDED IN ARTICLE X HEREOF;

 

(VII)                           EXERCISE ANY AND ALL RIGHTS AS BENEFICIAL AND
LEGAL OWNER OF THE PLEDGED COLLATERAL, INCLUDING, WITHOUT LIMITATION, PERFECTING
ASSIGNMENT OF AND EXERCISING ANY AND ALL VOTING, CONSENSUAL AND OTHER RIGHTS AND
POWERS WITH RESPECT TO ANY PLEDGED COLLATERAL; AND

 

(VIII)                        EXERCISE ALL THE RIGHTS AND REMEDIES OF A SECURED
PARTY UNDER THE UCC, AND THE ADMINISTRATIVE AGENT MAY ALSO IN ITS SOLE
DISCRETION, WITHOUT NOTICE EXCEPT AS SPECIFIED IN SECTION 9.2 HEREOF, SELL,
ASSIGN OR GRANT A LICENSE TO USE THE PLEDGED COLLATERAL OR ANY PART THEREOF IN
ONE OR MORE PARCELS AT PUBLIC OR PRIVATE SALE, AT ANY EXCHANGE, BROKER’S BOARD
OR AT ANY OF THE ADMINISTRATIVE AGENT’S OFFICES OR ELSEWHERE, FOR CASH, ON
CREDIT OR FOR FUTURE DELIVERY, AND AT SUCH PRICE OR PRICES AND UPON SUCH OTHER
TERMS AS THE ADMINISTRATIVE AGENT MAY DEEM COMMERCIALLY REASONABLE.  THE
ADMINISTRATIVE AGENT OR ANY OTHER SECURED PARTY OR ANY OF THEIR RESPECTIVE
AFFILIATES MAY BE THE PURCHASER, LICENSEE, ASSIGNEE OR RECIPIENT OF ANY OR ALL
OF THE PLEDGED COLLATERAL AT ANY SUCH SALE AND SHALL BE ENTITLED, FOR THE
PURPOSE OF BIDDING AND MAKING SETTLEMENT OR PAYMENT OF THE PURCHASE PRICE FOR
ALL OR ANY PORTION OF THE PLEDGED COLLATERAL SOLD, ASSIGNED OR LICENSED AT SUCH
SALE, TO USE AND APPLY ANY OF THE OBLIGATIONS OWED TO SUCH PERSON AS A CREDIT ON
ACCOUNT OF THE PURCHASE PRICE OF ANY PLEDGED COLLATERAL PAYABLE BY SUCH PERSON
AT SUCH SALE.  EACH PURCHASER, ASSIGNEE, LICENSEE OR RECIPIENT AT ANY SUCH SALE
SHALL ACQUIRE THE PROPERTY SOLD, ASSIGNED OR LICENSED ABSOLUTELY FREE FROM ANY
CLAIM OR RIGHT ON THE PART OF ANY PLEDGOR, AND EACH PLEDGOR HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS OF REDEMPTION, STAY AND/OR
APPRAISAL WHICH IT NOW HAS OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY
RULE OF LAW OR STATUTE NOW EXISTING OR HEREAFTER ENACTED.  THE ADMINISTRATIVE
AGENT SHALL NOT BE OBLIGATED TO MAKE ANY SALE OF PLEDGED COLLATERAL REGARDLESS
OF NOTICE OF SALE HAVING BEEN GIVEN.  THE ADMINISTRATIVE AGENT MAY ADJOURN ANY
PUBLIC OR PRIVATE SALE FROM TIME TO TIME BY ANNOUNCEMENT AT THE TIME AND PLACE
FIXED THEREFOR, AND SUCH SALE MAY, WITHOUT FURTHER NOTICE, BE MADE AT THE TIME
AND PLACE TO WHICH IT WAS SO ADJOURNED.  EACH PLEDGOR HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY CLAIMS AGAINST THE ADMINISTRATIVE AGENT
ARISING BY REASON OF THE FACT THAT THE PRICE AT WHICH ANY PLEDGED COLLATERAL MAY
HAVE BEEN SOLD, ASSIGNED OR LICENSED AT SUCH A PRIVATE SALE WAS LESS THAN THE
PRICE WHICH MIGHT HAVE BEEN OBTAINED AT A PUBLIC SALE, EVEN IF THE
ADMINISTRATIVE AGENT ACCEPTS THE FIRST OFFER RECEIVED AND DOES NOT OFFER SUCH
PLEDGED COLLATERAL TO MORE THAN ONE OFFEREE.

 

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Section 9.2                                      Notice of Sale.  Each Pledgor
acknowledges and agrees that, to the extent notice of sale or other disposition
of Pledged Collateral shall be required by law, ten (10) days’ prior notice to
such Pledgor of the time and place of any public sale or of the time after which
any private sale or other intended disposition is to take place shall be
commercially reasonable notification of such matters.  No notification need be
given to any Pledgor if it has signed, after the occurrence of an Event of
Default, a statement renouncing or modifying (as permitted under law) any right
to notification of sale or other intended disposition.

 

Section 9.3                                      Waiver of Notice and Claims. 
Each Pledgor hereby waives, to the fullest extent permitted by applicable law,
notice or judicial hearing in connection with the Administrative Agent’s taking
possession or the Administrative Agent’s disposition of any of the Pledged
Collateral, including, without limitation, any and all prior notice and hearing
for any prejudgment remedy or remedies and any such right which such Pledgor
would otherwise have under law, and each Pledgor hereby further waives, to the
fullest extent permitted by applicable law:  (a) all damages occasioned by such
taking of possession, (b) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the
Administrative Agent’s rights hereunder and (c) all rights of redemption,
appraisal, valuation, stay, extension or moratorium now or hereafter in force
under any applicable law.  The Administrative Agent shall not be liable for any
incorrect or improper payment made pursuant to this Article IX in the absence of
gross negligence or willful misconduct.  Any sale of, or the grant of options to
purchase, or any other realization upon, any Pledged Collateral shall operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of the applicable Pledgor therein and thereto, and shall be a perpetual bar both
at law and in equity against such Pledgor and against any and all Persons
claiming or attempting to claim the Pledged Collateral so sold, optioned or
realized upon, or any part thereof, from, through or under such Pledgor.

 

Section 9.4                                      Certain Sales of Pledged
Collateral.

 

(I)                                     EACH PLEDGOR RECOGNIZES THAT, BY REASON
OF CERTAIN PROHIBITIONS CONTAINED IN LAW, RULES, REGULATIONS OR ORDERS OF ANY
GOVERNMENTAL AUTHORITY, THE ADMINISTRATIVE AGENT MAY BE COMPELLED, WITH RESPECT
TO ANY SALE OF ALL OR ANY PART OF THE PLEDGED COLLATERAL, TO LIMIT PURCHASERS TO
THOSE WHO MEET THE REQUIREMENTS OF SUCH GOVERNMENTAL AUTHORITY.  EACH PLEDGOR
ACKNOWLEDGES THAT ANY SUCH SALES MAY BE AT PRICES AND ON TERMS LESS FAVORABLE TO
THE ADMINISTRATIVE AGENT THAN THOSE OBTAINABLE THROUGH A PUBLIC SALE WITHOUT
SUCH RESTRICTIONS, AND, NOTWITHSTANDING SUCH CIRCUMSTANCES, AGREES THAT ANY SUCH
RESTRICTED SALE SHALL BE DEEMED TO HAVE BEEN MADE IN A COMMERCIALLY REASONABLE
MANNER AND THAT, EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW, THE ADMINISTRATIVE
AGENT SHALL HAVE NO OBLIGATION TO ENGAGE IN PUBLIC SALES.

 

(II)                                  EACH PLEDGOR RECOGNIZES THAT, BY REASON OF
CERTAIN PROHIBITIONS CONTAINED IN THE SECURITIES ACT, AND APPLICABLE STATE
SECURITIES LAWS, THE ADMINISTRATIVE AGENT MAY BE COMPELLED, WITH RESPECT TO ANY
SALE OF ALL OR ANY PART OF THE SECURITIES COLLATERAL AND INVESTMENT PROPERTY, TO
LIMIT PURCHASERS TO PERSONS WHO WILL AGREE, AMONG OTHER THINGS, TO ACQUIRE SUCH
SECURITIES COLLATERAL OR INVESTMENT PROPERTY FOR THEIR OWN ACCOUNT, FOR
INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION OR RESALE THEREOF.  EACH
PLEDGOR ACKNOWLEDGES THAT ANY SUCH PRIVATE SALES MAY BE AT PRICES AND ON TERMS
LESS FAVORABLE TO THE ADMINISTRATIVE AGENT THAN THOSE OBTAINABLE THROUGH A
PUBLIC SALE WITHOUT SUCH RESTRICTIONS (INCLUDING, WITHOUT LIMITATION, A PUBLIC
OFFERING MADE PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT),
AND,

 

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NOTWITHSTANDING SUCH CIRCUMSTANCES, AGREES THAT ANY SUCH PRIVATE SALE SHALL BE
DEEMED TO HAVE BEEN MADE IN A COMMERCIALLY REASONABLE MANNER AND THAT THE
ADMINISTRATIVE AGENT SHALL HAVE NO OBLIGATION TO ENGAGE IN PUBLIC SALES AND NO
OBLIGATION TO DELAY THE SALE OF ANY SECURITIES COLLATERAL OR INVESTMENT PROPERTY
FOR THE PERIOD OF TIME NECESSARY TO PERMIT THE ISSUER THEREOF TO REGISTER IT FOR
A FORM OF PUBLIC SALE REQUIRING REGISTRATION UNDER THE SECURITIES ACT OR UNDER
APPLICABLE STATE SECURITIES LAWS, EVEN IF SUCH ISSUER WOULD AGREE TO DO SO.

 

(III)                               IF THE ADMINISTRATIVE AGENT DETERMINES TO
EXERCISE ITS RIGHT TO SELL ANY OR ALL OF THE SECURITIES COLLATERAL OR INVESTMENT
PROPERTY, UPON WRITTEN REQUEST, THE APPLICABLE PLEDGOR SHALL FROM TIME TO TIME
FURNISH TO THE ADMINISTRATIVE AGENT ALL SUCH INFORMATION AS THE ADMINISTRATIVE
AGENT MAY REQUEST IN ORDER TO DETERMINE THE NUMBER OF SECURITIES INCLUDED IN THE
SECURITIES COLLATERAL OR INVESTMENT PROPERTY WHICH MAY BE SOLD BY THE
ADMINISTRATIVE AGENT AS EXEMPT TRANSACTIONS UNDER THE SECURITIES ACT AND THE
RULES OF THE SECURITIES AND EXCHANGE COMMISSION THEREUNDER, AS THE SAME ARE FROM
TIME TO TIME IN EFFECT.

 

(IV)                              EACH PLEDGOR FURTHER AGREES THAT A BREACH OF
ANY OF THE COVENANTS CONTAINED IN THIS SECTION 9.4 WILL CAUSE IRREPARABLE INJURY
TO THE ADMINISTRATIVE AGENT AND OTHER SECURED PARTIES, THAT THE ADMINISTRATIVE
AGENT AND THE OTHER SECURED PARTIES HAVE NO ADEQUATE REMEDY AT LAW IN RESPECT OF
SUCH BREACH AND, AS A CONSEQUENCE, THAT EACH AND EVERY COVENANT CONTAINED IN
THIS SECTION 9.4 SHALL BE SPECIFICALLY ENFORCEABLE AGAINST SUCH PLEDGOR, AND
SUCH PLEDGOR 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 AND IS CONTINUING.

 

Section 9.5                                      No Waiver; Cumulative Remedies.

 

(I)                                     NO FAILURE ON THE PART OF THE
ADMINISTRATIVE AGENT TO EXERCISE, NO COURSE OF DEALING WITH RESPECT TO, AND NO
DELAY ON THE PART OF THE ADMINISTRATIVE AGENT IN EXERCISING, ANY RIGHT, POWER OR
REMEDY HEREUNDER SHALL OPERATE AS A WAIVER THEREOF; NOR SHALL ANY SINGLE OR
PARTIAL EXERCISE OF ANY SUCH RIGHT, POWER OR REMEDY HEREUNDER PRECLUDE ANY OTHER
OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT, POWER OR REMEDY;
NOR SHALL THE ADMINISTRATIVE AGENT BE REQUIRED TO LOOK FIRST TO, ENFORCE OR
EXHAUST ANY OTHER SECURITY, COLLATERAL OR GUARANTIES.  THE REMEDIES HEREIN
PROVIDED ARE CUMULATIVE AND ARE NOT EXCLUSIVE OF ANY REMEDIES PROVIDED BY LAW.

 

(II)                                  IN THE EVENT THAT THE ADMINISTRATIVE AGENT
SHALL HAVE INSTITUTED ANY PROCEEDING TO ENFORCE ANY RIGHT, POWER OR REMEDY UNDER
THIS AGREEMENT BY FORECLOSURE, SALE, ENTRY OR OTHERWISE, AND SUCH PROCEEDING
SHALL HAVE BEEN DISCONTINUED OR ABANDONED FOR ANY REASON OR SHALL HAVE BEEN
DETERMINED ADVERSELY TO THE ADMINISTRATIVE AGENT, THEN AND IN EVERY SUCH CASE,
THE PLEDGORS, THE ADMINISTRATIVE AGENT AND EACH OTHER SECURED PARTY SHALL BE
RESTORED TO THEIR RESPECTIVE FORMER POSITIONS AND RIGHTS HEREUNDER WITH RESPECT
TO THE PLEDGED COLLATERAL, AND ALL RIGHTS, REMEDIES AND POWERS OF THE
ADMINISTRATIVE AGENT AND THE OTHER SECURED PARTIES SHALL CONTINUE AS IF NO SUCH
PROCEEDING HAD BEEN INSTITUTED.

 

Section 9.6                                      Certain Additional Actions
Regarding Intellectual Property.  If any Event of Default shall have occurred
and be continuing, upon the written demand of Administrative Agent, each Pledgor
shall execute and deliver to Administrative Agent an

 

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assignment or assignments of the registered Patents, Trademarks and/or
Copyrights and such other documents as are necessary or appropriate to carry out
the intent and purposes hereof.  Within five (5) Business Days of written notice
thereafter from Administrative Agent, each Pledgor shall make available to
Administrative Agent, to the extent within such Pledgor’s power and authority,
such personnel in such Pledgor’s employ on the date of the Event of Default as
Administrative Agent may reasonably designate to permit such Pledgor to
continue, directly or indirectly, to produce, advertise and sell the products
and services sold by such Pledgor under the registered Patents, Trademarks
and/or Copyrights, and such Persons shall be available to perform their prior
functions on Administrative Agent’s behalf.

 

ARTICLE X.

 

PROCEEDS OF CASUALTY EVENTS AND COLLATERAL
DISPOSITIONS/APPLICATION OF PROCEEDS

 

Section 10.1                                Proceeds of Casualty Events and
Collateral Dispositions.  The Pledgors shall take all actions required by the
Credit Agreement with respect to any Net Cash Proceeds of any Casualty Event or
from the sale or disposition of any Pledged Collateral.

 

Section 10.2                                Application of Proceeds.  The
proceeds received by the Administrative Agent in respect of any sale of,
collection from or other realization upon all or any part of the Collateral
pursuant to the exercise by the Administrative Agent of its remedies shall be
applied, together with any other sums then held by the Administrative Agent
pursuant to this Agreement, in accordance with and as set forth in Section 8.02
of the Credit Agreement.

 

ARTICLE XI.

 

MISCELLANEOUS

 

Section 11.1                                Concerning Administrative Agent.

 

(I)                                     THE ADMINISTRATIVE AGENT HAS BEEN
APPOINTED AS ADMINISTRATIVE AGENT PURSUANT TO THE CREDIT AGREEMENT.  THE ACTIONS
OF THE ADMINISTRATIVE AGENT HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE
CREDIT AGREEMENT.  THE ADMINISTRATIVE AGENT SHALL HAVE THE RIGHT HEREUNDER TO
MAKE DEMANDS, TO GIVE NOTICES, TO EXERCISE OR REFRAIN FROM EXERCISING ANY
RIGHTS, AND TO TAKE OR REFRAIN FROM TAKING ACTION (INCLUDING, WITHOUT
LIMITATION, THE RELEASE OR SUBSTITUTION OF THE PLEDGED COLLATERAL), IN
ACCORDANCE WITH THIS AGREEMENT AND THE CREDIT AGREEMENT.  THE ADMINISTRATIVE
AGENT MAY EMPLOY AGENTS AND ATTORNEYS-IN-FACT IN CONNECTION HEREWITH AND SHALL
NOT BE LIABLE FOR THE NEGLIGENCE OR MISCONDUCT OF ANY SUCH AGENTS OR
ATTORNEYS-IN-FACT SELECTED BY IT IN GOOD FAITH.  THE ADMINISTRATIVE AGENT MAY
RESIGN AND A SUCCESSOR ADMINISTRATIVE AGENT MAY BE APPOINTED IN THE MANNER
PROVIDED IN THE CREDIT AGREEMENT.  UPON THE ACCEPTANCE OF ANY APPOINTMENT AS THE
ADMINISTRATIVE AGENT BY A SUCCESSOR ADMINISTRATIVE AGENT, THAT SUCCESSOR
ADMINISTRATIVE AGENT SHALL THEREUPON SUCCEED TO AND BECOME VESTED WITH ALL THE
RIGHTS, POWERS, PRIVILEGES AND DUTIES OF THE RETIRING ADMINISTRATIVE AGENT UNDER
THIS AGREEMENT, AND THE RETIRING ADMINISTRATIVE AGENT SHALL THEREUPON BE
DISCHARGED FROM ITS DUTIES AND OBLIGATIONS UNDER THIS AGREEMENT.  AFTER ANY
RETIRING ADMINISTRATIVE AGENT’S RESIGNATION, THE PROVISIONS HEREOF SHALL

 

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INURE TO ITS BENEFIT AS TO ANY ACTIONS TAKEN OR OMITTED TO BE TAKEN BY IT UNDER
THIS AGREEMENT WHILE IT WAS THE ADMINISTRATIVE AGENT.

 

(II)                                  THE ADMINISTRATIVE AGENT SHALL BE DEEMED
TO HAVE EXERCISED REASONABLE CARE IN THE CUSTODY AND PRESERVATION OF THE PLEDGED
COLLATERAL IN ITS POSSESSION IF SUCH PLEDGED COLLATERAL IS ACCORDED TREATMENT
SUBSTANTIALLY EQUIVALENT TO THAT WHICH THE ADMINISTRATIVE AGENT, IN ITS
INDIVIDUAL CAPACITY, ACCORDS ITS OWN PROPERTY CONSISTING OF SIMILAR INSTRUMENTS
OR INTERESTS, IT BEING UNDERSTOOD THAT NEITHER THE ADMINISTRATIVE AGENT NOR ANY
OF THE SECURED PARTIES SHALL HAVE RESPONSIBILITY FOR (I) ASCERTAINING OR TAKING
ACTION WITH RESPECT TO CALLS, CONVERSIONS, EXCHANGES, MATURITIES, TENDERS OR
OTHER MATTERS RELATING TO ANY SECURITIES COLLATERAL, WHETHER OR NOT THE
ADMINISTRATIVE AGENT OR ANY OTHER SECURED PARTY HAS OR IS DEEMED TO HAVE
KNOWLEDGE OF SUCH MATTERS OR (II) TAKING ANY NECESSARY STEPS TO PRESERVE RIGHTS
AGAINST ANY PERSON WITH RESPECT TO ANY PLEDGED COLLATERAL.

 

(III)                               THE ADMINISTRATIVE AGENT SHALL BE ENTITLED
TO RELY UPON ANY WRITTEN NOTICE, STATEMENT, CERTIFICATE, ORDER OR OTHER DOCUMENT
OR ANY TELEPHONE MESSAGE BELIEVED BY IT TO BE GENUINE AND CORRECT AND TO HAVE
BEEN SIGNED, SENT OR MADE BY THE PROPER PERSON, AND, WITH RESPECT TO ALL MATTERS
PERTAINING TO THIS AGREEMENT AND ITS DUTIES HEREUNDER, UPON ADVICE OF COUNSEL
SELECTED BY IT.

 

(IV)                              IF ANY ITEM OF PLEDGED COLLATERAL ALSO
CONSTITUTES COLLATERAL GRANTED TO ADMINISTRATIVE AGENT UNDER ANY OTHER DEED OF
TRUST, MORTGAGE, SECURITY AGREEMENT, PLEDGE OR INSTRUMENT OF ANY TYPE, IN THE
EVENT OF ANY CONFLICT BETWEEN THE PROVISIONS HEREOF AND THE PROVISIONS OF SUCH
OTHER DEED OF TRUST, MORTGAGE, SECURITY AGREEMENT, PLEDGE OR INSTRUMENT OF ANY
TYPE IN RESPECT OF SUCH COLLATERAL, ADMINISTRATIVE AGENT, IN ITS SOLE
DISCRETION, SHALL SELECT WHICH PROVISION OR PROVISIONS SHALL CONTROL.

 

Section 11.2                                Administrative Agent May Perform;
Administrative Agent Appointed Attorney-in-Fact.  If any Pledgor shall fail to
perform any covenants contained in this Agreement or in the Credit Agreement
(including, without limitation, such Pledgor’s covenants to (a) pay the premiums
in respect of all required insurance policies hereunder, (b) pay Claims,
(c) make repairs, (d) discharge Liens or (e) pay or perform any obligations of
such Pledgor under any Pledged Collateral) or if any warranty on the part of any
Pledgor contained herein shall be breached, the Administrative Agent may (but
shall not be obligated to) do the same or cause it to be done or remedy any such
breach, and may expend funds for such purpose; provided, however, that
Administrative Agent shall in no event be bound to inquire into the validity of
any tax, lien, imposition or other obligation which such Pledgor fails to pay or
perform as and when required hereby and which such Pledgor does not contest in
accordance with the provisions of Section 4.12 hereof.  Any and all amounts so
expended by the Administrative Agent shall be paid by the Pledgors in accordance
with the provisions of Section 11.3 hereof.  Neither the provisions of this
Section 11.2 nor any action taken by Administrative Agent pursuant to the
provisions of this Section 11.2 shall prevent any such failure to observe any
covenant contained in this Agreement nor any breach of warranty form
constituting an Event of Default.  Each Pledgor hereby appoints the
Administrative Agent its attorney-in-fact, with full authority in the place and
stead of such Pledgor and in the name of such Pledgor, or otherwise, from time
to time in the Administrative Agent’s discretion to take any action and to
execute any instrument consistent with the terms of the Credit Agreement and the
other Security Documents which the Administrative Agent may

 

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deem necessary or advisable to accomplish the purposes hereof.  The foregoing
grant of authority is a power of attorney coupled with an interest and such
appointment shall be irrevocable for the term hereof.  Each Pledgor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof.

 

Section 11.3                                Expenses.

 

(A)                                  EACH PLEDGOR WILL UPON DEMAND PAY TO THE
ADMINISTRATIVE AGENT THE AMOUNT OF ANY AND ALL COSTS AND EXPENSES, INCLUDING THE
REASONABLE FEES AND EXPENSES OF ITS COUNSEL AND THE REASONABLE FEES AND EXPENSES
OF ANY EXPERTS AND AGENTS WHICH THE ADMINISTRATIVE AGENT MAY INCUR IN CONNECTION
WITH (I) ANY ACTION, SUIT OR OTHER PROCEEDING AFFECTING THE PLEDGED COLLATERAL
OR ANY PART THEREOF COMMENCED, IN WHICH ACTION, SUIT OR PROCEEDING THE
ADMINISTRATIVE AGENT IS MADE A PARTY OR PARTICIPATES OR IN WHICH THE RIGHT TO
USE THE PLEDGED COLLATERAL OR ANY PART THEREOF IS THREATENED, OR IN WHICH IT
BECOMES NECESSARY IN THE JUDGMENT OF THE ADMINISTRATIVE AGENT TO DEFEND OR
UPHOLD THE LIEN HEREOF (INCLUDING, WITHOUT LIMITATION, ANY ACTION, SUIT OR
PROCEEDING TO ESTABLISH OR UPHOLD THE COMPLIANCE OF THE PLEDGED COLLATERAL WITH
ANY REQUIREMENTS OF ANY GOVERNMENTAL AUTHORITY OR LAW), (II) THE COLLECTION OF
THE OBLIGATIONS, (III) THE ENFORCEMENT AND ADMINISTRATION HEREOF, (IV) THE
CUSTODY OR PRESERVATION OF, OR THE SALE OF, COLLECTION FROM, OR OTHER
REALIZATION UPON, ANY OF THE PLEDGED COLLATERAL, (V) THE EXERCISE OR ENFORCEMENT
OF ANY OF THE RIGHTS OF THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY HEREUNDER
OR (VI) THE FAILURE BY ANY PLEDGOR TO PERFORM OR OBSERVE ANY OF THE PROVISIONS
HEREOF.  ALL AMOUNTS EXPENDED BY THE ADMINISTRATIVE AGENT AND PAYABLE BY ANY
PLEDGOR UNDER THIS SECTION 11.3 SHALL BE DUE UPON DEMAND THEREFOR (TOGETHER WITH
INTEREST THEREON ACCRUING AT THE HIGHEST RATE THEN IN EFFECT UNDER THE CREDIT
AGREEMENT DURING THE PERIOD FROM AND INCLUDING THE DATE ON WHICH SUCH FUNDS WERE
SO EXPENDED TO THE DATE OF REPAYMENT) AND SHALL BE PART OF THE OBLIGATIONS.

 

(B)                                 THE PLEDGORS AGREE, JOINTLY AND SEVERALLY,
TO INDEMNIFY THE ADMINISTRATIVE AGENT, EACH LENDER, EACH OTHER SECURED PARTY,
EACH AFFILIATE OF ANY OF THE FOREGOING PERSONS AND EACH OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, TRUSTEES, EMPLOYEES AND AGENTS (EACH SUCH PERSON BEING
CALLED AN “INDEMNITEE”), AGAINST, AND TO HOLD EACH INDEMNITEE HARMLESS FROM, ALL
REASONABLE OUT-OF-POCKET COSTS AND ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND RELATED EXPENSES, INCLUDING REASONABLE COUNSEL FEES, CHARGES,
EXPENSES AND DISBURSEMENTS, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE
ARISING OUT OF, IN ANY WAY CONNECTED WITH, OR AS A RESULT OF THIS AGREEMENT, THE
CREDIT AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER DOCUMENT EVIDENCING THE
OBLIGATIONS (INCLUDING, WITHOUT LIMITATION, ANY MISREPRESENTATION BY ANY PLEDGOR
IN THIS AGREEMENT, THE CREDIT AGREEMENT, OTHER LOAN DOCUMENT OR ANY OTHER
DOCUMENT EVIDENCING THE OBLIGATIONS); PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS
TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OR BAD FAITH OF SUCH INDEMNITEE.

 

(C)                                  THE PROVISIONS OF THIS SECTION 11.3 SHALL
REMAIN OPERATIVE AND IN FULL FORCE AND EFFECT REGARDLESS OF THE EXPIRATION OF
THE TERM OF THIS AGREEMENT, THE REPAYMENT OF ANY OF THE LOANS, THE EXPIRATION OF
THE COMMITMENTS, THE INVALIDITY OR UNENFORCEABILITY OF ANY TERM OR PROVISION OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY INVESTIGATION MADE BY OR ON
BEHALF OF THE AGENTS OR ANY LENDER.  ALL AMOUNTS DUE UNDER THIS SECTION 11.3
SHALL BE

 

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PAYABLE PROMPTLY (BUT IN ANY EVENT NO MORE THAN 10 DAYS FOLLOWING) UPON WRITTEN
DEMAND THEREFOR ACCOMPANIED BY REASONABLE DOCUMENTATION WITH RESPECT TO ANY
REIMBURSEMENT, INDEMNIFICATION OR OTHER AMOUNT REQUESTED.

 

Section 11.4                                Continuing Security Interest;
Assignment.  This Agreement shall create a continuing security interest in the
Pledged Collateral and shall (a) be binding upon the Pledgors, their respective
successors and assigns and (b) inure, together with the rights and remedies of
the Administrative Agent hereunder, to the benefit of the Administrative Agent
and the other Secured Parties and each of their permitted respective successors,
transferees and assigns.  No other Persons (including, without limitation, any
other creditor of any Pledgor) shall have any interest herein or any right or
benefit with respect hereto.  Without limiting the generality of the foregoing
clause (b), any Secured Party may assign or otherwise transfer any indebtedness
held by it secured by this Agreement to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party, herein or otherwise, subject however, to the provisions
of the Credit Agreement and any Lender Hedging Agreement.

 

Section 11.5                                Termination; Release.  The Pledged
Collateral shall be released from the Lien of this Agreement in accordance with
the provisions of the Credit Agreement.  Upon termination hereof or any release
of Pledged Collateral in accordance with the provisions of the Credit Agreement,
the Administrative Agent shall, upon the request and at the sole cost and
expense of the Pledgors, assign, transfer and deliver to Pledgor, against
receipt and without recourse to or warranty by the Administrative Agent except
as to the fact that the Administrative Agent has not encumbered the released
assets, such of the Pledged Collateral to be released (in the case of a release)
as may be in possession of the Administrative Agent and as shall not have been
sold or otherwise applied pursuant to the terms hereof, and, with respect to any
other Pledged Collateral, proper documents and instruments (including UCC-3
termination statements or releases) acknowledging the termination hereof or the
release of such Pledged Collateral, as the case may be.

 

Section 11.6                                Modification in Writing.  No
amendment, modification, supplement, termination or waiver of or to any
provision hereof, nor consent to any departure by any Pledgor therefrom, shall
be effective unless the same shall be made in accordance with the terms of the
Credit Agreement and unless in writing and signed by the Administrative Agent
and the Pledgors.  Any amendment, modification or supplement of or to any
provision hereof, any waiver of any provision hereof and any consent to any
departure by any Pledgor from the terms of any provision hereof shall be
effective only in the specific instance and for the specific purpose for which
made or given.  Except where notice is specifically required by this Agreement
or any other document evidencing the Obligations, no notice to or demand on any
Pledgor in any case shall entitle any Pledgor to any other or further notice or
demand in similar or other circumstances.

 

Section 11.7                                Notices.  Unless otherwise provided
herein or in the Credit Agreement, any notice or other communication herein
required or permitted to be given shall be given in the manner and become
effective as set forth in the Credit Agreement, as to any Pledgor, addressed to
it at the address of the Borrowers set forth in the Credit Agreement and as to
the Administrative Agent, addressed to it at the address set forth in the Credit
Agreement, or

 

36

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in each case at such other address as shall be designated by such party in a
written notice to the other party complying as to delivery with the terms of
this Section 11.7.

 

Section 11.8                                GOVERNING LAW.  THIS AGREEMENT SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.

 

Section 11.9                                CONSENT TO JURISDICTION AND SERVICE
OF PROCESS; WAIVER OF JURY TRIAL.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
PLEDGOR OR SECURED PARTY WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE
SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, THE COURTS OF
THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE
COURTS OF ANY THEREOF, AND BY EXECUTION AND DELIVERY HEREOF, EACH PLEDGOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT.  EACH PLEDGOR AGREES THAT SERVICE OF PROCESS IN ANY
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE
BORROWERS AT ITS ADDRESS SET FORTH IN THE CREDIT AGREEMENT OR AT SUCH OTHER
ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT
THERETO.  IF ANY AGENT APPOINTED BY ANY PLEDGOR REFUSES TO ACCEPT SERVICE, SUCH
PLEDGOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT
NOTICE.  NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT TO
BRING PROCEEDINGS AGAINST ANY PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION. 
THE PLEDGORS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 11.10                          Severability of Provisions.  Any
provision hereof 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.

 

Section 11.11                          Execution in Counterparts.  This
Agreement and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts together shall constitute
one and the same agreement.  Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or by email in PDF format shall be as
effective as a delivery of a manually executed counterpart of this Agreement.

 

37

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Section 11.12                          Business Days.  In the event any time
period or any date provided in this Agreement ends or falls on a day other than
a Business Day, then such time period shall be deemed to end and such date shall
be deemed to fall on the next succeeding Business Day, and performance herein
may be made on such Business Day, with the same force and effect as if made on
such other day.

 

Section 11.13                          No Credit for Payment of Taxes or
Imposition.  Such Pledgor shall not be entitled to any credit against the
principal, premium, if any, or interest payable under the Credit Agreement, and
such Pledgor shall not be entitled to any credit against any other sums which
may become payable under the terms thereof or hereof, by reason of the payment
of any Tax on the Pledged Collateral or any part thereof.

 

Section 11.14                          No Claims Against Administrative Agent. 
Nothing contained in this Agreement shall constitute any consent or request by
the Administrative Agent, express or implied, for the performance of any labor
or services or the furnishing of any materials or other property in respect of
the Pledged Collateral or any part thereof, nor as giving any Pledgor any right,
power or authority to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion as
would permit the making of any claim against the Administrative Agent in respect
thereof or any claim that any Lien based on the performance of such labor or
services or the furnishing of any such materials or other property is prior to
the Lien hereof.

 

Section 11.15                          No Release.  Nothing set forth in this
Agreement shall relieve any Pledgor from the performance of any term, covenant,
condition or agreement on such Pledgor’s part to be performed or observed under
or in respect of any of the Pledged Collateral or from any liability to any
Person under or in respect of any of the Pledged Collateral or shall impose any
obligation on the Administrative Agent or any other Secured Party to perform or
observe any such term, covenant, condition or agreement on such Pledgor’s part
to be so performed or observed or shall impose any liability on the
Administrative Agent or any other Secured Party for any act or omission on the
part of such Pledgor relating thereto or for any breach of any representation or
warranty on the part of such Pledgor contained in this Agreement, the Credit
Agreement or the other Loan Documents, or under or in respect of the Pledged
Collateral or made in connection herewith or therewith.  The obligations of each
Pledgor contained in this Section 11.15 shall survive the termination hereof and
the discharge of such Pledgor’s other obligations under this Agreement, the
Credit Agreement and the other Loan Documents.

 

Section 11.16                          Obligations Absolute.  All obligations of
each Pledgor hereunder shall be absolute and unconditional irrespective of:

 

(I)                                     ANY BANKRUPTCY, INSOLVENCY,
REORGANIZATION, ARRANGEMENT, READJUSTMENT, COMPOSITION, LIQUIDATION OR THE LIKE
OF ANY PLEDGOR;

 

(II)                                  ANY LACK OF VALIDITY OR ENFORCEABILITY OF
THE CREDIT AGREEMENT, ANY LENDER HEDGING AGREEMENT OR ANY OTHER LOAN DOCUMENT,
OR ANY OTHER AGREEMENT OR INSTRUMENT RELATING THERETO;

 

38

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

 

(III)                               ANY CHANGE IN THE TIME, MANNER OR PLACE OF
PAYMENT OF, OR IN ANY OTHER TERM OF, ALL OR ANY OF THE OBLIGATIONS, OR ANY OTHER
AMENDMENT OR WAIVER OF OR ANY CONSENT TO ANY DEPARTURE FROM THE CREDIT
AGREEMENT, ANY LENDER HEDGING AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OTHER
AGREEMENT OR INSTRUMENT RELATING THERETO;

 

(IV)                              ANY PLEDGE, EXCHANGE, RELEASE OR
NON-PERFECTION OF ANY OTHER COLLATERAL, OR ANY RELEASE OR AMENDMENT OR WAIVER OF
OR CONSENT TO ANY DEPARTURE FROM ANY GUARANTEE, FOR ALL OR ANY OF THE
OBLIGATIONS;

 

(V)                                 ANY EXERCISE, NON-EXERCISE OR WAIVER OF ANY
RIGHT, REMEDY, POWER OR PRIVILEGE UNDER OR IN RESPECT HEREOF, THE CREDIT
AGREEMENT, ANY LENDER HEDGING AGREEMENT OR ANY OTHER LOAN DOCUMENT EXCEPT AS
SPECIFICALLY SET FORTH IN A WAIVER GRANTED PURSUANT TO THE PROVISIONS OF
SECTION 11.6 HEREOF; OR

 

(VI)                              ANY OTHER CIRCUMSTANCES WHICH MIGHT OTHERWISE
CONSTITUTE A DEFENSE AVAILABLE TO, OR A DISCHARGE OF, ANY PLEDGOR.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

39

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IN WITNESS WHEREOF, the Pledgors and the Administrative Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.

 

 

 

PLEDGORS:

 

 

 

D 56, INC.

 

DEPARTMENT 56 RETAIL, INC.

 

TIME TO CELEBRATE, INC.

 

DEPARTMENT 56, INC.

 

DEPARTMENT 56 SALES, INC.

 

CAN 56, INC.

 

FL 56 INTERMEDIATE CORP.

 

 

 

 

 

By:

/s/ Susan E Engel

 

 

 

Name: Susan E Engel

 

 

Title:   Chairwoman & Chief Executive Officer

 

 

 

LENOX, INCORPORATED

 

 

 

 

 

By:

/s/ James G. Berwick

 

 

 

Name: James G. Berwick

 

 

Title:   Chief Financial Officer

 

 

 

DID, INCORPORATED

 

 

 

 

 

By:

/s/ Edward Paolella

 

 

 

Name: Edward Paolella

 

 

Title:   Vice President & Treasurer

 

 

 

UBS AG, STAMFORD BRANCH,

 

as Administrative Agent

 

 

 

 

 

By:

/s/ Wilfred V. Saint

 

 

 

Name: Wilfred V. Saint

 

 

Title:   Director

 

 

Banking Products Services, US

 

 

 

By:

/s/ Sulloz Sikka

 

 

 

Name: Sulloz Sikka

 

 

Title:   Associate Director

 

 

Banking Products Services, US

 

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

 

EXHIBIT 1

 

[Form of]

 

ISSUERS ACKNOWLEDGMENT

 

The undersigned hereby (i) acknowledges receipt of a copy of that certain
security agreement (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Security Agreement;” capitalized terms used but
not otherwise defined herein shall have the meanings assigned to such terms in
the Security Agreement), dated as of [                ], made by
[                ], a [                ] (the “Borrower”), and the Guarantors
party thereto in favor of [                                ], as Administrative
Agent (in such capacity and together with any successors in such capacity, the
“Administrative Agent”), (ii) agrees promptly to note on its books the security
interests granted to the Administrative Agent and confirmed under the Security
Agreement, (iii) agrees that it will comply with instructions of the
Administrative Agent with respect to the applicable Securities Collateral
without further consent by the applicable Pledgor, (iv) agrees to notify the
Administrative Agent upon obtaining knowledge of any interest in favor of any
Person in the applicable Securities Collateral that is adverse to the interest
of the Administrative Agent therein and (v) waives any right or requirement at
any time hereafter to receive a copy of the Security Agreement in connection
with the registration of any Securities Collateral thereunder in the name of the
Administrative Agent or its nominee or the exercise of voting rights by the
Administrative Agent or its nominee.

 

 

[                                                     ]

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

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

 

EXHIBIT 2

 

[Form of]

 

SECURITIES PLEDGE AMENDMENT

 

This Security Pledge Amendment, dated as of [                ], is delivered
pursuant to Section 5.1 of that certain security agreement (as amended, amended
and restated, supplemented or otherwise modified from time to time, the
“Security Agreement;” capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement), dated
as of [                             ], made by [                             ],
a [                ] (the “Borrower”), and the Guarantors party thereto in favor
of [                                                ], as Administrative Agent
(in such capacity and together with any successors in such capacity, the
“Administrative Agent”).  The undersigned hereby agrees that this Pledge
Amendment may be attached to the Security Agreement and that the Pledged
Securities and/or Pledged Notes listed on this Pledge Amendment shall be deemed
to be and shall become part of the Pledged Collateral and shall secure all
Obligations.

 

PLEDGED SECURITIES

 

 

ISSUER

 

CLASS OF
STOCK OR
INTERESTS

 

PAR
VALUE

 

CERTIFICATE
NO(S).

 

NUMBER
OF SHARES
OR
INTERESTS

 

PERCENTAGE OF
ALL ISSUED
CAPITAL OR OTHER
EQUITY INTERESTS
OF ISSUER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

PLEDGED NOTES

 

ISSUER

 

PRINCIPAL
AMOUNT

 

DATE OF
ISSUANCE

 

INTEREST RATE

 

MATURITY DATE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[

 

],

 

as Pledgor

 

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

AGREED TO AND ACCEPTED:

 

 

 

[

 

],

 

as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

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

 

 

EXHIBIT 3

 

[Form of]

 

JOINDER AGREEMENT

 

[Name of New Pledgor]

[Address of New Pledgor]

 

[Date]

 

 

 

 

 

 

 

 

 

 

Ladies and Gentlemen:

 

Reference is made to that certain security agreement (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Security
Agreement;” capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Security Agreement), dated as of
[                    ], made by [                    ], a
[                                 ] (the “Borrower”), and the Guarantors party
thereto in favor of
[                                                            ], as
Administrative Agent (in such capacity and together with any successors in such
capacity, the “Administrative Agent”).

 

This letter supplements the Security Agreement and is delivered by the
undersigned, [                      ] (the “New Pledgor”), pursuant to
Section 3.5 of the Security Agreement.  The New Pledgor hereby agrees to be
bound as a [Borrower] [Guarantor] and as a Pledgor by all of the terms,
covenants and conditions set forth in the Security Agreement to the same extent
that it would have been bound if it had been a signatory to the Security
Agreement on the execution date of the Security Agreement.  Without limiting the
generality of the foregoing, the New Pledgor hereby grants and pledges to the
Administrative Agent, as collateral security for the full, prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations, a Lien on and security interest in, all of its
right, title and interest in, to and under the Pledged Collateral and expressly
assumes all obligations and liabilities of a [Borrower] [Guarantor] and Pledgor
thereunder.  The New Pledgor hereby makes each of the representations and
warranties and agrees to each of the covenants applicable to the Pledgors
contained in the Security Agreement.

 

The New Pledgor is executing and delivering to the Administrative Agent a
Perfection Certificate with respect to itself on and as of the date hereof.

 

This agreement and any amendments, waivers, consents or supplements hereto may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts together shall constitute
one and the same agreement.

 

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

 

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

 

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

 

IN WITNESS WHEREOF, the New Pledgor has caused this letter agreement to be
executed and delivered by its duly authorized officer as of the date first above
written.

 

 

[NEW PLEDGOR]

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

AGREED TO AND ACCEPTED:

 

 

 

[

 

],

 

as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

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

 

EXHIBIT 4

 

FORM OF CONTROL AGREEMENT CONCERNING SECURITIES ACCOUNTS

 

This Control Agreement Concerning Securities Accounts (this “Control
Agreement”), dated as of [                              ], by and among
                               (the “Company”),
[                              ], as Administrative Agent for the Lenders and
the Agents (the “Administrative Agent”) and [              ] (the “Securities
Intermediary”), is delivered pursuant to Section 3.4(c) of that certain security
agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Security Agreement”), dated as of
[                              ], made by and among
[                                              ] [(the “Borrower”)] [the
Company],(1) each of the Guarantors listed on the signature pages thereto
(together with [the Borrower] [the Company], the “Pledgors”), in favor of the
Administrative Agent for the benefit of the Lenders and the Agents.  This
Control Agreement is for the purpose of perfecting the security interests of the
Secured Parties granted by the Pledgor in the Designated Securities Accounts
described below.  Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Security Agreement.

 

Section 1.                                            Confirmation of
Establishment and Maintenance of Designated Accounts.  The Securities
Intermediary hereby confirms that (i) the Securities Intermediary has
established for the Company and maintains the securities account(s) listed in
Schedule 1 annexed hereto (such account(s), together with each such other
securities account maintained by the Company with the Securities Intermediary
collectively, the “Designated Accounts” and each a “Designated Account”),
(ii) each of the Designated Accounts is a “securities account” as such term is
defined in Section 8-501(a) of the UCC, (iii) the Securities Intermediary shall,
subject to the terms of this Control Agreement and the Security Agreement, treat
the Administrative Agent as entitled to exercise the rights that comprise any
financial asset which is Investment Property and which is credited to a
Designated Account and (iv) all securities or other property underlying any
financial assets which constitute Investment Property and which are credited to
any Designated Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another securities account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to any Designated Account be
registered in the name of the Company, payable to the order of the Company or
specially endorsed to the Company, except to the extent the foregoing have been
specially endorsed to the Securities Intermediary or in blank.  For avoidance of
doubt, it is noted that the term “Designated Accounts” as used in any security
agreement or collateral agreement means both the Designated Accounts hereunder
and the “Designated Accounts” in the comparable agreement entered into with
respect to any other Pledgor.

 

Section 2.                                            “Financial Assets”
Election.  The Securities Intermediary hereby agrees that each item of
Investment Property (whether investment property, financial asset,

 

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

(1) Use “the Company” if Borrower owns the Designated Account(s).  If a
Subsidiary owns the Designated Account(s), use
[                                          ]. (the “Borrower”)”.

 

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

 

security, instrument or cash) credited to any Designated Account shall be
treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the
UCC.

 

Section 3.                                            Entitlement Order.  If at
any time the Securities Intermediary shall receive an “entitlement order”
(within the meaning of Section 8-102(a)(8) of the UCC) issued by the
Administrative Agent and relating to Investment Collateral or other Investment
Property maintained in one or more of the Designated Accounts, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Company or any other Person.

 

Section 4.                                            Subordination of Lien;
Waiver of Set-Off.  In the event that the Securities Intermediary has or
subsequently obtains by agreement, operation of law or otherwise a security
interest in any Designated Account or any Investment Property, the Securities
Intermediary hereby agrees that such security interest shall be subordinate to
the security interest of the Administrative Agent.  The financial assets and
other items deposited to any Designated Account will not be subject to
deduction, set-off, banker’s lien, or any other right in favor of any Person
other than the Secured Parties (except that the Securities Intermediary may set
off (i) all amounts due to the Securities Intermediary in respect of its
customary fees and expenses for the routine maintenance and operation of the
Designated Accounts, including overdraft fees and amounts advanced to settle
authorized transactions, and (ii) the face amount of any checks or other items
which have been credited to any Designated Account but are subsequently returned
unpaid because of uncollected or insufficient funds).

 

Section 5.                                            Choice of Law.  Both this
Control Agreement and the Designated Accounts shall be governed by the laws of
the State of New York.  Regardless of any provision in any other agreement, for
purposes of the UCC, New York shall be deemed to be the Securities
Intermediary’s location and the Designated Accounts (as well as the security
entitlements related thereto) shall be governed by the laws of the State of New
York.

 

Section 6.                                            Conflict with Other
Agreements; Amendments.  As of the date hereof, there are no other agreements
entered into between the Securities Intermediary and the Company with respect to
any Designated Account or any security entitlements or other financial assets
credited thereto (other than standard and customary documentation with respect
to the establishment and maintenance of such Designated Accounts).  The
Securities Intermediary and the Company will not enter into any other agreement
with respect to any Designated Account unless the Administrative Agent shall
have received prior written notice thereof.  The Securities Intermediary and the
Company will not enter into any other agreement with respect to creation or
perfection of any security interest in, or control of security entitlements
maintained in any of the Designated Accounts without the prior written consent
of the Administrative Agent acting in its sole discretion.  In the event of any
conflict with respect to “control” over any Designated Account between this
Control Agreement (or any portion hereof) and any other agreement now existing
or hereafter entered into, the terms of this Control Agreement shall prevail. 
No amendment or modification of this Control Agreement or waiver of any rights
hereunder shall be binding on any party hereto unless it is in writing and is
signed by all the parties hereto.

 

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

 

Section 7.                                            Certain Agreements.

 

(i)                                     The Securities Intermediary acknowledges
receipt of a copy of the Security Agreement.

 

(ii)                                  The Securities Intermediary has furnished
to the Administrative Agent and the Company the most recent account statement
issued by the Securities Intermediary with respect to each of the Designated
Accounts and the financial assets and cash balances held therein.  The account
statement for each Designated Account identifies the Investment Collateral held
therein in the manner set forth on Exhibit B annexed hereto.  The Securities
Intermediary represents and warrants to the Administrative Agent that each such
statement accurately reflects the assets held in such Designated Account as of
the date thereof.

 

(iii)                               The Securities Intermediary will, upon its
receipt of each supplement to the Security Agreement signed by the Company and
identifying one or more security entitlements or other financial assets as
“Investment Collateral,” enter into its records, including computer records,
with respect to each Designated Account a notation with respect to Investment
collateral so that such records and reports generated with respect thereto
identify the Investment Collateral as “Pledged.”

 

(iv)                              The Administrative Agent has delivered to the
Securities Intermediary a list, signed by an authorized representative (the
“Authorized Representative”), of the officers of the Administrative Agent
authorized to give approvals or instructions under this Control Agreement
(including notices and other instructions under Section 9 hereof) and the
Securities Intermediary shall be entitled to rely on communications from such
authorized officers until the earlier of (A) the termination of this Control
Agreement in accordance with the terms hereof, (B) notification by the
Authorized Representative of a change in the officers authorized to give
approvals or instructions and (C) the assignment of the rights of the Secured
Parties in accordance with Section 11 hereof.

 

Section 8.                                            Notice of Adverse Claims. 
Except for the claims and interest of the Administrative Agent and of the
Company in the Investment Collateral and other Investment Property, the
Securities Intermediary on the date hereof does not know of any claim to, or
security interest in, any Designated Account or in any “financial asset” (as
defined in Section 8-102(a) of the UCC) credited thereto and does not know of
any claim that any Person other than the Administrative Agent has been given
“control” of any Designated Account or any such financial asset.  If any Person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process and any claim of
“control”) against any of the Investment Collateral or in any financial asset
carried in any Designated Account constituting Investment Property, the
Securities Intermediary will promptly notify the Administrative Agent and the
Company thereof.

 

Section 9.                                            Maintenance of Designated
Accounts.  In addition to, and not in lieu of, the obligation of the Securities
Intermediary to honor entitlement orders as agreed in Section 3 hereof, the
Securities Intermediary agrees to maintain the Designated Accounts as follows:

 

(i)                                     Notice of Sole Control.  If at any time
the Administrative Agent delivers to the Securities Intermediary a notice of
sole control in substantially the form set forth in

 

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

 

Exhibit A attached hereto (the “Notice of Sole Control”) with respect to any
Designated Account, the Securities Intermediary agrees that, after receipt of
such notice, it will take all instructions with respect to such Designated
Account solely from the Administrative Agent.  Permitting settlement of trades
pending at the time of receipt of such notice shall not constitute a violation
of the immediately preceding sentence.  Without limiting the generality of the
first sentence of this paragraph, upon receipt of a Notice of Sole Control, the
Securities Intermediary shall (x) no longer permit any trading with respect to
the applicable Investment Collateral to be initiated by the Company or any
representative of, or investment manager appointed by, the Company and the
Securities Intermediary shall follow all instructions given by an authorized
officer of the Administrative Agent, including without limitation instructions
for distribution or transfer of any Investment Collateral or other Investment
Property in any Designated Account to be made to the Administrative Agent and
(y) follow all instructions given by an authorized officer of the Administrative
Agent, including, without limitation, instructions for distribution or transfer
of any funds in any Designated Account to be made to the Administrative Agent.

 

(ii)                                  Voting Rights.  Until such time as the
Securities Intermediary receives a Notice of Sole Control pursuant to clause
(i) of this Section 9, the Company, or an investment manager on behalf of the
Company, shall direct the Securities Intermediary with respect to the voting of
any Investment Collateral or other financial assets constituting Investment
Property credited to any Designated Account.

 

(iii)                               Permitted Dispositions.  Until such time as
the Securities Intermediary receives either a Notice of Sole Control signed by
the Administrative Agent with respect to some or all of the Investment
Collateral and other Investment Property or a notice signed by the
Administrative Agent that a proposed sale, exchange or transfer of certain
Investment Collateral by or on behalf of the Company will violate the Security
Agreement, the  Company, or any representative of, or investment manager
appointed by, the Company, may direct the Securities Intermediary with respect
to the sale, exchange or transfer of such Investment Collateral held in a
Designated Account.

 

(iv)                              Statements and Confirmations.  The Securities
Intermediary will send copies of all statements and other correspondence
(excluding routine confirmations) concerning any Designated Account or any
financial assets constituting Investment Property credited thereto
simultaneously to the Company and the Administrative Agent at the address set
forth in Section 12 hereof.  The Securities Intermediary will provide to the
Administrative Agent and to the Company, upon the Administrative Agent’s request
therefor from time to time (which may be as frequent as daily and is expected to
be at least as frequent as weekly) and, in any event as of the last business day
of each calendar month, a statement of the market value of each item of the
Investment Collateral in each Designated Account.

 

(v)                                 Bailee for Perfection.  The Securities
Intermediary acknowledges that, in the event that it should come into possession
of any certificate representing any security or other assets held as Investment
Collateral in any of the Designated Accounts, the Securities Intermediary shall
retain possession of the same for the benefit of the Administrative Agent (and
such act shall cause the Securities Intermediary to be deemed

 

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

 

a bailee for the Administrative Agent, if necessary) to perfect the
Administrative Agent’s security interest in such securities or assets.  The
Securities Intermediary hereby acknowledges its receipt of a copy of the
Security Agreement as notice to the Securities Intermediary regarding notice of
a security interest in collateral held by a bailee.

 

(vi)                              Certain Matters Relating to Interest,
Dividends, etc.  Until receipt of a Notice of Sole Control with respect to some
or all of the Investment Collateral (or of a notice from the Administrative
Agent, making reference to this Section 9(vi), that an Event of Default, as
defined in the Security Agreement, has occurred and is continuing), the
Securities Intermediary shall have no responsibility to furnish reports to the
Administrative Agent with respect to, or to segregate or otherwise account to
the Administrative Agent for, dividends, interest or other amounts received in
Designated Accounts with respect to Investment Collateral.

 

Section 10.                                      Representations, Warranties and
Covenants of the Securities Intermediary.  The Securities Intermediary hereby
makes the following representations, warranties and covenants:

 

(i)                                     The Designated Accounts have been
established as set forth in Section 1 hereof and each Designated Account will be
maintained in the manner set forth herein until termination of this Control
Agreement.  The Securities Intermediary shall not change the name or account
number of any Designated Account without the prior written consent of the
Administrative Agent.

 

(ii)                                  No financial asset constituting Investment
Collateral is or will be registered in the name of the Company, payable to its
order or specially indorsed to it, except to the extent such financial asset has
been indorsed to the Securities Intermediary or in blank.

 

(iii)                               This Control Agreement is the valid and
legally binding obligation of the Securities Intermediary.

 

(iv)                              The Securities Intermediary has not entered
into any agreement with any other Person pursuant to which it has agreed to
comply with entitlement orders (as defined in Section 8-102(a)(8) of the UCC)
with respect to financial assets credited to any Designated Account.  Until the
termination of this Control Agreement the Securities Intermediary will not,
without the written approval of the Administrative Agent, enter into any
agreement with any Person pursuant to which it agrees to comply with entitlement
orders with respect to Investment Collateral.  Until the termination of this
Control Agreement, the Securities Intermediary will not, without the written
approval of the Administrative Agent (which shall not be unreasonably withheld),
enter into any agreement with any Person relating to any Designated Account or
any financial assets credited thereto pursuant to which it agrees to comply with
entitlement orders of such Person.

 

(v)                                 The Securities Intermediary is a “securities
intermediary” as defined in Article 8-102(a)(14) of the UCC.

 

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

 

(vi)                              The Securities Intermediary has not entered
into any other agreement with the Company or Administrative Agent purporting to
limit or condition the obligation of the Securities Intermediary to comply with
entitlement orders with respect to financial assets credited to any Designated
Account as set forth in Section 3 hereof.

 

Section 11.                                      Successors; Assignment.  The
terms of this Control Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective corporate successors and
permitted assignees.

 

Section 12.                                      Notices.  Any notice, request
or other communication required or permitted to be given under this Control
Agreement shall be in writing and deemed to have been properly given when
delivered in person, or when sent by telecopy or other electronic means and
electronic confirmation of error free receipt is received or two (2) days after
being sent by certified or registered United States mail, return receipt
requested, postage prepaid, addressed to the party at the address set forth
below.

 

Pledgors:                                             
[                                  ]

[Address]

Attention:

Telecopy:

Telephone:

 

with copy to:

 

[                                  ]

[Address]

Attention:

Telecopy:

Telephone:

 

Securities

Intermediary:                        [                                  ]

[Address]

Attention:

Telecopy:

Telephone:

 

Administrative

Agent:                                                          
[                                  ]

[Address]

Attention:

Telecopy:

Telephone:

 

with a copy to:

 

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

 

Winston & Strawn LLP

200 Park Avenue

New York, NY 10166

Attention:                      William D. Brewer

Telecopy.:                     (212) 294-4700

 

Any party may change its address for notices in the manner set forth above.

 

Section 13.                                      Termination.  The rights and
powers granted herein to the Administrative Agent have been granted in order to
perfect the security interests of the Secured Parties in the Investment
Collateral and other Investment Property maintained in the Designated Accounts,
are powers coupled with an interest and will be affected neither by the
bankruptcy of the Company nor by the lapse of time.  The obligations of the
Securities Intermediary hereunder shall continue in effect until the security
interests of the Secured Parties with respect to the Investment Collateral and
other Investment Property have been terminated and an Authorized Representative
has notified the Securities Intermediary of such termination in writing.

 

Section 14.                                      Definitions.  The following
terms shall have the following meanings:

 

“Investment Collateral” shall mean, all “investment property,” as such term is
used in the UCC, of the Company and, in any event, shall include, without
limitation, (i) the Designated Account, (ii) all financial assets, cash, checks,
drafts, securities and instruments deposited or held or required to be deposited
or held in the Designated Account and all security entitlements relating
thereto, (iii) all investments and all certificates and instruments, if any,
from time to time representing or evidencing any other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the foregoing items listed in clauses (i) and (ii) of this
definition and (iv) each consent, control or other agreement, including, without
limitation, this Control Agreement, entered into by the Company with the
Securities Intermediary and all rights, if any, and interests of the Company in,
to and under each such consent, control or other agreement; provided, however,
that Investment Collateral shall in no event include the Securities Collateral.

 

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New
York.

 

Section 15.                                      Severability.  If any term or
provision set forth in this Agreement shall be invalid or unenforceable, the
remainder of this Agreement, other than those provisions held invalid or
unenforceable, shall be construed in all respects as if such invalid or
unenforceable term or provision were omitted.

 

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

 

Section 16.                                      Counterparts.  This Control
Agreement may be executed in any number of counterparts, all of which shall
constitute one and the same instrument, and any party hereto may execute this
Control Agreement by signing and delivering one or more counterparts.

 

[Signature Page Follows]

 

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

 

 

[                                                               ],

 

as Pledgor

 

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

[

 

],

 

as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

[                                                               ],

 

as Securities Intermediary

 

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

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

 

SCHEDULE I

 

Designated Account(s)

 

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

 

EXHIBIT A

 

[Letterhead of [                           ]]

 

[Date]

 

[Securities Intermediary]

[Address]

 

Attention:

 

Re:                               Notice of Sole Control

 

Ladies and Gentlemen:

 

As referenced in Section 9(i) of the Control Agreement Concerning Designated
Accounts dated as of [                      ], by and among
[                      ] (the “Company”), us and you (the “Control Agreement;”
capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Control Agreement) (a copy of which is attached) we hereby
give you notice of our sole control over the Investment Collateral and other
financial assets constituting Investment Property maintained in the securities
accounts, account numbers                        (the “Specified Designated
Accounts”).  You are hereby instructed not to accept any direction, instruction
or entitlement order with respect to Investment Collateral maintained in the
Specified Designated Accounts or the financial assets constituting Investment
Property credited thereto from any Person other than the undersigned, unless
otherwise ordered by a court of competent jurisdiction.

 

You are instructed to deliver a copy of this notice by facsimile transmission to
[Company].

 

 

Very truly yours,

 

 

 

[

 

],

 

as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

cc: [Name of Company]

 

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

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

 

EXHIBIT 5

 

FORM OF CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS

 

This CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS (this “Control Agreement”),
dated as of [                           ], by and among
[                           ] (the “Company”), UBS AG, STAMFORD BRANCH, as
Administrative Agent for the Lenders and the Agents (the “Administrative
Agent”), and [                           ] (the “Bank”), is delivered pursuant
to Section 3.4(b) of that certain security agreement (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Security
Agreement”), dated as of [                           ], made by
[                           ] [(the “Borrower”)] [the Company],(1) and each of
the Guarantors listed on the signature pages thereto (together with [the
Borrower] [the Company], the “Pledgors”), in favor of the Administrative Agent
for the benefit of the Lenders and the Agents.  This Control Agreement is for
the purpose of perfecting the security interests of the Administrative Agent
granted by the Company in the Designated Accounts described below.  All
references herein to the “UCC” shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York.  Capitalized terms used but
not defined herein shall have the meanings assigned to such terms in the
Security Agreement.

 

Section 1.                                            Confirmation of
Establishment and Maintenance of Designated Accounts.  The Bank hereby confirms
that (i) the Bank has established for the Company and maintains the deposit
account(s) listed in Schedule 1 annexed hereto (such deposit account(s),
collectively, the “Designated Accounts” and each a “Designated Account”) and
(ii) each Designated Account is a “deposit account” as such term is defined in
Article 9 of the UCC.  For avoidance of doubt, it is noted that the term
“Designated Accounts” as used in any security agreement means both the
Designated Accounts hereunder and the “Designated Accounts” in the comparable
agreement entered into with respect to any other Pledgor.

 

Section 2.                                            Control.  The
Administrative Agent shall at all times (i) have “control” (as defined in
Section 9-104 of the UCC) of any Designated Account and (ii) be authorized to
direct the Bank to comply, without further consent of the Company or any Person
acting or purporting to act for the Company being required, with all
instructions originated by the Administrative Agent directing disposition of the
funds in the Designated Account.  The Company, the Administrative Agent, and the
Bank agree that the Bank will comply with instructions originated by the
Administrative Agent directing the disposition of the funds in the Designated
Account without further consent by the Company.  The Bank shall also comply with
instructions directing the disposition of funds in the Designated Accounts
originated by the Company or its authorized representatives until such time as
the Administrative Agent delivers a Notice of Sole Control pursuant to
Section 8(i) hereof to the Bank.

 

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

(1) Use “the Company” if Borrower owns the Designated Account(s).  If a
Subsidiary owns the Designated Account(s), use
[                                  ]. (the “Borrower”)”.

 

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

 

Section 3.                                            Subordination of Lien;
Waiver of Set-Off.  In the event that the Bank has or subsequently obtains by
agreement, operation of law or otherwise a security interest in any Designated
Account, the Bank hereby agrees that such security interest shall be subordinate
to that of the Secured Parties.  The funds deposited into any Designated Account
will not be subject to deduction, set-off, banker’s lien, or any other right in
favor of any Person other than the Secured Parties (except that the Bank may set
off (i) all amounts due to the Bank in respect of its customary fees and
expenses for the routine maintenance and operation of the Designated Accounts,
including overdraft fees, and (ii) the face amount of any checks or other items
which have been credited to any Designated Account but are subsequently returned
unpaid because of uncollected or insufficient funds).

 

Section 4.                                            Choice of Law.  Both this
Control Agreement and the Designated Accounts shall be governed by the law of
the State of New York.  Regardless of any provision in any other agreement, for
purposes of the UCC, New York shall be deemed to be the Bank’s jurisdiction and
the Designated Accounts shall be governed by the law of the State of New York.

 

Section 5.                                            Conflict with Other
Agreements; Amendments.  As of the date hereof, there are no other agreements
entered into between the Bank and the Company with respect to any Designated
Account or any funds credited thereto (other than standard and customary
documentation with respect to the establishment and maintenance of such
Designated Accounts).  The Bank and the Company will not enter into any other
agreement with respect to any Designated Account, other than standard and
customary documentation with respect to the establishment and maintenance of
such Designated Accounts, unless the Administrative Agent shall have received
prior written notice thereof.  The Bank and the Company will not enter into any
other agreement with respect to control of the Designated Accounts without the
prior written consent of the Administrative Agent acting in its sole
discretion.  In the event of any conflict with respect to “control” over any
Designated Account between this Control Agreement (or any portion hereof) and
any other agreement now existing or hereafter entered into, the terms of this
Control Agreement shall prevail.  No amendment or modification of this Control
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.

 

Section 6.                                            Certain Agreements.

 

(i)                                     The Bank has furnished to the
Administrative Agent and the Company the most recent account statement issued by
the Bank with respect to each of the Designated Accounts and the cash balances
held therein.  The Bank represents and warrants to the Administrative Agent that
such statement accurately reflects the assets held in such Designated Account as
of the date thereof.

 

(ii)                                  The Administrative Agent has delivered to
the Bank a list, signed by an authorized representative (the “Authorized
Representative”), of the officers of the Administrative Agent authorized to give
approvals or instructions under this Control Agreement (including notices and
other instructions under Section 8 hereof) and the Bank shall be entitled to
rely on communications from such authorized officers until the earlier of
(A) the termination of this Control Agreement in accordance with the terms
hereof, (B)

 

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

 

the notification by the Authorized Representative of a change and (C) the
assignment of the rights of the Secured Parties in accordance with Section 11
hereof.

 

Section 7.                                            Notice of Adverse Claims. 
Except for the claims and interest of the Administrative Agent and of the
Company in the Designated Accounts, the Bank on the date hereof does not know of
any claim to, or security interest in, any Designated Account or in any funds
credited thereto and does not know of any claim that any Person other than the
Administrative Agent has been given “control” of any Designated Account or any
such funds.  If any Person asserts any lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process and any claim of “control”) against any funds in any Designated
Account, the Bank will promptly notify the Administrative Agent and the Company
thereof.

 

Section 8.                                            Maintenance of Designated
Accounts.  In addition to, and not in lieu of, the obligation of the Bank agreed
in Section 2 hereof, the Bank agrees to maintain the Designated Accounts as
follows:

 

(i)                                     Notice of Sole Control.  If at any time
the Administrative Agent delivers to the Bank a notice of sole control in
substantially the form set forth in Exhibit A attached hereto (the “Notice of
Sole Control”) with respect to any Designated Account, the Bank agrees that,
after receipt of such notice, it will take all instruction with respect to such
Designated Account solely from the Administrative Agent.  Without limiting the
generality of the first sentence of this paragraph, upon receipt of a Notice of
Sole Control, the Bank shall follow all instructions given by an authorized
officer of the Administrative Agent, including, without limitation, instructions
for distribution or transfer of any funds in any Designated Account to be made
to the Administrative Agent.

 

(ii)                                  Permitted Dispositions.  Until such time
as the Bank receives a Notice of Sole Control signed by the Administrative Agent
with respect to a Designated Account, the Company, or any representative of the
Company, may direct the Bank with respect to the transfer of the funds held in
such Designated Account.  Until such time as the Bank receives a Notice of Sole
Control, the Company shall be entitled to write checks against amounts in each
Designated Account, and make withdrawals, transfers, and other dispositions of
the funds in each Designated Account.

 

(iii)                               Statements and Confirmations.  The Bank will
promptly send copies of all statements and other correspondence (excluding
routine confirmations) concerning any Designated Account to the Company and the
Administrative Agent at the addresses set forth in Section 11 hereof.  The Bank
will promptly provide to the Administrative Agent and to the Company, upon the
Administrative Agent’s request therefor from time to time and in any event as of
the last business day of each calendar month, a statement of the cash balance in
each Designated Account.

 

Section 9.                                            Representations,
Warranties and Covenants of the Bank.  The Bank hereby makes the following
representations, warranties and covenants:

 

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

 

(i)                                     The Designated Accounts have been
established as set forth in Section 1 hereof and each Designated Account will be
maintained in the manner set forth herein until termination of this Control
Agreement.  The Bank shall not change the name or account number of any
Designated Account without the prior written consent of the Administrative
Agent.

 

(ii)                                  The Bank is a “bank,” as such term is
defined in the UCC.

 

(iii)                               This Control Agreement is the valid and
legally binding obligation of the Bank.

 

(iv)                              The Bank has not entered into any agreement
with any other Person pursuant to which it has agreed to comply with any orders
or instructions with respect to any Designated Account.  Until the termination
of this Control Agreement, the Bank will not, without the written approval of
the Administrative Agent, enter into any agreement with any Person pursuant to
which it agrees to comply with any orders or instructions of such Person with
respect to any Designated Account.

 

(v)                                 The Bank has not entered into any other
agreement with the Company or the Administrative Agent purporting to limit or
condition the obligation of the Bank to comply with any orders or instructions
with respect to any Designated Account as set forth in Section 2 hereof.

 

Section 10.                                      Successors; Assignment.  The
terms of this Control Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective corporate successors and
permitted assignees.

 

Section 11.                                      Notices.  Any notice, request
or other communication required or permitted to be given under this Control
Agreement shall be in writing and deemed to have been properly given when
delivered in person, or when sent by telecopy or other electronic means and
electronic confirmation of error free receipt is received or two (2) days after
being sent by certified or registered United States mail, return receipt
requested, postage prepaid, addressed to the party at the address set forth
below.

 

Company:                                       
[                                         ]

[Address]

Attention:

Telecopy:

Telephone:

 

with copy to:

 

[                                         ]

[Address]

Attention:

Telecopy:

Telephone:

 

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

 

Bank:                                                               
[                                         ]

[Address]

Attention:

Telecopy:

Telephone:

 

Administrative

Agent:                                                          
[                                         ]

[Address]

Attention:

Telecopy:

Telephone:

 

with a copy to:

 

[                                         ]

[Address]

Attention:

Telecopy:

Telephone:

 

Any party may change its address for notices in the manner set forth above.

 

Section 12.                                      Termination.  The rights and
powers granted herein to the Administrative Agent have been granted in order to
perfect the security interests of the Secured Parties in the Designated
Accounts, are powers coupled with an interest and will be affected neither by
the bankruptcy of the Company nor by the lapse of time.  The obligations of the
Bank hereunder shall continue in effect until the termination of the security
interests of the Secured Parties (including, without limitation, by virtue of
the notice pursuant to Section 11 hereof) with respect to the Designated
Accounts have been terminated and an Authorized Representative has notified the
Bank of such termination in writing.

 

Section 13.                                      Severability.  If any term or
provision set forth in this Agreement shall be invalid or unenforceable, the
remainder of this Agreement, other than those provisions held invalid or
unenforceable, shall be construed in all respects as if such invalid or
unenforceable term or provision were omitted.

 

Section 14.                                      Counterparts.  This Control
Agreement may be executed in any number of counterparts, all of which shall
constitute one and the same instrument, and any party hereto may execute this
Control Agreement by signing and delivering one or more counterparts.

 

[Signature Page Follows]

 

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

 

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

 

 

[                                                                ],

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

[                                     ],

 

as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

[                                                                ],

 

as Bank

 

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

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

 

SCHEDULE 1

 

Designated Accounts

 

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

 

EXHIBIT A

 

Letterhead of UBS AG, Stamford Branch

 

[Date]

 

[Bank]

[Address]

 

Attention: 

 

Re:                               Notice of Sole Control

 

Ladies and Gentlemen:

 

As referenced in Section 8(i) of the Control Agreement Concerning Deposit
Accounts dated as of                            , 2005, by and among D 56, Inc.,
a Minnesota corporation and Lenox, Incorporated, a New Jersey corporation
(collectively, the “Company”), us and you (the “Control Agreement”; capitalized
terms used but not defined herein shall have the meanings assigned to such terms
in the Control Agreement) (a copy of which is attached) we hereby give you
notice of our sole control over the Designated Account(s), account number(s): 
                                                                                 
(the “Specified Designated Accounts”).  You are hereby instructed not to accept
any direction or instructions with respect to the Specified Designated Accounts
or any funds credited thereto from any Person other than the undersigned, unless
otherwise ordered by a court of competent jurisdiction.

 

You are instructed to deliver a copy of this notice by facsimile transmission to
the Company.

 

 

 

Very truly yours,

 

 

 

UBS AG, Stamford Branch,

 

as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

cc:  D 56, Inc., and Lenox, Incorporated

 

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