EXHIBIT I

SECURITY AGREEMENT
dated as of
May 9, 2014,
among
DIAMOND RESORTS INTERNATIONAL, INC.,

DIAMOND RESORTS CORPORATION,

the other Subsidiaries of Holdings
from time to time party hereto

and
CREDIT SUISSE AG,
as Collateral Agent

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TABLE OF CONTENTS
 
 
 
Page
 
ARTICLE I
 
 
Definitions
 
SECTION 1.01.
Credit Agreement
1
SECTION 1.02.
Other Defined Terms
1
 
 
 
 
ARTICLE II
 
 
Pledge of Securities
 
SECTION 2.01.
Pledge
9
SECTION 2.02.
Delivery of the Pledged Collateral
10
SECTION 2.03.
Representations, Warranties and Covenants
11
SECTION 2.04.
Certification of Limited Liability Company Interests and Limited Partnership
Interests
12
SECTION 2.05.
Registration in Nominee Name; Denominations
12
SECTION 2.06.
Voting Rights; Dividends and Interest, Etc
13
 
 
 
 
ARTICLE III
 
 
Security Interests in Personal Property
 
SECTION 3.01.
Security Interest
15
SECTION 3.02.
Representations and Warranties
17
SECTION 3.03.
Covenants
19
SECTION 3.04.
Other Actions
23
SECTION 3.05.
Covenants Regarding Patent, Trademark and Copyright Collateral
25
 
 
 
 
ARTICLE IV
 
 
Remedies
 
SECTION 4.01.
Remedies Upon Default
27
SECTION 4.02.
Application of Proceeds
28
SECTION 4.03.
Grant of License to Use Intellectual Property
29
SECTION 4.04.
Securities Act, Etc
29
SECTION 4.05.
Registration
30
SECTION 4.06.
Disposition of Collateral
31
 
 
 
 
ARTICLE V
 
 
Indemnity, Subrogation and Subordination
 
SECTION 5.01.
Indemnity and Subrogation
31
SECTION 5.02.
Contribution and Subrogation
31

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SECTION 5.03.
Subordination
32
 
 
 
 
ARTICLE VI
 
 
Miscellaneous
 
SECTION 6.01.
Notices
32
SECTION 6.02.
Security Interest Absolute
32
SECTION 6.03.
Survival of Agreement
33
SECTION 6.04.
Binding Effect; Several Agreement
33
SECTION 6.05.
Successors and Assigns
33
SECTION 6.06.
Collateral Agent’s Fees and Expenses; Indemnification
33
SECTION 6.07.
Collateral Agent Appointed Attorney-in-Fact
34
SECTION 6.08.
Applicable Law
35
SECTION 6.09.
Waivers; Amendment
35
SECTION 6.10.
WAIVER OF JURY TRIAL
36
SECTION 6.11.
Severability
36
SECTION 6.12.
Counterparts
36
SECTION 6.13.
Headings
37
SECTION 6.14.
Jurisdiction; Consent to Service of Process
37
SECTION 6.15.
Termination or Release
37
SECTION 6.16.
Additional Subsidiaries
38
SECTION 6.17.
Right of Setoff
38
SECTION 6.18.
Maximum Liability
38
 
Schedules
 
Schedule I
Subsidiary Grantors
 
Schedule II
Equity Interests; Pledged Debt Securities
 
Schedule III
Excluded Equity Interests
 
Schedule IV
Resorts
 
Schedule V
Intellectual Property
 
 
 
 
 
Exhibits
 
Exhibit A
Form of Supplement
 
Exhibit B
Form of Perfection Certificate
 

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SECURITY AGREEMENT dated as of May 9, 2014 (this “Agreement”), among DIAMOND
RESORTS CORPORATION, a Maryland corporation (the “Borrower”), DIAMOND RESORTS
INTERNATIONAL, INC., a Delaware corporation (“Holdings”), the other Subsidiaries
of Holdings from time to time party hereto (the “Subsidiary Grantors”) and
CREDIT SUISSE AG, as collateral agent (in such capacity, together with its
successors and assigns, the “Collateral Agent”).
Preliminary Statement
Reference is made to the Credit Agreement dated as of May 9, 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, Holdings, the lenders from time to time party
thereto (the “Lenders”) and Credit Suisse AG, as administrative agent (in such
capacity, together with its successors and assigns, the “Administrative Agent”)
and Collateral Agent. The Lenders have agreed to extend credit to the Borrower
pursuant to, and upon the terms and subject to the conditions set forth in, the
Credit Agreement.
The obligations of the Lenders to extend credit to the Borrower are conditioned
upon, among other things, the execution and delivery of this Agreement by the
Borrower and each other Grantor. Each Grantor (other than the Borrower) is an
affiliate of the Borrower, will derive substantial benefits from the extension
of credit to the Borrower pursuant to the Credit Agreement, and each Grantor is
willing to execute and deliver this Agreement in order to induce the Lenders to
extend such credit. Accordingly, the parties hereto agree as follows:
ARTICLE I

Definitions
SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement
(including in the preliminary statement hereto) and not otherwise defined herein
have the meanings set forth in the Credit Agreement. All capitalized terms
defined in the New York UCC (as such term is defined herein) and not defined in
this Agreement have the meanings specified therein. All references to the
Uniform Commercial Code shall mean the New York UCC unless context requires
otherwise.
(a) The rules of construction specified in Section 1.02 of the Credit Agreement
also apply to this Agreement.
SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

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“Accounts Receivable” shall mean all Accounts and all right, title and interest
in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
“Administrative Agent” shall have the meaning assigned to such term in the
preliminary statement.
“Agreement” shall have the meaning assigned to such term in the preamble hereto.
“Article 9 Collateral” shall have the meaning assigned to such term in
Section 3.01.
“Borrower” shall have the meaning assigned to such term in the preamble hereto.
“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, commercial credit card and
merchant card services, stored value card services, electronic funds transfer
and other cash management arrangements to any Loan Party.
“Cash Management Bank” means any Person that (a) at the time it enters into a
Cash Management Agreement, is a Lender, an Arranger or the Administrative Agent
or an Affiliate of any of the foregoing or (b) in the case of any Cash
Management Agreement in effect as of the Closing Date, is, as of the Closing
Date, a Lender, an Arranger or the Administrative Agent or an Affiliate of any
of the foregoing and a party to a Cash Management Agreement, in each case, in
its capacity as a party to such Cash Management Agreement.
“Claiming Grantor” shall have the meaning assigned to such term in Section 5.02.
“Collateral” shall mean the Article 9 Collateral and the Pledged Collateral.
“Collateral Agent” shall have the meaning assigned to such term in the preamble
hereto.
“Collection” shall mean each of the Diamond Resorts U.S. Collection, the Diamond
Resorts Hawaii Collection, the Diamond Resorts California Collection and any
successor or similar club (including the Diamond Resorts European Collection,
the Premiere Vacation Collection, the Monarch Grand Vacations Collection and the
Diamond Resorts Mediterranean Collection).
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.).

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“Contributing Grantor” shall have the meaning assigned to such term in Section
5.02.
“Copyright License” shall mean any written agreement, now or hereafter in
effect, granting any right to any third party under any copyright now or
hereafter owned by any Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
“Copyrights” shall mean all of the following now owned or hereafter acquired by
any Grantor: (a) all copyright rights in any work subject to the copyright laws
of the United States or any other country, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office (or any
successor office or any similar office in any other country), including those
listed on Schedule V.
“Credit Agreement” shall have the meaning assigned to such term in the
preliminary statement hereto.
“Debtor Relief Laws” shall mean the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
“Excluded Accounts” shall mean (a) payroll accounts, (b) employee trust
accounts, (c) escrow accounts, (d) cash collateral accounts for credit card
companies, (e) tax accounts, (f) accounts containing rental payments for Resort
occupancy collected on behalf of the applicable homeowners’ association or
individual unit owners and that may not be controlled without the consent of
such parties and (g) accounts containing amounts collected on behalf of business
partners of a Grantor and that may not be controlled without the consent of such
business partners; provided that, in the case of clauses (f) and (g), such
accounts are reconciled no less frequently than once a month and all amounts
allocated to Holdings, the Borrower or a Subsidiary Grantor in such
reconciliations are deposited reasonably promptly in a Deposit Account that is
controlled in accordance with Section 3.04(b).
“Excluded Collateral” shall mean all Timeshare Receivables and Excluded
Accounts.
“Excluded Swap Guarantor” shall mean Holdings and/or any Subsidiary Guarantor
all or a portion of whose Guarantee of, or grant of a security interest to
secure, any Obligations arising under or otherwise with respect to any Secured
Hedging Agreement (or any Guarantee thereof) is now or hereafter becomes illegal
(disregarding for purposes of assessing any such illegality the last sentence of
the definition of the term “Obligations”)

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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).
“Excluded Swap Obligations” shall mean, with respect to Holdings and/or any
Subsidiary Guarantor, any Obligations arising under or otherwise with respect to
any Secured Hedging Agreement if, and to the extent that, all or a portion of
the Guarantee by Holdings or such Subsidiary Guarantor of, or the grant by
Holdings or such Subsidiary Guarantor of a security interest to secure, such
Obligations (or any Guarantee thereof) is now or hereafter becomes illegal
(disregarding for purposes of assessing any such illegality the last sentence of
the definition of the term “Obligations”) 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). If any such
Obligation arises under a master agreement governing more than one hedging
arrangement, such exclusion shall apply only to the portion of such Obligation
that is attributable to hedging arrangements for which such Guarantee or
security interest is or becomes illegal.
“Executive Services Agreement” shall mean the Amended and Restated Homeowner
Association Oversight, Consulting and Executive Management Services Agreement
dated as of December 31, 2012, by and between the Borrower and Hospitality
Management and Consulting Service, L.L.C., a Nevada limited liability company.
“Federal Securities Laws” shall have the meaning assigned to such term in
Section 4.04.
“General Intangibles” shall mean all choses in action and causes of action and
all other intangible personal property of any Grantor of every kind and nature
(other than Accounts) now owned or hereafter acquired by any Grantor, including
all rights and interests in partnerships, limited partnerships, limited
liability companies and other unincorporated entities, corporate or other
business records, indemnification claims, contract rights (including rights
under leases, whether entered into as lessor or lessee, Hedging Agreements,
Material Contracts and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts.
“Governmental Authority” shall mean the government of the United States of
America or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any self-regulatory organization and any supra-national
bodies such as the European Union or the European Central Bank).
“Grantors” shall mean Holdings, the Borrower and the Subsidiary Grantors.
“Hedge Bank” shall mean any Person that (a) at the time it enters into a Hedging
Agreement , is a Lender, an Arranger or the Administrative Agent or an Affiliate

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of any of the foregoing or (b) with respect to Hedging Agreements in effect as
of the Closing Date, is, as of the Closing Date, a Lender, an Arranger or the
Administrative Agent or an Affiliate of any of the foregoing and a party to a
Hedging Agreement, in each case, in its capacity as a party to such Hedging
Agreement.
“Hedging Agreement” shall mean any interest rate protection agreement, foreign
currency exchange agreement or other interest or currency exchange rate hedging
arrangement.
“Holdings” shall have the meaning assigned to such term in the preamble hereto.
“Intellectual Property” shall mean all intellectual and similar property of any
Grantor of every kind and nature now owned or hereafter acquired by any Grantor,
including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade
secrets, confidential or proprietary technical and business information,
know‑how, show‑how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
“IP Security Agreements” shall have the meaning assigned to such term in Section
3.02(b).
“Lenders” shall have the meaning assigned to such term in the preliminary
statement.
“License” shall mean any Patent License, Trademark License, Copyright License or
other license or sublicense agreement relating to Intellectual Property to which
any Grantor is a party, including those listed on Schedule V.
“Material Contracts” shall mean the Executive Services Agreement, each Property
Management Agreement, all material agreements of each Collection and any
material agreements related to a Reservation System.
“New York UCC” shall mean the Uniform Commercial Code as from time to time in
effect in the State of New York.
“Obligations” shall mean all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, Secured Cash Management Agreement or Secured
Hedging Agreement, in each case whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party of any proceeding under any Debtor
Relief Laws naming such person as the debtor in such proceeding (or would accrue
but for the operation of applicable Debtor Relief Laws),

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regardless of whether such interest and fees are allowed or allowable claims in
such proceeding; provided that (a) obligations of the Loan Parties under any
Secured Cash Management Agreement or Secured Hedging Agreement shall be secured
and guaranteed pursuant to the Loan Documents only to the extent that, and for
so long as, the other Obligations are so secured and guaranteed and (b) any
release of Collateral or Guarantees effected in a manner permitted by any Loan
Document shall not require the consent of holders of obligations under Secured
Hedging Agreements or obligations under Secured Cash Management Agreements.
Without limiting the generality of the foregoing, the Obligations of the Loan
Parties under the Loan Documents include (i) the obligation (including guarantee
obligations) to pay principal, interest, reimbursement obligations, charges,
expenses, fees, indemnities and other amounts payable by any Loan Party under
any Loan Document and (ii) the obligation of any Loan Party to reimburse any
amount in respect of any of the foregoing that the Administrative Agent, the
Collateral Agent or any Lender, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party. Notwithstanding the foregoing, in the case
of any Excluded Swap Guarantor, “Obligations” shall not include Excluded Swap
Obligations of such Excluded Swap Guarantor.
“Patent License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
“Patents” shall mean all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of the United States or the equivalent thereof
in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office (or any successor
or any similar offices in any other country), including those listed on
Schedule V, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
“Perfection Certificate” shall mean a certificate substantially in the form of
Exhibit B, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Responsible Officer of each of
Holdings and the Borrower.
“Person” shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership,
Governmental Authority or other entity.
“Points” shall mean points or a similar form of currency, the redemption of
which entitles the holder thereof to reserve the use and occupancy of a
residential accommodation at a Points Based Resort.

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“Points Based Resort” shall mean the Resorts identified on Schedule IV as
“Points Based Resorts” and any other Resort that is designated after the Closing
Date, by means of a certificate delivered to the Collateral Agent by a
Responsible Officer of Holdings or the Borrower, as a Resort at which holders of
Points Based Time Share Interests are entitled to reserve the use and occupancy
of residential accommodations.
“Points Based Time Share Interest” shall mean a Time Share Interest (including a
club membership) that is denominated in Points. Any Grantor that is a seller of
Points Based Time Share Interests shall be deemed the owner of a Points Based
Time Share Interest to the extent of its unsold Points from time to time.
“Pledged Collateral” shall have the meaning assigned to such term in
Section 2.01.
“Pledged Debt Securities” shall have the meaning assigned to such term
in Section 2.01.
“Pledged Securities” shall mean any promissory notes, stock certificates or
other securities now or hereafter included in the Pledged Collateral, including
all certificates, instruments or other documents representing or evidencing any
Pledged Collateral.
“Pledged Stock” shall have the meaning assigned to such term in Section 2.01.
“Property Management Agreement” shall mean a management agreement entered into
by and between a homeowners’ association and a property management company,
pursuant to which the property manager is to provide management and other
services with respect to a Resort.
“Reservation System” shall mean the reservation system operated by THE Club, a
Florida corporation, and any other system(s) pursuant to which reservations for
particular locations, times, lengths of stay and unit types at Points Based
Resorts with respect to Points Based Time Share Interests are received,
accepted, modified or canceled.
“Resort” shall mean a time share residential real estate property identified on
Schedule IV or any other time share residential real estate property with
respect to which any Grantor sells Time Share Interests after the Closing Date,
including in each case the land on which such project is located, all buildings
and other improvements thereon and all fixtures located at or used in connection
with such project.
“Responsible Officer” of any Person shall mean any executive officer or
Financial Officer of such Person and any other officer or similar official
thereof responsible for the administration of the obligations of such Person in
respect of this Agreement.

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“Secured Cash Management Agreement” shall mean any Cash Management Agreement
that is entered into by and between any Loan Party and any Cash Management Bank.
“Secured Hedging Agreement” means any Hedging Agreement not prohibited under
Section 6.01 of the Credit Agreement that is entered into by and between any
Loan Party and any Hedge Bank.
“Secured Parties” shall mean (a) the Administrative Agent, (b) the Collateral
Agent, (c) the beneficiary of each indemnification obligation undertaken by any
Loan Party under any Loan Document, (d) the Lenders, (e) the Hedge Banks to the
extent they are party to one or more Secured Hedging Agreements, (f) the Cash
Management Banks to the extent they are party to one or more Secured Cash
Management Agreements and (g) the permitted successors and assigns of each of
the foregoing.
“Security Interest” shall have the meaning assigned to such term in
Section 3.01.
“Subsidiary Grantor” shall have the meaning assigned to such term in the
preamble hereto. The Subsidiary Grantors party to this Agreement as of the date
hereof are set forth on Schedule I hereto.
“Time Share Interest” shall mean a timeshare interest or interval, however
defined in the applicable condominium or timeshare declaration, trust agreement
or other relevant document or instrument pursuant to which such timeshare
interest or interval is created, whether or not coupled with a fee simple
interest in real estate, together with all rights, benefits, privileges and
interests appurtenant thereto, including the right to use and occupy a
residential unit within the applicable Resort and the common areas and common
furnishings appurtenant to such unit for a specified period of time, on an
annual or a biennial basis, as more specifically described in the applicable
declaration or other relevant document or instrument. Time Share Interests shall
include Points Based Time Share Interests.
“Time Share Mortgage” shall mean a mortgage, deed of trust or other security
interest on or with respect to a Time Share Interest, including any financing
instruments for Time Share Interests in St. Maarten and for Points Based Time
Share Interests.
“Time Share Receivables” shall mean Time Share Mortgage receivables originated
upon the sale of Time Share Interests.
“Trademark License” shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.

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“Trademarks” shall mean all of the following now owned or hereafter acquired by
any Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office (or
any successor office) or any similar offices in any State of the United States
or any other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule V, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.
“Unfunded Advances” shall mean the aggregate amount of an applicable Borrowing,
if any, (a) made available to the Borrower by the Administrative Agent on the
assumption that each Lender has made its portion of the applicable Borrowing
available to the Administrative Agent as contemplated by Section 2.02(d) of the
Credit Agreement and (b) with respect to which a corresponding amount shall not
in fact have been returned to the Administrative Agent by the Borrower or made
available to the Administrative Agent by any such Lender.
ARTICLE II

Pledge of Securities
SECTION 2.01. Pledge. As security for the payment or performance, as the case
may be, in full of the Obligations, each Grantor hereby assigns and pledges to
the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, and hereby grants to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, a first-priority
security interest in, all of such Grantor’s right, title and interest in, to and
under:
(a) (i) the Equity Interests owned by such Grantor on the date hereof (including
all such Equity Interests listed on Schedule II), (ii) any other Equity
Interests obtained in the future by such Grantor and (iii) the certificates
representing all such Equity Interests (all the foregoing collectively referred
to herein as the “Pledged Stock”); provided, however, that the Pledged Stock
shall not include (x) more than 66% of the issued and outstanding voting Equity
Interests of any first tier Foreign Subsidiary to the extent that the pledge of
any greater percentage would result in adverse tax consequences to Holdings, (y)
any Equity Interests of Citrus Insurance Company, Inc. a Nevada corporation, so
long as the net worth of such Subsidiary is less than $500,000 or (z) any Equity
Interests of any Subsidiary set forth on Schedule III to this Agreement;
(b) (i) the debt securities held by such Grantor on the date hereof (including
all such debt securities listed opposite the name of such Grantor on
Schedule II), (ii) any debt securities in the future issued to such Grantor and
(iii) the promissory

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notes and any other instruments evidencing such debt securities (all the
foregoing collectively referred to herein as the “Pledged Debt Securities”);
(c) all other property that may be delivered to and held by the Collateral Agent
pursuant to the terms of this Section 2.01;
(d) subject to Section 2.06, all payments of principal or interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clauses (a) and (b) above;
(e) subject to Section 2.06, all rights and privileges of such Grantor with
respect to the securities and other property referred to in clauses (a), (b),
(c) and (d) above; and
(f) all Proceeds of any of the foregoing (the items referred to in clauses (a)
through (f) above being collectively referred to as the “Pledged Collateral”);
provided, however, that notwithstanding the foregoing, Pledged Collateral shall
not include at any time any Timeshare Receivables.
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
SECTION 2.02. Delivery of the Pledged Collateral. (a) Each Grantor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and all
certificates, instruments or other documents representing or evidencing Pledged
Securities.
(a) Each Grantor agrees promptly to deliver or cause to be delivered to the
Collateral Agent any and all Pledged Debt Securities.
(b) Upon delivery to the Collateral Agent, (i) any certificate, instrument or
document representing or evidencing Pledged Securities shall be accompanied by
undated stock powers duly executed in blank or other undated instruments of
transfer satisfactory to the Collateral Agent and duly executed in blank and by
such other instruments and documents as the Collateral Agent may reasonably
request and (ii) all other property comprising part of the Pledged Collateral
shall be accompanied by proper instruments of assignment duly executed by the
applicable Grantor and such other instruments or documents as the Collateral
Agent may reasonably request. Each delivery of Pledged Securities shall be
accompanied by a schedule describing the applicable securities, which schedule
shall be attached hereto as Schedule II and made a part hereof; provided that
failure to attach any such schedule hereto shall not affect the validity of the
pledge of such Pledged Securities. Each schedule so delivered shall supplement
any prior schedules so delivered.

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SECTION 2.03. Representations, Warranties and Covenants. The Grantors jointly
and severally represent, warrant and covenant to and with the Collateral Agent,
for the benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the issued and
outstanding shares of each class of the Equity Interests of the issuer thereof
represented by such Pledged Stock and includes all Equity Interests, debt
securities and promissory notes required to be pledged hereunder;
(b) the Pledged Stock and Pledged Debt Securities have been duly and validly
authorized and issued by the issuers thereof and (i) in the case of Pledged
Stock, are fully paid and nonassessable and (ii) in the case of Pledged Debt
Securities, are legal, valid and binding obligations of the issuers thereof;
(c) except for the security interests granted hereunder (or otherwise permitted
under the Credit Agreement), each Grantor (i) is and, subject to any transfers
made in compliance with the Credit Agreement, will continue to be the direct
owner, beneficially and of record, of the Pledged Securities indicated on
Schedule II as owned by such Grantor, (ii) holds the same free and clear of all
Liens other than Liens expressly permitted under Section 6.02 of the Credit
Agreement, (iii) will make no assignment, pledge, hypothecation or transfer of,
or create or permit to exist any security interest in or other Lien on, the
Pledged Collateral, other than transfers made in compliance with the Credit
Agreement, and (iv) subject to Section 2.06, will cause any and all Pledged
Collateral, whether for value paid by such Grantor or otherwise, to be forthwith
deposited with the Collateral Agent and pledged or assigned hereunder;
(d) except for restrictions and limitations imposed by the Loan Documents or
securities laws generally, the Pledged Collateral is and will continue to be
freely transferable and assignable, and none of the Pledged Collateral is or
will be subject to any option, right of first refusal, shareholders agreement,
charter, by-law provisions or other organizational documents or contractual
restriction of any nature that might prohibit, impair, delay or otherwise affect
the pledge of such Pledged Collateral hereunder, the sale or disposition thereof
pursuant hereto or the exercise by the Collateral Agent of rights and remedies
hereunder;
(e) each Grantor (i) has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or contemplated and
(ii) will defend its title or interest thereto or therein against any and all
Liens (other than any Lien created by the Loan Documents or permitted under
Section 6.02 of the Credit Agreement), however arising, of all Persons
whomsoever;
(f) no consent or approval of any Governmental Authority, any securities
exchange or any other Person was or is necessary to the validity of the pledge
effected hereby (other than such as have been obtained and are in full force and
effect);

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(g) by virtue of the execution and delivery by each Grantor of this Agreement,
when any Pledged Securities are delivered to the Collateral Agent in accordance
with this Agreement, the Collateral Agent will obtain a legal, valid and
perfected first priority lien upon and security interest in such Pledged
Securities as security for the payment and performance of the Obligations, prior
to any other Lien on any of the Pledged Securities other than any Liens
expressly permitted under Section 6.02 of the Credit Agreement; and
(h) the pledge effected hereby is effective to vest in the Collateral Agent, for
the ratable benefit of the Secured Parties, the rights of the Collateral Agent
in the Pledged Collateral as set forth herein and all action by any Grantor
necessary or desirable to protect and perfect the Lien on the Pledged Collateral
has been duly taken.
SECTION 2.04. Certification of Limited Liability Company Interests and Limited
Partnership Interests. (a) Each Grantor acknowledges and agrees that (i) each
interest in any limited liability company or limited partnership now or
hereafter Controlled by such Grantor, pledged hereunder and represented by a
certificate shall be a “security” within the meaning of Article 8 of the New
York UCC and shall be governed by Article 8 of the New York UCC and (ii) each
such interest shall at all times hereafter continue to be such a security and
represented by such certificate.
(a) Each Grantor further acknowledges and agrees that (i) each interest in any
limited liability company or limited partnership now or hereafter Controlled by
such Grantor, pledged hereunder and not represented by a certificate shall not
be a “security” within the meaning of Article 8 of the New York UCC and shall
not be governed by Article 8 of the New York UCC, and (ii) such Grantor shall at
no time elect to treat any such interest as a “security” within the meaning of
Article 8 of the New York UCC or issue any certificate representing such
interest, unless such Grantor provides prior written notification to the
Collateral Agent of such election and such interest is thereafter represented by
a certificate that is immediately delivered to the Collateral Agent pursuant to
the terms hereof.
SECTION 2.05. Registration in Nominee Name; Denominations. The Collateral Agent,
on behalf of the Secured Parties, shall have the right (in its sole and absolute
discretion) to hold the Pledged Securities in its own name as pledgee or secured
party, the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the Collateral
Agent. Each Grantor will promptly give to the Collateral Agent written copies of
any notices or other communications received by it with respect to Pledged
Securities in its capacity as the registered owner thereof. The Collateral Agent
shall at all times have the right to exchange any certificates representing
Pledged Securities for certificates of smaller or larger denominations for any
purpose consistent with this Agreement.
SECTION 2.06. Voting Rights; Dividends and Interest, Etc. (a) Unless and until
an Event of Default shall have occurred and be continuing and the Collateral
Agent shall have given the Grantors notice of its intent to exercise its rights
under this Agreement

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(which notice shall be deemed to have been given immediately upon the occurrence
of an Event of Default under paragraphs (g) or (h) of Article VII of the Credit
Agreement):
(i) Each Grantor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Securities or any
part thereof for any purpose consistent with the terms of this Agreement, the
Credit Agreement and the other Loan Documents; provided, however, that such
rights and powers shall not be exercised in any manner that could materially and
adversely affect the rights inuring to a holder of any Pledged Securities or the
rights and remedies of any of the Collateral Agent or the other Secured Parties
under this Agreement or the Credit Agreement or any other Loan Document or the
ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to each Grantor, or cause to
be executed and delivered to each Grantor, all such proxies, powers of attorney
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and/or consensual rights and powers
it is entitled to exercise pursuant to paragraph (i) above.
(iii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Securities to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable law; provided,
however, that any noncash dividends, interest, principal or other distributions
that would constitute Pledged Stock or Pledged Debt Securities, whether
resulting from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Securities or received in exchange
for Pledged Securities or any part thereof, or in redemption thereof, or as a
result of any merger, consolidation, acquisition or other exchange of assets to
which such issuer may be a party or otherwise, shall be and become part of the
Pledged Collateral, and, if received by any Grantor, shall not be commingled by
such Grantor with any of its other funds or property but shall be held separate
and apart therefrom, shall be held in trust for the ratable benefit of the
Secured Parties and shall be forthwith delivered to the Collateral Agent in the
same form as so received (with any necessary endorsement or instrument of
assignment). This paragraph (iii) shall not apply to dividends between or among
the Borrower, the Grantors and any Subsidiaries only of property subject to a
perfected security interest under this Agreement; provided that the Borrower
notifies the Collateral Agent in writing, specifically referring to this
Section 2.06 at the time of such dividend and takes any actions the Collateral
Agent specifies to ensure the continuance of its perfected security interest in
such property under this Agreement.
(b) Upon the occurrence and during the continuance of an Event of Default, after
the Collateral Agent shall have notified (or shall be deemed to have notified
pursuant

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to Section 2.06(a)) the Grantors in writing of the suspension of their rights
under paragraph (a)(iii) of this Section 2.06, then all rights of any Grantor to
dividends, interest, principal or other distributions that such Grantor is
authorized to receive pursuant to paragraph (a)(iii) of this Section 2.06 shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to receive
and retain such dividends, interest, principal or other distributions. All
dividends, interest, principal or other distributions received by any Grantor
contrary to the provisions of this Section 2.06 shall be held in trust for the
benefit of the Collateral Agent, shall be segregated from other property or
funds of such Grantor and shall be forthwith delivered to the Collateral Agent
upon demand in the same form as so received (with any necessary endorsement or
instrument of assignment). Any and all money and other property paid over to or
received by the Collateral Agent pursuant to the provisions of this
paragraph (b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 4.02. After
all Events of Default have been cured or waived and each applicable Grantor has
delivered to the Administrative Agent certificates to that effect, the
Collateral Agent shall, promptly after all such Events of Default have been
cured or waived, repay to each applicable Grantor (without interest) all
dividends, interest, principal or other distributions that such Grantor would
otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of
this Section 2.06 and that remain in such account.
(c) Upon the occurrence and during the continuance of an Event of Default, after
the Collateral Agent shall have notified (or shall be deemed to have notified
pursuant to Section 2.06(a)) the Grantors in writing of the suspension of their
rights under paragraph (a)(i) of this Section 2.06, then all rights of any
Grantor to exercise the voting and consensual rights and powers it is entitled
to exercise pursuant to paragraph (a)(i) of this Section 2.06, and the
obligations of the Collateral Agent under paragraph (a)(ii) of this
Section 2.06, shall cease, and all such rights shall thereupon become vested in
the Collateral Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers; provided
that, unless otherwise directed by the Required Lenders, the Collateral Agent
shall have the right from time to time following and during the continuance of
an Event of Default to permit the Grantors to exercise such rights.
(d) Any notice given by the Collateral Agent to the Grantors exercising its
rights under paragraph (a) of this Section 2.06 (i) shall be in writing, (ii)
may be given to one or more of the Grantors at the same or different times and
(iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph
(a)(iii) in part without suspending all such rights (as specified by the
Collateral Agent in its sole and absolute discretion) and without waiving or
otherwise affecting the Collateral Agent’s rights to give additional notices
from time to time suspending other rights so long as an Event of Default has
occurred and is continuing.

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ARTICLE III

Security Interests in Personal Property
SECTION 3.01. Security Interest. (a) As security for the payment or performance,
as the case may be, in full of the Obligations, each Grantor hereby assigns and
pledges to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, a
security interest (the “Security Interest”), in all right, title or interest in
or to any and all of the following assets and properties now owned or at any
time hereafter acquired by such Grantor or in which such Grantor now has or at
any time in the future may acquire any right, title or interest (collectively,
the “Article 9 Collateral”):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all cash and Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property;
(x) all Letter-of-Credit Rights;
(xi) all Commercial Tort Claims;
(xii) all books and records pertaining to the Article 9 Collateral; and
(xiii) to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing;
provided, however, that notwithstanding the foregoing, Article 9 Collateral
shall not include at any time (A) any Excluded Collateral, (B) any property to
the extent that a grant of a security interest in or other Lien on such
property, or the perfection of any such Lien, is prohibited by any law; provided
that such security interest in or Lien on such property, or the perfection of
such Lien, shall be included in the Collateral immediately at such time it

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is no longer prohibited by any such law, (C) any Grantor’s rights or interests
under any contract or agreement to which such Grantor is a party (other than a
Material Contract) to the extent that (1) such rights or interests are not
assignable or capable of being encumbered under the terms of the contract or
agreement applicable thereto (but solely to the extent that any such restriction
shall be enforceable under applicable law, including Section 9-406, 9-407, 9-408
or 9-409 of the New York UCC, in respect of the grant of a security interest
hereunder), without the consent of the other applicable party thereto and (2)
such consent has not been obtained; provided, however, that such security
interest shall attach immediately at such time as such contract or agreement may
be assigned or is capable of being so encumbered or such consent has been
obtained, as the case may be, and, to the extent severable, shall attach
immediately to any portion of such contract or agreement that may be assigned or
encumbered or such consent has been obtained, as the case may be, including any
Proceeds of such contract or agreement, or (D) any vehicle subject to a
certificate of title or similar statute and having a value of less than
$100,000.
For the avoidance of doubt, and in furtherance and not limitation of any other
provision herein, the Article 9 Collateral shall include an assignment, as
security for the Obligations, of the Material Contracts and all of each
Grantor’s rights thereunder, including all payments of any kind for or with
respect to the obligations under a Material Contract and the right to make all
waivers, amendments and agreements, to exercise any election or option, to grant
any consent, waiver or approval, to give and receive duplicate copies of all
notices and other instruments or communications, to declare any default, to take
such action and exercise such rights and remedies including the commencement,
conduct and consummation of legal, administrative or other proceedings, as shall
be permitted by a Material Contract or by law, and to do any and all other
things whatsoever which the Collateral Agent or parties to a Material Contract
are or may be entitled to do under such Material Contracts.
(b) Each Grantor hereby irrevocably authorizes the Collateral Agent at any time
and from time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) with respect to the Article 9 Collateral
or any part thereof and amendments thereto that (i) indicate the Article 9
Collateral as “all assets, other than time share receivables and consumer loans”
of such Grantor or words of similar effect, and (ii) contain the information
required by Article 9 of the Uniform Commercial Code of each applicable
jurisdiction for the filing of any financing statement or amendment, including
(A) whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor and (B) in the case
of a financing statement filed as a fixture filing, a sufficient description of
the real property to which such Article 9 Collateral relates. Each Grantor
agrees to provide such information to the Collateral Agent promptly upon
request.
Each Grantor also ratifies its authorization for the Collateral Agent to file in
any relevant jurisdiction any initial financing statements or amendments thereto
if filed prior to the date hereof.

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The Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) such documents as may be necessary
or advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor, without the signature
of any Grantor, and naming any Grantor or the Grantors as debtors and the
Collateral Agent as secured party.
(c) The Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Grantor with respect to or arising out of the
Article 9 Collateral, including the Material Contracts.
SECTION 3.02. Representations and Warranties. The Grantors jointly and severally
represent and warrant to the Collateral Agent and the Secured Parties that:
(a) Each Grantor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Collateral Agent, for
the ratable benefit of the Secured Parties, the Security Interest in such
Article 9 Collateral pursuant hereto and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the consent
or approval of any other Person other than any consent or approval that has been
obtained.
(b) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein (including (x) the exact legal name of
each Grantor and (y) the jurisdiction of organization of each Grantor) is
correct and complete as of the Closing Date. Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the Article 9
Collateral have been prepared by the Collateral Agent based upon the information
provided to the Administrative Agent, the Collateral Agent and the Secured
Parties in the Perfection Certificate for filing in each governmental, municipal
or other office specified in Section 2 of the Perfection Certificate (or
specified by notice from the Borrower to the Collateral Agent after the Closing
Date in the case of filings, recordings or registrations required by
Sections 5.06 or 5.10 of the Credit Agreement), which are all the filings,
recordings and registrations (other than filings required to be made in the
United States Patent and Trademark Office and the United States Copyright Office
in order to perfect the Security Interest in the Article 9 Collateral consisting
of United States Patents, Trademarks and Copyrights) that are necessary to
publish notice of and protect the validity of and to establish a legal, valid
and perfected first-priority security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Article 9
Collateral in which the Security Interest may be perfected by filing, recording
or registration in the United States (or any political subdivision thereof) and
its territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is

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necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements. Each Grantor represents and
warrants that a fully executed agreement in the form hereof (or a fully executed
short form agreement in form and substance reasonably satisfactory to the
Collateral Agent (each such agreement, an “IP Security Agreement”)), and
containing a description of all Article 9 Collateral consisting of Intellectual
Property with respect to United States Patents and United States registered
Trademarks (and Trademarks for which United States registration applications are
pending) and United States registered Copyrights has been delivered to the
Collateral Agent for recording by the United States Patent and Trademark Office
and the United States Copyright Office pursuant to 35 U.S.C. §261,
15 U.S.C. §1060 or 17 U.S.C. §205 and the regulations thereunder, as applicable,
and otherwise as may be required pursuant to the laws of any other necessary
jurisdiction, to protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the ratable
benefit of the Secured Parties) in respect of all Article 9 Collateral
consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Article 9 Collateral consisting of
Patents, Trademarks and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid security interest in
all Article 9 Collateral securing the payment and performance of the
Obligations, (ii) subject to the filings described in Section 3.02(b), a
perfected first-priority security interest in all Article 9 Collateral in which
a security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
first-priority security interest that shall be perfected in all Article 9
Collateral in which a security interest may be perfected upon the receipt and
recording of this Agreement (or the IP Security Agreements) with the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable. The Security Interest is and shall be prior to any other Lien on any
of the Article 9 Collateral, other than Liens expressly permitted under Section
6.02 of the Credit Agreement.
(d) The Article 9 Collateral is owned by the Grantors free and clear of any
Lien, except for Liens expressly permitted under Section 6.02 of the Credit
Agreement. No Grantor has filed or consented to the filing of (i) any financing
statement or analogous document under the Uniform Commercial Code or any other
applicable laws covering any Article 9 Collateral, (ii) any assignment in which
any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Article 9 Collateral with the United States Patent and
Trademark Office

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or the United States Copyright Office, (iii) any notice under the Assignment of
Claims Act, or (iv) any assignment in which any Grantor assigns any Article 9
Collateral or any security agreement or similar instrument covering any
Article 9 Collateral with any foreign governmental, municipal or other office,
which financing statement or analogous document, assignment, security agreement
or similar instrument is still in effect, except, in each case, for Liens
expressly permitted under Section 6.02 of the Credit Agreement. No Grantor holds
any Commercial Tort Claims except as indicated on the Perfection Certificate.
SECTION 3.03. Covenants. (a) Each Grantor agrees promptly to notify the
Collateral Agent in writing of any change in (i) its legal name, (ii) its
identity or type of organization or corporate structure, (iii) its Federal
Taxpayer Identification Number or organizational identification number, (iv) its
jurisdiction of organization or (v) in the location of its chief executive
office, its principal place of business, any office in which it maintains books
or records relating to Article 9 Collateral owned by it or any office or
facility at which Article 9 Collateral owned by it is located (including the
establishment of any such new office or facility in respect of any Grantor that
is not a registered organization). Each Grantor agrees promptly to provide the
Collateral Agent with certified organizational documents reflecting any of the
changes described in the first sentence of this paragraph. Each Grantor agrees
not to effect or permit any change referred to in the preceding sentence unless
all filings have been made under the Uniform Commercial Code or otherwise that
are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected first-priority
security interest in all the Article 9 Collateral. Each Grantor agrees promptly
to notify the Collateral Agent if any material portion of the Article 9
Collateral owned or held by such Grantor is damaged or destroyed. Holdings and
the Borrower agree to supplement Schedule IV for any newly created or acquired
“Points Based Resort” within 10 business days of such creation or acquisition by
delivering to the Collateral Agent a certificate executed by a Responsible
Officer of Holdings or the Borrower that designates such Resort as a Resort at
which holders of Points Based Time Share Interests are entitled to reserve the
use and occupancy of residential accommodations.
(a) Each Grantor agrees to maintain, at its own cost and expense, such complete
and accurate records with respect to the Article 9 Collateral owned by it as is
consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received with respect to
any part of the Article 9 Collateral, and, at such time or times as the
Collateral Agent may request, promptly to prepare and deliver to the Collateral
Agent a duly certified schedule or schedules in form and detail satisfactory to
the Collateral Agent showing the identity, amount and location of any and all
Article 9 Collateral.
(b) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to Section 5.04(a) of the Credit
Agreement, the Borrower shall deliver to the Collateral Agent (i) a certificate
executed by a Responsible Officer of each of Holdings and the Borrower setting
forth the information required pursuant

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to the Perfection Certificate or confirming that there has been no change in
such information since the date of such certificate or the date of the most
recent certificate delivered pursuant to this Section 3.03(c) and (ii) a
certificate executed by a Responsible Officer of each of Holdings and the
Borrower certifying that all Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations, including all refilings, re-recordings and
re-registrations, containing a description of the Article 9 Collateral have been
filed of record in each governmental, municipal or other appropriate office in
each jurisdiction identified pursuant to clause (a) of this Section 3.03 to the
extent necessary to protect and perfect the Security Interest for a period of
not less than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period). Each certificate delivered pursuant to this Section 3.03(c) shall
identify in the format of Schedule V all Intellectual Property of any Grantor in
existence on the date thereof and not then listed on such Schedules or
previously so identified to the Collateral Agent.
(c) Each Grantor shall, at its own expense, take any and all actions necessary
to defend title to the Article 9 Collateral against all Persons and to defend
the Security Interest of the Collateral Agent in the Article 9 Collateral and
the priority thereof against any Lien not expressly permitted under Section 6.02
of the Credit Agreement.
(d) Each Grantor agrees, at its own expense, promptly to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Collateral Agent may from time to time
reasonably request to better assure, obtain, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the
payment of any fees and Taxes required in connection with the execution and
delivery of this Agreement, the granting of the Security Interest and the filing
of any financing or continuation statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable to any
Grantor under or in connection with any of the Article 9 Collateral shall be or
become evidenced by any promissory note or other instrument, such note or
instrument shall be promptly pledged and delivered to the Collateral Agent, duly
endorsed in a manner satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby authorizes
the Collateral Agent, with prior notice thereof to the Grantors, to supplement
this Agreement by supplementing Schedule V or adding additional schedules hereto
to identify specifically any asset or item of a Grantor that may, in the
Collateral Agent’s reasonable judgment (in consultation with counsel),
constitute Copyrights, Licenses, Patents or Trademarks; provided that any
Grantor shall have the right, exercisable within 10 days after it has been
notified by the Collateral Agent of the specific identification of such
Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Collateral. Each Grantor agrees that it will use its best efforts to take
such action as shall be necessary in order that all representations and
warranties hereunder shall be true and correct with respect to such

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Collateral within 30 days after the date it has been notified by the Collateral
Agent of the specific identification of such Collateral.
(e) The Collateral Agent and such Persons as the Collateral Agent may designate
shall have the right, at the applicable Grantor’s own cost and expense, to
inspect the Article 9 Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Article 9 Collateral is located, to discuss the applicable Grantor’s affairs
with the officers of such Grantor and its independent accountants and to verify
the existence, validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Article 9 Collateral, including, if an
Event of Default has occurred and is continuing, in the case of Accounts or
other Article 9 Collateral in the possession of any third party, by contacting
Account Debtors or the third party possessing such Article 9 Collateral for the
purpose of making such a verification. The Collateral Agent shall have the
absolute right to share any information it gains from such inspection or
verification with any Secured Party.
(f) At its option, the Collateral Agent may discharge past due Taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Article 9 Collateral and not expressly
permitted pursuant to Section 5.03 or 6.02 of the Credit Agreement, and may pay
for the maintenance and preservation of the Article 9 Collateral to the extent
any Grantor fails to do so as required by the Credit Agreement or this
Agreement, and each Grantor jointly and severally agrees to reimburse the
Collateral Agent on demand for any payment made or any expense incurred by the
Collateral Agent pursuant to the foregoing authorization, and the Collateral
Agent agrees to notify the applicable Grantor within 10 Business Days following
any such discharge or payment (provided that the failure to give such notice
shall not affect the Collateral Agent’s rights hereunder, including its right to
reimbursement for such expenses pursuant to this clause (g)); provided, however,
that nothing in this paragraph shall be interpreted as excusing any Grantor from
the performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any Grantor
with respect to Taxes, assessments, charges, fees, Liens, security interests or
other encumbrances and maintenance as set forth herein or in the other Loan
Documents.
(g) If at any time any Grantor shall take a security interest in any property of
an Account Debtor or any other Person to secure payment and performance of an
Account, such Grantor shall promptly assign such security interest to the
Collateral Agent for the ratable benefit of the Secured Parties. Such assignment
need not be filed of public record unless necessary to continue the perfected
status of the security interest against creditors of and transferees from the
Account Debtor or other Person granting the security interest.
(h) Each Grantor shall remain liable to observe and perform all the conditions
and obligations to be observed and performed by it under each contract,
agreement or instrument relating to the Article 9 Collateral, all in accordance
with the terms and conditions thereof, and each Grantor jointly and severally
agrees to indemnify and hold harmless the

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Collateral Agent and the Secured Parties from and against any and all liability
for such performance.
(i) No Grantor shall make or permit to be made an assignment, pledge or
hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral or permit any notice to be filed under the
Assignment of Claims Act, except, in each case, as expressly permitted under
Section 6.02 of the Credit Agreement. No Grantor shall make or permit to be made
any transfer of the Article 9 Collateral and each Grantor shall remain at all
times in possession or otherwise in control of the Article 9 Collateral owned by
it, except as permitted by the Credit Agreement.
(j) Except as specifically permitted under the Credit Agreement, no Grantor will
grant any extension of the time of payment of any Accounts included in the
Article 9 Collateral, compromise, compound or settle the same for less than the
full amount thereof, release, wholly or partly, any Person liable for the
payment thereof or allow any credit or discount whatsoever thereon, other than
extensions, credits, discounts, compromises, compoundings or settlements granted
or made in the ordinary course of business and consistent with its current
practices and in accordance with such prudent and standard practice used in
industries that are the same as or similar to those in which such Grantor is
engaged.
(k) Each Grantor, at its own expense, shall maintain or cause to be maintained
insurance covering physical loss or damage to the Inventory and Equipment in
accordance with the requirements set forth in the Credit Agreement. Each Grantor
irrevocably makes, constitutes and appoints the Collateral Agent (and all
officers, employees or agents designated by the Collateral Agent) as such
Grantor’s true and lawful agent (and attorney‑in‑fact) for the purpose, upon the
occurrence and during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of Article 9 Collateral under policies
of insurance, endorsing the name of such Grantor on any check, draft, instrument
or other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or under the Credit Agreement or to pay
any premium in whole or part relating thereto, the Collateral Agent may, without
waiving or releasing any obligation or liability of any Grantor hereunder or any
Default or Event of Default, in its sole discretion, obtain and maintain such
policies of insurance and pay such premium and take any other actions with
respect thereto as the Collateral Agent deems advisable. All sums disbursed by
the Collateral Agent in connection with this paragraph, including attorneys’
fees, court costs, expenses and other charges relating thereto, shall be
payable, upon demand, by the Grantors to the Collateral Agent and shall be
additional Obligations secured hereby.
(l) Each Grantor shall maintain, in form and manner satisfactory to the
Collateral Agent, records of its Chattel Paper and its books, records and
documents evidencing or pertaining thereto.

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SECTION 3.04. Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest in the Article 9 Collateral, each Grantor agrees, in each
case at such Grantor’s own expense, to take the following actions with respect
to the following Article 9 Collateral:
(a) Instruments. If any Grantor shall at any time hold or acquire any
Instruments, such Grantor shall forthwith endorse, assign and deliver the same
to the Collateral Agent, accompanied by such undated instruments of endorsement,
transfer or assignment duly executed in blank as the Collateral Agent may from
time to time specify.
(b) Deposit Accounts. For each Deposit Account (other than Excluded Accounts)
that any Grantor at any time opens or maintains that has a balance in excess of
$100,000, such Grantor shall promptly notify the Collateral Agent thereof and,
upon the Collateral Agent’s request, either (i) cause the depositary bank to
agree to comply at any time with instructions from the Collateral Agent to such
depositary bank directing the disposition of funds from time to time credited to
such Deposit Account, without further consent of such Grantor or any other
Person, pursuant to an agreement in form and substance satisfactory to the
Collateral Agent, or (ii) arrange for the Collateral Agent to become the
customer of the depositary bank with respect to the Deposit Account, with the
Grantor being permitted, only with the consent of the Collateral Agent, to
exercise rights to withdraw funds from such Deposit Account. The Collateral
Agent agrees with each Grantor that the Collateral Agent shall not give any such
instructions or withhold any withdrawal rights from any Grantor, unless an Event
of Default has occurred and is continuing, or, after giving effect to any
withdrawal, would occur. The provisions of this paragraph shall not apply to any
Deposit Account for which any Grantor, the depositary bank and the Collateral
Agent have entered into a cash collateral agreement specially negotiated among
such Grantor, the depositary bank and the Collateral Agent for the specific
purpose set forth therein.
(c) Investment Property. Except to the extent otherwise provided in Article II,
if any Grantor shall at any time hold or acquire any certificated securities,
such Grantor shall forthwith endorse, assign and deliver the same to the
Collateral Agent, accompanied by such undated instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time to time
specify. If any securities now or hereafter acquired by any Grantor are
uncertificated and are issued to such Grantor or its nominee directly by the
issuer thereof, such Grantor shall promptly notify the Collateral Agent thereof
and, at the Collateral Agent’s request and option, pursuant to an agreement in
form and substance satisfactory to the Collateral Agent, either (i) cause the
issuer to agree to comply with instructions from the Collateral Agent as to such
securities, without further consent of any Grantor or such nominee, or
(ii) arrange for the Collateral Agent to become the registered owner of the
securities. If any securities, whether certificated or uncertificated, or other
Investment Property now or hereafter acquired by any Grantor are held by such

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Grantor or its nominee through a Securities Intermediary or Commodity
Intermediary, such Grantor shall promptly notify the Collateral Agent thereof
and, at the Collateral Agent’s request and option, pursuant to an agreement in
form and substance satisfactory to the Collateral Agent, either (i) cause such
Securities Intermediary or Commodity Intermediary, as the case may be, to agree
to comply with Entitlement Orders from the Collateral Agent to such Securities
Intermediary as to such securities or other Investment Property, or (as the case
may be) to apply any value distributed on account of any commodity contract as
directed by the Collateral Agent to such Commodity Intermediary, in each case
without further consent of any Grantor or such nominee, or (ii) in the case of
Financial Assets (as governed by Article 8 of the New York UCC) or other
Investment Property held through a Securities Intermediary, arrange for the
Collateral Agent to become the Entitlement Holder with respect to such
Investment Property, with the Grantor being permitted, only with the consent of
the Collateral Agent, to exercise rights to withdraw or otherwise deal with such
Investment Property. The Collateral Agent agrees with each Grantor that the
Collateral Agent shall not give any such Entitlement Orders or instructions or
directions to any such issuer, Securities Intermediary or Commodity
Intermediary, and shall not withhold its consent to the exercise of any
withdrawal or dealing rights by any Grantor, unless an Event of Default has
occurred and is continuing, or, after giving effect to any such investment and
withdrawal rights would occur. The provisions of this paragraph shall not apply
to any Financial Assets credited to a Securities Account for which the
Collateral Agent is the Securities Intermediary.
(d) Electronic Chattel Paper and Transferable Records. If any Grantor at any
time holds or acquires an interest in any Electronic Chattel Paper or any
“transferable record”, as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify the Collateral Agent thereof
and, at the request of the Collateral Agent, shall take such action as the
Collateral Agent may request to vest in the Collateral Agent control under
New York UCC Section 9‑105 of such Electronic Chattel Paper or control under
Section 201 of the Federal Electronic Signatures in Global and National Commerce
Act or, as the case may be, Section 16 of the Uniform Electronic Transactions
Act, as so in effect in such jurisdiction, of such transferable record. The
Collateral Agent agrees with such Grantor that the Collateral Agent will
arrange, pursuant to procedures satisfactory to the Collateral Agent and so long
as such procedures will not result in the Collateral Agent’s loss of control,
for the Grantor to make alterations to the Electronic Chattel Paper or
transferable record permitted under UCC Section 9‑105 or, as the case may be,
Section 201 of the Federal Electronic Signatures in Global and National Commerce
Act or Section 16 of the Uniform Electronic Transactions Act for a party in
control to allow without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by such Grantor with respect to such Electronic Chattel Paper or transferable
record.

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(e) Letter-of-Credit Rights. If any Grantor is at any time a beneficiary under a
letter of credit now or hereafter issued in favor of such Grantor, such Grantor
shall promptly notify the Collateral Agent thereof and, at the request and
option of the Collateral Agent, such Grantor shall, pursuant to an agreement in
form and substance satisfactory to the Collateral Agent, either (i) arrange for
the issuer and any confirmer of such letter of credit to consent to an
assignment to the Collateral Agent of the proceeds of any drawing under the
letter of credit or (ii) arrange for the Collateral Agent to become the
transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be paid to the applicable Grantor unless an Event of Default has
occurred or is continuing.
(f) Commercial Tort Claims. If any Grantor shall at any time hold or acquire a
Commercial Tort Claim in an amount reasonably estimated to exceed $500,000, the
Grantor shall promptly notify the Collateral Agent thereof in a writing signed
by such Grantor including a summary description of such claim and grant to the
Collateral Agent, for the ratable benefit of the Secured Parties, in such
writing a security interest therein and in the proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
satisfactory to the Collateral Agent.
SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright Collateral.
(a) Each Grantor agrees that it will not, and will not permit any of its
licensees to, do any act, or omit to do any act, whereby any Patent that is
material to the conduct of such Grantor’s business may become invalidated or
dedicated to the public, and agrees that it shall continue to mark any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.
(a) Each Grantor (either itself or through its licensees or its sublicensees)
will, for each Trademark material to the conduct of such Grantor’s business,
(i) maintain such Trademark in full force free from any claim of abandonment or
invalidity for non‑use, (ii) maintain the quality of products and services
offered under such Trademark, (iii) display such Trademark with notice of
Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
(b) Each Grantor (either itself or through its licensees or sublicensees) will,
for each work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws.
(c) Each Grantor shall notify the Collateral Agent promptly if it knows or has
reason to know that any Patent, Trademark or Copyright material to the conduct
of its business may become abandoned, lost or dedicated to the public, or of any
adverse

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determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office
of any country) regarding such Grantor’s ownership of any Patent, Trademark or
Copyright, its right to register the same, or its right to keep and maintain the
same.
(d) In no event shall any Grantor, either itself or through any agent, employee,
licensee or designee, file an application for any Patent, Trademark or Copyright
(or for the registration of any Trademark or Copyright) with the United States
Patent and Trademark Office, United States Copyright Office or any office or
agency in any political subdivision of the United States or in any other country
or any political subdivision thereof, unless it promptly (and in any event
within 10 days after any such filing) notifies the Collateral Agent, and, upon
request of the Collateral Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Collateral Agent may request to
evidence the Security Interest in such Patent, Trademark or Copyright, and each
Grantor hereby appoints the Collateral Agent as its attorney‑in‑fact to execute
and file such writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an interest,
is irrevocable.
(e) Each Grantor will take all reasonably necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor’s business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.
(f) In the event that any Grantor has actual knowledge that any Article 9
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor’s business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly sue for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Article 9 Collateral.
(g) Upon the occurrence and during the continuance of an Event of Default, each
Grantor shall use its best efforts to obtain all requisite consents or approvals
by the licensor of each Copyright License, Patent License or Trademark License,
and each other material License, to effect the assignment of all such Grantor’s
right, title and interest

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thereunder to the Collateral Agent, for the ratable benefit of the Secured
Parties, or its designee.
ARTICLE IV

Remedies
SECTION 4.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Grantor to the Collateral Agent, or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Collateral Agent
shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained), and (b) with or
without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to enter any premises where the Article 9 Collateral may
be located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker’s board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and appraisal
which such Grantor now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.
The Collateral Agent shall give each applicable Grantor 10 days’ written notice
(which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of
the Collateral Agent’s intention to make any sale of Collateral. Such notice, in
the case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker’s board or on a securities exchange, shall state
the board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or

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exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Agreement, any Secured Party may bid for or purchase, free (to the extent
permitted by applicable law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by applicable law), the Collateral or any
part thereof offered for sale and may make payment on account thereof by using
any claim then due and payable to such Secured Party from any Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section 4.01 shall be deemed to conform to the commercially
reasonable standards as provided in Section 9-610(b) of the New York UCC or its
equivalent in other jurisdictions.
SECTION 4.02. Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection, sale, foreclosure or other realization upon any
Collateral, including any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by, and indemnities
then owing to, the Collateral Agent or the Administrative Agent (in their
respective capacities as such hereunder or under any other Loan Document) in
connection with such collection, sale, foreclosure or realization or otherwise
in connection with this Agreement, any other Loan Document or any of the
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costs and the fees and expenses of its agents and legal counsel, the repayment
of all advances made by the Collateral Agent and/or the Administrative Agent
hereunder or under any other Loan Document on behalf of any Grantor and any
other costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of Unfunded Advances owed to the Administrative
Agent;
THIRD, to the payment in full of all other Obligations (the amounts so applied
to be distributed among the Secured Parties pro rata in accordance with the
amounts of the Obligations owed to them on the date of any such distribution);
and
FOURTH, to the extent of the balance of such proceeds after application in
accordance with the foregoing, to the Grantors, their successors or assigns, or
as a court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 4.03. Grant of License to Use Intellectual Property. For the purpose of
enabling the Collateral Agent to exercise rights and remedies under this
Agreement at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants (other than in
violation of any then-existing licensing arrangements to the extent that waivers
cannot be obtained) to the Collateral Agent an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to the Grantors),
to use, license or sublicense any of the Article 9 Collateral consisting of
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof. The
use of such license by the Collateral Agent may be exercised, at the option of
the Collateral Agent, only upon the occurrence and during the continuation of an
Event of Default; provided, however, that any license, sublicense or other
transaction entered into by the Collateral Agent after the occurrence of an
Event of Default shall be binding upon each Grantor notwithstanding any
subsequent cure of an Event of Default.
SECTION 4.04. Securities Act, Etc. In view of the position of the Grantors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the U.S. Securities Act of 1933, as
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any similar statute hereafter enacted analogous in purpose or effect (such Act
and any such similar statute as from time to time in effect being called the
“Federal Securities Laws”) with respect to any disposition of the Pledged
Collateral permitted hereunder. Each Grantor understands that compliance with
the Federal Securities Laws might very strictly limit the course of conduct of
the Collateral Agent if the Collateral Agent were to attempt to dispose of all
or any part of the Pledged Collateral, and might also limit the extent to which
or the manner in which any subsequent transferee of any Pledged Collateral could
dispose of the same. Similarly, there may be other legal restrictions or
limitations affecting the Collateral Agent in any attempt to dispose of all or
part of the Pledged Collateral under applicable “blue sky” or other state
securities laws or similar laws analogous in purpose or effect. Each Grantor
recognizes that in light of such restrictions and limitations the Collateral
Agent may, with respect to any sale of the Pledged Collateral, limit the
purchasers to those who will agree, among other things, to acquire such Pledged
Collateral for their own account, for investment, and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that in
light of such restrictions and limitations, the Collateral Agent, in its sole
and absolute discretion (a) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such Pledged Collateral or
part thereof shall have been filed under the Federal Securities Laws and (b) may
approach and negotiate with a limited number of potential purchasers (including
a single potential purchaser) to effect such sale. Each Grantor acknowledges and
agrees that any such sale might result in prices and other terms less favorable
to the seller than if such sale were a public sale without such restrictions. In
the event of any such sale, the Collateral Agent shall incur no responsibility
or liability for selling all or any part of the Pledged Collateral at a price
that the Collateral Agent, in its sole and absolute discretion, may in good
faith deem reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a limited number
of purchasers (or a single purchaser) were approached. The provisions of this
Section 4.04 will apply notwithstanding the existence of a public or private
market upon which the quotations or sales prices may exceed substantially the
price at which the Collateral Agent sells.
SECTION 4.05. Registration. Each Grantor agrees that, upon the occurrence and
during the continuance of an Event of Default, if for any reason the Collateral
Agent desires to sell any of the Pledged Collateral at a public sale, it will,
at any time and from time to time, upon the written request of the Collateral
Agent, use its best efforts to take or to cause the issuer of such Pledged
Collateral to take such action and prepare, distribute and/or file such
documents, as are required or advisable in the reasonable opinion of counsel for
the Collateral Agent to permit the public sale of such Pledged Collateral. Each
Grantor further agrees to indemnify, defend and hold harmless the Collateral
Agent, each other Secured Party, any underwriter and their respective affiliates
and their respective officers, directors, affiliates and controlling Persons
from and against all loss, liability, expenses, costs of counsel (including
reasonable fees and expenses to the Collateral Agent of legal counsel), and
claims (including the costs of investigation) that they may incur insofar as
such loss, liability, expense or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in any prospectus (or any
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thereto) or in any notification or offering circular, or arises out of or is
based upon any alleged omission to state a material fact required to be stated
therein or necessary to make the statements in any thereof not misleading,
except insofar as the same may have been caused by any untrue statement or
omission based upon information furnished in writing to such Grantor or the
issuer of such Pledged Collateral by the Collateral Agent or any other Secured
Party expressly for use therein. Each Grantor further agrees, upon such written
request referred to above, to use its best efforts to qualify, file or register,
or cause the issuer of such Pledged Collateral to qualify, file or register, any
of the Pledged Collateral under the Blue Sky or other securities laws of such
states as may be requested by the Collateral Agent and keep effective, or cause
to be kept effective, all such qualifications, filings or registrations. Each
Grantor will bear all costs and expenses of carrying out its obligations under
this Section 4.05. Each Grantor acknowledges that there is no adequate remedy at
law for failure by it to comply with the provisions of this Section 4.05 and
that such failure would not be adequately compensable in damages, and therefore
agrees that its agreements contained in this Section 4.05 may be specifically
enforced.
SECTION 4.06. Disposition of Collateral. In the event of a foreclosure by the
Collateral Agent on any of the Collateral pursuant to a public or private sale
or other disposition, the Collateral Agent or any Secured Party may be the
purchaser or licensor of any or all of such Collateral at any such sale or other
disposition, and the Collateral Agent, as agent for and representative of the
Secured Parties shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any Collateral payable by the
Collateral Agent on behalf of the Secured Parties at such sale or other
disposition. Each Secured Party, whether or not a party hereto, will be deemed,
by its acceptance of the benefits of the Collateral and of the Guarantees of the
Obligations provided under the Loan Documents, to have agreed to the foregoing
provisions.
ARTICLE V

Indemnity, Subrogation and Subordination
SECTION 5.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Grantors may have under applicable law (but
subject to Section 5.03), the Borrower agrees that in the event any assets of
Holdings or any Subsidiary Grantor shall be sold pursuant to this Agreement or
any other Security Document to satisfy in whole or in part a claim of any
Secured Party, the Borrower shall indemnify Holdings or such Subsidiary Grantor,
as applicable, in an amount equal to the greater of the book value or the fair
market value of the assets so sold.
SECTION 5.02. Contribution and Subrogation. Each Grantor (other than the
Borrower) (a “Contributing Grantor”) agrees (subject to Section 5.03) that, in
the event assets of any other Grantor (other than the Borrower) shall be sold
pursuant to any Security Document to satisfy any Obligation owed to any Secured
Party, and such other Grantor (the “Claiming Grantor”) shall not have been fully
indemnified by the Borrower as provided in

I-34

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Section 5.01, the Contributing Grantor shall indemnify the Claiming Grantor in
an amount equal to the greater of the book value or the fair market value of
such assets, as the case may be, in each case multiplied by a fraction of which
the numerator shall be the net worth of the Contributing Grantor on the date
hereof and the denominator shall be the aggregate net worth of all the Grantors
(other than the Borrower) on the date hereof (or, in the case of any Subsidiary
Grantor becoming a party hereto pursuant to Section 6.16, the date of the
supplement hereto executed and delivered by such Subsidiary Grantor). Any
Contributing Grantor making any payment to a Claiming Grantor pursuant to this
Section 5.02 shall (subject to Section 5.03) be subrogated to the rights of such
Claiming Grantor under Section 5.01 to the extent of such payment.
SECTION 5.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of Holdings and the Subsidiary Grantors under
Sections 5.01 and 5.02 and all other rights of Holdings and the Subsidiary
Grantors of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations. No failure on the part of the Borrower or any other
Grantor to make the payments required by Sections 5.01 and 5.02 (or any other
payments required under applicable law or otherwise) shall in any respect limit
the obligations and liabilities of Holdings or any Subsidiary Grantor with
respect to its obligations hereunder, and each of Holdings and each Subsidiary
Grantor shall remain liable for the full amount of its obligations hereunder.
(a) Each Grantor hereby agrees that all Indebtedness and other monetary
obligations owed by it to, or to it by, any other Grantor or any other
Subsidiary shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations; provided that, as long as no Event of Default shall
have occurred and be continuing and until notice to the contrary shall have been
received by any Grantor from the Collateral Agent (except when an Event of
Default described in clause (g) or (h) of Article VII of the Credit Agreement
has occurred and is continuing in which case no such notice shall be required),
nothing in this Section 5.03(b) shall prohibit any payments or distributions
permitted by the Credit Agreement.
ARTICLE VI

Miscellaneous
SECTION 6.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement. All communications and notices hereunder
to any Grantor shall be given to it in care of Holdings as provided in
Section 9.01 of the Credit Agreement.
SECTION 6.02. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a first-priority security
interest in the Pledged Collateral and all obligations of each Grantor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit

I-35

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Agreement, any other Loan Document, any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to the foregoing, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.
SECTION 6.03. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Grantors in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Secured Parties and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any Secured Party or on its behalf and notwithstanding
that the Collateral Agent or any other Secured Party may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended pursuant to the Credit Agreement, and shall continue in full
force and effect as long as the principal of or any accrued interest on any
Loan, any fee or any other amount payable under any Loan Document is outstanding
and unpaid and so long as the Commitments have not expired or been terminated.
SECTION 6.04. Binding Effect; Several Agreement. This Agreement shall become
effective as to any Grantor when a counterpart hereof executed on behalf of such
Grantor shall have been delivered to the Collateral Agent and a counterpart
hereof shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such Grantor and the Collateral Agent and their
respective permitted successors and assigns, and shall inure to the benefit of
such Grantor, the Collateral Agent and the other Secured Parties and their
respective successors and assigns, except that no Grantor shall have the right
to assign or transfer its rights or obligations hereunder or any interest herein
or in the Collateral (and any such assignment or transfer shall be void) except
as expressly contemplated or permitted by this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or
released with respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor hereunder.
SECTION 6.05. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

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SECTION 6.06. Collateral Agent’s Fees and Expenses; Indemnification. (a) Each
Grantor jointly and severally agrees to pay all reasonable out‑of‑pocket
expenses incurred by the Collateral Agent and reimburse the Collateral Agent’s
other expenses incurred hereunder as provided in Section 9.05 of the Credit
Agreement, including the reasonable fees, charges and disbursements of its
counsel, in connection with (i) the preparation, execution, delivery and
administration of this Agreement and any other Security Document, (ii) the
custody and preservation of, or the sale of, collection from or other
realization upon any of the Collateral, (iii) the exercise, enforcement or
protection of any of the rights of the Collateral Agent hereunder or under any
Security Document or (iv) the failure of any Grantor to perform or observe any
of the provisions hereof.
(a) Without limitation of its indemnification obligations under the other Loan
Documents, each Grantor jointly and severally agrees to indemnify the Collateral
Agent, the other Secured Parties and each Related Party of any of the Secured
Parties against, and hold the Collateral Agent, each other Secured Party and
each Related Party of any of the foregoing harmless from, any and all losses,
claims, damages, liabilities, and related expenses, including the reasonable
fees, charges and disbursements of any counsel for any Secured Party and its
Related Parties, incurred by or asserted against any Secured Party or its
Related Parties arising out of, in any way connected with, or as a result of,
the execution, delivery or performance of this Agreement or any agreement or
instrument contemplated hereby or any claim, litigation, investigation or
proceeding relating to any of the foregoing or to the Collateral, regardless of
whether any Secured Party or any of its Related Parties is a party thereto or
whether initiated by a third party or by a Grantor or any Affiliate thereof;
provided, however, that such indemnity shall not, as to any Secured Party or any
of its Related Parties, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the bad
faith, gross negligence or wilful misconduct of such Secured Party or such
Related Party. To the extent permitted by applicable law, no Grantor shall
assert, and each Grantor hereby waives any claim against any Secured Party and
its Related Parties, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement any other
Loan Document, or any agreement or instrument contemplated hereby or thereby,
the Transactions, any Loans or the use of proceeds thereof.
(b) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 6.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 6.06 shall be payable on written demand therefor and shall bear
interest at the rate specified in Section 2.06(a) of the Credit Agreement.

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SECTION 6.07. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby
appoints the Collateral Agent as the attorney-in-fact of such Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent’s name or in the name of such Grantor (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof, (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral, (c) to sign the
name of any Grantor on any invoice or bill of lading relating to any of the
Collateral, (d) to send verifications of Accounts Receivable to any Account
Debtor, (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral, (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral,
(g) to notify, or to require any Grantor to notify, Account Debtors to make
payment directly to the Collateral Agent, and (h) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral (including completing any stock powers or other
instruments of transfer delivered pursuant to Section 2.02(c)), and to do all
other acts and things necessary to carry out the purposes of this Agreement in
accordance with its terms, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; provided,
however, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct, as determined by a court of competent
jurisdiction in a final and nonappealable judgment. Upon termination of this
Agreement, the Collateral Agent’s rights as attorney-in-fact shall terminate.
SECTION 6.08. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6.09. Waivers; Amendment. (a) No failure or delay by the Collateral
Agent or any other Secured Party in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver hereof or thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or

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the exercise of any other right or power. The rights and remedies of the
Collateral Agent and the other Secured Parties hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of any Loan Document
or consent to any departure by any Grantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section 6.09, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan under the Credit Agreement
shall not be construed as a waiver of any Default or Event of Default,
regardless of whether the Collateral Agent or any other Secured Party may have
had notice or knowledge of such Default or Event of Default at the time. No
notice or demand on any Grantor in any case shall entitle any Grantor any other
or further notice or demand in similar or other circumstances.
(a) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Grantor or Grantors with respect to which such
waiver, amendment or modification is to apply, subject to any consent required
in accordance with Section 9.08 of the Credit Agreement. Each of Holdings and
the Borrower agrees that it shall not permit any amendment or modification of
the Credit Agreement if the effect of such amendment or modification would
adversely affect in any material respect the rights, duties, liabilities or
immunities of the Collateral Agent under any Loan Document to which it is a
party.
SECTION 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.
SECTION 6.11. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

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SECTION 6.12. Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 6.04.
Delivery of an executed signature page to this Agreement by facsimile
transmission or electronic means shall be as effective as delivery of a manually
signed counterpart of this Agreement.
SECTION 6.13. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 6.14. Jurisdiction; Consent to Service of Process. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of any New York State court or Federal court of the
United States of America, sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each Grantor hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each Grantor 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 or any other Loan Document shall affect any right that the Collateral
Agent or any other Secured Party may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Grantor or its properties in the courts of any jurisdiction.
(a) Each Grantor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (a) of this Section 6.14. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(b) Each Grantor hereby irrevocably consents to service of process in the manner
provided for notices in Section 6.01. Nothing in this Agreement or any other
Loan Document will affect the right of the Collateral Agent to serve process in
any other manner permitted by law.
SECTION 6.15. Termination or Release. (a) This Agreement, the Security Interest,
the pledge of the Pledged Collateral and all other security interests granted
hereby shall terminate when all the Obligations (other than contingent
indemnification obligations as to which no claim has been made) have been
indefeasibly paid in full and the Lenders have no further commitment to lend
under the Credit Agreement.

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(a) A Subsidiary Grantor shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such Subsidiary Grantor
shall be automatically released upon the consummation of any transaction
permitted by the Credit Agreement as a result of which such Subsidiary Grantor
ceases to be a Subsidiary.
(b) Upon (i) any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement to any Person that is not a Grantor or
(ii) the effectiveness of any written consent to the release of the Security
Interest granted hereby in any Collateral pursuant to Section 9.08 of the Credit
Agreement, the Security Interest in such Collateral shall be automatically
released.
(c) In connection with any termination or release pursuant to paragraph (a), (b)
or (c) above, the Collateral Agent shall promptly execute and deliver to any
Grantor, at such Grantor’s expense, all Uniform Commercial Code termination
statements and similar documents that such Grantor shall reasonably request to
evidence such termination or release. Any execution and delivery of documents
pursuant to this Section 6.15 shall be without recourse to or representation or
warranty by the Collateral Agent or any Secured Party. Without limiting the
provisions of Section 6.06, the Borrower shall reimburse the Collateral Agent
upon demand for all costs and out of pocket expenses, including the fees,
charges and expenses of counsel, incurred by it in connection with any action
contemplated by this Section 6.15.
SECTION 6.16. Additional Subsidiaries. Any Subsidiary that is required to become
a Subsidiary Grantor pursuant to Section 5.10 of the Credit Agreement shall
enter into this Agreement as a Subsidiary Grantor within the time period
specified in Section 5.10 of the Credit Agreement. Upon execution and delivery
by the Collateral Agent and such Subsidiary of a supplement in the form of
Exhibit A hereto (a “Supplement”), such Subsidiary shall become a Grantor
hereunder with the same force and effect as if originally named as a Grantor
herein. The execution and delivery of any Supplement shall not require the
consent of any other Grantor hereunder. The rights and obligations of each
Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor as a party to this Agreement.
SECTION 6.17. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Secured Party is hereby authorized at any time and from time to
time, except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Secured Party to or for
the credit or the account of any Grantor against any of and all the obligations
of such Grantor now or hereafter existing under this Agreement and other Loan
Documents held by such Secured Party, irrespective of whether or not such
Secured Party shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The rights of each
Secured Party under this Section 6.17 are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party may have.

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SECTION 6.18. Maximum Liability. Notwithstanding anything to the contrary in
this Agreement or any other Loan Document, the maximum liability of each Grantor
under this Agreement and under any other Loan Document shall not exceed an
amount equal to the largest amount that would not render such Grantor’s
obligations hereunder and under any other Loan Document subject to avoidance
under Section 548 of the Bankruptcy Code of the United States or any equivalent
provision of any other Debtor Relief Law.
[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
DIAMOND RESORTS CORPORATION,
by
 
 
 
Name:
 
Title:

DIAMOND RESORTS INTERNATIONAL, INC.,
by
 
 
 
Name:
 
Title:

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[Subsidiary Guarantors]

 
By:
 
 
Name:
 
Title:
 
 
 
Acting on behalf of each of the Subsidiaries set forth above

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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Collateral Agent,
by
 
 
 
Name:
 
Title:

I-45

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Schedule I to the
Security Agreement

SUBSIDIARY GRANTORS
Entity Name
Jurisdiction
of
Organization
 
 
 
 
 
 
 
 

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

Schedule II to the
Security Agreement

PLEDGED EQUITY INTERESTS
CERTIFICATED INTERESTS
Issuer
Jurisdiction of Organization/Formation
Registered
Owner
Percentage
of Equity Interests
Number and
Class of
Equity Interest
Number of
Certificate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

NON-CERTIFICATED INTERESTS
Issuer
Jurisdiction of Organization/Formation
Registered
Owner
Percentage
of Equity Interests
Number and
Class of
Equity Interest
Number of
Certificate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

II-2

SPECIAL PURPOSE SECURITIZATION ENTITIES
Issuer
Jurisdiction of Organization/Formation
Registered
Owner
Percentage
of Equity Interests
Number and
Class of
Equity Interest
Number of
Certificate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

II-3

PLEDGED DEBT SECURITIES
Issuer
Creditor
Principal Amount
Outstanding Amount
Date of Note
Maturity Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Schedule III to the
Security Agreement

EXCLUDED EQUITY INTERESTS

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

Schedule IV to the
Security Agreement

RESORTS

Name of Resort
Location of Sales
Point Based Resort?
If Points Based, Owner of Real Property Rights
 
 
 
 
 
 
 
 
 
 
 
 

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

Schedule V to the
Security Agreement

COPYRIGHTS OWNED BY BORROWER AND SUBSIDIARY GRANTORS
U.S. Copyright Registrations
Title
Reg. No.
Author
 
 
 
 
 
 
 
 
 

Pending U.S. Copyright Applications for Registration
Title
Author
Class
Date Filed
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Copyright Registrations
Country
Title
Reg. No.
Author
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Pending Copyright Applications for Registration
Country
Title
Author
Class
Date Filed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

V-2

COPYRIGHTS OWNED BY HOLDINGS
U.S. Copyright Registrations
Title
Reg. No.
Author
 
 
 
 
 
 
 
 
 

Pending U.S. Copyright Applications for Registration
Title
Author
Class
Date Filed
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Copyright Registrations
Country
Title
Reg. No.
Author
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Pending Copyright Applications for Registration
Country
Title
Author
Class
Date Filed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

V-3

PATENTS OWNED BY BORROWER AND SUBSIDIARY GRANTORS

U.S. Patents
Patent No.
Issue Date
 
 
 
 
 
 

U.S. Patent Applications
Patent Application No.
Filing Date
 
 
 
 
 
 

Non-U.S. Patents
Country
Issue Date
Patent No.
 
 
 
 
 
 
 
 
 

Non-U.S. Patent Applications
Country
Filing Date
Patent Application No.
 
 
 
 
 
 
 
 
 

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

V-4

PATENTS OWNED BY HOLDINGS

U.S. Patents
Patent No.
Issue Date
 
 
 
 
 
 

U.S. Patent Applications
Patent Application No.
Filing Date
 
 
 
 
 
 

Non-U.S. Patents
Country
Issue Date
Patent No.
 
 
 
 
 
 
 
 
 

Non-U.S. Patent Applications
Country
Filing Date
Patent Application No.
 
 
 
 
 
 
 
 
 

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

V-5

TRADEMARK/TRADE NAMES OWNED BY BORROWER AND SUBSIDIARY GRANTORS
U.S. Trademark Registrations
Owner Entity
Mark
Reg. Date
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

U.S. Trademark Applications
Applicant Entity
Mark
Filing Date
Application No.
 
 
 
 
 
 
 
 
 
 
 
 

State Trademark Registrations
State
Mark
Reg. Date
Reg. No.
 
 
 
 
 
 
 
 

Non-U.S. Trademark Registrations
Country
Mark
Reg. Date
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Trademark Applications

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

V-6

Country
Mark
Application Date
Application No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Trade Names
Owner Entity
Country Where Used
Trade Names
 
 
 
 
 
 
 
 
 
 
 
 

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

V-7

TRADEMARK/TRADE NAMES OWNED BY HOLDINGS
U.S. Trademark Registrations

U.S. Trademark Applications

State Trademark Registrations

Non-U.S. Trademark Registrations

Non-U.S. Trademark Applications

Trade Names

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

V-8

LICENSES
Licenses/Sublicenses of Borrower and Subsidiary Grantors as Licensor/Sublicensor
on Date Hereof
A.  Copyrights
U.S. Copyrights
Licensee Name
and Address
Date of License/
Sublicense
Title of
U.S.
Copyright
Author
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Copyrights
Country
Licensee Name
and Address
Date of
License/
Sublicense
Title of
Non-U.S.
Copyrights
Author
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

B.  Patents
U.S. Patents
Licensee Name
and Address
Date of License/
Sublicense
Issue Date
Patent No.
 
 
 
 
 
 
 
 
 
 
 
 

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

V-9

U.S. Patent Applications
Licensee Name
and Address
Date of License/
Sublicense
Date Filed
Application No.
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Patents
Country
Licensee Name
and Address
Date of License/
Sublicense
Issue
Date
Non-U.S.
Patent No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Patent Applications
Country
Licensee Name
and Address
Date of License/
Sublicense
Date
Filed
Application No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

C.  Trademarks
U.S. Trademarks
Licensee Name
and Address
Date of License/
Sublicense
U.S. Mark
Reg. Date
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

V-10

U.S. Trademark Applications

Licensee Name
and Address
Date of License/
Sublicense
U.S. Mark
Date Filed
Application No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Trademarks
Country
Licensee Name
and Address
Date of License/
Sublicense
Non-U.S.
Mark
Reg. Date
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Trademark Applications
Country
Licensee Name
and Address
Date of License/
Sublicense
Non-U.S.
Mark
Date
Filed
Application No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

D.  Others
Licensee Name
and Address
Date of License/
Sublicense
Subject
Matter
 
 
 
 
 
 
 
 
 

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

V-11

LICENSES

Licenses/Sublicenses of Holdings as Licensor/Sublicensor on Date Hereof
A.  Copyrights
U.S. Copyrights
Licensee Name
and Address
Date of License/
Sublicense
Title of
U.S.
Copyright
Author
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Copyrights
Country
Licensee Name
and Address
Date of
License/
Sublicense
Title of
Non-U.S.
Copyrights
Author
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

B.  Patents
U.S. Patents
Licensee Name
and Address
Date of License/
Sublicense
Issue Date
Patent No.
 
 
 
 
 
 
 
 
 
 
 
 

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

V-12

U.S. Patent Applications
Licensee Name
and Address
Date of License/
Sublicense
Date Filed
Application No.
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Patents
Country
Licensee Name
and Address
Date of License/
Sublicense
Issue
Date
Non-U.S.
Patent No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Patent Applications
Country
Licensee Name
and Address
Date of License/
Sublicense
Date
Filed
Application No.
 
 
 
 
 
NONE
 
 
 
 
 
 
 
 
 

C.  Trademarks
U.S. Trademarks
Licensee Name
and Address
Date of License/
Sublicense
U.S. Mark
Reg. Date
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

V-13

U.S. Trademark Applications

Licensee Name
and Address
Date of License/
Sublicense
U.S. Mark
Date Filed
Application No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Trademarks
Country
Licensee Name
and Address
Date of License/
Sublicense
Non-U.S.
Mark
Reg. Date
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Trademark Applications
Country
Licensee Name
and Address
Date of License/
Sublicense
Non-U.S.
Mark
Date
Filed
Application No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

D.  Others
Licensee Name
and Address
Date of License/
Sublicense
Subject
Matter
 
 
 
 
 
 
 
 
 

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

Exhibit A to the
Security Agreement

SUPPLEMENT NO. [●] (this “Supplement”) dated as of [●], 20[●] to the Security
Agreement dated as of _________, 201_ (the “Security Agreement”), among DIAMOND
RESORTS CORPORATION, a Maryland Corporation (the “Borrower”), DIAMOND RESORTS
INTERNATIONAL, INC., a Delaware corporation (“Holdings”), the other Subsidiaries
of Holdings from time to time party thereto (each such Subsidiary individually a
“Subsidiary Grantor” and collectively, the “Subsidiary Grantors”; the Subsidiary
Grantors, the Borrower and Holdings are referred to collectively herein as the
“Grantors”) and CREDIT SUISSE AG, as collateral agent (in such capacity,
together with its successors and assigns, the “Collateral Agent”) for the
Secured Parties (as defined therein).
A. Reference is made to the Credit Agreement dated as of ___________, 201_    
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among the Borrower, Holdings, the lenders from time to time
party thereto (the “Lenders”) and Credit Suisse AG, as administrative agent (in
such capacity, together with its successors and assigns, the “Administrative
Agent”) and Collateral Agent. The Lenders have agreed to extend credit to the
Borrower pursuant to, and upon the terms and subject to the conditions set forth
in, the Credit Agreement.
B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement or the Security
Agreement, as applicable.
C. The Grantors have entered into the Security Agreement in order to induce the
Lenders to make Loans. Section 6.16 of the Security Agreement provides that
additional Subsidiaries of Holdings may become a Subsidiary Grantor under the
Security Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary (the “New Subsidiary”) is executing
this Supplement in accordance with the requirements of the Credit Agreement to
become a Subsidiary Grantor under the Security Agreement in order to induce the
Lenders to make additional Loans and as consideration for Loans previously made.
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 6.16 of the Security Agreement, the New
Subsidiary by its signature below becomes a Grantor under the Security Agreement
with the same force and effect as if originally named therein as a Grantor and
the New Subsidiary hereby (a) agrees to all the terms and provisions of the
Security Agreement applicable to it as a Grantor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct on and as of the date hereof. In furtherance of
the foregoing, the New Subsidiary, as security

I-Ex. A-1

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

A-2

for the payment and performance in full of the Obligations (as defined in the
Security Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, their
successors and assigns, a security interest in and lien on all of the New
Subsidiary’s right, title and interest in and to the Collateral (as defined in
the Security Agreement) of the New Subsidiary. Each reference to a “Grantor” and
a “Subsidiary Grantor” in the Security Agreement shall be deemed to include the
New Subsidiary. The Security Agreement is hereby incorporated herein by
reference.
SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received counterparts of this Supplement that, when taken together, bear
the signatures of the New Subsidiary and the Collateral Agent. Delivery of an
executed signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth
on Schedule I attached hereto is a true and correct schedule of (i) any and all
Equity Interests and Pledged Debt Securities now owned by the New Subsidiary and
(ii) any and all Intellectual Property now owned by the New Subsidiary and (b)
set forth under its signature hereto, is the true and correct legal name of the
New Subsidiary and its jurisdiction of organization.
SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

I-Ex. A-2

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

A-3

SECTION 8. All communications and notices hereunder shall (except as otherwise
expressly permitted by the Security Agreement) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder to the New Subsidiary shall be given to it in care of Holdings as
provided in Section 9.01 of the Credit Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
out-of-pocket expenses in connection with this Supplement, including the fees,
other charges and disbursements of counsel for the Collateral Agent.

I-Ex. A-3

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

A-4

IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
[NAME OF NEW SUBSIDIARY],
by
 
 
 
Name:
 
Title:
 
Address:
 
Legal Name:
 
Jurisdiction of Formation:

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Collateral Agent,
by
 
 
 
Name:
 
Title:

I-Ex. A-4

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

Schedule I to
Supplement No. [●] to the
Security Agreement

Collateral of the New Subsidiary
EQUITY INTERESTS
Issuer
Number of 
Certificate
Registered 
Owner
Number and
Class of 
Equity Interest
Percentage
of Equity Interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

PLEDGED DEBT SECURITIES
Issuer
Principal 
Amount
Date of Note
Maturity Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

INTELLECTUAL PROPERTY

[Follow format of Schedule V to the
Security Agreement.]

I-Ex. A-5

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

EXHIBIT B to the
Security Agreement

FORM OF PERFECTION CERTIFICATE

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

B-1

[FORM OF] CLOSING DATE PERFECTION CERTIFICATE
(Dated as of _________, 201_)
Reference is made to (i) the Credit Agreement dated as of ____________, 201_ (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Diamond Resorts Corporation (the “Borrower”), Diamond Resorts
International, Inc. (“Parent”), the lenders from time to time party thereto (the
“Lenders”) and Credit Suisse AG, as administrative agent and collateral agent
(in such capacities, together with its successors and assigns, the
“Administrative Agent”), (ii) the Guarantee Agreement dated as of _______, 201_
(as amended, supplemented or otherwise modified from time to time, the
“Guarantee”), among the Borrower, Parent, the subsidiaries of Parent from time
to time party thereto (the “Subsidiary Guarantors”) and the Administrative
Agent, and (iii) the Security Agreement dated as of __________, 201_ (as
amended, supplemented or otherwise modified from time to time, the “Security
Agreement”), among the Borrower, Parent, the Subsidiary Guarantors and the
Administrative Agent. Capitalized terms used but not defined herein have the
meanings assigned in the Credit Agreement, the Guarantee or the Security
Agreement, as applicable.

The undersigned hereby certifies to the Administrative Agent and each other
Secured Party as of the Closing Date, as follows:
Names.
Borrower
The exact legal name of the Borrower, as such name appears in its respective
certificate of formation:
Legal Name of Entity
 

Each other legal name the Borrower has had in the past five years, together with
the date of the relevant change: N/A
Except as set forth below, the Borrower has not changed its identity or
corporate structure in any way within the past five years. Changes in identity
or corporate structure would include mergers, consolidations and acquisitions,
as well as any change in the form, nature or jurisdiction of organization. If
any such change has occurred, included below is the information required by the
applicable provisions of Sections 1 and 2 of this certificate as to each
acquiree or constituent party to a merger or consolidation: N/A
All other names (including trade names or similar appellations) used by the
Borrower or any of its divisions or other business units in connection with the
conduct

1

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

B-2

of its business or the ownership of its properties at any time during the past
five years:
Current Legal Name
Trade Names/Assumed Names
 
 

The Organizational Identification Number, if any, issued by the jurisdiction of
formation of the Borrower that is a registered organization:
Legal Name of Entity
Organizational Identification Number
 
 

The Federal Taxpayer Identification Number of the Borrower: [only necessary for
filing in North Dakota and South Dakota]
Legal Name of Entity
Federal Taxpayer Identification Number
 
 

Diamond Resorts Holdings, LLC (“Holdings”) and Diamond Resorts Parent, LLC (“DR
Parent”)
(a) The exact legal name of Holdings and DR Parent, as such name appears in its
respective certificate of formation:
Legal Name of Entity
 
 

(b) Each other legal name Holdings and DR Parent have had in the past five
years, together with the date of the relevant change:
Current Legal Name
Prior legal name
Date of change
 
 
 

(c) Holdings has not changed its identity or corporate structure in any way
within the past five years. Changes in identity or corporate structure would
include mergers, consolidations and acquisitions, as well as any change in the
form, nature or jurisdiction of organization.

2

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

B-3

(d) Except as set forth below, DR Parent has not changed its identity or
corporate structure in any way within the past five years. Changes in identity
or corporate structure would include mergers, consolidations and acquisitions,
as well as any change in the form, nature or jurisdiction of organization. If
any such change has occurred, included below is the information required by the
applicable provisions of Sections 1 and 2 of this certificate as to each acquire
or constituent party to a merger or consolidation:

(e) All other names (including trade names or similar appellations) used by
either Holdings or DR Parent or any of its divisions or other business units in
connection with the conduct of the business of either Holdings or DR Parent or
the ownership of the properties of either Holdings or DR Parent at any time
during the past five years:
Current Legal Name
Trade Names/Assumed Names
 
 

(f) The Organizational Identification Number, if any, issued by the jurisdiction
of formation of each of Holdings and DR Parent that is or was a registered
organization:
Legal Name of Entity
Organizational Identification Number
 
 
 
 

(g) The Federal Taxpayer Identification Number of each of Holdings and DR
Parent: [only necessary for filing in North Dakota and South Dakota.]
Legal Name of Entity
Federal Taxpayer Identification Number
 
 

Parent
The exact legal name of Parent, as such name appears in its respective
certificate of incorporation:

3

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

B-4

Legal Name of Entity
 

Each other legal name Parent has had in the past five years, together with the
date of the relevant change:
Current Legal Name
Prior legal name
Date of change
 
 
 

(h) Except as set forth below, Parent has not changed its identity or corporate
structure in any way within the past five years. Changes in identity or
corporate structure would include mergers, consolidations and acquisitions, as
well as any change in the form, nature or jurisdiction of organization. If any
such change has occurred, included below is the information required by the
applicable provisions of Sections 1 and 2 of this certificate as to each
acquiree or constituent party to a merger or consolidation:
Diamond Resorts Parent, LLC merged with and into Diamond Resorts International,
Inc. on or about July 24, 2013.
All other names (including trade names or similar appellations) used by Parent
or any of their divisions or other business units in connection with the conduct
of the business of Parent or the ownership of the properties of Parent at any
time during the past five years:
Current Legal Name
Trade Names/Assumed Names
 
 

The Organizational Identification Number, if any, issued by the jurisdiction of
formation of Parent that is a registered organization:
Legal Name of Entity
Organizational Identification Number
 
 

The Federal Taxpayer Identification Number of Parent: [only necessary for filing
in North Dakota and South Dakota.]
Legal Name of Entity
Federal Taxpayer Identification Number
 
 

4

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

B-5

Subsidiary Guarantors
The exact legal name of each Subsidiary Guarantor (other than Holdings), as such
name appears in its respective certificate of formation or incorporation:
Legal Name of Entity
1.    
2.    
3.    
4.    
5.    
6.    
7.    
8.    
9.    
10.    

Each other legal name each Subsidiary Guarantor (other than Holdings) has had,
together with the date of the relevant change:
Current Legal Name
Prior Legal Name
Date of Change
1.    
 
 
2.    
 
 
3.    
 
 
4.    
 
 
5.    
 
 
6.    
 
 
7.    
 
 
8.    
 
 
9.    
 
 
10.    
 
 

Except as set forth below, no Subsidiary Guarantor (other than Holdings) has
changed its identity or corporate structure in any way within the past five
years. Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of organization. If any such change has occurred, included below is
the information required by the applicable provisions of Sections 1 and 2 of
this certificate as to each acquiree or constituent party to a merger or
consolidation: N/A
All other names (including trade names or similar appellations) used by each
Subsidiary Guarantor (other than Holdings) or any of its divisions or other

5

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

B-6

business units in connection with the conduct of its business or the ownership
of its properties at any time during the past five years:
Current Legal Name
Trade Names/Assumed Names
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The Organizational Identification Number, if any, issued by the jurisdiction of
formation of each Subsidiary Guarantor (other than Holdings) that is a
registered organization:
Legal Name of Entity
Organizational Identification Number
1.    
 
2.    
 
3.    
 
4.    
 
5.    
 
6.    
 
7.    
 
8.    
 
9.    
 
10.    
 

The Federal Taxpayer Identification Number of each Subsidiary Guarantor (other
than Holdings): [only necessary for filing in North Dakota and South Dakota.]

6

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

B-7

Legal Name of Entity
Federal Taxpayer Identification Number
1.    
 
2.    
 
3.    
 
4.    
 
5.    
 
6.    
 
7.    
 
8.    
 
9.    
 
10.    
 

Current Locations.
Borrower
The chief executive office of the Borrower is located at:
Name of Entity
Chief Executive Office
 
 

All locations where the Borrower maintains any books or records relating to any
Accounts Receivable (with each location at which chattel paper, if any, is kept
being indicated by an “*”):

7

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

B-8

Location of Books or Records
Name of Entity
Address of books or records location
County
 
 
 

The jurisdiction of formation of the Borrower that is a registered organization:
Name of Entity
Jurisdiction of Organization
 
 

All locations where the Borrower maintains any Equipment or other Collateral:
None.
All the places of business of the Borrower not identified in paragraph (i),
(ii), (iii) or (iv) above: None.

All names and addresses of all Persons other than the Borrower that have
possession of any of the Collateral of the Borrower:
Name
Address
Collateral
 
 
 

Holdings and Parent
The chief executive office of each of Holdings and Parent is located at:
Name of Entity
Chief Executive Office
 
 
 
 

All locations where each of Holdings and Parent maintains any books or records
relating to any Accounts Receivable (with each location at which chattel paper,
if any, is kept being indicated by an “*”):
Location of Books or Records
Name of Entity
Address of books or records location
County
 
 
 
 
 
 

8

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

B-9

The jurisdiction of formation of each of Holdings and Parent that is a
registered organization:
Name of Entity
Jurisdiction of Organization
 
 
 
 

All locations where each of Holdings and Parent maintains any Equipment or other
Collateral are set forth:
Location of Collateral
Name of Entity
Address of collateral location
County
 
 
 
 
 
 

All the places of business of each of Holdings and Parent not identified in
paragraph (i), (ii), (iii) or (iv) above:
Name of Entity
Location of business
 
 

All names and addresses of all Persons, other than Holdings and Parent, that
have possession of any of the Collateral of Holdings or Parent:
Name
Address
Collateral
 
 
 

Subsidiary Guarantor
The chief executive office of each Subsidiary Guarantor (other than Holdings) is
located at:
10600 West Charleston Boulevard, Las Vegas, Nevada 89135.

All locations where each Subsidiary Guarantor (other than Holdings) maintains
any books or records relating to any Accounts Receivable (with each location at
which chattel paper, if any, is kept being indicated by an “*”):

9

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

B-10

Location of Books or Records
Name of Entity
Address of books or records location
County
 
 
 

The jurisdiction of formation of each Subsidiary Guarantor (other than Holdings)
that is a registered organization:
Name of Entity
Jurisdiction of Organization
1.    
 
2.    
 
3.    
 
4.    
 
5.    
 
6.    
 
7.    
 
8.    
 
9.    
 
10.    
 

All locations where each Subsidiary Guarantor (other than Holdings) maintains
any Equipment or other Collateral:
Location of Collateral
Name of Entity
Address of Collateral Location
County
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

All the places of business of each Subsidiary Guarantor (other than Holdings)
not identified in paragraph (i), (ii), (iii) or (iv) above:

10

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

B-11

Name of Entity
Location of Business
 
 

All names and addresses of all Persons other than each Subsidiary Guarantor
(other than Holdings) that have possession of any of the Collateral of each
Subsidiary Guarantor:
Name
Address
Collateral
 
 
 

Unusual Transactions. All Accounts have been originated by the Borrower,
Holdings, Parent and the Subsidiary Guarantors (other than Holdings) and all
Inventory has been acquired by the Borrower, Holdings, Parent and Subsidiary
Guarantors (other than Holdings), in each case in the ordinary course of
business.
File Search Reports. File search reports have been obtained from each Uniform
Commercial Code filing office identified with respect to the Borrower, Holdings,
Parent and each Subsidiary Guarantor (other than Holdings) in Section 2 hereof,
and such search reports reflect no Liens against any of the Collateral other
than those permitted under the Credit Agreement.
UCC Filings.
Financing statements in substantially the form set forth below have been
prepared for filing in the proper Uniform Commercial Code filing office in the
jurisdiction in which the Borrower is located and, to the extent any of the
Collateral is comprised of fixtures, in the proper local jurisdiction, in each
case as set forth with respect to the Borrower in Section 2(A) hereof:
See Schedule 5(A) attached.
Financing statements in substantially the form set forth below have been
prepared for filing in the proper Uniform Commercial Code filing office in the
jurisdiction in which each of Holdings and Parent is located and, to the extent
any of the Collateral is comprised of fixtures, in the proper local
jurisdiction, in each case as set forth with respect to such entity in Section
2(B) hereof:
See Schedule 5(B) attached.
Financing statements in substantially the form set forth below have been
prepared for filing in the proper Uniform Commercial Code filing office in the
jurisdiction in which each Subsidiary Guarantor (other than Holdings) is located
and, to the extent any of the Collateral is comprised of fixtures, in the proper
local jurisdiction, in each case as set forth with respect to such Subsidiary
Guarantor (other than Holdings) in Section 2(C) hereof:

11

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

B-12

See Schedule 5(C) attached.
Schedule of Filings.
Listed below is a true and correct schedule setting forth, with respect to the
filings described in Section 5 above, each filing for the Borrower and the
filing office in which such filing is to be made:
Name
Filing
Filing Office
 
 
 

Listed below is a true and correct schedule setting forth, with respect to the
filings described in Section 5 above, each filing for Holdings and Parent and
the filing office in which such filing is to be made:
Name
Filing
Filing Office
 
 
 
 
 
 

Listed below is a schedule setting forth, with respect to the filings described
in Section 5 above, each filing for each Subsidiary Guarantor (other than
Holdings) and the filing office in which such filing is to be made:
Name
Filing
Filing Office
1.    
 
 
 
2.    
 
 
 
3.    
 
 
 
4.    
 
 
 
5.    
 
 
 
6.    
 
 
 
7.    
 
 
 
8.    
 
 
 
9.    
 
 
 
10.    
 
 
 

Stock Ownership and other Equity Interests. A true and correct list, set forth
below, of all the issued and outstanding stock, partnership interests, limited
liability company membership interests or other equity interest, whether held
directly or indirectly, of the Borrower, Holdings, Parent and each Subsidiary
Guarantor (other than Holdings), respectively, and the record and beneficial
owners of such stock, partnership interests, membership interests or other
equity interests. Also set forth is each equity investment, whether held
directly or indirectly, of the

12

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

B-13

Borrower, Holdings, Parent and each Subsidiary Guarantor (other than Holdings)
that represents 50% or more of the equity of the entity in which such investment
was made:
Borrower
Name
Outstanding Equity
Owner
 
 
 

Holdings and Parent
Name
Outstanding Equity
Owner
 
 
 
 
 
 

Subsidiary Guarantors
Name
Outstanding Equity
Owner
1.    
 
 
2.    
 
 
3.    
 
 
4.    
 
 
5.    
 
 
6.    
 
 
7.    
 
 
8.    
 
 
9.    
 
 
10.    
 
 

Debt Instruments. A true and correct list, set forth below, of all promissory
notes and other evidence of Indebtedness held by the Borrower, Holdings, Parent
and each Subsidiary Guarantor (other than Holdings), respectively, that are
required to be pledged under the Collateral Agreement, including all
intercompany notes:

13

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

B-14

Borrower
Issuer
Principal
Amount
Date of Note
Maturity Date
 
 
 
 
 
 
 
 
 
 
 
 

Holdings and Parent
Name
Debt Instrument
 
 
 
 

Subsidiary Guarantors
Name
Debt Instrument
 
 

Advances. A true and correct list is set forth below of all advances made by
Parent to any Subsidiary of Parent, or made by any Subsidiary of Parent to
Parent or to any other Subsidiary of Parent (other than those identified in
Section 8 above), which advances will be on and after the date hereof evidenced
by one or more intercompany notes pledged to the Administrative Agent under the
Collateral Agreement. A true and correct list is also set forth of all unpaid
intercompany transfers of goods sold and delivered by or to Parent or any
Subsidiary of Parent:
Borrower
Name
Advances
 
 

Holdings and Parent
Name
Advances
 
 

Subsidiary Guarantors
Name
Advances
 
 

14

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

B-15

Mortgage Filings. Listed below are schedules setting forth, with respect to each
mortgaged property, (a) the exact name of the Person that owns such property as
such name appears in its certificate of incorporation or other organizational
document, (b) if different from the name identified pursuant to clause (a), the
exact name of the current record owner of such property reflected in the records
of the filing office for such property identified pursuant to the following
clause, (c) the filing office in which a mortgage with respect to such property
must be filed or recorded in order for the Administrative Agent to obtain a
perfected security interest therein, and (d) an estimate of the fair market
value of such property.
Property
(a) Owner
(c) Filing Office
(d) Book Value
 

Intellectual Property.
Borrower
Set out below, in proper form for filing with the United States Patent and
Trademark Office, is a true and correct list setting forth all of the Borrower’s
Patents, Patent Licenses and Patent Applications, including the name of the
registered owner, type, registration or application number and the expiration
date (if already registered) of each Patent, Patent License and Patent
Application owned or licensed, as applicable, by the Borrower:
Name
Patents
 
 

Set out below, in proper form for filing with the United States Patent and
Trademark Office, is a true and correct list setting forth all of the Borrower’s
Trademarks, Trademark Licenses and Trademark Applications, including the name of
the registered owner, the registration or application number and the expiration
date (if already registered) of each Trademark, Trademark License and Trademark
application owned or licensed, as applicable, by the Borrower:
Name
Trademarks
 
 

Set out below, in proper form for filing with the United States Copyright
Office, is a true and correct schedule setting forth all of the Borrower’s
Copyrights (including the name of the registered owner, title, the registration
number and the expiration date (if already registered), Copyright Licenses
(including the name of the registered owner, title, the registration number and
the expiration date (if already registered)) and Copyright Applications

15

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

B-16

(including the name of the registered owner and title) of each Copyright,
Copyright License and Copyright Application owned or licensed, as applicable, by
the Borrower:
Name
Copyrights
 
 

Holdings and Parent
Set forth below, in proper form for filing with the United States Patent and
Trademark Office, is a true and correct list setting forth all of each of
Holdings’ and Parent’s Patents, Patent Licenses and Patent Applications,
including the name of the registered owner, type, registration or application
number and the expiration date (if already registered) of each Patent, Patent
License and Patent Application owned or licensed, as applicable, by either
Holdings or Parent:
Name
Patents
 
 

Set forth below, in proper form for filing with the United States Patent and
Trademark Office, is a true and correct a list setting forth all of each of
Holdings’ and Parent’s Trademarks, Trademark Licenses and Trademark
Applications, including the name of the registered owner, the registration or
application number and the expiration date (if already registered) of each
Trademark, Trademark License and Trademark application owned or licensed, as
applicable, by either Holdings or Parent:
Name
Trademarks
International Class
Registration Number
Registration Date
 

Set forth below, in proper form for filing with the United States Copyright
Office, is a true and correct list setting forth all of each of Holdings’ and
Parent’s Copyrights (including the name of the registered owner, title, the
registration number and the expiration date (if already registered), Copyright
Licenses (including the name of the registered owner, title, the registration
number and the expiration date (if already registered) and Copyright
Applications (including the name of the registered owner and title) of each
Copyright, Copyright License and Copyright Application owned or licensed, as
applicable, by either Holdings or Parent:

16

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B-17

Name
Copyrights
 
 

Subsidiary Guarantors
Set forth below, in proper form for filing with the United States Patent and
Trademark Office, is a true and correct list setting forth all of each
Subsidiary Guarantor’s (other than Holdings’) Patents, Patent Licenses and
Patent Applications, including the name of the registered owner, type,
registration or application number and the expiration date (if already
registered) of each Patent, Patent License and Patent Application owned or
licensed by any Subsidiary Guarantor (other than Holdings):
Name
Patents
 
 

Set forth below, in proper form for filing with the United States Patent and
Trademark Office, is a true and correct list setting forth all of each
Subsidiary Guarantor’s (other than Holdings’) Trademarks, Trademark Licenses and
Trademark Applications, including the name of the registered owner, the
registration or application number and the expiration date (if already
registered) of each Trademark, Trademark License and Trademark application owned
or licensed, as applicable, by any Subsidiary Guarantor (other than Holdings):
Name
Trademarks
 

Set forth below, in proper form for filing with the United States Copyright
Office, is a true and correct list setting forth all of each Subsidiary
Guarantor’s (other than Holdings’) Copyrights (including the name of the
registered owner, title and the expiration date (if already registered)),
Copyright Licenses (including the name of the registered owner, title and the
expiration date (if already registered)) and Copyright Applications (including
the name of the registered owner and title) of each Copyright, Copyright License
and Copyright Application owned or licensed by any Subsidiary Guarantor (other
than Holdings):
Name
Copyrights
 
 

Commercial Tort Claims

17

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

B-18

Set forth below is a true and correct list of commercial tort claims in excess
of $500,000 held by the Borrower, including a brief description thereof:
Claim
Amount
 
 

Set forth below is a true and correct list of commercial tort claims in excess
of $500,000 held by either Holdings or Parent, including a brief description
thereof:
Claim
Amount
 
 

Set forth below is a true and correct list of commercial tort claims in excess
of $500,000 held by any Subsidiary Guarantor (other than Holdings), including a
brief description thereof:
Claim
Amount
 
 

Deposit Accounts.
A true and correct list of deposit accounts maintained by the Borrower is set
forth below, including the name and address of the depositary institution, the
type of account and the account number:
Name
Deposit Accounts
 
 

A true and correct list of deposit accounts maintained by each of Holdings and
Parent is set forth below, including the name and address of the depositary
institution, the type of account and the account number:
Name
Deposit Accounts
 
 

A true and correct list of deposit accounts maintained by each Subsidiary
Guarantor, (other than Holdings) is set forth below, including the name and
address of the depositary institution, the type of account and the account
number:
See Schedule II (attached).

18

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B-19

Securities Accounts.
A true and correct list of securities accounts maintained by the Borrower is set
forth below, including the name and address of the intermediary institution, the
type of account and the account number:
Name
Securities Accounts
 
 

A true and correct list of securities accounts maintained by each of Holdings
and Parent is set forth below, including the name and address of the
intermediary institution, the type of account and the account number:
Name
Securities Accounts
 
 

A true and correct list of securities accounts maintained by each Subsidiary
Guarantor (other than Holdings) is set forth below, including the name and
address of the intermediary institution, the type of account and the account
number:
See Schedule II (attached).

[Remainder of page intentionally blank]

19

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IN WITNESS WHEREOF, the undersigned have duly executed this Perfection
Certificate as of             , 201 .
 
DIAMOND RESORTS CORPORATION,
a Maryland corporation 
 
By:                
Name: ________________________
Its: ________________________

 
DIAMOND RESORTS INTERNATIONAL, INC., a Delaware corporation 
 
By:                
Name: ________________________
Its: ________________________

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

Schedule I

Trade Names
Owner Entity
Country Where Used
Trade Names
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

State Trademark Registrations
State
Mark
Reg. Date
Expiration Date
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

21

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B-22

TRADEMARK/TRADE NAMES OWNED BY PARENT AND HOLDINGS
U.S. Trademark Registrations
Owner Entity
Mark
Reg. Date
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

U.S. Trademark Applications
Applicant Entity
Mark
Filing Date
Application No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

State Trademark Registrations
State
Mark
Reg. Date
Reg. No.
 

Non-U.S. Trademark Registrations

22

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B-23

Country
Mark
Reg. Date
Reg. No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Non-U.S. Trademark Applications
Country
Mark
Application Date
Application No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Trade Names
Country(s) Where Used
Trade Names
 

23

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Schedule II

Accounts Maintained by Subsidiary Guarantors

Name and Address of Depositary (Deposit Accounts)
Account Name
Type of Account
Account Number
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

24

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Schedule III

Location of Business

Description of Property
Address / Location
Lessee
Lessor
Term (Start and End Date)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

25

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Schedule 5(A)

Forms of UCC-1 Financing Statement (Borrower)

To be attached.

26

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Schedule 5(B)

Forms of UCC-1 Financing Statements (Holdings and Parent)

To be attached.

27

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Exhibit B to the
Security Agreement

Schedule 5(C)

Forms of UCC-1 Financing Statements (Subsidiary Guarantors (other than
Holdings))

To be attached.