Exhibit 10.14

 

 

PLEDGE AGREEMENT

dated as of March 26, 2009

among

SBARRO, INC.,

as Borrower,

SBARRO HOLDINGS, LLC,

as Holdings,

THE OTHER LOAN PARTIES FROM TIME TO TIME PARTY HERETO,

and

NATIXIS, NEW YORK BRANCH,

as Collateral Agent

 

 

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TABLE OF CONTENTSa

 

     Page

ARTICLE I

DEFINITIONS

Section 1.01

  

Terms Defined in the Credit Agreement

   1

Section 1.02

  

Terms Defined in the UCC

   1

Section 1.03

  

Additional Definitions

   2

Section 1.04

  

Terms Generally

   9

ARTICLE II

THE SECURITY INTERESTS

Section 2.01

  

Grant of Security Interests

   9

Section 2.02

  

Collateral

   10

Section 2.03

  

Security Interests Absolute

   11

Section 2.04

  

Continuing Liability Under Collateral

   12

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.01

  

Title to Collateral

   13

Section 3.02

  

Governmental Authority

   13

Section 3.03

  

Collateral

   13

Section 3.04

  

No Consents

   14

ARTICLE IV

COVENANTS

Section 4.01

  

Delivery of Collateral

   14

Section 4.02

  

Reserved

   15

Section 4.03

  

Change of Name, Organizational Structure or Location; Subjection to Other
Security Agreements

   15

Section 4.04

  

Further Actions

   16

Section 4.05

  

Disposition of Collateral

   16

Section 4.06

  

Additional Collateral

   16

Section 4.07

  

Information Regarding Collateral

   17

 

a

The Table of Contents is not a part of the Pledge Agreement.

 

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ARTICLE V

DISTRIBUTIONS ON COLLATERAL; VOTING

Section 5.01

  

Right to Receive Distributions on Collateral; Voting

   17

ARTICLE VI

GENERAL AUTHORITY; REMEDIES

Section 6.01

  

General Authority

   19

Section 6.02

  

Authority of Collateral Agent

   20

Section 6.03

  

Remedies upon Event of Default

   20

Section 6.04

  

Securities Act

   21

Section 6.05

  

Other Rights of the Collateral Agent

   22

Section 6.06

  

Limitation on Duty of the Collateral Agent in Respect of Collateral

   23

Section 6.07

  

Waiver and Estoppel

   23

Section 6.08

  

Application of Proceeds

   24

ARTICLE VII

THE COLLATERAL AGENT

Section 7.01

  

Concerning the Collateral Agent

   24

Section 7.02

  

Appointment of Co-Collateral Agent

   25

Section 7.03

  

Appointment of Sub-Agents

   25

ARTICLE VIII

MISCELLANEOUS

Section 8.01

  

Notices

   25

Section 8.02

  

No Waivers; Non-Exclusive Remedies

   26

Section 8.03

  

Compensation and Expenses of the Collateral Agent; Indemnification

   26

Section 8.04

  

Enforcement

   27

Section 8.05

  

Amendments and Waivers

   27

Section 8.06

  

Successors and Assigns

   28

Section 8.07

  

Governing Law

   28

Section 8.08

  

Limitation of Law; Severability

   28

Section 8.09

  

Counterparts; Effectiveness

   28

Section 8.10

  

Additional Loan Parties

   29

Section 8.11

  

Termination; Release of Loan Parties

   29

Section 8.12

  

Entire Agreement

   30

Section 8.13

  

No Conflict

   30

Section 8.14

  

Intercreditor Agreement

   30

 

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Schedules: Schedule I   -   List of Pledged Shares Schedule II   -   List of
Pledged Notes Schedule III   -   List of Pledged LLC Interests Schedule IV   -  
List of Pledged Partnership Interests Exhibits: Exhibit A   -   Form of Issuer
Control Agreement Exhibit B   -   Form of Securities Account Control Agreement

 

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PLEDGE AGREEMENT dated as of March 26, 2009 (as amended, restated, modified or
supplemented from time to time, this “Agreement”) among SBARRO HOLDINGS, LLC, a
Delaware limited liability company (“Holdings”), SBARRO, INC., a New York
corporation (the “Borrower”), the other LOAN PARTIES from time to time party
hereto and NATIXIS, NEW YORK BRANCH, as collateral agent for the Credit Parties
(in such capacity, together with its successors, the “Collateral Agent”).

Holdings and the Borrower propose to enter into the Second Lien Credit Agreement
dated as of March 26, 2009 (as amended, restated, modified, supplemented,
restructured or refinanced from time to time, the “Credit Agreement”) among
Holdings, the Borrower, the banks and other lending institutions from time to
time party thereto (each a “Lender” and, collectively, the “Lenders”), Natixis,
New York Branch, as administrative agent and collateral agent (together with its
successor or successors in each such capacity, the “Administrative Agent” and
the “Collateral Agent”).

The Lender, the Administrative Agent, the Collateral Agent and their respective
successors and assigns are herein referred to individually as a “Credit Party”
and collectively as the “Credit Parties”.

To induce the Credit Parties to enter into the Credit Agreement and the other
Loan Documents referred to therein (collectively with the Credit Agreement, the
“Loan Documents”) and as a condition precedent to the obligations of the Credit
Parties under the Credit Agreement, Holdings and certain Subsidiaries of
Holdings (each a “Subsidiary Guarantor” and, collectively, the “Subsidiary
Guarantors”) and, together with Holdings, each other Person that becomes a
guarantor and the respective successors and permitted assigns of each of the
foregoing, the “Guarantors” and together with the Borrower, each a “Loan Party”
and, collectively the “Loan Parties”, have agreed, jointly and severally, to
provide a guaranty of all obligations of the Borrower and the other Loan Parties
under or in respect of the Loan Documents.

As a further condition precedent to the obligations of the Lenders under the
Loan Documents, each Loan Party has agreed or will agree to grant a continuing
security interest in favor of the Collateral Agent in and to the Collateral to
secure the Credit Obligations. Accordingly, in consideration of the foregoing,
the mutual covenants and obligations herein set forth and for other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

ARTICLE I

DEFINITIONS

Section 1.01 Terms Defined in the Credit Agreement. Terms defined in the Credit
Agreement have the respective meanings set forth therein, unless otherwise
defined in this Article I.

Section 1.02 Terms Defined in the UCC. Unless otherwise defined herein or in the
Credit Agreement or the context otherwise requires, the following terms,
together with any uncapitalized terms used herein which are defined in the UCC
(as defined below), have the

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respective meanings provided in the UCC: (i) Certificated Security;
(ii) Financial Asset; (iii) Investment Property; (iv) Payment Intangibles;
(v) Proceeds; (vi) Securities Account; (vii) Securities Intermediary;
(viii) Security; (ix) Security Certificate; (x) Uncertificated Security; and
(xi) Security Entitlement.

Section 1.03 Additional Definitions. Terms defined in the introductory section
hereof have the respective meanings set forth therein. The following additional
terms, as used herein, have the following respective meanings:

“Account Control Agreement” means (i) with respect to a Deposit Account, a
deposit account control agreement, substantially in the form of Exhibit C to the
Security Agreement or otherwise containing reasonably acceptable terms and in
form and substance reasonably acceptable to the Collateral Agent (which approval
shall be deemed given by execution of such agreement), among one or more Loan
Parties, the Collateral Agent and the bank which maintains such Deposit Account
and (ii) with respect to a Securities Account, a securities account control
agreement, substantially in the form of Exhibit B hereto or otherwise containing
reasonably acceptable terms and in form and substance reasonably acceptable to
the Collateral Agent (which approval shall be deemed given by execution of such
agreement), among one or more Loan Parties, the Collateral Agent and the
Securities Intermediary which maintains such Securities Account, in each case as
the same may be amended, modified or supplemented from time to time.

“Bankruptcy Code” means title 11 of the United States Code entitled
“Bankruptcy”, as now and hereafter in effect, or any successor statute.

“Bankruptcy Law” means the Bankruptcy Code and all other liquidation,
receivership, moratorium, conservatorship, assignment for the benefit of
creditors, insolvency or similar federal, state or foreign law for the relief of
debtors.

“Collateral” has the meaning set forth in Section 2.02 of this Agreement.

“Collateral Agent” means Natixis, New York Branch., in its capacity as
collateral agent for the Credit Parties, and its successor or successors in such
capacity.

“Credit Obligations” has the meaning assigned to the term “Second Lien Credit
Obligations” in the Credit Agreement.

“Delivery” and the corresponding term “Delivered” when used with respect to
Collateral means:

(i) in the case of Collateral constituting Certificated Securities, transfer
thereof to the First Lien Collateral Agent or its nominee or custodian or the
Collateral Agent or its nominee or custodian, as applicable, in accordance with
the terms of the Intercreditor Agreement, by physical delivery to the First Lien
Collateral Agent or its nominee or custodian or the Collateral Agent or its
nominee or custodian, as applicable, in accordance with the terms of the
Intercreditor Agreement, such Collateral to be in suitable form for transfer by
delivery, or accompanied by undated stock or note transfer powers duly executed
in blank;

 

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(ii) in the case of Collateral constituting Uncertificated Securities,
(A) registration thereof on the books and records of the issuer thereof in the
name of the First Lien Collateral Agent or its nominee or custodian or the
Collateral Agent or its nominee or custodian, as applicable, in accordance with
the terms of the Intercreditor Agreement, (who may not be a Securities
Intermediary) or (B) the execution and delivery by the issuer thereof of an
effective agreement, substantially in the form of Exhibit A hereto (each an
“Issuer Control Agreement”), pursuant to which such issuer agrees that it will
comply with instructions originated by the First Lien Collateral Agent or its
nominee or custodian or the Collateral Agent or its nominee or custodian, as
applicable, in accordance with the terms of the Intercreditor Agreement, without
further consent of the registered owner of such Collateral or any other Person;
provided that no such Delivery shall be required for Foreign Subsidiaries or
Persons who are not Wholly-Owned Subsidiaries;

(iii) in the case of Collateral constituting Security Entitlements or other
Financial Assets deposited in or credited to a Securities Account at the option
of the applicable Loan Parties, (A) completion of all actions necessary to
constitute the First Lien Collateral Agent or its nominee or custodian or the
Collateral Agent or its nominee or custodian, as applicable, in accordance with
the terms of the Intercreditor Agreement, the entitlement holder with respect to
each such Security Entitlement or (B) the execution and delivery by the relevant
Securities Intermediary of an effective Account Control Agreement pursuant to
which such Securities Intermediary agrees to comply with all entitlement orders
originated by the First Lien Collateral Agent or its nominee or custodian or the
Collateral Agent or its nominee or custodian, as applicable, in accordance with
the terms of the Intercreditor Agreement, without further consent by the
relevant entitlement holder or any other Person;

(iv) in the case of LLC Interests and Partnership Interests which do not
constitute Securities, (A) compliance with the provisions of clause (i) above
for each such item of Collateral which is represented by a certificate and
(B) compliance with the provisions of clause (ii) above for each such item of
Collateral which is not evidenced by a certificate;

(v) in the case of Collateral constituting Instruments, transfer thereof to the
First Lien Collateral Agent or its nominee or custodian or the Collateral Agent
or its nominee or custodian, as applicable, in accordance with the terms of the
Intercreditor Agreement, by physical delivery to the First Lien Collateral Agent
or its nominee or custodian or the Collateral Agent or its nominee or custodian,
as applicable, in accordance with the terms of the Intercreditor Agreement,
indorsed to, or registered in the name of, the First Lien Collateral Agent or
its nominee or custodian or the Collateral Agent or its nominee or custodian, as
applicable, in accordance with the terms of the Intercreditor Agreement, or
indorsed in blank;

 

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(vi) in the case of cash, transfer thereof to the First Lien Collateral Agent or
its nominee or custodian or the Collateral Agent or its nominee or custodian, as
applicable, in accordance with the terms of the Intercreditor Agreement, by
physical delivery to the Collateral Agent or such nominee or custodian; and

(vii) in each case such additional or alternative procedures as may hereafter
become reasonably appropriate to grant control of, or otherwise perfect a
security interest in, any Collateral in favor of the First Lien Collateral Agent
or its nominee or custodian or the Collateral Agent or its nominee or custodian,
as applicable, in accordance with the terms of the Intercreditor Agreement,,
consistent with changes in applicable Law or regulations or the interpretation
thereof.

“Domestic Subsidiary” means with respect to any Person each Subsidiary of such
Person that is organized under the laws of the United States, the District of
Columbia or any State, and “Domestic Subsidiaries” means any two or more of
them.

“Event of Default” means one or more Events of Default, as such term is defined
in the Credit Agreement.

“Excluded Contracts” shall have the meaning specified in the Security Agreement.

“Excluded Equipment” shall have the meaning specified in the Security Agreement.

“Exempt Deposit Accounts” shall have the meaning specified in the Credit
Agreement.

“First Lien Finance Party” means “Finance Party” as defined in the First Lien
Security Agreement.

“First Lien Security Agreement” means the Security Agreement, dated as of
January 31, 2007, among Holdings, the Borrower, the loan parties from time to
time party thereto, and the First Lien Collateral Agent.

“Foreign Subsidiary” means, with respect to any Person, any Subsidiary of such
Person that is not a Domestic Subsidiary of such Person.

“General Intangibles” means all “general intangibles” (as defined in the UCC),
including, without limitation, (i) all Payment Intangibles and other obligations
and indebtedness owing to any Loan Party in respect of Collateral and (ii) all
interests in limited liability companies and/or partnerships which interests do
not constitute Securities.

“Insolvency or Liquidation Proceeding” means (i) any voluntary or involuntary
case or proceeding under the Bankruptcy Code or any other Bankruptcy Law with
respect to any Loan Party, (ii) any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding

 

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with respect to any Loan Party or with respect to a material portion of their
respective assets, (iii) any liquidation, dissolution, reorganization or winding
up of any Loan Party whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy or (iv) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of any Loan Party.

“Instruments” means:

(i) the promissory notes described on Schedule II hereto, as such Schedule may
be amended, supplemented or modified from time to time (the “Pledged Notes”),
and all interest, distributions, cash, instruments and other property, income,
profits and proceeds from time to time received or receivable or otherwise made
upon or distributed in respect of or in exchange for any or all of the Pledged
Notes;

(ii) all additional or substitute promissory notes from time to time issued to
or otherwise acquired by any Loan Party in any manner in respect of Pledged
Notes or otherwise, and all interest, distributions, cash, instruments and other
property, income, profits and proceeds from time to time received or receivable
or otherwise made upon or distributed in respect of such additional or
substitute notes; and

(iii) all promissory notes, bankers’ acceptances, commercial paper, negotiable
certificates of deposit and other obligations constituting “instruments” within
the meaning of the UCC; and

(iv) to the extent not otherwise included in the foregoing, all cash and
non-cash Proceeds thereof.

“LLC Interests” means:

(i) the limited liability company membership interests described on Schedule III
hereto, as such Schedule may be amended, supplemented or modified from time to
time and all other limited liability company membership interests of any
Subsidiary from time to time issued or otherwise acquired by any Loan Party
(collectively, the “Pledged LLC Interests”), and all dividends, distributions,
cash, instruments and other property, income, profits and proceeds from time to
time received or receivable or otherwise made upon or distributed in respect of
or in exchange for any or all of the Pledged LLC Interests;

(ii) all additional or substitute limited liability company membership interests
from time to time issued to or otherwise acquired by any Loan Party in any
manner in respect of Pledged LLC Interests or otherwise, and all dividends,
distributions, cash, instruments and other property, income, profits and
proceeds from time to time received or receivable or otherwise made upon or
distributed in respect of such additional or substitute membership interests;

(iii) all right, title and interest of any Loan Party in each limited liability
company to which any Pledged LLC Interest relates, including, without
limitation;

 

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(iv) all interests of such Loan Party in the capital of such limited liability
company and in all profits, losses and assets, whether tangible or intangible
and whether real, personal or mixed, of such limited liability company, and all
other distributions to which such Loan Party shall at any time be entitled in
respect of such Pledged LLC Interests;

(v) all other payments due or to become due to such Loan Party in respect of
Pledged LLC Interests, whether under any limited liability company agreement or
operating agreement or otherwise and whether as contractual obligations,
damages, insurance proceeds or otherwise;

(vi) all of such Loan Party’s claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any limited
liability company agreement or operating agreement, or at Law or otherwise in
respect of such Pledged LLC Interests;

(vii) all present and future claims, if any, of such Loan Party against any such
limited liability company for moneys loaned or advanced, for services rendered
or otherwise; and

(viii) all of such Loan Party’s rights under any limited liability company
agreement or operating agreement or at Law to exercise and enforce every right,
power, remedy, authority, option and privilege of such Loan Party relating to
such Pledged LLC Interests, including any power to terminate, cancel or modify
any limited liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in the name of
such Loan Party in respect of such Pledged LLC Interests and any such limited
liability company, to make determinations, to exercise any election (including,
without limitation, election of remedies) or option to give or receive any
notice, consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or give receipt for any of the
foregoing or for any assets of any such limited liability company, to enforce or
execute any checks or other instruments or orders, to file any claims and to
take any other action in connection with any of the foregoing; and

(ix) to the extent not otherwise included in the foregoing, all cash and
non-cash Proceeds thereof.

“Loan Party” means Holdings, the Borrower and each Guarantor, and “Loan Parties”
means all of them, collectively.

“Partnership Interests” means:

(i) the partnership interests described on Schedule IV hereto, as such Schedule
may be amended, supplemented or modified from time to time and all other
partnership interests of any Subsidiary from time to time issued or otherwise
acquired by any Loan Party (collectively, the “Pledged Partnership Interests”),
and all dividends, distributions, cash, instruments and other property, income,
profits and proceeds from time to time received or receivable or otherwise made
upon or distributed in respect of or in exchange for any or all of the Pledged
Partnership Interests;

 

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(ii) all additional or substitute partnership interests from time to time issued
to or otherwise acquired by any Loan Party in any manner in respect of Pledged
Partnership Interests or otherwise, and all dividends, distributions, cash,
instruments and other property, income, profits and proceeds from time to time
received or receivable or otherwise made upon or distributed in respect of such
additional or substitute partnership interests;

(iii) all right, title and interest of any Loan Party in each partnership to
which any Pledged Partnership Interest relates, including, without limitation:

(A) all interests of such Loan Party in the capital of such partnership and in
all profits, losses and assets, whether tangible or intangible and whether real,
personal or mixed, of such partnership, and all other distributions to which
such Loan Party shall at any time be entitled in respect of such Pledged
Partnership Interests;

(B) all other payments due or to become due to such Loan Party in respect of
Pledged Partnership Interests, whether under any partnership agreement or
otherwise and whether as contractual obligations, damages, insurance proceeds or
otherwise;

(C) all of such Loan Party’s claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any partnership
agreement, or at Law or otherwise in respect of such Pledged Partnership
Interests;

(D) all present and future claims, if any, of such Loan Party against any such
partnership for moneys loaned or advanced, for services rendered or otherwise;
and

(E) all of such Loan Party’s rights under any partnership agreement or at Law to
exercise and enforce every right, power, remedy, authority, option and privilege
of such Loan Party relating to such Pledged Partnership Interests, including any
power to terminate, cancel or modify any partnership agreement, to execute any
instruments and to take any and all other action on behalf of and in the name of
such Loan Party in respect of such Pledged Partnership Interests and any such
partnership, to make determinations, to exercise any election (including,
without limitation, election of remedies) or option to give or receive any
notice, consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or give receipt for any of the
foregoing or for any assets of any such partnership, to enforce or execute any
checks or other instruments or orders, to file any claims and to take any other
action in connection with any of the foregoing; and

 

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(iv) to the extent not otherwise included in the foregoing, all cash and
non-cash Proceeds thereof.

“Perfection Certificate” means with respect to each Loan Party a certificate,
substantially in the form of Exhibit F-3 to the Credit Agreement, completed and
supplemented with the schedules and attachments contemplated thereby to the
reasonable satisfaction of the Collateral Agent.

“Permitted Lien” means any Lien referred to in, and permitted by, Section 7.02
of the Credit Agreement.

“Pledged LLC Interests” has the meaning set forth in clause (i) of the
definition of “LLC Interests”.

“Pledged Notes” has the meaning set forth in clause (i) of the definition of
“Instruments”.

“Pledged Partnership Interests” has the meaning set forth in clause (i) of the
definition of “Partnership Interests”.

“Pledged Shares” has the meaning set forth in clause (i) of the definition of
“Stock”.

“Requisite Priority Lien” means a valid and perfected security interest in favor
of the Collateral Agent for the benefit of the Credit Parties and securing the
Credit Obligations.

“Security Agreement” means the Security Agreement dated as of the date hereof
among Holdings, the Borrower, the Subsidiary Guarantors from time to time party
thereto and the Collateral Agent, as the same may be amended, modified or
supplemented from time to time.

“Security Interest” means the security interest granted pursuant to Section 2.01
hereof in favor of the Collateral Agent for the benefit of the Credit Parties
securing the Credit Obligations.

“Stock” means:

(i) the shares of capital stock and other Securities described on Schedule I
hereto, as such Schedule may be amended, supplemented or modified from time to
time and all other capital stock and securities of any Subsidiary from time to
time issued or otherwise acquired by any Loan Party (collectively, the “Pledged
Shares”), and all dividends, interest, distributions, cash, instruments and
other property, income, profits and proceeds from time to time received,
receivable or otherwise made upon or distributed in respect of or in exchange
for any or all of the Pledged Shares; and

(ii) all additional or substitute shares of capital stock or other equity
interests of any class of any issuer from time to time issued to or otherwise
acquired by any Loan Party in any manner in respect of Pledged Shares or
otherwise, the certificates

 

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representing such additional or substitute shares, and all dividends, interest,
distributions, cash, instruments and other property, income, profits and
proceeds from time to time received, receivable or otherwise made upon or
distributed in respect of or in exchange for any or all of such additional or
substitute shares; and

(iii) to the extent not otherwise included in the foregoing, all cash and
non-cash proceeds thereof.

“Supporting Obligation” means a Letter-of-Credit Right, Guaranty Obligation or
other secondary obligation supporting or any Lien securing the payment or
performance of one or more Receivables, General Intangibles, Documents or
Investment Property.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York; provided that if by reason of mandatory provisions of Law,
the perfection, the effect of perfection or non-perfection or the priority of
the Security Interests in any Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.

Section 1.04 Terms Generally. The definitions in Sections 1.02 and 1.03 shall
apply equally to both the singular and plural forms of the terms defined, except
for terms defined in both the singular and the plural form. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”. All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Unless otherwise expressly provided herein,
the word “day” means a calendar day.

ARTICLE II

THE SECURITY INTERESTS

Section 2.01 Grant of Security Interests. To secure the due and punctual payment
of the Credit Obligations, howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing or due or
to become due, in accordance with the terms thereof and to secure the
performance of all of the obligations of each Loan Party hereunder and under the
other Loan Documents in respect of the Credit Obligations, each Loan Party
hereby grants to the Collateral Agent for the benefit of the Credit Parties a
security interest in, and each Loan Party hereby pledges and collaterally
assigns to the Collateral Agent for the benefit of the Credit Parties, all of
such Loan Party’s right, title and interest in, to and under the Collateral.

 

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Section 2.02 Collateral.

(a) All right, title and interest of each Loan Party in, to and under the
following property, whether now owned or existing or hereafter created or
acquired by a Loan Party, whether tangible or intangible, and regardless of
where located, are herein collectively referred to as the “Collateral”:

(i) Stock;

(ii) Instruments;

(iii) LLC Interests;

(iv) Partnership Interests;

(v) Investment Property;

(vi) Financial Assets;

(vii) all General Intangibles; and

(viii) to the extent not otherwise included, all Proceeds of all or any of the
Collateral described in clauses (i) through (vii) hereof;

provided, however, that the Collateral shall not include (w) cash or other
distributions in respect of federal, state and/or local income taxes payable by
any Loan Party or any direct or indirect equity holder of any Loan Party in
respect of the income and profits of any limited liability company, partnership
or other entity which is not a corporation for United States federal income tax
purposes; (x) shares of capital stock or other equity interests of Subsidiaries
of a Foreign Subsidiary or capital stock or other equity interests in excess of
65% of all classes of capital stock or other equity interests issued by a first
tier Foreign Subsidiary of any Loan Party and (y) any property excluded from the
“Collateral” under and as that term is defined in the Security Agreement.

(b) Subject to the terms of the Intercreditor Agreement, notwithstanding
anything herein to the contrary, the foregoing Section 2.02(a) shall not require
the creation or perfection of pledges of or security interests in particular
assets if and for so long as, in the reasonable judgment of the Administrative
Agent (confirmed in writing by notice to the Borrower), the cost or effort of
creating or perfecting such pledges or security interests in such assets shall
be excessive in view of the benefits to be obtained by the Credit Parties
therefrom. Subject to the terms of the Intercreditor Agreement, the
Administrative Agent may grant extensions of time for the perfection of security
interests in particular assets (including extensions beyond the Closing Date for
the perfection of security interests in the assets of any Loan Party on such
date) where it reasonably determines, in consultation with the Borrower, that
perfection cannot be accomplished without undue effort or expense by the time or
times at which it would otherwise be required by this Agreement or the other
Loan Documents.

 

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Section 2.03 Security Interests Absolute. All rights of the Collateral Agent,
all security interests hereunder and all obligations of each Loan Party
hereunder are unconditional and absolute and independent and separate from any
other security for or guaranty of the Credit Obligations, whether executed by
such Loan Party, any other Loan Party or any other Person. Without limiting the
generality of the foregoing, the obligations of each Loan Party hereunder shall
not be released, discharged or otherwise affected or impaired by:

(i) any extension, renewal, settlement, compromise, acceleration, waiver or
release in respect of any obligation of any other Loan Party under any Loan
Document or any other agreement or instrument evidencing or securing any Credit
Obligation, by operation of Law or otherwise;

(ii) any change in the manner, place, time or terms of payment of any Credit
Obligation or any other amendment, supplement or modification to any Loan
Document or any other agreement or instrument evidencing or securing any Credit
Obligation;

(iii) any release, non-perfection or invalidity of any direct or indirect
security for any Credit Obligation, any sale, exchange, surrender, realization
upon, offset against or other action in respect of any direct or indirect
security for any Credit Obligation or any release of any other obligor or Loan
Parties in respect of any Credit Obligation;

(iv) any change in the existence, structure or ownership of any Loan Party, or
any insolvency, bankruptcy, reorganization, arrangement, readjustment,
composition, liquidation or other similar proceeding affecting any Loan Party or
its assets or any resulting disallowance, release or discharge of all or any
portion of any Credit Obligation;

(v) the existence of any claim, set-off or other right which any Loan Party may
have at any time against the Borrower, any other Loan Party, any Agent, any
other Credit Party, or any other Person, whether in connection herewith or any
unrelated transaction; provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;

(vi) any invalidity or unenforceability relating to or against the Borrower or
any other Loan Party for any reason of any Loan Document or any other agreement
or instrument evidencing or securing any Credit Obligation or any provision of
applicable Law or regulation purporting to prohibit the payment by the Borrower
or any other Loan Party of any Credit Obligation;

(vii) any failure by any Credit Party: (A) to file or enforce a claim against
any Loan Party or its estate in an Insolvency or Liquidation Proceeding; (B) to
give notice of the existence, creation or incurrence by any Loan Party of any
new or additional indebtedness or obligation under or with respect to the Credit
Obligations; (C) to commence any action against any Loan Party; (D) to disclose
to any Loan Party any facts which such Credit Party may now or hereafter know
with regard to any Loan Party; or (E) to proceed with due diligence in the
collection, protection or realization upon any collateral securing the Credit
Obligations;

 

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(viii) any direction as to application of payment by the Borrower, any other
Loan Party or any other Person;

(ix) any subordination by any Credit Party of the payment of any Credit
Obligation to the payment of any other liability (whether matured or unmatured)
of any Loan Party to its creditors;

(x) any act or failure to act by the Collateral Agent or any other Credit Party
under this Agreement or otherwise which may deprive any Loan Party of any right
to subrogation, contribution or reimbursement against any other Loan Party or
any right to recover full indemnity for any payments made by such Loan Party in
respect of the Credit Obligations; or

(xi) any other act or omission to act or delay of any kind by any Loan Party or
any Credit Party or any other Person or any other circumstance whatsoever which
might, but for the provisions of this clause, constitute a legal or equitable
discharge of any Loan Party’s obligations hereunder, except that a Loan Party
may assert the defense of final payment in full of the Credit Obligations.

Each Loan Party has irrevocably and unconditionally delivered this Agreement to
the Collateral Agent, for the benefit of the Credit Parties, and the failure by
any other Person to sign this Agreement or a security agreement similar to this
Agreement or otherwise shall not discharge the obligations of any Loan Party
hereunder.

This Agreement shall remain fully enforceable against each Loan Party
irrespective of any defenses that any other Loan Party may have or assert in
respect of the Credit Obligations, including, without limitation, failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, except that a Loan Party may
assert the defense of final payment in full of the Credit Obligations.

Section 2.04 Continuing Liability Under Collateral. Notwithstanding anything
herein to the contrary, (i) nothing contained herein shall affect the liability
of each Loan Party to observe and perform all obligations under the Collateral
and nothing contained herein is intended or shall be a delegation of duties to
the Collateral Agent or any Credit Party, (ii) nothing contained herein shall
affect the liability of each Loan Party under each of the agreements included in
the Collateral, including, without limitation, any agreements relating to
Pledged Partnership Interests or Pledged LLC Interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof (except following any change in owner or
control of any Loan Party resulting from the exercise by the Collateral Agent or
any other Credit Party of their rights hereunder) and neither the Collateral
Agent nor any Credit Party shall have any obligation or liability under any of
such agreements by reason of or arising out of this Agreement or any other
document related thereto nor shall the Collateral Agent nor any Credit Party
have any obligation to make any inquiry as to the nature or sufficiency of any
payment received by it or have any obligation to take any action to collect or
enforce any rights under any agreement included in the Collateral, including,
without limitation, any agreements relating to Pledged Partnership Interests or
Pledged LLC Interests, and (iii) the exercise by the Collateral Agent of any of
its rights hereunder shall not release any Loan Party from any of its duties or
obligations under the contracts and agreements included in the Collateral.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants that:

Section 3.01 Title to Collateral. Other than financing statements or other
similar or equivalent documents or instruments with respect to the Security
Interests and Permitted Liens, no authorized financing statement, mortgage,
security agreement or similar or equivalent document or instrument covering all
or any part of the Collateral is on file or of record in any jurisdiction in
which such filing or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession or control of any Person
asserting any claim thereto or security interest therein, except that the
Collateral Agent (on behalf of itself and the Credit Parties) or its designees
may have possession and/or control of the Collateral as contemplated hereby and
by the other Loan Documents.

Section 3.02 Governmental Authority. Except as set forth on Schedule 4.01 of the
Security Agreement, on and as of the date hereof no registration, recordation or
filing with any Governmental Authority is required in connection with the
execution or delivery of this Agreement, or necessary for the validity or
enforceability hereof or for the perfection of the Security Interest.

Section 3.03 Collateral.

(a) Schedules I, II, III and IV hereto (as such schedules may be amended,
supplemented or modified from time to time) set forth (i) the name and
jurisdiction of organization of, and the ownership interest (including
percentage owned and number of shares, units or other equity interests) of such
Loan Party in the Shares, LLC Interests and Partnership Interests issued by each
of such Loan Party’s direct Subsidiaries which are required to be included in
the Collateral and, subject to the terms of the Intercreditor Agreement, pledged
hereunder, (ii) all other Shares, LLC Interests and Partnership Interests
directly owned by such Loan Party that are required to be included in the
Collateral and, subject to the terms of the Intercreditor Agreement, pledged
hereunder and (iii) the issuer, date of issuance and amount of all promissory
notes having a face value in excess of $1,000,000 directly owned or held by such
Loan Party that are required to be included in the Collateral and, subject to
the terms of the Intercreditor Agreement, pledged hereunder. Except as set forth
on Schedules I, II, III and IV, such Loan Party holds all such Collateral
directly (i.e., not through a Subsidiary, Securities Intermediary or any other
Person).

(b) Except as set forth on Schedules I, II, III and IV hereto, all Collateral
consisting of Pledged Shares, Pledged LLC Interests and Pledged Partnership
Interests has been duly authorized and validly issued, is fully paid and with
respect to capital stock of a corporation, non-assessable and is subject to no
options to purchase or similar rights of any Person. Except as

 

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set forth on Schedules I, III and IV hereto, with respect to Pledged Shares,
Pledged LLC Interests and Pledged Partnership Interests issued by each of such
Loan Party’s direct Subsidiary which are required to be included in the
Collateral (i) such Collateral constitutes 100% of the issued and outstanding
shares of capital stock or other equity interests of the respective issuers
thereof, (ii) no issuer of such Collateral has outstanding any security
convertible into or exchangeable for any shares of its capital stock or other
equity interests or any warrant, option, convertible security, instrument or
other interest entitling the holder thereof to acquire any such shares or any
security convertible into or exchangeable for such shares, (iii) there are no
voting trusts, stockholder agreements, proxies or other agreements in effect
with respect to the voting or transfer of such shares of its capital stock and
(iv) there are no Liens or agreements, arrangements or obligations to create or
give any Lien relating to any such shares of capital stock except for Permitted
Liens. Except as permitted under the Credit Agreement, no Loan Party is now and
or will become a party to or otherwise bound by any agreement, other than the
First Lien Finance Documents, this Agreement or the Loan Documents, which
materially restricts in any adverse manner the rights of the Collateral Agent or
any other present or future holder of any Collateral with respect thereto.

Section 3.04 No Consents. No consent (other than consents previously obtained)
of any other Person (including, without limitation, any stockholder or creditor
of such Loan Party or any of its Subsidiaries) and no order, material consent,
approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by any Governmental Authority is required to be
obtained by such Loan Party in connection with the execution, delivery or
performance of this Agreement, or in connection with the rights and remedies of
the Collateral Agent pursuant to this Agreement, except in connection with the
disposition of the Collateral by Laws affecting the offering and sale of
securities generally or pursuant to the terms of the Intercreditor Agreement.

ARTICLE IV

COVENANTS

Each Loan Party covenants and agrees that until the Discharge of the Credit
Obligations (other than contingent indemnification obligations), such Loan Party
will comply with the following:

Section 4.01 Delivery of Collateral.

(a) All Collateral shall be Delivered to and held by or on behalf of the First
Lien Collateral Agent or the Collateral Agent, as applicable, in accordance with
the terms of the Intercreditor Agreement, pursuant hereto; provided, that with
respect to Collateral which are Uncertificated Securities, such Loan Party shall
use commercially reasonable efforts to cause the issuer of such Uncertificated
Securities to take such actions necessary for such Loan Party to Deliver such
Uncertificated Securities (and it is agreed to that no such Delivery shall be
required for such Uncertificated Securities having a value of less than
$1,000,000; provided further, that so long as no Event of Default shall have
occurred and be continuing and notice is received by the Loan Party from the
First Lien Collateral Agent or the Collateral Agent, as applicable, in

 

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accordance with the terms of the Intercreditor Agreement, stating otherwise, and
except as required by the Security Agreement or any other Loan Document, each
Loan Party may retain any Collateral (unless otherwise provided in Section 2.05
of the Security Agreement) (i) consisting of checks, drafts and other
Instruments (other than Pledged Notes and any additional or substitute
promissory notes issued to or otherwise acquired by such Loan Party in respect
of Pledged Notes) received by it in the ordinary course of business or
(ii) which it is otherwise entitled to receive and retain pursuant to
Section 5.01 hereof, and the First Lien Collateral Agent or the Collateral
Agent, as applicable, in accordance with the terms of the Intercreditor
Agreement, shall, promptly upon request of any Loan Party, make appropriate
arrangements for making any Collateral consisting of an Instrument or a
Certificated Security pledged by such Loan Party available to it for purposes of
presentation, collection or renewal (any such arrangement to be effected, to the
extent deemed appropriate by the First Lien Collateral Agent or the Collateral
Agent, as applicable, in accordance with the terms of the Intercreditor
Agreement, against trust receipt or like document). All Collateral Delivered
hereunder shall be accompanied by any required transfer tax stamps. The First
Lien Collateral Agent or the Collateral Agent, as applicable, in accordance with
the terms of the Intercreditor Agreement, shall have the right at any time upon
the occurrence and during the continuance of an Event of Default, and upon
notice to the Borrower, to cause any or all of the Collateral to be transferred
of record into the name of the First Lien Collateral Agent or its nominee, or
the Collateral Agent or its nominee, as applicable, in accordance with the terms
of the Intercreditor Agreement. Each Loan Party will promptly give the
Collateral Agent copies of any material notices or other material communications
received by it with respect to Collateral registered in the name of such Loan
Party, and the Collateral Agent will promptly give the Borrower and each Loan
Party copies of any material notices and material communications received by the
Collateral Agent with respect to Collateral registered in the name of the
Collateral Agent or its nominee or custodian.

(b) Notwithstanding any of the foregoing or any other provisions of this
Agreement, the parties hereto acknowledge and agree that the First Lien
Administrative Agent, for the ratable benefit of the Finance Parties, has a
prior security interest in the Collateral and that certificates, instruments and
documents representing or evidencing the Collateral are required to be delivered
to and held by the First Lien Administrative Agent under the applicable First
Lien Finance Documents, subject to the Intercreditor Agreement and such delivery
to the First Lien Administrative Agent under the applicable First Lien Finance
Documents shall be deemed to satisfy any requirement for such delivery to the
Collateral Agent under this Agreement until the Discharge of the First Lien
Finance Obligations shall have occurred.

Section 4.02 Reserved.

Section 4.03 Change of Name, Organizational Structure or Location; Subjection to
Other Security Agreements. Such Loan Party will not change the location of any
Collateral or its name, organizational structure or location (determined as
provided in Section 9-307 of the UCC) in any manner, in each case unless it
shall have given the Collateral Agent not less than ten (10) days’ prior notice
thereof; provided, if notice is given less than ten (10) days prior thereto, it
shall not be a breach hereof as long as the attachment and priority of the
Security Interest granted hereby are not adversely affected solely as a result
of such later

 

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notice. Such Loan Party shall not in any event change the location of any
Collateral or its name, organizational structure or location (determined as
provided in Section 9-307 of the UCC), or become bound, as provided in
Section 9-203(d) of the UCC, by a security agreement entered into by another
Person (except in connection with any Permitted Lien or otherwise permitted
under the Credit Agreement), if such change would cause the Security Interest in
any Collateral to lapse or cease to be perfected unless such Loan Party has
taken on or before the date of lapse all actions necessary to ensure that the
Security Interest in the Collateral does not lapse or cease to be perfected.

Section 4.04 Further Actions. Such Loan Party will, from time to time at its
expense and in such manner and form as the Collateral Agent may reasonably
request, execute, deliver, file and record or authorize the recording of any
financing statement, specific assignment, instrument, document, agreement or
other paper and take any other action (including, without limitation, any
filings of financing or continuation statements under the Uniform Commercial
Code) that from time to time may be necessary in order to create, preserve,
perfect or maintain the Security Interest or to enable the Collateral Agent and
the Credit Parties to exercise and enforce any of its rights, powers and
remedies created hereunder or under applicable Law with respect to any of the
Collateral. Such Loan Party shall maintain the Security Interest as a Requisite
Priority Lien (subject to Permitted Liens having priority by operation of Law
over the Collateral Agent’s Lien) and shall defend such security interests and
such priority against the claims and demands of all Persons to the extent
materially adverse to such Loan Party’s ownership rights or otherwise
inconsistent with this Agreement or the other Loan Documents. To the extent
permitted by applicable Law, such Loan Party hereby authorizes the Collateral
Agent to execute and file, in the name of such Loan Party or otherwise and
without separate authorization or authentication of such Loan Party appearing
thereon, such Uniform Commercial Code financing statements or continuation
statements as the Collateral Agent in its sole discretion may deem necessary or
reasonably appropriate to further perfect or maintain the perfection of the
Security Interest. Such Loan Party agrees that, except to the extent that any
filing office requires otherwise, a carbon, photographic, photostatic or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement. The Loan Parties shall pay the costs of, or incidental to,
any recording or filing of any financing or continuation statements concerning
the Collateral.

Section 4.05 Disposition of Collateral. Such Loan Party will not sell, exchange,
assign or otherwise dispose of, or grant any option with respect to, any
Collateral or create or suffer to exist any Lien (other than the Security
Interest and other Permitted Liens) on any Collateral except as permitted under
the Credit Agreement, whereupon, in the case of any such sale, exchange,
assignment, disposition or grant, the Security Interest created hereby in such
Collateral (but not in any Proceeds arising from such sale, exchange,
assessment, disposition or grant) shall automatically terminate and cease
immediately without any further action on the part of the Collateral Agent.

Section 4.06 Additional Collateral. Such Loan Party will cause each issuer of
the Collateral that is a Subsidiary of such Loan Party not to issue any stock,
other securities, limited liability company membership interests, partnership
interests, promissory notes or other instruments in addition to or in
substitution for the Pledged Shares, Pledged LLC Interests,

 

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Pledged Partnership Interests and Pledged Notes issued by such issuer (in each
case, to the extent that any of such items constitute Collateral), except as
permitted under the Credit Agreement or except to such Loan Party or pursuant to
a Qualifying IPO or ratably to all then existing holders of Equity Interests of
such issuer and, in the event that any issuer of Collateral at any time issues
any additional or substitute stock, other securities, limited liability company
membership interests, partnership interests, promissory notes or other
instruments to such Loan Party, such Loan Party will promptly Deliver all such
items (in each case, to the extent that such items constitute Collateral) to the
First Lien Collateral Agent, or the Collateral Agent, as applicable, in
accordance with the terms of the Intercreditor Agreement, to hold as Collateral
hereunder and will within 30 days thereafter deliver to the First Lien
Collateral Agent, or the Collateral Agent, as applicable, in accordance with the
terms of the Intercreditor Agreement, such supplements to Schedules I through IV
hereto as are necessary to cause such Schedules to be complete and accurate at
such time. The delivery of such items of Collateral and the associated
supplements to the applicable Schedules shall be conclusive evidence of such
Loan Parties pledge of such Collateral hereunder.

Section 4.07 Information Regarding Collateral. Such Loan Party will, promptly,
upon request, provide to the Collateral Agent all information and evidence it
may reasonably request concerning the Collateral to enable the Collateral Agent
to enforce the provisions of this Agreement.

ARTICLE V

DISTRIBUTIONS ON COLLATERAL; VOTING

Section 5.01 Right to Receive Distributions on Collateral; Voting.

(a) Unless and until (x) an Event of Default shall have occurred and be
continuing and (y) written notice thereof shall have been given by the First
Lien Collateral Agent or the Collateral Agent, as applicable, pursuant to the
terms of the Intercreditor Agreement, to the relevant Loan Party (provided, that
if an Event of Default specified in Section 8.01(f) of the Credit Agreement
shall occur, no such notice shall be required):

(i) Each Loan Party shall be entitled to exercise any and all voting,
management, administration and other consensual rights pertaining to the
Collateral or any part thereof for any purpose not inconsistent with the terms
of this Agreement and the other Loan Documents in accordance with the exercise
of its business discretion; and

(ii) Each Loan Party shall be entitled to receive and retain any and all
dividends, interest, distributions, cash, instruments and other payments and
distributions made upon or in respect of the Collateral.

(b) Upon the occurrence and during the continuance of an Event of Default under
Section 8.01(f) of the Credit Agreement or any other Event of Default in respect
of which the First Lien Collateral Agent or the Collateral Agent, as applicable,
pursuant to the terms of the Intercreditor Agreement, has given the Loan Parties
notice as required by Section 5.01(a) and notice to such Loan Party hereof:

(i) All rights of each Loan Party to receive the dividends, interest,
distributions, cash, instruments and other payments and distributions which it
would otherwise be authorized to receive and retain pursuant to
Section 5.01(a)(ii) shall cease, and all such rights shall thereupon become
vested in the First Lien Collateral Agent, or the Collateral Agent, as
applicable, in accordance with the terms of the Intercreditor Agreement, which
shall thereupon have the sole right to receive and hold as Collateral such
dividends, interest, distributions, cash, instruments and other payments and
distributions; provided that all cash dividends and other cash distributions in
respect of federal, state and/or local income taxes payable by any Loan Party or
any direct or indirect equity holder of any Loan Party in respect of income and
profits of any limited liability company, partnership or other entity which is
not a corporation for United States federal income tax purposes shall be paid to
the respective Loan Party free and clear of any Liens created hereby regardless
of whether an Event of Default shall have occurred and be continuing.

 

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(ii) All dividends, interest, distributions, cash, instruments and other
payments and distributions which are received by any Loan Party contrary to the
provisions of paragraph (i) of this Section 5.01(b) shall be received in trust
for the benefit of the First Lien Collateral Agent, or the Collateral Agent, as
applicable, in accordance with the terms of the Intercreditor Agreement, and
shall be segregated from other property or funds of such Loan Party and shall be
forthwith Delivered, in the same form as so received to the First Lien
Collateral Agent, or the Collateral Agent, as applicable, in accordance with the
terms of the Intercreditor Agreement, or its respective nominee or custodian to
hold as Collateral.

(iii) All rights of such Loan Party to exercise the voting, management,
administration and other consensual rights which it would otherwise be entitled
to exercise pursuant to Section 5.01(a)(i) shall cease, all such rights shall
thereupon become vested in the First Lien Collateral Agent, or the Collateral
Agent, as applicable, in accordance with the terms of the Intercreditor
Agreement, who shall thereupon have the sole right to exercise such voting and
other consensual rights, and such Loan Party shall take all actions reasonably
necessary to effect such right of the First Lien Collateral Agent, or the
Collateral Agent, as applicable, in accordance with the terms of the
Intercreditor Agreement.

(iv) The First Lien Collateral Agent, or the Collateral Agent, as applicable, in
accordance with the terms of the Intercreditor Agreement, shall, upon receiving
a written request from any Loan Party accompanied by a certificate signed by an
authorized officer of such Loan Party stating that no Event of Default has
occurred and is continuing, execute and deliver (or cause to be executed and
delivered) to such Loan Party or as specified in such request all proxies,
powers of attorney, consents, ratifications and waivers and other instruments as
such Loan Party may reasonably request for the purpose of enabling such Loan
Party to exercise the voting and other rights which it is entitled to

 

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exercise pursuant to paragraph (a)(i) above and to receive the dividends,
interest, distributions, cash, instruments or other payments or distributions
which it is authorized to receive and retain pursuant to paragraph (a)(ii) above
in respect of any of the Collateral, if any, which is registered in the name of
the First Lien Collateral Agent or its nominee, or the Collateral Agent or its
nominee, as applicable, in accordance with the terms of the Intercreditor
Agreement.

ARTICLE VI

GENERAL AUTHORITY; REMEDIES

Section 6.01 General Authority. Until the Discharge of Credit Obligations (other
than contingent indemnification obligations) or in respect of any Loan Party
that ceases to be a Guarantor, as permitted under the Credit Agreement, until
the time such Loan Party is released and the Security Interests granted hereby
are terminated, each Loan Party hereby irrevocably appoints the Collateral Agent
and any officer or agent thereof as its true and lawful attorney-in-fact, with
full power of substitution, in the name of such Loan Party, the Credit Parties
or otherwise, for the sole use and benefit of the Collateral Agent and the
Credit Parties, but at such Loan Party’s expense, to the extent permitted by Law
and subject to the terms of the Intercreditor Agreement, to exercise at any time
and from time to time while an Event of Default has occurred and is continuing
all or any of the following powers with respect to all or any of the Collateral
upon one Business Day’s notice to Pledgors:

(i) to take any and all reasonably appropriate action and to execute any and all
documents and instruments which may be necessary to carry out the terms of this
Agreement;

(ii) to receive, take, indorse, assign and deliver any and all checks, notes,
drafts, acceptances, documents and other negotiable and non-negotiable
Instruments taken or received by such Loan Party as, or in connection with, the
Collateral;

(iii) to accelerate any Pledged Note which may be accelerated in accordance with
its terms, and to otherwise demand, sue for, collect, receive and give
acquittance for any and all monies due or to become due on or by virtue of any
Collateral;

(iv) to commence, settle, compromise, compound, prosecute, defend or adjust any
claim, suit, action or proceeding with respect to, or in connection with, the
Collateral;

(v) to sell, transfer, assign or otherwise deal in or with the Collateral or the
Proceeds or avails thereof, as fully and effectually as if the Collateral Agent
were the absolute owner thereof;

(vi) to extend the time of payment of any or all of the Collateral and to make
any allowance and other adjustments with respect thereto;

 

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(vii) Subject to the giving of notice to the relevant Loan Party in accordance
with Section 5.01(a) hereof, to vote all or any part of the Pledged Shares,
Pledged LLC Interests, Pledged Partnership Interests and/or Pledged Notes
(whether or not transferred into the name of the Collateral Agent or its
nominee) and give all consents, waivers and ratifications in respect of the
Collateral; and

(viii) to do, at its option, but at the expense of the Loan Parties, at any time
or from time to time, all acts and things which the Collateral Agent deems
reasonably necessary to protect or preserve the Collateral and to realize upon
the Collateral.

Section 6.02 Authority of Collateral Agent. Each Loan Party acknowledges that
the rights and responsibilities of the Collateral Agent under this Agreement
with respect to any action taken by it or the exercise or nonexercise by the
Collateral Agent of any option, voting right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement
shall, as among the Collateral Agent and the other Credit Parties, be governed
by the Credit Agreement, the Intercreditor Agreement, and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent, on the one hand, and the Loan Parties on the
other, the Collateral Agent shall be conclusively presumed to be acting as agent
for the other Credit Parties it represents as collateral agent with full and
valid authority so to act or refrain from acting, and no Loan Party shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

Section 6.03 Remedies upon Event of Default. Subject, in each case, to the terms
of the Intercreditor Agreement:

(a) If any Event of Default has occurred and is continuing, the Collateral
Agent, upon being instructed to do so by the Required Lenders, may, in addition
to all other rights and remedies granted to it in this Agreement and in any
other agreement securing, evidencing or relating to the Credit Obligations
(including, without limitation, the right to give instructions or a notice of
sole control to an issuer subject to an Issuer Control Agreement): (i) exercise
on behalf of the Credit Parties all rights and remedies of a secured party under
the UCC (whether or not in effect in the jurisdiction where such rights are
exercised) and, in addition, (ii) without demand of performance or other demand
or notice of any kind (except as herein provided or as may be required by
mandatory provisions of Law) to or upon any Loan Party or any other Person (all
of which demands and/or notices are hereby waived by each Loan Party), (A) apply
all cash, if any, then held by it as Collateral as specified in Section 6.08 and
(B) if there shall be no such cash, Liquid Investments or other amounts or if
such cash, Liquid Investments and other amounts shall be insufficient to pay all
the Credit Obligations in full or cannot be so applied for any reason or if the
Collateral Agent determines to do so, collect, receive, appropriate and realize
upon the Collateral and/or sell, assign, give an option or options to purchase
or otherwise dispose of and deliver the Collateral (or contract to do so) or any
part thereof at public or private sale, at any office of the Collateral Agent or
elsewhere in such manner as is commercially reasonable and as the Collateral
Agent may deem best, for cash, on credit or for future delivery, without
assumption of any credit risk and at such price or prices as the Collateral
Agent may deem reasonably satisfactory.

 

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(b) If any Event of Default has occurred and is continuing, the Collateral Agent
shall give each Loan Party not less than 10 days’ prior notice of the time and
place of any sale or other intended disposition of any of the Collateral, except
any Collateral which threatens to decline speedily in value or is of a type
customarily sold on a recognized market. Any such notice shall (i) in the case
of a public sale, state the time and place fixed for such sale, (ii) in the case
of a private sale, state the day after which such sale may be consummated,
(iii) contain the information specified in Section 9-613 of the UCC, (iv) be
authenticated and (v) be sent to the parties required to be notified pursuant to
Section 9-611(c) of the UCC; provided that, if the Collateral Agent fails to
comply with this sentence in any respect, its liability for such failure shall
be limited to the liability (if any) imposed on it as a matter of Law under the
UCC. The Collateral Agent and each Loan Party agree that such notice constitutes
reasonable notification within the meaning of Section 9-611 of the UCC. Except
as otherwise provided herein, each Loan Party hereby waives, to the extent
permitted by applicable Law, notice and judicial hearing in connection with the
Collateral Agent’s taking possession or disposition of any of the Collateral.

(c) The Collateral Agent or any Credit Party may be the purchaser of any or all
of the Collateral so sold at any public sale (or, if the Collateral is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale). Each Loan
Party will execute and deliver such documents and take such other action
reasonably necessary in order that any such sale may be made in compliance with
Law. Upon any such sale, the Collateral Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so sold. Each
purchaser at any such sale shall hold the Collateral so sold to it absolutely
and free from any claim or right of whatsoever kind. Any such public sale shall
be held at such time or times within ordinary business hours and at such place
or places as the Collateral Agent may fix in the notice of such sale. At any
such sale, the Collateral may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may determine. The Collateral Agent shall not
be obligated to make any such sale pursuant to any such notice. The Collateral
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned without further notice. In the case of any
sale of all or any part of the Collateral on credit or for future delivery, the
Collateral so sold may be retained by the Collateral Agent until the selling
price is paid by the purchaser thereof, but the Collateral Agent shall not incur
any liability in the case of the failure of such purchaser to take up and pay
for the Collateral so sold and, in the case of any such failure, such Collateral
may again be sold upon like notice.

(d) Notwithstanding anything to the contrary in this Agreement, the exercise of
remedies under this Agreement by the Collateral Agent upon the occurrence and
during an Event of Default shall be subject to Section 8.02(e) of the Credit
Agreement.

Section 6.04 Securities Act. Each Loan Party expressly agrees that the
Collateral Agent is authorized, subject to the terms of the Intercreditor
Agreement, in connection with any sale of any Collateral to the extent permitted
under applicable Securities Laws, if it deems it advisable so to do, (i) to
restrict the prospective bidders on or purchasers of any of the

 

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Collateral to a limited number of sophisticated investors who will represent and
agree that they are purchasing for their own account for investment and not with
a view to the distribution or sale of any of such Collateral, (ii) to cause to
be placed on certificates for any or all of the Collateral or on any other
securities pledged hereunder a legend to the effect that such security has not
been registered under the Securities Act of 1933 and may not be disposed of in
violation of the provision of said Act and (iii) to impose such other
limitations or conditions in connection with any such sale as the Collateral
Agent deems necessary or advisable in order to comply with said Act or any other
Law. Each Loan Party acknowledges and agrees that such limitations may result in
prices and other terms less favorable to the seller than if such limitations
were not imposed, and, notwithstanding such limitations, agrees that any such
sale shall not be deemed to have been made in a commercially unreasonable manner
solely by virtue of such sale being private, it being the agreement of the Loan
Parties and the Collateral Agent that the provisions of this Section 6.04 will
apply notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Collateral Agent sells the Collateral. The Collateral Agent shall not be under
any obligation to delay a sale of any Collateral for a period of time necessary
to permit the issuer of any securities contained therein to register such
securities under the federal securities laws, or under applicable state
securities laws, even if the issuer would agree to do so. Furthermore, each Loan
Party acknowledges that it is aware that Section 9-610 of the UCC provides that
the Collateral Agent or a Credit Party may purchase Collateral if it is sold at
a public sale.

Section 6.05 Other Rights of the Collateral Agent.

(a) If any Event of Default has occurred and is continuing, subject to
Section 8.02(e) of the Credit Agreement and the terms of the Intercreditor
Agreement, the Collateral Agent, instead of exercising the power of sale
conferred upon it pursuant to this Section 6.05, may proceed by a suit or suits
at Law or in equity to foreclose the Security Interest and sell the Collateral,
or any portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction, and may in addition institute and maintain such suits
and proceedings as the Collateral Agent may deem appropriate to protect and
enforce the rights vested in it by this Agreement.

(b) If any Event of Default has occurred and is continuing, subject to
Section 8.02(e) of the Credit Agreement and the terms of the Intercreditor
Agreement, the Collateral Agent shall, to the extent permitted by applicable
Law, without notice to any Loan Party or any party claiming through any Loan
Party, without regard to the solvency or insolvency at such time of any Person
then liable for the payment of any of the Credit Obligations, without regard to
the then value of the Collateral and without requiring any bond from any
complainant in such proceedings, be entitled as a matter of right to the
appointment of a receiver or receivers (who may be the Collateral Agent) of the
Collateral or any part thereof, and of the profits, revenues and other income
thereof, pending such proceedings, with such powers as the court making such
appointment shall confer, and to the entry of an order directing that the
profits, revenues and other income of the property constituting the whole or any
part of the Collateral be segregated, sequestered and impounded for the benefit
of the First Lien Collateral Agent and the First Lien Finance Parties, or the
Collateral Agent and the Credit Parties, as applicable, subject to the terms of
the Intercreditor Agreement, and each Loan Party irrevocably consents to the
appointment of such receiver or receivers and to the entry of such order.

 

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Section 6.06 Limitation on Duty of the Collateral Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof, none
of the Collateral Agent or any Credit Party shall have any duty to exercise any
rights or take any steps to preserve the rights of any Loan Party in the
Collateral in its or their possession or control or in the possession or control
of any agent or bailee or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto, nor shall the
Collateral Agent or any Credit Party be liable to any Loan Party or any other
Person for failure to meet any obligation imposed by Section 9-207 of the UCC or
any successor provision. Each Loan Party agrees to the extent it may lawfully do
so that the Collateral Agent shall not at any time be required to, nor shall the
Collateral Agent be liable to any Loan Party for any failure to, account
separately to any Loan Party for amounts received or applied by the Collateral
Agent from time to time in respect of the Collateral pursuant to the terms of
this Agreement. Without limiting the foregoing, the Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
and (i) shall not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any agent or bailee selected by the Collateral Agent in good faith
absent gross negligence or willful misconduct and (ii) shall not have any duty
or responsibility for ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters.

Section 6.07 Waiver and Estoppel.

(a) Each Loan Party agrees, to the extent it may lawfully do so, that it will
not at any time in any manner whatsoever claim or take the benefit or advantage
of, any appraisal, valuation, stay, extension, moratorium, turnover or
redemption Law, or any Law permitting it to direct the order in which the
Collateral shall be sold, now or at any time hereafter in force which may delay,
prevent or otherwise affect the performance or enforcement of this Agreement,
and each Loan Party hereby waives all benefit or advantage of all such Laws to
the extent permitted by Law. Each Loan Party covenants that it will not hinder,
delay or impede the execution of any power granted to the Collateral Agent, the
Administrative Agent or any other Credit Party in any Loan Document.

(b) Each Loan Party, to the extent it may lawfully do so, on behalf of itself
and all who claim through or under it, including without limitation any and all
subsequent creditors, vendees, assignees and lienors, waives and releases all
rights to demand or to have any marshalling of the Collateral upon any sale,
whether made under any power of sale granted herein or pursuant to judicial
proceedings or under any foreclosure or any enforcement of this Agreement, and
consents and agrees that all of the Collateral may at any such sale be offered
and sold as an entirety.

(c) Each Loan Party waives, to the extent permitted by Law, presentment, demand,
protest and any notice of any kind (except the notices expressly required
hereunder or in the other Loan Documents) in connection with this Agreement and
any action taken by the Collateral Agent with respect to the Collateral.

 

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Section 6.08 Application of Proceeds.

(a) Priority of Distributions. The proceeds of any sale by the Collateral Agent
of, or other realization upon, all or any part of the Collateral (including any
proceeds received and held pursuant to Section 5.01) and any cash held hereunder
by the Collateral Agent or any nominee or custodian thereof shall be paid over
to the Administrative Agent for application as provided in the Credit Agreement,
subject in all cases to the priorities set forth in Section 8.03 of the Credit
Agreement and the terms of the Intercreditor Agreement. The Collateral Agent may
make distributions hereunder in cash or in kind or, on a ratable basis, in any
combination thereof.

(b) Reliance by the Collateral Agent. For purposes of applying payments received
in accordance with this Section 6.08, the Collateral Agent shall be entitled to
rely upon the Administrative Agent under the Credit Agreement for a
determination of the outstanding Credit Obligations owed to the Credit Parties,
and shall have no liability to any Loan Party or any other Credit Party for
actions taken in reliance on such information except in the case of its gross
negligence, bad faith or willful misconduct. All distributions made by the
Collateral Agent pursuant to this Section shall be presumptively correct (except
in the event of manifest error, gross negligence or willful misconduct), and the
Collateral Agent shall have no duty to inquire as to the application by the
Credit Parties of any amounts distributed to them.

(c) Deficiencies. It is understood that the Loan Parties shall remain liable to
the extent of any deficiency between the amount of the proceeds of the
Collateral and the amount of the Credit Obligations.

ARTICLE VII

THE COLLATERAL AGENT

Section 7.01 Concerning the Collateral Agent. The provisions of Article IX of
the Credit Agreement shall inure to the benefit of the Collateral Agent in
respect of this Agreement and shall be binding upon all Loan Parties and all
Credit Parties and upon the parties hereto in such respect. In furtherance and
not in derogation of the rights, privileges and immunities of the Collateral
Agent therein set forth and subject to the terms of the Intercreditor Agreement:

(i) The Collateral Agent is authorized to take all such actions as are provided
to be taken by it as Collateral Agent hereunder and all other action reasonably
incidental thereto. As to any matters not expressly provided for herein
(including, without limitation, the timing and methods of realization upon the
Collateral), the Collateral Agent shall act or refrain from acting in accordance
with written instructions from the Required Lenders or, in the absence of such
instructions or provisions, in accordance with its discretion.

 

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(ii) The Collateral Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Security Interest created hereunder in any of
the Collateral, whether impaired by operation of Law or by reason of any action
or omission to act on its part hereunder unless such action or omission
constitutes gross negligence or willful misconduct. The Collateral Agent shall
not have a duty to ascertain or inquire as to the performance or observance of
any of the terms of this Agreement by any Loan Party.

Section 7.02 Appointment of Co-Collateral Agent. Subject to the terms of the
Intercreditor Agreement, at any time or times, in order to comply with any legal
requirement in any jurisdiction or otherwise, the Collateral Agent may in
consultation with the Borrower and, unless an Event of Default shall have
occurred and be continuing with the consent of the Borrower (not to be
unreasonably withheld or delayed), appoint another bank or trust company or one
or more other persons, either to act as co-agent or co-agents, jointly with the
Collateral Agent, or to act as separate agent or agents on behalf of the Credit
Parties with such power and authority as may be necessary for the effectual
operation of the provisions hereof and may be specified in the instrument of
appointment (which may, in the discretion of the Collateral Agent, include
provisions for the protection of such co-agent or separate agent similar to the
provisions of Section 7.01). Notwithstanding any such appointment but only to
the extent not inconsistent with such legal requirements or, in the reasonable
judgment of the Collateral Agent, not unduly burdensome to it or any such
co-agent, each Loan Party shall, so long as no Event of Default shall have
occurred and be continuing, be entitled to deal solely and directly with the
Collateral Agent rather than any such co-agent in connection with the Collateral
Agent’s rights and obligations under this Agreement.

Section 7.03 Appointment of Sub-Agents. Subject to the terms of the
Intercreditor Agreement, the Collateral Agent shall have the right to appoint
one or more sub-agents for the purpose of retaining physical possession of the
Pledged Shares, Pledged LLC Interests, Pledged Partnership Interests and Pledged
Notes, which may be held (in the discretion of the Collateral Agent) in the name
of the relevant Loan Party, indorsed or assigned in blank or in favor of the
Collateral Agent or any nominee or custodian of the Collateral Agent or a
sub-agent appointed by the Collateral Agent.

ARTICLE VIII

MISCELLANEOUS

Section 8.01 Notices.

(a) Unless otherwise expressly provided herein, all notices, and other
communications provided for hereunder shall be in writing (including by
facsimile transmission) and mailed, faxed or delivered, to the address,
facsimile number or (subject to subsection (b) below) electronic mail address
specified for notices: (i) in the case of any Subsidiary Guarantor, as set forth
in Section 5.01 of the Guaranty; (ii) in the case of Holdings, the Borrower, the
Administrative Agent or any Lender, as specified in or pursuant to Section 10.02
of the Credit Agreement; (iii) in the case of the Collateral Agent, as set forth
in the signature pages hereto; or

 

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(iv) in the case of any party, at such other address as shall be designated by
such party in a notice to the Collateral Agent and each other party hereto. All
such notices and other communications shall be deemed to be given or made upon
the earlier to occur of: (i) actual receipt by the intended recipient and
(ii) (A) if delivered by hand or by courier, when signed for by the intended
recipient; (B) if delivered by mail, four Business Days after deposit in the
mails, postage prepaid; (C) if delivered by facsimile transmission, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection
(b) below), when delivered. Rejection or refusal to accept, or the inability to
deliver because of a changed address of which no notice was given, shall not
affect the validity of notice given in accordance with this Section.

(b) Except as expressly provided herein or as may be agreed by the
Administrative Agent in its sole discretion, electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, to distribute executed Loan Documents in Adobe
PDF format and may not be used for any other purpose.

Section 8.02 No Waivers; Non-Exclusive Remedies. No failure or delay on the part
of the Collateral Agent or any Credit Party to exercise, no course of dealing
with respect to, and no delay in exercising, any right, power or privilege under
this Agreement or any other Loan Document or any other document or agreement
contemplated hereby or thereby and no course of dealing between the Collateral
Agent or any Credit Party and any of the Loan Parties shall operate as a waiver
thereof nor shall any single or partial exercise of any such right, power or
privilege hereunder or under any Loan Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein and in the
other Loan Documents are cumulative and are not exclusive of any other remedies
provided by Law. Without limiting the foregoing, nothing in this Agreement shall
impair the right of any Credit Party to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of any Loan Party other than its indebtedness under the
Loan Documents. Each Loan Party agrees, to the fullest extent it may effectively
do so under applicable Law, that any holder, as to which the identity is
disclosed, of a participation in a Credit Obligation, whether or not acquired
pursuant to the terms of any applicable Loan Document, may exercise rights of
set-off or counterclaim or other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the Loan
Party in the amount of such participation.

Section 8.03 Compensation and Expenses of the Collateral Agent; Indemnification.

(a) Expenses and Indemnification. The Loan Parties agree that the Administrative
Agent and Collateral Agent are each entitled to (i) reimbursement of its
expenses incurred hereunder and (ii) certain indemnifications, each as provided
for in Section 10.04 of the Credit Agreement.

(b) Protection of Collateral. If any Loan Party fails to comply with the
provisions of any Loan Document, such that the value of any Collateral or the
validity, perfection, rank or value of the Security Interest is thereby
materially diminished or potentially

 

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diminished or put at material risk, the Collateral Agent may, but shall not be
required to, effect such compliance on behalf of such Loan Party, and the Loan
Parties shall reimburse the Collateral Agent for the out-of-pocket costs thereof
within ten (10) Business Days of demand. Any and all excise, property, sales and
use taxes imposed by any state, federal or local authority on any of the
Collateral, or in respect of periodic appraisals of the Collateral, or in
respect of the sale or other disposition thereof shall be borne and paid by the
Loan Parties. If any Loan Party fails to promptly pay any portion thereof when
due, the Collateral Agent may, at its option, but shall not be required to, pay
the same and charge the Loan Parties’ account therefor, and the Loan Parties
agree to reimburse the Collateral Agent therefor on demand. All sums so paid or
incurred by the Collateral Agent for any of the foregoing and any and all other
sums for which any Loan Party may become liable hereunder and all costs and
expenses (including attorneys’ fees, legal expenses and court costs) reasonably
incurred by the Collateral Agent in enforcing or protecting the Security
Interest or any of its rights or remedies under this Agreement, shall, together
with interest thereon until paid at the rate applicable to the Loans, be
additional Credit Obligations hereunder.

(c) Contribution. If and to the extent that the obligations of any Loan Party
under this Section 8.03 are unenforceable for any reason, each Loan Party hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable Law.

(d) Expenses. Notwithstanding anything to the contrary herein, the Loan Parties
shall not be required to pay the fees and expenses of third party advisors to
the Administrative Agent or Collateral Agent (which shall not include counsel)
retained without consent of the applicable Loan Party (such consent not to be
unreasonably withheld or delayed) or more than one counsel (plus local and
special counsel)

Section 8.04 Enforcement. The Credit Parties agree that this Agreement may be
enforced (subject to the terms of the Intercreditor Agreement) only by the
action of the Collateral Agent, acting upon the instructions of the Required
Lenders and that no other Credit Party shall have any right individually to seek
to enforce this Agreement or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent for the benefit of the Credit Parties upon the terms of
this Agreement and the other Loan Documents.

Section 8.05 Amendments and Waivers. Any provision of this Agreement may be
amended, changed, discharged, terminated or waived if, but only if, such
amendment or waiver is in accordance with the Intercreditor Agreement and in
writing and is signed by each Loan Party directly affected by such amendment,
change, discharge, termination or waiver (it being understood that the addition
or release of any Loan Party hereunder shall not constitute an amendment,
change, discharge, termination or waiver affecting any Loan Party other than the
Loan Party so added or released) and (i) the Collateral Agent (with the consent
of the Required Lenders to the extent required by Section 10.01 of the Credit
Agreement, or such lesser amount of the Lenders as may be specified therein), at
all times prior to the time on which all Credit Obligations have been paid in
full (other than contingent indemnification obligations) and all Commitments
with respect thereto have been terminated or (ii) the holders of all Swap

 

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Obligations then outstanding, at all times after the time which the Credit
Obligations have been paid in full (other than contingent indemnification
obligations) and all Commitments with respect thereto have been terminated;
provided, however, that no such amendment, change, discharge, termination or
waiver shall be made to Section 6.08 hereof or this Section 8.05 without the
consent of each Credit Party adversely affected thereby except to the extent
expressly provided in the Credit Agreement; provided further, that no consent
shall be required in connection with any automatic termination or release in
accordance with Section 8.11 hereof.

Section 8.06 Successors and Assigns. This Agreement shall be binding upon each
of the parties hereto and inure to the benefit of the Collateral Agent and the
Credit Parties and their respective successors and permitted assigns. In the
event of an assignment of all or any of the Credit Obligations, the rights
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. No Loan Party shall assign or delegate any
of its rights and duties hereunder without the prior written consent of the
Required Lenders or all of the Lenders as provided in Section 10.01 of the
Credit Agreement.

Section 8.07 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT AS OTHERWISE
REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES
PROVIDED BY THE LAWS OF ANY JURISDICTIONS OTHER THAN NEW YORK ARE GOVERNED BY
THE LAWS OF SUCH JURISDICTIONS.

Section 8.08 Limitation of Law; Severability.

(a) All rights, remedies and powers provided in this Agreement may be exercised
only to the extent that the exercise thereof does not violate any applicable
provision of Law, and all the provisions of this Agreement are intended to be
subject to all applicable mandatory provisions of Law which may be controlling
and be limited to the extent necessary so that they will not render this
Agreement invalid, unenforceable in whole or in part, or not entitled to be
recorded, registered or filed under the provisions of any applicable Law.

(b) If any provision hereof is invalid or unenforceable in any jurisdiction,
then, to the fullest extent permitted by Law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Collateral Agent and the Credit Parties in
order to carry out the intentions of the parties hereto as nearly as may be
possible, and (ii) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provisions in any other jurisdiction.

Section 8.09 Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective with respect to each Loan Party when the
Collateral Agent shall receive counterparts hereof executed by itself and such
Loan Party. This Agreement may be transmitted and/or

 

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signed by facsimile or Adobe PDF file and if so transmitted or signed, shall,
subject to requirements of Law, have the same force and effect as a manually
signed original and shall be binding on the Loan Parties and the Collateral
Agent.

Section 8.10 Additional Loan Parties. It is understood and agreed that any
Subsidiary of Holdings that is required by any Loan Document to execute a
counterpart of this Agreement after the date hereof shall automatically become a
Loan Party hereunder with the same force and effect as if originally named as a
Loan Party hereunder by executing an Accession Agreement or other form
reasonably acceptable to such Subsidiary and the Collateral Agent. Concurrently
with the execution and delivery of such instrument of accession or joinder, such
Subsidiary shall take all such actions and deliver to the Collateral Agent all
such documents and agreements as such Subsidiary would have been required to
deliver to the Collateral Agent on or prior to the date of this Agreement had
such Subsidiary been a party hereto on the date of this Agreement. Such
additional materials shall include, among other things, supplements to Schedules
I, II, III and IV hereto (which Schedules shall thereupon automatically be
amended and supplemented to include all information contained in such
supplements) such that, after giving effect to the joinder of such Subsidiary,
each of Schedules I, II, III and IV hereto is true, complete and correct with
respect to such Subsidiary as of the effective date of such accession or
joinder. The execution and delivery of any such instrument of accession or
joinder, and the amendment and supplementation of the Schedules hereto as
provided in the immediately preceding sentence, shall not require the consent of
any other Loan Party hereunder. The rights and obligations of each Loan Party
hereunder shall remain in full force and effect notwithstanding the addition of
any new Loan Party as a party to this Agreement.

Section 8.11 Termination; Release of Loan Parties.

(a) Upon the Discharge of Credit Obligations (other than contingent
indemnification obligations), the Security Interest created hereunder in favor
of the Collateral Agent shall automatically terminate and be released.

(b) Any Subsidiary that is a Loan Party shall automatically be released from its
obligations hereunder and the Security Interest in the Collateral of such
Subsidiary shall be automatically released upon (i) the consummation of any
transaction permitted by the Credit Agreement (or consented to in writing
pursuant to Section 10.01 of the Credit Agreement) as a result of which such
Subsidiary ceases to be a Subsidiary of Holdings.

(c) Upon any sale, transfer or other disposition by any Loan Party (other than
to another Loan Party) of Collateral that is permitted under the Credit
Agreement, or upon the effectiveness of any written consent to the release of
Security Interest granted hereby in any Collateral pursuant to Section 10.01 of
the Credit Agreement, the Security Interest of the Collateral Agent in such
Collateral and any other security interests granted hereby in such Collateral
shall be automatically released.

(d) Upon the termination or release of any Security Interest created hereunder
or release of Collateral, the Collateral Agent will, upon request by and at the
expense of any Loan Party, execute and deliver to such Loan Party such documents
as such Loan Party shall reasonably request to evidence the termination of the
Security Interest created hereunder or the

 

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release of such Collateral, as the case may be. Any such documents shall be
without recourse to or warranty by the Collateral Agent or the Credit Parties.
The Collateral Agent shall not have any liability whatsoever to any Credit Party
as a result of any release of Collateral by it as permitted by this
Section 8.11. Upon any release of Collateral pursuant to this Section 8.11, none
of the Credit Parties shall have any continuing right or interest in such
Collateral or the Proceeds thereof.

Section 8.12 Entire Agreement. This Agreement and the other Loan Documents
constitute the entire agreement and understanding among the parties hereto and
supersede any and all prior agreements and understandings, oral or written, and
any contemporaneous oral agreements and understandings relating to the subject
matter hereof and thereof.

Section 8.13 No Conflict. In the event of conflict between the provisions of the
Credit Agreement and this Agreement, the Credit Agreement shall take precedence.
In the event of conflict between the provisions of the Security Agreement and
this Agreement with respect to the matters contained herein, this Agreement
shall take precedence, subject to the preceding sentence.

Section 8.14 Intercreditor Agreement.

(a) In the event of conflict between the provisions of the Credit Agreement and
this Agreement, the Credit Agreement shall take precedence. In the event of
conflict between the provisions of the Security Agreement and this Agreement
with respect to the matters contained herein, this Agreement shall take
precedence, subject to the preceding sentence.

(b) Notwithstanding anything to the contrary herein, any provision hereof that
requires any Loan Party to (a) deliver any Collateral to the Collateral Agent or
(b) provide that the Collateral Agent have control over such Collateral may be
satisfied prior to the Discharge of the First Lien Finance Obligations by
(i) the delivery of such Collateral by such Loan Party to the First Lien
Collateral Agent for the benefit of the First Lien Finance Parties and the
Collateral Agent, for the benefit of itself and the Credit Parties Lenders
pursuant to the Intercreditor Agreement and (ii) providing that the First Lien
Collateral Agent be provided with control with respect to such Collateral of
such Loan Party for the for the benefit of the First Lien Finance Parties and
the Administrative Agent, for the benefit of itself and the Lenders, pursuant to
the Intercreditor Agreement.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
written above.

 

LOAN PARTIES:   SBARRO HOLDINGS, LLC,       as Holdings   By:  

/s/ Daniel G. Montgomery

  Name:   Dan Montgomery   Title:   Chief Financial Officer   SBARRO, INC.,  
    as Borrower   By:  

/s/ Daniel G. Montgomery

  Name:   Dan Montgomery   Title:   Chief Financial Officer   COREST MANAGEMENT,
INC.   DEMEFAC LEASING CORP.   LARKFIELD EQUIPMENT CORP.   MELVILLE ADVERTISING
AGENCY, INC.   SBARRO AMERICA, INC.   SBARRO AMERICA PROPERTIES, INC.   SBARRO
COMMACK, INC.   SBARRO NEW HYDE PARK, INC.   SBARRO OF LAS VEGAS, INC.   SBARRO
OF VIRGINIA, INC.   SBARRO PENNSYLVANIA, INC.   SBARRO PROPERTIES, INC.   SBARRO
VENTURE, INC.   SBARRO OF TEXAS, INC.   By:  

/s/ Daniel G. Montgomery

  Name:   Dan Montgomery   Title:   Chief Financial Officer

 

[Second Lien Pledge Agreement]   S-1   

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  SBARRO EXPRESS LLC   CARMELA’S, LLC   UMBERTO AT THE SOURCE, LLC   UMBERTO
WHITE PLAINS, LLC   By:   Sbarro, Inc., Sole Member of each company listed above
  By:  

/s/ Daniel G. Montgomery

  Name:   Dan Montgomery   Title:   Chief Financial Officer   SBARRO BLUE BELL
EXPRESS, LLC   By:   Sbarro Express LLC, its Sole Member     By:   Sbarro, Inc.,
its Sole Member   By:  

/s/ Daniel G. Montgomery

  Name:   Dan Montgomery   Title:   Chief Financial Officer   UMBERTO
HUNTINGTON, LLC   UMBERTO DEER PARK, LLC   UMBERTO HAUPPAUGE, LLC   UMBERTO
HICKSVILLE, LLC   UMBERTO SYOSSET, LLC   MAMA SBARRO’S OF EAST MEADOW, LLC   By:
  Sbarro New Hyde Park, Inc., Sole Member of each company listed above   By:  

/s/ Daniel G. Montgomery

  Name:   Dan Montgomery   Title:   Chief Financial Officer

 

[Second Lien Pledge Agreement]   S-2   

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  SBARRO OF LONGWOOD, LLC   CARMELA’S OF KIRKMAN, LLC   By:   Carmela’s, LLC,
Sole Member of each company listed above     By:   Sbarro, Inc., its Sole Member
  By:  

/s/ Daniel G. Montgomery

  Name:   Dan Montgomery   Title:   Chief Financial Officer

 

[Second Lien Pledge Agreement]   S-3   

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COLLATERAL AGENT:   NATIXIS, NEW YORK BRANCH       as Collateral Agent   By:  

/s/ Samantha X. Tang/Stacey Caruth

  Name:   Samantha X. Tang/Stacey Caruth   Title:   Associate Director/Associate
Director   Notice Address:   1251 Avenue of the Americas, 34th Floor   New York,
NY 10020   Attn: Hana Beckles   Phone: 212-583-4913   Fax: 646-607-9186   Email:
Hana.Beckles@natixis.us

 

  S-4