Exhibit 10.4

 

EXECUTION VERSION

 

GUARANTY AND SECURITY AGREEMENT

 

This GUARANTY AND SECURITY AGREEMENT (this “Agreement”), dated as of
November 18, 2015, among the Persons listed on the signature pages hereof as
“Grantors” and those additional entities that hereafter become parties hereto by
executing the form of Joinder attached hereto as Annex 1 (each, a “Grantor” and
collectively, the “Grantors”), and BSP AGENCY, LLC, a Delaware limited liability
company, in its capacity as agent for each member of the Lender Group (in such
capacity, together with its successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Credit Agreement”) by and among Inventure Foods, Inc., a Delaware corporation
(“Parent Borrower”), the Subsidiaries of the Parent Borrower identified on the
signature pages thereof (such Subsidiaries, together with the Parent Borrower,
are referred to herein each individually as a “Borrower” and individually and
collectively, jointly and severally, as “Borrowers”), the lenders party thereto
as “Lenders” (each of such Lenders, together with its successors and permitted
assigns, is referred to hereinafter as a “Lender”) and Agent, the Lender Group
has agreed to make certain financial accommodations available to Borrowers from
time to time pursuant to the terms and conditions thereof; and

 

WHEREAS, Agent has agreed to act as agent for the benefit of the Lender Group in
connection with the transactions contemplated by the Credit Agreement and this
Agreement;

 

WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement
and the other Loan Documents and to induce the Lender Group to make financial
accommodations to Borrowers as provided for in the Credit Agreement, the other
Loan Documents, (a) each Grantor (other than any Borrower) has agreed to
guaranty the Guarantied Obligations, and (b) each Grantor has agreed to grant to
Agent, for the benefit of the Lender Group, a continuing security interest in
and to the Collateral in order to secure the prompt and complete payment,
observance and performance of, among other things, the Secured Obligations; and

 

WHEREAS, each Grantor (other than any Borrower) is a Subsidiary of a Borrower
and, as such, will benefit by virtue of the financial accommodations extended to
Borrowers by the Lender Group.

 

NOW, THEREFORE, for and in consideration of the recitals made above and other
good and valuable consideration, the receipt, sufficiency and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Definitions; Construction.

 

(a)                                 All initially capitalized terms used herein
(including in the preamble and recitals hereof) without definition shall have
the meanings ascribed thereto in the Credit Agreement (including Schedule 1.1
thereto).  Any terms (whether capitalized or lower case) used in this Agreement
that are defined in the Code shall be construed and defined as set forth in the
Code unless otherwise defined herein or in the Credit Agreement; provided that
to the extent that the Code is used to define any term used herein and if such
term is defined differently in different Articles of the Code, the definition of
such term contained in Article 9 of the Code shall govern.  In addition to those
terms defined elsewhere in this Agreement, as used in this Agreement, the
following terms shall have the following meanings:

 

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(i)                                     “ABL Agent” means Wells Fargo Bank,
National Association or its successor in accordance with the terms of the ABL
Credit Agreement.

 

(ii)                                  “ABL Obligations” means those obligations
owing to the ABL Agent pursuant to the ABL Credit Agreement.

 

(iii)                               “ABL Priority Collateral” has the meaning
specified therefor in the Intercreditor Agreement.

 

(iv)                              “Account” means an account (as that term is
defined in Article 9 of the Code).

 

(v)                                 “Account Debtor” means an account debtor (as
that term is defined in the Code).

 

(vi)                              “Activation Instruction” has the meaning
specified therefor in Section 7(k).

 

(vii)                           “Agent” has the meaning specified therefor in
the preamble to this Agreement.

 

(viii)                        “Agent’s Lien” has the meaning specified therefor
in the Credit Agreement.

 

(ix)                              “Agreement” has the meaning specified therefor
in the preamble to this Agreement.

 

(x)                                 “Books” means books and records (including
each Grantor’s Records indicating, summarizing, or evidencing such Grantor’s
assets (including the Collateral) or liabilities, each Grantor’s Records
relating to such Grantor’s business operations or financial condition, and each
Grantor’s goods or General Intangibles related to such information).

 

(xi)                              “Borrower” and “Borrowers” have the respective
meanings specified therefor in the recitals to this Agreement.

 

(xii)                           “Cash Equivalents” has the meaning specified
therefor in the Credit Agreement.

 

(xiii)                        “CFC” has the meaning specified therefor in the
Credit Agreement.

 

(xiv)                       “Chattel Paper” means chattel paper (as that term is
defined in the Code), and includes tangible chattel paper and electronic chattel
paper.

 

(xv)                          “Code” means the New York Uniform Commercial Code,
as in effect from time to time; provided, however, that in the event that, by
reason of mandatory provisions of law, any or all of the attachment, perfection,
priority, or remedies with respect to Agent’s Lien on any Collateral is governed
by the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of New York, the term “Code” shall mean the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority, or
remedies.

 

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(xvi)                       “Collateral” has the meaning specified therefor in
Section 3.

 

(xvii)                    “Collections” means all cash, checks, notes,
instruments, and other items of payment (including insurance proceeds, cash
proceeds of asset sales, rental proceeds, and tax refunds).

 

(xviii)                 “Commercial Tort Claims” means commercial tort claims
(as that term is defined in the Code), and includes those commercial tort claims
listed on Schedule 1.

 

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

 

(xx)                          “Control Agreement” has the meaning specified
therefor in the Credit Agreement.

 

(xxi)                       “Controlled Account” has the meaning specified
therefor in Section 7(k).

 

(xxii)                    “Controlled Account Agreements” means those certain
cash management agreements, in form and substance reasonably satisfactory to
Agent, each of which is executed and delivered by a Grantor, Agent, and one of
the Controlled Account Banks.

 

(xxiii)                 “Controlled Account Bank” has the meaning specified
therefor in Section 7(k).

 

(xxiv)                “Copyrights” means any and all rights in any works of
authorship, including (A) copyrights and moral rights, (B) copyright
registrations and recordings thereof and all applications in connection
therewith including those listed on Schedule 2, (C) income, license fees,
royalties, damages, and payments now and hereafter due or payable under and with
respect thereto, including payments under all licenses entered into in
connection therewith and damages and payments for past, present, or future
infringements thereof, (D) the right to sue for past, present, and future
infringements thereof, and (E) all of each Grantor’s rights corresponding
thereto throughout the world.

 

(xxv)                   “Copyright Security Agreement” means each Copyright
Security Agreement executed and delivered by Grantors, or any of them, and
Agent, in substantially the form of Exhibit A.

 

(xxvi)                “Credit Agreement” has the meaning specified therefor in
the recitals to this Agreement.

 

(xxvii)             “Deposit Account” means a deposit account (as that term is
defined in the Code).

 

(xxviii)          “Equipment” means equipment (as that term is defined in the
Code).

 

(xxix)                “Equity Interests” has the meaning specified therefor in
the Credit Agreement.

 

(xxx)                   “Event of Default” has the meaning specified therefor in
the Credit Agreement.

 

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(xxxi)                “Excluded Swap Obligation” means, with respect to any
Guarantor, any Swap Obligation if, and to the extent that, all or a portion of
the Guaranty of such Guarantor of, or the grant by such Guarantor of a security
interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Guarantor’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time the Guaranty
of such Guarantor or the grant of such security interest becomes effective with
respect to such Swap Obligation. If a Swap Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such
Guaranty or security interest is or becomes illegal.

 

(xxxii)             “Farm Products” means farm products (as that term is defined
in the Code).

 

(xxxiii)          “Fixtures” means fixtures (as that term is defined in the
Code).

 

(xxxiv)         “Foreclosed Grantor” has the meaning specified therefor in
Section 2(i)(iii).

 

(xxxv)            “General Intangibles” means general intangibles (as that term
is defined in the Code), and includes payment intangibles, software, contract
rights, rights to payment, rights under Hedge Agreements (including the right to
receive payment on account of the termination (voluntarily or involuntarily) of
such Hedge Agreements), rights arising under common law, statutes, or
regulations, choses or things in action, goodwill, Intellectual
Property, Intellectual Property Licenses, purchase orders, customer lists,
monies due or recoverable from pension funds, route lists, rights to payment and
other rights under any royalty or licensing agreements, including Intellectual
Property Licenses, infringement claims, pension plan refunds, pension plan
refund claims, insurance premium rebates, tax refunds, and tax refund claims,
interests in a partnership or limited liability company which do not constitute
a security under Article 8 of the Code, and any other personal property other
than Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts,
goods, Investment Property, Negotiable Collateral, and oil, gas, or other
minerals before extraction.

 

(xxxvi)         “Grantor” and “Grantors” have the respective meanings specified
therefor in the preamble to this Agreement.

 

(xxxvii)      “Guarantied Obligations” means all of the Obligations now or
hereafter existing, whether for principal, interest (including any interest that
accrues after the commencement of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any such
Insolvency Proceeding), fees (including the fees provided for in the Fee
Letter), Lender Group Expenses (including any fees or expenses that accrue after
the commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding), or
otherwise, and any and all expenses (including reasonable counsel fees and
expenses) incurred by Agent or any other member of the Lender Group (or any of
them) in enforcing any rights under the any of the Loan Documents.  Without
limiting the generality of the foregoing, Guarantied Obligations shall include
all amounts that constitute part of the Guarantied Obligations and would be owed
by any Borrower to Agent, or any other member of the Lender Group but for the
fact that they are unenforceable or not allowable, including due to the
existence of a bankruptcy, reorganization, other Insolvency Proceeding or
similar proceeding involving any Borrower or any guarantor; provided that,
anything to the contrary contained in the foregoing notwithstanding, the
Guarantied Obligations shall exclude any Excluded Swap Obligation.

 

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(xxxviii)   “Guarantor” means each Grantor other than Borrowers.

 

(xxxix)         “Guaranty” means the guaranty set forth in Section 2 hereof.

 

(xl)                              “Insolvency Proceeding” has the meaning
specified therefor in the Credit Agreement.

 

(xli)                           “Intellectual Property” means any and all
Patents, Copyrights, Trademarks, trade secrets, know-how, inventions (whether or
not patentable), algorithms, software programs (including source code and object
code), processes, product designs, industrial designs, blueprints, drawings,
data, customer lists, URLs and domain names, specifications, documentations,
reports, catalogs, literature, and any other forms of technology or proprietary
information of any kind, including all rights therein and all applications for
registration or registrations thereof.

 

(xlii)                        “Intellectual Property Licenses” means, with
respect to any Person (the “Specified Party”), (A) any licenses or other similar
rights provided to the Specified Party in or with respect to Intellectual
Property owned or controlled by any other Person, and (B) any licenses or other
similar rights provided to any other Person in or with respect to Intellectual
Property owned or controlled by the Specified Party, in each case, including
(x) any software license agreements (other than license agreements for
commercially available off-the-shelf software that is generally available to the
public which have been licensed to a Grantor pursuant to end-user licenses),
(y) the license agreements listed on Schedule 3, and (z) the right to use any of
the licenses or other similar rights described in this definition in connection
with the enforcement of the Lender Group’s rights under the Loan Documents.

 

(xliii)                     “Intercreditor Agreement” has the meaning specified
therefor in the Credit Agreement.

 

(xliv)                    “Inventory” means inventory (as that term is defined
in the Code).

 

(xlv)                       “Investment Property” means (A) any and all
investment property (as that term is defined in the Code), and (B) any and all
of the following (regardless of whether classified as investment property under
the Code):  all Pledged Interests, Pledged Operating Agreements, and Pledged
Partnership Agreements.

 

(xlvi)                    “Joinder” means each Joinder to this Agreement
executed and delivered by Agent and each of the other parties listed on the
signature pages thereto, in substantially the form of Annex 1.

 

(xlvii)                 “Lender Group” has the meaning specified therefor in the
Credit Agreement.

 

(xlviii)              “Lender” and “Lenders” have the respective meanings
specified therefor in the recitals to this Agreement.

 

(xlix)                    “Loan Document” has the meaning specified therefor in
the Credit Agreement.

 

(l)                                     “Negotiable Collateral” means letters of
credit, letter-of-credit rights, instruments, promissory notes, drafts and
documents (as each such term is defined in the Code).

 

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(li)                                  “Obligations” has the meaning specified
therefor in the Credit Agreement.

 

(lii)                               “Parent Borrower” has the meaning specified
therefor in the recitals to this Agreement.

 

(liii)                            “Patents” means patents and patent
applications, including (A) the patents and patent applications listed on
Schedule 4, (B) all continuations, divisionals, continuations-in-part,
re-examinations, reissues, and renewals thereof and improvements thereon,
(C) all income, royalties, damages and payments now and hereafter due or payable
under and with respect thereto, including payments under all licenses entered
into in connection therewith and damages and payments for past, present, or
future infringements thereof, (D) the right to sue for past, present, and future
infringements thereof, and (E) all of each Grantor’s rights corresponding
thereto throughout the world.

 

(liv)                           “Patent Security Agreement” means each Patent
Security Agreement executed and delivered by Grantors, or any of them, and
Agent, in substantially the form of Exhibit B.

 

(lv)                              “Permitted Investments” has the meaning
specified therefor in the Credit Agreement.

 

(lvi)                           “Permitted Liens” has the meaning specified
therefor in the Credit Agreement.

 

(lvii)                        “Person” has the meaning specified therefor in the
Credit Agreement.

 

(lviii)                     “Pledged Companies” means each Person listed on
Schedule 5 as a “Pledged Company”, together with each other Person, all or a
portion of whose Equity Interests are acquired or otherwise owned by a Grantor
after the Closing Date.

 

(lix)                           “Pledged Interests” means all of each Grantor’s
right, title and interest in and to all of the Equity Interests now owned or
hereafter acquired by such Grantor, regardless of class or designation,
including in each of the Pledged Companies (subject to the limits on the pledge
of Equity Interests issued by CFCs, as set forth in the Credit Agreement), and
all substitutions therefor and replacements thereof, all proceeds thereof and
all rights relating thereto, also including any certificates representing the
Equity Interests, the right to receive any certificates representing any of the
Equity Interests, all warrants, options, share appreciation rights and other
rights, contractual or otherwise, in respect thereof and the right to receive
all dividends, distributions of income, profits, surplus, or other compensation
by way of income or liquidating distributions, in cash or in kind, and all cash,
instruments, and other property from time to time received, receivable, or
otherwise distributed in respect of or in addition to, in substitution of, on
account of, or in exchange for any or all of the foregoing.

 

(lx)                              “Pledged Interests Addendum” means a Pledged
Interests Addendum substantially in the form of Exhibit C.

 

(lxi)                           “Pledged Notes” has the meaning specified
therefor in Section 6(i).

 

(lxii)                        “Pledged Operating Agreements” means all of each
Grantor’s rights, powers, and remedies under the limited liability company
operating agreements of each of the Pledged Companies that are limited liability
companies.

 

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(lxiii)                     “Pledged Partnership Agreements” means all of each
Grantor’s rights, powers, and remedies under the partnership agreements of each
of the Pledged Companies that are partnerships.

 

(lxiv)                    “Proceeds” has the meaning specified therefor in
Section 3.

 

(lxv)                       “PTO” means the United States Patent and Trademark
Office.

 

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

 

(lxvii)                 “Real Property” means any estates or interests in real
property now owned or hereafter acquired by any Grantor or any Subsidiary of any
Grantor and the improvements thereto.

 

(lxviii)              “Record” means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.

 

(lxix)                    “Rescission” has the meaning specified therefor in
Section 7(k).

 

(lxx)                       “Secured Obligations” means each and all of the
following:  (A) all of the present and future obligations of each of the
Grantors arising from, or owing under or pursuant to, this Agreement (including
the Guaranty), the Credit Agreement, or any of the other Loan Documents and
(B) all other Obligations of each Borrower and all other Indebtedness of each
Guarantor under the Loan Documents (including, in the case of each of clauses
(A) and (B), reasonable attorneys fees and expenses and any interest, fees, or
expenses that accrue after the filing of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any Insolvency
Proceeding);  provided that, anything to the contrary contained in the foregoing
notwithstanding, the Secured Obligations of the Guarantors shall exclude any
Excluded Swap Obligation.

 

(lxxi)                    “Securities Account” means a securities account (as
that term is defined in the Code).

 

(lxxii)                 “Security Interest” has the meaning specified therefor
in Section 3.

 

(lxxiii)              “Supporting Obligations” means supporting obligations (as
such term is defined in the Code), and includes letters of credit and guaranties
issued in support of Accounts, Chattel Paper, documents, General Intangibles,
instruments or Investment Property.

 

(lxxiv)             “Swap Obligation” means, with respect to any Grantor, any
obligation to pay or perform under any agreement, contract or transaction that
constitutes a “swap” within the meaning of section 1a(47) of the Commodity
Exchange Act.

 

(lxxv)                “Trademarks” means any and all trademarks, trade names,
registered trademarks, trademark applications, service marks, registered service
marks and service mark applications, including (A) the trade names, registered
trademarks, trademark applications, registered

 

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service marks and service mark applications listed on Schedule 6, (B) all
renewals thereof, (C) all income, royalties, damages and payments now and
hereafter due or payable under and with respect thereto, including payments
under all licenses entered into in connection therewith and damages and payments
for past or future infringements or dilutions thereof, (D) the right to sue for
past, present and future infringements and dilutions thereof, (E) the goodwill
of each Grantor’s business symbolized by the foregoing or connected therewith,
and (F) all of each Grantor’s rights corresponding thereto throughout the world.

 

(lxxvi)             “Trademark Security Agreement” means each Trademark Security
Agreement executed and delivered by Grantors, or any of them, and Agent, in
substantially the form of Exhibit D.

 

(lxxvii)          “URL” means “uniform resource locator,” an internet web
address.

 

(lxxviii)       “VIN” has the meaning specified therefor in Section 5(h).

 

(b)                                 Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or.”  The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement refer to this
Agreement as a whole (including the Schedules to this Agreement) and not to any
particular provision of this Agreement.  Section, subsection, clause, schedule,
and exhibit references herein are to this Agreement unless otherwise specified. 
Any reference in this Agreement to any agreement, instrument, or document shall
include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto and
thereof, as applicable (subject to any restrictions on such alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements set forth herein).  The words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties.  Any
reference herein to the satisfaction, repayment, or payment in full of the
Secured Obligations or the Guarantied Obligations shall mean (a) the payment or
repayment in full in immediately available funds of (i) the principal amount of,
and interest accrued and unpaid with respect to, all outstanding Loans, together
with the payment of any premium applicable to the repayment of the Loans,
(ii) all Lender Group Expenses that have accrued and are unpaid regardless of
whether demand has been made therefor, (iii) all fees or charges that have
accrued hereunder or under any other Loan Document and are unpaid, (b) the
receipt by Agent of cash collateral in order to secure any other contingent
Secured Obligations or Guarantied Obligations for which a claim or demand for
payment has been made on or prior to such time or in respect of matters or
circumstances known to Agent or a Lender at such time that are reasonably
expected to result in any loss, cost, damage, or expense (including attorneys’
fees and legal expenses), such cash collateral to be in such amount as Agent
reasonably determines is appropriate to secure such contingent Secured
Obligations or Guarantied Obligations, (c) the payment or repayment in full in
immediately available funds of all other Secured Obligations or Guarantied
Obligations (as the case may be) other than unasserted contingent
indemnification obligations, and (d) the termination of all of the Commitments
of the Lenders.  Any reference herein to any Person shall be construed to
include such Person’s successors and assigns.  Any requirement of a writing
contained herein shall be satisfied by the transmission of a Record.

 

(c)                                  All of the Schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference.

 

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2.                                      Guaranty.

 

(a)                                 In recognition of the direct and indirect
benefits to be received by Guarantors from the proceeds of the Loans and by
virtue of the financial accommodations to be made to Borrowers, each of the
Guarantors, jointly and severally, hereby unconditionally and irrevocably
guarantees as a primary obligor and not merely as a surety the full and prompt
payment when due, whether upon maturity, acceleration, or otherwise, of all of
the Guarantied Obligations.  If any or all of the Obligations constituting
Guarantied Obligations becomes due and payable, each of the Guarantors,
unconditionally and irrevocably, and without the need for demand, protest, or
any other notice or formality, promises to pay such indebtedness to Agent, for
the benefit of the Lender Group, together with any and all expenses (including
Lender Group Expenses) that may be incurred by Agent or any other member of the
Lender Group in demanding, enforcing, or collecting any of the Guarantied
Obligations (including the enforcement of any collateral for such Guarantied
Obligations or any collateral for the obligations of the Guarantors under this
Guaranty).  If claim is ever made upon Agent or any other member of the Lender
Group for repayment or recovery of any amount or amounts received in payment of
or on account of any or all of the Guarantied Obligations and any of Agent or
any other member of the Lender Group repays all or part of said amount by reason
of (i) any judgment, decree, or order of any court or administrative body having
jurisdiction over such payee or any of its property, or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including any Borrower or any Guarantor), then and in each such event, each of
the Guarantors agrees that any such judgment, decree, order, settlement, or
compromise shall be binding upon the Guarantors, notwithstanding any revocation
(or purported revocation) of this Guaranty or other instrument evidencing any
liability of any Grantor, and the Guarantors shall be and remain liable to the
aforesaid payees hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by any such payee.

 

(b)                                 Additionally, each of the Guarantors
unconditionally and irrevocably guarantees the payment of any and all of the
Guarantied Obligations to Agent, for the benefit of the Lender Group, whether or
not due or payable by any Loan Party upon the occurrence of any of the Events of
Default specified in Section 8.4 or 8.5 of the Credit Agreement, and irrevocably
and unconditionally promises to pay such indebtedness to Agent, for the benefit
of the Lender Group, without the requirement of demand, protest, or any other
notice or other formality, in lawful money of the United States.

 

(c)                                  The liability of each of the Guarantors
hereunder is primary, absolute, and unconditional, and is independent of any
security for or other guaranty of the Guarantied Obligations, whether executed
by any other Guarantor or by any other Person, and the liability of each of the
Guarantors hereunder shall not be affected or impaired by (i) any payment on, or
in reduction of, any such other guaranty or undertaking, (ii) any dissolution,
termination, or increase, decrease, or change in personnel by any Grantor,
(iii) any payment made to Agent or any other member of the Lender Group on
account of the Obligations which Agent or such other member of the Lender Group
repays to any Grantor pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding (or any settlement or
compromise of any claim made in such a proceeding relating to such payment), and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding, or (iv) any action or
inaction by Agent or any other member of the Lender Group, or (v) any
invalidity, irregularity, avoidability, or unenforceability of all or any part
of the Obligations or of any security therefor.

 

(d)                                 This Guaranty includes all present and
future Guarantied Obligations including any under transactions continuing,
compromising, extending, increasing, modifying, releasing, or renewing the
Guarantied Obligations, changing the interest rate, payment terms, or other
terms and conditions thereof, or creating new or additional Guarantied
Obligations after prior Guarantied Obligations have been satisfied in whole or
in part.  To the maximum extent permitted by law, each Guarantor hereby waives
any right to revoke this Guaranty as to future Guarantied Obligations.  If such
a revocation is effective notwithstanding the foregoing waiver, each Guarantor
acknowledges and agrees

 

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that (i) no such revocation shall be effective until written notice thereof has
been received by Agent, (ii) no such revocation shall apply to any Guarantied
Obligations in existence on the date of receipt by Agent of such written notice
(including any subsequent continuation, extension, or renewal thereof, or change
in the interest rate, payment terms, or other terms and conditions thereof),
(iii) no such revocation shall apply to any Guarantied Obligations made or
created after such date to the extent made or created pursuant to a legally
binding commitment of any member of the Lender Group in existence on the date of
such revocation, (iv) no payment by any Guarantor, any Borrower, or from any
other source, prior to the date of Agent’s receipt of written notice of such
revocation shall reduce the maximum obligation of such Guarantor hereunder, and
(v) any payment by any Borrower or from any source other than such Guarantor
subsequent to the date of such revocation shall first be applied to that portion
of the Guarantied Obligations as to which the revocation is effective and which
are not, therefore, guarantied hereunder, and to the extent so applied shall not
reduce the maximum obligation of such Guarantor hereunder.  This Guaranty shall
be binding upon each Guarantor, its successors and assigns and shall inure to
the benefit of and be enforceable by Agent (for the benefit of the Lender Group)
and its successors, transferees, or assigns.

 

(e)                                  The guaranty by each of the Guarantors
hereunder is a guaranty of payment and not of collection.  The obligations of
each of the Guarantors hereunder are independent of the obligations of any other
Guarantor or Grantor or any other Person and a separate action or actions may be
brought and prosecuted against one or more of the Guarantors whether or not
action is brought against any other Guarantor or Grantor or any other Person and
whether or not any other Guarantor or Grantor or any other Person be joined in
any such action or actions.  Each of the Guarantors waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement hereof.  Any payment by any Grantor or
other circumstance which operates to toll any statute of limitations as to any
Grantor shall operate to toll the statute of limitations as to each of the
Guarantors.

 

(f)                                   Each of the Guarantors authorizes Agent
and the other members of the Lender Group without notice or demand, and without
affecting or impairing its liability hereunder, from time to time to:

 

(i)                                     change the manner, place, or terms of
payment of, or change or extend the time of payment of, renew, increase,
accelerate, or alter:  (A) any of the Obligations (including any increase or
decrease in the principal amount thereof or the rate of interest or fees
thereon); or (B) any security therefor or any liability incurred directly or
indirectly in respect thereof, and this Guaranty shall apply to the Obligations
as so changed, extended, renewed, or altered;

 

(ii)                                  take and hold security for the payment of
the Obligations and sell, exchange, release, impair, surrender, realize upon,
collect, settle, or otherwise deal with in any manner and in any order any
property at any time pledged or mortgaged to secure the Obligations or any of
the Guarantied Obligations (including any of the obligations of all or any of
the Guarantors under this Guaranty) incurred directly or indirectly in respect
thereof or hereof, or any offset on account thereof;

 

(iii)                               exercise or refrain from exercising any
rights against any Grantor;

 

(iv)                              release or substitute any one or more
endorsers, guarantors, any Grantor, or other obligors;

 

(v)                                 settle or compromise any of the Obligations,
any security therefor, or any liability (including any of those of any of the
Guarantors under this Guaranty) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of any Grantor to its
creditors;

 

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(vi)                              apply any sums by whomever paid or however
realized to any liability or liabilities of any Grantor to Agent or any other
member of the Lender Group regardless of what liability or liabilities of such
Grantor remain unpaid;

 

(vii)                           consent to or waive any breach of, or any act,
omission, or default under, this Agreement, any other Loan Document, or any of
the instruments or agreements referred to herein or therein, or otherwise amend,
modify, or supplement this Agreement, any other Loan Document, or any of such
other instruments or agreements; or

 

(viii)                        take any other action that could, under otherwise
applicable principles of law, give rise to a legal or equitable discharge of one
or more of the Guarantors from all or part of its liabilities under this
Guaranty.

 

(g)                                  It is not necessary for Agent or any other
member of the Lender Group to inquire into the capacity or powers of any of the
Guarantors or the officers, directors, partners or agents acting or purporting
to act on their behalf, and any Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.

 

(h)                                 Each Guarantor jointly and severally
guarantees that the Guarantied Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation, or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of any member of the Lender Group with respect thereto.  The
obligations of each Guarantor under this Guaranty are independent of the
Guarantied Obligations, and a separate action or actions may be brought and
prosecuted against each Guarantor to enforce such obligations, irrespective of
whether any action is brought against any other Guarantor or whether any other
Guarantor is joined in any such action or actions.  The liability of each
Guarantor under this Guaranty shall be absolute and unconditional irrespective
of, and each Guarantor hereby irrevocably waives any defense it may now or
hereafter have in any way relating to, any or all of the following:

 

(i)                                     any lack of validity or enforceability
of any Loan Document or any agreement or instrument relating thereto;

 

(ii)                                  any change in the time, manner, or place
of payment of, or in any other term of, all or any of the Guarantied
Obligations, or any other amendment or waiver of or any consent to departure
from any Loan Document, including any increase in the Guarantied Obligations
resulting from the extension of additional credit;

 

(iii)                               any taking, exchange, release, or
non-perfection of any Lien in and to any Collateral, or any taking, release,
amendment, waiver of, or consent to departure from any other guaranty, for all
or any of the Guarantied Obligations;

 

(iv)                              the existence of any claim, set-off, defense,
or other right that any Guarantor may have at any time against any Person,
including Agent or any other member of the Lender Group;

 

(v)                                 any defense, set-off, counterclaim, or
claim, of any kind or nature, arising directly or indirectly from the present or
future lack of perfection, sufficiency, validity, or enforceability of the
Guarantied Obligations or any security therefor;

 

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(vi)                              any right or defense arising by reason of any
claim or defense based upon an election of remedies by any member of the Lender
Group including any defense based upon an impairment or elimination of such
Guarantor’s rights of subrogation, reimbursement, contribution, or indemnity of
such Guarantor against any other Grantor or any guarantors or sureties;

 

(vii)                           any change, restructuring, or termination of the
corporate, limited liability company, or partnership structure or existence of
any Grantor; or

 

(viii)                        any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor or any other
guarantor or surety.

 

(i)                                     Waivers.

 

(i)                                     Each of the Guarantors waives any right
(except as shall be required by applicable statute and cannot be waived) to
require Agent or any other member of the Lender Group to (i) proceed against any
other Grantor or any other Person, (ii) proceed against or exhaust any security
held from any other Grantor or any other Person, or (iii) protect, secure,
perfect, or insure any security interest or Lien on any property subject thereto
or exhaust any right to take any action against any other Grantor, any other
Person, or any collateral, or (iv) pursue any other remedy in any member of the
Lender Group’s power whatsoever.  Each of the Guarantors waives any defense
based on or arising out of any defense of any Grantor or any other Person, other
than payment of the Guarantied Obligations to the extent of such payment, based
on or arising out of the disability of any Grantor or any other Person, or the
validity, legality, or unenforceability of the Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of any Grantor
other than payment of the Obligations to the extent of such payment.  Agent may,
at the election of the Required Lenders, foreclose upon any Collateral held by
Agent by one or more judicial or nonjudicial sales or other dispositions,
whether or not every aspect of any such sale is commercially reasonable or
otherwise fails to comply with applicable law or may exercise any other right or
remedy Agent or any other member of the Lender Group may have against any
Grantor or any other Person, or any security, in each case, without affecting or
impairing in any way the liability of any of the Guarantors hereunder except to
the extent the Guarantied Obligations have been paid.

 

(ii)                                  Each of the Guarantors waives all
presentments, demands for performance, protests and notices, including notices
of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation, or
incurring of new or additional Obligations or other financial accommodations. 
Each of the Guarantors waives notice of any Default or Event of Default under
any of the Loan Documents.  Each of the Guarantors assumes all responsibility
for being and keeping itself informed of each Grantor’s financial condition and
assets and of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope, and extent of the risks which each of the
Guarantors assumes and incurs hereunder, and agrees that neither Agent nor any
of the other members of the Lender Group shall have any duty to advise any of
the Guarantors of information known to them regarding such circumstances or
risks.

 

(iii)                               To the fullest extent permitted by
applicable law, each Guarantor hereby waives:  (A) any right to assert against
any member of the Lender Group, any defense (legal or equitable), set-off,
counterclaim, or claim which each Guarantor may now or at any time hereafter
have against any Borrower or any other party liable to any member of the Lender
Group; (B) any defense, set-off, counterclaim, or claim, of any kind or nature,
arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guarantied Obligations or any
security therefor; (C) any right or defense arising by reason of any claim or
defense based upon an election of remedies by any member of the Lender Group
including any defense based upon an impairment or

 

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elimination of such Guarantor’s rights of subrogation, reimbursement,
contribution, or indemnity of such Guarantor against any Borrower or other
guarantors or sureties; and (D) the benefit of any statute of limitations
affecting such Guarantor’s liability hereunder or the enforcement thereof, and
any act which shall defer or delay the operation of any statute of limitations
applicable to the Guarantied Obligations shall similarly operate to defer or
delay the operation of such statute of limitations applicable to such
Guarantor’s liability hereunder.

 

(iv)                              No Guarantor will exercise any rights that it
may now or hereafter acquire against any Grantor or any other guarantor that
arise from the existence, payment, performance or enforcement of such
Guarantor’s obligations under this Guaranty, including any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of Agent or any other member of the Lender
Group, against any Grantor or any other guarantor or any Collateral, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, including the right to take or receive from any Grantor or any other
guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security solely on account of such claim, remedy or
right, unless and until all of the Guarantied Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash and all of the
Commitments have been terminated.  If any amount shall be paid to any Guarantor
in violation of the immediately preceding sentence, such amount shall be held in
trust for the benefit of Agent, for the benefit of the Lender Group, and shall
forthwith be paid to Agent to be credited and applied to the Guarantied
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Credit Agreement, or to be
held as Collateral for any Guarantied Obligations or other amounts payable under
this Guaranty thereafter arising.  Notwithstanding anything to the contrary
contained in this Guaranty, no Guarantor may exercise any rights of subrogation,
contribution, indemnity, reimbursement or other similar rights against, and may
not proceed or seek recourse against or with respect to any property or asset
of, any other Grantor (the “Foreclosed Grantor”), including after payment in
full of the Obligations, if all or any portion of the Obligations have been
satisfied in connection with an exercise of remedies in respect of the Equity
Interests of such Foreclosed Grantor whether pursuant to this Agreement or
otherwise.

 

(v)                                 Each of the Guarantors hereby acknowledges
and affirms that it understands that to the extent the Guarantied Obligations
are secured by Real Property located in California, Guarantors shall be liable
for the full amount of the liability hereunder notwithstanding the foreclosure
on such Real Property by trustee sale or any other reason impairing such
Guarantor’s right to proceed against any Loan Party.  In accordance with
Section 2856 of the California Civil Code or any similar laws of any other
applicable jurisdiction, each of the Guarantors hereby waives until such time as
the Guarantied Obligations have been paid in full:

 

(1)                                 all rights of subrogation, reimbursement,
indemnification, and contribution and any other rights and defenses that are or
may become available to the Guarantors by reason of Sections 2787 to 2855,
inclusive, 2899, and 3433 of the California Civil Code or any similar laws of
any other applicable jurisdiction;

 

(2)                                 all rights and defenses that the Guarantors
may have because the Guarantied Obligations are secured by Real Property located
in California, meaning, among other things, that:  (A) Agent and the other
members of the Lender Group may collect from the Guarantors without first
foreclosing on any real or personal property collateral pledged by any Borrower
or any other Grantor, and (B) if Agent, on behalf of the Lender Group,
forecloses on any Real Property collateral pledged by any Borrower or any other
Grantor, (1) the amount of the Guarantied Obligations may be reduced only by the
price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price, and (2) the Lender Group may
collect from the Guarantors even if, by foreclosing on the

 

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Real Property collateral, Agent or the other members of the Lender Group have
destroyed or impaired any right the Guarantors may have to collect from any
other Grantor, it being understood that this is an unconditional and irrevocable
waiver of any rights and defenses the Guarantors may have because the Guarantied
Obligations are secured by Real Property (including, without limitation, any
rights or defenses based upon Sections 580a, 580d, or 726 of the California Code
of Civil Procedure or any similar laws of any other applicable jurisdiction);
and

 

(3)                                 all rights and defenses arising out of an
election of remedies by Agent and the other members of the Lender Group, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for the Guarantied Obligations, has destroyed Guarantors’ rights of
subrogation and reimbursement against any Grantor by the operation of
Section 580d of the California Code of Civil Procedure or any similar laws of
any other applicable jurisdiction or otherwise.

 

(vi)                              Each of the Guarantors represents, warrants,
and agrees that each of the waivers set forth above is made with full knowledge
of its significance and consequences and that if any of such waivers are
determined to be contrary to any applicable law or public policy, such waivers
shall be effective to the maximum extent permitted by law.

 

(j)                                    Each Qualified ECP Guarantor hereby
jointly and severally absolutely, unconditionally and irrevocably undertakes to
provide such funds or other support as may be needed from time to time by each
other Grantor to guaranty and otherwise honor all Obligations in respect of Swap
Obligations (provided, however, that each Qualified ECP Guarantor shall only be
liable under this Section 2(j) for the maximum amount of such liability that can
be hereby incurred without rendering its obligations under this Section 2(j), or
otherwise under the Loan Documents, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount). 
The obligations of each Qualified ECP Guarantor under this Section 2(j) shall
remain in full force and effect until payment in full of the Guarantied
Obligations.  Each Qualified ECP Guarantor intends that this
Section 2(j) constitute, and this Section 2(j) shall be deemed to constitute, a
“keepwell, support, or other agreement” for the benefit of each other Grantor
for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

3.                                      Grant of Security.  Each Grantor hereby
unconditionally grants, assigns, and pledges to Agent, for the benefit of each
member of the Lender Group, to secure the Secured Obligations (whether now
existing or hereafter arising), a continuing security interest (hereinafter
referred to as the “Security Interest”) in all of such Grantor’s right, title,
and interest in and to the following, whether now owned or hereafter acquired or
arising and wherever located (the “Collateral”):

 

(a)                                 all of such Grantor’s Accounts;

 

(b)                                 all of such Grantor’s Books;

 

(c)                                  all of such Grantor’s Chattel Paper;

 

(d)                                 all of such Grantor’s Commercial Tort
Claims;

 

(e)                                  all of such Grantor’s Deposit Accounts;

 

(f)                                   all of such Grantor’s Equipment;

 

(g)                                  all of such Grantor’s Farm Products;

 

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(h)                                 all of such Grantor’s Fixtures;

 

(i)                                     all of such Grantor’s General
Intangibles;

 

(j)                                    all of such Grantor’s Inventory;

 

(k)                                 all of such Grantor’s Investment Property;

 

(l)                                     all of such Grantor’s Intellectual
Property and Intellectual Property Licenses;

 

(m)                             all of such Grantor’s Negotiable Collateral
(including all of such Grantor’s Pledged Notes);

 

(n)                                 all of such Grantor’s Pledged Interests
(including all of such Grantor’s Pledged Operating Agreements and Pledged
Partnership Agreements);

 

(o)                                 all of such Grantor’s Securities Accounts;

 

(p)                                 all of such Grantor’s Supporting
Obligations;

 

(q)                                 all of such Grantor’s money, Cash
Equivalents, or other assets of such Grantor that now or hereafter come into the
possession, custody, or control of Agent (or its agent or designee) or any other
member of the Lender Group; and

 

(r)                                    all of the proceeds (as such term is
defined in the Code) and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance or Commercial Tort Claims covering or
relating to any or all of the foregoing, and any and all Accounts, Books,
Chattel Paper, Deposit Accounts, Equipment, Farm Products, Fixtures, General
Intangibles, Inventory, Investment Property, Intellectual Property, Negotiable
Collateral, Pledged Interests, Securities Accounts, Supporting Obligations,
money, or other tangible or intangible property resulting from the sale, lease,
license, exchange, collection, or other disposition of any of the foregoing, the
proceeds of any award in condemnation with respect to any of the foregoing, any
rebates or refunds, whether for taxes or otherwise, and all proceeds of any such
proceeds, or any portion thereof or interest therein, and the proceeds thereof,
and all proceeds of any loss of, damage to, or destruction of the above, whether
insured or not insured, and, to the extent not otherwise included, any
indemnity, warranty, or guaranty payable by reason of loss or damage to, or
otherwise with respect to any of the foregoing (the “Proceeds”).  Without
limiting the generality of the foregoing, the term “Proceeds” includes whatever
is receivable or received when Investment Property or proceeds are sold,
exchanged, collected, or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes proceeds of any indemnity or guaranty
payable to any Grantor or Agent from time to time with respect to any of the
Investment Property.

 

Notwithstanding anything contained in this Agreement to the contrary, the term
“Collateral” shall not include any of the following (the “Excluded Collateral”):
(i) voting Equity Interests of any CFC, solely to the extent that such Equity
Interests represent more than 65% of the outstanding voting Equity Interests of
such CFC (which pledge, if reasonably requested by Agent, shall be governed by
the laws of the jurisdiction of such Subsidiary); or (ii) any rights or interest
in any contract, lease, permit, license, or license agreement covering real or
personal property of any Grantor if under the terms of such contract, lease,
permit, license, or license agreement, or applicable law with respect thereto,
the grant of a security interest or lien therein is prohibited as a matter of
law or under the terms of such contract, lease, permit, license, or license
agreement and such prohibition or restriction has not been waived or the consent
of the other party to such contract, lease, permit, license, or license
agreement has not been obtained (provided,

 

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that, (A) the foregoing exclusions of this clause (ii) shall in no way be
construed (1) to apply to the extent that any described prohibition or
restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the
Code or other applicable law, or (2) to apply to the extent that any consent or
waiver has been obtained that would permit Agent’s Lien to attach
notwithstanding the prohibition or restriction on the pledge of such contract,
lease, permit, license, or license agreement and (B) the foregoing exclusions of
clauses (i) and (ii) shall in no way be construed to limit, impair, or otherwise
affect any of Agent’s, any other member of the Lender Group’s continuing
security interests in and liens upon any rights or interests of any Grantor in
or to (1) monies due or to become due under or in connection with any described
contract, lease, permit, license, license agreement, or Equity Interests
(including any Accounts or Equity Interests), or (2) any proceeds from the sale,
license, lease, or other dispositions of any such contract, lease, permit,
license, license agreement, or Equity Interests); or (iii) any United States
intent-to-use trademark applications to the extent that, and solely during the
period in which, the grant of a security interest therein would impair the
validity or enforceability of such intent-to-use trademark applications under
applicable federal law, provided that upon submission and acceptance by the PTO
of an amendment to allege use pursuant to 15 U.S.C. Section 1060(a) (or any
successor provision), such intent-to-use trademark application shall be
considered Collateral.

 

4.                                      Security for Secured Obligations.  The
Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts which constitute part of the Secured Obligations and would be owed
by Grantors, or any of them, to Agent, the Lender Group or any of them, but for
the fact that they are unenforceable or not allowable (in whole or in part) as a
claim in an Insolvency Proceeding involving any Grantor due to the existence of
such Insolvency Proceeding.  Further, the Security Interest created hereby
encumbers each Grantor’s right, title, and interest in all Collateral, whether
now owned by such Grantor or hereafter acquired, obtained, developed, or created
by such Grantor and wherever located.

 

5.                                      Grantors Remain Liable.  Anything herein
to the contrary notwithstanding, (a) each of the Grantors shall remain liable
under the contracts and agreements included in the Collateral, including the
Pledged Operating Agreements and the Pledged Partnership Agreements, and to
perform all of the duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Agent or any other
member of the Lender Group of any of the rights hereunder shall not release any
Grantor from any of its duties or obligations under such contracts and
agreements included in the Collateral, and (c) none of the members of the Lender
Group shall have any obligation or liability under such contracts and agreements
included in the Collateral by reason of this Agreement, nor shall any of the
members of the Lender Group be obligated to perform any of the obligations or
duties of any Grantors thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.  Until an Event of Default shall occur
and be continuing, except as otherwise provided in this Agreement, the Credit
Agreement, or any other Loan Document, Grantors shall have the right to
possession and enjoyment of the Collateral for the purpose of conducting the
ordinary course of their respective businesses, subject to and upon the terms
hereof and of the Credit Agreement and the other Loan Documents.  Without
limiting the generality of the foregoing, it is the intention of the parties
hereto that record and beneficial ownership of the Pledged Interests, including
all voting, consensual, dividend, and distribution rights, shall remain in the
applicable Grantor until (i) the occurrence and continuance of an Event of
Default and (ii) Agent has notified the applicable Grantor of Agent’s election
to exercise such rights with respect to the Pledged Interests pursuant to
Section 16.

 

6.                                      Representations and Warranties.  In
order to induce Agent to enter into this Agreement for the benefit of the Lender
Group, each Grantor makes the following representations and warranties to the
Lender Group which shall be true, correct, and complete, in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified

 

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or modified by materiality in the text thereof), as of the Closing Date, and
shall be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the date of the making of each Loan made thereafter, as though
made on and as of the date of such Loan (except to the extent that such
representations and warranties relate solely to an earlier date, in which case
such representations and warranties shall be true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) as of such earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

 

(a)                                 The name (within the meaning of
Section 9-503 of the Code) and jurisdiction of organization of each Grantor and
each of its Subsidiaries is set forth on Schedule 7 (as such Schedule may be
updated from time to time to reflect changes resulting from transactions
permitted under the Loan Documents).

 

(b)                                 The chief executive office of each Grantor
and each of its Subsidiaries is located at the address indicated on Schedule 7
(as such Schedule may be updated from time to time to reflect changes resulting
from transactions permitted under the Loan Documents).

 

(c)                                  Each Grantor’s and each of its
Subsidiaries’ tax identification numbers and organizational identification
numbers, if any, are identified on Schedule 7 (as such Schedule may be updated
from time to time to reflect changes resulting from transactions permitted under
the Loan Documents).

 

(d)                                 As of the Closing Date, no Grantor and no
Subsidiary of a Grantor holds any commercial tort claims that exceed $250,000 in
amount, except as set forth on Schedule 1.

 

(e)                                  Set forth on Schedule 9 (as such Schedule
may be updated from time to time subject to Section 7(k)(iii) with respect to
Controlled Accounts and provided that Grantors comply with Section 7(c) hereof)
is a listing of all of Grantors’ and their Subsidiaries’ Deposit Accounts and
Securities Accounts, including, with respect to each bank or securities
intermediary (a) the name and address of such Person, and (b) the account
numbers of the Deposit Accounts or Securities Accounts maintained with such
Person.

 

(f)                                   Schedule 8 sets forth all Real Property
owned by any of the Grantors as of the Closing Date.

 

(g)                                  As of the Closing Date: (i) Schedule 2
provides a complete and correct list of all registered Copyrights owned by any
Grantor, all applications for registration of Copyrights owned by any Grantor,
and all other Copyrights owned by any Grantor and material to the conduct of the
business of any Grantor; (ii) Schedule 3 provides a complete and correct list of
all Intellectual Property Licenses entered into by any Grantor pursuant to which
(A) any Grantor has provided any license or other rights in Intellectual
Property owned or controlled by such Grantor to any other Person (other than
non-exclusive software licenses granted in the ordinary course of business) or
(B) any Person has granted to any Grantor any license or other rights in
Intellectual Property owned or controlled by such Person that is material to the
business of such Grantor, including any Intellectual Property that is
incorporated in any Inventory, software, or other product marketed, sold,
licensed, or distributed by such Grantor; (iii) Schedule 4 provides a complete
and correct list of all Patents owned by any Grantor and all applications for
Patents owned by any Grantor; and (iv) Schedule 6 provides a complete and
correct list of all registered Trademarks owned by any Grantor, all applications
for registration of Trademarks owned by any Grantor, and all other Trademarks
owned by any Grantor and material to the conduct of the business of any Grantor.

 

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(h)                                 (i) (A) each Grantor owns exclusively or
holds licenses in all Intellectual Property that is necessary in or material to
the conduct of its business, and (B) all employees and contractors of each
Grantor who were involved in the creation or development of any Intellectual
Property for such Grantor that is necessary in or material to the business of
such Grantor have signed agreements containing assignment of Intellectual
Property rights to such Grantor and obligations of confidentiality;

 

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

 

(iii)                               to each Grantor’s knowledge after reasonable
inquiry, all registered Copyrights, registered Trademarks, and issued Patents
that are owned by such Grantor and necessary in or material to the conduct of
its business are valid, subsisting and enforceable and in compliance with all
legal requirements, filings, and payments and other actions that are required to
maintain such Intellectual Property in full force and effect; and

 

(iv)                              each Grantor has taken reasonable steps to
maintain the confidentiality of and to otherwise protect and enforce its rights
in all trade secrets owned by such Grantor that are necessary in or material to
the conduct of the business of such Grantor;

 

(i)                                     This Agreement creates a valid security
interest in the Collateral of each Grantor, to the extent a security interest
therein can be created under the Code, securing the payment of the Secured
Obligations.  Except to the extent a security interest in the Collateral cannot
be perfected by the filing of a financing statement under the Code, all filings
and other actions necessary or desirable to perfect and protect such security
interest have been duly taken or will have been taken upon the filing of
financing statements listing each applicable Grantor, as a debtor, and Agent, as
secured party, in the jurisdictions listed next to such Grantor’s name on
Schedule 11 (as such Schedule may be updated from time to time to reflect
changes resulting from transactions permitted under the Loan Documents).  Upon
the making of such filings, Agent shall have a first priority perfected security
interest in the Collateral of each Grantor (or, with respect to the ABL Priority
Collateral, second priority subject to the Liens of the ABL Agent securing the
ABL Obligations in accordance with the terms of the Intercreditor Agreement) to
the extent such security interest can be perfected by the filing of a financing
statement.  Upon filing of any Copyright Security Agreement with the United
States Copyright Office, filing of any Patent Security Agreement and any
Trademark Security Agreement with the PTO, and the filing of appropriate
financing statements in the jurisdictions listed on Schedule 11, all action
necessary or desirable to protect and perfect the Security Interest in and on
each Grantor’s Patents, Trademarks, or Copyrights has been taken and such
perfected Security Interest is enforceable as such as against any and all
creditors of and purchasers from any Grantor.  All action by any Grantor
necessary to protect and perfect such security interest on each item of
Collateral has been duly taken.

 

(j)                                    (i) Except for the Security Interest
created hereby, each Grantor is and will at all times be the sole holder of
record and the legal and beneficial owner, free and clear of all Liens other
than Permitted Liens, of the Pledged Interests indicated on Schedule 5 (as such
Schedule may be updated from time to time to reflect changes resulting from
transactions permitted under the Loan Documents) as being owned by such Grantor
and, when acquired by such Grantor, any Pledged Interests acquired after the
Closing Date; (ii) all of the Pledged Interests are duly authorized, validly
issued, fully paid and

 

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nonassessable and the Pledged Interests constitute or will constitute the
percentage of the issued and outstanding Equity Interests of the Pledged
Companies of such Grantor identified on Schedule 5 as supplemented or modified
by any Pledged Interests Addendum or any Joinder to this Agreement; (iii) such
Grantor has the right and requisite authority to pledge, the Investment Property
pledged by such Grantor to Agent as provided herein; (iv) all actions necessary
or desirable to perfect and establish the first priority (or, with respect to
the ABL Priority Collateral, second priority subject only to the Liens of the
ABL Agent securing the ABL Obligations in accordance with the terms of the
Intercreditor Agreement) of, or otherwise protect, Agent’s Lien in the
Investment Property, and the proceeds thereof, have been duly taken, upon
(A) the execution and delivery of this Agreement; (B) the taking of possession
by Agent (or its agent or designee, including the ABL Agent, as bailee pursuant
to the Intercreditor Agreement) of any certificates representing the Pledged
Interests, together with undated powers (or other documents of transfer
acceptable to Agent) endorsed in blank by the applicable Grantor; (C) the filing
of financing statements in the applicable jurisdiction set forth on Schedule 11
for such Grantor with respect to the Pledged Interests of such Grantor that are
not represented by certificates, and (D) with respect to any Securities
Accounts, the delivery of Control Agreements with respect thereto; and (v) each
Grantor has delivered to and deposited with Agent all certificates representing
the Pledged Interests owned by such Grantor to the extent such Pledged Interests
are represented by certificates, and undated powers (or other documents of
transfer acceptable to Agent) endorsed in blank with respect to such
certificates. None of the Pledged Interests owned or held by such Grantor has
been issued or transferred in violation of any securities registration,
securities disclosure, or similar laws of any jurisdiction to which such
issuance or transfer may be subject.

 

(k)                                 No consent, approval, authorization, or
other order or other action by, and no notice to or filing with, any
Governmental Authority or any other Person is required (i) for the grant of a
Security Interest by such Grantor in and to the Collateral pursuant to this
Agreement or for the execution, delivery, or performance of this Agreement by
such Grantor, or (ii) for the exercise by Agent of the voting or other rights
provided for in this Agreement with respect to the Investment Property or the
remedies in respect of the Collateral pursuant to this Agreement, except as may
be required in connection with such disposition of Investment Property by laws
affecting the offering and sale of securities generally and except for consents,
approvals, authorizations, or other orders or actions that have been obtained or
given (as applicable) and that are still in force.  Except as specified on
Schedule 3 (as such schedule may be updated from time to time to reflect changes
resulting from transactions permitted under the Loan Documents, no Intellectual
Property License of any Grantor that is necessary in or material to the conduct
of such Grantor’s business requires any consent of any other Person that has not
been obtained in order for such Grantor to grant the security interest granted
hereunder in such Grantor’s right, title or interest in or to such Intellectual
Property License.

 

(h)                                 Schedule 12 sets forth all motor vehicles
owned by Grantors as of the Closing Date, by model, model year, and vehicle
identification number (“VIN”).

 

(i)                                     There is no default, breach, violation,
or event of acceleration existing under any promissory note (as defined in the
Code) constituting Collateral and pledged hereunder (each a “Pledged Note”) and
no event has occurred or circumstance exists which, with the passage of time or
the giving of notice, or both, would constitute a default, breach, violation, or
event of acceleration under any Pledged Note that either individually or in the
aggregate could reasonably be expected to result in a Material Adverse Effect. 
No Grantor that is an obligee under a Pledged Note has waived any default,
breach, violation, or event of acceleration under such Pledged Note except in
connection with the compromise or collection thereof in the ordinary course of
business consistent with past credit practices.

 

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(j)                                    As to all limited liability company or
partnership interests, issued under any Pledged Operating Agreement or Pledged
Partnership Agreement, each Grantor hereby represents and warrants that the
Pledged Interests issued pursuant to such agreement (A) are not dealt in or
traded on securities exchanges or in securities markets, (B) do not constitute
investment company securities, and (C) are not held by such Grantor in a
Securities Account.  In addition, none of the Pledged Operating Agreements, the
Pledged Partnership Agreements, or any other agreements governing any of the
Pledged Interests issued under any Pledged Operating Agreement or Pledged
Partnership Agreement, provide that such Pledged Interests are securities
governed by Article 8 of the Uniform Commercial Code as in effect in any
relevant jurisdiction.

 

7.                                      Covenants.  Each Grantor, jointly and
severally, covenants and agrees with Agent that from and after the date of this
Agreement and until the date of termination of this Agreement in accordance with
Section 23:

 

(a)                                 Possession of Collateral.  In the event that
any Collateral, including Proceeds, is evidenced by or consists of Negotiable
Collateral, Investment Property, or Chattel Paper having an aggregate value or
face amount of $250,000 or more for all such Negotiable Collateral, Investment
Property, or Chattel Paper, the Grantors shall promptly (and in any event within
five (5) Business Days after acquisition thereof), notify Agent thereof, and if
and to the extent that perfection or priority of Agent’s Lien is dependent on or
enhanced by possession, the applicable Grantor, promptly (and in any event
within five (5) Business Days) after request by Agent, shall execute such other
documents and instruments as shall be requested by Agent or, if applicable,
endorse and deliver physical possession of such Negotiable
Collateral, Investment Property, or Chattel Paper to Agent, (or its agent or
designee, including the ABL Agent, as bailee pursuant to the Intercreditor
Agreement) together with such undated powers (or other relevant document of
transfer acceptable to Agent) endorsed in blank as shall be requested by Agent,
and shall do such other acts or things deemed necessary or desirable by Agent to
protect Agent’s Lien therein;

 

(b)                                 Chattel Paper.

 

(i)                                     Promptly (and in any event within five
(5) Business Days) after request by Agent, each Grantor shall take all steps
reasonably necessary to grant Agent control of all electronic Chattel Paper in
accordance with the Code and all “transferable records” as that term is defined
in Section 16 of the Uniform Electronic Transaction Act and Section 201 of the
federal Electronic Signatures in Global and National Commerce Act as in effect
in any relevant jurisdiction, to the extent that the aggregate value or face
amount of such electronic Chattel Paper equals or exceeds $250,000; and

 

(ii)                                  If any Grantor retains possession of any
Chattel Paper or instruments (which retention of possession shall be subject to
the extent permitted hereby and by the Credit Agreement), promptly upon the
request of Agent, such Chattel Paper and instruments shall be marked with the
following legend: “This writing and the obligations evidenced or secured hereby
are subject to the Security Interest of BSP Agency, LLC, as Agent for the
benefit of the Lender Group”;

 

(c)                                  Control Agreements.

 

(i)                                     Except to the extent otherwise excused
by Section 7(k)(iv), each Grantor shall obtain an authenticated Control
Agreement (which may include a Controlled Account Agreement), from each bank
maintaining a Deposit Account or Securities Account for such Grantor;

 

(ii)                                  Except to the extent otherwise excused by
Section 7(k)(iv), each Grantor shall obtain an authenticated Control Agreement,
from each issuer of uncertificated securities, securities intermediary, or
commodities intermediary issuing or holding any financial assets or commodities
to or for any Grantor, or maintaining a Securities Account for such Grantor; and

 

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(iii)                               Except to the extent otherwise excused by
Section 7(k)(iv), each Grantor shall obtain an authenticated Control Agreement
with respect to all of such Grantor’s investment property;

 

(d)                                 Letter-of-Credit Rights.  If the Grantors
(or any of them) are or become the beneficiary of letters of credit having a
face amount or value of $250,000 or more in the aggregate, then the applicable
Grantor or Grantors shall promptly (and in any event within five (5) Business
Days after becoming a beneficiary), notify Agent thereof and, promptly (and in
any event within five (5) Business Days) after request by Agent, enter into a
tri-party agreement with Agent and the issuer or confirming bank with respect to
letter-of-credit rights assigning such letter-of-credit rights to Agent all in
form and substance reasonably satisfactory to Agent and, upon the occurrence and
during the continuation of an Event of Default, directing all payments
thereunder to Agent’s Account;

 

(e)                                  Commercial Tort Claims.  If the Grantors
(or any of them) obtain Commercial Tort Claims having a value, or involving an
asserted claim, in the amount of $250,000 or more in the aggregate for all
Commercial Tort Claims, then the applicable Grantor or Grantors shall promptly
(and in any event within five (5) Business Days of obtaining such Commercial
Tort Claim), notify Agent upon incurring or otherwise obtaining such Commercial
Tort Claims and, promptly (and in any event within five (5) Business Days) after
request by Agent, amend Schedule 1 to describe such Commercial Tort Claims in a
manner that reasonably identifies such Commercial Tort Claims and which is
otherwise reasonably satisfactory to Agent, and hereby authorizes the filing of
additional financing statements or amendments to existing financing statements
describing such Commercial Tort Claims, and agrees to do such other acts or
things deemed necessary or desirable by Agent to give Agent a first priority,
perfected security interest in any such Commercial Tort Claim;

 

(f)                                   Government Contracts.  Other than Accounts
and Chattel Paper the aggregate value of which does not at any one time exceed
$500,000, if any Account or Chattel Paper arises out of a contract or contracts
with the United States of America or any department, agency, or instrumentality
thereof, Grantors shall promptly (and in any event within five (5) Business Days
of the creation thereof) notify Agent thereof and, promptly (and in any event
within five (5) Business Days) after request by Agent, execute any instruments
or take any steps reasonably required by Agent in order that all moneys due or
to become due under such contract or contracts shall be assigned to Agent, for
the benefit of the Lender Group, and shall provide written notice thereof under
the Assignment of Claims Act or other applicable law;

 

(g)                                  Intellectual Property.

 

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

 

(ii)                                  Each Grantor shall have the duty, with
respect to Intellectual Property that is necessary in or material to the conduct
of such Grantor’s business (as determined by such Grantor in its reasonable
business judgment), to protect and diligently enforce and defend at such
Grantor’s expense such Intellectual Property to the extent that such Grantor, in
its reasonable business judgment, determines it is necessary and appropriate to
do so, including (A) to diligently enforce and defend, including promptly suing
for infringement, misappropriation, or dilution and to recover any and all
damages for such infringement, misappropriation, or dilution, and filing for
opposition, interference, and cancellation against conflicting Intellectual
Property rights of any Person, (B) to prosecute diligently any

 

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trademark application or service mark application that is part of the Trademarks
pending as of the date hereof or hereafter until the termination of this
Agreement, (C) to prosecute diligently any patent application that is part of
the Patents pending as of the date hereof or hereafter until the termination of
this Agreement, (D) to take all reasonable and necessary action to preserve and
maintain all of such Grantor’s Trademarks, Patents, Copyrights, Intellectual
Property Licenses, and its rights therein, including paying all maintenance fees
and filing of applications for renewal, affidavits of use, and affidavits of
noncontestability, and (E) to require all employees, consultants, and
contractors of each Grantor who were involved in the creation or development of
such Intellectual Property to sign agreements containing assignment of
Intellectual Property rights and obligations of confidentiality.  Each Grantor
further agrees not to abandon any Intellectual Property or Intellectual Property
License that such Grantor determines in its reasonable business judgment is
necessary in or material to the conduct of such Grantor’s business.  Each
Grantor hereby agrees to take the steps described in this Section 7(g)(ii) with
respect to all new or acquired Intellectual Property to which it or any of its
Subsidiaries is now or later becomes entitled that is, as determined by such
Grantor in its reasonable business judgment, necessary in or material to the
conduct of such Grantor’s business;

 

(iii)                               Grantors acknowledge and agree that the
Lender Group shall have no duties with respect to any Intellectual Property or
Intellectual Property Licenses of any Grantor.  Without limiting the generality
of this Section 7(g)(iii), Grantors acknowledge and agree that no member of the
Lender Group shall be under any obligation to take any steps necessary to
preserve rights in the Collateral consisting of Intellectual Property or
Intellectual Property Licenses against any other Person, but any member of the
Lender Group may do so at its option from and after the occurrence and during
the continuance of an Event of Default, and all expenses incurred in connection
therewith (including reasonable fees and expenses of attorneys and other
professionals) shall be for the sole account of Borrowers and shall be
chargeable to the Loan Account;

 

(iv)                              On each date on which a Compliance Certificate
is to be delivered pursuant to Section 5.1 of the Credit Agreement in respect of
a fiscal quarter (or, if an Event of Default has occurred and is continuing,
more frequently if requested by Agent), each Grantor shall provide Agent with a
written report of all new Patents, Trademarks or Copyrights that are registered
or the subject of pending applications for registrations, and of all
Intellectual Property Licenses that are material to the conduct of such
Grantor’s business, in each case, which were acquired, registered, or for which
applications for registration were filed by any Grantor during the prior period
and any statement of use or amendment to allege use with respect to
intent-to-use trademark applications.  In the case of such registrations or
applications therefor, which were acquired by any Grantor, each such Grantor
shall file the necessary documents with the appropriate Governmental Authority
identifying the applicable Grantor as the owner (or as a co-owner thereof, if
such is the case) of such Intellectual Property.  In each of the foregoing
cases, the applicable Grantor shall promptly cause to be prepared, executed, and
delivered to Agent supplemental schedules to the applicable Loan Documents to
identify such Patent, Trademark and Copyright registrations and applications
therefor (with the exception of Trademark applications filed on an intent-to-use
basis for which no statement of use or amendment to allege use has been filed)
and Intellectual Property Licenses as being subject to the security interests
created thereunder;

 

(v)                                 Anything to the contrary in this Agreement
notwithstanding, in no event shall any Grantor, either itself or through any
agent, employee, licensee, or designee, file an application for the registration
of any Copyright with the United States Copyright Office or any similar office
or agency in another country without giving Agent written notice thereof at
least five (5) Business Days prior to such filing and complying with
Section 7(g)(i). Upon receipt from the United States Copyright Office of notice
of registration of any Copyright, each Grantor shall promptly (but in no event
later than five (5) Business Days following such receipt) notify (but without
duplication of any notice required by Section 7(g)(v)) Agent of such
registration by delivering, or causing to be delivered, to Agent,

 

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documentation sufficient for Agent to perfect Agent’s Lien on such Copyright. 
If any Grantor acquires from any Person any Copyright registered with the United
States Copyright Office or an application to register any Copyright with the
United States Copyright Office, such Grantor shall promptly (but in no event
later than five (5) Business Days following such acquisition) notify Agent of
such acquisition and deliver, or cause to be delivered, to Agent, documentation
sufficient for Agent to perfect Agent’s Lien on such Copyright.  In the case of
such Copyright registrations or applications therefor which were acquired by any
Grantor, each such Grantor shall promptly (but in no event later than five
(5) Business Days following such acquisition) file the necessary documents with
the appropriate Governmental Authority identifying the applicable Grantor as the
owner (or as a co-owner thereof, if such is the case) of such Copyrights;

 

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

 

(vii)                           No Grantor shall enter into any Intellectual
Property License material to the conduct of the business under which Grantor
receives any license or rights in any Intellectual Property of any other Person
unless such Grantor has used commercially reasonable efforts to permit the
assignment of or grant of a security interest in such Intellectual Property
License (and all rights of Grantor thereunder) to Agent (and any transferees of
Agent);

 

(h)                                 Investment Property.

 

(i)                                     If any Grantor shall acquire, obtain,
receive or become entitled to receive any Pledged Interests after the Closing
Date, it shall promptly (and in any event within five (5) Business Days of
acquiring or obtaining such Collateral) deliver to Agent a duly executed Pledged
Interests Addendum identifying such Pledged Interests;

 

(ii)                                  Upon the occurrence and during the
continuance of an Event of Default, following the request of Agent, all sums of
money and property paid or distributed in respect of the Investment Property
that are received by any Grantor shall be held by the Grantors in trust for the
benefit of Agent segregated from such Grantor’s other property, and such Grantor
shall deliver it forthwith to Agent in the exact form received;

 

(iii)                               Each Grantor shall promptly deliver to Agent
a copy of each material notice or other material communication received by it in
respect of any Pledged Interests;

 

(iv)                              No Grantor shall make or consent to any
amendment or other modification or waiver with respect to any Pledged Interests,
Pledged Operating Agreement, or Pledged Partnership Agreement, or enter into any
agreement or permit to exist any restriction with respect to any Pledged
Interests if the same is prohibited pursuant to the Loan Documents;

 

(v)                                 Each Grantor agrees that it will cooperate
with Agent in obtaining all necessary approvals and making all necessary filings
under federal, state, local, or foreign law to effect the perfection of the
Security Interest on the Investment Property or, during the continuance of an
Event of Default, to effect any sale or transfer thereof; and

 

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(vi)                              As to all limited liability company or
partnership interests, issued under any Pledged Operating Agreement or Pledged
Partnership Agreement, each Grantor hereby covenants that the Pledged Interests
issued pursuant to such agreement (A) are not and shall not be dealt in or
traded on securities exchanges or in securities markets, (B) do not and will not
constitute investment company securities, and (C) are not and will not be held
by such Grantor in a Securities Account.  In addition, none of the Pledged
Operating Agreements, the Pledged Partnership Agreements, or any other
agreements governing any of the Pledged Interests issued under any Pledged
Operating Agreement or Pledged Partnership Agreement, provides or shall provide
that such Pledged Interests are securities governed by Article 8 of the Uniform
Commercial Code as in effect in any relevant jurisdiction.

 

(i)                                     Real Property; Fixtures.  Each Grantor
covenants and agrees that upon the acquisition of any fee interest or leasehold
interest in Real Property having a fair market value in excess of $1,000,000 it
will promptly (and in any event within two (2) Business Days of acquisition)
notify Agent of the acquisition of such Real Property and will grant to Agent,
for the benefit of the Lender Group, a first priority Mortgage (subject only to
the Liens of the ABL Agent with respect to the ABL Priority Collateral, securing
the ABL Obligations in accordance with the terms of the Intercreditor Agreement)
on each fee interest or leasehold interest in Real Property (other than any such
Real Property is encumbered by a Permitted Lien) now or hereafter owned by such
Grantor and shall deliver such other documentation as required by Schedule 5.12
to the Credit Agreement in connection with the grant of such Mortgage as Agent
shall request in its Permitted Discretion, including title insurance policies,
financing statements, fixture filings and environmental audits and such Grantor
shall pay all recording costs, intangible taxes and other fees and costs
(including reasonable attorneys fees and expenses) incurred in connection
therewith.  Each Grantor acknowledges and agrees that, to the extent permitted
by applicable law, all of the Collateral shall remain personal property
regardless of the manner of its attachment or affixation to real property;

 

(j)                                    Transfers and Other Liens.  Grantors
shall not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral, except
as expressly permitted by the Credit Agreement, or (ii) create or permit to
exist any Lien upon or with respect to any of the Collateral of any Grantor,
except for Permitted Liens.  The inclusion of Proceeds in the Collateral shall
not be deemed to constitute Agent’s consent to any sale or other disposition of
any of the Collateral except as expressly permitted in this Agreement or the
other Loan Documents;

 

(k)                                 Controlled Accounts; Controlled Investments.

 

(i)                                     Each Grantor shall (A) establish and
maintain cash management services of a type and on terms reasonably satisfactory
to Agent at one or more of the banks set forth on Schedule 10 (as such Schedule
may be updated from time to time to reflect changes resulting from transactions
permitted under the Loan Documents) (each a “Controlled Account Bank”), and
shall take reasonable steps to ensure that all of its and its Subsidiaries’
Account Debtors forward payment of the amounts owed by them directly to such
Controlled Account Bank, and (B) deposit or cause to be deposited promptly, and
in any event no later than the first Business Day after the date of receipt
thereof, all of their Collections (including those sent directly by their
Account Debtors to a Grantor) into a bank account of such Grantor (each, a
“Controlled Account”) at one of the Controlled Account Banks.

 

(ii)                                  Each Grantor shall establish and maintain
Controlled Account Agreements with Agent and the applicable Controlled Account
Bank, in form and substance reasonably acceptable to Agent.  Each such
Controlled Account Agreement shall provide, among other things, that

 

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(A) the Controlled Account Bank will comply with any instructions originated by
Agent directing the disposition of the funds in such Controlled Account without
further consent by the applicable Grantor, (B) the Controlled Account Bank
waives, subordinates, or agrees not to exercise any rights of setoff or
recoupment or any other claim against the applicable Controlled Account other
than for payment of its service fees and other charges directly related to the
administration of such Controlled Account and for returned checks or other items
of payment, and (C) upon the instruction of Agent (an “Activation Instruction”),
the Controlled Account Bank will forward by daily sweep all amounts in the
applicable Controlled Account to the Agent’s Account.  Agent agrees not to issue
an Activation Instruction with respect to the Controlled Accounts unless an
Event of Default has occurred and is continuing at the time such Activation
Instruction is issued.  Agent agrees to use commercially reasonable efforts to
rescind an Activation Instruction (the “Rescission”) if: (1) the Event of
Default upon which such Activation Instruction was issued has been waived in
writing in accordance with the terms of the Credit Agreement, and (2) no
additional Event of Default has occurred and is continuing prior to the date of
the Rescission or is reasonably expected to occur on or immediately after the
date of the Rescission; provided, that, in no event shall Agent be obligated to
rescind an Activation Instruction on more than three (3) occasions.

 

(iii)                               So long as no Default or Event of Default
has occurred and is continuing, Borrowers may amend Schedule 10 to add or
replace a Controlled Account Bank or Controlled Account and shall upon such
addition or replacement provide to Agent an amended Schedule 10; provided,
however, that (A) such prospective Controlled Account Bank shall be reasonably
satisfactory to Agent, and (B) prior to the time of the opening of such
Controlled Account, the applicable Grantor and such prospective Controlled
Account Bank shall have executed and delivered to Agent a Controlled Account
Agreement.  Each Grantor shall close any of its Controlled Accounts (and
establish replacement Controlled Account accounts in accordance with the
foregoing sentence) as promptly as practicable and in any event within
forty-five (45) days after notice from Agent that the operating performance,
funds transfer, or availability procedures or performance of the Controlled
Account Bank with respect to Controlled Account Accounts or Agent’s liability
under any Controlled Account Agreement with such Controlled Account Bank is no
longer acceptable in Agent’s reasonable judgment; and

 

(iv)                              Other than (i) an aggregate amount of not more
than $25,000 at any one time, in the case of Grantors and their Subsidiaries,
and (ii) amounts deposited into Deposit Accounts specially and exclusively used
for payroll, payroll taxes and other employee wage and benefit payments to or
for any Grantor’s or its Subsidiaries’ employees, no Grantor will, and no
Grantor will permit its Subsidiaries to, make, acquire, or permit to exist
Permitted Investments consisting of cash, Cash Equivalents, or amounts credited
to Deposit Accounts or Securities Accounts unless Grantor or its Subsidiary, as
applicable, and the applicable bank or securities intermediary have entered into
Control Agreements with Agent governing such Permitted Investments in order to
perfect (and further establish) Agent’s Lien in such Permitted Investments;

 

(l)                                     Name, Etc.  No Grantor will, nor will
any Grantor permit any of its Subsidiaries to, change its name, organizational
identification number, jurisdiction of organization or organizational identity;
provided, that Grantor or any of its Subsidiaries may change its name upon at
least 10 days prior written notice to Agent of such change.

 

(m)                             Motor Vehicles.  Promptly (and in any event
within five (5) Business Days) after request by Agent, with respect to all goods
covered by a certificate of title owned by any Grantor, such Grantor shall
deliver to Agent or Agent’s designee, the certificates of title for all such
goods and promptly (and in any event within thirty (30) days) after request by
Agent, such Grantor shall take all actions necessary to cause such certificates
to be filed (with the Agent’s Lien noted thereon) in the appropriate state motor
vehicle filing office; and

 

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(n)                                 Pledged Notes.  Grantors (i) will not
(A) waive or release any obligation of any Person that is obligated under any of
the Pledged Notes, (B) take or omit to take any action or knowingly suffer or
permit any action to be omitted or taken, the taking or omission of which would
result in any right of offset against sums payable under the Pledged Notes, or
(C) other than Permitted Dispositions, assign or surrender their rights and
interests under any of the Pledged Notes or terminate, cancel, modify, change,
supplement or amend the Pledged Notes except in connection with the compromise
or collection thereof in the ordinary course of business consistent with past
credit practices, and (ii) shall provide to Agent copies of all material written
notices (including notices of default) given or received with respect to the
Pledged Notes promptly after giving or receiving such notice.

 

8.                                      Relation to Other Security Documents. 
The provisions of this Agreement shall be read and construed with the other Loan
Documents referred to below in the manner so indicated.

 

(a)                                 Credit Agreement. In the event of any
conflict between any provision in this Agreement and a provision in the Credit
Agreement, such provision of the Credit Agreement shall control.

 

(b)                                 Patent, Trademark, Copyright Security
Agreements.  The provisions of the Copyright Security Agreements, Trademark
Security Agreements, and Patent Security Agreements are supplemental to the
provisions of this Agreement, and nothing contained in the Copyright Security
Agreements, Trademark Security Agreements, or the Patent Security Agreements
shall limit any of the rights or remedies of Agent hereunder.  In the event of
any conflict between any provision in this Agreement and a provision in a
Copyright Security Agreement, Trademark Security Agreement or Patent Security
Agreement, such provision of this Agreement shall control.

 

9.                                      Further Assurances.

 

(a)                                 Each Grantor agrees that from time to time,
at its own expense, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that Agent may
reasonably request, in order to perfect and protect the Security Interest
granted hereby, to create, perfect or protect the Security Interest purported to
be granted hereby or to enable Agent to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral.

 

(b)                                 Each Grantor authorizes the filing by Agent
of financing or continuation statements, or amendments thereto, and such Grantor
will execute and deliver to Agent such other instruments or notices, as Agent
may reasonably request, in order to perfect and preserve the Security Interest
granted or purported to be granted hereby.

 

(c)                                  Each Grantor authorizes Agent at any time
and from time to time to file, transmit, or communicate, as applicable,
financing statements and amendments (i) describing the Collateral as “all
personal property of debtor” or “all assets of debtor” or words of similar
effect, (ii) describing the Collateral as being of equal or lesser scope or with
greater detail, or (iii) that contain any information required by subpart 5 of
Article 9 of the Code for the sufficiency or filing office acceptance.  Each
Grantor also hereby ratifies any and all financing statements or amendments
previously filed by Agent in any jurisdiction.

 

(d)                                 Each Grantor acknowledges that it is not
authorized to file any financing statement or amendment or termination statement
with respect to any financing statement filed in connection with this Agreement
without the prior written consent of Agent, subject to such Grantor’s rights
under Section 9-509(d)(2) of the Code.

 

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10.                               Agent’s Right to Perform Contracts, Exercise
Rights, etc.  Upon the occurrence and during the continuance of an Event of
Default, Agent (or its designee) (a) may proceed to perform any and all of the
obligations of any Grantor contained in any contract, lease, or other agreement
and exercise any and all rights of any Grantor therein contained as fully as
such Grantor itself could, (b) shall have the right to use any Grantor’s rights
under Intellectual Property Licenses in connection with the enforcement of
Agent’s rights hereunder (to the extent that the Grantors are not prohibited by
the express terms of such Intellectual Property Licenses from sublicensing their
rights thereunder), including the right to prepare for sale and sell any and all
Inventory and Equipment now or hereafter owned by any Grantor and now or
hereafter covered by such licenses, and (c) shall have the right to request that
any Equity Interests that are pledged hereunder be registered in the name of
Agent or any of its nominees.

 

11.                               Agent Appointed Attorney-in-Fact.  Each
Grantor hereby irrevocably appoints Agent its attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, at such time as an Event of Default has occurred and is
continuing, to take any action and to execute any instrument which Agent may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement, including:

 

(a)                                 to ask, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in connection with the Accounts or any other Collateral of
such Grantor;

 

(b)                                 to receive and open all mail addressed to
such Grantor and to notify postal authorities to change the address for the
delivery of mail to such Grantor to that of Agent (provided that, upon removing
Collateral from such mail, Agent shall forward such mail to such Grantor);

 

(c)                                  to receive, indorse, and collect any drafts
or other instruments, documents, Negotiable Collateral or Chattel Paper;

 

(d)                                 to file any claims or take any action or
institute any proceedings which Agent may deem necessary or desirable for the
collection of any of the Collateral of such Grantor or otherwise to enforce the
rights of Agent with respect to any of the Collateral;

 

(e)                                  to repair, alter, or supply goods, if any,
necessary to fulfill in whole or in part the purchase order of any Person
obligated to such Grantor in respect of any Account of such Grantor;

 

(f)                                   to use any Intellectual Property or
Intellectual Property Licenses (to the extent that such Grantor is not
prohibited by the express terms of such Intellectual Property Licenses from
sublicensing its rights thereunder) of such Grantor, including but not limited
to any labels, Patents, Trademarks, trade names, URLs, domain names, industrial
designs, Copyrights, or advertising matter, in preparing for sale, advertising
for sale, or selling Inventory or other Collateral and to collect any amounts
due under Accounts, contracts or Negotiable Collateral of such Grantor; and

 

(g)                                  Agent, on behalf of the Lender Group, shall
have the right, but shall not be obligated, to bring suit in its own name to
enforce the Intellectual Property and Intellectual Property Licenses (to the
extent that the Grantors are not prohibited by the express terms of such
Intellectual Property Licenses from sublicensing their rights thereunder) and,
if Agent shall commence any such suit, the appropriate Grantor shall, at the
request of Agent, do any and all lawful acts and execute any and all proper
documents reasonably required by Agent in aid of such enforcement.

 

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To the extent permitted by law, each Grantor hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof.  This
power of attorney is coupled with an interest and shall be irrevocable until
this Agreement is terminated.

 

12.                               Agent May Perform.  If any Grantor fails to
perform any agreement contained herein upon Agent’s written demand, Agent may
itself perform, or cause performance of, such agreement, and the reasonable
expenses of Agent incurred in connection therewith shall be payable, jointly and
severally, by Grantors.

 

13.                               Agent’s Duties.  The powers conferred on Agent
hereunder are solely to protect Agent’s interest in the Collateral, for the
benefit of the Lender Group, and shall not impose any duty upon Agent to
exercise any such powers.  Except for the safe custody of any Collateral in its
actual possession and the accounting for moneys actually received by it
hereunder, Agent shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.  Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its actual
possession if such Collateral is accorded treatment substantially equal to that
which Agent accords its own property.

 

14.                               Collection of Accounts, General Intangibles
and Negotiable Collateral.  At any time upon the occurrence and during the
continuance of an Event of Default, Agent or Agent’s designee may (a) notify
Account Debtors of any Grantor that the Accounts, General Intangibles, Chattel
Paper or Negotiable Collateral of such Grantor have been assigned to Agent, for
the benefit of the Lender Group, or that Agent has a security interest therein,
and (b) collect the Accounts, General Intangibles and Negotiable Collateral of
any Grantor directly, and any collection costs and expenses shall constitute
part of such Grantor’s Secured Obligations under the Loan Documents.

 

15.                               Disposition of Pledged Interests by Agent. 
None of the Pledged Interests existing as of the date of this Agreement are, and
none of the Pledged Interests hereafter acquired on the date of acquisition
thereof will be, registered or qualified under the various federal or state
securities laws of the United States and disposition thereof after an Event of
Default may be restricted to one or more private (instead of public) sales in
view of the lack of such registration.  Each Grantor understands that in
connection with such disposition, Agent may approach only a restricted number of
potential purchasers and further understands that a sale under such
circumstances may yield a lower price for the Pledged Interests than if the
Pledged Interests were registered and qualified pursuant to federal and state
securities laws and sold on the open market.  Each Grantor, therefore, agrees
that:  (a) if Agent shall, pursuant to the terms of this Agreement, sell or
cause the Pledged Interests or any portion thereof to be sold at a private sale,
Agent shall have the right to rely upon the advice and opinion of any nationally
recognized brokerage or investment firm (but shall not be obligated to seek such
advice and the failure to do so shall not be considered in determining the
commercial reasonableness of such action) as to the best manner in which to
offer the Pledged Interest or any portion thereof for sale and as to the best
price reasonably obtainable at the private sale thereof; and (b) such reliance
shall be conclusive evidence that Agent has handled the disposition in a
commercially reasonable manner.

 

16.                               Voting and Other Rights in Respect of Pledged
Interests.

 

(a)                                 Upon the occurrence and during the
continuation of an Event of Default, (i) Agent may, at its option, and with two
(2) Business Days prior notice to any Grantor, and in addition to all rights and
remedies available to Agent under any other agreement, at law, in equity, or
otherwise, exercise all voting rights, or any other ownership or consensual
rights (including any dividend or distribution rights) in respect of the Pledged
Interests owned by such Grantor, but under no circumstances is Agent obligated
by the terms of this Agreement to exercise such rights, and (ii) if Agent duly
exercises

 

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its right to vote any of such Pledged Interests, each Grantor hereby appoints
Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to
vote such Pledged Interests in any manner Agent deems advisable for or against
all matters submitted or which may be submitted to a vote of shareholders,
partners or members, as the case may be.  The power-of-attorney and proxy
granted hereby is coupled with an interest and shall be irrevocable.

 

(b)                                 For so long as any Grantor shall have the
right to vote the Pledged Interests owned by it, such Grantor covenants and
agrees that it will not, without the prior written consent of Agent, vote or
take any consensual action with respect to such Pledged Interests which would
materially adversely affect the Agent’s Lien against such Pledged Interests.

 

17.                               Remedies.  Upon the occurrence and during the
continuance of an Event of Default:

 

(a)                                 Agent may, and, at the instruction of the
Required Lenders, shall exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein, in the other Loan Documents, or
otherwise available to it, all the rights and remedies of a secured party on
default under the Code or any other applicable law.  Without limiting the
generality of the foregoing, each Grantor expressly agrees that, in any such
event, Agent without demand of performance or other demand, advertisement or
notice of any kind (except a notice specified below of time and place of public
or private sale) to or upon any Grantor or any other Person (all and each of
which demands, advertisements and notices are hereby expressly waived to the
maximum extent permitted by the Code or any other applicable law), may take
immediate possession of all or any portion of the Collateral and (i) require
Grantors to, and each Grantor hereby agrees that it will at its own expense and
upon request of Agent forthwith, assemble all or part of the Collateral as
directed by Agent and make it available to Agent at one or more locations where
such Grantor regularly maintains Inventory, and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of Agent’s offices or elsewhere, for cash, on
credit, and upon such other terms as Agent may deem commercially reasonable. 
Each Grantor agrees that, to the extent notification of sale shall be required
by law, at least ten (10) days notification by mail to the applicable Grantor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification and specifically such
notification shall constitute a reasonable “authenticated notification of
disposition” within the meaning of Section 9-611 of the Code.  Agent shall not
be obligated to make any sale of Collateral regardless of notification of sale
having been given.  Agent may adjourn any public 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 Grantor agrees that (A) the internet shall constitute a “place” for
purposes of Section 9-610(b) of the Code and (B) to the extent notification of
sale shall be required by law, notification by mail of the URL where a sale will
occur and the time when a sale will commence at least ten (10) days prior to the
sale shall constitute a reasonable notification for purposes of
Section 9-611(b) of the Code.  Each Grantor agrees that any sale of Collateral
to a licensor pursuant to the terms of a license agreement between such licensor
and a Grantor is sufficient to constitute a commercially reasonable sale
(including as to method, terms, manner, and time) within the meaning of
Section 9-610 of the Code.

 

(b)                                 Agent is hereby granted a license or other
right to use, without liability for royalties or any other charge, each
Grantor’s Intellectual Property, including but not limited to, any labels,
Patents, Trademarks, trade names, URLs, domain names, industrial designs,
Copyrights, and advertising matter, whether owned by any Grantor or with respect
to which any Grantor has rights under license, sublicense, or other agreements
(including any Intellectual Property License to the extent that the Grantor that
is the licensee thereunder is not prohibited by its express terms from granting
sublicenses of its rights thereunder), as it pertains to the Collateral, in
preparing for sale, advertising for sale and selling any Collateral, and each
Grantor’s rights under all licenses and all franchise agreements shall inure to
the benefit of Agent.

 

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(c)                                  Agent may, in addition to other rights and
remedies provided for herein, in the other Loan Documents, or otherwise
available to it under applicable law and without the requirement of notice to or
upon any Grantor or any other Person (which notice is hereby expressly waived to
the maximum extent permitted by the Code or any other applicable law), (i) with
respect to any Grantor’s Deposit Accounts in which Agent’s Lien are perfected by
control under Section 9-104 of the Code, instruct the bank maintaining such
Deposit Account for the applicable Grantor to pay the balance of such Deposit
Account to or for the benefit of Agent, and (ii) with respect to any Grantor’s
Securities Accounts in which Agent’s Lien are perfected by control under
Section 9-106 of the Code, instruct the securities intermediary maintaining such
Securities Account for the applicable Grantor to (A) transfer any cash in such
Securities Account to or for the benefit of Agent, or (B)  liquidate any
financial assets in such Securities Account that are customarily sold on a
recognized market and transfer the cash proceeds thereof to or for the benefit
of Agent.

 

(d)                                 Any cash held by Agent as Collateral and all
cash proceeds received by Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral shall be applied
against the Secured Obligations in the order set forth in the Credit Agreement. 
In the event the proceeds of Collateral are insufficient to satisfy all of the
Secured Obligations in full, each Grantor shall remain jointly and severally
liable for any such deficiency.

 

(e)                                  Each Grantor hereby acknowledges that the
Secured Obligations arise out of a commercial transaction, and agrees that if an
Event of Default shall occur and be continuing Agent shall have the right to an
immediate writ of possession without notice of a hearing.  Agent shall have the
right to the appointment of a receiver for the properties and assets of each
Grantor, and each Grantor hereby consents to such rights and such appointment
and hereby waives any objection such Grantor may have thereto or the right to
have a bond or other security posted by Agent.

 

18.                               Remedies Cumulative.  Each right, power, and
remedy of Agent or any other member of the Lender Group as provided for in this
Agreement or the other Loan Documents now or hereafter existing at law or in
equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power, or remedy provided for in this
Agreement and the other Loan Documents or now or hereafter existing at law or in
equity or by statute or otherwise, and the exercise or beginning of the exercise
by Agent or any other member of the Lender Group, of any one or more of such
rights, powers, or remedies shall not preclude the simultaneous or later
exercise by Agent, such other member of the Lender Group of any or all such
other rights, powers, or remedies.

 

19.                               Marshaling. Agent shall not be required to
marshal any present or future collateral security (including but not limited to
the Collateral) for, or other assurances of payment of, the Secured Obligations
or any of them or to resort to such collateral security or other assurances of
payment in any particular order, and all of its rights and remedies hereunder
and in respect of such collateral security and other assurances of payment shall
be cumulative and in addition to all other rights and remedies, however existing
or arising.  To the extent that it lawfully may, each Grantor hereby agrees that
it will not invoke any law relating to the marshaling of collateral which might
cause delay in or impede the enforcement of Agent’s rights and remedies under
this Agreement or under any other instrument creating or evidencing any of the
Secured Obligations or under which any of the Secured Obligations is outstanding
or by which any of the Secured Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.

 

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20.                               Indemnity and Expenses.

 

(a)                                 Each Grantor agrees to indemnify Agent and
the other members of the Lender Group from and against all claims, lawsuits and
liabilities (including reasonable attorneys’ fees) growing out of or resulting
from this Agreement (including enforcement of this Agreement) or any other Loan
Document to which such Grantor is a party to the extent and in the manner
provided in Section 10.3 of the Credit Agreement, which is incorporated herein
by this reference, mutatis mutandis.  This provision shall survive the
termination of this Agreement and the Credit Agreement and the repayment of the
Secured Obligations.

 

(b)                                 Grantors, jointly and severally, shall, upon
demand, pay to Agent (or Agent, may charge to the Loan Account) all the Lender
Group Expenses which Agent may incur in connection with (i) the administration
of this Agreement, (ii) the custody, preservation, use or operation of, or, upon
an Event of Default, the sale of, collection from, or other realization upon,
any of the Collateral in accordance with this Agreement and the other Loan
Documents, (iii) the exercise or enforcement of any of the rights of Agent
hereunder or (iv) the failure by any Grantor to perform or observe any of the
provisions hereof.

 

21.                               Merger, Amendments; Etc.  THIS AGREEMENT,
TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES.  No waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.  No amendment of any provision of this Agreement shall be
effective unless the same shall be in writing and signed by Agent and each
Grantor to which such amendment applies.

 

22.                               Addresses for Notices.  All notices and other
communications provided for hereunder shall be given in the form and manner and
delivered to Agent at its address specified in the Credit Agreement, and to any
of the Grantors at their respective addresses specified in the Credit Agreement
or herein, as applicable, or, as to any party, at such other address as shall be
designated by such party in a written notice to the other party.

 

23.                               Continuing Security Interest: Assignments
under Credit Agreement.

 

(a)                                 This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and
effect until the Obligations have been paid in full in accordance with the
provisions of the Credit Agreement and the Commitments have expired or have been
terminated, (ii) be binding upon each Grantor, and their respective successors
and assigns, and (iii) inure to the benefit of, and be enforceable by, Agent,
and its successors, transferees and assigns.  Without limiting the generality of
the foregoing clause (iii), any Lender may, in accordance with the provisions of
the Credit Agreement, assign or otherwise transfer all or any portion of its
rights and obligations under the Credit Agreement to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise.  Upon payment in full of the
Secured Obligations in accordance with the provisions of the Credit Agreement
and the expiration or termination of the Commitments, the Guaranty made and the
Security Interest granted hereby shall terminate and all rights to the
Collateral shall revert to Grantors or any other Person entitled thereto.  At
such time, upon Borrowers’ request, Agent will authorize the filing of
appropriate termination statements to terminate such Security Interest.  No
transfer or renewal, extension, assignment, or termination of this Agreement or
of the Credit Agreement, any other Loan Document, or any other instrument or
document executed and delivered by any Grantor to Agent nor any additional Loans
or other loans made by any Lender to Borrowers, nor the taking of further
security, nor the retaking or re-delivery of the Collateral to Grantors,

 

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or any of them, by Agent, nor any other act of the Lender Group, or any of them,
shall release any Grantor from any obligation, except a release or discharge
executed in writing by Agent in accordance with the provisions of the Credit
Agreement.  Agent shall not by any act, delay, omission or otherwise, be deemed
to have waived any of its rights or remedies hereunder, unless such waiver is in
writing and signed by Agent and then only to the extent therein set forth.  A
waiver by Agent of any right or remedy on any occasion shall not be construed as
a bar to the exercise of any such right or remedy which Agent would otherwise
have had on any other occasion.

 

(b)                                 If any member of the Lender Group repays,
refunds, restores, or returns in whole or in part, any payment or property
(including any proceeds of Collateral) previously paid or transferred to such
member of the Lender Group in full or partial satisfaction of any Secured
Obligation or on account of any other obligation of any Loan Party under any
Loan Document, because the payment, transfer, or the incurrence of the
obligation so satisfied is asserted or declared to be void, voidable, or
otherwise recoverable under any law relating to creditors’ rights, including
provisions of the Bankruptcy Code relating to fraudulent transfers, preferences,
or other voidable or recoverable obligations or transfers (each, a “Voidable
Transfer”), or because such member of the Lender Group elects to do so on the
reasonable advice of its counsel in connection with a claim that the payment,
transfer, or incurrence is or may be a Voidable Transfer, then, as to any such
Voidable Transfer, or the amount thereof that such member of the Lender Group
elects to repay, restore, or return (including pursuant to a settlement of any
claim in respect thereof), and as to all reasonable costs, expenses, and
attorneys’ fees of such member of the Lender Group related thereto, (i) the
liability of the Loan Parties with respect to the amount or property paid,
refunded, restored, or returned will automatically and immediately be revived,
reinstated, and restored and will exist and (ii) Agent’s Lien securing such
liability shall be effective, revived, and remain in full force and effect, in
each case, as fully as if such Voidable Transfer had never been made.  If, prior
to any of the foregoing, (A) Agent’s Lien shall have been released or terminated
or (B) any provision of this Agreement shall have been terminated or cancelled,
Agent’s Lien, or such provision of this Agreement, shall be reinstated in full
force and effect and such prior release, termination, cancellation or surrender
shall not diminish, release, discharge, impair or otherwise affect the
obligation of any Loan Party in respect of such liability or any Collateral
securing such liability; provided, however, that the Agent’s Lien shall be
reinstated only if the Voidable Transfer affects a member of the Lender Group.

 

24.                               Survival.  All representations and warranties
made by the Grantors in this Agreement and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that Agent or any Lender may have had notice or
knowledge of any Default or Event of Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
loan or any fee or any other amount payable under the Credit Agreement is
outstanding and unpaid and so long as the Commitments have not expired or
terminated.

 

25.                               CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER;
JUDICIAL REFERENCE PROVISION.

 

(a)                                 THE VALIDITY OF THIS AGREEMENT, THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES
HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY
CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF, BUT INCLUDING SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

 

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(b)                                 THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY
IN THE BOROUGH OF MANHATTAN AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF; PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH GRANTOR AND AGENT WAIVE,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 25(b).

 

(c)                                  TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH GRANTOR AND AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF
ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION
DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A “CLAIM”). 
EACH GRANTOR AND AGENT REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

(d)                                 EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT AGENT
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
AGAINST ANY GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(e)                                  NO CLAIM MAY BE MADE BY ANY GRANTOR AGAINST
THE AGENT, ANY OTHER LENDER, OR THE UNDERLYING ISSUER, OR ANY AFFILIATE,
DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT
OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN
RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY
ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR
ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH, AND EACH GRANTOR
HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.

 

33

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

 

26.                               New Subsidiaries.  Pursuant to Section 5.11 of
the Credit Agreement, certain Subsidiaries (whether by acquisition or creation)
of any Grantor are required to enter into this Agreement by executing and
delivering in favor of Agent a Joinder to this Agreement in substantially the
form of Annex 1.  Upon the execution and delivery of Annex 1 by any such new
Subsidiary, such Subsidiary shall become a Guarantor and Grantor hereunder with
the same force and effect as if originally named as a Guarantor and Grantor
herein.  The execution and delivery of any instrument adding an additional
Guarantor or Grantor as a party to this Agreement shall not require the consent
of any Guarantor or Grantor hereunder.  The rights and obligations of each
Guarantor and Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor or Grantor hereunder.

 

27.                               Agent.  Each reference herein to any right
granted to, benefit conferred upon or power exercisable by the “Agent” shall be
a reference to Agent, for the benefit of each member of the Lender Group.

 

28.                               Miscellaneous.

 

(a)                                 This Agreement is a Loan Document.  This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement.  Delivery of an executed counterpart
of this Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Agreement.  Any party delivering an executed counterpart of this Agreement
by telefacsimile or other electronic method of transmission also shall deliver
an original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.  The foregoing shall apply to each other Loan
Document mutatis mutandis.

 

(b)                                 Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.  Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

 

(c)                                  Headings and numbers have been set forth
herein for convenience only.  Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.

 

(d)                                 Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed against any member of the Lender Group or
any Grantor, whether under any rule of construction or otherwise.  This
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.

 

29.                               Intercreditor Agreement.  Notwithstanding
anything to the contrary contained in this Agreement, for so long as the
Intercreditor Agreement remains in effect, the Liens, security interests and
rights granted pursuant to this Agreement shall have the priority agreed to in,
and shall be subject to the terms of (and the exercise of any right or remedy by
Agent hereunder shall be subject to the terms and conditions of), the
Intercreditor Agreement.  In the event of any conflict between this Agreement
and the

 

34

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

 

Intercreditor Agreement, the Intercreditor Agreement shall control.  For so long
as the Intercreditor Agreement remains in effect, the delivery of any ABL
Priority Collateral to the ABL Agent as required by the Intercreditor Agreement
shall satisfy any delivery requirement with respect to such Collateral
hereunder.

 

[signature pages follow]

 

35

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

 

IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to
be executed and delivered as of the day and year first above written.

 

GRANTORS:

INVENTURE FOODS, INC., a Delaware corporation

 

 

 

By:

/s/ Steve Weinberger

 

Name:

Steve Weinberger

 

Title:

Chief Financial Officer

 

 

 

 

 

RADER FARMS, INC., a Delaware corporation

 

 

 

By:

/s/ Steve Weinberger

 

Name:

Steve Weinberger

 

Title:

Chief Financial Officer

 

 

 

 

 

FRESH FROZEN FOODS, INC., a Delaware corporation

 

 

 

By:

/s/ Steve Weinberger

 

Name:

Steve Weinberger

 

Title:

Chief Financial Officer

 

 

 

 

 

WILLAMETTE VALLEY FRUIT COMPANY, a
Delaware corporation

 

 

 

By:

/s/ Steve Weinberger

 

Name:

Steve Weinberger

 

Title:

Chief Financial Officer

 

 

 

 

 

POORE BROTHERS-BLUFFTON, LLC, a Delaware
limited liability company

 

 

 

By:

/s/ Steve Weinberger

 

Name:

Steve Weinberger

 

Title:

Chief Financial Officer

 

[SIGNATURE PAGE TO GUARANTY AND SECURITY AGREEMENT]

 

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

 

 

BOULDER NATURAL FOODS, INC., an Arizona
corporation

 

 

 

By:

/s/ Steve Weinberger

 

Name:

Steve Weinberger

 

Title:

Chief Financial Officer

 

 

 

 

 

TEJAS PB DISTRIBUTING, INC., an Arizona
corporation

 

 

 

By:

/s/ Steve Weinberger

 

Name:

Steve Weinberger

 

Title:

Chief Financial Officer

 

 

 

 

 

LA COMETA PROPERTIES, INC., an Arizona
corporation

 

 

 

By:

/s/ Steve Weinberger

 

Name:

Steve Weinberger

 

Title:

Chief Financial Officer

 

 

 

 

 

BN FOODS, INC., a Colorado corporation

 

 

 

By:

/s/ Steve Weinberger

 

Name:

Steve Weinberger

 

Title:

Chief Financial Officer

 

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

 

AGENT:

BSP AGENCY, LLC, a Delaware limited liability
company, as Agent

 

 

 

By:

/s/ Bryan Martoken

 

Name:

Bryan Martoken

 

Title:

Chief Financial Officer

 

[SIGNATURE PAGE TO GUARANTY AND SECURITY AGREEMENT]

 

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

 

ANNEX 1 TO GUARANTY AND SECURITY AGREEMENT
FORM OF JOINDER

 

Joinder No.      (this “Joinder”), dated as of              20   , to the
Guaranty and Security Agreement, dated as of November [  ], 2015 (as amended,
restated, supplemented, or otherwise modified from time to time, the “Guaranty
and Security Agreement”), by and among each of the parties listed on the
signature pages thereto and those additional entities that thereafter become
parties thereto (collectively, jointly and severally, “Grantors” and each,
individually, a “Grantor”) and BSP AGENCY, LLC, a Delaware limited liability
company, in its capacity as agent for the Lender Group (in such capacity,
together with its successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement, dated as of November [  ],
2015 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”), by and among Inventure Foods, Inc., a Delaware
corporation (“Parent Borrower”), the Subsidiaries of the Parent Borrower
identified on the signature pages thereof (such Subsidiaries, together with the
Parent Borrower, are referred to herein each individually as a “Borrower” and
individually and collectively, jointly and severally, as “Borrowers”), the
lenders party thereto as “Lenders” (each of such Lenders, together with its
successors and permitted assigns, is referred to hereinafter as a “Lender”) and
Agent, the Lender Group has agreed to make certain financial accommodations
available to Borrowers from time to time pursuant to the terms and conditions
thereof; and

 

WHEREAS, initially capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Guaranty and
Security Agreement or, if not defined therein, in the Credit Agreement, and this
Joinder shall be subject to the rules of construction set forth in
Section 1(b) of the Guaranty and Security Agreement, which rules of construction
are incorporated herein by this reference, mutatis mutandis; and

 

WHEREAS, Grantors have entered into the Guaranty and Security Agreement in order
to induce the Lender Group to make certain financial accommodations to Borrowers
as provided for in the Credit Agreement and the other Loan Documents; and

 

WHEREAS, pursuant to Section 5.11 of the Credit Agreement and Section 26 of the
Guaranty and Security Agreement, certain Subsidiaries of the Loan Parties, must
execute and deliver certain Loan Documents, including the Guarantor and Security
Agreement, and the joinder to the Guaranty and Security Agreement by the
undersigned new Grantor or Grantors (collectively, the “New Grantors”) may be
accomplished by the execution of this Joinder in favor of Agent, for the benefit
of the Lender Group; and

 

WHEREAS, each New Grantor (a) is a Subsidiary of a Borrower and, as such, will
benefit by virtue of the financial accommodations extended to Borrowers by the
Lender Group and (b) by becoming a Grantor will benefit from certain rights
granted to the Grantors pursuant to the terms of the Loan Documents;

 

NOW, THEREFORE, for and in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each New Grantor hereby agrees as follows:

 

1.                                      In accordance with Section 26 of the
Guaranty and Security Agreement, each New Grantor, by its signature below,
becomes a “Grantor” and “Guarantor” under the Guaranty and Security Agreement
with the same force and effect as if originally named therein as a “Grantor” and
“Guarantor” and each New Grantor hereby (a) agrees to all of the terms and
provisions of the Guaranty and Security Agreement applicable to it as a
“Grantor” or “Guarantor” thereunder and (b) represents and warrants that the
representations and warranties made by it as a “Grantor” or

 

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

 

“Guarantor” thereunder are true and correct in all material respects (except
that such materiality qualifier shall not be applicable to any representations
and warranties that are already qualified or modified by materiality in the text
thereof) on and as of the date hereof.  In furtherance of the foregoing, each
New Grantor hereby (a) jointly and severally unconditionally and irrevocably
guarantees as a primary obligor and not merely as a surety the full and prompt
payment when due, whether upon maturity, acceleration, or otherwise, of all of
the Guarantied Obligations, and (b) unconditionally grants, assigns, and pledges
to Agent, for the benefit of the Lender Group, to secure the Secured
Obligations, a continuing security interest in and to all of such New Grantor’s
right, title and interest in and to the Collateral.  Each reference to a
“Grantor” or “Guarantor” in the Guaranty and Security Agreement shall be deemed
to include each New Grantor.  The Guaranty and Security Agreement is
incorporated herein by reference.

 

2.                                      Schedule 1, “Commercial Tort Claims”,
Schedule 2, “Copyrights”, Schedule 3, “Intellectual Property Licenses”, Schedule
4, “Patents”, Schedule 5, “Pledged Companies”, Schedule 6, “Trademarks”,
Schedule 7, Name; Chief Executive Office; Tax Identification Numbers and
Organizational Numbers, Schedule 8, “Owned Real Property”, Schedule 9, “Deposit
Accounts and Securities Accounts”, Schedule 10, “Controlled Account Banks”,
Schedule 11, “List of Uniform Commercial Code Filing Jurisdictions”, and
Schedule 12, “Motor Vehicles” attached hereto supplement Schedule 1, Schedule 2,
Schedule 3, Schedule 4, Schedule 5, Schedule 6, Schedule 7, Schedule 8, Schedule
9, Schedule 10, Schedule 11, and Schedule 12 respectively, to the Guaranty and
Security Agreement and shall be deemed a part thereof for all purposes of the
Guaranty and Security Agreement.

 

3.                                      Each New Grantor authorizes Agent at any
time and from time to time to file, transmit, or communicate, as applicable,
financing statements and amendments thereto (i) describing the Collateral as
“all personal property of debtor” or “all assets of debtor” or words of similar
effect, (ii) describing the Collateral as being of equal or lesser scope or with
greater detail, or (iii) that contain any information required by subpart 5 of
Article 9 of the Code for the sufficiency or filing office acceptance.  Each New
Grantor also hereby ratifies any and all financing statements or amendments
previously filed by Agent in any jurisdiction in connection with the Loan
Documents.

 

4.                                      Each New Grantor represents and warrants
to Agent and the Lender Group that this Joinder has been duly executed and
delivered by such New Grantor and constitutes its legal, valid, and binding
obligation, enforceable against it in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium, or other similar laws affecting creditors’
rights generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity).

 

5.                                      This Joinder is a Loan Document.  This
Joinder may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Joinder.  Delivery of an executed counterpart of
this Joinder by telefacsimile or other electronic method of transmission shall
be equally as effective as delivery of an original executed counterpart of this
Joinder.  Any party delivering an executed counterpart of this Joinder by
telefacsimile or other electronic method of transmission also shall deliver an
original executed counterpart of this Joinder but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Joinder.

 

6.                                      The Guaranty and Security Agreement, as
supplemented hereby, shall remain in full force and effect.

 

7.                                      THIS JOINDER SHALL BE SUBJECT TO THE
PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL
REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS
ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

 

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

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Joinder to the Guaranty
and Security Agreement to be executed and delivered as of the day and year first
above written.

 

 

NEW GRANTORS:

[NAME OF NEW GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[NAME OF NEW GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

AGENT:

BSP AGENCY, LLC, a Delaware limited liability
company

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO JOINDER NO.     TO GUARANTY AND SECURITY AGREEMENT]

 

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

 

EXHIBIT A

 

COPYRIGHT SECURITY AGREEMENT

 

This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is made
this     day of            , 20  , by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and BSP AGENCY, LLC, a Delaware limited liability
company, in its capacity as agent for each member of the Lender Group (in such
capacity, together with its successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement, dated as of November [  ],
2015 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”), by and among Inventure Foods, Inc., a Delaware
corporation (“Parent Borrower”), the Subsidiaries of the Parent Borrower
identified on the signature pages thereof (such Subsidiaries, together with the
Parent Borrower, are referred to herein each individually as a “Borrower” and
individually and collectively, jointly and severally, as “Borrowers”), the
lenders party thereto as “Lenders” (each of such Lenders, together with its
successors and permitted assigns, is referred to hereinafter as a “Lender”) and
Agent, the Lender Group has agreed to make certain financial accommodations
available to Borrowers from time to time pursuant to the terms and conditions
thereof; and

 

WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement and the
other Loan Documents, but only upon the condition, among others, that Grantors
shall have executed and delivered to Agent, for the benefit of the Lender Group,
that certain Guaranty and Security Agreement, dated as of November [  ], 2015
(including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Guaranty and
Security Agreement”); and

 

WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Agent, for the benefit of the Lender Group, this
Copyright Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as follows:

 

1.                                      DEFINED TERMS.  All initially
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Guaranty and Security Agreement or, if not defined therein, in
the Credit Agreement, and this Copyright Security Agreement shall be subject to
the rules of construction set forth in Section 1(b) of the Guaranty and Security
Agreement, which rules of construction are incorporated herein by this
reference, mutatis mutandis.

 

2.                                      GRANT OF SECURITY INTEREST IN COPYRIGHT
COLLATERAL.  Each Grantor hereby unconditionally grants, assigns, and pledges to
Agent, for the benefit each member of the Lender Group, to secure the Secured
Obligations, a continuing security interest (referred to in this Copyright
Security Agreement as the “Security Interest”) in all of such Grantor’s right,
title and interest in and to the following, whether now owned or hereafter
acquired or arising (collectively, the “Copyright Collateral”):

 

(a)                                 all of such Grantor’s Copyrights and
Copyright Intellectual Property Licenses to which it is a party including those
referred to on Schedule I;

 

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

 

(b)                                 all renewals or extensions of the foregoing;
and

 

(c)                                  all products and proceeds of the foregoing,
including any claim by such Grantor against third parties for past, present or
future infringement of any Copyright or any Copyright exclusively licensed under
any Intellectual Property License, including the right to receive damages, or
the right to receive license fees, royalties, and other compensation under any
Copyright Intellectual Property License.

 

3.                                      SECURITY FOR SECURED OBLIGATIONS.  This
Copyright Security Agreement and the Security Interest created hereby secures
the payment and performance of the Secured Obligations, whether now existing or
arising hereafter.  Without limiting the generality of the foregoing, this
Copyright Security Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Agent, the other members of the Lender Group or any of them, whether or not
they are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any Grantor.

 

4.                                      SECURITY AGREEMENT.  The Security
Interest granted pursuant to this Copyright Security Agreement is granted in
conjunction with the security interests granted to Agent, for the benefit of the
Lender Group, pursuant to the Guaranty and Security Agreement.  Each Grantor
hereby acknowledges and affirms that the rights and remedies of Agent with
respect to the Security Interest in the Copyright Collateral made and granted
hereby are more fully set forth in the Guaranty and Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.  To the extent there is any inconsistency between this
Copyright Security Agreement and the Guaranty and Security Agreement, the
Guaranty and Security Agreement shall control.

 

5.                                      AUTHORIZATION TO SUPPLEMENT.  Grantors
shall give Agent prior written notice of no less than five (5) Business Days
before filing any additional application for registration of any copyright and
prompt notice in writing of any additional copyright registrations granted
therefor after the date hereof. Without limiting Grantors’ obligations under
this Section, Grantors hereby authorize Agent unilaterally to modify this
Copyright Security Agreement by amending Schedule I to include any future United
States registered copyrights or applications therefor of each Grantor. 
Notwithstanding the foregoing, no failure to so modify this Copyright Security
Agreement or amend Schedule I shall in any way affect, invalidate or detract
from Agent’s continuing security interest in all Collateral, whether or not
listed on Schedule I.

 

6.                                      COUNTERPARTS.  This Copyright Security
Agreement is a Loan Document.  This Copyright Security Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Copyright Security Agreement.  Delivery of an executed counterpart of this
Copyright Security Agreement by telefacsimile or other electronic method of
transmission shall be equally as effective as delivery of an original executed
counterpart of this Copyright Security Agreement.  Any party delivering an
executed counterpart of this Copyright Security Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Copyright Security Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Copyright Security Agreement.

 

3

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

 

7.                                      CHOICE OF LAW AND VENUE, JURY TRIAL
WAIVER, AND JUDICIAL REFERENCE PROVISION.  THIS COPYRIGHT SECURITY AGREEMENT
SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL
WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY
AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE,
MUTATIS MUTANDIS.

 

[SIGNATURE PAGE FOLLOWS]

 

4

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Copyright Security
Agreement to be executed and delivered as of the day and year first above
written.

 

 

GRANTORS:

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

AGENT:

BSP AGENCY, LLC, a Delaware limited
liability company

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO COPYRIGHT SECURITY AGREEMENT]

 

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

 

SCHEDULE I
TO
COPYRIGHT SECURITY AGREEMENT

 

COPYRIGHT REGISTRATIONS

 

Grantor

 

Country

 

Copyright

 

Registration No.

 

Registration Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Copyright Licenses

 

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

 

EXHIBIT B

 

PATENT SECURITY AGREEMENT

 

This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this
    day of            , 20  , by and among the Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and BSP AGENCY, LLC, a Delaware limited liability
company, in its capacity as agent for each member of the Lender Group (in such
capacity, together with its successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement, dated as of November [  ],
2015 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”), by and among Inventure Foods, Inc., a Delaware
corporation (“Parent Borrower”), the Subsidiaries of the Parent Borrower
identified on the signature pages thereof (such Subsidiaries, together with the
Parent Borrower, are referred to herein each individually as a “Borrower” and
individually and collectively, jointly and severally, as “Borrowers”), the
lenders party thereto as “Lenders” (each of such Lenders, together with its
successors and permitted assigns, is referred to hereinafter as a “Lender”) and
Agent, the Lender Group has agreed to make certain financial accommodations
available to Borrowers from time to time pursuant to the terms and conditions
thereof; and

 

WHEREAS, the members of Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement and the
other Loan Documents, but only upon the condition, among others, that the
Grantors shall have executed and delivered to Agent, for the benefit of the
Lender Group, that certain Guaranty and Security Agreement, dated as of
November [  ], 2015 (including all annexes, exhibits or schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified, the
“Guaranty and Security Agreement”); and

 

WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Agent, for the benefit of the Lender Group, this
Patent Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:

 

1.                                      DEFINED TERMS.  All initially
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Guaranty and Security Agreement or, if not defined therein, in
the Credit Agreement, and this Patent Security Agreement shall be subject to the
rules of construction set forth in Section 1(b) of the Guaranty and Security
Agreement, which rules of construction are incorporated herein by this
reference, mutatis mutandis.

 

2.                                      GRANT OF SECURITY INTEREST IN PATENT
COLLATERAL. Each Grantor hereby unconditionally grants, assigns, and pledges to
Agent, for the benefit each member of the Lender Group, to secure the Secured
Obligations, a continuing security interest (referred to in this Patent Security
Agreement as the “Security Interest”) in all of such Grantor’s right, title and
interest in and to the following, whether now owned or hereafter acquired or
arising (collectively, the “Patent Collateral”):

 

(a)                                 all of its Patents and Patent Intellectual
Property Licenses to which it is a party including those referred to on Schedule
I;

 

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(b)                                 all divisionals, continuations,
continuations-in-part, reissues, reexaminations, or extensions of the foregoing;
and

 

(c)                                  all products and proceeds of the foregoing,
including any claim by such Grantor against third parties for past, present or
future infringement of any Patent or any Patent exclusively licensed under any
Intellectual Property License, including the right to receive damages, or right
to receive license fees, royalties, and other compensation under any Patent
Intellectual Property License.

 

3.                                      SECURITY FOR SECURED OBLIGATIONS.  This
Patent Security Agreement and the Security Interest created hereby secures the
payment and performance of the Secured Obligations, whether now existing or
arising hereafter.  Without limiting the generality of the foregoing, this
Patent Security Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Agent, the other members of the Lender Group or any of them, whether or not
they are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any Grantor.

 

4.                                      SECURITY AGREEMENT.  The Security
Interest granted pursuant to this Patent Security Agreement is granted in
conjunction with the security interests granted to Agent, for the benefit of the
Lender Group, pursuant to the Guaranty and Security Agreement.  Each Grantor
hereby acknowledges and affirms that the rights and remedies of Agent with
respect to the Security Interest in the Patent Collateral made and granted
hereby are more fully set forth in the Guaranty and Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.  To the extent there is any inconsistency between this Patent
Security Agreement and the Guaranty and Security Agreement, the Guaranty and
Security Agreement shall control.

 

5.                                      AUTHORIZATION TO SUPPLEMENT.  If any
Grantor shall obtain rights to any new patent application or issued patent or
become entitled to the benefit of any patent application or patent for any
divisional, continuation, continuation-in-part, reissue, or reexamination of any
existing patent or patent application, the provisions of this Patent Security
Agreement shall automatically apply thereto. Grantors shall give prompt notice
in writing to Agent with respect to any such new patent rights.  Without
limiting Grantors’ obligations under this Section, Grantors hereby authorize
Agent unilaterally to modify this Patent Security Agreement by amending Schedule
I to include any such new patent rights of each Grantor.  Notwithstanding the
foregoing, no failure to so modify this Patent Security Agreement or amend
Schedule I shall in any way affect, invalidate or detract from Agent’s
continuing security interest in all Collateral, whether or not listed on
Schedule I.

 

6.                                      COUNTERPARTS.  This Patent Security
Agreement is a Loan Document.  This Patent Security Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Patent Security Agreement.  Delivery of an executed counterpart of this Patent
Security Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Patent Security Agreement.  Any party delivering an executed counterpart of
this Patent Security Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this Patent
Security Agreement but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Patent
Security Agreement.

 

3

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7.                                      CHOICE OF LAW AND VENUE, JURY TRIAL
WAIVER, AND JUDICIAL REFERENCE PROVISION.  THIS PATENT SECURITY AGREEMENT SHALL
BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL
WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY
AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE,
MUTATIS MUTANDIS.

 

[SIGNATURE PAGE FOLLOWS]

 

4

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IN WITNESS WHEREOF, the parties hereto have caused this Patent Security
Agreement to be executed and delivered as of the day and year first above
written.

 

 

GRANTORS:

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

AGENT:

ACCEPTED AND ACKNOWLEDGED BY:

 

BSP AGENCY, LLC, a Delaware limited liability
company

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

 

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SCHEDULE I
to
PATENT SECURITY AGREEMENT

 

Patents

 

Grantor

 

Country

 

Patent

 

Application/
Patent No.

 

Filing Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patent Licenses

 

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EXHIBIT C

 

PLEDGED INTERESTS ADDENDUM

 

This Pledged Interests Addendum, dated as of             , 20    (this “Pledged
Interests Addendum”), is delivered pursuant to Section 7 of the Guaranty and
Security Agreement referred to below.  The undersigned hereby agrees that this
Pledged Interests Addendum may be attached to that certain Guaranty and Security
Agreement, dated as of November [  ], 2015 (as amended, restated, supplemented,
or otherwise modified from time to time, the “Guaranty and Security Agreement”),
made by the undersigned, together with the other Grantors named therein, to BSP
AGENCY, LLC, a Delaware limited liability company, as Agent.  Initially
capitalized terms used but not defined herein shall have the meaning ascribed to
such terms in the Guaranty and Security Agreement or, if not defined therein, in
the Credit Agreement, and this Pledged Interests Addendum shall be subject to
the rules of construction set forth in Section 1(b) of the Guaranty and Security
Agreement, which rules of construction are incorporated herein by this
reference, mutatis mutandis.  The undersigned hereby agrees that the additional
interests listed on Schedule I shall be and become part of the Pledged Interests
pledged by the undersigned to Agent in the Guaranty and Security Agreement and
any pledged company set forth on Schedule I shall be and become a “Pledged
Company” under the Guaranty and Security Agreement, each with the same force and
effect as if originally named therein.

 

This Pledged Interests Addendum is a Loan Document.  Delivery of an executed
counterpart of this Pledged Interests Addendum by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Pledged Interests Addendum.  If the
undersigned delivers an executed counterpart of this Pledged Interests Addendum
by telefacsimile or other electronic method of transmission, the undersigned
shall also deliver an original executed counterpart of this Pledged Interests
Addendum but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Pledged
Interests Addendum.

 

The undersigned hereby certifies that the representations and warranties set
forth in Section 6 of the Guaranty and Security Agreement of the undersigned are
true and correct as to the Pledged Interests listed herein on and as of the date
hereof.

 

THIS PLEDGED INTERESTS ADDENDUM SHALL BE SUBJECT TO THE PROVISIONS REGARDING
CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN
SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED
HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

 

[SIGNATURE PAGE FOLLOWS]

 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum
to be executed and delivered as of the day and year first above written.

 

 

 

[                   ]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

SCHEDULE I
TO
PLEDGED INTERESTS ADDENDUM

 

Pledged Interests

 

Name of Grantor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Class of
Interests

 

Percentage
of Class
Owned

 

Certificate
Nos.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

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EXHIBIT D

 

TRADEMARK SECURITY AGREEMENT

 

This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made
this     day of            , 20  , by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and BSP AGENCY, LLC, a Delaware limited liability
company, in its capacity as agent for the Lender Group (in such capacity,
together with its successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement, dated as of November [  ],
2015 (as amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”), by and among Inventure Foods, Inc., a Delaware
corporation (“Parent Borrower”), the Subsidiaries of the Parent Borrower
identified on the signature pages thereof (such Subsidiaries, together with the
Parent Borrower, are referred to herein each individually as a “Borrower” and
individually and collectively, jointly and severally, as “Borrowers”), the
lenders party thereto as “Lenders” (each of such Lenders, together with its
successors and permitted assigns, is referred to hereinafter as a “Lender”) and
Agent, the Lender Group has agreed to make certain financial accommodations
available to Borrowers from time to time pursuant to the terms and conditions
thereof; and

 

WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement and the
other Loan Documents, but only upon the condition, among others, that Grantors
shall have executed and delivered to Agent, for the benefit of Lender Group,
that certain Guaranty and Security Agreement, dated as of November [  ], 2015
(including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Guaranty and
Security Agreement”); and

 

WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Agent, for the benefit of Lender Group, this Trademark
Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:

 

1.                                      DEFINED TERMS.  All initially
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Guaranty and Security Agreement or, if not defined therein, in
the Credit Agreement, and this Trademark Security Agreement shall be subject to
the rules of construction set forth in Section 1(b) of the Guaranty and Security
Agreement, which rules of construction are incorporated herein by this
reference, mutatis mutandis.

 

2.                                      GRANT OF SECURITY INTEREST IN TRADEMARK
COLLATERAL.  Each Grantor hereby unconditionally grants, assigns, and pledges to
Agent, for the benefit each member of the Lender Group, to secure the Secured
Obligations, a continuing security interest (referred to in this Trademark
Security Agreement as the “Security Interest”) in all of such Grantor’s right,
title and interest in and to the following, whether now owned or hereafter
acquired or arising (collectively, the “Trademark Collateral”):

 

(a)                                 all of its Trademarks and Trademark
Intellectual Property Licenses to which it is a party including those referred
to on Schedule I;

 

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

 

(b)                                 all goodwill of the business connected with
the use of, and symbolized by, each Trademark and each Trademark Intellectual
Property License; and

 

(c)                                  all products and proceeds (as that term is
defined in the Code) of the foregoing, including any claim by such Grantor
against third parties for past, present or future (i) infringement or dilution
of any Trademark or any Trademarks exclusively licensed under any Intellectual
Property License, including right to receive any damages, (ii) injury to the
goodwill associated with any Trademark, or (iii) right to receive license fees,
royalties, and other compensation under any Trademark Intellectual Property
License.

 

3.                                      SECURITY FOR SECURED OBLIGATIONS.  This
Trademark Security Agreement and the Security Interest created hereby secures
the payment and performance of the Secured Obligations, whether now existing or
arising hereafter.  Without limiting the generality of the foregoing, this
Trademark Security Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Agent, the other members of the Lender Group or any of them, whether or not
they are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any Grantor.

 

4.                                      SECURITY AGREEMENT.  The Security
Interest granted pursuant to this Trademark Security Agreement is granted in
conjunction with the security interests granted to Agent, for the benefit of the
Lender Group, pursuant to the Guaranty and Security Agreement.  Each Grantor
hereby acknowledges and affirms that the rights and remedies of Agent with
respect to the Security Interest in the Trademark Collateral made and granted
hereby are more fully set forth in the Guaranty and Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.  To the extent there is any inconsistency between this
Trademark Security Agreement and the Guaranty and Security Agreement, the
Guaranty and Security Agreement shall control.

 

5.                                      AUTHORIZATION TO SUPPLEMENT.  If any
Grantor shall obtain rights to any new trademarks, the provisions of this
Trademark Security Agreement shall automatically apply thereto. Grantors shall
give prompt notice in writing to Agent with respect to any such new trademarks
or renewal or extension of any trademark registration.  Without limiting
Grantors’ obligations under this Section, Grantors hereby authorize Agent
unilaterally to modify this Trademark Security Agreement by amending Schedule I
to include any such new trademark rights of each Grantor.  Notwithstanding the
foregoing, no failure to so modify this Trademark Security Agreement or amend
Schedule I shall in any way affect, invalidate or detract from Agent’s
continuing security interest in all Collateral, whether or not listed on
Schedule I.

 

6.                                      COUNTERPARTS.  This Trademark Security
Agreement is a Loan Document.  This Trademark Security Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Trademark Security Agreement.  Delivery of an executed counterpart of this
Trademark Security Agreement by telefacsimile or other electronic method of
transmission shall be equally as effective as delivery of an original executed
counterpart of this Trademark Security Agreement.  Any party delivering an
executed counterpart of this Trademark Security Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Trademark Security Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Trademark Security Agreement.

 

4

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

 

7.                                      CHOICE OF LAW AND VENUE, JURY TRIAL
WAIVER, AND JUDICIAL REFERENCE PROVISION.  THIS TRADEMARK SECURITY AGREEMENT
SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL
WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY
AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE,
MUTATIS MUTANDIS.

 

[SIGNATURE PAGE FOLLOWS]

 

5

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security
Agreement to be executed and delivered as of the day and year first above
written.

 

GRANTORS:

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

AGENT:

ACCEPTED AND ACKNOWLEDGED BY:

 

 

 

BSP AGENCY, LLC, a Delaware limited
liability company

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]

 

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

 

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT

 

Trademark Registrations/Applications

 

Grantor

 

Country

 

Mark

 

Application/
Registration No.

 

App/Reg Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade Names

 

Common Law Trademarks

 

Trademarks Not Currently In Use

 

Trademark Licenses

 

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