Exhibit 10.4

EXECUTION COPY

 

 

 

ABL GUARANTEE AND COLLATERAL AGREEMENT

dated as of August 28, 2009,

among

SPECTRUM BRANDS, INC.,

THE SUBSIDIARIES OF SPECTRUM BRANDS, INC. FROM TIME TO TIME PARTY HERETO

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as the Collateral Agent

 

 

 

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ARTICLE I

DEFINITIONS

SECTION 1.01.

  

Credit Agreement

   1

SECTION 1.02.

   Other Defined Terms    1 ARTICLE II GUARANTEE

SECTION 2.01.

   Guarantee    5

SECTION 2.02.

   Guarantee of Payment    5

SECTION 2.03.

   Guarantee Absolute and Unconditional    5

SECTION 2.04.

   Reinstatement    6

SECTION 2.05.

   Agreement to Pay; Subrogation    6

SECTION 2.06.

   Information    6

SECTION 2.07.

   Limitation of Guarantee    6 ARTICLE III SECURITY INTERESTS IN PERSONAL
PROPERTY

SECTION 3.01.

   Security Interest    7

SECTION 3.02.

   Representations and Warranties    7

SECTION 3.03.

   Covenants    8

SECTION 3.04.

   Other Actions    10 ARTICLE IV REMEDIES

SECTION 4.01.

   Remedies Upon Default    12

SECTION 4.02.

   Application of Proceeds    13 ARTICLE V INDEMNITY, SUBROGATION AND
SUBORDINATION

SECTION 5.01.

   Indemnity and Subrogation    13

SECTION 5.02.

   Contribution and Subrogation    14

SECTION 5.03.

   Subordination    14 ARTICLE VI MISCELLANEOUS

SECTION 6.01.

   Notices    14

SECTION 6.02.

   Waivers; Amendment    14

SECTION 6.03.

   Collateral Agent’s Fees and Expenses; Indemnification    15

SECTION 6.04.

   Successors and Assigns    15

SECTION 6.05.

   Survival of Agreement    15

SECTION 6.06.

   Counterparts; Effectiveness; Several Agreement    16

SECTION 6.07.

   Severability    16

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SECTION 6.08.

  

Right of Set-Off

   16

SECTION 6.09.

  

GOVERNING LAW; JURISDICTION

   16

SECTION 6.10.

  

WAIVER OF JURY TRIAL

   17

SECTION 6.11.

  

Headings

   18

SECTION 6.12.

  

Security Interest Absolute

   18

SECTION 6.13.

  

Termination or Release

   18

SECTION 6.14.

  

Additional Subsidiaries

   18

SECTION 6.15.

  

Collateral Agent Appointed Attorney-in-Fact

   19

 

ii

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Schedules

 

Schedule I

  

Subsidiary Loan Parties

Exhibits

  

Exhibit I

  

Form of Supplement

Exhibit II

  

Form of Perfection Certificate

 

iii

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ABL GUARANTEE AND COLLATERAL AGREEMENT dated as of August 28, 2009 (this
“Agreement”), by and among Spectrum Brands, Inc., a Delaware corporation (the
“Borrower”), each of the Subsidiary Loan Parties, and General Electric Capital
Corporation, in its capacity as collateral agent for the Secured Parties (in
such capacity, the “Collateral Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement dated as of the date hereof (as
amended, restated, supplemented, refinanced, replaced or otherwise modified from
time to time, the “Credit Agreement”), among the Borrower, the other Loan
Parties, the Lenders, General Electric Capital Corporation, as Administrative
Agent, Co-Collateral Agent, Swingline Lender, and Supplemental Loan Lender, Bank
of America, N.A., as Co-Collateral Agent and L/C Issuer, and RBS Asset Finance,
Inc., through its division RBS Business Capital, as Syndication Agent, the
Lenders and L/C Issuers have severally agreed to make revolving extensions of
credit to the Borrower upon the terms and subject to the conditions set forth
therein;

WHEREAS, each Subsidiary Loan Party is a direct or indirect Subsidiary of the
Borrower; and

WHEREAS, each Subsidiary Loan Party will receive substantial direct and indirect
benefits from the making of the Loans, the issuance of the Letters of Credit and
the granting of the other financial accommodations to the Borrower under the
Credit Agreement and is willing to execute and deliver this Agreement in order
to induce the Lenders and the L/C Issuers to extend such credit;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and
conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement
(including the preliminary statement hereto) and not otherwise defined herein
have the meanings specified in the Credit Agreement. All terms defined in the
New York UCC (as defined herein) and not defined in this Agreement or in the
Credit Agreement have the meanings specified therein; the term “instrument”
shall have the meaning specified in Article 9 of the New York UCC.

(b) The rules of construction specified in Section 1.02 of the Credit Agreement
also apply to this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“ABL Collateral” means any and all of the following assets and property of any
Loan Party, whether real, personal or mixed: (a) all Accounts (other than
Accounts arising under contracts for the sale of Non-ABL Collateral) and related
Records; (b) all Chattel Paper; (c) all Deposit Accounts and all cash, checks
and other negotiable instruments, funds and other evidences of payment held
therein (but not any identifiable Proceeds of Non-ABL Collateral); (d) all
Inventory; (e) solely to the extent evidencing, governing, securing or otherwise
related to the items referred to in the preceding clauses (a), (b), (c) and (d),
all Documents, General Intangibles (other than Intellectual Property),
Instruments, Investment

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Property and Letter of Credit Rights; (f) all books and records related to the
foregoing; and (g) all Proceeds, including insurance Proceeds, of any and all of
the foregoing and all collateral, security and guarantees given by any Person
with respect to any of the foregoing. Notwithstanding clause (g) of the
immediately preceding sentence, “ABL Collateral” shall not include any assets
referred to in clauses (a) through (j) and (l) of the definition of “Non-ABL
Collateral” that are not included in clause (e) above. All capitalized terms
used in this definition and not defined elsewhere in this Agreement have the
meanings assigned to them in the New York UCC.

“Account” has the meaning assigned to such term in Section 9-102 of the New York
UCC.

“Account Debtor” means any Person who is or who may become obligated to any Loan
Party under, with respect to or on account of an Account.

“Borrower” has the meaning assigned to such term in the preliminary statement to
this Agreement.

“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter owned
by any Loan Party or that such Loan Party otherwise has the right to license, or
granting any right to any Loan Party under any copyright now or hereafter owned
by any third party, and all rights of such Loan Party under any such agreement.

“Copyrights” means all of the following now owned or hereafter acquired by any
Loan Party: (a) all copyright rights in any work subject to the copyright laws
of the United States or any other country, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office.

“Credit Agreement” has the meaning assigned to such term in the preliminary
statement to this Agreement.

“Intellectual Property” means all intellectual and similar property of every
kind and nature now owned or hereafter acquired by any Loan Party, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other proprietary data or information, rights in software and
databases and rights in all embodiments or fixations thereof and rights in
related documentation, registrations and franchises, and all additions,
improvements and accessions to any of the foregoing.

“Inventory” has the meaning assigned to such term in Section 9-102 of the New
York UCC.

“Lender Party” means each Lender, each Agent, each Arranger, each L/C Issuer,
each Secured Hedging Counterparty and each of their respective Affiliates
(including any Person that is a Lender, an Agent, an Arranger or an L/C Issuer
(or that is such an Affiliate) as of the Closing Date but subsequently ceases to
be a Lender, an Agent, an Arranger or an L/C Issuer (or such an Affiliate), as
the case may be, if such Person provides any cash management services to any
Loan Party or is a counterparty to any Secured Hedging Agreement).

“License” means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement to which any Loan Party is a party.

“Loan Parties” means, collectively, the Borrower and the Subsidiary Loan
Parties.

 

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“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

“Non-ABL Collateral” means any and all of the following assets and property of
any Loan Party, whether real, personal or mixed: (a) all Investment Property;
(b) all Documents; (c) all General Intangibles; (d) all Intellectual Property;
(e) all Equipment; (f) all real property (including both fee and leasehold
interests) and fixtures; (g) all Instruments; (h) all insurance; (i) all Letter
of Credit Rights; (j) all Commercial Tort Claims; (k) all other assets and
property not constituting ABL Collateral; (1) all books and records related to
the foregoing; and (m) all Proceeds, including insurance Proceeds, of any and
all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing. Notwithstanding the foregoing,
“Non-ABL Collateral” shall not include any assets or property included in clause
(e) of the definition of “ABL Collateral” or any assets or property excluded
pursuant to the terms of the Term Collateral Documents. All capitalized terms
used in this definition and not defined elsewhere in this Agreement have the
meanings assigned to them in the New York UCC.

“Obligations” means (a) the due and punctual payment by the Borrower of (i) the
principal of and interest (including interest accruing during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding) on the Loans, when and as
due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (ii) each payment required to be made by the Borrower
under any Loan Document in respect of any Letter of Credit, when and as due,
including payments in respect of reimbursement of L/C Disbursements, interest
thereon (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) and obligations to provide cash
collateral and (iii) all other monetary obligations of the Borrower to any of
the Secured Parties under the Credit Agreement and each of the other Loan
Documents, including obligations to pay fees, expense reimbursement obligations
and indemnification obligations, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred, and any interest
thereon accruing, during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual payment of all the
monetary obligations of each other Loan Party under or pursuant to the Credit
Agreement and each of the other Loan Documents (including monetary obligations
incurred, and any interest thereon accruing, during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), (c) the due and punctual
payment and performance of all monetary obligations of each Loan Party under
each Secured Hedging Agreement (whether such Secured Hedging Agreement is in
effect on the Closing Date or entered into after the Closing Date, other than
any such Secured Hedging Agreement with respect to which the Lender Party that
is the counterparty thereto (or, in the case of a Secured Hedging Agreement
provided or arranged by the Administrative Agent or an Affiliate thereof, the
Administrative Agent) shall have agreed in writing that such Secured Hedging
Agreement shall be deemed not to be a “Secured Hedging Agreement” for purposes
of this clause (c) (a copy of such writing to be delivered to the Collateral
Agent)), and, and (d) the due and punctual payment and performance of all
monetary obligations of each Loan Party to any Lender Party in respect of cash
management services (including treasury, depository, overdraft, credit or debit
card (including non-card e-payable services), electronic funds transfer and
other cash management arrangements) (other than cash management services
provided after (i) the principal of each Loan and all L/C Disbursements,
interest and fees payable under the Credit Agreement have been paid in full,
(ii) all Commitments under the Credit Agreement have been reduced to zero,
(iii) no L/C Issuer shall have any obligation to issue Letters of Credit under
the Credit Agreement and no Letter of Credit shall be outstanding (other than
any Letter of Credit the obligations under which have been cash collateralized
in full or supported in full by letters of credit of other banks naming the
applicable L/C Issuer as the beneficiary, in each case, in a manner reasonably
satisfactory to the applicable L/C Issuer) and (iv) all amounts payable under
Cash Management Obligations (which

 

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existed prior to such date) and Secured Hedging Agreements have been paid in
full (other than any such amounts which have been cash collateralized in full or
supported in full by letters of credit in a manner satisfactory to the
Collateral Agent)).

“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Loan Party or that any Loan Party
otherwise has the right to license, is in existence, or granting to any Loan
Party any right to make, use or sell any invention on which a patent, now or
hereafter owned by any third party, is in existence, and all rights of any Loan
Party under any such agreement.

“Patents” means all of the following now owned or hereafter acquired by any Loan
Party: (a) all letters patent of the United States or the equivalent thereof in
any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or any similar
offices in any other country and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.

“Perfection Certificate” means a certificate substantially in the form of
Exhibit II, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Responsible Officer of the
Borrower.

“Proceeds” has the meaning assigned to such term in Section 9-102 of the New
York UCC.

“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) the
Co-Collateral Agents (including the Collateral Agent), (d) the Syndication
Agent, (e) the Arranger, (f) the L/C Issuers, (g) the Secured Hedging
Counterparties and Lender Parties to whom any of the Obligations are owed and
(h) the permitted successors and assigns of each of the foregoing.

“Security Interest” has the meaning assigned to such term in Section 3.01(a).

“Subsidiary Loan Parties” means (a) the Subsidiaries identified on Schedule I
and (b) each other Subsidiary that becomes a party to this Agreement as a
Subsidiary Loan Party after the Closing Date.

“Term Collateral Documents” has the meaning assigned to such term in the ABL
Intercreditor Agreement.

“Term Liens” has the meaning assigned to such term in the ABL Intercreditor
Agreement.

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by any Loan Party or that any Loan Party otherwise has the right to
license, or granting to any Loan Party any right to use any trademark now or
hereafter owned by any third party, and all rights of any Loan Party under any
such agreement.

“Trademarks” means all of the following now owned or hereafter acquired by any
Loan Party: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers and other general intangibles
of like nature, now existing or hereafter adopted or acquired, all registrations
and recordings thereof, and all registration and recording applications filed in
connection therewith, including registrations and registration applications in
the United States Patent and Trademark Office or any similar offices in any
State of the United States or any other country or any political subdivision
thereof, and all extensions or renewals thereof and (b) all goodwill associated
therewith or symbolized thereby.

 

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ARTICLE II

Guarantee

SECTION 2.01. Guarantee. Each Loan Party unconditionally guarantees, jointly
with the other Loan Parties and severally, as a primary obligor and not merely
as a surety, the due and punctual payment and performance of the Obligations.
Each Loan Party further agrees that the Obligations may be extended or renewed,
in whole or in part, or amended or modified, without notice to or further assent
from it, and that it will remain bound upon its guarantee notwithstanding any
extension or renewal, or amendment or modification, of any Obligation. Each Loan
Party waives presentment to, demand of payment from and protest to the Borrower
or any other Loan Party of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment.

SECTION 2.02. Guarantee of Payment. Each Loan Party further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any security held for the payment
of the Obligations or to any balance of any deposit account or credit on the
books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other Person.

SECTION 2.03. Guarantee Absolute and Unconditional. (a) Except for termination
of a Loan Party’s obligations hereunder as expressly provided in Section 6.13,
the obligations of each Loan Party hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise of any
Obligations, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Loan Party hereunder, to
the fullest extent permitted by applicable Law, shall not be discharged or
impaired or otherwise affected by (i) the failure of the Collateral Agent or any
other Secured Party to assert any claim or demand or to enforce any right or
remedy under the provisions of any Loan Document, any Secured Hedging Agreement
or otherwise; (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document, any Secured
Hedging Agreement or any other agreement, including with respect to any other
Loan Party under this Agreement; (iii) the release of, or any impairment of or
failure to perfect any Lien on or security interest in, any security held by the
Collateral Agent or any other Secured Party for the Obligations or any of them;
(iv) any default, failure or delay, willful or otherwise, in the performance of
the Obligations; or (v) any other act or omission that may or might in any
manner or to any extent vary the risk of any Loan Party or otherwise operate as
a discharge of any Loan Party as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations). Each Loan Party
expressly authorizes the Secured Parties to take and hold security in accordance
with the terms of this Agreement, the other Loan Documents and any Secured
Hedging Agreement for the payment and performance of the Obligations, to
exchange, waive or release any or all such security (with or without
consideration), to enforce or apply such security and direct the order and
manner of any sale thereof in their sole discretion or to release or substitute
any one or more other Loan Parties or obligors upon or in respect of the
Obligations, all without affecting the obligations of any Loan Party hereunder.

 

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(b) To the fullest extent permitted by applicable Law, each Loan Party waives
any defense based on or arising out of any defense of the Borrower or any other
Loan Party or the unenforceability of the Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of the Borrower or
any other Loan Party, other than the indefeasible payment in full in cash of all
the Obligations. The Collateral Agent and the other Secured Parties may, at
their election, foreclose on any security held by one or more of them in
accordance with the terms of this Agreement, the other Loan Documents and any
Secured Hedging Agreement by one or more judicial or nonjudicial sales, accept
an assignment of any such security in lieu of foreclosure, compromise or adjust
any part of the Obligations, make any other accommodation with the Borrower or
any other Loan Party or exercise any other right or remedy available to them
against the Borrower or any other Loan Party, without affecting or impairing in
any way the liability of any Loan Party hereunder except to the extent the
Obligations have been fully and indefeasibly paid in full in cash. To the
fullest extent permitted by applicable Law, each Loan Party waives any defense
arising out of any such election even though such election operates, pursuant to
applicable Law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Loan Party against the Borrower or
any other Loan Party, as the case may be, or any security.

SECTION 2.04. Reinstatement. Each Loan Party agrees that its guarantee hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by the Collateral Agent or any other Secured Party upon
the bankruptcy or reorganization of the Borrower, any other Loan Party or
otherwise.

SECTION 2.05. Agreement to Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against any Loan Party by virtue hereof,
upon the failure of the Borrower or any other Loan Party to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Loan Party hereby promises to and
will forthwith pay, or cause to be paid, to the Collateral Agent for
distribution to the applicable Secured Parties in cash the amount of such unpaid
Obligation. Upon payment by any Loan Party of any sums to the Collateral Agent
as provided above, all rights of such Loan Party against the Borrower or any
other Loan Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article V.

SECTION 2.06. Information. Each Loan Party assumes all responsibility for being
and keeping itself informed of the Borrower’s and each other Loan Party’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Loan Party assumes and incurs hereunder, and agrees that neither
the Collateral Agent nor any of the other Secured Parties will have any duty to
advise such Loan Party of information known to it or any of them regarding such
circumstances or risks.

SECTION 2.07. Limitation of Guarantee. Any term or provision of this Agreement,
any other Loan Document or any Secured Hedging Agreement to the contrary
notwithstanding, the maximum aggregate amount of the Obligations for which any
Loan Party shall be liable shall not exceed the maximum amount for which such
Loan Party can be liable without rendering this Agreement, any other Loan
Document or any Secured Hedging Agreement, as it relates to such Loan Party,
subject to avoidance under applicable law relating to fraudulent conveyance or
fraudulent transfer (including Section 548 of the Bankruptcy Code or any
applicable provisions of comparable state law) (collectively, “Fraudulent
Transfer Laws”), in each case after giving effect (a) to all other liabilities
of such Loan Party, contingent or otherwise, that are relevant under such
Fraudulent Transfer Laws (specifically excluding, however, any liabilities of
such Loan Party in respect of intercompany Indebtedness to the Borrower to the
extent that such Indebtedness would be discharged in an amount equal to the
amount paid by such Loan Party hereunder) and (b) to the value as assets of such
Loan Party (as determined under the applicable provisions of such Fraudulent
Transfer Laws) of any rights to subrogation, contribution, reimbursement,

 

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indemnity or similar rights held by such Loan Party pursuant to (i) applicable
Requirements of Law, (ii) Article V of this Agreement or (iii) any other
Contractual Obligations providing for an equitable allocation among such Loan
Party and other Subsidiaries or Affiliates of the Borrower of obligations
arising under this Agreement or other guaranties of the Obligations by such
parties.

ARTICLE III

Security Interests in Personal Property

SECTION 3.01. Security Interest. (a) As security for the payment or performance
when due, as the case may be, in full of the Obligations, each Loan Party hereby
pledges to the Collateral Agent, its successors and assigns, for the benefit of
the Secured Parties, and hereby grants to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, a security interest (the
“Security Interest”) in, all right, title or interest in, to and under any and
all of the ABL Collateral now owned or at any time hereafter acquired by such
Loan Party or in which such Loan Party now has or at any time in the future may
acquire any right, title or interest.

(b) Each Loan Party hereby irrevocably authorizes the Collateral Agent at any
time and from time to time to file in any relevant jurisdiction any initial
financing statements with respect to the ABL Collateral or any part thereof and
amendments thereto and continuations thereof that contain the information
required by Article 9 of the Uniform Commercial Code of each applicable
jurisdiction for the filing of any financing statement or amendment, including
whether such Loan Party is an organization, the type of organization and any
organizational identification number issued to such Loan Party. Each Loan Party
agrees to provide such information to the Collateral Agent promptly upon
request. Without limiting the foregoing, each Loan Party hereby irrevocably
authorizes the Collateral Agent at any time and from time to time to file in any
relevant jurisdiction financing statements that describe the ABL Collateral as
“all assets, whether now owned or hereafter acquired” of such Loan Party, or
words of similar effect as being of an equal or lesser scope or with greater
detail. Each Loan Party also ratifies its authorization for the Collateral Agent
to file in any relevant jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.

(c) The Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Loan Party with respect to or arising out of
the ABL Collateral (other than the duties expressly created hereunder).

SECTION 3.02. Representations and Warranties. The Loan Parties jointly and
severally represent and warrant to the Collateral Agent and the other Secured
Parties that:

(a) Each Loan Party has good and valid rights in and title to the ABL Collateral
with respect to which it has purported to grant a Security Interest hereunder
and has full power and authority to grant to the Collateral Agent, for the
benefit of the Secured Parties, the Security Interest in such ABL Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other Person, other than any consent or approval that has been obtained and
is in full force and effect, except to the extent that the failure to have such
rights, title, power or authority could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

(b) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein, including the exact legal name and place
of organization of each Loan Party, is correct and complete as of the Closing
Date. The Uniform Commercial Code financing statements or other appropriate
filings, recordings or registrations prepared by the Collateral Agent based upon
the

 

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information provided to the Collateral Agent in the Perfection Certificate for
filing in each governmental, municipal or other office specified in Schedules 2A
and 2B to the Perfection Certificate (or specified by notice from the Borrower
to the Collateral Agent after the Closing Date in the case of filings,
recordings or registrations required by Section 6.13 of the Credit Agreement),
are all the filings, recordings and registrations that are necessary to publish
notice of, perfect and protect the validity of and to establish a legal, valid
and perfected security interest in favor of the Collateral Agent, for the
benefit of the Secured Parties, in respect of all ABL Collateral in which the
Security Interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable Law with respect to the filing
of continuation statements.

(c) The Security Interest constitutes (i) a legal and valid security interest in
all the ABL Collateral securing the payment and performance of the Obligations
and (ii) subject to the filings described in Section 3.02(b), a perfected
security interest in all ABL Collateral in which a security interest may be
perfected by filing, recording or registering a financing statement or analogous
document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other
applicable Law in such jurisdictions. The Security Interest is and shall be
prior to any other Lien on any of the ABL Collateral, other than Permitted Liens
(but not Term Liens) that have priority as a matter of law.

(d) The ABL Collateral is owned by the Loan Parties free and clear of any Lien,
except for Permitted Liens. None of the Loan Parties has filed or consented to
the filing of (i) any financing statement or analogous document under the
Uniform Commercial Code or any other applicable Law covering any ABL Collateral
or (ii) any assignment in which any Loan Party assigns any ABL Collateral or any
security agreement or similar instrument covering any ABL Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Permitted Liens.

SECTION 3.03. Covenants. (a) Each Loan Party agrees to maintain, at its own cost
and expense, such complete and accurate records with respect to the ABL
Collateral owned by it as is consistent with its current practices and its
reasonable business judgment, and, at such time or times as the Collateral Agent
may reasonably request, promptly to prepare and deliver to the Collateral Agent
an updated schedule or schedules in form and detail reasonably satisfactory to
the Collateral Agent showing the identity, amount and location of any and all
ABL Collateral.

(b) Each Loan Party shall, at its own expense, take any and all actions
consistent with its current practices and its reasonable business judgment to
defend title to the ABL Collateral against all Persons and to defend the
Security Interest of the Collateral Agent in the ABL Collateral and the priority
thereof against any Lien that is not a Permitted Lien.

(c) Each Loan Party agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions as the Collateral Agent may from time to time reasonably
request to better assure, preserve, protect and perfect the Security Interest
and the rights and remedies created hereby, including the payment of any fees
and taxes required in connection with the execution and delivery of this
Agreement, the granting of the Security Interest and the filing of any financing
statements or other documents in connection herewith or therewith. If any amount
payable under or in connection with any of the ABL Collateral shall be or become
evidenced by any promissory note or other instrument, such note or instrument
shall be promptly pledged and delivered to the Collateral Agent, duly endorsed
in a manner reasonably satisfactory to the Collateral Agent.

 

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(d) The Collateral Agent and such Persons as the Collateral Agent may reasonably
designate shall have the right to inspect the ABL Collateral, all records
related thereto (and to make extracts and copies from such records) and the
premises upon which any of the ABL Collateral is located, to discuss the Loan
Parties’ affairs with the officers of the Loan Parties and their independent
accountants and to verify under reasonable procedures, in accordance with and as
provided by Section 6.11 of the Credit Agreement, the validity, amount, quality,
quantity, value, condition and status of, or any other matter relating to, the
ABL Collateral. In the case of Accounts or other ABL Collateral in the
possession of any third Person, the Collateral Agent and such Persons as the
Collateral Agent may reasonably designate shall have the right to verify, at any
time, the validity, amount, quality, quantity, value, condition and status
thereof by contacting Account Debtors or the third Person possessing such ABL
Collateral for the purpose of making such a verification. The Loan Parties shall
be required to pay all reasonable out-of-pocket costs and expenses incurred by
the Collateral Agent or any other Person in connection with any inspection or
verification referred to in this paragraph.

(e) At its option, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the ABL Collateral and not permitted pursuant to
Section 7.01 of the Credit Agreement, may obtain insurance and may pay for the
maintenance and preservation of the ABL Collateral to the extent any Loan Party
fails to do so as required by the Credit Agreement or this Agreement, and each
Loan Party jointly and severally agrees to reimburse the Collateral Agent on
demand for any payment made or any expense incurred by the Collateral Agent
pursuant to the foregoing authorization; provided that nothing in this paragraph
shall be interpreted as excusing any Loan Party from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Loan Party with respect to
taxes, assessments, charges, fees, Liens, security interests, insurance or other
encumbrances and maintenance as set forth herein, in the other Loan Documents or
any Secured Hedging Agreement.

(f) If at any time any Loan Party shall take a security interest in any property
with a value in excess of $1,000,000 in the aggregate of an Account Debtor or
any other Person to secure payment and performance of an Account, such Loan
Party shall promptly assign such security interest to the Collateral Agent, for
the benefit of the Secured Parties. Such assignment need not be filed of public
record unless necessary to continue the perfected status of the security
interest against creditors of and transferees from the Account Debtor or other
Person granting the security interest.

(g) Each Loan Party shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the ABL Collateral, all in
accordance with the terms and conditions thereof, and the Loan Parties jointly
and severally agree to indemnify and hold harmless the Collateral Agent and the
other Secured Parties from and against any and all liability for such
performance.

(h) If and to the extent requested by the Collateral Agent, each Loan Party
agrees that it shall notify each warehouseman, agent, bailee or processor that
possesses or controls any Inventory of such Loan Party of the Security Interest
and shall use its commercially reasonable efforts to obtain from such
warehouseman, agent, bailee or processor an acknowledgement in writing, in form
and substance reasonably satisfactory to the Collateral Agent, that such
warehouseman, agent, bailee or processor holds such Inventory for the benefit of
the Collateral Agent subject to the Security Interest and shall act upon the
instructions of the Collateral Agent without further consent from any Loan
Party, and that such warehouseman, agent, bailee or processor further agrees to
fully subordinate any Lien held by it with respect to such Inventory, whether
arising by operation of Law or otherwise, to the Security Interest.

 

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(i) None of the Loan Parties will, without the Collateral Agent’s prior written
consent, grant any extension of the time of payment of any Accounts included in
the ABL Collateral, compromise, compound or settle the same for less than the
full amount thereof, release, wholly or partly, any Person liable for the
payment thereof or grant any credit, discount or allowance whatsoever thereon,
other than extensions, compromises, settlements, releases, credits, discounts or
allowances granted or made in the ordinary course of business and consistent
with its current practices and in accordance with such prudent and standard
practice used in industries that are the same as or similar to those in which
such Loan Party is engaged. Upon the occurrence and during the continuance of an
Event of Default, the Collateral Agent shall, at its option, have the exclusive
right to settle, adjust or compromise any claim, offset, counterclaim or dispute
with Account Debtors or grant any credits, discounts or allowances.

(j) The Loan Parties, at their own expense, shall maintain or cause to be
maintained insurance policies with respect to the ABL Collateral in accordance
with the requirements set forth in Section 6.08 of the Credit Agreement. Each
Loan Party shall cause any insurance policies maintained by it with respect to
any ABL Collateral to be endorsed or otherwise amended to include the Collateral
Agent as an additional insured or loss payee, as appropriate, and to provide
that no cancellation, material addition in amount or material change in coverage
shall be effective until after 30 days’ notice thereof to the Collateral Agent.
Each Loan Party irrevocably makes, constitutes and appoints the Collateral Agent
(and all officers, employees or agents designated by the Collateral Agent) as
such Loan Party’s true and lawful agent (and attorney-in-fact) for the purpose,
during the continuance of an Event of Default, of making, settling and adjusting
claims in respect of ABL Collateral under policies of insurance, endorsing the
name of such Loan Party on any check, draft, instrument or other item of payment
for the proceeds of such policies of insurance and for making all determinations
and decisions necessary with respect thereto. In the event that any Loan Party
at any time or times shall fail to obtain or maintain any of the policies of
insurance required hereby or to pay any premium in whole or part relating
thereto, the Collateral Agent may, without waiving or releasing any obligation
or liability of the Loan Parties hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Collateral Agent deems
advisable. All sums disbursed by the Collateral Agent in connection with this
paragraph, including reasonable out-of-pocket attorneys’ fees, court costs,
expenses and other charges relating thereto, shall be payable, upon demand, by
the Loan Parties to the Collateral Agent and shall be additional Obligations
secured hereby.

(k) Each Loan Party shall maintain customary and prudent records of its Chattel
Paper and its books, records and documents evidencing or pertaining thereto.

(l) Each Loan Party agrees to notify promptly the Collateral Agent if any
material portion of the ABL Collateral owned or held by such Loan Party is
damaged or destroyed.

(m) Upon the request of the Collateral Agent, the Borrower shall deliver to the
Collateral Agent an updated Perfection Certificate certified by a Responsible
Officer of the Borrower reflecting all changes since the date of the Perfection
Certificate delivered on the Closing Date or the date of the most recent
Perfection Certificate delivered pursuant to this paragraph.

SECTION 3.04. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest, each Loan Party agrees, in each case at such Loan Party’s
own expense, to take the following actions with respect to the following ABL
Collateral:

(a) Instruments. If any Loan Party shall at any time hold or acquire any
Instruments that constitute ABL Collateral, such Loan Party shall promptly
endorse, assign and deliver the same to the Collateral Agent, accompanied by
such undated instruments of endorsement, transfer or assignment duly executed in
blank as the Collateral Agent may from time to time reasonably request.

 

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(b) Deposit Accounts. For each Deposit Account that any Loan Party at any time
opens or maintains, such Loan Party shall comply with the requirements set forth
in Section 2.16 of the Credit Agreement.

(c) Investment Property. If any Investment Property now or hereafter acquired by
any Loan Party is held by such Loan Party or its nominee through a securities
intermediary, and such Investment Property constitutes ABL Collateral, such Loan
Party shall immediately notify the Collateral Agent thereof and, at the
Collateral Agent’s request and option, pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral Agent, either (i) use
commercially reasonable efforts to cause such securities intermediary to agree
to comply with entitlement orders or other instructions from the Collateral
Agent to such securities intermediary as to such security entitlements without
further consent of any Loan Party or such nominee, or (ii) in the case of
Financial Assets or other Investment Property held through a securities
intermediary, use commercially reasonable efforts to arrange for the Collateral
Agent to become the entitlement holder with respect to such Investment Property,
with the Loan Party being permitted, only with the consent of the Collateral
Agent, to exercise rights to withdraw or otherwise deal with such Investment
Property. The Collateral Agent agrees with each of the Loan Parties that the
Collateral Agent shall not give any such entitlement orders or instructions or
directions to any such issuer or securities intermediary, and shall not withhold
its consent to the exercise of any withdrawal or dealing rights by any Loan
Party, except during the continuance of an Availability Triggering Event or if
an Event of Default has occurred and is continuing or, after giving effect to
any such investment and withdrawal rights, would occur. The provisions of this
paragraph shall not apply to (A) any Financial Assets credited to a securities
account for which the Collateral Agent is the securities intermediary and
(B) any securities account the value of securities or other Investment Property
in which does not exceed $1,000,000 for any such account individually, and
$5,000,000 for all such accounts in aggregate, at any time.

(d) Electronic Chattel Paper and Transferable Records. If any Loan Party at any
time holds or acquires an interest in any electronic chattel paper or any
“transferable record,” as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction of an amount in excess of $1,000,000, such Loan Party shall
promptly notify the Collateral Agent thereof and, at the request of the
Collateral Agent, shall take such action as the Collateral Agent may reasonably
request to vest in the Collateral Agent control under New York UCC Section 9-105
of such electronic chattel paper or control under Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in
such jurisdiction, of such transferable record. The Collateral Agent agrees with
such Loan Party that the Collateral Agent will arrange, pursuant to procedures
reasonably satisfactory to the Collateral Agent and so long as such procedures
will not result in the Collateral Agent’s loss of control, for the Loan Party to
make alterations to the electronic chattel paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such Loan
Party with respect to such electronic chattel paper or transferable record.

 

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(e) Letter-of-Credit Rights. If any Loan Party is at any time a beneficiary
under a letter of credit now or hereafter issued in favor of such Loan Party in
a face amount in excess of $1,000,000, and such letter of credit constitutes ABL
Collateral, such Loan Party shall promptly notify the Collateral Agent thereof
and, at the request and option of the Collateral Agent, such Loan Party shall,
pursuant to an agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) use commercially reasonable efforts to arrange for
the issuer and any confirmer of such letter of credit to consent to an
assignment to the Collateral Agent of the proceeds of any drawing under such
letter of credit or (ii) use commercially reasonable efforts to arrange for the
Collateral Agent to become the transferee beneficiary of such letter of credit,
with the Collateral Agent agreeing, in each case, that the proceeds of any
drawing under such letter of credit are to be paid to the applicable Loan Party
unless an Event of Default has occurred or is continuing.

ARTICLE IV

Remedies

SECTION 4.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Loan Party agrees to deliver, on
demand, each item of ABL Collateral to the Collateral Agent or any Person
designated by the Collateral Agent, and it is agreed that the Collateral Agent
shall have the right to take possession of the ABL Collateral and without
liability for trespass to enter any premises where the ABL Collateral may be
located for the purpose of taking possession of or removing the ABL Collateral
and, generally, to exercise any and all rights afforded to a secured party under
the Uniform Commercial Code or other applicable Law, in each case at the same or
different times, with or without legal process and with or without prior notice
or demand for performance. Without limiting the generality of the foregoing,
each Loan Party agrees that the Collateral Agent shall have the right, subject
to the mandatory requirements of applicable Law, to sell or otherwise dispose of
all or any part of the ABL Collateral at a public or private sale or at any
broker’s board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate. The Collateral
Agent shall be authorized at any such sale of securities (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to Persons
who will represent and agree that they are purchasing the ABL Collateral for
their own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the ABL Collateral so sold. Each such purchaser at any sale of ABL Collateral
shall hold the property sold absolutely, free from any claim or right on the
part of any Loan Party, and each Loan Party hereby waives (to the extent
permitted by law) all rights of redemption, stay and appraisal which such Loan
Party now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted.

The Collateral Agent shall give the applicable Loan Parties at least 10 days’
written notice (which each Loan Party agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent’s intention to make any sale of ABL
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker’s board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the ABL Collateral, or portion thereof, will first
be offered for sale at such board or exchange. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or
places as the Collateral Agent may fix and state in the notice (if any) of such
sale. At any such sale, the ABL Collateral, or portion thereof, to be sold may
be sold in one lot as an entirety or in separate parcels, as the Collateral
Agent may (in its sole and absolute discretion) determine. The Collateral Agent
shall not be obligated to make any sale of any ABL Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of such ABL
Collateral shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which

 

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the same was so adjourned. In case any sale of all or any part of the ABL
Collateral is made on credit or for future delivery, the ABL Collateral so sold
may be retained by the Collateral Agent until the sale price is paid by the
purchaser or purchasers thereof, but the Collateral Agent and the other Secured
Parties shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the ABL Collateral so sold and, in case of any
such failure, such ABL Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by applicable Law, private) sale made
pursuant to this Agreement, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Loan Party (all said rights being also hereby
waived and released to the extent permitted by law), the ABL Collateral or any
part thereof offered for sale and may make payment on account thereof by using
any claim then due and payable to such Secured Party from any Loan Party as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Loan Party therefor. For purposes hereof, a
written agreement to purchase the ABL Collateral or any portion thereof shall be
treated as a sale thereof; the Collateral Agent shall be free to carry out such
sale pursuant to such agreement and no Loan Party shall be entitled to the
return of the ABL Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall have entered into
such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Collateral Agent may proceed by a suit or suits at
law or in equity to foreclose this Agreement and to sell the ABL Collateral or
any portion thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver. Any sale pursuant to the provisions of this Section 4.01 shall be
deemed to conform to the commercially reasonable standards as provided in
Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.

SECTION 4.02. Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection or sale of ABL Collateral, including any ABL
Collateral consisting of cash, as set out in Section 8.03 of the Credit
Agreement. The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of ABL Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt by the Collateral Agent or by the officer making the sale of such
proceeds shall be a sufficient discharge to the purchaser or purchasers of the
ABL Collateral so sold and such purchaser or purchasers shall not be obligated
to see to the application of any part of the purchase money paid over to the
Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.

ARTICLE V

Indemnity, Subrogation and Subordination

SECTION 5.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Loan Parties may have under applicable Law (but
subject to Section 5.03), the Borrower agrees that (a) in the event a payment of
an Obligation of the Borrower shall be made by any Subsidiary Loan Party under
this Agreement, the Borrower shall indemnify such Subsidiary Loan Party for the
full amount of such payment and such Subsidiary Loan Party shall be subrogated
to the rights of the Person to whom such payment shall have been made to the
extent of such payment and (b) in the event any assets of any Subsidiary Loan
Party shall be sold pursuant to this Agreement or any other Security Document to
satisfy in whole or in part an Obligation of the Borrower owed to any Secured
Party, the Borrower shall indemnify such Subsidiary Loan Party in an amount
equal to the greater of the book value or the fair market value of the assets so
sold.

 

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SECTION 5.02. Contribution and Subrogation. Each Subsidiary Loan Party (a
“Contributing Party”) agrees (subject to Section 5.03) that, in the event a
payment shall be made by any other Subsidiary Loan Party hereunder in respect of
any Obligation or assets of any other Subsidiary Loan Party shall be sold
pursuant to any Security Document to satisfy any Obligation (other, in each
case, than an Obligation for the incurrence of which such other Subsidiary Loan
Party received fair and adequate consideration) and such other Subsidiary Loan
Party (the “Claiming Party”) shall not have been fully indemnified by the
Borrower as provided in Section 5.01, the Contributing Party shall indemnify the
Claiming Party in an amount equal to the amount of such payment or the greater
of the book value or the fair market value of such assets, as the case may be,
in each case multiplied by a fraction of which the numerator shall be the net
worth of the Contributing Party on the date hereof and the denominator shall be
the aggregate net worth of all the Subsidiary Loan Parties on the date hereof
(or, in the case of any Subsidiary Loan Party becoming a party hereto pursuant
to Section 6.14, the date of the supplement hereto executed and delivered by
such Subsidiary Loan Party). Any Contributing Party making any payment to a
Claiming Party pursuant to this Section 5.02 shall be subrogated to the rights
of such Claiming Party under Section 5.01 to the extent of such payment.

SECTION 5.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Loan Parties under Sections 5.01 and 5.02 and
all other rights of indemnity, contribution or subrogation under applicable Law
or otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations. No failure on the part of the Borrower or any other
Loan Party to make the payments required by Sections 5.01 and 5.02 (or any other
payments required under applicable Law or otherwise) shall in any respect limit
the obligations and liabilities of any Loan Party with respect to its
Obligations hereunder, and each Loan Party shall remain liable for the full
amount of the Obligations of such Loan Party hereunder.

(b) Each Loan Party hereby agrees that all Indebtedness and other monetary
obligations owed by it to any other Loan Party or any other Subsidiary shall be
fully subordinated to the indefeasible payment in full in cash of the
Obligations.

ARTICLE VI

Miscellaneous

SECTION 6.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 10.02 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Loan Party shall be given to it in care of the Borrower as
provided in Section 10.02 of the Credit Agreement.

SECTION 6.02. Waivers; Amendment. (a) No failure or delay by the Collateral
Agent, any other Agent, any LC Issuer or any Lender in exercising any right or
power hereunder, under any other Loan Document or any Secured Hedging Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Collateral Agent, any L/C Issuer and the other Secured Parties hereunder, under
the other Loan Documents or any Secured Hedging Agreement are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 6.02, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Collateral Agent, any other Agent, any

 

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Arranger, any Lender or any L/C Issuer may have had notice or knowledge of such
Default at the time. No notice or demand on any Loan Party in any case shall
entitle any Loan Party to any other or further notice or demand in similar or
other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Loan Party or Loan Parties with respect to which
such waiver, amendment or modification is to apply, and acknowledged by the
Administrative Agent, subject to any consent (including any consent of the
Required Lenders) required in accordance with Section 10.01 of the Credit
Agreement and the other terms of such Section.

SECTION 6.03. Collateral Agent’s Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 10.04(a)
of the Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan
Documents or any Secured Hedging Agreement, each Loan Party jointly and
severally agrees to indemnify, hold harmless and defend each Indemnitee (as
defined in the Credit Agreement) from and against all Liabilities (including
brokerage commissions, fees and other compensation) that may be imposed on,
incurred by or asserted against any such Indemnitee in any matter relating to or
arising out of, in connection with or as a result of the Indemnified Matters;
provided, however, that a Loan Party shall not have any liability under this
Section 6.03(b) to any Indemnitee with respect to any Indemnified Matter, and no
Indemnitee shall have any liability with respect to any Indemnified Matter other
than (to the extent otherwise liable), to the extent such liability has resulted
primarily from the gross negligence or willful misconduct of such Indemnitee, as
determined by a court of competent jurisdiction in a final non-appealable
judgment or order. In no event shall any Indemnitee be liable on any theory of
liability for any special, indirect, consequential or punitive damages
(including any loss of profits, business or anticipated savings). Each of the
parties hereto hereby waives, releases and agrees not to sue upon any such claim
for any special, indirect, consequential or punitive damages, whether or not
accrued and whether or not known or suspected to exist in its favor (except to
the extent of liabilities resulting primarily from the gross negligence or
willful misconduct as determined pursuant to a final, non-appealable order of a
court of competent jurisdiction).

(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Loan Documents. The provisions of
this Section 6.03 shall remain operative and in full force and effect regardless
of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 6.03 shall be payable promptly after written demand therefor.

SECTION 6.04. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Loan Party or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

SECTION 6.05. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the L/C Issuers and shall survive the
execution

 

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and delivery of the Loan Documents and the making of any Loans and issuance of
any Letters of Credit, regardless of any investigation made by or on behalf of
any Lender or any L/C Issuer and notwithstanding that any Agent, any L/C Issuer
or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under any Loan Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.

SECTION 6.06. Counterparts; Effectiveness; Several Agreement. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Agreement by facsimile transmission or electronic
transmission (pdf) shall be as effective as delivery of a manually signed
counterpart of this Agreement. This Agreement shall become effective as to any
Loan Party when a counterpart hereof executed on behalf of such Loan Party shall
have been delivered to the Collateral Agent and a counterpart hereof shall have
been executed on behalf of the Collateral Agent, and thereafter shall be binding
upon such Loan Party and the Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Loan Party, the
Collateral Agent and the other Secured Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
ABL Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the Credit Agreement. This Agreement
shall be construed as a separate agreement with respect to each Loan Party and
may be amended, modified, supplemented, waived or released with respect to any
Loan Party without the approval of any other Loan Party and without affecting
the obligations of any other Loan Party hereunder.

SECTION 6.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties hereto shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 6.08. Right of Set-Off. If an Event of Default shall have occurred and
be continuing, each Agent, each Lender, each L/C Issuer and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Agent, such Lender, such L/C Issuer
or such Affiliate to or for the credit or the account of any Loan Party against
any of and all the Obligations of such Loan Party now or hereafter existing
under this Agreement owed to such Agent, such Lender or such L/C Issuer,
irrespective of whether or not such Agent, such Lender or such L/C Issuer shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Agent, each Lender, each L/C Issuer and its
Affiliates under this Section 6.08 are in addition to other rights and remedies
(including other rights of set-off) which such Person may have. For the
avoidance of doubt, any payments obtained by any Lender pursuant to the exercise
of rights under this Section 6.08 shall be subject to Section 2.02A and
Section 2.14 of the Credit Agreement.

SECTION 6.09. GOVERNING LAW; JURISDICTION.

(a) GOVERNING LAW. THIS AGREEMENT, EACH OTHER LOAN DOCUMENT THAT DOES NOT
EXPRESSLY SET FORTH ITS APPLICABLE LAW, AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO AND THERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

16

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(b) JURISDICTION. (i) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO ANY LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK LOCATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS.

(ii) SERVICE OF PROCESS. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
PERSONAL SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND OTHER
DOCUMENTS AND OTHER SERVICE OF PROCESS OF ANY KIND AND CONSENTS TO SUCH SERVICE
IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA WITH
RESPECT TO OR OTHERWISE ARISING OUT OF OR IN CONNECTION WITH ANY LOAN DOCUMENT
BY ANY MEANS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, INCLUDING BY THE
MAILING THEREOF (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID) TO THE
ADDRESS OF SUCH PERSON SPECIFIED IN SECTION 10.13 OF THE CREDIT AGREEMENT (AND
SHALL BE EFFECTIVE WHEN SUCH MAILING SHALL BE EFFECTIVE, AS PROVIDED THEREIN).
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

(iii) NON-EXCLUSIVE JURISDICTION. NOTHING CONTAINED IN THIS SECTION 6.09 SHALL
AFFECT THE RIGHT OF THE COLLATERAL AGENT, ANY SECURED PARTY OR ANY LOAN PARTY TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW OR
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY HERETO IN ANY
OTHER JURISDICTION.

SECTION 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS, AS
APPLICABLE, BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.

 

17

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SECTION 6.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 6.12. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest and all obligations of each Loan Party
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement, any other Loan Document, any
Secured Hedging Agreement, any agreement with respect to any of the Obligations
or any other agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Credit Agreement, any Secured Hedging Agreement, any
other Loan Document or any other agreement or instrument, (c) any exchange,
release or non-perfection of any Lien on other collateral, or any release or
amendment or waiver of or consent under or departure from any guarantee,
securing or guaranteeing all or any of the Obligations, or (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Loan Party in respect of the Obligations or this Agreement.

SECTION 6.13. Termination or Release. (a) This Agreement, the Guarantees made
herein, the Security Interest and all other security interests granted hereby
shall terminate when all the Obligations (other than, with respect to the
termination of the Security Interest and all other security interests granted
hereby only, any Obligations that consist solely of contingent obligations) have
been indefeasibly paid in full (or, in the case of any L/C Reimbursement
Obligation or any Secured Hedging Counterparty’s exposure under the relevant
Hedging Agreement, such Obligations have been cash collateralized in full or
supported in full by letters of credit in a manner reasonably satisfactory to
the L/C Issuer, if applicable, and the Collateral Agent), all Commitments under
the Credit Agreement shall have been reduced to zero, no L/C Issuer shall have
any obligation to issue Letters of Credit under the Credit Agreement and no
Letter of Credit shall be outstanding (other than Letters of Credit the L/C
Reimbursement Obligations under which have been cash collateralized or supported
by letters of credit, in each case to the reasonable satisfaction of the L/C
Issuer and the Collateral Agent). In connection with any termination pursuant to
this paragraph, the Collateral Agent shall execute and deliver to any Loan
Party, at such Loan Party’s expense, all Uniform Commercial Code termination
statements and any other documents that such Loan Party shall reasonably request
to evidence such termination. Any execution and delivery of documents pursuant
to this Section 6.13 shall be without recourse to, or warranty by, the
Collateral Agent or any other Secured Party.

(b) Except as provided in paragraph (a) above, the release of any Subsidiary
Loan Party from its obligations hereunder and of the Security Interest in any
ABL Collateral shall be governed by Section 9.10 of the Credit Agreement.

SECTION 6.14. Additional Subsidiaries. Pursuant to Section 6.13(c) of the Credit
Agreement, certain Subsidiaries not originally parties hereto may be required
from time to time to enter in this Agreement as Subsidiary Loan Parties. Upon
execution and delivery by the Collateral Agent and a Subsidiary of an instrument
in the form of Exhibit I hereto, such Subsidiary shall become a party to this
Agreement as a Subsidiary Loan Party (and a guarantor and grantor hereunder)
with the same force and effect as if originally named as a Subsidiary Loan Party
herein. The execution and delivery of any such instrument 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.

 

18

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SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact. Each Loan Party
hereby appoints the Collateral Agent the attorney-in-fact of such Loan Party for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, but only upon the occurrence and
during the continuance of an Event of Default, with full power of substitution
either in the Collateral Agent’s name or in the name of such Loan Party (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the ABL
Collateral or any part thereof; (b) to demand, collect, receive payment of, give
receipt for and give discharges and releases of all or any of the ABL
Collateral; (c) to sign the name of any Loan Party on any invoice or bill of
lading relating to any of the ABL Collateral; (d) to send verifications of
Accounts Receivable to any Account Debtor; (e) to commence and prosecute any and
all suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the ABL Collateral
or to enforce any rights in respect of any ABL Collateral; (f) to settle,
compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the ABL Collateral; (g) to notify, or to require any
Loan Party to notify, Account Debtors to make payment directly to the Collateral
Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the ABL Collateral for all purposes; provided that nothing herein contained
shall be construed as requiring or obligating the Collateral Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent, or to present or file any claim or notice, or
to take any action with respect to the ABL Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby.
The Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Loan Party for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.

[The remainder of this page is blank.]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

SPECTRUM BRANDS, INC., as the Borrower By:   /s/ Anthony L. Genito   Name:  
Anthony L. Genito   Title:  

Executive Vice President,

Chief Financial Officer, and

Chief Accounting Officer

ROV HOLDING, INC.

UNITED INDUSTRIES CORPORATION

UNITED PET GROUP, INC.

ROVCAL, INC.

AQUARIA, INC.

SOUTHERN CALIFORNIA FOAM, INC.

TETRA HOLDING (US), INC.

SPECTRUM NEPTUNE US HOLDCO CORPORATION

PERFECTO MANUFACTURING, INC.

AQUARIUM SYSTEMS, INC.

SCHULTZ COMPANY

SPECTRUM JUNGLE LABS CORPORATION

DB ONLINE, LLC

By:   United Pet Group, Inc.,

         its Managing Member

By:   /s/ Anthony L. Genito   Name:   Anthony L. Genito   Title:   Vice
President

 

[Signature Page to ABL Guarantee and Collateral Agreement]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

GENERAL ELECTRIC CAPITAL CORPORATION,

as the Collateral Agent

By:   /s/ Patrick Lee Its: Duly Authorized Signatory

[Signature Page to ABL Guarantee and Collateral Agreement]

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Schedule I

Subsidiary Loan Parties

 

Grantor

   Type of
Organization    Jurisdiction
of
Organization    Organization
Identification
Number

ROV Holding, Inc.

   Corporation    Delaware    0946128

ROVCAL, Inc.

   Corporation    California    C2063405

United Industries Corporation

   Corporation    Delaware    0790751

Spectrum Neptune US Holdco Corporation

   Corporation    Delaware    3786826

Schultz Company

   Corporation    Missouri    00069779

United Pet Group, Inc.

   Corporation    Delaware    3066897

DB Online, LLC

   Limited Liability
Company    Hawaii    HI29170C5

Southern California Foam, Inc.

   Corporation    California    C1456775

Aquaria, Inc.

   Corporation    California    C0553017

Aquarium Systems, Inc.

   Corporation    Delaware    2583486

Perfecto Manufacturing, Inc.

   Corporation    Delaware    2626833

Tetra Holding (US), Inc.

   Corporation    Delaware    3589555

Spectrum Jungle Labs Corporation

   Corporation    Texas    801073291

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Exhibit I to

the ABL Guarantee and Collateral Agreement

SUPPLEMENT NO. ___ dated as of [                    ], to the ABL Guarantee and
Collateral Agreement dated as of August 28, 2009 (the “Guarantee and Collateral
Agreement”), among Spectrum Brands, Inc., a Delaware corporation (the
“Borrower”), each subsidiary of the Borrower listed on Schedule I thereto
(collectively, the “Subsidiary Loan Parties”; the Subsidiary Loan Parties and
the Borrower are referred to collectively herein as the “Loan Parties”) and
General Electric Capital Corporation, as the Collateral Agent.

A. Reference is made to the Credit Agreement dated as of August 28, 2009 (as
amended, restated, supplemented, refinanced, replaced or otherwise modified from
time to time, the “Credit Agreement”), among the Borrower, the other Loan
Parties, the Lenders, General Electric Capital Corporation, as Administrative
Agent, Co-Collateral Agent, Syndication Agent, Swingline Lender, and
Supplemental Loan Lender and Bank of America, N.A., as Co-Collateral Agent and
L/C Issuer.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Guarantee and
Collateral Agreement referred to therein.

C. The Loan Parties have entered into the Guarantee and Collateral Agreement in
order to induce the Lenders to make Loans and the L/C Issuers to issue Letters
of Credit. Section 6.14 of the Guarantee and Collateral Agreement provides that
additional Subsidiaries of the Borrower may become party to the Guarantee and
Collateral Agreement as Subsidiary Loan Parties by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary (the “New
Subsidiary”) is executing this Supplement in accordance with the requirements of
the Credit Agreement to become a party to the Guarantee and Collateral Agreement
as a Subsidiary Loan Party in order to induce the Lenders to make additional
Loans and the L/C Issuers to issue additional Letters of Credit and as
consideration for Loans previously made and Letters of Credit previously issued.

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 6.14 of the Guarantee and Collateral
Agreement, the New Subsidiary by its signature below becomes a party to the
Guarantee and Collateral Agreement as a Subsidiary Loan Party and Loan Party
thereunder (and accordingly, becomes a guarantor and a grantor thereunder), with
the same force and effect as if originally named therein as a Subsidiary Loan
Party, and the New Subsidiary hereby (a) agrees to all the terms and provisions
of the Guarantee and Collateral Agreement applicable to it as a Subsidiary Loan
Party and a guarantor and a grantor thereunder and (b) represents and warrants
that the representations and warranties made by it as a Loan Party thereunder
are true and correct on and as of the date hereof. In furtherance of the
foregoing, the New Subsidiary, as security for the payment and performance in
full of the Obligations does hereby (i) create and grant to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties, a
security interest in and lien on all of the New Subsidiary’s right, title and
interest in, to and under the ABL Collateral of the New Subsidiary,
(b) guarantee the Obligations as set forth in Article II of the Guarantee and
Collateral Agreement and (c) authorize the Collateral Agent at any time and from
time to time to file in the applicable jurisdictions any initial financing
statements with respect to the ABL Collateral or any part thereof and amendments
thereto and continuations thereof that contain the information required by
Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the
filing of any financing statement or amendment. Without limiting the foregoing,
each Loan Party hereby irrevocably authorizes the Collateral Agent at any time
and from time to time to file in any relevant jurisdiction financing

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statements that describe the ABL Collateral as “all assets, whether now owned or
hereafter acquired” of such Loan Party, or words of similar effect as being of
an equal or lesser scope or with greater detail. Each reference to a “Subsidiary
Loan Party” or a “Loan Party” in the Guarantee and Collateral Agreement shall be
deemed to include the New Subsidiary. The Guarantee and Collateral Agreement is
hereby incorporated herein by reference.

SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received a counterpart of this Supplement that bears the signature of the
New Subsidiary and the Collateral Agent has executed a counterpart hereof.
Delivery of an executed signature page to this Supplement by facsimile
transmission or electronic transmission (pdf) shall be as effective as delivery
of a manually signed counterpart of this Supplement.

SECTION 4. The New Subsidiary hereby represents and warrants that set forth
under its signature hereto, is the true and correct legal name of the New
Subsidiary, its jurisdiction of formation, the organizational identification
number, if any, issued to it by its jurisdiction of formation and the location
of its chief executive office.

SECTION 5. Except as expressly supplemented hereby, the Guarantee and Collateral
Agreement shall remain in full force and effect.

SECTION 6. THIS SUPPLEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
SUPPLEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE
CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS
SUPPLEMENT, EACH PARTY HERETO HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
NOTICES AND OTHER DOCUMENTS AND OTHER SERVICE OF PROCESS OF ANY KIND AND
CONSENTS TO SUCH SERVICE IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED
STATES OF AMERICA WITH RESPECT TO OR OTHERWISE ARISING OUT OF OR IN CONNECTION
WITH ANY LOAN DOCUMENT BY ANY MEANS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
INCLUDING BY THE MAILING THEREOF (BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID) TO THE ADDRESS OF SUCH PERSON SPECIFIED IN SECTION 10.13 OF THE CREDIT
AGREEMENT (AND SHALL BE EFFECTIVE WHEN SUCH MAILING SHALL BE EFFECTIVE, AS
PROVIDED THEREIN). EACH PARTY HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING

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CONTAINED IN THIS SECTION 6 SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR
ANY SECURED PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY PARTY HERETO IN ANY OTHER JURISDICTION.

SECTION 7. Any provision of this Supplement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof and of the Guarantee and Collateral Agreement and the Credit Agreement;
and the invalidity of a particular provision in a particular jurisdiction shall
not invalidate such provision in any other jurisdiction. The parties hereto
shall endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 6.01 of the Guarantee and Collateral Agreement.

SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.