Exhibit 10.2

 

EXECUTION VERSION

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

GENERAC ACQUISITION CORP.

 

GENERAC POWER SYSTEMS, INC.

 

and certain Subsidiaries of GENERAC POWER SYSTEMS, INC.

 

in favor of

 

JPMORGAN CHASE BANK, N.A., as Administrative Agent

 

Dated as of February 9, 2011

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

SECTION 1.

DEFINED TERMS

2

 

 

 

1.1.

Definitions

2

1.2.

Other Definitional Provisions

9

 

 

 

SECTION 2.

GUARANTEE

10

 

 

 

2.1.

Guarantee

10

2.2.

Rights of Reimbursement, Contribution and Subrogation

10

2.3.

Amendments, etc. with respect to the Borrower Obligations

12

2.4.

Guarantee Absolute and Unconditional

12

2.5.

Reinstatement

13

2.6.

Payments

13

 

 

 

SECTION 3.

GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL

13

 

 

 

SECTION 4.

REPRESENTATIONS AND WARRANTIES

15

 

 

 

4.1.

Title; No Other Liens

15

4.2.

Perfected First Priority Liens

15

4.3.

Name; Jurisdiction of Organization, etc

16

4.4.

Inventory and Equipment

16

4.5.

Farm Products

16

4.6.

Investment Property

16

4.7.

Receivables

17

4.8.

Intellectual Property

18

4.9.

Letters of Credit and Letter of Credit Rights

20

 

 

 

SECTION 5.

COVENANTS

20

 

 

 

5.1.

Delivery and Control of Certain Collateral

20

5.2.

Maintenance of Perfected Security Interest; Further Documentation

21

5.3.

Changes in Locations, Name, Jurisdiction of Incorporation, etc

21

5.4.

Investment Property

22

5.5.

Intellectual Property

23

5.6.

Commercial Tort Claims

25

 

 

 

SECTION 6.

REMEDIAL PROVISIONS

25

 

 

 

6.1.

Certain Matters Relating to Receivables

25

6.2.

Communications with Obligors; Grantors Remain Liable

25

6.3.

Pledged Collateral

26

6.4.

Proceeds to be Turned Over To Administrative Agent

27

6.5.

Application of Proceeds

27

6.6.

Code and Other Remedies

27

 

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Page

 

 

 

6.7.

Registration Rights

29

6.8.

Deficiency

30

 

 

 

SECTION 7.

THE ADMINISTRATIVE AGENT

30

 

 

 

7.1.

Administrative Agent’s Appointment as Attorney-in-Fact, etc

30

7.2.

Duty of Administrative Agent

32

7.3.

Execution of Financing Statements

32

7.4.

Authority of Administrative Agent

32

7.5.

Appointment of Co-Collateral Agents

33

 

 

 

SECTION 8.

MISCELLANEOUS

33

 

 

 

8.1.

Amendments in Writing

33

8.2.

Notices

33

8.3.

No Waiver by Course of Conduct; Cumulative Remedies

33

8.4.

Enforcement Expenses; Indemnification

33

8.5.

Successors and Assigns

34

8.6.

Set-Off

34

8.7.

Counterparts

34

8.8.

Severability

35

8.9.

Section Headings

35

8.10.

Integration

35

8.11.

APPLICABLE LAW

35

8.12.

Submission to Jurisdiction; Waivers

35

8.13.

Acknowledgments

36

8.14.

Additional Grantors

36

8.15.

Releases

36

8.16.

WAIVER OF JURY TRIAL

36

 

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SCHEDULE 3(a)  — COMMERCIAL TORT CLAIMS

 

SCHEDULE 4.3 — FILINGS; OTHER ACTIONS

 

SCHEDULE 4.4 — NAME; JURISDICTION OF ORGANIZATION, ETC

 

SCHEDULE 4.5 — INVENTORY AND EQUIPMENT

 

SCHEDULE 4.7 — INVESTMENT PROPERTY

 

SCHEDULE 4.9 — INTELLECTUAL PROPERTY

 

SCHEDULE 4.10 — LETTERS OF CREDIT AND LETTERS OF CREDIT RIGHTS

 

SCHEDULE 8.2 — NOTICES

 

EXHIBIT A — ACKNOWLEDGEMENT AND CONSENT

 

EXHIBIT B-1 — INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

EXHIBIT B-2 — AFTER-ACQUIRED INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

EXHIBIT D — ASSUMPTION AGREEMENT

 

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GUARANTEE AND COLLATERAL AGREEMENT, dated as of February 9, 2012, made by each
of the signatories hereto (other than the Administrative Agent, but together
with any other entity that may become a party hereto as provided herein, the
“Grantors”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent (in
such capacity and together with its successors, the “Administrative Agent”) for
(i) the banks and other financial institutions or entities (the “Lenders”) from
time to time parties to the Credit Agreement, dated as of February 9, 2012 (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Generac Acquisition Corp., a
Delaware corporation (“Holdings”), Generac Power Systems, Inc., a Wisconsin
corporation (the “Borrower”), the Lenders party thereto, J.P. Morgan Securities
LLC, Goldman Sachs Credit Partners L.P. and Merrill Lynch, Pierce, Fenner &
Smith LLP, as joint bookrunners and joint lead arrangers (in each such capacity,
the “Joint Lead Arrangers”), Goldman Sachs Bank USA and Bank of America, N.A.,
as syndication agents (in such capacity, the “Syndication Agents”) and RBS
Citizens, N.A., PNC Bank, National Association, Mizuho Corporate Bank, Ltd.,
Sumitomo Mitsui Banking Corporation and Bank of Montreal, as documentation
agents (in such capacity, the “Documentation Agents”) and (ii) the other Secured
Parties (as hereinafter defined).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;

 

WHEREAS, the Borrower is a member of an affiliated group of companies that
includes each other Grantor;

 

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the Borrower to make valuable transfers to one or
more of the other Grantors in connection with the operation of their respective
businesses;

 

WHEREAS, the Borrower and the other Grantors are engaged in related businesses,
and each Grantor will derive substantial direct and indirect benefit from the
making of the extensions of credit under the Credit Agreement; and

 

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective extensions of credit to the Borrower under the Credit Agreement
that the Grantors shall have executed and delivered this Agreement to the
Administrative Agent for the ratable benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the foregoing premises and to induce the
Joint Lead Arrangers, the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:

 

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SECTION 1.                                DEFINED TERMS

 

1.1.                              Definitions.  (a)  Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement, and the following terms are used
herein as defined in the New York UCC (and if defined in more than one Article
of the New York UCC, such terms shall have the meanings given in Article 9
thereof): Accounts, Account Debtor, Certificated Security, Chattel Paper,
Commercial Tort Claim, Commodity Account, Commodity Contract, Commodity
Intermediary, Documents, Deposit Account, Electronic Chattel Paper, Equipment,
Farm Products, Financial Asset, Fixtures, General Intangibles, Goods,
Instruments, Inventory, Letter of Credit, Letter of Credit Rights, Money,
Payment Intangibles, Securities Account, Securities Intermediary, Security,
Security Entitlement, Supporting Obligations, Tangible Chattel Paper and
Uncertificated Security.

 

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

 

“Administrative Agent” shall have the meaning assigned to such term in the
preamble.

 

“After-Acquired Intellectual Property” shall have the meaning assigned to such
term in Section 5.9(k).

 

“Agreement” shall mean this Guarantee and Collateral Agreement, as the same may
be amended, amended and restated, restated, supplemented or otherwise modified
from time to time.

 

“Borrower” shall have the meaning assigned to such term in the preamble.

 

“Borrower Obligations” shall mean the collective reference to all Obligations of
the Borrower; provided, that (i) obligations of the Borrower or any other Loan
Party under any Specified Hedge Agreement or in respect of any Cash Management
Obligations, in each case with a Lender Counterparty, shall be secured and
guaranteed pursuant to the Security Documents only to the extent that, and for
so long as the Obligations referred to in clause (a) of the definition of
Obligations in the Credit Agreement are so secured and guaranteed, (ii) any
release of collateral or guarantors effected in the manner permitted by the
Credit Agreement or any other Loan Document shall not require the consent of
holders of obligations under Specified Hedge Agreements or in respect of any
Cash Management Obligations and (iii) the amount of secured obligations under
any Specified Hedge Agreements shall not exceed the net amount, including any
net termination payments, that would be required to be paid to the counterparty
to such Specified Hedge Agreement on the date of termination of such Specified
Hedge Agreement.

 

“Co-Documentation Agents” shall have the meaning assigned to such term in the
preamble.

 

“Collateral” shall have the meaning assigned to such term in Section 3.

 

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“Collateral Account” shall mean (i) any collateral account established by the
Administrative Agent as provided in Section 6.1 or Section 6.4 or (ii) any cash
collateral account established as provided in Section 2.05(j) of the Credit
Agreement.

 

“Collateral Account Funds” shall mean, collectively, the following: all funds
(including all trust monies) and investments (including all cash equivalents)
credited to, or purchased with funds from, any Collateral Account and all
certificates and instruments from time to time representing or evidencing such
investments; all Money, notes, certificates of deposit, checks and other
instruments from time to time hereafter delivered to or otherwise possessed by
the Administrative Agent for or on behalf of any Grantor in substitution for, or
in addition to, any or all of the Collateral; and all interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the items
constituting Collateral.

 

“Contracts” shall mean all contracts and agreements between any Grantor and any
other person (in each case, whether written or oral, or third party or
intercompany) as the same may be amended, assigned, extended, restated,
supplemented, replaced or otherwise modified from time to time including (i) all
rights of any Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (ii) all rights of any Grantor to receive proceeds
of any insurance, indemnity, warranty or guaranty with respect thereto, (iii)
all rights of any Grantor to damages arising thereunder and (iv) all rights of
any Grantor to terminate and to perform and compel performance of, such
Contracts and to exercise all remedies thereunder.

 

“Copyright Licenses” shall mean any written agreement naming any Grantor as
licensor or licensee (including those listed on Schedule 4.9(a) (as such
schedule may be amended or supplemented from time to time)), granting any right
in, to or under any Copyright, including the grant of rights to manufacture,
print, publish, copy, import, export, distribute, exploit and sell materials
derived from any Copyright.

 

“Copyrights”  shall mean (i) all copyrights arising under the laws of the United
States, whether registered or unregistered and whether published or unpublished
(including those listed on Schedule 4.9(a) (as such schedule may be amended or
supplemented from time to time)), all registrations and recordings thereof, and
all applications in connection therewith and rights corresponding thereto
throughout the world, including all registrations, recordings and applications
in the United States Copyright Office, and (ii) the right to, and to obtain, all
extensions and renewals thereof.

 

“Credit Agreement” shall have the meaning assigned to such term in the preamble.

 

“dollars” or “$” shall mean lawful money of the United States of America.

 

“Excluded Assets” shall mean: (i) the Excluded Foreign and Other Subsidiary
Equity Interests; (ii) any Equity Interests if, and to the extent that, and for
so long as doing so would violate applicable law or, other than in the case of
Wholly-Owned Subsidiaries, a contractual obligation binding on such Equity
Interests; (iii) any property subject to a Lien permitted under Section 6.02(i)
or 6.02(j) of the Credit Agreement, (iv) cash and cash

 

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equivalents and all Deposit Accounts, Securities Accounts and Commodities
Accounts (other than to the extent the foregoing are proceeds of Collateral
perfected by filing a Uniform Commercial Code financing statement), (v) all
leasehold real property, (vi) any asset (including any fee owned real property
but excluding any personal property in which a security interest may be created
under the terms of any existing Security Documents pursuant to the Uniform
Commercial Code) that has an individual fair market value in an amount less than
$10.0 million (as reasonably estimated by the Borrower), (vii) Equity Interests
of any partnerships, joint ventures and any non-Wholly Owned Subsidiary which
cannot be pledged without the consent of one or more third parties, (viii)
margin stock, (ix) security interests to the extent the same would result in
adverse tax consequences as reasonably determined by the Borrower, (x) any
property and assets the pledge of which would require governmental consent,
approval, license or authorization, (xi) all foreign intellectual property and
any “intent-to-use” trademark applications prior to the filing of a “Statement
of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if
any, that, and solely during the period, if any, in which, the grant of a
security interest therein would impair the validity or enforceability of such
intent-to-use trademark application under applicable federal law, (xii) the
Equity Interests of any Immaterial Subsidiary, (xiii) Trust Funds and (xiv)
other assets which the Administrative Agent, in consultation with the Borrower,
determines, in its reasonable discretion, should be excluded taking into account
the practical operations of the Borrower’s business and its client
relationships.  Notwithstanding anything to the contrary herein, (x) the Loan
Parties shall not be required to grant a security interest in any Collateral or
perfect a security interest in any Collateral to the extent (A) the burden or
cost of obtaining or perfecting a security interest therein outweighs the
benefit of the security afforded thereby as reasonably determined by the
Borrower and the Administrative Agent or (B) if the granting of a security
interest in such asset would be prohibited by, other than to the extent
prohibited by Section 6.09(d) of the Credit Agreement, enforceable
anti-assignment provisions of contracts or applicable law or with respect to any
assets to the extent such a pledge would violate the terms of any contract with
respect to such assets (in each case, after giving effect to the applicable
anti-assignment provisions of the Uniform Commercial Code or other applicable
law) or would trigger termination pursuant to any “change of control” or similar
provision in any contract and (y) no foreign law security or pledge agreement
shall be required.

 

“Excluded Foreign and Other Subsidiary Equity Interests” shall mean the (A)
Equity Interests in excess of 65% of the voting Equity Interests of (i) each
“first tier” Foreign Subsidiary owned by any Grantor and (ii) each Disregarded
Domestic Subsidiary; (B) any voting or non-voting Equity Interest of any Foreign
Subsidiary that is not a “first tier” Foreign Subsidiary owned by any Grantor
and (C) the Equity Interests of any Unrestricted Subsidiary, Immaterial
Subsidiary, Special Purpose Subsidiary (to the extent a pledge is not permitted
under the securitization agreements applicable to such Special Purpose
Subsidiary), Captive Insurance Subsidiary, and not-for-profit Subsidiary.

 

“Excluded Perfection Assets” shall mean (i) Collateral for which the perfection
of Liens thereon requires filings in or other actions under the laws of
jurisdictions outside of the United States of America, any State, territory or
dependency thereof or the District of Columbia, (ii) goods included in
Collateral received by any Person from any Grantor for “sale or return” within
the meaning of Section 2-326 of the Uniform Commercial Code of the applicable
jurisdiction, to the extent of claims of creditors of such Person, (iii)
Equipment constituting

 

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Fixtures and (iv) Collateral as to which actions necessary for perfection are
not required to be taken pursuant to Section 5.02 hereof or Section 5.09(g) of
the Credit Agreement.

 

“Grantors” shall have the meaning assigned to such term in the preamble.

 

“Guarantor Obligations” shall mean all Obligations of any Guarantor; provided,
that (i) obligations of the Guarantor under any Specified Hedge Agreement or
Cash Management Obligations shall be secured and guaranteed pursuant to the
Security Documents only to the extent that, and for so long as the Obligations
referred to in clause (a) of the definition of Obligations in the Credit
Agreement are so secured and guaranteed, (ii) any release of collateral or
guarantors effected in the manner permitted by the Credit Agreement or any other
Loan Document shall not require the consent of holders of obligations under
Specified Hedge Agreements or Cash Management Obligations and (iii) the amount
of secured obligations under any Specified Hedge Agreements shall not exceed the
net amount, including any net termination payments, that would be required to be
paid to the counterparty to such Specified Hedge Agreement on the date of
termination of such Specified Hedge Agreement.

 

“Guarantors” shall mean the collective reference to each Grantor other than the
Borrower.

 

“Holdings” shall have the meaning assigned to such term in the preamble.

 

“Insurance” shall mean (i) all insurance policies covering any or all of the
Collateral (regardless of whether the Administrative Agent is the loss payee
thereof) and (ii) any key man life insurance policies.

 

“Intellectual Property” shall mean the collective reference to all rights,
priorities and privileges relating to intellectual property arising under United
States laws, including the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets and
the Trade Secret Licenses.

 

“Intercompany Note” shall mean any promissory note evidencing loans made by any
Grantor to Holdings, the Borrower or any of the Subsidiaries, including the
Global Intercompany Note.

 

“Investment Property” shall mean the collective reference to (i) all “investment
property” as such term is defined in Section 9-102(a)(49) of the New York UCC
(other than any such investment property which is an Excluded Asset) including
all Certificated Securities and Uncertificated Securities and all Security
Entitlements, (ii) security entitlements, in the case of any United States
Treasury book-entry securities, as defined in 31 C.F.R. section 357.2, or, in
the case of any United States federal agency book-entry securities, as defined
in the corresponding United States federal regulations governing such book-entry
securities, and (iii) whether or not otherwise constituting “investment
property,” all Pledged Notes, all Pledged Equity Interests, all Pledged Security
Entitlements and all Pledged Commodity Contracts.

 

“Issuers” shall mean the collective reference to each issuer of Pledged
Collateral that is a Subsidiary.

 

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“Joint Lead Arrangers” shall have the meaning assigned to such term in the
preamble.

 

“Lenders” shall have the meaning assigned to such term in the preamble.

 

“Licensed Intellectual Property” shall have the meaning assigned to such term in
Section 4.9(a).

 

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

 

 “Owned Intellectual Property” shall have the meaning assigned to such term in
Section 4.9(a).

 

“Patent License” shall mean all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use, import,
export, distribute or sell any invention covered in whole or in part by a
Patent, including any of the foregoing listed on Schedule 4.9(a) (as such
schedule may be amended or supplemented from time to time).

 

“Patents” shall mean  (i) all letters of patent of the United States, all
reissues and extensions thereof and all goodwill associated therewith, including
any of the foregoing listed in Schedule 4.9(a) (as such schedule may be amended
or supplemented from time to time), (ii) all applications for letters of patent
of the United States and all divisions, continuations and continuations-in-part
thereof, all improvements thereof, including any of the foregoing listed in
Schedule 4.9(a) (as such schedule may be amended or supplemented from time to
time), and (iii) all rights to, and to obtain, any reissues or extensions of the
foregoing.

 

“Pledged Alternative Equity Interests” shall mean all interests (other than any
such interests that are Excluded Assets) of any Grantor in participation or
other interests in any equity or profits of any business entity and the
certificates, if any, representing such interests and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such interests and
any other warrant, right or option to acquire any of the foregoing; provided,
however, that Pledged Alternative Equity Interests shall not include any Pledged
Stock, Pledged LLC Interests, Pledged Partnership Interests or Pledged Trust
Interests.

 

“Pledged Collateral” shall mean the collective reference to the Pledged Debt
Securities, the Pledged Notes and the Pledged Equity Interests.

 

 “Pledged Debt Securities” shall mean all debt securities now owned or hereafter
acquired by any Grantor, (other than any such debt securities that are Excluded
Assets), including the debt securities listed on Schedule 4.7(b), (as such
schedule may be amended or supplemented from time to time), together with any
other certificates, options, rights or security entitlements of any nature
whatsoever in respect of the debt securities of any person that may be issued or
granted to, or held by, any Grantor while this Agreement is in effect.

 

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“Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests, Pledged Trust Interests and Pledged Alternative
Equity Interests.

 

“Pledged LLC Interests” shall mean all interests of any Grantor now owned or
hereafter acquired in any limited liability company (other than any such
interests that are Excluded Assets), including all limited liability company
interests listed on Schedule 4.7(a) hereto under the heading “Pledged LLC
Interests” (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such limited liability company
interests and any interest of such Grantor on the books and records of such
limited liability company and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such limited liability company interests and any
other warrant, right or option to acquire any of the foregoing.

 

“Pledged Notes” shall mean all promissory notes now owned or hereafter acquired
by any Grantor (other than any such promissory notes that are Excluded Assets),
including those listed on Schedule 4.7(b) (as such schedule may be amended or
supplemented from time to time) and all Intercompany Notes at any time issued to
or held by any Grantor (other than promissory notes issued in connection with
extensions of trade credit by any Grantor in the ordinary course of business).

 

“Pledged Partnership Interests” shall mean all interests of any Grantor now
owned or hereafter acquired in any general partnership, limited partnership,
limited liability partnership or other partnership (other than any such
interests that are Excluded Assets), including all partnership interests listed
on Schedule 4.7(a) hereto under the heading “Pledged Partnership Interests” (as
such schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such partnership interests and any interest
of such Grantor on the books and records of such partnership and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such partnership
interests and any other warrant, right or option to acquire any of the
foregoing.

 

“Pledged Security Entitlements” shall mean all security entitlements with
respect to the financial assets listed on Schedule 4.7(c) (as such schedule may
be amended from time to time) and all other security entitlements of any
Grantor.

 

“Pledged Stock” shall mean all shares of capital stock (other than any such
shares that are Excluded Assets) now owned or hereafter acquired by any Grantor,
including all shares of capital stock listed on Schedule 4.7(a) hereto under the
heading “Pledged Stock” (as such schedule may be amended or supplemented from
time to time), and the certificates, if any, representing such shares and any
interest of such Grantor in the entries on the books of the issuer of such
shares and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such shares and any other warrant, right or option to acquire any
of the foregoing.

 

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“Pledged Trust Interests” shall mean all interests of any Grantor now owned or
hereafter acquired in a Delaware business trust or other trust (other than any
such interests that are Excluded Assets), including all trust interests listed
on Schedule 4.7(a) hereto under the heading “Pledged Trust Interests” (as such
schedule may be amended or supplemented from time to time) and the certificates,
if any, representing such trust interests and any interest of such Grantor on
the books and records of such trust or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust interests
and any other warrant, right or option to acquire any of the foregoing.

 

“Proceeds” shall mean all “proceeds” as such term is defined in
Section 9-102(a)(64) of the New York UCC and, in any event, shall include all
dividends or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.

 

“Receivable” shall mean all Accounts and any other right to payment for goods or
other property sold, leased, licensed or otherwise disposed of or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper or classified as a Payment Intangible and whether or not it has been
earned by performance.  References herein to Receivables shall include any
Supporting Obligation or collateral securing such Receivable.

 

“Secured Parties” shall mean, collectively, the Joint Lead Arrangers, the
Administrative Agent, the Lenders, the Issuing Banks and, with respect to any
Specified Hedge Agreement or Cash Management Obligations, any Lender
Counterparty, in each case, to which Borrower Obligations or Guarantor
Obligations, as applicable, are owed.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Specified Hedge Agreement” shall mean any Swap Agreement entered into by
(i) the Borrower or any of the Subsidiaries and (ii) a Lender Counterparty.

 

“Syndication Agent” shall have the meaning assigned to such term in the
preamble.

 

“Trademark License” shall mean any agreement, whether written or oral, providing
for the grant by or to any Grantor of any right in, to or under any Trademark,
including any of the foregoing referred to on Schedule 4.9(a) (as such schedule
may be amended or supplemented from time to time).

 

“Trademarks” shall mean (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, in the United States Patent and Trademark Office or in any similar
office or agency of the United States or any State thereof and all common-law
rights related thereto, including any of the foregoing listed on Schedule
4.9(a) (as such schedule may be amended or supplemented from time to time),
(ii) the right to, and to obtain, all renewals thereof, (iii) the

 

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goodwill of the business symbolized by the foregoing and (iv) other source or
business identifiers, designs and general intangibles of a like nature.

 

“Trade Secret License” shall mean any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right in, to or under any
Trade Secret.

 

“Trade Secrets” shall mean all trade secrets and all other confidential or
proprietary information and know-how (all of the foregoing being collectively
called a “Trade Secret”), whether or not reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or describing
such Trade Secret, the right to sue for past, present and future infringements
of any Trade Secret and all proceeds of the foregoing, including royalties,
income, payments, claims, damages and proceeds of suit.

 

“Trust Funds” shall mean any cash or cash equivalents comprised of (i) funds
specifically and exclusively used for payroll taxes, payroll and other employee
benefit payments to or for the benefit of any Grantor’s employees, (ii) all
taxes required to be collected, remitted or withheld (including, without
limitation, federal and state withholding taxes (including the employer’s share
thereof)) and (iii) any other funds (A) which any Grantor holds on behalf of
another person and (B) which such Grantor holds as an escrow or fiduciary for
such person.

 

1.2.          Other Definitional Provisions.  (a)  The words “hereof,” “herein,”
“hereto” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to the specific
provisions of this Agreement unless otherwise specified.

 

(b)           The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

 

(c)           Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to the
property or assets such Grantor has granted as Collateral or the relevant part
thereof.

 

(d)           The expressions “payment in full,” “paid in full” and any other
similar terms or phrases when used herein with respect to the Borrower
Obligations or the Guarantor Obligations shall mean the payment in full, in
immediately available funds, of all of the Borrower Obligations or the Guarantor
Obligations, as the case may be, in each case, unless otherwise specified, other
than indemnification and other contingent obligations not then due and payable.

 

(e)           The words “include,” “includes” and “including,” and words of
similar import, shall not be limiting and shall be deemed to be followed by the
phrase “without limitation.”

 

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SECTION 2.           GUARANTEE

 

2.1.          Guarantee.

 

(a)           Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees and permitted transferees and assigns, the prompt and complete payment
and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.

 

(b)           If and to the extent required in order for the Obligations of any
Guarantor to be enforceable under applicable federal, state and other laws
relating to the insolvency of debtors, the maximum liability of such Guarantor
hereunder shall be limited to the greatest amount which can lawfully be
guaranteed by such Guarantor under such laws, after giving effect to any rights
of contribution, reimbursement and subrogation arising under Section 2.2.

 

(c)           Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time be incurred or permitted in an amount exceeding the
maximum liability of such Guarantor hereunder without, to the extent permitted
by applicable law, impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of any Secured Party hereunder.

 

(d)           The guarantee contained in this Section 2 shall remain in full
force and effect until the Termination Date, notwithstanding that from time to
time during the term of the Credit Agreement the Borrower may not then owe any
Borrower Obligations.

 

(e)           No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other person or received or collected by any Secured Party from
the Borrower, any of the Guarantors, any other guarantor or any other person by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Borrower Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor (including by means
of setoff or appropriation) in respect of the Borrower Obligations or any
payment received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Termination Date.

 

2.2.          Rights of Reimbursement, Contribution and Subrogation.  In case
any payment is made on account of the Obligations by any Grantor or is received
or collected on account of the Obligations from any Grantor or its property:

 

(a)           If such payment is made by the Borrower or from its property,
then, if and to the extent such payment is made on account of Obligations
arising from or relating to a Loan or other extension of credit made to the
Borrower or a Letter of Credit issued for the account of the Borrower, the
Borrower shall not be entitled (i) to demand or enforce reimbursement or
contribution in respect of such payment from any other Grantor or (ii) to be
subrogated to any claim, interest, right or remedy of any Secured Party against
any other person, including any other Grantor or its property.

 

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(b)           If such payment is made by a Guarantor or from its property, such
Guarantor shall be entitled, subject to and upon payment in full of the
Obligations, (i) to demand and enforce reimbursement for the full amount of such
payment from the Borrower and (ii) to demand and enforce contribution in respect
of such payment from each other Guarantor that has not paid its fair share of
such payment, as necessary to ensure that (after giving effect to any
enforcement of reimbursement rights provided hereby) each Guarantor pays its
fair share of the unreimbursed portion of such payment. For this purpose, the
fair share of each Guarantor as to any unreimbursed payment shall be determined
based on an equitable apportionment of such unreimbursed payment among all
Guarantors based on the relative value of their assets and any other equitable
considerations deemed appropriate by a court of competent jurisdiction.

 

(c)           Until the Termination Date, notwithstanding Sections 2.2(a) and
2.2(b), no Grantor shall be entitled, to be subrogated (equally and ratably with
all other Grantors entitled to reimbursement or contribution from any other
Grantor as set forth in this Section 2.2) to any security interest that may then
be held by the Administrative Agent upon any Collateral granted to it in this
Agreement nor shall any Grantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Grantor in respect of payments made
by any Grantor hereunder.  Such right of subrogation shall be enforceable solely
against the Grantors, and not against the Secured Parties, and neither the
Administrative Agent nor any other Secured Party shall have any duty whatsoever
to warrant, ensure or protect any such right of subrogation or to obtain,
perfect, maintain, hold, enforce or retain any Collateral for any purpose
related to any such right of subrogation.  If subrogation is demanded by any
Grantor, then (and only after the Termination Date) the Administrative Agent
shall deliver to the Grantors making such demand, or to a representative of such
Grantors or of the Grantors generally, an instrument reasonably satisfactory to
the Administrative Agent transferring, on a quitclaim basis without any
recourse, representation, warranty or obligation whatsoever, whatever security
interest the Administrative Agent then may hold in whatever Collateral may then
exist that was not previously released or disposed of by the Administrative
Agent.

 

(d)   All rights and claims arising under this Section 2.2 or based upon or
relating to any other right of reimbursement, indemnification, contribution or
subrogation that may at any time arise or exist in favor of any Grantor as to
any payment on account of the Obligations made by it or received or collected
from its property shall be fully subordinated in all respects prior to the
Termination Date.  Until the Termination Date, no Grantor shall demand or
receive any collateral security, payment or distribution whatsoever (whether in
cash, property or securities or otherwise) on account of any such right or
claim.  If any such payment or distribution is made or becomes available to any
Grantor in any bankruptcy case or receivership, insolvency or liquidation
proceeding, such payment or distribution shall be delivered by the person making
such payment or distribution directly to the Administrative Agent, for
application to the payment of the Obligations.  If any such payment or
distribution is received by any Grantor, it shall be held by such Grantor in
trust, as trustee of an express trust for the benefit of the Secured Parties,
and shall promptly be transferred and delivered by such Grantor to the
Administrative Agent, in the exact form received and, if necessary, duly
endorsed, to be applied against any Borrower Obligations then outstanding in
accordance with Section 6.05.

 

(e)   The obligations of the Grantors under the Loan Documents, including their
liability for the Obligations and the enforceability of the security interests
granted thereby, are

 

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not contingent upon the validity, legality, enforceability, collectability or
sufficiency of any right of reimbursement, contribution or subrogation arising
under this Section 2.2 and the provisions of this Section 2.2 shall in no
respect limit the obligations and liabilities of any Guarantor to the
Administrative Agent and Secured Parties, and each Guarantor shall remain liable
to the Administrative Agent and the Secured Parties for the full amount
guaranteed by such Guarantor hereunder.  The invalidity, insufficiency,
unenforceability or uncollectability of any such right shall not in any respect
diminish, affect or impair any such obligation or any other claim, interest,
right or remedy at any time held by any Secured Party against any Guarantor or
its property.  The Secured Parties make no representations or warranties in
respect of any such right and shall have no duty to assure, protect, enforce or
ensure any such right or otherwise relating to any such right.

 

(f)    Each Grantor reserves any and all other rights of reimbursement,
contribution or subrogation at any time available to it as against any other
Grantor, but (i) the exercise and enforcement of such rights shall be subject to
Section 2.2(d) and (ii) neither the Administrative Agent nor any other Secured
Party shall ever have any duty or liability whatsoever in respect of any such
right, except as provided in the last sentence of Section 2.2(c).

 

2.3.          Amendments, etc. with respect to the Borrower Obligations.  Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by any Secured Party may be rescinded by such Secured Party and
any of the Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, increased, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
any Secured Party, and the Credit Agreement and the other Loan Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders or all Lenders, as the case may be) and the
applicable Loan Parties may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by any Secured Party for
the payment of the Borrower Obligations may be sold, exchanged, waived,
surrendered or released.  No Secured Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.

 

2.4.          Guarantee Absolute and Unconditional.  Each Guarantor waives, to
the extent permitted by applicable law, any and all notice of the creation,
renewal, extension or accrual of any of the Borrower Obligations and notice of
or proof of reliance by any Secured Party upon the guarantee contained in this
Section 2 or acceptance of the guarantee contained in this Section 2; the
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the Secured
Parties, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 2. 
Each Guarantor waives, to the extent permitted by applicable law,

 

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diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Borrower Obligations.  Each Guarantor understands and agrees, to the extent
permitted by applicable law, that until the Termination Date the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment and performance without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by any Secured Party, (b) any defense, set-off or counterclaim (other
than a defense of payment, performance or release of guarantee hereunder) which
may at any time be available to or be asserted by the Borrower or any other
person against any Secured Party, or (c) any other circumstance whatsoever (with
or without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance.  When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, any Secured Party may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such rights
and remedies as it may have against the Borrower, any other Guarantor or any
other person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by any
Secured Party to make any such demand, to pursue such other rights or remedies
or to collect any payments from the Borrower, any other Guarantor or any other
person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower, any other
Guarantor or any other person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of any Secured Party against
any Guarantor, except to the extent of any such release.  For the purposes
hereof “demand” shall include the commencement and continuance of any legal
proceedings.

 

2.5.          Reinstatement.  The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by any Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

 

2.6.          Payments.  Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars in immediately available funds at the office of the
Administrative Agent as specified in the Credit Agreement.

 

SECTION 3.           GRANT OF SECURITY INTEREST;

CONTINUING LIABILITY UNDER COLLATERAL

 

(a)           Each Grantor hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the ratable benefit of
the Secured Parties, a

 

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security interest in all of the personal property of such Grantor, including the
following property, in each case, wherever located and now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
“Collateral”), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor’s Obligations:

 

(i)            all Accounts;

 

(ii)           all Chattel Paper;

 

(iii)          all Collateral Accounts and all Collateral Account Funds;

 

(iv)          all Commercial Tort Claims in excess of $1,000,000, in each case,
from time to time specifically described on Schedule 3(a);

 

(v)           all Contracts;

 

(vi)          all Documents;

 

(vii)         all Equipment;

 

(viii)        all Fixtures

 

(ix)           all General Intangibles;

 

(x)            all Goods

 

(xi)           all Instruments;

 

(xii)          all Insurance;

 

(xiii)         all Intellectual Property;

 

(xiv)        all Inventory;

 

(xv)         all Investment Property;

 

(xvi)        all Letters of Credit and Letter of Credit Rights;

 

(xvii)       all Money;

 

(xviii)      all books, records, ledger cards, files, correspondence, customer
lists, blueprints, technical specifications, manuals, computer software,
computer printouts, tapes, disks and other electronic storage media and related
data processing software and similar items that at any time pertain to or
evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and

 

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(xix)         to the extent not otherwise included, all other personal property,
whether tangible or intangible, of the Grantor and all Proceeds, products,
accessions, rents and profits of any and all of the foregoing and all collateral
security, Supporting Obligations and guarantees given by any person with respect
to any of the foregoing;

 

provided that, notwithstanding any other provision set forth in this Agreement,
the term “Collateral” and the component definitions thereof shall not include,
and this Agreement shall not, at any time, constitute a grant of a security
interest in any property that is, at such time, an Excluded Asset.

 

(b)           Notwithstanding anything herein to the contrary, (i) each Grantor
shall remain liable for all obligations under and in respect of the Collateral
and nothing contained herein is intended or shall be a delegation of duties to
the Administrative Agent or any other Secured Party, (ii) each Grantor shall
remain liable under and each of the agreements included in the Collateral,
including any Receivables, any Contracts and any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof and neither the Administrative Agent nor any
other Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related hereto nor shall the Administrative Agent nor any other Secured Party
have any obligation to make any inquiry as to the nature or sufficiency of any
payment received by it or have any obligation to take any action to collect or
enforce any rights under any agreement included in the Collateral, including any
agreements relating to any Receivables, any Contracts or any agreements relating
to Pledged Partnership Interests or Pledged LLC Interests and (iii) the exercise
by the Administrative Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral, including any agreements relating to any
Receivables, any Contracts and any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests.

 

SECTION 4.           REPRESENTATIONS AND WARRANTIES

 

To induce the Joint Lead Arrangers, the Administrative Agent, the Syndication
Agent, the Documentation Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Secured Parties that:

 

4.1.          Title; No Other Liens.  Such Grantor owns each item of the
Collateral free and clear of any and all Liens, including Liens arising as a
result of such Grantor becoming bound (as a result of merger or otherwise) as
grantor under a security agreement entered into by another person, except for
Liens permitted by Section 6.02 of the Credit Agreement.

 

4.2.          Perfected First Priority Liens.  This Agreement is effective to
create in favor of the Administrative Agent, for the benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral of
such Grantor, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally.  When (i) in the case of the Pledged Stock and
Pledged Notes, stock certificates and promissory notes representing such Pledged

 

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Stock and Pledged Notes, respectively, together with powers indorsed for
transfer to the Administrative Agent or in blank, are delivered to the
Administrative Agent and (ii) financing statements and other filings listed on
Schedule 4.2 are filed in appropriate form in the offices specified thereon,
this Agreement shall create a fully perfected Lien on, and security interest in,
all right title and interest of such Grantor in such Collateral and the proceeds
thereof ((a) to the extent such security interest may be perfected under the New
York UCC by filing a financing statement, (b) in the case of the Pledged Stock
and Pledged Notes, to the extent such security interest may be perfected under
the New York UCC by possession thereof (and of appropriate transfer powers) by
the Administrative Agent, (c) with respect to Patents and Trademarks, to the
extent such security interest may be perfected under the New York UCC by filing
evidence of such security interest with the United States Patent and Trademark
Office, (d) with respect to Copyrights, to the extent such security interest may
be perfected under the New York UCC by filing evidence of such security interest
with the United States Copyright Office and (e) except to the extent the actions
to perfect such security interest are not then required to have been taken under
the terms of the Loan Documents) as security for the Obligations, in each case
prior and superior in right to any other person (except (A) in the case of
Collateral other than Pledged Stock and Pledged Notes, Liens permitted by
Section 6.02 of the Credit Agreement and (B) in the case of the Pledged Stock
and Pledged Notes, non-consensual Liens arising by operation of law).

 

4.3.          Name; Jurisdiction of Organization, etc.  On the date hereof, such
Grantor’s exact legal name (as indicated on the public record of such Grantor’s
jurisdiction of formation or organization), jurisdiction of organization,
organizational identification number, if any, and the location of such Grantor’s
chief executive office or sole place of business are specified on Schedule 4.4. 
On the date hereof, except as otherwise described in the Collateral
Questionnaire, each Grantor is organized solely under the law of the
jurisdiction so specified and has not filed any certificates of domestication,
transfer or continuance in any other jurisdiction.  On the date hereof, except
as otherwise described in the Collateral Questionnaire, no such Grantor has
changed its name, jurisdiction of organization, chief executive office or sole
place of business in any way (e.g. by merger, consolidation, change in corporate
form or otherwise) within the past five years and has not within the last five
years become bound (whether as a result of merger or otherwise) as a grantor
under a security agreement (other than in respect of a Lien permitted by
Section 6.02 of the Credit Agreement) entered into by another person, which has
not heretofore been terminated.

 

4.4.          Inventory and Equipment.  As of the Closing Date, such Grantor
does not maintain Equipment or Inventory (other than mobile goods or Inventory
or Equipment in transit or, out for repair) with a value in excess of $5,000,000
at any location other than the locations set forth on Schedule 4.5.

 

4.5.          Farm Products.  None of the Collateral constitutes, or is the
Proceeds of, Farm Products.

 

4.6.          Investment Property. (a)     Schedule 4.7(a) hereto (as such
schedule may be amended or supplemented from time to time by notice from one or
more Grantors to the Administrative Agent) sets forth under the headings
“Pledged Stock,” “Pledged LLC Interests,” “Pledged Partnership Interests” and
“Pledged Trust Interests,” respectively, all of the Pledged

 

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Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust
Interests owned by any Grantor and such Pledged Equity Interests constitute the
percentage of issued and outstanding shares of stock, percentage of membership
interests, percentage of partnership interests or percentage of beneficial
interest of the respective issuers thereof indicated on such schedule.  Schedule
4.7(b) (as such schedule may be amended or supplemented from time to time by
notice from one or more Grantors to the Administrative Agent) sets forth under
the heading “Pledged Debt Securities” or “Pledged Notes” all of the Pledged Debt
Securities and Pledged Notes owned by any Grantor, and except as set forth on
Schedule 4.7(b) (as such schedule may be amended or supplemented from time to
time by notice from one or more Grantors to the Administrative Agent) all of the
intercompany Pledged Debt Securities and intercompany Pledged Notes have been
duly authorized, authenticated or issued, and delivered and is the legal, valid
and binding obligation of the issuers thereof enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law and constitutes all of the issued and outstanding
inter-company indebtedness evidenced by an instrument or certificated security
of the respective issuers thereof owing to such Grantor.

 

(b)           The Pledged Equity Interests issued by any Subsidiary have been
duly and validly issued and, if applicable, are fully paid and nonassessable
(except for shares of any unlimited liability company which are assessable in
certain circumstances).

 

(c)           None of the terms of any uncertificated Pledged LLC Interests and
Pledged Partnership Interests expressly provide that they are securities
governed by Article 8 of the Uniform Commercial Code in effect from time to time
in the “issuer’s jurisdiction” of each Issuer thereof (as such term is defined
in the Uniform Commercial Code in effect in such jurisdiction).

 

(d)           All certificated Pledged LLC Interests and Pledged Partnership
Interests, if any, do not expressly provide that they are “securities” for
purposes of Section 8-103(c) of the Uniform Commercial Code as in effect in any
relevant jurisdiction.

 

(e)           Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or options in favor of, or claims of, any other person,
except the security interests created by this Agreement and Liens permitted by
Section 6.02 of the Credit Agreement, and there are no outstanding warrants,
options or other rights to purchase, or shareholder, voting trust or similar
agreements outstanding with respect to, or property that is convertible into, or
that requires the issuance or sale of, any Pledged Equity Interests.

 

(f)            Each Issuer that is not a Grantor hereunder has executed and
delivered to the Administrative Agent an Acknowledgment and Consent, in
substantially the form of Exhibit A, to the pledge of the Pledged Collateral
pursuant to this Agreement.

 

4.7.         Receivables.  No amount payable to such Grantor under or in
connection with any Receivable that is included in the Collateral is evidenced
by any Instrument or Tangible

 

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Chattel Paper with a value in excess of $1,000,000 which has not been delivered
to the Administrative Agent to the extent required under Section 5.2.

 

4.8.         Intellectual Property.  (a)  As of the Closing Date, Schedule
4.9(a) lists all (i) Intellectual Property which is registered with a
Governmental Authority or is the subject of an application for registration and
all material unregistered Intellectual Property (other than unregistered
Copyrights), in each case which is owned by such Grantor in its own name on the
date hereof (collectively, the “Owned Intellectual Property”) and (ii) licenses
of United States Intellectual Property applications or registrations in which
such Grantor is an exclusive licensee.  As of the Closing Date, except as set
forth in Schedule 4.9(a) and except as would not reasonably be expected to have
a Material Adverse Effect, each such Grantor is the exclusive owner of the
entire and unencumbered right, title and interest in and to all such Owned
Intellectual Property and is otherwise entitled to use, and grant to others the
right to use, all such Owned Intellectual Property subject only to the license
terms of the licensing or franchise agreements referred to in paragraph
(c) below.  Such Grantor has the right to use all Intellectual Property which it
uses in its business, but does not own (collectively, the “Licensed Intellectual
Property”).

 

(b)           As of the Closing Date, all Owned Intellectual Property and, to
such Grantor’s knowledge, all Licensed Intellectual Property (collectively, the
“Material Intellectual Property”), is subsisting, unexpired and has not been
abandoned, except as would not reasonably be expected to have a Material Adverse
Effect.  Neither the operation of such Grantor’s business as currently conducted
or as contemplated to be conducted nor the use of the Intellectual Property in
connection therewith conflicts with, infringes, misappropriates, dilutes,
misuses or otherwise violates the intellectual property rights of any other
person, except in each case as would not reasonably be expected to have a
Material Adverse Effect.

 

(c)           As of the Closing Date, except as set forth in Schedule 4.9(c), on
the date hereof (i) none of the Material Intellectual Property is the subject of
any licensing or franchise agreement pursuant to which such Grantor is the
licensor or franchisor and (ii) there are no other agreements, obligations,
orders or judgments which materially affect the use of any Material Intellectual
Property.

 

(d)           The rights of such Grantor in or to the Material Intellectual
Property do not conflict with or infringe upon the rights of any third party,
and no claim has been asserted in writing that the use of such Intellectual
Property does or may infringe upon the rights of any third party except in each
case as would not reasonably be expected to have a Material Adverse Effect.

 

(e)           As of the Closing Date, no action or proceeding is pending, or, to
such Grantor’s knowledge, threatened in writing (i) seeking to limit, cancel or
question any Owned Intellectual Property, (ii) alleging that any services
provided by, processes used by, or products manufactured or sold by such Grantor
infringe any patent, trademark, copyright, or any other right of any other
person or (iii) alleging that any Material Intellectual Property is being
licensed, sublicensed or used in violation of any intellectual property or any
other right of any other person, in each case, which would reasonably be
expected to have a material adverse effect on the value of the Collateral, taken
as a whole.  On the date hereof, to such Grantor’s knowledge, except as set
forth on Schedule 4.9(f) no person is engaging in any activity that infringes
upon,

 

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or is otherwise an unauthorized use of, any Material Intellectual Property or
upon the rights of such Grantor therein.  Except as set forth in Schedule
4.9(f) as of the date hereof, such Grantor has not granted any license, release,
covenant not to sue, non-assertion assurance, or other right to any person with
respect to any part of the Material Intellectual Property.  The consummation of
the transactions contemplated by this Agreement (including the enforcement of
remedies) will not result in the termination or impairment of any of the
Material Intellectual Property the loss of which would be reasonably likely to
have a Material Adverse Effect.

 

(f)            To such Grantor’s knowledge, with respect to each Copyright
License, Trademark License, Trade Secret License and Patent License which
relates to Material Intellectual Property or the loss of which could otherwise
have a Material Adverse Effect:  (i) such license is in full force and effect
and represents the entire agreement between the respective licensor and licensee
with respect to the subject matter of such license; (ii) such license will not
cease to be valid and binding and in full force and effect on terms identical to
those currently in effect as a result of the rights and interests granted
herein, nor will the grant of such rights and interests constitute a breach or
default under such license or otherwise give the licensor or licensee a right to
terminate such license; (iii) such Grantor has not received any notice of
termination or cancellation under such license; (iv) such Grantor has not
received any notice of a breach or default under such license, which breach or
default has not been cured; (v) such Grantor has not granted to any other person
any rights, adverse or otherwise, under such license; and (vi) such Grantor is
not in breach or default in any material respect, and no event has occurred
that, with notice and/or lapse of time, would constitute such a breach or
default or permit termination, modification or acceleration under such license,
except in each case as would not have a material adverse effect on the value of
the Collateral, taken as a whole.

 

(g)           Except in each case as would not reasonably be expected to have a
Material Adverse Effect, (i) none of the Trade Secrets of such Grantor that are
material to its business have been used, divulged, disclosed or appropriated to
the detriment of such Grantor for the benefit of any other person; (ii) no
employee, independent contractor or agent of such Grantor has misappropriated
any trade secrets of any other person in the course of the performance of his or
her duties as an employee, independent contractor or agent of such Grantor; and
(iii) no employee, independent contractor or agent of such Grantor is in default
or breach of any term of any employment agreement, non-disclosure agreement,
assignment of inventions agreement or similar agreement or contract relating in
any way to the protection, ownership, development, use or transfer of such
Grantor’s Intellectual Property.

 

(h)           Such Grantor has made all filings and recordations necessary to
adequately protect (in its reasonable business judgment) its interest in its
Material Intellectual Property, including recordation of its interests in the
Patents and Trademarks with the United States Patent and Trademark Office, and
recordation of any of its interests in the Copyrights with the United States
Copyright Office.

 

(i)            Except as would not reasonably be expected to have a Material
Adverse Effect, such Grantor has taken all commercially reasonable steps to use
consistent standards of quality in the manufacture, distribution and sale of all
products sold and provision of all services provided under or in connection with
any item of Intellectual Property and has taken all

 

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commercially reasonable steps to ensure that all licensed users of any kind of
Intellectual Property use such consistent standards of quality.

 

(j)            Except as would not reasonably be expected to have a Material
Adverse Effect, no Grantor is subject to any settlement or consents, judgment,
injunction, order, decree, covenants not to sue, non-assertion assurances or
releases that would impair the validity or enforceability of, or such Grantor’s
rights in, any Material Intellectual Property.

 

4.9.         Letters of Credit and Letter of Credit Rights.  No Grantor is a
beneficiary or assignee under any letter of credit with a face amount in excess
of $1,000,000 (including any “Letter of Credit”) other than the letters of
credit described on Schedule 4.10 (as such schedule may be amended or
supplemented from time to time).

 

SECTION 5.         COVENANTS

 

Each Grantor covenants and agrees with the Secured Parties that, until the
Termination Date:

 

5.1.         Delivery and Control of Certain Collateral.  (a)  If any of the
Collateral is or shall become evidenced or represented by any Certificated
Security or Tangible Chattel Paper, such Certificated Security or Tangible
Chattel Paper shall be delivered promptly to the Administrative Agent, duly
endorsed, if applicable, in a manner reasonably satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement, and
all of such property owned by any Grantor as of the Closing Date shall be
delivered on the Closing Date.  Any Pledged Collateral evidenced or represented
by any Instrument or Negotiable Document shall be delivered promptly to the
Administrative Agent, duly endorsed, if applicable, in a manner reasonably
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement, and all of such property owned by any Grantor as of the Closing
Date shall be delivered on the Closing Date. Notwithstanding the foregoing, no
Instrument, Tangible Chattel Paper, Pledged Debt Security constituting a
Certificated Security or Negotiable Document shall be required to be delivered
to the Administrative Agent pursuant to this clause (a) if the value thereof is
less than $1,000,000 individually or $5,000,000 in the aggregate.

 

(b)           If any of the Collateral is or shall constitute “Electronic
Chattel Paper” (under Article 9 of the UCC) such Grantor shall ensure (to the
Administrative Agent’s reasonable satisfaction) that (i) a single authoritative
copy exists which is unique, identifiable, unalterable (except as provided in
clauses (iii), (iv) and (v) of this paragraph), (ii) such authoritative copy
identifies the Administrative Agent as the assignee and is communicated to and
maintained by the Administrative Agent or its designee, (iii) copies or
revisions that add or change the assignee of the authoritative copy can only be
made with the participation of the Administrative Agent, (iv) each copy of the
authoritative copy and any copy of a copy is readily identifiable as a copy and
not the authoritative copy and (v) any revision of the authoritative copy is
readily identifiable as an authorized or unauthorized revision; provided that
such actions shall not be required to be taken until the aggregate face amount
of the Electronic Chattel Paper included in the Collateral exceeds $1,000,000.

 

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(c)           If any Collateral with a value in excess of $1,000,000 shall
become evidenced or represented by an Uncertificated Security, such Grantor
shall cause the Issuer thereof either (i) to register the Administrative Agent
as the registered owner of such Uncertificated Security, upon original issue or
registration of transfer or (ii) to agree in writing with such Grantor and the
Administrative Agent that such Issuer will comply with instructions with respect
to such Uncertificated Security originated by the Administrative Agent without
further consent of such Grantor, such agreement to be in substantially the form
of Exhibit C, or such other form as may be reasonably agreed to by the
Administrative Agent, and such actions shall be taken on or prior to the Closing
Date with respect to any Uncertificated Securities owned as of the Closing Date
by any Grantor.

 

5.2.         Maintenance of Perfected Security Interest; Further Documentation. 
(a)  Except as otherwise permitted by the Credit Agreement, such Grantor shall
maintain each of the security interests created by this Agreement as a security
interest having at least the perfection and priority described in Section 4.3
and shall defend such security interest against the claims and demands of all
persons whomsoever except as otherwise permitted by Section 6.02 of the Credit
Agreement, subject to the provisions of Section 8.15.

 

(b)           At any time and from time to time, upon the reasonable written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor shall promptly and duly authorize, execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, (i) the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property subject to the requirements of
Section 5.2 and any other relevant Collateral, taking any actions necessary to
enable the Administrative Agent to obtain “control” (within the meaning of the
applicable Uniform Commercial Code) with respect thereto; provided, however,
that in no event shall any Grantor be required to execute or deliver any control
agreement in respect of any Deposit Account or Securities Account.

 

5.3.         Changes in Locations, Name, Jurisdiction of Incorporation, etc. 
(a) Such Grantor shall give 10 days’ written notice to the Administrative Agent
and delivery to the Administrative Agent of duly authorized and, where required,
executed copies of all additional financing statements and other documents
reasonably requested in writing by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein
after any of the following:

 

(i)            a change in its jurisdiction of organization or the location of
its chief executive office or sole place of business from that referred to in
Section 4.4; or

 

(ii)           a change in its legal name, identity or structure that would
render any financing statement filed by the Administrative Agent in connection
with this Agreement “seriously misleading” (as such term is used in
Section 907(b) of the New York UCC).

 

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5.4.         Investment Property. (a) If such Grantor shall receive any
Certificated Security (including any certificate representing a stock dividend
or a distribution in connection with any reclassification, increase or reduction
of capital or any certificate issued in connection with any reorganization),
options or rights in respect of the Equity Interests in any Issuer, whether in
addition to, in substitution of, as a conversion of, or in exchange for, any
shares of or other ownership interests in the Pledged Equity Interests, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Secured Parties, hold the same in trust for the Secured Parties and deliver
the same promptly to the Administrative Agent in the exact form received, duly
endorsed by such Grantor to the Administrative Agent, if required, together with
an undated stock power or similar instrument of transfer covering such
Certificated Security duly executed in blank by such Grantor, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations.

 

(b)           Without the prior written consent of the Administrative Agent,
such Grantor shall not (i) vote to enable, or take any other action to permit,
any issuer of Pledged Equity Interests to issue any stock, partnership
interests, limited liability company interests or other equity securities of any
nature or to issue any other securities convertible into or granting the right
to purchase or exchange for any stock, partnership interests, limited liability
company interests or other equity securities of any nature of any such issuer
(except, in each case, pursuant to a transaction expressly permitted by the
Credit Agreement), (ii) sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, any of the Investment Property
constituting Collateral or Proceeds thereof or any interest therein (except, in
each case, pursuant to a transaction permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any person with respect to, any of the Investment Property or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement or any Lien permitted thereon pursuant to Section 6.02 of the
Credit Agreement, (iv) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Investment Property or Proceeds thereof or any interest
therein or except as permitted by the Credit Agreement, or (v) cause or permit
any Issuer of any Pledged Partnership Interests or Pledged LLC Interests which
are not securities (for purposes of the New York UCC) on the date hereof to
elect or otherwise take any action to cause such Pledged Partnership Interests
or Pledged LLC Interests to be treated as securities for purposes of the New
York UCC; provided, however, notwithstanding the foregoing, if any Issuer of any
Pledged Partnership Interests or Pledged LLC Interests takes any such action in
violation of the provisions in this clause (v), such Grantor shall promptly
notify the Administrative Agent in writing of any such election or action and,
in such event, shall take all steps necessary or advisable to establish the
Administrative Agent’s “control” thereof.

 

(c)           In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it shall be bound by the terms of this Agreement relating to the
Pledged Collateral issued by it and shall comply with such terms insofar as such
terms are applicable to it, (ii) it shall notify the Administrative Agent
concurrently with delivery of the financial statements required under
Section 5.04(b) of the Credit Agreement in writing of the occurrence of any of
the events described in Section 5.7(a) with respect to the Pledged Collateral
issued by it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) or 6.7 with respect to the Pledged Collateral issued
by it.  In addition, each Grantor which is either an Issuer or an owner of any
Pledged Collateral

 

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hereby consents to the grant by each other Grantor of the security interest
hereunder in favor of the Administrative Agent and to the transfer of any
Pledged Collateral to the Administrative Agent or its nominee following an Event
of Default and to the substitution of the Administrative Agent or its nominee as
a partner, member or shareholder of the Issuer of the related Pledged
Collateral.

 

5.5.         Intellectual Property.  (a)  Except as would not reasonably be
expected to have a Material Adverse Effect or in connection with a transaction
permitted by the Credit Agreement, such Grantor shall (i) to the extent
commercially reasonable, continue to use each Trademark owned by such Grantor
material to its business on each and every trademark class of goods applicable
to its current line as reflected in its current catalogs, brochures and price
lists, (ii) maintain as in the past the quality of products and services offered
under such Trademark at least at the level of quality of such products and
services in the past, (iii) where commercially reasonable and feasible, use such
Trademark with the appropriate notice of registration and all other notices and
legends required by law, and (iv) not (and not permit any licensee or
sublicensee of such Grantor to) knowingly do any act or knowingly omit to do any
act whereby such Trademark is likely to become invalidated or materially
impaired in any way, unless, in the case of each of the foregoing, such Grantor
shall have determined, in its reasonable business judgment, that such Trademark
is no longer necessary for, or desirable in the conduct of, such Grantor’s
business.

 

(b)           Except as could not reasonably be expected to have a Material
Adverse Effect or in connection with a transaction permitted by the Credit
Agreement, such Grantor shall not knowingly do any act, or omit to do any act,
whereby any Patent owned by such Grantor material to its business could
reasonably be expected to become forfeited, abandoned or dedicated to the public
unless such Grantor shall have determined, in its reasonable business judgment,
that such Patent is no longer necessary for, or desirable in the conduct of,
such Grantor’s business.

 

(c)           Except as could not reasonably be expected to have a Material
Adverse Effect or in connection with a transaction permitted by the Credit
Agreement, such Grantor shall not knowingly do any act or knowingly omit to do
any act whereby any material portion of any material Copyright owned by such
Grantor is likely to become invalidated or otherwise materially impaired,
unless, in the case of each of the foregoing, such Grantor shall have
determined, in its reasonable business judgment, that such Copyright is no
longer necessary for, or desirable in, the conduct of, such Grantor’s business. 
Such Grantor shall not knowingly do any act whereby any material portion of such
Copyright is likely to fall into the public domain, unless such Grantor shall
have determined, in its reasonable business judgment, that such Copyright or
portion thereof is no longer necessary for, or desirable in the conduct of, such
Grantor’s business.

 

(d)           Except as could not reasonably be expected to have a Material
Adverse Effect or in connection with a transaction permitted by the Credit
Agreement, such Grantor shall not knowingly do any act that knowingly uses any
Material Intellectual Property to infringe, misappropriate or violate the
Intellectual Property rights of any other person in any material respect.

 

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(e)           Except as could not reasonably be expected to have a Material
Adverse Effect or in connection with a transaction permitted by the Credit
Agreement, such Grantor shall use proper statutory notice in connection with the
use of the Material Intellectual Property.

 

(f)            Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall acquire or become an exclusive licensee of
any United States Intellectual Property application or registration or file an
application for the registration of any Intellectual Property with the United
States Patent and Trademark Office or the United States Copyright Office, such
Grantor shall report such event to the Administrative Agent together with the
delivery by the Borrower of the financial statements pursuant to
Section 5.04(b) of the Credit Agreement.  Upon the reasonable written request of
the Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any of the foregoing items.

 

(g)           Except as could not reasonably be expected to have a Material
Adverse Effect or in connection with a transaction permitted by the Credit
Agreement, such Grantor shall take all reasonable and necessary steps, in any
proceeding before the United States Patent and Trademark Office or the United
States Copyright Office to maintain and pursue each application (for
registration) and to maintain each registration of Intellectual Property
material to its business, including the payment of required fees and taxes, the
filing of responses to office actions issued by the United States Patent and
Trademark Office and the United States Copyright Office, the filing of
applications for renewal or extension, the filing of affidavits of use and
affidavits of incontestability, the filing of divisional, continuation,
continuation-in-part, reissue, and renewal applications or extensions, the
payment of maintenance fees, and the participation in interference,
reexamination, opposition, cancellation, infringement and misappropriation
proceedings , unless such Grantor shall have determined, in its reasonable
business judgment, that any such application or registration of material
Intellectual Property is no longer necessary for, or desirable in the conduct
of, such Grantor’s business.

 

(h)           Such Grantor agrees to execute an Intellectual Property Security
Agreement with respect to its Intellectual Property in substantially the form of
Exhibit B-1 in order to record the security interest granted in such
Intellectual Property herein to the Administrative Agent for the ratable benefit
of the Secured Parties with the United States Patent and Trademark Office and
the United States Copyright Office.

 

(i)            Upon the reasonable written request of the Administrative Agent,
such Grantor agrees to execute an After-Acquired Intellectual Property Security
Agreement with respect to its After-Acquired Intellectual Property in
substantially the form of Exhibit B-2 in order to record the security interest
granted herein to the Administrative Agent for the ratable benefit of the
Secured Parties with the United States Patent and Trademark Office and the
United States Copyright Office, as applicable.

 

(j)            Except as could not reasonably be expected to have a Material
Adverse Effect or in connection with a transaction permitted by the Credit
Agreement, such Grantor shall take all commercially reasonable steps necessary
to protect the secrecy of all Trade Secrets material to its business.

 

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5.6.         Commercial Tort Claims.  Such Grantor shall advise the
Administrative Agent concurrently with delivery of the financial statements
required under Section 5.04(b) of the Credit Agreement of any Commercial Tort
Claim held by such Grantor in excess of $1,000,000 and shall promptly
thereafter, upon written request by the Administrative Agent, execute a
supplement to this Agreement in form and substance reasonably satisfactory to
the Administrative Agent to grant a security interest in such Commercial Tort
Claim to the Administrative Agent for the ratable benefit of the Secured
Parties.

 

SECTION 6.         REMEDIAL PROVISIONS

 

6.1.         Certain Matters Relating to Receivables.  (a)  The Administrative
Agent hereby authorizes each Grantor to collect such Grantor’s Receivables, and
each Grantor hereby agrees to continue to collect all amounts due or to become
due to such Grantor under the Receivables and any Supporting Obligation and
diligently exercise each material right it may have under any Receivable and any
Supporting Obligation, in each case, at its own expense; provided, however, that
the Administrative Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default.  If
required in writing by the Administrative Agent at any time after the occurrence
and during the continuance of an Event of Default, any payments of Receivables,
when collected by such Grantor, (i) shall be promptly (and, in any event, within
two Business Days) deposited by such Grantor in the exact form received, duly
endorsed by such Grantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Secured Parties only as provided in Section 6.5, and (ii) until
so turned over, shall be held by such Grantor in trust for the Secured Parties,
segregated from other fund of such Grantor.

 

(b)           At the Administrative Agent’s reasonable request after the
occurrence and during the continuance of any Event of Default, each Grantor
shall deliver to the Administrative Agent any original Documents, Instruments or
Chattel Paper giving rise to the Receivables that are included in the
Collateral.

 

6.2.         Communications with Obligors; Grantors Remain Liable.  (a)  The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default,
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the Administrative Agent’s reasonable satisfaction the
existence, amount and terms of any Receivables or Contracts.

 

(b)           Upon reasonable written request of the Administrative Agent, at
any time after the occurrence and during the continuance of any Event of
Default, the Administrative Agent may at any time notify, or require any Grantor
to so notify, the Account Debtor or counterparty on any Receivable or Contract
of the security interest of the Administrative Agent therein.  In addition,
after the occurrence and during the continuance of an Event of Default, the
Administrative Agent may upon written notice to the applicable Grantor, notify,
or require any Grantor to notify, the Account Debtor or counterparty to make all
payments under the Receivables and/or Contracts directly to the Administrative
Agent;

 

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(c)           Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables and Contracts to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto.  No Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) or Contract by reason of or
arising out of this Agreement or the receipt by any Secured Party of any payment
relating thereto, nor shall any Secured Party be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto) or Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

 

6.3.         Pledged Collateral.  (a)  Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent’s intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Equity Interests
and all payments made in respect of the Pledged Notes, to the extent permitted
in the Credit Agreement, and to exercise all voting and corporate rights with
respect to the Pledged Collateral.

 

(b)           If an Event of Default shall have occurred and be continuing and
the Administrative Agent shall have given notice to the relevant Grantor of the
Administrative Agent’s intent to exercise its rights pursuant to this
Section 6.3(b):  (i) all rights of each Grantor to exercise or refrain from
exercising the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease and all such rights shall
thereupon become vested in the Administrative Agent who shall thereupon have the
sole right, but shall be under no obligation, to exercise or refrain from
exercising such voting and other consensual rights, (ii) the Administrative
Agent shall have the right, without notice to any Grantor, to transfer all or
any portion of the Investment Property to its name or the name of its nominee or
agent and (iii) the Administrative Agent shall have the right to receive any and
all cash dividends, payments or other Proceeds paid in respect of the Investment
Property and make application thereof to the Obligations in accordance with
Section 6.5.  In addition, the Administrative Agent shall have the right at any
time after the occurrence and during the continuance of any Event of Default,
without notice to the relevant Grantor, to exchange any certificates or
instruments representing any Investment Property for certificates or instruments
of smaller or larger denominations.  In order to permit the Administrative Agent
to exercise the voting and other consensual rights which it may be entitled to
exercise pursuant hereto after the occurrence and during the continuance of any
Event of Default and to receive all dividends and other distributions which it
may be entitled to receive hereunder each Grantor shall promptly execute and
deliver (or cause to be executed and delivered) to the Administrative Agent all
proxies, dividend payment orders and other instruments as the Administrative
Agent may from time to time reasonably request in writing and each Grantor
acknowledges that the Administrative Agent may utilize the power of attorney set
forth herein.

 

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(c)                                  If an Event of Default shall have occurred
and be continuing, each Grantor hereby authorizes and instructs each Issuer of
any Pledged Collateral pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that
(x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) pay any dividends or other
payments with respect to the Investment Property, including Pledged Collateral,
directly to the Administrative Agent.

 

6.4.                              Proceeds to be Turned Over To Administrative
Agent.  In addition to the rights of the Secured Parties specified in
Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing, all Proceeds received by any Grantor consisting
of cash, cash equivalents, checks and other near-cash items shall be held by
such Grantor in trust for the Secured Parties, segregated from other funds of
such Grantor, and shall, promptly upon demand, be turned over to the
Administrative Agent in the exact form received by such Grantor (duly endorsed
by such Grantor to the Administrative Agent, if required).  All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control.  All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Grantor in trust for the Secured Parties) shall
continue to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 6.5.

 

6.5.                              Application of Proceeds.  If an Event of
Default shall have occurred and be continuing, at any time at the Administrative
Agent’s election, the Administrative Agent may apply all or any part of the net
Proceeds (after deducting fees and expenses as provided in Section 6.6)
constituting Collateral realized through the exercise by the Administrative
Agent of its remedies hereunder, whether or not held in any Collateral Account,
and any proceeds of the guarantee set forth in Section 2, in payment of the
Obligations in the following order:

 

First, to the Administrative Agent, to pay incurred and unpaid fees and expenses
of the Secured Parties under the Loan Documents;

 

Second, to the Administrative Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations,
pro rata among the Secured Parties according to the amounts of the Obligations
then due and owing and remaining unpaid to the Secured Parties;

 

Third, to the Administrative Agent, for application by it towards prepayment of
the Obligations, pro rata among the Secured Parties according to the amounts of
the Obligations then held by the Secured Parties; and

 

Fourth, any balance of such Proceeds remaining after the Termination Date shall
be paid over to the Borrower or to whomsoever may be lawfully entitled to
receive the same.

 

6.6.                              Code and Other Remedies.  (a)  If an Event of
Default shall have occurred and be continuing, the Administrative Agent, on
behalf of the Secured Parties, may exercise, in

 

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addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
(whether or not the New York UCC applies to the affected Collateral) or its
rights under any other applicable law or in equity.  Without limiting the
generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below, by the Credit
Agreement, this Agreement or any other Loan Document) to or upon any Grantor or
any other person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, license, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker’s board or office of any Secured
Party or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk.  Each Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released.  Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of any Grantor, and each Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted.  Each Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten days notice to such Grantor of
the time and place of any public sale or the time after which any private sale
is to be made shall, to the extent permitted by law, constitute reasonable
notification.  The Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given.  The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.  The
Administrative Agent may sell the Collateral without giving any warranties as to
the Collateral.  The Administrative Agent may specifically disclaim or modify
any warranties of title or the like.  This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.
Each Grantor agrees that it would not be commercially unreasonable for the
Administrative Agent to dispose of the Collateral or any portion thereof by
using Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets.  Each Grantor hereby waives any
claims against the Administrative Agent arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if the
Administrative Agent accepts the first offer received and does not offer such
Collateral to more than one offeree.  Each Grantor further agrees, at the
Administrative Agent’s reasonable written request, to assemble the Collateral
and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor’s premises
or elsewhere upon the occurrence and during the continuance of any Event of
Default.  The Administrative Agent shall have the right to enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process.

 

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(b)                                 The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.6, after deducting
all reasonable costs and expenses of every kind incurred in connection therewith
or incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Secured Parties hereunder,
including reasonable attorneys’ fees and disbursements to the extent required to
be paid in accordance with the Credit Agreement, to the payment in whole or in
part of the Obligations in accordance with Section 6.5 and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including Section 9-615(a) of the New
York UCC, need the Administrative Agent account for the surplus, if any, to any
Grantor.  If the Administrative Agent sells any of the Collateral upon credit,
the Grantor will be credited only with payments actually made by the purchaser
and received by the Administrative Agent and applied to indebtedness of the
purchaser.  In the event the purchaser fails to pay for the Collateral, the
Administrative Agent may resell the Collateral and the Grantor shall be credited
with proceeds of the sale.  To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands it may acquire against any
Secured Party arising out of the exercise by them of any rights hereunder.

 

6.7.                              Registration Rights.  (a)  If the
Administrative Agent shall determine to exercise its right to sell any or all of
the Pledged Equity Interests or the Pledged Debt Securities pursuant to
Section 6.6, and if in the reasonable opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Equity Interests or the Pledged Debt
Securities, or that portion thereof to be sold, registered under the provisions
of the Securities Act, the relevant Grantor shall use commercially reasonable
efforts to cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the reasonable opinion of the Administrative Agent, necessary or
advisable to register the Pledged Equity Interests or the Pledged Debt
Securities, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the date of the
first public offering of the Pledged Equity Interests or the Pledged Debt
Securities, or that portion thereof to be sold, and (iii) make all amendments
thereto and/or to the related prospectus which, in the reasonable opinion of the
Administrative Agent, are reasonably necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and regulations of the
SEC applicable thereto.  Each Grantor agrees to use commercially reasonable
efforts to cause such Issuer to comply with the provisions of the securities or
“Blue Sky” laws of any and all jurisdictions which the Administrative Agent
shall designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.

 

(b)                                 Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Equity Interests or the Pledged Debt Securities, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof.  Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such

 

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circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner.  The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Equity Interests or
the Pledged Debt Securities for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree
to do so.

 

(c)           Each Grantor agrees to use its commercially reasonable efforts to
do or cause to be done all such other acts as may be necessary to make such sale
or sales of all or any portion of the Pledged Equity Interests or the Pledged
Debt Securities pursuant to Section 6.6 valid and binding and in compliance with
any and all other applicable law.  Each Grantor further agrees that a breach of
any of the covenants contained in this Section 6.7 will cause irreparable injury
to the Secured Parties, that the Secured Parties have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.7 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees, to the extent permitted by
applicable law, not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred or is continuing under the Credit Agreement, that the applicable
Grantor has been released from its obligations hereunder, that the Termination
Date has occurred or a defense of payment.

 

6.8.                              Deficiency.  Each Grantor shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay its Obligations.

 

SECTION 7.           THE ADMINISTRATIVE AGENT

 

7.1.                              Administrative Agent’s Appointment as
Attorney-in-Fact, etc.

 

(a)                                  Each Grantor hereby irrevocably constitutes
and appoints the Administrative Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable (until the Termination Date) power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following:

 

(i)            in the name of such Grantor or its own name, or otherwise, take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any Receivable or Contract
or with respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
reasonably appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Receivable or Contract or with respect to
any other Collateral whenever payable;

 

(ii)           in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and papers as
the

 

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Administrative Agent may reasonably request to evidence the Secured Parties’
security interest in such Intellectual Property and the goodwill and General
Intangibles of such Grantor relating thereto or represented thereby;

 

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

 

(iv)                              execute, in connection with any sale provided
for in Section 6.6, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and

 

(v)                                 (1) direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral;
(3) sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral;
(5) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem reasonably appropriate; (7) assign
any Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the world
for such term or terms, on such conditions, and in such manner, as the
Administrative Agent shall in its reasonable discretion determine; and
(8) generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes, and do,
at the Administrative Agent’s option and such Grantor’s expense, at any time, or
from time to time, all acts and things which the Administrative Agent deems
reasonably necessary to protect, preserve or realize upon the Collateral and the
Secured Parties’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.

 

Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.

 

(b)                                 If an Event of Default has occurred and is
continuing and if any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement; provided, however if a Default
has

 

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occurred and is continuing, and if any Grantor fails to perform or comply with
any of its agreements contained herein, the Administrative Agent, at its option,
but without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance (except as otherwise provided herein) solely to cause
the Collateral and Guarantee Requirement to be, or remain, satisfied.

 

(c)           Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof.  All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until the Termination Date.

 

7.2.                              Duty of Administrative Agent.  The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner as
the Administrative Agent deals with similar property for its own account. 
Neither the Administrative Agent, nor any other Secured Party nor any of their
respective officers, directors, partners, employees, agents, attorneys and other
advisors, attorneys-in-fact or affiliates shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other person or to take any other action
whatsoever with regard to the Collateral or any part thereof.  The powers
conferred on the Secured Parties hereunder are solely to protect the Secured
Parties’ interests in the Collateral and shall not impose any duty upon any
Secured Party to exercise any such powers.  The Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
affiliates shall be responsible to any Grantor for any act or failure to act
hereunder, except from their own gross negligence or willful misconduct or
breach of a duty owed to such Grantor.

 

7.3.                              Execution of Financing Statements.  Each
Grantor acknowledges that pursuant to Section 9-509(b) of the New York UCC and
any other applicable law, each Grantor authorizes the Administrative Agent to
file or record financing or continuation statements, and amendments thereto, and
other filing or recording documents or instruments with respect to the
Collateral, in such form and in such offices as the Administrative Agent
reasonably determines appropriate to perfect or maintain the perfection of the
security interests of the Administrative Agent under this Agreement.  Each
Grantor agrees that such financing statements may describe the collateral in the
same manner as described in the Security Documents or as “all assets” or “all
personal property,” whether now owned or hereafter existing or acquired or such
other description as the Administrative Agent, in its sole judgment, reasonably
determines is necessary or advisable.  A photographic or other reproduction of
this Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.

 

7.4.                              Authority of Administrative Agent.  Each
Grantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the

 

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other Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Secured Parties
with full and valid authority so to act or refrain from acting, and no Grantor
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.

 

7.5.                              Appointment of Co-Collateral Agents.  At any
time or from time to time, in order to comply with any applicable requirement of
law, the Administrative Agent may appoint another bank or trust company or one
of more other persons, either to act as co-agent or agents on behalf of the
Secured Parties with such power and authority as may be reasonably necessary for
the effectual operation of the provisions hereof and which may be specified in
the instrument of appointment (which may, in the discretion of the
Administrative Agent, include provisions for indemnification and similar
protections of such co-agent or separate agent).

 

SECTION 8.           MISCELLANEOUS

 

8.1.                              Amendments in Writing.  None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 9.08 of the Credit Agreement;
provided that any provision of this Agreement imposing obligations on any
Grantor may be waived by the Administrative Agent in a written instrument
executed by the Administrative Agent.

 

8.2.                              Notices.  All notices, requests and demands to
or upon the Administrative Agent or any Grantor hereunder shall be effected in
the manner provided for in Section 9.01 of the Credit Agreement; provided that
any such notice, request or demand to or upon any Guarantor shall be addressed
to such Guarantor at its notice address set forth on Schedule 8.2.

 

8.3.                              No Waiver by Course of Conduct; Cumulative
Remedies.  No Secured Party shall by any act (except by a written instrument
pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default.  No failure to exercise, nor any delay in exercising, on
the part of any Secured Party, any right, power or privilege hereunder shall
operate as a waiver thereof.  No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.  A waiver by any Secured
Party of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which such Secured Party would
otherwise have on any future occasion.  The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

 

8.4.                              Enforcement Expenses; Indemnification.  (a) 
Each Grantor agrees to pay or reimburse each Secured Party for all its
reasonable costs and expenses incurred in collecting against such Grantor under
the guarantee contained in Section 2 or otherwise in enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such Grantor
is a party (but limited in the case of legal fees and expenses, to the
reasonable out-of-pocket documented fees, disbursements and charges of one
counsel of the Administrative Agent

 

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and the Secured Parties, taken as a whole, and if necessary, of one local
counsel in any relevant material jurisdiction to such persons, taken as a
whole).

 

(b)           Each Grantor agrees to pay, and to hold the Secured Parties
harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Agreement.

 

(c)           Each Grantor agrees to pay, and to hold the Secured Parties
harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 9.05 of the Credit Agreement.

 

(d)           The agreements in this Section shall survive the Termination Date.

 

8.5.                              Successors and Assigns.  This Agreement shall
be binding upon the successors and assigns of each Grantor and shall inure to
the benefit of the Secured Parties and their respective permitted successors and
assigns; provided that, except as otherwise permitted by the Credit Agreement,
no Grantor may assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Administrative
Agent, and any attempted assignment without such consent shall be null and void.

 

8.6.                              Set-Off.  Each Grantor hereby irrevocably
authorizes each Secured Party at any time and from time to time while an Event
of Default shall have occurred and be continuing, without notice to such Grantor
or any other Grantor, any such notice being expressly waived by each Grantor to
the extent permitted by applicable law, to set-off and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Secured Party to or for the credit
or the account of such Grantor, or any part thereof in such amounts as such
Secured Party may elect, against and on account of the obligations and
liabilities of such Grantor to such Secured Party hereunder and claims of every
nature and description of such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan
Document or otherwise, as such Secured Party may elect, whether or not any
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured.  Each Secured Party shall
notify such Grantor promptly of any such set-off and the application made by
such Secured Party of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application.  The
rights of each Secured Party under this Section are in addition to other rights
and remedies (including other rights of set-off) which such Secured Party may
have.

 

8.7.                              Counterparts.  This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts (including by facsimile or

 

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other electronic transmission (including .pdf)), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.

 

8.8.                            Severability.  Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

8.9.                            Section Headings.  The Section headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

 

8.10.                     Integration.  This Agreement and the other Loan
Documents represent the agreement of the Grantors, the Administrative Agent and
the other Secured Parties with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by any
Secured Party relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Loan Documents.

 

8.11.                     APPLICABLE LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

8.12.                     Submission to Jurisdiction; Waivers.  Each Grantor and
the Administrative Agent hereby irrevocably and unconditionally:

 

(a)                                 submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such federal court.  Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. 
Nothing in this Agreement shall affect any right that any Lender, the
Administrative Agent or any Issuing Bank may otherwise have to bring any action
or proceeding relating to this Agreement or the other Loan Documents against
Holdings, the Borrower or any Loan Party or their properties in the courts of
any jurisdiction;

 

(b)                                 waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Loan Documents in any New York State or federal
court.  Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court; and

 

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(c)                                  agrees that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested at its address provided in Section 8.2 agrees that
service as so provided in is sufficient to confer personal jurisdiction over the
applicable credit party in any such proceeding in any such court, and otherwise
constitutes effective and binding service in every respect; and agrees that
agents and lenders retain the right to serve process in any other manner
permitted by law or to bring proceedings against any credit party in the courts
of any other jurisdiction.

 

8.13.                     Acknowledgments.  Each Grantor hereby acknowledges
that:

 

(a)                                 it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents to which it is a party;

 

(b)                                 no Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

 

(c)                                  no joint venture is created hereby or by
the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Grantors and the
Secured Parties.

 

8.14.                     Additional Grantors.  Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 5.09 of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Exhibit D hereto.

 

8.15.                     Releases.  (a)  On the Termination Date, the
Collateral shall be released from the Liens created hereby, and this Agreement
and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
automatically terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Collateral shall revert to the
Grantors.  At the request and sole expense of any Grantor on or following the
Termination Date, the Administrative Agent shall deliver to such Grantor any
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination.

 

(b)                                 The obligations of Guarantors that are
Subsidiaries and the security interests created hereunder shall be subject to
release in accordance with Section 9.17 of the Credit Agreement.

 

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

 

8.16.                     WAIVER OF JURY TRIAL.  EACH GRANTOR AND THE
ADMINISTRATIVE AGENT HEREBY AGREES TO WAIVE ITS RESPECTIVE

 

36

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RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER
RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO
BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 8.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER LOAN DOCUMENTS
OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. 
IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL BY THE COURT.

 

[Remainder of page intentionally left blank]

 

37

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

 

 

 

GENERAC ACQUISITION CORP.

 

 

 

 

 

By:

/s/ York A. Ragen

 

Name:

York A. Ragen

 

Title:

Chief Financial Officer

 

[Signature Page to the Collateral Agreement]

 

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GENERAC POWER SYSTEMS, INC.

 

 

 

 

 

By:

/s/ York A. Ragen

 

Name:

York A. Ragen

 

Title:

Chief Financial Officer

 

[Signature Page to the Collateral Agreement]

 

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PRO POWER SOLUTIONS, LLC

 

 

 

 

 

By:

/s/ York A. Ragen

 

Name:

York A. Ragen

 

Title:

Secretary and Treasurer

 

[Signature Page to the Collateral Agreement]

 

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MAGNUM POWER PRODUCTS, LLC

 

 

 

 

 

By:

/s/ York A. Ragen

 

Name:

York A. Ragen

 

Title:

Secretary and Treasurer

 

[Signature Page to the Collateral Agreement]

 

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JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent

 

 

 

 

 

By:

/s/ Aized Rabbani

 

Name: Aized Rabbani

 

Title: Vice President

 

[Signature Page to the Collateral Agreement]

 

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