Exhibit 10.44

Execution Version

 

GUARANTY AND SECURITY AGREEMENT

Dated as of November 18, 2019

by

 

EPIZYME, INC.

(as Borrower),

and

Each OTHER Grantor
From Time to Time Party Hereto

in favor of

 

BIOPHARMA CREDIT PLC

(as Collateral Agent on behalf of Lenders and the other Secured Parties)

 

 

 

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

 

TABLE OF CONTENTS

 

 

Page

ARTICLE I DEFINED TERMS

 

 

Section 1.1.

 

Definitions

1

 

Section 1.2.

 

Certain Other Terms

5

ARTICLE II GUARANTY

7

 

Section 2.1.

 

Guaranty

7

 

Section 2.2.

 

Limitation of Guaranty

7

 

Section 2.3.

 

Authorization; Other Agreements

7

 

Section 2.4.

 

Guaranty Absolute and Unconditional

8

 

Section 2.5.

 

Waivers

9

 

Section 2.6.

 

Reliance

9

 

Section 2.7.

 

Contribution

10

Article III GRANT OF SECURITY INTEREST

10

 

Section 3.1.

 

Collateral

10

 

Section 3.2.

 

Grant of Security Interest in Collateral

11

Article IV REPRESENTATIONS AND WARRANTIES

12

 

Section 4.1.

 

Title; No Other Liens

12

 

Section 4.2.

 

Perfection and Priority

12

 

Section 4.3.

 

Pledged Stock

13

Article V COVENANTS

14

 

Section 5.1.

 

Maintenance of Perfected Security Interest; Further Documentation and

Consents

14

 

Section 5.2.

 

Pledged Collateral

15

 

Section 5.3.

 

Intellectual Property

15

Article VI REMEDIAL PROVISIONS

16

 

Section 6.1.

 

Code and Other Remedies

16

 

Section 6.2.

 

Accounts and Payments in Respect of General Intangibles

19

 

Section 6.3.

 

Pledged Collateral

20

 

Section 6.4.

 

Proceeds to be Turned over to and Held by Collateral Agent

21

 

Section 6.5.

 

Sale of Pledged Collateral

22

 

Section 6.6.

 

Deficiency

22

-i-

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

TABLE OF CONTENTS
(continued)

Page

 

Section 6.7.

 

Collateral Accounts

22

 

Section 6.8.

 

Directions, Notices or Instructions

22

Article VII ADDITIONAL RIGHTS OF COLLATERAL AGENT

23

 

Section 7.1.

 

Collateral Agent’s Appointment as Attorney-in-Fact

23

 

Section 7.2.

 

Authorization to File Financing Statements

24

 

Section 7.3.

 

Authority of Collateral Agent

25

 

Section 7.4.

 

Duty; Obligations and Liabilities

25

Article VIII MISCELLANEOUS

25

 

Section 8.1.

 

Reinstatement

25

 

Section 8.2.

 

Release of Collateral and Guarantee Obligations

26

 

Section 8.3.

 

Independent Obligations

26

 

Section 8.4.

 

No Waiver by Course of Conduct

26

 

Section 8.5.

 

Amendments in Writing

27

 

Section 8.6.

 

Additional Grantors and Guarantors; Additional Pledged Collateral

27

 

Section 8.7.

 

Notices

27

 

Section 8.8.

 

Successors and Assigns

27

 

Section 8.9.

 

Counterparts

27

 

Section 8.10.

 

Severability

27

 

Section 8.11.

 

Governing Law

28

 

Section 8.12.

 

Waiver of Jury Trial

28

 

ANNEXES

 

Annex 1

 

Form of Pledge Amendment

 

Annex 2

 

Form of Joinder Agreement

 

Annex 3

 

Form of Intellectual Property Security Agreement

 

Annex 4

 

Form of Uncertificated Stock Control Agreement

 

 

 

-ii-

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

 

GUARANTY AND SECURITY AGREEMENT, dated as of November 18, 2019, by EPIZYME,
INC., a Delaware corporation (“Borrower”) and each other Person that becomes a
party hereto pursuant to Section 8.6 (together with Borrower and such
Guarantors, “Grantors”), in favor of BIOPHARMA CREDIT PLC, a public limited
company incorporated under the laws of England and Wales (as the “Collateral
Agent”) on behalf of Lenders and each other Secured Party.

W I T N E S S E T H:

WHEREAS, pursuant to the Loan Agreement dated as of November 4, 2019 (as the
same may be amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Loan Agreement”) by and among Borrower, the
Collateral Agent and the other parties thereto, Lenders agrees to make
extensions of credit to Borrower upon the terms and subject to the conditions
set forth therein;

WHEREAS, each Grantor other than Borrower agrees to guaranty, jointly and
severally, the Obligations (as defined in the Loan Agreement) of Borrower;

WHEREAS, each Grantor will derive substantial direct and indirect benefits from
the making of the extensions of credit under the Loan Agreement; and

WHEREAS, it is a condition precedent to the obligation of Lenders to extend
credit to Borrower under the Loan Agreement that the Grantors shall have
executed and delivered this Agreement to the Collateral Agent and each Lender
for the benefit of Lenders and the other Secured Parties.

NOW, THEREFORE, in consideration of the mutual premises herein contained and for
valuable consideration the receipt and sufficiency of which is hereby
acknowledged and to induce the Collateral Agent, Lenders and the Credit Parties
to enter into the Loan Agreement and to induce each Lender to make extensions of
credit to Borrower thereunder, each Grantor hereby agrees with the Collateral
Agent, each intending to be legally bound, as follows:

Article I

DEFINED TERMS

Section 1.1.Definitions. Capitalized terms used herein without definition are
used as defined in the Loan Agreement.

(a)The following terms have the meanings given to them in the Code and terms
used herein without definition that are defined in the Code have the meanings
given to them in the Code (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):  “account”, “account debtor”,
“as-extracted collateral”, “certificated security”, “chattel paper”, “check”,
“commercial tort claim”, “commodity account”, “commodity contract”, “documents”,
“deposit account”, “electronic chattel paper”, “encumbrance”, “entitlement
holder”, “equipment”, “farm products”, “financial asset”, “fixture”, “general
intangible”, “goods”, “health-care-insurance receivable”, “instruments”,
“inventory”, “investment property”, “letter of credit”, “letter-of-credit
right”, “money”, “proceeds”, “promissory note”, “record”, “securities account”,
“security”, “security entitlement”, “supporting obligation”, “tangible chattel
paper” and “uncertificated security”.

 

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

 

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

“Agreement” means this Guaranty and Security Agreement, as it may be amended,
restated, supplemented or otherwise modified from time to time.

“Applicable IP Office” means the United States Patent and Trademark Office or
the United States Copyright Office.

“Collateral” has the meaning specified in Section 3.1.

“Excluded Property” means, collectively:

(i)any “intent to use” United States Trademark applications for which a
statement of use or an amendment to allege use has not been filed (but only
until such statement is filed) solely to the extent, if any, that, and only
during the period, if any, in which, the grant of a security interest therein
would impair the validity or enforceability of such intent to use Trademark
applications under applicable federal law;

(ii)any permit, lease, license, contract, instrument or other agreement held by
any Grantor with respect to which, the grant to the Collateral Agent, in favor
of and for the benefit of Lenders and the other Secured Parties, of a security
interest therein and Lien thereupon, and the pledge to the Collateral Agent
thereof, in favor of and for the benefit of Lenders and the other Secured
Parties, to secure the Obligations (and any guaranty thereof) are validly
prohibited by the terms thereof, but only, in each case, to the extent, and for
so long as, such prohibition is not terminated or rendered unenforceable or
otherwise deemed ineffective by the Code (including Sections 9-406(d), 9-407(a),
9-408(a) and 9-409 of the Code) or by any applicable Requirements of Law;

(iii)any other permit, lease, license, contract, instrument or other agreement
held by any Grantor with respect to which, the grant to the Collateral Agent, in
favor of and for the benefit of Lenders and the other Secured Parties, of a
security interest in and Lien thereupon, and the pledge to the Collateral Agent
thereof, in favor of and for the benefit of Lenders and the other Secured
Parties, to secure the Obligations (and any guaranty thereof) require the
consent, approval or waiver of any Governmental Authority or other third party
(other than Borrower or an Affiliate of Borrower) and such consent, approval or
waiver has not been obtained by such Grantor or Borrower following their
respective commercially reasonable efforts to obtain the same;

(iv)any other asset or property subject or purported to be subject to a Lien
under any Collateral Document held by any Grantor with respect to which, the
grant to the Collateral Agent, in favor of and for the benefit of Lenders and
the other Secured Parties, of a security interest in and Lien thereupon, and the
pledge to the Collateral Agent thereof, in favor of and for the benefit of
Lenders and the other Secured Parties, to secure the Obligations (and any
guaranty thereof) require the consent, approval or waiver of any Governmental
Authority or other third party (other than Borrower or an Affiliate of Borrower)
and such consent, approval or waiver has not been obtained by such Grantor or
Borrower following their respective commercially reasonable efforts to obtain
the same;

-2-

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

 

(v)any property or asset subject or purported to be subject to a Lien under any
Collateral Document held by any Grantor that is a non-Wholly-Owned Subsidiary
with respect to which, the grant to the Collateral Agent, in favor of and for
the benefit of Lenders and the other Secured Parties, of a security interest
therein and Lien thereupon, and the pledge to the Collateral Agent thereof, in
favor of and for the benefit of Lenders and the other Secured Parties, to secure
the Obligations (and any guaranty thereof) are validly prohibited by, or would
give any third party (other than Borrower or an Affiliate of Borrower) the right
to terminate its obligations under, the Operating Documents of, the joint
venture agreement or shareholder agreement with respect to, or any other
contract with such third party relating to such non-Wholly-Owned Subsidiary
(other than customary non-assignment provisions which are ineffective under
Article 9 of the Code or other Requirements of Law), but only, in each case, to
the extent, and for so long as such Operating Documents, joint venture
agreement, shareholder agreement or other contract is in effect;

(vi)any asset or property subject or purported to be subject to a Lien under any
Collateral Document held by any Grantor with respect to which, the cost,
difficulty, burden or consequences (including adverse Tax consequences) of
granting the Collateral Agent, in favor of and for the benefit of Lenders and
the other Secured Parties, a security interest therein and Lien thereupon, and
pledging to the Collateral Agent thereof, in favor of and for the benefit of
Lenders and the other Secured Parties, to secure the Obligations (and any
guaranty thereof) are excessive relative to the value to be afforded to Lenders
thereby;

(vii)any rights under any Federal or state governmental license, permit,
franchise or authorization to the extent that the granting of a security
interest therein is specifically prohibited or restricted by any Requirements of
Law;

(viii)any asset or property subject to a Permitted Lien to the extent the
documents governing such Permitted Lien or the Permitted Indebtedness secured
thereby validly prohibit other Liens on such assets or property, but only, in
each case, to the extent, and for so long as, such prohibition is not terminated
or rendered unenforceable or otherwise deemed ineffective by the Code (including
Sections 9-406(d), 9-407(a), 9-408(a) and 9-409 of the Code) or by any
applicable Requirements of Law;

(ix)leasehold interests in real property;

(x)fee interests in real property with a fair market value (reasonably
determined in good faith by a Responsible Officer of Borrower) less than
$5,000,000;

(xi)Vehicles;

(xii)any letter of credit with an amount less than $500,000 and all
letter-of-credit rights with respect thereto;

(xiii)any other property or assets (other than Intellectual Property) as to
which the creation or attachment of a lien is not governed by Article 9 of the
Code;

-3-

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

 

(xiv)Excluded Equity Interests; and

(xv)Excluded Accounts;

provided, however, that “Excluded Property” shall not include any proceeds,
products, substitutions or replacements of Excluded Property (unless such
proceeds, products, substitutions or replacements would otherwise constitute
Excluded Property).

“Fraudulent Transfer Laws” has the meaning set forth in Section 2.2.

“Guaranteed Obligations” has the meaning set forth in Section 2.1.

“Guarantor” means each Grantor other than Borrower.

“Guaranty” means the guaranty of the Guaranteed Obligations made by Guarantors
as set forth in this Agreement.

“IP License” means all express and implied grants or rights to make, have made,
use, sell, reproduce, distribute, modify, or otherwise exploit any Intellectual
Property, as well as all covenants not to sue and co-existence agreements (and
all related IP Ancillary Rights), whether written or oral, relating to any
Intellectual Property.

“Maximum Guaranteed Amount” has the meaning set forth in Section 2.2.

“NDA” means a new drug application filed with the FDA pursuant to Section 505(b)
of the U.S. Federal Food, Drug, and Cosmetic Act, along with all supplements and
amendments thereto.

“Pledged Certificated Stock” means all of the Equity Interests (other than
Excluded Equity Interests) of any Subsidiary evidenced by a certificate,
instrument or other similar document (as defined in the Code), in each case
owned by any Grantor, including a Grantor’s right, title and interest resulting
from its ownership of any such Equity Interests as a limited or general partner
in any partnership that has issued Pledged Certificated Stock or as a member of
any limited liability company that has issued Pledged Certificated Stock, and a
Grantor’s right, title and interest resulting from its ownership of any such
Equity Interests in, to and under any Operating Document or shareholder
agreement of any corporation, partnership or limited liability company to which
it is a party, and any distribution of property made on, in respect of or in
exchange for the foregoing from time to time, including all certificated Equity
Interests listed on Schedule 1 of the Security Disclosure Letter.  “Pledged
Certificated Stock” includes, for the avoidance of doubt, any Pledged
Uncertificated Stock that subsequently becomes certificated.

-4-

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

 

“Pledged Collateral” means, collectively, the Pledged Stock and the Pledged Debt
Instruments.

“Pledged Debt Instruments” means all right, title and interest of any Grantor in
instruments evidencing any Indebtedness owed to such Grantor or other
obligations owed to such Grantor, and any distribution of property made on, in
respect of or in exchange for the foregoing from time to time, including all
Indebtedness described on Schedule 3 of the Security Disclosure Letter, issued
by the obligors named therein.  “Pledged Debt Instruments” excludes any Excluded
Property.

“Pledged Investment Property” means any investment property of any Grantor, and
any distribution of property made on, in respect of or in exchange for the
foregoing from time to time, other than any Pledged Stock or Pledged Debt
Instruments.  “Pledged Investment Property” excludes any Excluded Property.

“Pledged Stock” means all Pledged Certificated Stock and all Pledged
Uncertificated Stock.

“Pledged Uncertificated Stock” means all of the Equity Interests (other than
Excluded Equity Interests) of any Subsidiary that is not Pledged Certificated
Stock, in each case owned by any Grantor, including Grantor’s right, title and
interest resulting from its ownership of any such Equity Interests as a limited
or general partner in any partnership not constituting Pledged Certificated
Stock or as a member of any limited liability company not constituting Pledged
Certificated Stock, a Grantor’s right, title and interest resulting from its
ownership of any such Equity Interests in, to and under any Operating Document
or shareholder agreement of any partnership or limited liability company to
which it is a party, and any distribution of property made on, in respect of or
in exchange for the foregoing from time to time, including in each case those
interests set forth on Schedule 1 of the Security Disclosure Letter, to the
extent such interests are not certificated.

“Secured Obligations” has the meaning set forth in Section 3.2.

“Security Disclosure Letter” means the security agreement disclosure letter,
dated as of the date hereof, delivered by the Grantors to the Collateral Agent
and each Lender.

“Vehicles” means rolling stock, motor vehicles, vessels, aircraft and other
assets subject to certificates of title.

 

Section 1.2.Certain Other Terms

.

(a)For the purposes of and as used in this Agreement: (i) references to any
Person include its successors and assigns and, in the case of any Governmental
Authority, any Person succeeding to its functions and capacities; (ii) each
authorization herein shall be deemed irrevocable and coupled with an interest;
and (iii) where the context requires, provisions relating to any Collateral when
used in relation to a Grantor shall refer to such Grantor’s Collateral or any
relevant part thereof.

(b)Other Interpretive Provisions.

-5-

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

 

(i)Defined Terms.  Unless otherwise specified herein or therein, all terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto.

(ii)This Agreement.  The words “hereof”, “herein”, “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.

(iii)Certain Common Terms.  The words “include”, “included” and “including” are
not limiting and mean “including without limitation.”  The word “or” has the
inclusive meaning represented by the phrase “and/or”.  The word “shall” is
mandatory.  The word “may” is permissive.  The singular includes the plural and
the plural includes the singular.

(iv)Performance; Time.  Whenever any performance obligation hereunder (other
than a payment obligation) shall be stated to be due or required to be satisfied
on a day other than a Business Day, such performance shall be made or satisfied
on the next succeeding Business Day.  In the computation of periods of time from
a specified date to a later specified date, the word “from” means “from and
including”; the words “to” and “until” each mean “to but excluding”, and the
word “through” means “to and including.”  If any provision of this Agreement
refers to any action taken or to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be interpreted to encompass any and
all means, direct or indirect, of taking, or not taking, such action.

(v)Contracts.  Except as the context otherwise requires (including to the extent
otherwise expressly provided herein), references to any contract, agreement,
instrument or other document, including this Agreement and the other Loan
Documents, shall be deemed to include any and all amendments, supplements or
modifications thereto or restatements or substitutions thereof, in each case
which are in effect from time to time, but only to the extent such amendments,
supplements, modifications, restatements or substitutions are not prohibited by
the terms of any Loan Document.

(vi)Laws.  Except as the context otherwise requires (including to the extent
otherwise expressly provided herein), references to any law, statute, treaty,
order, policy, rule or regulation include any amendments, supplements and
successors thereto, and references to any law, statute, treaty, order, policy,
rule or regulation are to be construed as including all statutory and regulatory
provisions related thereto or consolidating, amending, replacing, supplementing
or interpreting such law, statute, treaty, order, policy, rule or regulation.

(vii)Excluded Property.  Notwithstanding anything to the contrary herein, the
representations, warranties and covenants set forth herein in relation to the
assets of the Grantors shall not apply to any Excluded Property.

-6-

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

 

Article II

GUARANTY

Section 2.1.Guaranty.  To induce Lenders to make the Term Loans to Borrower in
accordance with the terms and conditions of the Loan Agreement, each Guarantor,
jointly and severally with each other Guarantor, absolutely, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, the full
and punctual payment when due, whether at stated maturity or earlier, by reason
of acceleration, mandatory prepayment or otherwise in accordance with any Loan
Document, of all the Obligations of Borrower existing on the date hereof or
hereinafter incurred or created (the “Guaranteed Obligations”).  This Guaranty
by each Guarantor hereunder constitutes a guaranty of payment and not of
collection.  Each Guarantor hereby acknowledges and agrees that the Guaranteed
Obligations, at any time and from time to time, may exceed the Maximum
Guaranteed Amount of such Guarantor and may exceed the aggregate of the Maximum
Guaranteed Amounts of all Guarantors, in each case without discharging, limiting
or otherwise affecting the obligations of any Guarantor hereunder or the rights,
powers and remedies of any Secured Party hereunder or under any other Loan
Document.

Section 2.2.Limitation of Guaranty.  Any term or provision of this Guaranty or
any other Loan Document to the contrary notwithstanding, the maximum aggregate
amount for which any Guarantor shall be liable hereunder (the “Maximum
Guaranteed Amount”) shall not exceed the maximum amount for which such Guarantor
can be liable without rendering this Guaranty or any other Loan Document, as it
relates to such Guarantor, subject to avoidance under applicable Requirements of
Law relating to fraudulent conveyance or fraudulent transfer (including the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and
Section 548 of title 11 of the United States Code or any applicable provisions
of comparable Requirements of Law) (collectively, “Fraudulent Transfer
Laws”).  Any analysis of the provisions of this Guaranty for purposes of
Fraudulent Transfer Laws shall take into account the right of contribution
established in Section 2.7 below and, for purposes of such analysis, give effect
to any discharge of intercompany debt as a result of any payment made under the
Guaranty.

Section 2.3.Authorization; Other Agreements.  The Collateral Agent, on behalf of
Lenders and the other Secured Parties is hereby authorized, without notice, to
or demand upon any Guarantor and without discharging or otherwise affecting the
obligations of any Guarantor hereunder and without incurring any liability
hereunder, from time to time, to do each of the following but subject in all
cases to the terms and conditions of the other Loan Documents, including, for
the avoidance of doubt in the case of clause (d) below, subject to being
permitted to do so in accordance with such terms and conditions:

(a)subject to compliance with Section 11.5 of the Loan Agreement and Section 8.5
hereof (as applicable), (i) modify, amend, supplement or otherwise change,
(ii) accelerate or otherwise change the time of payment or (iii) waive or
otherwise consent to noncompliance with, any Guaranteed Obligation or any Loan
Document;

(b)apply to the Guaranteed Obligations any sums by whomever paid or however
realized to any Guaranteed Obligation in such order as provided in the Loan
Documents;

-7-

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

 

(c)refund at any time any payment received by any Secured Party in respect of
any Guaranteed Obligation;

(d)(i) sell, exchange, enforce, waive, substitute, liquidate, terminate,
release, abandon, fail to perfect, subordinate, accept, substitute, surrender,
exchange, affect, impair or otherwise alter or release any Collateral for any
Guaranteed Obligation or any other guaranty therefor in any manner,
(ii) receive, take and hold additional Collateral to secure any Guaranteed
Obligation, (iii) add, release or substitute any one or more other Guarantors,
makers or endorsers of any Guaranteed Obligation or any part thereof and
(iv) otherwise deal in any manner with Borrower or any other Guarantor, maker or
endorser of any Guaranteed Obligation or any part thereof; and

(e)settle, release, compromise, collect or otherwise liquidate the Guaranteed
Obligations.

Section 2.4.Guaranty Absolute and Unconditional.  Each Guarantor hereby waives
and agrees not to assert any defense (other than the indefeasible payment in
full of the Guaranteed Obligations (other than inchoate indemnity obligations)),
whether arising in connection with or in respect of any of the following clauses
(a) through (f) or otherwise, and hereby agrees that its obligations under this
Guaranty are irrevocable, absolute and unconditional and shall not be discharged
as a result of or otherwise affected by any of the following clauses (a) through
(f) (which may not be pleaded and evidence of which may not be introduced in any
proceeding with respect to this Guaranty, in each case except as otherwise
agreed in writing by Lender):

(a)the invalidity or unenforceability of any obligation of Borrower or any other
Guarantor under any Loan Document or any other agreement or instrument relating
thereto (including any amendment, consent or waiver thereto), or any security
for, or other guaranty of, any Guaranteed Obligation or any part thereof, or the
lack of perfection or continuing perfection or failure of priority of any
security for the Guaranteed Obligations or any part thereof;

(b)the absence of (i) any attempt to collect any Guaranteed Obligation or any
part thereof from Borrower or any other Guarantor or other action to enforce the
same or (ii) any action to enforce any Loan Document or any Lien thereunder;

(c)the failure by any Person to take any steps to perfect and maintain any Lien
on, or to preserve any rights with respect to, any Collateral;

(d)any workout, insolvency, bankruptcy proceeding, reorganization, arrangement,
liquidation or dissolution by or against Borrower, any other Guarantor or any of
Borrower’s other Subsidiaries or any procedure, agreement, order, stipulation,
election, action or omission thereunder, including any discharge or disallowance
of, or bar or stay against collecting, any Guaranteed Obligation (or any
interest thereon) in or as a result of any such proceeding;

-8-

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

 

(e)any foreclosure, whether or not through judicial sale, and any other sale or
other disposition of any Collateral or any election following the occurrence of
an Event of Default and during the continuance thereof by the Collateral Agent,
on behalf of Lenders and any other Secured Party, to proceed separately against
any Collateral in accordance with the Collateral Agent’s rights and the rights
of any Lender or other Secured Party under any applicable Requirements of Law;
or

(f)any other defense, setoff, counterclaim or any other circumstance that might
otherwise constitute a legal or equitable discharge of Borrower, any other
Guarantor or any other Subsidiary of Borrower, in each case other than the
indefeasible payment in full of the Guaranteed Obligations (other than inchoate
indemnity obligations).

Section 2.5.Waivers.  To the fullest extent permitted by Requirements of Law,
each Guarantor hereby unconditionally and irrevocably waives and agrees not to
assert any claim, defense, setoff or counterclaim based on diligence,
promptness, presentment, requirements for any demand or notice
hereunder, including any of the following:  (a) any demand for payment or
performance and protest and notice of protest; (b) any notice of acceptance;
(c) any presentment, demand, protest or further notice or other requirements of
any kind with respect to any Guaranteed Obligation (including any accrued but
unpaid interest thereon) becoming immediately due and payable; and (d) any other
notice in respect of any Guaranteed Obligation or any part thereof, and any
defense arising by reason of any disability or other defense of Borrower or any
other Guarantor.  Until the indefeasible payment in full of the Guaranteed
Obligations (other than inchoate indemnity obligations), each Guarantor further
unconditionally and irrevocably agrees not to (x) enforce or otherwise exercise
any right of subrogation or any right of reimbursement or contribution or
similar right against Borrower or any other Guarantor by reason of any Loan
Document or any payment made thereunder or (y) assert any claim, defense, setoff
or counterclaim it may have against any other Credit Party or set off any of its
obligations to such other Credit Party against obligations of such Credit Party
to such Guarantor.  No obligation of any Guarantor hereunder shall be discharged
other than by complete performance.

Section 2.6.Reliance.  Each Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of Borrower, each other Guarantor and
any other guarantor, maker or endorser of any Guaranteed Obligation or any part
thereof, and of all other circumstances bearing upon the risk of nonpayment of
any Guaranteed Obligation or any part thereof that reasonable and diligent
inquiry would reveal, and each Guarantor hereby agrees that neither the
Collateral Agent nor any Lender or other Secured Party shall have any duty to
advise any Guarantor of information known to it regarding such condition or any
such circumstances.  In the event the Collateral Agent, in its sole discretion,
undertakes at any time or from time to time to provide any such information to
any Guarantor, such Person shall be under no obligation to (a) undertake any
investigation not a part of its regular business routine, (b) disclose any
information that any Lender or other Secured Party, pursuant to accepted or
reasonable commercial finance or banking practices, wishes to maintain
confidential or (c) make any future disclosures of such information or any other
information to any Guarantor.

-9-

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

 

Section 2.7.Contribution.  To the extent that any Guarantor shall be required
hereunder to pay any portion of any Guaranteed Obligation exceeding the greater
of (a) the amount of the value actually received by such Guarantor and its
Subsidiaries from the Term Loans and other Obligations and (b) the amount such
Guarantor would otherwise have paid if such Guarantor had paid the aggregate
amount of the Guaranteed Obligations (excluding the amount thereof repaid by
Borrower) in the same proportion as such Guarantor’s net worth on the date
enforcement is sought hereunder bears to the aggregate net worth of all
Guarantors on such date, then such Guarantor shall be reimbursed by such other
Guarantors for the amount of such excess, pro rata, based on the respective net
worth of such other Guarantors on such date.

Article III

GRANT OF SECURITY INTEREST

Section 3.1.Collateral.  For the purposes of this Agreement, the following
tangible and intangible assets and property now owned or at any time hereafter
acquired, developed or created by a Grantor or in which a Grantor now has or at
any time in the future may acquire any right, title or interest, in each case,
wherever located, is collectively referred to as the “Collateral”:

(a)all accounts;

(b)all as-extracted collateral;

(c)all chattel paper, including electronic chattel paper or tangible chattel
paper;

(d)all checks;

(e)all deposit accounts;

(f)all documents;

(g)all encumbrances;

(h)all equipment;

(i)all fixtures;

(j)all general intangibles (including all agreements of any kind);

(k)all goods;

(l)all Intellectual Property and IP Licenses (including Current Company IP
Agreements to which a Grantor is a party and the rights of such Grantor
thereunder, and all of a Grantor’s right, title and interest in, to and under
any NDA, Internet Domain Names and Software);

-10-

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

 

(m)all instruments (including all promissory notes);

(n)all inventory;

(o)all investment property (including Pledged Collateral, Pledged Investment
Property, Equity Interests, securities, securities accounts and security
entitlements with respect thereto and financial assets carried therein, and all
commodity accounts and commodity contracts);

(p)all money;

(q)all letters of credit, letter-of-credit rights and supporting obligations;

(r)the commercial tort claims with a predicted value of $500,000 or more (as
reasonably determined by a Responsible Officer of Borrower in good faith and
based upon reasonable assumptions) described on Schedule 4 of the Security
Disclosure Letter;

(s)all books, records, ledger cards, files, correspondence, customer lists,
blueprints, technical specifications, manuals, computer software, computer
printouts, tapes, disks and other electronic storage media and related data
processing software and similar items that at any time pertain to or evidence or
contain information relating to any of the other property described in this
Section 3.1;

(t)all property of such Grantor held by the Collateral Agent for the benefit of
Lenders and any other Secured Party, including all property of every
description, in the custody of or in transit to the Collateral Agent for the
benefit of Lenders and any other Secured Party for any purpose, including
safekeeping, collection or pledge, for the account of such Grantor or as to
which such Grantor may have any right or power, including cash;

(u)all proceeds, products, accessions, rents and profits of or in respect of any
of the foregoing;

(v)to the extent not otherwise included, all personal property of such Grantor,
whether tangible or intangible and wherever located, and all proceeds, products,
accessions, rents, issues and profits of any and all of the foregoing and all
collateral security, supporting obligations and guarantees given by any Person
with respect to any of the foregoing; and

(w)to the extent not otherwise included, all other properties or assets of
whatever kind and nature subject or purported to be subject from time to time to
a Lien under any Collateral Document;

excluding, however, all Excluded Property.

Section 3.2.Grant of Security Interest in Collateral.  Without limiting any
other security interest granted to the Collateral Agent, in favor of and for the
benefit of Lenders and the other Secured Parties, each Grantor, as collateral
security for the prompt and complete payment and performance when due (whether
at stated maturity, by acceleration or otherwise) of the Obligations of such
Grantor (the “Secured Obligations”), hereby pledges, hypothecates and

-11-

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

 

grants to the Collateral Agent, in favor and for the benefit of Lenders and the
other Secured Parties, to secure the payment and performance in full of all of
the Obligations for the benefit of Lenders and the other Secured Parties, a
first priority Lien (subject only to Permitted Liens) on and continuing security
interest in, all of its right, title and interest in, to and under the
Collateral of such Grantor, wherever located, whether now owned or hereafter
acquired or arising; provided, however, notwithstanding the foregoing, no Lien
or security interest is hereby granted on, and “Collateral” shall not include,
any Excluded Property; provided, further, that if and when any property or asset
shall cease to be Excluded Property, a first priority Lien (subject only to
Permitted Liens) on and security interest in such property or asset shall be
deemed granted therein and, therefore, “Collateral” shall then include any such
property or asset.

Article IV

REPRESENTATIONS AND WARRANTIES

To induce the Collateral Agent and Lenders to enter into the Loan Documents,
each Grantor, jointly and severally with each other Grantor, represents and
warrants each of the following to the Collateral Agent, each Lender and the
other Secured Parties:

Section 4.1.Title; No Other Liens.  Except for the Lien granted to the
Collateral Agent for the benefit of Lenders and the other Secured Parties
pursuant to this Agreement and any other Permitted Liens under any Loan Document
(including Section 4.2 hereof), such Grantor owns or otherwise has the rights it
purports to have in each item of the Collateral, free and clear of any and all
Liens or claims of others.  Such Grantor (a) is the record and beneficial owner
of the Collateral pledged by it hereunder constituting instruments or
certificates and (b) except for Permitted Subsidiary Distribution Restrictions,
has rights in or the power to transfer each other item of Collateral in which a
Lien is granted by it hereunder, free and clear of any other Lien other than any
Permitted Liens.

Section 4.2.Perfection and Priority.  Other than in respect of money and other
Collateral subject to Section 9-311(a)(1) of the Code, the security interest
granted to the Collateral Agent pursuant to this Agreement constitutes a valid
and continuing first priority perfected security interest (subject, in the case
of priority only, to Permitted Liens that are expressly permitted (if at all) by
the terms of the Loan Agreement or this Agreement to have superior priority to
the Lien and security interest granted to the Collateral Agent for the benefit
of Lenders and the other Secured Parties) in favor of and for the benefit of
Lenders and the other Secured Parties in all Collateral, subject, for the
following Collateral, to the occurrence of the following:  (a) in the case of
all Collateral in which a security interest may be perfected by filing a
financing statement under the Code, the completion of the filings and other
actions specified on Schedule 2 of the Security Disclosure Letter (which, in the
case of all filings and other documents referred to on such schedule, have been
duly authorized by the applicable Guarantor); (b) with respect to any deposit
account over which a Control Agreement is required pursuant to Section 5.5 of
the Loan Agreement, the execution of Control Agreements; (c) in the case of all
United States Trademarks, Patents and Copyrights for which Code filings are
insufficient to effectuate perfection, all appropriate filings having been made
with the Applicable IP Office, as applicable; (d) in the case of all Pledged
Certificated Stock, the delivery thereof to the Collateral Agent, for the
benefit of Lenders and the other Secured Parties, of such Pledged Certificated
Stock consisting of instruments and certificates, in each case, properly
endorsed for transfer to the Collateral Agent or in blank; (e) in the case of
all Pledged Uncertificated Stock, the delivery

-12-

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

 

to the Collateral Agent, for the benefit of Lenders and the other Secured
Parties, of an executed uncertificated stock control agreement among the issuer,
the registered owner and the Collateral Agent in the form attached as Annex 4
hereto; and (f) in the case of all other instruments that are not Pledged Stock,
if any, the delivery thereof to the Collateral Agent, for the benefit of Lenders
and the other Secured Parties, of such instruments.  Such Lien on and security
interest in Pledged Stock shall be prior to all other Liens on such Collateral,
subject to Permitted Liens having priority over the Collateral Agent’s Lien by
operation of law or as and to the extent expressly permitted (if at all) by any
Loan Document.  Except to the extent expressly not required pursuant to the
terms of the Loan Agreement or this Agreement, all actions by each Grantor
necessary or desirable to protect and perfect the first priority Lien on and
security interest in the Collateral granted hereunder have been duly taken.

Section 4.3.Pledged Stock.

(a)The Pledged Stock issued by any Subsidiary of any Grantor pledged by such
Grantor hereunder (i) consist of the number and types of Equity Interests listed
on Schedule 1 of the Security Disclosure Letter and constitutes that percentage
of the issued and outstanding equity of all classes of each issuer thereof as
set forth on Schedule 1 of the Security Disclosure Letter, (ii) has been duly
authorized, validly issued and is fully paid and nonassessable (other than
Pledged Stock in limited liability companies and partnerships), and (ii)
constitutes the legal, valid and binding obligation of the obligor with respect
thereto, enforceable in accordance with its terms.  As of the date any Joinder
Agreement or Pledge Amendment is delivered pursuant to Section 8.6, the Pledged
Stock pledged by each applicable Grantor thereunder (x) is listed on the
applicable schedule attached to such Joinder Agreement or Pledge Amendment, as
applicable, and constitutes that percentage of the issued and outstanding equity
of all classes of each issuer thereof as set forth on such schedule, (y) has
been duly authorized, validly issued and is fully paid and non-assessable (other
than Pledged Stock in limited liability companies and partnerships) and (z)
constitutes the legal, valid and binding obligation of the obligor with respect
thereto, enforceable in accordance with its terms.

(b)(i) All Pledged Certificated Stock has been delivered to the Collateral
Agent, for the benefit of Lenders and the other Secured Parties, in accordance
with Section 5.2(a), and (ii) with respect to Pledged Uncertificated Stock,
uncertificated stock control agreements in the form attached as Annex 4 hereto
have been delivered to the Collateral Agent, for the benefit of Lenders and the
other Secured Parties, in accordance with Section 5.2(a).

(c)Upon the occurrence and during the continuance of an Event of Default, the
Collateral Agent for the benefit of Lenders and the other Secured Parties shall
be entitled to exercise all of the rights of the Grantor granting the security
interest in any Pledged Stock, and a transferee or assignee of such Pledged
Stock shall become a holder of such Pledged Stock to the same extent as such
Grantor and, upon the transfer of the entire interest of such Grantor, such
Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.

-13-

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

 

Article V

COVENANTS

Each Grantor agrees with the Collateral Agent to the following, until the
indefeasible payment in full of the Obligations (other than inchoate indemnity
obligations) and unless the Collateral Agent, on behalf of Lenders and the other
Secured Parties, otherwise consents in writing:

Section 5.1.Maintenance of Perfected Security Interest; Further Documentation
and Consents.

(a)Subject to the occurrence of the actions described in Section 4.2, which each
Grantor shall promptly undertake, and except to the extent perfection is either
(i) mutually agreed between Borrower and the Collateral Agent not to be required
under this Agreement or the other Loan Documents or (ii) mutually agreed between
Borrower and the Collateral Agent to be effected by filings of financing
statements or amendments thereto to be made by the Collateral Agent or any
Lender or its Related Party pursuant to Section 7.2, such Grantor shall maintain
the security interest created by this Agreement as a perfected security interest
having at least the priority described in Section 4.2 and shall warrant and
defend the Collateral covered by such security interest and such priority
against the claims and demands of all Persons (other than Secured Parties).

(b)Such Grantor shall furnish to the Collateral Agent at any time and from time
to time statements and schedules further identifying and describing the
Collateral and such other documents in connection with the Collateral as the
Collateral Agent may reasonably request in writing, all in reasonable detail and
in form and substance reasonably satisfactory to the Collateral Agent.

(c)At any time and from time to time, upon the written request of the Collateral
Agent, such Grantor shall, for the purpose of obtaining or preserving the full
benefits of this Agreement and the other Collateral Documents and of the rights
and powers herein and therein granted, (i) promptly and duly execute and
deliver, and have recorded, such further documents, including an authorization
to file (or, as applicable, the filing) of any financing statement or amendment
under the Code (or other filings under similar Requirements of Law) in effect in
any jurisdiction with respect to the security interest created hereby and
(ii) take such further action as the Collateral Agent may reasonably request in
writing that is consistent with the requirements hereof and of the other Loan
Documents, including executing and delivering any Control Agreements required by
Section 5.5 of the Loan Agreement with respect to the Collateral Accounts.

-14-

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

 

Section 5.2.Pledged Collateral.

(a)Delivery of Pledged Collateral.  Such Grantor shall, promptly after acquiring
any Pledged Collateral not owned on the Tranche A Closing Date, (i) deliver to
the Collateral Agent, in suitable form for transfer and in form and substance
reasonably satisfactory to the Collateral Agent, (A) all such Pledged Stock that
is Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all
certificates and instruments evidencing Pledged Investment Property, (ii)
subject all Collateral Accounts required to be subject to a Control Agreement
pursuant to the Loan Agreement to a Control Agreement, and (iii)  cause the
issuer of any such Pledged Stock that is Pledged Uncertificated Stock to execute
an uncertificated stock control agreement in the form attached hereto as Annex
4, pursuant to which, inter alia, such issuer agrees to comply with the
Collateral Agent’s instructions with respect to such Pledged Uncertificated
Stock without further consent by such Grantor, and, for the avoidance of doubt,
if any such Pledged Uncertificated Stock becomes certificated, promptly (but in
any event within thirty (30) days thereof) deliver to the Collateral Agent, in
suitable form for transfer and in form and substance reasonably satisfactory to
the Collateral Agent, all such certificates, instruments or other similar
documents (as defined in the Code).

(b)Event of Default.  During the continuance of any Event of Default and in
connection with the exercise of rights or remedies hereunder or under any other
Loan Document, the Collateral Agent shall have the right, at any time in its
discretion and without prior notice to Grantor, to (i) transfer to or to
register in its name or in the name of its nominees any Pledged Stock and
(ii) exchange any certificate or instrument representing or evidencing any
Pledged Stock for certificates or instruments of smaller or larger
denominations.

(c)Cash Distributions with respect to Pledged Collateral and Pledged Investment
Property.  Except as provided in Article VI and subject to any limitations set
forth in the Loan Agreement, such Grantor shall be entitled to receive all cash
distributions paid in respect of the Pledged Collateral and the Pledged
Investment Property.

(d)Voting Rights.  Except as provided in Article VI, such Grantor shall be
entitled to exercise all voting, consent and corporate, partnership, limited
liability company and similar rights with respect to the Pledged Collateral and
Pledged Investment Property; provided, however, that no vote shall be cast,
consent, waiver or ratification given or right exercised (or failed to be
exercised) or other action taken (or failed to be taken) by such Grantor in any
manner that would reasonably be expected to (i) violate or be inconsistent with
any of the terms of this Agreement or any other Loan Document or (ii) have the
effect of materially impairing such Collateral or the position or interests of
the Secured Parties.

Section 5.3.Intellectual Property.  Such Grantor shall, promptly (and in no
event later than fifteen (15) days) after delivery of financial statements
pursuant to Section 5.2(a) of the Loan Agreement), execute and deliver to Lender
in form and substance reasonably acceptable to Lender and suitable for filing in
the Applicable IP Office the short-form intellectual property security
agreements in the form attached hereto as Annex 3 for all Collateral consisting
of any newly-acquired Copyrights, Trademarks or Patents (as applicable) of such
Grantor registered in the Applicable IP Office during the applicable reporting
period.

-15-

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

 

Article VI

REMEDIAL PROVISIONS

Section 6.1.Code and Other Remedies.

(a)Code Remedies.  During the continuance of an Event of Default, the Collateral
Agent, on behalf of Lenders and the other Secured Parties, may exercise, in
addition to all other rights and remedies granted to it in this Agreement, any
IP Agreement, any other Loan Document or in any other instrument or agreement
securing, evidencing or relating to any Secured Obligation, all rights, powers
and remedies of a secured party under the Code or any other Requirements of Law
or in equity.

(b)Disposition of Collateral.  During the continuance of an Event of Default,
without limiting the generality of the foregoing, the Collateral Agent may
(personally or through its agents or attorneys), without demand of performance
or other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by Requirements of Law referred to below) to or upon
any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived):  (i) enter upon the premises
where any Collateral is located, without any obligation to pay rent, through
self-help, without judicial process, without first obtaining a final judgment or
giving Grantor or any other Person notice or opportunity for a hearing on the
Collateral Agent’s or any Lender’s claim or action; (ii) collect, receive,
appropriate and realize upon any Collateral; (iii) store, process, repair or
recondition the Collateral or otherwise prepare any Collateral for disposition
in any manner to the extent the Collateral Agent deems appropriate; and
(iv) sell, assign, license out, convey, transfer, grant option or options to
purchase or license and deliver any Collateral (or enter into contractual
obligations to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker’s board or office of the
Collateral Agent or any Lender or other Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk.  The Collateral Agent, on behalf of Lenders and the other Secured
Parties, shall have the right, upon any such public sale or sales and, to the
extent permitted by the Code and other Requirements of Law, upon any such
private sale or sales, to purchase or license the whole or any part of the
Collateral so sold or licensed, free of any right or equity of redemption of any
Grantor, which right or equity is hereby waived and released.  The Collateral
Agent, as representative of all Lenders and other 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 sale
made in accordance with the Code, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by the Collateral Agent on behalf of Lenders and the other Secured
Parties, at such sale.  If the Collateral Agent on behalf of any Lender sells
any of the Collateral upon credit, Grantor will be credited only with payments
actually made by purchaser and received by such Lender and applied to
indebtedness of the purchaser.  In the event the purchaser fails to pay for the
Collateral, the Collateral Agent may resell the Collateral and Grantor shall be
credited with proceeds of the sale.  Neither the Collateral Agent nor any Lender
shall have an obligation to marshal any of the Collateral.

-16-

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

 

(c)Management of the Collateral.  Each Grantor further agrees, that, during the
continuance of any Event of Default, (i) at the Collateral Agent’s request, it
shall assemble the Collateral and make it available to the Collateral Agent at
places that the Collateral Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere, (ii) without limiting the foregoing, the
Collateral Agent also has the right to require that such Grantor store and keep
any Collateral pending further action by the Collateral Agent and, while any
such Collateral is so stored or kept, provide such guards and maintenance
services as shall be necessary to protect the same and to preserve and maintain
such Collateral in good condition, normal wear and tear excepted, (iii) until
the Collateral Agent is able to sell, assign, license out, convey or transfer
any Collateral, the Collateral Agent shall have the right to hold or use such
Collateral to the extent that it deems appropriate for the purpose of preserving
the Collateral or its value or for any other purpose deemed appropriate by the
Collateral Agent and (iv) the Collateral Agent may, if it so elects, seek the
appointment of a receiver or keeper to take possession of any Collateral and to
enforce any of the Collateral Agent’s or any Lender’s remedies, with respect to
such appointment without prior notice or hearing as to such appointment.  The
Collateral Agent shall not have any obligation to any Grantor to maintain or
preserve the rights of any Grantor as against other Persons with respect to any
Collateral while such Collateral is in the possession of the Collateral Agent.

(d)Application of Proceeds.  The Collateral Agent shall apply the cash proceeds
received by it in respect of any sale of, any collection from, or other
realization upon all or any part of the Collateral, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any Collateral or in any way relating
to the Collateral or the rights of Lenders and the other Secured Parties,
including reasonable and documented out-of-pocket attorneys’ fees and
disbursements, to the payment in whole or in part of the Secured Obligations, as
set forth in the Loan Agreement, and only after such application and after the
payment by the Collateral Agent or Lenders of any other amount required by any
Requirements of Law, need the Collateral Agent or any Lender account for the
surplus, if any, to any Grantor.

(e)Direct Obligation.  Neither the Collateral Agent nor any Lender or other
Secured Party shall be required to make any demand upon, or pursue or exhaust
any right or remedy against, any Grantor or any other Person with respect to the
payment of the Obligations or to pursue or exhaust any right or remedy with
respect to any Collateral therefor or any direct or indirect guaranty
thereof.  All of the rights and remedies of the Collateral Agent and Lenders and
any other Secured Party shall be cumulative, may be exercised individually or
concurrently and not exclusive of any other rights or remedies provided by any
Requirements of Law.  To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of,
and covenants not to assert against the Collateral Agent, Lenders or any other
Secured Party, any valuation, stay, appraisement, extension, redemption or
similar laws and any and all rights or defenses it may have as a surety, now or
hereafter existing, arising out of the exercise by any of them of any rights or
remedies hereunder.  If any notice of a proposed sale or other disposition of
any Collateral shall be required by Requirements of Law, such notice shall be
deemed reasonable and proper if given at least ten (10) days before such sale or
other disposition.

-17-

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

 

(f)Commercially Reasonable.  To the extent that applicable Requirements of Law
impose duties on the Collateral Agent or any Lender or other Secured Party to
exercise remedies in a commercially reasonable manner, each Grantor acknowledges
and agrees that it is not commercially unreasonable for the Collateral Agent or
any Lender to do any of the following:

(i)fail to incur significant costs, expenses or other liabilities reasonably
deemed as such by the Collateral Agent or such Lender to prepare any Collateral
for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition;

(ii)fail to obtain permits, licenses or other consents for access to any
Collateral to sell or license or for the collection or sale or licensing of any
Collateral, or, if not required by other Requirements of Law, fail to obtain
permits, licenses or other consents for the collection or disposition of any
Collateral;

(iii)fail to exercise remedies against account debtors or other Persons
obligated on any Collateral or to remove Liens on any Collateral or to remove
any adverse claims against any Collateral;

(iv)advertise dispositions of any Collateral through publications or media of
general circulation, whether or not such Collateral is of a specialized nature,
or to contact other Persons, whether or not in the same business as any Grantor,
for expressions of interest in acquiring any such Collateral;

(v)exercise collection remedies against account debtors and other Persons
obligated on any Collateral, directly or through the use of collection agencies
or other collection specialists, hire one or more professional auctioneers to
assist in the disposition of any Collateral, whether or not such Collateral is
of a specialized nature, or, to the extent deemed appropriate by the Collateral
Agent or such Lender, obtain the services of other brokers, investment bankers,
consultants and other professionals to assist the Collateral Agent or such
Lender in the collection or disposition of any Collateral, or utilize Internet
sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capacity of doing so, or that match
buyers and sellers of assets to dispose of any Collateral;

(vi)dispose of assets in wholesale rather than retail markets;

(vii)disclaim warranties, such as title, merchantability, possession,
non-infringement or quiet enjoyment; or

(viii)purchase insurance or credit enhancements to insure the Collateral Agent
or any Lender or other Secured Party against risks of loss, collection or
disposition of any Collateral or to provide to the Collateral Agent and Lenders
a guaranteed return from the collection or disposition of any Collateral.

-18-

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

 

Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a
non-exhaustive list of actions or omissions that are commercially reasonable
when exercising remedies against any Collateral and that other actions or
omissions by the Collateral Agent, Lenders or any other Secured Party shall not
be deemed commercially unreasonable solely on account of not being indicated in
this Section 6.1.  Without limitation upon the foregoing, nothing contained in
this Section 6.1 shall be construed to grant any rights to any Grantor or to
impose any duties on the Collateral Agent or any Lender or other Secured Party
that would not have been granted or imposed by this Agreement or by applicable
Requirements of Law in the absence of this Section 6.1.

(g)IP Licenses.  To the extent permitted, and only for the purpose of enabling
the Collateral Agent to exercise rights and remedies under this Section 6.1
during the continuance of an Event of Default (including in order to take
possession of, collect, receive, assemble, process, appropriate, remove, realize
upon, sell, assign, license out, convey, transfer or grant options to purchase
any Collateral) at such time as the Collateral Agent on behalf of Lenders and
the other Secured Parties shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Collateral Agent (i) an irrevocable,
nonexclusive, assignable, worldwide license (exercisable without payment of
royalty or other compensation to such Grantor), including the right to
sublicense, use and practice any and all Intellectual Property now owned or held
or hereafter acquired or held by such Grantor and access to all media in which
any of the licensed items may be recorded or stored and to all Software and
programs used for the compilation or printout thereof and (ii) an irrevocable
license (without payment of rent or other compensation to such Grantor) to use,
operate and occupy all real property owned, operated, leased, subleased or
otherwise occupied by such Grantor.

Section 6.2.Accounts and Payments in Respect of General Intangibles.

(a)In addition to, and not in substitution for, any similar requirement in the
Loan Agreement, if required by the Collateral Agent at any time during the
continuance of an Event of Default, any payment of accounts or payment in
respect of general intangibles relating to the Collateral, when collected by any
Grantor, shall be promptly (and, in any event, within two (2) Business Days of
such collection) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Collateral Agent for the benefit of Lenders and
the other Secured Parties, in a Collateral Account, subject to withdrawal by the
Collateral Agent as provided in Section 6.4.  Until so turned over, such payment
shall be held by such Grantor in trust for the Collateral Agent for the benefit
of Lenders and the other Secured Parties, segregated from other funds of such
Grantor.  Each such deposit of proceeds of accounts and payments in respect of
general intangibles relating to the Collateral shall, upon the Collateral
Agent’s request, be accompanied by a report identifying in reasonable detail the
nature and source of the payments included in the deposit.

(b)At any time during the continuance of an Event of Default:

(i)each Grantor shall, upon the Collateral Agent’s request, assemble and hold
for the benefit of Lenders and the other Secured Parties all original and other
documents evidencing, and relating to, the contractual obligations and
transactions that gave rise to any account or any payment in respect of general
intangibles, including all IP Licenses, original orders, invoices and shipping
receipts and notify account debtors that the accounts or general intangibles
have been collaterally assigned to the Collateral Agent for the benefit of
Lenders and the other Secured Parties and that payments in respect thereof shall
be made directly to the Collateral Agent for the benefit of Lenders and the
other Secured Parties or to any Lender on behalf of itself and the other Secured
Parties, as the Collateral Agent shall direct; and

-19-

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

 

(ii)each Grantor shall take all actions, deliver all documents and provide all
information necessary or reasonably requested by the Collateral Agent to ensure
any Internet Domain Name is registered.

(c)Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each account and each payment in respect of general intangibles
included in the Collateral to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto.  Neither the Collateral
Agent nor any Lender or other Secured Party shall have any obligation or
liability under any agreement giving rise to an account or a payment in respect
of a general intangible included in the Collateral by reason of or arising out
of any Loan Document or the receipt by the Collateral Agent or any Lender or
other Secured Party of any payment relating thereto, nor shall the Collateral
Agent nor any Lender or other Secured Party be obligated in any manner to
perform any obligation of any Grantor under or pursuant to any agreement giving
rise to an account or a payment in respect of a general intangible included in
the Collateral, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts that
may have been assigned to it or to which it may be entitled at any time or
times.

Section 6.3.Pledged Collateral.

(a)Voting Rights.  During the continuance of an Event of Default, all rights of
each Grantor to exercise or refrain from exercising the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
hereto shall cease and all such rights shall thereupon become vested in the
Collateral Agent or a nominee on behalf of Lenders or the other Secured Parties,
who shall thereupon have the sole right to exercise such voting and other
consensual rights, including the right to exercise (i) any voting, consent,
corporate and other right pertaining to the Pledged Collateral at any meeting of
shareholders, partners or members, as the case may be, of the relevant issuer or
issuers of Pledged Collateral or otherwise, and (ii) any right of conversion,
exchange and subscription and any other right, privilege or option pertaining to
the Pledged Collateral as if it were the absolute owner thereof (including the
right to exchange at its discretion any Pledged Collateral upon the merger,
amalgamation, consolidation, reorganization, recapitalization or other
fundamental change in the corporate or equivalent structure of any issuer of
Pledged Collateral, the right to deposit and deliver any Pledged Collateral with
any committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Collateral Agent (or such nominee) on
behalf of Lenders or the other Secured Parties may determine), all without
liability except to account for property actually received by it; provided,
however, that the Collateral Agent (or such nominee) shall have no duty to any
Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.

-20-

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

 

(b)Proxies.  During the continuance of an Event of Default, in order to permit
the Collateral Agent on behalf of Lenders and the other Secured Parties to
exercise the voting and other consensual rights that it may be entitled to
exercise pursuant hereto and to receive all dividends and other distributions
that it may be entitled to receive hereunder, (i) each Grantor shall promptly
execute and deliver (or cause to be executed and delivered) to the Collateral
Agent all such proxies, dividend payment orders and other instruments as the
Collateral Agent may from time to time reasonably request and (ii) without
limiting the effect of clause (i) above, such Grantor hereby grants to the
Collateral Agent for the benefit of Lenders and the other Secured Parties an
irrevocable proxy to vote all or any part of the Pledged Collateral and to
exercise all other rights, powers, privileges and remedies to which a holder of
the Pledged Collateral would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case may
be, and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any Pledged
Collateral on the record books of the issuer thereof) by any other Person
(including the issuer of such Pledged Collateral or any officer or agent
thereof) during the continuance of an Event of Default and which proxy shall
only terminate upon (A) the cure of any and all Events of Default or (B) the
indefeasible payment in full of the Secured Obligations (other than contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted).

(c)Authorization of Issuers.  Each Grantor hereby expressly and irrevocably
authorizes and instructs, without any further instructions from such Grantor,
each issuer of any Pledged Collateral pledged hereunder by such Grantor to, and
each Grantor that is an issuer of Pledged Collateral so pledged hereunder hereby
agrees to (i) comply with any instruction received by it from the Collateral
Agent in writing that states that an Event of Default is continuing in
accordance with the terms of this Agreement and each Grantor agrees that such
issuer shall be fully protected from liabilities to such Grantor in so
complying, and (ii) during the continuance of such Event of Default, unless
otherwise permitted hereby or by the Loan Agreement, pay any dividend or make
any other payment with respect to the Pledged Collateral directly to the
Collateral Agent for the benefit of Lenders and the other Secured Parties or to
any Lender on behalf of itself and the other Secured Parties, as the Collateral
Agent shall direct.

Section 6.4.Proceeds to be Turned over to and Held by Collateral Agent.  Unless
otherwise expressly provided in the Loan Agreement or this Agreement, during the
continuance of an Event of Default and, upon written notice by the Collateral
Agent to the relevant Grantor or Grantors, all proceeds of any Collateral
received by any Grantor hereunder in cash or Cash Equivalents shall be held by
such Grantor in trust for Lenders and the other Secured Parties, segregated from
other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be
turned over to the Collateral Agent for the benefit of Lenders and the other
Secured Parties in the exact form received (with any necessary
endorsement).  All such proceeds of Collateral and any other proceeds of any
Collateral received by the Collateral Agent in cash or Cash Equivalents shall be
held by the Collateral Agent for the benefit of itself and the other Secured
Parties in a Collateral Account.  All proceeds being held by the Collateral
Agent in a Collateral Account (or by such Grantor in trust for Lenders and the
other Secured Parties) shall continue to be held as collateral security for the
Secured Obligations and shall not constitute payment thereof until applied as
provided in the Loan Agreement.

-21-

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

 

Section 6.5.Sale of Pledged Collateral.

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

(b)Each Grantor agrees to use commercially reasonable efforts to do or cause to
be done all such other acts as may be reasonably necessary to make such sale or
sales of any portion of the Pledged Collateral pursuant to Section 6.1 and this
Section 6.5 valid and binding and in compliance with all applicable Requirements
of Law.  Each Grantor further agrees that a breach of any covenant contained
herein will cause irreparable injury to the Collateral Agent, Lenders and the
other Secured Parties, that the Collateral Agent, Lenders and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained herein shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defense against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing under the Loan Agreement or a defense of indefeasible payment in full
of the Guaranteed Obligations (other than inchoate indemnity obligations).  Each
Grantor waives any and all rights of contribution or subrogation upon the sale
or disposition of all or any portion of the Pledged Collateral by the Collateral
Agent on behalf of Lenders and the other Secured Parties.

Section 6.6.Deficiency.  Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of any Collateral are insufficient
to pay the Secured Obligations and the reasonable and documented fees and
disbursements of any attorney employed by the Collateral Agent or any Lender to
collect such deficiency.

Section 6.7.Collateral Accounts.  If any Event of Default shall have occurred
and be continuing, the Collateral Agent may apply the balance from any
Collateral Account of a Grantor or instruct the bank at which any Collateral
Account is maintained to pay the balance of any Collateral Account to the
Collateral Agent for the benefit of Lenders and the other Secured Parties or to
any Lender on behalf of itself and the other Secured Parties, as the Collateral
Agent shall direct, to be applied to the Secured Obligations in accordance with
the terms hereof.

Section 6.8.Directions, Notices or Instructions.  Neither the Collateral Agent
nor any Lender or any Related Party thereof or any other Secured Party shall
take any action under or issue any directions, notice or instructions pursuant
to any Control Agreement or similar agreement unless an Event of Default has
occurred and is continuing.

-22-

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

 

Article VII

ADDITIONAL RIGHTS OF COLLATERAL AGENT

Section 7.1.Collateral Agent’s Appointment as Attorney-in-Fact.  

(a)Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent
and any Related Party thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of the Loan Documents, to take any
appropriate action and to execute any document or instrument that may be
necessary or desirable to accomplish the purposes of the Loan Documents, in each
case during the continuance of an Event of Default, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Collateral Agent and
its Related Party the power and right, on behalf of such Grantor, without notice
to or assent by such Grantor, to do any of the following when an Event of
Default shall be continuing:

(i)in the name of such Grantor, in its own name or otherwise, take possession of
and indorse and collect any check, draft, note, acceptance or other instrument
for the payment of moneys due under any account or general intangible or with
respect to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Collateral Agent for the purpose of collecting any such moneys due under any
account or general intangible or with respect to any other Collateral whenever
payable;

(ii)in the case of any Intellectual Property (including any IP Ancillary Rights)
or any IP Licenses included in the Collateral, execute, deliver and have
recorded any document that the Collateral Agent may request to evidence, effect,
publicize or record the Collateral Agent’s security interest, in favor of and
for the benefit of Lenders and the other Secured Parties, in such Intellectual
Property or IP Licenses and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby and the Collateral Agent’s (on behalf of
Lenders and the other Secured Parties) rights and remedies with respect thereto;

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

(iv)execute, in connection with any sale provided for in Section 6.1 or 6.5, any
document to effect or otherwise necessary or appropriate in relation to evidence
the sale of any Collateral; or

(v)(A) direct any party liable for any payment under any Collateral to make
payment of any moneys due or to become due thereunder directly to the Collateral
Agent or as the Collateral Agent shall direct, (B) ask or demand for, and
collect and receive payment of and receipt for, any moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Collateral, (C) commence and prosecute any suit, action or proceeding at law or
in equity in any court of competent jurisdiction to collect any Collateral and
to enforce any other right in respect of any Collateral, (D) defend any actions,
suits, proceedings, audits, claims, demands, orders or disputes brought against
such Grantor with respect to any

-23-

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

 

Collateral, (E) settle, compromise or adjust any such actions, suits,
proceedings, audits, claims, demands, orders or disputes and, in connection
therewith, give such discharges or releases as the Collateral Agent may deem
appropriate, (F) assign or license any Intellectual Property included in the
Collateral on such terms and conditions and in such manner as the Collateral
Agent shall in its sole discretion determine, including the execution and filing
of any document necessary to effectuate or record such assignment or license and
(G) generally, sell, assign, license, convey, transfer or grant a Lien on, make
any contractual obligation with respect to and otherwise deal with, any
Collateral as fully and completely as though the Collateral Agent on behalf of
Lenders and the other Secured Parties were the absolute owner thereof for all
purposes and do, at the Collateral Agent’s option, at any time or from time to
time, all acts and things that the Collateral Agent deems necessary to protect,
preserve or realize upon any Collateral and the Collateral Agent’s, in favor of
and for the benefit of Lenders and the other Secured Parties, security interests
therein and to effect the intent of the Loan Documents, all as fully and
effectively as such Grantor might do.

(vi)If any Grantor fails to perform or comply with any contractual obligation
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such contractual obligation.

(b)The reasonable and documented out-of-pocket expenses of the Collateral Agent
and any Lender and other Secured Party incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at
the Default Rate, from the date of payment by such Person to the date reimbursed
by the relevant Grantor, shall be payable by such Grantor to such Person on
demand.

(c)Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue of this Section 7.1.  All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until the indefeasible payment in full of the Secured Obligations
(other than inchoate indemnity obligations), this Agreement is terminated and
the security interests created hereby are released.

Section 7.2.Authorization to File Financing Statements

.  Each Grantor authorizes the Collateral Agent and its Related Party, at any
time and from time to time, without notice to any Grantor, to file or record
financing statements, amendments thereto, and other filing or recording
documents or instruments with respect to any Collateral in such form, in such
jurisdictions and in such offices as the Collateral Agent reasonably determines
appropriate to perfect or protect the security interests of the Collateral
Agent, in favor of and for the benefit of Lenders and the other Secured Parties,
under this Agreement or any other Loan Document (and the Collateral Agent’s and
each Lender’s and each other Secured Party’s rights in respect thereof), and
such financing statements and amendments may describe the Collateral covered
thereby as “all assets of the debtor” or words of similar effect and may include
a notice that any disposition of the Collateral, by any Grantor or other Person,
shall be deemed to violate the rights of the Collateral Agent and Lenders and
other Secured Parties under the Code to the extent not permitted under this
Agreement or any other Loan Document.  A photographic or other reproduction of
this Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any
jurisdiction.  Such Grantor also hereby ratifies its authorization for the
Collateral Agent to have filed any initial financing statement or amendment
thereto under the Code (or other similar laws) in effect in any jurisdiction if
filed prior to the date hereof.

-24-

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

 

Section 7.3.Authority of Collateral Agent.  Each Grantor acknowledges that, as
between the Collateral Agent and the Grantors, the Collateral Agent shall be
conclusively presumed to be acting as agent for each Lender and all of the other
Secured Parties with full and valid authority so to act or refrain from acting,
and no Grantor shall be under any obligation or entitlement to make any inquiry
respecting such authority.

Section 7.4.Duty; Obligations and Liabilities.

(a)Duty of Collateral Agent.  The Collateral Agent’s sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession shall be to deal with it in the same manner as it deals with similar
property for its own account.  The powers conferred on the Collateral Agent
hereunder are solely to protect each Lender’s and the other Secured Parties’
interest in the Collateral and shall not impose any duty upon the Collateral
Agent to exercise any such powers.  The Collateral Agent shall be accountable
only for amounts that it receives as a result of the exercise of such powers,
and neither it nor any of its Related Parties shall be responsible to any
Grantor for any act or failure to act hereunder, except for its or their own
gross negligence, bad faith or willful misconduct as finally determined by a
court of competent jurisdiction.  In addition, the Collateral Agent shall not be
liable or responsible for any loss or damage to any Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any
warehousemen, carrier, forwarding agency, consignee or other bailee if such
Person has been selected by the Collateral Agent in good faith.

(b)Obligations and Liabilities with respect to Collateral.  Neither the
Collateral Agent nor Lenders or any other Secured Parties nor any of their
respective Related Parties shall be liable for failure to demand, collect or
realize upon any Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to any Collateral.

Article VIII

MISCELLANEOUS

Section 8.1.Reinstatement.  Each Grantor agrees that, if any payment made by any
Credit Party or other Person and applied to the Secured Obligations is at any
time annulled, avoided, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of any Collateral are required to be returned by any Secured Party
to such Credit Party, its estate, trustee, receiver or any other party,
including any Grantor, under any bankruptcy law, state or federal law, common
law or equitable cause, then, to the extent of such payment or repayment, any
Lien or other Collateral securing such liability shall be and remain in full
force and effect, as fully as if such payment had never been made.  If, prior to
any of the foregoing, (a) any Lien or other Collateral securing such Grantor’s
liability hereunder shall have been released or terminated by virtue of the
foregoing or (b) any provision of the Guaranty hereunder shall have been
terminated, cancelled or surrendered, such Lien, other Collateral or provision
shall be reinstated in full force and effect and such prior release,
termination, cancellation or surrender shall not diminish, release, discharge,
impair or otherwise affect the obligations of such Grantor in respect of any
Lien or other Collateral securing such obligation or the amount of such payment.

-25-

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

 

Section 8.2.Release of Collateral and Guarantee Obligations.

(a)When all Obligations (other than inchoate indemnity obligations)  have
indefeasibly been paid in full, the Collateral shall be released from the Lien
created hereby and this Agreement and all obligations (other than those
expressly stated to survive such termination) of each Lender and any other
Secured Party and each Guarantor and Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party
(except as required hereunder), and all rights of the Collateral Agent, Lenders
and any other Secured Parties to the Collateral shall revert to the Grantors.

(b)In connection with any termination or release pursuant to this Section 8.2,
the Collateral Agent shall, and to the extent required, each Secured Party
hereby authorizes the Collateral Agent to, promptly execute and deliver to any
Grantor all instruments, documents and agreements which such Grantor shall
reasonably request in writing to evidence and confirm such termination or
release (including termination statements under the Code), and will duly assign,
transfer and deliver to such Grantor (or its designee), such of the Collateral
that may be in the possession of the Collateral Agent, all without further
consent or joinder of the Collateral Agent or any Lender or other Secured Party.

(c)Any termination or release pursuant to this Section 8.2 is subject to
reinstatement as provided in Section 8.1.

(d)Upon the release of the Liens on any Collateral or of a Grantor from all of
its obligations as a Credit Party under the Loan Agreement and as a Grantor
hereunder, any representation, warranty or covenant contained in any Loan
Document relating to any such Collateral or such Grantor, as applicable, shall
no longer be deemed to be made.

(e)Without limiting the generality of Section 2.4 of the Loan Agreement,
Borrower agrees to pay all reasonable and documented out-of-pocket expenses
incurred by the Collateral Agent and each Lender and other Secured Party in
connection with the taking of any actions pursuant to or as otherwise
contemplated by this Section 8.2.

Section 8.3.Independent Obligations.  The obligations of each Grantor hereunder
are independent of and separate from the Secured Obligations and the Guaranteed
Obligations.  Upon any Event of Default and during the continuance thereof, the
Collateral Agent for the benefit of Lenders and the other Secured Parties may,
at its sole election, proceed directly and at once, without notice, against any
Grantor and any Collateral to collect and recover the full amount of any Secured
Obligation or Guaranteed Obligation then due, without first proceeding against
any other Grantor, any other Credit Party or any other Collateral and without
first joining any other Grantor or any other Credit Party in any proceeding.

Section 8.4.No Waiver by Course of Conduct.  Neither the Collateral Agent nor
any Secured Party shall by any act (except by a written instrument pursuant to
Section 8.5), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default.  No failure to exercise, nor any delay in exercising, on the part of
the Collateral Agent or any Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof.  No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  A
waiver by the Collateral Agent or any Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Collateral Agent or any Secured Party would otherwise have on
any future occasion.

-26-

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

 

Section 8.5.Amendments in Writing.  None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 11.5 of the Loan Agreement; provided, however, that
annexes to this Agreement may be supplemented (but no existing provisions may be
modified and no Collateral may be released) through Pledge Amendments and
Joinder Agreements, in substantially the form of Annex 1 and Annex 2 attached
hereto, respectively, in each case, duly executed by the Collateral Agent and
each Grantor directly affected thereby.

Section 8.6.Additional Grantors and Guarantors; Additional Pledged Collateral.

(a)Joinder Agreements.  If, at the option of Borrower or as required pursuant to
Section 5.12 or Section 5.13 of the Loan Agreement, Borrower shall cause any
Subsidiary (other than an Excluded Subsidiary) that is not a Grantor or
Guarantor to become a Grantor and Guarantor hereunder, such Subsidiary shall
execute and deliver to the Collateral Agent a Joinder Agreement substantially in
the form of Annex 2 attached hereto and shall thereafter for all purposes be a
party hereto and have the same rights, benefits and obligations as a Grantor
party hereto on the Closing Date.

(b)Pledge Amendments.  To the extent any Pledged Collateral has not been
delivered as of the Tranche A Closing Date, such Grantor shall, promptly after
such Pledged Collateral is acquired, deliver a pledge amendment duly executed by
the Grantor in substantially the form of Annex 1 attached hereto (each, a
“Pledge Amendment”).  Such Grantor authorizes the Collateral Agent to attach
each Pledge Amendment to this Agreement.

Section 8.7.Notices

.  All notices, requests and demands to or upon the Collateral Agent or any
Grantor hereunder shall be effected in the manner provided for in Section 9 of
the Loan Agreement; provided, however, that any such notice, request or demand
to or upon any Grantor shall be addressed to Borrower’s notice address set forth
in Section 9 of the Loan Agreement.

Section 8.8.Successors and Assigns

.  This Agreement shall be binding upon the successors and assigns of each
Grantor and shall inure to the benefit of the Collateral Agent and each Secured
Party and their respective successors and assigns; provided, however, that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Collateral Agent.

Section 8.9.Counterparts

.  This Agreement may be executed in any number of counterparts and by different
parties in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.  Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart.  Delivery of an executed
signature page of this Agreement by facsimile transmission or by electronic
transmission shall be as effective as delivery of a manually executed
counterpart hereof.

Section 8.10.Severability

.  Any provision of this Agreement being held illegal, invalid or unenforceable
in any jurisdiction shall not affect any part of such provision not held
illegal, invalid or unenforceable, any other provision of this Agreement or any
part of such provision in any other jurisdiction.

-27-

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

 

Section 8.11.Governing Law

.  This Agreement and the rights and obligations of the parties hereto shall be
governed by, and construed and interpreted in accordance with, the law of the
State of New York without regard to any principle of conflicts of law that could
require the application of the law of any other jurisdiction.

Section 8.12.Waiver of Jury Trial

.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT
TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN AND
THEREIN OR RELATED HERETO OR THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY
OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO
RELATED PARTY 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, (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.12 AND (C) HAS REVIEWED THIS WAIVER WITH ITS
COUNSEL.

EACH GRANTOR AGREES TO BE BOUND BY THE PROVISIONS OF SECTION 10 OF THE LOAN
AGREEMENT.

[Signature Pages Follow]

 

 

-28-

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

 

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

 

EPIZYME, INC.,

as Borrower and Grantor

 

 

 

By:

 

/s/ Robert B. Bazemore

Name:

 

Robert B. Bazemore

Title:

 

Chief Executive Officer

 

ACCEPTED AND AGREED

as of the date first above written:

 

 

 

BIOPHARMA CREDIT PLC,

as Collateral Agent

 

 

 

By:

 

Pharmakon Advisors, LP,

its Investment Manager

 

 

 

By:

 

Pharmakon Management I, LLC,

its General Partner

 

 

 

By:

 

/s/ Pedro Gonzalez de Cosio

Name:

 

Pedro Gonzalez de Cosio

Title:

 

Managing Member